Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
Shenzhen SEG Co., Ltd.
2015 Annual Report
March 2016
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Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
Chapter 1 Important Notice, Contents, and Definitions
The Board of Directors, the Board of Supervisors, the directors, the supervisors, and the
senior executives guarantee that the 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 legal liabilities.
Chairman of the Board of Directors Wang Li, the Chief Financial Officer 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.
Except the diractor listed below, all the directors have attended this board meeting reviewing
the semi-annual report.
Title of director not
Name of director unattended Cause of absence Name of attorney
attended personally
Li Luoli Independent director Business trip Song Pingping
The future plans, development strategies, and forward-looking statements involved in the
annual report do not constitute any tangible commitment to investors. Investors should pay
attention to investment risks.
The profit distribution plan passed by the Board of Directors is to issue cash RMB 0.30 (tax
included) as dividends with 0 bonus shares per 10 shares (tax included) to all shareholders
with RMB 784,799,010 as the base without transferring the capital reserve to share capital.
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CONTENTS
Chapter 1 Important Notice, Contents, and Definitions ..........................................2
Chapter 2 Company Profile and Main Financial Indexes ........................................7
Chapter 3 Overview of Business ...............................................................................12
Chapter 4 Management Discussion and Analysis ...................................................14
Chapter 5 Important Matters ...................................................................................43
Chapter 6 Changes in Share Capital and Information on Shareholders .............. 74
Chapter 7 Preferred Shares.......................................................................................80
Chapter 8 Information on Directors, Supervisors, Senior Executives and Employees 81
Chapter 9 Corporate Governance ............................................................................91
Chapter 10 Financial Report...................................................................................105
I. Company Profile ...................................................................................................134
III. Basis of preparation of the financial statements.............................................136
V. Taxes171
VII. Change in consolidation scope ........................................................................201
No changes are made to the consolidation scope in the current reporting period.201
VIII. Equity in other entities ...................................................................................201
X. Related parties and associated transactions .....................................................206
Note *1: Under the cooperation agreement signed by and between both parties, Xi'an
Hairong SEG Electronics Market Co., Ltd. pays the rental according to 70% of profits of the
electronics market. Therefore, the amount of rental in the future is uncertain. 210
Note *2: The rental of Shenzhen SEG Electronics Market Management Co., Ltd. is adjusted
according to the CPI. Therefore, the amount of rental in the future is uncertain.210
Note *3: Under the cooperation agreement signed by and between both parties, Wujiang
SEG Electronics Market Co., Ltd. pays the rental according to 70% of pretax profits of the
electronics market. Therefore, the amount of rental in the future is uncertain. 210
XII. Events after the balance sheet date................................................................. 211
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XIII. Notes to other important matters ..................................................................212
Continued: ................................................................................................................212
Chapter 11 Documents for Reference.....................................................................222
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Definitions
Definition Refers to Description
This Company, the Company Refers to Shenzhen SEG Co., Ltd.
Shenzhen SEG Group Co., Ltd. Refers to Shenzhen SEG Group Co., Ltd.
Huakong SEG Refers to Shenzhen Huakong SEG Co., Ltd.
SEG Baohua Refers to Shenzhen SEG Baohua Enterprise Development Co., Ltd.
Xi'an SEG Refers to Xi’an SEG Electronics Market Co., Ltd.
Suzhou SEG Refers to Suzhou SEG Electronics Market Co., Ltd.
Xi'an Hairong SEG Refers to Xi’an Hairong SEG Electronics Market Co., Ltd.
Nanjing SEG Refers to Shenzhen SEG Electronics Market Management Co., Ltd.
Shanghai SEG Refers to Shanghai SEG Electronics Market Co., Ltd.
Nantong SEG Refers to Nantong SEG Times Square Management Co., Ltd.
Changsha SEG Refers to Changsha SEG Development Co., Ltd.
Mellow Orange Hotel Refers to Shenzhen Mellow Orange Business Hotel Management Co., Ltd
Longgang SEG Refers to Shenzhen SEG Electronics Market Management Co., Ltd.
SEG Industry Refers to Shenzhen SEG Industrial Investment Co., Ltd.
SEG E-Commerce Refers to Shenzhen SEG E-Commerce Co., Ltd.
SEG Credit Refers to Shenzhen SEG Credit Co., Ltd.
SEG Navigations Refers to Shenzhen SEG GPS Scientific Navigations Co., Ltd.
Wujiang SEG Refers to Wujiang SEG Electronics Market Co., Ltd.
Shunde SEG Refers to Shunde SEG Electronics Market Management Co., Ltd
Wuxi SEG Refers to Wuxi SEG Electronics Market Co., Ltd
Nanning SEG Refers to Nanning SEG Digital Plaza Management Co., Ltd.
Yantai SEG Refers to Yantai SEG Times Square Development Co., Ltd.
Suzhou SEG Digital Refers to Suzhou SEG Digital Plaza Management Co., Ltd.
Zhengzhou SEG Refers to Zhengzhou SEG Digital Plaza Management Co., Ltd.
Xi'an Fengdong SEG Refers to Xi'an Fengdong New Town SEG Times Square Properties Co.,
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Definition Refers to Description
Ltd.
Nantong SEG Operation Refers to Nantong SEG Commercial Operation Management Co., Ltd.
SEG Investment Refers to Shenzhen SEG Investment Management Co., Ltd.
SEG Chuangpinhui Refers to Chuangpinhui Branch of Shenzhen SEG Co., Ltd
SEG Logistics Refers to Shenzhen SEG Logistics Co., Ltd.
An integrated information platform for market management with
SEG Universal Refers to the functions of access control management, micro-payment,
query system and information distribution.
State-owned Assets Supervision and Administration Commission
Shenzhen SASAC Refers to
of Shenzhen Municipality
CSRC Refers to China Securities Regulatory Commission
Shenzhen Securities Regulatory Bureau of China Securities
Shenzhen Securities Regulatory Bureau Refers to
Regulatory Commission
The Articles of Association Refers to The Articles of Association of Shenzhen SEG Co., Ltd.
Unless otherwise specified, the amount referred
Refers to Amount in RMB
to in the report
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Chapter 2 Company Profile and Main Financial Indexes
I. Basic Information
Stock abbreviation SHEN SEG, SHEN SEG B Stock code 000058, 200058
Changed stock abbreviation (if
None
any)
Listed on Shenzhen Stock Exchange
Company name in Chinese 深圳赛格股份有限公司
Company name in Chinese SHEN SEG
Company name in English (if
SHENZHEN SEG CO.,LTD.
any)
Company name abbreviations
None
in English (if any)
Legal representative Wang Li
Registered address 31/F, Tower A, Stars Plaza, Huaqiang Road (N), Futian District, Shenzhen
Post code 518028
Office address 31/F, Tower A, Stars 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, Stars Plaza, Huaqiang Road 31/F, Tower A, Stars Plaza, Huaqiang Road
Contact address
(N), Futian District, Shenzhen (N), Futian District, Shenzhen
Phone 0755-83747939 0755-83747939
Fax 0755-83975237 0755-83975237
E-mail segcl@segcl.com.cn segcl@segcl.com.cn
III. Information Disclosure and Filing Site
Media selected by the Company for information China Securities Journal, Securities Times, Securities Daily and Hong Kong
disclosure Commercial Daily
Website selected by CSRC for publishing the annual
http://www.cninfo.com.cn (Cninfo Website)
report
The place where the annual report is prepared and Secretary's Office of Board of Directors, 31/F, Tower A, Stars Plaza,
kept Huaqiang Road (N), Futian District, Shenzhen
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IV. Changes of Registration Information
Organization code 27925377-6
Changes to business scope on July 6, 2005: Domestic commerce, goods supply and
sale (excluding commodities under special operation, control and sale), industrial
Changes of main business since the investment (licenses for specific projects shall be subject to application on a
Company's listing (if any) case-by-case basis), economic information consultancy, property lease, real estate
agency, and operation of SEG professional electronics markets (the license for the
professional market shall be further applied for).
Changes of dominant stockholders (if any) No change.
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 firm Room 1101, 11/F, Tower 7, No. 16 Block, Xisihuan Road (M), Haidian District, Beijing
Name of the certified public
Zhang Xing and Zhang Zhaocheng
accountant
The sponsor firm employed by the Company for fulfilling the duties of continuous supervision in the report
period:
□ Applicable √ Not applicable
The financial advisor employed by the Company for fulfilling the duties of continuous supervision in the report
period:
□ Applicable √ Not applicable
VI. Main Accounting Data and Financial Indexes
Are retrospective adjustments made to previous financial statements due to accounting policy changes or
accounting errors?
□ Yes √ No
Year-on-year
2015 2014 2013
increase/decrease
Operating revenue (Yuan) 741,533,676.93 681,343,920.99 8.83% 597,358,257.82
Net profit attributable to shareholders of
74,242,090.49 48,380,294.05 53.46% 54,338,735.35
the listed company (Yuan)
Net profit attributable to shareholders of
the listed company after deduction of 84,931,560.68 45,920,252.23 84.95% 48,912,658.58
non-recurring gains and losses (Yuan)
Net cash flow arising from operating
-12,453,523.82 -427,933,620.94 -97.09% -122,530,546.70
activities (Yuan)
Basic EPS (Yuan/Share) 0.0946 0.0616 53.57% 0.0692
Diluted EPS (Yuan/Share) 0.0946 0.0616 53.57% 0.0692
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Weighted average ROE 5.19% 3.80% 1.39% 4.44%
Year-on-year
End of 2015 End of 2014 End of 2013
increase/decrease
Total assets (Yuan) 2,614,660,524.37 2,659,717,718.28 -1.69% 2,134,940,597.85
Net assets attributable to shareholders of
1,475,126,229.16 1,298,970,719.85 13.56% 1,250,224,375.08
the listed company (Yuan)
VII. Differences in Accounting Data under Chinese and Overseas Accounting Standards
1. Differences in net profits and net assets reported in the financial statements disclosed under
international accounting standards and Chinese accounting standards
□ Applicable √ Not applicable
In the report period, the company’s net profits and net assets have no differences in the financial report disclosed
based on both the international and the Chinese accounting standards.
2. Differences in net profits and net assets reported in the financial statements disclosed under overseas
accounting standards and Chinese accounting standards
□ Applicable √ Not applicable
In the report period, the company’s net profits and net assets have no differences in the financial report disclosed
based on both the international and the Chinese accounting standards.
VIII. Major Quarterly Financial Indexes
Unit: Yuan
Quarter 1 Quarter 2 Quarter 3 Quarter 4
Operating income 191,029,218.56 183,525,917.05 194,784,480.30 277,336,268.42
Net profit attributable to shareholders of the
21,348,553.12 13,557,580.49 7,280,509.44 32,160,825.24
listed company
Net profit attributable to shareholders of the
listed company after deduction of 21,168,892.76 13,529,361.55 6,782,338.84 43,450,967.53
non-recurring gains and losses
Net cash flow from operating activities -37,829,627.54 -60,758,206.08 52,310,864.17 33,823,445.63
Are there any significant differences between the financial indexes or their totals in the preceding table and those
described in the disclosed quarterly reports or semi-annual reports?
□ Yes √ No
IX. Items and amount of non-recurring gains and losses:
√ Applicable □ Not applicable
Unit: Yuan
Amount of Amount of Amount of
Item Remarks
2015 2014 2013
Gains and losses on disposal of
-257,269.63 6,475.34 1,810,628.46 Gains on disposal of fixed assets
non-current assets (including the write-off
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Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
Amount of Amount of Amount of
Item Remarks
2015 2014 2013
of assets depreciation reserves)
Won the special subsidies issued by
Futian District Bureau of Science and
Government subsidies recorded into Technology Innovation of Shenzhen,
current gains and losses (except those won the special subsidies issued by
closely related with corporate business 980,956.24 1,554,585.78 1,117,834.72 Shenzhen Economic, Trade and
and enjoyed according to national Information Technology Commission,
standards or certain quota) and won the discount loans issued by
Futian Distict Bureau of Economic
Promotion.
Fund appropriation charges for
3,414,955.63
non-financial entities recorded into 700,000.00 581,000.00
current profits and losses
Transferred-back impairment provision
469,871.93
for accounts receivable, for which 3,022,045.29
separate impairment tests are carried out
Trustee fee from entrusted operation 200,000.00 200,000.00 200,000.00
The house leased by Nanning SEG for
developing the electronics market
suffered from severe water seeping and
leakage, so the operation of the market
was severely impacted. In 2015, because
of this incident, the potential
compensation to be paid by Nanning
Electronics Market because of the
dispute of cancelling contract was
Other non-operating income and expenses -13,043,897.59
498,4496 1,212,506.81 estimated
except the above-mentioned items
Suzhou SEG could not reach a final
agreement with Suzhou Track Traffic
Group Co. on the metro project. The the
opposite part submitted a case to the
court. According to the result of the 1st
instance judgment, in 2015 the potential
compensation to be paid by Suzhou SEG
because of the dispute of cancelling
contract was estimated
Less: Amount of affected income tax -2,022,052.01 216,991.94 1,617,611.87
Amount of influence of minority
-432,034.76 282,468.32 900,326.64
shareholders’ equity (after tax)
Total -10,689,470.19 2,460,041.82 5,426,076.77 --
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
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Securities to the Public - Non-recurring Profit and Loss and the reason of classifying the non-recurring profit
and loss listed in this announcement as recurring.
□ Applicable √ Not applicable
In the report period, it does not happen that the company defines the non-recurring profit and loss items defined
or listed by Interpretive Bulletin No. 1 on Information Disclosure by Companies Publicly Issuing Securities -
Non-recurring Gains and Losses as recurring profit and loss items.
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Chapter 3 Overview of Business
I. Main Business within Report Period
(I) Main business and operation model
Main business of the Company includes development and operation of specialized electronics market and
supporting projects, property lease service, trade and channel service, e-commerce, value-added microcredit
service, and hotel service.
Operation model: Developing the three commercial operation platform that focuses on electronics market,
commercial real estate and Chuangpinhui, expanding externally to mainstream industries relating to electronic
information industry and relevant industries, participating in the manufacturing and operation of relevant
contents instead of only serving as a single commercial platform, and creating a combined type operation mode
with multiple industries’ interaction involving maker demonstration, children experience, culture and education,
entertainment and sports, intelligent science and technology, and e-sports games.
(II) Competition situation and development trend
In recent years, the development of the Internet - particularly the rapid development of mobile Internet and
popularity of terminal services - has profoundly influenced people's thinking mode, behavioral pattern, shopping
mode and consumption customs. Meanwhile, the rapid development of e-finance, collection and application of
big data, Internet of Things, cloud computing, e-commerce oligopoly and vertical segmentation of e-commerce
market have created many new business models and changed consumption customs and impacted the traditional
business model. Now the traditional business model cannot satisfy diversified consumption demands in modern
times. The physical electronics market that adopts traditional business and service models is declining in the
technological revolution and is suffering impact to certain extent.
Toady the science and technology are developing rapidly, the physical electronics market is developing from a
single mode to a commercial combination of electronics, science and technology, culture, catering and
entertainment. An experiential, interactive and social business operation model has become a mainstream of the
electronics market.
The Company's main business is involved in perfectly competitive industries. Significant changes in the external
market environment have brought more challenges to the Company's main business. The Company is urged to
seek new strategic business and new profit growth points through intensional innovation and extensional
expansion and alliance between giants to effectively strengthen core competences and promote the sustainable
development.
(III) Industrial position
Through 27-year hardworking operation in electronics market industry, ith rich market business resources and
mature market operation and management experience, the Company has developed a professional electronics
market chain that covers the Pearl River Delta, the Yangtze River Delta, and even the entire country. SEG
Electronics Market has successfully combined IT complex self-construction, leasing and trusted management,
combined market service and value-added financial service, and combined professional market, SEG factory
store and distribution channels. SEG Electronics Market stood out as the largest specialized electronics markets
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in China and even in Asia covering electronic components, IT products, and communications products and has
great brand influence at home and abroad.
II. Significant Changes in Main Assets
1. Significant Changes in Main Assets
Main assets Description of Significant Changes
(1) On January 9, 2015, the holding enterprise Huakong SEG of the Company privately
issued 110 million shares to its controlling shareholder Shenzhen Waranty Assets
Management Co., Ltd. The Company gave up private placement, so the shareholding
proportion fell from 22.54% to 20.00%. Based on the shareholding proportion after
alteration, the Company included RMB 102,284,520.03 in equity investment.
(2) Huakong SEG increased capital investment of RMB 55,307,710.00 individually to
the subsidiary Tsinghua Holdings Huamn Settlements Environment Institute on June 4,
Equity 2015. Based on purchase cost and the equity proportion newly acquired, the difference of
net identifiable assets since the date of transaction is RMB 2,329,608.93 to decrease the
"capital reserve-stock premium". Based on the shareholding proportion, the Company
included RMB 465,946.64 to decrease in investment in Tsinghua Holdings Huamn
Settlements Environment Institute.
(3) Within the report period, Huakong SEG holding 20% shares and Shanghai SEG
holding 35% shares made profit, jointly contributing RMB 1,203,800 to the Company's
equity investment (cash dividends to Shanghai SEG deducted).
Fixed assets There is no significant change within the report period.
Within the report period, the Company configured its financial accounting software
Intangible assets
Jindie EAS and put it into use, which was included in this item.
Within the report period, LCD in the lobby of SEG Plaza was installed, which was
Construction in progress
included in this iterm.
2. Main Overseas Assets
□ Applicable √ Not applicable
III. Analysis of Core Competence
Main business of the Company includes development and operation of specialized electronics market and
supporting projects, property lease service, trade and channel service, e-commerce, value-added microcredit
service, and hotel service.
Shenzhen SEG Electronics Market operated by the Company has a leading position in the industry and is the
founder of the professional electronics market operation model in China. The Company has won various
honorary titles such as "China Five-star Electronics Market", "Most Influential Professional Market in Shenzhen
in 30 years", “2014-2015 National Integrity Model Market” (awarded by the State Administration for Industry
and Commerce) and "Top 10 Brands of Professional Markets Influencing China in Shenzhen" and so on.
At present, the Company has operated nearly 30 professional electronics markets in China in direct operation,
joint operation, and entrusted operation modes. The electronics market covers the Pearl River Delta and Yangtze
River Delta, with a radiation to the entire China. Through 27-year hardworking operation in electronics market
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Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
industry, the Company possesses abandont resources of commercial tenant in market and mature experience in
market operation and management, SEG Electronics Market has successfully combined IT complex
self-construction, leasing and trusted management, combined market service and value-added financial service,
and combined professional market, SEG factory store and distribution channels. SEG Electronics Market stood
out as the largest specialized electronics markets in China and even in Asia covering electronic components, IT
products, and communications products and has great brand influence at home and abroad.
Confronted with the increasingly drastic market competition and a new business model featuring the Internet, the
Company starts with "020" of the electronics market and e-commerce, and vigorously forges a compound
business model that combines physical market, e-commerce and channels by e-commerce platform construction,
retail channel development and physical shop sales. Meanwhile, the Company cooperates with famous Internet
enterprises in "Internet+" combined type business mode by using background big-data management system
based on SEG Market Management System (MIS) and SEG Universal and so on, and also based on “PC +
mobile terminal”, to forge a resource sharing platform that integrates businesses, suppliers, purchasers and
consumers, thereby realizing "online+offline" interaction and resource integration.
In the times of "Public Makership and Mass Innovation", the Company makes the most of geographical location
of Shenzhen SEG Electronics Market at Huaqiang North as well as the industrial advantages of electronics (for
example, electronic components) hubs to give full play to its rich operational experience and industry position
achieved over the past twenty-seven years. Through SEG International Maker Product Exhibit and Promotion
Center, the Company advances from product and market terminals to the resource terminals level by level, and
integrates the information from the resource terminal with the makership terminal, thereby creating new platform
value for SEG and providing omnibearing one-stop solution and supporting service to SEG Makers’ ecosphere
for project stationing, experiment and development, project incubation, project demonstration, channel
incubation, marking promotion, IPO coaching and so on. The Company will take advantage of its unique
location, market, brand, resources and channels to invent and satisfy the demands of makers, advance
capitalization and industrialization of maker products, fuel innovation energy of the physical electronics market,
continuously extend and enrich the service value chain, and thereby promote transformation and upgrading and
healthy development of the Company.
Chapter 4 Management Discussion and Analysis
I. Overview
In 2015, the world economy remains being profoundly adjusted, and China's economy witnesses the critical
phase of restructuring and transformation. Trending decline of potential growth rate together with long-term
structural and short-term periodical problems aggravates the economic downturn. On the other hand, confronted
with the economic downturn, China continues proactive fiscal policies and stable monetary policies to boost the
real economy, advances economic restructuring, emphasizes the power of consumption to promote economic
growth, and advocates the concepts of "Public Enterpreneurship and Mass Innovation" and the “Internet+" to
solve the problems of slowdown in economic growth as well as economic restructuring, transformation and
upgrading by deepening reforms and innovation.
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The Company has re-positioned its existing business according to its advantages and realities. In 2015, thanks to
joint efforts made by the Company and investors, the Company witnessed stable growth and intensified efforts in
industrial transformation and upgrading as well as operation model innovation.
During the report period, the Company achieved a total operating income of RMB 846,675,900, a 12.53%
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 microcredit; and (3) growth in the income of property rental and
hotel business.
During the report period, the Company achieved a total profit of RMB 143,068,600, a 28.01% increase over the
previous year, mainly due to: (1) increase in the income and profit of the small loan business; (2) Huakong SEG
holding 20% shares made profit within the report period, contributing RMB 1,400,000 to investment income of
the Company, while Huakong SEG suffered losses within the same period last year, which reduced the
investment income of the Company.
II. Analysis of Main Business
1. Overview
Main business of the Company includes development and operation of specialized electronics market and
supporting projects, property lease service, trade and channel service, e-commerce, value-added microcredit
service, and hotel service.
(1) Operation of the electronics market (including maker platform and “Internet+” services)
In 2015, along with the rapis development of Internet and mobile Internet and the speedy popularity of terminal
business, and the form of e-commerce oligopoly and vertical segmentation of e-commerce market, electronics
market was impacted to certain extent.
Facing the fierce market competition and impact from new-type business mode, the Company focued on
promoting the transformation and up-grading of the exiting business, actively explored new business
development mode and continuously enhanced the abilityies of operation and innovation of the electronics
market mainly run by the Company, through the methods of making the most out of users’ value, integrating
various resources and establishing multi-channel profitability pattern and so on. In addition, the Company put
forth effort to build new-type O2O operational platform in SEG electronics market through the strategic
cooperation with popular web platform such as Taobao and Tmall and etc.
The Shenzhen Municipal Government plans to develop Huaqiang North into a maker center. Capturing this
opportunity, the Company has established SEG International Maker Product Exhibition and Promotion Center
based on its advantages, creating a segmented vertical O2O channel for SEG electronics market. With intelligent
hardware and maker products as the core, the Company makes the best of its resource allocation capability, and
connects upstream and downstream channels of the electronics market, finally creating its own platform value
with SEG characteristics, which helps attract multi-tier consumers, compete against other electronics markets
with diversified products, and promote transformation and upgrading. Meanwhile, during the development of
SEG factory store, the Company digged and incubated sales channels of maker products, and promoted the
construction and optimization of SEG maker ecosphere.
In the report period, the Company achieved operating revenue of RMB 350,190,000 from the business of
electronics markets with an increase of 12% over the same period of the previous year, and a total profit of RMB
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70,060,000 with a decrease of 9% over the same period of the previous year. The decrease results from the losses
suffered by Nanning SEG.
(2) Businesses of property leasing service
In the report period, the property rental business of the headquarters and the Company's subsidiary SEG Baohua
(holding 66.58% shares) continues to increase steadily.
Despite the depressing property lease environment in Huaqiang North district and the rising vacancy rate and
rent drop of the surrounding office buildings, SEG Baohua kept the occupancy rate at 99% and above and
maintained the highest rent among the office buildings in Huaqiang North district by improving the service level
and quality of property management and taking effective business operation measures. In addition, the rent price
was kept high among surrounding buildings in Huaqiang North and even with an increase comparing with the
previous year.
In the report period, the Company's property rental service yielded a total operation income of RMB 64,940,000,
a year-on-year decrease of 2%, and a total profit of RMB 23,860,000, a year-on-year increase of 2%.
(3) Trade and channel service
In the report period, the Company's wholly-owned subsidiary SEG Industry operated its trade and channel
service in good condition, with a dramatic increase in each economic index over the same period of the previous
year. SEG Industry has formally signed a memorandum of cooperation documents with Apple and officially
obtained the authorized Apple distributor for big customers in the China Southern Region. In mid-June, SEG
Industry has achieved good results in the first App recommended council for big customers held in Shenzhen
after the cooperation. In the report period, the number of terminal retail shops increased by 3.
In the report period, the Company's trade and channel service achieved a total operating income of RMB
264,300,000, a 14% increase over the previous year, mainly due to the increase of trade purchase agency, mobile
phone distribution and communications distribution business over the previous year.
(4) Electronic commerce
In the report period, the SEG E-commerce achieved a total operating income of RMB 35,580,000, a 24%
decrease over the previous year, total revenue of 98,000 Yuan, a 93% decrease over the previous year, mainly
due to the decrease of the supply chain service in the current report period.
Till the date of disclosure of this report, the Company's board had approved the Proposal for Transferring 51% of
the SEG E-commerce Share Held by Shenzhen SEG. At present, the Company has submitted the application to
the related departments for equity transfer, and auditing and evaluation are in progress. However, as there are
outstanding debts between SEG E-commerce and the Company, equity transfer can be continued only after the
debts are settled. The Company will timely disclose the related information according to the specific progress.
(5) Microcredit
SEG Microcredit, a subsidiary controlled by the Company (holding 53.02% shares), operated in good condition
within the report period, with a dramatic increase in each economic index over the same period of the previous
year. At present, SEG Microcredit has reached strategic cooperation with major commercial tenants of SEG
Electronics Market. Based on the warehouse receipt pledge mode, SEG Microcredit provides the agent
purchasing and other supply chain finance business, therefore relieving the cash flow pressure of the commercial
tenants and achieving a win-win situation.
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In the report period, SEG Microcredit achieved a total operating income of RMB 105,140,000, a 48% increase
over the previous year, a total revenue of RMB 46,750,000, an 18% increase over the previous year, mainly due
to the increase of the loan scale and loan interests over the previous year.
(6) Hotel
The Company's hotel includes Changsha Brach of Chengguo Hotel, Xingsha Branch of Chengguo Hotel, and
Bao'an Branch of Chengguo Hotel, which offer accommodation, catering, and conference services. Xingsha
Brach of Changguo Hotel invested in the second half of 2014 operated stably in 2015, and contributed to hotel
business growth for the Company.
In the report period, the Company achieved from its hotel business a total operating income of RMB 26,520,000,
a 10% increase over the previous year, a total profit of RMB 2,090,000, an 8.29% increase over the previous year,
mainly due to the increase in the number of hotels.
2. Income and Cost
(1) Formation of operating income
Unit: Yuan
2015 2014 Year-on-year
Percentage of total Percentage of total increase/decrease
Amount Amount
operating income operating income (%)
Total operating
846,675,884.33 100% 752,414,741.06 846,675,884.33 100%
income
Classified by industry
Electronics market 415,127,517.70
operation and 49.03% 378,687,526.55 50.33% 9.62%
property leasing
Trade 264,303,143.71 31.22% 231,763,054.54 30.80% 14.04%
Hotel 26,523,482.58 3.13% 24,114,841.00 3.20% 9.99%
(3). E-commerce 35,579,532.94 4.20% 46,778,498.90 6.22% -23.94%
Finance 105,142,207.40 12.42% 71,070,820.07 9.45% 47.94%
Classified by product
Region
Shenzhen 625,255,412.68 73.85% 550,831,410.15 65.06% 13.51%
Xi’an 59,688,953.13 7.05% 54,408,611.06 6.43% 9.70%
Su Zhou 79,040,494.44 9.34% 56,137,670.38 6.63% 40.80%
Changsha 39,091,884.16 4.62% 32,771,338.47 3.87% 19.29%
Nanjing 32,421,829.58 3.83% 40,176,866.63 4.75% -19.30%
Foshan 2,474,556.31 0.29% 2,331,170.63 0.28% 6.15%
Nanning 1,623,611.29 0.19% 10,572,085.86 1.25% -84.64%
Wuxi 7,079,142.74 0.84% 5,185,587.88 0.61% 36.52%
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Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
(2) Information on industries, products or regions accounting for over 10% of operating income or
operating profit
√ Applicable □ Not applicable
Unit: Yuan
Year-on-year Year-on-year
Year-on-year
increase/decrease increase/decrease
Operating income Operating cost Gross Profit Rate increase/decrease
of operating of gross profit
of operating cost
income rate
Classified by industry
Electronics
market operation
415,127,517.70 301,511,104.70 27.37% 9.62% 12.89% -2.10%
and property
leasing
Trade 264,303,143.71 260,773,559.46 1.34% 14.04% 13.97% 0.07%
Hotel 26,523,482.58 22,255,148.18 16.09% 9.99% 23.80% -9.36%
(3). E-commerce 35,579,532.94 24,989,821.48 29.76% -23.94% -40.79% 19.98%
Finance 105,142,207.40 8,533,082.37 91.88% 47.94% 75.38% -1.27%
Region
Shenzhen 625,255,412.68 423,538,888.25 32.26% 13.51% 10.16% 2.06%
Xi’an 59,688,953.13 43,478,512.32 27.16% 9.70% 8.00% 1.15%
Su Zhou 79,040,494.44 75,535,558.83 4.43% 40.80% 38.45% 1.61%
Changsha 39,091,884.16 27,686,044.38 29.18% 19.29% 0.10% 13.58%
Nanjing 32,421,829.58 33,873,081.64 -4.48% -19.30% -7.80% -13.04%
Shunde 2,474,556.31 2,314,003.45 6.49% 6.15% 2.08% 3.73%
Nanning 1,623,611.29 6,134,780.83 -277.85% -84.64% -36.86% -285.95%
Wuxi 7,079,142.74 5,501,846.49 22.28% 36.52% 4.14% 24.16%
If the statistical caliber of main business data is adjusted in the report period, the Company shall use the main
business data of the previous year collected at the end of the report period after adjustment of statistical caliber.
□ Applicable √ Not applicable
(3) Is the Company's material sales revenue more than its service revenue?
□ Yes √ No
(4) Performance of executed major sales contracts as of this report period
□ Applicable √ Not applicable
(5) Formation of operating cost
Industry classification
Unit: Yuan
Industry Item 2015 2014 Year-on-year
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classification Percentage of Percentage of increase/decrease
Amount Amount
operating cost operating cost (%)
Electronics
market operation Lease and
99,519,264.28 33.01% 92,118,558.40 34.49% 8.03%
and property property costs
leasing
Electronics
Total
market operation
remuneration for 73,123,516.29 24.25% 71,127,699.88 26.63% 2.81%
and property
employees
leasing
Electronics
market operation Depreciation and
29,266,499.62 9.71% 30,331,273.28 11.36% -3.51%
and property amortization
leasing
Electronics
Market and
market operation
property service 75,217,006.81 24.95% 73,064,579.48 27.36% 2.95%
and property
costs
leasing
Electronics
market operation Retail goods sales
24,384,817.70 8.09% 440,050.85 0.16% 5441.36%
and property cost
leasing
Electronics
market operation
Total 301,511,104.70 100.00% 267,082,161.89 100.00% 12.89%
and property
leasing
Unit: Yuan
2015 2014 Year-on-year
Product category Item Percentage of Percentage of increase/decrease
Amount Amount (%)
operating cost operating cost
Trade Goods sales cost 260,773,559.46 100.00% 228,817,359.36 100.00% 13.97%
2015 2014 Year-on-year
Industry
Item Percentage of Percentage of increase/decrease
classification Amount Amount
operating cost operating cost (%)
Finance Lease cost 664,432.82 7.79% 620,955.52 12.76% 7.00%
Financial service
Finance 7,868,649.55 92.21% 4,244,413.96 87.24% 85.39%
cost
2015 2014 Year-on-year
Industry
Item Percentage of Percentage of increase/decrease
classification Amount Amount
operating cost operating cost (%)
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2015 2014 Year-on-year
Industry
Item Percentage of Percentage of increase/decrease
classification Amount Amount
operating cost operating cost (%)
Total
E-commerce remuneration for 1,248,958.81 5.00% 1,721,073.48 4.08% -27.43%
employees
E-commerce Sales cost 16,457,203.37 65.86% 25,449,032.36 60.30% -35.33%
Promotion
E-commerce 2,562,768.35 10.26% 3,375,883.77 8.00% -24.09%
expenses
Customs
declaration and
E-commerce 2,058,226.13 8.24% 7,455,094.45 17.67% -72.39%
property service
expenses
E-commerce Others 2,662,664.82 10.65% 4,201,100.68 9.95% -36.62%
2015 2014 Year-on-year
Industry
Item Percentage of Percentage of increase/decrease
classification Amount Amount
operating cost operating cost (%)
Total
Hotel remuneration for 5,458,034.64 24.52% 5,190,604.03 28.87% 5.15%
employees
Depreciation and
Hotel 3,577,343.55 16.07% 3,590,428.65 19.97% -0.36%
amortization
Hotel Administrative fee 597,774.92 2.69% 596,888.64 3.32% 0.15%
Hotel Lease cost 8,199,833.24 36.84% 8,202,585.69 45.63% -0.03%
Hotel Others 4,422,161.83 19.87% 396,875.30 2.21% 1014.24%
(6) Is the consolidation scope changed in the report period?
□ Yes √ No
(7) Information about significant changes or adjustments of business, product or service in the report
period
□ Applicable √ Not applicable
(8) Information on main customers and main suppliers
Information about the Company's major customers
Sales amount of top 5 customers (Yuan) 259,258,237.07
Percentage of the total sales amount of top 5 customers to
30.62%
the annual sales
Information about top 5 customers
No. Customer Name Sales amount (Yuan) Percentage of the annual sales amount
1 Shenzhen Runneng Digital Co., Ltd. 120,891,901.16 14.28%
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No. Customer Name Sales amount (Yuan) Percentage of the annual sales amount
2 Shenzhen Wonder Industry Co., Ltd. 59,270,803.34 7.00%
3 Shenzhen Comnet Technology Co., Ltd. 33,381,639.00 3.94%
Shenzhen Nanfang Yunhe Technology Co.,
4 32,219,754.72 3.81%
Ltd.
Beijing Botai Yongxin Scientific and
5 13,494,138.85 1.59%
Technological Development Co., Ltd.
Total -- 259,258,237.07 30.62%
Other information on main customers
□ Applicable √ Not applicable
Information about major suppliers
Total purchase amount of top 5 suppliers (Yuan) 218,317,113.43
Percentage of the total purchase amount of top 5 suppliers
35.32%
to the annual purchase
Information about top 5 suppliers
No. Name of supplier Purchase amount (Yuan) Percentage of the annual purchase
1 Shenzhen Shuojian Industry Co., Ltd 146,858,533.11 23.76%
Nanjing Yunde Investment and
2 23,119,020.12 3.74%
Development Co., Ltd.
Beijing Hengsha Science and Technology
3 19,439,652.52 3.15%
Co., Ltd.
Tonmac International Electronics (Suzhou)
4 16,024,907.88 2.59%
Co., Ltd
Xi'an Gaoke (Group) New West China
5 12,874,999.80 2.08%
Industrial Development Co., Ltd
Total -- 218,317,113.43 35.32%
Other information on main suppliers
□ Applicable √ Not applicable
3. Expense
Unit: Yuan
Year-on-year
2015 2014 increase/decrease Description of significant changes
(%)
In the report period, the newly established
sales office of Nantong SEG Times Square
Sale expenses 4,585,434.23 2,149,313.48 113.34% incurred expenses of RMB 2,420,000, while
this project was not opened in the same period
of the previous year.
Management expenses 44,222,779.09 45,406,128.22 -2.61%
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Year-on-year
2015 2014 increase/decrease Description of significant changes
(%)
(1) In the report period, financing amount was
reduced, and interest rate decreased, which
reduced the financing cost.
Financial cost 3,564,776.76 9,168,643.60 -61.12%
(2) The proportion of loan used in Nantong
SEG Times Square increased, so the amount of
capitalized interests increased accordingly.
4. Investment in research and development
√ Applicable □ Not applicable
During the report period, the company's R&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.
Investment in research and development
2015 2014 Percentage of change
Number of R&D staff (Person) 0 0 0.00%
Percentage of R&D staff 0.00% 0.00% 0.00%
Amount invested in research
659,249.00 1,136,073.70 -41.97%
and development (Yuan)
Ratio of investment in research
and development to operating 0.09% 0.17% -0.08%
income
Amount of capitalized
investment in research and 0.00 0.00 0.00%
development (Yuan)
Ratio of capitalized amount to
total investment in research and 0.00% 0.00% 0.00%
development
Reason for significant change in ratio of total investment in research and development to operating income over
the previous year
□ Applicable √ Not applicable
Reason for significant change in rate of capitalization of investment in research and development and description
of its rationality
□ Applicable √ Not applicable
5. Cash Flow
Unit: Yuan
Year-on-year increase/decrease
Item 2015 2014
(%)
Subtotal of cash inflow from
2,188,033,814.36 2,439,133,722.87 -10.29%
operating activities
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Year-on-year increase/decrease
Item 2015 2014
(%)
Subtotal of cash outflow in
2,200,487,338.18 2,867,067,343.81 -23.25%
operating activities
Net cash flow from operating
-12,453,523.82 -427,933,620.94
activities
Subtotal of cash inflow from
2,264,549,143.15 3,997,632,856.03 -43.35%
investing activities
Subtotal of cash outflow in
2,172,173,875.73 3,914,849,729.51 -44.51%
investing activities
Net cash flow from investing
92,375,267.42 82,783,126.52 11.59%
activities
Subtotal of cash inflow from
442,000,000.00 678,352,371.12 -34.84%
financing activities
Subtotal of cash outflow in
628,455,033.90 286,738,699.97 119.17%
financing activities
Net cash flow arising from
-186,455,033.90 391,613,671.15 -147.61%
financing activities
Net increase in cash and cash
-106,533,251.60 46,463,186.89 -329.29%
equivalents
Description of main factors of significant year-on-year change
√ Applicable □ Not applicable
1. The reason for a 10.29% year-on-year decrease in the sub-total of operating cash inflow in the report period is
that the subsidiary SEG E-commerce witnessed a decline in supplier chain business within the report period and
that cash inflow decreased accordingly.
2. The reasons for a 23.25% year-on-year decrease in the sub-total of operating cash outflow in the report period:
① The subsidiary SEG E-commerce witnessed a decline in supplier chain business within the report period and
the cash paid decreased.
② During the report period, the cash outflow of Nantong SEG estate subsidiary decreased over the same period
of the previous year.
3. During the report period, the net amount of cash flow incurred in operation increased over the same period of
the previous year. The reason is that the cash outflow in operation decreased for the above-mentioned reasons
and that the amount of such decrease exceeds that in cash inflow in operation during the same period.
4. The reasons for a 43.35% year-on-year decrease in the sub-total of investment cash inflow in the report period
is that the amount of bank investment decreased.
5. The reasons for a 44.51% year-on-year decrease in the sub-total of investment cash outflow in the report
period is that the amount of bank investment decreased and that the received investment fund decreased
accordingly.
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6. Net cash flow arising from investing activities has a year-on-year increase during the report period because the
bank financial investment recovered is higher than the external investment size and the income received from
bank financial investment increased.
7. The reasons for a 34.84% year-on-year decrease in the sub-total of financing cash inflow in the report period
are that the amount of acquired bank loans and financing bonds decreased.
8. The reasons for a 119.17% year-on-year increase in the sub-total of financing cash outflow in the report period
is that the total amount of acquired bank loans and financing bonds increased.
9. The reasons for a 147.61% year-on-year decrease in the net amount of financing cash flow in the report period
are that the scale of financing declined.
10. Increase or decrease in increased cash or cash equivalent in the report period is co-caused by the reasons
described in Items 3, 6, and 9.
Reasons for the big difference between the net cash flow arising from operating activities and the annual net
profit in the report period
√ Applicable □ Not applicable
The reason for the big difference between the cash flow arising from operating activities and the annual net profit
in the report period is that cash outflow of the subsidiary the Nantong SEG estate formed inventory, which did
not increase net profits within the report period.
III. Analysis of Non-major Business
√ Applicable □ Not applicable
Unit: Yuan
Percentage of
Amount Reason Sustainable or not
total profit
Financial income and income from
Investment income 17,647,493.77 12.33% Partially sustainable
investment in joint ventures
Impairment provision for loans and
Asset impairment 5,095,364.09 3.56% advances issued by subsidiary SEG Partially sustainable
CREDIT
Non-operating Government subsidies and liquidated
2,367,546.40 1.65% Partially sustainable
income damages
During the report period, Suzhou SEG paid
Non-operating
14,687,757.38 10.27% lawsuit compensation and such payment Unsustainable
expenses
was estimated.
IV. Assets and Liabilities
1. Significant Changes in Asset Formation
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Unit: Yuan
End of 2015 End of 2014
Increase/decre Description of
Percentage of Percentage of
Amount Amount ase significant changes
total assets total assets
Monetary funds 276,863,429.10 10.59% 383,056,680.70 14.40% -3.81%
Accounts
98,212,422.87 3.76% 185,866,040.16 6.99% -3.23%
receivable
Inventory 450,809,934.72 17.24% 278,281,586.72 10.46% 6.78%
Investment
443,851,726.40 16.98% 462,562,882.78 17.39% -0.41%
properties
Long-term equity
185,122,573.88 7.08% 82,100,197.01 3.09% 3.99%
investment
Fixed assets 37,524,425.25 1.44% 41,408,298.43 1.56% -0.12%
Construction in
140,810.00 0.01% 0.00% 0.01%
progress
Short-term
367,759,630.48 14.07% 189,246,687.38 7.12% 6.95%
borrowing
2. Assets and liabilities measured based on fair value
□ Applicable √ Not applicable
V. Investment
1. General
√ Applicable □ Not applicable
Investment over the same period of the
Investment in the report period (Yuan) Increase/decrease (%)
previous year (Yuan)
171,899,357.22 218,410,000.00 -21.22%
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2. Significant equity investment within report period
√ Applicable □ Not applicable
Unit: Yuan
Investment
Progress as
Shareholdi profits and
Investment Investment Source of Investment of the date Projected Lawsuite Disclosure Disclosure
Investee name Main business ng Partner Product Type losses of the
mode amount capital horizon of Balance income invololved date (if any) Index (if any)
percentage current
Sheet
period
Investment
management,
investment real
industry,
investment
CNINFhttp://w
consultation,
ww.cninfo.com.
financial
Announcement cn
consultation,
of Shenzhen Announcement
industrial Investment
SEG Newly- Self-owned Not December about
investment 10,000,000.00 100.00% None funds None 0.00 0.00 No
Investment established capital applicable 30, 2015 Establishment of
funds management
Management Shenzhen SEG
management,
Co., Ltd. Investment
makership
Management
investment
Co. Ltd.
funds
management,
equity
investment
management
Total -- -- 10,000,000.00 -- -- -- -- -- -- 0.00 0.00 -- -- --
3. Significant non-equity investment in progress within report period
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√ Applicable □ Not applicable
Unit: Yuan
Reasons for
Accumulated failure to
Amount of Accumulated
Industries amount achieve the
Fixed assets investment Source of Projected income as of Disclosure Disclosure
Project name Investment mode involved in invested as of Progress plan schedule
investment? during this capital income the end of this date (if any) Index (if any)
investment the end of this objective and
report period report period
report period expected
income
Self-owned
Nantong SEG Not
Self-constructed? No Real estate 171,899,357.22 448,858,750.91 capital and 0.00 -6,188,279.12
Times Square applicable
bank loans
Total -- -- -- 171,899,357.22 448,858,750.91 -- -- 0.00 -6,188,279.12 -- -- --
4. Financial assets investment
(1) Security investment
√ Applicable □ Not applicable
Unit: Yuan
Gains and
losses from Accumulative Amount of Amount of
Short form Accounting Gains and
Stock Initial Opening book fair value change of fair purchase in sales in the Closing book Source of
Stock type of the measurement losses in the Accounting item
code investment cost value changes in value counted the current current value capital
security mode report period
the current into equity period period
period
Domestic and
Youhao Measurement Available-for-sale Self-owned
overseas 600778 90,405.00 554,642.62 0.00 189,937.79 0.00 0.00 744,580.41
Group of fair value financial assets capital
shares
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Gains and
losses from Accumulative Amount of Amount of
Short form Accounting Gains and
Stock Initial Opening book fair value change of fair purchase in sales in the Closing book Source of
Stock type of the measurement losses in the Accounting item
code investment cost value changes in value counted the current current value capital
security mode report period
the current into equity period period
period
Domestic and Measurement
Huakong Self-owned
overseas 000068 279,307,046.38 of cost 78,523,408.83 0.00 101,818,573.39 0.00 0.00 1,401,178.85 181,743,161.07 Other assets
SEG capital
shares method
Domestic and Measurement
SEG Available-for-sale Self-owned
overseas 832770 8,275,321.43 of cost 13,515,392.83 0.00 0.00 0.00 750,000.00 13,515,392.83
Navigations financial assets capital
shares method
Other securities invested at the end of
-- 0.00 -- --
period
Total 287,672,772.81 -- 92,593,444.28 0.00 102,008,511.18 0.00 0.00 2,151,178.85 196,003,134.31 -- --
(2) Investment of derived products
□ Applicable √ Not applicable
No investment in derivatives is involved within the report period.
5. Use of the collected capital
□ Applicable √ Not applicable
In the report period, there was no usage of raised capital.
VI. Sales of Major Assets and Equity
1. Sales of Major Assets
□ Applicable √ Not applicable
No major asset sales are involved in the report period.
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2. Sales of Major Equity
□ Applicable √ Not applicable
VII. Analysis of Controlling and Holding Companies
√ Applicable □ Not applicable
Information on main subsidiaries and holding companies with more than 10% influences on the Company's net profits
Unit: Yuan
Company Registered
Company name Main business Total assets Net Assets Operating income Operating Profit Net profit
Type Capital
Operation and management of
Wujiang SEG Subsidiary 3,000,000.00 21,284,118.57 4,507,264.36 14,557,817.51 1,557,532.38 1,294,311.28
professional electronics market
Operation and management of
Wuxi SEG Subsidiary 3,000,000.00 12,180,152.44 3,945,310.68 7,079,142.74 1,561,015.08 1,254,297.87
professional electronics market
Development and operation of
Nantong SEG Subsidiary 30,000,000.00 496,111,485.13 23,811,720.88 -3,611,015.41 -3,578,015.98
real estate
Operation and management of
Nanning SEG Subsidiary 8,000,000.00 1,759,691.34 -881,062.28 1,623,611.29 -4,740,544.72 -8,667,217.21
professional electronics market
SEG E-Commerce Subsidiary E-commerce 48,000,000.00 235,625,802.19 7,960,975.57 35,579,532.94 -674,410.27 97,877.53
SEG Credit Subsidiary Micro-credit 150,000,000.00 519,089,420.44 190,007,937.67 77,554,704.11 46,750,090.02 35,003,585.70
Property operation and
SEG Baohua Subsidiary 30,808,800.00 149,837,326.21 104,178,215.48 83,242,678.25 34,832,330.47 26,178,616.48
management and hotel business
Channel retail terminal of
SEG Industry Subsidiary electronic products and property 25,500,000.00 98,207,733.58 38,661,918.21 274,095,883.71 7,807,596.25 6,913,740.17
operation and management
Operation and management of
Xi'an SEG Subsidiary 3,000,000.00 46,795,150.81 16,930,015.72 39,424,062.40 12,218,974.34 10,424,310.91
professional electronics market
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Company Registered
Company name Main business Total assets Net Assets Operating income Operating Profit Net profit
Type Capital
Operation and management of
Longgang SEG Subsidiary 3,000,000.00 27,721,592.72 7,598,986.93 10,553,765.58 2,623,440.68 1,984,703.82
professional electronics market
Operation and management of
Suzhou SEG Subsidiary 3,000,000.00 40,688,470.26 7,440,740.54 44,300,279.01 6,519,137.79 2,769,888.05
professional electronics market
Operation and management of
Changsha SEG Subsidiary 35,000,000.00 83,638,292.12 63,757,520.59 23,221,623.20 7,377,443.16 5,350,203.30
professional electronics market
Operation and management of
Xi'an Hairong SEG Subsidiary 3,000,000.00 27,235,772.09 5,223,325.28 20,264,890.73 2,389,659.27 2,152,901.11
professional electronics market
Operation and management of
Nanjing SEG Subsidiary 20,000,000.00 28,986,700.38 8,989,546.45 32,421,829.58 -3,011,470.00 -2,869,425.38
professional electronics market
Operation and management of
Suzhou SEG Digital Subsidiary 8,000,000.00 21,998,127.23 -2,543,191.96 34,740,215.43 -4,003,025.37 -3,996,481.53
professional electronics market
Operation and management of
Shunde SEG Subsidiary 6,000,000.00 4,996,901.03 3,159,222.55 2,474,556.31 12,150.64 43,916.14
professional electronics market
Nantong SEG
Commercial Subsidiary Property Operation 5,000,000.00 796,227.61 -472.97 -406.13 -406.13
Operation
Manufacturing and operation of
Shareholding
Huakong SEG color picture tube (CPT), CPT 1,006,671,464.00 757,877,879.31 662,394,969.60 170,618,870.76 -599,926.54 8,133,783.50
company
materials, and glass apparatus
Shareholding Operation and management of
Shanghai SEG 5,000,000.00 21,112,291.39 10,364,443.80 8,283,156.47 933,616.52 864,641.80
company professional electronics market
SEG GPS products
Shareholding
SEG Navigations manufacturing and operation 60,000,000.00 372,367,978.78 203,933,390.54 232,971,791.13 -6,211,307.94 5,828,366.52
company
network service
30
Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
Information on controlling and holding companies
1. In the report period, the operating income of Nanjing SEG decreased by 19.30% over the previous year mainly
because some customers withdrew and resulted in more empty stalls, the Phase IV market ended at the end of
October 2014 and resulted in zero income in 2015. As a result, operating income significantly decreased and
Nanjing SEG suffered losses in the report period.
2. In the report period, the house leased by Nanning SEG for developing the electronics market suffered from
severe water seeping and leakage, which seriously affected operation of the market and resulted in a decrease of
84.64% in operating income in the report period. Nanning SEG has filed a lawsuit against the property lesser.
The original decoration expenses of previous years can no longer be amortized according to the benef years, so
they one-off transferred into non-business expenditures as losses, making Nanning SEG suffered great losses in
the current period.
3. In the report period, Suzhou SEG Digital witnessed a dramatic increase in operating income mainly because
the operation of the company increased operating income since this company started its formal operation in
September 2014..
4. In the report period, total profits of Xi’an Hairong SEG increased by 41.47% over the previous year mainly
because of many factors, such as the market gradually matured, rents for some stalls were raised, and income
from investment in financing products also increased, making Xi’an Hairong SEG witnessed a dramatic rise in
total profits comparing to that of previous year..
5. In the report period, Wuxi SEG witnessed an increase of 36.52% in its operating income over the previous
year as well as a turnaround of total profits. Wuxi SEG opened at the end of March 2014. Rental income of the
previous year was accumulated for only three quarters, while the rental income in 2015 was accumulated for four
quarters. Therefore, the operating income increased over the previous year. The increase in operating income and
financial product investment income greatly raised the total profit over the previous year.
6. In the report period, Changsha SEG witnessed a year-on-year increase of 38.66% in the total profit mainly
because the company operated stably and fiscal expenses decreased year-on-year. The fiscal expenses decreased
mainly because Changsha SEG paid back its parent company the decoration loans together with principal and it
paid no interest in the report period.
7. In the report period, SEG E-commerce witnessed a 24% decrease in operating income and a 93% decrease in
the total profit over the previous year mainly because of reduction of supplier chain business in the report period.
Till the date of disclosure of this report, the Company's board had approved the Proposal for Transferring 51%
of the SEG E-commerce Share Held by Shenzhen SEG. At present, the Company has submitted the application to
the related departments for equity transfer, and auditing and evaluation are in progress. However, because there
was outstanding debt existing between SEG E-commerce and the Company, the relevant work can be carries out
only after the outstanding debt has been settled. The Company will timely perform the duty for information
disclosure according to the actual progress of this issue.
8. In the report period, SEG Industry witnessed a 24% decrease in operating income and a93% decrease in the
total profit over the previous year mainly because of reduction of supplier chain business in the report period.
Till the date of disclosure of this report, the Company's board had approved the Proposal for Transferring 51% of
the SEG E-commerce Share Held by Shenzhen SEG. At present, the Company has submitted the application to
the related departments for equity transfer, and auditing and evaluation are in progress.
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Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
In the report period, SEG Industry witnessed a 128.31% increase year-on-year in the total profit mainly because
the income from investment in SEG CREDIT increased.
Information on the acquisition and disposal of subsidiaries in the report period
√ Applicable □ Not applicable
Mode of acquisition and disposal of
Company name Impact on the overall production and performance
subsidiaries in the report period
Shenzhen SEG Investment
Investment, newly-established Net profits of the current period are not affected.
Management Co., Ltd.
VIII. Information on Structural Entity Controlled by the Company
□ Applicable √ Not applicable
IX. Outlook of future development of the Company
(I)Future development planning of the Company
1. With the development of electronic information industry in China, the electronics market industry maintains a
rapid growth in recent years and market functions are expanded. According to statistics of Wind, by the end of
2014, China has 154 electronics markets with the scale of 100 million Yuan in total and the total turnover
amounted to 97.205 billion Yuan.
The booming e-commerce in the context of mobile Internet has a considerable impact on the electronics markets.
The trade share of the physical electronics market is squeezed, causing considerable pressure on market
operation. The electronics market industry hits its bottleneck currently and presses for transformation and
upgrading.
2016 will be a critical year for transformation and upgrading of the Company. Though electronics markets of the
Company have maintained a rapid growth in recent years, to deal with the impact of e-commerce, the Company
shall transform and upgrade the traditional electronics markets by further expanding the industry chains and
enriching the industry products and service. This is specifically embodied in "three transformations": firstly,
transformation from a single electronic trading platform and commercial real estate platform to an integrated
industry platform for comprehensive makers’ echology, culture and education, intelligent science and technology,
sports and entertainment, virtual experence, Internet games and financial services, etc. and from the operation of
single business platform to the manufacturing and operation of relevant content; secondly, the Company’s rapid
transformation of enterprises engaged in electronics markets from a single tenancy role to platform operator and
service provider engaged in integration of on-line and off-line resources; thirdly, based on the business resource
platform of electronics markets and commercial real estate business, the Company shall support innovative
business development, strive to build an international maker platform with SEG characteristics, develop a
whole-industry chain layout, and expand innovative fields such as electronic information products and intelligent
electronic applications, and financial service in the supply chain.
2. The annual project investment plan in 2016 focuses on the transformation and upgrading of the Company
which is expected to be RMB 326,700,000 in total.
Unit: RMB ten thousand Yuan
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No. Project name 2016 Plan Remarks
1 New investment project 18,570 For new investment in the innovative development
business
2 Nantong SEG Times Square 14,100 The key tasks of Nantong SEG Times Square
project in 2016 are the completion of construction
and delivery with safety and high quality and
completion of the construction of Nantong
Animation Industry Base project and the
preliminary tender-invitation for the opening of the
animation industrial park and business. The new
investment in 2016 is expected to be RMB
141,000,000.
Total 32,670
(II) Completion Result of Main financial budget and investment plan of 2015:
1. The Company released Announcement of Resolution of 6th meeting of the 6th Session of the Board of
Directors on March 28, 2015, wherein main financial budget targets of 2015 was disclosed. The completion
result is shown in the table below:
Unit: RMB ten thousand Yuan
Increase or decrease
Budget target
Item Actual amount of 2015 ratio based on the
of 2015
target
I. Total assets 261,466 274,522 -4.76%
II. Total liabilities 93,432 118,084 -20.88%
III. Owners' equity 168,034 156,438 7.41%
Including: Owners' equity attributable to the parent company 147,513 135,228 9.08%
IV. Asset-liability ratio (%) 35.73% 43.01% -16.92%
V. Management expenses 4,422 5,176 -14.56%
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 RMB 594,010,000. The completion result is shown in the table below:
Unit: RMB ten thousand Yuan
2015 Investment
No. Project name Investment planned in Details of completion
completed 2015
Due to changes in the environment of
electronics market industry, the risks of
Construction of new electronics
1 2,000 market operation increase and the Company
markets
slows down the construction of new
electronics markets. In the reporting period,
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Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
2015 Investment
No. Project name Investment planned in Details of completion
completed 2015
the Company has no investment in the
construction of new electronics markets.
In the reporting period, this investment
2 Commercial property reserve project 30,000 budget is not used because there is no proper
land.
In consideration of the domestic real estate
market trend, in order to reduce capital costs,
Nantong SEG Electronics Market the Company postponed the opening time of
3 17,190 27,401
and auxiliary project. the project. In the reporting period, the
investment progress is slowed down and the
expected investment amount is not reached.
Total 59,401
(III) Review and summary of progress of the disclosed operation plan in the reporting period
In 2015, according to the Company's "transformation, innovation, and development" guideline for management,
the Company actively develops new business while maintaining the steady development of the existing business.
Driven by the capital and resources, the Company creates a multi-channel profit model and mainly implements
the following work in the report period:
1. Reform of organizational structure and innovation of business mode
In oreder to adtapt to the change of external business environment and customers’ demand, the Company spped
up the steps of business transformation and innovation. For this purpose, the Company has adjusted the original
organizational structure in the first half of 2015. The new organizational structure is featured by flexible
organizational structure and matrix management, a combination of the "fixation and flexibility", which helps the
company respond quickly to changes in demands of market, technology and users and improve the efficiency of
operational decision-making.
At the same time, the Company has introduced the business project system and encourages the integration of
tradition and modernism and the integration of online and offline. By utilizing resources in the global platform,
the Company actively cultivates the makership culture to stimulate the creativity of employees, promotes the
optimized distribution of all kinds of elements and,resources.
2. Development of new markets and exploration of new business modes in the electronics market
(1) In the current environment, the Company uses the asset-light model to explore new markets. In the reporting
period, the Company has completed the signing of the Tangshan SEG and Nanchang SEG entrust management
projects.
(2) Electronics markets all over the country have been promoting the business transformation and upgrading,
improving the market core competitiveness, searching for rich promotion channel, increasing investment,
enhancing service innovation, optimizing and strengthening internal management, improving the quality and
benefits of management.
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(3) While the original business mode and the market competitiveness are maintained, electronics markets all over
the country actively carry out business innovation and explore new profit model. For example, "Community
Store" project in Xi'an SEG, "Dream House" project in Suzhou SEG Digital, and "S-mart Lifestyle House"
project in Suzhou SEG, and “SEG Internet Cafe” in headquarters and so on.
3. Orderly advance of the commercial real estate project
The Nantong SEG Times Square project has obtained the sales licenses of three tower buildings (mainly SOHO
and LOFT office areas) and commercial podium buildings respectively in March 2015 and July 2015. The
permitted total construction area for pre-sale is 99,133.63 m2.
To improve the attractiveness and competitiveness of the entire project, the Company is building the first
animation industry maker base in China, together with Nantong municipal government, Gangzha district
government, Kungfu Animation Company, venture capital institutions, and universities and colleges. On June 18,
2015, Nantong SEG Times Square is formally awarded "Nantong Animation Industry Base". As of the date of
disclosure of this report, over 10 animation enterprises have entered into settlement agreements with the
Company.
Within this report period, the decoration of commercial podium buildings has been completed. In the reporting
period, the Company has been digging into the advantages and selling points of the project, enhanced the
promotion, expanded the market, optimized the business planning and orientation, and achieved differentiated
investment. Currently, anchor stores have entered and started decoration.
Nantong SEG Times Square will be built into a commercial complex with SEG characteristics integrating
children’s animation, cultural education and Internat games as a whole.
4. Research and promotion of new projects
(1) To promote the transformation and upgrading of the Company's main industry and extension to the upstream
of the industry chain, the Company has established a strategic cooperation partnership with Dongguan EONTEC
company (hereinafter referred to as EONTEC), making use of own advantages in technology research and
resources. The cooperation intends to promote the development and application in the consumer electronics and
related fields of new materials such as liquid metal. Both parties signed the Strategic Cooperation Framework
Agreement of EONTEC and Shenzhen SEG on May 27, 2015. However, in view of the restriction of either party,
no specific agreement on this cooperation project has been reached so far.
(2) The Company set up “SEG Chuangpinhui” and built SEG International Maker Product Exhibition and
Promotion Center to build the maker industry ecosystem with SEG characteristics.
In the national strategy context of “Public Enterpreneurship and Mass Innovation”, the Company built SEG
International Maker Product Exhibition and Promotion Center based on mature brand and platform resources.
With its advantages in region, brand, supporting facilities and operation, the Company expands business by
means of maker product exhibition, O2O channel creation and resource integration, which creates a new
development space and area for its upgrading and transformation and sustainable development in the future.
In August 2015, the Company set up SEG Chuangpinhui Branch through investment. As one of the major
projects of CHFT, SEG Chuangpinhui successfully started business in November 2015.
SEG Chuangpinhui principally provides services to the global makers’ space and makers, mainly divided into
four functional areas. i.e. product display and transaction area, route-show and distribution area, in-site service
and communication and leisure area, and focusing on makers’ innovative products in intellectural hardware area,
including various categories such as unmanned plane, robot, 3D printer, VR experience, intellectural wearing,
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Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
innovative digital products, solution demonstration, open source software and so on, exert itself to becoming the
wind vane of global intellectual hardware science and technology, and building the dreaming palace of globle
makers and the paradice of innovators and the everlasting global innovative product exhibition.
SEG Chuangpinhui takes makers’ innovative products as its core and the operational mode of being makers’
innovative product presentation center, building internationalized promotion and transaction center, achieving
O2O interactive experience and promoting nation-wide chains as its development direction. SEG Chuangpinhui
combines innovation with display and display, provides makers with comprehensive services including product
release, display, route-show, promotion, transaction, mass-funding, financing and makers’ communication and
training and so on, helps the industrialized development of makers’ products, as well as pushes the deep
integration of industry chain and innovation chain at the same time so as to decrease the cost of “Public
Enterpreneurship and Mass Innovation”.
Within a short period of several months, SEG Chuangpinhui has already attracted a number of international and
domestic famous brands and makers’ innovative products to station here gathered over 300 kinds of brand
products, held more than 20 meetings for route-show, academic exchange and product release, entertained above
40 times of the visits from leaders at various levels, industries and enterprises, and achieved extentive influence
and sound social demonstration effects. So, its brand effect is becoming increasingly obvious day by day.
(3) The Company invested and established Shenzhen SEG Investment Management Co., Ltd.
In the reporting period, in order to build the complete maker industry ecosystem, based on its geographic
advantages in electronics markets and Huaqiang North area and years of industry experience and integration
capacity in the electronic Information Industry, relying on the resource advantage of maker service platform such
as SEG International Maker Product Exhibition and Promotion Center, the Company invested and established a
wholly-owned subsidiary Shenzhen SEG Investment Management Co., Ltd. for fund management business such
as project investment, industry investment and VC.
(4) Innovative research on Internet finance
In the reporting period, SEG Credit ran well on the whole. While actively expanding business, SEG Credit
carried out in-depth exploration and research on the new-type service mode of finance of purchase chain and
Internet finance platform and so on, and has primarily intered into supply chain financial business.
5. Major asset restructuring
The Company launched a major asset restructuring program in November 2015 and its stock (SHEN SEG, SHEN
SEG B, stock code: 000058, 200058) have been suspended since the opening of morning session on November 4,
2015. During suspension, the Company and relevant parties have been promoting major asset restructuring and
regularly disclose the progress announcement according to relevant provisions. As of the date of disclosure of the
report, the Company has disclosed the major asset restructuring plan. See Shenzhen SEG Co., Ltd. Plan on
Assets Purchase and Collection of Supporting Funds based on Issue of Shares and Cash Payment & Associated
Transaction (Revision) for details. Its stocks have been suspended since the opening of morning session on
February 25, 2016. After resumption, the Company and relevant parties will continue to promote this major asset
restructuring, prepare the restructuring report and perform relevant approval procedures.
According to the major asset restructuring plan, the Company plans to purchase 100% of equity of SEG
Chuangyehui, 55% of equity of SEG Kang Le, 100% of equity of SEG Property, and 79.02% of equity of SEG
Real Estate based on issue of shares and cash payment and issued private placement to no more than 10 specific
investors.
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Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
After this major asset restructuring, based on integration of the existing resource platform, the Company will
promote interactive development in combination of the commercial real estate and comprehensively improve the
property value. The Company will build an O2O platform via e-commerce and a diversified SEG industry
ecosystem. As a result, a new SEG with clear strategic orientation and leading position in the field will be
formed.
After restructuring, the Company plans to expand multiple businesses in cultural education,, intelligence, science
and technology, sports and entertainment, Internet games and financial service. At the same time, based on its
operation advantages in electronics market and commercial real estate business and advantages in Huaqiang
North industrial clusters, the Company gives full play to the resource allocation function. The Company has built
SEG Maker Center, SEG International Maker Product Exhibition and Promotion Center, SEG Maker Apartment
and maker funds to dig into maker business ecosystem, facilitate maker groups with fundamental hardware
technology, R & D and production supports and fund investment. Besides, the Company connects upstream and
downstream manufacturers, promotes the capitalization and industrialization of innovations, boosts the rapid
market application of technologies and products, stimulates innovation vitality of the market in order to build a
new maker business ecosystem featured by an integration of "experimental development + incubation
+marketing + supporting services" and promote the business development of the Company. In addition, based on
vitalization of the existing electronics market, the Company has integrated the service advantages of electronics
markets and customer resources to expand businesses in e-financial services, Internet e-commerce, financial
services in the supply chain, intelligent hardware, virtual interactive experience and other industries, and
optimize and integrate the business chain system. Based on the consumption experience, the Company makes
use of online and offline channels and resources to carry out industry upgrading.
(IV) Main problems of business development
1. The booming e-commerce in the context of mobile Internet has a considerable impact on the electronics
markets. The trade share of the physical electronics market is squeezed, causing considerable pressure on market
operation. The electronics market industry hits its bottleneck currently and presses for transformation and
upgrading.
2. The limited financing channels and deficient capital sources restricted the business development of SEG
Credit. Meanwhile, due to impact of economic downward pressure and slow growth of all industries, the petty
loan business is confronted with risks in sluggish growth to some extent and falling yields.
3. Due to a sharp increase in supply of domestic commercial real estate, some commercial real estate projects
have problems such as poor operating, harsh homogeneous competition and rising regional bubble risks. In 2016,
the inventory pressure of Nantong macro real estate market remains apparent, particularly office products, and
the supply and demand ratio is still inclined toward the buyer's market. In light of the macro environment of the
said commercial real estate at present and in the future, Nantong project has certain risks in investment sales and
post-operation.
4. Lack of various professional talents will be highlighted in the transformation and upgrading of the Company.
(V) Focus of 2016
1. To accelerate the transformation and upgrading of strategic business; to build the maker service platform,
financial service platform and e-market operation platform by integrating all physical or intangible resources and
resources from other channels; and to promote the transformation of SEG electronics markets from the
traditional rent-based profit model to the multi-channel platform profit model, at the same time, to expand the
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Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
strategic cooperation with the leading enterprises in relevant industries and to actively pursue the strategic
partner with strong complementarity which not only complies with the Company’s strategic development,
direction but also exert respective advantages, so to constantly strengthen self core competence and profitability.
2. To complete the examination and approval procedures and implementation of new projects.
3. To further develop "SEG Chuangpinhui" based on the operation strategy of "SEG maker ecosystem", to
enhance strategic cooperation with famous enterprises or maker platforms, to focus on creation of the influence
of SEG maker platform, to find a suitable platform business model, to expand the popularity of the platform, and
to improve resource integration capacity of the platform.
4. Speed up the work of attracting investment and sales of Nantong SEG Times Square project.
5. In the social context that "Internet plus" and inclusive finance system have been major policies of the central
government, SEG Credit should take advantage of such opportunities to carry out transformation and upgrading.
For example, SEG Credit should focus on Internet-based business and the mobile end, try to use big data risk
control technology, exploit specific markets , bring in innovative talents, and ultimately improve efficiency and
reduce costs.
6. Actively promote the major asset restructuring. (Refer to Chapter 4 “Management Discussion and Analysis”,
Clause 9 “Outlook of future development of the Comapny”, Subclause III, Item 5.)
7. Accelerate the development of qualified personnel: To deepen reform and innovation in human resources
management, talent cultivation and reservation and especially talent motivation.
(VI) Risk warning
The future development planning and investment plan mentioned above do not reflect the profit estimation of 2016 by the Company.
The results depend on multiple factors such as changes in market condition, efforts of the operation team, and approval of relevant
authority departments and great uncertainties exist. Investors shall pay special attention to it.
X. Statement of receipt of surveys, communication and visits
1. Registration form for investigations, communication and Interviews in the report period
√ Applicable □ Not applicable
Time Means Type Basic information on investigation
Asked about the results of 29.51% equity listed for transfer,
Waranty Assets Management Co., Ltd. answered that no
January 09, 2015 Phone call Individual related information about the SEG Group equity transfer was
received. For details, please focus on the real-time
notifications on the Shenzhen Stock Exchange website.
Asked whether the Company has an owned enterprise reform
January 12, 2015 Phone call Individual program. The Company answered that no formal notice from
the parent unit has been received yet.
Asked about the results of 29.51% equity listed for transfer.
The company answered that no related information about the
January 14, 2015 Phone call Individual SEG Group equity transfer was received. For details, please
focus on the real-time notifications on the Shenzhen Stock
Exchange website.
January 15, 2015 Phone call Individual Inquired why the share is not dramatically appreciated. The
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Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
Time Means Type Basic information on investigation
Company provided the basic information and regularly
disclosed reports of the Company.
Inquired when Nantong SEG Times Square can obtain the
pre-sale permit. The Company answered that currently the
January 22, 2015 Phone call Individual
Company was promoting the related matters and will disclose
the related information if the pre-sale permit was received.
Inquired when Nantong SEG Times Square can obtain the
pre-sale permit. The Company answered that currently the
January 26, 2015 Phone call Individual
Company was promoting the related matters and will disclose
the related information if the pre-sale permit was received.
Asked why the Huakong SEG Co., Ltd was suspended. The
January 29, 2015 Phone call Individual Company suggested the investor to consult the information
from Deputy General Manager office.
Asked why the Huakong SEG Co., Ltd was suspended. The
January 30, 2015 Phone call Individual Company suggested the investor to consult the information
from Deputy General Manager office.
Inquired the number of shareholders till January 31. The
Company answered that releasing the register of shareholders
February 1, 2015 Phone call Individual
of B shares requires T+3 working days and therefore the
corresponding information cannot be provided.
Inquired the number of shareholders till January 31. The
February 4, 2015 Phone call Individual Company provided the information released by the Securities
Depository and Clearing Corporation.
Inquired the specific operating conditions in Q1. The
February 5, 2015 Phone call Individual Company suggested the investor to focus on the 2015 Q1
Report to be disclosed soon.
Inquired when Nantong SEG Times Square can obtain the
pre-sale permit. The Company answered that currently the
February 10, 2015 Phone call Individual
Company was promoting the related matters and will disclose
the related information if the pre-sale permit was received.
Inquired when Nantong SEG Times Square can obtain the
pre-sale permit. The Company answered that currently the
February 13, 2015 Phone call Individual
Company was promoting the related matters and will disclose
the related information if the pre-sale permit was received.
Inquired the time for disclosing the annual report. The
March 9, 2015 Phone call Individual Company answered that the annual report was to be disclosed
on March 28, 2015.
Inquired the number of shareholders till February 28. The
March 10, 2015 Phone call Individual Company provided the information released by the Securities
Depository and Clearing Corporation.
Inquired the specific operating conditions in Q1. The
March 13, 2015 Phone call Individual Company suggested the investor to focus on the 2015 Q1
Report to be disclosed soon.
March 17, 2015 Phone call Individual Inquired the number of shareholders till March 15. The
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Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
Time Means Type Basic information on investigation
Company provided the information released by the Securities
Depository and Clearing Corporation.
Inquired the specific operating conditions in Q1. The
March 24, 2015 Phone call Individual Company suggested the investor to focus on the 2015 Q1
Report to be disclosed soon.
Inquired that whether the revenues of Nantong SEG Time
Square will be disclosed in the semi-annual report. The
May 7, 2015 Phone call Individual
Company suggested the investor to focus on the 2015
Semi-annual Report to be disclosed soon.
Inquired the number of shareholders till May 15. The
May 20, 2015 Phone call Individual Company provided the information released by the Securities
Depository and Clearing Corporation.
Inquired the sales situations of Nantong SEG Time Square.
May 25, 2015 Phone call Individual The Company suggested the investor to focus on the 2015
Semi-annual Report to be disclosed soon.
Inquired that whether the revenues of Nantong SEG Time
Square will be disclosed in the semi-annual report. The
May 28, 2015 Phone call Individual
Company suggested the investor to focus on the 2015
Semi-annual Report to be disclosed soon.
Inquired the specific implementation plans after the Company
signed the strategic cooperation agreement with EONTEC.
May 29, 2015 Phone call Individual
The Company suggested the investor to focus on the related
public notice disclosed according to the progress.
Inquired the specific implementation plans after the Company
signed the strategic cooperation agreement with EONTEC.
June 1, 2015 Phone call Individual
The Company suggested the investor to focus on the related
public notice disclosed according to the progress.
Inquired the information about SEG Baohua, SEG GPS,
June 2, 2015 Phone call Institution Huakong SEG, and Nantong SEG. The Company provided the
written reply according to the disclosed public notice.
Inquired the specific implementation plans after the Company
signed the strategic cooperation agreement with EONTEC.
June 3, 2015 Phone call Individual
The Company suggested the investor to focus on the related
public notice disclosed according to the progress.
Inquired whether the Company will disclose important public
June 23, 2015 Phone call Individual notice. The Company replied no information that needs to be
disclosed is undisclosed.
Inquired the specific operating conditions in Q2. The
June 25, 2015 Phone call Individual Company suggested the investor to focus on the 2015
Semi-annual Report to be disclosed soon.
Inquired whether the Company will disclose important public
June 30, 2015 Phone call Individual notice. The Company replied no information that needs to be
disclosed is undisclosed.
July 2, 2015 Phone call Individual (20) Inquired about operation of the Company and whether
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Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
Time Means Type Basic information on investigation
continuous drop of the stock price was caused by
abnormalities. The Company returned to normal without any
information that should have been disclosed.
Inquired whether continuous drop of the stock price was
caused by abnormalities and whether the Company took
July 6, 2015 Phone call Individual (20)
protective measures, and urged the Company to suspend its
shares.
July 7, 2015 Phone call Individual (24) Urged the Company to suspend its shares.
July 8, 2015 Phone call Individual (27) Urged the Company to suspend its shares.
July 10, 2015 Phone call Individual (8) Inquired when the Company would resume trading of shares.
Inquired about transfer of SEG E-commerce equity. The
July 22, 2015 Phone call Individual (5)
company replied based on the notice contents.
Inquired about purchase of shares by directors, supervisors
July 25, 2015 Phone call Individual and senior executives. The Company advised them to refer to
the disclosed announcement,
Inquired the number of shareholders till July 31. The
August 3, 2015 Phone call Individual Company provided the information released by the Securities
Depository and Clearing Corporation.
Inquired about progress of transfer of SEG E-commerce
August 10, 2015 Phone call Individual equity. The Company indicated that it would timely fulfill the
obligations disclosed according to the progress of transfer.
Inquired about purchase of shares by directors, supervisors
August 18, 2015 Phone call Individual and senior executives. The Company advised them to refer to
the disclosed announcement,
Inquired about purchase of shares by directors, supervisors
August 25, 2015 Phone call Individual and senior executives. The Company advised them to refer to
the disclosed announcement,
Inquired the number of shareholders till August 31. The
September 2, 2015 Phone call Individual Company provided the information released by the Securities
Depository and Clearing Corporation.
Inquired the specific operating conditions in Q3. The
September 15, 2015 Phone call Individual Company suggested the investor to focus on the 2015 Q3
Report to be disclosed soon.
Inquired the number of shareholders till September 30. The
October 9, 2015 Phone call Individual Company provided the information released by the Securities
Depository and Clearing Corporation.
Inquired about financial data in Q3. The Company suggested
October 22, 2015 Phone call Individual the investor to focus on the 2015 Q3 Report to be disclosed
soon.
Inquired why the Company suspended trading of shares. The
November 4, 2015 Phone call Individual (7)
Company replied according to the announcement thereof.
Inquired why the Company suspended trading of shares. The
November 5, 2015 Phone call Individual (3)
Company replied according to the announcement thereof.
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Time Means Type Basic information on investigation
November 9, 2015 Phone call Individual
November 20, 2015 Phone call Individual
December 2, 2015 Phone call Individual
December 3, 2015 Phone call Individual
December 7, 2015 Phone call Individual (2) Inquired about the progress of major asset restructuring. The
December 8, 2015 Phone call Individual Company replied according to the disclosed progress.
December 9, 2015 Phone call Individual
December 15, 2015 Phone call Individual (3)
December 16, 2015 Phone call Individual (4)
December 21, 2015 Phone call Individual
December 30, 2015 Phone call Individual
Frequency of reception 164
Number of institutions received 1
Number of individuals received 163
Number of other objects received 0
Is there any important information
No
disclosed?
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Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
Chapter 5 Important Matters
I. Plan of ordinary share profit distribution and transferring the capital reserve to shares
Information on the establishment, implementation or adjustment of the ordinary share profit distribution policy,
especially the cash dividend policy:
√ Applicable □ Not applicable
(I) Information on the establishment, implementation or adjustment of the profit distribution policy:
1. In the report period, the Company developed a profit distribution proposal and the proposal for transfer of
capital reserve into share capital of 2014 complied with related regulations in the Articles of Association and the
Plan of Shareholder Return in the Future Three Years (2012-2014), and the deliberation procedure accorded with
related regulations without damaging the interests of the Company and shareholders. The independent director
expressed independent opinion.
2. In the report period, to perfect the dividend mechanism and supervision mechanism, further improve the
transparency of the profit distribution policy, and effectively protect the legitimate rights and interests of all
shareholders, the Company prepared the Plan of Shareholder Return in the Future Three Years (2015-2017). The
plan was passed at the first interim meeting of shareholders in 2015.
Special explanation of cash dividend policy
Does it comply with the Article of Association of the Company
Yes
or the resolutions of the meeting of shareholders?
Are the dividend standard and ratio explicit and clear? Yes
Are the decision-making procedure and mechanism perfect? Yes
Do independent directors fulfill their obligations and play their
Yes
role?
Is there any channel for medium and small shareholders to fully
express themselves? Are their legitimate rights and interests fully Yes
protected?
Are the conditions and procedure for adjustment or change of
Yes
cash dividend policy compliant and transparent?
Information on ordinary share profit distribution (proposal) and the plan of transfer of capital reserve into share
capital (proposal) in the recent three years (including the report period)
Pursuant to Accounting Standard for Business Enterprise 2014, the investment in subsidiaries by the Company
was calculated based on the basis of cost method, the profit of parent company remained bigger differences with
consolidated profit. According to relevant provisions of the Company Law and the Articles of Association, profits
shall be distributed by the parent company and the Company’s distribution of profits for 2010 shall be subject to
distributable profit of the parent company. In accordance with relevant provisions of the Company Law, the
profit distribution was implemented with the parent company as the main body. Therefore, the profit distribution
of the Company in 2013, 2014, and 2015 was implemented depending on the distributable profit of the parent
company.
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Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
1. Profit distribution proposal and the proposal for transfer of capital reserve into share capital in 2015: The
auditing by Beijing Shu Lun Pan Certified Public Accountants Co., Ltd found that the net profit attributable to
the listed company realized by the parent company in 2015 amounted to RMB 92,305,001.57; the profit
distributable to shareholders this time, which was calculated by adding the undistributed profit at the beginning
of the previous year, RMB -22,209,989.62 to the former, was RMB 70,095,011.95. According to the Plan of
Shareholder Return in the Future Three Years (2015-2017), the Company's profit distribution plan in 2015 is:
withdraw 10% of distributable profits RMB 7,009,501.20 as legal surplus capital reserve, and distribute cash
RMB 0.30 per ten shares (tax included) to all shareholders based on the share capital 784,799,010 shares as of
December 31, 2015. The amount of profits distributed totals RMB 23,543,970.30. Cash dividends account for
100%. 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 2014: The
auditing by Beijing Shu Lun Pan 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 32,887,973.01; the profit
distributable to shareholders this time, which was calculated by adding the undistributed profit at the beginning
of the previous year, RMB -55,097,962.63 to the former, was RMB -22,209,989.62. 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 2013: The
auditing by Beijing Shu Lun Pan 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; the profit
distributable to shareholders this time, which was calculated by adding the undistributed profit at the beginning
of the previous year, RMB -106,113,041.79 to the former, was RMB -55,097,962.63. 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 ordinary share cash dividends by the Company in the recent three years (including the
report period)
Unit: Yuan
Net profit
Ratio of net profit
attributable to
attributable to
ordinary
ordinary Amount of cash Percentage of cash
Year for bonus Amount of cash shareholders of
shareholders of dividends otherwise dividends otherwise
distribution bonus (incl. tax) listed company in
listed company in distributed distributed
consolidated
consolidated
statement of bonus
statement (%)
year
2015 23,543,970.30 74,242,090.49 31.71% 0.00 0.00%
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%
The net profit of the Company was positive and the profit of the parent company to be distributed to ordinary
shareholders was also positive, but the proposal for distribution of cash dividends was not put forward.
□ Applicable √ Not applicable
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Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
II. Plan of profit distribution and transferring the capital reserve to shares in the report
period
√ Applicable □ Not applicable
Bonus shares per 10 shares (share) 0
Interest per 10 shares (Yuan) (tax included ) 0.3
Base of share capital in the distribution proposal
784,799,010
(share)
Total of cash dividends (Yuan) (tax included) 23,543,970.30
Distributable profits (Yuan) 63,085,510.75
Ratio of cash dividends to total of distributed
100.00%
profits
Information on distribution of cash dividends
Others
Details of profit distribution proposal or proposal for transfer of capital reserve into share capital
According to the audit report issued by Dahua Certified Public Accountants Co., Ltd., the parent company realized net profit
attributable to listed companies amounting to of RMB 92,305,001.57 attributable to listed companies, plus the undistributed profit
at year-beginning amounting to RMB -22,209,989.62, the profit available for distribution amount to RMB 70,095,011.95.
According to the Plan of Shareholder Return in the Future Three Years (2015-2017) for Shenzhen SEG Co., Ltd., the Company's
profit distribution plan in 2015 is: withdraw 10% of distributable profits RMB 7,009,501.20 as legal surplus capital reserve, and
distribute cash RMB 0.30 per ten shares (tax included) to all shareholders based on the share capital 784,799,010 shares as of
December 31, 2015. The amount of profits distributed totals RMB 23,543,970.30. Cash dividends account for 100%. The Company
decided not to transfer capital reserve into share capital.
III. Fulfillment of Commitments
1. Commitments fulfilled within the report period or yet to be fulfilled as of the end of the report period
by the Company, shareholders, actual controllers, purchaser, directors, supervisors, senior executives or
other associates
√ Applicable □ Not applicable
Commitment Commitment
Commitments Promisor Content Fulfillment
date term
Commitment for share Not
reform applicable
Commitments in the
Acquisition Report Not
and the Report of applicable
Changes on Equity
Commitments made at
the time of Not
restructuring of major applicable
assets
Commitment made at Shenzhen According to the Article Five of the Equity July 1, 1996 Long-term In progress
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Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
Commitment Commitment
Commitments Promisor Content Fulfillment
date term
the time of initial SEG Transfer Agreement signed by the Company
public offerings or Group with SEG Group when the Company was
refinancing Co., Ltd. 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.
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
Shenzhen
on September14, 2007, which said that
SEG September 14,
“SEG Group and Shenzhen SEG Co., Ltd. Long-term In progress
Group 2007
have similar business in electronics markets
Co., Ltd.
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.
From February
The 6th interim meeting of the 5th Board of
1, 2011 to
Directors held on January 26, 2011
January 31,
reviewed and approved the Proposal of
2015, totally
Solving the Horizontal Competition
five years, and
between the Company and Its Controlling
the entrustment
Shareholder. After friendly consultation,
Shenzhen contract was
SEG Group agreed to entrust the Company
SEG January 26, expired within
to operate and manage with full authority In progress
Group 2011 this report
SEG Communications Market under direct
Co., Ltd. period. As of the
management of SEG Group. Therefore, the
end of the report
two parties have signed the entrustment
period, the
operation and management contract, and
above-mentione
SEG Group will pay the Company RMB
d contract has
200,000 Yuan as entrust management
been renewed.
expenses.
The contract
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Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
Commitment Commitment
Commitments Promisor Content Fulfillment
date term
term lasts from
February 1,
2015 to January
31, 2016.
Commitment of equity Not
incentives applicable
With confidence in the prospect of China's
economy and the development of the
Company, and with the objective to
Shenzhen co-maintain the stable market and promote
SEG a sustainable, stable and health development
July 9, 2015 Twelve months In progress
Group of the Company, the controlling shareholder
Co., Ltd. of the Company Shenzhen SEG Group Co.,
Ltd. makes a commitment not to unload the
shares of the Company within the coming
twelve months following July 9.
With confidence in the prospect of the
Other commitments
Company and rational judgment of the
made to the medium
share price, and with the objective to
and small
co-maintain the stable market, promote a
shareholders of the
sustainable, stable and health development
Company
of the Company and protect the interests of
Directors,
medium and small shareholders, directors,
Supervisor
supervisors, and senior executives commit
s, and July 9, 2015 Six months In progress
themselves to purchase from the secondary
Senior
market or increase share holdings with their
Executives
own funds within six months following July
14 when the trading of shares is resumed,
not to unload shares, not to engage in
insider trading, not to trade shares or engage
in short-swing trading in the sensitive
period.
Whether commitments
Yes
were fulfilled on time
Reason for not
fulfilling the
commitments and N/A
future plan (if
applicable)
2. The attainment of forecasts for the assets or projects of the Company which were profitable and the
description of the reasons with this report period remaining in the forecasting period
□ Applicable √ Not applicable
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Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
IV. Non-operating Capital Occupation on the Listed Company by the Controlling
Shareholders and Related Parties
□ Applicable √ Not applicable
No non-operating capital occupation on the listed company by the controlling shareholders and related parties is
involved in the report period.
V. Explanations of the Board of Directors, the Board of Supervisors and Independent
Directors (if any) to the “Non-standard Audit Report” made by the accounting firm in the
report period
□ Applicable √ Not applicable
VI. Information on changes in accounting policies, accounting estimates and accounting
methods compared with the financial reports of 2014
□ Applicable √ Not applicable
There is no change in the Company's accounting policies, accounting estimates and accounting methods in the
report period.
VII. Information on retroactive restatements in corrections of major accounting errors in the
report period
□ Applicable √ Not applicable
There is no retrospective restatement due to corrections on significant accounting errors in the report period.
VIII. Information on changes in the scope of consolidation compared with the financial
report of 2012
□ Applicable √ Not applicable
There are no changes in the scope of consolidation in the report period.
IX. 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)
Consecutive years of service offered by accounting
13
firm engaged from China
Name of certified public accounts from the
Zhang Xing and Zhang Zhaocheng
accounting firm engaged from China
Name of accounting firm engaged from outside of
N/A
China (if any)
Consecutive years of service offered by overseas
N/A
accounting firm (if any)
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Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
Name of certified public accounts from the overseas
N/A
accounting firm (if any)
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
X. Information on Listing Suspension or Abortion after Disclosure of Annual Report
□ Applicable √ Not applicable
XI. Bankruptcy and Reorganization
□ Applicable √ Not applicable
No bankruptcy and reorganization matter is involved in the report period.
XII. Major lawsuits and arbitrations
√ Applicable □ Not applicable
Amount
Whether
(RMB: Judgment
Basic Information About Lawsuits Estimated Judgment Disclosure
ten Progress Result and Disclosure Index
and Arbitrations Liabilities Execution Date
thousand Impact
Occurred
Yuan)
(I) In March 2013, Nanning SEG
rented from Nanning Haiqi Real
Estate Development Co., Ltd.
(hereinafrer referred to as "Haiqi")
the 1st and 2nd floors aboveground
of Nanning Zhidi Plaza at No. 158,
East Renmin Road, Xingning
District, Nanning to develop an The trial
electronics market. The lease term started on
agreed lasts from March 18, 2013 September
to March 17, 2025. With respect to 28, 2015.
455.81 Yes N/A N/A
the severe water seepage and The
leakage in the rented houses, judgment
Nanning SEG had communicated is yet to
with Haiqi for multiple times but be made.
failed to solve the problem. Thus,
Nanning SEG appealed to the
People's Court of Xingning
District, Nanning. Meanwhile,
Haiqi appealed to the same court
against Nanning SEG for its failure
to pay rent and default incurred.
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Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
Amount
Whether
(RMB: Judgment
Basic Information About Lawsuits Estimated Judgment Disclosure
ten Progress Result and Disclosure Index
and Arbitrations Liabilities Execution Date
thousand Impact
Occurred
Yuan)
The court will rationally judge the
case.
(II) On February 4, 2013, Suzhou
SEG signed the Contract of
Renting Underground Space of
Suzhou Metro Line 1 at South
Guangji Road with Suzhou Rail
Transit (hereinafter referred to as
SRT), agreeing that Suzhou SEG
The trial
should rented the underground
ended on
space of Suzhou Metro Line 1 at
February Cninfo Website:
South Guangji Road for 96
7, 2016. http://www.cninfo.com.cn
months. After execution of the August
326.42 Yes The N/A N/A Semi-Annual Report
Contract, as market changes made 29, 2015
second 2015 of Shenzhen SEG
it difficult to operate the project,
judgment Co., Ltd.
both parties repeatedly negotiated
is yet to
about changes of conditions for
be made.
cooperation but failed to agree
upon new conditions, and the
project was under liquidation.
On January 26, 2015, SRT
appealed to the court, requesting
the court to order Suzhou SEG to
assume corresponding penalties.
(III) On June 29, 2011, SEG The case
Industry signed the Lease was
Agreement with Shenzhen Saibo registered
Maite Digital Science and with the
Technology Co., Ltd. (hereinafter People's
referred to as Saibo Maite), Court of
agreeing that SEG Industry should Futian
Cninfo Website:
lease its stores covering 240 square District,
SEG industry http://www.cninfo.com.cn
meters totally at Contemporary Shenzhen In August
0 No won the Semi-Annual Report
Window to Saibo Maite. The on April progress 29, 2015
lawsuit. 2015 of Shenzhen SEG
validity period lasts from July 1, 15, 2015.
Co., Ltd.
2011 to June 30, 2019. Later on, The court
due to construction of the subway ordered
at North Huaqiang Road, Shenzhen on August
as well as Saibo Maite encountered 12, 2015
operation problems, both parties that SEG
signed the Supplementary industry
Agreement on February 20, 2014, win the
50
Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
Amount
Whether
(RMB: Judgment
Basic Information About Lawsuits Estimated Judgment Disclosure
ten Progress Result and Disclosure Index
and Arbitrations Liabilities Execution Date
thousand Impact
Occurred
Yuan)
agreeing upon new terms of rent lawsuit.
and liquidated damages. In August
2014, SEG Industry received the
Notice of Contract Termination and
Store Takeover from Saibo Maite.
SEG Industry communicated with
Saibo Maite about liquidated
damages under the lease contract
for multiple times but failed. To
effectively protect its interests,
SEG Industry decided to engage a
lawyer to file a risk agency lawsuit.
SEG Industry engaged Guangdong
Ruiting Law Firm.
(IV) Eight intellectual property Two cases
rights cases: In these cases, have been
individual stores in the electronics Six cases closed, one
market operated by the Company have not case has been
Cninfo Website:
may sell products that infringe been judged, and
http://www.cninfo.com.cn
others' intellectual property rights, closed, one case has In August
345.41 No Semi-Annual Report
and the obligees file a lawsuit and two been progress 29, 2015
2015 of Shenzhen SEG
against them and consider the cases have withdrawn.
Co., Ltd.
Company as a co-defendant. As a been The Company
market manager, the Company is closed. is not liable
not the actual seller of the products for
that are suspected to be infringing. compensation.
XIII. Punishment and Rectification Issues
□ Applicable √ Not applicable
No punishment and rectification is involved in the report period.
XIV. Integrity of the Company and its Controlling Shareholders and Actual Controllers
□ Applicable √ Not applicable
XV. Implementation of Equity Incentive Plan, Employee Shareholding Plan or Other
Employee Incentives
□ Applicable √ Not applicable
No stock incentive plan and implementation is involved in the report period.
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Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
XVI. Major Relevant Transactions
1. Transactions Concerning Routine Operation
√ Applicable □ Not applicable
Approved
Transaction Amount Whether
Pricing transaction Available
Amount Proportion Exceeding Transaction
Related Party Associated Transaction Associated Principles of Transaction amount similar Disclosure Disclosure
(RMB ten Occupied in the the Clearing
Transaction Relationship Type Transactions Associated price (RMB ten market Date Index
thousand Transactions of Approved Form
Transactions thousand price
Yuan) the Same Kind Quota
Yuan)
Shenzhen Warehouse with an 65.77 According 60-125
Controlling Property Determined
SEG Group area of 809.26m2 on (Yuan/m2. 63.87 0.10% 100 No to the (Yuan/m2.
shareholder lease by the market
Co., Ltd. 8F of SEG Plaza month) agreement month)
The controlling
shareholder entrusted
Shenzhen its investment in According
Controlling Entrusted Determined RMB
SEG Group SEG 20 0.03% 20 No to the --
shareholder operation by the market 200,000
Co., Ltd. communications agreement
market to the
Company. March 28, (Cninfo
2015 Website)
The 15th floor of
67.77 According 60-125
Shenzhen Controlling Property SEG Plaza, with an Determined
(Yuan/m2. 46.56 0.07% Yes to the (Yuan/m2.
SEG Group shareholder lease area of 687.01 square by the market
month) agreement month)
meters
Shenzhen
SEG Real 76.58 According 60-100
Subsidiary of Property 12F (West), Block 4, Determined
Estate (Yuan/m2. 27.87 0.04% No to the (Yuan/m2.
shareholders lease SEG Science Park by the market
Investment month) agreement month)
Co., Ltd.
Total -- -- 158.3 -- 120 -- -- -- -- --
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Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
2. Relevant Transactions Due to Asset or Equity Sales and Acquisition
□ Applicable √ Not applicable
No relevant transaction due to asset or equity sales and acquisition is involved in the report period.
3. Relevant Transactions Due to Joint External Investment
□ Applicable √ Not applicable
No relevant transaction due to joint external investment is involved in the report period.
4. Creditor's Rights and Liabilities of Related Parties
√ Applicable □ Not applicable
Whether there are non-operating associated creditors rights and liabilities?
□ Yes √ No
No non-operating creditor's rights and liabilities of related parties are involved in the report period.
5. Other Important Transactions
□ Applicable √ Not applicable
In the report period, the Company has no other major related transactions.
XVII. Important contracts and implementation
1. Trusteeship, Contracting, and Leasing Issues
(1) Trusteeship Issues
√ Applicable □ Not applicable
Explanations to trusteeship
The controlling shareholder Shenzhen SEG Group Co., Ltd. entrust the Company to manage SEG
telecommunication market. The Company administrates the income RMB 200,000 according to the trusteeship
agreement in the report period.
Projects which bring the losses and gains that take up 10% of the profit amount of the Company.
□ Applicable √ Not applicable
In the report period, the Company has no entrusted projects which bring the losses and gains that take up 10% of
the profit amount of the Company in the report period.
(2) Contracting Issues
□ Applicable √ Not applicable
No contracting issue is involved within the report period.
(3) Leasing Issues
√ Applicable □ Not applicable
Information about lease
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Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
Refer to the preceding section Transactions Concerning Routine Operation.
Projects which bring the losses and gains that take up 10% of the profit amount of the Company in the report
period.
□ Applicable √ Not applicable
In the report period, the Company has no lease projects which bring the losses and gains that take up 10% of the
profit amount of the Company in the report period.
2. Major guarantees
□ Applicable √ Not applicable
No guarantee issue is involved within the report period.
3. Information on cash asset management entrusted to others
(1) Entrusted financing
√ Applicable □ Not applicable
Unit: RMB ten thousand Yuan
Actual
Principal Actual
loss and
Amount amount return of
Connected Remuneration Projecte gain
Name of Product of returned gains and
Transaction Start Date End Date confirmation d amount
trustee Type entrusted in the losses in
or Not method income in the
financing report the report
report
period period
period
Industrial and
SZWL1560 August 24, Novembe
Commercial No 1,000 Float income 1,000 12.23 12.23 12.23
(93 days) 2015 r 25, 2015
Bank of China
Industrial and
SZWL1560 September December
Commercial No 700 Float income 700 8.75 8.75 8.75
(93 days) 17, 2015 19, 2015
Bank of China
Industrial and
SZWL1560 December March 30,
Commercial No 2,000 Float income 24.46 0
(93 days) 28, 2015 2016
Bank of China
AMZYJZT- July 4, January 9,
Bank of China No 600 Float income 600 15.53 15.53 15.53
A14208 2014 2015
Instructions
for October April 13,
Bank of China No 400 Float income 400 10 10 10.00
AMZYPW 16, 2014 2015
HQ14509
AMZYZH1 January 12, July 9,
Bank of China No 600 Float income 600 15.36 15.36 15.36
5009 2015 2015
AMZYJZT- April 14, August
Bank of China No 400 Float income 400 6.97 6.97 6.97
A15231 2015 18, 2015
Shanghai
No 230113733 400 April 29, October Float income 400 10.85 10.85 10.85
Pudong
54
Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
Actual
Principal Actual
loss and
Amount amount return of
Connected Remuneration Projecte gain
Name of Product of returned gains and
Transaction Start Date End Date confirmation d amount
trustee Type entrusted in the losses in
or Not method income in the
financing report the report
report
period period
period
Development 8 2015 24, 2015
Bank
AMZYPW June 8, Septembe
Bank of China No 80 Float income 80 1.02 1.02 1.02
HQ15336 2015 r 10, 2015
AMZYPW June 4, Septembe
Bank of China No 320 Float income 320 3.91 3.91 3.91
HQ15334 2015 r 7, 2015
AMZYPW July 16, October
Bank of China No 400 Float income 400 4.68 4.68 4.68
HQ15443 2015 19, 2015
Product
code -
230113733
Shanghai
8; product
Pudong August 20, Novembe
No name - 400 Float income 400 4.78 4.78 4.78
Development 2015 r 18, 2015
Liduoduo
Bank
Wealth Bus
Progress
No. 3
Product
code -
230113733
Shanghai
8; product
Pudong September December
No name - 400 Float income 400 4.74 4.74 4.74
Development 12, 2015 14, 2015
Liduoduo
Bank
Wealth Bus
Progress
No. 3
AMZYPW October January
Bank of China No 400 Float income 4.19 0
HQ15711 22, 2015 21, 2016
Product
code -
230113733
Shanghai
8; product
Pudong October January
No name - 400 Float income 4.54 0
Development 28, 2015 25, 2016
Liduoduo
Bank
Wealth Bus
Progress
No. 3
Shanghai Product
November May 19,
Pudong No code - 400 Float income 8.68 0
21, 2015 2016
Development 230113733
55
Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
Actual
Principal Actual
loss and
Amount amount return of
Connected Remuneration Projecte gain
Name of Product of returned gains and
Transaction Start Date End Date confirmation d amount
trustee Type entrusted in the losses in
or Not method income in the
financing report the report
report
period period
period
Bank 8; product
name -
Liduoduo
Wealth Bus
Progress
No. 4
Product
Shanghai code -
Pudong 230113733 December January
No 400 Float income 1.46 0
Development 5; product 16, 2015 15, 2016
Bank name -
Yuetianli
Industrial and
ZQL180ZQ June 24, December
Commercial No 77.9 Float income 46.77 1.31 1.31 1.3115
X 2014 31, 2016
Bank of China
Industrial and
October January
Commercial No SZWL1560 72 Float income 0 0.89 0
15, 2015 16, 2016
Bank of China
CNYAQKF August 19, Septembe
Bank of China No 100 Float income 100 0.36 0.36 0.36
TP0 2015 r 29, 2015
China
Gu Zhi January 9, April 23,
Merchants No 150 Float income 150 1.89 1.89 1.89
Ying 52271 2015 2015
Bank
China
Gu Zhi February 6, March 19,
Merchants No 50 Float income 50 0.22 0.22 0.22
Ying 52287 2015 2015
Bank
China
Gu Zhi March 13, May 20,
Merchants No 100 Float income 100 0.75 0.75 0.75
Ying 52298 2015 2015
Bank
China
Gu Zhi March 19, June 18,
Merchants No 50 Float income 50 0.56 0.56 0.56
Ying 52299 2015 2015
Bank
Bank of
April 10, October
Communicatio No YTCF-RZL 150 Float income 150 3.59 3.59 3.59
2015 12, 2015
ns
Bank of
April 27, October
Communicatio No YTCF-RZL 100 Float income 100 2.39 2.39 2.39
2015 26, 2015
ns
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Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
Actual
Principal Actual
loss and
Amount amount return of
Connected Remuneration Projecte gain
Name of Product of returned gains and
Transaction Start Date End Date confirmation d amount
trustee Type entrusted in the losses in
or Not method income in the
financing report the report
report
period period
period
Bank of
May 4, August 3,
Communicatio No YTCF-RZL 150 Float income 150 1.87 1.87 1.87
2015 2015
ns
Bank of
May 29, Septembe
Communicatio No YTCF-RZL 100 Float income 100 1.13 1.13 1.13
2015 r 3, 2015
ns
Bank of
June 15, Septembe
Communicatio No YTCF-RZL 150 Float income 150 1.46 1.46 1.46
2015 r 14, 2015
ns
Bank of
August 24, Septembe
Communicatio No YTCF-RZL 150 Float income 150 0.49 0.49 0.49
2015 r 29, 2015
ns
Bank of
September October
Communicatio No YTCF-RZL 100 Float income 100 0.34 0.34 0.34
14, 2015 15, 2015
ns
Bank of
September October
Communicatio No YTCF-RZL 150 Float income 150 0.42 0.42 0.42
21, 2015 22, 2015
ns
January 5, January
Bank of China No GSRJYL01 600 Float income 600 0.88 0.88 0.88
2015 28, 2015
March 18, March 26,
Bank of China No GSRJYL01 300 Float income 300 0.18 0.18 0.18
2015 2015
March 24, April 23,
Bank of China No GSRJYL01 600 Float income 600 0.5 0.5 0.50
2015 2015
April 22, May 26,
Bank of China No GSRJYL01 1,400 Float income 1,400 2.27 2.27 2.27
2015 2015
May 29, June 26,
Bank of China No GSRJYL01 800 Float income 800 0.87 0.87 0.87
2015 2015
June 24, July 7,
Bank of China No GSRJYL01 700 Float income 700 0.61 0.61 0.61
2015 2015
July 21, August
Bank of China No GSRJYL01 400 Float income 400 0.44 0.44 0.44
2015 11, 2015
August 25, October
Bank of China No GSRJYL01 900 Float income 900 1.83 1.83 1.83
2015 13, 2015
September October
Bank of China No GSRJYL01 300 Float income 300 0.53 0.53 0.53
29, 2015 22, 2015
Bank of China No GSRJYL01 500 October December Float income 500 1.04 1.04 1.04
57
Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
Actual
Principal Actual
loss and
Amount amount return of
Connected Remuneration Projecte gain
Name of Product of returned gains and
Transaction Start Date End Date confirmation d amount
trustee Type entrusted in the losses in
or Not method income in the
financing report the report
report
period period
period
29, 2015 8, 2015
December December
Bank of China No GSRJYL01 900 Float income 400 0
14, 2015 31, 2016
AMZYPW April 7, October
Bank of China No 500 Float income 500 12.98 12.98 12.98
HQ-15190 2015 8, 2015
AMZYPW April 16, July 16,
Bank of China No 300 Float income 300 3.7 3.7 3.7
HQ-15213 2015 2015
AMZYJZT- April 27, June 1,
Bank of China No 300 Float income 300 1.38 1.38 1.38
B15116 2015 2015
China
April 30, May 13,
Minsheng No 20150430 650 Float income 650 1.22 1.22 1.22
2015 2015
Banking
China
April 30, May 28,
Minsheng No 20150430 50 Float income 50 0.19 0.19 0.19
2015 2015
Banking
AMZYJZT- May 5, June 9,
Bank of China No 300 Float income 300 1.36 1.36 1.36
A15267 2015 2015
China
May 14, May 27,
Minsheng No 20150430 900 Float income 900 1.69 1.69 1.69
2015 2015
Banking
China
May 28, June 10,
Minsheng No 20150430 900 Float income 900 1.64 1.64 1.64
2015 2015
Banking
China
June 11, June 25,
Minsheng No 20150430 900 Float income 900 1.57 1.57 1.57
2015 2015
Banking
China
June 26, July 9,
Minsheng No 20150430 900 Float income 900 1.62 1.62 1.62
2015 2015
Banking
July 1, July 15,
Bank of China No GSRJYL01 600 Float income 600 0.64 0.64 0.64
2015 2015
China
July 10, July 23,
Minsheng No 20150430 900 Float income 900 1.59 1.59 1.59
2015 2015
Banking
AMZYJZT- July 10, October
Bank of China No 420 Float income 420 5.08 5.08 5.08
A15440 2015 13, 2015
Bank of China No AMZYPW 80 July 13, October Float income 80 1.01 1.01 1.01
58
Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
Actual
Principal Actual
loss and
Amount amount return of
Connected Remuneration Projecte gain
Name of Product of returned gains and
Transaction Start Date End Date confirmation d amount
trustee Type entrusted in the losses in
or Not method income in the
financing report the report
report
period period
period
HQ-15190 2015 15, 2015
AMZYPW July 20, October
Bank of China No 220 Float income 220 2.47 2.47 2.47
HQ-15447 2015 22, 2015
AMZYZH1 July 20, October
Bank of China No 80 Float income 80 0.98 0.98 0.98
5263 2015 19, 2015
China
July 24, August 6,
Minsheng No 20150430 900 Float income 900 1.52 1.52 1.52
2015 2015
Banking
China
August 7, August
Minsheng No 20150430 900 Float income 900 1.5 1.5 1.5
2015 20, 2015
Banking
China
August 21, Septembe
Minsheng No 20150430 900 Float income 900 1.76 1.76 1.76
2015 r 3, 2015
Banking
China
September Septembe
Minsheng No 20150430 900 Float income 900 1.11 1.11 1.11
4, 2015 r 17, 2015
Banking
September Septembe
Bank of China No GSRJYL01 500 Float income 500 0.19 0.19 0.19
25, 2015 r 29, 2015
AMZYJZT- October December
Bank of China No 1,000 Float income 1,000 5.57 5.57 5.57
A15647 16, 2015 4, 2015
December December
Bank of China No GSRJYL01 1,400 Float income 1,400 0.7 0.7 0.7
4, 2015 11, 2015
Bank of
May 26, January
Communicatio No RZLS 600 Float income 600 13.68 13.68 13.68
2014 12, 2015
ns
CITIC-CP
China Citic cash December December
No 3,000 Float income 3,000 11 11 11.00
Bank managemen 22, 2014 31, 2016
t No.3
Shanghai
Liduoduo
Pudong December January
No 230113733 6,400 Float income 6,400 29.46 29.46 29.46
Development 23, 2014 22, 2015
5
Bank
AMZYPW December February
Bank of China No 500 Float income 500 2.84 2.84 2.84
HQ14687 30, 2014 5, 2015
Shanghai Liduoduo
No 3,000 December January Float income 3,000 3.74 3.74 3.74
Pudong 230114703
59
Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
Actual
Principal Actual
loss and
Amount amount return of
Connected Remuneration Projecte gain
Name of Product of returned gains and
Transaction Start Date End Date confirmation d amount
trustee Type entrusted in the losses in
or Not method income in the
financing report the report
report
period period
period
Development 1 30, 2014 12, 2015
Bank
Shanghai
Liduoduo
Pudong December January
No 230113733 5,800 Float income 5,800 26.7 26.7 26.70
Development 30, 2014 29, 2015
5
Bank
CITIC-CP
China Citic short-term January 14, April 20,
No 20,000 Float income 20,000 315.62 315.62 315.62
Bank financing 2015 2015
A14
Shanghai
Liduoduo
Pudong January 16, February
No 230113733 6,000 Float income 6,000 27.62 27.62 27.62
Development 2015 15, 2015
5
Bank
Shanghai
Liduoduo
Pudong January 28, February
No 230113733 6,460 Float income 6,460 29.73 29.73 29.73
Development 2015 27, 2015
5
Bank
Shanghai
Liduoduo
Pudong February March 12,
No 230113733 300 Float income 300 1.38 1.38 1.38
Development 10, 2015 2015
5
Bank
Shanghai
Liduoduo
Pudong February March 17,
No 230113733 920 Float income 920 4.23 4.23 4.23
Development 15, 2015 2015
5
Bank
Shanghai
Liduoduo
Pudong February March 18,
No 230113733 1,000 Float income 1,000 4.6 4.6 4.60
Development 16, 2015 2015
5
Bank
AMZYPW February March 23,
Bank of China No 1,900 Float income 1,900 9.02 9.02 9.02
HQ15085 16, 2015 2015
Shanghai
Liduoduo
Pudong February March 19,
No 230113733 6,030 Float income 6,030 27.75 27.75 27.75
Development 17, 2015 2015
5
Bank
Shanghai Liduoduo
March 3, April 2,
Pudong No 230113733 3,890 Float income 3,890 17.9 17.9 17.90
2015 2015
Development 5
60
Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
Actual
Principal Actual
loss and
Amount amount return of
Connected Remuneration Projecte gain
Name of Product of returned gains and
Transaction Start Date End Date confirmation d amount
trustee Type entrusted in the losses in
or Not method income in the
financing report the report
report
period period
period
Bank
Shanghai
Liduoduo
Pudong March 17, April 16,
No 230113733 560 Float income 560 2.58 2.58 2.58
Development 2015 2015
5
Bank
AMZYJZT- March 24, April 28,
Bank of China No 2,000 Float income 2,000 9.49 9.49 9.49
LPA15175 2015 2015
March 27, April 27,
Industrial Bank No 37514031 2,800 Float income 2,800 13.32 13.32 13.32
2015 2015
CITIC-CP
China Citic cash April 1, May 12,
No 2,900 Float income 2,900 17.88 17.88 17.88
Bank managemen 2015 2015
t No.3
CITIC-CP
China Citic cash April 27, May 12,
No 20,300 Float income 20,300 45.78 45.78 45.78
Bank managemen 2015 2015
t No.3
CITIC-CP
China Citic cash June 4, August
No 6,000 Float income 2,000 6.16 6.16 6.16
Bank managemen 2015 13, 2015
t No.3
The
June 10, July 6,
Agricultural No HLF155634 5,000 Float income 5,000 13.01 13.01 13.01
2015 2015
Bank of China
Shanghai
Liduoduo
Pudong July 29, August
No 230113733 2,800 Float income 2,800 12.89 12.89 12.89
Development 2015 31, 2015
5
Bank
Shanghai
Liduoduo
Pudong August 11, Septembe
No 230113733 12,400 Float income 12,400 51.98 51.98 51.98
Development 2015 r 10, 2015
5
Bank
Shanghai
Liduoduo
Pudong August 27, Septembe
No 230113733 2,500 Float income 2,500 10.96 10.96 10.96
Development 2015 r 28, 2015
5
Bank
Shanghai
Liduoduo September October
Pudong No 2,800 Float income 2,800 13.81 13.81 13.81
230113733 2, 2015 8, 2015
Development
61
Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
Actual
Principal Actual
loss and
Amount amount return of
Connected Remuneration Projecte gain
Name of Product of returned gains and
Transaction Start Date End Date confirmation d amount
trustee Type entrusted in the losses in
or Not method income in the
financing report the report
report
period period
period
Bank 5
Shanghai
Liduoduo
Pudong September October
No 230113733 1,000 Float income 1,000 3.99 3.99 3.99
Development 10, 2015 12, 2015
5
Bank
Shanghai
Liduoduo
Pudong September October
No 230113733 10,800 Float income 10,800 43.05 43.05 43.05
Development 16, 2015 16, 2015
5
Bank
Shanghai
Liduoduo
Pudong September October
No 230113733 2,000 Float income 2,000 7.97 7.97 7.97
Development 23, 2015 23, 2015
5
Bank
Shanghai
Liduoduo
Pudong September October
No 230113733 1,200 Float income 1,200 4.78 4.78 4.78
Development 30, 2015 30, 2015
5
Bank
Shanghai
Liduoduo
Pudong October Novembe
No 230113733 2,800 Float income 2,800 11.16 11.16 11.16
Development 13, 2015 r 12, 2015
5
Bank
Shanghai
Liduoduo
Pudong October Novembe
No 230113733 12,000 Float income 12,000 47.84 47.84 47.84
Development 20, 2015 r 19, 2015
5
Bank
Shanghai
Liduoduo
Pudong November December
No 230113733 10,000 Float income 10,000 38.14 38.14 38.14
Development 26, 2015 28, 2015
5
Bank
The
AXLD 20 December December
Agricultural No 3,000 Float income 0
days 2, 2015 31, 2016
Bank of China
AMZYJZT- November February
Bank of China No 500 Float income 500 6.31 6.31 6.31
A14388 11, 2014 17, 2015
China
FFZCGLB August 25, February
Minsheng No 300 Float income 300 7.83 7.83 7.83
NZL144 2014 26, 2015
Banking
Bank of China No AMZYJZT- 300 December March 24, Float income 300 3.81 3.81 3.81
62
Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
Actual
Principal Actual
loss and
Amount amount return of
Connected Remuneration Projecte gain
Name of Product of returned gains and
Transaction Start Date End Date confirmation d amount
trustee Type entrusted in the losses in
or Not method income in the
financing report the report
report
period period
period
A14468 23, 2014 2015
AMZYJZT- March 9, April 13,
Bank of China No 250 Float income 250 1.19 1.19 1.19
B15061 2015 2015
AMZYJZT- January 9, May 5,
Bank of China No 400 Float income 400 6.61 6.61 6.61
A15003 2015 2015
AMZYJZT- May 8, June 12,
Bank of China No 300 Float income 300 1.35 1.35 1.35
A15272 2015 2015
AMZYJZT- February July 3,
Bank of China No 500 Float income 500 9.78 9.78 9.78
A15079 13, 2015 2015
AMZYJZT- February July 3,
Bank of China No 100 Float income 100 1.96 1.96 1.96
A15079 13, 2015 2015
AMZYJZT- March 3, July 7,
Bank of China No 300 Float income 300 5.33 5.33 5.33
A15104 2015 2015
AMZYJZT- March 27, August 4,
Bank of China No 200 Float income 200 3.74 3.74 3.74
A15193 2015 2015
AMZYJZT- April 14, August
Bank of China No 250 Float income 250 4.36 4.36 4.36
A15231 2015 18, 2015
AMZYJZT- June 16, Septembe
Bank of China No 350 Float income 350 4.24 4.24 4.24
A15380 2015 r 18, 2015
AMZYJZT- July 10, Septembe
Bank of China No 650 Float income 650 5.1 5.1 5.1
A15438 2015 r 11, 2015
AMZYPW August 20, February
Bank of China No 800 Float income 17.15 0
HQ-15558 2015 18, 2016
AMZYJZT- September March 4,
Bank of China No 700 Float income 13.37 0
A15603 22, 2015 2016
AMZYJZT- November January
Bank of China No 500 Float income 3.25 0
A15761 27, 2015 26, 2016
AGT10000 December February
Ping An Bank No 3,300 Float income 3,300 2.7 2.7 2.7
2 31, 2014 10, 2015
AGT10000 January 5, February
Ping An Bank No 2,400 Float income 2,400 1.97 1.97 1.97
2 2015 10, 2015
AGT10000 January 26, February
Ping An Bank No 700 Float income 700 0.58 0.58 0.58
2 2015 10, 2015
AGT10000 March 12, March 16,
Ping An Bank No 3,000 Float income 3,000 0.95 0.95 0.95
2 2015 2015
Ping An Bank No AGT10000 200 March 13, March 16, Float income 200 0.06 0.06 0.06
63
Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
Actual
Principal Actual
loss and
Amount amount return of
Connected Remuneration Projecte gain
Name of Product of returned gains and
Transaction Start Date End Date confirmation d amount
trustee Type entrusted in the losses in
or Not method income in the
financing report the report
report
period period
period
2 2015 2015
AGT10000 March 20, March 31,
Ping An Bank No 3,000 Float income 3,000 2.4 2.4 2.4
2 2015 2015
e+
China enterprise
April 1, April 9,
Merchants No regular 543 Float income 543 0.64 0.64 0.64
2015 2015
Bank financing
project
e+
China enterprise
April 1, April 9,
Merchants No regular 793 Float income 793 0.93 0.93 0.93
2015 2015
Bank financing
project
e+
China enterprise
April 2, April 14,
Merchants No regular 364 Float income 364 0.64 0.64 0.64
2015 2015
Bank financing
project
AGT10000 April 2, May 6,
Ping An Bank No 400 Float income 400 0.72 0.72 0.72
2 2015 2015
AGT10000 April 10, May 06,
Ping An Bank No 1,300 Float income 1,300 2.23 2.23 2.23
2 2015 2015
AGT10000 April 16, May 6,
Ping An Bank No 260 Float income 260 0.57 0.57 0.57
2 2015 2015
AGT10000 May 8, May 13,
Ping An Bank No 1,400 Float income 1,400 0.52 0.52 0.52
2 2015 2015
AGT10000 September Novembe
Ping An Bank No 1,500 Float income 1,500 4.86 4.86 4.86
2 8, 2015 r 10, 2015
AGT10000 September Novembe
Ping An Bank No 500 Float income 500 1.62 1.62 1.62
2 23, 2015 r 20, 2015
AGT10000 December December
Ping An Bank No 1,200 Float income 700 0
2 12, 2015 31, 2016
AGT10000 December December
Ping An Bank No 2,100 Float income 0
2 29, 2015 31, 2016
AGT10000 December December
Ping An Bank No 1,000 Float income 0
2 31, 2015 31, 2016
China
No 52218 500 October January Float income 500 6.07 6.07 6.07
Merchants
64
Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
Actual
Principal Actual
loss and
Amount amount return of
Connected Remuneration Projecte gain
Name of Product of returned gains and
Transaction Start Date End Date confirmation d amount
trustee Type entrusted in the losses in
or Not method income in the
financing report the report
report
period period
period
Bank 16, 2014 19, 2015
Industrial and
December February
Commercial No 14H044A 650 Float income 650 2.12 2.12 2.12
31, 2014 3, 2015
Bank of China
Industrial and
February 7, April 10,
Commercial No WL63BBX 1,000 Float income 1,000 6.39 6.39 6.39
2015 2015
Bank of China
Industrial and
February March 24,
Commercial No WL35BBX 430 Float income 430 1.48 1.48 1.48
17, 2015 2015
Bank of China
Industrial and
March 28, May 01,
Commercial No 15JH013A 430 Float income 430 1.8 1.8 1.80
2015 2015
Bank of China
Industrial and
April 14, June 15,
Commercial No 63BBX 650 Float income 650 4.15 4.15 4.15
2015 2015
Bank of China
The 995101010
April 17, May 26,
Agricultural No 010200 50 Float income 50 0.13 0.13 0.13
2015 2015
Bank of China phase 3
The 995101010
April 17, May 30,
Agricultural No 010200 300 Float income 300 0.85 0.85 0.85
2015 2015
Bank of China phase 3
Industrial and
May 05, July 07,
Commercial No 63BBX 430 Float income 430 2.89 2.89 2.89
2015 2015
Bank of China
The 995101010
June 01, June 15,
Agricultural No 010200 250 Float income 250 0.23 0.23 0.23
2015 2015
Bank of China phase 3
Industrial and
June 19, August
Commercial No 63BBX 650 Float income 650 3.93 3.93 3.93
2015 21, 2015
Bank of China
Industrial and
July 09, Septembe
Commercial No 63BBX 430 Float income 430 2.6 2.6 2.60
2015 r 10, 2015
Bank of China
Industrial and
July 31, October
Commercial No 63BBX 200 Float income 200 1.27 1.27 1.27
2015 02, 2015
Bank of China
The No BLF90 700 August 27, Novembe Float income 700 6.47 6.47 6.47
65
Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
Actual
Principal Actual
loss and
Amount amount return of
Connected Remuneration Projecte gain
Name of Product of returned gains and
Transaction Start Date End Date confirmation d amount
trustee Type entrusted in the losses in
or Not method income in the
financing report the report
report
period period
period
Agricultural 2015 r 27, 2015
Bank of China
Industrial and
September Novembe
Commercial No 63BBX 430 Float income 430 2.6 2.6 2.60
15, 2015 r 17, 2015
Bank of China
Industrial and
October January
Commercial No 63BBX 200 Float income 0
30, 2015 01, 2016
Bank of China
Industrial and
November January
Commercial No 63BBX 200 Float income 0
24, 2015 26, 2016
Bank of China
Industrial and
November January
Commercial No 63BBX 230 Float income 0
26, 2015 28, 2016
Bank of China
The
November February
Agricultural No BLF90 550 Float income 0
27, 2015 25, 2016
Bank of China
The 995101010
November December
Agricultural No 010200 150 Float income 150 0.56 0.56 0.56
27, 2015 17, 2015
Bank of China phase 3
Industrial and
January 22, April 24,
Commercial No 1001RSYH 30 Float income 30 0.25 0.25 0.249534
2015 2015
Bank of China
Industrial and
January 22, April 24,
Commercial No 1001RSYH 30 Float income 30 0.25 0.25 0.249534
2015 2015
Bank of China
Industrial and
January 22, May 26,
Commercial No 1001RSYH 30 Float income 30 0.34 0.34 0.339041
2015 2015
Bank of China
Industrial and
January 22, May 26,
Commercial No 1001RSYH 30 Float income 30 0.34 0.34 0.339041
2015 2015
Bank of China
Industrial and
January 22, May 26,
Commercial No 1001RSYH 30 Float income 30 0.34 0.34 0.339041
2015 2015
Bank of China
Industrial and
January 22, Novembe
Commercial No 1001RSYH 30 Float income 30 0.78 0.78 0.778438
2015 r 05, 2015
Bank of China
66
Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
Actual
Principal Actual
loss and
Amount amount return of
Connected Remuneration Projecte gain
Name of Product of returned gains and
Transaction Start Date End Date confirmation d amount
trustee Type entrusted in the losses in
or Not method income in the
financing report the report
report
period period
period
Industrial and
January 22, December
Commercial No 1001RSYH 30 Float income 30 0.92 0.92 0.924904
2015 28, 2015
Bank of China
Industrial and
May 08, December
Commercial No 1001RSYH 30 Float income 30 0.64 0.64 0.637397
2015 28, 2015
Bank of China
Industrial and
May 08, December
Commercial No 1001RSYH 30 Float income 30 0.64 0.64 0.637397
2015 28, 2015
Bank of China
Industrial and
May 08, December
Commercial No 1001RSYH 30 Float income 30 0.64 0.64 0.637397
2015 28, 2015
Bank of China
Industrial and
May 8, December
Commercial No 1001RSYH 30 Float income 30 0.64 0.64 0.637397
2015 28, 2015
Bank of China
China
February March 19,
Construction No ZHQYBB 250 Float income 250 1.01 1.01 1.008219
15, 2015 2015
Bank
China
March 23, April 29,
Construction No ZHQYBB 200 Float income 200 0.89 0.89 0.892055
2015 2015
Bank
China
June 12, August
Construction No ZHQYTF 100 Float income 100 0.7 0.7 0.702740
2015 12, 2015
Bank
Industrial and
August 14, December
Commercial No 1001RSYH 30 Float income 30 0.36 0.36 0.360740
2015 28, 2015
Bank of China
Industrial and
August 14, December
Commercial No 1001RSYH 30 Float income 30 0.36 0.36 0.360740
2015 28, 2015
Bank of China
Industrial and
August 14, December
Commercial No 1001RSYH 30 Float income 30 0.36 0.36 0.360740
2015 28, 2015
Bank of China
March 20, March 16,
Bank of China No AMZYPW 1,500 Float income 1,500 83.08 83.08 83.08
2014 2015
July 01, June 29,
Bank of China No AMZYPW 1,100 Float income 1,100 57.43 57.43 57.43
2014 2015
Bank of China No AMZYZH1 1,000 July 14, July 13, Float income 1,000 52.85 52.85 52.85
67
Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
Actual
Principal Actual
loss and
Amount amount return of
Connected Remuneration Projecte gain
Name of Product of returned gains and
Transaction Start Date End Date confirmation d amount
trustee Type entrusted in the losses in
or Not method income in the
financing report the report
report
period period
period
4156-G 2014 2015
(364 days)
AMZYZH3
September Septembe
Bank of China No 5714206 2,000 Float income 2,000 107.59 107.59 107.59
29, 2014 r 21, 2015
(357 days)
Industrial and
December February
Commercial No WL60ZL 500 Float income 500 3.68 3.68 3.68
15, 2014 12, 2015
Bank of China
AMZYJZT January 05, January
Bank of China No 1,300 Float income 0 0 0 0
(364 days) 2015 04, 2016
February May 08,
Bank of China No AMZYJZT 1,000 Float income 1,000 12.88 12.88 12.88
03, 2015 2015
AMZYJZT March 19, March 17,
Bank of China No 1,500 Float income 0 0 0 0
(364 days) 2015 2016
CITIC-CP
China Citic cash July 17, December
No 1,000 Float income 0 0 0 0
Bank managemen 2015 31, 2016
t No.3
AMZYJF15 July 31, July 22,
Bank of China No 1,000 Float income 0 0 0 0
047HQ 2015 2016
Citic
Leying
China Citic July 31, August 3,
No series RMB 1,000 Float income 1,000 0.3 0.3 0.30
Bank 2015 2015
financing
product
CITIC-CP
China Citic cash August 04, December
No 1,000 Float income 0 0 0 0
Bank managemen 2015 31, 2016
t No.3
September Septembe
Bank of China No AMZYPW 2,100 Float income 0 0 0 0
24, 2015 r 27, 2016
Li Cai
Industrial and
Gong Ying November February
Commercial No 100 Float income 0 0 0 0
Suixin 26, 2015 26, 2016
Bank of China
Tianli
231,386.7 1,510.0
Total 257,369.9 -- -- -- 1,588.08 --
7 9
(2) Entrusted loaning
68
Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
□ Applicable √ Not applicable
No entrusted loaning is involved within the report period.
4. Other Important Contracts
√ Applicable □ Not applicable
Transaction
Price
Connected
Pricing (Unit: Associated
Lender Borrower Transaction Execution by the End of the Report Period
Principle RMB then Relationship
or Not
thousand
Yuan)
On October 14, 2013, the 3rd special meeting of the 6th
Board of Directors discussed and approved the Proposal
about Offering Shenzhen SEG E-Commerce Co., Ltd. with
Financial Assistance. The company offers the 51% share
controlled SEG E-commerce with the financial assistance
of 60,000,000 Yuan for one year (from September 15, 2013
to September 14, 2014) and pays based on the
requirements of the e-commerce business. SEG
E-Commerce pays expenses for using the funds to the
Company based on its actual loan amount and period. The
Shenzhen
Shenzhen expenses for using the funds is charged with the
SEG Fair Not
SEG Co., 6,000 No benchmarking interest rate of the one-year bank loan in the
E-Commerce value applicable
Ltd. same period and should be paid on due date.
Co., Ltd.
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
Financial Assistance. This load is the renewal load with
the term being one year. SEG E-commerce pays expenses
for using the funds to the shareholders based on its actual
load amount and period. The fund appropriation charge
rate is 6.5%. As of the end of the report period, SEG
E-commerce has not yet paid back the above-mentioned
expenses.
The 15th special meeting of the 6th Board of Directors
held on July 29, 2014 reviewed and approved the Proposal
Shenzhen on the Current Fund Loan of RMB 10,000,000 by
Shenzhen SEG Interest Shenzhen SEG Industry Investment Co., Ltd from Shenzhen
Not
SEG Co., Industrial not 4,200 No SEG Co., Ltd. The Company provides RMB 10,000,000 as
applicable
Ltd. Investment accrued cash flow for the wholly-owned subsidiary SEG Industry.
Co., Ltd. Till now, the Company has loaned a total of RMB
42,000,000 for SEG Industry. No interest is accrued for the
above funds.
Suzhou SEG The 23rd special meeting of the 6th Board of Directors
Shenzhen
Digital Plaza Fair Not held on May 27, 2015 reviewed and approved the Proposal
SEG Co., 1,000 No
Management price applicable on the Financial Aid of RMB 10,000,000 for Suzhou SEG
Ltd.
Co., Ltd. Digital Square Management Co., Ltd. The Company
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Transaction
Price
Connected
Pricing (Unit: Associated
Lender Borrower Transaction Execution by the End of the Report Period
Principle RMB then Relationship
or Not
thousand
Yuan)
provides RMB 10,000,000 for the wholly-owned
subsidiary Suzhou SEG Digital for helping the business
development of Suzhou SEG Digital. No interest is
accrued for the above funds. The loan term is one year
(from June 8, 2015 to June 7, 2016). As of the end of the
report period, the above-mentioned contract is being
performed.
XVIII. Notes on Other Important Matters
√ Applicable □ Not applicable
Inquiry Index for the Websites Disclosing the
Overview of Important Events Disclosure Date
Temporary Reports
The Announcement for Nantong SEG Times
Square Obtained the Pre-sale Permit was
1. Nantong SEG Times Square obtained the pre-sale permit. Mar 20, 2015
disclosed on the Cninfo Website
(http://www.cninfo.com.cn/).
2. Matters about Waranty Assets Management Co., Ltd. The Announcement for Equity Transfer of
transferring the 21% equity of the controlling shareholder of Mar 10, 2015 Shenzhen SEG Group Co., Ltd was disclosed on
the Company Shenzhen SEG Group Co., Ltd. the Cninfo Website (http://www.cninfo.com.cn/).
The Public Notice on Resolutions of the 21st
3. Providing a Loan of RMB 300 Million for the Company's
Meeting of the Sixth Board of Directors of
Wholly-Owned Subsidiary Nantong SEG Times Square Co., Feb 13, 2015
Shenzhen SEG Co., Ltd was disclosed on the
Ltd. to Construct the Nantong SEG Times Square Project
Cninfo Website (http://www.cninfo.com.cn/).
The Announcement for Registered Capital
4. The controlled subsidiary Shenzhen SEG E-Commerce Change of Shenzhen SEG E-Commerce Co., Ltd
Feb 13, 2015
Co., Ltd changing its registered capital was disclosed on the Cninfo Website
(http://www.cninfo.com.cn/).
The Announcement for Joint Stock Company
5. The joint stock company Shenzhen SEG GPS Technology Shenzhen SEG GPS Technology Co., Ltd. Was
Co., Ltd. was accepted for the listing in China's SME share April 18, 2015 Accepted for the Listing in China's SME Share
transfer system Transfer System was disclosed on the Cninfo
Website (http://www.cninfo.com.cn/).
The Announcement for Strategic Cooperation
6. Strategic cooperation framework agreement signed with framework Agreement Signed with Dongguan
May 29, 2015
Dongguan EONTEC EONTEC was disclosed on the Cninfo Website
(http://www.cninfo.com.cn/).
7. The joint stock company Shenzhen SEG GPS Technology The Announcement for Joint Stock Company
July 8, 2015
Co., Ltd. was accepted for the listing in China's SME share Shenzhen SEG GPS Technology Co., Ltd. Was
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Inquiry Index for the Websites Disclosing the
Overview of Important Events Disclosure Date
Temporary Reports
transfer system Approved for the Listing in China's SME Share
Transfer System was disclosed on the Cninfo
Website.
The Announcement for Joint Stock Company
Shenzhen SEG GPS Technology Co., Ltd. Was
July 21, 2015
Listed in China's SME Share Transfer System
was disclosed on the Cninfo Website.
8. Temporary share suspension
As the Company's shareholder *ST Huakong SEG's
non-public share issue significantly influenced the financial
The Announcement of Share Suspension for
standing of the Company, to prevent fluctuation of the share
July 8, 2015 Important Matters was disclosed on the Cninfo
price and protect the interests of investors, the Company
Website.
decided to temporarily suspend trading of shares (SHEN
SEG 000058 and SHEN SEG B 200058) from July 8, 2015
according to rules of Shenzhen Stock Exchange.
9. Resumption share trading
During share suspension, the Company consulted the
accountants of its annual examination institution Dahua
Certified Public Accountants Co., Ltd. as well as the
authorities, and finally confirmed the influences of the
above-mentioned matter on the Company's financial The Announcement of Share Resumption for
standing. Its share price was higher than the issuance July 14, 2015 Important Matters was disclosed on the Cninfo
premium of the book value. The long-term equity Website (http://www.cninfo.com.cn/)
investment and capital reserve should be adjusted. The
influences were represented in the 2015 semi-annual report.
The Company's shares (Shen SEG, Shen SEG B, stock code:
000058,200058) have been resumed since the opening of
morning session on July 14, 2015.
The Announcement of Supervisors to Purchase
July 09, 2015 Company Shares was disclosed on the Cninfo
Website (http://www.cninfo.com.cn/).
The Announcement of Controlling Shareholders'
Commitment to Not Unload Shares, Directors,
Supervisors and Senior Executives' Commitment
July 11, 2015 to Purchase Shares of the Company, and
10. Controlling shareholders' commitment to not unload Initiative for Employees to Purchase Shares of
shares and Directors, Supervisors and Senior Executives' the Company was disclosed on the Cninfo
commitment to purchase shares of the Company Website (http://www.cninfo.com.cn/).
The Announcement of Shares, Directors,
Supervisors And Senior Executives'' Commitment
July 17, 2015 to Increase Holding of the Company Shares was
disclosed on the Cninfo Website
(http://www.cninfo.com.cn/).
July 25, 2015 The Announcement for Strategic Cooperation
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Inquiry Index for the Websites Disclosing the
Overview of Important Events Disclosure Date
Temporary Reports
Framework Agreement Signed with Dongguan
EONTEC was disclosed on the Cninfo Website
(http://www.cninfo.com.cn/).
The Announcement for Strategic Cooperation
Framework Agreement Signed with Dongguan
September 10, 2015
EONTEC was disclosed on the Cninfo Website
(http://www.cninfo.com.cn/).
11. Transfer of 51% shares of Shenzhen SEG E-Commerce
Co., Ltd. held by the Company
As of the end of the report period, the above-mentioned The Announcement for Transferring 51% shares
matter has not been finished. As there are outstanding debts of Shenzhen SEG E-Commerce Co., Ltd. Held by
July 22, 2015
between SEG E-commerce and the Company, equity the Company was disclosed on the Cninfo
transfer can be continued only after the debts are settled. Website (http://www.cninfo.com.cn/).
The Company will timely disclose the related information
according to the specific progress.
The Announcement for Establishing the SEG
International Maker Product Exhibition and
August 10, 2015
Promotion Center was disclosed on the Cninfo
12. Establishment of the SEG International Maker Product Website (http://www.cninfo.com.cn/).
Exhibition and Promotion Center The Announcement for Chuangpinhui Branch of
SEG's Acquisition of Business License was
August 19, 2015
disclosed on the Cninfo Website
(http://www.cninfo.com.cn/).
13. Major assets restructuring
Due to major assets restructuring, the Company's shares
(Shen SEG, Shen SEG B, stock code: 000058,200058) have
been suspended since the opening of morning session on
November 4, 2015. During suspension, The Announcement about Share Suspension for
the Company and relevant parties have been promoting November 4, 2015 Important Matters was disclosed on the Cninfo
major asset restructuring and regularly disclose the progress Website (http://www.cninfo.com.cn/).
announcement according to relevant provisions. As of the
date of disclosure of the report, the Company has disclosed
the major asset restructuring plan. Its shares will be resumed
at the opening of morning session on February 25, 2016.
The Announcement about Establishment of
14. Investment in Shenzhen SEG Investment Management Shenzhen SEG Investment Management Co. Ltd.
December 30, 2015
Co., Ltd. was disclosed on the Cninfo Website
(http://www.cninfo.com.cn/).
XIX. Important Matters of Subsidiaries
□ Applicable √ Not applicable
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XX. Social Accountability
□ Applicable √ Not applicable
XXI. Company Bonds
Is there any bond publicly issued, listed on stock exchange, and unmatured as of the annual report disclosure
date or matured but not fully cahsed?
No
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Chapter 6 Changes in Share Capital and Information on
Shareholders
I. Information on Changes in Share Capital
1. Changes of shares
Unit: Share
Before the change Increase/decrease by (+) After the change
New Capitalization
Bonus
Quantity Percentage share of public Others Subtotal Quantity Percentage
share
offering reserve
I. Restricted shares 26,689 0.00% 0 0 0 45,000 45,000 71,689 0.01%
1. State-owned shares 0 0.00% 0 0 0 0 0 0 0.00%
(2) State-owned legal
0 0.00% 0 0 0 0 0 0 0.00%
person’s shares
3. Other domestic shares 26,689 0.00% 0 0 0 45,000 45,000 71,689 0.00%
Including: Shares held by
0 0.00% 0 0 0 0 0 0 0.00%
overseas legal persons
Shares held by
26,689 0.00% 0 0 0 45,000 45,000 71,689 0.00%
domestic natural persons
4. Shares held by foreign
0 0.00% 0 0 0 0 0 0 0.00%
units
Including: Shares held by
0 0.00% 0 0 0 0 0 0 0.00%
overseas legal persons
Shares held by
0 0.00% 0 0 0 0 0 0 0.00%
foreign natural persons
II. Unrestricted shares 784,772,321 100.00% 0 0 0 -45,000 -45,000 784,727,321 99.99%
1. RMB ordinary shares 538,311,003 68.59% 0 0 0 -45,000 -45,000 538,266,003 68.59%
2. Domestically listed
246,461,318 31.40% 0 0 0 0 0 246,461,318 31.40%
foreign shares
3. Overseas listed foreign
0 0.00% 0 0 0 0 0 0 0.00%
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
□ Applicable √ Not applicable
Approval of changes in share capital
□ Applicable √ Not applicable
Share transfer
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Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
□ Applicable √ Not applicable
Impact of changes in share capital on such financial indicators as basic EPS, diluted EPS, and net asset per share
attributable to common shareholders of the Company in the last year and previous report period
□ Applicable √ Not applicable
Other contents as deemed necessary by the Company or required by the securities regulatory authority to be
disclosed
□ Applicable √ Not applicable
2. Information on changes in restricted shares
√ Applicable □ Not applicable
Unit: Share
Restricted shares Restricted shares Restricted shares Date for
Name of Restricted shares Reason for
at period released in the increased in the releasing
shareholder at period end restricted trade
beginning current period current period restricted trade
Senior
Xu Ning 0 0 15,000 15,000 executive-targeted 3
share
Senior
Liu Zhijun 0 0 7,500 7,500 executive-targeted 3
share
Senior
Zheng Dan 26,689 0 5,250 31,939 executive-targeted 3
share
Senior
Zhu Longqing 0 0 9,000 9,000 executive-targeted 3
share
Senior
Ying Huadong 0 0 7,500 7,500 executive-targeted 3
share
Senior
Tian Jiliang 0 0 750 750 executive-targeted 3
share
Total 26,689 0 45,000 71,689 -- --
II. Issuance and listing of shares
1. Securities Issue (preferential shares excluded) in the report period
□ Applicable √ Not applicable
2. Explanations to changes of the sum of shares and the shareholder structure as well as the changes of the
asset and debt structure of the company.
□ Applicable √ Not applicable
3. Information of existing staff shares
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Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
□ Applicable √ Not applicable
III. Information on Shareholders and Actual Controllers
1. Information on the number of shareholders and their shareholding status
Unit: Share
Total number
of preferred
shareholders
Total number of restored with
Total number of
Total number of ordinary the voting
preferred
ordinary shareholders at the rights at the
shareholders
shareholders at the 82,269 end of the month 87,327 0 end of the 0
restored with the
end of the report immediately before month
voting rights (if
period the disclosure of the immediately
any) (see note 8)
annual report before the
disclosure of
the annual
report (if any)
Information on the shareholders holding more than 5% shares or top 10 shareholders
Share Quantity Information on pledged or
Shares held
increase/ of Quantity of frozen shares
Nature of Shareholding by the end
Name of shareholder decrease in restricted unrestricted
shareholder percentage of report
the report shares shares held Share status Quantity
period
period held
Shenzhen SEG Group State-owned
30.24% 237,359,666 Unchanged 0 237,359,666
Co., Ltd. legal person
Domestic
Liu Guocheng 0.85% 6,691,302 1,195,707 0 6,691,302
natural person
Domestic
Liu Guohong 0.43% 3,354,558 +899,617 0 3,354,558
natural person
Domestic
Zeng Ying 0.42% 3,300,000 -4,740,826 0 3,300,000
natural person
Overseas
Gong Qianhua 0.37% 2,940,000 -2,371,520 0 2,940,000
natural person
China Securities Domestic
Finance Corporation non-state-owned 0.29% 2,271,900 +2,271,900 0 2,271,900
Limited legal person
Overseas legal
NORGES BANK 0.24% 1,890,226 Unchanged 0 1,890,226
person
ARROWSTREET
MULTI STRATEGY
Overseas legal
UMBRELLA 0.23% 1,811,274 +1,811,274 0 1,811,274
person
PLC-ARROWSTREET
EMERGING
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MARKET FUND III
GUOTAI JUNAN
SECURITIES Overseas legal +118,172
0.23% 1,780,969 0 1,780,969
(HONGKONG) person shares
LIMITED
Domestic
Zheng Anzheng 0.22% 1,750,000 +1,750,000 0 1,750,000
natural person
Strategic investors or general legal
entities who became one of the top ten
N/A
shareholders by participating in rights
issue (If any)
Shenzhen SEG Group Co., Ltd has no associated relationship with other shareholders, nor
Explanations on the association it is a concerted action unit as described by the Management Methods for Disclosure of
relationship or concerted action among Information on Changes of Shareholding Status of Shareholders of Listed Companies It is
the above-mentioned shareholders unknown whether other shareholders have an associated relationship or are concerted
action units or not.
Unrestricted Tradable Shares Held by Top Ten Shareholders
Type of share
Name of shareholder Unrestricted shares held at the period end Type of
Quantity
share
RMB
Shenzhen SEG Group Co., Ltd. 237,359,666 ordinary 237,359,666
shares
Domestically
Liu Guocheng 6,691,302 listed foreign 6,691,302
shares
Domestically
Liu Guohong 3,354,558 listed foreign 3,354,558
shares
Domestically
Zeng Ying 3,300,000 listed foreign 3,300,000
shares
Domestically
Gong Qianhua 2,940,000 listed foreign 2,940,000
shares
RMB
China Securities Finance Corporation
2,271,900 ordinary 2,271,900
Limited
shares
Domestically
NORGES BANK 1,890,226 listed foreign 1,890,226
shares
ARROWSTREET MULTI STRATEGY Domestically
UMBRELLA PLC-ARROWSTREET 1,811,274 listed foreign 1,811,274
EMERGING MARKET FUND III shares
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Domestically
GUOTAI JUNAN SECURITIES
1,780,969 listed foreign 1,780,969
(HONGKONG) LIMITED
shares
RMB
Zheng Anzheng 1,750,000 ordinary 1,750,000
shares
Explanations on the association
Shenzhen SEG Group Co., Ltd has no associated relationship with other shareholders, nor
relationship or concerted action among
it is a concerted action unit as described by the Management Methods for Disclosure of
the top ten shareholders of unrestricted
Information on Changes of Shareholding Status of Shareholders of Listed Companies It is
shares, and between the top ten
unknown whether other shareholders have an associated relationship or are concerted
shareholders of unrestricted shares and
action units or not.
the top ten shareholders
Information of top ten ordinary Among the above-mentioned top 10 shareholders, Zheng Anzheng holds 0 shares of the
shareholders participating in financing Company by the ordinary account and 1,750,000 shares by the credit account of the
business (if any) (see note 4) financing bill investor, totaling 1,750,000 shares of the Company.
Whether the top ten ordinary shareholders of the Company or top ten ordinary shareholders of non-restricted
shares conducted agreed repurchase transactions in the report period?
□ Yes √ No
The top ten ordinary shareholders of the Company or top ten ordinary shareholders of non-restricted shares did
not conduct agreed repurchase transactions in the report period.
2. Information about controlling shareholders of the Company
Nature of controlling shareholder: local state-owned control
Type of controlling shareholder: legal person
Name of controlling Legal representative/ Organization
Date of incorporation Main business
shareholder Company manager code
Business scope: Production and research of
electronic products, household appliances,
toys, electronic and telecom equipments,
instruments and meters, motor equipments,
computers and accessories, OA equipments
and articles and electronic chemical
projects (the license of the production site
should be specially applied for);
acceptance of various electronic system
Shenzhen SEG Group
Sun Shengdian August 23, 1984 19218093-0 projects; operation of specialized
Co., Ltd.
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
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Name of controlling Legal representative/ Organization
Date of incorporation Main business
shareholder Company manager code
network and information projects; import
and export. Import and export business
Equity of other overseas listed companies in which the controlling shareholders have a controlling share and hold shares
Proportion of
Abbreviations of held stock and Number of shares held
No. Company name shareholding
securities code (Unit: Share)
(%)
Shenzhen SEG Group
1 Huakong SEG 000068 68,392,697 6.79
Co., Ltd.
SEG (HONGKONG)
2 Shen Huafa B200020 16,569,560 5.85
Company Limited
GOOD HOPE CORNER
3 Shen Huafa 200020 13,900,000 4.91
INVESTMENTS LTD
SEG (HONGKONG)
4 NewOcean Energy 0342 100,000 0.01
Company Limited
Changes of the controlling shareholders in the report period
□ Applicable √ Not applicable
In the report period, the controlling shareholders of the Company are not changed.
3. Actual controller of the Company
Nature of actual controller: local state-owned assets management institution
Type of actual controller: legal person
Legal
Date of
Name of actual controller representative/Co Organization code Main business
incorporation
mpany manager
Shenzhen State-owned Assets
Supervision and Administration Gao Zimin Not applicable Not applicable
Commission
Changes of the actual controllers in the report period
□ Applicable √ Not applicable
In the report 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
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The actual controllers control the Company by trust or other asset management methods.
□ Applicable √ Not applicable
4. Other legal-person shareholders who hold more than 10% shares
□ Applicable √ Not applicable
5. Limited unloading of shares by controlling shareholder, actual controller, restructured entity and other
commitment makers
□ Applicable √ Not applicable
Chapter 7 Preferred Shares
□ Applicable √ Not applicable
No preferred share is involved in the report period.
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Chapter 8 Information on Directors, Supervisors, Senior Executives
and Employees
I. Changes in Shares Held by Directors, Supervisors and Senior Executives
Increase Decrease
of of
Shares Shares
Beginning Ending Shares Shares Increase
Held at Held at
Employment date of date of Held in Held in or
Name Title Gender Age Period Period
Status office office the the decrease
Beginning End
term term Report Report (Share)
(Share) (Share)
Period Period
(Share) (Share)
June 17, June 16,
Wang Li Chairman Incumbent Male 54 0 0 0 0 0
2013 2016
Zhang June 17, June 16,
Director Incumbent Male 53 0 0 0 0 0
Guangliu 2013 2016
June 17, June 16,
Ye Jun Director Incumbent Male 54 0 0 0 0 0
2013 2016
Liu Director/ General June 17, June 16,
Incumbent Male 47 0 10,000 0 0 10,000
Zhijun Manager 2013 2016
Director/Vice
General
Zheng June 17, June 16,
Manager/Secretary Incumbent Female 50 35,586 7,000 0 0 42,586
Dan 2013 2016
of the Board of
Directors
Zhu Director/Vice June 17, June 16,
Incumbent Male 54 0 12,000 0 0 12,000
Longqing General Manager 2013 2016
Song Independent June 17, June 16,
Incumbent Female 48 0 0 0 0 0
Pingping Director 2013 2016
Independent June 17, June 16,
Li Luoli Incumbent Male 68 0 0 0 0 0
Director 2013 2016
Zhou Independent June 17, June 16,
Incumbent Male 46 0 0 0 0 0
Hanjun Director 2013 2016
August June 16,
Xu Ning Supervisor Incumbent Male 51 0 20,000 0 0 20,000
27, 2014 2016
Tang June 17, June 16,
Supervisor Incumbent Male 55 0 0 0 0 0
Chongyin 2013 2016
Peng June 17, June 16,
Supervisor Incumbent Male 42 0 0 0 0 0
Aiyun 2013 2016
Tian June 17, June 16,
Supervisor Incumbent Male 49 0 1,000 0 0 1,000
Jiliang 2013 2016
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Increase Decrease
of of
Shares Shares
Beginning Ending Shares Shares Increase
Held at Held at
Employment date of date of Held in Held in or
Name Title Gender Age Period Period
Status office office the the decrease
Beginning End
term term Report Report (Share)
(Share) (Share)
Period Period
(Share) (Share)
Ying June 17, June 16,
Supervisor Incumbent Male 46 0 10,000 0 0 10,000
Huadong 2013 2016
Bo Vice General July 24, June 16,
Incumbent Male 58 0 0 0 0 0
Hongxi Manager 2013 2016
Total -- -- -- -- -- -- 35,586 60,000 0 0 95,586
II. Changes of Directors, Supervisors, and Senior Executives
No changes of directors, supervisors, and senior executives are involved in the report period. For details:
III. Information on Position
Professional background, work experience and main responsibility of incumbent directors, supervisors, and
senior executives
(I) Members of the Board of Directors
1. Wang Li, male, born in 1961, is a Master. He now serves as the Chairman of the Company, Vice Secretary and
General Manager of SEG Group, Chairman of SEG CREDIT, and Director of Shenzhen Saiyi Fawei Electronics
Co., Ltd. He used to serve as the Vice General Manager and standing Vice General Manager (in charge of
business) of SEG Group, President of Shenzhen SEG Hi-tech Industrial Co., Ltd., and Chairman of SEG
Property.
2. Zhang Guangliu, male and born in 1962, is a Master He now serves as the Director of the Company, Vice
General Manager of SEG Group, Chairman of SEG Kang Le, and Chairman of the Board of Supervisors of
Shenzhen Shenai Semi-conductive Co., Ltd. He used to serve as the Chairman of the Board of Supervisors of
Huakong SEG, and Chairman of SEG (HONGKONG) Company Limited
3. Liu Zhijun, male and born in 1968, is a Master of Engineering. He now serves as the Secretary of Party
Committee, Director and General Manager of the Company. Concurrently, he serves as the Chairman of Nantong
SEG, the Chairman of Longgang SEG, the Chairman of Xi'an SEG, the Chairman of Xi'an Hairong SEG, the
Chairman and General Manager of SEC Investment, Director of SEG E-commerce, director of SEG Credit, and
supervisor of Kashgar Shenzhen City Co., Ltd. He used to serve as the Vice Secretary of Party Committee of the
Company, the Chairman of SEG E-commerce, the Chairman of Shanghai SEG, the Manager of the Business
Department of SEG Group, and the Deputy General Manager of SEG Baohua.
4. Zheng Dan, female and born in 1965, a Senior Economist and a Master of Science. She now serves as the Vice
Secretary of Party Committee of the Company, the Secretary of the Discipline Inspection Commission, the
Director, Vice General Manager and Secretary of the Board of Directors; she is also a Standing Committee
Member of the Second Committee of Directors and Secretaries of China Association for Public Companies, the
Chairman of Suzhou SEG, the Chairman of Wujiang SEG, the Chairman of SEG Baohua, the Chairman of
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Suzhou SEG Digital, the Functional Chairman of Suzhou SEG, the Director of SEG Credit, the Director of
Nantong SEG, the Director of Nantong SEG Commercial Operation Management Co., Ltd., the Director of SEG
Investment, the Chairman of the Board of Supervisors of Changsha SEG, the Chairman of the Board of
Supervisors of SEG e-Commerce, and the Chairman of the Board of Supervisors of Huakong SEG. She used to
serve as the Director of SEG e-Commerce, the Director of Huakong SEG, the Chairman of the Board of
Supervisors of SEG Baohua, the Chairman of the Board of Supervisors of SEG Logistics, and the Chairman of
the Board of Supervisors of SEG GPS.
5. Zhu Longqing, male and born in 1961 is a MBA. He now serves as Director and Vice General Manager of the
Company and concurrently as President of SEG Storage and Transportation and Changsha SEG, Director of SEG
Baohua, Supervisor of Shanghai SEG, Director and General Manager of SEG E-commerce. Concurrently, he
serves as the Chairman of SEG Industry, the Chairman of Changsha SEG, the Chairman of Nanjing SEG, the
Chairman of Wuxi SEG, the Chairman of Shanghai SEG, the Director of Nantong SEG, the Director of SEG
e-commerce, the Director of Nantong SEG Commercial Operation Management Co., Ltd., the Director of SEG
GPS, and the Chairman of the Board of Supervisors of SEG Baohua. He used to serve as the Chairman of SEG
Logistics and the Chairman of the Board of Supervisors of SEG Logistics, the Director of SEG Baohua, the
Director and General Manager of SEG Industry.
6. Ye Jun, male and born in 1960, is a Bachelor and a Senior Accountant. He now serves as the Director of the
Company, the Director and President of SEC Credit. He used to serve as the Chief Financial Officer of SEG
Group, the Chairman of Shenzhen SEG Real Estate Investment Co., Ltd., the Director of Shenzhen SEG Square
Investment & Development Co., Ltd., the Director of Huakong SEG, the Director of Shenzhen Shenai
Semi-conductive Co., Ltd., and the Director of Shijiazhuang SEG Square Investment Co., Ltd.
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 Yushun Electronics Co., Ltd.
8. Li Luoli, male and born in 1947, is a Master of Economics. He now serves as a Professor and a PhD Tutor of
Nankai University. He now serves as the Vice President of China Development Institute (Shenzhen, China), Vice
Chairman of China Society of Economic Reform, and President of Shenzhen Mahong Economics Research and
Development Foundation. He used to serve as the Vice Director of Nankai Institute of Economics, the Vice
Director of Price Research Institute of the National Price Bureau, the Vice Director of the General Office of the
People's Government of Shenzhen City, the Director of Shenzhen Information Center, the Vice Secretary General
and Director of Recipient Office of the Municipal Commission of Shenzhen City, the Vice President and
Secretary General of China Development Institute, and Director of China Opening Journal.
9. Song Pingping, female and born in 1967, is a Master of Law. She now serves as a partner of Shenzhen
Dongfang Fuhai Investment Management Co., Ltd., the Secretary General of the Risk Control Commission of
Shenzhen Yuanzhi Fuhai Investment Management Co., Ltd., the Arbitrator of Huanan International Economy
and Trade Arbitration Commission, and the Independent Director of Shenzhen Yantianang Co., Ltd. She was a
partner of Beijing Jinshe Law Firm.
(II) Members of the Board of Supervisors
1. Xu Ning, male, born in 1965, is a Bachelor. He now serves as the Chairman of the Board of Supervisors of the
Company, Vice Secretary of the Party Committee, and the Secretary of the Discipline Inspection Commission,
and Chairman of SEG Group Labor Union. She served as the President of SEG Talent Training Center, and
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Complaint Processing Specialist at Division Level for Shenzhen State-owned Assets Supervisory and
Administrative Bureau.
2. Tang Chongyin, male and born in 1960, is a Doctor. He now serves as the Supervisor of the Company, the
Director of Shenzhen Shenai Semi-conductive Co., Ltd., the Director of Tianjin SEG Haijing Co., Ltd., the
Director of Shenzhen SEG Yuren Technology Co., Ltd., and the Chairman of the Board of Supervisors of SEC
Credit. He was the Director of SEC e-commerce, and the Vice Chairman of Shenzhen Zhongheng Huafa Co.,
Ltd.
3. Peng Aiyun, male, born in 1973, is a Bachelor. He now serves as the Director of the Company, the Vice
Director of Business Development Division of SEG Group, and concurrently serves as the Director of Shenzhen
SEG Real Estate Investment Co., Ltd., the Chairman of Shenzhen SEG Huaqiang North Makership Co., Ltd. and
the Supervisor of Shijiazhuang SEG Square Investment Co., Ltd. He was the Vice Manager of the Electronics
Market and Property Management Department of SEG Group.
4. Tian Jiliang, male and born in 1966, is a Bachelor. He now serves as Supervisor (Worker Supervisor),
Operation Director, and Director of the Strategic Department of the Company; concurrently, he serves as the
Director of SEG Baohua, the Chairman of the Board of Supervisors of Xi'an SEG, the Chairman of the Board of
Director of Longgang SEG, the Supervisor of Xi'an Hairong SEG, and the Supervisor of SEG Investment. He
served as the Director of the Department of Human Resources of the Company, the Director of Suzhou SEG, and
the Supervisor of Wuxi SEG.
5. Ying Huadong, male and born in 1969, is a Bachelor and a Senior Accountant. He now serves as Supervisor
(Worker Supervisor) of the Company and Manager of the Finance and Assets Management Department.
Concurrently, he serves as Director of Changsha SEG, Supervisor of Nanjing SEG, Supervisor of Nantong SEG,
and Supervisor of Nantong SEG Commercial Operation Management Co., Ltd. He was the Chief Financial
Officer of the Company, and the Supervisor of Changsha SEG.
(III) Senior executives
1. Liu Zhijun is General Manager and relevant information may be referred to in the above introduction on
Directors.
2. Zheng Dan is Vice General Manager and relevant information may be referred to in the above introduction to
directors.
3. Zhong Longqing is Vice General Manager and relevant information may be referred to in the above
introduction to directors.
4. Bo hongxi, male and born in 1958, is a Bachelor and a Senior Accountant. He now serves as the Vice General
Manager of the Company, the Director and General Manager of SEG Baohua, and concurrently as the Chairman
of Supervisor of Nantong SEG Commercial Operation Management Co., Ltd.
Information about directors, supervisors and senior executives serving in shareholders’ units
√ Applicable □ Not applicable
Receiving
Position in shareholders’ Beginning date of Ending date of remuneration from
Name Name of shareholders’ units
units office term office term shareholders’ units
or not
Vice Secretary of the
Wang Li SEG Group January 04, 2011 Up to now Yes
Party Committee and
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Receiving
Position in shareholders’ Beginning date of Ending date of remuneration from
Name Name of shareholders’ units
units office term office term shareholders’ units
or not
General Manager
Zhang
SEG Group Vice General Manager March 10, 2003 Up to now Yes
Guangliu
Liu Zhijun SEG Group -- -- -- No
Zheng Dan SEG Group -- -- -- No
Zhu Longqing SEG Group -- -- -- No
Ye Jun SEG Group -- -- -- No
Vice Secretary of Party
Committee, Secretary of
Xu Ning SEG Group Discipline Committee, -- Up to now Yes
and Chairman of the
Labor Union
Manager of the Asset
Tang Chongyin SEG Group April 17, 2003 Up to now Yes
Department
Vice Director of
Peng Aiyun SEG Group Business Development August 29, 2011 Up to now Yes
Division
Tian Jiliang SEG Group -- -- No
Ying Huadong SEG Group -- -- -- No
Bo Hongxi SEG Group -- -- -- No
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 01, 2011 Up to now No
Wang Li Shenzhen Saiyi Fawei Electronics Co.,
Director September 01, 2003 Up to now No
Ltd.
SEG Kang Le Enterprise Development
Chairman August 1, 2011 Up to now No
Co., Ltd.
Zhang Guangliu Chairman of
Shenzhen Shenai Semi-conductive
Supervisory July 1, 2010 Up to now No
Co., Ltd.
Board
Nantong SEG Chairman January 1, 2013 Up to now No
Liu Zhijun Longgang SEG Chairman June 1, 2010 Up to now No
Xi'an SEG Chairman May 1, 2013 Up to now No
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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
Xi'an Hairong SEG Chairman May 1, 2013 Up to now No
Chairman
SEG Investment and General November 1, 2015 Up to now No
Manager
SEG E-Commerce Director January 1, 2014 Up to now No
SEG Credit Director September 1, 2011 Up to now No
Kashgar Shenzhen City Co., Ltd. Supervisor October 1, 2012 Up to now No
Second Committee of Directors and Standing
Secretaries of China Association for committee November 1, 2015 Up to now No
Public Companies member
Suzhou SEG Chairman September 1, 2011 Up to now No
Wujiang SEG Chairman June 1, 2012 Up to now No
SEG Baohua Chairman April 1, 2013 Up to now No
Suzhou SEG Digital Chairman August 1, 2014 Up to now No
Suzhou SEG Chairman January 1, 2016 Up to now No
SEG Credit Director September 1, 2011 Up to now No
Nantong SEG Director January 1, 2013 Up to now No
Zheng Dan
Nantong SEG Operation Director May 1, 2014 Up to now No
SEG Investment Director November 1, 2015 Up to now No
Chairman of
Changsha SEG Supervisory March 1, 2009 Up to now No
Board
Chairman of
SEG E-Commerce Supervisory May 1, 2013 Up to now No
Board
Chairman of
Huakong SEG Supervisory March 1, 2014 Up to now No
Board
SEG Industry Chairman May 01, 2013 Up to now No
Changsha SEG Chairman June 01, 2010 Up to now No
Nanjing SEG Chairman April 01, 2011 Up to now No
Wuxi SEG Chairman Aug 1, 2012 Up to now No
Zhu Longqing
Shanghai SEG Chairman June 01, 2014 Up to now No
Nantong SEG Director January 01, 2013 Up to now No
SEG E-Commerce Director January 01, 2011 Up to now No
Nantong SEG Operation Director May 01, 2014 Up to now No
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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 Navigations Director February 01, 2012 Up to now No
Chairman of
SEG Baohua Supervisory April 01, 2013 Up to now No
Board
SEG Credit Director June 01, 2013 Up to now No
Ye Jun
SEG Credit President June 01, 2013 Up to now No
Shenzhen SEG Hi-tech Industrial Co.,
Director July 01, 2006 Up to now No
Ltd.
Shenzhen Shenai Semi-conductive
Director December 01, 2010 Up to now No
Co., Ltd.
Tianjin SEG Haijing Co., Ltd. Director December 01, 2006 Up to now No
Shenzhen Daming Electronics Co.,
Tang Chongyin Chairman July 01, 2006 Up to now No
Ltd.
Chairman of
SEG Credit Supervisory May 01, 2014 Up to now No
Board
Shenzhen SEG Yuren Technology Co.,
Director May 01, 2015 Up to now No
Ltd.
Shenzhen SEG Huaqiang North
Director May 01, 2015 Up to now No
Makership Co., Ltd.
Shenzhen SEG Real Estate Investment
Peng Aiyun Director May 01, 2013 Up to now No
Co., Ltd.
Shijiazhuang SEG Square Investment
Supervisor August 01, 2011 Up to now No
Co., Ltd.
SEG Baohua Director March 01, 2009 Up to now No
Chairman of
Xi'an SEG Supervisory November 01, 2008 Up to now No
Board
Tian Jiliang Chairman of
Longgang SEG Supervisory May 01, 2011 Up to now No
Board
Xi'an Hairong SEG Supervisor July 01, 2011 Up to now No
SEG Investment Supervisor November 01, 2015 Up to now No
Changsha SEG Director June 01, 2010 Up to now No
Nanjing SEG Supervisor April 01, 2011 Up to now No
Ying Huadong
Nantong SEG Supervisor January 01, 2013 Up to now No
Nantong SEG Operation Supervisor May 01, 2014 Up to now No
Bo Hongxi SEG Baohua General March 01, 2005 Up to now Yes
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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
Manager
SEG Baohua Director March 01, 1999 Up to now Yes
Nantong SEG Operation Chairman May 01, 2014 Up to now No
Information on punishment of incumbent and resigned directors, supervisors and senior executives in the report
period by the securities regulatory authority in the recent three years
□ Applicable √ Not applicable
IV. 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 wage system. The annual remuneration of Senior Executives comprises
three parts, namely, the wage (the position 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 wage system of the Company; the year-end bonus is decided based on the completing of annual
operation targets and work tasks laid out in 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 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 amount of remuneration of RMB
3,670,600 (pre-tax) in the report period. The Company shall issue RMB 100,000 (pre-tax) per year as the
subsidies for independent directors according to the resolution passed at the seventeenth General Meeting of
Shareholders (2011) on April 20, 2012. 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 according to the Articles of Association are
reimbursed by the Company according to the actual expenses.
Remuneration for directors, supervisors and senior executives in the report period
Unit: RMB ten thousand Yuan
Total pre-tax
Remuneration
Employment remuneration
Name Title Gender Age acquired from
Status from the
associates
Company
Wang Li Chairman Male 54 Incumbent -- Yes
Zhang Guangliu Director Male 53 Incumbent -- Yes
Director/ General
Liu Zhijun Male 47 Incumbent 83.81 No
Manager
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Total pre-tax
Remuneration
Employment remuneration
Name Title Gender Age acquired from
Status from the
associates
Company
Director/Vice
General
Zheng Dan Manager/Secretar Female 50 Incumbent 70.65 No
y of the Board of
Directors
Director, Vice
Zhu Longqing Male 54 Incumbent 70.65 No
General Manager
Ye Jun Director Male 55 Incumbent -- Yes
Independent
Zhou Hanjun Male 46 Incumbent 10 No
Director
Independent
Li Luoli Male 68 Incumbent 10 No
Director
Independent
Song Pingping Female 48 Incumbent 10 No
Director
Chairman of
Xu Ning Supervisory Male 50 Incumbent -- Yes
Board
Tang Chongyin Supervisor Male 55 Incumbent -- Yes
Peng Aiyun Supervisor Male 42 Incumbent -- Yes
Tian Jiliang Supervisor Male 49 Incumbent 58.17 No
Ying Huadong Supervisor Male 46 Incumbent 53.78 No
Vice General
Bo Hongxi Male 57 Incumbent -- No
Manager
Total -- -- -- -- 367.06 --
Information on equity incentives bestowed to directors, supervisors and senior executives during the report
period
□ Applicable √ Not applicable
V. Information on Employees of the Company
1. Number, profession composition and education background of on-the-job employees
Number of on-the-job employees in the parent company 161
Number of on-the-job employees in the major subsidiaries 721
Total number of on-the-job employees 882
Total number of paid employees in the current period 882
Number of retired workers to whom the Company pays pension
0
benefits assumed by parent company and major subsidiaries
Profession composition
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Profession composition Number of employees
Production staff 140
Sales staff 100
Technical staff 140
Financial staff 80
Administrative staff 422
Total 882
Education background
Education background Number of employees
Master 33
Bachelor 269
Junior college graduate 259
Technical secondary school (Polytechnic school) graduate 64
Senior high school and below 257
Total 882
2. Remuneration policy
Priority to effectiveness: Remuneration structure and level are related to operation performance. Rationally set
up salary differences based on value of position as well as individual performance and competence, and incline
to core positions to reflect effective incentives of remuneration.
Performance and capability orientation: Correlate remuneration adjustment and payment to organization
performance, employee performance and employee capability to reflect value of organization of individuals.
Salary varying with position: The remuneration system supports employee career development; remuneration is
strictly matched to position.
Dynamic adjustment: Based on development strategy and operation strategy as well as industrial development,
when business model and organization structure are significantly changed, organization functions and positions
change, and remuneration structure, payment and adjustment process must be dynamically adjusted for business
development.
3. Training plan
Based on strategies, culture, operation performance and human orientation, the Company cultivates its core
competence through normalized, systematic and professional total management.
Within the report peruiod, the Company cultivated and trained the targeted talents needed in transformation and
upgrading of the Company’s industry through series of activities like “elite training camp”.
4. Labor outsourcing
□ Applicable √ Not applicable
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Chapter 9 Corporate Governance
I. Basic information on corporate governance
(I) Within the report period, the Company strictly abides by the Company Law, the Security Law, Administrative
Regulations on Listed Companies, and the Regulations on Stock Listing of Shenzhen Securities Exchange, and
relevant laws and regulations of China Securities Regulatory Commission, continuously improves the structure
for company legal person management, establishes and improves internal control system, makes further efforts
on Company management, so that the Company may further standardize its operation, increase information
disclosure, and actively engage in the management of investor relationships. As of the end of the report period,
the Company generally meets the specifications set forth in the regulation documents on listed companies as
published by China Securities Regulatory Commission. The followings are particulars on the Company's
management:
1. Information on the Company and controlling shareholders
Controlling shareholders of the Company, exercising shareholder's rights through the General Meeting of
Shareholders, imposes rules on shareholder's behaviors in strict compliance with Administrative Regulations on
Listed Companies, the Regulations on Stock Listing of Shenzhen Securities Exchange, and the Articles of
Association of the Company. Controlling shareholders are not found to have directly intervened the Company's
business and decision-making by acting without consulting with the General Meeting of Shareholders and the
Board of Directors. The Company is capable of independent business operation, and is independent from the
controlling shareholder in respect of its business, asset, personnel, organization and finance. The Board of
Directors, the Board of Supervisors, and the internal organizations can work independently.
2. Shareholders and the General Meeting of Shareholders
The Company convened and held the General Meeting of Shareholders in strict compliance with the Guidance of
the Articles of Association and the Rules of Procedure of the Board of Directors. No proposal to hold the interim
meeting of shareholders was put forward by shareholders representing more than 10% of the Company's voting
shares within the report period, nor is there a meeting of shareholders held at the proposal of the Board of
Supervisors. In the report period, the Company complied with the Company Law and the Articles of Association
by making decisions subject to the deliberation at the general meeting of shareholders without overriding the
general meeting of shareholders or implementation before deliberation.
3. Directors and the Board of Directors
The Company elected its directors in strict compliance with the Articles of Association. The Board of Directors
comprised of 9 directors, including 3 independent directors. The number and composition of personnel in the
Board of Directors was in compliance with laws and regulations. The Board of Directors had three special
committees under its management. The Board of Directors conscientiously fulfilled its obligations in strict
compliance with the Articles of Association, Regulations on Work of Independent Directors, and the Rules of
Procedure of the Board of Directors. All directors of the Company attended the meeting of directors and general
meeting of shareholders, and actively took part in relevant trainings, and studies relevant laws and regulations.
Independent directors protected the overall interests of the Company by performing their obligations in an
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independent manner, and by paying special attention to the lawful interests of medium and small shareholders.
Also, independent directors expressed their independent opinions on matters of importance and significance.
4. Supervisors and the Board of Supervisors
The Company elected supervisors in strict compliance with the Company Law and the Articles of Association.
The number and composition of the Board of Supervisors complied with laws and regulations. The Company
formulated Rules of Procedure of the Board of Supervisors; the eligibility and election of supervisors complied
with regulations. All supervisors of the Company attended the meeting of supervisors, and reviewed the regular
reports prepared by the Board of Directors and gave written opinions by attending the general meeting of
shareholders as non-voting members, attending the meeting of the Board of Directors and holding the meeting of
the Board of Supervisors. The supervisors were effective at supervising matters of importance, associated
transactions and finance status of the Company, and at overseeing the legality and regulation compliance of the
Company's directors and senior executives in performing their duties.
5. Information disclosure and transparency
The Company designates the works on information disclosure, shareholder visitation and consultation reception
to the Secretary's Office of Board of Directors of the Company in strict compliance with the Management
Methods for Disclosure of Information and the System on Investor Relationship Management. The Company
appoints China Securities Journal, Securities Times, Securities Daily, Hong Kong Commercial Daily, and the
Cninfo Website as the newspapers and website on which the Company discloses its information. Within the
report period, the Company published 76 public announcements in total, disclosing information on the
Company's business activities and major issues in a truthful, accurate, complete and timely manner. The
Company imposed strict, sufficient and effective internal control on information disclosure without violating
regulations of relevant supervisory organs. In the future, the Company will further strengthen communication
and information exchange with the supervisory organs by pro-actively reporting Company issues and by having
a better understanding of disclosure requirements.
(II) Non-compliance within the report period
1. The controlling shareholders exert the “Property Right Representatives Report System” for managing the
Company. The Company's controlling shareholder SEG Group is a state-controlled corporation in Shenzhen and
Shenzhen State-owned Assets Supervision and Administration Bureau is the controlling shareholder of SEG
Group. It must implement the Property Right Representatives Report System for state-owned assets management
according to the management methods of Shenzhen for state-owned assets.
2. In the respect of personnel rating, our controlling shareholder SEG Group evaluates the annual operation
performance of the general manager based on the accomplishment of indexes of its annual operation plan and
other indexes.
3. 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
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the Letter of Commitment on Strengthening Management of Undisclosed Information to Shenzhen Securities
Regulatory Bureau. Meanwhile, the Company has established and implemented the Non-public Information
Insider Reporting System and the Confidentiality System of Shenzhen SEG Co., Ltd for Insiders of Non-public
Information and has monthly reported to Shenzhen Securities Regulatory Bureau about its reports of
unpublicized information. Senior executives and all employees at the headquarters signed a Confidentiality
Agreement with the Company on July 15, 2009. The Confidentiality Agreement clearly stipulates that all
employees are obligated to hold confidential the business secrets and undisclosed information of the Company.
The unpublicized information the Company offered to the Company’s majority shareholder and actual controller
in the report 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
The invested corporation of
the Company and the The document Notice
financial staff at the about Formulation of the
The flash
Headquarters prepare the Monthly Flash Report of
report of main
report and consolidate the Enterprises Supervised Approved
Controlling financial
SEG statements, which are by Stated-owned Assets by the
1 shareholder indicators of Monthly
Group reviewed by the leadership Supervision and Board of
(30.24%) the Company
of the Financial Administration Directors
registered in
Department and reported Commission of the State
Shenzhen
through the State-owned Council (SASAC
Asset Management [2003]23)
Information System.
The invested corporation of The document Notice
the Company and the about Formulation of the
financial staff at the Monthly Flash Report of
Summary sheet
Headquarters prepare the Enterprises Supervised Approved
Controlling of
SEG Group sheet and consolidate the by Stated-owned Assets by the
2 shareholder implementation Monthly
Group statements, which are Supervision and Board of
(30.24%) of monthly
reported through the Administration Directors
expense budget
State-owned Asset Commission of the State
Management Information Council (SASAC
System. [2003]23)
The invested corporation of The document Notice
the Company and the about Formulation of the
financial staff at the Monthly Flash Report of
Headquarters prepare the Enterprises Supervised Approved
Controlling Summary sheet
SEG Group sheet and consolidate the by Stated-owned Assets by the
3 shareholder of monthly Monthly
Group statements, which are Supervision and Board of
(30.24%) cash flow
reported through the Administration Directors
State-owned Asset Commission of the State
Management Information Council (SASAC
System. [2003]23)
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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
The document Notice
about Formulation of the
The financial personnel at Monthly Flash Report of
Summary sheet
the Headquarters prepare Enterprises Supervised Approved
Controlling of deposits,
SEG Group the sheet that is reported by Stated-owned Assets by the
4 shareholder financing, and Quarterly
Group through the State-owned Supervision and Board of
(30.24%) loans of the
Asset Management Administration Directors
Headquarters
Information System. Commission of the State
Council (SASAC
[2003]23)
The invested corporation of The document Notice
Summary sheet the Company and the about Formulation of the
of quarterly financial staff at the Monthly Flash Report of
non-operating Headquarters prepare the Enterprises Supervised Approved
Controlling
SEG Group gains and sheet and consolidate the by Stated-owned Assets by the
5 shareholder Quarterly
Group losses of the statements, which are Supervision and Board of
(30.24%)
Company reported through the Administration Directors
registered in State-owned Asset Commission of the State
Shenzhen Management Information Council (SASAC
System. [2003]23)
It has been reported since
June 2009. The document Notice
Summary sheet The invested corporation of about Formulation of the
of quarterly the Company and the Monthly Flash Report of
information on financial staff at the Enterprises Supervised Approved
Controlling
SEG Group investment Headquarters prepare the by Stated-owned Assets by the
6 shareholder Quarterly
Group properties of sheet and consolidate the Supervision and Board of
(30.24%)
the Company statements, which are Administration Directors
registered in reported through the Commission of the State
Shenzhen State-owned Asset Council (SASAC
Management Information [2003]23)
System.
Monthly
They should be reported
consolidated
every month after being
statements The Notice of Shenzhen
printed, signed and sealed
(including the SEG Co., Ltd on Approved
Controlling and reported every quarter
SEG Group Balance Sheet, Submitting of Monthly by the
7 shareholder through the State-owned Monthly
Group the Profit Statements issued by Board of
(30.24%) Asset Management
Statement, the Shenzhen SEG Group Directors
Information System. They
Cash Flow Co., Ltd.
have been reported on line
Statement, the
from July 2008.
Notes to
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Full Texrt of 2015 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
Preparation of
the Statements
and the
Financial
Statements)
Controlling It was provided by
SEG Group
shareholder Article Three of the
Group
(30.24%) Statistics Law of the
People’s Republic of
China that state organs,
social organizations,
corporations, public
institutions and privately
or individually owned
businesses, on which
Statistical statistical survey is
survey on the implemented, must
statements or comply with the
monthly and Statistics Law and the Approved
Monthly
annual reports regulations of the state by the
8 Sealed by the Company and
Shenzhen of the and provide statistical Board of
Government production annually
Statistics of data faithfully but not Directors
branch electronics make a false report,
Bureau
information conceal data, refuse to
industry report, delay the report,
or fabricate or falsify
data. Self-governing
mass organizations at the
grass roots level and
citizens have the
obligation to provide
truthfully the
information required by
the statistical survey of
the state.
The document Notice
about Formulation of the
Monthly Flash Report of Approved
Controlling Summary sheet
SEG Group Enterprises Supervised by the
9 shareholder of quarterly Sealed by the Company Quarterly
Group by Stated-owned Assets Board of
(30.24%) financial assets
Supervision and Directors
Administration
Commission of the State
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Full Texrt of 2015 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
Council (SASAC
[2003]23)
The hard copy of the
The requirements from The Board
Register of top official website of
2015 Shenzhen of
Shenzhen Actual 100 A and B Shenzhen Branch of China
10 Quarterly state-owned enterprise Directors
SASAC controller shareholders in Securities Depository and
capital operation agrees to
2015 Clearing Corporation
conference report.
Limited
Whether the Company generally meets the specifications set forth in the regulation documents on listed
companies as published by China Securities Regulatory Commission
□ Yes √ No
Whether the Company generally meets the specifications set forth in the regulation documents on listed
companies as published by China Securities Regulatory Commission
II. Description about the Company's independence from controlling shareholders in terms of
business, personnel, asset, organization and finance
(I) In the aspect of business, Shenzhen Securities Regulatory Bureau pointed out that there was horizontal
competition between the Company and SEG Group in regard to the electronics market business. The Company
received a written commitment letter from SEG Group on September 14, 2007, saying "We have similar business
to Shenzhen SEG Co., Ltd. (hereinafter referred to as Shenzhen SEG) in regard to the electronics market of
Shenzhen because of historical reasons with an objective market development background. We hereby promise
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 Securities Times, China Securities Journal and 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 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 income right 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
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the management fee and profit fee as follows based on the market sound value: the total income of SEG
Communications Market in 2010, RMB 20,000,000 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 20,000,000 Yuan; the Company shall take 20% 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 exceed
RMB 20,000,000 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 2011-2015, RMB 200,000 Yuan, from SEG Group. Therefore, there is no longer the issue of
horizontal competition between the Company and SEG Group.
(II) 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.
(III) 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.
(IV) In respect of organization, the Company has set up organizations and arranged 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.
(V) 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.
III. Horizontal Competition
□ Applicable √ Not applicable
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IV. Annual meeting of shareholders and interim meeting of shareholders held in the report
period
1. Annual general meeting of shareholders in the report period
Percentage of
Meeting No. Meeting Type Investor Date Disclosure Date Disclosure Index
Participation
Cninfo Website:
http://www.cninfo.com.cn
The 20th General Annual general
Announcement about
Meeting of meeting of 0.07% April 17, 2015 April 18, 2015
Resolutions of the 20th Meeting
Shareholders (2014) shareholders
of Shareholders (2014) of
Shenzhen SEG Co., Ltd.
Cninfo Website:
http://www.cninfo.com.cn
First Interim
Interim general Announcement about
Meeting of December 31,
meeting of 0.08% January 04, 2016 Resolutions of the First Interim
Shareholders in 2015
shareholders General Meeting of
2015
Shareholders (2015) of Shenzhen
SEG Co., Ltd.
2. Preferred shareholders restored with the voting rights proposed to hold interim general meeting of
shareholders
□ Applicable √ Not applicable
V. Performance of independent directors in the report 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 attend
Number of Times of
Attendances Times of the meeting in
Name of independent meetings to be entrusted
through entrusted Times of absence person in two
director attended in the personal
communication presence consecutive
report period presence
times
Zhou Hanjun 12 3 9 0 0 No
Li Luoli 12 2 9 1 0 No
Song Pingping 12 2 9 1 0 No
Times for independent directors to
attend the general meeting of 2
shareholders
2. Objections raised by independent directors against relevant matters of the Company
Whether independent directors raised objections against relevant matters of the Company
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□ Yes √ No
The independent directors did not raise any objection against relevant matters of the Company in the report
period.
3. Other descriptions about the performance of independent directors
Whether the independent directors accepted proposals of the Company
√ Yes □ No
In the report period, three independent directors of the Company fully exercised power and functions specified
by national regulations and the Articles of Association, gave play to professional skills, fulfilled their obligations
with caution, rationalized decision making and procedures, and protected the overall interests of the Company,
particularly legitimate rights and interests of the medium and small shareholders.
(I) Attended the meeting of the Board of Directors on time, and actively fulfilled obligations of independent
directors. Independent directors deeply understood and investigated resolutions deliberated on by the Board of
Directors, actively participated in discussions, and gave rational suggestions. Besides, they always paid attention
to important matters of the Company, independently fulfilled obligations without being affected by controlling
shareholders, actual controllers or units or individuals having interest in the Company and its controlling
shareholders or actual controllers, objectively and cautiously deliberated on self-evaluation reports on associated
transactions, foreign guarantee and internal control, expressed independent opinions and fulfilled the obligation
of supervision.
(II) Actively cooperated with the professional committees of the Board of Directors. Independent directors were
members of Development Strategy Committee, Audit Committee and Wage and Assessment Committee of the
Board of Directors. In compliance with the working rules of the professional committees, they actively
participated in daily work of the committees, gave professional opinions and suggestions on the Company
development planning and short-term financing bonds issuance, and supported scientific and cautious decision
making of the Board of Directors.
(III) Paid attention to internal control of the Company. Independent directors communicated repeatedly with the
management and relevant departments over construction and evaluation of the internal control system, and gave
suggestions based on their professional experience. In this way, they played the role of supervisors, supervised
and urged the Company to continuously perfect corporate management structure, perfect the internal control
system, continuously and deeply carry out corporate management activities and improve normalized operation.
(IV) Deeply understood the Company. In 2015, independent directors took advantage of the Company meetings
and specially took time to conduct field investigation of the Company and its investors to deeply understand the
Company's daily operation and project construction. Meanwhile, independent directors kept in close touch with
other directors, senior executives and personnel by means of phone and e-mails, always paid attention to
influences of changes of external environment and market on the Company, and timely understood the progress
of important matters of the Company. In addition, independent directors always paid attention to information
disclosure, supervised and check such disclosure, and ensure fair and timely disclosure of the Company
information so that public shareholders could be timely updated about the development of the Company.
(V) Proposals raised by independent directors in regard to normalized development and the adoption of
proposals
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Adoption
Proposal raised by Proposal content Form
status
Zhou Hanjun, Song Pingping and Li Advice to the Company on paying more attention to "Chuangke"
Oral Adopted
Luoli and other emerging industries
Zhou Hanjun, Song Pingping and Li
Advice on Company business transformation and upgrading Oral Adopted
Luoli
Zhou Hanjun, Song Pingping and Li
Relevant advice on Company major assets restructuring Oral Adopted
Luoli
Song Pingping and Zhou Hanjun Advice on asset operation model adopted by the Company Oral Adopted
Advice on rolling business plan of the Company for the next 3
Zhou Hanjun and Li Luoli Oral Adopted
years (from 2016 to 2018)
Advice on adjustment to Company organization structure and the
Li Luoli and Song Pingping Oral Adopted
implementation of project system
VI. Performance of duties by special committees of the Board of Directors
Within the report period, the Audit Committee, Wage and Assessment Committee, and Development Strategy
Committee under the Board of Supervisors conscientiously performed their duties in compliance with the Code
of Corporate Governance for Listed Companies, the Articles of Association, the Rules of Procedure of the Board
of Directors, and functions, powers and obligations conferred by implementation rules of the special committees.
(I) 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 report 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 2015 Financial Statements of the Company
In the report 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 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, 2015 and the operating results and cash flow of the Company in 2015. The Committee approved the
use of these financial statements as the basis for implementation of the audit work for 2015.
(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 2015 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
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the use of these financial statements as the basis for the preparation of the 2015 Annual Report and Report
Summary.
2. Supervision on and impelling over the audit work of the accounting firm
After consultation with Dahua Certified Public Accountants Co., Ltd., the auditing institution of 2015, the
arrangement for the 2015 auditing was decided by the Company in December 2015, 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
main responsible person of the project, the CPA whose signature was provided and relevant personnel, got
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 2015 auditing conducted by Dahua Certified Public
Accountants Co., Ltd.
In order to conduct timely and accurate audit on the financial status and business results of 2015 of the Company,
Dahua Certified Public Accountants Co., Ltd. carried out preliminary investigation and pre-auditing in December
12, and completed the audit work in March 2015.
The audit committee exchanged ideas with the CPAs on December 23, 2015, and continued the communication
during audit. Also, the audit committee reviewed the draft of the annual audit report issued by the CPAs. The
Audit Committee believed that the CPA could perform his duty in strict accordance with auditing laws,
regulations and principles, focused on the Company's 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 audit schedule. The CPA was capable of
being independent and discreet, well finished the auditing on the Financial Statements and internal control of the
Company for the Year 2015, and issued an 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. Two meetings were held in the report 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 2015 on March 9, 2015 by means of
telecommunication, reviewed and approved the Opinion of the Audit Committee on the 2014 Financial
Statements, Audit Report of 2014 from Dahua Certified Public Accountants Co., Ltd., Proposal on Auditor
Engagement for the 2015 Annual Report and Payment of Audit Fee, and Proposal on Engagement of Internal
Control Auditor for the 2015 Semi-Annual Report and Payment of Internal Control Audit Fee.
(2) The audit committee of the Company held the second meeting of 2015 on December 23, 2015 by means of
telecommunication. The meeting reviewed and approved the Audit Work Plan and Communication Report of the
Audit Committee of 2015 of Shenzhen SEG Co., Ltd.
(II) Performance of duties by the Wage and Assessment Committee of the Board of Directors
The opinion of the Wage and Assessment Committee on the disclosed remuneration of the Directors, Supervisors
and Senior Executives of the Company: Director of the Board and General Manager Liu Zhijun, Director, Vice
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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
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 report period by the Wage and Assessment Committee of the Board of Directors
and the details were as follows:
1. The Wage and Assessment Committee of the Company held the first meeting of 2015 on March 10, 2015 by
means of telecommunication. The meeting reviewed and approved the Proposal of Shenzhen SEG Co., Ltd. on
the Adjustment of WagesCorporate Organizational Structure.
2. The Wage and Assessment Committee of the Company held the second meeting of 2015 on April 17, 2015 in
the Company conference room. The meeting reviewed and approved the Proposal of Shenzhen SEG Co., Ltd. on
the Adjustment of Wages.
(V) Performance of duties by the Development Strategy Committee of the Board of Directors
Two meetings were held in the report 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 2015 on December 23, 2015
by means of telecommunication. The meeting reviewed and approved the Rolling Business Plan from 2016 to
2018 of Shenzhen SEG Co., Ltd.
2. The Development Strategy Committee of the Company held the second meeting of 2015 on December 31,
2015 by means of telecommunication. The meeting reviewed and approved the Work Summary of 2015 and the
Work Plan for 2016 of Shenzhen SEG Co., Ltd.
VII. Performance of the Board of Supervisors
Whether the Board of Supervisors found any risk in the Company during supervision in the report period
□ Yes √ No
The Board of Supervisors raised no objections against the supervised matters in the report period.
VIII. Assessment and incentive system for senior executives
Principles on performance management of senior executives of the Company
(I) Target management principle: the target management over senior executives is carried out in light of
enterprise annual target and enterprise management requirements.
(II) Categorized assessment principle: categorized assessment is carried out in accordance with the industry
engaged in by the enterprise and the industrial characteristics.
(III) The principle of coupling incentives with restrictions: senior executives were rewarded or punished in
accordance with the completion of annual targets, and the assessment system is carried out where incentives are
coupled with restrictions.
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IX. Internal control
1. Information about the major defects discovered in the report period in the internal control
self-assessment report
□ Yes √ No
2. Internal Control Self-assessment Report
Disclosure date of the internal control
March 30, 2016
self-assessment report
Disclosure index of the internal control Cninfo Website: http://www.cninfo.com.cnAnnouncement about Internal Control
self-assessment report Self-assessment Report (2014) of Shenzhen SEG Co., Ltd.
Defect Identification Standard
Category Financial Statements Non-financial statements
Major defects: extremely negative
impact due to the lack of scientific
decision-making procedures, the
intended result being in contrary to the
result achieved, or extremely low
Major defect: malpractice by directors,
decision-making efficiency, rendering the
supervisors and senior executives; correction
Company impossible to grasp market
to major errors in published financial report;
opportunities; major miscalculation due
current financial report included major
to the Company's decision-making
faults, and internal control failed to detect
procedures; the Company is given
such faults in the process; the internal
warnings from the securities agency or
control and supervision by the Audit
the securities exchange; serious loss of
Committee and Internal Audit Division on
medium and high level management and
the internal control of the financial report is
senior technical staff; frequent negative
invalid.
news on media, with widespread
Important defects: failure in selecting and
negative influence and long-term impact;
applying accounting policies according to
Identification standards lack of systematic control over major
publicly recognized accounting standards;
business or failure of the system; failure
failure in establishing anti-malpractice
in correcting major or significant internal
procedures and control measures; failure in
control defects of the Company.
establishing corresponding control
Important defects: serious negative
mechanism or implementing corresponding
impact due to a lack of scientific
compensatory control on non-conventional
decision-making procedure, the result
or special transaction accounting treatments;
achieved is far from the intended target,
one or more defects in the process of
or the decision-making efficiently is very
controlling closing financial report, and
low, with frequent cases where market
failure in ensuring the truthfulness and
opportunities are lost; general
accuracy of the financial statements
miscalculation in the Company's
prepared.
decision-making procedures; failure in
correcting important or general defects in
the Company's internal control; serious
loss of personnel in important positions;
regional impact of negative news on
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media; defects in institution or system
for important business.
Major defects: satisfying one or more
conditions as follows: erroneous
reporting≥10% of total profit; erroneous
reporting≥1% of total asset; erroneous
reporting≥2% of business income; erroneous
reporting≥1% of owner's equity. Major defects: absolute value of direct
Important defects: satisfying one or more property loss≥10% of total profit.
Quantification conditions as follows: 5% of total Important defects: absolute value of
profit≤erroneous reporting<10% of total direct property loss≥5% of total profit
profit; 0.5% of total assets≤erroneous but <10% of total profit.
reporting<1% of total asset; 1% of business
income≤erroneous reporting<2% of total
business income; 0.5% of owner's
equity≤erroneous reporting<1% of owner's
equity.
Number of major defects in financial report 0
Number of major defects in non-financial
0
report
Number of important defects in financial
0
report
Number of important defects in financial
6
report
X. Internal Control Audit Report
√ Applicable □ Not applicable
Opinion paragraph in the internal control audit report
Da Hua Certified Public Accountants thinks that the Company has maintained effective internal financial control in every major
aspect in accordance with the Basic Standard for Enterprise Internal Control and relevant rules and regulations on December 31,
2015.
Disclosure on internal audit report Disclosure
Disclosure date of the internal
March 30, 2016
control audit report
Disclosure index of the internal Cninfo Website: http://www.cninfo.com.cnAnnouncement about Internal Control Report
control audit report (2014) of Shenzhen SEG Co., Ltd.
Type of advice on disclosure on
No conservation in standard
internal audit report
Whether or not major defects exist
No
in non-financial report
Does the accounting firm provide the internal control audit report with a modified opinion?
□ Yes √ No
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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
Chapter 10 Financial Report
I. Auditor's Report
Type of auditor’s opinion Non-standard audit opinions
Signing date of Audit Report March 28, 2016
Da Hua Certified Public Accountants (Special General
Name of audit firm
Partnership)
Auditor’s Report Document No. Da Hua Shen Zi [2016] No. 001907
Names of Certified Public Accountant Zhang Xing and Zhang Zhaocheng
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Shenzhen SEG Co., Ltd.
Audit Report and Financial Statements
From January 1, 2015 to December 31, 2015
CONTENTS Page
I. Audit Report 85-105
II. Audited Financial Statements 85-105
Consolidated Balance Sheet
Consolidated Profit Statement
Consolidated Cash Flow Statement
Consolidated Statement of Changes in Owners' Equity
Balance Sheet of the Parent Company
Profit Statement of the Parent Company
Cash Flow Statement of the Parent Company
Statement of Changes in Owners' Equity of the Parent
Company
Notes to the Financial Statements 105-177
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I. Audit Report
D. H. S. Zi. [2016] No. 001907
Shenzhen SEG Co., Ltd.,
We have audited the attached Financial Statements of Shenzhen SEG Co., Ltd (hereinafter referred to as "SEG
Corporation"), including the Consolidated Balance Sheet and the Balance Sheet of the Parent Company as of
December 31, 2015 as well as the Consolidated Profit Statement, the Profit Statement of the Parent Company,
the Consolidated Cash Flow Statement, the Cash Flow Statement of the Parent Company, the Consolidated
Statement of Changes in Owners' Equity, the Statement of Changes in Owners' Equity of the Parent Company
and the Notes to Financial Statements for the year 2015.
1. Responsibilities of the management to financial statements
It is the responsibility of the management of SEG Corporation to prepare and fairly present financial statements,
which includes: (1) Preparing financial statements in accordance with the provisions of the Accounting Standard
for Business Enterprises and making the statements fairly reflect the financial status of the Company; (2)
Designing, implementing and maintaining necessary internal control in order to avoid major misstatements
resulting from fraud, malpractice, mistakes or errors.
2. CPA's responsibility
Our responsibility is to express opinions on these financial statements on the basis of the implementation of
auditing work. We have conducted our audit in accordance with the provisions in the Auditing Standards for
Chinese Certified Public Accountants. The Auditing Standards for Chinese Certified Public Accountants require
that we observe the professional ethics and regulations, plan and perform the audit to obtain reasonable
assurance about whether these financial statements are free of misstatements.
The audit involves the implementation of an audit procedure to obtain the auditing evidences supporting the
amounts in the financial statements and relevant disclosure. The selection of the auditing procedure depends on
the judgment of the CPA, including the estimation to the risks on material misstatements in the financial
statements resulting from malpractice or mistakes and errors. During the process of risk assessment, we took into
account the internal control related to the 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
expressing auditor's opinions.
3. Auditor's opinion
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We believe that the Financial Statements of SEG Corporation 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 status as of December 31, 2015 as well as the consolidated and
the parent company's operating results and cash flows for the year 2015.
Da Hua Certified Public Accountants (Special General Partnership)
Certified Public Accountant: Zhang Xing
Certified Public Accountant: Zhang Chaocheng Zhang Chaocheng
March 28, 2016
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II. Financial Statements
The Unit in the notes to financial statements is RMB Yuan.
1. Consolidated Balance Sheet
Prepared by: Shenzhen SEG Co., Ltd.
December 31, 2015
Unit: Yuan
Item Closing balance Opening balance
Current assets:
Monetary funds 276,863,429.10 383,056,680.70
Deposit reservation for balance
Loans to other banks 40,000,000.00 30,000,000.00
Financial assets measured by fair value with
changes included in current profit and loss
Derivative financial assets
Notes receivable 84,618.08
Accounts receivable 98,212,422.87 185,866,040.16
Prepayment 129,044,887.26 94,633,317.07
Premiums receivable
Reinsurance accounts receivable
Reinsurance deposit receivable
Interest receivable
Dividends receivable
Other accounts receivable 27,352,784.33 95,366,156.27
Redemptory monetary capital for resale
Inventory 450,809,934.72 278,281,586.72
Held-for-sale assets
Non-current assets due within one year
Other current assets 339,430,419.74 443,543,013.49
Total current assets 1,361,713,878.02 1,510,831,412.49
Non-current assets:
Loans and prepayment issued 475,520,822.08 452,517,072.06
Available-for-sale financial assets 34,539,973.24 34,350,035.45
Held-to-maturity investment
Long-term receivables
Long-term equity investment 185,122,573.88 82,100,197.01
Investment properties 443,851,726.40 462,562,882.78
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Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
Item Closing balance Opening balance
Fixed assets 37,524,425.25 41,408,298.43
Construction in progress 140,810.00
Engineering materials
Disposal of fixed assets
Productive biological assets
Oil & gas assets
Intangible assets 1,143,762.11 655,587.54
Development expenses
Goodwill 10,328,927.82 10,328,927.82
Long-term expenses to be amortized 49,235,999.86 49,768,678.00
Deferred income tax assets 10,433,814.57 10,539,563.16
Other non-current assets 5,103,811.14 4,655,063.54
Total non-current assets 1,252,946,646.35 1,148,886,305.79
Total assets 2,614,660,524.37 2,659,717,718.28
Current liabilities:
Short-term borrowing 367,759,630.48 189,246,687.38
Loans from central bank
Deposits from customers and interbank
Loans from other banks
Financial liabilities measured by fair value with
changes included in current profit and loss
Derivative financial liabilities
Notes payable
Accounts payable 89,908,781.98 200,129,651.92
Prepayment from customers 190,430,121.05 183,059,311.31
Financial assets sold for repurchase
Service charges and commissions payable
Payroll payable 21,849,134.16 18,858,843.33
Taxes payable 34,645,030.07 39,445,696.47
Interest payable 516,758.34 10,295,250.65
Dividends payable 2,218,224.58 1,717,882.74
Other payables 194,329,885.69 244,804,403.06
Reinsurance accounts payable
Insurance deposit
Customer brokerage deposits
Securities underwriting brokerage deposits
Held-for-sale liabilities
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Item Closing balance Opening balance
Non-current liabilities due within one year
Other current liabilities 250,000,000.00
Total current liabilities 901,657,566.35 1,137,557,726.86
Non-current liabilities:
Long-term borrowing
Bonds payable
Preferred stock
Perpetual capital securities
Long-term payables
Payroll payable
Special payables
Estimated liabilities 7,000,000.00
Deferred income 9,634,114.77 9,705,371.01
Deferred income tax liabilities 16,024,102.35 17,085,543.80
Other non-current liabilities
Total non-current liabilities 32,658,217.12 26,790,914.81
Total liabilities 934,315,783.47 1,164,348,641.67
Owners' equity:
Share capital 784,799,010.00 784,799,010.00
Other equity instruments
Preferred stock
Perpetual capital securities
Capital reserve 506,545,831.11 404,727,257.72
Less: Treasury shares
Other comprehensive income 326,662.48 231,817.05
Special reserve
Surplus reserve 109,922,336.87 102,912,835.67
General risk provision
Undistributed profits 73,532,388.70 6,299,799.41
Total owners' equity attributable to the parent company 1,475,126,229.16 1,298,970,719.85
Minority shareholders' equity 205,218,511.74 196,398,356.76
Total owners' equity 1,680,344,740.90 1,495,369,076.61
Total liabilities and owners' equity 2,614,660,524.37 2,659,717,718.28
Legal representative: Wang Li Person in charge of accounting: Liu Zhijun Responsible person of the
accounting institution: Ying Huadong
2. Balance Sheet of the Parent Company
111
Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
Unit: Yuan
Item Closing balance Opening balance
Current assets:
Monetary funds 186,369,470.58 204,395,253.65
Financial assets measured by fair value with
changes included in current profit and loss
Derivative financial assets
Notes receivable
Accounts receivable
Prepayment 418,544.10
Interest receivable 897,225.78
Dividends receivable
Other accounts receivable 570,671,617.38 410,453,048.03
Inventory 112,715.50 786,589.00
Held-for-sale assets
Non-current assets due within one year
Other current assets 393,166,401.54 463,590,246.68
Total current assets 1,150,738,749.10 1,080,122,363.14
Non-current assets:
Available-for-sale financial assets 33,515,392.83 33,515,392.83
Held-to-maturity investment
Long-term receivables
Long-term equity investment 455,106,100.12 382,083,723.25
Investment properties 284,399,860.14 294,918,970.98
Fixed assets 19,458,584.25 19,583,422.45
Construction in progress 140,810.00
Engineering materials
Disposal of fixed assets
Productive biological assets
Oil & gas assets
Intangible assets 622,054.24 271,067.06
Development expenses
Goodwill
Long-term expenses to be amortized 7,000,181.66 4,589,158.00
Deferred income tax assets 8,242,045.89 8,354,062.87
Other non-current assets 1,313,063.54
Total non-current assets 808,485,029.13 744,628,860.98
Total assets 1,959,223,778.23 1,824,751,224.12
112
Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
Item Closing balance Opening balance
Current liabilities:
Short-term borrowing 315,000,000.00 100,000,000.00
Financial liabilities measured by fair value with
changes included in current profit and loss
Derivative financial liabilities
Notes payable
Accounts payable 36,075.52 1,500.00
Prepayment from customers 42,704,620.99 65,628,441.87
Payroll payable 13,652,201.42 9,907,467.00
Taxes payable 10,033,418.41 20,697,003.64
Interest payable 477,402.78 10,237,500.66
Dividends payable 119,803.29 119,803.29
Other payables 95,119,560.37 87,202,387.17
Held-for-sale liabilities
Non-current liabilities due within one year
Other current liabilities 250,000,000.00
Total current liabilities 477,143,082.78 543,794,103.63
Non-current liabilities:
Long-term borrowing
Bonds payable
Preferred stock
Perpetual capital securities
Long-term payables
Payroll payable
Special payables
Estimated liabilities 7,000,000.00
Deferred income 9,500,000.00 9,500,000.00
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities 16,500,000.00 9,500,000.00
Total liabilities 493,643,082.78 553,294,103.63
Owners' equity:
Share capital 784,799,010.00 784,799,010.00
Other equity instruments
Preferred stock
Perpetual capital securities
Capital reserve 507,773,837.83 405,955,264.44
113
Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
Item Closing balance Opening balance
Less: Treasury shares
Other comprehensive income
Special reserve
Surplus reserve 109,922,336.87 102,912,835.67
Undistributed profits 63,085,510.75 -22,209,989.62
Total owners' equity 1,465,580,695.45 1,271,457,120.49
Total liabilities and owners' equity 1,959,223,778.23 1,824,751,224.12
Legal representative: Wang Li Person in charge of accounting: Liu Zhijun Responsible person of the
accounting institution: Ying Huadong
3. Consolidated Profit Statement
Unit: Yuan
Amount incurred in the current Amount incurred in the previous
Item
period period
I. Total operating revenue 846,675,884.33 752,414,741.06
Including: Operating revenue 741,533,676.93 681,343,920.99
Interest income 101,205,806.40 61,496,910.07
Earned premiums
Service charges and commissions income 3,936,401.00 9,573,910.00
II. Total operating cost 708,934,598.86 649,917,541.74
Including: Operating cost 618,062,716.19 560,944,457.78
Interest expenses 5,599,355.64 3,344,972.23
Commissions
Surrender value
Net compensation pay-outs
Net insurance deposit accrued
Insurance dividends
Reinsurance expenses
Operating tax and surcharges 27,804,172.86 26,612,635.13
Sale expenses 4,585,434.23 2,149,313.48
Management expenses 44,222,779.09 45,406,128.22
Financial cost 3,564,776.76 9,168,643.60
Loss from asset impairment 5,095,364.09 2,291,391.30
Income from change of fair value (enter "-" for
loss)
Income from investment (enter "-" for loss) 17,647,493.77 7,204,943.01
Including: Income from investment in joint
1,703,803.48 -24,010,440.06
ventures and associated enterprises
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Amount incurred in the current Amount incurred in the previous
Item
period period
Income from exchange (enter "-" for loss)
III. Operating profit (enter "-" for loss) 155,388,779.24 109,702,142.33
Add: Non-operating revenue 2,367,546.40 3,135,256.00
Including: Gains on disposal of non-current
19,382.00 21,274.83
assets
Less: Non-operating expenses 14,687,757.38 1,075,753.92
Including: Loss from disposal of non-current
276,651.63 14,799.49
assets
IV. Total profit (enter "-" for total loss) 143,068,568.26 111,761,644.41
Less: Income tax 35,099,837.65 33,087,414.03
V. Net profit (enter "-" for net loss) 107,968,730.61 78,674,230.38
Net profit attributable to owners of the parent
74,242,090.49 48,380,294.05
company
Profit and loss of minority shareholders 33,726,640.12 30,293,936.33
VI. Net of tax of other comprehensive incomes 142,453.34 -5,916.59
Total owners' net of tax of other comprehensive
94,845.43 -3,939.27
incomes attributable to the parent company
1. Other comprehensive incomes not to be
reclassified into profit and loss
(1) Changes of net liabilities or net assets of
the re-measured defined benefit plans
(2) Shares of the investee of other
comprehensive incomes not to be reclassified into profit
and loss under the equity method
2. Other comprehensive incomes to be reclassified
94,845.43 -3,939.27
into profit and loss
(1) Shares of the investee of other
comprehensive incomes to be reclassified into profit and
loss under the equity method
(2) Profit and loss from changes of fair
94,845.43 -3,939.27
value of the available-for-sale financial assets
(3) Held-to-maturity investments
categorized as profit and loss from the available-for-sale
financial assets
(4) Effective gains or loss from cash flows
(5) Foreign currency translation differences
(6) Others
Net of tax of other comprehensive incomes
47,607.91 -1,977.32
attributable to minority shareholders
115
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Amount incurred in the current Amount incurred in the previous
Item
period period
VII. Total comprehensive income 108,111,183.95 78,668,313.79
Total comprehensive income attributable to
74,336,935.92 48,376,354.78
shareholders of the parent company
Total comprehensive income attributable to
33,774,248.03 30,291,959.01
minority shareholders
VIII. Earnings per share
1. Basic earnings per share 0.0946 0.0616
2. Diluted earnings per share 0.0946 0.0616
Legal representative: Wang Li Person in charge of accounting: Liu Zhijun Responsible person of the
accounting institution: Ying Huadong
4. Profit Statement of the Parent Company
Unit: Yuan
Amount incurred in the current Amount incurred in the previous
Item
period period
I. Operating revenue 123,925,453.43 125,724,062.61
Less: Operating cost 76,436,384.08 76,758,875.18
Operating tax and surcharges 7,016,959.19 7,389,606.24
Sale expenses
Management expenses 22,226,491.04 22,468,321.28
Financial cost -18,483,129.66 7,413,635.27
Loss from asset impairment -448,067.93 -51,814.00
Income from change of fair value (enter "-" for
loss)
Income from investment (enter "-" for loss) 70,405,467.34 31,358,353.59
Including: Income from investment in joint
1,703,803.48 -24,010,440.06
ventures and associated enterprises
II. Operating profit (enter "-" for loss) 107,582,284.05 43,103,792.23
Add: Non-operating revenue 297,504.50 721,464.41
Including: Gains on disposal of non-current
1,975.00
assets
Less: Non-operating expenses 8,207,673.50 132,950.00
Including: Loss from disposal of non-current
1,270.00
assets
III. Total profit (enter "-" for total loss) 99,672,115.05 43,692,306.64
Less: Income tax 7,367,113.48 10,804,333.63
V. Net profit (enter "-" for net loss) 92,305,001.57 32,887,973.01
V. Net of tax of other comprehensive incomes
116
Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
1. Other comprehensive incomes not to be
reclassified into profit and loss
(1) Changes of net liabilities or net assets of
the re-measured defined benefit plans
(2) Shares of the investee of other
comprehensive incomes not to be reclassified into profit
and loss under the equity method
2. Other comprehensive incomes to be reclassified
into profit and loss
(1) Shares of the investee of other
comprehensive incomes to be reclassified into profit and
loss under the equity method
(2) Profit and loss from changes of fair
value of the available-for-sale financial assets
(3) Held-to-maturity investments
categorized as profit and loss from the available-for-sale
financial assets
(4) Effective gains or loss from cash flows
(5) Foreign currency translation differences
(6) Others
VI. Total comprehensive income 92,305,001.57 32,887,973.01
VII. Earnings per share
1. Basic earnings per share
2. Diluted earnings per share
Legal representative: Wang Li Person in charge of accounting: Liu Zhijun Responsible person of the
accounting institution: Ying Huadong
5. Consolidated Cash Flow Statement
Unit: Yuan
Amount incurred in the current Amount incurred in the previous
Item
period period
I. Cash flow from operating activities:
Cash received from sales of goods and rendering of
1,511,673,510.40 1,939,331,584.78
services
Net increase in deposits from customers and
interbank
Net increase in loans from central bank
Net increase in borrowing from other financial
institutions
Cash received from premiums of primary insurance
contracts
Net cash received from reinsurance business
117
Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
Amount incurred in the current Amount incurred in the previous
Item
period period
Net increase in deposits from policyholders and
investment
Net increase in financial assets measured by fair
value with changes included in current profit and loss
Cash received from interest and commissions 102,063,076.56 72,018,080.07
Net increase in loans from other banks
Net increase in redemption capital
Tax refunds 152,736,297.03 89,775,871.83
Other cash received related to operating activities 421,560,930.37 338,008,186.19
Subtotal of cash inflow from operating activities 2,188,033,814.36 2,439,133,722.87
Cash paid for goods and service 1,521,336,369.82 1,992,374,811.35
Net increase in loans to customers and prepayment 23,205,533.47 210,971,045.00
Net increase in deposits with central bank and
interbank
Cash paid for compensation pay-outs of primary
insurance contracts
Cash paid for interest, service charges, and
120,333.34 3,287,222.24
commissions
Cash paid as insurance dividends
Cash paid to and on behalf of employees 101,723,764.24 95,611,490.67
Taxes paid 127,410,425.79 141,705,938.09
Other cash paid related to operating activities 426,690,911.52 423,116,836.46
Subtotal of cash outflow in operating activities 2,200,487,338.18 2,867,067,343.81
Net cash flow from operating activities -12,453,523.82 -427,933,620.94
II. Cash flows from investing activities:
Cash received from withdrawal of investment 2,247,982,304.11 3,950,900,000.00
Cash received from investment income 16,383,656.54 37,207,556.03
Net cash received from disposal of fixed assets,
183,182.50 25,300.00
intangible assets and other long-term assets
Net cash received from disposal of subsidiaries and
other business units
Other cash received related to investing activities 9,500,000.00
Subtotal of cash inflow from investing activities 2,264,549,143.15 3,997,632,856.03
Cash paid for purchase and construction of fixed
17,573,875.73 26,270,729.51
assets, intangible assets and other long-term assets
Cash paid for investment 2,154,600,000.00 3,888,579,000.00
Net increase in mortgage loans
Net cash paid for acquisition of subsidiaries and
118
Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
Amount incurred in the current Amount incurred in the previous
Item
period period
other business units
Other cash paid related to investing activities
Subtotal of cash outflow in investing activities 2,172,173,875.73 3,914,849,729.51
Net cash flow from investing activities 92,375,267.42 82,783,126.52
III. Cash flow from financing activities:
Cash received by absorbing investment
Including: Cash received by subsidiaries from
investment of minority shareholders
Borrowings received 442,000,000.00 355,400,000.00
Cash received from bond issue 250,000,000.00
Other cash received related to financing activities 72,952,371.12
Subtotal of cash inflow from financing activities 442,000,000.00 678,352,371.12
Cash repayment 513,484,629.66 236,153,312.62
Cash paid for dividend and profit distribution or
56,139,431.32 29,547,818.85
interest payment
Including: Dividends and profit paid by
23,853,751.20 19,156,907.18
subsidiaries to minority shareholders
Other cash paid related to financing activities 58,830,972.92 21,037,568.50
Subtotal of cash outflow in financing activities 628,455,033.90 286,738,699.97
Net cash flow arising from financing activities -186,455,033.90 391,613,671.15
IV. Influence of exchange rate fluctuation on cash and
38.70 10.16
cash equivalents
V. Net increase of cash and cash equivalents -106,533,251.60 46,463,186.89
Add: Opening balance of cash and cash equivalents 382,056,680.70 335,593,493.81
VI. Closing balance of cash and cash equivalents 275,523,429.10 382,056,680.70
Legal representative: Wang Li Person in charge of accounting: Liu Zhijun Responsible person of the
accounting institution: Ying Huadong
6. Cash Flow Statement of the Parent Company
Unit: Yuan
Amount incurred in the current Amount incurred in the previous
Item
period period
I. Cash flow from operating activities:
Cash received from sales of goods and rendering of
124,700,292.45 114,802,727.21
services
Tax refunds
Other cash received related to operating activities 180,735,884.82 395,074,870.68
Subtotal of cash inflow from operating activities 305,311,177.27 509,877,597.89
119
Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
Amount incurred in the current Amount incurred in the previous
Item
period period
Cash paid for goods and service 55,054,712.57 34,329,122.58
Cash paid to and on behalf of employees 37,351,053.58 37,875,519.23
Taxes paid 73,873,732.82 98,652,745.40
Other cash paid related to operating activities 262,681,816.46 515,490,539.56
Subtotal of cash outflow in operating activities 428,961,315.43 686,347,926.77
Net cash flow from operating activities -123,525,138.16 -176,470,328.88
II. Cash flows from investing activities:
Cash received from withdrawal of investment 2,065,693,441.09 3,581,000,000.00
Cash received from investment income 70,106,085.85 60,463,740.83
Net cash received from disposal of fixed assets,
5,420.00
intangible assets and other long-term assets
Net cash received from disposal of subsidiaries and
other business units
Other cash received related to investing activities 9,500,000.00
Subtotal of cash inflow from investing activities 2,135,799,526.94 3,650,969,160.83
Cash paid for purchase and construction of fixed
2,002,530.00 3,672,148.03
assets, intangible assets and other long-term assets
Cash paid for investment 1,965,600,000.00 3,782,000,000.00
Net cash paid for acquisition of subsidiaries and
other business units
Other cash paid related to investing activities
Subtotal of cash outflow in investing activities 1,967,602,530.00 3,785,672,148.03
Net cash flow from investing activities 168,196,996.94 -134,702,987.20
III. Cash flow from financing activities:
Cash received by absorbing investment
Borrowings received 315,000,000.00 180,000,000.00
Cash received from bond issue 250,000,000.00
Other cash received related to financing activities 302,371.12
Subtotal of cash inflow from financing activities 315,000,000.00 430,302,371.12
Cash repayments of amounts borrowed 350,000,000.00 80,000,000.00
27,697,680.55 7,132,693.34
Other cash paid related to financing activities 742,500.00
Subtotal of cash outflow in financing activities 377,697,680.55 87,875,193.34
Net cash flow arising from financing activities -62,697,680.55 342,427,177.78
IV. Influence of exchange rate fluctuation on cash and
38.70 13.31
cash equivalents
V. Net increase of cash and cash equivalents -18,150,783.07 31,253,875.01
120
Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
Amount incurred in the current Amount incurred in the previous
Item
period period
Add: Opening balance of cash and cash equivalents 204,395,253.65 173,141,378.64
VI. Closing balance of cash and cash equivalents 186,244,470.58 204,395,253.65
Legal representative: Wang Li Person in charge of accounting: Liu Zhijun Responsible person of the
accounting institution: Ying Huadong
121
Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
7. Consolidated Statement of Changes in Owners' Equity
Amount incurred in the current period
Unit: Yuan
Current period
Owners' equity attributable to the parent company
Other equity instruments Minority
Item Less: Other General Total owners'
Perpetual Special Undistributed shareholders'
Share capital Preferred Capital reserve Treasury comprehensive Surplus reserve risk equity
reserve profits equity
capital Others
Shares shares income provision
securities
I. Closing balance of the
784,799,010.00 404,727,257.72 231,817.05 102,912,835.67 6,299,799.41 196,398,356.76 1,495,369,076.61
previous year
Plus: Change of
accounting policies
Correction to
errors of the previous
period
Merger of the
enterprises under the
control of a same entity
Others
II. Opening balance of the
784,799,010.00 404,727,257.72 231,817.05 102,912,835.67 6,299,799.41 196,398,356.76 1,495,369,076.61
current year
III. Increase and decrease
of the current year (enter 101,818,573.39 94,845.43 7,009,501.20 67,232,589.29 8,820,154.98 184,975,664.29
"-" for decrease)
1. Total comprehensive
94,845.43 74,242,090.49 33,774,248.03 108,111,183.95
income
122
Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
Current period
Owners' equity attributable to the parent company
Other equity instruments Minority
Item Less: Other General Total owners'
Perpetual Special Undistributed shareholders'
Share capital Preferred Capital reserve Treasury comprehensive Surplus reserve risk equity
reserve profits equity
capital Others
Shares shares income provision
securities
2. Capital invested or
101,818,573.39 101,818,573.39
decreased by owners
(1) Ordinary shares
invested by the
shareholders
(2) Capitals invested by
other equity instrument
holders
(3) Amount of
share-based payment
included in owners' equity
(4) Others 101,818,573.39 101,818,573.39
3. Profit distribution 7,009,501.20 -7,009,501.20 -24,954,093.05 -24,954,093.05
(1) Accrual of surplus
reserve
(2) Accrual of general
-24,954,093.05 -24,954,093.05
risk provision
(3) Amount distributed to
owners (or shareholders)
(4) Others
4. Internal carrying
123
Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
Current period
Owners' equity attributable to the parent company
Other equity instruments Minority
Item Less: Other General Total owners'
Perpetual Special Undistributed shareholders'
Share capital Preferred Capital reserve Treasury comprehensive Surplus reserve risk equity
reserve profits equity
capital Others
Shares shares income provision
securities
forward of owners' equity
(1) Capital reserve
transferred to increase
capital (or share capital)
(2) Surplus reserve
transferred to increase
capital (or share capital)
(3) Surplus reserve
compensating losses
(4) Others
5. Special reserve
(1) Accrual of the current
year
(2) Amount utilized in
the current period
6. Others
IV. Closing balance of the
784,799,010.00 506,545,831.11 326,662.48 109,922,336.87 73,532,388.70 205,218,511.74 1,680,344,740.90
current period
Legal representative: Wang Li Person in charge of accounting: Liu Zhijun Responsible person of the accounting institution: Ying Huadong
124
Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
Amount of the previous period
Unit: Yuan
Previous period
Owners' equity attributable to the parent company
Other equity instruments Minority
Item Less: Other General Total owners'
Special Undistributed shareholders'
Perpetual equity
Share capital Preferred Capital reserve Treasury comprehensive Surplus reserve risk
reserve profits equity
capital Others
Shares shares income provision
securities
I. Closing balance of the
784,799,010.00 404,357,267.73 235,756.32 102,912,835.67 -42,080,494.64 185,584,512.58 1,435,808,887.66
previous year
Plus: Change of
accounting policies
Correction to
errors of the previous
period
Merger of
enterprises under common
control
Others
II. Opening balance of the
784,799,010.00 404,357,267.73 235,756.32 102,912,835.67 -42,080,494.64 185,584,512.58 1,435,808,887.66
current year
III. Increase and decrease
of the current year (enter 369,989.99 -3,939.27 48,380,294.05 10,813,844.18 59,560,188.95
"-" for decrease)
1. Total comprehensive
-3,939.27 48,380,294.05 30,291,959.01 78,668,313.79
income
125
Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
Previous period
Owners' equity attributable to the parent company
Other equity instruments Minority
Item Less: Other General Total owners'
Special Undistributed shareholders'
Perpetual equity
Share capital Preferred Capital reserve Treasury comprehensive Surplus reserve risk
reserve profits equity
capital Others
Shares shares income provision
securities
2. Capital invested or
67,618.87 79,378.67 146,997.54
decreased by owners
(1) Ordinary shares
invested by the
shareholders
(2) Capitals invested by
other equity instrument
holders
(3) Amount of
share-based payment
included in owners' equity
(4) Others 67,618.87 79,378.67 146,997.54
3. Profit distribution -19,557,493.50 -19,557,493.50
(1) Accrual of surplus
reserve
(2) Accrual of general risk
-19,557,493.50 -19,557,493.50
provision
(3) Amount distributed to
owners (or shareholders)
(4) Others
126
Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
Previous period
Owners' equity attributable to the parent company
Other equity instruments Minority
Item Less: Other General Total owners'
Special Undistributed shareholders'
Perpetual equity
Share capital Preferred Capital reserve Treasury comprehensive Surplus reserve risk
reserve profits equity
capital Others
Shares shares income provision
securities
4. Internal carrying
forward of owners' equity
(1) Capital reserve
transferred to increase
capital (or share capital)
(2) Surplus reserve
transferred to increase
capital (or share capital)
(3) Surplus reserve
compensating losses
(4) Others
5. Special reserve
(1) Accrual of the current
year
(2) Amount utilized in the
current period
6. Others 302,371.12 302,371.12
IV. Closing balance of the
784,799,010.00 404,727,257.72 231,817.05 102,912,835.67 6,299,799.41 196,398,356.76 1,495,369,076.61
current period
Legal representative: Wang Li Person in charge of accounting: Liu Zhijun Responsible person of the accounting institution: Ying Huadong
8. Statement on Changes of Owners' Equity of the Parent Company
127
Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
Amount incurred in the current period
Unit: Yuan
Amount incurred in the current period
Other equity instruments
Other
Item Perpetual Less: Treasury Undistributed Total owners'
Share capital Preferred Capital reserve comprehensive Special reserve Surplus reserve
capital Others shares profits equity
Shares income
securities
I. Closing balance of the
784,799,010.00 405,955,264.44 102,912,835.67 -22,209,989.62 1,271,457,120.49
previous year
Plus: Change of
accounting policies
Correction to
errors of the previous period
Others
II. Opening balance of the
784,799,010.00 405,955,264.44 102,912,835.67 -22,209,989.62 1,271,457,120.49
current year
III. Increase and decrease of
the current year (enter "-" 101,818,573.39 7,009,501.20 85,295,500.37 194,123,574.96
for decrease)
1. Total comprehensive
92,305,001.57 92,305,001.57
income
2. Capital invested or
101,818,573.39 101,818,573.39
decreased by owners
(1) Ordinary shares invested
by the shareholders
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Amount incurred in the current period
Other equity instruments
Other
Item Perpetual Less: Treasury Undistributed Total owners'
Share capital Preferred Capital reserve comprehensive Special reserve Surplus reserve
capital Others shares profits equity
Shares income
securities
(2) Capitals invested by
other equity instrument
holders
(3) Amount of share-based
payment included in owners'
equity
(4) Others 101,818,573.39 101,818,573.39
3. Profit distribution 7,009,501.20 -7,009,501.20
(1) Accrual of surplus
7,009,501.20 -7,009,501.20
reserve
(2) Amount distributed to
owners (or shareholders)
(3) Others
4. Internal carrying forward
of owners' equity
(1) Capital reserve
transferred to increase
capital (or share capital)
(2) Surplus reserve
transferred to increase
capital (or share capital)
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Amount incurred in the current period
Other equity instruments
Other
Item Perpetual Less: Treasury Undistributed Total owners'
Share capital Preferred Capital reserve comprehensive Special reserve Surplus reserve
capital Others shares profits equity
Shares income
securities
(3) Surplus reserve
compensating losses
(4) Others
5. Special reserve
(1) Accrual of the current
year
(2) Amount utilized in the
current period
6. Others
IV. Closing balance of the
784,799,010.00 507,773,837.83 109,922,336.87 63,085,510.75 1,465,580,695.45
current period
Legal representative: Wang Li Person in charge of accounting: Liu Zhijun Responsible person of the accounting institution: Ying Huadong
Amount of previous period
Unit: Yuan
Previous period
Other equity instruments
Other
Item Perpetual Less: Treasury Undistributed Total owners'
Share capital Preferred Capital reserve comprehensive Special reserve Surplus reserve
capital Others shares profits equity
Shares income
securities
I. Closing balance of the
784,799,010.00 405,652,893.32 102,912,835.67 -55,097,962.63 1,238,266,776.36
previous year
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Previous period
Other equity instruments
Other
Item Perpetual Less: Treasury Undistributed Total owners'
Share capital Preferred Capital reserve comprehensive Special reserve Surplus reserve
capital Others shares profits equity
Shares income
securities
Plus: Change of
accounting policies
Correction to
errors of the previous period
Others
II. Beginning balance of the
784,799,010.00 405,652,893.32 102,912,835.67 -55,097,962.63 1,238,266,776.36
current year
III. Increase and decrease of
the current year (enter "-" 302,371.12 32,887,973.01 33,190,344.13
for decrease)
1. Total comprehensive
32,887,973.01 32,887,973.01
income
2. Capital invested or
decreased by owners
(1) Ordinary shares
invested by the shareholders
(2) Capitals invested by
other equity instrument
holders
(3) Amount of share-based
payment included in owners'
equity
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Previous period
Other equity instruments
Other
Item Perpetual Less: Treasury Undistributed Total owners'
Share capital Preferred Capital reserve comprehensive Special reserve Surplus reserve
capital Others shares profits equity
Shares income
securities
(4) Others
3. Profit distribution
(1) Accrual of surplus
reserve
(2) Amount distributed to
owners (or shareholders)
(3) Others
4. Internal carrying forward
of owners' equity
(1) Capital reserve
transferred to increase
capital (or share capital)
(2) Surplus reserve
transferred to increase
capital (or share capital)
(3) Surplus reserve
compensating losses
(4) Others
5. Special reserve
(1) Accrual of the current
year
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Previous period
Other equity instruments
Other
Item Perpetual Less: Treasury Undistributed Total owners'
Share capital Preferred Capital reserve comprehensive Special reserve Surplus reserve
capital Others shares profits equity
Shares income
securities
(2) Amount utilized in the
current period
6. Others 302,371.12 302,371.12
IV. Closing balance of the
784,799,010.00 405,955,264.44 102,912,835.67 -22,209,989.62 1,271,457,120.49
current period
Legal representative: Wang Li Person in charge of accounting: Liu Zhijun Responsible person of the accounting institution: Ying Huadong
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Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2015
I. Company Profile
(I) Registered Place, Organizational Form and Headquarters Address
Shenzhen SEG Co., Ltd. (hereinafter referred to as "the Company" or “this Company”) was incorporated on July
16, 1996 through public offering with Shenzhen SEG Group Co., Ltd. as the sole initiator upon the approval of
relevant departments of Shenzhen and the state in accordance with the Company Law of the People's Republic of
China. The Enterprise Corporation Business License S. S. Zi. No. N16886 (Registration No. 440301103573251)
was issued on July 16, 1996. And upon the approval of the securities administration departments of Shenzhen
and the state, the Company's B shares and A shares were listed and traded on Shenzhen Stock Exchange
respectively in July and December, 1996.
On June 7, 2006, the Company passed a resolution at the general meeting of shareholders concerning the equity
division reform. According to the transfer plan of capital reserve into common shares, the Company distributed
4.6445 shares to tradable A share shareholders for each 10 shares, which totaled 40,233,322 transferred shares.
As a result, its non-tradable A shares were qualified for listing and circulating. Among the converted and
increased capital share obtained by the tradable A-share shareholders, 6,997,054 shares were received due to the
company's share capital expansion and the rest of 33,236,268 shares were the consideration paid to the tradable
A-share shareholders by non-tradable A-share holders under fixed arrangements.
As of December 31, 2015, the total capital share of the Company amounts to 784,799,010 shares, including
26,689 restricted shares and 784,772,321 unrestricted shares. The registered capital is 784,799,010 Yuan. The
registered address is 31F, Tower A, Stars Plaza, Huaqiang Road (N), Futian District, Shenzhen. The final
controlling party of the enterprise is Shenzhen State-owned Assets Supervision and Administration Commission.
District, Shenzhen. The parent company is Shenzhen SEG Group Co., Ltd., and its final controlling party is
Shenzhen State-owned Assets Supervision and Administration Commission.
(II) Business Scope
General items: Domestic commerce, goods supply and sales (excluding commodities under special operation,
control and sales), business development (specific projects shall be further declared), economic information
consulting. property lease, real estate agency, and operation of SEG special electronics markets (the license for
the special market shall be further applied for).
(III) Business Property and Business Operations
The Company engages in business service industry, involving products and service mainly in operation and
management of special electronics markets, lease business and other tertiary industries.
(IV) Approval for Disclosure of the Financial Statements
The Financial Statements are approved for disclosure by all directors of the Company on March 28, 2016.
II. Scope of Consolidated Financial Statements
20 entities are included in the current consolidated financial statements, namely:
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Type of Proportion of Proportion of voting
Company name Level
subsidiary shareholding (%) right(%)
Shenzhen SEG Baohua Enterprise Development Holding
I 66.58 66.58
Co., Ltd. subsidiary
Holding
Shenzhen Mellow Orange Business Hotel
grandson II 66.58 66.58
Management Co., Ltd
company
Wholly-owned
Shenzhen SEG Industrial Investment Co., Ltd. I 100.00 100.00
subsidiary
Holding
Changsha SEG Development Co., Ltd. I 46.00 51.00
subsidiary
Shenzhen SEG Electronics Market Management Share-controlled
I 70.00 70.00
Co., Ltd. subsidiary
Holding
Suzhou SEG Electronics Market Co., Ltd. I 45.00 45.00
subsidiary
Holding
Xi'an SEG Electronics Market Co., Ltd. I 65.00 65.00
subsidiary
Holding
Shenzhen SEG Credit Co., Ltd. I 53.02 53.02
subsidiary
Holding
Shenzhen SEG E-Commerce Co., Ltd. I 51.00 51.00
subsidiary
Shenzhen SEG Electronics Market Management Wholly-owned
I 100.00 100.00
Co., Ltd. subsidiary
Holding
Xi'an Hairong SEG Electronics Market Co., Ltd. I 51.00 51.00
subsidiary
Holding
Wujiang SEG Electronics Market Co., Ltd. I 51.00 51.00
subsidiary
Holding
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
Holding
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
Xi'an Fengdong New Town SEG Times Square Wholly-owned
I 100.00 100.00
Properties Co., Ltd. subsidiary
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For the cause of difference between the proportion of shareholding and the proportion of voting rights and the
basis for control of the invested entity even with half of voting rights or less, see "Attachment 8: Equities in
other entities – (1) Equities in subsidiaries".
Entities included in the consolidated financial statements of current period remain the same as that of previous
period.
III. Basis of preparation of the financial statements
(I) Basis of preparation of the financial statements
The Company has conducted confirmation and measurement based on the transactions and events that have been
actually incurred and in accordance with the Accounting Standards for Business Enterprises (ASBE) and specific
standards, the application guide of ASBE, the interpretation of ASBE and other relevant regulations (hereinafter
collectively referred to as "the ASBE"). According to Listed Company Information Disclosure Preparation Rules
No. 15 - General Regulations on Financial Report (amended in 2014) released by CSRC, the Company prepared
the financial statements.
(II) Sustainable Operation ability
There is no concern on sustainable operation ability of the Company within 12 months since the end of the
current reporting period.
IV. Main accounting policies and accounting estimates
(I) 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.
(II) Accounting period
A fiscal year lasts from January 1st to December 31st of the Gregorian Calendar.
(III) Recording currency
Renminbi is the recording currency of the financial statements of the Company.
(IV) Accounting method for the business merger under or not under common control
1. If the terms and conditions or economic influences of deals involved in business merger by steps are
consistent with the following case(s), several deals will be treated as a package deal for accounting treatment.
(1) Those deals are made at the same time or in consideration of mutual influences;
(2) A complete business result can be achieved only with the deals as integrity;
(3) The occurrence of one deal depends on the occurrence of at least one deal.
(4) A single deal is uneconomical but the integration with other deals is economical.
2. Business merger under common control
Assets and liabilities acquired by the Company in the merger are calculated based on the book value of the
merged party's assets and liabilities (including goodwill resulting from the acquisition of the merged party) in the
consolidated financial statements of the ultimate controlling party on the date of merger. The capital stock
premium of capital reserve is adjusted based on the difference between the book value of net assets acquired in
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the merger and that of the consideration of the merger (or the total book value of issued shares). The retained
earnings are adjusted if the capital stock premium is not sufficient for writing off.
If contingent consideration exists and the estimated liabilities and assets have to be recognized, the capital
reserve (capital surplus or capital stock premium) is adjusted based on the difference between the estimated
liabilities and assets and the subsequent contingent consideration. The retained earnings are adjusted if the
capital reserve is not sufficient for writing off.
For business merger through several deals, deals in a package will be treated as one deal with control right
acquired for accounting treatment; for deals not in a package, the capital reserve is adjusted based on the
difference between the initial cost of long-term equity investment and the sum of book value of long-term equity
investment before merger and book value of consideration payment for new shares. The retained earnings are
adjusted if the capital reserve is not sufficient for writing off. For equity investment held before merger, other
comprehensive income recognized by the equity method, financial instruments or calculation standards will not
be subject to accounting treatment, and until the disposal of such investment such accounting treatment is carried
out on the same basis as the direct disposal of related assets and liabilities by the invested party; other changes in
owners' equity excluding net profit and loss, other comprehensive income and profit distribution in the net assets
of the invested party recognized by the equity accounting method will not be subject to accounting treatment and
is transferred to current profit and loss after the disposal of such investment.
3. Business merger not under common control
The assets paid and the liabilities incurred or undertaken by the Company as the consideration on the date of
merger are calculated based on fair value. The difference between fair value and book value will be included in
current profit and loss.
If the merger cost is higher than the fair value of the net identifiable assets of the acquired party acquired by
merger, the difference is recognized as goodwill. If the merger cost is lower than the fair value of the net
identifiable assets of the acquired party acquired by merger, the difference is included in current profit and loss.
For business merger through several deals, deals in a package will be treated as one deal with control right
acquired for accounting treatment; for deals not in a package, the sum of book value of long-term equity
investment before merger and new investment cost is treated as the initial cost of long-term equity investment on
the date of merger. For equity investment held before merger, other comprehensive income recognized with the
equity accounting method, accounting treatment of such investment is carried out on the same basis as the direct
disposal of related assets and liabilities by the invested party. If the equity investment held before merger is
subject to recognition by financial instruments and accounting by measure standards, the sum of book value of
long-term equity investment on the date of merger and new investment cost is treated as the initial cost of
long-term equity investment on the date of merger. The difference between the fair value and book value of the
equity previously held and accumulative changes in fair value originally included in other comprehensive
income are transferred to the investment income of the period of the date of merger.
4. Expenses incurred due to merger
The auditing, legal, appraisal and consulting, and other relevant direct fees incurred for business merger are
included in current profit and loss at occurrence. The transaction expenses of equity securities issued for business
merger which are directly attributable to equity transaction are deducted from the equity.
(V) Preparation method of the consolidated financial statements
1. Consolidation scope
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The scope of the consolidated financial statements of the Company is determined based on share-holding status,
and all subsidiaries are included in the scope.
2. Consolidation procedure
The Company prepares the consolidated financial statements based on the financial statements of its own and its
subsidiaries and other related materials. In the preparation of consolidated financial statements, the whole group
is deemed as an accounting entity. According to the recognition, calculation and presentation requirements of
related accounting standards and consistent accounting policies, the overall financial condition, operation results
and cash flow are reflected.
The accounting policies and accounting period adopted by all subsidiaries included in the consolidation scope
are consistent with those of the Company. Otherwise, the Company shall make necessary adjustments according
to its own accounting policies and accounting period when preparing the consolidated financial statements.
During the consolidation, the influences of internal transactions between the Company and its subsidiaries and
among the subsidiaries on the consolidated balance sheet statement, the consolidated profit statement, the
consolidated cash flow statement and the consolidated statement of changes of owner's equity will be
counteracted. If judgment on the same transaction differs from the group perspective and with the Company or a
subsidiary as the accounting entity, the transaction shall be adjusted from the group perspective.
The owner's equity of subsidiaries, current net profit and loss and minority shares in current comprehensive
income are separately listed in the owner's equity of the consolidated balance sheet statement, net profit and total
comprehensive income of the consolidated profit statement respectively. If the current losses undertaken by
minority shareholders of a subsidiary exceed the owners' equity shared by minority shareholders of a subsidiary,
the balance will be used to offset the minority shareholders' equity.
For a subsidiary acquired by merger of enterprises under common control, its financial statements are adjusted
based on the book value of its assets and liabilities (including goodwill resulting from acquisition of this
subsidiary) in the financial statements of the ultimate controlling party.
For a subsidiary acquired by merger of enterprises not under common control, its financial statements are
adjusted based on the fair value of net identifiable assets on the date of acquisition.
(1) Expansion of subsidiaries or business
In the current reporting period, in case of expansion of subsidiaries or business due to merger of enterprises
under common control, the opening amount of the consolidated balance sheet is adjusted. The income, expenses
and profits of such subsidiaries and business from the beginning of merger to the end of the current reporting
period are included in the consolidated profit statement. The cash flow of such subsidiaries from the beginning
of merger to the end of the current reporting period is included in the consolidated cash flow statement and
relevant items of comparative statements are also adjusted. The reporting entity after merger is deemed to exist
since the ultimate controlling party starts control.
If the Company exerts control on an invested party under common control due to additional investment, it is
deemed that all parties involved in merger make adjustments in the present condition since the ultimate
controlling party starts control. For the equity investment held before acquisition of control right of the acquiree,
relevant income and loss, other comprehensive income and other changes in net asset are recognized from the
later one between the date of acquisition of the original equity and the date of the acquirer and the acquiree under
common control to the date of merger, which are used to offset the opening retained earnings or current profit
and loss respectively.
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In the current reporting period, in case of expansion of subsidiaries or business due to merger of enterprises not
under common control, the opening amount of the consolidated balance sheet is not adjusted. The income,
expenses and profits of such subsidiaries and business from the date of acquisition to the end of the current
reporting period are included in the consolidated profit statement. The cash flow of such subsidiaries from the
date of acquisition to the end of the current reporting period is included in the consolidated cash flow statement
If the Company exerts control on an invested party not under common control due to additional investment, the
equity of the acquiree held before the date of acquisition shall be remeasured based on its fair value on the date
of acquisition, and the difference between the fair value and book value of the equity shall be included in current
investment income. If the equity of the acquiree held before the date of acquisition is involved in other
comprehensive income and other changes in owner's equity except net profit and loss, other comprehensive
income and profit distribution with the equity method, the relevant other comprehensive income and other
changes in owner's equity are included in current investment income, excluding other comprehensive income
due to re-measurement of changes in net liabilities and net assets in defined benefit plans.
(2) Disposal of subsidiaries or business
1) General disposal method
If the Company disposes of a subsidiary in the current reporting period, the income, expenses and profits of the
subsidiary from the beginning period to the disposal date are included in the consolidated profit statement and
the cash flow of the subsidiary in the same period is included in the consolidated cash flow statement.
If the Company loses control of its subsidiary due to disposal of part of equity investment or other reasons, the
remaining equity shall be remeasured at fair value on the day when the Company losses control of the subsidiary.
The difference between the sum of consideration acquired due to equity disposal & fair value of the remaining
equity and the sum of net assets to be enjoyed based on the original shareholding proportion since the date of
acquisition or merger & goodwill is included in the investment income in the period of loss of control. Other
comprehensive income and other changes in owner's equity except net profit and loss, other comprehensive
income and profit distribution relevant to the equity investment in any previous subsidiary are transferred to
current investment income at the time of loss of control, excluding other comprehensive income due to
re-measurement of changes in net liabilities and net assets in defined benefit plans.
2) Disposal of subsidiaries by steps
If the Company disposes of equity investment in a subsidiary in several deals by steps until its loss of control and
the terms and conditions or economic influences of deals are consistent with the following case(s), several deals
will be treated as a package deal for accounting treatment.
A. Those deals are made at the same time or in consideration of mutual influences;
B. A complete business result can be achieved only with the deals as integrity;
C. The occurrence of one deal depends on the occurrence of at least one deal.
D. A single deal is uneconomical but the integration with other deals is economical.
If deals incurred for disposal of equity investment in a subsidiary until the loss of control belong to a package
deal, the Company treats all deals as one for accounting treatment. However, the difference between the
consideration acquired from every disposal and the net asset to be enjoyed such subsidiary based on such equity
investment before loss of control is recognized as other comprehensive income of the consolidated financial
statements and transferred to the current profit and loss at the time of loss of control.
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For deals not in a package, before loss of control, the accounting treatment is based on policies about disposal of
part of equity investment in a subsidiary in case of no loss of control while at the time of loss of control, the
accounting treatment is based on general methods for disposing of such subsidiary.
(3) Acquisition of minority shares of subsidiary
Based on the difference between long-term equity investment acquired due to acquisition of minority shares and
net assets to be enjoyed from such subsidiary since the date of acquisition (or merger), the capital stock premium
of the consolidated balance sheet statement is adjusted. The retained earnings are adjusted if the capital stock
premium is not sufficient for writing off.
(4) Disposal of part of equity investment in a subsidiary in case of no loss of control
The difference between the consideration acquired due to disposal of party of long-term equity investment in a
subsidiary and net assets to be enjoyed from such subsidiary since the date of acquisition (or merger), the capital
stock premium of the consolidated balance sheet statement is adjusted. The retained earnings are adjusted if the
capital stock premium is not sufficient for writing off.
(VI) Classification of joint venture arrangement and accounting treatment method of joint operation
1. Classification of joint venture arrangement
Based on the structure and legal form of joint venture arrangement, terms agreed in joint venture arrangement
and other facts and condition, the Company classifies joint venture arrangement into joint operation and joint
venture.
Joint venture arrangement agreed not by individual entities is defined as joint operation. Joint venture
arrangement agreed by individual entities is generally defined as joint venture. If any joint venture arrangement
satisfies any of the following conditions and conforms to relevant laws and regulations with conclusive evidence,
such joint venture arrangement is defined as joint operation:
(1) The legal form of joint venture arrangement shows that joint ventures share rights and obligations for assets
and liabilities in such arrangement.
(2) It is agreed in the terms of joint venture arrangement that joint ventures share rights and obligations for assets
and liabilities in such arrangement.
(3) Other facts and condition show that joint ventures share rights and obligations for assets and liabilities in
such arrangement. For example, the joint ventures enjoy nearly all output relevant to such arrangement and
settlement of liabilities in such arrangement constantly depends on the support of joint ventures.
2. Accounting treatment method of joint operation
The Company recognizes the following items in interest shares during joint operation, and carries out accounting
treatment in accordance with Accounting Standards for Business Enterprises:
(I) Recognizing the assets held separately and assets shared based on shares;
(2) Recognizing the liabilities undertaken separately and liabilities shared based on shares;
(3) Recognizing the income from sales of the share in joint operation output;
(4) Recognizing the income from sales of joint operation output based on shares;
(5) Recognizing the expenses individually incurred and expenses incurred by joint operation based on shares.
If the Company invests or sells assets (excluding assets that constitute business) to the joint operation, before
such assets are sold by the joint operation to the third party, only the part of profit and loss attributed to other
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parties in the joint operation incurred by such transaction is recognized. If any impairment losses occur to the
assets invested or sold in accordance with Accounting Standards for Business Enterprises No. 8 - Asset
Impairment, the Company recognizes the losses in full.
If the Company purchases assets from the joint operation, before such assets are sold to the third party, only the
part of profit and loss attributed to other parties in the joint operation incurred by such transaction is recognized.
If any impairment losses occur to the assets purchased in accordance with Accounting Standards for Business
Enterprises No. 8 - Asset Impairment, the Company recognizes the losses based on shares.
The Company enjoys no common control of the joint operation. If the Company enjoys assets in the joint
operation and undertakes liabilities in the joint operation, the Company shall still carry out accounting treatment
based on the foregoing principles. Otherwise, the Company shall carry out accounting treatment in accordance
with Accounting Standards for Business Enterprises.
(VII) Standards for determination of cash and cash equivalents
In the preparation of the cash flow statement, the cash on hand and the bank deposits available for payment at
any time of the Company are recognized as cash. The investments that meet four conditions at the same time, i.e.
short term (due within 3 months since the date of purchase), strong liquidity, easiness in being converted into
known cash, fairly small risk of value fluctuation are recognized as cash equivalents.
(VIII) Foreign currency business and translation of foreign currency financial statements
1. Foreign currency business
In the initial recognition, a foreign currency business transaction is converted to RMB for bookkeeping based on
the spot exchange rate at the date of transaction.
At the balance sheet date, monetary items in foreign currency are converted based on the spot exchange rate at
the balance sheet date. The exchange difference thus incurred is included in current profit and loss while the
exchange difference incurred by special foreign currency borrowings for acquisition and construction of assets
eligible for capitalization is treated with the principle of capitalization of borrowing costs. Non-monetary items
in foreign currency measured by the historical cost method are converted based on the spot exchange rate at the
date of transaction, and the amount in the recording currency is not changed.
Non-monetary items in foreign currency measured by fair value are converted based on the spot exchange rate at
the date of recognition of the fair value while the translation difference thus incurred is included in current profit
and loss as profit and loss from changes in fair value. For non-monetary items in available-for-sale foreign
currency, the translation difference is included in other comprehensive income.
2. Translation of foreign currency financial statements
In the balance sheet statement, assets and liabilities are converted based on the spot exchange rate at the date of
balance sheet statement, and items other than "undistributed profits" in the owner's equity are converted based on
the spot exchange rate. The income and expense in the profit statement are converted based on the spot exchange
rate at the date of transaction. The translation difference of foreign currency financial statements with the
foregoing method is included in other comprehensive income.
At the disposal of overseas business, the translation difference of foreign currency financial statements that is
listed in other comprehensive income of the balance sheet statement and relevant to such overseas business is
transferred from other comprehensive income to current profit and loss in the period of disposal. The equity
proportion in overseas business is reduced due to disposal of part of equity investment or other reasons but the
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control right on the overseas business remains, the translation difference of foreign currency financial statements
relevant to such overseas business is not transferred to current profit and loss. At the disposal of part of equity
investment in overseas business in the form of associate or joint venture, the translation difference of foreign
currency financial statements relevant to such overseas business is transferred to current profit and loss in the
period of disposal based on the proportion of disposal.
(IX) Financial instruments
Financial instruments include financial assets, financial liabilities and equity instruments.
1. Classification of financial instruments
According to the contract terms and economic nature of financial instruments rather than in the legal form only,
in combination of the purposes of acquisition and holding of financial assets and undertaking of financial debts,
the management classifies financial assets and liabilities as follows: financial assets (or liabilities) measured by
fair value with changes included in current profit and loss, held-to-maturity investment, accounts receivable,
available-for-sale financial assets, and other financial liabilities.
2. Confirmation basis for and measurement method of financial instruments
(1) Financial assets (liabilities) measured by fair value with changes included in current profit and loss
Financial assets or liabilities measured by fair value with changes included in current profit and loss include
transactional financial assets or liabilities and financial assets or liabilities to be measured by fair value with
changes included in current profit and loss through direct designation.
Transactional financial assets or liabilities refer to financial assets or liabilities that satisfy any of the following
conditions:
1) Such financial assets or liabilities are acquired for the purpose of sales, repurchase or redemption in a short
term;
2) Such financial assets or liabilities are part of identifiable financial instruments portfolio available for central
management, and objective evidence shows that the Company has recently managed the portfolio for short-term
gains;
3) Such financial assets or liabilities belong to derivative financial instruments, excluding the designated
derivative instruments which are effective hedging instruments, derivative instruments for financial guarantee
contracts, and derivative instruments that are connected with equity instrument investments for which there is no
quoted price in the active market, whose fair value cannot be reliably measured, and which shall be settled by
delivering the said equity instruments.
Financial assets or liabilities can be measured by fair value with changes included in current profit and loss
through designation only when one of the following conditions is met.
1) Through such designation, inconsistency in recognition or measurement of profit and loss resulting from
different measurement basis of financial assets or liabilities can be eliminated or obviously reduced;
2) It has been set forth in formal written documents about risk management or investment strategy that such
financial asset portfolio, financial liability portfolio, or the portfolio of such financial assets or liabilities shall be
managed, evaluated and reported to key management based on fair value;
3) A mixed instrument with one and several embedded derivative instrument (s), unless the embedded derivative
instruments cause no major changes to the cash flow of such mixed instrument or shall not be separated from the
derivative instrument (s) obviously;
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4) A mixed instrument with embedded derivative instrument (s) that needs to be separated but cannot be
separately measured at the time of acquisition or the subsequent balance sheet date.
The Company treats the fair value of financial assets or liabilities measured by fair value with changes included
in current profit and loss at the time of acquisition as the initial recognized amount, and includes relevant
transaction expenses in current profit and loss. The interests and cash dividends acquired during the period of
holding are recognized as investment income. At the time of disposal, the difference between the fair value and
the initial amount entered in the account is recognized as investment income and the profit and loss from
changes in fair value are adjusted at the same time.
(2) Accounts receivable
For credit receivable due to the commodities sold or labor services provided by the Company and credit of other
enterprises held by the Company other than the credit of debt tools with quotes in an active market, including
accounts receivable and other receivables, the amount receivable in contracts or agreements from the purchaser
is treated as the initial recognition amount. For those of a financing nature, the current value is treated as the
initial recognition amount.
At the time of collection or disposal, the difference between the amount acquired and the book value of such
accounts receivable are included in current profit and loss.
(3) Held-to-maturity investment
Held-to-maturity investment refers to non-derivative financial assets with fixed maturity date and fixed or
definite recovery amount which the Company may hold to maturity with clear intention and ability.
For held-to-maturity investment, the Company treats the sum of fair value at the time of acquisition (deducting
bond interests matured but not collected) and relevant transaction expenses as the initial recognition amount.
During the period of share-holding, the interest income is calculated and confirmed in accordance with the
amortized and the actual interest rate, which is included in the investment income. The actual interest rate is
determined at the time of acquisition and remains unchanged within the anticipated existence period or a shorter
period applicable. At the time of disposal, the difference between the price of acquisition and the book value of
such investment is included in investment income.
If the amount of held-to-maturity investment disposed of or reclassified into other financial assets is larger than
the total amount of held-to-maturity investment before sales or reclassification, the remaining held-to-maturity
investment shall be immediately reclassified into available-for-sale financial assets after disposal or
reclassification. The difference between book value and fair value of such investment is included in other
comprehensive income at the date of reclassification, and transferred to current profit and loss in case of
impairment of such available-for-sale financial assets or termination of recognition. However, the following
cases are exceptional:
1) The date of sales or reclassification is close to the due date or redemption date of such investment (e.g. within
3 months before the due date), and changes in the market interest rate have no significant influence on the fair
value of such investment.
2) The enterprise has recovered almost all initial principal with the payment method agreed in the contract.
3) The sales or reclassification arise from independent events beyond the control that are not expected to recur
and is difficult to predict reasonably.
(4) Available-for-sale financial assets
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Available-for-sale financial assets refer to non-derivative available-for-sale financial assets through designation
at initial recognition and financial assets other than other financial asset categories.
For available-for-sale financial assets, the Company treats the sum of fair value at the time of acquisition
(deducting bond interests matured but not collected) and relevant transaction expenses as the initial recognition
amount. The interests or cash dividends obtained during the time of holding are recognized as investment income.
Profit or loss from change in the fair value of available-for-sale financial assets, excluding impairment loss and
exchange difference of monetary financial assets in foreign currency, are directly included in other
comprehensive income. At the time of disposal, the difference between the price of acquisition and the book
value of such financial assets is included in investment profit and loss. At the same time, the amount of assets
disposed originally included in the accumulative amount of changes in the fair value of other comprehensive
income is transferred to investment profit and loss.
Equity instruments with no quotes in the active market and with fair value not reliably measured and derivative
instruments that are connected with the said equity instruments and settled by delivery of the said equity
instruments are measured by cost.
(5) Other financial liabilities
The sum of the fair value of such assets and relevant transaction expenses is taken as the initial recognition
amount. The amortized cost is adopted in the subsequent measurement.
3. Recognition basis and measurement method of financial assets transfer
In case of financial assets transfer of the Company, if almost all risks and returns in the ownership rights of
financial assets are transferred to the assignee, the recognition of such financial assets is terminated, and if
almost all risks and returns in the ownership rights of such financial assets are retained, the recognition of such
financial assets is not terminated.
In the judgment whether a financial asset transfer meets the foregoing conditions for termination of its
recognition, the principle of more focus on substance than form is adopted. The Company divides financial
assets transfer into the complete and the partial transfer. Where the complete transfer of financial assets meets the
conditions for termination of recognition, the difference between the following two amounts is included in
current profit and loss.
(1) Book value of the transferred financial assets;
(2) The sum of consideration acquired due to transfer and the accumulative amount of changes in fair value
originally included in owners' equity (involving the case where the transferred financial assets are the
available-for-sale financial assets).
If the partial transfer of financial assets meet conditions for termination of recognition, the part with its
recognition terminated and that with its recognition not terminated, among the book value of all the transferred
financial assets, are apportioned separately based on their relevant fair value while the difference between the
following two amounts is included in current profit and loss.
(1) Book value of the part with its recognition terminated;
(2) The sum of consideration of the part with its recognition terminated and the amount of the part with its
recognition terminated originally included in the accumulative amount of changes in the fair value of owners'
equity (involving the case where the transferred financial assets are the available-for-sale financial assets).
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In case that financial assets transfer does not meet the conditions for termination of recognition, the recognition
of such financial assets is continued. The consideration acquired is recognized as a financial liability.
4. Conditions for termination of recognition of financial liabilities
If current obligations for a financial liability are discharged wholly or partially, the recognition of the financial
liability is terminated wholly or partially. If the Company signs an agreement with the creditor to substitute an
existing financial liability with a new financial liability and the contract terms about the new liability and the
existing liability are inconsistent, the recognition of the existing financial liability is terminated and the new
financial liability is recognized at the same time.
If material alterations have been made to contract terms of the existing financial liability wholly or partially, the
recognition of the existing liability is wholly or partially terminated and, in the meantime, the liability after
alterations is recognized as a new financial liability.
If the confirmation of all or a part of a financial liability is terminated, the difference between the book value of
the liability with its confirmation terminated and the consideration (including non-cash assets transferred or the
new liability assumed) is included in current profit and loss.
If the Company repurchases part of a financial liability, the total book value of such liability is allocated on the
date of purchase based on the relative fair value of the part with its recognition continued and that with its
recognition terminated. The difference between the book value allocated to the part with its recognition
terminated and the consideration (including non-cash assets or the new liability) is included in current profit and
loss.
5. Methods for the determination of the fair value of financial assets and liabilities
For financial assets and liabilities that exist in an active market, the Company determines their fair value based
on the quotation in the active market. For financial assets initially acquired or derivative financial assets or
liabilities undertaken, the Company determines their fair value based on the market price. For financial assets
and liabilities that do not exist in an active market, their fair value are determined with appraisal techniques. In
appraisal, the Company adopts applicable appraisal techniques in the current case with sufficient data and other
information support, chooses the input values that are consistent with features of assets or liabilities taken into
consideration by market participants in relevant transactions, and makes priority use of relevant observable input
values. In case that relevant observable input values cannot be obtained or it is unpractical to obtain them,
unobservable input values will be used.
6. Accrual of impairment provision for financial assets (excluding accounts receivable)
The Company shall verify the book value of financial assets measured by fair value with changes included in
current profit and loss at the balance sheet date. If any objective evidence shows impairment of such financial
assets, an impairment provision shall be made.
Objective evidence for impairment of such financial assets includes but is not limited to:
(1) A serious financial difficulty occurs to the issuer or debtor;
(2) The debtor breaches any contract terms, for example, fails to pay or delays the payment of interests or the
principal;
(3) The creditor makes any concession to the debtor which is in financial difficulties due to economic or legal
factors;
(4) The debtor will probably become bankrupt or carry out other financial reorganizations;
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(5) The financial asset can no longer continue to be traded in the active market due to serious financial
difficulties of the issuer;
(6) It is impossible to identify whether the cash flow of a certain asset within a certain combination of financial
assets has decreased or not. But after an overall appraisal according to the public data available, it is found that
the predicted future cash flow of the said combination of financial assets has indeed decreased since it was
initially recognized and such decrease can be measured, for example, the ability of the debtor of the said
combination of financial assets worsens gradually, the unemployment rate of the country or region where the
debtor is situated increases, the prices of the region where the guaranty is situated are obviously dropping, or the
industrial sector concerned is in slump;
(7) Any seriously disadvantageous change has occurred to technical, market, economic or legal environment
wherein the issuer operates its business, which makes the investor of an equity instrument unable to withdraw its
investment cost;
(8) Where the fair value of the equity instrument investment drops significantly or not temporarily.
Specific impairment methods of financial assets are as follows:
(1) Impairment provision for available-for-sale financial assets
The Company shall appraise the impairment loss of each financial asset with the specific identification method at
the balance sheet date. Where the fair value of the equity instrument investment drops significantly or not
temporarily, it is an objective evidence for impairment of available-for-sale equity instruments. In terms of the
specific quantitative criterion, if the fair value of such equity instrument investment is lower than over 50%
(including 50%) of its cost or is lower than its cost for over 12 months (including 2 months) consecutively, it
indicates that such asset is impaired.
When an available-for-sale financial asset is impaired, even if the recognition of the financial asset has not been
terminated, the accumulative losses arising from decrease in the fair value of the owner's equity which was
directly included in other comprehensive income shall be transferred out and included in current profit and loss.
The accumulative losses that are transferred out shall be the balance between the initial costs of the financial
asset available for sale and the principals as taken back, the current fair value and the impairment-related losses
as was included in current profit and loss.
As for the available-for-sale debt instruments whose impairment losses have been recognized, if, within the
accounting period thereafter, the fair value has risen and such instruments are objectively related to the
subsequent events that occur after the original impairment losses were recognized, the originally recognized
impairment losses shall be reversed and included in current profit and loss. The impairment loss of
available-for-sale equity instruments shall be reversed when the value of such equity instruments rebound.
However, for equity instruments investment with no quotes in the active market and with fair value not reliably
measured and derivative instruments that are connected with the said equity instruments and settled by delivery
of the said equity instruments, the impairment loss shall not be reversed.
(2) Impairment provision for held-to-maturity investments
If any objective evidence shows impairment of held-to-maturity investments, the impairment loss shall be
calculated based on the difference between the book value of those investments and the current value of the
expected future cash flow. If any evidence indicates that the investment value has recovered after provision, the
originally recognized impairment loss can be reversed and included in current profit and loss. However, the
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reversed book value shall not exceed the amortized cost of such financial assets at the date of reversal in case
that the impairment provision has not been made.
7. Counteraction of financial assets and liabilities
Financial assets and liabilities are separately listed in the balance sheet statement and not counteracted. However,
if the following conditions are satisfied at the same time, the balance after counteraction may be listed in the
balance sheet statement.
(1) The Company has the legal right to counteract the recognized amount which is currently enforceable.
(2) The Company plans to settle in net amount or realize such financial assets and liquidate such financial
liabilities at the same time.
(X) Accounts receivable
1. Accounts receivable with significant single amount and single provision for bad debts
Recognition criteria for accounts receivable with significant single amount and single provision for bad debts:
Top 5 accounts receivable
Recognition criteria for accounts receivable with significant single amount: impairment tests are carried out
separately, and the difference between the expected future cash flow and its book value is accrued for bad debt
provision and included in current profit and loss. Accounts receivable with no impairment by test shall be
included in the bad debt provision for a certain combination.
2. Accounts receivable with bad debt provision accrued based on credit risk feature combinations
(1) Determination basis for credit risk feature combinations
Accounts receivable with no significant single amount and accounts receivable with significant single amount
and no impairment by test are classified into several combinations according to credit risk feature. Based on the
actual loss rate of the accounts receivable combinations with similar credit risk feature in the previous year, the
bad debt provision accrual shall be determined according to the present condition.
Determination basis for combination:
Name of combination Method of accrual Determination basis for combination
The Company makes the best appraisal of the provision proportion of
Combination of aging accounts receivable based on the previous experience and classifies
Aging analysis method
analysis method the credit risk feature combinations by reference to aging of accounts
receivable
Based on the property of accounts receivable, the bad debt provision
Combination of
No bad debt provision accrual is not accrued, including rental deposit, deposit, account with related
specific object
parties, etc.
(2) Accrual method based on credit risk feature combinations:
Bad debt provision accrued with the aging analysis method
Provision proportion of accounts Provision proportion of other accounts
Aging
receivable (%) receivable (%)
Within 1 year (including 1 year)
1-2 years 5.00 5.00
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Provision proportion of accounts Provision proportion of other accounts
Aging
receivable (%) receivable (%)
2-3 years 10.00 10.00
Over 3 years 20.00 20.00
Accounts receivable with no significant single amount but with single provision for bad debts
Reason for single provision for bad debts: Any objective evidence indicates that the Company is unable to
recover the accounts receivable according to the original terms.
Accrual method for bad debt provision: The difference between the expected future cash flow and its book value
is accrued for bad debt provision.
(XI) Inventory
1. Classification of inventory
Inventory refers to finished products or commodities held for sale by the Company in daily activities, products in
process, and materials consumed in the production or labor service process. It mainly includes raw materials,
circulating materials, commissioned processing materials, products in process, semi-finished goods, finished
products (stock goods), delivered goods, development costs, developed products, etc.
Development costs refer to properties not completed for sale purposes. Lands to be developed refer to the land
which is purchased and planned for developed products after its completion. Developed products refer to
properties which has been completed and is to be sold. In the overall development of a project, lands to be
developed are transferred to development costs. In the development by phases, the land developed in phases is
transferred to development costs while the land not developed remains in the land to be developed.
2. Pricing method of inventory
Initial measurement will be carried out at the time of acquisition of the inventory based on its costs, including
procurement cost, processing cost and other costs. The pricing of the inventory is based on the weighted-average
method at the time of delivery.
3. Determination basis for net realizable value of inventory and accrual method for inventory depreciation
provision
After a complete check on the inventory at the end of the period, the inventory depreciation provision is accrued
or adjusted based on the lower one between the inventory cost and the net realizable value. The net realizable
value of commodity inventory directly for sale including finished products, stock goods and materials for sale is
determined by the estimated selling price of such inventory minus estimated selling expenses and relevant taxes
during production and operation. The net realizable value of material inventory to be processed is determined by
the estimated selling price of the finished product minus estimated cost to be incurred until completion,
estimated selling expenses and relevant taxes during production and operation. The net realizable value of
inventory held for fulfilling sales contract or labor service contract is calculated based on the contract price. If
quantity of inventories held is more than the ordered quantity in the sales contract, the net realizable value of the
inventory for the excess part is calculated based on general selling price.
At the end of the period, the inventory depreciation provision is accrued based on separate items. However, for
inventories in large quantity at low unit price, the depreciation provision is accrued based on types of inventories.
For inventories that are related to product series produced and sold in the same area for same or similar final use
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or purpose and difficult to be measured separately from other items, inventory depreciation provision is
consolidated for accrual.
Where factors that caused decrease in value of inventory disappear, the amount written down shall be recovered
and written back from the accrued inventory depreciation provision. The amount written back shall be included
in current profit and loss.
4. Inventory system
The perpetual inventory system is adopted.
5. Amortization method of low-value consumables and packages
(1) For low-value consumables, one-off amortization method is adopted.
(2) For packages, one-off amortization method is adopted.
6. Accounting method of land for development
The expenses incurred by pure land development project shall constitute the land development cost alone.
For projects with overall development of property, the expenses with definite payers are generally amortized to
the commodity house cost based on the actual area.
7. Accounting method of public facility expenses
For public facilities not available for paid transfer, the expenses shall be included in the commodity house cost
based on the benefit ratio;
For public facilities available for paid transfer, all supporting facilities are treated as the accounting object and
the costs incurred are collected.
8. Accounting method of maintenance fund
According to relevant provisions at the location of the developed project, the maintenance cost is collected from
the house purchaser or included in the development cost when the relevant developed product is sold (or
pre-sold), and turned in to maintenance cost management department.
9. Accounting method of quality deposit
The quality deposit is retained from the project fund of the construction party according to the construction
contract. Maintenance expenses incurred during the warranty period of the developed product are used to offset
the quality deposit. When the agreed warranty period expires, the remaining quality deposit is returned to the
construction party.
(XII) Loans and prepayment issued
1. Loan
Loan refers to the money in RMB lent to medium and small enterprise corporations, individual businessmen and
individuals according to the market interest rate, the principal of which issued will be taken as the amount for
initial recognition. The earnings of interest recognized during the holding of the loan shall be calculated
according to actual interest rate, which will be determined when the loan is issued, and will remain unchanged
during the holding of the loan or shorter period.
2. Reserve for loss of loan
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In the end of every quarter, the Company will divide every unit loan into such five categories as normal, focused,
secondary, suspicious and lost according to the quality of the credit assets and incorporate into daily credit
management to carry out classified supervision.
The Company shall reasonably estimate possible loss that might arise from the loan to accrue reserve for loss of
loan in time, which shall include general reserve and special reserve. General reserve is accrued according to
certain percentage of the total balance of loan, used for compensating the reserve of potential loss not recognized.
Special reserve is the provision accrued for compensating special loss according to the level of the loss of every
loan after classifying the risks of the loan in light with the Guiding Principles o Classification of Risks of Loan.
The scope of provision of reserve for loss of loan comprises the assets to bear risks and losses, in details,
including all kinds of small loans (including loan by mortgage, pledge, guarantee and credit, etc.) and bill
discount, etc.
The Company shall withdraw general serve every quarter. The year-end balance of general reserve shall not be
lower than 1% of the balance of the loan in the end of the year.
The Company shall withdraw special reserve per quarter according to the following percentages:
(1) Normal loan: the percentage of provision is 1%;
(2) Focused loan: the percentage of provision is 2%;
(3) Secondary loan: the percentage of provision is 25%;
(4) Suspicious loan: the percentage of provision is 50%;
(5) Lost loan: the percentage of provision is 100%.
(XIII) Held-for-sale assets
1. Standards to recognize as held-for-sale
The Company will recognize the components of the enterprise (or non-circulating assets) satisfying the
following conditions at the same time as the held-for-sale part:
(1) Such components can be sold immediately under current situations according to the conventional terms for
selling such components;
(2) The enterprise has made resolution on how to dispose such components. If approval shall be obtained from
shareholders according to the stipulations, approval has been obtained from the General Meeting of Shareholders
or relevant power authority;
(3) The enterprise has signed irrevocable transfer agreement with the transferee;
(4) This transfer will be completed within one year.
2. Accounting method for dividing to held-for-sale
The Company will adjust the estimated net residual value of the fixed asset held-for-sale to make its estimated
residual value reflect the amount of its fair value minus the disposition cost, but shall not exceed the original
book value of such fixed asset in compliance with the held-for-sale conditions. The balance between the original
book value and the estimated net residual value (the former higher than the latter) shall be incorporated into
current profits and losses as assets impairment loss. No depreciation or amortization will be accrued for
held-for-sale fixed asset, but will measurement will be carried out according to the lower between the book value
and the net amount of fair value minus the disposition cost.
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Other non-circulating assets including equity investment and intangible assets in compliance with the
held-for-sale conditions shall be treated according to the aforesaid principles, but will not include deferred
income tax assets, financial assets normalized by
the contractual rights arising from Enterprise Accounting Rules No. 22-Reconigition and Measurement of
Financial Instruments, investment real estate and biological assets measured by fair value and contractual rights
arising from insurance contract.
(XIV) Long-term equity investment
1. Determination of investment cost
(1) Long-term equity investment formed by consolidation of enterprises. For specific accounting policies, please
refer to Notes IV/iv Accounting Treatment Methods of Consolidation of Enterprises under Same Control and Not
under Same Control.
(2) Long-term equity investment obtained by other methods
Concerning the long-term equity investment obtained by paying cash, the purchasing price actually paid will be
taken as initial investment cost, which includes costs, taxes and other necessary expenditures directly related
with the acquisition of long-term equity investment.
Concerning the long-term equity investment obtained by issuing equity securities, the fair value of the equity
securities issued shall be taken as the initial investment cost. Transaction cost arising from issuance or acquiring
own equity tools, if can be directly attributed to equity transaction, can be deducted from equity.
Under the preconditions that the non-monetary assets exchange possesses commercial nature and the fair value
of assets exchanged in or out can be reliably measured, the initial investment cost of long-term equity investment
exchanged in by non-monetary assets shall be determined based on the fair value of assets exchanged out, unless
there is solid evidence proving that the fair value of the assets exchanged in is more reliable. For the exchange of
non-monetary assets not satisfying aforesaid preconditions, the book value of the assets exchanged out and
relevant taxes payable shall be recognized as the initial investment cost of long-term equity investment
exchanged in.
The initial investment cost of the long-term equity investment obtained by restructure of debts shall be
determined based on fair value.
2. Subsequent measurement and recognition of profits and losses
(1) Cost method
The Company can adopt cost method to account the long-term equity investment controlled by the invested unit,
and priced according to the investment cost, add or recover the investment and adjust the cost of long-term
equity investment.
Except the cash dividends or profits included in the price or the consideration actually paid when acquiring the
investment but not issued, the Company shall recognize the cash dividends or profits announced to distribute by
the invested unit as the current investment earnings.
(2) Equity method
The Company adopts equity method to account the long-term equity investment to the affiliated business and
jointly operated enterprise. For equity investment of the jointly operated enterprise indirectly held by similar
subject including venture investment organization, joint fund, trust company or unit-linked insurance fund, fair
value shall be adopted for measurement and the changes will be incorporated into profits and losses.
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For the balance between the initial investment cost of long-term equity investment higher than the identifiable
net assets fair value of the invested unit at the time of investment, initial investment cost of long-term equity
investment shall not be adjusted. The balance between the initial investment cost lower than the fair value shares
of identifiable net assets of the invested unit at the time of investment shall be incorporated into current profits
and losses.
After the Company acquires long-term equity investment, according to the net profits and losses realized by the
invested unit to be enjoyed or shared and other comprehensive earnings, investment earnings and other
comprehensive earnings shall be recognized respectively, meanwhile book value of long-term equity investment
shall be adjusted. Moreover, according to the profits or cash dividends announced by the invested unit to be
distributed, the part to be received will be calculated and book value of long-term equity investment shall be
reduced accordingly. Concerning other changes in owner's equity of the invested unit apart from net profits and
losses, other comprehensive earnings and profits distribution, book value of long-term equity investment shall be
adjusted and incorporated into owner's rights and interests.
When recognizing the shares of net profits and losses of the invested unit to be received, based on the fair value
of each identifiable asset of the invested unit at the time of acquiring the investment, recognition shall be made
after adjusting the net profits of the invested unit. Profits and losses from internal transactions not realized
between the Company and the joint ventures and jointly operated enterprises shall be amortized according to the
part attributable to the Company that is calculated based on the percentage receivable, and on such basis
investment profits and losses are recognized.
When the Company recognizing the losses of the invested unit to be shouldered, it shall be handled according to
the following sequence: firstly, to write down the book value of the long-term equity investment; secondly, if the
book value of long-term equity investment is not sufficient to write down, investment loss shall be recognized
continuously based on the book value of long-term equity that has materially formed net investment to the
invested unit, and write down the book value of long-term receivable items. At last, after aforesaid disposal,
according to investment contract or agreement, if it is stipulated that the enterprise shall undertake extra
obligations, estimated liabilities shall be recognized according to the estimated obligations for undertaking,
incorporated into current investment loss.
If profits are realized by the invested unit in subsequent period, after the Company deducts the shares to be
shouldered for the losses not recognized, the treatment shall be made according to reverse sequence as above
mentioned. After writing down the book balance of estimated liabilities, recovering the long-term equity that
actually forms net investment to the invested unit as well as the book value of long-term equity investment,
investment earnings shall be recovered in recognition.
3. Conversion of accounting method for long-term equity investment
(1) Measurement of fair value changed to accounting by equity method
Concerning the equity investment on which accounting treatment is carried out held by the Company previously
that has no control, joint control or significant influences on the invested unit according to the recognition as
financial instruments and measurement rules, after increasing investment, if the Company is able to impose
significant influences on the invested unit or performs joint control by not control, the total of the fair value of
the equity investment held according to Enterprise Accounting Rules No. 22-Reconigition and Measurement of
Financial Instruments plus the newly increased investment cost shall be recognized as the initial investment cost
accounted by equity method.
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If the originally held equity investment is classified as available-for-sale financial asset, the balance between its
fair value and book as well as the total fair value changes that were incorporate dint other comprehensive
earnings shall be transferred to the current profits and losses accounted by equity method.
The book value of the long-term equity investment accounted by the balance between the initial investment cost
accounted by equity method and the fair value of identifiable net assets of the invested unit on the date of
increased investment determined by the new shareholding percentages after the increase of investment, and shall
be incorporated into current non-operating revenue.
(2) Fair value measurement or equity method accounting changed to accounting by cost method
Concerning the equity investment held by the Company in the invested unit that the Company does not control,
jointly control or generates significant influences accounted according to recognition of financial instruments
and measurement rules, or due to the increase of investment in long-term equity investment held in any joint
venture or jointly operated enterprise, the Company is able to perform control on the invested unit not under the
same control, when individual financial statement is prepared, the total of the book value of the equity
investment held previously and the newly increased investment cost will be recognized as initial investment cost
accounted by cost method.
Concerning other comprehensive earnings recognized by adopting equity method on equity investment held
before the date of acquisition, when such investment is disposed, accounting treatment shall be carried out
according to the same basis as directly treatment of relevant assets or liabilities by the invested unit.
If the equity investment held before the date of acquisition encounters accounting treatment in accordance with
relevant stipulations set out in Enterprise Accounting Rules No. 22 - Reconigition and Measurement of Financial
Instruments, total changes of fair value that was incorporated into other comprehensive earnings previously shall
be transferred into current profits and losses when cost method is used for accounting.
(3) Accounting by equity method changed to measurement by fair value
If the Company loses it joint control or significant influence on the invested unit due to such reason as disposing
part of the equity investment, the remaining equity shall be accounted according to Enterprise Accounting Rules
No. 22 - Reconigition and Measurement of Financial Instruments. The balance between the fair value and the
book value on the date of losing joint control or significant influence shall be incorporated into current profits
and losses.
Other comprehensive earnings recognized because of the adaptation of equipment method for the accounting of
the original equity investment shall receive accounting treatment of the same basis as the invested unit directly
treating relevant assets or liabilities when the use of equity method for accounting is terminated.
(4) Cost method changed to equity method
If the Company has lost the control over the invested unit due to such reasons as treating part of equity
investment, when preparing individual financial statement, if the remaining equity after treatment can perform
joint control or impose significant influences on the invested unit, equity method shall be used for the accounting,
and adjustment shall be implemented as if the remaining equity has been accounted by using equity method since
the acquisition.
(5) Cost method changed to measurement by fair value
If the Company has lost the control over the invested unit due to such reasons as treating part of equity
investment, when preparing individual financial statement, if the remaining equity after treatment cannot
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perform joint control or impose significant influences on the invested unit, accounting treatment shall be
changed to according to relevant stipulations set out in Enterprise Accounting Rules No. 22 - Reconigition and
Measurement of Financial Instruments. The balance between the fair value and the book value on the date of
losing control shall be incorporated into current profits and losses.
4. Treatment on long-term equity investment
When treating long-term equity investment, the balance between its book value and the actually acquired price
shall be incorporated into current profits and losses. Concerning long-term equity investment accounted by
equity method, when treating such investment, the same basis used by the invested unit in directly treatment
relevant assets or liabilities shall be adopted to carry out accounting treatment on the part that was incorporated
into other comprehensive earnings according to relevant percentages.
When treating the equity investment to subsidiaries, if terms, conditions and economic influences of the
transactions comply with one or several situations below, several transactions shall be taken as package deal to
carry out accounting treatment:
(1) These transactions are concluded at the same time or after mutual influences are considered.
(2) The entirety of these transactions can reach a complete business result.
(3) Occurrence of one transaction depends on at least one other transaction.
(4) On transaction, separately seen, is not economic, but when being considered with other transactions, is
economic.
If control over the previous subsidiary is lost due to treating part of equity investment or other reasons, it is not
considered as package deal. Individual financial statement and consolidated financial statement shall be
distinguished to carry out relevant accounting treatment.
(1) In individual financial statement, the balance between the book value and the actual acquisition price of the
equity to be treated shall be incorporated into current profits and losses. If the remaining equity after treatment
can implement joint control or impose significant influence on the invested unit, equity method shall be changed
for accounting, and adjustment shall be made on the remaining equity as if it was accounted by equity method at
the time of acquisition. If the remaining equity after treatment cannot implement joint control or impose
significant influence on the invested unit, accounting treatment shall be carried out according to relevant
stipulations set out in Enterprise Accounting Rules No. 22 - Reconigition and Measurement of Financial
Instruments. The balance between the fair value and the book value on the date of losing control shall be
incorporated into current profits and losses.
(2) In consolidated financial statement, for all the transactions before the loss of the control on the subsidy,
capital surplus (share capital premium) shall be adjusted based on the balance between the disposition price and
the net assets shares enjoyable in the subsidiary that is calculated continuously since the date of purchase or
consolidation. If the capital surplus is not sufficient to write down, retained earnings shall be adjusted. When the
control over the subsidy is lost, the remaining equity shall be measured again according to the fair value on the
date of losing the control. The balance obtained by total of consideration acquired by disposing equity and the
fair value of remaining equity minus the net assets calculated continuously since the date of purchase of the
subsidiary enjoyable as calculated according to the original shareholding percentage shall be incorporated into
the investment earnings of the term in which the control is lost, meanwhile goodwill shall be written down.
Other comprehensive earnings related with the equity investment of the previous subsidiary shall be transferred
to be current investment earnings when the control is lost.
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If the transactions from dealing with the equity investment to subsidiary until the loss of control belong to
package deal, all transactions shall be taken as one transaction of disposing equity investment to the subsidiary
and losing control for accounting treatment. Relevant accounting treatment shall be carried out in individual
financial statement and consolidated financial statement:
(1) In individual financial statement, before the loss of control, the balance between the price of every disposal
and the book value of long-term equity investment corresponding to the equity disposed shall be recognized as
other comprehensive earnings, and will be transferred to losses and profits of the term in which the control is lost
when the control is lost.
(2) In consolidated financial statements, the balance between the price of every disposal before the loss of
control and the net assets shares held in the subsidiary corresponding to the disposal of investment shall be
recognized as other comprehensive earnings, and will be transferred to losses and profits of the term in which the
control is lost when the control is lost.
4. Standards to judge control joint and significant influences
If the Company controls some arrangement with other participants collectively according to relevant stipulations,
and the decision on activity that generates significant influence on the return of such arrangement only exists
upon consensus of all participants that share the control right, it will be regarded as the Company controls such
arrangement jointly with other participants, and the arrangement belongs to jointly operated arrangement.
If jointly operated arrangement is achieved by single entity, according to relevant stipulations, if it is judged that
the Company has right on the net assets of such single entity, the single entity shall be taken as joint venture, and
equity method will be adopted for settlement. If according to relevant stipulations, it is judged that the Company
has no right on the net assets of such single entity, such single entity shall be taken as jointly operating. The
Company shall recognize the items that are related with the shares of the jointly operated interests, and carry out
accounting treatment according to the stipulations set out in relevant enterprise accounting standards.
Significant influence refers that the investor has the power to participate in the decision-making of financial and
operation policies of the invested unit, but cannot control or jointly control with other parties the formulation of
these policies. The Company will judge the possession of significant influence on the invested unit through one
or several situations below and comprehensively consideration of all facts and situations. (1) Has designated
deputy in the Board of Directors or similar power authority in the invested unit; (2) Participates in the
formulation of financial and operation policies of the invested unit; (3) Has important transactions with the
invested unit; (4) Has dispatched management personnel to the invested unit; (5) Provides key technical files to
the invested unit.
(XV) Investment real estate
Investment real estate refers to the real estate held for earning rent or capital value adding or both, including the
using right of the land leased, the land using right held for transfer after appreciation and the leased buildings.
Cost of investment real estate of the Company shall be taken as entry value. Cost of purchased investment real
estate includes purchasing price, relevant taxes and other expenses that can be directly attributable to such asset.
Cost of the investment real estate built will be composed by all necessary expenses to build such asset and those
arising before the asset reaches the estimated usable status.
The Company carries out follow-up measurement on investment real estate by adopting cost mode, and accrues
depreciation or amortization on buildings and land using right according to estimated service life and net residual
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value rate. Estimated service life, net residual value rate and yearly depreciation (amortization) rate are shown
below:
Yearly depreciation (amortization)
Type Estimated service life (year) Estimated net residual value rate
rate
Buildings 20-40 5% 4.75%-2.38%
If the purpose of investment real estate is for own use, since the date of change, the Company converts such
investment real estate to fixed asset or intangible asset. If the purpose of the real estate is changed to earning rent
or capital value adding, since the date of change, the Company shall convert fixed asset or intangible asset to
investment real estate. When conversion occurs, the book value before the conversion will be taken as the entry
value after conversion.
When investment real estate is disposed or permanently exits from use, and is estimated that no economic
interest will be gained from its disposal, the recognition on such investment real estate shall be terminated. The
income of disposal of real estate, including selling, transferring, discarding or destroying the investment real
estate minus its book value and relevant taxes shall be incorporated into current profits and losses.
(XVI) Fixed asset
1. Conditions to recognize fixed assets
Fixed assets refer to intangible assets that are held for producing commodities, providing labors, renting or
operation management with the service life over one fiscal year. Fixed asset will be recognized when satisfying
the following conditions at the same time:
(1) Economic interest related with such fixed assets might probably flow into the enterprise.
(2) Cost of such fixed asset can be reliably measured.
2. Initial measurement of fixed assets
Initial measurement on the fixed assets of the Company will be carried out according to the cost, in which cost of
fixed assets purchased include purchasing price and import tariff, etc. as well as other expenses arising in order
to make the fixed assets reach estimated usable status that can be directly attributable to such assets. Cost of
fixed asset built by the Company will be composed of necessary expenses to make the asset reach usable status.
Value of fixed asset invested by the investor stipulated in the investment contract or agreement shall be taken as
entry value, but if the price set out in the contract or agreement is not fair, it shall be accounted according to its
fair value. If the price of fixed asset purchased exceeds normal credit conditions and is paid in extension, in fact
possessing financing nature, the cost of fixed asset shall be determined based on the current value of purchasing
price. The balance between the actually paid price and the current value of purchasing price, except to be
capitalized, shall be incorporated into current profits and losses in the credit period.
3. Follow-up measurement and disposal of fixed assets
(1) Depreciation of fixed assets
Depreciation of fixed asset shall be accrued during the estimated service life according to the entry value minus
the estimated net residual value. For fixed asset that impairment reserve has been provided, depreciation shall be
determined according to the book value after the deduction of impairment reserve in the coming period as well
as the years to be used.
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According to nature and situation of use of fixed asset, the Company will determine the service life and
estimated net residual value of the fixed asset. At the end of the year, the Company will recheck the service life,
the estimated net residual value and the depreciation method of the fixed. If there is difference from the
previously estimated amount, relevant adjustment shall be carried out.
Estimated service life, net residual value rate and yearly depreciation rate of different type of fixed assets are
shown below:
Yearly depreciation
Type Depreciation method Depreciation life (year) Residual value rate (%)
rate (%)
Buildings and Straight-line depreciation
20-40 5 4.75-2.38
constructions method
Machines and Straight-line depreciation
5-10 5 19.00-9.50
equipment method
Electronic Straight-line depreciation
5-10 5 19.00-9.50
equipment method
Transportation Straight-line depreciation
5-10 5 19.00-9.50
equipment method
Straight-line depreciation
Other equipment 5-10 5 19.00-9.50
method
(2) Subsequent expenditures of fixed assets
Subsequent expenditures related with fixed asset, if complies with the recognition conditions for fixed asset,
shall be incorporated into the cost of fixed asset; if does not comply with the recognition conditions for fixed
asset, shall be incorporated into current profits and losses at the time of occurrence.
(3) Disposal of fixed asset
When a fixed asset cannot generate economic profits by disposal or by use as estimated, such fixed asset shall be
terminated in recognition. The amount received by disposal of fixed asset, such as selling, transferring,
discarding or destroying, minus its book value and relevant taxes shall be incorporated into current profits and
losses.
4. Recognition basis, pricing and depreciation method of fixed assets leased by financing
When fixed asset leased by the Company complies one or several standards set below, it shall be recognized as
fixed asset leased in by financing:
(1) When the leasing period is expired, the ownership of the leased asset will be transferred to the Company.
(2) The Company has the option to purchase the leased asset. It is estimated that the purchasing price concluded
will be far lower than the fair value of the leased asset at the time of exercising the option, therefore, it can be
reasonably decided from the starting date of the lease that the Company will excise such option.
(3) Even if the ownership of asset will not be transferred, the leasing period accounts for most of the service life
of the leased asset.
(4) The current value of the minimum leasing payment from the starting date of the lease is almost equal to the
fair value of the leased asset when the lease starts.
(5) The nature of the leased asset is special. If no big renovation is made, it can only be used by the Company.
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The lower between the fair value of the leased asset starting from the leasing date and the current value of the
minimum leasing payment will be taken as the entry value of the fixed asset leased in by financing. The
minimum leasing payment shall be taken as the entry value of long-term payable, and its balance shall be taken
as the unrecognized financing cost. Initially direct expenses arising from the leasing negotiation and the signing
of leasing contract attributable to leased items, including commission charge, lawyer fee, traveling cost and
stamp tax shall be incorporated into the value of the leased asset. The leasing expenses not recognized will be
amortized by using actual interest rate method during the period of leasing in installments.
The Company adopts depreciation policy consistent with the self-owned fixed assets to accrue depreciation of
fixed assets leased in by financing. If it can be reasonably determined that the ownership of the leased asset can
be acquired when the leasing period is expired, depreciation shall be accrued during the service life of the leased
asset. If it cannot be reasonably determined that the ownership of the leased asset can be acquired when the
leasing period is expired, depreciation shall be accrued in the shorter period between the leasing period and the
service life of the leased asset.
(XVII) Construction in progress
1. Type of construction in progress
Construction in progress built by the Company shall be priced according to the actual cost, which will be
composed of the necessary costs to build the asset and make it reach the estimated usable status, including
material cost for the project, labor cost, relevant taxes paid, borrowing cost to be capitalized and indirect cost to
be amortized. The construction in progress of the Company shall be settled according to the category of project.
2. Standard and time for construction in progress to be carried over to fixed asset
All costs of construction in progress arising to make such asset reach estimated usable status shall be taken as the
entry value of the fixed asset. If the construction in progress built has reached the estimated usable status, but no
completion settlement is done, from the date of reaching the usable status, according to engineering budget,
construction cost or actual cost of the project, the construction in progress will be carried over to fixed asset
according to the estimated value, and depreciation of fixed asset shall be accrued according to the Company's
depreciation policy on fixed assets. After the completion settlement is done, the estimated value shall be adjusted
according to the actual cost, but the depreciation accrued will not be adjusted.
(XVIII) Borrowing costs
1. Recognition principles of capitalization of borrowing costs
Borrowing costs incurred by the Company, if can be directly attributable to the purchase, construction or
production of asset in compliance with the capitalization conditions, will be capitalized upon satisfying the
conditions of capitalization, and incorporated into costs of relevant assets. Other borrowing costs will be
recognized as costs according to the accrual at the time of occurrence, and incorporated into current profits and
losses.
Assets in compliance with the capitalization conditions refer to fixed assets, investment real estate and inventory
that can reach estimated usable or sellable status after quite long time of purchasing, construction or production
activities.
Borrowing costs will be capitalized when satisfying the following conditions at the same time:
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(1) Assets costs have occurred, which include the expenses arising from paying cash, transferring non-cash assets
or bearing liabilities with interest in order to purchase, build or produce assets in compliance with the
capitalization conditions.
(2) Borrowing costs have occurred.
(3) Necessary activities including purchasing, building or production to make the asset reach estimated usable or
sellable status have been started.
2. Period of capitalization of borrowing costs
The capitalization period refers to the period from when the borrowing costs are capitalized to the stop of the
capitalization. The suspended period of capitalization of borrowing costs are not included.
When the assets purchased, built or produced in compliance with the capitalization conditions reach estimated
usable or sellable status, the capitalization of borrowing costs shall be stopped.
When part of the items in the assets purchased, built or produced in compliance with the capitalization are
completed respectively and can be used separately, the capitalization of borrowing costs of such part of assets
shall be stopped.
If the assets purchased, built or produced are completed in different parts, but can only be used or sold after the
entire completion, the capitalization of borrowing costs shall be stopped when such assets are entirely completed.
3. Period of suspension of capitalization
If asset in compliance with capitalization conditions encounters abnormal suspension, and the suspension
exceeds 3 months continuously during the process of purchase, construction or production, the capitalization of
borrowing costs shall be suspended. If such suspension is necessary procedure to make the asset in compliance
with capitalization conditions purchased, built or produced to reach usable or sellable status, capitalization of
borrowing costs shall be continued. The borrowing costs arising during the suspension shall be recognized as
current profits and losses until the activities of purchasing, building or production of asset are restarted,
capitalization of borrowing costs shall be continued.
4. Calculation method for amount of capitalization of borrowing costs
Interest of special loan (minus the income of interest obtained by unused loan deposited in the bank or the
investment earnings obtained by temporary investment) and its auxiliary costs shall be capitalized before the
asset in compliance with the capitalization conditions purchased, built or produced reaches usable or sellable
status.
Interest amount of general loan to be capitalized shall be calculated and determined by the weighted average of
the accumulated asset expenditures exceeding special loan multiplying the capitalization rate of general loan
occupied. Capitalization rate will be calculated and determined according to the weighted average interest rate of
general loan.
If the loan has discount or premium, amount of discount or premium to be amortized in every accounting period
shall be determined according to actual interest rate method, and amount of interest of every period shall be
adjusted.
(XIX) Intangible assets and development expenses
An intangible asset refers to an identifiable non-monetary asset without physical substance which is possessed or
controlled by the Company, including purchased software and land use rights.
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1. Initial measurement of intangible assets
The cost of the intangible assets purchased from outside includes purchase price money, relevant taxes and other
expenses incurred due to putting such assets to the anticipated use that can be directly attributed to such assets.
Where the price money of the purchased intangible assets is paid on a deferred basis within a term exceeding
regular credit conditions and actually of a financing nature, the cost of the intangible assets is determined on the
basis of the current value of the price money in purchase.
The entry value in the account of the fixed assets obtained from debtors for the repayment of liabilities in debt
restructuring is determined on the basis of the fair value of the fixed assets. The difference between the book
value of debt restructuring and the fair value of the fixed assets used for the repayment of liabilities is included
in current profit and loss.
Under the premises that the non-monetary assets exchange is of commercial nature and that the fair value of the
assets received and given out in the exchange can be measured reliably, the initial investment cost of the
long-term equity investment received in non-monetary assets exchange is determined on the basis of the fair
value of the assets given out, unless there are definite evidences that the fair value of the received assets is more
reliable. For the non-monetary assets exchange that do not meet the above premises, the book value of the
received assets and relevant taxes payable is taken as the cost of the long-term equity investment.
The recorded value in the account of the intangible assets obtained by the merger of the enterprises under the
control of a same entity is determined according to the book value of the merged party. The recorded value in the
account of the intangible assets obtained by the merger of the enterprises under the control of different entities is
determined according to the fair value.
The cost of the intangible assets formed through internal R&D activities includes: the cost of materials and labor
consumed in the development of such intangible assets, registration fee, the amortization of other patent rights
and franchises used in the development process and the interests expenses that meet the conditions of
capitalization, and other direct expenses incurred due to putting such intangible assets into the anticipated use.
2. Subsequent measurement of intangible assets
When the Company acquires intangible assets, the Company analyzes and determines the service life and
classifies intangible assets into intangible assets with limited service life and intangible assets with uncertain
service life.
(1) Intangible assets with limited service life
The intangible assets with limited service life are amortized based on straight-line method in the period when the
assets bring economic benefits to the enterprise. The estimated service life and basis of intangible assets with
limited service life are as follows:
Item Estimated service life Basis
Outsourced software 5 Benefit period
Land use right 50 Benefit period
At the end of each year, the service life and amortization method of intangible assets with limited service life are
rechecked and an adjustment is made if the service life differs from the original estimated service life.
At the end of the current period, the service life and amortization method of the intangible assets are the same as
the last year.
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3. Classification standards for research and development phases of R&D projects inside the Company
Research phase: a phase in which creative and planned investigation and research activities are carried out for
the purpose of obtaining and understanding new scientific or technological knowledge.
Development phase: a phase in which research results or other knowledge, before being produced or used for
commercial purposes, are applied in a certain plan or design for the purpose of producing materials, equipment
and products that are new or feature substantial improvement.
The expenses for inside R&D projects in the research phase are included in current profit and loss when the
expenses occur.
4. Standards for meeting the conditions of capitalization by research phase
The expenditure in the development phase of the research and development project can be recognized as
intangible assets only when all the following conditions are met:
(1) The completion of such intangible assets makes it usable or its sale technically feasible.
(2) There is an intention to complete such intangible assets and use or sell it.
(3) The way that the intangible assets generate economic interests can prove that the product using such
intangible assets or the intangible assets itself have market. If the intangible assets are to be used internally, its
usefulness is proved.
(4) The Company has sufficient technical and financial resources and other resources to support the completion
of the development of such intangible assets and the capacities to use or sell such intangible assets.
(5) The expenditure attributed to the development stage of such intangible assets can be reliably measured.
The expenditure in the development phase not meeting the preceding conditions is included in the current profits
and losses when it is incurred. The development expenditure that is included in profits and losses in the previous
year will not be identified as assets again in later years. The capitalized expenditure in the development phase is
listed as development expenditure in the balance sheet and is converted into intangible assets from the date when
it meets the expected purpose.
(XX) Long-term impairment of assets
The Company determines whether any sign of possible impairment exists for long-term assets on the balance
sheet date. If the sign of impairment exists for long-term assets, the recoverable amount of each asset is
estimated. If the recoverable amount of each assets cannot be estimated, the recoverable amount of the asset
group where the asset belong is determined based on the asset group.
The recoverable amount may be determined according to the higher one of the net value of the fair value of the
assets minus the disposal expenses and the current value of the anticipated future cash flow of the assets.
If the measurement result of recoverable amount indicates that the recoverable amount of a long-term asset is
lower than its book value, the book value of the long-term asset is written down to the recoverable amount. The
write-down amount is identified as asset impairment loss and is included in the current profits and losses and
provision for asset impairment provision is made. Once the impairment loss of assets is recognized, the loss will
not be reversed in later accounting periods.
At the same time, the corresponding assets impairment provision is accrued. After the recognition of assets
impairment loss, corresponding adjustments are made in the future periods on the depreciation or amortized
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expenses of the impaired assets so that the adjusted book value of such assets (with the anticipated expected
salvage value deducted) can be amortized systematically within the remaining service life.
The goodwill and intangible assets with uncertain service life, which are formed due to enterprise merger, are
tested every year on whether the sign of impairment exists.
During impairment test of goodwill, the book value of goodwill can be amortized to the asset group or
combination of asset groups that is expected to acquire synergistic benefit from business combination. When
impairment test is performed for relevant asset groups or asset group combinations that include goodwill, for
example, if the sign of impairment exists for asset groups or asset group combinations relevant to goodwill, the
impairment test is first performed for the asset groups or asset group combinations that do not include goodwill
and the recoverable amount is calculated and is compared with the relevant book value to recognize the
corresponding impairment loss. Then the impairment test is first performed for the asset groups or asset group
combinations that include goodwill and the book value (including the book value of amortized goodwill) of the
relevant asset groups or asset group combinations is compared with the recoverable amount. If the recoverable
amount of relevant asset groups or asset group combinations is lower than the book value, the impairment loss of
goodwill is recognized.
(XXI) Long-term expenses to be amortized
1. Method of amortization
Long-term unamortized expenses refer to the expenses that have incurred at the Company but should be born in
current period and later periods, where the amortization period is above one year. Long-term unamortized
expenses shall be amortized based on direct method in the period of benefit.
(XXII) Payroll
Payroll refers to various remunerations and compensations provided by the Company for obtaining services
provided by employees or for terminating the employment relationship. Payroll includes short-term remuneration,
welfare after leave, dismissal welfare and other long-term employee's welfare.
1. Short-term payroll
Short-term remuneration refers to the payroll that needs to be paid completely within 12 months in the annual
report period when employees provide relevant services, excluding welfare after leave and dismissal welfare. In
the accounting period when employees provide services, the Company identities short-term remuneration as
liabilities and includes it in relevant asset costs and fees according to the benefit objects of services provided by
employees.
2. Post-employment welfare
The welfare after leave refers to the remuneration and welfare provided by the Company for obtaining services
provided by employees or for terminating the employment relationship after employees have retired, excluding
short-term remuneration and dismissal welfare. The welfare plan after dismissal is classified into the defined
contribution plan and the defined benefit plan.
The welfare defined contribution plan aims to join the social basic endowment insurance and unemployment
insurance organized and implemented by labor and social security agencies in various regions. In addition to
social basic endowment insurance and unemployment insurance, employees can join the pension plan set by the
Company at their own discretion. In the accounting period when employees provide the Company with services,
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the amount that shall be paid and deposited shall be identified as liabilities according to the defined contribution
plan and is included in the current profits and losses or relevant asset costs.
After making the preceding payment according to the national standard and pension plan, the Company shall no
longer have any other payment obligation.
3. Dismissal welfare
Dismissal welfare refers to the compensation the Company gives to an employee for terminating the employment
relationship with employee before the employment contract expires or for encouraging an employee to accept
downsizing. It is a liability incurred by compensating an employee for terminating employment relationship with
the employee when the Company cannot unilaterally withdraw the contract termination plan or downsizing
suggestion, or when the Company confirms the costs related to restructuring that involves payment of dismissal
welfare, whichever is earlier. Dismissal welfare is included in the current profits and losses.
The Company provides early retirement welfare for the employees who accept early retirement. Early retirement
welfare involves salary paid to and social insurance premiums paid for the employees who are permitted by the
Company management to voluntarily leave office before state-specified retirement age. The Company pays early
retirement welfare to early retired employees from the day the arrangement takes effect to the day the employees
reach retirement age. The Company deals with early retirement welfare using the accounting method for
dismissal welfare, namely when the conditions for dismissal welfare are met, recognizing the salary and social
insurance premiums to be paid within the period from the day the employees leave office to the day the
employees reach the retirement age as liabilities and including them in the current profits and losses once.
Actuarial analysis of early retirement welfare assumes that differences caused by changes and welfare standard
adjustment are included in the current profits and losses.
4. Other long-term employees' welfare
Other long-term employees' welfare refers to all other employees' welfare except short-term remuneration,
welfare after leave and dismissal welfare.
For other long-term employees' welfare that meets conditions of the defined contribution plan, the amount that
shall be paid and deposited shall be identified as liabilities in the accounting period and is included in the current
profits and losses or relevant asset costs; except other long-term employees' welfare in the preceding
circumstance, an independent actuary sets the welfare generated by the defined benefit plan to the period in
which employees provide services by using the method of expected accumulative welfare unit and includes it in
the current profits and losses or relevant asset costs.
(XXIII) 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 estimated liabilities.
The obligation is a current obligation undertaken by the Company;
The fulfillment of the obligation is very likely to cause an outflow of economic interests from the Company;
The amount of the obligation can be measured reliably.
2. Measurement method of estimated liabilities
Initial measurement is carried out to estimated liabilities of the Company according to the optimum estimation
amount of the required expense when relevant obligations are fulfilled.
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When determining the optimum estimation amount, the Company considers in a comprehensive way the factors
related to contingencies like risks, uncertainties and time value of currency. Where there are great influences of
time value of currency, the optimum estimation amount is determined after discounting relevant future cash
flows.
The optimum estimation amount is determined according to different situations as follows:
Where there is a continuous range (or interval) of the required expense and different results in the range have
same possibility to occur, the optimum estimation amount is determined according to the intermediate value of
the range, i.e. the average of the maximal and the minimum amounts.
Where there is no continuous range (or interval) or there is a continuous range but different results have different
possibilities to occur, if contingencies involve individual proceedings, the optimum estimation amount is the
amount most likely to occur, and if contingencies involve several proceedings, the optimum estimation amount is
determined according to various possible results and the calculation of relevant probabilities.
If all expenses or part of them, which are used by the Company for paying off estimated liabilities, are
anticipated to be compensated by a third party and compensation amount is basically sure to be received, the
compensation amount is recognized separately as an asset, which should not exceed the book value of the
estimated liabilities.
(XXIV) 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 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
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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 confirmed cost or expense and total equity amount
after the vesting date.
The case-settled share-based payment shall be measured by reference to the fair value of the Company's eligible
liabilities which is calculated based on shares or other equity instruments. If the equity instruments granted vest
immediately, the Company shall include the fair value of eligible liabilities in related cost or expense on the
vesting date, with a corresponding increase in liabilities. For the cash-settled share-based payment where the
granted options are not exercised until the counterparty completes a specified period of service or achieves a
performance condition in the vesting period, the Company shall include the service obtained in the current period
into related cost or expense and liabilities by reference to the grant-date fair value of liabilities, based on the best
estimate of the number of vested equity instruments on each balance sheet date during the vesting period. The
Company shall re-measure the fair value of its liabilities on each balance sheet date and settlement date before
settlement of related liabilities, and include liability changes in current profit and loss.
5. Modifications to the terms and conditions on which equity instruments were granted
If a grant of an equity instrument is canceled during the vesting period, the Company shall account for the
cancellation as an acceleration of vesting, and shall therefore include immediately the amount that would
otherwise have been confirmed 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.
(XXV) Other financial instruments such as preferred stock and sustainable debt
Based on the rules of financial instruments, the Company classifies financial instruments or their components
into financial liabilities or equity instruments during initial recognition according to the contact terms of
financial instruments such as preferred stock and sustainable debt and economic essence they reflect rather than
legal form, in combination with definitions of financial liabilities and equity instruments.
1. When one of the following conditions is met, the issued financial instrument is classified into financial
liabilities:
(1) Contractual obligation to deliver cash or other financial assets to other parties;
(2) Contractual obligation to exchange financial assets or financial liabilities under potential adverse conditions;
(3) Non-derivative instrument contract that must or may use equity instruments of an enterprise for settlement in
the future (the enterprise delivers a variable number of equity instruments according to the contract);
(4) Derivative instrument contract that must or may use equity instruments of an enterprise for settlement in the
future (except derivative instrument contracts that use a fixed number of equity instruments to exchange a fixed
amount of cash or other financial assets).
2. When the following conditions are met at the same time, the issued financial instruments are classified into
equity instruments:
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(1) The financial instruments do not include the contractual obligation to deliver cash or other financial assets to
other parties or exchange financial assets or financial liabilities under potential adverse conditions;
(2) For the financial instruments that must or may use equity instruments of an enterprise for settlement in the
future, if the financial instruments are non-derivative instruments, the contractual obligation to deliver a variable
number of equity instruments for settlement is not included; if the financial instruments are derivative
instruments, the enterprise can only settle the financial instruments by exchanging a fixed number of equity
instruments with the fixed amount of cash or other financial assets.
3. Accounting treatment method
For financial instruments that belong to equity instruments, the interest expenditure or dividend distribution shall
be used as profits of the enterprise for distribution, the buy-back and write-off are treated as changes of equity,
and transaction expenses such as handling charge and commission shall be deducted from the equity.
For financial instruments that belong to financial liabilities, the interest expenditure or dividend distribution shall
be treated as borrowing costs in principle, the gain or loss generated due to buy-back or redemption are included
in the current profits and losses, and transaction expenses such as handling charge and commission are included
in the initial amount of measurement of the issues instruments.
(XXVI) 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 interests are likely to flow into the enterprise, and relevant costs incurred or to be incurred can be
measured reliably.
The Company mainly runs the leasing business in the electronics market. It identifies received rental as rental
income in the term of lease by using the method of line and the income of other business is recognized when the
risk premium is transferred according to contract provisions.
The price of a contract or agreement is collected through deferral. In the case of actual financial nature, the
amount of income from sales commodities shall be determined according to the fair value of the price of the
contract or agreement.
2. Basis for recognition of income from transfer of asset use right
When economic interests relevant to transaction probably flow into the enterprise and the amount of income can
be reliably measured, the amount of income from transfer of asset use right is determined in the following
circumstances:
(1) The amount of interest income is determined according to the time and actual interest rate of other people
using the monetary fund of the enterprise.
(2) The amount of the income from use fee is determined in accordance with the time and method of charges as
agreed in relevant contract or agreement.
3. Recognition basis and method for income from rendering of services
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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 completion percentage method. The completion
progress of a labor service transaction is determined by survey of the work completed.
When the following conditions are met at the same time, the result of rendering of services can be reliably
estimated:
(1) The amount of income can be measured reliably;
(2) Relevant economic interests are very likely to flow into the enterprise;
(3) The completion progress of transactions can be reliably determined;
(4) The costs that have been incurred or will be incurred in transactions can be reliably measured.
The total amount of the income from the provision of labor services is determined according to the price money
received or receivable of a relevant contract or agreement, unless the price money received or receivable of a
relevant contract or agreement is unfair. The labor services income of the current period is recognized on the
balance sheet date according to the resulted amount of the total amount of income from provision of labor
services times the completion percentage and deducted by the accumulative amount of the recognized income
from provision of labor services in previous accounting periods. At the same time, the labor cost of the current
period is carried forward according to the estimated total cost of the provision of labor services times the
completion percentage and deducted by the accumulative amount of the recognized labor cost in previous
accounting periods.
Where the results of the provision of labor services on the balance sheet date cannot be estimated reliably, such
results are processed respectively according to the following conditions:
(1) Where it is estimated that the labor services cost incurred can be compensated, the income from provision of
labor services is recognized according to the amount of the labor services cost incurred and the same amount is
transferred to the labor cost.
(2) Where it is estimated that the labor services cost incurred cannot be compensated, the labor services cost
incurred is included in current profit and loss and no income is recognized.
When the contracts or agreements between the Company and other companies involve 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. Recognition basis and method for income from construction contracts
(1) When the results of construction contracts can be reliably estimated, relevant income from contracts and
costs of contracts are confirmed based on the method of completion percentage. The method of completion
percentage refers to the method for confirming income from contracts and costs of contracts according to the
completion progress of contracts. The completion progress of a contract is determined according to the ratio of
actual accumulative cost of the contract to estimated total costs of the contract.
If the following conditions are met at the same time, the result of a fixed construction contract can be reliably
estimated:
1) The total income from the contract can be reliably measured;
2) Economic interests relevant to the contract are very likely to flow into the enterprise;
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3) The actual costs of the contract can be clearly distinguished and reliably measured;
4) The completion progress of the contract and the costs needed for completing the contract can be reliably
determined.
If the following conditions are met at the same time, the result of a cost-plus contract can be reliably estimated:
1) Economic interests relevant to the contract are very likely to flow into the enterprise;
2) The actual costs of the contract can be clearly distinguished and reliably measured;
On the balance sheet date, the amount of total contractual income multiplied by the completion progress,
deducting the accumulated confirmed income in the previous accounting period, is recognized as the current
contractual income; the amount of estimated total contract cost multiplied by the completion progress, deducting
the accumulative confirmed cost in the previous accounting period, is recognized as the current costs of contract.
The change of contract engineering, claim and bonus is included in the total income of contract based on the
amount that may be brought and can be reliably calculated.
(2) If the result of a construction contract cannot be reliably estimated, the contract is treated as follows:
1) If the contract cost can be recovered, the income from the contract is recognized according to the actual
recovered contract cost and the contract cost is recognized as the current costs of contract.
2) If the contract cost cannot be recovered, the cost is immediately recognized as the costs of contract in the
current period when the cost is incurred and the income from the contract is not recognized.
(3) If the total cost of contract probably exceeds the total income from the contract, the expected loss is
immediately recognized as costs.
5. Transfer of the assets with repurchase conditions
If the Company signs a repurchase agreement when selling products or transferring other assets, whether the
products sold meet the conditions for income recognition is judged according to the articles of the agreement. If
the repurchase is a financing transaction, the Company does not recognize sales income when delivering
products or assets. If the repurchase price is higher than the selling price, interests are accrued for the difference
during repurchase period and included in financial expenses.
(XXVII) 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. Based on the
subsidy objects specified in relevant government documents, the subsidies are divided into subsidies relevant to
assets and subsidies relevant to profits.
Subsidies relevant to assets refer to government subsidies acquired by the Company for the purposes of
acquisition and construction or turned to long-term assets in other ways. Subsidies relevant to profits refer to
government subsidies other than subsidies relevant to assets.
2. Recognition of government subsidies
If any evidence indicates that the Company can meet relevant conditions for financial support policies and is
expected to obtain financial support fund at the end of the period, the government subsidy shall be recognized
based on the amount receivable. In other cases, government subsidies shall be recognized at receipt.
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Government subsidies that are monetary funds shall be measured based on the amount received or receivable.
Government subsidies that are non-monetary funds shall be measured based on fair value. Where the fair value
cannot be reliably calculated, the nominal amount (1 Yuan) is measured. Government subsidies that are
measured by nominal amount shall be directly included in current profit and loss.
3. Accounting treatment method
The government subsidies relevant to assets are recognized as deferred income and are included in non-operating
income according to the service life of the built or purchased assets;
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.
If recognized government subsidies have to be returned and the balance of relevant deferred income exists, the
book balance of relevant deferred income is offset and the excess part is included in the current profit and loss;
when relevant deferred income does not exist, the government subsidies are directly included in the current profit
and loss.
(XXVIII) Deferred income tax assets and liabilities
Deferred income tax assets and liabilities are calculated and recognized according to the difference (temporary
difference) between the taxable basis of the assets and liabilities and their book value. On the balance sheet date,
deferred income tax assets and liabilities are measured based on the tax rate applicable to the period when the
assets are expected to be recovered or the liabilities are expected to be paid off.
1. Basis for recognition of deferred incomes tax assets
The Company confirms the deferred income tax assets generated due to deductible temporary difference based
on the amount of taxable income that is probably obtained to deduct deductible temporary difference and can
carry over deductible loss and tax deduction. However, the deferred income tax assets generated due to initial
recognition of assets or liabilities in a transaction with the following features at the same time: (1) the transaction
is not business merger; (2) the transaction does not affect the accounting profit, taxable income or deductible
loss.
For the deductible temporary difference relevant to investment of joint ventures, when the following conditions
are met at the same time, corresponding deferred income tax assets are confirmed; the temporary difference is
probably reversed in the foreseeable future and taxable income used to deduct the deductible temporary
difference will probably be obtained in the future.
2. Basis for recognition of deferred income tax liabilities
The temporary difference between the tax payable but unpaid in the current period and that in previous periods is
recognized by the Company as deferred income tax liabilities, excluding:
(1) Temporary difference formed due to initial confirmation of goodwill;
(2) Transaction or matter formed due to factors rather than business merger (the transaction or matter does not
affect the accounting profit or the temporary difference formed due to taxable income or deductible loss);
(3) For the taxable temporary difference relevant to investment of subsidiaries and joint ventures, the reversal
time of the temporary difference can be controlled and may not be reversed in the foreseeable future.
3. The balance between deferred income tax assets and deferred tax income liabilities is listed if the following
conditions are met at the same time.
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(1) The entity has the legal right to settle the current tax income assets against current income tax liabilities; and
(2) The deferred income tax assets and deferred tax income liabilities are relevant to income taxes levied by
common 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.
(XXIX) Lease
If the lease terms essentially transfer all risks and gains related to the ownership of the leased asset to the lessee,
such lease is finance lease while other leases are operating lease.
1. Accounting treatment of operating lease
(1) The rental fee paid by the Company for rented assets is apportioned by the straight-line method in the whole
lease term including the rent-free period and included in current expenses. The initial direct expenses related to
lease transactions, paid by the Company, are included in current expenses.
In case that the lessor undertakes the lease-related expenses that shall be undertaken by the Company, the
Company shall deduct such expenses from the total rental fee and the rental fee after deduction is apportioned in
the lease term and included in current expenses.
(2) The rental fee received by the Company from leasing of assets is apportioned by the straight-line method in
the whole lease term including the rent-free period and included in the lease income. The initial direct expenses
related to lease transactions, paid by the Company, are included in current expenses. Those with significant
amounts are capitalized and included in current profit in the whole lease term on the same basis for recognition
of the lease income.
In case that the Company undertakes the lease-related expenses which shall be undertaken by the lessee, the
Company shall deduct the expenses from the total lease income and the lease expenses after deduction are
allocated in the lease term.
Accounting treatment of financing lease
(1) Assets leased under financing lease: The lower one between the fair value of rented assets and the minimum
lease payment is treated as the recording value of the rented assets, the minimum lease payment as the recording
value of long-term accounts payable, and the difference between the two as financing expenses yet to be
recognized.
The financing expenses yet to be recognized are apportioned by the Company by the actual interest rate method
in the lease term of the assets and included in accounting expenses.
(2) Assets rented 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 included in the initial measurement of financing lease payment
receivable and the amount of profits recognized in the lease term is reduced.
(XXX) Changes of main accounting policies and accounting estimates
1. Changes of accounting policies
No change was made to main accounting estimates in the current reporting period.
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2. Changes of accounting estimates
No change was made to main accounting estimates in the current reporting period.
V. Taxes
(I) 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 Paid-in turnover tax payable 7
Educational surtax Paid-in turnover tax payable 3
Local educational surtax Paid-in turnover tax payable 2
Enterprise income tax Taxable income 25, 15
Notes to income tax rate for different tax payers:
Name of tax payer Income tax rate (%)
Xi'an SEG Electronics Market Co., Ltd. 15
Xi'an Hairong SEG Electronics Market Co., Ltd. 15
(II) Tax preference policy and basis
According to the confirmation letter (S. F. G. C. Y. Q. R. H. [2014] No. 134 issued by Shaanxi Provincial
Development and Reform Commission, Xi'an SEG Electronics Market Co., Ltd., a subsidiary of the Company, is
engaged in projects encouraged by the nation and complies with the corporate income tax preference policy for
development of the west regions. Therefore, the corporate income tax shall be paid at the rate of 15%.
According to the confirmation letter (S. F. G. C. Y. Q. R. H. [2014] No. 060 issued by Shaanxi Provincial
Development and Reform Commission, Xi'an Hairong SEG Electronics Market Co., Ltd., a subsidiary of the
Company, is engaged in projects encouraged by the nation and complies with the corporate income tax
preference policy for development of the west regions. Therefore, the corporate income tax shall be paid at the
rate of 15%.
Excluding the foregoing two subsidiaries, the income tax rates of other subsidiaries are 25%.
VI. Notes to Main Items of the Consolidated Financial Statements
(Unless specifically noted, the following unit of the amount is RMB Yuan)
Note 1. Monetary funds
Item Closing balance Opening balance
Cash on hand 526,467.72 602,592.57
Bank deposit 274,816,839.04 381,404,611.82
Other monetary capital 1,520,122.34 1,049,476.31
Total 276,863,429.10 383,056,680.70
Details of other restricted monetary fund:
Item Closing balance Opening balance
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Item Closing balance Opening balance
Performance bond 340,000.00 -
Cash deposit for credit card repayment 1,000,000.00 1,000,000.00
Total 1,340,000.00 1,000,000.00
Note 2. Loans to other banks
Item Closing balance Opening balance
Loans to interbank 40,000,000.00 30,000,000.00
Less: impairment provision - -
Total 40,000,000.00 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
Commercial acceptance bill - -
Total - 84,618.08
2. The Company has no pledged notes receivable at the end of the period.
3. The Company has no notes receivable endorsed or discounted and not due on the balance sheet date at the end
of the period.
4. The Company has no notes that were transferred to accounts receivable due to default by the biller at the end
of the period.
Note 4. Accounts receivable
1. Accounts receivable disclosed by type
Closing balance
Book balance Bad debt provision
Type
Proportion Proportion of Book value
Amount Amount
(%) provision (%)
Accounts receivable with single
significant amount and single - - - - -
bad debt provision
Accounts receivable with bad
debt provision accrued based on 98,238,596.47 89.91 26,173.60 0.03 98,212,422.87
credit risk feature combinations
Accounts receivable with no
significant single amount but
11,029,908.51 10.09 11,029,908.51 100.00 -
with single provision for bad
debts
Total 109,268,504.98 100.00 11,056,082.11 10.12 98,212,422.87
Continued:
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Opening balance
Book balance Bad debt provision
Type
Proportion Proportion of Book value
Amount Amount
(%) provision (%)
Accounts receivable with single
significant amount and single - - - - -
bad debt provision
Accounts receivable with bad
debt provision accrued based on 185,866,040.16 94.08 - - 185,866,040.16
credit risk feature combinations
Accounts receivable with no
significant single amount but
11,699,138.18 5.92 11,699,138.18 100.00 -
with single provision for bad
debts
Total 197,565,178.34 100.00 11,699,138.18 5.92 185,866,040.16
Notes to types of accounts receivable:
(1) Accounts receivable with no significant single amount but with single provision for bad debts at the end of
the period
Closing balance
Name of company Accounts Bad debt Proportion of
Reason for provision
receivable provision provision (%)
Unable to be recovered for aging
Jiangsu Unicom 3,092,011.09 3,092,011.09 100.00
of over 5 years
Shenzhen Shuangxionghui Industrial Unable to be recovered for aging
2,160,725.63 2,160,725.63 100.00
Co., Ltd of over 5 years
Shenzhen LiYuanshun Industrial Unable to be recovered for aging
1,906,865.35 1,906,865.35 100.00
Co., Ltd. of over 5 years
Zhejiang Financial Information Co., Unable to be recovered for aging
786,000.00 786,000.00 100.00
Ltd of over 5 years
Unable to be recovered for aging
Shanghai Tianci Industrial Co., Ltd. 899,000.00 899,000.00 100.00
of over 5 years
Unable to be recovered for long
Other companies 2,185,306.44 2,185,306.44 100.00
aging
Total 11,029,908.51 11,029,908.51 100.00 -
(2) Accounts receivable in combinations with bad debt provision accrued by the aging analysis method
Closing balance
Aging
Accounts receivable Bad debt provision Proportion of provision (%)
Less than one year 97,715,124.47 - -
1-2 years 523,472.00 26,173.60 5.00
2-3 years - - -
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Closing balance
Aging
Accounts receivable Bad debt provision Proportion of provision (%)
Over 3 years - - -
Total 98,238,596.47 26,173.60 0.03
2. Accrual, recovery and writing back of current bad debt provision
The accrual amount of current bad debt provision is RMB 26,173.60. The written-off amount of current bad debt
provision is RMB 400,000.00. The written-back amount of current bad debt provision is RMB 269,229.67.
Including: Current bad debt provision written back or recovered to accounts receivable with significant amount:
Amount of writing back or Method of writing back or
Name of company Remarks
recovery recovery
House fund for Jiangshang
400,000.00 House fund collected -
Village
Total 400,000.00 -
3. Accounts receivable with top 5 closing balance collected based on debtors
Percentage in the total
Accrued bad debt
Name of company Closing balance amount of accounts
provision
receivable
Shenzhen Wonder Industry Co., Ltd. 12,482,060.76 11.42 -
Shenzhen Qway Group Co., Ltd. 11,405,168.45 10.44 -
Shenzhen Runneng Digital Co., Ltd. 9,916,497.72 9.08 -
POCO TRADE CO.,LTD 9,460,596.43 8.66 -
BORICLE INTL 9,310,555.50 8.52
Total 52,574,878.86 48.12 -
4. There are no accounts receivable with its recognition terminated due to transfer of financial assets in the
current period.
5. There are no assets and liabilities due to transfer or increase of accounts receivable in the current period.
Note 5. Prepayment
1. Prepayment listed by aging
Closing balance Opening balance
Aging
Amount Proportion (%) Amount Proportion (%)
Less than one year 129,044,887.26 100.00 94,633,317.07 100.00
1-2 years - - - -
2-3 years - - - -
Over 3 years - - - -
Total 129,044,887.26 100.00 94,633,317.07 100.00
2. Prepayment with top 5 closing balance collected based on prepayment payers
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Percentage in the
Period-end total amount of Reason for
Name of company Prepayment date
amount accounts non-settlement
receivable (%)
Xi'an Gaoke (Group) New West China Less than one Prepaid rental for
20,000,000.00 15.50
Industrial Development Co., Ltd year 2016
Shenzhen Must Energy Technology Co., Less than one
18,688,026.22 14.48 Prepayment for goods
Ltd. year
Tonmac International Electronics (Suzhou) Less than one Prepaid rental for
17,500,000.00 13.56
Co., Ltd year 2016
Less than one
Shenzhen Must Power Co., Ltd. 13,215,125.18 10.24 Prepayment for goods
year
Less than one
Shenzhen Shuojian Industry Co., Ltd 9,936,340.86 7.70 Prepayment for goods
year
Total 79,339,492.26 61.48 - -
Note 6. Other accounts receivable
1. Other receivables disclosed by type
Closing balance
Book balance Bad debt provision
Type
Proportion Proportion of Book value
Amount Amount
(%) provision (%)
Other accounts receivable with
single significant amount and 14,434,547.87 24.12 14,434,547.87 100.00 -
single bad debt provision
Other accounts receivable with bad
debt provision accrued based on 27,674,049.48 46.25 321,265.15 1.16 27,352,784.33
credit risk feature combinations
Combination 1 13,873,923.11 23.19 321,265.15 2.32 13,552,657.96
Combination 2 13,800,126.37 23.06 - - 13,800,126.37
Other accounts receivable with no
significant single amount but with 17,731,257.04 29.63 17,731,257.04 100.00 -
single provision for bad debts
Total 59,839,854.39 100.00 32,487,070.06 54.29 27,352,784.33
Continued:
Opening balance
Book balance Bad debt provision
Type
Proportion Proportion of Book value
Amount Amount
(%) provision (%)
Other accounts receivable with
single significant amount and 14,434,547.87 11.31 14,434,547.87 100.00 -
single bad debt provision
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Opening balance
Book balance Bad debt provision
Type
Proportion Proportion of Book value
Amount Amount
(%) provision (%)
Other accounts receivable with bad
debt provision accrued based on 95,371,972.98 74.74 5,816.71 0.01 95,366,156.27
credit risk feature combinations
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 no
significant single amount but with 17,800,002.44 13.95 17,800,002.44 100.00 -
single provision for bad debts
Total 127,606,523.29 100.00 32,240,367.02 25.27 95,366,156.27
Notes to types of other accounts receivable:
(1) Other accounts receivable with single significant amount and single bad debt provision at the end of the
period
Closing balance
Name of company Other accounts Bad debt Proportion of
Reason for provision
receivable provision provision (%)
Unable to be recovered
Yangjiang Yuntong Grease Co., Ltd. 8,530,276.35 8,530,276.35 100.00
with aging of over 5 years
Creditor's right transferred in by Unable to be recovered
5,904,271.52 5,904,271.52 100.00
SEG Communications with aging of over 5 years
Total 14,434,547.87 14,434,547.87 100.00 -
(2) Accounts receivable in combinations with bad debt provision accrued by the aging analysis method
Closing balance
Aging
Other accounts receivable Bad debt provision Proportion of provision (%)
Less than one year 7,513,116.52 - -
1-2 years 6,323,147.84 316,157.40 5.00
2-3 years 24,240.00 2,424.00 10.00
Over 3 years 13,418.75 2,683.75 20.00
Total 13,873,923.11 321,265.15 2.32
(3) Other accounts receivable in Combination 2 are mainly deposit, security deposit, account with related parties.
2. Accrual, recovery and writing back of current bad debt provision
The amount of the current accrued bad debt provision is RMB 316,574.97 and the amount of the current
recovered or reversed bad debt provision is RMB 69,871.93. There are no other receivables written off in the
current period.
3. Classification of other receivables by nature
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Item Closing balance Opening balance
Creditor's right transfer cost 32,165,804.91 28,568,316.79
Imprest 831,185.54 1,733,960.46
Deposit and security deposit 23,342,863.94 90,906,485.24
Others 3,500,000.00 6,397,760.80
Total 59,839,854.39 127,606,523.29
4. Other accounts receivable with top 5 closing balance collected based on debtors
Percentage in the Bad debt
Nature of total amount of other provision
Name of company Closing balance Aging
receivables accounts receivable Closing
(%) balance
Debt
Yangjiang Yuntong Grease
restructuring of 8,530,276.35 Over 5 years 14.26 8,530,276.35
Co., Ltd.
SEG Orient
Nantong Construction Salary deposit for
6,200,000.00 1-2 years 10.36 -
Engineering Administration peasant workers
Debt
Creditor's right transferred in restructuring of
5,904,271.52 Over 5 years 9.87 5,904,271.52
by SEG Communications SEG
Communications
Creditor's
Shenzhen Lianjing Trade Co.,
incomings and 5,697,287.51 Over 5 years 9.52 5,697,287.51
Ltd.
outgoings
Creditor's
Shenzhen Top Industry Co.,
incomings and 3,281,387.96 Over 5 years 5.48 3,281,387.96
Ltd.
outgoings
Total 29,613,223.34 49.49 -
5. There are no items involving government subsidies in the current period.
6. There are no accounts receivable with its recognition terminated due to transfer of financial assets in the
current period.
7. There are no assets and liabilities due to transfer or increase of other accounts receivable in the current period.
Note 7. Inventory
1. Classification of inventory
Closing balance Opening balance
Item Depreciation Depreciation
Book balance Book value Book balance Book value
provision provision
Raw materials 149,186.66 - 149,186.66 80,293.26 - 80,293.26
Commodity
1,579,916.40 - 1,579,916.40 202,195.78 - 202,195.78
stock
Low-value 222,080.75 - 222,080.75 1,039,703.99 - 1,039,703.99
177
Full text of 2015 Annual Report of Shenzhen SEG Co., Ltd.
Closing balance Opening balance
Item Depreciation Depreciation
Book balance Book value Book balance Book value
provision provision
consumables
Development
448,858,750.91 - 448,858,750.91 276,959,393.69 - 276,959,393.69
cost
Total 450,809,934.72 - 450,809,934.72 278,281,586.72 - 278,281,586.72
2. Notes to capitalization amount of borrowing costs included in closing balance of inventory
Decrease in the current Capitalization
period rate of
capitalization
Opening Increase in the
Inventory item name Closing balance amount
balance current period Decrease in
Others recognized in the
sales
current period
(%)
Nantong SEG Times
2,885,600.89 11,029,496.28 - - 13,915,097.17 5.37
Square
Total 2,885,600.89 11,029,496.28 - - 13,915,097.17 -
3. Development cost
Expected
Commencemen Expected
Project name investment Closing balance Opening balance
t time completion date
amount
Nantong SEG Times
2013.5 2015.12 600,000,000.00 448,858,750.91 276,959,393.69
Square
Total - - - 448,858,750.91 276,959,393.69
Note 8. Other current assets
Item Closing balance Opening balance
Bank financial products 259,831,270.00 322,679,000.00
Tax to be deducted and withheld 79,402,305.52 120,700,762.42
Others 196,844.22 163,251.07
Total 339,430,419.74 443,543,013.49
Note 9. Loans and prepayment issued
1. Loans and prepayment issued
Item Closing balance Opening balance
Loan principal 486,435,059.77 458,229,526.30
Advance - -
Less: Impairment provision for loans and
10,914,237.69 5,712,454.24
prepayment
Total 475,520,822.08 452,517,072.06
178
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Note 10. Available-for-sale financial assets
1. Available-for-sale financial assets
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 by fair value 744,580.41 - 744,580.41 554,642.62 - 554,642.62
Measured by cost 33,810,392.83 15,000.00 33,795,392.83 33,810,392.83 15,000.00 33,795,392.83
Others - - - - - -
Total 34,554,973.24 15,000.00 34,539,973.24 34,365,035.45 15,000.00 34,350,035.45
2. Available-for-sale financial assets measured by fair value at the end of the period
Available-for-sale Available-for-sale debt
Classification Others Total
equity instruments instruments
Cost of equity
instruments/amortized cost of 90,405.00 - - 90,405.00
debt instruments
Accumulative changes in fair
value
654,175.41 - - 654,175.41
included in other
comprehensive income
Less: Accrued impairment
- - - -
amount
Fair value 744,580.41 - - 744,580.41
3. Measured by cost
Shareholding Book balance
Invested organization proportion Opening Increase in the Decrease in the
Closing balance
(%) balance current period current period
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
179
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Continued:
Impairment provision Cash dividends
Invested organization Opening Increase in the Decrease in the Closing of the current
balance current period current period balance period
Kashgar Shenzhen City Co., Ltd. - - - - -
Shenzhen SEG GPS Scientific
- - - - -
Navigations Co., Ltd.
Nanjing Shangsha Co., Ltd - - - - -
Anshan Yibai Co., Ltd 15,000.00 - - 15,000.00 -
Total 15,000.00 - - 15,000.00 -
4. Loss from impairment of available-for-sale financial assets in the current reporting period
Available-for-sale Available-for-sale
Available-for-sale financial assets Others Total
equity instruments debt instruments
Accrued impairment provision at the
15,000.00 - - 15,000.00
beginning of period
Provision of the year - - - -
Including: Transfer in Other
- - - -
comprehensive income
Decrease in the year - - - -
Including: Writing back due to
recovery of fair value at the end of the - - - -
period
Accrued impairment provision at the
15,000.00 - - 15,000.00
end of the period
Note 11. Long-term equity investment
Increase/Decrease of the year
Investment profit Adjustment of
Invested organization Opening balance Additional Negative and loss other
investment investment recognized with comprehensive
the equity method income
II. Associates - - - - -
Shanghai SEG Electronics Market
3,576,788.18 - - 302,624.63 -
Co., Ltd.
Shenzhen Huakong SEG Co., Ltd. 78,523,408.83 - - 1,401,178.85 -
Subtotal 82,100,197.01 - - 1,703,803.48 -
Total 82,100,197.01 - - 1,703,803.48 -
180
Full text of 2015 Annual Report of Shenzhen SEG Co., Ltd.
Continued:
Increase/Decrease of the year Closing
balance of
Issued cash Accrued
Invested organization Other equity Closing balance impairme
dividends or impairment Others
changes nt
profits provision
provision
II. Associates - - - - - -
Shanghai SEG Electronics Market
- -500,000.00 - - 3,379,412.81 -
Co., Ltd.
Shenzhen Huakong SEG Co., Ltd. 101,818,573.39 - - - 181,743,161.07 -
Subtotal 101,818,573.39 -500,000.00 - - 185,122,573.88 -
Total 101,818,573.39 -500,000.00 - - 185,122,573.88 -
Note 12. Investment properties
1. Details of investment properties
Construction in
Item Houses and buildings Land use right Total
progress
I. Original book value
1. Opening balance 705,673,301.76 5,237,512.49 - 710,910,814.25
2. Increase in the current
12,608,327.29 - - 12,608,327.29
period
Outsourcing - - - -
Transfer-in of
inventory/fixed
- - - -
assets/construction in
progress
Increase due to business
- - - -
merger
Capital invested by
- - - -
shareholders
Other transfer-in 12,608,327.29 - - 12,608,327.29
3. Decrease in the current
- - - -
period
Disposal - - - -
Other transfer-out
4. Closing balance 718,281,629.05 5,237,512.49 - 723,519,141.54
II. Accumulated
depreciation
1. Opening balance 246,495,704.92 1,852,226.55 - 248,347,931.47
2. Increase in the current
31,198,883.82 120,599.85 31,319,483.67
period
181
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Construction in
Item Houses and buildings Land use right Total
progress
Provision or
18,590,556.53 120,599.85 18,711,156.38
amortization
Increase due to business
- - - -
merger
Other transfer-in 12,608,327.29 - - 12,608,327.29
3. Decrease in the current
- - - -
period
Disposal - - - -
Other transfer-out - - - -
4. Closing balance 277,694,588.74 1,972,826.40 279,667,415.14
III. Impairment provision
1. Opening balance - - - -
2. Increase in the current
- - - -
period
Accrual - - - -
Increase due to business
- - - -
merger
Other transfer-in - - - -
3. Decrease in the current
- - - -
period
Disposal - - - -
Other transfer-out - - - -
4. Closing balance - - - -
IV. Book value
1. Closing book value 440,587,040.31 3,264,686.09 - 443,851,726.40
2. Opening book value 459,177,596.84 3,385,285.94 - 462,562,882.78
2. Details of investment properties
Owner of investment property Investment property project Net value of investment property
Shenzhen SEG Co., Ltd. F2, F4 and F5 of SEG Plaza 230,986,014.27
Shenzhen SEG Co., Ltd. Some floors of Contemporary Window 51,579,212.11
Shenzhen SEG Co., Ltd. Other houses 1,834,633.76
Shenzhen SEG Baohua Enterprise
Blocks A and B of Baohua Building 33,609,325.51
Development Co., Ltd.
Shenzhen SEG Industrial Investment Co.,
Some floors of Contemporary Window 2,698,987.72
Ltd.
Changsha SEG Development Co., Ltd. Changsha SEG 123,143,553.03
Total 443,851,726.40
182
Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
Note 13. Original value and accumulated depreciation of fixed assets
1. Details of fixed assets
Houses and Machinery Transportatio Electronic Other
Item Total
buildings equipment n vehicles equipment equipment
I. Original book value - - - - - -
1. Opening 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
2. Increase in the
- 759,698.00 5,500.00 637,808.12 119,395.17 1,522,401.29
current period
Purchase - 759,698.00 5,500.00 637,808.12 119,395.17 1,522,401.29
Transfer-in of
construction in - - - - - -
progress
Increase due to
- - - - - -
business merger
Capital invested by
- - - - - -
shareholders
Financial leasing - - - - - -
Other transfer-in - - - - - -
3. Decrease in the
12,608,327.29 486,435.00 355,162.75 - 13,785,051.36
current period 335,126.32
Disposal or scrap - 335,126.32 486,435.00 355,162.75 - 1,176,724.07
Financial leasing - - - - - -
Other transfer-out 12,608,327.29 - - - - 12,608,327.29
4. Closing balance 35,694,847.73 30,744,844.49 5,470,881.82 32,437,022.84 3,717,659.88 108,065,256.76
II. Accumulated
- - - - - -
depreciation
1. Opening 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
2. Increase in the
825,314.98 1,589,023.04 651,896.93 1,407,337.12 500,935.22 4,974,507.29
current period
Accrual 825,314.98 1,589,023.04 651,896.93 1,407,337.12 500,935.22 4,974,507.29
Increase due to
business merger
Other transfer-in - - - - - -
3. Decrease in the
12,608,327.29 181,864.17 274,372.55 286,780.59 1,939.58 13,353,284.18
current period
Disposal or scrap - 181,864.17 274,372.55 286,780.59 1,939.58 744,956.89
Financial leasing - - - - - -
Other transfer-out 12,608,327.29 - - - - 12,608,327.29
4. Closing balance 14,788,585.07 29,586,623.96 3,630,627.47 20,012,581.46 2,522,413.55 70,540,831.51
III. Impairment - - - - - -
183
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Houses and Machinery Transportatio Electronic Other
Item Total
buildings equipment n vehicles equipment equipment
provision
1. Opening balance - - - - - -
2. Increase in the
- - - - - -
current period
Accrual - - - - - -
Increase due to
- - - - - -
business merger
Other transfer-in - - - - - -
3. Decrease in the
- - - - - -
current period
Disposal or scrap - - - - - -
Financial leasing - - - - - -
Other transfer-out - - - - - -
4. Closing balance - - - - - -
5. Book value - - - - - -
6. Closing book value 20,906,262.66 1,158,220.53 1,840,254.35 12,424,441.38 1,195,246.33 37,524,425.25
7. Opening book
21,731,577.64 2,140,807.72 2,698,713.73 13,262,352.54 1,574,846.80 41,408,298.43
value
2. There are no fixed assets that are temporarily idle at the end of the period.
3. There are no fixed assets acquired through financing lease in at the end of the period.
4. There are no fixed assets acquired through financing lease out at the end of the period.
5. Fixed assets with no property right certificate acquired at the end of the period
Reason for property right certificate not
Item Book value
acquired
Houses and buildings 1,280,170.96 Qualification procedures not complete
Total 1,280,170.96
Note 14. Construction in progress
1. Details of Construction in progress
Closing balance Opening balance
Item Impairment Impairment
Book balance Book value Book balance Book value
provision provision
LCD in the lobby
140,810.00 - 140,810.00 - - -
of SEG Plaza
Total 140,810.00 - 140,810.00 - - -
Note 15. Intangible assets
1. Intangible assets
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Item Land use right Outsourced software Total
I. Original book value
1. Opening balance 159,759.24 2,269,353.00 2,429,112.24
2. Increase in the current period - 791,500.00 791,500.00
Purchase - 791,500.00 791,500.00
Internal R&D - - -
Increase due to business merger - - -
Capital invested by shareholders - - -
Other transfer-in - - -
3. Decrease in the current period - 18,000.00 18,000.00
Disposal - - -
Other transfer-out 18,000.00 18,000.00
4. Closing balance 159,759.24 3,042,853.00 3,202,612.24
II. Accumulated amortization
1. Opening balance 54,754.79 1,718,769.91 1,773,524.70
2. Increase in the current period 2,759.76 291,565.67 294,325.43
Accrual 2,759.76 291,565.67 294,325.43
Increase due to business merger - - -
Other transfer-in - - -
3. Decrease in the current period - 9,000.00 9,000.00
Disposal - - -
Other transfer-out - 9,000.00 9,000.00
4. Closing balance 57,514.55 2,001,335.58 2,058,850.13
III. Impairment provision
1. Opening balance - - -
2. Increase in the current period - - -
Accrual - - -
Increase due to business merger - - -
Other transfer-in - - -
3. Decrease in the current period - - -
Disposal - - -
Other transfer-out - - -
4. Closing balance - - -
IV. Book value
1. Closing book value 102,244.69 1,041,517.42 1,143,762.11
2. Opening book value 105,004.45 550,583.09 655,587.54
Note 16. Goodwill
185
Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
1. Original book value of goodwill
Decrease in the current
Name of the invested Increase in the current period
period
organization or the item
Opening balance Increase due Closing balance
contributing to a
to business Others Disposal Others
goodwill
merger
Changsha SEG
10,328,927.82 - - - - 10,328,927.82
Development Co., Ltd.
Total 10,328,927.82 - - - - 10,328,927.82
Goodwill is measured as the difference on the acquisition date between the cost of the enterprises merger not
under common control over the acquirer's interest in the fair value of the identifiable net assets.
Calculation process of goodwill:
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%
Difference between the investment cost and the fair value of net identifiable assets of the invested
10,328,927.82
organization to be enjoyed at the time of acquisition
The Company purchased 46% of the equity of Changsha SEG Development Co., Ltd with the price of
69,000,000 Yuan in March 2009. The net assets in book value of Changsha SEG Development Co., Ltd were
57,508,384.14 Yuan in the current month while the net assets in fair value of Changsha SEG Development Co.,
Ltd after the evaluation for the added value was carried out. Thus, a goodwill amounting to 10,328,927.82 was
formed.
The goodwill impairment testing was conducted at the end of the period and there was no sign of impairment, so
no provision was accrued for impairment.
Note 17. Long-term expenses to be amortized
Amortization
Increase in the
Item Opening balance amount of Other decrease Closing balance
current period
current period
Decoration expenses 48,923,477.62 11,403,776.91 13,117,828.08 2,984,091.34 44,225,335.11
Firefighting renovation 111,754.83 5,053,548.00 490,103.03 356,268.00 4,318,931.80
Market supporting fee of
733,445.55 - 41,712.60 - 691,732.95
Tower B
Total 49,768,678.00 16,457,324.91 13,649,643.71 3,340,359.34 49,235,999.86
Note 18. Deferred income tax assets and liabilities
1. Deferred income tax assets not offset
186
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Closing balance Opening balance
Item Deductible temporary Deferred income tax Deductible temporary Deferred income tax
difference assets difference assets
Asset impairment provision 32,235,258.25 8,058,814.57 32,658,252.58 8,164,563.16
Unrealized profit from
- - - -
internal transaction
Deductible losses - - - -
Payroll payable - - - -
Technology development
- - - -
expense
Accrued expenses - - - -
Estimated liabilities - - - -
Government subsidies
9,500,000.00 2,375,000.00 9,500,000.00 2,375,000.00
included in deferred income
Total 41,735,258.25 10,433,814.57 42,158,252.58 10,539,563.16
2. Deferred income tax liabilities not offset
Closing balance Opening balance
Item Taxable temporary Deferred income Taxable temporary Deferred income tax
difference tax liabilities difference liabilities
Asset evaluation increment for
merger of not the same 63,442,234.08 15,860,558.49 67,877,937.66 16,969,484.39
controlling enterprise
Changes in fair value of the
available-for-sale financial 654,175.41 163,543.86 464,237.62 116,059.41
assets
Changes in fair value of
- - - -
transactional financial assets
Designated financial assets
measured by fair value with
- - - -
changes included in current
profit and loss
Changes in fair value of the
- - - -
investment property
Changes in fair value of
- - - -
productive biological assets
Total 64,096,409.49 16,024,102.35 68,342,175.28 17,085,543.80
3. Details of deductible temporary difference of deferred income tax assets unrecognized in this period
Item Closing balance Opening balance
Asset impairment provision 11,322,893.92 11,296,252.62
187
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Item Closing balance Opening balance
Estimated liabilities - -
Deductible losses 46,691,048.83 39,063,382.24
Total 58,013,942.75 50,359,634.86
The deductible temporary differences and deductible losses are not recognized because it is uncertain to make
sufficient taxable income in the future.
4. Unrecognized deductible losses of deferred income tax assets will be due in the following years
Item Closing balance Opening balance Remarks
2015 - -
2016 12,973,257.02 13,071,134.55
2017 7,431,196.64 7,431,196.64
2018 9,295,488.88 11,864,843.19
2019 6,546,777.27 6,696,207.86
2020 10,444,329.02 -
Total 46,691,048.83 39,063,382.24
Note 19. Other non-current assets
Category and contents Closing balance Opening balance
Prepayment for software - 520,000.00
Prepayment for engineering in electronics
5,103,811.14 4,135,063.54
market
Total 5,103,811.14 4,655,063.54
Note 20. Short-term borrowing
1. Classification of short-term borrowings
Item Closing balance Opening balance
Borrowing on credit 10,000,000.00 -
Pledge loans 42,759,630.48 59,246,687.38
Mortgage loans 315,000,000.00 100,000,000.00
Guaranteed loans - 30,000,000.00
Total 367,759,630.48 189,246,687.38
2. There are no overdue outstanding short-term loans in this period.
3. The collateral of the pledge loan is the export tax rebate of Shenzhen SEG E-Commerce Co., Ltd., a subsidiary
of the Company.
Note 21. Accounts payable
Item Closing balance Opening balance
Payment for goods 84,158,671.54 195,385,013.38
Others 5,750,110.44 4,744,638.54
188
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Total 89,908,781.98 200,129,651.92
Note 22. Prepayment
1. Details of prepayment
Item Closing balance Opening balance
Advance brand royalty 11,452,476.85 9,390,743.64
Advance rental payment 111,836,641.23 136,482,047.49
Advance payment for goods 53,693,141.53 27,013,851.48
Advance advertising payment 8,013,712.80 6,353,263.26
Others 5,434,148.64 3,819,405.44
Total 190,430,121.05 183,059,311.31
Note 23. Payroll payable
1. List of payroll payable
Increase in the Decrease in the
Item Opening balance Closing balance
current period current period
Short-term payroll 18,719,733.31 97,824,417.06 94,764,047.34 21,780,103.03
Welfare after leave – defined contribution
139,110.02 6,265,382.11 6,335,461.00 69,031.13
plan
Dismissal welfare - 624,255.90 624,255.90 -
Other welfare due within one year - --- --- -
Total 18,858,843.33 104,714,055.07 101,723,764.24 21,849,134.16
2. List of short-term payroll
Increase in the Decrease in the
Item Opening balance Closing balance
current period current period
Wages, bonuses, allowances and
16,654,352.38 85,937,544.18 83,324,989.40 19,266,907.16
subsidies
Employee welfare - 3,047,755.61 2,830,208.55 213,347.06
Social insurance premiums 16,498.16 2,775,135.97 2,702,481.62 89,152.51
Including: Medical insurance premiums 10,294.54 2,442,368.09 2,363,906.12 88,756.51
Supplementary medical insurance 5,639.70 6,798.22 12,041.92 396.00
Work injury insurance 265.38 144,270.60 144,535.98 -
Maternity insurance 298.54 181,699.06 181,997.60 -
Housing fund 1,159,284.62 3,776,357.26 3,575,835.42 1,265,986.46
Labor union expenditures 617,715.42 1,696,942.37 1,369,947.95 944,709.84
Accumulative compensated absences in
- - - -
short term
Short-term profit (bonus) sharing plan - - - -
Other short-term payroll 271,882.73 688,701.67 960,584.40 -
189
Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
Increase in the Decrease in the
Item Opening balance Closing balance
current period current period
Total 18,719,733.31 97,824,417.06 94,764,047.34 21,780,103.03
3. List of defined contribution plan
Increase in the Decrease in the
Item Opening balance Closing balance
current period current period
Pension insurance 9,288.08 4,365,731.60 4,306,976.17 68,043.51
Unemployment insurance premium 663.43 219,255.02 218,930.83 987.62
Supplementary pension payment 129,158.51 1,680,395.49 1,809,554.00 -
Total 139,110.02 6,265,382.11 6,335,461.00 69,031.13
Note 24. Taxes payable
Taxes and fees Closing balance Opening balance
Value-added tax 169,594.16 1,659,452.21
Business tax 1,424,420.92 1,028,150.77
Enterprise income tax 28,476,563.20 32,336,241.19
Individual income tax 805,153.42 1,098,931.96
Urban maintenance and construction tax 178,371.98 720,549.53
Education surtax 102,484.34 461,020.60
Housing property tax 2,939,568.67 1,721,703.23
Stamp tax and water fund 532,994.96 254,539.95
Others 15,878.42 165,107.03
Total 34,645,030.07 39,445,696.47
Note 25. Interest payable
Item Closing balance Opening balance
Interest payable of short-term financing
- 10,062,500.66
bonds
Interest payable on short-term loans 516,758.34 232,749.99
Total 516,758.34 10,295,250.65
Note 26. Dividends payable
Reason for not making
Item Closing balance Opening balance
payment for over one year
Common stock dividends 2,218,224.58 1,717,882.74 -
Total 2,218,224.58 1,717,882.74 -
Note 27. Other payables
1. Other payables listed based on nature
Nature of receivables Closing balance Opening balance
190
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Nature of receivables Closing balance Opening balance
Deposit and security deposit 117,687,835.08 119,826,258.74
Central air conditioner maintenance cost and special
12,975,174.61 11,754,618.52
maintenance fund
Receipts under custody 16,469,845.49 13,624,148.51
Funds from related parties 2,753,679.48 57,653,186.81
Electronics market water and electricity charges and rental
44,443,351.03 41,946,190.48
payable
Total 194,329,885.69 244,804,403.06
Note 28. Other current liabilities
Item Closing balance Opening balance
Short-term financing bonds - 250,000,000.00
Total - 250,000,000.00
1. Increase and decrease in short-term bonds payable
Bond name Book value Issuing date Bond term Issue amount Opening balance
Short-term financing
100.00 May 15, 2014 365 days 250,000,000.00 250,000,000.00
bonds
Continued:
At par Premium and
Bond name Issue in this period Provision for discount Current repayment Closing balance
interest amortization
Short-term
- 15,750,000.00 - 265,750,000.00 -
financing bonds
Total - 15,750,000.00 - 265,750,000.00 -
Note 29. Estimated liabilities
Item Closing balance Opening balance Cause
External guarantee - -
Pending litigation 7,000,000.00 - See item 2 of note 11
Product quality assurance - - -
Restructuring obligation - - -
Onerous contract to be executed - - -
Others - - -
Total 7,000,000.00 - -
Note 30. Deferred income
Opening Increase in the Decrease in the
Item Closing balance Cause
balance current period current period
Asset-related government 9,593,659.89 --- 5,549.52 9,588,110.37 -
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Opening Increase in the Decrease in the
Item Closing balance Cause
balance current period current period
subsidy
Income-related government
111,711.12 849,700.00 915,406.72 46,004.40 -
subsidy
Bonus point 9,705,371.01 849,700.00 920,956.24 9,634,114.77 -
Total 9,593,659.89 --- 5,549.52 9,588,110.37 -
1. Deferred income related to government subsidy
Amount of
Amount of Relevant to
Opening non-operating Other Closing
Liability item new subsidies assets/relevant
balance income in the changes balance
in this period to income
current period
Subsidies for online Relevant to
93,659.89 - 5,549.52 - 88,110.37
SEG projects asset
Subsidies for project Relevant to
111,711.12 849,700.00 915,406.72 - 46,004.40
funds income
Support project for
construction of Relevant to
9,500,000.00 - - - 9,500,000.00
Nantong SEG assets
Electronics Market
Total 9,705,371.01 849,700.00 920,956.24 - 9,634,114.77
Note 31. Share capital
Increase (+)/decrease (-) in the current period
Capitalizati
Item Opening balance New share Closing balance
Bonus share on of public Others Subtotal
offering
reserve
Sum of shares 784,799,010.00 - - - - - 784,799,010.00
Note 32. Capital reserve
Increase in the Decrease in the
Item Opening balance Closing balance
current period current period
Capital premium (capital share premium) 322,339,973.81 - - 322,339,973.81
Other capital reserves 82,387,283.91 102,284,520.03 465,946.64 184,205,857.30
Total 404,727,257.72 102,284,520.03 465,946.64 506,545,831.11
Notes to capital reserve:
1. The main cause for increase in capital reserve is that Shenzhen Huakong SEG Co., Ltd., an associated
company of the Company (hereinafter referred to as "Huakong SEG") issued 110,000,000.00 shares by
non-public offering to raise a total fund of RMB 529,100,000.00. After deduction of underwriting expenses of
RMB 6,976,169.80, the actual fund raised is RMB 522,123,830.20. After the foregoing transaction, the
newly-added capital of Huakong SEG is RMB 110,000,000.00. The difference between the actual fund raised
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and the newly-added capital RMB 412,123,830.20 is included in "capital reserve-stock premium". The Company
gave up private placement, so the shareholding proportion fell from 22.54% to 20.00%. Based on the
shareholding proportion after alteration, the Company included RMB 102,284,520.03 in "capital reserve-other
capital reserve".
2. Huakong SEG increased capital investment of RMB 55,307,710.00 individually to the subsidiary Tsinghua
Holdings Huamn Settlements Environment Institute on June 4, 2015. Based on purchase cost and the equity
proportion newly acquired, Huakong SEG calculated the difference of net identifiable assets since the date of
transaction and included RMB 2,329,608.93 to decrease in "capital reserve-stock premium". Based on the
shareholding proportion, the Company included RMB 465,946.64 to decrease in "capital reserve-other capital
reserve".
Note 33. Other comprehensive income
Amount incurred in the current period
Less: profit
and loss Amount Amount
Pretax
Opening transferred in Less: after tax after tax Closing
Item amount
balance from other Income attributable attributable balance
obtained in
comprehensive tax to parent to minority
this period
income in the company shareholders
current period
I. Other comprehensive
incomes not to be
reclassified into profit and
loss
(1) Changes in net liabilities
or net assets due to
- - - - - - -
re-measurement in defined
benefit plans
(2) Shares of the investee of
other comprehensive
incomes not to be - - - - - - -
reclassified into profit and
loss with the equity method
II. Other comprehensive
income to be reclassified
into profit and loss
(1) Shares of the investee of
other comprehensive
incomes to be reclassified
- - - - - - -
into profit and loss with the
equity method if the
required conditions are met
(2) Profit or loss from
changes in the fair value of 231,817.05 189,937.79 - 47,484.45 94,845.43 47,607.91 326,662.48
available-for-sale financial
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Amount incurred in the current period
Less: profit
and loss Amount Amount
Pretax
Opening transferred in Less: after tax after tax Closing
Item amount
balance from other Income attributable attributable balance
obtained in
comprehensive tax to parent to minority
this period
income in the company shareholders
current period
assets
(3) Held-to-maturity
investments reclassified
into profit or loss from the - - - - - - -
available-for-sale financial
assets
(4) Effective profit or loss
- - - - - - -
from hedging of cash flows
(5) Foreign currency
- - - - - - -
translation differences
Total other comprehensive
231817.05 189,937.79 47,484.45 94,845.43 47,607.91 326,662.48
income
Note 34. Surplus reserve
Increase in the current Decrease in the current
Item Opening balance Closing balance
period period
Statutory surplus
102,912,835.67 7,009,501.20 - 109,922,336.87
reserve
Total 102,912,835.67 7,009,501.20 - 109,922,336.87
Note 35. Undistributed profits
Item Amount Accrual/Distribution Rate
Before adjustment undistributed profits at the end of the previous
6,299,799.41 -
period
After adjustment total undistributed profits (+ for increase, - for
- -
decrease) at the beginning of period
After adjustment undistributed profit at the beginning of period 6,299,799.41 -
Add: Net profits attributable to the parent company owner in the
74,242,090.49 -
current period
Less: Accrual of statutory surplus reserve -7,009,501.20 10.00
Accrual of free surplus reserve - -
Accrual of reserve fund - -
Accrual of enterprise development fund - -
Accrual of bonus and welfare fund - -
Ordinary share dividends payable - -
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Item Amount Accrual/Distribution Rate
Ordinary share dividends converted to share capital - -
Preferred stock dividend - -
Other distributions to shareholders - -
Profits capitalized on return - -
Other profit distribution - -
Plus: Surplus reserve compensating losses - -
Changes in net liabilities or net assets due to re-measurement in
- -
defined benefit plans
Internal carrying forward of owners' equity - -
Others - -
Undistributed profits at the end of the period 73,532,388.70 -
Note 36. Operating income and operating cost
1. Operating income and operating cost
Amount incurred in the current period Amount incurred in the previous period
Item
Income Cost Income Cost
Main business 715,233,992.20 607,958,493.22 662,288,806.93 555,763,805.28
Other businesses 26,299,684.73 10,104,222.97 19,055,114.06 5,180,652.50
2. Main operating businesses (by industry)
Amount incurred in the current period Amount incurred in the previous period
Name of company
Operating income Operating cost Operating income Operating cost
(1) Industry - - - -
(2) Trade 328,466,444.85 317,862,517.36 280,659,908.96 273,086,775.55
(3) Real estate - - - -
(4) Leasing and others 386,767,547.35 290,095,975.86 381,628,897.97 282,677,029.73
Total 715,233,992.20 607,958,493.22 662,288,806.93 555,763,805.28
Note 37. Operating tax and surcharges
Item Amount incurred in the current period Amount incurred in the previous period
Business tax 24,424,798.34 23,430,459.38
Urban maintenance and construction tax 1,877,631.66 1,700,075.86
Education surtax 1,349,358.86 1,265,708.52
Others 152,384.00 216,391.37
Total 27,804,172.86 26,612,635.13
Note 38. Financial cost
Category Amount incurred in the current period Amount incurred in the previous period
Interest expenses 9,028,274.77 17,742,811.44
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Category Amount incurred in the current period Amount incurred in the previous period
Less: Interest income 5,060,702.65 6,804,715.70
Loss on exchange -1,048,526.70 -2,273,683.31
Others 645,731.34 504,231.17
Total 3,564,776.76 9,168,643.60
Note 39. Loss from asset impairment
Item Amount incurred in the current period Amount incurred in the previous period
Loss from bad debt -106,419.36 -34,020.36
Impairment losses on loans and
5,201,783.45 2,325,411.66
prepayment
Loss from inventory depreciation - -
Loss from impairment of
- -
available-for-sale financial assets
Total 5,095,364.09 2,291,391.30
Note 40. Investment income
1. Details of investment income
Amount incurred Amount incurred
Item in the current in the previous
period period
Long-term equity investment income by the equity method 1,703,803.48 -24,010,440.06
Long-term equity investment income by the cost method - -
Income from disposal of long-term equity investments - -
Income from holding financial assets measured by fair value with changes included in
- -
current profit and loss
Income from disposal of financial assets measured by fair value with changes included
- -
in current profit and loss
Income from holding of held-to-maturity investments - -
Income from disposal of held-to-maturity investments - -
Investment income during the possession of available-for-sale financial assets 755,461.47 16,991.24
Income from disposal of available-for-sale financial assets - -
Profit from re-measurement of fair value of the remaining equity after loss of control - -
Others (financial products) 15,188,228.82 31,198,391.83
Total 17,647,493.77 7204,943.01
Note 41. Non-operating income
Amount included in
Amount incurred in the Amount incurred in the
Item current non-recurring
current period previous period
profit and loss
Total gains on disposal of non-current 19,382.00 21,274.83 19,382.00
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assets
Including: Gain on disposal of fixed
19,382.00 21,274.83 19,382.00
assets
Profit from disposal of intangible assets - - -
Profit from debt restructuring - - -
Profit from transfer of non-monetary
- - -
assets
Income from donations - - -
Government subsidies 980,956.24 1,554,585.78 980,956.24
Liquidated damages 809,234.56 1,152,807.95 809,234.56
Others 557,973.60 406,587.44 557,973.60
Total 2,367,546.40 3,135,256.00 2,367,546.40
1. Government subsidies included in current profit and loss
Amount incurred in the Amount incurred in the Relevant to assets
Subsidy item
current period previous period /Relevant to income
Special funds for development of
- 491,000.00 Relevant to income
industries
Subsidies for online SEG projects 5,549.52 57,834.72 Relevant to assets
Subsidies for project funds 915,406.72 499,040.46 Relevant to income
Guiding funds for development of service
- 500,000.00 Relevant to income
industry
Others 60,000.00 6,710.60 Relevant to income
Total 980,956.24 1,554,585.78
Note 42. Non-operating expenses
Amount included in
Amount incurred in the Amount incurred in the
Item current non-recurring
current period previous period
profit and loss
Total loss from disposal of non-current
276,651.63 14,799.49 276,651.63
assets
Including: loss from disposal of fixed
276,651.63 14,799.49 276,651.63
assets
Loss from disposal of intangible assets - - -
Loss from debt restructuring - - -
Loss from transfer of non-monetary
- - -
assets
Donation expenses 3,000.00 83,000.00 3,000.00
Compensation for loss 10,511,906.63 49,382.00 10,511,906.63
Others 3,896,199.12 928,572.43 3,896,199.12
Total 14,687,757.38 1,075,753.92 14,687,757.38
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Note 43. Income tax
1. Income tax
Item Amount incurred in the current period Amount incurred in the previous period
Income tax of the current period 36,103,014.96 36,558,413.93
Deferred income tax -1,003,177.31 -3,470,999.90
Total 35,099,837.65 33,087,414.03
2. Adjustment process of accounting profit and income tax
Item Amount incurred in the current period
Total profit 143,173,946.06
Income tax calculated according to statutory or applicable tax rate 35,793,696.09
Impact of different tax rates applicable to subsidiaries -1,485,485.15
Impact of income tax before adjustment -112,586.22
Impact of non-taxable income 434,488.67
Impact of non-deductible costs, expenses and losses 761,602.54
Impact of deferred income tax assets unrecognized in the early phase of utilization on
-77,246.80
deductible losses
Impact of deferred income tax assets unrecognized in the current period on deductible
-214,631.48
temporary difference or deductible losses
Income tax 35,099,837.65
Note 44. Notes on the cash flow statement
1. Other cash received concerning operating activities
Item Amount incurred in the current period Amount incurred in the previous period
Acquisition of security deposit for land 60,000,000.00 -
Incomings and outgoings 18,596,802.04 49,899,809.43
Goods payment collected from tenants 337,685,284.36 278,226,239.78
Interest income 5,060,702.65 6,804,715.70
Non-operating income 218,141.32 3,077,421.28
Total 421,560,930.37 338,008,186.19
2. Other cash paid concerning operating activities
Item Amount incurred in the current period Amount incurred in the previous period
Payment of security deposit for land - 60,000,000.00
Incomings and outgoings 56,090,169.65 36,450,341.99
Goods payment paid for tenants 284,098,911.45 274,400,400.19
Cash expenses 46,498,830.42 21,205,139.85
Non-operating expenses 3,000.00 1,060,954.43
Total 386,690,911.52 393,116,836.46
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3. Other cash received concerning investing activities
Item Amount incurred in the current period Amount incurred in the previous period
Asset-related government subsidy - 9,500,000.00
Total - 9,500,000.00
4. Other cash received concerning financing activities
Item Amount incurred in the current period Amount incurred in the previous period
Cash received from disposal of fractional
- 302,371.12
share
Interbank financing of related parties - 72,650,000.00
Total - 72,952,371.12
5. Other cash paid related to financing activities
Item Amount incurred in the current period Amount incurred in the previous period
Interbank financing of related parties 57,650,000.00 20,000,000.00
Payment for cash deposit - -
Payment for loan interest of related
110,222.92 295,068.50
parties
Payment for issuance of short-term
1,070,750.00 742,500.00
financing bonds
Total 58,830,972.92 21,037,568.50
Note 45. Supplementary information on the cash flow statement
1. Supplementary information on the cash flow statement
Amount of the Amount of the
Item
current period previous period
1. Reconciliation of net income to cash flow from operating activities
Net profit 107,968,730.61 78,674,230.38
Plus: Asset impairment provision 5,095,364.09 2,291,391.30
Depreciation of fixed assets, oil & gas assets and consumable biological assets 18,711,156.38 24,050,023.59
Amortization of intangible assets 294,325.43 235,813.92
Amortization of long-term expenses to be apportioned 13,649,643.71 15,012,751.26
Loss on disposal of fixed assets, intangible assets, and other long-term assets (enter "-"
257,269.63 -6,475.34
for profit)
Loss on discard of fixed asset (enter "-" for profit) - -
Loss on change in fair value (enter "-" for profit) - -
Financial expenses (enter “–” for profit) 9,028,274.77 17,742,811.44
Income from investment (enter “–” for profit) -17,647,493.77 -7,204,943.01
Decrease in deferred tax assets (enter “–” for increase) 105,748.59 -2,362,074.00
Increase in deferred tax liabilities (enter “–” for decrease) -1,061,441.45 -1,108,925.90
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Amount of the Amount of the
Item
current period previous period
Inventory decrease (enter “–” for increase) -172,528,348.00 -180,280,665.22
Decrease in accounts receivable related to operating activities (enter “–” for increase) 188,086,349.80 -77,682,986.62
Increase in accounts payable related to operating activities (enter “–” for decrease) -164,413,103.61 -297,294,572.74
Others - -
Net cash flow from operating activities -12,453,523.82 -427,933,620.94
2. Major investing and financing activities that involve no cash payments and receipts - -
Conversion of debt into capital - -
Convertible bonds due within one year - -
Fixed assets acquired by financing lease -
3. Change in cash and cash equivalents: -
Closing balance of cash 275,523,429.10 382,056,680.70
Less: Opening balance of cash 382,056,680.70 335,593,493.81
Add: Closing balance of cash equivalents - -
Less: Opening balance of cash equivalents - -
Net increase in cash and cash equivalents -106,533,251.60 46,463,186.89
2. Combination of cash and cash equivalents
Item Closing balance Opening balance
1. Cash 275,523,429.10 382,056,680.70
Cash on hand 526,467.72 602,592.57
Bank deposits available for payment at any time 274,816,839.04 381,404,611.82
Other monetary capital available for payment at any time 180,122.34 49,476.31
Accounts in the central bank available for payment - -
Deposits from interbank - -
Loans from interbank - -
2. Cash equivalents - -
Including: Bond investments due within 3 months - -
3. Closing balance of cash and cash equivalents 275,523,429.10 382,056,680.70
Including: Cash and cash equivalents with the use by the parent company and
- -
subsidiaries
Note 46. Assets with restrictions on ownership or the use right
Item Balance Reason for restriction
Deposit and performance bond for credit
Monetary funds 1,340,000.00
card repayment
Investment properties 98,205,323.20 Pledge for bank loans
Fixed assets 15,903,181.38 Collaterals for bank loans
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Item Balance Reason for restriction
Total 300,482,399.26
Note 47. Foreign currency monetary items
1. Foreign currency monetary items
Closing balance of foreign Closing balance of converted
Item Discount exchange rate
currency RMB
Monetary funds - -
Including: USD 100.00 6.4936 649.36
HK$ 240.00 0.8378 201.07
Accounts receivable
Including: USD 18,028,404.32 6.4936 117,069,246.31
VII. Change in consolidation scope
No changes are made to the consolidation scope in the current reporting period.
VIII. Equity in other entities
(I) Equity in subsidiaries
1. Composition of the group
Main Share-holding
Place of Business Method of
Subsidiary name business proportion (%)
registration Nature of business acquisition
address Direct Indirect
Xi'an SEG Electronics Market Electronics market Investment and
Xi'an Xi'an 65.00 -
Co., Ltd. lease management establishment
Shenzhen SEG Electronics Electronics market Investment and
Shenzhen Shenzhen 70.00 -
Market Management Co., Ltd. lease management establishment
Suzhou SEG Electronics Market Electronics market Investment and
Su Zhou Su Zhou 45.00 -
Co., Ltd. lease management establishment
Shenzhen Mellow Orange Hotel management,
Investment and
Business Hotel Management Co., Shenzhen Shenzhen consultancy and - 66.58
establishment
Ltd property management
Petty loan business
(pooling public
deposits is prohibited) Investment and
Shenzhen SEG Credit Co., Ltd. Shenzhen Shenzhen 36.00 17.02
within the establishment
administrative region
of Shenzhen.
Shenzhen SEG E-Commerce Co., Investment and
Shenzhen Shenzhen E-commerce 51.00 -
Ltd. establishment
Market facilities
Shenzhen SEG Electronics leasing, property Investment and
Nanjing Nanjing 100.00 -
Market Management Co., Ltd. management, sales of establishment
electronic products and
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Main Share-holding
Place of Business Method of
Subsidiary name business proportion (%)
registration Nature of business acquisition
address Direct Indirect
advertisement
Property leasing, sales
Xi'an Hairong SEG Electronics Investment and
Xi'an Xi'an of electronic products 51.00 -
Market Co., Ltd. establishment
and advertisement
Wujiang SEG Electronics Market Electronics market Investment and
Wujiang Wujiang 51.00 -
Co., Ltd. lease management establishment
Wuxi SEG Electronics Market Electronics market Investment and
Wuxi Wuxi 51.00 -
Co., Ltd lease management establishment
Shunde SEG Electronics Market Electronics market Investment and
Foshan Foshan 100.00 -
Management Co., Ltd. lease management establishment
Nanning SEG Electronics Market Electronics market Investment and
Nanning Nanning 100.00 -
Management Co., Ltd. lease management establishment
Nantong SEG Times Square Investment and
Nantong Nantong real estate development 100.00 -
Development Co., Ltd. establishment
Merger of
Shenzhen SEG Baohua Enterprise Property lease and
Shenzhen Shenzhen 66.58 - enterprises under
Development Co., Ltd. management
common control
Investment in industrial Merger of
Shenzhen SEG Industrial
Shenzhen Shenzhen and commercial 100.00 - enterprises under
Investment Co., Ltd.
business common control
Merger of the
Changsha SEG Development Co., enterprises under
Changsha Changsha Property lease 46.00 -
Ltd. the control of a
same entity
Yantai SEG Times Square Investment and
Yantai Yantai real estate development 90.00 -
Development Co., Ltd. establishment
Nantong SEG Commercial Investment and
Nantong Nantong - 100.00 -
Operation Management Co., Ltd. establishment
Suzhou SEG Digital Plaza Investment and
Su Zhou Su Zhou - 100.00 -
Management Co., Ltd. establishment
Xi'an Fengdong New Town SEG Real estate Investment and
Xi'an Xi'an 100.00 -
Times Square Properties Co., Ltd. development establishment
(1) Cause for difference between the proportion of shareholding and the proportion of voting rights
For Changsha SEG Development Co., Ltd. (originally named Changcha Emerging Development Co., Ltd.), the
current capital stock structure is as follows: The company holds 46% of shares and is the largest shareholder. In
addition, according to the Memorandum of Cooperation Concerning the Stock Equity Project of Joint Investment
and Acquisition of Changsha Emerging Development Co., Ltd. signed by and between the Company and Hong
Kong Jinhong Group on October 8th, 2008, Hong Kong Jinhong Group agreed to give up the 5% of voting
power, which would be exercised by the Company, and the voting power ratio of the company is 51%. Half of
the directors, the Chairman of the Board, the General Manager, the Chief Financial Officer and the management
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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 control of the invested entity even with half of voting rights or less
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.
2. Important non-wholly-owned subsidiaries
Equity Minority
Current gains of Current dividends
proportion of shareholders'
Subsidiary name losses of minority paid to minority Remarks
minority equity at the end
shareholders shareholders
shareholders of the period
Shenzhen SEG Credit Co., Ltd. 46.98 16,444,684.56 - 89,265,729.12
Changsha SEG Development Co.,
54.00 2,889,109.78 - 34,429,061.12
Ltd.
Shenzhen SEG Baohua Enterprise
33.42 8,748,893.63 6,177,600.00 34,816,359.61
Development Co., Ltd.
Total - 28,082,687.97 6,177,600.00 158,511,149.85
3. Main financial information on important non-wholly-owned subsidiaries
Unit: Yuan
Closing balance
Subsidiary name Non-current Current Non-current
Current assets Total assets Total liabilities
assets liabilities liabilities
Shenzhen SEG
43,081,968.84 476,007,451.60 519,089,420.44 329,081,482.77 - 329,081,482.77
Credit Co., Ltd.
Changsha SEG
Development Co., 15,438,729.45 68,199,562.67 83,638,292.12 19,880,771.53 - 19,880,771.53
Ltd.
Shenzhen SEG
Baohua Enterprise
97,334,289.19 52,503,037.02 149,837,326.21 45,495,566.87 163,543.86 45,659,110.73
Development Co.,
Ltd.
Total 155,854,987.48 596,710,051.29 752,565,038.77 394,457,821.17 163,543.86 394,621,365.03
Continued:
Opening balance
Subsidiary
Non-current Non-current
name Current assets Total assets Current liabilities Total liabilities
assets liabilities
Shenzhen
SEG Credit 42,768,150.12 452,858,389.93 495,626,540.05 313,882,188.08 - 313,882,188.08
Co., Ltd.
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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
Continued:
Amount incurred in the current Amount incurred in the previous
period period
Subsidiary name
Operating Operating
Net profit Net profit
income income
Shenzhen SEG Credit Co., Ltd. 77,554,704.11 35,003,585.70 62,998,793.90 29,712,107.16
Changsha SEG Development Co., Ltd. 23,221,623.20 5,350,203.30 21,651,924.25 480,408.75
Shenzhen SEG Baohua Enterprise Development
83,242,678.25 26,178,616.48 81,708,199.76 24,911,642.59
Co., Ltd.
Total 184,019,005.56 66,532,405.48 166,358,917.91 55,104,158.50
(II) Equity in joint venture arrangements or joint ventures
1. Important associates
Main Place of Business Shareholding proportion
Accounting
Name of joint venture or associate business registrati Nature of (%)
treatment method
address on business Direct Indirect
Manufactu
Shenzhen Huakong SEG Co., Ltd. Shenzhen Shenzhen 20.00 - Equity method
ring
Shanghai SEG Electronics Market Service
Shanghai Shanghai 35.00 - Equity method
Co., Ltd. industry
2. Main financial information on important associates
Closing balance/amount incurred in the current period
Item Shenzhen Huakong SEG Co., Shanghai SEG Electronics
Ltd. Market Co., Ltd.
Current assets 395,623,546.83 20,901,493.33
Non-current assets 362,254,332.48 210,798.06
Total assets 757,877,879.31 21,112,291.39
Current liabilities 94,113,723.78 10,747,847.59
Non-current liabilities 1,369,185.93 -
Total liabilities 95,482,909.71 10,747,847.59
204
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Closing balance/amount incurred in the current period
Item Shenzhen Huakong SEG Co., Shanghai SEG Electronics
Ltd. Market Co., Ltd.
Minority shareholders' equity 48,141,144.00 -
Shareholders' equity attributable to the parent company 614,253,825.60 10,364,443.80
Net asset shares calculated based on shareholding ratio 122,857,318.61 3,627,555.33
Adjustment items - -
Goodwill - -
-Unrealized profit from internal transaction - -
-Others 58,885,842.46 -248,142.52
Book value of equity investment in associates 185,122,573.88 3,379,412.81
Fair value of equity investment with public offer 2,551,041,568.11 -
Operating income 170,618,870.76 8,283,156.47
Net profit 7,005,520.52 864,641.80
Net profit after termination of operation - -
Other comprehensive income - -
Total comprehensive income 7,005,520.52 864,641.80
Dividends received from associates in the current period - 500,000.00
Continued:
Opening balance/amount incurred in the previous period
Item Shenzhen Huakong SEG Co., Shanghai SEG Electronics
Ltd. Market Co., Ltd.
Current assets 158,732,194.56 30,650,791.15
Non-current assets 262,002,634.60 37,816.64
Total assets 420,734,829.16 30,688,607.79
Current liabilities 303,841,418.53 20,289,991.11
Non-current liabilities 456,054.73 -
Total liabilities 304,297,473.26 20,289,991.11
Minority shareholders' equity 28,983,272.09 -
Shareholders' equity attributable to the parent company 87,454,083.81 10,293,666.63
Net asset shares calculated based on shareholding ratio 19,633,441.82 3,602,783.32
Adjustment items - -
Goodwill - -
-Unrealized profit from internal transaction - -
-Others 58,889,967.01 -25,995.14
Book value of equity investment in associates 78,523,408.83 3,576,788.18
Fair value of equity investment with public offer 1,759,755,588.42 -
Operating income 67,194,613.97 21,463,752.09
205
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Opening balance/amount incurred in the previous period
Item Shenzhen Huakong SEG Co., Shanghai SEG Electronics
Ltd. Market Co., Ltd.
Net profit -105,387,168.32 898,454.72
Net profit after termination of operation - -
Other comprehensive income - -
Total comprehensive income -105,387,168.32 898,454.72
Dividends received from associates in the current period - 5,992,172.96
IX. Fair value
(I) Financial instruments measured by fair value
The Company listed the book value of financial asset instruments measured by fair value on December 31, 2015
based on three levels of fair value. The fair value is classified into three levels according to the lowest level that
each important input value used in measurement of fair value is attributed to. Definitions of three levels:
Level 1: Unadjusted quotes of same assets or liabilities available on the date of measurement in the active
market.
Level 2: Directly or indirectly observable input values of relevant assets or liabilities other than input values at
level 1.
Input values at level 2 include: (1) quotes of similar assets or liabilities in the active market; (2) quotes of same
or similar assets or liabilities in the non-active market; (3) other observable input values other than quotes,
including observable interest rate and yield rate curves, implied volatility and credit spread in the interval of
normal quotes; (4) input values proved by the market.
Level 3: Unobservable input values of relevant assets or liabilities.
(II) Measurement of fair value at the end of the period
Persistent fair value measurement
Fair value at the end of the period
Item
Level 1 Level 2 Level 3 Total
Total available-for-sale
744,580.41 - - 744,580.41
financial assets
Bond instrument
- - - -
investment
Equity instrument
744,580.41 - - 744,580.41
investment
Other investment - - - -
X. Related parties and associated transactions
(I) Information on subsidiaries of the Company:
206
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Registered
Shareholding Voting right
Place of Capital
Name of parent company Nature of business proportion over the proportion over the
registration (RMB ten
Company (%) Company (%)
thousand Yuan)
Comprehensive
Shenzhen SEG Group Co., Ltd. Shenzhen 135,542.00 30.24 30.24
business
1. The final controlling party of the Company is Shenzhen State-owned Assets Supervision and Administration
Commission.
(II) For details of subsidiaries of the Company, see Note 8 (1) equity in subsidiaries
(III) Information on the joint ventures and associates of the Company
For details of important associates or joint ventures of the Company, see Note 8 (2) equity in joint venture
arrangement or associates.
(IV) Information on 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
(V) 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) Information on the Company's entrusted management
Pricing basis for
Trust profit
Type of income from
recognized in the
Name of trustor Name of trustee entrusted Starting date Ending date entrusted
current reporting
assets management/con
period
tracting
SEG
Shenzhen SEG Shenzhen SEG January 1, January 31, Trusteeship
Communicat 200,000.00
Group Co., Ltd. Co., Ltd. 2015 2016 Agreement
ions Market
Total 200,000.00
3. Information on leases between the Company and related parties
(1) The Company as the leasee:
207
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Rental recognized in this Rental recognized in previous
Name of lessor Type of leased assets
period period
Shenzhen SEG Group Co., Warehouse with an area of
638,661.00 586,200.00
Ltd. 809.26m2 on 8F of SEG Plaza
Total 638,661.00 586,200.00
(2) A subsidiary of the Company as the leasee:
Rental recognized in this Rental recognized in previous
Name of lessor Type of leased assets
period period
The 15th floor of SEG Plaza,
Shenzhen SEG Business
with an area of 687.01 square 465,593.70 502,891.20
Operation Co., Ltd.
meters
12F (West), Block 4, SEG
Shenzhen SEG Real Estate
Science Park with an area of 278,684.00 -
Investment Co., Ltd.
909.79 m2
Total 744,277.70 502,891.20
4. Interbank financing of related parties
(1) Loans from other banks
Related party Loans Starting date Due date Remarks
Shenzhen SEG Hi-tech Industrial Co., Tuesday, December 30, Tuesday, January 20, Interest
17,650,000.00
Ltd. 2014 2015 calculation
according to
Wednesday, December Tuesday, January 6,
Shenzhen SEG Group Co., Ltd. 40,000,000.00 the exact
31, 2014 2015
number of days
Total 57,650,000.00
Loans from associated party
As of December 31, 2015, the interest of RMB 66,922.92 has been paid to Shenzhen SEG Hi-tech Industrial Co.,
Ltd., and the interest of RMB 43,300.00 to payable Shenzhen SEG Group Co., Ltd. has been accrued.
5. Remuneration of key managers
Amount incurred in the current period Amount incurred in the previous period
Item
(RMB ten thousand Yuan) (RMB ten thousand Yuan)
Remuneration of key managers 337.06 340.20
6. 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 10,325.00 - 12,325.00 -
208
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Closing balance Opening balance
Project name Related party Bad debt Bad debt
Book balance Book balance
provision provision
Development Co., Ltd.
Shenzhen SEG Group Co.,
227,149.60 - 214,491.60 -
Ltd.
Shenzhen SEG Property
20,100.00 - - -
Management Co., Ltd.
Shenzhen SEG Real Estate
139,342.00 - - -
Investment Co., Ltd.
(2) Accounts payable to related parties
Project name Related party Closing balance Opening balance
Dividends
payable
Shenzhen SEG Computers Co., Ltd 662,310.00 543,510.00
Other payables
Shenzhen SEG Group Co., Ltd. - 40,000,000.00
Shenzhen SEG Property Development Co.,
- -
Ltd.
Shenzhen SEG Hi-tech Industrial Co., Ltd. - 17,653,186.81
XI. Commitments and contingency
(I) Major commitments
1. Concluded lease contract being performed or to be performed and minimum rental to be paid the next year
Xi'an
Shenzhen SEG Shenzhen SEG
Hairong Wujiang SEG
Xi'an SEG Suzhou SEG Electronics Electronics
Remaining lease SEG Electronics
Electronics Electronics Market Market
term Electronics Market Co.,
Market Co., Ltd. Market Co., Ltd. Management Management
Market Ltd.
Co., Ltd. Co., Ltd.
Co., Ltd.
Within one year
(including one 13,125,000.00 16,024,907.88 5,060,198.20 - - -
year)
Above one year
but within two
13,375,000.00 16,234,383.80 5,212,004.15 - - -
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 35,375,000.00 140,977,294.16 9,925,451.00 - - -
209
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Total 75,250,000.00 189,470,969.64 25,409,657.50 Note *1 Note *2 Note *3
(Continued)
Nanning SEG Shunde SEG
Remaining lease Electronics Market Electronics Market Wuxi SEG Electronics Suzhou SEG Digital Plaza
term Management Co., Management Co., Market Co., Ltd Management Co., Ltd.
Ltd. Ltd.
Within one year
(including one 8,000,000.00 4,800,000.00 - 13,054,290.12
year)
Above one year but
within two years
8,000,000.00 5,040,000.00 - 13,403,893.21
(including two
years)
Above two years
but within three
8,000,000.00 5,040,000.00 - 13,403,893.21
years (including
three years)
Over 3 years 56,000,000.00 38,047,508.73 - 69,228,846.75
Total 80,000,000.00 52,927,508.73 Note *4 109,090,923.29
Note *1: Under the cooperation agreement signed by and between both parties, Xi'an Hairong SEG Electronics Market Co., Ltd.
pays the rental according to 70% of profits of the electronics market. Therefore, the amount of rental in the future is uncertain.
Note *2: The rental of Shenzhen SEG Electronics Market Management Co., Ltd. is adjusted according to the CPI. Therefore, the
amount of rental in the future is uncertain.
Note *3: Under the cooperation agreement signed by and between both parties, Wujiang SEG Electronics Market Co., Ltd. pays the
rental according to 70% of pretax profits of the electronics market. Therefore, the amount of rental in the future is uncertain.
Note *4: Wuxi SEG Electronics Market Co., Ltd. is exempted from the rental within the three years before
opening of the company and pays the rental in the fourth year according to 70% of the pre-tax profits of the
electronics market. Therefore, the amount of rental in the future is uncertain.
Except the preceding commitments, the Company has no significant commitments that shall be disclosed or have
not been disclosed by December 31, 2015.
2. Other major financial commitment
(1) Other important financial commitments
As of the end of the current reporting period, the Company mortgaged its own property for bank loans and issue
of bonds. Details of the mortgaged property and the at the end of the current reporting period are as follows:
Net value of
Owner of property Name of property property at the end Remarks
of the period
Shenzhen SEG Co., Ltd. 4F, SEG Plaza 45,952,119.59 Mortgage for bank loans
2F & 5F of SEG Operational property of 2F & 5F of SEG Plaza as
Shenzhen SEG Co., Ltd. 185,033,894.68
Plaza pledge for issue of bond
210
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Some floors of
Shenzhen SEG Co., Ltd. Contemporary 51,579,212.11 Mortgage for bank loans
Window
Shenzhen SEG Co., Ltd. 31F, Qunxing Plaza 9,645,613.75 Mortgage for bank loans
Shenzhen SEG Co., Ltd. Other properties 6,931,559.13 Mortgage for bank loans
Total 299,142,399.26
(II) Contingency on the balance sheet date
1. Contingency arising from pending litigation or arbitration and its financial impact
On July 1, 2015, Nanning Haiqi Real Estate Development Co., Ltd. filed a lawsuit against Nanning SEG Digital
Square Management Co., Ltd. (a subsidiary of the Company) to the People's Court of Xingning District, Nanning
for dispute on contract termination, and requested the Court to order that the Company (as the second defendant)
and the subsidiary pay the rental fee of RMB 4,503,669.43, the liquidated damage of RMB 24,391.97 and the
attorney fee of RMB 30,000.00 as of October 2015 As of the end of current year, the Company has recognized
the estimated liabilities of RMB 7,000,000.00 based on the amount payable. As of the report date, the case is in
trial.
Except the preceding contingency, the Company has no significant commitments that shall be disclosed but have
not been disclosed as of December 31, 2015.
XII. Events after the balance sheet date
(I) Major non-adjustment items
1. Issue of shares and bonds
The 6th Session of the Board of Directors of Shenzhen SEG Co., Ltd. passed Plan on Non-Public Offering of
Bonds at the 29th interim meeting. Shenzhen SEG Co., Ltd. released an announcement hereof on December 16,
2015 that bonds of 400-600 million Yuan would be issued. As of the financial report date, the issue of bonds is
not completed.
2. Significant acquisitions or restructuring plan
On February 3, 2016, Shenzhen SEG Co., Ltd. and Shenzhen SEG Group Co., Ltd. entered into the "Framework
Agreement on Issue of Shares and Assets Purchase in Cash". The Company plans to purchase the equity of
targeted companies held by SEG Group (including 55% of equity of SEG Kang Le, 100% of equity of SEG
Property, 100% of equity of SEG Chuangyehui, and 79.02% of equity of SEG Real Estate) by non-public
offering of shares and in cash, and issue private placement to no more than 10 specific investors to raise
supporting funds for no more than 2 billion Yuan. The supporting funds are used to pay the cash considerations
of such transaction, the subsequent investment to the construction project of Xi'an SEG Plaza, and the
subsequent investment to the construction project of Shenzhen SEG International Electronics Industry Center by
Shenzhen SEG New Urban Construction Development Co., Ltd. As of the report date, the organization plan is in
progress.
(II) Details of profit distribution
According to the resolutions of the meeting of the Board of Directors, the Company shall distribute profits to all
shareholders at 0.03 yuan per share in 2015. The foregoing plan is to be approved by the shareholder's meeting.
(III) Notes to other events after the balance sheet date:
211
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Except the events after the balance sheet date, the Company has no such events that shall be disclosed but have
not been disclosed as of the report date.
XIII. Notes to other important matters
(I) Purchase of financial products with idle funds
On the second shareholders meeting held on July 21, 2014, the Proposal on Purchase of Financial Products
Using Idle Funds of the Company was passed, which allows the company and its subsidiaries to invest and
manage wealth by using idle funds of not more than RMB 1 billion Yuan and the capital can be rolled over
within the forgoing limit. The shareholder's meeting passed a resolution that general manager of the Company
shall make decisions for specific projects and the management shall carry out such decisions. The investment
period is from the date of resolution to June 30, 2016 (subject to the time of purchasing financial products).
As of December 31, 2015, the balance 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
Company Shenzhen SEG
Electronics Market Enterprise Development Electronics SEG Electronics
name Co., Ltd.
Co., Ltd. Co., Ltd. Market Co., Ltd Market Co., Ltd.
Amount 9,000.00 1,600.00 8,000.00 1,180.00 2,000.00
Continued:
Shenzhen SEG Nanning SEG
Company Shenzhen SEG Credit Co.,
E-Commerce Co., Electronics Market Total
name Ltd.
Ltd. Management Co., Ltd.
Amount 3,600.00 500.00 103.127 25,983.127
XIV. Notes to main items in the financial statements of the parent company
Note 1. Accounts receivable
1. Accounts receivable disclosed by type
Closing balance
Book balance Bad debt provision
Type
Proportion of Book value
Amount Proportion (%) Amount
provision (%)
Accounts receivable with single
significant amount and single - - - - -
bad debt provision
Accounts receivable with bad
debt provision accrued based on - - - - -
credit risk feature combinations
Accounts receivable with no
significant single amount but
8,869,182.88 100.00 8,869,182.88 100.00 -
with single provision for bad
debts
Total 8,869,182.88 100.00 8,869,182.88 100.00 -
212
Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
Continued:
Opening balance
Book balance Bad debt provision
Type
Proportion of Book value
Amount Proportion (%) Amount
provision (%)
Accounts receivable with single
significant amount and single 7,163,876.44 77.29 7,163,876.44 100.00
bad debt provision
Accounts receivable with bad
debt provision accrued based on - - - -
credit risk feature combinations
Accounts receivable with no
significant single amount but
2,105,306.44 22.71 2,105,306.44 100.00
with single provision for bad
debts
Total 9,269,182.88 100.00 9,269,182.88 100.00
Notes to types of accounts receivable:
2. Accrual, recovery and writing back of current bad debt provision
The amount of the current bad debt provision recovered or reversed is RMB 400,000.00.
3. No other accounts receivable are written off in the current period
4. Accounts receivable with top 5 closing balance collected based on debtors
Percentage in the total amount
Name of company Closing balance Accrued bad debt provision
of accounts receivable
Jiangsu Unicom 3,092,011.09 34.86 3,092,011.09
Shenzhen LiYuanshun
1,906,865.35 21.50 1,906,865.35
Industrial Co., Ltd.
Shanghai Tianci Industrial
899,000.00 10.14 899,000.00
Co., Ltd.
Zhejiang Financial
786,000.00 8.86 786,000.00
Information Co., Ltd
Sichuan HuiYuan Electronics
480,000.00 5.41 480,000.00
Co., Ltd.
Total 7,163,876.44 80.77 7,163,876.44
Note 2. Other accounts receivable
1. Other receivables disclosed by type
Closing balance
Book balance Bad debt provision
Type
Proportion Proportion of Book value
Amount Amount
(%) provision (%)
213
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Closing balance
Book balance Bad debt provision
Type
Proportion Proportion of Book value
Amount Amount
(%) provision (%)
Other accounts receivable with
single significant amount and single 8,530,276.35 1.43 8,530,276.35 100.00 -
bad debt provision
Other accounts receivable with bad
debt provision accrued based on 570,672,790.85 95.71 1,173.47 0.00 570,671,617.38
credit risk feature combinations
Including: Combination 1 1,059,894.27 0.18 1,173.47 0.11 1,058,720.80
Combination 2 569,612,896.58 95.53 - - 569,612,896.58
Other accounts receivable with no
significant single amount but with 17,070,353.09 2.86 17,070,353.09 100.00 -
single provision for bad debts
Total 596,273,420.29 100.00 25,601,802.91 4.29 570,671,617.38
Continued:
Opening balance
Book balance Bad debt provision
Type
Proportion Proportion of Book value
Amount Amount
(%) provision (%)
Other accounts receivable with
single significant amount and single 8,530,276.35 1.96 8,530,276.35 100.00 -
bad debt provision
Other accounts receivable with bad
debt provision accrued based on 410,454,248.03 94.12 1,200.00 - 410,453,048.03
credit risk feature combinations
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 no
significant single amount but with 17,118,394.49 3.92 17,118,394.49 100.00 -
single provision for bad debts
Total 436,102,918.87 100.00 25,649,870.84 5.88 410,453,048.03
Notes to types of other accounts receivable:
(1) Other accounts receivable with single significant amount and single bad debt provision
Closing balance
Name of company Other accounts Bad debt Proportion of
Reason for provision
receivable provision provision (%)
Unable to be recovered for
Yangjiang Yuntong Grease Co., Ltd. 8,530,276.35 8,530,276.35 100.00
aging of over 5 years
214
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Closing balance
Name of company Other accounts Bad debt Proportion of
Reason for provision
receivable provision provision (%)
Total 8,530,276.35 8,530,276.35 100.00 -
(2) Other accounts receivable in Combination 1, for which bad debt provision is accrued by the aging analysis
method:
Closing balance
Aging
Other accounts receivable Bad debt provision Proportion of provision (%)
Less than one year 1,036,424.93 - -
1-2 years 23,469.34 1,173.47 5.00
Total 1,059,894.27 1,173.47 0.11
(3) Other accounts receivable in Combination 2 include deposit, security deposit, account with related parties.
2. Accrual, recovery and writing back of current bad debt provision
The amount of the current bad debt provision reversed is RMB 48,067.93.
3. No other accounts receivable are written off in the current period.
4. Classification of other receivables by nature
Item Closing balance Opening balance
Receivables of related parties 568,166,228.80 408,087,205.17
Creditor's right transfer cost 23,583,862.58 22,664,045.27
Imprest 579,868.64 790,404.70
Deposit and security deposit 1,446,667.78 1,247,233.78
Others 2,496,792.49 3,314,029.95
Total 596,273,420.29 436,102,918.87
5. Other receivables with top 5 closing balance collected based on arrears party
Bad debt
Percentage in the total
Nature of provision
Name of company Closing balance Aging amount of other
receivables Closing
accounts receivable
balance
Nantong SEG Times Square Loans and Within 3
449,256,574.33 75.34 -
Development Co., Ltd. interests years
Shenzhen SEG E-Commerce Loans and Within 2
10.08 -
Co., Ltd. interests 60,117,534.25 years
Shenzhen SEG Industrial Loans and Within 5
7.25 -
Investment Co., Ltd. interests 43,202,666.68 years
Suzhou SEG Digital Plaza Incomings and Less than
10,000,000.00 1.68 -
Management Co., Ltd. outgoings one year
Yangjiang Yuntong Grease Co., Debt Over 5
8,530,276.35 1.43 8,530,276.35
Ltd. restructuring of years
215
Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
Bad debt
Percentage in the total
Nature of provision
Name of company Closing balance Aging amount of other
receivables Closing
accounts receivable
balance
SEG Orient
Total 571,107,051.61 95.78 8,530,276.35
Note 3. Long-term equity investment
Closing balance Opening balance
Nature of
Bad debt Bad debt
receivables Book balance Book value Book balance Book value
provision provision
Investment in
269,983,526.24 - 269,983,526.24 299,983,526.24 - 299,983,526.24
subsidiaries
Investment in
associates and 185,122,573.88 - 185,122,573.88 82,100,197.01 - 82,100,197.01
joint ventures
Total 455,106,100.12 - 455,106,100.12 382,083,723.25 - 382,083,723.25
1. Investment in subsidiaries
Accrued
Increase impairment Closing
Initial Decrease in
Invested Opening in the Closing provision balance of
investment cost the current
organization balance current balance in the impairment
Cost period
period current provision
period
Shenzhen SEG
Baohua
Enterprise 20,512,499.04 20,512,499.04 - - 20,512,499.04 - -
Development
Co., Ltd.
Shenzhen SEG
Industrial
29,181,027.20 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
Electronics 1,350,000.00 1,350,000.00 - - 1,350,000.00 - -
Market Co.,
216
Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
Accrued
Increase impairment Closing
Initial Decrease in
Invested Opening in the Closing provision balance of
investment cost the current
organization balance current balance in the impairment
Cost period
period current provision
period
Ltd.
Xi'an SEG
Electronics
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
Electronics 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
Market 6,000,000.00 6,000,000.00 - - 6,000,000.00 - -
Management
Co., Ltd.
Nanning SEG
Electronics
Market 8,000,000.00 8,000,000.00 - - 8,000,000.00 - -
Management
Co., Ltd.
Nantong SEG
30,000,000.00 30,000,000.00 - - 30,000,000.00 - -
Times Square
217
Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
Accrued
Increase impairment Closing
Initial Decrease in
Invested Opening in the Closing provision balance of
investment cost the current
organization balance current balance in the impairment
Cost period
period current provision
period
Development
Co., Ltd.
Suzhou 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
30,000,000.00 30,000,000.00 - 30,000,000.00 - - -
Square
Properties Co.,
Ltd.
Total 299,983,526.24 299,983,526.24 - 30,000,000.00 269,983,526.24 - -
2. Investment in associates and joint ventures
Increase/Decrease of the year
Investment
Adjustment of
profit and loss
Invested organization Opening balance Additional Negative other
confirmed
investment investment comprehensive
under the equity
income
method
II. Associates -
Shanghai SEG Electronics Market
3,576,788.18 - - 302,624.63 -
Co., Ltd.
Shenzhen Huakong SEG Co., Ltd. 78,523,408.83 - - 1,401,178.85 -
Subtotal 82,100,197.01 - - 1,703,803.48 -
Total 82,100,197.01 - - 1,703,803.48
Continued:
Increase/Decrease of the year Closin
g
balanc
Declared cash Accrued
e of
Invested organization Other changes in dividends or impairme Closing balance
Others impair
equity profits nt
ment
distribution provision
provis
ion
II. Associates - - - - - -
Shanghai SEG Electronics Market - 500,000.00 - - 3,379,412.81 -
218
Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
Increase/Decrease of the year Closin
g
balanc
Declared cash Accrued
e of
Invested organization Other changes in dividends or impairme Closing balance
Others impair
equity profits nt
ment
distribution provision
provis
ion
Co., Ltd.
Shenzhen Huakong SEG Co., Ltd. 101,818,573.39 - - - 181,743,161.07 -
Subtotal 101,818,573.39 500,000.00 - - 185,122,573.88 -
Total 101,818,573.39 500,000.00 - - 185,122,573.88 -
Note 4. Operating revenue and operating cost
1. Operating income and operating cost
Amount incurred in the current period Amount incurred in the previous period
Item
Income Cost Income Cost
Main business 123,368,604.11 76,436,384.08 125,263,172.20 76,758,875.18
Other businesses 556,849.32 - 460,890.41 -
Note 5. Investment income
Amount incurred in the Amount incurred in the
Item
current period previous period
Long-term equity investment income by the cost method 32,436,680.00 25,244,873.17
Long-term equity investment income by the equity method 1,703,803.48 -24,010,440.06
Income from disposal of long-term equity investments - -
Income from holding financial assets measured by fair value with changes
- -
included in current profit and loss
Income from disposal of financial assets measured by fair value with changes
- -
included in current profit and loss
Income from holding of held-to-maturity investments - -
Investment income during the possession of available-for-sale financial assets - -
Income from disposal of held-to-maturity investments - -
Income from disposal of available-for-sale financial assets - -
Profit from re-measurement of fair value of the remaining equity after loss of
- -
control
Others 36,264,983.86 30,123,920.48
Total 70,405,467.34 31,358,353.59
XV. Supplementary material
(I) Details of non-recurring profit and loss
219
Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
Item Amount Notes
profit and loss from disposal of non-current assets -257,269.63
Tax refund, reduction or exemption upon approval exceeding authorized
--
limits or without formal documents
Government subsidies included in current gains and losses (except those
closely related with corporate business and enjoyed according to national 980,956.24
standards or certain quota)
Fund appropriation charges for non-financial entities included in current
3,414,955.63
profit and loss
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 -
profit and loss from entrusting investment or managing assets -
Provision for assets impairment withheld for Force Majeure -
profit and loss from debt restructuring -
Expenditures for corporate restructuring, such as expenses for relocation of
-
employees and for integration
profit and loss from unfairly priced transactions in which the transaction
-
value exceeds the fair value
Net current profit and loss of a subsidiary due to the merger of enterprises
-
under common control from the beginning of period to the date of merger
profit and loss from contingency items irrelevant with regular operation of the
-
Company
Profit and loss 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 available-for-sale
financial assets
Transferred-back impairment provision for accounts receivable, for which
469,871.93
separate impairment tests are carried out
Profit and loss for external entrusted loans -
profit and loss from fair value changes of investment properties, whose
-
subsequent measurement is carried out based on the fair value mode
Influence on current profit and loss 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 -13,043,897.59
Other profit and loss fitting the definition of non-recurring profit and loss -
Influenced amount of income tax -2,022,052.01
Amount of influence of minority shareholders' equity (after tax) -432,034.76
220
Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
Item Amount Notes
Total -10,689,470.19
(II) ROE and EPS
Weighted average Earnings per share
Profit in current reporting period
return on equity (ROE) (%) Basic EPS Diluted EPS
Net profit attributable to common shareholders
5.19 0.0946 0.0946
of the Company
Net profit attributable to common shareholders
of the Company after deduction of 5.94 0.1082 0.1082
non-recurring losses and gains
221
Full Texrt of 2015 Annual Report of Shenzhen SEG Co., Ltd.
Chapter 11 Documents for Reference
1. Financial statements with seals of legal representative, person in charge of accounting, and responsible person
of the accounting institution;
2. Original of Audit Report with the seal of the accounting firm and the signatures and seals of CPAs;
3. Originals of all documents of the Company disclosed in the newspapers designated by China Securities
Regulatory Commission in the reporting period and the original manuscripts of the relevant announcements.
Shenzhen SEG Co., Ltd.
(Offical seal)
March 28, 2016
222
