The 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd.
SHENZHEN PROPERTIES & RESOURCES
DEVELOPMENT (GROUP) LTD.
THE 2015 ANNUAL REPORT
2016-03
March 2016
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The 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd.
Section I Important Statements, Contents & Terms
The Board of Directors, the Supervisory Committee as well as the directors, supervisors and senior
management staff of Shenzhen Properties & Resources Development (Group) Ltd. (hereinafter
referred to as the “Company”) warrant that this Report is factual, accurate and complete without any
false information, misleading statements or material omissions. And they shall be jointly and
severally liable for that.
Mr. Chen Yugang, company principal, Mr. Wang Hangjun, person-in-charge of the accounting work,
and Ms. Shen Xueying, person-in-charge of the accounting organ (chief of accounting), hereby
confirm that the financial report carried in this Report is factual, accurate and complete.
All directors attended the board meeting for reviewing this Report.
The Company’s preliminary plan for profit distribution upon review and approval at the board
meeting: Based on the total shares of 595,979,092, a cash dividend of RMB0.8 (tax included) will
be distributed to all the shareholders for every 10 shares that they hold. No bonus shares will be
granted and no capital reserves will be turned into share capital.
This Report is prepared in both Chinese and English. Should there be any understanding
discrepancy between the two versions, the Chinese version shall prevail.
Major risk warning: 1. Changes in the government’s real estate and financial policies; 2. Changes in
real estate supply and demand.
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The 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd.
Contents
Section I Important Statements, Contents & Terms.......................................................................2
Section II Company Profile & Financial Highlights.......................................................................5
Section III Business Profile .............................................................................................................10
Section IV Discussion & Analysis by the Management ................................................................13
Section V Significant Events ...........................................................................................................25
Section VI Share Changes & Particulars about the Shareholders ..............................................35
Section VII Preference Shares ........................................................................................................45
Section VIII Directors, Supervisors, Senior Management Staff & Employees ..........................46
Section IX Corporate Governance .................................................................................................55
Section X Financial Report .............................................................................................................62
Section XI Documents Available for Reference...........................................................................220
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The 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd.
Terms
Term Specific meaning
Company, the Company Shenzhen Properties & Resources Development (Group) Ltd.
SIHC Shenzhen Investment Holdings Co., Ltd.
SCIHC Shenzhen Construction Investment Holdings Corporation
SIM Shenzhen Investment Management Co., Ltd.
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The 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd.
Section II Company Profile & Financial Highlights
I. Basic information of the Company
Stock abbr. SZPRD A, SZPRD B Stock code 000011, 200011
Stock exchange Shenzhen Stock Exchange
Company name in Chinese 深圳市物业发展(集团)股份有限公司
Abbr. of Company name in
深物业集团
Chinese
Company name in English (if
ShenZhen Properties & Resources Development（Group） Ltd.
any)
Abbr. of Company name in
SZPRD
English (if any)
Legal representative Mr. Chen Yugang
39/F and 42/F, International Trade Center, Renmin South Road, Shenzhen, Guangdong Province,
Registered address
P.R.China
Zip code 518014
39/F and 42/F, International Trade Center, Renmin South Road, Shenzhen, Guangdong Province,
Office address
P.R.China
Zip code 518014
Company website www.szwuye.com.cn
Email address 000011touzizhe@szwuye.com.cn
II. Contact information
Company Secretary Securities Affairs Representative
Name Fan Weiping
Qian Zhong, Huang Fengchun
42/F, International Trade Center, Renmin 42/F, International Trade Center, Renmin
Contact address South Road, Shenzhen, Guangdong South Road, Shenzhen, Guangdong
Province, P.R.China Province, P.R.China
Tel. 0755-82211020 0755-82211020
Fax 0755-82210610 82212043 0755-82210610 82212043
E-mail address 000011touzizhe@szwuye.com.cn 000011touzizhe@szwuye.com.cn
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The 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd.
III. About information disclosure and where this Report is placed
Newspapers designated by the Company for A-share: Securities Times
information disclosure B-share: Ta Kung Pao (HK)
Internet website designated by CSRC for disclosing
www.cninfo.com.cn
this Report
Board Office, 42/F, International Trade Center, Renmin South Road,
Where this Report is placed
Shenzhen, Guangdong Province, P.R.China
IV. Changes in the registered information
Organizational code No changes
Changes in main business since listing (if
No changes
any)
Changes of controlling shareholder (if any) No changes
V. Other information
The CPAs firm hired by the Company
Name Union Power CPAs Co., Ltd. (LLP)
2~9/F, Union Power Building, 169 Donghu Road, Wuchang District, Wuhan, Hubei Province,
Office address
P.R.China
Signing accountants Wang Yu & Fan Guiming
Sponsor engaged by the Company to conduct consistent supervision during the reporting period
□ Applicable √ Inapplicable
Financial consultant engaged by the Company to conduct consistent supervision during the reporting period
□ Applicable √ Inapplicable
VI. Accounting and financial highlights
Does the Company adjust retrospectively or restate the accounting data of previous years due to changes in the accounting policy or
correction of accounting errors?
□ Yes √ No
Increase/decrease of
2015 2014 current year over last 2013
year
Operating revenues (RMB Yuan) 1,077,418,500.93 1,268,451,451.86 -15.06% 1,619,227,227.60
Net profits attributable to
shareholders of the Company 156,819,966.71 417,498,679.91 -62.44% 300,840,563.81
(RMB Yuan)
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The 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd.
Net profits attributable to
shareholders of the Company after
18,480,611.70 253,778,668.88 -92.72% 300,239,183.47
extraordinary gains and losses
(RMB Yuan)
Net cash flows from operating
309,767,629.66 -14,627,057.08 2,217.77% 110,424,330.10
activities (RMB Yuan)
Basic EPS (RMB Yuan/share) 0.2631 0.7005 -62.44% 0.5048
Diluted EPS (RMB Yuan/share) 0.2631 0.7005 -62.44% 0.5048
Weighted average ROE (%) 7.59% 21.82% -14.23% 18.19%
Increase/decrease of
As at 31 Dec. 2015 As at 31 Dec. 2014 current year-end than As at 31 Dec. 2013
last year-end
Total assets (RMB Yuan) 4,379,763,486.10 3,883,288,145.46 12.78% 3,873,252,714.32
Net assets attributable to
shareholders of the Company 2,099,906,766.61 2,074,242,662.07 1.24% 1,802,781,292.68
(RMB Yuan)
VII. Differences of the accounting data under the domestic and the overseas accounting
standards
1. Differences of the net profits and the net assets disclosed in the financial reports prepared under the
international and the Chinese accounting standards
√ Applicable □ Inapplicable
Unit: RMB Yuan
Net profits attributable to shareholders of the Net assets attributable to shareholders of the
Company Company
2015 2014 Closing amount Opening amount
According to Chinese
156,819,966.71 417,498,679.91 2,099,906,766.61 2,074,242,662.07
accounting standards
Items and amounts adjusted according to international accounting standards
According to international
156,819,966.71 417,498,679.91 2,099,906,766.61 2,074,242,662.07
accounting standards
2. Differences of the net profits and the net assets disclosed in the financial reports prepared under the
overseas and the Chinese accounting standards
√ Applicable □ Inapplicable
Unit: RMB Yuan
Net profits attributable to shareholders of the Net assets attributable to shareholders of the
Company Company
2015 2014 Closing amount Opening amount
According to Chinese
156,819,966.71 417,498,679.91 2,099,906,766.61 2,074,242,662.07
accounting standards
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The 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd.
Items and amounts adjusted according to overseas accounting standards
According to overseas
156,819,966.71 417,498,679.91 2,099,906,766.61 2,074,242,662.07
accounting standards
3. Reason for any differences in the accounting data under the domestic and the overseas accounting
standards
√ Applicable □ Inapplicable
No differences.
VIII. Financial highlights by quarter
Unit: RMB Yuan
Q1 Q2 Q3 Q4
Operating revenues 135,271,193.34 203,490,117.05 297,288,997.73 441,368,192.81
Net profits attributable to
356,364.92 30,806,466.82 15,292,968.63 110,364,166.34
shareholders of the Company
Net profits attributable to
shareholders of the Company after 254,313.28 26,692,562.91 15,154,797.52 -23,621,062.01
extraordinary gains and losses
Net cash flows from operating
-129,634,375.83 -92,274,805.10 182,346,525.43 349,330,285.16
activities
Any material differences between the financial indicators above or their summations and those which have been disclosed in
quarterly or semi-annual reports?
□ Yes √ No
IX. Extraordinary gains and losses
√ Applicable □ Inapplicable
Unit: RMB Yuan
Item 2015 2014 2013 Note
Gains/losses on disposal of non-current
assets (including offset part of asset -175,931.40 219,223,848.63 72,626.95
impairment provisions)
Government grants recognized in current
period, except for those acquired in ordinary
course of business or granted at certain 153,795.84 4,500.00
quotas or amounts according to
government’s unified standards
Assets on 14/F and
Gains/losses on contingencies irrelevant to 15/F of Longyuan
168,991,971.80
the Company’s normal business activities Chuangzhan Building
worthy of
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The 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd.
RMB174,382,120.00
recognized. See (2) 2
XIV in “Section X
Financial Report” for
details.
Gains and losses on change in fair value
from tradable financial assets and tradable
financial liabilities, as well as investment
income from disposal of tradable financial
5,709,098.20
assets and tradable financial liabilities and
financial assets available for sales except for
effective hedging related with normal
businesses of the Company
Impairment provision reversal for accounts
receivable on which impairment test is 8,374,421.28 429,994.49 833,813.78
carried out separately
Non-operating income and expense other
164,576.21 -22,799,362.40 -724,421.19
than above
Other gain and loss items that meet
5,895,627.11
definition of extraordinary gain/loss
Less: Income tax effects 44,878,576.92 39,034,596.80 -419,360.80
Total 138,339,355.01 163,720,011.03 601,380.34 --
Explain the reasons if the Company classifies an item as an extraordinary gain/loss according to the definition in the Explanatory
Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Extraordinary Gains and
Losses, or classifies any extraordinary gain/loss item mentioned in the said explanatory announcement as a recurrent gain/loss item
□ Applicable √ Inapplicable
No such cases in the reporting period.
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The 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd.
Section III Business Profile
I. Main business during the reporting period
The Company has 12 functioning subsidiaries in total, including 4 real estate subsidiaries (Huangcheng, Dongguan, Xuzhou and
Yangzhou), 2 property management subsidiaries (International Trade Center Property Management and Huangcheng Property
Management), 2 taxi service subsidiaries (International Trade Center Car Industry and Shenxin), 2 joint ventures (Jifa and Tian’an,
with the Company holding a 50% stake in both), 1 catering subsidiary and 1 supervision subsidiary.
The main business of the Company is as follows:
(1) Real estate
Real estate is the primary business of the Company, operated by 4 of its subsidiaries with 130 employees. 5 projects (Imperial
Garden, Xinhua Town, Shengang No. 1, Langqiao International and Caitianyise) have been completed over the past few years and
the following 5 are currently ongoing:
Xuzhou Banshanyujing: Won against competition on 10 Feb. 2010, floor space 96,900 ㎡, plot ratio 0.8, total land price RMB192
million (RMB2,481/㎡ if converted into floor price).
Dongguan Songhulangyuan: Won on 15 Jul. 2010, floor space 66,900 ㎡, plot ratio 2.2, total land price RMB214 million
(RMB1,454/㎡ if converted into floor price), available for sale from the end of Jul. 2015, 428 houses sold up to Sept. 2015 (over
RMB300 million for a total area of 43,000 ㎡).
Yangzhou Hupanyujing: Won on 28 Jan. 2011, floor space 66,600 ㎡, plot ratio 1.4, total land price RMB610 million (RMB6,439/㎡
if converted into floor price), 119 houses sold so far for RMB183 million.
Shenzhen Qianhai project: Obtained in Jul. 2011 in an asset swap promised in the share reform, floor space 19,900 ㎡, plot ratio 3.2,
total land price RMB270 million (RMB4,206/㎡ if converted into floor price).
Shenzhen Golden Collar Holiday: Located at Huanggang Port, historical land, floor space 12,600 ㎡, plot ratio 10.5, total
construction area 130,000 ㎡.
The 5 ongoing projects above combined cover a floor space of 231,300 ㎡ and a total construction area of 716,100 ㎡, with the
plot-ratio-counted and available-for sale area reaching 474,700 ㎡.
(2) Property management
The Company currently has 2 property management subsidiaries, namely International Trade Center Property Management and
Huangcheng Property Management.
(3) Taxi service
The Company currently has 2 taxi service subsidiaries, namely International Trade Center Car Industry and Shenxin Taxi, holding a
total of 530 red taxi licenses.
(4) Property rental
The Company has now a total area of 86,200 ㎡ available for rental, with the letting rate up to 96%.
(5) Warehousing service
The warehousing service is mainly provided by SZPRD Jifa Warehouse Co., Ltd., a joint venture where the Company holds a 50%
stake, with the total area of the warehouses reaching 35,000 ㎡.
(6) Catering service
The total business area is 1,892 ㎡.
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The 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd.
II. Significant changes in the main assets
1. Significant changes in the main assets
Main asset Reason for any significant change
Up 4.98% from opening amount, mainly because of gains on joint ventures recognized at
Equity assets
equity method
Fixed assets Up 34.12% from opening amount, mainly because of increase in renewed taxies
Intangible assets Down 7.17% from opening amount, mainly because of amortization in current period
Up 16.91% from opening amount, mainly because of increase in house payments
Monetary funds
received
Up 45.84% from opening amount, mainly because of increase in receivables from house
Accounts receivable
owners to property management subsidiaries
Down 21.59% from opening amount, mainly because of sale of these assets in current
Available-for-sale financial assets
period
Up 6.15% from opening amount, mainly because of increase in project input in current
Inventories
period
Up from opening amount, mainly because of recognition of assets on 14/F and 15/F of
Other current assets
Longyuan Chuangzhan Building
Up 10.98% from opening amount, mainly because of deferred income tax assets on
Deferred income tax assets
anticipated profit growth on pre-sale revenue of real estate subsidiaries
Down 92% from opening amount, mainly because of repayment of due short-term
Short-term borrowings
borrowings
Up 2168.61% from opening amount, mainly because of increase in house pre-sale
Accounts received in advance
revenue
Taxes and fares payable Down 17.88% from opening amount, mainly because of taxes and fares paid as required
Down 18.45% from opening amount, mainly because of transfer to non-current liabilities
Long-term borrowings
due within 1 year
2. Main assets overseas
□ Applicable √ Inapplicable
III. Core competitiveness analysis
The Company’s projects of high value in Shenzhen are now in full swing. SZPRD-Qianhai Bay Garden in Qianhai, Shenzhen has
been open since Nov. 2015 and greeted by an overwhelming response in the market. The Langqiao International project achieved a
remarkable result in sale of shops by seizing opportunities of the May Day and taking effective marketing measures such as joint
marketing in the three tiers of markets. The SZPRD-Golden Collar’s Holiday Apartment project at the Huanggang Port has
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The 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd.
completed its pile foundation and is proceeding smoothly. In the year, the fast growth in the real estate market of Shenzhen
influenced its neighboring cities. The SZPRD-Songhulangyuan project in Dongguan were open as scheduled, which is ideal in its
pace of sales and anticipated economic benefits. As for the SZPRD-Hupanyujing project located in Yangzhou, Phase I has allowed
house owners to move in and the progress of its sales is satisfactory, and Phase II has completed part of the main construction and
will be open for sale in Jan. 2016. All well located, the projects of the Company in Shenzhen will see better economic benefits along
with the rapid development of the city’s real estate market, laying a solid foundation for the business expansion of the Company in
the future.
The brand value and overall strength of the Company is highly regarded in the market as ever before. In the year, the Company was
granted quite a few titles such as “The 2015 China Top 500 Real Estate Developers”, “The 2015 Shenzhen Top 10 Real Estate
Brands”, “The 2015 Guangdong Top 500 Enterprises”, “The 2015 Shenzhen Top 25 Contributors to Urban Construction” and “The
2015 Leading Real Estate Brand”.
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The 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd.
Section IV Discussion & Analysis by the Management
I. Summary
In 2015, with a general guideline of “Consumption Promotion and De-stocking”, China’s real estate market
showed a distinct sign of recovery due to the frequent easing policies in the supply and demand. The total area of
the sold commodity houses in the country throughout the year hit a record high, but the real estate market
continued to polarize with an obvious recovery in the first-tier cities and great de-stocking pressure on the third
and fourth-tier cities. And the market competition was increasingly fierce due to the slowing-down growth in real
estate investment, the difficulties in real estate sales in the third and fourth-tier cities, the rising land prices in the
first-tier cities, etc.
To deal with that, the Company accelerated its project construction progress, enhanced its real estate marketing
and promoted its sidelines while solidifying its main business of real estate. As a result, in 2015, the Company
achieved operating revenues of RMB1.077 billion and total profits of RMB217 million.
Despite an expectedly pessimistic macro-economy for 2016-2018, these three years are within the duration of the
government’s crucial “13th Five-Year” strategic planning. Therefore, the government is expected to unveil more
proactive fiscal and monetary policies as well as other growth-stabilizing and employment-boosting policies so as
to ensure the fulfillment of its objectives as well as the sustained and healthy development of China’s economy.
For a real estate developer amid the constant changes in the business environment, to build up products highly
recognized by consumers and effectively control costs is the key to win. Therefore, integration among enterprises
is increasing. The product types will gradually shift from residential, commercial and office real estate to
industrial, tourism, endowment real estate, etc., which are more specific. In terms of development strategies,
cross-field marketing models such as the Internet thinking and real estate financing, investment models such as
joint land acquisition and light-assets operation, and new financing models such as the property fund will continue
to infiltrate into the real estate enterprises, which should keep up with these new development trends in the sector.
The Company will beef up the construction progress of its real estate projects to meet its schedules, further
improve its capability in operation and management of real estate projects, and monitor closely the development
progress so as to ensure the fulfillment of the business objectives for its real estate projects. Meanwhile, it will
draw up market-oriented marketing plans according to the actual situations and development trends in different
cities, and follow up and analyze market responses and changes so that it can adjust its marketing strategies in
time to promote its project sales.
Meanwhile, the Company is well aware of the influence of industry changes on its operation. It will coordinate its
resources and look for more quality real estate projects in a variety of ways. In the meantime, it will also boost the
development of its sidelines of property management, house rental, taxi service, etc. for business expansion and
more profits. For example, it will carry out the “Internet + Property Management” in an orderly manner for its
property management business so that it can make a better use of the Internet, big data and technology to increase
its operating efficiency.
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The 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd.
II. Main business analysis
1. Summary
See “I. Summary” in “Discussion & Analysis by the Management”.
2. Revenues and costs
(1) Breakdown of the operating revenues
Unit: RMB Yuan
2015 2014
In operating In operating +/-
Amount Amount
revenues revenues
Operating revenues 1,077,418,500.93 100% 1,268,451,451.86 100% -15.06%
By segment
Real estate
589,882,920.27 57.52% 809,260,338.23 67.02% -9.50%
development
Property
338,396,640.78 33.00% 307,136,733.64 25.44% 7.56%
management
Transport service 60,914,047.94 5.94% 62,476,507.32 5.17% 0.77%
Catering service 31,014,702.89 3.02% 24,634,302.99 2.04% 0.98%
Other 5,326,342.63 0.52% 5,937,003.71 0.49% 0.03%
By product
By area
(2) Segments, products or areas contributing over 10% of the operating revenues or profits
√ Applicable □ Inapplicable
Unit: RMB Yuan
Operating Gross profit
Operating Gross profit Operating cost:
Operating cost revenue: YoY margin: YoY
revenue margin YoY +/-%
+/-% +/-%
By segment
Real estate
515,974,918.00 234,013,337.05 54.65% -31.08% 62.79% -26.15%
development
Property
333,400,952.67 316,217,676.81 5.15% 5.15% 16.63% -1.17%
management
By product
By area
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The 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd.
Main business data of the previous year restated according to the changed statistical caliber for the reporting period
□ Applicable √ Inapplicable
(3) Product sales revenue higher than the service revenue
√ Yes □ No
Business segment Item Unit 2015 2014 +/-
Real estate
Sales volume ㎡ 99506.81 16801.66 492.24%
development
production volume ㎡ 456925.08 531283.08 -14.00%
Inventory volume ㎡ 204462.17 303968.98 -32.74%
Reason for any over 30% YoY movements in the data above
√ Applicable □ Inapplicable
The sold and ready-for-settlement real estate area decreased considerably from that of last year.
(4) Execution progress of major signed sales contracts in the reporting period
□ Applicable √ Inapplicable
(5) Breakdown of the operating costs
By segment
Unit: RMB Yuan
2015 2014
Segment Item +/-
Amount In operating costs Amount In operating costs
Real estate
248,862,700.87 39.43% 162,645,492.90 32.99% 86,217,207.97%
development
Property rental &
322,986,076.28 51.18% 279,143,261.38 56.62% 43,842,814.90%
management
Transport service 29,554,744.59 4.68% 30,388,793.31 6.16% -834,048.72%
Catering service 25,527,473.13 4.04% 20,202,098.26 4.10% 5,325,374.87%
Other 4,203,603.52 0.67% 5,269,572.72 1.07% -1,065,969.20%
Total 631,134,598.39 100.00% 497,649,218.57 100.00% 133,485,379.82%
Notes
Not available
(6) Changes in the consolidation scope for the reporting period
□ Yes √ No
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The 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd.
(7) Major changes in the business, products or services in the reporting period
□ Applicable √ Inapplicable
(8) Main customers and suppliers
Main customers
Total sales to top 5 customers (RMB Yuan) 239,326,720.53
Ratio of total sales to top 5 customers to annual total sales
22.21%
(%)
Information about the top 5 customers
Serial No. Name of customer Sales (RMB Yuan) Proportion in annual total sales (%)
1 Individual A 63,352,439.00 5.88%
2 Individual B 55,818,509.00 5.18%
3 Huawei Technologies Co., Ltd. 42,297,614.53 3.93%
4 Alibaba (China) Co., Ltd. 39,155,270.00 3.63%
5 Individual C 38,702,888.00 3.59%
Total -- 239,326,720.53 22.21%
Other information about the main customers
□ Applicable √ Inapplicable
3. Expense
Unit: RMB Yuan
2015 2014 +/- Reason for any significant change
Sales service and agency costs
Selling expenses 41,941,165.94 26,318,080.91 59.36%
increased as marketing was enhanced
Administrative expenses 102,968,126.79 103,915,932.80 -0.91% Cost control was tightened
Financial expenses -7,514,689.31 -12,697,790.50 -40.82% Decrease in interest revenue
Income tax expenses 60,771,725.42 136,266,283.67 -55.40% Decrease in profits
4. R&D input
□ Applicable √ Inapplicable
5. Cash flows
Unit: RMB Yuan
Item 2015 2014 +/-
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The 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd.
Subtotal of cash inflows from
1,711,116,833.24 1,169,054,597.62 46.37%
operating activities
Subtotal of cash outflows from
1,401,349,203.58 1,183,681,654.70 18.39%
operating activities
Net cash flows from operating
309,767,629.66 -14,627,057.08 2,217.77%
activities
Subtotal of cash inflows from
8,058,358.89 238,169,791.85 -96.62%
investing activities
Subtotal of cash outflows from
38,285,548.55 13,949,481.24 174.46%
investing activities
Net cash flows from investing
-30,227,189.66 224,220,310.61 -113.48%
activities
Subtotal of cash inflows from
216,470,006.83 316,370,000.00 -31.58%
financing activities
Subtotal of cash outflows from
374,393,615.57 693,077,717.73 -45.98%
financing activities
Net cash flows from financing
-157,923,608.74 -376,707,717.73 -58.08%
activities
Net increase in cash and cash
124,374,439.09 -168,208,437.52 173.94%
equivalents
Main influence factors for any significant YoY changes in the items above
√ Applicable □ Inapplicable
① The subtotal of the cash inflows from operating activities and the net cash flows from operating activities increased from last year
mainly because of the increase in the house payments received.
② The subtotal of the cash inflows from investing activities and the net cash flows from investing activities decreased from last year
mainly because of the cash received from the disposal of the 50% stake in Tian’an Company last year.
③ The subtotal of the cash outflows from investing activities increased from last year mainly because of the increase in the renewed
taxies of the subsidiaries.
④ The subtotal of cash inflows from financing activities decreased from last year mainly because of the decreased in new
borrowings.
⑤ The subtotal of cash outflows from financing activities decreased from last year mainly because of the decreased in repaid
borrowings.
⑥ The net cash flows (net outflows) from financing activities decreased from last year mainly because of the decrease in repaid
borrowings.
⑦ The net increase in cash and cash equivalents increased from last year mainly because of the increase in the house payments
received and the decrease in repaid borrowings.
Reasons for any big difference between the net operating cash flows and the net profits in the reporting period
√ Applicable □ Inapplicable
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The 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd.
For the reporting period, the net cash flows from operating activities stood at RMB309,767,629.66, representing a big difference with
the net profits of RMB155,619,966.71, which was mainly because the pre-sale revenue had not yet met the condition for settlement.
III. Non-core business analysis
√ Applicable □ Inapplicable
Unit: RMB Yuan
Amount In total profits (%) Source/reason Continuity
Gains on disposal of
Investment gains 7,738,371.09 3.58% available-for-sale financial No
assets
Falling price provision for
Asset impairment 91,863,939.71 42.45% SZPRD-Banshanyujing No
project
Assets on 14/F and 15/F of
Longyuan Chuangzhan
Building worthy of
Non-business
171,619,115.05 79.31% RMB169,582,120.00 No
revenue
recognized. See (1) 2 (XIV)
in “Section X Financial
Report” for details.
Non-business Losses on penalties, overdue
2,876,737.49 1.33% No
expense fines and estimated liabilities
IV. Asset and liability analysis
1. Significant changes in the asset composition
Unit: RMB Yuan
As at 31 Dec. 2015 As at 31 Dec. 2014 Proportio
In total assets In total assets n change Reason for any significant change
Amount Amount
(%) (%) （%）
945,739,975.7
Monetary funds 21.59% 808,963,376.68 20.83% 0.76% Increase in project sales revenue
7
Increase in accounts receivable by
Accounts
38,772,146.41 0.89% 26,585,132.12 0.68% 0.21% property management subsidiaries
receivable
from house owners
Closing change in proportion due to
2,466,342,278. 2,323,472,671. increased total assets, closing amount
Inventories 56.31% 59.83% -3.52%
85 20 higher than opening amount due to
increase in project development input
18
The 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd.
Investing real 237,260,788.8
5.42% 250,014,034.94 6.44% -1.02% Depreciation
estate 2
Closing change in proportion due to
Long-term equity increased total assets, closing amount
34,526,177.41 0.79% 32,888,939.41 0.85% -0.06%
investment higher than opening amount due to
increase in gains on joint ventures
Increase in renewed taxies of
Fixed assets 85,929,516.37 1.96% 64,069,233.96 1.65% 0.31%
subsidiaries
Short-term
8,000,000.00 0.18% 100,000,000.00 2.58% -2.40% Due short-term borrowings repaid
borrowings
Long-term 144,840,006.8 Long-term borrowings shifted to
3.31% 177,613,352.00 4.57% -1.26%
borrowings 3 non-current liabilities due within 1 year
Other current 174,382,120.0 Assets on 14/F and 15/F of Longyuan
3.98% 3.98%
assets 0 Chuangzhan Building recognized
Intangible assets 92,640,083.99 2.12% 99,792,587.03 2.57% -0.45% Amortization
Closing change in proportion due to
increased total assets, closing amount
Deferred income 240,335,370.5 higher than opening amount due to
5.49% 216,552,790.60 5.58% -0.09%
tax assets 1 deferred income tax assets on
anticipated profit growth on pre-sale
revenue of real estate subsidiaries
Closing change in proportion due to
increased total assets, closing amount
191,524,938.5
Accounts payable 4.37% 175,347,021.19 4.52% -0.15% higher than opening amount due to
4
increase in tentatively estimated costs
on project completion
Accounts
652,369,778.2
received in 14.90% 28,756,337.08 0.74% 14.16% Increase in real estate pre-sale revenue
0
advance
Taxes and fares 833,797,372.4 1,015,363,636.
19.04% 26.15% -7.11% Paid as required
payable 3 69
Non-current
121,243,352.0 Shift from long-term borrowings to this
liabilities due 2.77% 5,000,000.00 0.13% 2.64%
0 item as prescribed
within 1 year
2. Assets and liabilities measured at fair value
√ Applicable □ Inapplicable
Unit: RMB Yuan
Item Opening Gain/loss on Cumulative fair Impairment Purchased Sold amount in Closing
19
The 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd.
amount fair value value changes provisions in amount in current period amount
changes in recorded into current period current period
current period equity
Financial assets
3.
Available-for-sa
3,993,000.00 6,511,297.75 0.00
le financial
assets
Subtotal of
3,993,000.00 6,511,297.75 0.00
financial assets
Total of above 3,993,000.00 6,511,297.75 0.00
Financial
0.00 0.00
liabilities
Significant changes in the measurement attributes of the main assets in the reporting period
□ Yes √ No
V. Investment analysis
1. Total investments
□ Applicable √ Inapplicable
2. Significant equity investments made in the reporting period
□ Applicable √ Inapplicable
3. Significant non-equity investments ongoing in the reporting period
□ Applicable √ Inapplicable
4. Financial investments
(1) Securities investments
√ Applicable □ Inapplicable
Unit: RMB Yuan
Gain/los Cumulat
Variety Account s on fair ive fair
Code of Name of Initial Purchas Gain/los
of ing Opening value value Sold in Closing Account Source
ed in s in
securitie securitie investm measure book changes changes current book
securitie current current
ment value in recorde period value ing title of funds
s s ent cost model period period
s current d into
period equity
Domesti Huasu 2,962,5 Fair 3,993,0 6,511,29 5,709,0 Availabl Own
000509 0.00
c/overse Holding 00.00 value 00.00 7.75 98.20 e-for-sal funds
20
The 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd.
as stock s method e
financia
l asset
2,962,5 3,993,0 6,511,29 5,709,0
Total -- 0.00 0.00 0.00 0.00 -- --
00.00 00.00 7.75 98.20
Disclosure date of board
announcement on approval
of securities investment
Disclosure date of general
meeting announcement on
approval of securities
investment (if any)
(2) Investment in financial derivatives
□ Applicable √ Inapplicable
No such cases in the reporting period
5. Utilization of raised funds
□ Applicable √ Inapplicable
No such cases in the reporting period
VI. Sale of major assets and equity interests
1. Sale of major assets
□ Applicable √ Inapplicable
No such cases in the reporting period
2. Sale of major equity interests
□ Applicable √ Inapplicable
VII. Main controlled and joint stock companies
√ Applicable □ Inapplicable
Main subsidiaries and joint stock companies with an over 10% influence on the Company’s net profits
Unit: RMB Yuan
Relationship Main
Company Registered Operating Operating
with the business Total assets Net assets Net profits
name capital revenues profits
Company
21
The 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd.
Shenzhen
Huangcheng Sale of 30,000,000.0 1,825,192,08 862,490,105. 406,926,102. 119,599,396.
Subsidiary Real estate
Real Estate houses 0 5.34 78 62 06
Co., Ltd.
SZPRD Real
Estate Sale of 30,950,000.0 249,829,650. 65,847,877.5
Subsidiary Real estate 1,120,394.00 7,747,560.57
Development houses 0 89 1
Co., Ltd.
Shenzhen Sale of
Real estate
International houses and
and motor 29,850,000.0 364,637,646. 224,303,666. 61,227,920.0 13,015,799.1
Trade Center Subsidiary motor
transportatio 0 32 46 3 4
Car Industry transportatio
n
Co., Ltd. n
Shenzhen
International
Property Property
Trade Center 20,000,000.0 273,275,196. 87,485,021.3 361,605,690. 22,559,557.1
Subsidiary management management
Property 0 08 7 30 7
and leasing and leasing
Management
Co., Ltd.
Subsidiaries obtained or disposed in the reporting period
□ Applicable √ Inapplicable
Particulars about the main controlled and joint stock companies
VIII. Structured bodies controlled by the Company
√ Applicable □ Inapplicable
For details, see the information about the equity interests in the subsidiaries in 1, IX in Section X. Financial Report.
IX. Outlook of the Company’s future development
1. Risks faced by the Company, and countermeasures
(1) Market risks
In 2015, as the macro economy stepped into the “New Normal” period, except for the 1st line and a few 2nd tier
cities, the real estate industry in country wide was under big stock pressure. The central government took
de-stocking policies in succession in real estate market, including dropping the deposit reserve ratio and interest
rate, allowing a second child, and dropping down-payment ratio. Affected by those superimposed policies, the real
estate market obtained improvement for recovery at the end of the year. However, the development trends showed
obvious differentiation. For 1st tier cities, such as Shenzhen and Shanghai, the housing price rapidly got high and
ranked among the upper heights. But for 3rd and 4th tier cities that faced with the biggest de-stocking pressure, the
market recovery trend was not bright and clear.
The Company will continue to beef up the construction progress of its real estate projects to meet its schedules,
further improve its capability in operation and management of real estate projects, and monitor closely the
22
The 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd.
development progress so as to ensure the fulfillment of the business objectives for its real estate projects.
Meanwhile, it will draw up market-oriented marketing plans according to the actual situations and development
trends in different cities, and follow up and analyze market responses and changes so that it can adjust its
marketing strategies in time to promote its project sales.
(2) Industry risks
As for the real estate industry that has stepped into the silver age, project sales has been the most difficult part, the
costs for developing land and other resources have increasingly gone up, the profit space has obviously shrunk,
and the market competitions has intensified. In response to such condition, the transformation and differentiation
of real estate companies will speed up. As for middle and small size real estate companies, their weakness in fund,
management, and project resources is distinct, and therefore it’s difficult for them to go into the 1st tier and 2nd tier
core cities to obtain qualified lands, which makes them faced with the unprecedented pressure from profitability
and sustainability of development. Some companies will positively develop health and finance businesses while
building up the main businesses. However, some other companies have no choice but to exit the market. The real
estate companies are faced with the test of re-building competitive edges.
The Company is well aware of the influence of industry changes on its operation. While effectively carrying out
lean management in its real estate development, it will also coordinate its resources and look for more quality real
estate projects in a variety of ways. In the meantime, it will also boost the development of its sidelines of property
management, house rental, taxi service, etc. for business expansion and more profits. For example, it will carry
out the “Internet + Property Management” in an orderly manner for its property management business so that it
can make a better use of the Internet, big data and technology to increase its operating efficiency.
2. Main work plans for 2016
(1) The Company will pay close attention to project engineering nodes to make sure the project progress run on
schedule
The Company will sustainably strengthen and improve operation management capability for real estate projects,
and pay close attention to project engineering nodes to make sure the project progress run on schedule. The
Company will make its best efforts to make the SZPRD-Banshanyujing (Xuzhou) (1st phase) completed, recorded,
and lived at the end of December, make the indoor and outdoor decoration completed and the outer wall unloaded
for SZPRD-Hupanyujing (Yangzhou) (2nd Phase) before the end of December, make the SZPRD-Songhulangyuan
(Dongguan) completed and recorded before the end of December, make the SZPRD-Qianhai Bay project lived
before the end of December, and make the basement body capped, as well as make the body structure of podium
building come into construction for the SZPRD-Golden Collar Holiday project.
(2) The Company will adjust marketing strategies in due time, and positively broaden sales channels
The Company will closely get familiar with the marketing situation, adjust marketing strategies in due time,
positively broaden sales channels, optimize current marketing methods, seek for the appropriate occasions to
create hot sales points, give full play to internet marketing strategies, enlarge the resource of the internet customer
group, and at the same time, continue to make qualified products, and put more emphasis on product display. The
Company will earnestly research on excellent marketing strategies and schemes in the market, learn from the
marvelous points, try new marketing ways while combining the feature of our own products, so that the contract
sales volume of RMB1.7 billion can be realized.
(3) The Company will orderly carry forward the application of “Internet + Property” in practice, so as to seek for
new profit growth factor
With the continuous development of informatization technology and the change of life-style of clients, the
property and property management has come into a new developing period of datamation, facilitation, and
multi-functionalization. The upgrade of means and tools of mobile internet is bringing new opportunities for
23
The 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd.
property management.
The Company will take advantage of current client resources to make win-win cooperation by introducing
technology and the operation party, upgrade the property management way and method in quality and efficiency
by applying the mobile internet technology, and improve clients’ satisfaction by providing clients with qualified
service in better way, improving client experience and perception, and accordingly improving the image of
property management. While firming businesses, the Company will also intensify client stickiness, fully dig out
client value, enlarge client service edges, and explore new value space for property management.
X. Visits paid to the Company for purposes of research, communication, interview, etc.
1. In the reporting period
√ Applicable □ Inapplicable
Date Way of visit Type of visitor Main inquiry information
2015-01-15 By phone Individual About sales
2015-03-04 By phone Individual About disclosure date of annual report
About implementation schedule of profit
2015-05-07 By phone Individual
distribution
2015-07-09 By phone Individual About opening date of Dongguan project
About opening plan for Qianhai Bay
2015-10-15 By phone Individual
project
2015-12-25 By phone Individual About sales of Qianhai project, etc.
Times of visit 200
Number of visiting institutions 0
Number of visiting individuals 200
Number of other visiting entities 0
Significant undisclosed information disclosed,
No
revealed or leaked
24
The 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd.
Section V Significant Events
I. Profit distribution to the common shareholders & increase of the share capital from the
capital reserves
Formulation, execution or adjustments of the profit distribution policy for the common shareholders, especially the cash dividend
policy, in the reporting period
□ Applicable √ Inapplicable
Profit distribution plans (or preliminary plans) for the common shareholders and plans (or preliminary plans) for turning capital
reserves into share capital for the recent three years (including the reporting period)
Year Plan for profit distribution and turning capital reserves into share capital
2015 A cash dividend of RMB0.80 (tax included) for every 10 shares and share
capital increase from capital reserves
2014 A cash dividend of RMB2.20 (tax included) for every 10 shares and share
capital increase from capital reserves
2013 A cash dividend of RMB2.50 (tax included) for every 10 shares and share
capital increase from capital reserves
Cash dividends distributed to the common shareholders in the recent three years (including the reporting period)
Unit: RMB Yuan
Net profits Proportion in net
attributable to profits attributable
Ratio of cash
Cash dividend (tax shareholders of the to shareholders of Cash dividend in
Year dividend in other
included) Company in the Company in other forms
forms
consolidated consolidated
statements statements (%)
2015 47,678,327.36 156,819,966.71 30.64% 0.00 0.00%
2014 131,115,400.24 417,498,679.91 31.40% 0.00 0.00%
2013 148,994,773.00 300,840,563.81 49.53% 0.00 0.00%
The Company made profits in the reporting period and the profits distributable to the common shareholders of the Company was
positive, but it did not put forward a preliminary plan for cash dividend distribution:
□ Applicable √ Inapplicable
II. Preliminary plan for profit distribution and turning capital reserves into share capital for
the reporting period
√ Applicable □ Inapplicable
Bonus shares for every 10 shares (share) 0
Dividend for every 10 shares (RMB Yuan) (tax
0.8
included)
Increased shares for every 10 shares (share) 0
Total shares as basis for preliminary distribution 595,979,092
plan (share)
Total cash dividends (RMB Yuan) (tax included) 47,678,327.36
Distributable profits (RMB Yuan) 1,233,358,112.55
Percentage of cash dividends in total distributed 100.00%
profits (%)
About cash dividends
25
The 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd.
If the Company is in a mature development stage and has no plans for any significant expenditure, in profit allocation, the ratio of
cash dividends in the profit allocation shall be 80% or above.
Details about preliminary plan for profit distribution and turning capital reserves into share capital
According to the Company’s Articles of Association as well as the actual situation of its development and operation, the
preliminary plan of the Company for 2015 annual profit distribution is as follows: Based on the total 595,979,092 shares of the
Company as at 31 Dec. 2015, a cash dividend of RMB0.80 (tax included) will be distributed to all its shareholders for every 10
shares they hold, with the total cash dividends to be distributed amounting to RMB47,678,327.36. And the retained profits will be
carried over for distribution in the future. No capital reserves will be turned into share capital for 2015.
III. Fulfillment of commitments
1. Commitments of the Company, its shareholders, actual controller, acquirer, directors, supervisors,
senior management staff or other related parties fulfilled in the reporting period or ongoing at the
period-end
□Applicable √ Inapplicable
No such cases in the reporting period.
2. Where there had been an earnings forecast for an asset or project and the reporting period was still
within the forecast period, explain why the forecast has been reached for the reporting period.
□Applicable √ Inapplicable
IV. Occupation of the Company’s funds for non-operating purposes by the controlling
shareholder or its related parties
□ Applicable √ Inapplicable
No such cases in the reporting period.
V. Explanations given by the Board of Directors, the Supervisory Committee and the
independent directors (if any) regarding the “non-standard auditor’s report” issued by the
CPAs firm for the reporting period
□ Applicable √ Inapplicable
VI. YoY changes in the accounting policy, estimation and methods
□ Applicable √ Inapplicable
No such cases in the reporting period.
VII. Retrospective restatement due to correction of material accounting errors in the
reporting period
□ Applicable √ Inapplicable
No such cases in the reporting period.
VIII. YoY changes in the consolidation scope
□ Applicable √ Inapplicable
No such cases in the reporting period.
26
The 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd.
IX. Particulars about engagement and disengagement of CPAs firm
CPAs firm engaged at present
Name of the domestic the CPAs firm Union Power CPAs Co., Ltd. (LLP)
Fee for the domestic the CPAs firm (RMB Ten
52
thousand)
Consecutive years of the audit services provided by
13
the domestic CPAs firm
Names of the certified public accountants from the
Wang Yu, Fan Guiming
CPAs firm
CPAs firm changed?
□ Yes √ No
Any CPAs firm, financial accountant or sponsor engaged for the audit of internal control:
√ Applicable □ Inapplicable
In the reporting period, the Company engaged Union Power CPAs Co., Ltd. (LLP) for its internal control audit and paid an internal
control audit fee of RMB230,000 to it for the year.
X. Possibility of listing suspension and termination after disclosure of this annual report
□ Applicable √ Inapplicable
XI. Bankruptcy and reorganization
□Applicable √ Inapplicable
There was no such situation of the Company during the reporting period.
XII. Significant lawsuit or arbitration
□Applicable √ Inapplicable
There was no such situation of the Company during the reporting period.
XIII. Punishment and rectification
□Applicable √ Inapplicable
There was no such situation of the Company during the reporting period.
XIV. Honesty situations of the Company, its controlling shareholders and actual controller
□ Applicable √ Inapplicable
XV. List of the execution of the stock incentive plan, ESOP, or other Staff incentives
□ Applicable √ Inapplicable
No such cases in the reporting period.
27
2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd.
XVI. Significant related-party transactions
1. Related-party transactions relevant to routine operation
□ Applicable √ Inapplicable
No such cases in the reporting period.
2. Related-party transactions regarding purchase and sales of assets
□ Applicable √ Inapplicable
No such cases in the reporting period.
3. Related-party transactions common external investment
□ Applicable √ Inapplicable
No such cases in the reporting period.
4. Credits and liabilities with related parties
√ Applicable □ Inapplicable
Whether was any contract related to the non-operating credits and liabilities with related parties?
√ Yes □ No
Creditors’ rights receivable of the related parties
Newly
Recovered
increased Interests of
amount of
Whether Opening amount of the Closing
the
there was balance the reporting balance
Related Relationshi reporting Interests
Reason non-operati (RMB Ten reporting period (RMB Ten
party p period rate
ng funds Thousand period (RMB Ten Thousand
(RMB Ten
occupation Yuan) (RMB Ten Thousand Yuan)
Thousand
Thousand Yuan)
Yuan)
Yuan)
Anhui 30%
Business
Nanpeng equities
circulating No 733 805
Papermakin held by the
funds
g Co., Ltd. Company
Shenzhen
Wufang 26%
Business
Pottery & equities
circulating No 175 175
Porcelain held by the
funds
Industrial Company
Co., Ltd.
28
2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd.
Shenzhen
Internationa
38.33%
l Trade Business
equities
Center circulating No 235 0
held by the
Industrial funds
Company
Developme
nt Co., Ltd.
Controlled
by the
Shenzhen parent Intercourse
No 91 91
Guesthouse company of funds
the
Company
Controlled
Shenzhen
by the
Investment
parent Intercourse
Property No 13 13 0
company of funds
Developme
the
nt Co., Ltd.
Company
Influences of the related
Were all within the risks control of the Company and not influenced the operating results and the
creditors’ rights on the
financial conditions. The changes of Anhui Nanpeng Papermaking Co., Ltd. during the reporting period
operating results and the
were due to the translation of the foreign currency exchange rate with Shenzhen International Trade
financial conditions of
Center Industrial Development Co., Ltd. due to the written-off and the roll out.
the Company
Creditors’ rights payable of the related parties
Newly
Returned
increased Interests of
Opening amount of Closing
amount of the reporting
balance the reporting balance
the reporting period (RMB
Related party Relationship Reason (RMB Ten period (RMB Interests rate (RMB Ten
period (RMB Ten
Thousand Ten Thousand
Ten Thousand
Yuan) Thousand Yuan)
Thousand Yuan)
Yuan)
Yuan)
Shenzhen Jifa
Intercourse
Warehouse Joint venture 2,630 2,630
funds
Co., Ltd.
Shenzhen
Tian’an Intercourse
Joint venture 411 110 521
International funds
Building
29
2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd.
Property
Management
Co., Ltd.
Influences of the related
liabilities on the operating Were all within the risks control of the Company and not influenced the operating results and the
results and the financial financial conditions.
conditions of the Company
5. Other significant related-party transactions
□ Applicable √ Inapplicable
No such cases in the reporting period.
XVII. Significant contracts and their execution
1. Trusteeship, contracting and leasing
(1) Trusteeship
□ Applicable √ Inapplicable
No such cases in the reporting period.
(2) Contract
□ Applicable √ Inapplicable
No such cases in the reporting period.
(3) Lease
□ Applicable √ Inapplicable
No such cases in the reporting period.
2. Significant guarantees
√ Applicable □ Inapplicable
(1) Guarantees provided by the Company
Unit: RMB Ten Thousand Yuan
Guarantees provided by the Company and its subsidiaries for external parties (excluding those for subsidiaries)
Disclosure Amount for Actual Actual Type of Period of Executed Guarante
Guaranteed party
date of guarantee occurrence date guarantee guarantee guarantee or not e for a
30
2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd.
relevant (date of amount related
announcem agreement) party or
ent on the not
guarantee
amount
Total actual occurred
Total external guarantee line
amount of external
approved during the reporting 0 0
guarantee during the
period (A1)
reporting period (A2)
Total external guarantee line that Total actual external
has been approved at the end of the 0 guarantee balance at the end 0
reporting period (A3) of the reporting period (A4)
Guarantees provided by the Company for its subsidiaries
Disclosure
date of Guarante
Actual
relevant Actual e for a
Amount for occurrence date Type of Period of Executed
Guaranteed party announcem guarantee related
guarantee (date of guarantee guarantee or not
ent on the amount party or
agreement)
guarantee not
amount
Dongguan
International Trade
Joint liability
Center Changsheng 21 Apr.
44,000 11 Jan. 2013 12,924 guarantee; 3 years No Yes
Real Estate 2012
pledge
Development Co.,
Ltd.
Shenzhen Properties
& Resources 24 Apr. Joint liability
45,000 20 Jun. 2014 14,484 3 years No Yes
Development (Group) 2013 guarantee
Ltd.
Total actual occurred
Total guarantee line approved for
amount of guarantee for the
the subsidiaries during the 15,000 13,647
subsidiaries during the
reporting period (B1)
reporting period (B2)
Total actual guarantee
Total guarantee line that has been
balance for the subsidiaries
approved for the subsidiaries at the 209,000 27,408
at the end of the reporting
end of the reporting period (B3)
period (B4)
Guarantees provided by the subsidiaries for its subsidiaries
Disclosure Amount for Actual Actual Type of Period of Executed Guarante
Guaranteed party
date of guarantee occurrence date guarantee guarantee guarantee or not e for a
31
2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd.
relevant (date of amount related
announcem agreement) party or
ent on the not
guarantee
amount
Total actual occurred
Total guarantee line approved for
amount of guarantee for the
the subsidiaries during the 0 0
subsidiaries during the
reporting period (C1)
reporting period (C2)
Total actual guarantee
Total guarantee line that has been
balance for the subsidiaries
approved for the subsidiaries at the 0 0
at the end of the reporting
end of the reporting period (C3)
period (C4)
Total guarantee amount provided by the Company (total of the above-mentioned three kinds of guarantees)
Total actual occurred
Total guarantee line approved
amount of guarantee during
during the reporting period 15,000 13,647
the reporting period
(A1+B1+C1)
(A2+B2+C2)
Total guarantee line that has been Total actual guarantee
approved at the end of the balance at the end of the
209,000 27,408
reporting period reporting period
(A3+B3+C3) (A4+B4+C4)
Proportion of total guarantee amount (A4+B4+C4) to the net
13.06%
assets of the Company
Of which:
Amount of guarantee for shareholders, actual controller and
0
related parties (D)
Amount of debt guarantee provided for the guaranteed party
whose asset-liability ratio is not less than 70% directly or 12,924
indirectly (E)
Part of the amount of the total guarantee over 50% of net assets
0
(F)
Total amount of the above three guarantees (D+E+F) 12,924
The external security of the Company was of RMB274.08
million, of which: the guarantee that the Company provided for
the subsidiaries was of 129.24 million, the guarantee that the
Explanation on the occurred warranty liability or possible bearing
subsidiaries provided for the parent company was of
joint responsibility of liquidation due to immature guarantee (if
RMB144.87 million and the Company and the subsidiaries did
any)
not provide any guarantee for any company except for the
consolidated statement and up to the period-end, the operation
of the subsidiaries is normal with the loans in the normal state
32
2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd.
that of which the risks are in controllable scope.
Explanation on provision of guarantees for external parties in
N/A
violation of the prescribed procedure (if any)
Explanation on particulars about the guarantees by complex ways
(2) Illegal external guarantee
□ Applicable √ Inapplicable
No such cases in the reporting period.
3. Cash assets management entrustment
(1) Wealth management entrustment
□ Applicable √ Inapplicable
No such cases in the reporting period.
(2) Entrustment loans
□ Applicable √ Inapplicable
No such cases in the reporting period.
4 Other significant contracts
□ Applicable √ Inapplicable
No such cases in the reporting period.
XVIII. Other significant events
□ Applicable √ Inapplicable
No such cases in the reporting period.
XIX. Significant events of subsidiaries
□ Applicable √ Inapplicable
XX. Social responsibilities
√ Applicable □ Inapplicable
I. Actively help and care those with difficulties
The Party Committee of Shenzhen Properties & Resources Development (Group) Ltd. carried out the 10th donation themed “Together
with State-owned Enterprises to Help and Care the Needed”, namely, “Care for Sanitation Workers”. There were 1112 Party
members and staff present and raised 24310.50 of funds in total. The Committee decided to transfer 5,000 of the donation to the
33
2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd.
account of Shenzhen Project Care Foundation for sanitation workers, and the other to “Help Poverty Fund” of the Group for helping
staff with difficulties only. SX Company under the Group also distributed 23,000 from its Driver Subsidies to help the disabled
drivers due to traffic accidents. Shenzhen International Trade Center Car Industry Co., Ltd. under the Group distributed 36,000 from
its Driver Subsidies and Labor Union to help the drivers with serious diseases and families of drivers lost due to diseases. During
holidays, the Group visited 7 staff with difficulties, 6 suffering from critical diseases including cancer and uremia. Besides, Shenzhen
International Trade Center Car Industry Co., Ltd. and SX Company also visited 910 and 270 taxi drivers respectively. SX Company
even took special care for 4 taxi drivers with difficulties.
II. Vigorously be engaged in public welfare
(I) Passionately carry out blood donation
International Trade Center Management Office and Fumin Xincun Management Office of International Trade Center Property
Management Co., Ltd. under the Group, together with Huangcheng Property Company and Shenzhen International Trade Center Car
Industry Co., Ltd. carried out 5 times of blood donation by Party members, their staff, taxi drivers and community residents through
various themes including Party Member Plan and Memorial for the Chinese People’s War of Resistance against Japanese Aggression
throughout the year, with 213 successfully donating 75,700ml blood in total.
(II) Provide free ride service for patients around hospitals and students for National College Entrance Examination
1. On 5 Mar., Shenzhen International Trade Center Car Industry Co., Ltd. launched a series of activities named “Learn from Lei Feng
to Show Your Love”. Its Caring Driver Team provided free ride for patients and their families around Shenzhen First People’s
Hospital and The University of Hong Kong – Shenzhen Hospital, reaching more than 200 in that day.
2. On 7 and 8 Jun., the Caring Driver Team of Shenzhen International Trade Center Car Industry Co., Ltd. and SX Company
respectively assigned 60 and 25 cars to offer free ride for more than 300 students attending National College Entrance Examination
in Shenzhen No.2 Experimental School and Shenzhen Hongling Middle School.
(III) Energetically organize volunteers to offer handy service for the public
1. The Group energetically organized volunteers to offer handy services, including providing information, guidance and check, at
Luohu Coach Station and Futian Coach Station on Spring Festival, Tomb-sweeping Day and Labor’s Day.
2. The Group also organized volunteers to provide services, like guidance and logistics, to attendants in several large-scale activities,
such as the Conference on International Exchange of Professionals and International Maker Week.
(IX) Volunteer in environmental protection
The Group organized all staff to launch a voluntary donation of the used clothing titled “Green Pioneer”. In this activity, the
volunteers sorted out and packed such clothing over 2200 pieces that were all donated to environmental protection organ for donation
and recycling.
Does the listed company or its subsidiaries belong to the heavily polluting industries stipulated by the environmental protection
authorities of the country?
□ Yes √ No □ Inapplicable
XXI. Corporation bonds
Whether existing corporation bonds public issued and listed in Stock Exchange and maturity or maturity but not fully paid on the
approval report date of annual report
No
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2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd.
Section VI. Share Changes & Particulars about the Shareholders
I. Changes in shares
1. Changes in shares
Unit: share
Before the change Increase/decrease (+, -) After the change
Capitaliza
New tion of
Number Proportio Bonus Number Proportio
shares public Other Subtotal
of shares n shares of shares n
issued reserve
fund
Reasons for changes in shares
□ Applicable √ Inapplicable
Approval of share changes
□ Applicable √ Inapplicable
Transfer of share ownership
□ Applicable √ Inapplicable
Effects of changes in shares on the basic EPS, diluted EPS, net assets per share attributable to common shareholders of the Company
and other financial indexes over the last year and the last reporting period
□ Applicable √ Inapplicable
Other contents that the Company considers necessary or is required by the securities regulatory authorities to disclose
□ Applicable √ Inapplicable
2. Changes in restricted shares
□ Applicable √ Inapplicable
II. Issuance and listing of securities
1. Issuance of securities (excluding preferred stock) in reporting period
□ Applicable √ Inapplicable
2. Explanation on changes in share capital & the structure of shareholders, the structure of assets and
liabilities
□ Applicable √ Inapplicable
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2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd.
3. Existent shares held by internal staffs of the Company
□ Applicable √ Inapplicable
III. Particulars about the shareholders and actual controller
1. Total number of shareholders and their shareholding
Unit: share
Total number of
preferred
stockholder with
Total number of Total number of
vote right
Total number shareholders on preferred
restored on the
of shareholders the 30th trading stockholder with
38,372 43,573 0 30th trading day 0
at the reporting day before the vote right restored
before the
period disclosure date of (if any) (see notes
disclosure date of
the annual report 8)
the annual report
(if any) (see
notes 8)
Shareholding of shareholders holding more than 5% shares
Number Increase Number Number Pledged or frozen shares
of and of shares of shares
Holding sharehold decrease held held not
Name of Nature of
percentag ing at the of shares subject to subject to
shareholder shareholders Status of shares Amount
e end of the during trading trading
reporting reporting moratoriu moratoriu
period period m m
Shenzhen
Construction
State-owned 323,796,3 293,997,3 29,798,95
Investment 54.33%
corporation 24 70 4
Holdings
Corporation
Shenzhen
Investment State-owned 56,582,57 56,582,57
9.49%
Management corporation 3 3
Corporation
Shenzhen
Duty-Free Domestic
Commodity non-state-owned 0.29% 1,730,300 1,730,300
Enterprises Co., corporation
Ltd.
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2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd.
Domestic
Zhou Yuling 0.26% 1,589,398
individual
Domestic
Zhang Jiao 0.25% 1,436,600
individual
Domestic
Mai Furong 0.23% 1,356,200
individual
Overseas
Yang Yaochu 0.20% 1,115,460
individual
Domestic
Chen Liying 0.18% 1,076,051
individual
Domestic
Wei Chunling 0.15% 924,000
individual
Domestic
Huang Qianwen 0.15% 900,000
individual
Explanation on associated relationship The first and second principal shareholders of the Company are managed by Shenzhen
or/and persons acting in concert Investment Holding Corporation, the actual controlling shareholder of the Company. And
among the above-mentioned the Company does not know whether there are related parties or acting-in-concert parties
shareholders: among the other 8 shareholders.
Particulars about shares held by the top ten non-restricted share holders
Number of non-restricted shares held at the Type of shares
Name of shareholder
period-end Type of shares Number
Shenzhen Construction Investment RMB ordinary
29,798,954 29,798,954
Holdings Corporation shares
RMB ordinary
Zhou Yuling 1,589,398 1,589,398
shares
RMB ordinary
Zhang Jiao 1,436,600 1,436,600
shares
Domestically
Mai Furong 1,356,200 listed foreign 1,356,200
shares
Domestically
Yang Yaochu 1,115,460 listed foreign 1,115,460
shares
Domestically
Chen Liying 1,076,051 listed foreign 1,076,051
shares
RMB ordinary
Wei Chunling 924,000 924,000
shares
Huang Qianwen 900,000 RMB ordinary 900,000
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2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd.
shares
Domestically
Cao Yifan 821,811 listed foreign 821,811
shares
BEIJING FENGDAN INVESTMENT RMB ordinary
720,000 720,000
CO., LTD. shares
Explanation on associated relationship
or/and persons acting in concert The first principal shareholder of the Company is managed by Shenzhen Investment
among the top ten tradable Holding Corporation, the actual controlling shareholder of the Company. Other than that,
shareholders and between the top ten the Company does not know whether there are related parties or acting-in-concert parties
tradable shareholders and the top ten among the other 9 shareholders.
shareholders
Did any of the top 10 common shareholder or the top 10 non-restricted common shareholders of the Company conduct any
promissory repo during the reporting period?
□ Yea √ No
No such cases in the reporting period.
2. Particulars about the controlling shareholder
Nature of controlling shareholder: local state-owned holding
Type of controlling shareholder: corporation
Name of controlling Legal representative
Date of establishment Organization code Business scope
shareholder / company principal
To execute the investment,
operating and management
of the state-owned equities
of the wholly-owned,
controlling and
stock-participating
enterprises through the
methods such as the
restructuring integration,
Shenzhen Investment
Xiong Peijin 13 Oct. 2004 914403007675664218 capital operation and assets
Holdings Corporation
disposal; to engage in the
property development and
operation business within
the scale of legally acquire
the land use right; to
execute the policy-based
and strategic investment
according to the
requirements of the
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2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd.
SASAC; to provide the
guarantee of the municipal
state-owned enterprises;
other business developed
with the authority from the
Municipal State-owned
Assets Supervision and
Administration
Commission.
Major wholly-owned or controlled enterprises: 1. Guosen Securities Co., Ltd. 2. Shenzhen Century
Science and Technology Investment Co., Ltd. (SIHC) 3. Shenzhen Urban Construction Investment
& Development (Group) Co., Ltd 4. Shenzhen Special Economic Zone Real Estate & Propertiest
(Group) Co., Ltd 5. Shenzhen High-Tech Investment & Guaranty Co., Ltd. (HTI) 6. Shenzhen
Properties & Resources Development (Group) Ltd. (SZPRD) 7. Shenzhen Tongchan Group Co.,
Ltd. 8. Shenzhen Small & Medium Enterprises Credit Financing Guarantee Group Co., Ltd.
(SZCGC) 9. Shenzhen Shenfubao (Group) Co., Ltd. 10. Shenzhen Yue Tong Construction
Engineering Co., Ltd. 11. Shenzhen Textile (Holdings) Co., Ltd. 12. Shenzhen Jian (Group) Co.,
Ltd. 13. Shenzhen Shentou Education Co., Ltd. 14. Shenzhen Investment Holdings Co., Ltd. 15.
Shenzhen General Institute of Architectural Design And Research Co., Ltd. (SADI) 16. Shenzhen
Convention & Exhibition Center Management Co., Ltd. (SZCEC) 17. China Academy of Science &
Technology Development (AST) 18. Shenzhen Silver Lake Resort Hotel Limited 19. Shenzhen
International Tendering Co., Ltd. 20. Shenzhen Institute of Building Research Co., Ltd. 21.
Shenzhen Shentou Property Management Ltd. 22. Shenzhen Information Pipeline Co., Ltd. 23.
Shenzhen Environmental Engineering Science and Technology Center (EETC) 24. The Orchid
Shareholdings of the
Conservation & Research Center of Shenzhen 25. Shenzhen 51emap Information Co., Ltd. 26.
controlling shareholders in
Shenzhen Foreign Trade and Economic Investment Co., Ltd. 27. Shenzhen Yunhai Villa Hotel
other listed companies at
Management Ltd. 28. Shenzhen Investment Holdings Co., Ltd Preschool Management Center 29.
home and abroad in the
Li Yuan Hotel Shenzhen 30. SZ Youth 31. Shenzhen Mangrove 32. Shenzhen Port Management
reporting period
Service Center 33. Shenzhen Transportation Service Center 34. Shenzhen Comprehensive
Transportation Design Institute 35. Shenzhen Highway Traffic Engineering Inspection & Test
Center 36. Shenzhen Cantonese Opera Troupe 37. Shenzhen Grand Theater 38. Shenzhen Concert
Hall 40. Shenzhen Road & Bridge Construction Group Co., Ltd. 41. Wuzhou Guest House
Shenzhen 42. Shenzhen Sports Center Operating Co., Ltd. 43. Shenzhen Sports Fashion Magazine
44. Special Zone Economy 45. Special Zone Literature 46. Shenzhen Talent Exchange Service
Center 47. Shenzhen Municipal People's Congress Cadre Training Center 48. Shenzhen Justice
Training Center 49. PPSZ Investigative Techniques Training Base 50. Shenzhen Water Resources
Planning & Design Institute 51. Shenzhen Real Estate Management Training Center 52. Housing &
Real Estate 53. Shenzhen Shanshui Hotel 54. Shenzhen Urban Transport Planning Center 55.
Shenzhen Hazardous Waste Treatment Station 56. Shenzhen Guesthouse 57. Manger 58. China
Opening Journal 59. Shenzhen Local Taxation Bureau Dongpeng Printing Plant 60. Shenzhen
Foreign Economy & Trade Service Center (FETSC) 61. IT Times 62. Women Magazine 63.
Shenzhen Women & Children Development Center 64. Housing and Construction Bureau of
Shenzhen Municipality Training Center
Change of the controlling shareholder in the reporting period
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2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd.
□ Applicable √ Inapplicable
No such cases in the reporting period.
3. Particulars about the actual controller
Nature of actual controller: local state-owned assets management institutions
Type of actual controller: corporation
Legal
representative / Date of
Name of actual controller Organization code Business scope
company establishment
principal
(I) Implementing and practicing
state, provincial and municipal
laws and regulations related to
management on state-owned
assets, drafting local laws,
regulations, and policies about
management on state-owned
assets, and organizing
implementation activities upon
approvals. Intending to draft
supervision systems and
methods about operational
state-owned assets, and
organizing implementation
activities.
Shenzhen Municipal
(II) On the basis of authorization
State-owned Assets Supervision Gao Zimin N/A
from municipal government,
and Administration Commission
fulfilling duties of investors
according to laws and
regulations, and protecting the
rights and interests of investors
for state-owned assets according
to laws
(III) Taking charge of
Party-building work for
enterprises in its supervision and
organs entrusted
(IV) Undertaking the
supervision over state-owned
assets of municipal enterprises,
strengthening management on
state-owned assets, further
40
2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd.
perfecting the management
mechanism for state-owned
assets with the unification of
power, obligation, and duties, as
well as the combination of
managing assets, people, and
affairs
(V) Being responsible for
hedging and appreciation of the
value of state-owned assets of
enterprises in its supervision,
establishing and perfecting the
index system for hedging and
appreciation of the value of
state-owned assets, setting out
assessment standards,
supervising on hedging and
appreciation of the value of
state-owned assets of enterprises
in its supervision by statistics,
audit, and check, and urging
enterprises in its supervision to
fulfill social duties
(VI) In charge of researching
and preparing the general
planning for transformation and
development of state-owned
enterprise in its supervision,
guiding and boosting
transformation and
re-organization of state-owned
enterprises, prompting the
construction of modern
enterprise system, carrying
forward operation of
state-owned capital, pushing the
strategic adjustment on
state-owned economy layout and
structure, and making
state-owned capital play the role
in significant industries and key
fields including national
security, national economy
lifeline, etc.
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2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd.
(VII) Directing and propelling
enterprises in its supervision to
perfect company governance
structure, intensifying
construction of Board and
Supervision Committees of
enterprises in its supervision,
and forming the governance
mechanism with specific duties,
coordinating operation, and
effective counterbalance
(VIII) Assuming the
management work of income
distribution for enterprises in its
supervision, and standardizing
the income distribution and
position-related consumption
over people in charge of
enterprises in its supervision
(IX) In line with rules of
municipal Party committee,
appointing and dismissing,
appraising, as well as, in
accordance with business
performance, rewarding and
punishing people in charge of
enterprises in its supervision by
applying legal procedures,
establishing the mechanism of
selecting and choosing
candidates meeting the
requirements of socialist market
economy system and modern
enterprise system, and perfecting
the incentive and control system
for operators
(X) Being responsible for
appointing or recommending
board directors, supervisors,
CFOs to enterprises in its
supervision, and auditing on
economic duties of people in
charge of enterprises in its
supervision according to rules
42
2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd.
about management authorization
to people in charge of
enterprises
(XI) In charge of preparing the
draft of budgets and final
accounts of annual state-owned
capital of enterprises in its
supervision, including it to the
government budget system,
organizing the execution upon
approvals, and collecting
earnings of state-owned capital
handed in by enterprises in its
supervision
(XII) In charge of strategy
research, policy formulation,
and guidance for transformation,
development, and asset
management related to
collectively-owned enterprises
(XIII) Assuming other
assignments assigned by
municipal government and
superior departments
List of the equities of the other
domestic and overseas listed
Listed companies such as the Shenzhen Airport, YTP, Shenzhen Energy, Shenzhen Zhenye,
companies controlled during the
Shenzhen Tagen, Agricultural Products and SDGI.
reporting period by the actual
controller
Change of the actual controller during the reporting period
□ Applicable √ Inapplicable
The actual controller did not change during the reporting period
The ownership and controlling relationship between the actual controller of the Company and the Company is detailed as follows
43
2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd.
The actual controller controlled the Company by entrustment or other assets management methods
□ Applicable √ Inapplicable
4. Other institutional shareholders owning over 10% shares
□ Applicable √ Inapplicable
5. Particulars about restriction of reducing holding-shares of controlling shareholders, actual controller,
restructuring parties and other commitment entities
□ Applicable √ Inapplicable
44
2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd.
Section VII. Preference Shares
□ Applicable √ Inapplicable
No such cases in the reporting period.
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2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd.
Section VIII. Directors, Supervisors, Senior Management Staff &
Employees
I. Changes in shares held by directors, supervisors and senior executives
Amount Amount
Amount
Shares of shares of shares Other
of shares
held at increased decreased increase/d
Office Tenure Ending held at
Name Sex Age Start date the at the at the ecrease
title status date the
year-begi reporting reporting changes
period-en
n (share) period period (shares)
d (share)
(share) (share)
Chen Board 30 Jun.
Current Male 59 0 0 0 0 0
Yugang Chairman 2006
Director, 15 Jul.
Wei Zhi Current Male 59 0 0 0 0 0
GM 2008
Director,
Chairman
Liu 22 Dec.
of the Current Male 58 0 0 0 0 0
Guangxin 2007
Labor
Union
Gong Director, 1 Jun.
Current Male 48 0 0 0 0 0
Sixin CFO 2011
1 Dec.
Wen Li Director Current Female 47 0 0 0 0 0
2007
Guo 30 Jun.
Director Current Male 43 0 0 0 0 0
Liwei 2006
Independ
22 Oct.
Li Jianxin ent Current Male 62 0 0 0 0 0
2014
Director
Independ
Liu 22 Oct.
ent Current Male 54 0 0 0 0 0
Ninghua 2014
Director
Independ
22 Oct.
Zhang Qi ent Current Male 38 0 0 0 0 0
2014
Director
Chairman
Dai 3 Jun.
of the Current Male 54 0 0 0 0 0
Xianhua 2011
Superviso
46
2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd.
ry
Committe
e
Zhang Superviso 22 Oct.
Current Male 41 0 0 0 0 0
Manhua r 2014
Wang Superviso 3 Jun.
Current Female 54 0 0 0 0 0
Xiuyan r 2011
Wang Superviso 3 Jun.
Current Female 46 0 0 0 0 0
Qiuping r 2011
Superviso
r,
Manager
Wang 3 Jun.
of Cost Current Female 41 0 0 0 0 0
Qiuping 2011
Control
Departme
nt
Superviso
Zhang 22 Oct.
r, Audit Current Male 50 0 0 0 0 0
Gejian 2007
Manager
Vice GM,
Person-in
Wang 22 Oct. 8 Dec.
-charge of Current Male 50 0 0 0 0 0
Hangjun 2007 2015
Financial
Affairs
8 Feb.
Li Zipeng Vice GM Current Male 51 0 0 0 0 0
2012
Total -- -- -- -- -- -- 0 0 0 0 0
II. Particulars about changes of Directors, Supervisors and Senior Executives
Name Office title Type Date Reason
Li Zipeng Vice GM Former 8 Dec. 2015 Initiatively resigned
III. Resumes of important personnel
Main working experience of current directors, supervisors and senior management staff
Work experience of current directors, supervisors and senior executives over the recent five years
Members of the Board of Directors:
Mr. Chen Yugang, was born in Sep. 1957, Postgraduate degree, is senior Political Worker. He gains rich
experience in government administrative management and enterprise management over 20 years. He held some
important posts in many municipal departments. He served as GM and Secretary of the CPC in Shenzhen Shenhua
47
2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd.
Group Company. Also, he served as GM and Vice Secretary of the CPC in Shenzhen Xianke Enterprise Group,
and Deputy General Manager of Shenzhen Investment Holdings Co., Ltd. From May 2006, he has served as
Secretary of CPC in the Company. And in June 2006, he was elected as Chairman of the Board of the Company.
Now he acts as Secretary of CPC and Chairman of the Board in the Company.
Mr. Wei Zhi, was born in Nov. 1957, Bachelor Degree, holds the title of interpretation. He gains rich experience
in enterprise management for over 20 years. He ever worked in Shenzhen International Engineering Co., Ltd. as
Deputy Manager of Overseas Department, in Shenzhen Zhongshen Overseas Development Company as Manage
of Labor Affairs Department and Deputy General Manager, in China Shenzhen International Cooperation (Group)
Co., Ltd. in Hong Kong Liyuan Company as Director and General Manager; in Shenzhen Construction Investment
Holdings Corporation as Deputy Manager of Overseas Department, in Shenzhen Construction Investment
Holdings Corporation as Deputy Manager of Contract Department, in Shenzhen Tonge (Group) Co., Ltd. as
Assistant General Manager and Deputy General Manager, in Tonge Real Estates Development Company as
Chairman of the Board and General Manager. Since October 2007, he took the posts of the Vice Secretary of CPC
and Standing Deputy General Manager in the Company. Since 20 Dec. 2007, he held the posts of Director, Vice
Secretary of CPC and GM of the Company. Since 15 Jul. 2008 to present, he acts as Vice Secretary of CPC,
Director and GM of the Company.
Mr. Liu Guangxin, was born in May 1958, College Diploma, is an Economist. He gains experience in enterprise
management over 10 years. Since May 1989, he held a job in the Company as Director of the Office in Properties
Engineering Development Company, General Manager of International Trade Center Industrial Development
Company, General Manager of International Trade Center Food Company, Deputy Director and Director of the
GM Office of the Company, as well as Manager of Operation and Management Department of the Company.
Since October 2007, he took the posts of Vice Secretary of CPC and Secretary of Discipline Inspection Committee
in the Company. Since November 2007, he was appointed as Chairman of the Labor Union of the Company. Now
he acts as Vice Secretary of CPC, Director, Secretary of Discipline Inspection Committee as well as Chairman of
Labor Union in the Company.
Mr. Gong Sixin, was born in Feb. 1968, Master of Economics, Senior Accountant. He has profound experiences
in financial accounting management. He ever took posts of CFO of Shandong Weigao Medical Polymer Company
Limited, of CFO of Shenzhen 3Nod Technology Co., Ltd. as well as CFO of Shenzhen Jiehe Technology Co., Ltd.
Since Sep. 2010, he kept acting as CFO of the Company. Since June 2011, he is acting as director and CFO of the
Company.
Ms. Wen Li, born in Dec. 1969, Postgraduate Degree, Master Degree, is an Economist as well as Engineer. She
gains experience in enterprise management over 10 years. She ever worked in Shenzhen Fantasia Investment
Development as Assistant of Standing Deputy General Manger, Manager of Project Department, as well as
Manager of Market Planning Department. Since July 2005, she worked in Shenzhen Investment Holdings Co., Ltd.
She was ever appointed as Deputy Department Director of Investment Department of Shenzhen Investment
Holdings Co., Ltd. Now she acts as Vice Director of Management Center of Construction Project of Shenzhen
Investment Holdings Co., Ltd., Director of the Company.
Mr. Guo Liwei, was born in Apr. 1973, Postgraduate Degree, is a master of Law. He once successively held the
posts in General Department of Ping An Insurance (Group) Company of China as legal consultant, and Shenzhen
Investment Management Corporation as Business Manager of Legal Affairs Department. Since October 2004, he
worked in Shenzhen Investment Holdings Co., Ltd as Deputy GM of Legal Affairs Department. He now acts as
Manager of the First Enterprise Management Department in Shenzhen Investment Holdings Co., Ltd. and Director
of the Company.
48
2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd.
Independent Directors:
Mr. Li Jianxin, was born in Sep. 1954, University Degree, member of Communist Party of China. He graduated
from Zhongnan University of Economics and Law in 1978; Once held the post in Wuhan Bureau of Statistics;
Engaged in the scientific research in Hubei Academy of Social Sciences, Institute of Economics in 1980; Acted as
Deputy Director of Hubei Academy of Social Sciences， Institute of Agricultural Economics in 1988; Acted as
Standing Deputy Director, Associate Professor and Postgraduate Tutor in 1992; Transferred into Shenzhen
Newrand Securities Investment Consulting Co., Ltd. and acted as Marketing Manager in 1995; Transferred into
Shenzhen Academy of Social Sciences in 1996, and had served successively as Deputy Director, Director,
Associate Professor in Institute of Economics. He acted as Independent Director of Shenzhen Kondarl (Group)
Co., Ltd. from 2001 to 2006; Acted as Independent Director of Shenzhen Tagen Group Co., Ltd. from 2003 to
2009; Acted as Independent Director of Shenzhen Kondarl (Group) Co., Ltd. from 2009 to present. He recently
acted as Chairman and Associate Professor in Shenzhen Academy of Social Sciences, Center of Open Economics,
and the Independent Director of the Company.
Mr. Liu Ninghua, born in Jun. 1962, bachelor’s degree, engineer, communist. He was once the Shenzhen
Investment Banking Vice GM and then GM in China Orient Trust Investment Co., Ltd. And he has been working
in the Law Compliance Department in China Galaxy Securities Co., Ltd. since Aug. 2013.
Mr. Zhang Qi, born in Jan. 1978, graduated from the Accounting Faculty in Zhongnan University of Economics
and Law, professor, doctor, doctoral supervisor, superintendent of a governmental accounting institution, deputy
head of the accounting department, China’s leading talent in accounting honored by the Ministry of Finance,
registered accountant in China, Hubei New Century High Level Engineering Talent (level 2), correspondence
commentator in the National Natural Science Foundation of China, anonymous checker in the Research> Magazine, vice chairman of the Government and NPO Accounting Specialized Committee in the Accounting Society of China, director in the National Budget and Accounting Research Institute of China, consultant expert in the Government Accounting Standards Committee under the Ministry of Finance, deputy head of the accounting department and associate professor in Zhongnan University of Economics and Law from 2009 to 2012, and doctor and doctoral supervisor in that university and superintendent of a governmental accounting institution from 2012 till now. Members of the Supervisory Committee: Mr. Dai Xianhua, was born in April 1962, doctor degree, Party member of CPC. He gains adequate work experience of over 20 years. He worked as a lecturer in School of Business and Economy of Zhongnan University of Economics and Law from 1986 to 1989. He took posts of editor of department of theory and review, assistant director, vice director in Shenzhen Economic Daily from 1992 to 1997; worked in Shenzhen State Assets Administration Committee (hereinafter referred as “Shenzhen SAC”) as Vice Section Chief of Assets Department, and Assets Management Department, Vice Director, investigator of Office, and investigator of Appraisal and Distribution Department from 1997 to 2011. Now he is Chairman of the Supervisory Committee of the Company. Ms. Wang Xiuyan, was born in Aug. 1962, MBA degree, is an accountant. From May 1997 to Sep. 2004, she worked in Shenzhen Investment Management Corporation, once acted as secretary of the Supervisory Committee Office, Business Manager of Audit Department, Director of Women’s Labor Union, Senior Business Manager of Audit Department and Supervision Department; from Oct. 2004 to Dec. 2007, she acted as manager of Supervision and Inspection Department in Shenzhen Investment Holding Co., Ltd.; from Dec. 2007 to present, she is manager of Audit Department (the Supervisory Committee Office) in Shenzhen Investment Holding Co., Ltd. Currently, she is the Deputy Head of the Audit & Risk Management Department (Office of the Supervisory Committee) in Shenzhen Investment Holding Co., Ltd. as well as a supervisor of the Company. 49 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. Mr. Zhang Manhua, born in Feb. 1975, master’s degree, studied and taught in Central South University from 1992 to 2004; Business Manager, Senior Manager in the Investment Center of Konka Group and concurrently worked as the Company Secretary for Shenzhen Jvlong Optoelectronic Co., Ltd. from 2004 to 2010; Vice Investment Manager and Investment Manager in Shenchao Technological Investment Co., Ltd. from 2010 to 2013; and Senior Supervisor in the Enterprise Department I in Shenzhen Investment Holding Co., Ltd. since 2013. Ms. Wang Qiuping, was born in Jan. 1970, Bachelor degree, is a senior economist. Since 1992, she worked for the Company, she ever took post in GM office, Plan and Finance Department and Operation and Management Department for comprehensive operation and management as well as planning and management. Now she is Supervisor, Manager of Development and Management Department of the Company. Mr. Zhang Gejian, was born in September 1975, Bachelor Degree, is an Accountant as well as Auditor. He was engaged in internal auditing work in Audit Department of the Company since July 1997. Now he acts as Supervisor of the Company and concurrently Manager of Audit Department. Senior executives: Mr. Wang Hangjun, was born in Nov. 1966, graduated from Zhongnan University of Economics with a master degree of economy. He is a senior auditor and has over 20 years corporate management experience. He ever took post of Deputy Chief of Audit Bureau of Nanshan District, Shenzhen; of Vice Minister, Minister of Audit Department of Shenzhen Investment and Management Company; of Vice Minister, Minister of Supervision Department of Shenzhen Investment and Management Company; of Minister of Audit and Inspection Department of Shenzhen Investment Holding Co., Ltd. He has been Deputy GM of the Company since Oct. 2007. Mr. Fan Weiping, born in Apr. 1965, graduated from Southwest University of Political Science & Law in 1988, postgraduate degree. He used to work in Shenhua Group successively as the Chief of the Legal Affairs Section in the Supervisory and Audit Department; the Vice Manager and Manager of the Legal Affairs Department; the GM Assistant; and the Chief Legal Adviser. Since Jan. 2009, he has become the Company Secretary and the Chief Legal Adviser for the Company. And he has been a Vice GM, the Company Secretary and the Chief Legal Adviser for the Company since Feb. 2012. Post-holding in shareholder units √ Applicable □ Inapplicable Name of the Position in person holding Receives payment the Beginning date Ending date of any post in any Name of the shareholder unit from the shareholder shareholder of office term office term shareholder unit? unit unit Chief of the Wen Li Shenzhen Investment Holdings Co., Ltd. Enterprise 1 Jul. 2005 Yes Department I Deputy Head of the Property Ownership Guo Liwei Shenzhen Investment Holdings Co., Ltd. 1 Oct. 2004 Yes Management & Legal Affairs Department 50 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. Deputy Head of the Audit & Risk Management Wang Xiuyan Shenzhen Investment Holdings Co., Ltd. 1 Oct. 2004 Yes Department (Office of the Supervisory Committee) Senior Supervisor of Zhang Manhua Shenzhen Investment Holdings Co., Ltd. 1 Mar. 2013 Yes the Enterprise Department I Particulars about employers in other companies √ Applicable □ Inapplicable Whether receiving Name of Posts held in Beginning date Ending date of subsidies and Name of other companies employers other of office term office term remuneration in companies other companies Research Li Jianxin Shenzhen Academy of Social Sciences 1 Jan. 1996 Yes scholar Law Liu Ninghua China Galaxy Securities Co., Ltd. Compliance 1 Aug. 2013 Yes Department Professor, Zhongnan University of Economics and Zhang Qi doctoral 1 Jan. 2012 Yes Law supervisor Particulars about the Company's current directors, supervisors and senior executives ‘punishments from Securities Regulatory Institution of recent three years in reporting period □ Applicable √ Inapplicable IV. Remuneration for directors, supervisors and senior management Decision-making procedure, determining basis and actual payment for the remuneration of directors, supervisors and senior management During the reporting period, the board and the management of the Company signed statement of operation objectives responsibility for 2015, conducted appraisal system integrating operation indicators, classification indicators with management objectives. After the end of the reporting period, assessment was implemented by the board. Remuneration of senior executives, according to “Management Method of Annual salary System of Directors, Supervisors and Senior Executives”, adopted annual salary system, and need to be implemented after assessment of the board. Remuneration of directors, supervisors, senior executives during the reporting period Unit: RMB Ten Thousand Yuan 51 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. Whether gained Total before-tax remuneration remuneration Name Position Gender Age Current/former from the related gained from the parties of the Company Company Chairman of the Chen Yugang Male 59 Current 76.28 Board Director, General Wei Zhi Male 59 Current 73.67 Manager Director, Liu Guangxin Chairman of Male 58 Current 70.8 Labor Union Gong Sixin Director, CFO Male 48 Current 41.88 Wen Li Director Female 47 Current 0 Yes Guo Liwei Director Male 43 Current 0 Yes Independent Lian Jianxin Male 62 Current 8 Director Independent Liu Ninghua Male 54 Current 8 director Independent Zhang Qi Male 38 Current 8 director Chairman of the Dai Xianhua Supervisory Male 54 Current 42.88 Committee Zhang Manhua Supervisor Male 54 Current 0 Yes Wang Xiuyan Supervisor Female 41 Current 0 Yes Supervisor, Manager of Wang Qiuping Development Female 46 Current 25.72 Management Department Supervisor, Manager of Cost Zhang Gejian Male 41 Current 36.55 Control Department Vice GM, Financial Wang Hangjun Male 50 Current 70.8 Employee in Charge 52 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. Li Zipeng Vice GM Male 50 Former 65.23 Vice GM, Fan Weiping Company Male 51 Current 70.8 Secretary Total -- -- -- -- 598.61 -- Particulars about equity incentive granted to directors, supervisors, senior executives during the reporting period □ Applicable √ Inapplicable V. About employees 1. Number of the employees, component difference and educational background Number of the serving employees of the parent company 69 (person) Number of the serving employees of the major subsidiaries 2,750 (person) Total number of the serving employees (person) 2,819 Total number of the employees receiving the salary of the 2,819 reporting period (person) Number of the left and retired employees that the parent company and the major subsidiaries should undertake the 269 expenses (person) Component difference Category Number (person) Production personnel 1,864 Sales personnel 187 Technical personnel 470 Financial personnel 115 Administrative personnel 183 Total 2,819 Educational background Category Number (person) Doctor 2 Master 37 Bachelor 261 College 393 Technical secondary school 738 53 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. High school and below 1,388 Total 2,819 2. Remuneration policy As required by corporate development strategy, based on actual situation to insist the internal industrialization and the marketization among the industry of the remuneration principles of the Group and our Company adopts a differentiated management on different industries to satisfy market demands by appropriately increasing the remuneration distance to better attract and retain talents. In HQ and real estate enterprises, position type management idea is introduced, with all positions divided into Leader Group, Management Group, Professional Group, Business Group and Service Group at different remuneration levels. Meanwhile, the remuneration for professional technicians and that for medium-level management are kept overlapped. In this way, remuneration and career development are provided at the same time. To some extent, the remuneration is a little bit favorable for professionals in real estate development industry. With regard to other enterprises under the Company group, market reference is applied, but the key is to appropriately adjust remuneration for key positions or some positions with lower remuneration than market level. 3. Training plan In 2016, as required by the Company’s business development and based on training investigation, and in order to enrich employees’ knowledge, business ability and skills, enhance team spirit, satisfy the Company’s sustainable development demand, and achieve a mutual development of the Company and employees, the Company will enhance training on real estate professional course, and overall qualities and business knowledge, specifically including the courses such as the whole process chessboard resuming of the real estate projects and construction of the operating and developing mode, construction and application of the structure of thinking, outdoor development team and the employee ability quality promotion. Such training will cover internal and external training as well, with trainees covering all employees and training time running through the whole year. 4. Labor outsourcing □ Applicable √ Inapplicable 54 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. Section IX. Corporate Governance I. Particulars about corporate governance During the reporting period, in accordance with the requirement of the Company Law, Securities Law, Code of Corporate Governance for Listed Companies in China and Stock Listing Rules of Shenzhen Stock Exchange as well as relevant laws and statutes of CSRC, the Company continuously regulated and perfected corporate governance structure, established and perfected internal management and control system and investigated in management activities of the Company, which promoted the Company’s standard management level. As to the end of the reporting period, the internal control system of the Company is complete, accomplished and defined that in accordance with Company Law, Articles of Association and other laws and regulations as well as requirements of regulatory documents. The convene of Shareholders’ General Meeting, the Board of Directors and Supervisory Committee are strictly in accordance with relevant rules and regulations, all directors and supervisors earnestly and diligently commit their responsibilities. Corporate structure of the Company is complete and the operation of the Company is standardized. With the goal of constructing a standard management structure, the Company has established related regulations on Shareholders’ Meeting, Board of Directors and Board of Supervisors, to ensure effective rights to decision-making, execution and supervision respectively. The Shareholders’ Meeting shall have the highest right to review and make decision on major issues, including the Company’s business idea, investment plan, major trading items, capital changes, appointment and dismissal of directors and supervisors, within the legal scope as defined by laws, regulations and rules like the Company Law and Articles of Corporation. The Company has established and strictly followed various regulations, including Rules of Procedure of Shareholders’ Meeting, to ensure all shareholders’ rights. The Board of Directors has the right to business decision-making, responsible for the establishment and effective execution of the Company’s internal control as well. Besides, it further sets up four special committees, namely, Strategic Development & Investment Committee, Remuneration and Assessment Committee, Audit Committee and Nomination Committee, to improve its operating efficiency based on corresponding work rules. The Board of Supervisors acts as a supervising organ for the Company. It checks the Company’s finance, and supervises all jobs of the Company’s directors and senior management. Also, it is responsible for and reports to the Shareholders’ Meeting. The business management have the right to execution. They are appointed by the Board of Directors, and responsible for daily running of business management and internal control. Based on the principle of science, simplicity and efficiency, the Company has established such functional departments as Office for Board of Directors, General Manager’s Office, Cost Control Department, Planning Design Department, Human Resources Department, Development Management Department, Financial Management Department, Audit Department (Office for Board of Supervisors), Law and Risk Control Department, Lease Center, and Party Work Office. These departments perform their specific functions and carry out work in accordance with regulations on internal control, to ensure the Company’s healthy running. The Company always pays attention to standardize the management for inside information, such as promulgating the Management Rules for Insiders, making clear about the contents of inside information, making the scope of insiders and accountability system for inside dealings. After reporting and submitting non-published information to the controlling shareholders, the Company all registered the relevant information of insiders and then submitted to securities regulatory authorities, as well as strictly controlled the transmission scope of inside information, further strengthened the security work of inside information. Upon Self-inspection, during the reporting period, there were 55 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. no particulars about insiders took advantages of inside information to purchase or sell shares of the Company before the disclosure of major sensitive information that shall have an impact on the share price of the Company, nor any investigation and punishment as well as rectification from the regulatory authority. From now on, the Company will continuously strengthen to learn relevant rules and laws, scrupulously execute the Management Rules for Insider Information and Insiders, standardize the corporate governance of the Company, do well the work of preventing inside dealings. Whether it exists any difference between the corporate governance and the Company Law and relevant rules of CSRC or not? □ Yes √ No There is no difference between the corporate governance and the Company Law and relevant rules of CSRC. II. Particulars about the Company’s separation from the controlling shareholder in respect of business, personnel, assets, organization and financial affairs The Company was independent from the controlling shareholder in business, personnel, assets, organization and finance to realize that independent personnel, independent finance, complete assets, independent organization and independent business. 1. In aspect of business: The Company was independent from the controlling shareholder with independent and complete business and independent operation capability. There was no business which was same or competitive with the controlling shareholder. 2. In aspect of personnel: The Company was complete independent from the controlling shareholder in terms of labor and personnel, management on remuneration. All Senior Executives drew the remuneration from the Company, and none held a post concurrently in shareholders’ company. Personnel of the Company are independent, all ones signed labor contract with the Company. The Company was independent from the shareholders or other related parties in personnel management, social security, salary etc. 3. In aspect of asset: The Company’s assets were complete and independent, the property relationship was clear. There was no capital occupation by controlling shareholder, and assets of the Company were completely independent from controlling shareholder. 4. In aspect of organization: The Company’s organization was independent, and the Company implemented rules and regulations as well as responsibilities for all departments, formed independent responsibilities and rights, scientific and rational internal control system. Independence of the Company on operation and management is free from impact from controlling shareholders and other subordinated units. There were no controlling shareholders intervene organization of the Company. 5. In aspect of finance: The Company’s finance was independent with independent finance department. The Company established the independent finance settling system and financial management system, had its own finance account and paid the tax in line with laws, run finance decision-making independently. The controlling shareholder of the Company performed normatively with no conduct that intervened with the operation decision-making and operation activities directly or indirectly over the shareholders’ general meeting, however, the controlling shareholder could influence on the significant decision-making through the shares holding. 56 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. III. Horizontal competition □ Applicable √ Inapplicable IV. Particulars about the annual shareholders’ general meeting and special shareholders’ general meetings held during the reporting period 1. Particulars about the shareholders’ general meeting in reporting period Proportion of Index to the Session Type investors' Convening date Disclosure date disclosed participation Announcement on the Resolution of the 2015-13-2014 st 2015 1 Annual Annual General Annual General 63.84% 30 Apr. 2015 1 May 2015 General Meeting Meeting Meeting, www.cninfo.com.cn, Securities News, Ta Kung Pao 2. Special Shareholders’ General Meeting applied by the preferred stockholder with restitution of voting right □ Applicable √ Inapplicable V. Performance of the Independent Directors 1. Particulars about the independent directors attending the board sessions and the shareholders’ general meetings Particulars about the independent directors attending the board sessions Sessions required Attendance by Non-attendance to attend during Attendance in way of Entrusted in person for two Independent director Absence rate the reporting person telecommunicati presence (times) consecutive period on times Li Jianxin 6 1 5 0 0 No Liu Ninghua 6 1 5 0 0 No Zhang Qi 6 1 5 0 0 No General meetings sat in on by 1 independent directors Note to non-attendance in person for two consecutive times 57 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. 2. Particulars about independent directors proposing objection on relevant events Whether independent directors propose objection on relevant events or not? □ Yes √ No During the reporting period, no independent directors proposed any objection on relevant events of the Company. 3. Other explanations about the duty performance of independent directors Whether advices to the Company from independent directors were adopted or not √ Yes □ No Explanation on the advices of independent directors for the Company being adopted or not adopted With attitude of credibility and diligence to the Company and all shareholders, independent directors was diligent and responsible, reviewed all resolutions, and in line with their professional knowledge and capability, made independent, objective and fair judgment away from influence from the Company and principal shareholders of the Company. Also, independent directors expressed independent, objective and fair opinion on relevant events, which made practical efforts to safeguard interests of the Company and minority shareholders. VI. Duty performance of special committee affiliated to the Board during the reporting period The four special committees under the board—the Strategic Development and Investment Committee, the Nomination Committee, the Remuneration and Appraisal Committee and the Audit Committee—according to “Governance Principle of listed Company”, “Articles of Association”, “and Rules of Procedure of the Board of Directors” and implementation rules of special committee, earnestly performed their duties. 1. Duty performance of strategic development and investment committee During the reporting period, strategic development and investment committee paid attention to authorization of the board to project development and financing, kept good contact with the management and had a good knowledge of matters within their power. 2. Duty performance of remuneration and assessment committee During the reporting period, remuneration and assessment committee earnestly performed their duties, kept good contact with the management and conducted several communication with the management for relevant matters. 3. Duty performance of audit committee During the reporting period, audit committee held on-the-spot working conference twice, listened to report of Union Power CPAs on audit work, deliberate preliminary audit opinion issued by 58 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. Union Power CPAs and proposed their opinions about 2014 Financial Statement of the Company. VII. Particulars about the work of the supervisory committee Whether there existed risks in the Company according to supervision of the supervisory committee during the reporting period □ Yes √ No The supervisory committee raised no objection to matters under the supervision during the reporting period. VIII. Assessment and incentive mechanisms for senior executives Within the reporting period, the annual operating target plan 2015 was went forth to the management team by the Board of Directors, of which the Company adopted appraisal method by the score combination of operation index, category index and administrative goal. At the end of the fiscal year, the Board of Directors examined the final score. For senior executives of the Company, the Company adopted annual salary system in accordance with Management Measure for Annual Salary System of Directors, Supervisors and Senior Executives, which shall be implemented after the Board of Directors completing fiscal examination. IX. Internal Control 1. Particulars about significant defects found in the internal control during reporting period □ Yes √ No 2. Self-appraisal report on internal control Disclosure date of the Self-appraisal 31 Mar. 2016 Report on Internal Control Disclosure index of the Self-appraisal http://www.cninfo.com.cn Report on Internal Control The proportion of total assets included in evaluation scope entities in the 99.00% Company's total assets of the consolidated financial statements The proportion of operation revenue included in evaluation scope entities in 100.00% the Company's operation revenue of the consolidated financial statements Defect judging standards 59 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. Category Financial Report Non-Financial Report If the following situation occurred, could Indications of the great defect of the be recognized as the great defect and financial report were including: (1) to other situation should be recognized as execute the misstatement correction of the the significant defect or the general great defect occurred on the reported and defect respectively according to the disclosed financial report by the Company; influenced degree: (1) the (2) the audit institution discovered the decision-making of the significant events current financial report had great defect of the Company lacked of the collective while the internal control of the Company democratic decision-making process or didn’t found out during the operating the collective democratic process; (3) the supervision of the decision-making process was not Company’s Audit and Risk Committee and normative; (2) the decision-making of the internal audit department on the internal the Company was not scientific or the control was invalid; (4) there was significant decision-making occurred serious corrupt practice among the Directors, mistakes; (3) the operating or the Supervisors or Senior Management; decision-making seriously violated the indications of the significant defect of the national laws and regulations; (4) the financial report were including: (1) didn’t Qualitative criteria Company occurred serious abide by the universally acknowledged environmental pollution or other events accounting standard to choose and apply the seriously effected the social public accounting policies; (2) had not built up the interests; (5) the media frequently anti-fraud process and the control measures; occurred the significant negative news; (3) had not built up the corresponding (6) lacked of the important business control mechanism or had not executed the management system or the corresponding compensating control for the systematicness of the system operation accounting treatment which was was invalid; (7) the constantly outflow of unconventional or with special transaction; the key management personnel and (4) the control during the process of the technical personnel of the Company; (8) financial report at the period-end existed one the great or significant internal control or multiple defects that could not guarantee defect of the Company could not be the compile of the financial report reach the timely modified; (9) the Company goal of being real and complete. General constantly or plentifully occurred the defect: refers to the other control defect significant internal control defects; (10) except for the above great defect and other situation may lead the Company to significant defect. seriously deviate from the control target. Great defect: potential misstatement of the The Company compared the magnitude operating income≥1 % of the operating of the direct property losses amount with income of the consolidated statements of the the net assets amount of the last fiscal Quantitative criteria current year, potential misstatement of the year to confirm the quantitative criteria total assets amount≥0.25% of the total of the internal control as the follows: amount of the consolidated statements of the great defect: amount of the direct current year; significant defect: 0.75% of the property losses≥0.5% of the net assets 60 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. operating income of the consolidated amount of the last fiscal year; significant statements of the current defect: 0.4% of the net assets amount of year≤misstatement<1 % of the operating the last fiscal year≤losses amount<0.5% income of the consolidated statements of the of the net assets amount of the last fiscal current year; 0.2% of the total amount of the year; general defect: losses consolidated statements of the current amount<0.4% of the net assets amount of year≤misstatement<0.25 of the total amount the last fiscal year of the consolidated statements of the current year; general defect: misstatement of the operating income<0.75% of the operating income of the consolidated statements of the current year, misstatement of the total assets amount<0.2 of the total assets amount of the consolidated statements of the current year Number of significant defects of financial 0 report (Piece) Number of significant defects of non- 0 financial report (Piece) Number of important defects of financial 0 report (Piece) Number of important defects of 0 non-financial report (Piece) X. Audit report on internal control √ Applicable □ Inapplicable Audit opinion paragraphs in the Audit Report on Internal Control We believe that, Shenzhen Properties & Resources Development (Group) Ltd. maintained efficient internal control of financial reports in all significant aspects according to “Basic Standards of Corporate Internal Control” and relevant regulations. Particulars about Audit Report on Disclosure Internal Control Disclosure date of the Audit Report 31 Mar. 2016 on Internal Control Disclosure index of the Audit http://www.cninfo.com.cn Report on Internal Control Type of Audit Report on Internal Unqualified auditor’s report Control Whether there is significant defect No in non-financial report Whether the CPAs firm issues an Audit Report on Internal Control with non-standard opinion or not? □ Yes √ No 61 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. Whether the Audit Report on Internal Control from the CPAs firm is in consistent with the Self-appraisal Report from the Board or not? √ Yes □ No Section X. Financial Report I. Auditor’s Report Type of audit opinions Standard unqualified audit opinion Signing date of audit report 30 Mar. 2016 Name of audit institution Union Power Certified Public Accountants Co., Ltd. Document No. of the auditor’s report ZHSZ (2016) No. 010878 Name of CPA Wang Yu, Fan Guiming Text of the auditor’s report TO THE SHAREHOLDERS OF SHENZHEN PROPERTIES & RESOURCES DEVELOPMENT (GROUP) LTD.： We have audited the accompanying financial statements of Shenzhen Properties & Resources Development (Group) Ltd. (hereinafter referred to as “Company” or “the Company”), which comprise the balance sheet and the consolidated balance sheet as at 31 Dec. 2015, the income statement and the consolidated income statement, the statement of change in equity and the consolidated statement of change in equity, the cash flow statement and the consolidated cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory notes. I. Management's responsibility for the financial statements The management of the Company is responsible for the preparation of these financial statements and fair presentation. These responsibilities include: (1) preparing financial statements according to the Accounting Standards for Business Enterprises and make them a fair presentation; and (2) designing, implementing and maintaining internal control relevant to the preparation of financial statements that are free from material misstatement, whether due to fraud or error. II. Auditor's responsibility Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audit in accordance with China’s Independent Auditing Standards. Those Standards require that we comply with relevant ethical requirements and plan and perform the audit to obtain reasonable assurance as to whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The audit procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit 62 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting principles used and the reasonableness of accounting estimates made by the management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidences we have obtained are sufficient and effective, providing a reasonable basis for our opinion. III. Opinion In our opinion, the financial statements comply with Accounting Standards for Business Enterprises in all material aspects, and present fairly the consolidated and the Company’s financial positions as of 31 Dec. 2015 and their operating results and cash flows for the year then ended. II. Financial statements Monetary unit of notes to financial statements: RMB Yuan 1. Consolidated balance sheet Prepared by Shenzhen Properties & Resources Development (Group) Ltd. 31 Dec. 2015 Unit: RMB Yuan Item 31 Dec. 2015 31 Dec. 2014 Current Assets: Monetary funds 945,739,975.77 808,963,376.68 Settlement reserves Intra-group lendings Financial assets measured at fair value of which changes are recorded in current profits and losses Derivative financial assets Notes receivable Accounts receivable 38,772,146.41 26,585,132.12 Accounts paid in advance 28,415,733.43 25,989,832.24 Premiums receivable Reinsurance premiums receivable Receivable reinsurance contract reserves Interest receivable Dividend receivable Other accounts receivable 11,619,503.47 6,638,425.25 Financial assets purchased under agreements to resell 63 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. Inventories 2,466,342,278.85 2,323,472,671.20 Assets held for sale Non-current assets due within 1 year Other current assets 174,382,120.00 Total current assets 3,665,271,757.93 3,191,649,437.49 Non-current assets: Loans by mandate and advances granted Available-for-sale financial assets 14,500,000.00 18,493,000.00 Held-to-maturity investments Long-term accounts receivable Long-term equity investment 34,526,177.41 32,888,939.41 Investing real estate 237,260,788.82 250,014,034.94 Fixed assets 85,929,516.37 64,069,233.96 Construction in progress Engineering materials Disposal of fixed assets Production biological assets Oil-gas assets Intangible assets 92,640,083.99 99,792,587.03 R&D expense Goodwill Long-term deferred expenses 2,024,722.07 2,553,053.03 Deferred income tax assets 240,335,370.51 216,552,790.60 Other non-current assets 7,275,069.00 7,275,069.00 Total of non-current assets 714,491,728.17 691,638,707.97 Total assets 4,379,763,486.10 3,883,288,145.46 Current liabilities: Short-term borrowings 8,000,000.00 100,000,000.00 Borrowings from Central Bank Customer bank deposits and due to banks and other financial institutions Intra-group borrowings Financial liabilities measured at fair value of which changes are recorded in 64 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. current profits and losses Derivative financial liabilities Notes payable Accounts payable 191,524,938.54 175,347,021.19 Accounts received in advance 652,369,778.20 28,756,337.08 Financial assets sold for repurchase Handling charges and commissions payable Payroll payable 63,791,816.49 57,777,210.65 Tax payable 833,797,372.43 1,015,363,636.69 Interest payable 479,413.09 562,879.72 Dividend payable Other accounts payable 128,243,079.68 111,032,824.55 Reinsurance premiums payable Insurance contract reserves Payables for acting trading of securities Payables for acting underwriting of securities Liabilities held for sale Non-current liabilities due within 1 121,243,352.00 5,000,000.00 year Other current liabilities Total current liabilities 1,999,449,750.43 1,493,839,909.88 Non-current liabilities: Long-term borrowings 144,840,006.83 177,613,352.00 Bonds payable Of which: preferred shares Perpetual bonds Long-term payables Long-term payroll payables Specific payables Estimated liabilities 834,999.50 Deferred income 19,072,625.05 21,765,846.69 Deferred income tax liabilities 23,985.24 257,625.00 65 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. Other non-current liabilities 114,773,265.38 114,706,662.76 Total non-current liabilities 279,544,882.00 314,343,486.45 Total liabilities 2,278,994,632.43 1,808,183,396.33 Owners’ equity: Share capital 595,979,092.00 595,979,092.00 Other equity instruments Of which: preferred shares Perpetual bonds Capital reserves 119,951,533.93 119,951,533.93 Less: Treasury stock Other comprehensive income -4,046,603.46 -4,006,141.53 Specific reserves Surplus reserves 154,664,631.59 136,591,232.84 Provisions for general risks Retained profits 1,233,358,112.55 1,225,726,944.83 Total equity attributable to owners of 2,099,906,766.61 2,074,242,662.07 the Company Minority interests 862,087.06 862,087.06 Total owners’ equity 2,100,768,853.67 2,075,104,749.13 Total liabilities and owners’ equity 4,379,763,486.10 3,883,288,145.46 Legal representative: Chen Yugang Person-in-charge of the accounting work: Wang Hangjun Chief of the accounting division: Shen Xueying 2. Balance sheet of the Company Unit: RMB Yuan Item 31 Dec. 2015 31 Dec. 2014 Current Assets: Monetary funds 296,196,656.86 338,036,109.52 Financial assets measured at fair value of which changes are recorded in current profits and losses Derivative financial assets Notes receivable Accounts receivable 979,569.49 1,029,211.52 66 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. Accounts paid in advance Interest receivable Dividend receivable Other accounts receivable 1,766,392,354.21 1,758,238,266.73 Inventories 530,588,344.24 385,762,064.03 Assets held for sale Non-current assets due within 1 year Other current assets 174,382,120.00 Total current assets 2,768,539,044.80 2,483,065,651.80 Non-current assets: Available-for-sale financial assets 230,500.00 4,223,500.00 Held-to-maturity investments Long-term accounts receivable Long-term equity investment 281,083,438.39 279,446,200.39 Investing real estate 157,390,561.34 162,666,161.07 Fixed assets 9,828,388.19 11,701,031.08 Construction in progress Engineering materials Disposal of fixed assets Production biological assets Oil-gas assets Intangible assets R&D expense Goodwill Long-term deferred expenses 1,297,321.41 1,470,297.69 Deferred income tax assets 29,561,006.63 Other non-current assets Total of non-current assets 479,391,215.96 459,507,190.23 Total assets 3,247,930,260.76 2,942,572,842.03 Current liabilities: Short-term borrowings Financial liabilities measured at fair value of which changes are recorded in current profits and losses Derivative financial liabilities 67 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. Notes payable Accounts payable 25,436,021.13 27,475,005.86 Accounts received in advance 311,717,646.30 556,723.50 Payroll payable 11,467,533.06 9,765,464.25 Tax payable 62,939,128.44 44,829,812.84 Interest payable 858,385.21 621,676.25 Dividend payable Other accounts payable 1,163,240,004.88 1,362,785,410.73 Liabilities held for sale Non-current liabilities due within 1 year Other current liabilities Total current liabilities 1,575,658,719.02 1,446,034,093.43 Non-current liabilities: Long-term borrowings 404,840,006.83 276,370,000.00 Bonds payable Of which: preferred shares Perpetual bonds Long-term payables Long-term payroll payables Specific payables Estimated liabilities 834,999.50 Deferred income Deferred income tax liabilities 257,625.00 Other non-current liabilities Total non-current liabilities 405,675,006.33 276,627,625.00 Total liabilities 1,981,333,725.35 1,722,661,718.43 Owners’ equity: Share capital 595,979,092.00 595,979,092.00 Other equity instruments Of which: preferred shares Perpetual bonds Capital reserves 94,057,859.68 94,057,859.68 Less: Treasury stock 68 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. Other comprehensive income 2,933,175.45 Specific reserves Surplus reserves 154,007,821.15 135,934,422.40 Retained profits 422,551,762.58 391,006,574.07 Total owners’ equity 1,266,596,535.41 1,219,911,123.60 Total liabilities and owners’ equity 3,247,930,260.76 2,942,572,842.03 3. Consolidated income statement Unit: RMB Yuan Item 2015 2014 I. Total operating revenues 1,077,418,500.93 1,268,451,451.86 Including: Sales income 1,077,418,500.93 1,268,451,451.86 Interest income Premium income Handling charge and commission income II. Total operating costs 1,037,507,557.45 908,328,822.13 Including: Cost of sales 648,572,894.10 520,485,126.20 Interest expenses Handling charge and commission expenses Surrenders Net claims paid Net amount withdrawn for the insurance contract reserve Expenditure on policy dividends Reinsurance premium Taxes and associate charges 159,676,120.22 277,057,303.89 Selling and distribution expenses 41,941,165.94 26,318,080.91 Administrative expenses 102,968,126.79 103,915,932.80 Financial expenses -7,514,689.31 -12,697,790.50 Asset impairment loss 91,863,939.71 -6,749,831.17 Add: Gain/(loss) from change in fair value (“-” means loss) Gain/(loss) from investment (“-” 7,738,371.09 214,624,884.25 69 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. means loss) Including: share of profits in 1,637,238.00 -352,555.03 associates and joint ventures Foreign exchange gains (“-” means loss) III. Business profit (“-” means loss) 47,649,314.57 574,747,513.98 Add: non-operating income 171,619,115.05 5,094,033.97 Including: Gains on disposal of 33,279.06 1,905,888.27 non-current assets Less: non-operating expense 2,876,737.49 26,076,584.37 Including: Losses on disposal of 601,245.35 93,576.27 non-current assets IV. Total profit (“-” means loss) 216,391,692.13 553,764,963.58 Less: Income tax expense 59,571,725.42 136,266,283.67 V. Net profit (“-” means loss) 156,819,966.71 417,498,679.91 Net profit attributable to owners of 156,819,966.71 417,498,679.91 the Company Minority shareholders’ income VI. After-tax net amount of other -40,461.93 3,092,574.98 comprehensive incomes After-tax net amount of other comprehensive incomes attributable to -40,461.93 3,092,574.98 owners of the Company (I) Other comprehensive incomes that will not be reclassified into gains and losses 1. Changes in net liabilities or assets with a defined benefit plan upon re-measurement 2. Enjoyable shares in other comprehensive incomes in investees that cannot be reclassified into gains and losses under the equity method (II) Other comprehensive incomes that will be reclassified into gains and -40,461.93 3,092,574.98 losses 1. Enjoyable shares in other comprehensive incomes in investees that will be reclassified into gains and losses 70 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. under the equity method 2. Gains and losses on fair value changes of available-for-sale -2,933,175.45 2,933,175.45 financial assets 3. Gains and losses on reclassifying held-to-maturity investments into available-for-sale financial assets 4. Effective hedging gains and losses on cash flows 5. Foreign-currency financial 2,892,713.52 159,399.53 statement translation difference 6. Other After-tax net amount of other comprehensive incomes attributable to minority shareholders VII. Total comprehensive incomes 156,779,504.78 420,591,254.89 Attributable to owners of the 156,779,504.78 420,591,254.89 Company Attributable to minority shareholders VIII. Earnings per share (I) Basic earnings per share 0.2631 0.7005 (II) Diluted earnings per share 0.2631 0.7005 Where business mergers under the same control occurred in this reporting period, the net profit achieved by the merged parties before the business mergers was RMB0.00, with the corresponding amount for the last period being RMB0.00. Legal representative: Chen Yugang Person-in-charge of the accounting work: Wang Hangjun Chief of the accounting division: Shen Xueying 4. Income statement of the Company Unit: RMB Yuan Item 2015 2014 I. Total sales 61,440,361.37 66,368,633.69 Less: cost of sales 14,568,381.71 26,061,655.45 Business taxes and surcharges 7,657,509.70 6,670,106.76 71 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. Distribution expenses 917,956.69 Administrative expenses 41,050,329.06 41,556,470.77 Financial costs -7,854,726.72 -5,716,403.24 Impairment loss -31,370,041.72 -6,776,623.28 Add: gain/(loss) from change in fair value (“-” means loss) Gain/(loss) from investment (“-” 7,571,676.55 210,458,029.19 means loss) Including: income form investment 1,637,238.00 -352,555.03 on associates and joint ventures II. Business profit (“-” means loss) 44,042,629.20 215,031,456.42 Add: non-operating income 169,812,889.47 2,285,081.37 Including: Gains on disposal of non-current assets Less: non-operating expense 1,323,166.82 23,964,998.79 Including: Losses on disposal of 103,611.83 3,861.79 non-current assets III. Total profit (“-” means loss) 212,532,351.85 193,351,539.00 Less: Income tax expense 31,798,364.35 42,863,068.67 IV. Net profit (“-” means loss) 180,733,987.50 150,488,470.33 V. After-tax net amount of other -2,933,175.45 2,933,175.45 comprehensive incomes (I) Other comprehensive incomes that will not be reclassified into gains and losses 1. Changes in net liabilities or assets with a defined benefit plan upon re-measurement 2. Enjoyable shares in other comprehensive incomes in investees that cannot be reclassified into gains and losses under the equity method (II) Other comprehensive incomes that will be reclassified into gains and -2,933,175.45 2,933,175.45 losses 1. Enjoyable shares in other comprehensive incomes in investees that will be reclassified into gains and 72 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. losses under the equity method 2. Gains and losses on fair value changes of available-for-sale financial -2,933,175.45 2,933,175.45 assets 3. Gains and losses on reclassifying held-to-maturity investments into available-for-sale financial assets 4. Effective hedging gains and losses on cash flows 5. Foreign-currency financial statement translation difference 6. Other VI. Total comprehensive incomes 177,800,812.05 153,421,645.78 VII. Earnings per share (I) Basic earnings per share 0.3033 0.2525 (II) Diluted earnings per share 0.3033 0.2525 5. Consolidated cash flow statement Unit: RMB Yuan Item 2015 2014 I. Cash flows from operating activities: Cash received from sale of 1,696,592,242.82 1,141,552,814.94 commodities and rendering of service Net increase of deposits from customers and dues from banks Net increase of loans from the central bank Net increase of funds borrowed from other financial institutions Cash received from premium of original insurance contracts Net cash received from reinsurance business Net increase of deposits of policy holders and investment fund Net increase of disposal of financial assets measured at fair value of which 73 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. changes are recorded into current gains and losses Cash received from interest, handling charges and commissions Net increase of intra-group borrowings Net increase of funds in repurchase business Tax refunds received Other cash received relating to 14,524,590.42 27,501,782.68 operating activities Subtotal of cash inflows from operating 1,711,116,833.24 1,169,054,597.62 activities Cash paid for goods and services 574,324,242.80 526,096,880.10 Net increase of customer lendings and advances Net increase of funds deposited in the central bank and amount due from banks Cash for paying claims of the original insurance contracts Cash for paying interest, handling charges and commissions Cash for paying policy dividends Cash paid to and for employees 308,224,325.62 271,319,723.58 Various taxes paid 450,753,009.58 301,412,102.96 Other cash payment relating to 68,047,625.58 84,852,948.06 operating activities Subtotal of cash outflows from 1,401,349,203.58 1,183,681,654.70 operating activities Net cash flows from operating activities 309,767,629.66 -14,627,057.08 II. Cash flows from investing activities: Cash received from withdrawal of 7,091,672.64 237,302,621.45 investments Cash received from return on investments Net cash received from disposal of 966,686.25 867,170.40 fixed assets, intangible assets and other 74 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. long-term assets Net cash received from disposal of subsidiaries or other business units Other cash received relating to investing activities Subtotal of cash inflows from investing 8,058,358.89 238,169,791.85 activities Cash paid to acquire fixed assets, intangible assets and other long-term 38,285,548.55 13,682,765.56 assets Cash paid for investment Net increase of pledged loans Net cash paid to acquire subsidiaries and other business units Other cash payments relating to 266,715.68 investing activities Subtotal of cash outflows from 38,285,548.55 13,949,481.24 investing activities Net cash flows from investing activities -30,227,189.66 224,220,310.61 III. Cash Flows from Financing Activities: Cash received from capital contributions Including: Cash received from minority shareholder investments by subsidiaries Cash received from borrowings 216,470,006.83 316,370,000.00 Cash received from issuance of bonds Other cash received relating to financing activities Subtotal of cash inflows from financing 216,470,006.83 316,370,000.00 activities Repayment of borrowings 225,000,000.00 514,316,666.64 Cash paid for interest expenses and 149,289,115.57 178,761,051.09 distribution of dividends or profit Including: dividends or profit paid by subsidiaries to minority shareholders 75 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. Other cash payments relating to 104,500.00 financing activities Sub-total of cash outflows from 374,393,615.57 693,077,717.73 financing activities Net cash flows from financing activities -157,923,608.74 -376,707,717.73 IV. Effect of foreign exchange rate 2,757,607.83 -1,093,973.32 changes on cash and cash equivalents V. Net increase in cash and cash 124,374,439.09 -168,208,437.52 equivalents Add: Opening balance of cash and 808,963,376.68 977,171,814.20 cash equivalents VI. Closing balance of cash and cash 933,337,815.77 808,963,376.68 equivalents 6. Cash flow statement of the Company Unit: RMB Yuan Item 2015 2014 I. Cash flows from operating activities: Cash received from sale of 44,991,559.19 50,534,901.36 commodities and rendering of service Tax refunds received Other cash received relating to 29,403,475.42 19,754,794.25 operating activities Subtotal of cash inflows from operating 74,395,034.61 70,289,695.61 activities Cash paid for goods and services 36,933,801.29 8,723,060.88 Cash paid to and for employees 25,261,992.16 22,284,922.53 Various taxes paid 13,695,960.29 11,664,415.35 Other cash payment relating to 467,630,748.14 469,502,088.72 operating activities Subtotal of cash outflows from 543,522,501.88 512,174,487.48 operating activities Net cash flows from operating activities -469,127,467.27 -441,884,791.87 II. Cash flows from investing activities: Cash received from retraction of 517,302,621.45 195,000,000.00 investments Cash received from return on 3,378,400.00 25,443,800.00 76 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. investments Net cash received from disposal of fixed assets, intangible assets and other 2,200.00 11,983,185.60 long-term assets Net cash received from disposal of subsidiaries or other business units Other cash received relating to investing activities Subtotal of cash inflows from investing 520,683,221.45 232,426,985.60 activities Cash paid to acquire fixed assets, intangible assets and other long-term 770,380.00 551,487.00 assets Cash paid for investment Net cash paid to acquire subsidiaries and other business units Other cash payments relating to investing activities Subtotal of cash outflows from 770,380.00 551,487.00 investing activities Net cash flows from investing activities 519,912,841.45 231,875,498.60 III. Cash Flows from Financing Activities: Cash received from capital contributions Cash received from borrowings 276,370,000.00 240,000,000.00 Cash received from issuance of bonds Other cash received relating to financing activities Subtotal of cash inflows from financing 276,370,000.00 240,000,000.00 activities Repayment of borrowings 240,000,000.00 Cash paid for interest expenses and 168,434,949.35 8,720,000.00 distribution of dividends or profit Other cash payments relating to 343,492.00 financing activities Sub-total of cash outflows from 408,434,949.35 9,063,492.00 77 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. financing activities Net cash flows from financing activities -132,064,949.35 230,936,508.00 IV. Effect of foreign exchange rate -1,253,281.96 changes on cash and cash equivalents V. Net increase in cash and cash -82,532,857.13 20,927,214.73 equivalents Add: Opening balance of cash and 420,568,966.65 399,641,751.92 cash equivalents VI. Closing balance of cash and cash 338,036,109.52 420,568,966.65 equivalents 7. Consolidated statement of changes in owners’ equity 2015 Unit: RMB Yuan 2015 Equity attributable to owners of the Company Other equity Other Minorit Total Item instruments Less: General Share Capital compre Specific Surplus Retaine y owners’ Prefer Perpet treasury risk capital reserve hensive reserve reserve d profit interests equity red ual Other stock reserve incomes shares bonds I. Balance at the 595,97 1,225,7 2,075,1 119,951 -4,006,1 136,591 862,087 end of the 9,092. 26,944. 04,749. ,533.93 41.53 ,232.84 .06 previous year 00 83 13 Add: change of accounting policy Correction of errors in previous periods Business mergers under the same control Other II. Balance at the 595,97 1,225,7 2,075,1 119,951 -4,006,1 136,591 862,087 beginning of the 9,092. 26,944. 04,749. ,533.93 41.53 ,232.84 .06 year 00 83 13 III. Increase/ -40,461. 18,073, 7,631,1 25,664, decrease in the 93 398.75 67.72 104.54 78 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. period (“-” means decrease) (I) Total -40,461. 156,819 156,779 comprehensive 93 ,966.71 ,504.78 incomes (II) Capital increased and reduced by owners 1. Common shares increased by shareholders 2. Capital increased by holders of other equity instruments 3. Amounts of share-based payments recognized in owners’ equity 4. Other -149,18 -131,11 (III) Profit 18,073, 8,798.9 5,400.2 distribution 398.75 9 4 1. 18,073, -18,073, Appropriations to 398.75 398.75 surplus reserves 2. -131,11 -131,11 Appropriations to 5,400.2 5,400.2 general risk 4 4 provisions 3. Appropriations to owners (or shareholders) 4. Other (IV) Internal carry-forward of owners’ equity 1. New 79 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. increase of capital (or share capital) from capital public reserves 2. New increase of capital (or share capital) from surplus reserves 3. Surplus reserves for making up losses 4. Other (V) Specific reserve 1. Withdrawn for the period 2. Used in the period (VI) Other 595,97 1,233,3 2,100,7 IV. Closing 119,951 -4,046,6 154,664 862,087 9,092. 58,112. 68,853. balance ,533.93 03.46 ,631.59 .06 00 55 67 2014 Unit: RMB Yuan 2014 Equity attributable to owners of the Company Other equity Minorit Other Total Item instruments y Less: General Share Capital compre Specific Surplus Retaine owners’ treasury risk interest Prefer Perpet equity capital reserve hensive reserve reserve d profit stock reserve s red ual Other incomes shares bonds I. Balance at the 595,97 1,803,6 120,086 -7,098,7 121,542 972,271 862,087 end of the 9,092. 43,379. ,646.43 16.51 ,385.81 ,884.95 .06 previous year 00 74 Add: change of accounting policy Correction of errors in previous 80 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. periods Business mergers under the same control Other II. Balance at the 595,97 1,803,6 120,086 -7,098,7 121,542 972,271 862,087 beginning of the 9,092. 43,379. ,646.43 16.51 ,385.81 ,884.95 .06 year 00 74 III. Increase/ decrease in the -135,11 3,092,5 15,048, 253,455 271,461 period (“-” means 2.50 74.98 847.03 ,059.88 ,369.39 decrease) (I) Total 3,092,5 417,498 420,591 comprehensive 74.98 ,679.91 ,254.89 incomes (II) Capital increased and reduced by owners 1. Common shares increased by shareholders 2. Capital increased by holders of other equity instruments 3. Amounts of share-based payments recognized in owners’ equity 4. Other -164,04 -148,99 (III) Profit 15,048, 3,620.0 4,773.0 distribution 847.03 3 0 1. 15,048, -15,048, Appropriations to 847.03 847.03 surplus reserves 2. Appropriations to general risk 81 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. provisions 3. -148,99 -148,99 Appropriations to 4,773.0 4,773.0 owners (or 0 0 shareholders) 4. Other (IV) Internal carry-forward of owners’ equity 1. New increase of capital (or share capital) from capital public reserves 2. New increase of capital (or share capital) from surplus reserves 3. Surplus reserves for making up losses 4. Other (V) Specific reserve 1. Withdrawn for the period 2. Used in the period -135,11 -135,11 (VI) Other 2.50 2.50 595,97 1,225,7 2,075,1 IV. Closing 119,951 -4,006,1 136,591 862,087 9,092. 26,944. 04,749. balance ,533.93 41.53 ,232.84 .06 00 83 13 8. Statement of changes in owners’ equity of the Company 2015 Unit: RMB Yuan Item 2015 82 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. Other equity instruments Other Less: Total Share Capital comprehe Specific Surplus Retaine Preferre Perpetu treasury owners’ capital Other reserve nsive reserve reserve d profit d shares al bonds stock equity incomes I. Balance at the 595,979, 94,057,85 2,933,175 135,934,4 391,006 1,219,911 end of the previous 092.00 9.68 .45 22.40 ,574.07 ,123.60 year Add: change of accounting policy Correction of errors in previous periods Other II. Balance at the 595,979, 94,057,85 2,933,175 135,934,4 391,006 1,219,911 beginning of the 092.00 9.68 .45 22.40 ,574.07 ,123.60 year III. Increase/ decrease in the -2,933,17 18,073,39 31,545, 46,685,41 period (“-” means 5.45 8.75 188.51 1.81 decrease) (I) Total -2,933,17 180,733 177,800,8 comprehensive 5.45 ,987.50 12.05 incomes (II) Capital increased and reduced by owners 1. Common shares increased by shareholders 2. Capital increased by holders of other equity instruments 3. Amounts of share-based payments recognized in owners’ equity 4. Other (III) Profit 18,073,39 -149,18 -131,115, 83 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. distribution 8.75 8,798.9 400.24 9 1. 18,073,39 18,073, Appropriations to 8.75 398.75 surplus reserves 2. -131,11 Appropriations to -131,115, 5,400.2 owners (or 400.24 4 shareholders) 3. Other (IV) Internal carry-forward of owners’ equity 1. New increase of capital (or share capital) from capital public reserves 2. New increase of capital (or share capital) from surplus reserves 3. Surplus reserves for making up losses 4. Other (V) Specific reserve 1. Withdrawn for the period 2. Used in the period (VI) Other IV. Closing 595,979, 94,057,85 154,007,8 422,551 1,266,596 balance 092.00 9.68 21.15 ,762.58 ,535.41 2014 Unit: RMB Yuan Item 2014 84 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. Other equity instruments Other Less: Total Share Capital comprehe Specific Surplus Retaine Preferre Perpetu treasury owners’ capital Other reserve nsive reserve reserve d profit d shares al bonds stock equity incomes I. Balance at the 595,979, 94,057,85 120,885,5 404,561 1,215,484 end of the previous 092.00 9.68 75.37 ,723.77 ,250.82 year Add: change of accounting policy Correction of errors in previous periods Other II. Balance at the 595,979, 94,057,85 120,885,5 404,561 1,215,484 beginning of the 092.00 9.68 75.37 ,723.77 ,250.82 year III. Increase/ decrease in the 2,933,175 15,048,84 -13,555, 4,426,872 period (“-” means .45 7.03 149.70 .78 decrease) (I) Total 2,933,175 150,488 153,421,6 comprehensive .45 ,470.33 45.78 incomes (II) Capital increased and reduced by owners 1. Common shares increased by shareholders 2. Capital increased by holders of other equity instruments 3. Amounts of share-based payments recognized in owners’ equity 4. Other (III) Profit 15,048,84 -164,04 -148,994, 85 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. distribution 7.03 3,620.0 773.00 3 1. 15,048,84 -15,048, Appropriations to 7.03 847.03 surplus reserves 2. -148,99 Appropriations to -148,994, 4,773.0 owners (or 773.00 0 shareholders) 3. Other (IV) Internal carry-forward of owners’ equity 1. New increase of capital (or share capital) from capital public reserves 2. New increase of capital (or share capital) from surplus reserves 3. Surplus reserves for making up losses 4. Other (V) Specific reserve 1. Withdrawn for the period 2. Used in the period (VI) Other IV. Closing 595,979, 94,057,85 2,933,175 135,934,4 391,006 1,219,911 balance 092.00 9.68 .45 22.40 ,574.07 ,123.60 III. Company Profile Shenzhen Properties & Resources Development (Group) Ltd. (hereinafter referred to as 86 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. “company” or “the Company”) was incorporated based on the reconstruction of Shenzhen Properties & Resources Development Co., Ltd. after obtaining approval of ZFBF [1991] No. 831 from People’s Government of Shenzhen Municipality. The registration number of Business License for Enterprises as Legal Person is ZQFZ No. 440301103570124. Up to 31 Dec. 2015, as for the registered capital of the Company which was of RMB595,979,092 and the paid-in capital of RMB595,979,092 The registered capital of the Company was RMB541, 799,175 after bonus issue of shares on the basis of one share for every existing 10 shares based on existing paid-in capital of the Company in 1996 and it changes to RMB595,979,092 after bonus issue of shares on the basis of one share for every existing 10 shares based on previous paid-in capital of RMB541,799,175 in 2009. 2. Registered office, organization form and headquarter address of the Company Registered office: Shenzhen Municipal, Guangdong Province, PRC Organization form: joint-stock company with limited liability Headquarter address: 39th and 42nd Floor, International Trade Center, Renmin South Road, Shenzhen. 3. Nature of the business and main business scope of the Company The business scope of the Company and its subsidiaries includes development and sale of commodity premises, construction and management of buildings, lease of properties, supervision of construction, domestic trading and materials supply and marketing (excluding exclusive dealing and monopoly sold products and commodities under special control to purchase). The Company and the subsidiary (hereinafter referred to as “the Group” in total) mainly operates the development of real estate; property management; buildings and the building devices maintainance, gargen afforest and cleaning service; houses and building leasing; passenger traffits and leasing of motor vehicles; supervise and management of the engineering; retails of the Chinese food, Western-styly food and wines. 3. About the controlling shareholder of the Company and the Group By the end of the reporting period, the controlling shareholder of the Company is still Shenzhen Construction Investment Holdings in register book. In 2004, People’s Government of Shenzhen Municipality incorporated Shenzhen Construction Investment Holdings with the other two municipal asset management companies, namely Shenzhen Investment Management Corporation and Shenzhen Trade and Business Holding Company, and established Shenzhen Investment Holdings Co., Ltd. Thus, the Company’s actual controlling shareholder is Shenzhen Investment Holdings Co., Ltd., a sole state-funded limited company, who was established in Oct. 13, and the main operating scope including: to execute the investment, operating and management of the state-owned equities of the wholly-owned, controlling and stock-participating enterprises through the methods such as the restructuring integration, capital operation and assets disposal; to engage in the property development and operation business within the scale of legally acquire the land use right; to execute the policy-based and strategic investment according to the requirements of the SASAC; to provide the guarantee of the municipal state-owned enterprises; other business developed with the authority from the Municipal State-owned Assets Supervision and Administration Commission. As a government department, Shenzhen State-owned Assets Supervision and Administration Bureau manage Shenzhen Investment Holdings Co., Ltd. on behalf of People’s Government of Shenzhen Municipality. Thus, the final controller of the Company is Shenzhen State-owned Assets Supervision and Administration Committee of Shenzhen Government. 87 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. 4. Authorization and date of issuing the financial statements The financial statements were approved and authorized for issue by the 8th Session of the 8th Board of the Directors on 30 Mar. 2016. Up to the end of the reporting period, there were 26 subsidiaries included in the consolidation financial statement, and for the details, please refer to Notes IX. 1 of Section X. For the changes of consolidation financial statement scope of the reporting period, please refer to Notes VIII. of Section X. IV. Basis for the preparation of financial statements 1. Preparation basis The company recognizes and measures transactions occurred according to Chinese Accounting Standards – Basic standard and other related accounting standards, prepares the financial statements based on accrual accounting and the underlying assumption of going concern. 2. Continuation There will be no such events or situations in the 12 months from the end of the reporting period that will cause material doubts as to the continuation capability of the Company. V. Important accounting policies and estimations Indication of specific accounting policies and estimations: Inapplicable 1. Statement of compliance with Enterprise accounting standards The company's financial statements comply with the requirements of Accounting Standards; the company's financial position, operating results, changes in shareholder's equity and cash flow, and other relevant information are truly and completely disclosed in financial statements. 2. Fiscal period The Group’s fiscal year starts on 1 Jan. and ends on 31 Dec. of every year according to the Gregorian calendar. 3. Operating cycle A normal operating cycle refers to a period from the Group purchasing assets for processing to realizing cash or cash equivalents. As for the construction of the real estate projects of the Group with rather long period, the normal operating period more than 1 year owning to the industry characteristics, and although the relevant assets be discounted, sold or consumed more than 1 year, should still be divided into the circulating assets; as for the operating liabilities projects during the 88 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. normal operation period even be liquidated over 1 year after the balance sheet date, should be divided into the circulation liabilities. Besides, the normal operating period of other business of the Group is shorter than 1 year. As for the normal operating period shorten than 1 year and the assets discounted since the balance sheet date or the liabilities should be liquidated due within 1 year since the balance sheet date, should be classified as the circulating assets or liabilities. 4. Recording currency The Company and the domestic subsidiaries regard the Renminbi as the recording currency. The Hong Kong subsidiary of the Company confirms the Hong Kong dollar as its recording currency according to the major economic environment of the currency of its office place. When compiling the financial statements, the currency the Company adopted was the Renminbi. 5. Accounting method of business combination under the common control and not under the common control (1) The Group adopts equity method for business combination under common control. The assets and liabilities that the combining party obtained in a business combination shall be measured on their carrying amount in the combined party on the combining date. The difference between the carrying amount of net assets acquired by the combining party and the carrying amount of the consideration paid by it (or the total par value of the shares issued) shall be adjusted to capital surplus. If the capital surplus is not sufficient for adjustment, retained earning is adjusted respectively. The business combination costs that are directly attributable to the combination, such as audit fees, valuation fees, and legal service fees and so on are recognized in profit or loss during the current period when they occurred. The bonds issued for a business combination or the handling fees, commissions and other expenses for bearing other liabilities shall be recorded in the amount of initial measurement of the bonds or other debts. The handling fees, commissions and other expenses for the issuance of equity securities for the business combination shall be credited against the surplus of equity securities; if the surplus is not sufficient, the retained earnings shall be offset. Where a relationship between a parent company and a subsidiary company is formed due to a business combination, the parent company shall, on the combining date, prepare consolidated financial statements according to the accounting policy of the Company; the period of the adjustment of the compared data of the consolidation financial statement should earlier than the later time under the control of the ultimate control party of the combine party and the combined party. (2) The Company adopts acquisition method for business combination not under common control. The acquirer shall recognize the initial cost of combination under the following principles: ①When business combination is achieved through a single exchange transaction, the cost of a business combination is the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity securities issued by the acquirer, in exchange for control of the acquiree; ② For the business combination involved more than one exchange transaction, accounting treatments will be carried out separately on individual and consolidated financial statements as the followings: 89 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. A. In the individual financial statements, the initial investment cost changed to be measured by the cost method of the particular project will be the sum of book value of equity in the entity before the date of acquisition and the newly added investment cost; the other comprehensive revenues recognized by adopting the equity method of the equity investment before the purchase date, should be executed accounting treatments based on the same basic of the relevant assets or liabilities directly disposed by the purchasers when disposing the investment. The equity investment held before the purchase date which is executed the accounting treatments according to the relevant regulations of No. 22 ASBE-Recognition and Measurement of the Financial Instruments, the accumulative fair value changes originally included into the other comprehensive income should be transferred into the current gains and losses by adopting the cost method. B. In the consolidated financial statements, the share equity in the acquired entity before the date of acquisition is recalculated upon the fair value of the equity at the date of acquisition. The balance between the fair value and book value shall be accounted into current investment income account; when the share equity before the date of acquisition involves with other integrated gains, such gains are transferred into investment income account of the period when it occurred. Within the notes of financial statement, the Company shall be disclosed the fair value (on the merger date) of the shareholdings of the bargainer hold and profits or losses recognized by the revaluation. ③ Agency expenses and other administrative expenses such as auditing, legal consulting, or appraisal services occurred relating to the merger of entities are accounted into current income account when occurred; the transaction fees of equity certificates or liability certificates issued by the purchaser for payment for the acquisition are accounted at the initial amount of the certificates. ④Where a business combination contract or agreement provides for a future event which may adjust the cost of combination, the Group shall include the amount of the adjustment in the cost of the combination at the acquisition date if the future event leading to the adjustment is probable and the amount of the adjustment can be measured reliably. The Group shall, on the acquisition date, measure the assets given and liabilities incurred or assumed by an enterprise for a business combination in light of their fair value, and shall record the balances between them and their carrying amounts into the profits and losses at the current period. The acquirer shall distribute the combination costs on the acquisition date, and shall recognize all identifiable assets, liabilities and contingent liabilities it obtains from the acquiree. (1) the acquirer shall recognize the difference that the combination costs are over the fair value of the identifiable net assets obtained from acquiree as goodwill; (2) if the combination costs are less than the fair value of the identifiable net assets obtained from acquiree, the acquirer shall reexamine the measurement of the fair values of the identifiable assets, liabilities and contingent liabilities obtained from the acquiree as well as the combination costs; and then after the reexamination, the result is still the same, the difference shall be recorded in the profit and loss of the current period. Where a relationship between a parent company and a subsidiary company is formed due to a business combination, the parent company shall prepare accounting books for future reference, which shall record the fair value of the identifiable assets, liabilities and contingent liabilities obtained from the subsidiary company on the acquisition date. When preparing consolidated financial statements, it shall adjust the financial statements of the subsidiary company on the basis of the fair values of the identifiable assets, liabilities and contingent liabilities determined on the acquisition date according to the Group’s accounting policy of “Consolidated financial statement”. 90 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. 6. Methods for preparing consolidated financial statements (1) Consolidation scope The consolidation scope for financial statements is determined on the basis of control, including the annual financial statement up to 31 Dec. 2014 of the Company and whole subsidiaries. The consolidated financial statements comprise the financial statements of the Group and its subsidiaries. A subsidiary is an enterprise or entity controlled by the Group (including the segmental part among the enterprises and investees as well as the structuralized main bodies etc.) The term “control” is the power of the Group upon an investee, with which it can take part in relevant activities of the investee to obtain variable returns and is able to influence the amount of returns. (2) Methods for preparing the consolidated financial statements The Company compiles the consolidation financial statement according to other relevant materials based on the financial statement of itself and its subsidiaries. The Company regards the whole enterprise group as an accounting main body when compiling the consolidation financial statement to reflect the whole financial conditions, operation results and cash flows according to the requirements of the recognition, measurement and presentation of the relevant ASBE and the unitize accounting polices. The financial statements of subsidiaries are adjusted in accordance with the accounting policies and accounting period of the Group during the preparation of the consolidated financial statements, where the accounting policies and the accounting periods are inconsistent between the Group and subsidiaries. For a subsidiary acquired from a business combination not under the same control, the individual financial statements of the subsidiary are adjusted based on the fair value of the identifiable net assets at the acquisition date. (3) Statement of minority interests and profits or losses The portion of the equity of the subsidiaries that are not owned by the parent is presented as minority interest in the consolidated balance sheet. The portion of the profit or loss of the subsidiaries that are not owned by the parent is presented as minority interest in the consolidated income statement. (4) Accounting treatment of excess losses When the share of losses attributable to the minor shareholders has exceeded their shares in the shareholders’ equity at the beginning of term, the shareholders’ equity shall be deducted thereof. (5) Accounting treatment on increase or decrease of the subsidiaries during the reporting period For any subsidiary acquired by the Company through business combination under the common control, when the consolidated balance sheet for the current period are being prepared, the amount at the beginning of the period in the consolidated balance sheet is made corresponding modification. For addition business combination not under common control during the reporting period, the Company makes no adjustment for the amount at the beginning of the period in the consolidated balance sheet. When disposing subsidiary during the reporting period, the Company makes no adjustment for the amount at the beginning of the period in the consolidated balance sheet. For any subsidiary acquired by the Company through business combination under the common control, when the consolidated income statement for the current period are being prepared, revenue, expense and profit for the period from the beginning of the consolidated period to the 91 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. year end of the reporting period are included in the consolidated income statement, and included the consolidate cash flow from the period-begin to the period-end of the subsidiary into the consolidate cash flow statement. For addition business combination not under common control during the reporting period, revenue, expense and profit for the period from acquisition date to the year end of the reporting period is included in the consolidated income statement and included the consolidate cash flow from the purchasing date to the period-end of the subsidiary into the consolidate cash flow statement. When disposing subsidiary during the reporting period, revenue, expense and profit for the period from the beginning to the disposal date are included in the consolidated income statement. When losing the control right of the original subsidiary owing to the disposing of party equity investment or other reasons, for the remaining equity investment after the disposing, should be remeasured according to the fair value of the date of losing the control right. The amount of the sum between the consideration of disposing the equity and the fair value of the remaining equity that minus the balance between the shares of net assets that gained from the original subsidiaries by continuously calculation according the original shareholding ratio since the purchasing date should accrued into the current investment benefits of losing the control right. The other comprehensive benefits related to the equity investment of the original subsidiaries should be transferred into the current investment benefits when losing the control right. The balance between the newly gained long-term equity investment owning to the purchasing of the minority equities and the net identifiable assets enjoyed from the subsidiaries according to the newly increased shareholding ratio, and the balance between the dispose of remuneration which gained from the partly depose of the equity investment of the subsidiaries under the situation of not losing the control right and the corresponding shares of net assets from the subsidiaries when disposing the long-term equity investment, should both adjust the share premium of the capital surplus of the consolidate balance sheet. If the share premium of the capital surplus is not sufficient for adjustment, retained earning is adjusted respectively. (6) Disposal on consolidation statement of disposing the equity step by step till lose the control right If the each transaction of disposing the equity investment of the subsidiaries till lose the control right which belongs to package deal, each transaction would be executed accounting treatment as a transaction of disposing the subsidiaries that lose the control right; however, before losing the control right, for the balance between each disposal of the remuneration and the corresponding shares of net assets of investing the subsidiary, would be confirmed as other comprehensive benefits in the consolidate financial statement and would be transferred into the current gains and losses of losing the control right when losing it. If not belongs to the package deal, before losing the control right, or when losing it, should execute the accounting treatment according to the aforesaid situation of not losing the control right to dispose party equity investment of the subsidiaries as well as according to the accounting policy of losing the control right of the original subsidiaries. If the regulations, conditions and its economic influences of each deal of disposing the equity investment of the subsidiary met with following one or more kinds of situations, it indicated that the multiple transactions would consolidate as package deal for accounting treatment: ①these transactions are formatted under the situation of contemporary or considering of the mutual influences; ②only the entirety of these transactions could achieve a complete commercial result; 92 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. ③the happen of one transaction depends on at least the happen of other one transaction; ④to see independently of one transaction is not economic while to considered with other transactions are economic. Execute the accounting treatment of the several financial statements of disposing the equity step by step till lose the control right according to the accounting policy of disposing the long-term equity investment. 7. Classification of joint arrangements and accounting treatment of joint operations (1) Category of joing arrangements A joint arrangement refers to an arrangement jointly controlled by two participants or above. The Group classifies joint arrangements into joint operations and joint ventures according to its rights and duties in the joint arrangements. A joint operation refers to a joint arrangement where the Group enjoys assets and has to bear liabilities related to the arrangement. A joint venture refers to a joint arrangement where the Group is only entitled to the net assets of the arrangement. The joint arrangement achieves not through the individual main body should be divided as joint operation. Individual main body refers to the entity owns individual distinguishable financial structure, including the individual legal entities and the entities without legal entity qualification but gains the legal permits. The joint arrangement achieves through individual main body is usually divided into the joint venture, but for the joint arrangement with definite evidence indicants that meet with any condition of the followings and meet with the regulations of the relevant laws and regulations should be divided into joint operation; the legal form of other joint arrangement indicates that, the jointly owned party respectively enjoys the rights and burdens the obligations of the relevant assets and liabilities among the arrangement; the clauses of the contacts of the joint arrangement agrees that, the jointly owned party respectively enjoys the rights and burdens the obligations of the relevant assets and liabilities among the arrangement; other relevant facts and situation indicates that, the jointly owned party respectively enjoys the rights and burdens the obligations of the relevant assets and liabilities among the arrangement, for example, the jointly owned party enjoys almost all of the output related to the joint arrangement and the liquidation of the liabilities of the arrangement constantly depends on the support of the jointly owned party. It’s forbidden to regard the jointly owned party which provides the liabilities for the joint arrangement as it has the responsibility to bear the relevant liabilities. For the jointly owned party takes the responsibility to pay the contributive obligations for the joint arrangement, not be considered to undertake the relevant liabilities related to the arrangement. For the relevant facts and the changes of the situation leads the rights enjoyed and the liabilities undertook amount the joint arrangement change, the Group should re-assess the category of the joint arrangement. For the structure agreement setting various joint arrangements for achieving different activities, the Group respectively recognizes each category of the joint arrangement. For the details of the basis of recognizing the joint control and the accounting policies of the measurement of the joint venture, please refer to Notes (V) 13. (2) Accounting treatment of joint operations The following projects related to the interests portion among the joint operation recognized by the Group and be executed according to the regulations of the relevant ASBE: recognizes the assets held alone and the assets joint held by recognizing accoridng to the portion; recognizes the 93 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. jointly-held assets and jointly-borne liabilites according to the Group’s stake in the joint operation; recognizes the income from sale of the Group’s share in the output of the joint operation; recognizes the income from sale of the joint operation’s outputs accoridng to the Group’s stake in it; and recognizes the expense solely incurred to the Group and the expense incurred to the joint operation according to the Group’s stake in it. When the Group, as a joint operator, transfers or sells assets (except for the assets constituing business) to the joint operation, before the assets are sold to a third party, the Group only recognizes the share of the other joint operators in the gains and losses arising from the sale. Where impairment occurs to the assets as prescribed in Business Enterprises—Asset Impairment>, the Group shall fully recognizes the loss. When the Group, purchases assets from the joint operation (except for the assets constituing business) to the joint operation, before the assets are sold to a third party, the Group only recognizes the share of the other joint operators in the gains and losses arising from the sale. Where impairment occurs to the assets as prescribed in Impairment>, the Group shall fully recognizes the loss according to its stake in the joint operation for a purchase of assets from the joint operation. If the Group attributes to the participate party without joint control on the joint operation,if enjoys the relevant assets and undertakes the relevant liabilities of the joint operation, should execute accounting treatment according to the above principles; otherwise, should execute the accounting treatment according to the accounting policies of the measurement of the financial instruments or the long-term equity investment formulated by the Group. 8. Recognition standard for cash and cash equivalents In the Group’s understanding, cash and cash equivalents include cash on hand, any deposit that can be used for cover, and short-term (usually due within 3 months since the day of purchase) and high circulating investments, which are easily convertible into known amount of cash and whose risks in change of value are minimal. 9. Foreign currency businesses and translation of foreign currency financial statements The foreign currency transactions are both discounted as recording currency according to the spot rate on the trading date (ususally refers to the middle price of the foreign exchange quotation on that very date issued by People’s Bank of China, similarly hereinafter). (1) Treatment of foreign currency exchange difference On balance sheet date, the Group accounts for monetary and non-monetary items denominated in foreign currencies as follows: a) monetary items denominated in foreign currencies are translated at the foreign exchange rates ruling at the balance sheet date. Foreign exchange gains and losses arising from the difference between the balance sheet date exchange rate and the exchange rate ruling at the time of initial recognition or the exchange rate ruling at the last balance sheet date are recognized in income statement; b) Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the current exchange rates ruling at the transaction dates. Non-monetary items denominated in foreign currencies that are stated at fair value are translated using the current exchange rates ruling at the dates the fair value was determined, the 94 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. difference between the amount of functional currency after translation and the original amount of functional currency is treated as part of change in fair value (including change in exchange rate) and recognized in income statement. During the capitalization period, exchange differences arising from foreign currency borrowings are capitalized as part of the cost of the capitalized assets. (2) Translations of financial statements in foreign currencies The Group translates the financial statements of its foreign operation in accordance with the following provisions: a) the asset and liability items in the balance sheets shall be translated at a spot exchange rate ruling at the balance sheet date. Among the owner's equity items, except the ones as “retained earnings”, others shall be translated at the spot exchange rate ruling at the time when they occurred; b) The income and expense items in the income statements shall be translated at an exchange rate which is determined in a systematic and reasonable way and is approximate to the spot exchange rate (calculated by the average of starting rate and closing rate on the reporting period) ruling at the transaction date. The foreign exchange difference arisen from the translation of foreign currency financial statements shall be presented separately under the owner's equity in the balance sheet. The translation of comparative financial statements shall be subject to the aforesaid provisions. 10. Financial instruments (1) Recognition of the financial instruments The Group recognizes a financial asset or financial liability on its balance sheet when, and only when, the Company becomes a party to the contractual provisions of the instrument. (2) Category and measurement of the financial assets ① The Group based on the reasons such as risks management, investment strategies and objective of holding the financial assets, classifies the financial assets into the following four categories: a) financial assets at fair value through profit or loss; b) held-to-maturity investments; c) loans and receivables; and d) available-for-sale financial assets. A. Financial assets measured by fair value and its changes included in the current gains and losses Financial assets measured by fair value and its changes included in the current gains and losses, including trading financial assets and the financial assets appointed to be measured by fair value with its changes included in the current gains and losses of the initial recognition. The financial assets meeting any of the following requirements shall be classified as transactional financial assets：A. The purpose to acquire the said financial assets is mainly for selling them in the near future; B. Forming a part of the identifiable combination of financial instruments which are managed in a centralized way and for which there are objective evidences proving that the enterprise may manage the combination by way of short-term profit making in the near future; C. Being a derivative instrument, excluding the designated derivative instruments which are effective hedging instruments, or derivative instruments to financial guarantee contracts, and the derivative instruments which are connected with the equity instrument investments for which there is no quoted price in the active market, whose fair value cannot be reliably measured, and which shall be settled by delivering the said equity instruments. The financial assets meeting any of the following requirements shall be designated as financial assets which are measured at their fair values and the variation of which is recorded into the profits and losses of the current period for initial recognition: A. the designation can eliminate or 95 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. significantly reduce the difference of relevant gains and losses between recognition and measurement causing from different bases for measurement of financial assets; B. The official written documents for risk management and investment strategies of the enterprise have clearly stated that it shall, manage, evaluate and report to important management personnel based on the fair value, about the financial assets group or the group of financial assets which the financial assets are belong to. For the equity instruments investment without quotation in the active market and the fair value could not be reliable measured, should not be appointed as the financial assets measured by the fair value with its changes included in the current gains and losses. B. Held-to-maturity investment The term "held-to-maturity investment" refers to a non-derivative financial asset with a fixed date of maturity, a fixed or determinable amount of repo price and which the enterprise holds for a definite purpose or the enterprise is able to hold until its maturity. C. Loans and the accounts receivables Loans and the accounts receivables refer to non-derivative financial assets, which there is no quotation in the active market, with fixed recovery cost or recognizable. D. Available-for-sale financial assets Available-for-sale financial assets refer to the non-derivative financial assts which appointed available for sale when initially recognizes and the financial assets except for the above category of the financial assets. After the Group classifies certain financial assets as the financial assets measured by fair value and included its changes in the current gains and losses when initially recognized, should not re-classified as other financial assets; other financial assets also should not be re-classified as the financial assets measured by fair value with its changes be included in the current gains and losses. ② The financial assets are initially recognized at fair value. Gains or losses arising from a change in the fair value of a financial asset at fair value through profit or loss is recognized in profit or loss when it incurred and relevant transaction costs are recognized as expense when it incurred. For other financial assets, the transaction costs are recognized as costs of the financial assets. ③ Subsequent measurement of financial assets A. A financial asset at fair value through profit or loss includes financial assets held for trading and financial assets designated by the Group as at fair value through profit or loss. The Group subsequently measures the financial asset at fair value through profit or loss at fair value and recognizes the gain or loss arising from a change in the fair value of a financial asset at fair value through profit or loss as profit or loss in the current period. B. Held-to-maturity investments are measured at amortized cost using the effective interest method. A gain or loss is recognized in profit or loss during the current period when the financial asset is derecognized or impaired and through the amortization process. C. Loans and receivables are measured at amortized cost using the effective interest method. A gain or loss is recognized in profit or loss during the current period when the financial asset is derecognized or impaired and through the amortization process. D. Available-for-sale financial assets are measured at fair value and the gain or loss arising from a change in the fair value of available-for-sale financial assets is recognized as capital reserve which is transferred into profit or loss when it is impaired or derecognized. Interests or cash dividends 96 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. during the holding period are recognized in profit or loss for the current period. For the equity instruments investment without quotation in the active market and the fair value could not be reliable measured and the derivative financial assets linked up with the equity instruments and should be settled through handing over to the equity instruments, should be measured according to the cost. ④ Impairment provision of the financial assets A. The Group assesses the carrying amount of the financial assets except the financial asset at fair value through profit or loss at each balance sheet date, if there is any objective evidence that a financial asset or group of financial assets is impaired, the Group shall recognize impairment loss. B. The objective evidences that the Group uses to determine the impairment are as follows: a) significant financial difficulty of the issuer or obligor; b) a breach of contract, such as a default or delinquency in interest or principal payments; c) the lender, for economic or legal reasons relating to the borrower's financial difficulty, granting to the borrower a concession that the lender would not otherwise consider; d) it becoming probable that the borrower will enter bankruptcy or other financial reorganization; e) the disappearance of an active market for that financial asset because of financial difficulties; f) observable data indicating that there is a measurable decrease in the estimated future cash flows from a group of financial assets since the initial recognition of those assets, although the decrease cannot yet be identified with the individual financial assets in the group, including: (i) Adverse changes in the payment status of borrowers in the group or (ii) an increase in the unemployment rate in the geographical area of the borrowers, a decrease in property prices for mortgages in the relevant area, or adverse changes in industry conditions that affect the borrowers. g) significant changes with an adverse effect that have taken place in the technological, market, economic or legal environment in which the borrower operates, and indicates that the cost of the investment in the equity instrument may not be recovered; h) a significant or non-temporary decrease in fair value of equity investment instruments; i) other objective evidences showing the impairment of the financial assets. C. Measurement of impairment loss of financial assets a) held-to-maturity investments, loans and receivables If there is objective evidence that an impairment loss on loans and receivables or held-to-maturity investments carried at amortized cost has been incurred, the amount of the loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows. The amount of the loss is recognized in profit or loss of the current period. The Group assesses whether objective evidence of impairment exists individually for financial assets that are individually significant, and individually or collectively for financial assets that are not individually significant. If the Group determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is or continues to be recognized are not included in a collective assessment of impairment. The Group performs impairment test for receivables and provide bad debt provisions at the balance sheet date. For the individually significant receivables and not individually significant receivables, the impairment tests are both carried on individually. If there is objective evidence that an impairment loss on loans and receivables, the Group provides provision for impairment 97 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. loss for the amount which is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized, the previously recognized impairment loss of financial asset measured at amortized cost is be reversed. The amount of the reversal is recognized in profit or loss of the current period. b) Available-for-sale financial assets The Group takes the individual investment of impairment test for available-for-sale financial assets. On the balance sheet date, it could judge whether the fair value of available-for-sale financial assets are seriously or non-temporary decline: if the decline of the fair value of the individual available-for-sale financial assets exceeds 50% of the cost, or had continuously declined for over 12 months, should be recognized the available-for-sale financial assets had decreased and should recognized the impairment losses according to the impairment provision for the balance between the cost and the fair value. The cost at the period-end of available-for-sale financial assets is the amortized cost which is initially measured according to the investment cost when receiving and is calculated by the weighted average method when selling. When a decline in the fair value of an available-for-sale financial asset has been recognized directly in equity, the cumulative loss that had been recognized directly in equity is removed from equity and recognized in profit or loss even though the financial asset has not been derecognized. If there is objective evidence that an impairment loss has been incurred on an unquoted equity instrument that is not carried at fair value because its fair value cannot be reliably measured, or on a derivative asset that is linked to and must be settled by delivery of such an unquoted equity instrument, the amount of the impairment loss is measured as the difference between the carrying amount of the financial asset and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such impairment losses are recognized in the profit or loss of the current period. If, in a subsequent period, the fair value of a debt instrument classified as available for sale increases and the increase can be objectively related to an event occurring after the impairment loss was recognized in profit or loss, the impairment loss is reversed, with the amount of the reversal recognized in profit or loss of the current period. Impairment losses recognized in profit or loss for an investment in an equity instrument classified as available for sale is not reversed through profit or loss. For impairment loss has been incurred on an unquoted equity instrument that is not carried at fair value because its fair value cannot be reliably measured, or on a derivative asset that is linked to and must be settled by delivery of such an unquoted equity instrument, the impairment loss is not reversed through profit or loss. (3) Classification and measurement of financial liabilities ① The financial liabilities held by the Group are divided into the financial liabilities measured at fair values and whose changes are recorded in current gains and losses and other financial liabilities. Financial liabilities measured by fair value and its changes included in the current gains and losses, including trading financial liabilities and the financial liabilities appointed to be measured by fair value with its changes included in the current gains and losses of the initial recognition. The financial liabilities meeting any of the following requirements shall be classified as transactional financial liabilities：A. The purpose to acquire the said financial liabilities is mainly 98 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. for selling them in the near future; B. Forming a part of the identifiable combination of financial instruments which are managed in a centralized way and for which there are objective evidences proving that the enterprise may manage the combination by way of short-term profit making in the near future; C. Being a derivative instrument, excluding the designated derivative instruments which are effective hedging instruments, or derivative instruments to financial guarantee contracts, and the derivative instruments which are connected with the equity instrument investments for which there is no quoted price in the active market, whose fair value cannot be reliably measured, and which shall be settled by delivering the said equity instruments. The financial liabilities meeting any of the following requirements shall be designated as financial liabilities which are measured at their fair values and the variation of which is recorded into the profits and losses of the current period for initial recognition: A. the designation can eliminate or significantly reduce the difference of relevant gains and losses between recognition and measurement causing from different bases for measurement of financial assets; B. The official written documents for risk management and investment strategies of the enterprise have clearly stated that it shall, manage, evaluate and report to important management personnel based on the fair value, about the financial liabilities group or the group of financial liabilities which the financial liabilities are belong to; for the blender instruments including one or more items of derivative instruments, unless there no significant changes of the cash flow of the blender instruments by the embedded derivatives, or the embedded derivative instruments parentally should be stripped off from the relevant blender instruments; including the blender instruments that embedded into the derivative instruments needed to be stripped out but failed to execute individual measurement when acquired or on the follow-up balance sheet date. After the Group classifies certain financial liabilities as the financial liabilities measured by fair value and included its changes in the current gains and losses when initially recognized, should not re-classified as other financial liabilities; other financial liabilities also should not be re-classified as the financial liabilities measured by fair value with its changes be included in the current gains and losses. ② Financial liabilities are initially measured at fair value. For the financial liability at fair value through profit or loss at its fair value, relevant transaction costs are recognized as expense when it incurred. For the other financial liabilities, relevant transaction costs are recognized as costs. ③ Subsequent measurement of financial liabilities A. The Group recognizes a financial liability at fair value through profit or loss at its fair value. A gain or loss of change in fair value is recognized in the profit or loss of the current period. B. Other financial liabilities are measured by amortized cost using effective interest rate. (4) Recognition and measurement for transfer of financial assets The Group derecognizes financial assets when the Group transfers substantially all the risks and rewards of ownership of the financial assets. On derecognizing of a financial asset in its entirety, the difference between the follows is recognized in profit or loss of the current period. ① the carrying amount of transferring financial assets; ② the sum of the consideration received and any cumulative gain or loss that had been recognized directly in equity (including financial assets transferred to available for sale category). If the transferred asset is part of a larger financial asset and the part transferred qualifies for derecognizing in its entirety, the previous carrying amount of the larger financial asset is allocated 99 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. between the part that continues to be recognized and the part that is derecognized, based on the relative fair values of those parts on the date of the transfer. The difference between the follows is recognized in profit or loss of the current period. ① the carrying amount allocated to the part derecognized; ② the sum of the consideration received for the part derecognized and any cumulative gain or loss allocated to it that had been recognized directly in equity (including financial assets transferred to available for sale category). A cumulative gain or loss that had been recognized in equity is allocated between the part that continues to be recognized and the part that is derecognized, based on the relative fair values of those parts. If a transfer does not qualify for derecognizing, the Group continues to recognize the transferred asset in its entirety and shall recognize a financial liability for the consideration received. When the Group continues to recognize a financial asset to the extent of its continuing involvement, the Group also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained. (5) De-recognition of financial liabilities If the whole or partly of the current obligation of the financial liabilities of the Group is relieved, should derecognize the financial liabilities or partly of it. The Group signs an agreement with the creditors is of the method by undertaking the new financial liabilities to replace the current financial liabilities. if the new financial liabilities are different from the current one on the essence of contract terms, should derecognize the current financial liabilities and recognize the new one at the same time. If the whole or partly of the financial liabilities had derecognized, should derecognize balance between partly of the book value and the paid consideration (including the turned out non-cash assets or the new financial liabilities) and accrued into the current gains and losses. (6) Offsetting financial assets and financial liabilities Financial assets and financial liabilities shall be presented separately in the balance sheet and shall not be offset. As for the financial assets and financial liabilities satisfy the following conditions at the same time, should be listed as the net amount within the balance sheet after the mutual offset: the Group had the legal right of the offset recognized amount and the right was executable for the moment; the Group planed to settle by net amount or at the same time discounted the financial assets and liquidated the financial liabilities. For the transfer of the financial assets not satisfy the de-recognition conditions, the transfer-out party should not offset the transfer financial assets and the relevant liabilities. 11. Receivables (1) Accounts receivable with significant single amount for which the bad debt provision is made individually Judgement basis or monetary standards of provision for bad Accounts receivable with individual amount of more than 2 debts of the individually significant accounts receivable million (including 2 million). 100 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. The Group made an independent impairment test on receivables with significant single amounts; if there was objective evidence indicated that the impairment had occurred should recognize the Method of individual provision for bad debts of the individually impairment losses and should withdraw the bad debt provision. significant accounts receivable The financial assets without impairment by independent impairment test should be included in financial assets portfolio with similar credit risk to take the impairment test. (2) Accounts receivable which the bad debt provision is withdrawn by credit risk characteristics Name of portfolios Bad debt provision method Portfolios 1 (accounts receivable among the companies within Other method the consolidated scope of the Group) Portfolios 2 (accounts receivable except for the portfolios 1 which had not been impaired after the independent test, and the Company analyzed and recognized the ratio of the withdrawal of the bad debt provision combined with the current situation and Aging of accounts based on the actual losses rate of the accounts receivable group which possessed the similar credit risk characteristics divided according to the aging phase that were the same as or similar to the previous years) In the groups, adopting aging analysis method to withdraw bad debt provision: √ Applicable □ Inapplicable Withdrawal proportion for accounts Withdrawal proportion for other accounts Age receivable receivable Within 1 year (including 1 year) 3.00% 3.00% 1-2 years 10.00% 10.00% 2-3 years 30.00% 30.00% 3-4 years 50.00% 50.00% 4-5 years 80.00% 80.00% Over 5 years 100.00% 100.00% In the groups, adopting balance percentage method to withdraw bad debt provision: □ Applicable √ Inapplicable In the groups, adopting other methods to withdraw bad debt provision: √ Applicable □ Inapplicable Withdrawal proportion for accounts Withdrawal proportion for other accounts Name of portfolios receivable receivable Portfolios 1 0.00% 0.00% 101 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. (3) Accounts receivable with an insignificant single amount but for which the bad debt provision is made individually The Group made independent impairment test on receivables Reason of individually withdrawing bad debt provision with insignificant amount but with special impairment indicated by objective evidence. The impairment test is carries out individually, the Company recognizes provision for impairment loss for the amount which is Withdrawal method for bad debt provision measured as the difference between the asset's carrying amount and the present value of estimated future cash flows, and withdraws relevant bad debts provision. 12. Inventory (1) Classification of inventory: inventory of the Group including the finished products or commodities held in the daily activities for sales, the unfinished products in the production process, the materials consumed in the production process or the process of providing the labor etc. Which are specific divided as: raw materials, finished goods, and low-value consumption goods, land use right held for real estate development, properties under development and completed properties for sale. (2) Reorganization of inventory: the Company confirms the inventory when meeting the following conditions at the same time: ① the economic benefits related to the inventory possibility would flow into the enterprise; ② the cost of the inventory could be reliably calculated. (3) Valuation method of inventories acquiring and issuing: Property inventories are measured at actual cost incurred, comprising the borrowing cost designated for real estate development before completion of developing properties. Completed saleable property inventories are measured using average unit area cost method. Other kinds of inventories are measured at actual cost incurred, and when the inventories are transferred out or issued for use, cost of the inventories is determined using weighted average cost method. (4) Amortization method of low-value consumption goods and wrappage: the low-value consumption goods and wrappage should adopt the one time amortization according to the actual situation when requiring. (5) Measurement of the inventories at the period-end: on the balance sheet date, the inventory should be measured according to the lower one between the cost and the net realizable value, if the inventory cost higher than the net realizable value, should withdraw the falling provision of the inventory and include in the current gains and losses. ① Estimation of net realizable value: Estimates of net realizable value are based on the most reliable evidence available at the time the estimates are made, of the amount the inventories are expected to realize. These estimates take into consideration the purpose for which the inventory is held and the influence of post balance sheet events. Materials and other supplies held for use in the production are measured at cost if the net realizable value of the finished goods in which they will be incorporated is higher than their cost. 102 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. However, when a decline in the price of materials indicates that the cost of the finished products will exceed their net realizable value, the materials are measured at net realizable value. The net realizable value of inventories held to satisfy sales or service contracts is generally based on the contract price. If the quantity specified in sales contracts is less than the inventory quantities held by the Company, the net realizable value of the excess shall be based on general selling prices. ②The Company generally provides provision for impairment of inventory individually. For large quantity and low value items of inventories, cost and net realizable value are determined based on categories of inventories. Where certain items of inventory have similar purposes or end uses and relate to the same product line produced and marketed in the same geographical area, and therefore cannot be practicably evaluated separately from other items in that product line, costs and net realizable values of those items may be determined on an aggregate basis. (6) The perpetual inventory system is maintained for stock system. 13. Divided as assets held for sale (1) Recognition criteria of the assets held for sale The Group recognizes the enterprise compose part (or the non-current assets, similarly hereinafter) that simultaneously meets with the following conditions as assets held for sale: ① The compose part must be immediately sold only according to the usual terms of selling the compose part of this kind under the current conditions; ② The relevant power institutions of the Group had made agreement on disposing the compose part, if receive the approval from the shareholders accoridng to the rules, which equals to had received the approved of the Annual General Meeting or the corresponding power institution; ③ The Group has signed the irrevocable transfer agreement with the assignee; ④ The sale transaction is highly probable to be completed within one year (2) Accounting treatments of the assets held for sale Non-current assets held for sale include single-item assets and disposal groups. Where a disposal group is an asset group and the goodwill obtained in the business combination is apportioned to the asset group according to the “Accounting Standard No. 8 for Business Enterprises—Asset Impairment”, or a disposal group is an operation in such an asset group, the disposal group shall include the goodwill in the business combination. As for the non-current assets and disposal group which be classiied held for sale by the Group, shall be measured at the lower one of the net amounts of the book value and the fair value after deducting the disposal expense. If the net amount the fair value minuses the disposal expenses is lower than the original book value, the difference should be included in the current gains and losses as the assets impairment losses; if the held for sale is the disposal group, the assets impairment losses should be firstly distributed to the goodwill and then included in the current gains and losses by amortized according to the proportion and attributed to the other non-current assets within the held for sale assets scope. The deferred income tax assets, the financial assets standarized by No. 22 of ASBE-Recognition and Measurement of Financial Instruments, investment property and biological asstes measured by fair value, contacts rights occurred from the insurance contacts and the assets occurred from the employee benefits are not suit for the held 103 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. for sale measurement, but be individually measured or be measured by being regarding as part of certain disposal group according to the relevant criterion or the relevant accounting policies formulated by the Group. An asset or an disposal group was classified as held for sale before, but if it couldn’t meet the recognition conditions for held-for-sale non-current asset later, the Company shall cease to classify it as held for sale, and measure it by the lower amount of the followings: (1) its carrying amount before the asset (or disposal group) was classified as held for sale, adjusted for any depreciation, amortization or impairment before the asset (or disposal group) being classified as held for sale; or (2) its recoverable amount on the date of the subsequent decision not to sell. 14. Long-term equity investments Long-term equity investement including the equity investment on the subsidiaries, joint ventures and associated enterprises. (1) Initial measument The Group initially measures long-term equity investments under two conditions: ① For long-term equity investment arising from business combination, the initial cost is recognized under the following principles. A. If the business combination is under the common control and the acquirer obtains long-term equity investment in the consideration of cash, non-monetary asset exchange or bearing acquiree’s liabilities, the initial cost is the carrying amount of the proportion of the acquiree’s owner’s equity at the acquisition date. The difference between cash paid, the carrying amount of the non-monetary asset exchanged and the acquiree’s liabilities beard and the initial cost of the long-term equity investment should be adjusted to capital surplus. If the capital surplus is not sufficient for adjustment, retained earning is adjusted respectively. The business combination costs that are directly attributable to the combination, such as audit fees, valuation fees, legal service fees and so on are recognized in profit or loss during the current period when they occurred. If the acquirer issuing equity securities as consideration, the initial cost is the carrying amount of the proportion of the acquiree’s owner’s equity at the acquisition date. Amount of share capital equal to the par value of the shares issued. The difference between initial cost of the long-term equity investment and the par value of shares issued is adjusted to capital surplus. If the capital surplus is not sufficient for adjustment, retained earning is adjusted respectively. The costs of issuing equity securities occurred in business combination such as charges of security issuing and commissions are deducted from the premium of equity securities. If the premium is not sufficient for deducting, retained earning is adjusted respectively. B. If the business combination is not under the common control, the acquirer recognizes the initial cost of combination under the following principles. a) When business combination is achieved through a single exchange transaction, the cost of a 104 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. business combination is the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity securities issued by the acquirer, in exchange for control of the acquiree; b) For a business combination that involves more than one exchange transaction, the initial investment cost is the summation of the book value of the equity interests of the acquiree held by the Company before the acquisition date and the new investment cost on the acquisition date; c) The fees incurred for audit, legal consultation, valuation services and other management expenses are to be recognized in profit or loss at the time such costs incurred. The transaction costs incurred by the acquirer for issuing equity securities or debt securities as the consideration of the acquisition are to be recognized as the initial amount of such equity security or debt security. d) Where a business combination contract or agreement provides for a future event which may adjust the cost of combination, the Company shall include the amount of the adjustment in the cost of the combination at the acquisition date if the future event leading to the adjustment is probable and the amount of the adjustment can be measured reliably. ② For long-term equity investment obtained in any method other than business combination, the initial cost is recognized under the following principles. A. If the long-term equity investment is acquired in cash consideration, the initial cost is the actual payment which includes direct expenses paid to acquire the long-term equity investment, taxes and other necessary expense. B. If the long-term equity investment is acquired by issuing equity securities, the initial cost is the fair value of the equity securities issued. However, cash dividends or profits that are declared but unpaid shall not be included in the initial cost. Direct costs attributed to issue equity securities such as handling charges and commissions paid to securities underwriting agencies are deducted from premium of equity securities. If the premium is not sufficient for deduction, reserved fund and retained earnings is adjusted respectively. C. For the long-term equity investment invested by investors, the initial cost is the agreed value prescribed in the investment contract or agreement unless the agreed value is not fair. D. For the long-term equity investment acquired through non-monetary asset exchange, the initial cost is recognized according to “Accounting Standards for Business Enterprises No. 7-Non-monetary transactions”. E. For the long-term equity investment acquired through debt restructuring, the initial cost is recognized according to “Accounting Standards for Business Enterprises No. 12-Debt restructuring”. ③ If there are cash dividends or profits that are declared but unpaid included in the consideration paid, the cash dividends or profits declared but unpaid shall be recognized as receivables separately rather than as part of initial cost of long-term equity instruments no matter through which method the long-term equity investment is acquired. (2) Subsequent measurement 105 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. The cost method is used among the individual financial statement when the long-term equity invetsment could execute control on the investees.The equity method is used when the Company has joint control or significant influence over the investee enterprise. ① The price of a long-term equity investment measured by adopting the cost method shall be included at its initial investment cost and append as well as withdraw the cost of investing and adjusting the long-term equity investment. As for the cash bonus or the profits be declared for distribution by the investees should be recognized as the current investment income. ② If the initial cost of a long-term equity investment is more than the Company's attributable share of the fair value of the invested entity's identifiable net assets for the investment, the initial cost of the long-term equity investment may not be adjusted. If the initial cost of a long-term equity investment is less than the Company's attributable share of the fair value of the invested entity's identifiable net assets for the investment, the difference shall be included in the current profits and losses and the cost of the long-term equity investment shall be adjusted simultaneously. After acquired the long-term equity investment, respectively recognize investment income and other comprehensive income according to the net gains and losses as well as the portion of other comprehensive income which should be enjoyed or be shared, and at the same time adjust the book value of the long-term equity investment; corresponding reduce the book value of the long-term equity investment according to profits which be declared to distribute by the investees or the portion of the calculation of cash dividends which should be enjoyed; for the other changes except for the net gains and losses, other comprehensive income and the owners’ equity except for the profits distribution of the investees, should adjust the book value of the long-term equity investment as well as include in the owners’ equities. The investing enterprise shall, on the ground of the fair value of all identifiable assets of the invested entity when it obtains the investment, recognize the attributable share of the net profits and losses of the invested entity after it adjusts the net profits of the invested entity. If the accounting polices adopted by the investees is not accord with that of the Group, should be adjusted according to the accounting policies of the Group and the financial statement of the investees during the accounting period and according which to recognize the investment income as well as other comprehensive income. The Group shall recognize the net losses of the invested enterprise until the book value of the long-term equity investment and other long-term rights and interests which substantially form the net investment made to the invested entity are reduced to zero. However, if the Group has the obligation to undertake extra losses, it shall be recognized as the estimated liabilities in accordance with the estimated duties and then recorded into investment losses at current period. If the invested entity realizes any net profits later, the Group shall, after the amount of its attributable share of profits offsets against its attributable share of the un-recognized losses, resume recognizing its attributable share of profits. When calculating and recognizing the net gains and losses enjoyed or be burdened by the investees, the part attributed to the Group which meausred according to the enjoyed proportion from the unrealized internal transactoins with the joint ventures and associated enterprises should be written off and be recognized as investment income on the basis. As for the unrealized internal transactions losses attributed to the assets impairment losses occurred between the Group and the investees, should be recognized in full amount. ③ When the Group disposing the long-term equity investment, as for the difference between the 106 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. book value and the actual required price, should be included in the current gains and losses.As for the long-term equity investment measured by equith method, when disposing the investment, should execute the accounting treatment on the part which be originally included in the other comprehensive income according to the correspoding proportion based on the same basic of the relevant assets or liabilities be directly disposed by the investees. (3) Basic of recognizing the joint control and significant influences on the investees Joint control, refers to the control jointly owned according to the relevant agreement on an arrangement by the Group and the relevant activities of the arrangement should be decided only after the participants which share the control right make consensus. Significant influence refers to the power of the Group which could anticipate in the finance and the operation polices of the investees, but could not control or jointly control the formulation of the policies with the other parties. (4) Impairment test method and withdrawal method of impairment provision The impairment test method and the withdrawal method of impairment provision of long-term equity investment are executed according to the accounting polices of “Long-term assets impairment” formulated by the Group. 15. Investment real estates Measurement mode of investment real estates Measurement of cost method Depreciation or amortization method (1) Investment properties of the Company are properties held to earn rentals or for capital appreciation or both, mainly comprising: ①Land use right which has already been rented; ②Land use right which is held for transfer out after appreciation; ③Property that has already been rented. (2) Investment property shall be recognized as an asset when the following conditions are satisfied: ①It is probable that the future economic benefits that are associated with the investment property will flow to the Company; ②The cost of the investment property can be measured reliably. (3) Initial measurement An investment property is measured initially at its cost. ①The cost of a purchased investment property comprises its purchase price, related tax expenses and any directly attributable expenditure. ②The cost of a self-constructed investment property comprises all necessary construction expenditures incurred before the property is ready for its intended use. ③The cost of a property acquired by other means shall be recognized according to relevant accounting standards. (4) Subsequent measurement After initial recognition, the Company adopts the cost model to measure its investment properties. The Company amortizes or depreciates its investment properties measured using cost model in the same way as fixed assets and intangible assets 107 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. If the Group had definite evidence indicated the usage of the property had changed, when transferring the self-used real estate or the inventories as the investment real estate or transferring the investment real estate as the self-used real estate, the book value before the transfer should be regarded as the entry value after transfer. The Group values the investment property measured using cost model at the lower of its cost and its recoverable amount at the end of the period. Where the cost exceeds the recoverable amount, the difference shall be recognized as impairment loss. Once a provision for impairment loss is made, it cannot be reversed. 16. Fixed assets (1) Recognized standard Fixed assets are tangible assets that: 1) are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes; and 2) have useful life more than one year. A fixed asset shall be initially recognized at cost when the following conditions are satisfied: ① It is probable that future economic benefits associated with the assets will flow to the Company; ② The cost of the assets can be measured reliably. (2) Depreciation methods Expected net salvage Category of fixed assets Method Useful life Annual deprecation value Housing and building Straight-line depreciation 20-25 years 5-10% 3.8-4.5% Machinery equipments Straight-line depreciation 10 years 5% 9.5% Transportation vehicle Straight-line depreciation 5 years 5% 19% Electronic and other Straight-line depreciation 5 years 5% 19% equipments Decoration of fixed Straight-line depreciation 5 years 0% 20% assets Subsequent expenditure related to the fixed assets should accrued into the cost of fixed assets if met with the stipulated reorganization conditions of fixed assets; if not, should accrued directly into the current gains and losses when occurred. The depreciation method adopted by the Company is straight-line method. The Group will execute reexamine for the service life, estimated net salvage and the depreciation method of the fixed assets after each accounting year. If there was difference between the service life and the original estimated number, should adjust the useful life of the fixed assets; if there was difference between the estimated net salvage and the original estimated number, should adjust the estimated net salvage; if there were significant changes of the realization method of the economic benefits related to the fixed assets, should changes the depreciation method of the fixed assets. The changes of the useful life, estimated net salvage and the depreciation method of the fixed 108 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. assets should be regarded as the accounting estimate changes. Impairment of fixed asset refers to accounting policy “Long-term assets impairment” of the Group. (3) Recognition basis, pricing and depreciation method of fixed assets by finance lease The "finance lease" shall refer to a lease that has transferred in substance all the risks and rewards related to the ownership of an asset. Its ownership may or may not eventually be transferred. The fixed assets by finance lease shall adopt the same depreciation policy for self-owned fixed assets. If it is reasonable to be certain that the lessee will obtain the ownership of the leased asset when the lease term expires, the leased asset shall be fully depreciated over its useful life. If it is not reasonable to be certain that the lessee will obtain the ownership of the leased asset at the expiry of the lease term, the leased asset shall be fully depreciated over the shorter one of the lease term or its useful life. 17. Construction in progress (1) The valuation of the construction in progress: recognizes the engineering cost according to the cost actual occurred. The cost of construction in progress also includes the borrowing expenses and exchange gains and losses which should be capitalized. (2) The Company should transfer the construction in progress into fixes assets when the construction in progress is ready for their intended use. If the built construction had reached the state ready for intended use but had not settled the fixed assets of completion settlement, should recognized as fixed assets according to the estimated value as well withdrew and depreciated; after execute the completion settlement procedure, it should adjust the original provisional estimate value according to the actual cost but not the original withdrew depreciation amount. (3) Impairment of construction in progress refers to accounting policy “Long-term assets impairment” of the Group. 18. Borrowing costs (1) Recognition principles for capitalization of borrowing costs and capitalization period The costs of borrowings designated for acquisition or construction of qualifying assets should be capitalized as part of the cost of the assets. Capitalization of borrowing costs starts when ① The capital expenditures have incurred; ② The borrowing costs have incurred; ③ The acquisition and construction activities that are necessary to bring the asset to its expected usable condition have commenced. Other borrowing costs that do not qualify for capitalization should be expensed off during current period. Capitalization of borrowing costs should be suspended during periods in which the acquisition or construction is interrupted abnormally, and the interruption period is three months or longer. These borrowing costs should be recognized directly in profit or loss during the current period. However, capitalization of borrowing costs during the suspended periods should continue when 109 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. the interruption is a necessary part of the process of bringing the asset to working condition for its intended use. Capitalization of borrowing costs ceases when the qualifying asset being acquired or constructed is substantially ready for its intended use. Subsequent borrowing costs should be expensed off during the period in which they are incurred. The term “assets eligible for capitalization” refers to the fixed assets, investment real estate, inventories and other assets, of which the acquisition and construction or production may take quite a long time to get ready for its intended use or for sale. (2) Calculation method of capitalized amount of borrowing costs To the extent that funds are borrowed specifically for the purpose of acquiring or constructing a qualifying asset, the amount of borrowing costs eligible for capitalization on that asset is determined as the actual borrowing costs incurred on that borrowing during the period less any investment income on the temporary investment of the borrowing. To the extent that funds are borrowed generally and used for the purpose of acquiring or constructing a qualifying asset, the amount of borrowing costs eligible for capitalization shall be determined by applying a capitalization rate to the weighted average of excess of accumulated expenditures on qualifying asset over that on specific purpose borrowing. The capitalization rate is the weighted average rate of the general borrowings. During the period of capitalization, the exchange balance on foreign currency special borrowings shall be capitalized; the exchange balance on foreign currency general borrowings shall be recorded into current profits and losses. 19. Biological assets Inapplicable 20. Oil-gas assets Inapplicable 21. Intangible assets (1) Pricing method, useful life and impairment test The term "intangible asset" refers to the identifiable non-monetary assets possessed or controlled by enterprises which have no physical shape. (1) Recognition of intangible asset: The Company recognizes an intangible asset when that intangible asset fulfills both of the following conditions: ①It is probable that the economic benefits associated with that asset will flow to the Company; ②The cost of that asset can be measured reliably. (2) Measurement of intangible assets ①An intangible asset is measured initially at its cost. ②Subsequent measurement of intangible assets 110 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. A．For an intangible asset with finite useful life, the Company estimates its useful life at the time of acquisition and amortizes it during its useful life in a reasonable and systematic way. The amount of amortization is allocated to relevant costs and expenses according to the nature of beneficial items. The Company does not amortize intangible asset with infinite useful life. At the end of period, the Group shall check the service life and amortization method of intangible assets with finite service life, if there is any change, it shall be regarded as a change of the accounting estimates. Besides, the Group shall check the service life of intangible assets without certain service life, if there is any evidence showing that the period of intangible assets to bring the economic benefits to the enterprise can be prospected, it shall be estimated the service life and amortized in accordance with the amortization policies for intangible assets with finite service life. Impairment of the intangible assets should be executed according to the accounting policies of “Long-term assets impairment” formulated by the Group. (2) Accounting polices of internal R & D expenses Inapplicable 22. Impairment of long-term assets Following indications indicate that there occurs the impairment: (1) The current market price of the assets greatly decreased with the range of a price drop obviously higher than the estimated decline owning to the passage of time or the normal employ. (2) The environment the economy, technology and laws of the Group involved, and the market the assets involved, if there are significant changes occur in the current period or in recent period, would cause harmful influences on the Group. (3) The market interests rate or other market investment return rate had improved in the current period, thus influenced and the discount rate for calculating the estimated current value of the future cash flow of the assets by the enterprises, which would led to the sharply decrease of the recoverable amount. (4) There are evidences indicate the assets are of obsolescence or the entity had been damaged. (5) The assets had been or will be left unused, cease using or planed to dispose in advance. (6) The evidence of the internal report of the Group indicant that the economy performance had been lower or would be lower than estimations, for example, the net cash flow or the operation profits (or losses) realized were far lower than the estimated amount etc. (7) Other assets indicate there are indications there occurs the impairment. The Group judges each assets such as the long-term equity investment, fixed assets, engineering materials, intangible assets (except for those with uncertain usage life) which adapt to the No. 8 of ASBE-Assets Impairment on the balance sheet date and executes the recover by impairment test-estimations when there are impairment indications. The recoverable amount is recognized through the fair value of the assets which minus the higher one between the net amount after disposal and the current value of the assets estimated future cash flow. If the recoverable amount lower than the book value of the assets, the book value should be written down as the recoverable amount with the written-down amount be recognized as the assets impairment losses and included in the current gains and losses and at the same time withdraw the assets impairment provision. 111 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. If there are indications indicate any asset occur impairment, the Group usually estimates its recoverable amount base on the individual asset. If it is difficult to estimate the recoverable amount of the individual asset, which asset group it belongs to should be recognized the recoverable amount base on the asset group. The asset group is the smallest asset group that could be recognized by the Group, and its cash inflow is basically independent of other asset or asset group. The asset group is composed by the relevant assets which create the cash inflow. The recognition of the asset group is based on whether the main cash inflow caused by the asset group is independent of the cash inflow of the other assets or the asset group. The Group executes the impairment test every year on the goodwill formed by the enterprise combination and the intangible assets with uncertain service life no mater there are impairment indications or not. The impairment test of the goodwill is executed by combining with the relevant asset group or the asset group combination. Once the assert impairment losses had been recognized, should not be reversed in the accounting period afterwards. 23. Amortization method of long-term deferred expenses The Company recognizes all expenses which have occurred during the period but shall be amortized beyond one year, such as improvement expenditures of operating leased fixed assets, as long-term deferred expenses. The Company amortizes long-term deferred expenses using straight-line method according to relevant beneficial periods. 24. Payroll (1) Accounting treatment of short-term compensation Employee compensation refers to the reward or compensation of various modes provided by the Group which wants to receive the service offering by the employees or to execute the release of the labor relationship. The employee compensation including the short-term salary, departure benefits, demission benefits and other long-term employee benefits. The Group provides the benefits for the spouses, children, supported families of the employees, the members of the deceased's employees and other beneficiaries, which are also employee compensations. The short-term compensation actually happened during the accounting period when the active staff offering the service for the Group should be recognized as liabilities and is included in the current gains and losses or relevant assets cost except for those be required or permitted to included in the assets cost by other ASBE. (2) Accounting treatment of the welfare after demission The Group divides the departure benefits plan into defined contribution plans and defined benefit plans. Benefits plan of after demission refer to the agreement between the Group and employees on the departure benefits, or the regulations or methods formulated by the Group for providing welfares after demission for the employees. Of which, defined contribution plans refers to the departure benefits plan that the Group no more undertake the further payment obligations after the 112 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. payment and deposit of the fixed expenses for the independent funds; defined benefit plans refers to the departure benefits plan except for the defined contribution plans. A. Defined contribution plans During the accounting period when providing the service for the employees, the Group will recognize the deposited amount as the liabilities which measured by defined contribution plans and include in the current gains and losses or the relevant assets cost. B.Defined benefit plans Other long-term employee benefits the Group had not executed the defined contribution plans or met with the conditions of defined benefit plans. (3) Accounting treatment of the demission welfare When the Company is unable to unilaterally withdraw the plan on the cancellation of labor relationship or the layoff proposal, or when recognizing the costs or expenses (the earlier one between the two) related to the reorganization of paying the demission welfare, should recognize the payroll liabilities from the demission welfare and include in the current gains and losses. (4) Accounting treatment of the welfare of the long-term employees The Group provides the other long-term employee benefist for the employess, and for those met with the defined contribution plans, should be disposed according to the above accounting polices of the defined contribution plans; the for the others except for the former, should be recognized according to above accounting polices of the defined benefit plans and measure the net liabiilties or net assets of other long-term employee benefits. 25. Estimated liabilities (1) Recognition criteria of estimated liabilities The company should recognize the related obligation as a provision for liability when the obligation meets the following conditions: ①That obligation is a present obligation of the enterprise; ②It is probable that an outflow of economic benefits from the enterprise will be required to settle the obligation; ③A reliable estimate can be made of the amount of the obligation. (2) Measurement of estimated liabilities To fulfill the present obligations, which initially measured by the best estimate of the expenditure required to settle the liability. Where there is a continuous range of possible amounts of the expenditure required to settle the liability, as all kinds of possibilities are at same level, the best estimate should be determined according to the average of the lower and upper limit of the range. In other cases, the best estimate should be determined in accordance with the following methods: ①Where the contingency involves a single item, the best estimate involves a singe item, the best estimate should be determined according to the most likely outcome; ②Where the contingency involves several items; The best estimate should be determined by weighting all possible outcomes by their associated probabilities of occurrence. To determine the best estimate, it should be considered with factors such as: related contingency 113 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. risks, uncertain matters and time value of currency. If time value of currency has a significant impact, the best estimate should be measured at its converted present value through the relevant future cash outflows. Where some or all of the expenditures are expected to be reimbursed by a third party, the reimbursement should be separately recognized as an asset only when it is virtually received. The amount of the reimbursement should not exceed the carrying amount of the liability recognized. At balance sheet date, the Group should review book value of provision for liabilities. If there is strong evidence that the book value does not truly indicate the current best estimate, it should be adjusted in accordance with the current best estimate. 26. Share-based payment Inapplicable 27. Other financial instruments such as preferred shares and perpetual capital securities Inapplicable 28. Revenue The revenue of the Group including the commodities sales revenue, real estate sales revenues, property leasing revenues, labor revenues and the revenues from the using of the assets of the Company by others. (1) Commodities sales revenues The Group had transferred the major risks and the remunerations of the ownership of the commodities to the buyers and neither remained the continuous management right that usually related to the ownership nor executed the efficient control of the sold commodities. As for the revenues amount and the relevant costs occurred or will occurr which could be reliable measured, should confirm the revenues of the sales of the commodities when the relevant economic benefits would probably flow into the enterprise. The revenues of the sales of the commodities of the Group were mainly the sales revenues of the commercial residential buildings. The sales of the properties of the Group had executed completion acceptance that had transferred to the buyers or be regarded as had transferred to the buyers according to the sales contacts as well as confirmed the realization of the revenues when executing the liquidation of the sales amount of the commercial residential buildings (the mortgage purchase way of the buildings were the receipted down payment and the bank mortage amount). (2) Provide labor income The labor income provided by the Group mainly comes from property management income, project supervision service income and catering service income. Property management income: the property management income is realized when the property management service has been provided and the service fee as agreed with the owner is able to flow into the enterprise. Other labor income: the labor income is realized when the labor service has been provided and the related economic interest is able to flow into the enterprise and related cost is able to be reliably 114 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. measured. (3) Income from transferring asset use right The income from transferring asset use right includes property lease income, taxi income, interest income and other use right income. Property lease income: the property lease income is realized by the method of straight line as agreed in the lease contract or agreement signed with the leasee. If there are lease periods free of any rent, the lessor shall distribute the total rent, not deducting the rent during those periods free of any rent, within the entire lease period by the method of straight line or other reasonable means. During the periods free of any rent, the lessor shall recognize the lease income. Taxi income: the taxi income is recognized as the contract amount agreed under the contracting contract or agreement signed with the contractor. Interest income: the interest income is recognized by the duration you use the Company’s cash and the applicable interest rate. The fee income is recognized by the charging time and method as regulated in related contract or agreement. Income from other use right: the income from transferring asset use right is recognized when the income amount is able to be reliably measured and related economic interest is possible to flow into the enterprise. 29. Government subsidies (1) Judgment basis and accounting treatment of government subsidies related to assets The government subsidies divides into the government subsidies related to the assets and the government subsidies realted to the profits. The government subsidies pertinent to assets mean the government assets that are obtained by enterprises used for purchase or construction, or forming the long-term assets by other ways. (1) Recognition of the government subsidies If the government subsidies meet with the following conditions at the same, should be recognized: ① The entity will comply with the condition attaching to them; ② The grants will be received from government. (2) Measurement of the government subsidies: ① If monetary grants are received, it recognized at actual received or receivable amount. If non-monetary grants are received, it recognized at fair value, replacing with nominal amount while fair value is not reliable. ② The Capital approach for government grants, the grant is recognized as deferred income when it is acquired. Since the related assets achieve its intended using status, the deferred income is amortized and recognized in profit and loss during asset’s using period. If related assets were disposed before using period ended, undistributed deferred income shall be shift to current profit and loss at once. The Income approach for government grants, to retrieve expense or loss of the Company in further period, the government grants is recognized as deferred income, and shall be recorded in profit and loss when that expense or loss occurred. To retrieve expense or loss of the Company in current period, the government grants shall be recorded directly in current profit and loss. 115 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. ③ As for the confirmed repayment of government grants should be handled respectively according to the following situation: A. When deferred income exists, the repayment write-downs closing balance of deferred income, and the exceed part shall be recognized in current profit and loss; B. When no deferred income exists, the repayment shall be recognized directly in current profit and loss. (2) Judgment basis and accounting treatment of government subsidies related to profits The government subsidies divides into the government subsidies related to the assets and the government subsidies realted to the profits. The government subsidies pertinent to income refer to all the government subsides except those pertinent to assets. If the government subsidies documents had not definitely confirm the subsidy targets, the Group should divide them as the government subsidies related to profits except for those be indicated by the clear evidence that belongs to the government subsidies related to assets. (1) Recognition of the government subsidies If the government subsidies meet with the following conditions at the same, should be recognized: ① The entity will comply with the condition attaching to them; ② The grants will be received from government. (2) Measurement of the government subsidies: ① If monetary grants are received, it recognized at actual received or receivable amount. If non-monetary grants are received, it recognized at fair value, replacing with nominal amount while fair value is not reliable. ② The Capital approach for government grants, the grant is recognized as deferred income when it is acquired. Since the related assets achieve its intended using status, the deferred income is amortized and recognized in profit and loss during asset’s using period. If related assets were disposed before using period ended, undistributed deferred income shall be shift to current profit and loss at once. The Income approach for government grants, to retrieve expense or loss of the Company in further period, the government grants is recognized as deferred income, and shall be recorded in profit and loss when that expense or loss occurred. To retrieve expense or loss of the Company in current period, the government grants shall be recorded directly in current profit and loss. ③ As for the confirmed repayment of government grants should be handled respectively according to the following situation: A. When deferred income exists, the repayment write-downs closing balance of deferred income, and the exceed part shall be recognized in current profit and loss; B. When no deferred income exists, the repayment shall be recognized directly in current profit and loss. 30. Deferred income tax assets/deferred income tax liabilities The Company executes the accounting treatments of the income tax by adopting the balance sheet 116 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. liability method. (1) Deferred income tax assets ① Where there are deductible temporary differences between the carrying amount of assets or liabilities in the balance sheet and their tax bases, a deferred tax asset shall be recognized for all those deductible temporary differences to the extent that it is probable that taxable profit will be available against which the deductible temporary difference can be utilized. Deferred tax assets arising from deductible temporary differences should be measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled. ② At the balance sheet date, where there is strong evidence showing that sufficient taxable profit will be available against which the deductible temporary difference can be utilized, the deferred tax asset unrecognized in prior period shall be recognized. ③ The Company assesses the carrying amount of deferred tax asset at the balance sheet date. If it’s probable that sufficient taxable profit will not be available against which the deductible temporary difference can be utilized, the Company shall write down the carrying amount of deferred tax asset, or reverse the amount written down later when it’s probable that sufficient taxable profit will be available. (2) Deferred income tax liabilities A deferred tax liability shall be recognized for all taxable temporary differences, which are differences between the carrying amount of an asset or liability in the balance sheet and its tax base, and measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled. 31. Lease (1) Accounting treatment of operating lease Lessee in an operating lease shall treat the lease payment under an operating lease as a relevant asset cost or the current profit or loss on a straight-line basis over the lease term. The initial direct costs incurred shall be recognized as the current profit or loss; Contingent rents shall be charged as expenses in the periods in which they are incurred. Lessors in an operating lease shall present the assets subject to operating leases in the relevant items of their balance sheet according to the nature of the asset. Lease income from operating leases shall be recognized as the current profit or loss on a straight-line basis over the lease term; Initial direct costs incurred by lessors shall be recognized as the current profit or loss; Lessors shall apply the depreciation policy for the similar assets to depreciate the fixed assets in the operating lease; For other assets in the operating lease , lessors shall adopt a reasonable systematical method to amortize; Contingent rents shall be charged as expenses in the periods in which they are incurred. (2) Accounting treatments of financial lease For the lessee, a fixed asset acquired under finance lease shall be valued at the lower of the fair value of the leased asset and the present value of the minimum lease payments at the inception of lease. The minimum lease payments as the entering value in long-term account payable, the difference as unrecognized financing charges; The initial direct costs identified as directly attributable to activities performed by the lessee during the negotiation and signing of the finance 117 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. lease such as handling fees, legal fees, travel expenses, stamp tax shall be counted as lease asset value; the unrecognized financing charges shall be apportioned at each period during the lease term and adopt the effective interest rate method to calculate and confirm the current financing charge; Contingent rents shall be charged as expenses in the periods in which they are incurred. When the lessee calculates the present value of the minimum lease payments, for that lessee who can obtain the interest rate implicit in the lease, the discount rate shall be the interest rate implicit in the lease; otherwise the discount rate shall adopt the interest rate specified in the lease agreement. If the lessee can not get the interest rate implicit in the lease and there is no specified interest rate in the lease agreement, the discount rate shall adopt the current bank loan interest rate. Lessees shall depreciate the leased assets with the depreciation policy which is consistent with the normal depreciation policy for similar assets. If there is reasonable certainty that the lessee will obtain ownership by the end of the lease term, the depreciation shall be allocated to the useful life of the asset. If there is no reasonably certainty that the lessee will obtain ownership by the end of the lease term, the asset shall be depreciated over the shorter of the lease term and its useful life. On the initial date of financial lease, lessee of the financial lease shall record the sum of the minimum lease payments and initial direct costs as the financing lease accounts receivable, and also record the non-guaranteed residual value; recognize the difference between the total minimum lease payments , initial direct costs, non-guaranteed residual value and sum of the present value as the unrealized financing income; the unrealized financing income shall be distributed to each period over the lease term; adopt the actual interest rate to calculate the current financial income; Contingent rents shall be charged as expenses in the periods in which they are incurred. 32. Other significant accounting policies and estimates (1) Measurement of fair value Fair value refers to the price received from selling any asset or paid for transferring any liability in the orderly transactions that occur on the measurement date of the market participants. The Group should consider the characteristics of the assets or liabilities when measuring the relevant assets or liabilities by fair value; to suppose the transactions of selling or transferring the assets on the measurement date by the market participants is the orderly transactions under the conditions of the current market; to suppose the orderly transaction of selling or transferring the assets is executing in the market of the relevant assets or liabilities; to suppose the transaction is executing in the most favorable market of the relevant assets or liabilities if there is no any main market. The Group adopts the advice used when pricing the assets or liabilities for realizing the maximum of the economy benefits by the market participants. The Group judges the fair value of initial recognition whether is equal to the transaction price according to the characteristics of the relevant assets or liabilities with transaction nature etc.; if the transaction price and fair value is not equal, should include the relevant gains or losses in the current gains and losses except for those stipulated by other relevant ASBE. The Group adopts the assessment technology which adapt to the current conditions with sufficient available data and other information support, and the assessment technology mainly including the market method, equity method and cost method. In the application of the assessment technology, the Group should prefer the relevant observable input value and only when the relevant observable 118 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. input value could not be required or required the not feasible value, could use the not observable input value. The input value used for the fair value measurement is divided into three levels and the first level of the input value is initially used, then come to the second level and the third one the last. The first level input value is the quotation acquired from the activa market of the same assets or liabilities that had not be adjusted; the second input value is the input value could be directly or indirecly observed of the relevant assets or liabilities except for the first level input value; the third level input value is the not observable input value of the relevant assets or liabilities. The Group measures the non-financial assets by fair value by considering the ability of the market participants when using the assets for the best purpose for causing the economy benefits or the ability to sell the assets to the other market participants which can use them with the best purpose for causing the economy benefits. The Group supposes to transfer the liabilities to other market participants on the measurement date and the liabilities would be continue to exist after the transfer as well as to be as the market participants of the transfees to execute the obligation when measuring the liabilities by fair value. The Group supposes to transfer the self equity instruments to other market participants on the measurement date and the self equity instruments would be continue to exist after the transfer as well as to acquire the relevant rights and to undertake the relevant obligations as the market participants of the transfees. (2) Operation termination Operation termination refers to the compose part that meet with one of the following conditions which had been disposed by the Group or be classified to held-to-sold as well as could be individually distinguished in operating and compiling the financial statement: ① the compose part represents an individual main business or a main operation area; ② the compose part is a part intends to dispose and plan an individual main business or a main operation area; ③ the compose part is a subsidiary which be acquired only for resold. (3) Segmental report The Group recognizes the operating segments according to the internal organization structure, the management requirements and the internal report system and recognizes the reporting segments and discloses the segmental information according base on the operating segments. Operating segments refer to the compose parts of the Group which meet with the following conditions at the same time: (1) the compose part could cause revenues and expenses in the daily activities; (2) the management layer could periodically evaluate the operation results of the compose part and base which to distribute the resources and evaluate the performance;(3) the Group could acquire the relevant accounting information of the financial conditions, operation results and the cash flows of the compose part. If two or more operating segments own the similar economy characteristics and meet with certain conditions, could be combining as an operating segment. (4) Quality margin According to the regulations of the construction contact, the Group should execute the retention of the quality margin for construction organizations and should include which into the “accounts payable” and to pay according to the actual situation and the contacts agreement after the guarantee period. (5) Maintenance funds The received public maintenance funds for the entrusted management of the owner from the 119 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. property management company of the Group should be included in the “non-current liabilities”, which were specially used for the maintenance and updating for the residential common areas, common equipments and the communal facilities of the realty management area. 33. Changes in main accounting policies and estimates (1) Change of accounting policies □ Applicable √ Inapplicable (2) Change of main accounting estimates □ Applicable √ Inapplicable 34. Other Inapplicable VI. Taxation 1. Main taxes and tax rate Category of taxes Tax basis Tax rate VAT Operating revenue 3%, 6%, 17% Business tax Operating revenue 3%, 5% Urban maintenance and construction tax Turnover tax payable 1%, 7% Enterprise income tax Taxable income 15%, 16.5%, 20%, 25% Education surtax Turnover tax payable 3% Local education surtax Turnover tax payable 2% Levee fee Operating revenue 0.01% Added amount from transfer of real Four progressive levels with the tax rate Land value appreciation tax property ranging from 30% to 60% Notes of the disclosure situation of the taxpaying bodies with different enterprises income tax rate Name Income tax rate Chongqing Shenzhen International Trade Center Property 15% Management Co., Ltd. Chongqing Aobo Elevator Co., Ltd. 20% Subsidiaries registered in Hong Kong area 16.5% Other taxpaying bodies within the consolidated scope 25% 120 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. 2. Tax preference According to the regulations of No. 2, Property Service of No. 37, Commercial Service among the encouraging category of the Guidance Catalogue of Industry Constructure Adjustment (Y2011), the western industry met with the conditions should be collected the corporate income tax according to 15% of the tax rate. The subsidiary of the Group Chongqing Shenzhen International Trade Center Property Management Co., Ltd. had be regarded as the western enterprise of the property service by Local Taxation Bureau of Chongqing Jiulong District on 4 May 2014, and had be collected the corporate income tax according to 15% of the tax rate. According to the regulations of the notice of the income tax preferential policies of the s mall low-profit enterprises issued by SAT of CS [2015] No. 34, from 1 Jan. 2015 to 31 Dec. 2017, as for those small low-profit enterprises with the annual after-tax amount lowe r than RMB0.2 million (including RMB0.2 million), of which 50% of the revenues should be included into the taxable income and should be collected the corporate income tax ac cording to 20% of the tax rate. 3. Other Inapplicable VII. Notes on major items in consolidated financial statements of the Company 1. Monetary funds Unit: RMB Yuan Item Closing balance Opening balance Cash on hand 208,170.99 199,841.15 Bank deposits 930,987,796.17 806,458,046.62 Other monetary funds 14,544,008.61 2,305,488.91 Total 945,739,975.77 808,963,376.68 Of which: the total amount deposited 50,515,270.67 46,940,545.88 overseas Other notes The restricted L/G deposits used at the period-end were the cash deposits paid by the subsidiary of the Company-Dongguan International Trade Center Changsheng Property Development Co., Ltd. by entrusting the commercial bank to issue the Commercial Housing Quality Guarantee Letter. Owning the subsidiary of the Company-Dongguan International Trade Center Changsheng Property Development Co., Ltd. was the real estate development enterprise with provisional qualification, when handling the application of the pre-sale permit of the commercial residential housing should submit the quality guarantee letter of the commercial residential housing after the liquidation situation such as the enterprise bankruptcy and dissolution. The guarantee letter was 121 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. the irrepealably commercial residential quality guarantee letter, of which the guarantee period of RMB1,468,870.00 was from 30 Jun. 2015 to 31 Dec. 2020 and the guarantee period of the remained RMB10,933,290.00 was from 1 Jul. 2015 to 31 Dec. 2020. 2. Financial assets measured by fair value and the changes be included in the current gains and losses Unit: RMB Yuan Item Closing balance Opening balance Other notes: 3. Derivative financial assets □ Applicable √ Inapplicable 4. Notes receivable (1) Notes receivable listed by category Unit: RMB Yuan Item Closing balance Opening balance (2) Notes receivable pledged by the Company at the period-end Unit: RMB Yuan Item Amount (3) Notes receivable which had endorsed by the Company or had discounted and had not due on the balance sheet date at the period-end Unit: RMB Yuan Amount of recognition termination at the Amount of not terminated recognition at Item period-end the period-end (4) Notes transferred to accounts receivable because drawer of the notes fails to executed the contract or agreement Unit: RMB Yuan Amount of the notes transferred to accounts receivable at the Item period-end Other notes 122 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. 5. Accounts receivable (1) Accounts receivable disclosed by category Unit: RMB Yuan Closing balance Opening balance Book balance Bad debt provision Book balance Bad debt provision Category Withdra Book Proportio wal Proportio Withdrawal Book value Amount Amount value Amount Amount n proportio n proportion n Accounts receivable with significant 102,216, 102,216, 107,016 107,016,1 single amount with 70.30 100.00 77.64% 100.00% 173.89 173.89 ,173.89 73.89 bad debt provision separately accrued Accounts receivable withdrawn bad debt 41,288,5 2,516,36 38,772,14 28,933, 2,348,398 26,585,132. provision according 28.40 6.09 20.99% 8.12% 06.76 0.35 6.41 530.20 .08 12 to credit risks characteristics Accounts receivable with insignificant single amount for 1,884,02 1,884,02 1,884,0 1,884,022 1.30 100.00 1.37% 100.00% which bad debt 2.38 2.38 22.38 .38 provision separately accrued 145,388, 106,616, 38,772,14 137,833 111,248,5 26,585,132. Total 100.00 73.33 100.00% 80.71% 703.03 556.62 6.41 ,726.47 94.35 12 Accounts receivable with significant single amount for which bad debt provision separately accrued at the period-end： √Applicable □ Inapplicable Unit: RMB Yuan Accounts receivable Closing balance (classified by units) Accounts receivable Bad debt provision Proportion Reason Involved in lawsuit and Shenzhen Jiyong no executable property, Properties & Resources 93,811,328.05 93,811,328.05 100.00% and see details in Notes Development Company (XII) 2 (1) Shenzhen Tewei Industry 2,836,561.00 2,836,561.00 100.00% Uncollectible for a long 123 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. Co., Ltd. period Poor operating Shenzhen Lunan Industry 2,818,284.84 2,818,284.84 100.00% conditions, uncollectible Development Co., Ltd. for a long period Uncollectible for a long Zhou Tanjin 2,750,000.00 2,750,000.00 100.00% period Total 102,216,173.89 102,216,173.89 -- -- In the groups, accounts receivable adopting aging analysis method to withdraw bad debt provision: √ Applicable □ Inapplicable Unit: RMB Yuan Closing balance Aging Accounts receivable Bad debt provision Withdrawal proportion Subitem within 1 year Within 1 year 38,918,893.83 1,167,937.44 3.00% Subtotal within 1 year 38,918,893.83 1,167,937.44 3.00% 1 to 2 years 263,749.39 26,374.93 10.00% 2 to 3 years 1,025,783.92 307,735.18 30.00% 3 to 4 years 113,573.39 56,786.70 50.00% 4 to 5 years 44,900.63 35,920.50 80.00% Over 5 years 921,605.60 921,605.60 100.00% Total 41,288,506.76 2,516,360.35 6.09% Notes of the basis of recognizing the group: The basic of recognizing the group refers to Notes V. 11 of Section X. of the report. In the groups, accounts receivable adopting balance percentage method to withdraw bad debt provision □ Applicable √ Inapplicable In the groups, accounts receivable adopting other methods to accrue bad debt provision: Inapplicable (2) Accounts receivable withdraw, reversed or collected during the reporting period The withdrawal amount of the bad debt provision during the reporting period was of RMB167,962.27; the amount of the reversed or collected part during the reporting period was of RMB4,800,000.00. Of which the significant amount of the reversed or collected part during the reporting period: Unit: RMB Yuan Name of the units Reversed or collected amount Method Total 4,800,000.00 -- 124 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. (3) The actual write-off accounts receivable Unit: RMB Yuan Item Amount 0.00 Of which the significant actual write-off accounts receivable: Unit: RMB Yuan Whether occurred Name of the units Nature Amount Reason Process from the related transactions Total -- 0.00 -- -- -- Notes of the write-off the accounts receivable: There was no write-off the accounts receivable. (4) Top 5 of the closing balance of the accounts receivable colleted according to the arrears party Name of units Closing balance Proportion of the total year Closing balance of bad end balance of the accounts debt provision receivable (%) Shenzhen Jiyong Properties & Resources Development Company 93,811,328.05 64.52 93,811,328.05 Huawei Technologies Co Ltd 10,325,622.57 309,768.68 7.10 2,836,561.00 2,836,561.00 Shenzhen Tewei Industry Co., Ltd. 1.95 Shenzhen Lunan Industry Development 2,818,284.84 2,818,284.84 Co., Ltd. 1.94 2,750,000.00 2,750,000.00 Zhou Tanjin 1.89 Total 112,541,796.46 77.40 102,525,942.57 (5) Account receivable which terminate the recognition owning to the transfer of the financial assets Inapplicable 125 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. (6) The amount of the assets and liabilities formed by the transfer and the continues involvement of accounts receivable Inapplicable Other notes: Inapplicable 6. Prepayment (1) List by aging analysis: Unit: RMB Yuan Closing balance Opening balance Aging Amount Proportion Amount Proportion Within 1 year 20,734,383.56 72.97% 24,605,664.84 94.68% 1 to 2 years 6,602,570.30 23.24% 1,374,527.95 5.29% 2 to 3 years 1,070,523.28 3.77% 8,600.00 0.03% Over 3 years 8,256.29 0.02% 1,039.45 Total 28,415,733.43 -- 25,989,832.24 -- Notes of the reasons of the prepayment ages over 1 year with significant amount but failed settled in time: (2) Top 5 of the closing balance of the prepayment colleted according to the prepayment target Top 5 of the closing balance of the prepayment were as follows: Name of the unit Closing balance Proportion of the total year end balance of the accounts receivable (%) Prepayment of taxes 19,900,230.79 70.03 Name of the unit Closing balance Proportion of the total year end balance of the accounts receivable (%) Shenzhen Guangan Firefighting & Decoration 243,124.00 0.86 Engineering Co., Ltd. Jinan Central District Housing Security and Land and 127,142.20 0.45 Property Management Authority Shenzhen Institute of Building Research Co., Ltd. 40,000.00 0.14 Total 27,963,590.57 98.41 Notes 1: According to the regulations of the Enforcement Regulation of the Provisional Regulations of the Business Tax to transfer the land use right or to sell the real estate, and for those adopting the prepayment (including receiving the deposits in advance) method, the occurrence time of the rateability was the date receiving the prepayments. The surplus prepay taxes of the Company was the taxes such as the property prepayments had not reached the revenue 126 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. recognition conditions and the business taxes, urban construction taxes, education surtaxes that paid in advance. Notes 2: Social security charges in building industry refer to the social security expenses the construction enterprises pay for the employees such as the endowment insurance, medical insurance, unemployment insurance, work-related injury insurance and maternity insurance (including Individual pay part). Take the engineering project as unit, to execute the unified payment standard, to collect uniformly from the construction units and uniformly settled by the construction enterprises. Other Notes: 7. Interest receivable (1) Category of interest receivable Unit: RMB Yuan Item Closing balance Opening balance (2) Significant overdue interest Whether occurred Borrower Closing balance Overdue time Reason impairment and its judgment basis Other notes: Inapplicable 8. Dividend receivable (1) Dividend receivable Unit: RMB Yuan Item (or investees) Closing balance Opening balance (2) Significant dividend receivable aged over 1 year Unit: RMB Yuan Whether occurred Item (or investees) Closing balance Aging Reason impairment and its judgment basis Other notes: Inapplicable 127 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. 9. Other accounts receivable (1) Other accounts receivable disclosed by category Unit: RMB Yuan Closing balance Opening balance Book balance Bad debt provision Book balance Bad debt provision Category Withdra Book Proportio wal Proportio Withdrawal Book value Amount Amount value Amount Amount n proportio n proportion n Accounts receivable with significant 90,718,7 87,150,3 3,568,421 92,351, 92,351,15 single amount with 75.46% 96.07% 76.80% 100.00% 39.20 17.92 .28 159.68 9.68 bad debt provision separately accrued Accounts receivable withdrawn bad debt 19,789,4 11,738,3 8,051,082 18,187, 11,549,19 6,638,425.2 provision according 16.46% 59.32% 15.12% 63.50% 22.31 40.12 .19 620.34 5.09 5 to credit risks characteristics Accounts receivable with insignificant single amount for 9,711,26 9,711,26 9,717,2 9,717,262 8.08% 100.00% 8.08% 100.00% which bad debt 2.51 2.51 62.51 .51 provision separately accrued 120,219, 108,599, 11,619,50 120,256 113,617,6 6,638,425.2 Total 100.00% 90.33% 100.00% 94.48% 424.02 920.55 3.47 ,042.53 17.28 5 Other accounts receivable with significant single amount for which bad debt provision separately accrued at the period-end √ Applicable □ Inapplicable Unit: RMB Yuan Other accounts Closing balance receivable (classified by Other accounts Bad debt provision Withdrawal proportion Reason units) receivable No payed assets Gintian Industry (Group) according to the 56,600,000.00 53,031,578.72 93.70% Co., Ltd. creditors’ reorganization plan 128 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. Anhui Nanpeng Unrecoverable for a long 8,047,712.00 8,047,712.00 100.00% Papermaking Co., Ltd. term Shenzhen Shengfenglu, No executable finance GUOMAO Jewel & Gold 6,481,353.60 6,481,353.60 100.00% and difficult to recover Co., Ltd. Shanghai Yutong Real Difficult to recover the estate development Co., 5,676,000.00 5,676,000.00 100.00% lawsuit judgment Ltd. Unrecoverable for a long Wuliangye Restaurant 5,523,057.70 5,523,057.70 100.00% term Hong Kong Yueheng Unrecoverable for a long 3,271,837.78 3,271,837.78 100.00% Development Co., Ltd. term Dameisha Tourism Projects construction ce 2,576,445.69 2,576,445.69 100.00% Center ased Projects construction Elevated Train Project 2,542,332.43 2,542,332.43 100.00% ceased Total 90,718,739.20 87,150,317.92 -- -- In the groups, other accounts receivable adopting aging analysis method to accrue bad debt provision: √Applicable □ Inapplicable Unit: RMB Yuan Closing balance Aging Other accounts receivable Bad debt provision Withdrawal proportion Subitem within 1 year Within 1 year (including 1 year) 5,378,303.53 161,349.08 3.00% Subtotal within 1 year 5,378,303.53 161,349.08 3.00% 1 to 2 years 1,992,771.46 199,277.15 10.00% 2 to 3 years 1,089,014.70 326,704.39 30.00% Over 3 years 518,494.02 259,247.01 50.00% 3 to 4 years 95,380.55 76,304.44 80.00% 4 to 5 years 10,715,458.05 10,715,458.05 100.00% Over 5 years 19,789,422.31 11,738,340.12 59.32% Notes of the basis of recognizing the group: The basis recognizing the group refers to Notes V. 11 of Section X of the report. In the groups, other accounts receivable adopting balance percentage method to withdraw bad debt provision □ Applicable √ Inapplicable In the groups, other accounts receivable adopting other methods to accrue bad debt provision: □ Applicable √ Inapplicable 129 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. (2) Accounts receivable withdraw, reversed or collected during the reporting period The withdrawal amount of the bad debt provision during the reporting period was of RMB185,960.87; the amount of the reversed or collected part during the reporting period was of RMB3,574,421.28. Of which the significant amount of the reversed or collected part during the reporting period: Unit: RMB Yuan Name of units Reversed or collected amount Method Gintian Industry (Group) Co., Ltd. 3,568,421.28 Debt-to-equity swap Total 3,568,421.28 -- The reserve was according to the creditors’ reorganization plan. (3) The actual write-off other accounts receivable Unit: RMB Yuan Item Amount Of which the significant write-off other accounts receivable: Unit: RMB Yuan Whether occurred Name of units Nature Amount Reason Process from the related transactions Total -- 0.00 -- -- -- Notes of write-off other accounts receivable: There was no write-off other accounts receivable. (4) Other accounts receivable classified by the nature of accounts Unit: RMB Yuan Nature Closing book balance Opening book balance Margin 12,540,024.90 10,175,218.68 Pretty cash borrowing 772,557.45 507,093.70 Accounts receivable of the related 9,985,704.65 12,337,357.13 companies Accounts receivable of the non-related 96,921,137.02 97,236,373.02 companies Total 120,219,424.02 120,256,042.53 130 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. (5) Top 5 of the closing balance of the other accounts receivable colleted according to the arrears party Unit: RMB Yuan Proportion of the total year end Closing balance of Name of units Nature Closing balance Aging balance of the bad debt provision accounts receivable (%) Accounts receivable Gintian Industry of the non-related 56,600,000.00 Over 5 years 47.08% 53,031,578.72 (Group) Co., Ltd. companies Anhui Nanpeng Accounts receivable Papermaking Co., of the related 8,047,712.00 Over 5 years 6.69% 8,047,712.00 Ltd. companies Shenzhen Accounts receivable Shengfenglu, of the non-related 6,481,353.60 Over 5 years 5.39% 6,481,353.60 GUOMAO Jewel & companies Gold Co., Ltd. Shanghai Yutong Accounts receivable Real estate of the non-related 5,676,000.00 Over 5 years 4.72% 5,676,000.00 development Co., companies Ltd. Accounts receivable Shenzhen Wuliangye of the non-related 5,523,057.70 Over 5 years 4.59% 5,523,057.70 Restaurant companies Total -- 82,328,123.30 -- 68.48% 78,759,702.02 (6) Accounts receivable involved with government subsidies Unit: RMB Yuan Project of government Estimated received time, Name of units Closing balance Closing age subsidies amount and basis Total -- 0.00 -- -- Inapplicable (7) Other account receivable which terminate the recognition owning to the transfer of the financial assets Inapplicable 131 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. (8) The amount of the assets and liabilities formed by the transfer and the continues involvement of other accounts receivable Inapplicable Other notes: Inapplicable 10. Inventory (1) Category of inventory Unit: RMB Yuan Closing balance Opening balance Item Falling price Falling price Book balance Book value Book balance Book value reserves reserves Raw materials 1,602,571.24 529,191.39 1,073,379.85 1,693,606.29 542,130.04 1,151,476.25 Inventory goods 54,087.62 54,087.62 48,639.56 48,639.56 Low-value consumption 116,472.20 116,472.20 258,564.20 258,564.20 goods Products held for real estate 121,070,697.97 6,648,404.13 114,422,293.84 118,834,981.63 6,648,404.13 112,186,577.50 development Completed 315,453,876.53 315,453,876.53 141,326,022.02 141,326,022.02 properties for sale Properties under 2,135,119,545.31 99,897,376.50 2,035,222,168.81 2,068,501,391.67 2,068,501,391.67 development Total 2,573,417,250.87 107,074,972.02 2,466,342,278.85 2,330,663,205.37 7,190,534.17 2,323,472,671.20 (2) Falling price reserves of inventory Unit: RMB Yuan Increased amount Decreased amount Item Opening balance Reverse or Closing balance Withdrawal Other Other write-off Raw materials 542,130.04 -12,938.65 529,191.39 Land to be deve 6,648,404.13 6,648,404.13 loped Properties under 99,897,376.50 99,897,376.50 132 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. development Total 7,190,534.17 99,884,437.85 107,074,972.02 (3) Notes of the closing balance of the inventory which includes capitalized borrowing expenses The closing balance of the inventory included the total amount of the capitalized borrowings was of RMB84,253,102.56. (4) Completed unsettled assets formed from the construction contact at the period-end Unit: RMB Yuan Item Amount Accumulative occurred cost 0.00 Accumulative recognized gross margin 0.00 Less: estimated losses 0.00 Amount had executed settlement 0.00 Other notes: Specific details of the inventories were as follows: A. Land to be developed Item Closing balance Book balance Falling price reserve Book value Hainan Qiongshan Land 6,648,404.13 6,648,404.13 Fuchang Phase II Land 5,940,627.11 5,940,627.11 Shenhui Garden Land 36,824,440.89 36,824,440.89 Shenzhen Properties & 71,657,225.84 71,657,225.84 ResourcesBanshan Yujing Phase II Land Total 121,070,697.97 6,648,404.13 114,422,293.84 Item Opening balance Book balance Falling price Book value reserve Hainan Qiongshan Land 6,648,404.13 6,648,404.13 Fuchang Phase II Land 5,895,627.11 5,895,627.11 Shenhui Garden Land 36,682,840.89 36,682,840.89 Shenzhen Properties & ResourcesBanshan Yujing 69,608,109.50 69,608,109.50 Phase II Land Total 118,834,981.63 6,648,404.13 112,186,577.50 133 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. B. Properties under development Item Start time Estimate Estimated total Period-end Year-begin d investment completi Book balance Capitalized interest Book balance Capitalized interest balance balance on time Shenzhen 2011.09 2016.12 645,146,600.00 498,973,613.05 27,205,315.95 450,741,685.32 27,205,315.95 Properties & ResourcesBan shanyujing Phase I Shenzhen 2013.04 2015.06 392,186,872.53 10,446,911.43 Properties & ResourcesHu panyujing Phase I Shenzhen 2015.08 2017.08 653,380,000.00 440,834,282.15 372,672,889.65 Properties & ResourcesHu panyujing Phase II Shenzhen 2014.02 2016.10 799,200,000.00 448,310,252.81 10,944,354.97 315,161,554.23 6,394,471.23 Properties & ResourcesQia nhai Harbor Shenzhen 2014.03 2018.12 1,521,400,000.0 146,379,982.82 3,858,872.36 111,310,253.41 2,267,136.76 Properties & 0 ResourcesJinl ing Holiday Shenzhen 2012.01 2016.12 895,230,000.00 600,621,414.48 30,357,575.40 426,428,136.53 17,022,072.09 Properties & ResourcesSon ghu Langyuan Total 2,135,119,545.3 72,366,118.68 2,068,501,391.6 63,335,907.46 1 7 C. Completed properties for sale Item Completion Opening Increase Decrease Closing balance Falling time balance price reserve 134 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. International Trade Center 1995.12 7,372,250.95 7,372,250.95 Plaza Huangyuyuan A Area 2001.06 790,140.58 790,140.58 Podium Building of 1999.11 6,421,447.63 5,775,914.98 645,532.65 Fuchang Building 2010.06 692,134.84 692,134.84 Shenzhen Properties & ResourcesXihua Town 2012.12 118,828,569.47 317,942.24 91,991,919.11 27,154,592.60 Shenzhen Properties & ResourcesLangqiao International 2013.03 4,470,745.52 308,792.87 4,779,538.39 Shenzhen Properties & ResourcesCaitianyise Shenzhen Properties & 2015.06 413,694,461.80 137,645,969.92 276,048,491.88 ResourcesHupan Yujing Phase I Other projects 2,750,733.03 2,750,733.03 Total 141,326,022.02 414,321,196.91 240,193,342.40 315,453,876.53 11. Assets divided as held-to-sold Unit: RMB Yuan Estimated disposal Item Closing book value Fair value Estimated disposal time expense Other notes: Inapplicable 12. Non-current assets due within 1 year Unit: RMB Yuan Item Closing balance Opening balance Other notes: Inapplicable 13. Other current assets Unit: RMB Yuan Item Closing balance Opening balance 1. Property receivable of F14, F15 of 174,382,120.00 Longyuan Chuangzhan Building 135 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. 2. Original value of the assets group held 69,437,140.28 69,437,140.28 to distribute to the owners-Hainan Xinda Impairment provision of the assets group held to distribute to the owners-Hainan -69,437,140.28 -69,437,140.28 Xinda 3. Original value of the assets group held 6,034,625.03 to cancel after verification Depreciation reserves of the assets group -6,034,625.03 held to cancel after verification Total 174,382,120.00 Other notes: Notes 1: as for the situation of the property receivable of F14, F15 of Longyuan Chuangzhan Building, please refer to Notes XIV. 2 of Section X. Financial Report. Notes 2: Assets group held to distribute to the owners-Hainan Xinda were the assets from the calculation of the original long-term equity investment and the other accounts receivable of the Company after the 2014 bankruptcy liquidation process of the original subsidiary of the Company-Hainan Xinda Development Corporation and had reported as the other current assets since 2014 with the specific assets list as follows: Original calculation subjects Original value Depreciation reserves Net value Long-term equity investment 20,000,000.00 20,000,000.00 Other accounts receivable 49,437,140.28 49,437,140.28 Total 69,437,140.28 69,437,140.28 Up to the period-end, the bankruptcy and liquidation administrator had not found out the available-for-cash property of Hainan Xinda Development Corporation with the bankruptcy and liquidation process was under executon. Notes 3: Assets group held to cancel after verification were the long-term equity investment and the other accounts receivable of the original associated enterprise-Shenzhen International Trade Center Industrial Development Co., Ltd.. The enterprise had been written off by the bankruptcy and liquidation administrator in Apr. 2015 and owning to the cancellation and verification process had not been complete, the above assets were reported as the other current assets since 2015 with the specific assets list as follows: Original calculation subjects Original value Depreciation reserves Net value Long-term equity investment 3,682,972.55 3,682,972.55 Other accounts receivable 2,351,652.48 2,351,652.48 Total 6,034,625.03 6,034,625.03 14. Available-for-sale financial assets (1) List of available-for-sale financial assets Unit: RMB Yuan 136 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. Closing balance Opening balance Item Depreciation Depreciation Book balance Book value Book balance Book value reserves reserves Available-for-sale equity 32,501,237.68 18,001,237.68 14,500,000.00 38,398,429.06 19,905,429.06 18,493,000.00 instruments Measured by fair value 6,153,300.45 2,160,300.45 3,993,000.00 Measured by cost 32,501,237.68 18,001,237.68 14,500,000.00 32,245,128.61 17,745,128.61 14,500,000.00 Total 32,501,237.68 18,001,237.68 14,500,000.00 38,398,429.06 19,905,429.06 18,493,000.00 (2) Available-for-sale financial assets measured by fair value at the period-end Unit: RMB Yuan Available-for-sale equity Available-for-sale debt Category Total instruments instruments Cost of the equity instruments/amortized 0.00 cost of the liabilities instruments Fair value 0.00 Changed amount of the fair value accumulatively 0.00 included in other comprehensive income Withdrawn impairment 0.00 amount (3) Available-for-sale financial assets measured by cost at the period-end Unit: RMB Yuan Book balance Impairment provision Shareholdi Cash ng bonus of Investee Period-beg Period-beg proportion the Increase Decrease Period-end Increase Decrease Period-end in in among the reporting investees period North Machinery 3,465,000. 3,465,000. 3,465,000. 3,465,000. 12.66% (Group) 00 00 00 00 Co., Ltd. Guangdon 8,780,645. 8,780,645. 8,780,645. 8,780,645. 8.47% g Huayue 20 20 20 20 137 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. Real Estate Co., Ltd. Shenzhen Internation al Trade 8,500,000. 8,500,000. Center 100.00% 00 00 Petroleum Company Limited Guangzho u 6,000,000. 6,000,000. Lishifeng 30.00% 00 00 Automobil e Co., Ltd. Sanya East 1,350,000. 1,350,000. 1,350,000. 1,350,000. Travel 0.28% 00 00 00 00 Co., Ltd. Shensan 17,695.09 17,695.09 17,695.09 17,695.09 Co., Ltd. Macao Huashen 76,592.24 4,747.57 81,339.81 76,592.24 4,747.57 81,339.81 10.00% Enterprise Co., Ltd. Chongqing Guangfa Real estate 2,324,085. 2,468,143. 2,324,085. 2,468,143. 144,058.52 144,058.52 27.25% developme 20 72 20 72 nt Co., Ltd. Saipan 1,731,110. 1,838,413. 1,731,110. 1,838,413. 107,302.98 107,302.98 30.00% Project 88 86 88 86 32,245,128 32,501,237 17,745,128 18,001,237 Total 256,109.07 256,109.07 -- 0.00 .61 .68 .61 .68 (4) Changes of the impairment of the available-for-sale financial assets during the reporting period Unit: RMB Yuan Available-for-sale equity Available-for-sale debt Foreign currency Category Total instruments instruments statement translation 138 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. Balance of the withdrawn impairment at the 19,905,429.06 19,905,429.06 period-begin Withdrawal amount 256,109.07 256,109.07 Decreased amount 2,160,300.45 2,160,300.45 Balance of the withdrawn impairment at the 17,745,128.61 256,109.07 18,001,237.68 period-end (5) Relevant notes of the fair value of the available-for-sale equity instruments which seriously fell or temporarily fell but not withdrawn the impairment provision Unit: RMB Yuan Item of Falling range of Withdrawn Reason of not available-for-sale Fair value of the Continued falling Investment cost the fair value amount of withdrawn the equity period-end time (month) against the cost impairment impairment instruments Total 0.00 0.00 -- -- 0.00 -- Other notes Notes 1: The reason of the changes of the long-term equity investment of Macau Huashen Investment Co., Ltd., Saipan Project and Chongqing Guangfa Housing Development Co., Ltd. and the impairment provision was occurred owing to the discount of the foreign currency statement. Notes 2: The Company had not dispatched any personnel to serve in Guangzhou Lishifeng Automobile Co., Ltd., Chongqing Guangfa Housing development Co., Ltd. and Saipan Company, although the share holding proportion was more than 20% but lower than 50%, it had no any significant influence and be recognized as the available for sale financial assets according to the cost measurement. Notes 3: In Jan. 2008, Shenzhen International Trade Center Automobile Industry Co., Ltd. and Shenzhen Guanghong Investment Co., Ltd. signed the Operation Contacts of the Gas Station Leasing, which agreed to the leasing the assets and equity as well as the operating management power such as the land of the gas station, refueling tent, operating houses, dormitory and facility instrument of gas station of the Shenzhen Shenzhen International Trade Center Petroleum Co., Ltd. (Shenzhen Shenzhen International Trade Center Automobile Industry Co., Ltd. held 100% equity of it) by Shenzhen Guanghong Investment Co., Ltd. and be operated by the later with the leasing period of 15 years. Since the starting date of the operating and leasing, the Company no more execute the control on Shenzhen Shenzhen International Trade Center Petroleum Co., Ltd., and thus no more include it in the scope of the consolidation financial statement according to the regulations of the ASBE. Notes 4: The decrease of the equity investments calculated by fair value during the reporting period was due to the disposal. 139 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. 15. Investment held-to-maturity (1) List of investment held-to-maturity Unit: RMB Yuan Closing balance Opening balance Item Impairment Impairment Book balance Book value Book balance Book value provision provision Total 0.00 0.00 0.00 0.00 (2) Significant held-to-maturity investment at the period-end Unit: RMB Yuan Bond item Par value Nominal interest rate Actual interest rate Due date Total 0.00 -- -- -- (3) Re-classified held-to-maturity investment during the reporting period Inapplicable Other notes Inapplicable 16. Long-term accounts receivable (1) List of long-term accounts receivable Unit: RMB Yuan Closing balance Opening balance Discount rate Item Bad debt Bad debt Book balance Book value Book balance Book value range provision provision Total 0.00 0.00 0.00 0.00 -- (2) Long-term accounts receivable which terminate the recognition owning to the transfer of the financial assets Inapplicable (3) The amount of the assets and liabilities formed by the transfer and the continues involvement of long-term accounts receivable Inapplicable Other notes 140 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. Inapplicable 17. Long-term equity investment Unit: RMB Yuan Increase/decrease Closing Gains and Adjustme Cash Withdraw balance Additiona losses nt of Opening Reduced Changes bonus or al of Closing of Investees l recognize other balance investmen of other profits impairme Other balance impairme investmen d under comprehe t equity announce nt nt t the equity nsive d to issue provision provision method income I. Joint ventures Jifa Warehous 29,880,87 908,463.5 30,789,34 e Co., 8.39 9 1.98 Ltd. Shenzhen Tian’an Internatio nal 3,008,061 728,774.4 3,736,835 Building .02 1 .43 Property Managem ent Co., Ltd. 32,888,93 1,637,238 34,526,17 Subtotal 9.41 .00 7.41 II. Associated enterprises Shenzhen Wufang Pottery & 18,983,61 18,983,61 18,983,61 Porcelain 4.14 4.14 4.14 Industrial Co., Ltd. Shenzhen 3,682,972 -3,682,97 Internatio .55 2.55 141 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. nal Trade Center Industrial Develop ment Co., Ltd. Anhui Nanpeng 13,824,00 13,824,00 13,824,00 Papermak 0.00 0.00 0.00 ing Co., Ltd. 36,490,58 -3,682,97 32,807,61 32,807,61 Subtotal 6.69 2.55 4.14 4.14 69,379,52 1,637,238 -3,682,97 67,333,79 32,807,61 Total 6.10 .00 2.55 1.55 4.14 Other notes The decrease of the long-term equity investment of the Shenzen Shenzhen International Trade Center Industrial Development Co., Ltd. was due to bankruptcy administrator written off which as the assets held to cancel and verification that transferred into the current assets in Apr. 2015. 18. Investment property (1) Investment property adopted the cost measurement mode √ Applicable □ Inapplicable Unit: RMB Yuan Item Houses and buildings Land use right Construction in progress Total I. Original book value 1. Opening balance 460,978,287.63 7,969,954.40 468,948,242.03 2. Increased amount 6,451,008.07 6,451,008.07 of the period (1) Outsourcing (2) Transfer of inventory\fixed 6,451,008.07 6,451,008.07 assets\project under 142 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. construction (3) Increased from enterprise merger 3. Decreased 4,119,705.21 4,119,705.21 amount of the period (1) Disposal (2) Other transfer 4,119,705.21 4,119,705.21 4. Closing balance 463,309,590.49 7,969,954.40 471,279,544.89 II. Accumulative depreciation and accumulative amortization 1.Opening balance 214,074,089.54 4,860,117.55 218,934,207.09 2. Increased amount 16,260,849.99 509,145.12 16,769,995.11 of the period (1) Withdrawal or 16,260,849.99 509,145.12 16,769,995.11 amortization 3. Decreased 1,685,446.13 1,685,446.13 amount of the period (1) Disposal (2) Other transfer 1,685,446.13 1,685,446.13 4. Closing balance 228,649,493.40 5,369,262.67 234,018,756.07 III. Depreciation reserves 1.Opening balance 2. Increased amount of the period (1) Withdrawal 3. Decreased amount of the period (1) Disposal (2) Other transfer 143 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. 4. Closing balance IV. Book value 1. Closing book 234,660,097.09 2,600,691.73 237,260,788.82 value 2. Opening book 246,904,198.09 3,109,836.85 250,014,034.94 value (2) Investment property adopted fair value measurement mode □ Applicable √ Inapplicable (3) Details of investment property failed to accomplish certification of property Unit: RMB Yuan Item Book value Reason Other notes As for the investment property with restricted ownership, please refer to Notes VII. 76 and Notes XIV. 2 (1) of Section X. Financial Report. 19. Fixed assets (1) List of fixed assets Unit: RMB Yuan Houses and Transportation Electronic and Decoration of the Item Total buildings equipment other equipment fixed assets 1. Opening balance 2. Increased 112,236,697.13 52,163,133.30 33,429,189.15 6,451,403.79 204,280,423.37 amount of the period (1) Purchase 329,672.14 36,768,014.29 1,338,020.26 38,435,706.69 (2) Transfer of project under 17,250.29 36,768,014.29 1,338,020.26 38,123,284.84 construction 3. Decreased amount of the period 4. Closing balance 1.Opening 312,421.85 312,421.85 144 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. balance 2. Increased 1,548,000.00 25,542,072.00 358,421.68 27,448,493.68 amount of the period (1) Withdrawal 1,548,000.00 25,542,072.00 358,421.68 27,448,493.68 3. Decreased amount of the period (1) Disposal or 111,018,369.27 63,389,075.59 34,408,787.73 6,451,403.79 215,267,636.38 Scrap 4. Closing balance 1.Opening 75,465,399.04 32,918,507.14 26,849,707.57 4,901,858.50 140,135,472.25 balance 4. Closing 3,546,363.72 9,357,842.69 1,697,759.77 422,003.40 15,023,969.58 balance 1. Closing book 3,546,363.72 9,357,842.69 1,697,759.77 422,003.40 15,023,969.58 value 2. Opening book value 1. Opening 1,470,600.00 24,105,660.60 320,778.38 25,897,038.98 balance 2. Increased 1,470,600.00 24,105,660.60 320,778.38 25,897,038.98 amount of the period (1) Purchase (2) Transfer of project under 77,541,162.76 18,170,689.23 28,226,688.96 5,323,861.90 129,262,402.85 construction 3. Decreased amount of the period 4. Closing 75,717.16 75,717.16 balance 1.Opening balance 2. Increased amount of the period (1) Withdrawal 3. Decreased amount of the period (1) Disposal or 145 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. Scrap 4. Closing balance 1.Opening 75,717.16 75,717.16 balance 4. Closing balance 1. Closing book 33,477,206.51 45,218,386.36 6,106,381.61 1,127,541.89 85,929,516.37 value 2. Opening 36,771,298.09 19,244,626.16 6,503,764.42 1,549,545.29 64,069,233.96 book value (2) List of temporarily idle fixed assets Unit: RMB Yuan Accumulative Impairment Item Original book value Book value Notes depreciation provision Houses and 3,865,391.77 2,044,503.94 1,820,887.83 buildings (3) Fixed assets leased in from financing lease Unit: RMB Yuan Accumulative Item Original book value Impairment provision Book value depreciation (4) Fixed assets leased out from operation lease Unit: RMB Yuan Item Closing book value (5) Details of fixed assets failed to accomplish certification of property Unit: RMB Yuan Item Book value Reason Other notes: 146 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. 20. Construction in progress (1) List of construction in progress Unit: RMB Yuan Closing balance Opening balance Item Depreciation Depreciation Book balance Book value Book balance Book value reserves reserves (2) Changes of significant construction in progress Unit: RMB Yuan Of Amount Proporti which: Accumul that on the Capitaliz Other ative transferr estimate amount ation rate Estimate decrease amount Name o f Opening Increase ed to Closing d of the Project of the of the Capital d d amount of item balance d amount fixed balance project progress capitaliz interests resources number of the capitaliz assets of accumul ed of the period ed the ative interests period interests period input of the period (3) List of the withdrawal of the impairment provision of the construction in progress Unit: RMB Yuan Item Withdrawn amount Reason Other notes: Inapplicable 21. Engineering material Unit: RMB Yuan Item Closing balance Opening balance Notes: Inapplicable 22. Liquidation of fixed assets Unit: RMB Yuan 147 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. Item Closing balance Opening balance Notes: Inapplicable 23. Productive biological assets (1) Productive biological assets adopted cost measurement mode □ Applicable √ Inapplicable (2) Productive biological assets adopted fair value measurement mode □ Applicable √ Inapplicable 24. Oil and gas assets □ Applicable √ Inapplicable 25. Intangible assets (1) List of intangible assets Unit: RMB Yuan Business license Item Land use right Patent right Non-patent right Software Total of the taxies I. Original book value 1. Opening 170,866,146.80 18,260.00 170,884,406.80 balance 2. Increased amount of the period (1) Purchase (2) Internal R&D (3) Enterprise combination increase 3. Decreased 148 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. amount of the period (1) Disposal 4. Closing 170,866,146.80 18,260.00 170,884,406.80 balance II. Accumulated amortization 1. Opening 71,073,559.77 18,260.00 71,091,819.77 balance 2. Increased amount of the 7,152,503.04 7,152,503.04 period (1) Withdrawal 7,152,503.04 7,152,503.04 3. Decreased amount of the period (1) Disposal 4. Closing 78,226,062.81 18,260.00 78,244,322.81 balance III. Depreciation reserves 1. Opening balance 2. Increased amount of the period (1) Withdrawal 3. Decreased amount of the period (1) Disposal 4. Closing balance 149 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. IV. Book value 1. Closing 92,640,083.99 92,640,083.99 book value 2. Opening 99,792,587.03 99,792,587.03 book value The proportion of the intangible assets formed from the internal R&D through the Company amount the balance of the intangible assets at the period-end was 0.00%. (2) Details of fixed assets failed to accomplish certification of land use right Unit: RMB Yuan Item Book value Reason Notes: 26. R&D expenses Unit: RMB Yuan Opening Closing Item Increased amount Decrease balance balance Other notes: Inapplicable 27. Goodwill (1) Original book value of goodwill Unit: RMB Yuan Name of the investees or the Opening balance Increase Decrease Closing balance events formed goodwill (2) Impairment provision of goodwill Unit: RMB Yuan Name of the investees or the Opening balance Increase Decrease Closing balance events formed goodwill Notes of the testing process of goodwill impairment, parameters and the recognition method of goodwill 150 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. impairment losses: Inapplicable Other notes: Inapplicable 28. Long-term unamortized expenses Unit: RMB Yuan Amortization Item Opening balance Increased amount Decrease Closing balance amount Facilities reconstruction 1,470,297.69 172,976.28 1,297,321.41 expense Renovation costs 1,082,755.34 355,354.68 727,400.66 Total 2,553,053.03 528,330.96 2,024,722.07 Other notes: 29. Deferred income tax assets/deferred income tax liabilities (1) Deferred income tax assets had not been off-set Unit: RMB Yuan Closing balance Opening balance Item Deductible temporary Deferred income tax Deductible temporary Deferred income tax difference assets difference assets Assets impairment 57,759,280.17 14,401,252.75 2,828,014.89 707,003.72 provision Unrealized internal sales 39,385,119.40 9,846,279.85 16,162,142.68 4,040,535.67 gain and loss Deductible losses 30,376,338.54 7,594,084.64 Accrued land VAT 738,683,130.69 184,670,782.67 845,498,064.20 211,374,516.05 Estimated profit calculated at pre-sale 93,163,091.00 23,290,772.75 1,616,280.60 404,070.15 revenue of property enterprises Payroll payable unpaid 1,293,791.92 323,447.97 106,660.04 26,665.01 but withdrawn Accrued liabilities 834,999.50 208,749.88 151 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. Total 961,495,751.22 240,335,370.51 866,211,162.41 216,552,790.60 (2) Deferred income tax liabilities had not been off-set Unit: RMB Yuan Closing balance Opening balance Item Deductible temporary Deferred income tax Deductible temporary Deferred income tax difference liabilities difference liabilities Change in fair value of available-for-sale 1,030,500.00 257,625.00 financial assets The book value of fixed assets is larger than tax 95,940.98 23,985.24 basis Total 95,940.98 23,985.24 1,030,500.00 257,625.00 (3) Deferred income tax assets or liabilities listed by net amount after off-set Unit: RMB Yuan Mutual set-off amount of Amount of deferred Mutual set-off amount of Amount of deferred deferred income tax income tax assets or deferred income tax income tax assets or Item assets and liabilities at liabilities after off-set at assets and liabilities at liabilities after off-set at the period-end the period-end the period-begin the period-begin Deferred income tax 240,335,370.51 216,552,790.60 assets Deferred income tax 23,985.24 257,625.00 liabilities (4) List of unrecognized deferred income tax assets Unit: RMB Yuan Item Closing balance Opening balance Total 0.00 0.00 (5) Deductible losses of unrecognized deferred income tax assets will due the following years Unit: RMB Yuan Years Closing amount Opening amount Notes Total 0.00 0.00 -- Notes: 152 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. 30. Other non-current assets Unit: RMB Yuan Item Closing balance Opening balance Housing purchase prepayment 7,275,069.00 7,275,069.00 Total 7,275,069.00 7,275,069.00 Notes: 31. Short-term loans (1) Category of short-term loans Unit: RMB Yuan Item Closing balance Opening balance Pledge loan 10,000,000.00 Guaranteed loan 70,000,000.00 Pledge and guaranteed loan 20,000,000.00 Mortgage and guaranteed loan 8,000,000.00 Total 8,000,000.00 100,000,000.00 Notes of short-term loans category (2) List of the short-term loans overdue but not return The total amount of the overdue but not return short-term borrowings at the period-end was of RMB 000, of which the situation of the significant overdue but not return short-term borrowings as follows: Unit: RMB Yuan Entity Closing balance Borrowing rate Overdue time Overdue rate Total 0.00 -- -- -- Notes: 32. Financial liabilities measured by fair value and the changes included in the current gains and losses Unit: RMB Yuan Item Closing balance Opening balance Notes: Inapplicable 153 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. 33. Derivative financial liabilities □ Applicable √ Inapplicable 34. Notes payable Unit: RMB Yuan Category Closing balance Opening balance The total amount of the due but not pay notes payable at the period-end was of RMB000. 35. Accounts payable (1) List of accounts payable Unit: RMB Yuan Item Closing balance Opening balance Within 1 year (including 1 year) 102,357,186.61 47,105,587.26 1 to 2 years (including 2 years) 10,999,069.54 41,653,953.49 2 to 3 years (including 3 years) 20,968,866.58 55,822,201.37 3 to 4 years (including 4 years) 29,208,688.99 1,855,718.02 4 to 5 years (including 5 years) 1,054,522.02 82,543.41 Over 5 years 26,936,604.80 28,827,017.64 Total 191,524,938.54 175,347,021.19 (2) Notes of the accounts payable aging over one year Unit: RMB Yuan Item Closing balance Unpaid/ Un-carry-over reason Shenzhen Luohu District Land and 25,000,000.00 Unsettled Resources Bureau Hunan Construction Engineering Group 14,947,087.00 Unsettled Zhanjiang West Guangdong Construction 8,092,820.03 Unsettled Engineering Co., Ltd. Shenzhen Yuanpeng Decoration Group 3,763,729.00 Unsettled Co., Ltd. Shantou Chaoyang Construction 1,751,764.45 Unsettled Engineering Corporation Total 53,555,400.48 -- Notes: 154 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. 36. Advance from customers (1) List of advance from customers Unit: RMB Yuan Item Closing balance Opening balance Within 1 year (including 1 year) 650,027,894.78 27,324,851.60 1 to 2 years (including 2 years) 1,802,283.71 1,010,331.46 2 to 3 years (including 3 years) 218,445.69 950.00 3 to 4 years (including 4 years) 950.00 100,000.00 4 to 5 years (including 5 years) 76,500.00 Over 5 years 320,204.02 243,704.02 Total 652,369,778.20 28,756,337.08 (2) Significant advance from customers aging over one year Unit: RMB Yuan Item Closing balance Unpaid/ Un-carry-over reason Total 0.00 -- (3) Particulars of settled but unfinished projects formed by construction contract at period-end. Unit: RMB Yuan Item Amount Notes: The closing balance of advance from customer increase 2168.61%, comparing to the opening period, mainly was the SZPRD- Dongguan Songhulangyuan Project and SZPRD-Front Sea Harbour Garden Project had arrived the presell conditions and prepayment of houses. There was no significant advance from customers aging over one year in the Company. Prepayment of sale of real estate projects Item Aging Closing balance Estimate finished time SZPRD-Front Sea Harbour Within 1 year 311,312,946.00 Oct. 2016 Garden Project SZPRD-Dongguang Within 1 year 307,985,018.00 Dec. 2016 Songhulangyuan Project Total 619,297,964.00 155 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. 37. Payroll payable (1) List of Payroll payable Unit: RMB Yuan Item Opening balance Increase Decrease Closing balance I. Short-term salary 56,931,919.65 283,889,974.42 277,557,514.88 63,264,379.19 II. Post-employment benefit-defined 28,727,699.54 28,303,336.24 424,363.30 contribution plans III. Termination benefits 845,291.00 1,621,257.50 2,363,474.50 103,074.00 Total 57,777,210.65 314,238,931.46 308,224,325.62 63,791,816.49 (2) List of Short-term salary Unit: RMB Yuan Item Opening balance Increase Decrease Closing balance 1. Salary, bonus, 52,141,105.22 244,247,521.22 239,099,134.40 57,289,492.04 allowance, subsidy 2. Employee welfare 10,266,893.58 10,266,893.58 3. Social insurance 10,059,607.56 10,008,933.96 50,673.60 Including: 1. Medical 8,082,921.06 8,040,693.06 42,228.00 insurance premiums Work-related injury 709,136.03 706,652.03 2,484.00 insurance Maternity insurance 1,106,393.52 1,100,431.92 5,961.60 Other social insurance 161,156.95 161,156.95 4. Housing fund 1,124,577.90 9,205,428.70 9,205,428.70 1,124,577.90 5. Labor union budget and employee education 3,666,236.53 7,092,160.00 5,958,760.88 4,799,635.65 budget 8. Non-monetary benefits 3,018,363.36 3,018,363.36 Total 56,931,919.65 283,889,974.42 277,557,514.88 63,264,379.19 (3) List of drawing scheme Unit: RMB Yuan Item Opening balance Increase Decrease Closing balance 156 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. Basic pension benefits 22,687,548.79 22,273,121.49 414,427.30 Unemployment insurance 4,559,590.12 4,559,590.12 Annuity 1,480,560.63 1,470,624.63 9,936.00 Total 28,727,699.54 28,303,336.24 424,363.30 Notes: The demission welfare withdrawn by relieving the labor relationship was of RMB 1,621,257.50 and the unpaid amount at the period-end was of RMB103,074.00. 38. Taxes payable Unit: RMB Yuan Item Closing balance Opening balance VAT 684,049.71 189,027.64 Business tax 8,092,058.86 6,955,522.44 Corporate income tax 78,927,414.58 167,344,046.82 Personal income tax 742,060.64 795,140.50 Urban maintenance and construction tax 576,383.19 496,438.65 Stamp tax 24,807.75 -7,322.87 Education Surcharge 250,010.86 215,734.70 Local education surtax 167,498.25 144,647.54 Land VAT 742,704,599.09 837,634,789.82 Property tax 1,125,407.71 980,366.67 Levee fee 451.42 -602.94 Other 502,630.37 615,847.72 Total 833,797,372.43 1,015,363,636.69 Notes: 39. Interest payable Unit: RMB Yuan Item Closing balance Opening balance Long-term loan interest of installment payment of interest and repay the due 467,184.76 318,917.49 capital Interest paid for short-term loans 12,228.33 243,962.23 Total 479,413.09 562,879.72 157 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. Particulars of significant overdue unpaid interest: Unit: RMB Yuan Entity Overdue amount Overdue reason Total 0.00 -- Notes: 40. Dividends payable Unit: RMB Yuan Item Closing balance Opening balance Note: Including significant unpaid dividends payable over one year, the unpaid reason shall be disclosed: 41. Other accounts payable (1) Other accounts payable listed by nature of the account Unit: RMB Yuan Item Closing balance Opening balance Margin 35,877,241.66 29,119,954.26 Accounts receivable of the related 31,511,011.04 30,411,011.04 companies Accounts receivable of the non-related 44,937,756.84 33,704,263.95 companies Other 15,917,070.14 17,797,595.30 Total 128,243,079.68 111,032,824.55 (2) Other significant accounts payable with aging over one year Unit: RMB Yuan Item Closing balance Unpaid/ Un-carry-over reason Come-and-go accounts without specific Shenzhen Jifa Warehouse Co., Ltd. 26,296,665.14 amortization period Guangzhou Lishifeng Automobile Co., Come-and-go accounts without specific 15,344,017.08 Ltd. amortization period Shenzhen International Trade Center Come-and-go accounts without specific 7,196,769.67 Petroleum Company Limited amortization period Tianan International Building Property Come-and-go accounts without specific 4,114,345.90 Management Company of Shenzhen amortization period RAINBOW DEPARTMENT STORE CO., 2,330,000.00 Margin within the leasing period 158 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. LTD Total 55,281,797.79 -- Other notes: 42. Liabilities classified as holding for sale Unit: RMB Yuan Item Closing balance Opening balance Notes: 43. Non-current liabilities due within 1 year Unit: RMB Yuan Item Closing balance Opening balance Long-term loans due within 1 year 121,243,352.00 5,000,000.00 Total 121,243,352.00 5,000,000.00 Notes: 44. Other current-liabilities Unit: RMB Yuan Item Closing balance Opening balance Changes on short term bonds payable: Unit: RMB Yuan Overflow The Withdraw Pay in Name of Book Issue Opening discount Closing Issue date Period current interest at current the bond value amount balance amortizati balance issue par period on Notes: 45. Long-term loan (1) Category of long-term loan Unit: RMB Yuan Item Closing balance Opening balance Guaranteed loan 144,840,006.83 Mortgage and guaranteed loan 177,613,352.00 Total 144,840,006.83 177,613,352.00 Notes of short-term loans category: 159 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. Other notes including interest rate range: 46. Bonds payable (1) Bonds payable Unit: RMB Yuan Item Closing balance Opening balance (2) Changes on bonds payable (not including other financial instrument classified as preferred stock and perpetual capital securities of financial liabilities) Unit: RMB Yuan (3) Note to conditions and time of share transfer of convertible bonds (4) Note to other financial instrument classified as financial liabilities Basic information of preferred stock, perpetual capital securities and other financial instruments outstanding issued at period-end Change list of preferred stock, perpetual capital securities and other financial instruments outstanding issued at period-end Unit: RMB Yuan Financial Opening period Increase Decrease Closing period instruments outstanding Amount Book value Amount Book value Amount Book value Amount Book value issued Notes to the basis of other financial instrument classified as financial liabilities Other notes: 47. Long-term payable (1) Long-term payable listed by nature of the account Unit: RMB Yuan Item Closing balance Opening balance Notes: 48. Long term payroll payable (1) List of long term payroll payable Unit: RMB Yuan 160 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. Item Closing balance Opening balance (2) Changes of defined benefit plans Present worth of defined benefit plans obligation: Unit: RMB Yuan Item Reporting period Same period of last year Plan assets: Unit: RMB Yuan Item Reporting period Same period of last year Net liabilities (net assets) of defined benefit plans Unit: RMB Yuan Item Reporting period Same period of last year Notes to the influence of the content and related risk of defined benefit plans to the future cash flows, time and uncertainty of the Company: Notes to analysis results of major actuarial assumptions and sensibility of defined benefit plans Notes: 49. Special payable Unit: RMB Yuan Item Opening balance Increase Decrease Closing balance Formation reasons Notes: 50. Accrued liabilities Unit: RMB Yuan Item Closing balance Opening balance Formation reasons For details, please refer to Pending litigation 834,999.50 Section X. Financial Report XIV. 2, (1) Total 834,999.50 -- Other notes, including related important assumptions and estimates of accrued liabilities: 51. Deferred income Unit: RMB Yuan Item Opening balance Increase Decrease Closing balance Formation reasons Operating license 10,095,846.69 1,293,221.64 8,802,625.05 Operating license 161 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. plate rental income plate rental held to carry forward International Trade Rental of Center petroleum International Trade 11,670,000.00 1,400,000.00 10,270,000.00 rental income held to Center Petroleum carry forward Co., Ltd. Total 21,765,846.69 2,693,221.64 19,072,625.05 -- Items involved in government subsidies: Unit: RMB Yuan Amount accrued Amount of newly Related to the Item Opening balance in non-business Other changes Closing balance subsidy assets/ income income Total 0.00 0.00 0.00 -- Notes: 52. Other non-current liabilities Unit: RMB Yuan Item Closing balance Opening balance Utility specific fund 237,163.45 237,163.45 Housing principle fund 15,096,884.76 13,764,771.61 House warming deposit 7,770,164.12 7,784,938.18 Electric Equipment Maintenance fund 4,019,415.44 4,019,415.44 Deputed Maintenance fund 27,476,957.21 26,667,849.33 Taxi Deposit 41,606,566.60 41,042,500.00 Equity of stripping the assets 18,253,188.54 19,771,409.10 Other 312,925.26 1,418,615.65 Total 114,773,265.38 114,706,662.76 Notes: 53. Share capital Unit: RMB Yuan Increase/decrease (+/-) Opening Capitalization Closing Newly issue balance Bonus shares of public Other Subtotal balance share reserves The sum of 595,979,092.00 595,979,092.00 162 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. shares Notes: 54. Other equity instruments (1) Basic information of preferred stock, perpetual capital securities and other financial instruments outstanding issued at period-begin (2) Change list of preferred stock, perpetual capital securities and other financial instruments outstanding issued at period-begin Unit: RMB Yuan Financial Opening period Increase Decrease Closing period instruments outstanding Amount Book value Amount Book value Amount Book value Amount Book value issued Changes, reason of change and basis of relevant accounting treatment of other equity instruments in reporting period: Notes: 55. Capital reserves Unit: RMB Yuan Item Opening balance Increase Decrease Closing balance Capital premium 38,450,087.51 38,450,087.51 Other capital reserves 81,501,446.42 81,501,446.42 Total 119,951,533.93 119,951,533.93 Other notes, including changes and reason of change: 56. Treasury stock Unit: RMB Yuan Item Opening balance Increase Decrease Closing balance Other notes, including changes and reason of change: 57. Other comprehensive income Unit: RMB Yuan Reporting period Opening Closing Item Amount Less: Amount Less: After-tax After-tax balance balance incurred transferred income tax attribute to attribute to 163 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. before into profit and expense the parent minority income tax loss in the company shareholder current period that recognized into other comprehensive income in prior period II. Other comprehensive reclassified 2,892,713.5 -4,046,60 -4,006,141.53 3,190,800.45 -257,625.00 -40,461.93 into profits or losses 2 3.46 Profits or losses of change in -2,933,175. fair value of available-for-sale 2,933,175.45 3,190,800.45 -257,625.00 45 financial assets Converted difference of the 2,892,713.5 2,892,713.5 -4,046,60 -6,939,316.98 foreign currency financial statement 2 2 3.46 2,892,713.5 -4,046,60 total -4,006,141.53 3,190,800.45 -257,625.00 -40,461.93 2 3.46 Other notes, including the adjustment of the recognition of initial amount of effective part of the cash flow hedging gains and losses transfer into arbitraged items: 58. Special reserves Unit: RMB Yuan Item Opening balance Increase Decrease Closing balance Other notes, including changes and reason of change: 59. Surplus reserves Unit: RMB Yuan Item Opening balance Increase Decrease Closing balance Statutory surplus 136,591,232.84 reserves 18,073,398.75 154,664,631.59 Total 136,591,232.84 18,073,398.75 154,664,631.59 Other note, including changes and reason of change The increase of the surplus reserves of the reporting period was due to the 10% withdrawal of the net profits of the parent company. 164 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. 60. Retained profits Unit: RMB Yuan Item Reporting period Last period Opening balance of retained profits before 1,225,726,944.83 972,271,884.95 adjustments Opening balance of retained profits after 1,225,726,944.83 972,271,884.95 adjustments Add: Net profit attributable to owners of the 417,498,679.91 Company 156,819,966.71 Less: Withdrawal of statutory surplus reserves 15,048,847.03 18,073,398.75 Dividend of common stock payable 131,115,400.24 148,994,773.00 Closing retained profits 1,233,358,112.55 1,225,726,944.83 List of adjustment of opening retained profits: 1) RMB0.00 opening retained profits was affected by retrospective adjustment conducted according to the Accounting Standards for Business Enterprises and relevant new regulations. 2) RMB0.00 opening retained profits was affected by changes on accounting policies. 3) RMB0.00 opening retained profits was affected by correction of significant accounting errors. 4) RMB0.00 opening retained profits was affected by changes in combination scope arising from same control. 5) RMB0.00 opening retained profits was affected totally by other adjustments. 61. Revenues and operating costs Unit: RMB Yuan Reporting period Same period of last year Item Revenue Operating costs Revenue Operating costs Main operations 1,025,534,654.51 631,134,598.38 1,209,444,885.89 497,649,218.57 Other operations 51,883,846.42 17,438,295.72 59,006,565.97 22,835,907.63 Total 1,077,418,500.93 648,572,894.10 1,268,451,451.86 520,485,126.20 62. Business tax and surcharges Unit: RMB Yuan Item Reporting period Same period of last year Business tax 52,898,669.75 61,698,267.20 Urban maintenance and construction tax 3,835,248.14 4,460,442.38 Education Surcharge 1,710,450.62 1,916,647.22 Local education surtax 1,035,781.13 1,276,948.72 165 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. Levee fee 1,034.51 61,792.70 Property tax 3,531,389.54 2,844,379.45 Land use tax 726,610.67 Land VAT 95,776,519.92 204,157,447.55 Other 160,415.94 641,378.67 Total 159,676,120.22 277,057,303.89 Notes: 63. Sales expenses Unit: RMB Yuan Item Reporting period Same period of last year Employee’s remuneration 4,562,356.24 3,488,625.76 Office expenses of operating institutions 6,755,310.83 4,351,269.72 Sales agency fee, advertising expense and 28,521,950.60 17,904,918.45 general publicity expense Other 2,101,548.27 573,266.98 Total 41,941,165.94 26,318,080.91 Notes: The sales expenses increased 59.36% over the last period which mainly was the increase of new project opening sales agency fee. 64. Administrative expenses Unit: RMB Yuan Item Reporting period Same period of last year Employee’s remuneration 62,531,485.31 63,705,186.43 Administrative office cost 21,137,197.32 23,747,798.96 Assets amortization and depreciation 4,717,738.87 5,771,598.27 expense Litigation costs 2,497,654.50 407,187.00 Taxes 2,867,555.63 1,139,291.88 Other 9,216,495.16 9,144,870.26 Total 102,968,126.79 103,915,932.80 Notes: 166 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. 65. Financial expenses Unit: RMB Yuan Item Reporting period Same period of last year Interest expenses 494,767.88 Less: Interest income 8,509,056.15 14,179,022.79 Net losses of exchange 591.36 -107,869.08 Other 993,775.48 1,094,333.49 Total -7,514,689.31 -12,697,790.50 Notes: The amount of the financial expenses of the period decrease over the last period was mainly due to the decrease of the agreement deposit and the 7-dayes notice deposit. 66. Asset impairment loss Unit: RMB Yuan Item Reporting period Same period of last year I. Bad debt loss -936,571.89 -8,020,498.14 II. Inventory falling price loss -5,813,259.28 99,884,437.85 Total -6,749,831.17 91,863,939.71 Notes: The amount of the assets impairment losses largely increased over the last period was mainly due to the reverse of the inventory falling price provision of SZPRD-Banshanyujing Project. 67. Gains on the changes in the fair value Unit: RMB Yuan Source Reporting period Same period of last year Notes: 68. Investment income Unit: RMB Yuan Item Reporting period Same period of last year Long-term equity investment income 1,637,238.00 -352,555.03 accounted by equity method Investment income arising from disposal of 207,432,184.22 long-term equity investments 167 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. Investment income received from disposal of 5,709,098.20 available-for-sale financial assets Gains of the quit of the combination entity 7,545,255.06 Others 392,034.89 Total 7,738,371.09 214,624,884.25 Notes: 69. Non-operating gains Unit: RMB Yuan Recorded in the amount of the Item Reporting period Same period of last year non-recurring gains and losses Total gains from disposal of 33,279.06 1,905,888.27 33,279.06 non-current assets Including: Gains from disposal 33,279.06 1,905,888.27 33,279.06 of fixed assets Government subsidies 153,795.84 4,500.00 153,795.84 Confiscated income 153,231.52 2,705,567.24 153,231.52 Other 478,078.46 176,078,808.63 171,278,808.63 Total 5,094,033.97 176,419,115.05 171,619,115.05 Government subsidies recorded into current profits and losses Unit: RMB Yuan Whether Whether influence the Related to the Distribution Distribution Special Reporting Same period Item Nature/type profits or assets/ entity reason subsidy or period of last year losses of the income not year or not Subsidy gained due to undertaking Shenzhen the state Subsidy for International protecting improvement Trade Center one public Related to the of air Subsidy No No 10,500.00 Vehicles utility or income environment Industry Co., social quality Ltd. necessary products supply or price 168 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. controlling Subsidy gained due to SHENZHEN undertaking INTERNATI the state ONAL protecting Subsidy for TRADE one public elevator Related to the CENTER Subsidy utility or No No 142,980.00 transformatio income PROPERTY social n MANAGER necessary MENT CO., products LTD. supply or price controlling Subsidy gained due to undertaking the state protecting Chongqing one public Tax Ao’bo Related to the Subsidy utility or No No 315.84 preference Elevator Co., income social Ltd. necessary products supply or price controlling Subsidy gained due to undertaking the state Chongqing protecting Graduate International one public employment Trade Center Related to the Subsidy utility or No No 4,500.00 apprentice Property income social subsidies Management necessary Co., Ltd. products supply or price controlling Total -- -- -- -- -- 153,795.84 4,500.00 -- Note: The non-operating revenue was increased of 3269.02% over the last period was mainly due to the 169 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. recognition of assets of Dragon Garden Development Building F14, F15, RMB169,582,120.00, For details, please refer to Section X Financial Report (XIV) 2, (2). 70. Non-operating expenses Unit: RMB Yuan Recorded in the amount of the Item Reporting period Same period of last year non-recurring gains and losses Loss on disposal of non-current 601,245.35 93,576.27 601,245.35 assets Including: Loss on disposal of 601,245.35 93,576.27 601,245.35 fixed assets Taxes overdue payment fines 1,410,492.64 25,116,322.54 1,410,492.64 and other fines Accrued liabilities losses 834,999.50 834,999.50 Other 30,000.00 866,685.56 30,000.00 Total 2,876,737.49 26,076,584.37 2,876,737.49 Notes: 71. Income tax expense (1) Lists of income tax expense Unit: RMB Yuan Item Reporting period Same period of last year Current income tax expense 161,226,485.47 83,330,320.09 Deferred income tax expense -24,960,201.80 -23,758,594.67 Total 136,266,283.67 59,571,725.42 (2) Adjustment process of accounting profit and income tax expense Unit: RMB Yuan Item Reporting period Total profits 216,391,692.13 Current income tax expense accounted by tax and relevant 54,097,923.03 regulations Influence of different tax rate suitable to subsidiary -7,889.24 Influence of income tax before adjustment -285,195.97 170 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. Influence of non taxable income -409,309.50 Influence of not deductible costs, expenses and losses 559,673.29 Influence of deductible losses of deferred income tax assets derecognized used in previous period -24,499,171.74 Influence of deductible temporary difference or deductible losses of deferred income tax assets derecognized in reporting period. 30,115,695.55 Income tax expense 59,571,725.42 Other notes: 72. Other comprehensive income Refer to the Note. 57 73. Supplementary information to cash flow statement (1) Other cash received relevant to operating activities Unit: RMB Yuan Item Reporting period Same period of last year Large current funds received 1,100,000.00 6,749,857.14 Interest income 8,509,056.15 14,179,022.79 Net margins, security deposit and various 4,931,895.90 special funds received Net amount of utilities, miscellaneous fees and accident fee and other receivables 3,881,747.21 on behalf Other small receivables 1,033,787.06 1,641,006.85 Total 14,524,590.42 27,501,782.68 Notes: (2) Other cash paid relevant to operating activities Unit: RMB Yuan Item Reporting period Same period of last year Paying administration expenses in cash 30,726,090.13 33,060,657.02 Paying sales expenses in cash 26,398,187.28 22,770,689.39 Net margins, security deposit and various 9,405,053.02 special funds paid Net amount of utilities, miscellaneous 20,401,287.75 171 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. fees and accident fee and other payments on behalf Other small payments 1,518,295.15 8,620,313.90 Total 68,047,625.58 84,852,948.06 Notes: (3) Other cash received relevant to investment activity Unit: RMB Yuan Item Reporting period Same period of last year Notes: (4) Other cash paid relevant to investment activity Unit: RMB Yuan Item Reporting period Same period of last year Cash balance of Hainan Company drop out 266,715.68 the combination Total 266,715.68 Notes: (5) Other cash received relevant to financing activities Unit: RMB Yuan Item Reporting period Same period of last year Notes: (6) Other cash paid relevant to financing activities Unit: RMB Yuan Item Reporting period Same period of last year Handling charges of significant loans 104,500.00 Total 104,500.00 Notes: 74. Supplementary information to cash flow statement (1) Information of net profit to net cash flows generated from operating activities Unit: RMB Yuan 172 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. Supplementary materials Reporting period Last period 1. Reconciliation of net profit to net cash -- -- flows generated from operating activities Net profit 156,819,966.71 417,498,679.91 Add: Provision for impairment of assets 96,663,939.71 -6,749,831.17 Depreciation of fixed assets, of oil-gas 31,793,964.69 33,701,124.55 assets, of productive biological assets Amortization of intangible assets 7,152,503.04 7,152,503.04 Long-term unamortized expenses 528,330.96 528,330.96 Losses on disposal of fixed assets, intangible assets and other long-term assets (gains: 567,966.29 -1,812,312.00 negative) Financial cost (gains: negative) 275,874.59 494,767.88 Investment loss (gains: negative) -7,738,371.09 -214,624,884.25 Decrease in deferred income tax assets -23,782,579.91 -24,960,201.80 (gains: negative) Increase in deferred income tax liabilities 23,985.24 (“-” means decrease) Decrease in inventory (gains: negative) -230,356,245.15 -220,800,911.09 Decrease in accounts receivable from 18,742,572.67 operating activities (gains: negative) -12,169,078.01 Increase in payables from operating -23,796,895.78 activities (decrease: negative) 484,005,911.67 Other -189,218,539.08 Net cash flows generated from operating 309,767,629.66 -14,627,057.08 activities 2. Investing and financing activities that do -- -- not involving cash receipts and payment: 3. Net increase in cash and cash equivalents -- -- Closing balance of cash 933,337,815.77 808,963,376.68 Less: Opening balance of cash 808,963,376.68 977,171,814.20 Net increase in cash and cash equivalents 124,374,439.09 -168,208,437.52 (2) Net Cash paid of obtaining the subsidiary Unit: RMB Yuan Amount 173 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. Of which: -- Of which: -- Of which: -- Notes: (3) Net Cash receive of disposal of the subsidiary Unit: RMB Yuan Amount Of which: -- Of which: -- Of which: -- Notes: (4) Cash and cash equivalents Unit: RMB Yuan Item Closing balance Opening balance I. Cash 933,337,815.77 808,963,376.68 Including: Cash on hand 208,170.99 199,841.15 Bank deposit on demand 930,987,796.17 806,458,046.62 Other monetary funds on demand 2,141,848.61 2,305,488.91 III. Closing balance of cash and cash 933,337,815.77 808,963,376.68 equivalents Notes: 75. Note of statement of changes in the owner's equity Explain "other" project name and adjustment amount of the adjustment of closing balance in previous year, etc.: Inapplicable 76. The assets with the ownership or use right restricted Unit: RMB Yuan Item Closing book value Restricted reason Guarantee deposit, for details, please refer Monetary capital 12,402,160.00 to Section X. Financial Report XIV. 2, (1) Guarantee deposit, for details, please refer Investment property 1,381,878.96 to Section X. Financial Report XIV. 2, (1) 174 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. Total 13,784,038.96 -- Notes: 77. Foreign currency monetary items (1) Foreign currency monetary items Unit: RMB Yuan Closing foreign currency Closing convert to RMB Item Exchange rate balance balance Monetary capital -- -- 51,240,449.83 HKD 61,160,718.35 0.8378 51,240,449.83 Other accounts receivable -- 277,785.66 Of which: HKD 331,565.60 0.8378 277,785.66 Other account payable 418,927.70 Of which: HKD 500,033.05 0.8378 418,927.70 Accounts payable 46,916.80 Of which: HKD 56,000.00 0.8378 46,916.80 Notes: (2) Note to oversea entities including: for significant oversea entities, shall disclose main operating place, recording currency and selection basis, if there are changes into recording currency, shall also disclose the reason. √ Applicable □ Inapplicable Item Main Recording Basis for selection operating currency place Shum Yip Properties Development Hong HKD Located in HK, settled by HKD Co., Ltd. and its subsidiary Kong 78. Arbitrage According to arbitrage category to disclose arbitrage item, relevant arbitrage tools and been arbitraged risk qualitative and quantitative information: Inapplicable 175 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. 79. Other Inapplicable VIII. Changes of merge scope 1. Business merger not under same control (1) Business merger not under same control in reporting period Unit: RMB Yuan Income of Net profits of Time and Cost of Way to gain Recognition acquiree acquiree Name of place of Proportion of gaining the the stock Purchase date basis of during the during the acquiree gaining the stock rights stock rights rights purchase date purchase date purchase date stock rights to period-end to period-end Notes: Inapplicable (2) Combined cost and goodwill Unit: RMB Yuan Combination cost Note to determination method, consideration and changes of fair value of combined cost: Inapplicable The main formation reason for the large goodwill: Inapplicable Notes: Inapplicable (3) The identifiable assets and liabilities of acquiree at purchase date Unit: RMB Yuan Fair value on purchase date Book value on purchase date The recognition method of the fair value of identifiable assets and liabilities Inapplicable 176 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. Contingent liability of acquiree undertaken by business merger Inapplicable Notes: Inapplicable (4) The profit or loss from equity held by the date before acquisition in accordance with the fair value measured again Whether there is a transaction that through multiple transaction step by step to realize enterprises merger and gaining the control during the reporting period □ Yes √ No (5) Note to merger could not be determined reasonable consideration or Identifiable assets, Fair value of liabilities of the acquiree at acquisition date or closing period of the merge Inapplicable (6) Other notes There was no change in the reporting period. 2. Business combination under the same control (1) Business combination under the same control during the reporting period Unit: RMB Yuan Income from Net profits the from the Recognition Income Net profits period-begin reporting Combined Proportion of Combination basis of during the during the Basis to the period to the party the profits date combination period of period of combination combination date comparison comparison date of the date of the combination combination Notes: (2) Combination cost Unit: RMB Yuan 177 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. Combination cost Note to contingent consideration or other changes: Notes: (3) The book value of the assets and liabilities of the combined party at combining date Unit: RMB Yuan Combination date Period-end of last period Contingent liabilities of the combined party undertaken in combination Notes: 3. Counter purchase Basic information of trading, the basis of transactions constitute counter purchase, the retain assets , liabilities of the listed companies whether constituted a business and its basis, the determination of the combination costs, the amount and calculation of adjusted rights and interests in accordance with the equity transaction process. 4. The disposal of subsidiary Whether there is a single disposal of the investment to subsidiary and lost control □ Yes √ No Whether there are multiple transactions step by step dispose the investment to subsidiary and lost control in reporting period □ Yes √ No 5. Other reasons for the changes in combination scope Notes to reasons for the changes in combination scope (Newly established subsidiary and subsidiary of liquidation) and relevant information: 6. Other IX. Equity in other entities 1. Equity in subsidiary (1) The structure of the enterprise group Name of the Main operating Nature of Holding percentage (%) Registration place Way of gaining subsidiary place business Directly Indirectly Shenzhen Shenzhen Shenzhen Property 95.00% 5.00% Set-up 178 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. Huangcheng Real development Estate Co., Ltd. SZPRD Real Estate Property Shenzhen Shenzhen 95.00% 5.00% Set-up Development Co., development Ltd. PRD Group Xuzhou Dapeng Property Real Estate Xuzhou Xuzhou 100.00% Set-up development Development Co.,Ltd. Dongguan International Trade Center Property Changsheng Real Dongguan Dongguan 100.00% Set-up development Estate Development Co., Ltd. PRD Yangzhou Real Estate Property Yangzhou Yangzhou 100.00% Set-up Development Co., development Ltd. SHENZHEN INTERNATION AL TRADE Property CENTER Shenzhen Shenzhen 95.00% 5.00% Set-up management PROPERTY MANAGERMEN T CO., LTD. Shenzhen Huangcheng Real Property Estate Shenzhen Shenzhen 100.00% Set-up management Management Co., Ltd. Shandong Shenzhen International Property Trade Center Jinan Jinan 100.00% Set-up management Property Management Co., Ltd. Chongqing Chongqing Chongqing Property 100.00% Set-up 179 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. Shenzhen management International Trade Center Property Management Co., Ltd. Chongqing Ao’bo Chongqing Chongqing Service 100.00% Set-up Elevator Co., Ltd. Shenzhen Tianque Elevator Shenzhen Shenzhen Service 100.00% Set-up Technology Co., Ltd. Shenzhen International Trade Center Property Shenzhen Shenzhen Service 100.00% Set-up Management Engineering Equipment Co., Ltd. Shenzhen International Shenzhen Shenzhen Catering service 80.00% 20.00% Set-up Trade Center Food Co., Ltd. Shenzhen Property Project Construction Shenzhen Shenzhen 100.00% Set-up supervision Supervision Co., Ltd. Shenzhen Real Shenzhen Shenzhen Service 100.00% Set-up Estate Exchange Shenzhen International Trade Center Shenzhen Shenzhen Service 90.00% 10.00% Set-up Vehicles Industry Co., Ltd. Shenzhen International Trade Center Shenzhen Shenzhen Service 100.00% Set-up Motor Rent Co., Ltd. 180 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. Shenzhen Tesu Vehicle Driver Shenzhen Shenzhen Service 100.00% Set-up Training Center Co., Ltd. Shenzhen International Shenzhen Shenzhen Trading 95.00% 5.00% Set-up Trade Plaza Sichuan Tianhe Chengdu Chengdu Trading 100.00% Set-up Industry Co., Ltd. Zhanjiang Shenzhen Real Property Estate Zhanjiang Zhanjiang 100.00% Set-up development Development Co., Ltd. Business Shenzhen combination Shenxin Taxi Co., Shenzhen Shenzhen Service 100.00% under the same Ltd. control Shum Yip Properties Property Hong Kong Hong Kong 100.00% Set-up Development Co., development Ltd. Wayhang Property Development Co., Hong Kong Hong Kong 100.00% Set-up development Ltd. Chief Link Property Properties Co., Hong Kong Hong Kong 70.00% Set-up development Ltd. Business Syndis Property combination not Investment Co., Hong Kong Hong Kong 100.00% development under the same Ltd. control Notes: holding proportion in subsidiary different from voting proportion: Naught Basis of holding half or less voting rights but still been controlled investee and holding more than half of the voting rights not been controlled investee: Naught Significant structure entities and controlling basis in the scope of combination: The Company and controlling shareholders in Shenzhen Investment Holdings Co., Ltd. 181 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. (hereinafter referred to as “SIH”) entered into Asset Replacement Agreement in Sep. 2010, agreeing that the Company replaces Moon Bay T102-0237 land and 100% equity of Shenzhen Shenxin Taxi Co., Ltd. (hereinafter referred to as “SX Company”) possessed by SIH with parts of house property owned by the Company and wholly-owned subsidiary Shenzhen Huangcheng Real Estate Co., Ltd. In order to optimize structure of replaced asset, SIH agrees that assets and liabilities which are not suitable to be included into the listed company such as non-market commodity house and non-performing loans and debts owned by SX Company and shown in No. [2010] 103 file of SIH (hereinafter referred to as “Divestiture Assets of SX Company” or “Divestiture Assets”) will not be incorporated into scope of replacement and will be divested. In principle, Divestiture Assets shall handle procedures of registration of transfer and transfer of credit and debt. SIH, Shenzhen Foreign Economy & Trade Investment Co., Ltd. (hereinafter referred to as FET Company”) and SX Company signed Contract on Transfer of Divestiture Assets in Jun. 2012. According to agreement of the Contract, SIH requires SX Company to transfer Divestiture Assets to FET Company for management. Since there are legal impediments in partial transfer of Divestiture Assets, FET Company and SX Company concluded and signed Contract on Entrusted Management of Divestiture Assets and Liabilities, promising that FET Company has entrusted SX Company to liquidate, manage and dispose of Divestiture Assets. The entrusted period ends on Dec. 31, 2014. Since there are legal impediments in partial transfer of Divestiture Assets, FET Company and SX Company concluded and signed Supplement Contract on Entrusted Management of Divestiture Assets and Liabilities, promising that FET Company has entrusted SX Company to liquidate, manage and dispose of Divestiture Assets. The entrusted period ends on Sept. 30, 2016. SX Company paid for FET Company with RMB313,000 income obtained from assets operation from Jun. 1, 2012 to Dec. 31, 2012. Since then SX Company will pay RMB626,000 to FET Company each year and the remaining incomes gained from assets operation will be possessed by SX Company. Balance of Divestiture Assets as of December 31, 2015 in consolidated statements is as follows: Item Amount Item Amount Other accounts receivable 50.00 Other account payable 683,578.08 Investment property 9,158,914.93Other non-current liabilities 18,253,188.54 Fixed assets 9,531,321.79 Long-term unamortized 246,479.90 expenses Total assets 18,936,766.62 Total liabilities and owners’ 18,936,766.62 equity Notes: other non-current liabilities shall belong to equity of SIH Divestiture Assets. Through the above Contract on Entrusted Management of Divestiture Assets and Liabilities, the Company has actually controlled SX Company’s Divestiture Assets which become a business entity with control rights by entrusted business mode. Basis of determine whether the Company is the agent or the principal: Naught 182 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. Notes: As of the end of reporting period, the balance of minority shareholders was RMB 862,087.06; there was no significant non-wholly owned subsidiary in the Company. (2) Significant not wholly owned subsidiary Unit: RMB Yuan The profits and losses Declaring dividends Balance of minority Shareholding proportion Name of the subsidiary arbitrate to the minority distribute to minority shareholder at closing of minority shareholder shareholders shareholder period Holding proportion of minority shareholder in subsidiary different from voting proportion: Naught Notes: Naught (3) The main financial information of significant not wholly owned subsidiary Unit: RMB Yuan Name of Closing balance Opening balance the Non-curr Non-curr Non-curr Non-curr current Total Current Total current Total Current Total subsidiar ent ent ent ent assets assets liabilities liabilities assets assets liabilities liabilities y assets liability assets liability Unit: RMB Yuan Reporting period Same period of last year Name of the Total Total Operation Operating Operation Operating subsidiary Net profit comprehensi Net profit comprehensi revenue cash flow revenue cash flow ve income ve income Notes: Naught (4) Significant restrictions of using enterprise group assets and pay off enterprise group debt Naught 183 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. (5) Provide financial support or other support for structure entities incorporate into the scope of consolidated financial statements Naught Notes: Naught 2. The transaction of the Company with its owner’s equity share changed but still controlling the subsidiary (1) Note to owner’s equity share changed in subsidiary Naught (2) The transaction’s influence to equity of minority shareholders and attributable to the owner's equity of the parent company Unit: RMB Yuan Other notes: Naught 3. Equity in joint venture arrangement or associated enterprise (1) Significant joint venture arrangement or associated enterprise Holding percentage (%) Accounting treatment of the Main operating Nature of investment of Name Registration place place business Directly Indirectly joint venture or associated enterprise Shenzhen Jifa Warehouse Co., Shenzhen Shenzhen Warehouse serve 50.00% Equity method Ltd. Tianan International Property Shenzhen Shenzhen 50.00% Equity method Building Property management Management 184 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. Company of Shenzhen Notes to holding proportion of joint venture or associated enterprise different from voting proportion: The Company’s long term equity investment had withdrawn bad debt provision for the associate enterprise of Shenzhen Wufang Pottery & Porcelain Industrial Co., Ltd., Shenzhen INTERNATIONAL TRADE CENTER Industrial Development Co., Ltd. and Anhui Nanpeng Papermaking Co., Ltd. Now the aforesaid companies’ financial statement cannot be obtained, thus, the Company believed that they were insignificant associate enterprises. Basis of holding less than 20% of the voting rights but has a significant impact or holding 20% or more voting rights but does not have a significant impact: Naught (2) Main financial information of significant joint venture Unit: RMB Yuan Closing balance/ reporting period Opening balance /last period Tianan International Tianan International Building Property Shenzhen Jifa Warehouse Building Property Shenzhen Jifa Warehouse Management Company Co., Ltd. Management Company Co., Ltd. of Shenzhen of Shenzhen current assets 38,895,590.21 5,555,289.81 35,704,923.71 2,060,981.97 Of which: cash and cash 27,170,290.21 5,279,230.56 26,199,623.71 1,790,481.86 equivalence Non-current assets 112,137.15 59,395,951.93 115,690.14 60,575,943.01 Total assets 39,007,727.36 64,951,241.74 35,820,613.85 62,636,924.98 Current liabilities 14,868,217.22 3,372,557.80 13,314,464.45 2,875,168.22 Non-current liability 16,665,839.28 16,490,027.37 Total liabilities 31,534,056.50 3,372,557.80 29,804,491.82 2,875,168.22 Equity attributable to owners of parent 7,473,670.86 61,578,683.94 6,016,122.03 59,761,756.76 company Portion of net assets calculated according to 3,736,835.43 30,789,341.97 3,008,005.30 29,880,878.38 proportion of shareholdings Book value of equity investment to joint 3,736,835.43 30,789,341.97 3,008,005.30 29,880,878.38 venture Operation revenue 18,022,357.14 6,676,118.83 18,118,056.52 6,934,396.44 185 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. Financial expenses 87,226.94 -8,792.28 -80,034.42 -1,803.80 Income tax expense 494,157.26 599,795.60 357,987.23 563,714.04 Net profit 1,457,548.83 1,816,927.18 1,060,223.38 1,673,601.73 Total comprehensive 1,457,548.83 1,816,927.18 1,060,223.38 1,673,601.73 income Other notes: Naught (3) Main financial information of significant associated enterprise Unit: RMB Yuan Closing balance/ reporting period Opening balance /last period Other notes: The Company’s long term equity investment had withdrawn bad debt provision for the associate enterprise of Shenzhen Wufang Pottery & Porcelain Industrial Co., Ltd., Shenzhen INTERNATIONAL TRADE CENTER Industrial Development Co., Ltd. and Anhui Nanpeng Papermaking Co., Ltd. Now the aforesaid companies’ financial statement cannot be obtained, thus, the Company believed that they were insignificant associate enterprises. (4) Summary financial information of insignificant joint venture or associated enterprise Unit: RMB Yuan Closing balance/ reporting period Opening balance /last period Joint venture: -- -- The total of following items according to the -- -- shareholding proportions Associated enterprise: -- -- The total of following items according to the -- -- shareholding proportions Other notes: Naught (5) Note to the significant restrictions of the ability of joint venture or associated enterprise transfer funds to the Company Naught 186 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. (6) The excess loss of joint venture or associated enterprise Unit: RMB Yuan The cumulative recognized The derecognized losses or the The noncumulative Name losses in previous share of net profit in reporting unrecognized losses in reporting accumulatively derecognized period period Other notes: Naught (7) The unrecognized commitment related to joint venture investment Naught (8) Contingent liabilities related to joint venture or associated enterprise investment Naught 4. Significant common operation Proportion /share portion Name Main operating place Registration place Nature of business Directly Indirectly Notes to holding proportion or share portion in common operation different from voting proportion: Naught Basis of common operation as a single entity, classify as common operation Naught Other notes: Naught 5. Equity of structure entity not including in the scope of consolidated financial statements Related notes to structure entity not including in the scope of consolidated financial statements Naught 6. Other Naught 187 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. X. The risk related financial instruments The financial instruments of the Group include: monetary fund, the available for sale financial assets, loan, accounts receivable and notes receivable, accounts payable and notes payable, etc, for details, see disclosure in each note. 1. Credit risk Credit risk was one party of the contract failed to fulfill the obligations and causes loss of financial assets of the other party. The Group manages the credit risk according to the combination of credit risk classification; the credit risk mainly occurred in bank deposit, account receivable and other account receivables. The source of credit risk of financial assets was the default of the other party. The biggest risk exposure was equivalent to book value of the instruments. The Group’s working capital was in bank with higher credit rating, so there was no significant credit risk, nor significant losses due to the default of other entity. There were lots of account receivables withdrawn individually in the Group and had withdrawn bad debt provision, which fully reveal the existence of credit risk. Amount of balance of account receivables was RMB41.2885 million except the aforesaid had withdrawn bad debt provision, mainly was the account receivable of property management, of which was account receivable RMB10.3256 million of Huawei Technologies Co., Ltd. was the total property management costs of several serve district of Huawei Technology Center. Other client receivables were widely dispersed owners and tenants. The Group conducted continuous supervisor to the account receivables to ensure the Group not facing significant bad debt risk. For the quantized data of credit risk exposure incurred by account receivables and other account receivables, see 2, Note (VII) and 4, Note (VII). 2. Liquidity risk Liquidity risk was referred to the risk of incurring capital shortage when performing settlement obligation in the way of cash payment or other financial assets. The subsidiary of the Group monitor the cash flow and the need of itself, the headquarters of the finance department combine the cash flow of each subsidiary, continue to monitor the short term or long term capital needs to ensure maintain plenty of cash flow. Besides, according to the actual capital need of the Group, provided commitment of adequate emergency capital to meet the short term and long term capital need. The analysis of maturity term made by the Group’s financial liabilities in line with non discount cash flow of the contracts: (1) The Group’s current liabilities including short-term loans payable, accounts payable, interest payable, other payables and non-current liabilities due within one year are expected paid within 1 year. (2)The analysis of maturity term made by the Group’s financial liabilities in line with non discount cash flow of the contracts: Item Closing balance (RMB Ten Thousand Yuan) Within 1 year 1-3years (including 3 3-5 years Over 5 years Total (including 1 year) years) (including 5 year) 188 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. Long term loan( interest included) 902.83 14,756.09 15,658.91 Item Opening balance (RMB Ten Thousand Yuan) Within 1 year 1-3 years 3-5 years Over 5 Total (including 1 year) (including 3 year) (including 5 year) years Long term loan( interest 1,194.27 17,979.91 19,174.19 included) 3. Market risk Market risk was referred to risk of the fair value or future cash flow of financial instrument changed due to the change of market price, including: exchange rate risk, interest rate risk and other price risk. (1) Exchange rate risk Exchange rate risk is referred to the fair value and future cash flow of financial instruments change due to the change of foreign exchange rate. Sensitive analysis of foreign exchange risk was as followed. Reflecting under the hypothesis of other variables constant, listed the reasonable and possible change of foreign exchange, due to the fair value of the monetary assets and monetary liabilities changes will impact on net income and shareholders' equity Item Reporting period Last year Influence to the Influence to equity of Influence to the Influence to equity of profits shareholders profits shareholders RMB down 2% against HKD 17,907.03 -1,010,786.30 3,252.26 468,210.83 RMB up 2% against HKD -17,907.03 999,629.25 -3,252.26 -468,210.83 Notes 1: the above-mentioned expressed as a positive number increase, a negative number decrease. Notes 2: the above-mentioned expressed as changes in shareholder's equity does not include retained earnings (2) Interest rate risk Interest rate risk was referred to risk of the fair value or future cash flow of financial instrument changed due to the change of market interest risk. The interest risk of the Group incurred from bank loan, interest rate risk of a floating interest rate of financial liabilities that lead to the group facing cash flow interest rate risk, financial liabilities with a fixed interest rate lead to the group facing cash flow interest rate risk. The Group’s interest-bearing debt situation was as followed: Type Closing balance Opening balance Interest-bearing debt from fixed interest rate 144,840,006.83 30,000,000.00 Of which: short term loan 30,000,000.00 Non current liabilities due within one years Long-term borrowings 144,840,006.83 189 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. Interest-bearing debt from floating interest rate 252,613,352.00 129,243,352.00 Of which: short term loan 70,000,000.00 8,000,000.00 Non current liabilities due within one years 5,000,000.00 121,243,352.00 Long-term borrowings 177,613,352.00 Total 274,083,358.83 282,613,352.00 The management conducting sensitive analysis, the change of 25 BP increase or decrease was considered as reasonable reflection of possible range of interest rate. Base on the assumption of aforesaid floating interest rate of long-term borrowing paid by the due date, and in a full accounting year will not be required to pay, under the situation of other variable remain constant, the influence of interest rate increase / decrease 25 BP to net profits and shareholders: Item Reporting period Last period Influence to the Influence to equity Influence to the Influence to equity profits of shareholders profits of shareholders Increase 25 BP -333,025.04 -6,314.76 Decrease 25 BP 333,025.04 6,314.76 Notes 1: the above-mentioned expressed as a positive number increase, a negative number decrease. Notes 2: the above-mentioned expressed as changes in shareholder's equity does not include retained earnings XI. The disclosure of the fair value 1. Closing fair value of assets and liabilities calculated by fair value Unit: RMB Yuan Closing fair value Item Fair value measurement Fair value measurement Fair value measurement Total items at level 1 items at level 2 items at level 3 I. Consistent fair value -- -- -- -- measurement II. Inconsistent fair value -- -- -- -- measurement 2. Market price recognition basis for consistent and inconsistent fair value measurement items at level 1 Inapplicable 190 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. 3. Valuation technique adopted and nature and amount determination of important parameters for consistent and inconsistent fair value measurement items at level 2 Inapplicable 4. Valuation technique adopted and nature and amount determination of important parameters for consistent and inconsistent fair value measurement items at level 3 Inapplicable 5. Sensitiveness analysis on unobservable parameters and adjustment information between opening and closing book value of consistent fair value measurement items at level 3 Inapplicable 6. Explain the reason for conversion and the policy governing when the conversion happens if conversion happens among consistent fair value measurement items at different levels Inapplicable 7. Changes in the valuation technique in the current period and the reason for change Inapplicable 8. Fair value of financial assets and liabilities not measured at fair value Inapplicable 9. Other Inapplicable XII. Related party and related Transaction 1. Information related to parent company of the Company Proportion of share Proportion of voting Name of parent Registration place Nature of business Registered capital held by parent rights owned by 191 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. company company against the parent company Company (%) against the Company (%) SHENZHEN INVESTMENT Managing Shenzhen RMB21.45 billion 63.82% 63.82% HOLDINGS CO., state-owned assets LTD Notes: Information on the parent company: By the end of the reporting period, the controlling shareholder of the Company is still Shenzhen Construction Investment Holdings in register book. In 2004, People’s Government of Shenzhen Municipality incorporated Shenzhen Construction Investment Holdings with the other two municipal asset management companies, namely Shenzhen Investment Management Corporation and Shenzhen Trade and Business Holding Company, and established Shenzhen Investment Holdings Co., Ltd. Thus, the Company’s actual controlling shareholder is Shenzhen Investment Holdings Co., Ltd., a sole state-funded limited company, who was established in Oct. 13, 2004.Its main business scope is investing, operating and managing the state-owned shares in sole-funded, holding and joint-stock enterprises by means of reorganization, capital running and assets proposal; carrying out real estate development and operation business after legally obtaining the land use right; making investment based on policies and strategies as required by Shenzhen SASAC, providing guarantee to municipal state-owned enterprises, and running other business authorized by Shenzhen SASAC. As a government department, Shenzhen State-owned Assets Supervision and Administration Bureau manage Shenzhen Investment Holdings Co., Ltd. on behalf of People’s Government of Shenzhen Municipality. Thus, the final controller of the Company is Shenzhen State-owned Assets Supervision and Administration Committee of Shenzhen Government. Notes: 2. Subsidiaries of the Company See details to Notes IX. 1 3. Information on the joint ventures and associated enterprises of the Company See details to Notes IX. 3 Information on other joint venture and associated enterprise of occurring related party transactions with the Company in reporting period, or form balance due to related party transactions in previous period: Name Relationship Other notes: 4. Information on other related parties of the Company Name Relationship 192 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. Shenzhen Guesthouse Restaurant Under the same control of the parent company of the Company Shenzhen Foreign Economy & Trade Investment Co., Ltd. Under the same control of the parent company of the Company Shenzhen Investment Holdings Co., Ltd. Under the same control of the parent company of the Company Other notes: 5. List of related-party transactions (1) Information on acquisition of goods and reception of labor service (unit: ten thousand Yuan) Information on acquisition of goods and reception of labor service (unit: ten thousand Yuan) Unit: RMB Yuan The approval trade Whether exceed trade Same period of last Related-party Content Reporting period credit credit or not year Information of sales of goods and provision of labor service Unit: RMB Yuan Related-party Content Reporting period Same period of last year Shenzhen Investment Holdings Provision of labor service 259,084.80 1,576,605.60 Co., Ltd. Notes: (2) Related trusteeship/contract Lists of related trusteeship/contract: Unit: RMB Yuan Name of the Name of the Income entruster/contract entrustee/ Type Initial date Due date Pricing basis recognized in the ee contractor reporting period Notes: Lists of entrust/contractee Unit: RMB Yuan Name of the Name of the Charge entruster/contract entrustee/ Type Initial date Due date Pricing basis recognized in the ee contractor reporting period Notes: (3) Information of related lease The Company was lessor: Unit: RMB Yuan 193 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. The lease income confirmed in The lease income confirmed in Name of lessee Category of leased assets this year last year The Company was lessee: Unit: RMB Yuan The lease income confirmed in lessor Category of leased assets Category of leased assets this year Shenzhen Investment Holdings Rental 344,842.92 338,185.06 Co., Ltd. Notes: (4) Related-party guarantee The Company was guarantor: Unit: RMB Yuan Execution accomplished Secured party Guarantee amount Start date End date or not Dongguan International Trade Center 129,243,352.00 11 Jan. 2013 11 Jan. 2016 No Changsheng Real Estate Development Co., Ltd. The Company was Secured party Unit: RMB Yuan Execution accomplished Guarantor: Guarantee amount Start date End date or not Shenzhen Huangcheng 144,840,006.83 20 Jun. 2014 21 Apr. 2017 No Real Estate Co., Ltd. Notes: The Company and its subsidiaries didn’t provide guarantees for other companies beyond the range of consolidated financial statements. The above guarantees are those Company and its subsidiaries provided to each other. (5) Inter-bank lending of capital of related parties： Unit: RMB Yuan Amount borrowed and Related-party Initial date Due date Explanation loaned Borrowed Loaned 194 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. (6) Related party asset transfer and debt restructuring Unit: RMB Yuan Related-party Content Reporting period Same period of last year (7) Rewards for the key management personnel Unit: RMB Yuan Item Reporting period Same period of last year Total rewards for the key management 5,985,900.00 6,671,900.00 personnel( tax included) (8) Other related-party transactions Related party entrusted operating In Nov. 2012, Shenzhen Foreign Economy & Trade Investment Co., Ltd. (hereinafter referred to as FET Company”) and Shenzhen Shenxin Taxi Co., Ltd. (hereinafter referred to as “SX Company”) concluded and signed Contract on Entrusted Management of Divestiture Assets and Liabilities, promising that FET Company has entrusted SX Company to liquidate, manage and dispose of Divestiture Assets, see 2, Section X Financial Report, IX, 1. According to the Contract on Entrusted Management, during reporting period, SX Company paid the assets operating income of RMB 626,000 to FET Company. During the entrusted operating period in 2015, the situation of divestiture assets was as followed: Item Amount Operation revenue 1,847,405.24 Operation cost 2,638,389.70 Business tax and surcharges 101,006.96 Administrative expenses 757,768.67 Total profits -1,649,760.09 Income tax expense -412,440.02 Net profit -1,237,320.07 Notes: the management costs included paying operation income of RMB 626,000 to FET Company. 6. Receivables and payables of related parties (1) Receivables Unit: RMB Yuan Closing balance Opening balance Name o f item Related-party Book balance Bad debt provision Book balance Bad debt provision 195 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. Anhui Nanpeng Other accounts Papermaking Co., 8,047,712.00 8,047,712.00 7,328,480.00 7,328,480.00 receivable Ltd. Shenzhen Wufang Other accounts Pottery & Porcelain 1,747,264.25 1,747,264.25 1,747,264.25 1,747,264.25 receivable Industrial Co., Ltd. Shenzhen International Trade Other accounts Center Industrial 2,351,652.48 2,351,652.48 receivable Development Co., Ltd Shenzhen Other accounts Guesthouse 909,960.40 909,960.40 909,960.40 909,960.40 receivable Restaurant Shenzhen Account receivable Investment Holdings 129,542.40 3,886.27 Co., Ltd. (2) Payables Unit: RMB Yuan Name o f item Related-party Closing book balance Opening book balance Shenzhen Jifa Warehouse Co., Other account payable 26,296,665.14 26,296,665.14 Ltd. Tianan International Building Other account payable Property Management 5,214,345.90 4,114,345.90 Company of Shenzhen 7. Related party commitment No such case in reporting period. 8. Other Inapplicable XIII. Stock payment 1. The Stock payment overall situation □ Applicable √ Inapplicable 196 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. 2. The Stock payment settled by equity □ Applicable √ Inapplicable 3. The Stock payment settled by cash □ Applicable √ Inapplicable 4. Modification and termination of the stock payment Naught 5. Other Naught XIV. Commitments 1. Significant commitments Significant commitments at balance sheet date Item Closing amount Large amount contract of real estate development project signed but derecognized in 855,729,640.97 financial statements. Total 855,729,640.97 2. Contingency (1) Significant contingency at balance sheet date A. About transferring Jiabin Building contentious matter ( Now rename as: Longyuan Development Building; former name Jinlihua Commercial Plaza） In 1993, the Company signed Right of Development Transfer Contract of Jiabin Building (name of Jiabin Building has been changed to Jinlihua Commercial Plaza) with Shenzhen Haibin Property Development Co., Ltd. (name of which has been changed to Shenzhen Jiyong Property Development Co., Ltd., hereinafter referred to as Jiyong Company). In January 1999, Jiyong Company sued the company to Guangdong Higher People’s Court (hereinafter referred to as “Guangdong Higher Court”) for termination of the transfer contract and refund of the transfer consideration and construction payment paid on the ground that the area of premises was in discrepancy with the contract. With respect to this, the Company counterclaimed the opposing party to pay back the rest transfer consideration and applied for sealing up their property with an 197 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. area of 28,000 square meters. On July 29, 2001, Guangdong Higher Court issued Civil Court Judgment YGFM (1999) No. 3 (hereinafter referred to as Judgment No. 3) to judge that ① the Company should transfer the title of land use right specified in the transfer contract to Jiyong Company within 30 days from the date the judgment taking into effect and ②Jiyong Company should pay off the transfer consideration amounting to RMB143, 860,000.00 within 60 days from the date the Company transferred the title of land use right. On November 27, 2001, the Company applied to Guangdong Higher Court for forcible execution, however Guangdong Higher Court adjudicated to release the sealing property of Jiyong Company approximately 10,000 square meters since Industrial & Commercial Bank of China Zhejiang Branch disagree to seal the properties. The Company thought the applicable law of the decision was error, and raised an objection to High Court of Guangdong province. In Sep.2005, the High Court of Guangdong province delivered unlocked decision to the Departments of Land and House Property Registers of Shenzhen. The aforesaid about ten thousand square meters of real estate was officially unlocked. In January 2006, Guangdong Higher Court issued Civil Court Judgment YGFZ (2002) No. 1 and adjudicated because that ① the Company has not yet transferred the title of land use right specified in the transfer contract to Jiyong Company and ② Jiyong Company cannot provide other properties available for execution and the Company also cannot provide the property available for execution, the second judgment of the Judgment No. 3 - “Jiyong Company should pay off the transfer consideration amounted RMB143,860,000 within 60 days from the date the Company transferred the title of land use right” is terminated for execution. When the conditions causing termination for execution of the second judgment are eliminated, the second judgment should still be executed. In March 2006, according to the ordain of Guangdong Higher People’s Court, the properties in Jiabin Building that have been sealed up in this case have been released automatically. On September 2009, company received YGFZ (2002) No. 1-1 Resume Execution Notice from Guangdong Province Higher Court claimed to resume execution the case that the transfer money owed by Jiyong company about Jiabin building project. In October 2009, the Company received (Verdict YGFZ (2002) No. 1-2) from Guangdong Higher Court. The verdict claimed: The resume execution of this case is according to the "The requirements for the Guangdong Higher Court to concentrate the implementation of accumulated cases" Through the investigation conducted by Guangdong Higher Court to Shenzhen department of motor vehicles, Shenzhen Securities Registration and Settlement Organizations, Shenzhen Land resources and real estate administration and the opening bank of the executed party, the executed party – Jiyong Company does not have any executable property. For these, Guangdong Higher Court adjudicated: ① Terminate the executive procedure of Verdict YGFZ (2002) No. 1② When the execution conditions are satisfied, the applicant can apply for resume execution. According to note (VII) 3, Shenzhen Longyuan-Kaili-Hengfeng Real Estate Co., Ltd. (hereinafter as the “Longyuan-Kaili”) and Shenzhen Huaneng-Jindi Property Co., Ltd. (hereinafter as the “Huaneng Property”) plan to conduct reconstructions to the plaza, On 3 mar. 2011, the Company, 198 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. The First Administration Under Shenzhen Planning And Land Resources Committee Directly and Longyuan-Kaili had registered the land of Jin Lihua Building to its name according to SDHZ (1992) No. 0228 Second Supplementary Agreement of Shenzhen Grant Contract of Land Use Right signed in 2011 and Meeting Summery about Research of Dealing with Problem Building Issued (No. 481) by Shenzhen Municipal Government. In April 2012, the Company raised the subrogation right lawsuit to Shenzhen Luohu District People's Court, based on the creditor’s right for Jiyong Company decided by the Civil Ruling Paper YGFMC (1999) No. 3, prosecuting the obligor of Jiyong Company—Shenzhen Zongli Investment Co., Ltd. (hereinafter referred to as “Zongli Company”), which was required to compensate for the Company within its debt range for Jiyong Company. Meanwhile, due to it was highly similar in the management level of Shenzhen Huaneng-Jindi Property Co., Ltd. (hereinafter referred to as “Huaneng-Jindi Company”) and Zongli Company, the Company believed that there was significant related-party relationship between Huaneng-Jindi Company and Zongli Company, therefore, the Company also prosecuted Huaneng-Jindi Company, which was required to undertake the joint liability for the debts born by Zongli Company. On 11 Sep. 2013 Shenzhen Luohu District People's Court issued (2012) SLFMECZ No. 1150paper of civil judgment; the decision rejected the Company’s claims. The Company refused to accept the verdict, has instituted an appeal to the Shenzhen Intermediate People's Court, In Mar. 2015, Shenzhen Intermediate People's Court made Civil Judgment (2014) SZFSZZ No. 400, the decision to reject the appeal of the Company, and maintain the original judgment. As the executable property are not found in the case so far, the Company withdraw bad debt provision for Shenzhen Jiyong Properties & Resources Development Company‘s transfer amount of Jin Lihua Commercial Plaza. In Aug. 2015, the Company as a creditor applied to Shenzhen Intermediate People's Court for the bankruptcy and insolvency of Shenzhen Jiyong Properties & Resources Development Company, now the Company is waiting for acceptance and inspection. B. Lawsuit item about land approval of Meisi Company In June 2004, Shenzhen Meisi Industrial Co., Ltd. (hereinafter referred to as “Meisi Company”) prosecuted Shenzhen Luohu Economic Development Co., Ltd and the Company to Shenzhen Intermediate People’s Court(hereinafter referred to as “Shenzhen Intermediate Court”) for illegal use of land owned by Meisi Company and request for ceasing the infringing act and receiving a compensation amounted RMB8 million. In March 2005, Shenzhen Intermediate Court issued Civil Ruling Paper SZFMCZ (2004) No. 108 and adjudicated that the Company should return the land with an area of 4,782 square meters to Meisi Company within 3 months and other claims of Meisi Company were overruled. The Company refused to accept the verdict and appealed to Guangdong Higher Court. On November 25, 2005, Guangdong Higher Court adjudicated that the Civil Ruling Paper SZFMCZ (2004) No. 108 issued by Shenzhen Intermediate Court should be cancelled and the prosecution of Meisi Company were overruled. During the process of trial of second instance, Meisi Company applied to Registration Center for Property of Real Estate of Shenzhen Municipality for revoking Property Ownership Certificates SFDZ No. 3000320987 and No. 300119899 owned by the Company. On July 7, 2005, Registration Center for Property of Real Estate of Shenzhen Municipality issued the reply of SFDH (2005) No. 199 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. 84 to Meisi Company and judged that aforesaid certificates are legal and effective and should not be revoked. Meisi Company disagreed with this judgment and applied the administrative reconsideration to the People's Government of Shenzhen Municipality. On October 8, 2005, the People's Government of Shenzhen Municipality issued Decision on Administrative Reconsideration SFFJ (2005) No. 294 and judged that aforesaid 2 certificates were registered illegally and should be revoked, reply of SFDH (2005) No. 84 was canceled accordingly. The Company refused to accept Decision on Administrative ReconsiderFation SFFJ (2005) No. 294 and prosecuted an administrative litigation to Shenzhen Intermediate Court on October 20, 2005. Shenzhen Intermediate Court issued Administrative Judgment SZFXCZ (2005) No. 23 and adjudicated that Decision on Administrative Reconsideration SFFJ (2005) No. 294 is sustained. The Company disagreed with this administrative judgment and appealed to Guangdong Higher Court on August 2, 2006. Guangdong Higher Court issued Administrative Judgment YGFXZZ (2006) No. 154 in which the appeal was rejected and Administrative Judgment SZFXCZ (2005) No. 23 was sustained. According to this Judgment, Shenzhen Municipal Bureau of Land Resources and Housing Management would reconsider the request of Meisi Company to revoke the Property Ownership Certificates SFDZ No. 3000320987 and No. 3000119899 of the Company. On May 15, 2007, Registration Center for Property of Real Estate of Shenzhen Municipality issued Decision on Revoking the Property Ownership Certificates SFDZ No. 3000320987 and No. 3000119899 (SFZ (2007) No. 27). Registration Center for Property of Real Estate of Shenzhen Municipality decided to revoke property ownership certificates SFDZ No. 3000320987 and No. 3000119899 owned by the Company that indicating the ownership of occupied property of Meilin Workshop, Comprehensive Building and the land use right of 11,500 square meters and restore the registration of the ownership of occupied property of Meilin Workshop, Comprehensive Building and the land use right of certificates of SFDZ No. 0103142 and No. 0103139. The Company had the ownership of occupied property of Meilin Workshop, Comprehensive Building and the land use right of 11,500 square meters according to original property ownership certificates. On July 9,2007, the Company applied the administrative reconsideration to the Administrative Reconsideration Office of the People’s Government of Shenzhen Municipality, which considered that those action that Registration Center for Property and Real Estate of Shenzhen Municipality revoked property ownership certificate SFDZ No. 3000320987 and No. 3000119899 owned by the Company and restore the registration of Meilin Workshop, Comprehensive Building and land use right violated the provisions of the Decision on Strengthening Land Market Management and further Enlivening and Standardizing Real Estate Market (SF (2001) No. 94) promulgated by People’s Government of Shenzhen Municipality, and requested People’s Government of Shenzhen Municipality to rescind the Decision. On September 6, 2007, the People’s Government of Shenzhen Municipality issued Decision on Administrative Reconsideration SFFJ (2007) No. 255 to sustain the administrative decision of Shenzhen Municipal Bureau of Land Resources and Housing Management. 200 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. In November 2007, Shenzhen Municipal Bureau of Land Resources and Housing Management rejected the application of Meisi Company for revoking Property Ownership Certificates SFDZ No. 0103142 and No. 0103139. Meisi Company prosecuted an administrative litigation to Shenzhen Futian People’s Court (hereinafter referred as to “Futian Court”) to ask for revoking the administrative decision of Shenzhen Municipal Bureau of Land Resources and Housing Management. The Company was involved as third party. Court session started on January 8, 2008 with litigation number of (2008) SFFXCZ No. 10 (hereinafter referred as to “No.10 Case”). On January 2008, Meisi Company prosecuted an administrative litigation to Futian Court for revoking the above administrative decision of Shenzhen Municipal Bureau of Land Resources and Housing Management, revoking Property Ownership Certificates SFDZ No. 0103142 and No. 0103139, and restoring the land use right to Meisi Company with the litigation number of SFFX (2008) No. 70 (hereinafter referred as to “No.70 Case”). On May 2008, the Futian Court made adjudication to No. 70 Case in which the property ownership certificates SFDZ No. 0103142 and No. 0103139 owned by the Company were revoked and Shenzhen Municipal Bureau of Land Resources and Housing Management were required to re-investigate the application of Meisi Company. The company, the Shenzhen Municipal Bureau of Land Resources and Housing Management as well as Meisi Company refused to accept the verdict and made an appeal. On July 2008, the Company has received the Administrative Ruling Paper from Futian Court in which the trial of No. 10 Case was terminated. On December 2008, Shenzhen Intermediate Court issued the Administrative Ruling Paper SZFXZZ (2008) No. 223, in which the final adjudication of appeal No. 70 Case was made and the original verdict was sustained. Moreover, the final adjudication stated that the controversy over the land use right in this case between Meisi Company and the Company should be settled through civil procedures; the Bureau of Land Resources and Housing Management of Shenzhen Municipality should not proceed the registration procedure until the controversy is final settled. On February 11, 2009, the Company received the Civil Complaint from Futian Court; Meisi Company has made a civil prosecution against the Company and Shenzhen Luohu Commercial Development Co., Ltd. for the confirmation of Meisi Company’s land use right and the buildings in original Property Ownership Certificates SFDZ No., 0103142 and No., 0103139. Furthermore, Meisi Company requests that return of related land use right and a compensation of RMB7.5 Million. The Company has submitted an objection to jurisdiction. On March 4, 2009, Futian Court sent the Notice to the Company to inform that this case has been transferred to Shenzhen Intermediate Court for adjudication. On 22 December 2009, the Company received court ruling delivered by the Guangdong Higher Court. After investigated by Guangdong Higher Court, it is considered that the retrial application to Shenzhen Intermediate Court Judgment SZFZ (2008) No. 223 by the company is complied to the law, and adjudicated: ① Arraign by Guangdong Highest People's Court ② suspended the execution of the original verdict during the retrial. On 15 Aug. 2011, the Company received the Administrative Ruling Paper (YGFSJZ Zi (2010) No. 8) from the Guangdong Higher Court, which maintained the Administrative Ruling Paper (SZFXZ Zi (2008) No. 223), and it believed that the dispute on the land ownership for both parties was civil right confirmation, and both parties should find other legal way to solve. 201 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. The Company received the ruling of Shenzhen Medium People's Court in Oct. 2012, at which the court approved legally Meisi Company’s application on canceling the lawsuit towards the Company. After receiving the above ruling, due to the Administrative Ruling Paper SZFXZ Zi (2008) No. 223 had clearly ruled that the dispute on Meilin land between the Company and Meisi Company should be settled through civil law procedures, therefore, the Company raised the civil lawsuit to Meisi Company and Luojingfa Company, requiring to recognize the ownership of the above involved land for the Company, and the court has accepted the above mentioned lawsuit. Then, Meisi Company raised the counterclaim towards the Company, requiring recognizing its ownership of the above involved land. And the two cases were combined for public trial on 1 Mar. 2013, and now it’s waiting for ruling. The Company believes that the land use right and ownership of above building should be legally confirmed to the Company. The Company will secure its own legal rights through all legal means, and the above issues do not have significant impact on the Company’s financial position. C. Shenzhen Hetaiheng prosecuted the Company to undertake joint liability for the debts for Shenzhen International Trade Center Industry Development Co., Ltd. On 31 July 2015, Shenzhen Luohu District People's Court issued (2015) SLFMECZ No. 2499 paper of civil judgment. It decided the Company and China (Shenzhen) Education Business Shares Co., Ltd. (“China Education Company”) shall undertake the joint liability for the debts for Shenzhen International Trade Center Industry Development Co., Ltd. (“International Trade Center Company”) declared under (2002) SLFJYCZ No. 582 paper of civil judgment. According to (2002) SLFJYCZ No. 582 paper of civil judgment, Shenzhen Xinguang Industry Co., Ltd. (“Xinguang Company”) shall, within ten days after the effectiveness of such paper, clean off 2.21 million of principal and interest thereon (such interest shall be counted from 22 Dec. 2000 to the date when the debts are paid off based on related regulations by the People’s Bank of China as agreed under Loan Contract) to Shenzhen Shendong Branch of Industrial and Commercial Bank of China (“Shendong Branch of ICBC”); and International Trade Center Company shall undertake joint liability for cleaning off such debts. After the effectiveness of (2002) SLFJYCZ No. 582 paper of civil judgment, Shendong Branch of ICBC has only been paid off 31,551, and then the creditor’s right has been transferred to Shenzhen Office of China Orient Asset Management Corporation, who has applied for execution by force to the People’s Court, but received no more payment. On 22 May 2008, Shenzhen Office of China Orient Asset Management Corporation further transferred the creditor’s right to Dongfu Asset Management Corporation. On 24 Oct. 2010, Dongfu Asset Management Corporation again transferred such right to Shenzhen Hetaiheng Investment Co., Ltd., which has been paid 700,000 during the execution of this paper. In 2013, International Trade Center Company was under bankruptcy liquidation. On 17 Dec. 2014, Shenzhen Intermediate People’s Court issued (2013) SZFPZ No. 24-3 paper of civil judgment to end the bankruptcy proceeding on International Trade Center Company due to its liquidation failure since the Company’s address was unknown and management failed to take over the Company’s property and financial data. On 1 Apr.2015, the management of International Trade Center Company dissolved the company. 202 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. Under (2015) SLFMECZ No. 2499 paper of civil judgment, Shenzhen Hetaiheng Investment Co., Ltd. claimed that the Company and China Education Company shall undertake the joint liability for paying off the debts under (2002) SLFJYCZ No. 582 paper of civil judgment (By 31 Mar. 2015, 2,178,449.00 of principal, with the interest counted from the date as regulated by the law to the date when the debts are paid off). It is decided in the first-instance judgment by Shenzhen Luohu District People's Court that the two sharing companies of International Trade Center Industry Company, namely the Company and China Education Company, as well as Shicai Company though not involved in this case, shall undertake the joint liability for the debts of International Trade Center Company under (2002) SLFJYCZ No. 582 paper of civil judgment since they failed to perform the liquidation liability and to provide accounting books during bankruptcy proceedings of International Trade Center Company, which led to the failure of an overall liquidation; as for the debt amount, this Court did not make any decision since such amount may be changed with the performance of paying off the debts under (2002) SLFJYCZ No. 582 paper of civil judgment by parties involved. The Company refuses to accept the above judgment and has appealed against such decision. During the reporting period, the Company estimated about 834,999.50 of debts based on (2015) SLFMECZ No. 2499 paper of civil judgment and its actual holding 38.33% of the shares of International Trade Center Company. (2) Guarantee A. The Company obtained a long-term loan of RMB 450 million from Bank of Beijing Co., Ltd. Shenzhen Branch guaranteed by Huangcheng Real Estate Co., Ltd., which had total lending RMB144.84 million. The closing balance stood at RMB 144.84 million. B. The Company’s subsidiary Dongguan International Trade Center Changsheng Real Estate Development Co., Ltd. borrowed RMB40 million from Bank of Communications Co., Ltd. Dongguan Branch, by mortgaging the use right of area of 66,881.10 square meters (DFGY (2010) NO. T316). The Company provided joint liability guarantee and mortgaged its 101-104, 2/F, 5/F in Block A and 1-02 and 1-03 room in Block B as a total of 8 sets of real estate of Shenzhen International Trade Center Plaza located at Renmin South Road, Luohu District, Shenzhen., which had total lending RMB169.2434 million. The closing balance stood at RMB 129.2434 million. C. The Company’s subsidiary Dongguan International Trade Center Changsheng Real Estate Development Co., Ltd. belongs to provisional qualification real estate development enterprise, when dealing with the application of approval of the presale of houses, the commercial housing quality guarantee after the liquidations of enterprise bankruptcy, dissolution, Dongguan International Trade Center Changsheng Real Estate Development Co., Ltd. submitted guarantee RMB12,402,160.00 to Bank of Communications, Duangguang, Dalang Branch, the bank issue 9 Guarantee Letter for irrevocable goods, of which one guarantee of RMB1,468,870.00, from 30Jun. 2015 to 31 Dec. 2020, and the remained were RMB10,933,290.00 from 1 Jul. 2015 to 31 Dec. 2020. D. Guarantee for the owners: the Company and its subsidiaries are the purchasers providing mortgage guarantee for the bank, As of 31 Dec. 2015, the unsettle guarantee amount was RMB220.91 million, the guarantee event was provided by real estate developer for small owners’ purchases of commercial houses of the Company, which was the common phenomenon in the industry (3) Contingent assets 203 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. Bureau of Foreign Trade and Economic Cooperation of Hubei province Shenzhen branch (hereinafter referred as to “Hubei FTEC Shenzhen branch”) sued the Company to Shenzhen Intermediate Court on July 2000 for termination of the agreement between the Hubei FTEC Shenzhen branch and the Company about office property of 4,000 square meters purchasing in Jiabing Building (now renamed as Longyuan Development Building use known as Jinlihua Commercial Plaza) and asked for refund of purchase payment of RMB10.8 million and an indemnify of RMB18.6756 million on the ground of delayed delivery. Guangdong Higher Court issued YGFMYZZ No. 90 judgment (hereinafter referred as to “No. 90 Judgment”) and adjudicated that the Company should refund the Hubei FTEC Shenzhen branch purchase payment of RMB 10.8 million and related interests. Hubei FTEC Shenzhen branch applied for the court to implement the case. At the end of January 2005, Guangzhou Railway Transportation Intermediate Court (hereinafter referred to as “GRTIC” was appointed by Guangdong Higher Court to execute the case of Hubei FTEC suing the Company. GRTIC had sent seizure adjudication to liquidation team of Luohu Hotel to seal up the Company’s RMB 23 million of distributed obligatory right in Luhu Hotel. The Company rejected the adjudication of Guangdong Higher People’s Court and applied for retrial to the Supreme People’s Court. In August 2005, the Supreme People’s Court issued (2004) MEJZ No.146-1 Civil Judgment, adjudicating that Guangdong Higher People’s Court carried out retrial for this case and the original judgment was suspended to be implemented during retrial period. On May 12, 2006, Guangdong Higher People’s Court concluded retrial of No. 90 Judgment and maintained adjudication of No. 90 Judgment. The execution of this case was resumed. Hubei FTEC Shenzhen branch asked GRTIC for payment and re-execution of interest judgment during retrial period. Meanwhile, the Company applied for temporary respite. On June 30, 2006, GRTIC issued (2004) GTZFZZ No. 225-4 Civil Judgment, adjudicating that: ① the application for temporary respite of the Company was not adopted due to the lack of fact and legal basis; ②the application of Hubei FTEC Shenzhen branch related to payment was in conformity with stipulations of law and GRTIC decided to remit the rest of money to the account of Hubei FTEC Shenzhen branch after deducting execution fees from RMB 23 million; ③ Hubei FTEC Shenzhen branch’s application on asking repayment of interest during retrial period was not supported; ④ Repayment duty of the Company confirmed by No. 90 Judgment was executed and finished according to law; ⑤ No. 90 Judgment was terminated and executed. The Company had confirmed losses according to the above adjudications and added the accounts receivable of Jiyong Company and withdrawn provision for bad debt. The Company considered that there were errors in identified fact and applicable law of the retrial adjudication from Guangdong Higher People’s Court and therefore applied for retrial in the Supreme People’s Court. The Supreme People’s Court issued (2004) MEJZ No. 146-3 Civil Judgment in October 2007, adjudicating that the Supreme People’s Court would execute retrial for this case. However, the Company revoked the retrial appeal toward the Supreme Court after comprehensive considerations, and the Supreme Court approved such cancel. The 14th and 15th floors of Jiabin Building retuned by Hubei FTEC Shenzhen branch were possessed by the Company legally after the Company had pay for housing compensation and interest. For the purpose of resolving building property right problem and through investigation the Company found that the 14th and 15th floors of Jiabin Building were registered under the name of Yinzhu Industrial Development Company of Western Zhuhai (hereinafter referred to as 204 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. “Zhuhai Yinzhu Company” by the means of filing registration. The Company submitted civil action to Luohu Court on June 2008 to prosecute Zhuhai Yinzhu Company, ask the Court to confirm that the Company was oblige of the 14th and 15th floors of Jiabin Building and judge that the 14th and 15th floors of Jiabin Building was transferred to and registered under the name of the Company. Luohu Court accepted this case according to law with the case number of (2008) SLFMSCZ No. 1442. On July 21, 2008, the Court made public hearing and presided over mediation for this case. The Company and Zhuhai Yinzhu Company reached a settlement and Luohu Court issued Civil Mediation Agreement which mainly contained the following contents: ① the two parties agreed to return the 14th and 15th floors of Jiabin Building to plaintiff (the Company); ② Defendant should assist plaintiff (the Company) to handle related procedures about transferring the above house property to the name of the plaintiff. This Civil Mediation Agreement entered into force pursuant to the law. As of the end of reporting year, the 14th and 15th floors of Jiabin Building were registered under the name of the Company by Registration Center for Property of Real Estate of Shenzhen Municipality in the way of filing registration. Since Shenzhen Longyuan-Kaili-Hengfeng Real Estate Co., Ltd. ( hereinafter as the “Longyuan-Kaili”) and Shenzhen Huaneng-Jindi Property Co., Ltd.( hereinafter as the “Huaneng Property”) attempted to reconstruct Jinlihua Commercial Plaza, the Company, the first administration directly under Shenzhen Urban Planning and Land Resources Committee (hereinafter as the “SUPLRC”), Longyuan-Kaili and Huaneng Property signed SDHZ (1992) No. 0228 Second Supplementary Agreement of Shenzhen Grant Contract of Land Use Right on March 3, 2011 which was shown as follows: ① SUPLRC agreed that the transferee for the right of use of the land with a land parcel No. H206-0002 and an area of 6,892 square meters was changed to Longyuan-Kaili and Huaneng Property; ② Longyuan-Kaili and Huaneng Property undertook all rights, responsibilities and liabilities of this land parcel and straightened out the relationship of the transferred property on their own and assisted to handle relevant procedures; ③ Longyuan-Kaili and Huaneng Property promised to resolve existing mortgage and pre-seizure of this project, coped with all disputes arising from changes on transferee of right of use of this land and assumed legal and economic responsibilities; ④ the property right of the 14th and 15th floors in this project which belonged to commodity houses, were owned by the Company and Longyuan-Kaili and Huaneng Property were responsible for the construction and decoration of this project according to harmonized standards on delivery of building; ⑤ the period of use of land parcel was adjusted to 50 years from February 21, 2011 to February 20, 2061. In Nov. 2014, Longyuan-Kaili and Huaneng Property obtained the Building Engineering Construction Permission of Longyuan Development Building, in Dec. 2014, the entrusted construction unit Silver Guangsha Group Co., Ltd., and the exterior wall decoration, glass curtain wall, roofing and waterproofing project, ventilating engineering, air conditioning engineering, building water supply and drainage engineering, outdoor engineering etc. were been conducted, and finished in Dec. 2015. The project so far, was in the completion acceptance stage. In 9 Jan. 2015, the project obtained Real Estate Pre-sale Permit, and on 17 Jan. 2015, the project was opening quotation, in line with the public information inquiry of Shenzhen Urban Planning and Land Resources Committee, there were 1.077 houses for public sale, as of the end of report issued, 755 sale contracts and contract records, 70% of the total, the intake time agreed by the contract was 30 Jun. 2016. 205 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. The Company believed that: due to the project had been completed in Dec. 2015, and had entered the in the completion acceptance stage in 2016, the delivery of F14 and F15 has no major substantive obstacles, the potential assets were sure to received, thus, recognized it as an assets, listed in other current assets. The Company, in line with the Property Value Of Real Estate Consulting Report of Jinlihua Building F14, F15 of the North of Shen NanWest Road, Luohu District, Shenzhen (WUZZ No. 2015-Z12006) issued by Shenzhen World Union Appraisal Co., Ltd., which recognized the F14 and F15 of the Company with market of RMB174,382,120 as value of entered assets. (2) The Company have no significant contingency to disclose, also should be stated There was no significant contingency in the Company. 3. Other Naught XV. Events after balance sheet date 1. Significant events had not adjusted Unit: RMB Yuan Influence number to the Reason of unable to estimate Item Content financial position and operating influence number results 2. Profit distribution Unit: RMB Yuan Planning allocation of profits or dividends 47,678,327.36 Profits or dividends approved, reviewed and issue by the 47,678,327.36 declaration 3. Sales return Naught 206 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. 4. Notes of other significant events By 31 Dec. 2015, the Company held 56,600,000.00 (reported under Other Receives) of creditor’s right on Gintian Industry (Group) Co., Ltd. (“Gintian Industry”) and 53,031,578.72 of withdrawn bad debt provision on the book. On 29 Jan. 2016, Shenzhen Intermediate People’s Court issued (2015) SZFPZ No. 14-5 paper of civil judgment. It is considered that The Reorganization Plan of Gintian Industry (Group) Co., Ltd. has clearly defined the standard of successful execution of such plan as “the cash and shares distributed to creditors based on reorganization plan have been transferred to the accounts specified by creditors or deposited to those specified by the management”. Under the supervision by the management, Gintian Industry, according to its reorganization plan and the creditors’ payment instruction, has paid cash to the creditors, and meanwhile transferred its tradable share A, non-tradable share A and share B to the accounts specified by creditors. Besides, Gintian Industry has also deposited the payment and shares distributed based on the creditors’ rights those not providing qualified capital accounts or securities accounts. Therefore, Gintian Industry has successfully executed the reorganization plan. As from suchexecution, Gintian Industry shall not undertake any liability for the debts reduced or exempted by in the reorganization plan. The paper further confirmed the successful execution of the reorganization plan by Gintian Industry and thus ended its bankruptcy proceedings. Based on the final execution of The Reorganization Plan of Gintian Industry (Group) Co., Ltd., the Company received 772,717 tradable A shares, 712,123 non-tradable A shares and 447,217 B shares distributed by Gintian Industry. Counted on the price issued on the last trading date before the trading suspension of Gintian Industry (10 Dec. 2014), 2.09 per A share and 1.04 per B share, the assets compensated shall be valued at 3,568,421.28. According to (2015) SZFPZ No. 14-5 paper of civil judgment issued by Shenzhen Intermediate People’s Court, Gintian Industry has successfully executed the reorganization plan, and as from such execution, Gintian Industry shall not undertake any liability for the debts reduced or exempted by in the reorganization plan. Therefore, the Company shall write off the receivables of 53,031,578.72 from Gintian. Since this asset item has withdrawn bad debt provision, it will not exert any influences on business results. XVI. Other significant events 1. The accounting errors correction in previous period (1) Retrospective restatement Unit: RMB Yuan Name of the influenced report Content Processing program Cumulative impact items during comparison period (2) Prospective application Content Processing program Reason of adopting prospective application 207 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. 2. Debt restructuring Inapplicable 3. Replacement of assets (1) Non-monetary assets exchange Inapplicable (2) Other assets replacement Inapplicable 4. Pension plan Inapplicable 5. Discontinuing operation Unit: RMB Yuan Termination of the business Income tax profits Item Revenue Expense Total profits Net profit expense attributable to the parent company owner Other notes: Inapplicable 6. Segment information (1) Recognition basis and accounting policies of reportable segment The Group's business includes real estate business, housing lease management, transportation, catering services, and other business (including: mechanical and electrical professional maintenance business, mechanics, engineering supervision, parking lot, because of the above businesses income are small, approve them being merged), etc. The Group separately organized and managed according to the business and the properties of products and services provided. Each 208 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. business division of the Group was a business group, provided the facing risk and obtained rewards and products different from other division. A. Real estate business divisions: real estate development, sales and rental B. The property management business divisions: building management C. Transportation business division: operating passenger car D. Diet services: catering service E. Other business: operating mechanical and electrical professional maintenance business, mechanics, engineering supervision business, and parking lot The management considering the decision of resources and evaluation of performance separately manage the operating results of each unit of business. (2) The financial information of reportable segment Unit: RMB Yuan Property Transportatio Catering Offset in Item Real estate Others Undistributed Total management n service segment Operation 595,657,932. 383,726,480. 60,914,047.9 31,014,702.8 1,077,418,50 6,105,337.18 revenue 90 02 4 9 0.93 Trading revenues 12,388,568.8 -21,338,047.5 2,083,303.00 301,670.95 1,288,269.00 5,276,235.69 between 7 1 divisions Sales 42,384,136.3 41,941,165.9 -442,970.42 expenses 6 4 Investments in associated companies 1,637,238.00 1,637,238.00 and joint ventures Asset 77,621,988.8 18,542,750.3 96,663,939.7 impairment 680,576.21 41,119.62 -52,369.17 -170,126.21 9 7 1 loss Depreciation and 19,263,331.2 18,335,149.0 39,474,798.6 1,444,495.48 390,107.44 41,715.54 amortization 1 2 9 charges Total profits 222,095,481. 29,272,449.8 -33,946,158.1 -10,621,843.0 216,391,692. 8,401,807.02 1,226,323.68 -36,368.78 (losses) 59 0 2 6 13 5,684,470,69 417,588,343. 380,067,812. 2,362,095,34 -4,479,715,64 4,379,763,48 Total assets 7,339,004.31 7,917,928.25 2.79 01 71 5.82 0.79 6.10 Total 4,108,077,83 319,798,701. 183,821,035. 7,429,395.61 9,406,441.89 1,770,580,39 -4,120,119,17 2,278,994,63 209 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. liabilities 9.11 37 17 0.13 0.85 2.4 Leong term equity investments 34,526,177.4 34,526,177.4 in associated 1 1 companies and joint ventures Increase amount of non-current 33,676,912.4 40,901,000.9 assets except 6,327,435.98 894,302.56 2,350.00 4 8 long term equity investment (3) There was no reportable segment, or the total amount of assets and liabilities of each part of reportable segment, shall disclose the reason. Inapplicable (4) Other notes A. Income of foreign trade of production and labor serve Item Reporting period Last period Real estate 595,657,932.90 823,545,260.23 Property management 383,726,480.02 348,639,937.02 Transportation 60,914,047.94 65,503,394.11 Catering service 31,014,702.89 24,634,302.99 Other 6,105,337.18 6,128,557.51 Total 1,077,418,500.93 1,268,451,451.86 B. Geography information Distribution of foreign trade income: Item Reporting period Last period Mainland of China 1,076,951,837.08 1,267,999,589.99 Countries and regions outside the Chinese mainland 466,663.85 451,861.87 Total 1,077,418,500.93 1,268,451,451.86 Distribution of total non-current assets liabilities: Item Closing balance Opening balance Mainland of China 457,200,691.14 453,648,609.02 210 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. Countries and regions outside the Chinese mainland 2,455,666.52 2,944,308.35 Total 459,656,357.66 456,592,917.37 C. Customers information the customers of the Group were rather dispersed; there was no individual transaction over 10%. 7. Other important transactions and events have an impact on investors decision-making Inapplicable 8. Other Inapplicable XVII. Notes of main items in the financial statements of the Company 1. Accounts receivable (1) Accounts receivable classified by category Unit: RMB Yuan Closing balance Opening balance Book balance Bad debt provision Book balance Bad debt provision Category Withdra Book Proportio wal Proportio Withdrawal Book value Amount Amount value Amount Amount n proportio n proportion n Accounts receivable with insignificant single amount for 96,647,8 96,647,8 101,447 101,447,8 98.08 100.00 97.88% 100.00% which bad debt 89.05 89.05 ,889.05 89.05 provision separately accrued Accounts receivable withdrawal of bad 1,828,82 849,254. 979,569.4 2,149,1 1,119,917 1,029,211.5 debt provision of by 1.77% 46.44% 2.07% 52.11% 4.21 72 9 28.71 .19 2 credit risks characteristics: Accounts receivable 54,380.3 0.05% 54,380.3 100.00% 54,380. 0.05% 54,380.35 100.00% 211 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. with insignificant 5 5 35 single amount for which bad debt provision separately accrued 98,531,0 97,551,5 979,569.4 103,651 102,622,1 1,029,211.5 Total 100.00 99.01 100.00% 99.01% 93.61 24.12 9 ,398.11 86.59 2 Accounts receivable with significant single amount for which bad debt provision separately accrued at the period-end √ Applicable □ Inapplicable Unit: RMB Yuan Accounts receivable Closing balance (entity) Account receivable Bad debt provision Withdrawal proportion Withdrawal reason 93,811,328.05 93,811,328.05 100.00 Involved in lawsuit and Shenzhen Jiyong no executable property, Properties & Resources please refer to Section X. Development Company Financial Report XIV. 2, (1) Shenzhen Tewei Industry Uncollectible for a long 2,836,561.00 2,836,561.00 100.00% Co., Ltd. period Total 96,647,889.05 96,647,889.05 -- -- In the groups, accounts receivable adopting aging analysis method to withdraw bad debt provision: √ Applicable □ Inapplicable Unit: RMB Yuan Closing balance Aging Account receivable Bad debt provision Withdrawal proportion Subentry within 1 year Within 1 year (including 1 year) 429,793.50 12,893.81 3.00% Subtotal of within 1 year 429,793.50 12,893.81 3.00% 2 to 3 years 803,814.00 241,144.20 30.00% Over 5 years 595,216.71 595,216.71 100.00% Total 1,828,824.21 849,254.72 46.44% Notes: For details, please refer to Section X. Financial Report V. 11 In the groups, accounts receivable adopting balance percentage method to withdraw bad debt provision: □ Applicable √ Inapplicable In the groups, accounts receivable adopting other methods to withdraw bad debt provision: 212 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. (2) Bad debt provision withdrawal, reversed or recovered in the report period The withdrawal amount of the bad debt provision during the reporting period was of RMB-270,662.47; the amount of the reversed or collected part during the reporting period was of RMB4,800,000.00. Significant amount of reversed or recovered bad debt provision: Unit: RMB Yuan Name of the entity Amount Method Total 4,800,000.00 -- (3) Particulars of the actual verification of accounts receivable during the reporting period Unit: RMB Yuan Item Amount Of which: significant actual verification of accounts receivable Unit: RMB Yuan Whether occurred Name of the entity Nature Amount Reason Procedure because of related party transactions Total -- 0.00 -- -- -- Notes: No such case in reporting period. (4) Top five of account receivable of closing balance collected by arrears party Name of the entity Closing balance Proportion (%) Closing balance of bad debt provision Shenzhen Jiyong Properties & 93,811,328.05 95.21 93,811,328.05 Resources Development Company Shenzhen Tewei Industry Co., Ltd. 2,836,561.00 2.88 2,836,561.00 RAINBOW DEPARTMENT STORE 1,399,030.71 1.42 836,360.91 CO., LTD Shenzhen Jindu Wedding Etiquette Co., 283,251.00 0.29 8,497.53 Ltd. Luohu District Economic Development 54,380.35 0.06 54,380.35 Co., Ltd. Total 98,384,551.11 99.86 97,547,127.84 (5) Derecogniziton of account receivable due to the transfer of financial assets Naught 213 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. (6) The amount of the assets and liabilities formed by the transfer and the continues involvement of accounts receivable Naught Notes: Naught 2. Other accounts receivable (1) Other account receivable classified by category Unit: RMB Yuan Closing balance Opening balance Book balance Bad debt provision Book balance Bad debt provision Category Withdra Book Proportio wal Proportio Withdrawal Book value Amount Amount value Amount Amount n proportio n proportion n Other accounts receivable with insignificant single 188,204, 89,137,8 99,066,31 184,010 115,277,8 68,732,459. 10.08% 47.36% 9.76% 62.65% amount for which 157.06 42.62 4.44 ,311.48 52.18 30 bad debt provision separately accrued Other accounts receivable withdrawn 1,699,1 1,676,94 9,623,90 1,667,326 9,668,771 1,689,505,8 bad debt provision 89.79% 0.57% 74,579. 90.11% 0.57% 9,946.25 6.48 ,039.77 .88 07.43 according to credit 31 risks characteristics Other accounts receivable with insignificant single 2,415,32 2,415,32 2,421,3 2,421,326 0.13% 100.00% 0.13% 100.00% amount for which 6.23 6.23 26.23 .23 bad debt provision separately accrued 1,885,6 1,867,56 101,177, 1,766,392 127,367,9 1,758,238,2 Total 100.00% 5.42% 06,217. 100.00% 6.75% 9,429.54 075.33 ,354.21 50.29 66.73 02 214 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. Other accounts receivable with significant single amount for which bad debt provision separately accrued at the period-end √ Applicable □ Inapplicable Unit: RMB Yuan Closing balance Other accounts receivable Other accounts (unit） Bad debt provision Withdrawal proportion Withdrawal reason receivable Shum Yip Properties Uncollectible for a long 103,008,475.56 7,510,582.40 7.29% Development Co., Ltd. period Perform guarantee item, Jintian Group Co., Ltd. 56,600,000.00 53,031,578.72 93.70% irrecoverable Anhui Nanpeng Irrecoverable for long 8,047,712.00 8,047,712.00 100.00% Papermaking Co., Ltd. time The Company was Advances the shopping 6,481,353.60 6,481,353.60 100.00% enforced to conduct, mall gold business utilities irrecoverable Shanghai Yutong Real estate development Co., 5,676,000.00 5,676,000.00 100.00% Judgments, irrecoverable Ltd. Irrecoverable for long Wuyao Company 3,271,837.78 3,271,837.78 100.00% time Dameisha Tourism Cente 2,576,445.69 2,576,445.69 100.00% Suspend of projects Project son hold Elevated Train Project 2,542,332.43 2,542,332.43 100.00% irrecoverable Total 188,204,157.06 89,137,842.62 -- -- In the groups, other accounts receivable adopting aging analysis method to withdraw bad debt provision: √ Applicable □ Inapplicable Unit: RMB Yuan Closing balance Aging Other accounts receivable Bad debt provision Withdrawal proportion Subentry within 1 year Within 1 year (including 1 year) 298,875.17 8,966.25 3.00% Subtotal of within 1 year 298,875.17 8,966.25 3.00% 1 to 2 years 351,821.46 35,182.15 10.00% 2 to 3 years 4,853.18 1,455.95 30.00% Over 5 years 9,578,302.13 9,578,302.13 100.00% Total 10,233,851.94 9,623,906.48 94.04% Notes: 215 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. For details, please refer to Section X. Financial Report V. 11. In the groups, other accounts receivable adopting balance percentage method to withdraw bad debt provision □ Applicable √ Inapplicable In the groups, other accounts receivable adopting other methods to withdraw bad debt provision: □ Applicable √ Inapplicable (2) Bad debt provision withdrawal, reversed or recovered in the report period The withdrawal amount of the bad debt provision during the reporting period was of RMB -44,865.40; the amount of the reversed or collected part during the reporting period was of RMB26,254,513.85. Significant amount of reversed or recovered bad debt provision Unit: RMB Yuan Name of the entity Reversed or collected amount Method Of which: recovered and reversed asset Shum Yip Properties Development Co., Ltd. 22,680,092.57 value Jintian Industrial (Group) Co., Ltd. 3,568,421.28 Debt to equity Total 26,248,513.85 -- The amount of bad debt provision was RMB-44,865.40; the increase of amount of bad debt provision of foreign currency of creditor's rights receivable after exchange was RMB2, 460,156.77, the amount of reversed or recovered bad debt provision in the report period RMB 26,254,513.85. In Apr. 2014, due to Shenzhen International Trade Center Industrial Development Co., Ltd.’s original transfer of bad debt provision of RMB2, 351,652.48 to other current assets were canceled. (3) Particulars of the actual verification of other accounts receivable during the reporting period Unit: RMB Yuan Item Amount Of which: significant actual verification of other accounts receivable Unit: RMB Yuan Whether occurred Name of the entity Nature Amount Reason Procedure because of related party transactions Total -- 0.00 -- -- -- Notes of write-off other accounts receivable: (4) Other account receivable classified by account nature Unit: RMB Yuan 216 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. Nature Closing book balance Opening book balance Margin 3,204,898.13 2,311,917.57 Pretty cash advance 47,200.00 65,579.80 Account receivable to subsidiary 1,769,778,048.64 1,785,986,694.93 Account receivable to affiliated company 9,794,976.25 11,427,396.73 Account receivable non-affiliated company 84,744,306.52 85,814,627.99 Total 1,867,569,429.54 1,885,606,217.02 (5) Top 5 of the closing balance of the other accounts receivable collected according to the arrears party Unit: RMB Yuan Closing balance of Name of the entity Nature Closing balance Aging Proportion% bad debt provision PRD Yangzhou Real Account receivable Estate Development 659,369,836.60 Within 4 year 35.31% to subsidiary Co., Ltd. PRD Group Xuzhou Account receivable Dapeng Real Estate 580,204,789.61 Within 4 year 31.07% to subsidiary Development Co.,Ltd. Dongguan International Trade Center Changsheng Account receivable 264,541,793.00 Within 3 year 14.17% Real Estate to subsidiary Development Co., Ltd. Shum Yip Properties Account receivable Development Co., 103,008,475.56 Over 5 years 5.52% 7,510,582.40 to subsidiary Ltd. Shenzhen Huangcheng Real Account receivable 90,040,000.00 Within 2 year 4.82% Estate Management to subsidiary Co., Ltd. Total -- 1,697,164,894.77 -- 90.88% 7,510,582.40 (6) Account receivable involving government subsidies Unit: RMB Yuan Project of government Estimated recovering Name of the entity Closing balance Closing aging subsidies time, amount and basis 217 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. Total -- 0.00 -- -- Naught (7) Other account receivable derecognized due to the transfer of financial assets Naught (8) Amount of transfer other account receivable and assets and liabilities formed by its continuous involvement Naught Notes: Naught 3. Long-term equity investment Unit: RMB Yuan Closing balance Opening balance Item Depreciation Depreciation Book balance Book value Book balance Book value reserves reserves Investment to the 278,521,260.98 31,964,000.00 246,557,260.98 278,521,260.98 31,964,000.00 246,557,260.98 subsidiary Investment to joint ventures and 67,333,791.55 32,807,614.14 34,526,177.41 69,379,526.10 36,490,586.69 32,888,939.41 associated enterprises Total 345,855,052.53 64,771,614.14 281,083,438.39 347,900,787.08 68,454,586.69 279,446,200.39 (1) Investment to the subsidiary Unit: RMB Yuan Withdrawn Closing balance impairment Investee Opening balance Increase Decrease Closing balance of impairment provision in the provision reporting period Shenzhen Huangcheng Real 28,500,000.00 28,500,000.00 Estate Co., Ltd. 218 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. SZPRD Real Estate 30,950,000.00 30,950,000.00 Development Co., Ltd. PRD Yangzhou Real Estate 50,000,000.00 50,000,000.00 Development Co., Ltd. Dongguan International Trade Center Changsheng Real 20,000,000.00 20,000,000.00 Estate Development Co., Ltd. Shenzhen International Trade 29,850,000.00 29,850,000.00 Center Vehicles Industry Co., Ltd. SHENZHEN INTERNATIONA L TRADE CENTER 20,000,000.00 20,000,000.00 PROPERTY MANAGERMEN T CO., LTD. Shenzhen Shenxin Motor Rent Co., 12,877,260.98 12,877,260.98 Ltd. Shenzhen International Trade 1,600,000.00 1,600,000.00 1,600,000.00 Center Food Co., Ltd. Shenzhen Property Construction 3,000,000.00 3,000,000.00 Supervision Co., Ltd. Shenzhen International Trade 12,000,000.00 12,000,000.00 12,000,000.00 Plaza Shenzhen Real 1,380,000.00 1,380,000.00 219 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. Estate Exchange Zhanjiang Shenzhen Real Estate 2,530,000.00 2,530,000.00 2,530,000.00 Development Co., Ltd. Shum Yip Properties 15,834,000.00 15,834,000.00 15,834,000.00 Development Co., Ltd. PRD Group Xuzhou Dapeng Real Estate 50,000,000.00 50,000,000.00 Development Co., Ltd. Total 278,521,260.98 278,521,260.98 31,964,000.00 (2) Investment to joint ventures and associated enterprises Unit: RMB Yuan Increase/decrease in reporting period Investme Closing Adjustme nt profit Withdraw balance Additiona nt of Declarati Opening Negative and loss Other n Closing of Investee l other on of cash balance investmen recognize equity impairme Other balance impairme investmen comprehe dividends t d under changes nt nt t nsive or profits the equity provision provision income method I. Joint ventures Shenzhen Jifa 29,880,87 908,463.5 30,789,34 Warehous 8.39 9 1.98 e Co., Ltd. Tianan Internatio nal 3,008,061 728,774.4 3,736,835 Building .02 1 .43 Property Managem ent 220 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. Company of Shenzhen 32,888,93 1,637,238 34,526,17 Subtotal 9.41 .00 7.41 II. Associated enterprises Shenzhen Wufang Pottery & 18,983,61 18,983,61 18,983,61 Porcelain 4.14 4.14 4.14 Industrial Co., Ltd. Shenzhen Internatio nal Trade Center 3,682,972 -3,682,97 Industrial .55 2.55 Develop ment Co., Ltd. Anhui Nanpeng 13,824,00 13,824,00 13,824,00 Papermak 0.00 0.00 0.00 ing Co., Ltd. 36,490,58 -3,682,97 32,807,61 32,807,61 Subtotal 6.69 2.55 4.14 4.14 69,379,52 1,637,238 -3,682,97 67,333,79 32,807,61 Total 6.10 .00 2.55 1.55 4.14 (3) Other notes The decrease of long term equity investment of Shenzhen International Trade Center Industrial Development Co., Ltd. was the assets to be cancel after verification transfer to current assets canceled by the bankruptcy administrator in Apr. 2014. 4. Revenues and operating costs Unit: RMB Yuan Reporting period Same period of last year Item Revenue Operating costs Revenue Operating costs 221 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. Main operations 61,440,361.37 14,568,381.71 56,980,961.69 19,108,080.80 Other operations 9,387,672.00 6,953,574.65 Total 61,440,361.37 14,568,381.71 66,368,633.69 26,061,655.45 Notes: 5. Investment income Unit: RMB Yuan Item Reporting period Same period of last year Long-term equity investment income 1,637,238.00 -352,555.03 accounted by equity method Investment income arising from disposal of 207,432,184.22 long-term equity investments Investment income received from disposal of 5,709,098.20 available-for-sale financial assets Investment income arising from entrust loans 3,378,400.00 Others 225,340.35 Total 7,571,676.55 210,458,029.19 6. Other Inapplicable XVIII. Supplementary materials 1. Items and amounts of extraordinary gains and losses √ Applicable □ Inapplicable Unit: RMB Yuan Item Amount Explanation Gains/losses on the disposal of non-current -175,931.40 assets Tax rebates, reductions or exemptions due to approval beyond authority or the lack of 153,795.84 official approval documents The non-operating revenue was increased Profits or losses incurred from contingency of 3269.02% over the last period was 168,991,971.80 of non-operating business. mainly due to the recognition of assets of Dragon Garden Development Building 222 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. F14, F15, RMB169,582,120.00, For details, please refer to Section X Financial Report (XIV) 2, (2). Gain/loss from change of fair value of transactional assets and liabilities, and investment gains from disposal of transactional financial assets and liabilities 5,709,098.20 and available-for-sale financial assets, other than valid hedging related to the Company’s common businesses Reverse of bad debt provision of account receivable individually conducting 8,374,421.28 impairment test Other non-operating income and expenses 164,576.21 other than the above Less: Income tax effects 44,878,576.92 Total 138,339,355.01 -- Explain the reasons if the Company classifies an item as an extraordinary gain/loss according to the definition in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Extraordinary Gains and Losses, or classifies any extraordinary gain/loss item mentioned in the said explanatory announcement as a recurrent gain/loss item □ Applicable √ Inapplicable 2. Return on equity (ROE) and earnings per share (EPS) EPS（Yuan/share） Profit as of reporting period Weighted average ROE (%) EPS-basic EPS-diluted Net profit attributable to common 7.59% 0.2631 0.2631 shareholders of the Company Net profit attributable to common shareholders of the Company after 0.89% 0.0310 0.0310 deduction of non-recurring profit and loss 3. Differences between accounting data under domestic and overseas accounting standards (1) Differences of net profit and net assets disclosed in financial reports prepared under international and Chinese accounting standards √ Applicable □ Inapplicable Unit: RMB Yuan 223 2015 Annual Report of Shenzhen Properties & Resources Development (Group) Ltd. Net profit Net asset Reporting period Same period of last year Closing balance Opening balance According to Chinese 156,819,966.71 417,498,679.91 2,099,906,766.61 2,074,242,662.07 accounting standards Items and amounts adjusted according to international accounting standards According to international 156,819,966.71 417,498,679.91 2,099,906,766.61 2,074,242,662.07 accounting standards (2) Differences of net profit and net assets disclosed in financial reports prepared under overseas and Chinese accounting standards √ Applicable □ Inapplicable Name of foreign accounting standard Unit: RMB Yuan Net profit Net asset Reporting period Same period of last year Closing balance Opening balance According to Chinese 156,819,966.71 417,498,679.91 2,099,906,766.611 2,074,242,662.07 accounting standards Items and amounts adjusted according to international accounting standards According to international 156,819,966.71 417,498,679.91 2,099,906,766.61 2,074,242,662.07 accounting standards (3) Explain reasons for the differences between accounting data under domestic and overseas accounting standards, for audit data adjusting differences had been foreign audited, should indicate the name of the foreign institutions No difference 4. Other Naught 224
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