ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE &
PROPERTIES (GROUP) CO., LTD.
ANNUAL REPORT 2019
2020-019
March 2020
1
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Part I Important Notes, Table of Contents and Definitions
The Board of Directors (or the “Board”), the Supervisory Committee as well as the directors,
supervisors and senior management of ShenZhen Special Economic Zone Real Estate &
Properties (Group) Co., Ltd. (hereinafter referred to as the “Company”) hereby guarantee the
factuality, accuracy and completeness of the contents of this Report and its summary, and
shall be jointly and severally liable for any misrepresentations, misleading state ments or
material omissions therein.
Liu Zhengyu, chairman of the Company’s Board, Chen Maozheng, the Company’s General
Manager, Tang Xiaoping, the Company’s head for financial affairs, and Qiao Yanjun, head of
the Company’s financial department (equivalent to financial manager) hereby guarantee that
the Financial Statements carried in this Report are factual, accurate and complete.
All the Company’s directors have attended the Board meeting for the review of this Report
and its summary.
The Company is subject to the Guideline No. 3 of the Shenzhen Stock Exchange on
Information Disclosure by Industry—for Listed Companies Engaging in Real Estate.
Certain descriptions about the Company’s operating plans or work arrangements for the
future mentioned in this Report and its summary, the implementation of which is subject to
various factors, shall NOT be considered as promises to investors. Therefore, investors are
reminded to exercise caution whe n making investment decisions.
Risks facing the Company have been explained in detail in “IX Prospects” in “Part IV
Ope rating Performance Discussion and Analysis” herein.
The Board has approved a final dividend plan as follows: based on the total share capital of
1,011,660,000 shares as at 31 December 2019, a cash dividend of RMB1.65 (tax inclusive) per
10 shares is to be distributed to the shareholders, with no bonus issue from either profit or
capital reserves.
This Report and its summary have been prepared in both Chinese and English. Should there
be any discrepancies or misunderstandings between the two versions, the Chinese versions
shall prevail.
2
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Table of Contents
Part I Important Notes, Table of Contents and Definitions ........................................................... 2
Part II Corporate Information and Key Financial Information ................................................... 5
Part III Business Summary ............................................................................................................. 10
Part IV Operating Performance Discussion and Analysis ........................................................... 12
Part V Significant Events ................................................................................................................ 32
Part VI Share Changes and Shareholder Information ................................................................. 43
Part VII Preferred Shares ............................................................................................................... 50
Part VIII Convertible Corporate Bonds ........................................................................................ 52
Part IX Directors, Supe rvisors, Senior Management and Staff .................................................. 53
Part X Corporate Governance ........................................................................................................ 61
Part XI Corporate Bonds ................................................................................................................ 68
Part XII Financial Statements ........................................................................................................ 70
Part XIII Documents Available for Reference............................................................................... 71
3
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Definitions
Term Definition
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
“SPG”, the “Company”, the “Group” or “we”
and its consolidated subsidiaries, except where the context otherwise requires
Holding Company Shenzhen Investment Holdings Co., Ltd.
4
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Part II Corporate Information and Key Financial Information
I Corporate Information
Stock name SPG, SPG-B Stock code 000029, 200029
Stock exchange for stock listing Shenzhen Stock Exchange
Company name in Chinese 深圳经济特区房地产(集团)股份有限公司
Abbr. 深房集团
Company name in English (if any) ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Abbr. (if any) SPG
Legal representative Liu Zhengyu
Registered address 45/F-48/F, SPG Plaza, Renmin South Road, Shenzhen, Guangdong, P.R.China
Zip code 518001
Office address 47/F, SPG Plaza, Renmin South Road, Shenzhen, Guangdong, P.R.China
Zip code 518001
Company website http://www.sfjt.com.cn
Email address spg@163.net
II Contact Information
Board Secretary Securities Representative
Name Tang Xiaoping Luo Yi
47/F, SPG Plaza, Renmin South Road, 47/F, SPG Plaza, Renmin South Road,
Address
Shenzhen, Guangdong, P.R.China Shenzhen, Guangdong, P.R.China
Tel. （86 755）82293000-4638 （86 755）82293000-4715
Fax （86 755）82294024 （86 755）82294024
Email address tangxiaoping0086@126.com spg@163.net
III Media for Information Disclosure and Place where this Report Is Lodged
Newspapers designated by the Company for Domestic: Securities Times and China Securities Journal
information disclosure Overseas: Ta Kung Pao (HK)
Website designated by CSRC for publication of this
http://www.cninfo.com.cn
Report
47/F, SPG Plaza, 3005 Renmin South Road, Luohu District, Shenzhen,
Place where this Report is lodged
Guangdong, P.R.China
5
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
IV Change to Company Registered Information
Unified social credit code 91440300192179585N (unified social credit code)
Change to principal activity of the
No change
Company since going public (if any)
On 24 M arch 1999, the controlling shareholder was changed from Shenzhen
Every change of controlling shareholder Investment M anagement Co., Ltd. to Shenzhen Construction Investment Holdings Co.,
since incorporation (if any) Ltd. And on 14 February 2006, it was changed to Shenzhen Investment Holdings Co.,
Ltd.
V Other Information
The independent audit firm hired by the Company:
Name Grant Thornton China
Office address 5/F, Sci-Tech Plaza, 22 Jianguomenwai Avenue, Chaoyang District, Beijing
Accountants writing signatures Huang Shengsen and Zhao Juanjuan
The independent sponsor hired by the Company to exercise constant supervision over the Company in the Reporting Period:
□ Applicable √ Not applicable
The independent financial advisor hired by the Company to exercise constant supervision over the Company in the Reporting Period:
□ Applicable √ Not applicable
VI Key Financial Information
Indicate by tick mark whether there is any retrospectively restated datum in the table below.
□ Yes √ No
2019-over-2018 change
2019 2018 2017
(%)
Operating revenue (RM B) 2,548,740,319.49 2,175,187,242.60 17.17% 1,345,912,605.09
Net profit attributable to the listed
552,452,307.59 503,498,831.60 9.72% 184,988,512.42
company’s shareholders (RM B)
Net profit attributable to the listed
company’s shareholders before 524,204,812.66 490,490,702.80 6.87% 181,588,638.91
exceptional gains and losses (RM B)
Net cash generated from/used in operating
603,607,724.75 1,062,567,405.59 -43.19% -17,801,139.64
activities (RM B)
Basic earnings per share (RM B/share) 0.5461 0.4977 9.72% 0.1829
Diluted earnings per share (RM B/share) 0.5461 0.4977 9.72% 0.1829
Weighted average return on equity (%) 15.90% 16.35% -0.45% 6.76%
6
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Change of 31 December
31 December 2019 31 December 2018 2019 over 31 December 31 December 2017
2018 (%)
Total assets (RMB) 4,909,669,536.09 4,665,891,514.25 5.22% 3,989,263,981.96
Equity attributable to the listed
3,666,874,569.99 3,332,259,641.39 10.04% 2,828,242,120.98
company’s shareholders (RM B)
VII Accounting Data Differences unde r China’s Accounting Standards for Business
Enterprises (CAS) and International Financial Reporting Standards (IFRS) and Foreign
Accounting Standards
1. Net Profit and Equity under CAS and IFRS
√ Applicable □ Not applicable
Unit: RM B
Net profit attributable to the listed company’s Equity attributable to the listed company’s
shareholders shareholders
2019 2018 Ending amount Beginning amount
Under CAS 552,452,307.59 503,498,831.60 3,666,874,569.99 3,316,581,079.94
Adjusted as per IFRS
Under IFRS 552,452,307.59 503,498,831.60 3,670,790,192.32 3,319,891,256.50
2. Net Profit and Equity under CAS and Foreign Accounting Standards
□ Applicable √ Not applicable
No difference for the Reporting Period.
3. Reasons for Accounting Data Differences Above
□ Applicable √ Not applicable
VIII Key Financial Information by Quarter
Unit: RM B
Q1 Q2 Q3 Q4
Operating revenue 424,535,370.83 826,802,431.74 652,161,755.98 645,240,760.94
Net profit attributable to the listed company’s shareholders 84,028,728.24 249,127,115.17 106,361,655.99 112,934,808.19
Net profit attributable to the listed company’s shareholders
84,055,572.77 238,810,381.76 105,876,740.20 96,334,902.68
before exceptional gains and losses
Net cash generated from/used in operating activities 217,157,204.59 468,518,040.51 356,240,434.19 -434,357,269.54
7
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Indicate by tick mark whether any of the quarterly financial data in the table above or their summations differs materially from what
have been disclosed in the Company’s quarterly or interim reports.
□ Yes √ No
IX Exceptional Gains and Losses
√ Applicable □ Not applicable
Unit: RM B
Item 2019 2018 2017 Note
Gain or loss on disposal of non-current assets (inclusive
-69,739.73 4,261,370.46
of impairment allowance write-offs)
Government subsidies charged to current profit or loss
(exclusive of government subsidies given in the
1,168,127.90 10,243.00 59,611.09
Company’s ordinary course of business at fixed quotas
or amounts as per the government’s uniform standards)
Gain or loss on assets entrusted to other entities for Income from mature
31,425,651.98 16,347,157.53
investment or management structured deposits
Non-operating income and expense other than the
1,118,861.69 891,652.84 212,183.13
above
Interest income from undue structured deposits 3,950,685.00
Less: Income tax effects 9,415,831.64 4,171,184.84 1,133,291.17
Total 28,247,494.93 13,008,128.80 3,399,873.51 --
Explanation of why the Company reclassifies as recurrent an exceptional gain/loss item defined or listed in the Explanatory
Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Exceptional Gain/Loss
Items:
□ Applicable √ Not applicable
No such cases for the Reporting Period.
8
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Part III Business Summary
I Principal Activity of the Company in the Reporting Period
With regard to China’s real estate market in 2019, under the macro-control policy of maintaining
stability, growth in house sales continued to slow down nationwide, but with relatively strong
demand in the Yangtze River Delta and the Guangdong-Hong Kong-Macau areas due to the
positive factor of urban development planning.
The Company primarily develops and sells residential properties in two cities, Shenzhen and
Shantou. In Shenzhen, the Chuanqi Jingyuan project completed the interior fine decoration in
January 2019 and was 100% sold out and handed over during the Reporting Period; the Chuanqi
Donghu Mingyuan project completed the filing for completed construction in December 2019 and
has started the hand-over and move- in process, which is cumulatively around 25% sold; and the
Cuilinyuan project is approximately 90% sold. In Shantou, the Tianyuewan Phase I project has
basically finished municipal road supporting and landscape improvement, which is around 50%
sold cumulatively; and the Tianyuewan Phase II project completed the basement in October 2019.
II Significant Changes in Major Assets
1. Significant Changes in Major Assets
M ajor assets M ain reason for significant changes
The ending amount was down by RMB12,091,268.59 (or 96.26%) from the beginning amount in
Equity assets
2019, primarily driven by the allowance for impairment of long-term equity investments.
The ending amount was down by RMB3,404,163.41 (or 10.03%) from the beginning amount in 2019,
Fixed assets
primarily driven by the depreciation allowance.
Intangible assets No significant change
Construction in progress No significant change
The ending amount was up by RM B28,632,064.03 (or 85.66%) from the beginning amount in 2019,
Accounts receivable primarily driven by the receivable of Shenzhen Zhentong Engineering Co., Ltd. for engineering
service provided.
The ending amount was down by RMB16,742,799.35 (or 37.19%) from the beginning amount in
Other receivables
2019, primarily driven by the allowances for doubtful accounts.
The ending amount was up by RM B34,387,156.71 (or 199.23%) from the beginning amount in 2019,
Short-term borrowings primarily driven by the increased borrowings of Shenzhen Zhentong Engineering Co., Ltd. through
discounting and pledging accounts receivable.
The ending amount was up by RM B285,153,442.38 (or 94.88%) from the beginning amount in 2019,
Taxes payable
primarily driven by the provision for land VAT.
9
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
The ending amount was down by RMB444,500,723.95 (or 61.58%) from the beginning amount in
Other payables
2019, primarily driven by the final settlement and payment of land VAT.
2. Major Assets Overseas
□ Applicable √ Not applicable
III Core Competitiveness Analysis
As one of the earliest real estate listed companies in Shenzhen, the Company has a history over 40
years in real estate development in Shenzhen and rich experience in the main business of real estate
development. In recent years, thanks to the experience learned from the Shenzhen- located
Chuanqishan project, Chuanqi Shanglin project, Chuanqi Jingyuan project and Chuanqi Donghu
Mingyuan project, as well as from the Shantou- located projects, the Company accelerates the
establishment of a modern enterprise HR management system and works hard in building a
professional and high-quality development team. It also keeps improving the management
mechanism and processes for project development. As a result, the professionalism and
management capability of the Company have improved significantly; planning, construction, cost
control, marketing capability and brand image have been effectively enhanced; and the operational
capability in the main business of real estate keeps increasing, along with the core competitiveness.
As of the Reporting Period (inclusive), the Company has been honored jointly by the Guangdong
Provincial Enterprise Confederation and the Guangdong Provincial Association of Entrepreneurs as
a “Most Honest Enterprise in Guangdong Province” for eight years in a row. It has also won
accolades from the Shenzhen Real Estate Association, namely, the “Rea l Estate Developer in
Shenzhen with the Highest Brand Value” for the past two years.
10
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Part IV Operating Performance Discussion and Analysis
I Overvie w
For 2019, the Company recorded operating revenue of RMB2,549 million, up 17.17% year-on-year;
a profit before tax of RMB732 million, up 7.21% year-on-year; and a net profit attributable to the
listed company’s shareholders of RMB552 million, up 9.72% year-on- year. As at 31 December
2019, equity attributable to the listed company’s shareholders amounted to RMB3,667 million, up
10.04% year-on-year; and the debt/asset ratio was 28.20%, down by 3.20 percentage points
year-on-year.
Review of Ope ration and Manage ment for 2019
In 2019, on the backdrop of a complicated international environment and continuous recession of
world economy, China’s economy continued to suffer from downward pressure, but achieved
generally stable growth while making further progress. All local governments firmly implemented
the decisions of the CPC Central Committee and the State Council, persisted in the positioning of
“Houses are for living in, not for speculating on” without using real estate as a measure to
stimulate economic development on a short-term basis, fully performed the main responsibilities of
cities and maintained an overall stable trend for the real estate market. During the Reporting Period,
the Company orderly drove the progress of a number of matters, including main business
development, management and operations, material assets restructuring, party building and
production safety, and set another new record in major operating indicators. The main achievements
over the year include:
(I) Stable Growth with Further Progress in Main Business Development
1. The progress of project development was smooth. The Company placed importance on
improving its capacity of controlling project development, implemented a full-cost, whole-process
and penetrated management concept, carried out tender invitation and bidding legally and in
compliance, timely identified and solved problems encountered during project development and
took strict measures for the settlement of project payment. As a result, it basically achieved the goal
for project development progress in main business. It completed the interior refined decoration
works for the Chuanqi Jingyuan project in Shenzhen in January 2019 and achieved 100% delivery
during the Reporting Period; it completed the regulatory filing and started the process of partnership
and delivery for the Chuanqi Donghu Mingyuan project in December 2019. It basically completed
the municipal road works and landscape renovation and upgrading works of Shantou Tianyuewan
Phase I, and completed the basement works of Phase II in October 2019.
2. The property sales exceeded the forecast. The Company continued to keep watch on market
changes and policy trends. Considering the regional market status of on-sale projects and the
11
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
advantages and disadvantages of the projects, the Company established different promotion and
sales plans, selected such new media channels as WeChat and Toutiao for marketing and duly
kicked off citywide referral sales. As a result, the Company made big breakthroughs in the sale of
on-sale projects compared with the forecast, b ut with marked regional differences. The Chuanqi
Jingyuan project became a hot sale across the city and was sold out in just 10 months; the projects
of Chuanqi Donghu Mingyuan and Cuilinyuan were sold at a regular speed; the Tianyuewan Phase
I project required stronger promotion.
(II) Higher Quality and Efficiency in Manage ment and Ope ration
1. Regulated and highly efficient financial management
The Company intensified financial control by printing and distributing a number of policies,
including SPG Management Measures for Financial Approval, SPG Management Measures for
Expert Consultation Fee, SPG Management Measures for Online Banking Payment and
Management Measures for Traveling Expense Management (Revision), making further
improvements to the financial management policy system; strengthened communication with
cooperating banks and effectively sped up the return of sales fund; fully increased the returns of
temporarily idle fund through bank structured deposits and agreement deposits; strictly controlled
period costs, with a YOY decrease of 0.76% in six cost items of focus.
2. Stable growth in rental income
Affected by the economic downturn and facing the leasing trend of increasingly frequent surrender
of tenancy and reduction of leasing sizes, the Company tried every means to retain customers,
stabilize prices and urge payment collection, worked hard to raise the leasing returns of property
stock and thus exceeded the annual rental target.
3. New progress in outstanding matters
By strengthening efforts to solve outstanding matters, the Company won nine legal cases with
effective court decisions in the year, and had five winning cases that had entered the enforcement
stage.
4. Continuous enhancement in the competitiveness of affiliates
All the Company’s affiliates worked hard to develop the market, took tough measures for
operation, strengthened management, improved services and maintained profitability with growth.
(III) Progress in Assets Restructuring in Compliance
In 2019, trading in the Company’s shares was suspended due to the material assets restructuring.
The Company worked with related parties to continuously promote various fundamental work for
the restructuring, including the updating of due diligence documents, additional audit, additional
evaluation and the updating of restructuring related documents and data; while strictly observing
regulation, disciplines and information disclosure principles, the Company proactively and properly
handled the investor relations by attentively answering investors’ questions by deadlines and
patiently providing explanations and assurance for investors calling and visiting the Company,
gaining understanding and support from the majority of them. To ensure orderly progress of its
restructuring, the Company signed Supplementary Agreement V to the Cooperation Agreement on
Restructuring and Listing and Supplementary Agreement VI to the Cooperation Agreement on
12
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Restructuring and Listing respectively on March 13, 2019 and December 13, 2019 with related
parties. The corresponding announcements have been disclosed through the media outlets
designated by the Company. During the Reporting Period, the Company fulfilled the obligation of
information disclosure strictly in accordance with regulatory rules, including disclosing the
restructuring progress at least every five trading days, duly going through the procedures for
postponing the resumption of share trading and disclosing the restructuring related information.
(IV) Marked Achievements in Party-Related Work
The party committee of the Company further implemented the theme education of “Stay true to
your mission”, made full use of the theoretical study of its central group, the primary subject study
of itself and the branches’ study and education of “Study the party constitution and regulations
and become a qualified party member”, persisted in promoting theoretical study while driving
practical rectifications and centered around study & learning, investigation & research, examination
of problems and rectifications throughout the whole theme education process; continued the
education in politics, ideology and incorruptible practice and kept improving the risk prevention and
control system for incorruptible practice; continuously promoted the party building project of
“support from state-owned enterprises and party building to communities”, gaining recognition
from the organization divisions of the provincial and the municipal party committees; continued to
carry out the “rendering warmness” activities, including consoling needy employees and party
members and hospitalized employees, and proactively participating in public benefit activities, such
as donations on Guangdong Day of Poverty Alleviation and the clothes donation themed
“Donation of Used Clothes to Deliver Warmness”; exerted the organization role of different
groups, including actively organizing diverse corporate cultural activities through interest group
activities, such as soccer, tennis, badminton, yoga and table tennis, leading to increasingly stronger
corporate cohesion.
(V) Effective Efforts in Production Safety
The Company formulated SPG Emergency Plan for Production Safety Accidents and printed and
distributed SPG Compilation of Safety Management Policies, further refining the safety
management policy system with obvious improvements in standardization and operability. The
affiliates refined and updated their safety management policies according to the requirements and
conducted a number of targeted emergency drills based on their respective industrial characteristics.
The Company has not had production safety accidents in its system for years with stable and
controllable production safety.
The Company is subject to the Guideline No. 3 of the Shenzhen Stock Exchange on Information Disclosure by Industry —for Listed
Companies Engaging in Real Estate.
New additions to the land bank:
Planned Floor area How the The Total land Consideration of the
Name of land Site area
Location usage of with plot land is Company’s price Company’s interest
lot or project （㎡）
land ratio （㎡） obtained interest (RM B’0,000) (RM B’0,000)
13
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Cumulative land bank:
Floor area available for
Name of project/area Site area（㎡） Floor area（㎡）
development（㎡）
Xinfeng Building in Shantou 0.59 2.66 2.66
Total 0.59 2.66 2.66
Development status of major projects:
Time Planned Floor
Cumulat Expecte Cumulat
for floor area
The ive d total ive
commen % % area complet
City/reg Name of Locatio Compan Site area complet investm investm
Status cement develop construc with ed in the
ion project n y’s （㎡） ed floor ent ent
of ed ted plot Current
interest area (RM B’0 (RM B’0
construc ratio Period
（㎡） ,000) ,000)
tion （㎡） （㎡）
Constru
Chuanqi ction
1
Shenzhe Donghu Luohu complet 100.00 100.00 5,889.7 45,256. 45,256. 45,256.
Februar 100% 51,000 40,828
n M ingyu District ed on 18 % %0 26 26 26
y 2016
an Decemb
er 2019
Framew
Tianyue Chaoya 1
ork in 100.00 31,167. 153,470
Shantou wan ng October 60% 79,801 69,884
construc % 50 .40
Phase II District 2018
tion
Sales status of major projects:
Pre-sale/ Pre-sale/
Floor
Cumulati sales Floor sales
area
Floor ve revenue Cumulati area revenue
The Floor pre-sold/
area pre-sold/ generate ve settled in settled in
City/regi Name of Compan area with sold in
Location Status available sold in the settled the the
on project y’s plot ratio the
for sale floor Current floor Current Current
interest （㎡） Current
（㎡） area Period area (㎡) Period Period
Period
（㎡） (RM B’0, （㎡） (RM B’0,
（㎡）
000) 000)
Shenzhe Cuilinyu Longgan Ready 60,111.4
100.00% 56,137 50,695 8,059 28,685 48,427 7,302 25,675
n an g District for sale 2
Shenzhe Chuanqi Futian 43,075.4
Sold out 49.00% 21,093 21,093 18,012 131,715 21093 18,719 135,119
n Jingyuan District 5
Tianyue
Chaoyan 153,470.
Shantou wan For sale 100.00% 160,372 69,198 27,630 15,658 52,953 28,576 16,629
g District 40
Phase I
Rental status of major projects:
14
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
The Company’s Rentable area Cumulative Average
Name of project Location Usage
interest （㎡） rented area （㎡） occupancy rate
Real Estate Shenzhen Commercial
100.00% 3,413.88 3,413.88 100.00%
M ansion
North Block of Shenzhen Commercial
Guoshang 100.00% 4,819.71 4,819.71 100.00%
M ansion
Petrel Building Shenzhen Commercial 100.00% 22,475.47 22,475.47 100.00%
SPG Plaza Shenzhen Office building 100.00% 59,462.52 48,110.57 80.91%
SPG Plaza Shenzhen Commercial
100.00% 21,456.72 21,456.72 100.00%
Podium
Wenjin Garden Shenzhen Commercial 100.00% 3,531.60 3,531.60 100.00%
Primary land development:
□ Applicable √ Not applicable
Financing channels:
Financing cost M aturity structure
Financing
Ending balance of financings range/average
channel Within 1 year 1-2 years 2-3 years Over 3 years
financing cost
Development strategy and operating plan for the coming year:
Please refer to “IX Prospects” in this part.
Provision of guarantees for homebuyers on bank mortgages:
√ Applicable □ Not applicable
As at 31 December 2019, as a usual practice for real estate developers, the Group provided
guarantees of a total amount of RMB475.3967 million for its homebuyers on their bank mortgages.
Project Guarantee period Guarantee amount Note
(RMB’0,000)
Until the property ownership certificate is registered as
Cuilinyuan 15,819.86
collateral and handed over to bank for keeping
Chuanqi Donghu Until the property ownership certificate is registered as
17,535.05
Mingyuan collateral and handed over to bank for keeping
Tianyuewan Until the property ownership certificate is registered as
14,184.76
Phase I collateral and handed over to bank for keeping
Total 47,539.67
Joint investments by directors, supervisors and senior management and the listed company (applicable for such investments where
the directors, supervisors and senior management are the major source of investment):
□ Applicable √ Not applicable
15
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
II Core Business Analysis
1. Overview
See “I Overview” above.
2. Revenue and Cost Analysis
(1) Breakdown of Operating Revenue
Unit: RM B
2019 2018
As % of total As % of total
Change (%)
Operating revenue operating revenue Operating revenue operating revenue
(%) (%)
Total 2,548,740,319.49 100% 2,175,187,242.60 100% 17.17%
By operating division
Property sales 2,017,872,864.14 79.17% 1,595,473,065.40 73.35% 5.82%
Engineering and
304,837,313.46 11.96% 370,298,109.36 17.02% -5.06%
construction
Property
157,665,638.01 6.19% 146,123,975.95 7.36% -1.17%
management
Rental service 86,484,133.79 3.39% 92,015,827.23 3.59% -0.20%
Other 15,337,469.10 0.60% 25,329,926.73 1.16% -0.56%
Eliminated internal
transactions and -33,457,099.01 -1.31% -54,053,662.07 -2.49% 1.17%
accounts
By product category
Residential units 719,499,453.23 28.23% 1,435,068,125.37 65.97% -37.74%
Shops and parking
11,526,595.29 0.45% 1,614,094.30 0.07% 0.38%
lots
Apartments 1,286,846,815.62 50.49% 158,790,845.73 7.30% 43.19%
Other 564,324,554.36 22.14% 633,767,839.27 29.14% -6.99%
Eliminated internal
transactions and -33,457,099.01 -1.31% -54,053,662.07 -2.49% 1.17%
accounts
By operating segment
Guangdong Province 2,491,373,238.76 97.75% 2,142,575,113.69 98.50% -0.75%
16
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Other regions in
90,235,417.77 3.54% 86,071,887.30 3.96% -0.42%
China
Overseas 588,761.97 0.02% 593,903.68 0.03% 0.00%
Eliminated internal
transactions and -33,457,099.01 -1.31% -54,053,662.07 -2.49% 1.17%
accounts
(2) Operating Division, Product Category or Operating Segment Contributing over 10% of Operating
Revenue or Operating Profit
√ Applicable □ Not applicable
Unit: RM B
YoY change in YoY change in
Operating Gross profit YoY change in
Cost of sales operating revenue gross profit
revenue margin cost of sales (%)
(%) margin (%)
By operating division
Property sales 2,017,872,864.14 497,310,023.38 75.35% 26.47% 11.63% 3.28%
Engineering and
304,837,313.46 298,315,846.77 2.14% -17.68% -16.75% -1.09%
construction
By product category
Residential units 719,499,453.23 268,317,902.55 62.71% -49.86% -36.48% -7.86%
Shops and
11,526,595.29 4,281,944.66 62.85% 614.12% 441.60% 11.83%
parking lots
Apartments 1,286,846,815.62 224,710,176.17 82.54% 710.40% 909.10% -3.44%
By operating segment
Guangdong
2,491,373,238.76 910,671,531.26 63.45% 16.28% -0.51% 31.77%
Province
Core business data of the prior year restated according to the changed statistical caliber for the Reporting Period:
□ Applicable √ Not applicable
(3) Whether Revenue from Physical Sales Is Higher than Service Revenue
√ Yes □ No
Operating division Item Unit 2019 2018 Change (%)
Sales volume RM B’0,000 53,222 37,808 40.77%
Real estate Output RM B’0,000 38,575 73,927 -47.82%
Inventory RM B’0,000 161,109 176,408 -8.67%
Any over 30% YoY movements in the data above and why:
17
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
√ Applicable □ Not applicable
The sales volume went up 40.77% year-on-year, primarily driven by the launch of a tertiary referral agent system for the purpose of
promoting sales. And the output went down year-on-year, primarily because most constructions in progress had been completed and
the major ongoing construction project was Tianyuewan Phase II in Shantou.
(4) Execution Progress of Major Signed Sales Contracts in the Reporting Period
□ Applicable √ Not applicable
(5) Breakdown of Cost of Sales
By operating division
Unit: RM B
2019 2018
Operating division Item As % of total cost As % of total cost of Change (%)
Cost of sales Cost of sales
of sales (%) sales (%)
Real estate 497,310,023.38 51.92% 445,500,004.85 47.48% 16.85%
Engineering construction 298,315,846.77 31.15% 358,335,541.20 38.19% -14.97%
Property management 142,261,602.88 14.85% 128,536,788.40 15.08% 12.47%
Rental services 45,173,891.05 4.72% 46,069,096.38 3.52% -10.49%
Other 13,404,895.03 1.40% 19,705,354.72 2.10% -0.58%
Eliminated internal transactions
-38,713,606.57 -4.04% -59,760,772.46 -6.37% -3.27%
and accounts
(6) Changes in the Scope of Consolidated Financial Statements for the Reporting Period
□ Yes √ No
(7) Major Changes to the Business Scope or Product or Service Range in the Reporting Period
□ Applicable √ Not applicable
(8) Major Customers and Suppliers
M ajor customers:
Total sales to top five customers (RM B) 91,065,399.14
Total sales to top five customers as % of total sales of the Reporting Period (%) 3.57%
Total sales to related parties among top five customers as % of total sales of the Reporting Period (%) 0.00%
Information about top five customers:
18
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Sales revenue contributed for the Reporting Period
No. Customer As % of total sales revenue (%)
(RM B)
1 Legal person A 30,430,950.54 1.19%
2 Legal person B 19,809,523.81 0.78%
3 Legal person C 15,607,569.91 0.61%
4 Legal person D 15,035,134.76 0.59%
5 Legal person E 10,182,220.12 0.40%
Total -- 91,065,399.14 3.57%
Other information about major customers:
□ Applicable √ Not applicable
M ajor suppliers:
Total purchases from top five suppliers (RM B) 225,289,440.84
Total purchases from top five suppliers as % of total purchases of the Reporting Period (%) 48.32%
Total purchases from related parties among top five suppliers as % of total purchases of the
36.01%
Reporting Period (%)
Information about top five suppliers:
No. Supplier Purchase in the Reporting Period (RM B) As % of total purchases (%)
1 Legal person A 167,885,971.23 36.01%
2 Legal person B 19,623,072.70 4.21%
3 Legal person C 15,035,134.76 3.23%
4 Legal person D 12,563,042.03 2.69%
5 Legal person E 10,182,220.12 2.18%
Total -- 225,289,440.84 48.32%
Other information about major suppliers:
□ Applicable √ Not applicable
3. Expense
Unit: RM B
2019 2018 Change (%) Reason for any significant change
Selling expense 79,480,254.02 52,562,980.22 51.21% Increase of referral fee and commission
Administrative expense 68,854,618.70 74,029,840.44 -6.99%
Finance costs -20,906,149.20 -17,235,722.16 21.30% The decrease of interest expense
Taxes and surcharges 751,013,928.21 445,365,141.92 68.63% Provisions for VAT of land
Return on investment Wealth management income from bank
32,429,481.23 17,121,605.87 89.41%
(“-” for loss) structural deposits
19
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
4. R&D Expense
□ Applicable √ Not applicable
5. Cash Flows
Unit: RM B
Item 2019 2018 Change (%)
Subtotal of cash generated from operating
2,728,276,550.05 2,274,046,624.46 19.97%
activities
Subtotal of cash used in operating activities 2,124,668,825.30 1,211,479,218.87 75.38%
Net cash generated from/used in operating
603,607,724.75 1,062,567,405.59 -43.19%
activities
Subtotal of cash generated from investing
2,237,622,620.55 614,891,757.53 263.91%
activities
Subtotal of cash used in investing activities 2,321,918,490.62 1,500,629,839.43 54.73%
Net cash generated from/used in investing
-84,295,870.07 -885,738,081.90 90.48%
activities
Subtotal of cash generated from financing
43,741,293.64 17,550,137.29 149.24%
activities
Subtotal of cash used in financing activities 204,370,642.51 253,025,175.24 -19.23%
Net cash generated from/used in financing
-160,629,348.87 -235,475,037.95 31.78%
activities
Net increase in cash and cash equivalents 358,667,324.42 -58,266,620.53 722.34%
Explanation of why any of the data above varies significantly:
√ Applicable □ Not applicable
The subtotal of cash generated from operating activities in 2019 showed a year-on-year increase of 19.97%,
mainly caused by the increase of the houses selling amount received from selling products and providing the labor
services of 2019.
The subtotal of cash used in operating activities in 2019 showed a year-on-year increase of 75.38%, mainly due to
the increase of tax payments.
The subtotal of cash generated by investing activities in 2019 showed a year-on-year increase of 263.91%, mainly
because of recovering the bank structural deposits of RMB2.2 billion in2019.
The subtotal of cash used in investing activities in 2019 showed a year-on-year increase of 54.73%, mainly because
the Company invested to buy bank structural deposits of RMB2.3 billion in 2019.
The subtotal of cash generated by financing activities in 2019 showed a year-on-year increase of 149.24%, mainly
because of the increase of wealth management income from bank structural deposits in 2019.
The subtotal of cash used in financing activities in 2019 showed a year-on-year decrease of 19.23%, mainly because
funds increased in the factoring operations in the current year.
The net increase in cash and cash equivalents in 2019 showed a year-on-year increase of 722.34%, mainly
because funds increased in the factoring operations in the current year.
20
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Reason for any big difference between the net operating cash flow and t he net profit for this Reporting Period
□ Applicable √ Not applicable
III Analysis of Non-Core Businesses
□ Applicable √ Not applicable
IV Analysis of Assets and Liabilities
1. Significant Changes in Asset Composition
Unit: RM B
31 December 2019 31 December 2018 Change in
As % of total As % of total percentag Reason for any significant change
Amount Amount
assets assets e (%)
2,511,140,445. 2,050,804,935.
M onetary assets 51.15% 44.07% 7.08% Withdrawal of money from selling
35 93
Accounts
62,059,055.68 1.26% 26,678,630.82 0.57% 0.69% Increase of receivable project funds
receivable
1,462,229,048. 1,685,152,051.
Inventories 29.78% 36.22% -6.44%
18 26
Investment 632,241,900.2
12.88% 623,930,838.15 13.41% -0.53%
property 0
Long-term equity
469,838.65 0.01% 12,561,107.24 0.27% -0.26% Provision for impairment
investments
Fixed assets 30,522,035.11 0.62% 33,926,198.52 0.73% -0.11%
Short-term Increase of pledge and discount by
51,647,260.17 1.05% 17,260,103.46 0.37% 0.68%
borrowings accounts receivable
585,700,815.3
Taxes payable 11.93% 300,547,372.98 6.46% 5.47% Provisions for VAT of land
6
277,319,174.5
Other payables 5.65% 721,819,898.48 15.51% -9.86% Settlement of VAT of land
3
2. Assets and Liabilities at Fair Value
√ Applicable □ Not applicable
Unit: RM B
21
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Gain/loss on Cumulative
Impairment
fair-value fair-value Purchased in Sold in the
Beginning allowance for Other Ending
Item changes in the changes the Reporting Reporting
amount the Reporting changes amount
Reporting charged to Period Period
Period
Period equity
Financial
assets
4. Investment
s in other 33,126,730.
30,922,155.02 2,204,575.02
equity 04
instruments
Subtotal of
33,126,730.
financial 30,922,155.02 2,204,575.02
04
assets
Total of the 33,126,730.
30,922,155.02 2,204,575.02
above 04
Financial
0.00 0.00
liabilities
Other change
Significant changes to the measurement attributes of the major assets in the Reporting Period:
□ Yes √ No
3. Restricted Asset Rights as at the Period-End
Item Ending carrying value Reasons
Monetary assets 1,003,950,685.00 Undue structural deposits
Accounts receivable 51,647,260.17 Pledge for short-term borrowings
Total 1,055,597,945.17
V Investments Made
1. Total Investment Amount
□ Applicable √ Not applicable
2. Major Equity Investments Made in the Reporting Period
□ Applicable √ Not applicable
22
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
3. Major Non-Equity Investments Ongoing in the Reporting Period
□ Applicable √ Not applicable
4. Financial Investments
(1) Securities Investments
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(2) Investments in Derivative Financial Instruments
□ Applicable √ Not applicable
No such cases in the Reporting Period.
5. Use of Funds Raised
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(1) Overall Use of Funds Raised
□ Applicable □ Not applicable
(2) Commitment Projects of Funds Raised
□ Applicable □ Not applicable
(3) Change in Projects of Funds Raised
□ Applicable □ Not applicable
VI Sale of Major Assets and Equity Inte rests
1. Sale of Major Assets
□ Applicable √ Not applicable
No such cases in the Reporting Period.
2. Sale of Major Equity Interests
□ Applicable √ Not applicable
23
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
VII Major Subsidiaries
√ Applicable □ Not applicable
M ajor fully/majority-owned subsidiaries and those minority -owned subsidiaries with an over 10% effect on the Company’s net profit:
Unit: RM B
Relationship Principal Registered Operating Operating
Name with the activity Total assets Net assets Net profit
capital revenue profit
Company
Shenzhen SPG
Longgang Real estate 30,000,000. 641,467,005 85,723,587. 245,325,748 52,271,506. 39,261,438.
Subsidiary
Development Co., development 00 .26 64 .56 74 25
Ltd.
Shantou SEZ,
Wellam FTY
Real estate 91,226,120. 199,040,626 124,606,659 16,142,556. 1,235,069.5 1,008,352.8
Building Subsidiary
development 44 .36 .86 25 9 8
Development, Co.,
Ltd.
Shantou Huafeng
Real Estate Real estate 80,000,000. 922,144,188 21,314,115. 158,381,370 -2,818,105.3 -10,348,77
Subsidiary
Development Co., development 00 .81 14 .34 2 9.46
Ltd.
Great Wall Estate Real estate 2,051,146.0 19,313,504. -88,661,190. -273,403.8
Subsidiary 588,761.97 -273,403.83
Co., Inc. (U.S.) development 0 71 63 3
Shenzhen Zhentong Installation
10,000,000. 111,975,243. 24,285,554. 306,512,094 -1,526,881.6 -1,087,022.
Engineering Co., Subsidiary and
00 95 39 .79 3 38
Ltd. maintenance
Shenzhen Property
Property 7,250,000.0 106,677,568 28,018,960. 164,538,783 5,564,347.7 4,204,947.2
M anagement Co., Subsidiary
management 0 .29 29 .12 4 2
Ltd.
Shenzhen Petrel Hotel 30,000,000. 51,250,282. 46,221,091. 26,011,914. 4,900,951.9 4,431,852.5
Subsidiary
Hotel Co., Ltd. service 00 57 78 59 7 8
Shenzhen Huazhan
Construction 8,000,000.0 10,234,197. 9,412,297.9 3,889,537.6
Subsidiary Supervisor 789,329.31 591,564.98
Supervision Co., 0 06 4 1
Ltd.
Investment
Xin Feng Enterprise 405,581,919 -138,637,92 -16,668,673. -16,668,67
Subsidiary and 502,335.00 0.00
Co., Ltd. .38 9.01 66 3.66
management
Subsidiaries obtained or disposed in the Reporting Period:
□ Applicable √ Not applicable
Information about major majority - and minority-owned subsidiaries:
24
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
1. Except the Company, the subordinate subsidiaries engaged in real estate development mainly
include: Shenzhen SPG Longgang Development Co., Ltd., Shantou SEZ, Wellam FTY, Building
Development, Co., Ltd., Shantou Huafeng Real Estate Development Co., Ltd. The Cuilinyuan
project developed by Shenzhen SPG Longgang Development Co., Ltd. brought forward RMB245
million in 2019 (the percentage of accumulative sales carried forward was 85%), accounting for 12%
of the Company's real estate sector income, 9.6% of the Company's operating revenue and 7% of
the group's combined profits. Jinyedao and YuejingDongfang developed by Shantou SEZ, Wellam
FTY, Building Development, Co., Ltd. left a few amount of remaining buildings for sale. And
Shantou Huafeng Real Estate Development Co., Ltd. was responsible for the development of
Tianyuewan project (divided into Phase I and Phase II). Tianyuewan Phase I was opened for sale in
October 2016 and completed in December 2017. The Phase II started construction in November
2018 and was expected to be completed before the end of 2019. As of 2019, the sales progress of
the Phase I was relatively slow with a accumulated sales rate of about 50%. The main reasons for
the loss in 2019 were: the sales progress was not up to expectations, and another was due to the
payment of interest on internal borrowings.
2. Shenzhen Zhentong Engineering Co., Ltd. was engaged in the business of building installation and
maintenance with the 2019 operating revenues of RMB306 million and of 8% to the operating
revenues of the Company.
3. Shenzhen Property Management Co., Ltd was engaged in the industry of property management,
and the business was steady. The 2019 operating revenues was of RMB164 million that was of 6% to
the operating revenues of the Company.
4. The 2019 net profits of Xin Feng Enterprise Co., Ltd. was of RMB-16.67 million which mainly due
to the changes of exchange rate and the provision made for impairment of long-term equity
investment of RMB12.17 million.
VIII Structured Bodies Controlled by the Compa ny
□ Applicable √ Not applicable
IX Prospects
(I) Industrial Pattern and Trend
With a look into 2020, the sudden COVID-19 Epidemic has increased the downward pressure of domestic
economy for a short period. But from a long-term view, due to the strong resilience of China’s economy, the
short-term economic fluctuation caused by the epidemic will gradually weaken to the general trend of economic
development. The basic trend of growth amid stability and on a long-term basis of China’s economy will remain
unchanged. The real estate industry is affected by the epidemic substantially in a short term, with real estate
companies under performance pressure. However, with the implementation of a variety of stimulation policies
countering the epidemic impact, improvement is expected in the “abnormal trend” of the real estate sector at the
beginning of the year; from an overall perspective, the country’s positioning of “Houses are for living in, not for
speculating on” and the target of “stabilizing land prices, housing prices and expectations” are expected to remain
unchanged. In 2019, Shenzhen’s medium- and long-term plans continuously yielded good results. Coupled with
partial adjustment to the real estate market policy, it sparked continuous market concern and stimulated the
growth of deals. It is expected that Shenzhen’s real estate market in 2020 will continue the momentum of stable
25
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
development.
(II) Development Strategy of the Company
The Company will proactively adapt to the “new norm” of macroeconomic development, seek new opportunities
th
in the real estate industry, make full use of the favorable foundation for rapid development during the 13
Five-Year Plan period, and persist in the concept of seeking growth amid stability and continuous development.
By continuing to center around the goal of building a competitive professional real estate company, it will
accelerate the development and construction of existing land and projects, prudently look for new investment
opportunities, recover the financing capacity on capital market, vigorously promote reforms, innovation and
mechanism switch, and make full efforts to generate reasonable and stable investment returns for the shareholders
without insisting on high-speed growth in business scale and profit targets.
(III) Potential Risks
Despite another new record in its performance during the Reporting Period, the Company still have some
problems that require prompt solution:
First, affected by the assets restructuring, the Company has not developed any new land for reser ve in recent years,
bringing great challenges to its sustained operations; the restructuring work remains unsettled for prolonged time,
resulting in the loss of the Company’s core professional and technical personnel with a stronger wait-and-see
attitude among the staff;
Second, the transformation of the economic development pattern and the reform in the housing policy have
enhanced the competitive edges of industrial leading companies, leading to a faster process of “the fittest survive”,
increasingly higher concentration of the real estate industry and ever-growing market shares of advantaged
enterprises. The Company has yet to improve its core competitiveness in a number of segments involved in its real
estate development control, including design, construction, cost control, marketing and after-sale services;
Third, the sudden COVID-19 Epidemic has brought substantial impact to the Company’s main business and
affiliates. Consequently, its original marketing plans for the first quarter and the first half year are exposed to
serious impact and its affiliates are unable to carry out their business normally, putting pressure on the annual
operating income and performance targets.
The Company will attach great importance to the above-mentioned problems and proactively take effective
measures to solve them.
(IV) Operating Plan
The Company will follow these guidelines for its work of 2020: Persist in the concept of innovation with stability
and sustained development; work hard to manage the efforts towards party building, the construction of an honest
party and an incorruptible government and the building of corporate culture; reinforce strategic management;
focus on its main business real estate; make full efforts to properly carry out safe production and busines s
management; proactively plan for new land development; continuously improve the control level; effectively deal
with the COVID-19 Epidemic; orderly promote material assets restructuring; push the progress of all tasks to a
higher level; and strive to develop itself into a listed real estate company with industrial competitiveness.
Centering around the annual target, the Company will focus on the following four aspects in 2020:
First, it will focus on main business and strive to strengthen industrial competitiveness. The Company will
reinforce strategic management, keep close watch on land market information, proactively explore new models of
project development and increase land and project reserves through multiple channels; it will spare no efforts to
promote the construction of ongoing projects and properly control project progress, quality and safety; it will pay
close attention to market changes and policy trends, vigorously drive project sales and ensure the achievement of
the annual sales target; it will continue to optimize control policies and processes, manage talent team building
and comprehensively improve its main business development capacity.
26
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Second, it will orderly promote the material assets restructuring. The Company will keep close watch on the
trends of capital market and regulatory polic ies, work hard to strengthen communication with regulatory
authorities and collaboration with all trade parties, promote the material assets restructuring process in compliance,
fulfill the obligation of information disclosure strictly in accordance with regulatory rules, patiently and
attentively manage investor relations and maintain its good image on capital market; during the restructuring, it
will stabilize the staff team and guarantee normal operations and the implementation of the original targets.
Third, it will make full efforts in the epidemic prevention and control and production safety. The Company will
intensify guarantee measures, make active steps to deal with the epidemic, work hard at the s afety of project
construction, rental property and office areas, properly reduce the epidemic impact on production and operations,
avoid production safety accidents and create favorable conditions for the achievement of this year’s operating
target.
Fourth, it will endeavor to manage its efforts towards party building and the construction of an honest party and an
incorruptible government. The Company will further study and implement Xi Jinping Thought on Socialism with
Chinese Characteristics for a New Era, put into effect the guiding principles of the 19th National Congress the
th
second, third and fourth plenary sessions of its 19 Central Committee of the Communist Party of China,
implement fully the decisions of the superior party committee, give play to the leading role of the party
committees of state-owned enterprises in controlling directions, managing the overall situation and guaranteeing
the implementation, integrate party leadership into corporate governance and lead high-quality corporate
development.
X Communications with the Investment Community such as Researches, Inquiries and
Inte rvie ws
1. During the Reporting Period
√ Applicable □ Not applicable
Type of
Way of
Date communication Index to main information communicated
communication
party
Inquired of the progress of assets restructuring and the sales of project
21 January 2019 By telephone Individual
development, and didn’t offer written materials
Inquired of the progress of assets restructuring and annual operation and
25 February 2019 By telephone Individual expected disclosure time of annual report, and didn’t offer written
materials
Inquired of the progress of assets restructuring and fundamentals of the
26 M arch 2019 By telephone Individual
Company, and didn’t offer written materials
Inquired of the progress of assets restructuring and share trading
11 April 2019 By telephone Individual
resumption time of the Company, and didn’t offer written materials
Inquired of the progress of assets restructuring and share trading
17 M ay 2019 By telephone Individual
resumption time of the Company, and didn’t offer written materials
Inquired of the progress of assets restructuring and fundamentals of the
12 June 2019 By telephone Individual
Company, and didn’t offer written materials
27
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Inquired of the progress of assets restructuring and fundamentals of the
26 June 2019 By telephone Individual
Company, and didn’t offer written materials
Inquired of the interim operation, progress of assets restructuring and
4 July 2019 By telephone Individual expected share trading resumption time of the Company, and didn’t offer
written materials
Inquired of the progress of assets restructuring and share trading
24 July 2019 By telephone Individual
resumption time of the Company, and didn’t offer written materials
Inquired of the progress of assets restructuring and share trading
5 August 2019 By telephone Individual resumption time of the Company, and expected disclosure time of interim
report, and didn’t offer written materials
Inquired of the progress of assets restructuring and share trading
12 September 2019 By telephone Individual
resumption time of the Company, and didn’t offer written materials
Inquired of the progress of assets restructuring and share trading
18 September 2019 By telephone Individual
resumption time of the Company, and didn’t offer written materials
Inquired of the progress of assets restructuring and operation of the
30 September 2019 By telephone Individual Company, and expected disclosure time of third quarter report, and didn’t
offer written materials
Inquired of the progress of assets restructuring and, reasons for delaying
10 October 2019 By telephone Individual share trading resumption, and expected share trading resumption time and
didn’t offer written materials
Inquired of the progress of assets restructuring and, reasons for delaying
25 October 2019 By telephone Individual share trading resumption, and expected share trading resumption time and
didn’t offer written materials
Inquired of the progress of assets restructuring and, reasons for delaying
7 November 2019 By telephone Individual share trading resumption, and expected share trading resumption time and
didn’t offer written materials
Inquired of the progress of assets restructuring and share trading
18 November 2019 By telephone Individual resumption time of the Company, and change of CPAs by the Company,
and didn’t offer written materials
Inquired of the progress of assets restructuring and share trading
2 December 2019 By telephone Individual
resumption time of the Company, and didn’t offer written materials
Inquired of the progress of assets restructuring and share trading
10 December 2019 By telephone Individual
resumption time of the Company, and didn’t offer written materials
Inquired of the progress of assets restructuring, annual operation, and the
19 December 2019 By telephone Individual
sales of project development, and didn’t offer written materials
Inquired of the progress of assets restructuring, annual operation, and the
26 December 2019 By telephone Individual
sales of project development, and didn’t offer written materials
Times of communications 21
Number of institutions communicated with 0
28
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Number of individuals communicated with 21
Number of other communication parties 0
Tip-offs or leakages of substantial supposedly -confidential information during communications None
29
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Part V Significant Events
I Profit Distributions to Ordinary Shareholders (in the Form of Cash and/or Stock)
How the profit distribution policy, especially the cash dividend policy, for ordinary shareholders was formulated, executed or revised in
the Reporting Period:
□ Applicable √ Not applicable
The profit distributions to ordinary shareholders, either in the form of cash or stock, in the past three years (including the Reporting
Period) are summarized as follows:
The profit distribution strictly observe regulations of the Articles of Association, and the specific
cash dividend plan is worked out after the approval of the board meeting and general meeting.
Independent directors played their roles with due diligence.
For the year 2017, no profit distribution or share capital increase from capital reserve would be
conducted.
For 2018, based on the total 1,011,660,000 shares of the Company as at 31 December 2018, a cash
dividend of RMB2.00 (tax included) will be distributed to the A-share and B-share holders for every
10 shares they hold without bonus share (tax included), and no share capital increase from capital
reserve would be conducted.
For 2019, based on the total 1,011,660,000 shares of the Company as at 31 December 2019, a cash
dividend of RMB1.65 (tax included) will be distributed to the A-share and B-share holders for every
10 shares they hold without bonus share (tax included), and no share capital increase from capital
reserve would be conducted.
Cash dividend for ordinary shareholders in the past three years (including the Reporting Period):
Unit: RM B
Net profit attributable to Total cash
Cash
Cash ordinary shareholders of dividends in dividends
A as % of other forms C as % of D as %
Year dividends (tax the listed company in (such as share (including those
B (%) B (%) of B (%)
inclusive) (A) consolidated statements repurchase) in other forms)
(C)
for the year (B) (D)
2019 166,923,900.00 552,452,307.59 30.22% 0.00 0.00% 166,923,900.00 30.22%
2018 202,332,000.00 503,498,831.60 40.19% 0.00 0.00% 202,332,000.00 40.19%
2017 0.00 184,988,512.42 0.00% 0.00 0.00% 0.00 0.00%
Indicate by tick mark whether the Company fails to put forward a cash dividend proposal for the ordinary shareholders despite the
facts that the Company has made profits in the Reporting Period and the profits of the Company as the parent distributable to the
ordinary shareholders are positive.
□ Applicable √ Not applicable
II Final Dividend Plan for the Reporting Pe riod
√ Applicable □ Not applicable
30
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Bonus shares for every 10 shares (share) 0
Dividend for every 10 shares (RM B) (tax inclusive) 1.65
Additional shares to be converted from capital reserve for every 10 shares (share) 0
Total shares as the basis for the profit distribution proposal (share) 1011660000
Cash dividends (RM B) (tax inclusive) 166,923,900.00
Cash dividends in other forms (such as share repurchase) (RM B) 0.00
Total cash dividends (including those in other forms) (RM B) 166,923,900.00
Distributable profit (RM B) 1,280,197,219.96
Total cash dividends (including those in other forms) as % of total profit distribution 100%
Cash dividend policy
It’s not easy to distinguish in the Company’s development stage. While, when there is a major capital spending, the percentage of
cash dividends to the profit distribution shall be 20% at least when conducting the profit distribution.
Details about the proposal for profit distribution and converting capital reserve into share capital
The Profit Distribution Plan of 2019 was reviewed and approved by the 50 th M eeting of the 7th Board of Directors held on 13
M arch 2020, and intended to be submitted to The 2019 Annual General M eeting for review. Based on the total 1,011,660,000
shares of the Company as at 31 December 2019, a cash dividend of RM B1.65 (tax included) will be distributed to the A -share and
B-share holders for every 10 shares they hold without bonus share (tax included), and no share capital increase from capital reserve
would be conducted. The profit distribution plan can be implemented upon review and approval of the Shareholders’ General
M eeting of the Company.
III Fulfillme nt of Commitments
1. Commitments of the Company’s Actual Controller, Shareholders, Related Parties and Acquirers, as well
as the Company Itself and other Entities Fulfilled in the Reporting Period or Ongoing at the Period-end
□ Applicable √ Not applicable
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 √ Not applicable
IV Occupation of the Company’s Capital by the Controlling Shareholder or Its Related
Parties for Non-Operating Purposes
□ Applicable √ Not applicable
No such cases in the Reporting Period.
31
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
V Explanations Given by the Board of Directors, the Supervisory Board and the Independent
Directors (if any) Regarding the Independent Auditor's “Modified Opinion” on the Financial
Statements of the Reporting Pe riod
□ Applicable √ Not applicable
VI YoY Changes to Accounting Policies, Estimates and Methods
√ Applicable □ Not app licable
Please refer to “30. Changes in Main Accounting Policies and Estimates” of “III Main Accounting
Policies and Estimates” in “Part XII Financial Statements” for details.
VII Retrospective Restatements due to Correction of Material Accounting Errors in the
Reporting Period
□ Applicable √ Not applicable
No such cases in the Reporting Period.
VIII YoY Changes to the Scope of the Consolidated Financial Statements
□ Applicable √ Not applicable
No such cases in the Reporting Period.
IX Engage ment and Disengagement of Independent Auditor
Current independent auditor
Name of the domestic independent auditor Grant Thornton China (LLP)
The Company’s payment to the domestic independent auditor (RM B’0,000) 53
How many consecutive years the domestic independent auditor has
0
provided audit service for the Company
Names of the certified public accountants from the domestic independent
Huang Shengsen, Zhao Juanjuan
auditor writing signatures on the auditor’s report
How many consecutive years the certified public accountants from the
0
domestic independent auditor have provided audit service for the Company
Indicate by tick mark whether the independent auditor was changed for the Reporting Period.
√ Yes □ No
Indicate by tick mark whether the independent auditor was changed during the auditing period
□ Yes √ No
Whether the change of the independent auditor has performed the approval procedure
√ Yes □ No
Notes to the change of the independent auditor
Considering that Ruihua Certified Public Accountants LLP has provided audit service for the Company for consecutive years, to
32
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
ensure the independence and objectivity of audit, the Company made a public bidding for CPAs based on the Company’s demand for
future development. Then, after review of the 47th M eeting of the 7th Board of Directors and the 1st Extraordinary General M eeting of
2019, the Company determined to hire Grant Thornton China (LLP) (hereinafter referred to as “Grant Thornton”) as the auditor for
the Company’s 2019 Financial Report and internal control.
Independent auditor, financial advisor or sponsor engaged for the audit of internal controls:
√ Applicable □ Not applicable
The Company hired Grant Thornton China (LLP) to provide internal control audit service for this Reporting Period at the cost of
RM B0.23 million.
X Possibility of Listing Suspension or Termination after Disclosure of this Report
□ Applicable √ Not applicable
XI Insolvency and Reorganization
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XII Major Legal Matters
√Applicable □ Not applicable
Involved Index to
General Provi Progre Execution of Disclosure
amount Decisions and effects disclosed
information sion ss decisions date
(RM B’0,000) information
The applicant
Business Tourism Company had to
has received
pay for the compensation RMB36.62
RM B15.20
million and the relevant interest (from
million. Now
14 September 1998 to the payment day)
Business
to Xi’an Fresh Peak Company within
Tourism
one month after the judgment entering
Company has no Interim
into force. If the Business Tourism
Xi’an In executable Report 2019
Company failed to pay in time, it had to 21 August
Project 2,100 No execut properties and (full text) on
pay double debt interests to Xi’an Fresh 2019
Lawsuit ion Xi’an Joint www.cninfo.
Peak Company for the overdue period;
Commission on com.cn
② Xi’an Joint Commission on
Commerce has
Commerce had jointly and severally
been refusing to
obligation of the interests of the
execute the
compensation; . ③ Business Tourism
ruling. It is
Company shall bear RM B227,500 of the
difficult to
acceptance fee and the security fee.
recover the rest.
33
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
XIII Punishme nts and Rectifications
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XIV Credit Quality of the Company as well as Its Controlling Share holder and Actual
Controller
□ Applicable √ Not applicable
XV Equity Incentive Plans, Employee Stock Owners hip Plans or Other Incentive Measures
for Employees
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XVI Major Related-Party Transactions
1. Continuing Related-Party Transactions
√Applicable □ Not applicable
As % of Obtaina
total Approv ble Index
Relation Over
Total value of ed M ethod market to
ship Type of Specific Pricing Transact the
Related value all transacti of price for Disclos disclose
with the transacti transacti principl ion approve
party (RM B’0 same-ty on line settleme same-ty ure date d
Compan on on e price d line or
,000) pe (RM B’0 nt pe informa
y not
transacti ,000) transacti tion
ons ons
Wholly-
owned
subsidia 2018
Controll
ry Annual
ed by Negotiat
Shenzhen Enginee undertoo Report
the e 29
Jianan ring k Bank disclose
same through - 283.61 0.93% 283.61 Not - M arch
(Group) construc engineer transfer d on
compan agreeme 2019
Co., Ltd. tion ing www.c
y as the nts
construc ninfo.c
parent
tion of om.cn
related
party
Shenzhen Controll Enginee Wholly- Negotiat 16,788. 16,788. Bank 29 2018
- 36.01% Not -
Jianan ed by ring owned e 6 6 transfer M arch Annual
34
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
(Group) the construc subsidia through 2019 Report
Co., Ltd. same tion ry paid agreeme disclose
compan total nts d on
y as the account www.c
parent for ninfo.c
construc om.cn
tion
contract
ed to
related
party
17,072. 17,072.
Total -- -- -- -- -- -- -- --
21 21
Large-amount sales return in detail N/A
Give the actual situation in the Reporting Period (if any) where an estimate had been made for the total value of
N/A
continuing related-party transactions by type to occur in the Reporting Period
Reason for any significant difference between the transaction price and the market reference price (if applicable) N/A
2. Related-Party Transactions Regarding Purchase or Sales of Assets or Equity Interests
□ Applicable √ Not applicable
No such cases in the Reporting Period.
3. Related Transactions Regarding Joint Investments in Third Parties
□ Applicable √ Not applicable
No such cases in the Reporting Period.
4. Credits and Liabilities with Related Parties
□ Applicable √ Not applicable
No such cases in the Reporting Period.
5. Other Major Related-Party Transactions
□ Applicable √ Not applicable
No such cases in the Reporting Period.
35
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
XVII Major Contracts and Execution thereof
1. Entrustment, Contracting and Leases
(1) Entrustment
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(2) Contracting
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(3) Leases
□ Applicable √ Not applicable
No such cases in the Reporting Period.
2. Major Guarantees
□ Applicable √ Not applicable
No such cases in the Reporting Period.
3. Cash Entrusted to Other Entities for Management
(1) Cash Entrusted for Wealth Management
√ Applicable □ Not applicable
Overview of cash entrusted for wealth management in the Reporting Period
Unit: RM B’0,000
Overdue unrevoked
Type Capital resources Amount incurred Outstanding balance
amount
Bank financial products Self-owned funds 100,000 0 0
Bank financial products Self-owned funds 30,000 0 0
Bank financial products Self-owned funds 100,000 100,000 0
Total 230,000 100,000 0
High-risk entrusted wealth management with significant single amount or low security, poor liquidity and no capital preservation:
□ Applicable √ Not applicable
Whether there is the case where the principal cannot be recovered at maturity or other case which may cause impairment for
entrusted wealth management
□ Applicable √ Not applicable
36
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
(2) Entrusted Loans
□ Applicable √ Not applicable
No such cases in the Reporting Period.
4. Other Major Contracts
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XVIII Corporate Social Responsibility (CSR)
1. Measures Taken to Fulfill CSR Commitment
The Company paid attention on the execution of the social responsibilities and positively protected
the legal interests of the stakeholders such as the creditors, employees, customers, suppliers and
community as well as executed the social responsibilities. During the Reporting Period, the
Company organized the volunteer team and the Party member volunteer service team and positively
developed the volunteer service and the Party member volunteer service activities; furthermore, the
Company also executed the social responsibilities as a state-owned enterprise, made donations to
Shenzhen Charity Community Public Welfare Fund, provided special funds for community to
carrying out joint construction, joint governance and joint enjoyment, helped families with family
planning difficulty, paid consolation money to Party members and employees in hardship and
hospitalized employees due to diseases; carried out condolence activities for employees on their
birthday and for retired cadres on festivals; positively developed the interest teams activities such as
the badminton, table tennis, mountain climbing and basketball as well as football. As of the
Reporting Period, the Company actively performed its social responsibilities and obligations,
issuing consolation money of RMB37,192.90 to vulnerable groups and donations of RMB30,000.00
to poor families in the administrative region, collecting donations of 52,435.00 for poverty
alleviation as well as donating 1500 items of clothing.
2. Measures Taken for Targeted Poverty Alleviation
(1) Plans
(2) Summary of the Related Work Done in the Reporting Period
(3) Results
Indicator M easurement unit Quantity/Progress
1. General results —— ——
2. Itemized results —— ——
2.1 Out of poverty by industrial development —— ——
37
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
2.2 Out of poverty by transferring
—— ——
employment
2.3 Out of poverty by relocation —— ——
2.4 Out of poverty by education —— ——
2.5 Out of poverty by improving health —— ——
2.6 Out of poverty by protecting ecological
—— ——
environment
2.7 Subsidy for the poorest —— ——
2.8 Social poverty alleviation —— ——
2.9 Other items —— ——
3. Accolades received (for what and at what
—— ——
level)
(4) Subsequent Plans
3. Issues Related to Environmental Protection
Indicate by tick mark whether the Company or any of its subsidiaries is identified as a major polluter by the environmental p rotection
authorities.
Not applicable
XIX Other Significant Events
√ Applicable □ Not applicable
Since the controlling shareholder of the Company is planning a significant event that involves the
Company, upon the application to the Shenzhen Stock Exchange, trading in the stocks of the
Company (A-stock under the name of “SPG” and the code of “000029”; B-stock under the name of
“SPG-B” and the code of “200029”) was suspended starting from the opening of 14 September
2016. The Company disclosed the Announcement on Share Trading Suspension due to Planning of
Significant Event (No. 2016-022), the Announcement on Continued Share Trading Suspension due
to Planning of Significant Event (No. 2016-023) and the Announcement on Continued Share
Trading Suspension due to Planning of Significant Event (No. 2016-024) on 14 September 2016, 22
September 2016 and 29 September 2016, respectively. Upon ascertainment, the event constituted a
material asset restructuring. The Company disclosed the Announcement on Share Trading
Suspension due to Planning of Major Assets Restructuring (No. 2016-025) on 30 September 2016
and the Announcement on Signing Cooperation Agreement on Restructuring and Listing (No.
2016-027) on 10 October 2016.
The Company convened the 33rd Meeting of the 7th Board of the Directors on 11 November 2016,
which the Proposal on Continued Share Trading Suspension due to Planning of Major Assets
Restructuring was reviewed and approved. For details, see the Announcement on Continued Share
38
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Trading Suspension after Expiration of Period of Share Trading Suspension due to Planning of
Major Assets Restructuring (No. 2016-039) disclosed on 14 November 2016.
The Company convened the 1st Extraordinary General Meeting of 2016 on 12 December 2016, on
which the Proposal on Continued Share Trading Suspension due to Planning of Major Assets
Restructuring was reviewed and approved. For details, see the Announcement on Application for
Continued Share Trading Suspension after Expiration of Period of Share Trading Suspension due to
Planning of Major Assets Restructuring (No. 2016-047) disclosed on 13 December 2016.
The Company held an online illustration meeting to investors on 10 March 2017, communicating
this major assets restructuring with them and answering questions that they were generally
concerned about with the information allowed to be disclosed. For details, see the Announcement
on Online Illustration Meeting to Investors (No. 2017-012) disclosed on 11 March 2017.
On 14 December 2019, the Company disclosed the Announcement on Signing the Supplementary
Agreement VI of the Cooperation Agreement governing Restructuring and Listing (No. 2019-090),
which extends the exclusivity period and validity period stipulated in the restructuring cooperation
agreement to 31 December 2020.
To ensure the smooth progress of this major assets restructuring, prevent abnormal fluctuations in
the prices of its stocks and protect the rights and interests of its non-controlling interests, the
Company has applied to the Shenzhen Stock Exchange for continued share trading suspension for
no more than 1 month as of 14 February 2020 and expects to disclose the major assets restructuring
plan or report according to the requirements of the Standards for the Contents and Formats of
Information Disclosure by Companies Offering Securities to the Public No. 26—Major Assets
Restructuring of Listed Companies prior to 14 March 2020. For details, see the Announcement on
Delay of Share Trading Resumption of Planning of Major Assets Restructuring (No. 2019-011)
disclosed on 14 February 2020.
During the share trading suspension period, the Company shall disclose the p rogress of this major
assets restructuring at least every five trading days in strict accordance with the requirements of
applicable laws and regulations. At present, this major assets restructuring is proceeding smoothly.
This major assets restructuring is subject to great uncertainty. Therefore, investors are kindly
reminded to pay attention to possible investment risk.
XX Significant Events of Subsidiaries
□ Applicable √ Not applicable
39
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Part VI Share Changes and Shareholder Information
I. Share Changes
1. Share Changes
Unit: share
Before Increase/decrease (+/-) After
Shares as Shares as
dividend dividend
Percentage New Percentag
Shares converted converted Other Subtotal Shares
(%) issues e (%)
from from capital
profit reserves
1. Restricted shares 0 0.00% 0 0 0 0 0 0 0.00%
1.1 Shares held by the state 0 0.00% 0 0 0 0 0 0 0.00%
1.2 Shares held by state-own
0 0.00% 0 0 0 0 0 0 0.00%
Legal-person
1.3 Shares held by other domestic
0 0.00% 0 0 0 0 0 0 0.00%
investors
Among which: shares held by
0 0.00% 0 0 0 0 0 0.00%
domestic legal person
Shares held by domestic natural
0 0.00% 0 0 0 0 0 0 0.00%
person
1.4 Oversea shareholdings 0 0.00% 0 0 0 0 0 0.00%
Among which: shares held by
0 0.00% 0 0 0 0 0 0 0.00%
oversea legal person
Shares held by oversea natural
0 0.00% 0 0 0 0 0 0 0.00%
person
1,011,660, 1,011,660
2. Unrestricted shares 100.00% 0 0 0 0 0 100.00%
000 ,000
891,660,0 891,660,0
2.1 RM B ordinary shares 88.14% 0 0 0 0 0 88.14%
00 00
2.2 Domestically listed foreign 120,000,0 120,000,0
11.86% 0 0 0 0 0 11.86%
shares 00 00
2.3 Oversea listed foreign shares 0 0.00% 0 0 0 0 0 0 0.00%
2.4 Other 0 0.00% 0 0 0 0 0 0 0.00%
1,011,660, 1,011,660
3. Total shares 100.00% 0 0 0 0 0 100.00%
000 ,000
40
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Reasons for share changes:
□ Applicable √ Not applicable
Approval of share changes:
□ Applicable √ Not applicable
Transfer of share ownership:
□ Applicable √ Not applicable
Progress on any share repurchase:
□ Applicable √ Not applicable
Progress on reducing the repurchased shares by means of centralized bidding:
□ Applicable √ Not applicable
Effects of share changes on the basic and diluted earnings per share, equity per share attributable to the Company’s ordinary
shareholders and other financial indicators of the prior year and the prior accounting period, respectively:
□ Applicable √ Not applicable
Other information that the Company considers necessary or is required by the securities regulator to be disclosed:
□ Applicable √ Not applicable
2. Changes in Restricted Shares
□ Applicable √ Not applicable
II. Issuance and Listing of Securities
1. Securities (Exclusive of Preferred Shares) Issued in the Reporting Period
□ Applicable √ Not applicable
2. Changes to Total Shares, Shareholder Structure and Asset and Liability Structures
□ Applicable √ Not applicable
3. Existing Staff-Held Shares
□ Applicable √ Not applicable
41
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
III Shareholders and Actual Controlle r
1. Shareholders and Their Shareholdings at the Period-End
Unit: share
Number of preferred
Number of ordinary Number of preferred
shareholders with resumed
Number of ordinary shareholders at the shareholders with
76,443 76,443 0 voting rights at the month-end 0
shareholders month-end prior to the resumed voting rights (if
prior to the disclosure of this
disclosure of this Report any) (see Note 8)
Report (if any) (see Note 8)
Shareholding of ordinary shareholders holding more than 5% shares or the top 10 of ordinary shareholders
Number Increase Number Number Pledged or frozen shares
of and of shares of shares
Holding sharehold decrease held held
Name of Nature of
percentag ing at the of shares subject to subject to
shareholder shareholder Status of shares Amount
e (%) end of the during trading trading
Reporting Reporting moratoriu moratoriu
Period Period m m
Shenzhen
State-owned legal 642,884,2 642,884,2
Investment 63.55%
person 62 62
Holdings Co., Ltd
Shandong Gold
Financial Holding
Capital
Domestic
M anagement Co., 10,300,00 10,300,00
non-state-owned 1.02%
Ltd. － Shandong 0 0
legal person
Gold Financial
Holding Sustaining
Fund 1
Domestic natural
Lu Zhigao 0.32% 3,246,949 3,246,949
person
Domestic natural
Tan Shiqing 0.13% 1,286,701 1,286,701
person
Domestic natural
Yang Shuilian 0.13% 1,273,700 1,273,700
person
Domestic natural
Yang Jianxiong 0.12% 1,255,750 1,255,750
person
Central Huijin
State-owned legal
Asset M anagement 0.12% 1,165,500 1,165,500
person
Co., Ltd.
42
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Domestic natural
Peng Wei 0.11% 1,129,082 1,129,082
person
Foreign natural
Wu Haoyuan 0.11% 1,109,300 1,109,300
person
Guotai Junan
Foreign legal
Securities (Hong 0.10% 1,015,683 1,015,683
person
Kong) Limited
Strategic investor or general legal person
becoming a top-10 ordinary shareholder due None
to rights issue (if any) (see Note 3)
The Company has found no related parties or acting-in-concert parties as defined in
Related or acting-in-concert parties among the
the Administrative M easures for Shareholding Changes in Listed Companies among
shareholders above
the shareholders above.
Top 10 unrestricted shareholders
Unrestricted shares Shares by type
Name of shareholder held at the
Type Shares
period-end
RM B ordinary
Shenzhen Investment Holdings Co., Ltd 642,884,262 642,884,262
shares
Shandong Gold Financial Holding Capital M anagement Co., Ltd. － RM B ordinary
10,300,000 10,300,000
Shandong Gold Financial Holding Sustaining Fund 1 shares
RM B ordinary
Lu Zhigao 3,246,949 3,246,949
shares
RM B ordinary
Tan Shiqing 1,286,701 1,286,701
shares
RM B ordinary
Yang Shuilian 1,273,700 1,273,700
shares
Domestically
Yang Jianxiong 1,255,750 listed foreign 1,255,750
shares
RM B ordinary
Central Huijin Asset M anagement Co., Ltd. 1,165,500 1,165,500
shares
RM B ordinary
Peng Wei 1,129,082 1,129,082
shares
Domestically
Wu Haoyuan 1,109,300 listed foreign 1,109,300
shares
43
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Domestically
Guotai Junan Securities (Hong Kong) Limited 1,015,683 listed foreign 1,015,683
shares
Related or acting-in-concert parties among top 10 The Company has found no related parties or acting-in-concert parties
unrestricted public shareholders, as well as between top 10 as defined in the Administrative M easures for Shareholding Changes
unrestricted public shareholders and top 10 shareholders in Listed Companies among the shareholders above.
The fourth shareholder held all his shares in the Company in his
Top 10 ordinary shareholders involved in securities margin
margin account. And the third shareholder held part of his shares in the
trading (if any) (see Note 4)
Company in his margin account.
Indicate by tick mark whether any of the top 10 ordinary shareholders or the top 10 unrestricted ordinary shareholders of the
Company conducted any promissory repo during the Reporting Period.
□ Yea √ No
No such cases in the Reporting Period.
2. Controlling Shareholder
Nature of the controlling shareholder: Controlled by a local state-owned legal person
Type of the controlling shareholder: legal person
Legal
Name of controlling Date of Unified social
representative/perso Principal activity
shareholder establishment credit code
n in charge
Investment in equities on behalf of the government
and management of those investments;
Shenzhen Investment development and operation of
Wang Yongjian 13 October 2004 767566421
Holdings Co., Ltd. government-allocated land; and investment in and
provision of services for strategic emerging
industries
44
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
380,380,000 shares in SZPRD A (000011), representing a stake of 63.82%;;
234,070,000 shares in STHC (000045) , representing a stake of 45.96%;
12,270,000 shares in Shenzhen Universe A (000023) , representing a stake of 8.85%;
962,720,000 shares in Ping An (601318) , representing a stake of 5.27%;
2,749,530,000 shares in Guosen Securities (002736) , representing a stake of 33.53%;
609,240,000 of A shares and 103,370,000 of H shares in Guotai Junan (601211) , representing a stake of
Controlling 8%;
shareholder’s holdings 195,030,000 shares in Telling Holding (000829) , representing a stake of 18.80%;
in other listed
952,010,000 shares in Shenzhen International (00152) , representing a stake of 44.04%;
companies at home or
604,820,000 shares in BEAUTYSTAR (002243), representing a stake of 51.93%;
abroad in the
2,213,450,000 shares in Bay Area Development (00737), representing a stake of 71.83%;
Reporting Period
315,830,000 shares in Infinova (002528), representing a stake of 26.35%;
388,450,000 shares in EA (002183), representing a stake of 18.30%;
5,640,000 shares in Shenzhen Energy (000027), representing a stake of 0.14%;
9,520,000 shares in BOCOM (601328), representing a stake of 0.01%;
113,980,000 shares in Techand Ecology (002243), representing a stake of 4.86%;
77,270,000 shares in Vanke (02202), representing a stake of 0.68%.
Change of the controlling shareholder in the Reporting Period:
□ Applicable √ Not applicable
No such cases in the Reporting Period.
3. Actual Controller and Its Acting-in-Concert Parties
Nature of the actual controller: Local institution for state-owned assets management
Type of the actual controller: legal person
Legal representative/person in Date of Unified social
Name of actual controller Principal activity
charge establishment credit code
Perform the responsibilities of
Shenzhen State-owned Assets investor on behalf of the state,
Supervision and Administration Yu Gang 31 July 2004 K3172806-7 and supervise and manage the
Commission authorized state-owned assets
legally.
Other listed companies at home
In addition to the Company controlling shareholder - Shenzhen Investment Holding Co., Ltd.
or abroad controlled by the
Other domestic and overseas listed companies whose equity held by the actual controllers did not
actual controller in the
rank among the top ten shareholders of the Company.
Reporting Period
Change of the actual controller during the Reporting Period:
□ Applicable √ Not applicable
No such cases in the Reporting Period.
Ownership and control relations between the actual controller and the Company:
45
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Shenzhen State-owned Assets Supervision
and Administration Commission
Shenzhen Investment Holdings Co., Ltd.
The Company
Indicate by tick mark whether the actual controller controls the Company via trust or other ways of asset management.
□ Applicable √ Not applicable
4. Other 10% or Greater Corporate Shareholders
□ Applicable √ Not applicable
5. Limitations on Shareholding Decrease by the Company’s Controlling Shareholder, Actual Controller,
Reorganizer and Other Commitment Makers
□ Applicable √ Not applicable
46
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Part VII Preferred Shares
□ Applicable √ Not applicable
No preferred shares in the Reporting Period.
I Issuance and Listing of Preferred Shares in the Resent 3 Years up the Period-end
□ Applicable √ Not applicable
II Amount and Shareholding of Preferred Shareholders
Unit: share
Shareholding of preferred shareholders holding more than 5% shares or the top 10 of preferred shareholders
Increase Pledged or frozen shares
Number of
and Number of Number of
shareholdin
decrease of shares held shares held
Name of Nature of Holding g at the end
shares subject to subject to Status of
shareholder shareholder percentage (%) of the Amount
during trading trading shares
Reporting
Reporting moratorium moratorium
Period
Period
III Profit Distribution of Preferred Shares
□ Applicable √ Not applicable
IV Repurchase and Conversion of Preferred Shares
□ Applicable √ Not applicable
V Resumed Voting Rights of Preferred Shares in the Reporting Pe riod
1. Restoration and Exercise of Preferred Shares
□ Applicable □ Not applicable
2. Shareholders and Actual Controllers Involved in the Resumed Voting Rights of Preferred Shares
□ Applicable □ Not applicable
47
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
VI Accounting Policies and Reasons for Preferred Shares
□ Applicable □ Not applicable
48
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Part VIII Convertible Bonds
□ Applicable √ Not applicable
No convertible bonds in the Reporting Period.
I Previous Adjustments of Conversion Price
II Cumulative Conversion
□ Applicable □ Not applicable
III Top 10 Shareholders of Convertible Bonds
Unit: share
Number of Amount of
Nature of convertible bonds convertible bonds
No. Name of shareholder Proportion (%)
shareholder held at the held at the
period-end period-end
IV Significant Changes in Profitability, Assets Condition and Credit Standing of Guarantees
□ Applicable □ Not applicable
V Pe riod–end Liabilities, Changes of Credit Standing and Cas h Arrange ment of Future
Repayment of the Company
49
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Part IX Directors, Supervisors, Senior Management and Staff
I Change in Shareholdings of Directors, Supervisors and Senior Management
Beginnin Increase Decrease
Other Ending
g in the in the
Office Incumben End of increase/d sharehold
Name Gender Age Start of tenure sharehold Reporting Reporting
title t/Former tenure ecrease ing
ing Period Period
(share) (share)
(share) (share) (share)
Chairman
Liu Incumben 15 January 16 April
of the M ale 50 0 0 0 0 0
Zhengyu t 2020 2015
Board
General
Chen
M anager Incumben 16 April
M aozhen M ale 56 17 April 2012 0 0 0 0 0
and t 2015
g
Director
Dai Superviso Incumben 15 January 16 April
M ale 58 0 0 0 0 0
Xianhua r t 2020 2015
Deng
Incumben 16 April
Kangchen Director M ale 54 17 April 2012 10,000 0 0 0 10,000
t 2015
g
Zhang CFO and Incumben 16 April
M ale 52 17 April 2012 0 0 0 0 0
Lei Director t 2015
Incumben 16 April
Wen Li Director Female 51 17 April 2012 0 0 0 0 0
t 2015
Jiang Incumben 16 April
Director Female 56 17 April 2012 0 0 0 0 0
Lihua t 2015
Independ 14
Song Incumben 15 October
ent M ale 52 October 0 0 0 0 0
Botong t 2010
director 2016
Independ
Zhang Incumben 22 April
ent M ale 54 23 April 2014 0 0 0 0 0
Shunwen t 2020
director
Independ
Kang Incumben 14 M ay
ent M ale 56 15 M ay 2018 0 0 0 0 0
Xiaoyue t 2021
director
Superviso Incumben 16 April
Ren Wei M ale 40 15 M ay 2018 2,000 0 0 0 2,000
r t 2015
50
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Superviso Incumben 16 April
Li Yufei Female 42 17 April 2012 0 0 0 0 0
r t 2015
Feng Superviso Incumben 16 April
M ale 49 2 M arch 2017 0 0 0 0 0
Hongwei r t 2015
Superviso Incumben 16 April
Lin Jun Female 51 27 April 2016 0 0 0 0 0
r t 2015
Wei Incumben 28 September 16 April
Vice GM Female 54 0 0 0 0 0
Hanping t 2012 2015
Vice GM ,
Tang Secretary Incumben 22 October 16 April
M ale 50 0 0 0 0 0
Xiaoping of the t 2013 2015
Board
Chairman 15
Zhou
of the Left M ale 65 17 April 2012 January 0 0 0 0 0
Jianping
Board 2020
15
Zhuang Superviso
Left M ale 65 17 April 2012 January 80,000 0 0 0 80,000
Quan r
2020
24
Teng
Vice GM Left M ale 63 17 M ay 2012 December 0 0 0 0 0
Xianyou
2019
Total -- -- -- -- -- -- 92,000 0 0 0 92,000
II Change of Directors, Supervisors and Senior Management
√Applicable □ Not applicable
Name Office title Type of change Date of change Reason for change
Director, Chairman of the Board and Director of
Zhou Jianguo Left 15 January 2020 Retired
the Strategic Committee of the Board
Zhuang Quan Supervisor, Chairman of the Supervisory Board Left 15 January 2020 Retired
24 December
Teng Xianyou Vice GM Left Retired
2019
III Biographical Information
Professional backgrounds, major work experience and current duties in the Company of the incumbent directors, supervisors and
senior management:
1. Liu zhengyu: he once was the director of Inspection Department in State-owned Assets Supervision and Administration
Commission of the People’s Government of Shenzhen M unicipal and Chief Accountant of Shenzhen Investment Holdings Co., Ltd.
Now he acts as the vice GM of Shenzhen Investment Holdings Co., Ltd. and the member of CPC. He has been the secretary of CPC
51
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
and Chairman of the Board of the Company since January 2020.
2. Chen M aozheng: he once was the vice secretary of CPC and managing director of Shenzhen City Construction Development
(Group) Co. Ltd. And he has been the vice secretary of CPC and director as well as managing director of the Company since October
2009.
3. Dai Xianhua: he once was vice director of the Asset M anagement Department in State-owned Assets Supervision and
Administration Commission of the People’s Government of Shenzhen M unicipal, office investigator and investigator of Appraisal
and Distribution Department. Now he acts as the Chairman of the Supervisory Board of ShenZhen Properties & Resources
Development (Group) Ltd.He has been the Chairman of the Supervisory Board of the Company since January 2020.
4. Deng Kangcheng: he was once deputy director, director of the Office of Shenzhen Investment Holdings Co., Ltd., and supervisor
of the Company. And he has been director, Vice Secretary of CPC and Secretary in Discipline Inspection Committee of the Company
since February 2009.
5. Zhang Lei: he was once the CFO and Secretary to the Board of SDIC ZHONGLU FRUIT Co., Ltd. And he has been the director
and CFO of the Company since October 2010.
6. Wen Li: she once worked as the vice chief of the Investment and Development Department, vice director of M anagement Center
for Construction Project and M inister of Enterprise Department I of Shenzhen Investment Holdings Co., Ltd. Now, she serves as the
director, GM and vive secretary of CPC in Shenzhen Bay Technology Development Co., Ltd. And she has been the director of the
Company since September 2006.
7. Jiang Lihua: she once was the vice chief of the Finance Department and the Chief of Appraisal and Distribution Department in
Shenzhen Investment Holdings Co., Ltd. Now, she serves as the Chief of Financial Department (Settlement Center). And she has
been acting as director of the Company since February 2009.
8. Song Botong: he ever took posts of vice chief of Civil Engineering Department in College of Architecture and Civil Engineering
and Chairman of Labor Union, and secretary of CPC of Shenzhen University. Now he acts as standing deputy director of Research
Center for Real Estate and director of Infrastructure Department in Shenzhen University. He has been the independent director of the
Company since October 2010.
9. Zhang Shunwen: he acted as director of the Shenzhen Juyuan Certified Public Accounting, now he acts as partner of BDO China
Shu Lun Pan Certified Public Accountants LLP. He acts as theindependent directors of the Company since April 2014.
10. Kang Xiaoyue: he was once the staff member of Department of Justice of Jiangxi Province, a reporter, editor and head of News
Department of Shenzhen Legal Newspaper. Now he serves as a general partner of BeijingWeiheng (Shenzhen) Law Firm. He acts as
the independent director of the Company since M ay 2018.
11. Ren Wei: he once was the CFO of Xian Zhenye Real Estate Development Co., Ltd., minister of Budget & Financing Department
and director of Fund Centre of Shenfubao Group Co., Ltd. Now he serves as the vice minister of Audit Department of Shenzhen
Investment Holdings Co., Ltd. Since M ay 2018 he serves as the supervisor of the Company.
12. Li Yufei: she ever worked as the Assistant to the M anager of the Investment Department and Assistant to the M anager & Vice
M anager of Assets M anagement Centre as well as the Senior M anagement Staff of Enterprise Department I and Enterprise
Department II (Journal Center) in Shenzhen Investment Holdings Co., Ltd. Now, she serves as the senior executive of Industrial
M anagement Department. And she has been the supervisor of the Company since April 2012.
13. Feng Hongwei: he once was the Vice Chief of the Board Secretariat, and the Securities Representative. Now he acts as the Audit
Supervisory M anager of the Company. He has been acting as a supervisor of the Company since M arch 2017.
14. Lin Jun: She once was the Vice Chief of the Party -M ass Work Department and the Vice Discipline Inspection Secretary & Chief
of the Party-M ass Work Department of the Company. And she has been acting as a supervisor of the Company since April 2016.
15. Wei Hanping: she ever worked as the manager of the Leasing Operation Department in Shenzhen City Construction Development
(Group) Co. and the manager of Cost Control Department of the Company. And she has been the Vice GM of the Company since
September 2012.
52
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
16. Tang Xiaoping: he ever act as CFO of Shenzhen HRD Assets M anagement Company, minister of Financial Operations
M anagement Department of Shenzhen Foreign Labor Service Co., Ltd., legal representative, the executive director of the Shenzhen
Foreign Affairs Service Center, and financing plan department manager of the Company. Since 22 October 2013 he acts as deputy
GM of the Company. Since 26 April 2018 he acts as secretary of the Board of the Company.
Offices held concurrently in shareholding entities:
√Applicable □Not applicable
Remuneration or
Office held in the shareholding
Name Shareholding entity Start of tenure End of tenure allowance from the
entity
shareholding entity
Shenzhen Investment
Liu Zhengyu Vice GM , member of CPC 9 January 2017 Yes
Holdings Co., Ltd
Shenzhen Investment Chief of Financial Department
Jiang Lihua 6 M arch 2017 Yes
Holdings Co., Ltd (Settlement Center)
Shenzhen Investment Vice minister of Audit 18 September
Ren Wei Yes
Holdings Co., Ltd Department 2017
Shenzhen Investment Senior executive of Industrial
Li Yufei 9 July 2015 Yes
Holdings Co., Ltd M anagement Department
Offices held concurrently in other entities:
√Applicable □Not applicable
Remuneration or
Office held in the End of
Name Other entity Start of tenure allowance from
entity tenure
the entity
Shenzhen Urban Transport Planning Center
Liu Zhengyu Director 17 October 2017 No
Co.., Ltd.
Telling Telecommunication Holding Co.,
Liu Zhengyu Director 2 M arch 2017 No
Ltd.
China's State Owned Capital Venture
Liu Zhengyu Director 16 August 2016 No
Capital Fund
Liu Zhengyu Kashi Shenzhen City Co., Ltd. Director 8 October 2013 No
Non-executive
Shenzhen Investment Holdings Bay Area
Liu Zhengyu director, Chairman of 14 M arch 2018 No
Development Co., Ltd.
the Board
Shenzhen Investment International Capital 18 December
Liu Zhengyu Director No
Holdings Infrastructure Co., Ltd. 2017
Shenzhen Investment International Capital 9 September
Liu Zhengyu Director No
Holdings Co., Ltd. 2016
ShenZhen Properties & Resources Supervisor, Chairman
Dai Xianhua 27 M ay 2011 Yes
Development (Group) Ltd. of Supervisory Board
53
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Infrastructure Department of Shenzhen
Song Botong Director 1 M arch 2013 Yes
University
BDO China Shu Lun Pan Certified Public
Zhang Shunwen Partner 1 M arch 2008 Yes
Accountants LLP.
2 December
Kang Xiaoyue BeijingWeiheng (Shenzhen) Law Firm General partner Yes
2019
Shenzhen Bay Technology Development Director, GM and Vice 1 December
Wen Li Yes
Co., Ltd. Secretary of CPC 2016
Zhang Lei Shenzhen A gricultural Products Co., Ltd. CFO 11 January 2017 Yes
Zhang Lei Shenzhen Zhenye (Group) Co., Ltd. Supervisor 16 M arch 2017 No
Punishments imposed in the recent three years by the securities regulator on the incumbent directors, supervisors and senior
management as well as those who left in the Reporting Period:
□ Applicable √ Not applicable
IV Remuneration of Directors, Supervisors and Senior Manage ment
Decision-making procedure, determination basis and actual payments of remuneration for directors, supervisors and senior
management:
It was executed according to the procedures stipulated in the Interim Measures for the Administration of Human
Resources of the Company.
Their remuneration was decided in accordance with the Interim Provisions of the Annual Salary System for
Managers of the State-owned Enterprises in Shenzhen and spirit of relevant documents as well as the Interim
Measures for the Administration of Human Resources of the Company.
The Directors Jiang Lihua and Wen Li, and the Supervisor Ren Wei, Li Yufei are dispatched by controlling
shareholders of the Company without drawing remuneration from the Company.
With review and approval of the 2013 Annual General Meeting convened on 23 April 2014, allowance for each
independent director was adjusted to RMB7,000 (tax included) per month since May 2014. Besides, they
received no other rewards from the Company.
The independent director Song Botong hasn’t received rew ards from the Company since January 2019.
The Company paid their remuneration monthly according to relevant systems for remuneration management of
the Company.
Remuneration of directors, supervisors and senior management for the Reporting Period
Unit: RM B’0,000
Total before-tax Any
Incumbent/For
Name Office title Gender Age remuneration from remuneration
mer
the Company from related party
Zhou Jianguo Chairman of the Board M ale 65 Left 121.98 No
Chen M aozheng General M anager and Director M ale 56 Incumbent 134.28 No
Zhuang Quan Supervisor M ale 65 Left 86.15 No
Deng Kangcheng Director M ale 54 Incumbent 114.36 No
54
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Zhang Lei CFO and Director M ale 52 Incumbent 0 No
Wen Li Director Female 51 Incumbent 0 No
Jiang Lihua Director Female 56 Incumbent 0 No
Song Botong Independent director M ale 52 Incumbent 0 No
Zhang Shunwen Independent director M ale 54 Incumbent 8.4 No
Kang Xiaoyue Independent director M ale 56 Incumbent 8.4 No
Ren Wei Supervisor M ale 40 Incumbent 0 No
Li Yufei Supervisor Female 42 Incumbent 0 No
Feng Hongwei Supervisor M ale 49 Incumbent 54.65 No
Lin Jun Supervisor Female 51 Incumbent 54.65 No
Teng Xianyou Vice GM M ale 64 Left 92.59 No
Wei Hanping Vice GM Female 53 Incumbent 112.26 No
Tang Xiaoping Vice GM , Secretary of the Board M ale 50 Incumbent 114.36 No
Total -- -- -- -- 902.08 --
Equity incentives for directors, supervisors and senior management in the Reporting Period:
□ Applicable √ Not applicable
V Employees
1. Number, Functions and Educational Backgrounds of Employees
Number of in-service employees of the Company as the parent 102
Number of in-service employees of major subsidiaries 1,823
Total number of in-service employees 1,925
Total number of paid employees in the Reporting Period 1,925
Number of retirees to whom the Company as the parent or its
597
major subsidiaries need to pay retirement pensions
Functions
Function Employees
Production 1,294
Sales 82
Technical 419
Financial 53
Administrative 77
Total 1,925
Educational backgrounds
55
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Educational background Employees
Doctors 1
M asters 29
Bachelors 193
College graduates 297
Technical secondary school graduates 148
High school graduates and below 1,257
Total 1,925
2. Employee Remuneration Policy
The management personnel above vice general manager (including vice GM) of the Company
conducted annual salary system, other employees conducted contacting the performance with the
benefit salary system.
3. Employee Training Plans
The Company established annual training plan in line with Measures for the Management of
Employee Training The Company adopts internal training, hires experts give lectures to the
Company or participate professional training, train the on job employees with job knowledge,
professional skills, rules and regulations, the business process etc., which enrich and renew the
professional knowledge, enhance the comprehensive quality and business skills of the employees.
4. Labor Outsourcing
□ Applicable √ Not applicable
56
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Part X Corporate Governance
I Basic Situation of Corporate Governance
In this Reporting Period, the Company strictly accorded with requirements of Company Law,
Securities Law, Code of Corporate Governance of Listed Companies and other laws and statutes,
continuously perfected its corporate governance, and standardized its operation. The actual situation
of corporate governance was in line with the requirements of the relevant normative documents.
The operating mechanism, of which the Board of Directors made decisions, the manageme nt team
took execution, and the Supervisory Board implemented supervision.
(I) Preparations and holding of shareholders’ general meeting and disclosure of resolution of the
meetings were normatively in line with Articles of Association and Rules for Proced ure of the
Shareholders’ General Meeting; all shareholders were on an equal position and could fully exercise
their legal rights.
(II) Directors and the Board of Directors: The Board is responsible for decision- making and
choosing directions. It exercised its power as per the corporate governance requirements.
Preparations, holding and disclosure of resolution of the Board sessions were normatively in line
with the Articles of Association and Rules of Procedure for the Board of Directors; all directors
performed their obligations in an honest and diligent manner; independent directors had a rational
profession structure; and special committees concerning strategy, audit, nomination, remuneration
and appraisal under the Board can operate positively and effectively.
(III) Supervisors and the Supervisory Board: structure of the Supervisory Board was reasonable.
The Supervisory Board conducted the supervision and inspection for the significant events of the
Company strictly in accordance with the Rules for Procedure of the Supervisory Board, and
exercised its supervision right effectively and brought its supervision function into fully play.
(IV) Manager level: the manager level of the Company was fully responsible for the production and
management of the Company, performed their obligations in an honest and diligence manner.
Implemented the resolution of the Board with efficient supervision and restriction and acquired
good achievement.
Indicate by tick market whether there is any material incompliance wit h the regulatory documents issued by the CSRC governing the
governance of listed companies.
□ Yes √ No
No such cases in the Reporting Period.
II The Company’s Independence from Its Controlling Shareholder in Business, Personnel,
Asset, Organization and Financial Affairs
(I) In respect of business, the Company possessed independent production, supply and sales system;
(II) In respect of personnel, the Company was absolutely independent in management of labor,
personnel and salaries from the controlling shareholders. All the senior executives of the Company
57
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
took no office title concurrently and drew no remunerations from the Shareholder Company.
(III) In respect of assets, the Company possessed independent and integrated assets and the property
of the Company is transparent.
(IV) In respect of organization, the Board of Directors and the Supervisory Board operated
independently. There existed no superior- inferior relationship between the controlling shareholder
and its function department and the Company.
(V) In respect of finance, the Company has independent financial department, independently
accounted and paid taxes according to the law. The Company established a complete accounting
system, financial accounting system and financial administrative systems. The Company opened
independent bank accounts.
III Horizontal Competition
□ Applicable √ Not applicable
IV Annual and Special General Meetings Convened during the Reporting Period
1. General Meeting Convened during the Reporting Period
Investor Index to disclosed
M eeting Type Date of the meeting Disclosure date
participation ratio information
Announcement on
Resolutions of 2018
The 2018 Annual Annual General
63.61% 18 April 2019 19 April 2019 Annual General Meeting
General M eeting M eeting
disclosed on
www.cninfo.com.cn.
Announcement on
st
The 1 Extraordinary Resolutions of the 1st
Extraordinary
General M eeting of 63.60% 15 November 2019 16 November 2019 Extraordinary General
General M eeting
2019 Meeting of 2019disclosed
on www.cninfo.com.cn.
2. Special General Meetings Convened at the Request of Preferred Shareholders with Resumed Voting
Rights
□ Applicable √Not applicable
58
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
V Pe rformance of Duty by Independent Directors in the Reporting Period
1. Attendance of Independent Directors at Board Meetings and General Meetings
Attendance of independent directors at board meetings and general meetings
Total number The
Board
of board Board Board independent
Board meetings
meetings the meetings meetings the director failed General
Independent meetings attended by
independent attended independent to attend two meetings
director attended on way of
director was through a director failed consecutive attended
site telecommunica
eligible to proxy to attend board meetings
tion
attend (yes/no)
Song Botong 5 5 0 0 0 No 2
Zhang Shunwen 5 5 0 0 0 No 2
Kang Xiaoyue 5 4 0 1 0 No 2
Why any independent director failed to attend two consecutive board meetings:
Not applicable
2. Objections Raised by Independent Directors on Matters of the Company
Indicate by tick mark whether any independent directors raised any objections on any matter of the Company.
□ Yes √ No
No such cases in the Reporting Period.
3. Other Information about the Performance of Duty by Independent Directors
Indicate by tick mark whether any suggestions from independent directors were adopted by the Company.
√ Yes □ No
Suggestions from independent directors adopted or not adopted by the Company:
None
VI Performance of Duty by Specialized Committees under the Board in the Reporting Period
All committees actively, effectively work, providing powerful guarantee to the scientific
decision- making, the relevant details are as follows:
1. Performance of the Audit Committee of the Board of Directors
During the Reporting Period, the Audit Committee actively promoted the progress of the annual
audit and the relevant work. It reviewed on the Company’s following issues: Arrangement on the
Annual Audit Work, Periodic Financial Report, Profit Distribution Plan, Change of CPAs Firm,
Written Submission of the Administration on CPAs Firm, Construction of Internal Control, Fund
Transfer Between Listed Companies and Related Parties and Guarantee Events, etc.. Besides, it also
kept full and necessary communication with the annual auditor of the Company. During the
59
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Reporting Period, the Audit Committee has convened four meetings, reviewed the Company’s
financial statements and the preliminary auditing result issued by the annual auditor of the Company,
as well as issued their opinions after the review, and remarked for the change of CPAs Firm.
2. Performance of the Remuneration and Appraisal Committee
The Remuneration and Appraisal Committee issued its opinion on annual remuneration of directors,
supervisors and senior management disclosed in 2018 Annual Report on 28 March 2019.
3. Performance of the Nomination Committee
The Nomination Committee issued its opinion on the Company’s changes in directors on 24
December 2019.
VII Performance of Duty by the Supervisory Committee
Indicate by tick mark whether the Supervisory Committee found any risk to the Company during its supervision in the Reporting
Period.
□ Yes √ No
The Supervisory Committee raised no objections in the Reporting Period.
VIII Appraisal of and Incentive for Senior Manage ment
The Company's board of directors assesses, evaluates and employs management teams. The
Company’s chairman and general manager implement the annua l salary system, and the annual
salary is composed of basic salary and performance compensation. The shareholder unit formulates
assessment methods for assessment. The other senior management personnel's compensation is
determined based on individual job performance with reference to the total salary of the Company’s
leader; the Company has not implemented equity incentive plan.
IX Internal Control
1. Material Internal Control Weaknesses Identified for the Reporting Period
□ Yes √ No
2. Internal Control Self-Evaluation Report
Disclosure date of the internal control self-evaluation report 14 M arch 2020
Internal Control Self-Evaluation
Index to the disclosed internal control self-evaluation report
Report on www.cninfo.com.cn
Evaluated entities’ combined assets as % of consolidated total assets 86.25%
Evaluated entities’ combined operating revenue as % of consolidated operating revenue 100.00%
Identification standards for internal control weaknesses
60
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Weaknesses in internal control over Weaknesses in internal control not related
Type
financial reporting to financial reporting
The criterion of quality of the recognition
of defects of internal control in the
non-financial statements mainly were order
of severity of defect involving business
nature, the direct or potential negative
influence nature and the influence scope
The Company in line with the actual
and other factors. If the follows events or
situation, when the follows events or
indicators occur, there may be serious or
indications happen, which means there
important defects of internal control in the
probably existing serious or important
non-financial statements:(1) Lack
defects in the financial report; (1) the
democratic decision-making process, if
directors, supervisors and senior
lack significant problem decision-making,
executives were fraud. (2) Certified Public
important appointment and dismissal of
Accountant find that there is a significant
cadres, significant project investment
Nature standard error in the financial report, however, the
decision-making; usage of large capital
internal control did not discover it when
(three important, one large); (2)
conducting internal control; (3) The Audit
Unscientific decision-making process, such
Committee under the Board and Internal
as the major decision-making errors, has
Audit Service's supervision to the internal
caused a serious property loss to the
control is invalid. (4) The accounting
company; (3) Seriously violating state laws
personnel were without necessary qualities
and regulations; (4) Loss of key
to complete the preparation of financial
management personnel or important talent;
statements.
(5) Negative news media appear frequently
and widely spread; (6) The results of the
internal control evaluation especially large
or significant defects have not been
corrected. (7) Important business systems
lack control rules, or systemic failure.
Serious defects: the defects, or defect
group may lead to the financial results
misstatement or potential losses >3% of
net assets; important defects: 1% of net The criterion of quantity of the recognition
assets lead to the financial results misstatement non-financial statements mainly were
Quantitative standard or potential losses ≤ 3% of net assets; amount of direct economy losses, in line
General defects: the defects, or defect with the criterion of quantity of the
group may lead to the financial results recognition of defects of internal control in
misstatement or potential losses ≤ 1% of financial report of the Company.
net assets. Note: Net assets in a recent
issue of the audited financial report shall
prevail
61
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Number of material weaknesses in internal control over financial report ing 0
Number of material weaknesses in internal control not related to financial reporting 0
Number of serious weaknesses in internal control over financial reporting 0
Number of serious weaknesses in internal control not related to financial reporting 0
X Independent Auditor’s Report on Internal Control
√ Applicable □ Not applicable
Opinion paragraph in the independent auditor’s report on internal control
We believe that Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. maintained effective internal control
of financial statements in all significant aspects on 31 December 2019 in accordance with Basic Standards for Internal Control and
relevant regulations.
Independent auditor’s report on internal control disclosed or not Disclosed
Disclosure date 14 M arch 2020
Index to such report disclosed Report on Internal Control disclosed on www.cninfo.com.cn.
Type of the auditor’s opinion Unmodified unqualified opinion
M aterial weaknesses in internal control not related to financial
No
reporting
Indicate by tick mark whether any modified opinion is expressed in the independent auditor’s report on the Company’s internal
control.
□ Yes √ No
Indicate by tick mark whether the independent auditor’s report on the Company’s internal control is consistent with the internal
control self-evaluation report issued by the Company’s Board.
√ Yes □ No
62
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Part XI Corporate Bonds
Does the Company have any corporate bonds publicly offered on the stock exchange, which were outstanding before the date of t his
Report’s approval or were due but could not be redeemed in full?
No
I Basic Information of the Corporate Bonds
Bonds balance Way of
Name Abbr. Code Release date Due date Interest rate
(RM B’0,000) redemption
II List of the Bond Trustee and the Rating Organization
Bond trustee:
Rating organization executed the tracking rating of the corporate bonds of the Reporting Period:
III List of the Usage of the Raised Funds of the Corporate Bonds
IV Rating Situation of the Corporate Bonds Information
V Credit-adding Mechanis m, Repayment Plan and Othe r Repayment Guarantee Measures of
the Corporate Bonds
VI Convene Situation of the Bonds Holders Meeting during the Reporting Period
VII List of the Duty Execution of the Bonds Trustee during the Reporting Period
VIII The Major Accounting Data and the Financial Indicators of the Recent 2 Years of the
Company up the Period-end
Unit: RM B’0,000
Item 2019 2018 Change rate of the same period
M ain reason of the above accounting data and the financial indicators with the YoY change exceeded 30%
□ Applicable □ Not applicable
63
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
IX List of the Interest Payment of Other Bonds and Debt Financing Instruments during the
Reporting Period
X List of the Acquired Bank Credit Lines, Usage and the Repayment of the Bank Loans
XI. List of the Execution of the Agreements or the Commitments Related to the Company
Bonds Raising Specification during the Reporting Period
XII Significant Events Occurring during the Reporting Period
XIII Whether there Was Guarantor of the Corporate Bonds
□ Yes □ No
64
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Part XII Financial Statements
Type of the audit opinion Unmodified unqualified opinion
Date of signing this report 31 December 2019
Name of the audit institution Grant Thornton Accounting Firm (LLP)
Number of the audit report ZTSZ (2020) No. 441ZA1280
Name of the certified public accountants Huang Shengsen, Zhao Juanjuan
Text of the Audit Report
Audit Report
GTCSZ（2020）No. 441ZA 1280
To the Shareholders of SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) CO. Ltd.:
Opinion
We have audited the financial statement of SHENZHEN SPECIAL ECONO MIC ZONE REAL ESTATE & PROPERTIES (GROUP ) CO., Ltd.
and its subsidiaries (the "Group"), which comprise the consolidated and company statement of financial position as at 31 December 2019,
the consolidated and company statement of comprehensive income, the consolidated and company cash flows for the year then ended,
consolidated and company statement of changes in equity and the notes to the financial statements.
In our opinion, the accompanying consolidated and company financial statements present fairly, in all material respects, the Group’s
consolidated and company financial position as at 31 December 2019, and their consolidated financial performance and their consolidated
cash flows for the year then ended in accordance with Accounting Standards for Business Enterprises.
Basi s for Opinion
We conducted our audit in accordance with the China Standards on Auditing. Our responsibilities under those standards are further
described in the A uditor’s Responsibilities for the A udit of the Financial S tatement S ection of our report. We are independent of the G roup in
accordance with the Code of E thics for Chinese Certified P ublic Accountant (E thics Code) together with the ethical requiremen ts that are
relevant to our audit of the financial statements, and we fulfilled our other ethical responsibilities in accordance with thes e requirements and
the E thics Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key audi t matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consoli dated financial
statements of the current period. These matters were addressed in the contex t of our audit of the consolidated financial statements as a
whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
1.Revenue recogni tion from sales of properti es
Relatively detailed information is set out i n Notes III. 23 and Note V.27.
Descriptions of the m atter
In 2019, the revenue from sales of properties was RMB 2.018 billion that accounted for 79. 65% of total revenue of the Group.
When all of the following conditions have been met, the Group recognizes the revenue of sales of properties: (1) the signed s ales contract
filed with the land department; (2) properties have been completed and accepted; (3) fully one-off payment, or the first installment payment
has been received and the bank mortgage approval procedures have been completed; (4) the procedures of housing delivery have c ompleted
in accordance with the sales contract.
Due to the importance of revenue from sales of properties, and any discrepancies in revenue recognition will have a significant impact on the
65
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
profit of the Group. Therefore, the revenue recognition from sales of properties is a key audit matter.
How our audit addressed the Key Audit Matter
Our audit procedures for the recognition of revenue include:
① Understanding, assessing and testing the design and implementation o f key internal controls
about the progress of contract performance and revenue recognition.
② Examining the main clauses in sales contracts to evaluate the appropriateness of the Gro up’s
revenue recognition policy associated with the relevant accounting standards;
③ Performing tests, on a sample basis, to examine contracts of sales of properties, trace to
collection of revenue and check letter of admission (elements of revenue recognition) in o rder to assess
the compliance with the Group’s revenue recognition policy.
④ Evaluating the revenue of sales of properties, on sample basis, before and after the balance
sheet date by checking to sales contracts, revenue collection and the letter of admission, fo r the
appropriateness of the period of revenue recognition
⑤ Calculating average house price and comparing it with the price from last year to analyze the
reasonableness of revenue and gross profit.
⑥ Evaluating the appropriate ness of accounting treatment, p resentation and disclosure o f the
revenue recognition o f sales of properties and other relevant information by the Group in the financial
statements.
2. Accuracy of land appreci ation tax cal cul ations
Relatively detailed information is set out in Notes IV and Note V. 28.
Descriptions of the m atter
Land appreciation tax is the main tax category for the Group.
For the sales of properties, land appreciation tax (“LAT”) is charged at a progressive tax rate of 30% -60% . At the end of reporting period,
management evaluates the provision of LAT with the consideration of factors including the provisions of the relevant taxation, estimable
revenue minus deductible land c osts, costs of real estate development, interest expense, development expense, etc. I t is possible that a
significant difference exists between actual and estimated taxable amount.
Due to the importance of the LAT accrual to the consolidated financial statements, and management's judgment when making estimates
includes consideration of relevant tax laws and regulations and practical practices. Therefore, we identified the accrual of LAT of the G roup
as a key audit matter.
How our audit addressed the Key Audit Matter
Our audit procedures for the land appreciation tax include:
① Evaluating the design and effectiveness of key internal controls related to the measurement of LAT;
② Involved our internal tax specialists in the PRC to assess the provision of LAT on 31 December 2019 on basis of our experience,
knowledge, understanding of the practical operation of relevant tax laws by local tax authorities, to evaluate the Group’s assumptions and
judgments;
③ Evaluating the management's expected estimates of the estimated income from the sale of real estate and the amount of
deductible items, and assess the G roup’s assumptions and judgments;
④ Recalculating the amount of provision of LAT and comparing it to management estimate.
66
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Other Inform ation
Management is responsible for the other information. The other information comprises the information included in the Annual R eport of 2019,
but does not include the financial statements and our auditor’s report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conc lusion
thereon.
In connection with our audit of financial statements, our responsibility is to read the other information and, in doing so, consider w hether the
other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwis e appears to be
materially misstated.
If, based on the w ork w e have performed, w e conclude that there is material misstatement of this other information, we are required to report
that fact. We have nothing to report in this regard.
Responsi biliti es of Managem ent and Those Charge with Governance for the Financi al Statem ent
Management of the Group is responsible for the preparation and fair presentation of the financial statement in accordance with Accounting
Standards for Business Enterprises, and for such internal control as management determines in necessary to enable the preparation of
financial statements that are free form material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing,
as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to
liquidate the Group or to cease operations, or has no realistic alternative but to do so.
Those charge with governance are responsible for overseeing the G roup’s financial reporting process.
Auditor’ s Responsibili ti es for the Audi t of the Financial Statem ent
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material mi sstatement,
whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assura nce,
but is not a guarantee that an audit conducted in accordance with China Standards on Auditing will always detect a material m isstatement
when it exists. Misstatements can arise form fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of these financial s tatements.
As part of an audit in accordance with China S tandards on Auditing, w e exercise professional judgment and maintain profession al skepticism
throughout the audit. We also:
Identify and assess the risks of material misstatement o f the financial sta tements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting
a material misstatement resulting from fraud is higher than for one resulting from erro r, as fraud may
involve collusion, forgery, intentio nal omissions, misrepresentations, or the override of internal control.
Obtain an understanding o f internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis o f accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to
the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our
67
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
opinion. Our conclusio ns are based on the audit evidence obtained up to the date of our auditor’s
report. However, further events or conditions may cause the Group to cease to continue as a going
concern.
Evaluate the overall presentatio n, structure and content o f the financial statements, and whether the
financial statements represent the underlying transactions and events in a manner that achieves fair
presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Gro up to express an opinion on the consolidated financial statements.
We are responsible for the direction, supervision and performance of the group audit. We remain
solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the governance body with a statement that we have complied with relevant ethical requirements regarding independence
and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where
applicable, related safeguards.
From the matters communicated with the governance body, we determine those matters that were of most significance in the audit of the
financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’ s report unless
law or regulation precludes public disclosure about the matter or when, in ex tremely rare circumstances, we determine that a matter should
not be communicated in our report because the adverse consequences of doing so would reasonably be expec ted to outweigh the public
interest benefits of such communication.
Grant Thornton Auditor's signature and stamp
Auditor's signature and stamp
68
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
China B eijing 13 March 2020
Date of the auditor's report
69
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Consolidated and Company Balance Sheet
As at 31 December 2019
Prepared by： SHENZHE N SP E CIAL ECONOMI C Z ONE RE AL
E STAT E & PROPE RT IE S ( GROUP) Co., Ltd Expresse d in RM B
As at 31/ 12/2019 As at 31/ 12/2018
Item Note
Consolidated Company Consolidated Company
Current assets:
Cash at bank and on hand V.1 2,511,140,445.35 1,967,688,122.55 2,048,522,435.93 1,344,486,378.53
Financial assets held for trading
Financial assets at fair v alue through profit or
loss
Bills rec eiv able
Accounts receiv able V.2 62,059,055.68 156,935.84 33,426,991.65 5,164,795.67
Accounts receiv able financing
Prepay ments V.3 219,948.17 200,000.00 4,177,767.88 200,000.00
Other receiv ables V.4 28,275,228.26 835,275,498.69 45,018,027.61 770,374,849.84
Including: Interest receiv ables - - 2,453,067.78 2,380,301.11
Div idend rec eiv ables 1,052,192.76 - 1,052,192.76 -
Inv entories V.5 1,462,229,048.18 419,453,091.86 1,685,152,051.26 543,912,100.37
Assets held for sale
Non-current assets due w ithin one y ear
Other current assets V.6 102,781,855.48 407,560.64 6,780,999.56 215,745.41
Total current assets 4,166,705,581.12 3,223,181,209.58 3,823,078,273.89 2,664,353,869.82
Non-current assets:
Debt inv estments
Av ailable-for-sale financial assets V.7 - - 17,464,240.74 12,000,000.00
Other debt inv estments
Held-to-maturity inv estments
Long-term receiv ables
Long-term equity inv estments V.8 469,838.65 150,676,516.92 12,561,107.24 235,284,776.57
Other equity instrument inv estments V.9 33,126,730.04 13,229,501.03 - -
Other non-current financial assets
Inv estm ent properties V.10 632,241,900.20 522,038,731.16 623,930,838.15 511,040,299.65
Fix ed assets V.11 30,522,035.11 19,586,720.47 33,926,198.52 21,942,842.11
Cons truc tion in progress
Produc tiv e biological assets
Oil and gas assets
Intangible ass ets V.12 - - - -
Dev elopment costs
Goodw ill
Long-term deferred ex penses V.13 162,125.72 162,125.72 387,066.91 346,015.72
Deferred tax assets V.14 46,441,325.25 20,975,294.54 154,543,788.80 16,699,980.23
Other non-current assets
Total non-current assets 742,963,954.97 726,668,889.84 842,813,240.36 797,313,914.28
Total assets 4,909,669,536.09 3,949,850,099.42 4,665,891,514.25 3,461,667,784.10
70
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Consolidated and Company Balance Sheet(Continued)
As at 31 D ecember 2019
Prepared by：SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE &
PROPERTIES (GROUP) Co., Ltd Expressed in RMB
As at 31/12/2019 As at 31/12/2018
Item Note
Consolidated Company Consolidated Company
Current liabilities:
Short-term loans V.15 51,647,260.17 - 17,260,103.46 -
Financial liabilities at fair v alue through profit or
loss
Bills pay able
Accounts pay able V.16 244,224,478.46 103,915,931.14 216,758,906.71 16,743,360.96
Adv ances from customers V.17 159,482,510.43 59,409,454.38 156,426,152.86 22,035,608.45
Employ ee benefits pay able V.18 53,909,576.49 25,544,403.23 45,836,830.05 19,687,728.50
Tax es pay able V.19 585,700,815.36 143,434,273.95 300,547,372.98 144,621,616.85
Other pay ables V.20 277,319,174.53 190,666,487.82 721,819,898.48 594,392,900.98
Including: Interest pay ables 16,535,277.94 16,535,277.94 16,535,277.94 16,535,277.94
Div idend pay ables
Liabilities held for sale
Non-current liabilities
due w ithin one y ear
Other current liabilities
Total current liabilities 1,372,283,815.44 522,970,550.52 1,458,649,264.54 797,481,215.74
Non-current liabilities:
Long-term loans
Debentures pay able
Long-term pay ables V.21 7,499,192.92 - 6,507,139.20 -
Long-term employ ee benefits pay able
Prov isions
Deferred income
Deferred tax liabilities V.14 4,903,293.58 1,295,046.51 - -
Other non-current liabilities
Total non-current liabilities 12,402,486.50 1,295,046.51 6,507,139.20 -
Total liabilities 1,384,686,301.94 524,265,597.03 1,465,156,403.74 797,481,215.74
Share capital V.22 1,011,660,000.00 1,011,660,000.00 1,011,660,000.00 1,011,660,000.00
Capital reserv e V.23 978,244,910.11 964,711,931.13 978,244,910.11 964,711,931.13
Less: treasury shares
Other comprehensiv e income V.24 20,831,004.13 922,125.77 10,564,385.97 -
Specific reserv e
Surplus reserv e V.25 191,222,838.94 168,093,225.53 95,906,222.59 72,776,609.18
Retained earnings V.26 1,464,915,816.81 1,280,197,219.96 1,235,884,122.72 615,038,028.05
Total equity attributable to shareholders of the 3,666,874,569.99 3,425,584,502.39 3,332,259,641.39 2,664,186,568.36
Company
Non-controlling interes ts -141,891,335.84 - -131,524,530.88 -
Total shareholders' equity 3,524,983,234.15 3,425,584,502.39 3,200,735,110.51 2,664,186,568.36
Total liabilities and shareholders' equity 4,909,669,536.09 3,949,850,099.42 4,665,891,514.25 3,461,667,784.10
Le gal re presentative : Person in charge of accounting: Person in charge of accounting organ:
71
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Consolidated and Company Income Statement
For the year ended 31 December 2019
Prep ared by：SHE NZ H EN SP EC IA L EC ON O MIC ZO N E RE AL ES TAT E & P ROP ER TIES (GR OUP ) Co., Ltd Express ed in RM B
Yea r ended 3 1/1 2/20 19 Yea r ended 3 1/1 2/20 18
Item Note
Consolidated Compan y Consolidated Compan y
I. Ope rating income V.27 2,54 8,7 40,3 19. 49 1,66 6,9 52,9 12. 58 2,17 5,1 87,2 42. 60 22 9,68 2,5 50.1 7
Less: op erati ng costs V.27 95 7,75 2,6 52.5 4 33 0,87 4,2 97.0 0 93 8,38 6,0 13.0 9 48,3 32, 11 8.70
Taxes a n d surc har ge s V.28 75 1,01 3,9 28.2 1 63 0,41 8,4 53.8 6 44 5,36 5,1 41.9 2 76,3 02, 96 4.10
Sel lin g a nd distri but io n ex pe nses V.29 79,4 80, 25 4.02 56,1 46, 74 9.47 52,5 62, 98 0.22 4,05 2,4 27.5 7
Ge ne ral an d a dmi nistr ativ e exp en ses V.30 68,8 54, 61 8.70 30,5 40, 74 0.51 74,0 29, 84 0.44 29,5 29, 99 5.90
Res ear ch a nd dev el opm e nt exp ens es
Fina nci al exp ens es V.31 -20,9 06, 14 9.2 0 -45,8 94, 18 0.9 2 -17,2 35, 72 2.1 6 -47,8 84, 28 4.7 8
Inclu di ng: Inter est ex pe ns es 38,6 42. 51 - 2,81 7,5 21.6 0 2,39 9,3 65.7 4
Interest i nco me 19,6 86, 88 2.13 41,0 49, 60 6.12 19,8 25, 33 4.08 41,5 76, 90 3.81
Add: Othe r inc om e V.32 1,16 8,1 27.9 0 18,9 98. 01 - -
Investm ent i nco me ("-" f or los ses) V.33 32,4 29, 48 1.23 55 1,12 9,6 12.8 7 17,1 21, 60 5.87 17,1 21, 60 5.87
Inclu di ng: Inc om e from i nvestm ent i n
1,00 3,8 29.2 5 1,00 3,8 29.2 5 -52,6 51. 66 -52,6 51. 66
asso ciat es a nd
Ga in s from d erec og nit io n of fin anc ia l ass ets me asur ed at
amort ise d cost ("- " for los ses)
Ga in fro m n et exp osu re of h ed ge (" -" for l osse s)
Ga in s from cha ng es in fair va lu e ("-" for loss es) Cr ed it - - - -
imp airm ent l oss es(“ -” for losses) V.34 -3,11 1,2 57.4 4 -2,02 9,2 82.3 8
Impai rme nt los ses ("- " for l osse s) V.35 -12,1 66, 89 7.8 4 -83,6 83, 88 8.9 0 -17,3 04, 69 9.7 5 -
Ga in s from ass ets d isp osa l ("-" for loss es) V.36 - - -53 0.20 -
II. Ope rating profit ("-" for loss es) 73 0,86 4,4 69.0 7 1,13 0,3 02,2 92. 26 68 1,89 5,3 65.0 1 13 6,47 0,9 34.5 5
Add: N on- op er atin g in com e V.37 1,34 5,4 28.4 9 1,04 2,2 66.3 1 1,41 1,7 86.3 2 63 3,37 7.6 4
Less: N on -o per atin g exp en ses V.38 22 6,56 6.8 0 64,2 97. 33 57 9,10 0.0 1 37 4,43 6.1 8
III . Profit befor e income t ax ("-" for los se s) 73 1,98 3,3 30.7 6 1,13 1,2 80,2 61. 24 68 2,72 8,0 51.3 2 13 6,72 9,8 76.0 1
Less: Inc om e tax ex pe nse s V.39 19 0,78 6,3 00.7 0 17 3,95 2,5 83.4 6 18 2,75 6,4 86.3 6 34,3 34, 33 0.15
IV. Net p rofit for th e y ea r ("-" for n et los se s) 54 1,19 7,0 30.0 6 95 7,32 7,6 77.7 8 49 9,97 1,5 64.9 6 10 2,39 5,5 45.8 6
(1) Clas sifica tion acco rding to operation continuity
Inclu di ng: N et pr ofit from co ntin ui ng op erati o ns
54 1,19 7,0 30.0 6 95 7,32 7,6 77.7 8 49 9,97 1,5 64.9 6 10 2,39 5,5 45.8 6
("-" for n et loss)
Net pr ofit from d isc onti nu ed op erati on s
("-" for n et loss)
(2) Clas sifica tion acco rding to attibute
Inclu di ng: S har eh ol ders of the co mp any( "-" for n et lo ss) 55 2,45 2,3 07.5 9 - 50 3,49 8,8 31.6 0 -
No n-co ntro lli ng inte rests(" -" for n et loss ) -11,2 55, 27 7.5 3 -3,52 7,2 66.6 4
V. Othe r co mpreh ensiv e incom e, net of ta x -17 6,62 2.0 9 -50,7 66. 47 74 0,98 4.0 1 -
Oth er com pr eh ens ive inc om e (net of tax) attrib uta bl e to
17 3,18 2.4 6 -50,7 66. 47 51 8,68 8.8 1 -
shar eh ol der s of the c omp any
A. Items that wi ll n ot be r ecl assif ie d to profit o r loss a.Ch an g es 1,65 3,4 31.2 7 -50,7 66. 47 - -
in fair v al ue of other eq uity instr ume nts 1,65 3,4 31.2 7 -50,7 66. 47
B. Items that may be r ecl assif ie d to prof it or loss -1,48 0,2 48.8 1 - 51 8,68 8.8 1 -
Trans lati on differ enc es ar isi ng fro m trans lat io n of
-1,48 0,2 48.8 1 - 51 8,68 8.8 1 -
forei gn c urre ncy fi na nci al stat eme nts
Oth er com pr eh ens ive inc om e (net of tax) attrib uta bl e to no n-
-34 9,80 4.5 5 - 22 2,29 5.2 0 -
contr oll in g int ere sts
VI. Total compr ehensi ve inco me for the y ear 54 1,02 0,4 07.9 7 95 7,27 6,9 11.3 1 50 0,71 2,5 48.9 7 10 2,39 5,5 45.8 6
Attribut abl e to sh ar eh old ers of the co mp any 55 2,62 5,4 90.0 5 50 4,01 7,5 20.4 1
No n-co ntro lli ng i nter ests -11,6 05, 08 2.0 8 -3,30 4,9 71.4 4
VII . Earnings pe r sha re:
(1) Basic ear ni ngs per s har e 0.54 61 0.49 77
(2)D il uted ear ni ngs per s har e - -
Legal rep rese nta tive : Pe rson in cha rge of a ccoun ting : Pe rson in c harge of a ccou nting organ :
72
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Consolidated and Company Cash Flow Statements
For the year ended 31 December 2019
Prepared by：SHENZHEN SPECIAL ECONOMIC ZONE REAL
ESTATE & PROPERTIES (GROUP) Co., Ltd
Expressed in RMB
Year ended 31/12/2019 Year ended 31/12/2018
Item Note
Consolidated Company Consolidated Company
I.Cash flows from operating activities
Proceeds from sales of goods or rendering of services Refund 2,648,597,164.58 1,787,968,670.18 2,216,524,455.50 260,723,994.01
of taxes - - - -
Proceeds from other operating activities V.40 79,679,385.47 58,719,902.38 57,522,168.96 411,645,620.31
Sub-total of cash inflows 2,728,276,550.05 1,846,688,572.56 2,274,046,624.46 672,369,614.32
Payment for goods and services 639,208,411.38 99,847,275.06 686,915,180.64 172,885,291.04
Payment to and for employees 178,713,870.65 51,174,841.78 155,037,192.56 38,307,017.74
Payments of various taxes 1,199,806,904.82 916,815,076.44 286,175,244.06 39,081,749.05
Payment for other operating activities V.40 106,939,638.45 79,596,205.39 83,351,601.61 14,362,419.34
Sub-total of cash outflows 2,124,668,825.30 1,147,433,398.67 1,211,479,218.87 264,636,477.17
Net cash flows from operating activities 603,607,724.75 699,255,173.89 1,062,567,405.59 407,733,137.15
II.Cash flows from investing activities
- - - -
Proceeds from disposal of investments
37,502,720.55 143,151,908.78 14,891,757.53 184,285,709.71
Investment returns received
Net proceeds from disposal of fixed assets, intangible assets and 119,9 00. 00 - - -
other long-term assets - - - -
Net proceeds from disposal of subsidiaries and other business units
V.40 2,200,000,000.00 2,200,000,000.00 600,000,000.00 892,206,391.13
Proceeds from other investing activities
2,237,622,620.55 2,343,151,908.78 614,891,757.53 1,076,492,100.84
Sub-total of cash inflows
Payment for acquisition of fixed assets, intangible assets and other 21,918,490.62 20,824,023.65 629,839.43 127,680.54
long-term assets
- - - -
Payment for acquisition of investments
- - - -
Net payment for acquisition of subsidiaries and other business units
V.40 2,300,000,000.00 2,300,000,000.00 1,500,000,000.00 1,618,000,000.00
Payment for other investing activities
2,321,918,490.62 2,320,824,023.65 1,500,629,839.43 1,618,127,680.54
Sub-total of cash outflows -885,738,081.90 -541,635,579.70
-84,295,870.07 22,327,885.13
Net cash flows from investing activities
III.Cash flows from financing activities - - - -
Proceeds from investors - - - -
subsidiaries 43,741,293.64 - 17,260,103.46 -
Proceeds from borrowin gs V.40 - - 290,033.83 -
Proceeds from other financing activities 43,741,293.64 - 17,550,137.29 -
Sub-total of cash inflows 2,000,000.00 - 250,207,653.64 146,000,000.00
Repayments of borrowings 202,370,642.51 202,332,000.00 2,817,521.60 2,399,365.74
Payment for dividends, profit distributions or interest
- - - -
Including: Dividends and profits paid to non-controlling
shareholders of subsidiaries - - - -
Payment for other financing activities 204,370,642.51 202,332,000.00 253,025,175.24 148,399,365.74
Sub-total of cash outflows -160,629,348.87 -202,332,000.00 -235,475,037.95 -148,399,365.74
Net cash flows from financing activities -15,181.39 - 379,093.73 -13,487.07
IV. Effect of foreign exchange rate changes on cash and cash
equivalents 358,667,324.42 519,251,059.02 -58,266,620.53 -282,315,295.36
V. Net increase in cash and cash equivalents 1,148,522,435.93 444,486,378.53 1,206,789,056.46 726,801,673.89
Add: Cash and cash equivalents as at 01/01/2019 1,507,189,760.35 963,737,437.55 1,148,522,435.93 444,486,378.53
VI. Cash and cash equivalent as at 31/12/2019
Legal representative: Person in charge of accounting: Person in charge of accounting organ:
73
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Consolidated Statement of Changes in Shareholders' Equity
For the year ended 31 December 2019
Prepared by：SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd Expressed in RMB
Year ended 31/12/2019
Attributable to shareholders' equity of the parent company
Item Non-controlling
Less: Other Total
Share capital Capital reserve trea sur y comprehensive Spe ci fi c Surplus reserve R etai ned interests
shares income reserve ear ni ngs
I.Balance at 31/12/2018 1,011,660,000.00 97 8, 24 4, 9 10. 1 1 - 10,564,385.97 - 95,906,222.59 1,235,884,122.72 -131,524,530.88 3, 20 0, 73 5, 11 0. 5 1
Add ：Changes in accounting policies - - - 10 ,0 93 ,4 3 5.7 0 - -4 1 6, 15 1. 43 -2 5, 3 55, 8 45 .7 2 -390,720.82 -16,069,282.27
Correction of prior period errors -
Business combination involving enterprises under common control -
Others -
II.Balance at 01/01/2019 1,011,660,000.00 97 8, 24 4, 9 10. 1 1 - 20,657,821.67 - 95,490,071.16 1,210,528,277.00 -131,915,251.70 3, 18 4, 66 5, 82 8. 2 4
III.Changes in equity during the year( "- "for decrease) - - - 17 3, 18 2. 4 6 - 95,732,767.78 254,387,539.81 -9,976,084.14 340,317,405.91
(I)Total comprehensive income - - - 17 3, 18 2. 4 6 - - 552,452,307.59 -11,605,082.08 541,020,407.97
(II)Shareholders' contributions and decrease of capital - - - - - - - - -
1.Contribution by ordinary shareholders -
2.Capital contributed by the holders of other equity instrument -
3. Equity settled share-based payments -
4. Others -
(III) Appropriation of profits - - - - - 95,732,767.78 -298,064,767.78 - -202,332,000.00
1. Appropriation for surplus reserves - - - - - 95,732,767.78 -95,732,767.78 - -
2. Appropriation for general risk reserve
3. Distributions to shareholders -202,332,000.00 -202,332,000.00
4. Others -
(IV) Transfer within equity - - - - - - - - -
1.Share capital increased by capital reserves transfer -
2.Share capital increased by surplus reserves transfer -
3.Transfer of surplus reserve to offset losses -
4.Others -
(V)Specific Reserve - - - - - - - - -
1. Appropriation during the year -
2.Utilisation during the year ("- ") -
(VI)Others 1, 62 8, 99 7. 94 1,628,997.94
IV.Balance at 31/12/2019 1,011,660,000.00 97 8, 24 4, 9 10. 1 1 - 20,831,004.13 - 191,222,838.94 1,464,915,816.81 -141,891,335.84 3, 52 4, 98 3, 23 4. 1 5
74
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Consolidated Statement of Changes in Shareholders' Equity
For the year ended 31 December 2019
Prepared by：SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE &
Expressed in RMB
Year ended 31/12/2018
Attributable to shareholders' equity of the parent company
Item Non-controlling
Less: Other Total
Share capital Capital reserve trea sur y comprehensive Spe ci fi c
reserve Surplus reserve Retained earnings interests
shares income
I.Balance at 31/12/2018 1, 01 1, 66 0, 00 0. 0 0 97 8, 24 4, 9 10. 1 1 - 10,045,697.16 - 85,666,668.00 742,624,845.71 -1 2 8, 21 9, 55 9. 44 2,700,022,561.54
Add ：Changes in accounting policies -
Correction of prior period errors -
Business combination involving enterprises under common co -
Others -
II.Balance at 01/01/2019 1,011,660,000.00 97 8, 24 4, 9 10. 1 1 - 10,045,697.16 - 85,666,668.00 742,624,845.71 -128,219,559.44 2,700,022,561.54
III.Changes in equity during the year( "- "for decrease) - - - 518,688.81 - 10,239,554.59 493,259,277.01 -3,304,971.44 500,712,548.97
(I)Total comprehensive income - - - 518,688.81 - - 503,498,831.60 -3,304,971.44 500,712,548.97
(II)Shareholders' contributions and decrease of capital - - - - - - - - -
1.Contribution by ordinary shareholders -
2.Capital contributed by the holders of other equity instrument -
3. Equity settled share-based payments -
4. Others -
(III) Appropriation of profits - - - - - 10,239,554.59 -10,239,554.59 - -
1. Appropriation for surplus reserves - - - - - 10,239,554.59 -10,239,554.59 - -
2. Appropriation for general risk reserve
3. Distributions to shareholders -
4. Others -
(IV) Transfer within equity - - - - - - - - -
1.Share capital increased by capital reserves transfer -
2.Share capital increased by surplus reserves transfer -
3.Transfer of surplus reserve to offset losses -
4.Others -
(V)Specific Reserve - - - - - - - - -
1. Appropriation during the year -
2.Utilisation during the year ("- ") -
(VI)Others -
IV.Balance at 31/12/2019 1,011,660,000.00 97 8, 24 4, 9 10. 1 1 - 10,564,385.97 - 95,906,222.59 1,235,884,122.72 -131,524,530.88 3,200,735,110.51
75
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Company Statement of Changes in Shareholders' Equity
For the year ended 31 December 2019
Prepared by：SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd Expressed in RMB
Year ended 31/12/2019
Less: Other
Sp e ci fi c
Share capital Capital reserve treasury comprehensive Surplus reserve Retained earnings Total
reserve
shares income
I. Balance at 31/12/2018 1,011,660,000.00 964,711,931.13 - - - 7 2, 7 7 6, 6 0 9 . 18 615,038,028.05 2,664,186,568.36
Add ：Changes in accounting policies 9 7 2, 8 9 2. 2 4 -4 1 6, 1 5 1. 4 3 -4, 0 7 2, 9 2 4 . 18 -3, 5 1 6, 1 8 3 . 37
Correction of prior period errors Others -
I I. Balance at 01/01/2019 9, 9 6 9 ,2 0 6 . 0 9 9, 9 6 9 ,2 0 6 . 0 9
I II . Changes in equity during the year( "- "for decrease) 1,011,660,000.00 964,711,931.13 - 9 7 2, 8 9 2. 2 4 - 7 2, 3 6 0, 4 5 7 . 75 620,934,309.96 2,660,670,384.99
- - - -50,766.47 - 9 5, 7 3 2, 7 6 7 . 78 659,262,910.00 754,944,911.31
(I ) Total comprehensive income
(II ) Shareholders' contributions and decrease of capital -50,766.47 957,327,677.78 957,276,911.31
1.Contribution by ordinary shareholders - - - - - - - -
2. Capital contributed by the holders of other equity -
instrument
-
3. Equity settled share-based payments
4. Others -
(III) Appropriation of profits -
1. Appropriation for surplus reserves - - - - - 9 5, 7 3 2, 7 6 7 . 78 -298,064,767.78 -202,332,000.00
2. Appropriation for general risk reserv e 9 5, 7 3 2, 7 6 7 . 78 -95,732,767.78 -
2. Distributions to shareholders
3. Others -202,332,000.00 -202,332,000.00
(IV ) Transfer within equity -
1. Share capital increased by capital reserves transfer - - - - - - - -
2.Sh are capital increased by surplus reserves transfer -
3.Transfer of surplus reserve to offset losses 4.Others -
( V) Specific Reserve -
1. Appropriation during the year -
2.Utilisation during the year ("- ") - - - - - - - -
( VI) Others -
IV.Balance at 31/12/2019 -
-
1,011,660,000.00 964,711,931.13 - 9 2 2, 1 2 5. 7 7 - 1 6 8, 0 9 3, 2 2 5 .5 3 1,280,197,219.96 3,425,584,502.39
Legal representative: Person in charge of accounting: Person in charge of accounting organ:
76
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Company Statement of Changes in Shareholders' Equity
For the year ended 31 December 2019
Prepared by：SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTA
Expressed in RMB
Year ended 31/12/2018
Less: Other
Sp e ci fi c Su rpl u s R et ai n ed
Share capital Capital reserve tre a su r y comprehens Total
reserve reserve e ar ni ng s
shares ive income
I. Balance at 31/12/2018 1,011,660,000.00 9 7 8, 2 4 4, 9 1 0 .1 1 - - - 62,537,054.59 5 2 2, 8 8 2, 0 3 6 .7 8 2,575,324,001.48
Add ：Changes in accounting policies -
Correction of prior period errors Others -
I I. Balance at 01/01/2019 -
I II . Changes in equity during the year( "- "for decrease) 1,011,660,000.00 9 7 8, 2 4 4, 9 1 0 .1 1 - - - 62,537,054.59 5 2 2, 8 8 2, 0 3 6 .7 8 2,575,324,001.48
- -13,532,978.98 - - - 10,239,554.59 9 2, 1 5 5, 9 9 1 . 27 8 8, 8 6 2, 5 6 6 . 88
(I ) Total comprehensive income
(II ) Shareholders' contributions and decrease of capital 1 0 2, 3 9 5, 5 4 5 .8 6 102,395,545.86
1.Contribution by ordinary shareholders - - - - - - - -
2. Capital contributed by the holders of other equity -
instrument
-
3. Equity settled share-based payments
4. Others -
(III) Appropriation of profits -
1 . Appropriation for surplus reserves - - - - - 10,239,554.59 -10,239,554.59 -
2 . Appropriation for general risk reserv e 10,239,554.59 -10,239,554.59 -
2 . Distributions to shareholders
3 . Others -
(IV ) Transfer within equity -
1. Share capital increased by capital reserves transfer - - - - - - - -
2.Sh are capital increased by surplus reserves transfer -
3.Transfer of surplus reserve to offset losses 4.Others -
( V) Specific Reserve -
1. Appropriation during the year -
2.Utilisation during the year ("- ") - - - - - - - -
( VI) Others -
IV.Balance at 31/12/2019 -
-13,532,978.98 -13,532,978.98
1,011,660,000.00 9 6 4, 7 1 1, 9 3 1 .1 3 - - - 72,776,609.18 6 1 5, 0 3 8, 0 2 8 .0 5 2,664,186,568.36
Legal representative: Person in charge of accounting: Person in charge of accounting organ:
77
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Notes to the Financial Statements
I.Company general information
1. Company’s profile
Shenzhen Special Economic Zone Real Estate and Properties (Group) Co., Ltd. (the “Group” or “the Company”) was established in July 1993, as
approved by the Shenzhen Municipal Government with document SFBF (1993) 724. The Company issued A shares on 15 September 1993 and
issued B shares on 10 January 1994. On 31 A ugust 1994, the issued B shares were listed in the New York Exchange market as class A
recommendation. The total share capital is 1,011,660, 000 shares, of which, A shares are 891,660, 000 shares, and the B shares are 120, 000, 000
shares. The company business license registration number is 440301103225878, and the registered capital is RMB 1,011,660, 000. 00. The
Company’s headquarter is at Floor 45-48, Shen Fang Plaza, Ren Min South Road, Luo Hu District, Shen Zhen, Guang Dong province.
On 13 October 2004，according to the document No.(2004) 223 “Decision on establishing Shenzhen investment Holding Co., Ltd.” issued by
State-Owned Assets Supervision and Administration Commission of Shenzhen Municipal Government, former major shareholder – Shenzhen
Construction Investment Holding Company with two other assets management companies merged to form the Shenzhen Investment Holding Co., Ltd.
By the State-owned Assets Supervision and Administration Commission of the state council, and quasi -exempt obligations tender offer as approved
by China Security Regulatory Committee with document No. (2005)116, this issue of consolidated has been authorized and the change in registration
had been completed on 15 February 2006. At the end of the reporting period, Shenzhen Investment Holding Limited holds 642, 884,262 shares of the
Company (63.55% of the total share capital). The shares are all tradable unrestricted shares.
The Company has established the corporate governance structure including the general meeting of shareholders, the board of directors and board of
supervisors. Currently, the Company’s structure includes human resources department, financing pla n department, marketing department,
engineering management department and etc.
The main products or services provided by the Company and its subsidiaries (hereinafter referred to as "the Group") includes: mainly engaged in real
estate development and sales, property leasing and management, retail merchandising and trade, hotel, equipment installation and maintenance,
construction, interior decoration, etc.
The parent of the Company is Shenzhen Investment Holdings Co., Ltd. The Financial statement published on 28 March 2019, which approved by the
Group’s Board of Directors. 25 entities were consolidated into the Group in 2018 for the detail in Note 8 "Equities in other entities". The scope of
consolidation of the Group does not change as compared with that of the previous year.
The consolidated and company financial statements and the notes to financial statements have been approved by the 7th Board of Directors in the
50th board meeting on 13 March 2020.
2. Scope of consolidated financial statements
The detail is set out in Note VII "Joint arrangement classification and accounting treatment for joint operation”.
In this reporting period, the change of consolidation scope is in Notes VI and VII for more details.
II.Basis of preparation
The financial statements are prepared in accordance with the Accounting Standards for Business Enterprises and corresponding application
guidance, interpretations and other related provisions issued by the Ministry of Finance (collectively, " Accounting Standa rds for Business Enterprises
"). In addition, the Group also discloses relevant financial information in accordance with the rules of information disclosure for publicly issued
securities companies No. 15 - general provisions on financial reporting (revised in 2014) of the China securities regulatory commission.
The financial statements of the Company have been prepared on going concern basis.
The Company adopts the accrual basis of accounting. Except for certain financial instruments, the financial
statements are prepared under the historical cost convention. In the event that impairment of assets occurs, a
provision for impairment is made accordingly in accordance with the relevant regulations.
III.Significant accounting policies and accounting estimates
The Group determines the revenue recognition policy according to its own production and operation characteristics. The detail is set out in Note III,
23 for the specific accounting policies.
1. Statement of compliance with the Accounting Standards for Business Enterprises
The financial statements have been prepared in compliance with the Accounting Standards for Business Enterprises to truly and completely present
the Company and consolidated financial position as at 31 December 2019 and the Company and consolidated operating results and cash flows for
78
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
the year ended 31 December 2019.
2. Accounting Period
The accounting period of the Company is from 1 January to 31 December.
3. Operating Period
The operating period of the Company is 12 months.
4. Functional currency
The Company and domestic subsidiaries use Renminbi (“RMB”) as their functional currency. Offshore subsidiaries determine [American Great Wall
Co., Ltd.] as their functional currency according to the primary economic environment where they operate. The financial statements of the Company
have been prepared in RMB.
5. Accounting treatments for business combinations involving enterprises under common control and not under common control
(1) Business combinations involving enterprises under common control
For a business combination involving enterprises under common control, the assets acquired and liabilities assumed are measur ed based on their
carrying amounts in the consolidated financial statements of the ultimate controlling party at the combination date, except for adjustments due to
different accounting policies. The difference between the carrying amount of the net assets acquired and the consideration paid for the combination
(or the total par value of shares issued) is adjusted against share premium in the capital reserve, with any excess adjusted against retained earnings.
Business combinations involving enterprises under common control and achieved in stages.
In the separate financial statements, the initial investment cost is calculated based on the shareholding portion of the assets and liabilities obtained
and are measured at the carrying amounts as recorded by the enterprise being combined at the combination date. The difference between the initial
investment cost and the sum of the carrying amount of the original investment cost and the carrying amount of consideration paid for the combin ation
is adjusted to the capital reserve, if the capital reserve is not sufficient to absorb the difference, the excess difference shall be adjusted to retained
earning.
In the consolidated financial statements, the assets and liabilities obtained at the combination shall be measured at the carrying value as recorded by
the enterprise at combination date, except for adjustments of different accounting policies. The difference between the sum of the carrying value from
original shareholding portion and the new investment cost incurred at combination date and the carrying value of net assets obtained at combination
date shall be adjusted to capital reserve, if the balance of capital reserve is not sufficient to absorb the differences, any excess is adjusted to retained
earnings. The long-term investment held by the combination party, the recognized profit or lose comprehensive income and other change of
shareholding’s equity at the closer date of the acquisition date and combination date under common control shall separately offset the opening
balance of retained earnings and profit or loss during comparative statements.
(2) Business combinations involving enterprises not under common control
For business combinations involving enterprises not under common control, the consideration costs include acquisition-date fair value of assets
transferred, liabilities incurred or assumed and equity securities issued by the acquirer in exchange for control of the acquiree. At the acquisition date,
the acquired assets, liabilities and contingent liabilities of the acquiree are measured at their fair value. The acquiree’s identifiable asset, liabilities
and contingent liabilities, are recognised at their acquisition-date fair value.
Where the combination cost exceeds the acquirer’s interest in the fair value of the acquiree’s identifiable net assets, the difference is recognised as
goodwill, and subsequently measured on the basis of its cost less accumulated impairment provisions. Where the combination cost is less than the
acquirer’s interest in the fair value of the acquiree’s identifiable net assets, the difference is recognised in profit or loss for the current period after
reassessment.
Business combinations involving enterprises not under common control and achieved in stages
In the separate financial statements, the initial investment cost of the investment is the sum of the carrying amount of the equity investment held by
the entity prior to the acquisition date and the additional investment cost at the acquisition date. The disposal accounting policy of other
comprehensive income related with equity investment prior to the purchase date recognized under equity method shall be compliance with the
method when the acquiree disposes the related assets or liabilities. Shareholder’s equity due to the changes of other shareholder’s equity other than
the changes of net profit, other comprehensive income and profit distribution shall be transferred to profit or lose for current period when disposed. I f
the equity investment held by the entity prior to the acquisition date is measured at fair value, the cumulative changes in fair value recognized in
other comprehensive income shall be transferred to profit or loss for current period when accounted for using cost method.
In the consolidation financial statements, the combination cost is the sum of consideration paid at acquisition date and fair value of the acquiree’s
equity investment held prior to acquisition date; the cost of equity of the acquiree held prior to acquisition date shall be re-measured at the fair value
at acquisition date, the difference between the fair value and book value shall be recognized as investment income or loss for the current period.
79
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Other comprehensive income and changes of investment equity related with acquiree’s equity held prior to acquisition date shall be transferred to
investment profit or loss for current period at acquisition date, besides there is other comprehensive income incurred by the changes of net assets or
net liabilities due to the re-measurement of defined benefit plan.
(3) Transaction costs for business combination
The overhead for the business combination, including the expenses for audit, legal services, valuation advisory, and other administrative expenses,
are recorded in profit or loss for the current period when incurred. The transaction costs of equity or debt securities issued as the considerations of
business combination are included in the initial recognition amount of the equity or debt securities.
6. Consolidated financial statements
(1) Scope of consolidated financial statements
The scope of consolidated financial statements is based on control. Control exists when the Company has power over the investee; exposure, or
rights to variable returns from its involvement with the investee and has the ability to affect its returns through its power over the investee. A
subsidiary is an entity that is controlled by the Company (including enterprise, a portion of an investee as a deemed separate component, and
structured entity controlled by the enterprise).
(2) Basis of preparation of consolidated financial statements
The consolidated financial statements are prepared by the Company based on the financial statements of the Company and its subsidiaries and
other relevant information. When preparing consolidated financial statements, the accounting policies and accounting periods of the subsidiaries
should be consistent with those established by the Company, and all significant intra-group balances and transactions are eliminated.
Where a subsidiary or business was acquired during the reporting period, through a business combination involving enterprises under common
control, the financial statements of the subsidiary or business are included in the consolidated financial statements as if the combination had
occurred at the date that the ultimate controlling party first obtained control.
Where a subsidiary or business was acquired during the reporting period, through a business combination involving enterprises not under common
control, the identifiable assets and liabilities of the acquired subsidiaries or business are included in the scope of consolidation from the date that
control commences.
The portion of a subsidiary’s equity that is not attributable to the parent is treated as non -controlling interests and presented separately in the
consolidated balance sheet within shareholders’ equity. The portion of net profit or loss of subsidiaries for the period attributable to non -controlling
interests is presented separately in the consolidated income statement below the “net profit” line item. When the amount of loss for the current period
attributable to the non-controlling shareholders of a subsidiary exceeds the non-controlling shareholders’ share of the opening owners’ equity of the
subsidiary, the excess is still allocated against the non-controlling interests.
(3) Changes in non-controlling interests
Where the Company acquires a non-controlling interest from a subsidiary’s non-controlling shareholders or disposes of a portion of an interest in a
subsidiary without a change in control, the transaction is treated as equity transaction, and the book value of shareholder’s equity attributed to the
Company and to the non-controlling interest is adjusted to reflect the change in the Company’s interest in the subsidiaries. The difference between
the proportion interests of the subsidiary’s net assets being acquired or disposed and the amount of the consideration paid or received is adjusted to
the capital reserve in the consolidated balance sheet, with any excess adjusted to retained earnings.
(4) Disposal of subsidiaries
When the Company loses control over a subsidiary because of disposing part of equity investment or other reasons, the remaining part of the equity
investment is re-measured at fair value at the date when the control is lost. A gain or loss is recognised in the cu rrent period and is calculated by the
aggregate of consideration received in disposal and the fair value of remaining part of the equity investment deducting the share of net assets in
proportion to previous shareholding percentage in the former subsidiary since acquisition date and the goodwill.
Other comprehensive income related to the former subsidiary is transferred to profit or loss when the control is lost, except for the comprehensive
income arising from the movement of net liabilities or assets in the former subsidiary’s re-measurement of defined benefit plan.
7. Joint arrangement classification and accounting treatment for joint operation
A joint arrangement is an arrangement of which two or more parties have joint control. The Company classifies j oint arrangements into joint
operations and joint ventures.
(1) Joint operations
A joint operation is a joint arrangement whereby the joint operators have rights to the assets, and obligations for the liabilities, relating to the
arrangement.
80
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
The Company recognizes the following items relating to its interest in a joint operation, and account for them in accordance with relevan t accounting
standards:
A、its solely-held assets, and its share of any assets held jointly;
B、its solely-assumed liabilities, and its share of any liabilities assumed jointly;
C、its revenue from the sale of its share of the output arising from the joint operation;
D、its share of the revenue from the sale of the output by the joint operation; and
E、its solely-incurred expenses, and its share of any expenses incurred jointly.
(2)Joint ventures
A joint venture is a joint arrangement whereby the joint venturers have rights to the net assets of the arrangement.
The Company adopts equity method under long-term equity investment in accounting for its investment in joint venture.
8. Cash and cash equivalents
Cash comprises cash in hand and deposits that can be readily withdrawn on demand. Cash equivalents include short-term, highly liquid investments
that are readily convertible to known amounts of cash and are subject to an insignificant risk of change in value.
9. Foreign currency transactions and translation of foreign currency financial statements
(1)Foreign currency transactions
Foreign currency transactions are translated to the functional currency of the Company at the spot exchange rates on the dates of the transactions.
Monetary items denominated in foreign currencies are translated to Renminbi at the spot exchange rate at the balance sheet da te. The resulting
exchange differences between the spot exchange rate on balance sheet date and the spot exchange rate on initial recognition or on the previous
balance sheet date are recognised in profit or loss. Non-monetary items that are measured at historical cost in foreign currencies are translated to
Renminbi using the exchange rate at the transaction date. Non-monetary items that are measured at fair value in foreign currencies are translated
using the exchange rate at the date the fair value is determined. The resulting exchange differences are recognised in profit or loss.
(2)Translation of foreign currency financial statements
When translating the foreign currency financial statements of overseas subsidiaries, assets and liabilities of foreign operation are translated to
Renminbi at the spot exchange rate at the balance sheet date. Equity items, excluding “retained earnings”, are translated to Renminbi a t the spot
exchange rates at the transaction dates.
Income and expenses of foreign operation are translated to Renminbi at the spo t exchange rates at the transaction dates.
Cash flow statement of foreign operation is translated to Renminbi at the spot exchange rates [the rates determined under a s ystematic and rational
method that approximate the spot exchange rates] at the cash flow occurence dates. Effect of foreign exchange rate changes on cash and cash
equivalents is presented separately as “Effect of foreign exchange rate changes on cash and cash equivalents” in the cash flow statement.
The resulting translation differences are recognised in other comprehensive income in shareholders’ equity of balance sheet.
The translation differences accumulated in shareholders’ equity with respect to a foreign operation are transferred to profit or loss in the period when
the foreign operation is disposed.
10. Financial instruments
Financial instruments refer to the contracts of forming enterprise financial assets and other entities’ financial liabilities or equity instruments.
(1) Recognition and Derecognition of financial instruments
A financial asset or financial liability is recognised when the Group becomes one party of financial instrument contracts.
If one of the following conditions is met, the financial assets are terminated:
81
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
① The right of the contract to receive the cash flows of financial assets terminates
② The financial asset has been transferred, and is in accordance with the following conditions for derecognition.
If the obligations of financial liability have been discharged in total or in part, derecognize all or part of it. If the Gro up (debtor) makes an agreement
with the creditor to replace the current financial liability of assuming new financial liability which contract provisions are different in substance,
derecognize the current financial liability and meanwhile recognize as the new financial liability.
If the financial assets are traded routinely, they are recognised and derecognised at the transaction dat e.
(2) Classification and measurement of financial assets
Financial assets are classified into the following three categories depends on the Group’s business mode of managing financial assets and cash flow
characteristics of financial assets: financial ass ets measured at amortized cost, financial assets at fair value through other comprehensive income
and financial assets at fair value through profit or loss.
Financial assets measured at amortised cost
The Group shall classify financial assets that meet the following conditions and are not designated as financial assets at fair value through profit or
loss as financial assets measured at amortized cost:
The Group’s business model for managing the financial assets is to collect contractual cash flows;
The terms of the financial asset contract stipulate that cash flows generated on a specific date are only payments of principal a nd interest
based on the amount of outstanding principal.
After initial confirmation, the real interest rate method is used to measure the amortized cost of such financial assets. Profits or losses arising from
financial assets measured at amortized costs and not part of any hedging relationship are included in current profits and los ses when the recognition
is terminated, amortized or impaired according to the Actual Interest Rate Law.
Financial assets at fair value through other comprehensive income
The Group shall classify financial assets that meet the following conditions and are not designated as financial assets measured at fair value and
whose changes are recorded in current profits and losses as financial assets measured at fair value through other comprehensive income:
The Group’s business model for managing the financial assets is both to collect contractual cash flows and to sell the financial assets;
The terms of the financial asset contract stipulate that cash flows generated on a specific date are only payments of princip al and interest
based on the amount of outstanding principal.
After initial recognition, financial assets are subsequently measured at fair value. Interest, impairment losses or gains and exchange gains calculated
by the effective interest rate method are recognised in profit or loss, while other gains or losses are recognised in other c omprehensive gains. When
derecognized, the accumulated gains or losses previously recognised in other comprehensive gains are transferred from other c omprehensive gains
and recorded in current profits and losses.
Financial assets at fair value through profit or loss
In addition to the aboving financial assets which are measured at amortized cost or at fair value a through other comprehensive income, the Group
classifies all other financial assets as financial assets measured at fair value through profit or loss.When initial recognition, in order to eliminate or
significantly reduce accounting mismatches, the Group irrevocably designates some financial assets that should have been measured at amortized
cost or at fair value through other comprehensive gains as financial ass ets at fair value through profit or loss.
After initial recognition, the financial assets are subsequently measured at fair value, and the profits or losses (including interest and dividend income)
generated from which are recognised in profit or loss, unless the financial assets are part of the hedging relationship.
However, for non-tradable equity instrument investment, when initially recognized, the Group irrevocably designates them as financial assets a t fair
value through other comprehensive gains. The designation is made on the basis of individual investment, and the relevant investment conforms to
the definition of equity instruments from the issuer’s point of view.
After initial confirmation, financial assets are subsequently measured at fair value. Dividend income that meets the requirements is recognised in
profit and loss, and other gains or losses and changes in fair value are recognised in other comprehensive gains. When dereco gnized, the
accumulated gains or losses previously recognised in other comprehensive gains are transferred from other comprehensive gains to retained
earnings.
The business model of managing financial assets refers to how the group manages financial assets to generate cash flow. The b usiness model
decides whether the source of cash flow of financial assets managed by the Group is to collect contract cash flow, sell financial assets or both of
82
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
them. Based on objective facts and the specific business objectives of financial assets management decided by key managers, the Group
determines the business model of financial assets management.
The Group evaluates the characteristics of the contract cash flow of financial assets to determine whether the contract cash flow generated by the
relevant financial assets on a specific date is only to pay principal and interest based on the amount of unpaid principal. Among them, principal refers
to the fair value of financial assets at the time of initial confirmation; interest includes the consideration of time value of money, credit risk related to
the amount of unpaid principal in a specific period, and other basic borrowing risks, costs and profits. In addition, the Group evaluates the terms and
conditions of the contracts that may lead to changes in the time distribution or amount of cash flow in financial asset contracts to determine whether
they meet the requirements of the aboving contract cash flow’s. characteristics
Only when the Group changes its business model of managing financial assets, all the financial assets affected shall be reclassified on the first day
of the first reporting period after the business model changes, otherwise, financial assets shall not be reclassified after initial confirmation.
Financial assets are measured at fair value at initial recognition. For financial assets that are measured at fair value and whose changes are included
in the current profit and loss, related transaction costs are directly included in the current profit and loss; for other types of financial assets, related
transaction costs are included in the initially recognized amount. For accounts receivable arising from the sale of products or the provision of labor
services that do not include or take into account significant financing components, the Group considers the amount of consideration expected to be
entitled as the initial recognition amount.
(3) Classification and Measurement of financial liabilities
On initial recognition, financial liabilities are classified as: financial liabilities at fair value through profit or loss (FVTPL), and financial liabilities
measured at amortized cost. For financial liabilities not classified as at fair value through profit or loss, the transaction costs are recognised in the
initially recognised amount.
Financial liabilities at fair value through profits and losses
Financial liabilities at FVTPL include transaction financial liabilities and financial liabilities designated as at fair value through profit or loss in the initial
recognition. Such financial liabilities are subsequently measured at fair value, all gains and losses arising from changes in fair value and dividend and
interest expense relative to the financial liabilities are recognised in profit or loss for the current period.
Financial liabilities measured at amortized cost
Other financial liabilities are subsequently measured at amortized cost using the effective interest method; gains and losses arising from
derecognition or amortization is recognised in profit or loss for the current period.
Distinction between financial liabilities and equity instruments
The financial liability is the liability that meets one of following cateria:
① Contractual obligation to deliver cash or other financial instruments to another entity.
② Under potential adverse condition, contractual obligation to exchange fi nancial assets or financial liabilities with other parties.
③ A contract that will or may be settled in the entity ’s own equity instruments and is a non-derivative for which the entity is or may be obliged to
deliver a variable number of the entity’s own equity instruments.
④ A derivative that will or may be settled other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of
the entity’s own equity instruments.
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.
If the group cannot unconditionally avoid fulfilling a contractual obligation by delivering cash or other financial assets, t he contractual obligation meets
the definition of financial liability.
If a financial instrument must or are able to be settled by the group’s own equity instrument, the group should consider whether the group’s equity
instrument as the settlement instrument is a substitute of cash or other financial assets or the residual interest in the assets of an entity after
deducting all of its liabilities. If the former, the tool is the group’s financial liability; if the latter, the tool is the equity instrument of the group.
(4) Fair value of financial instruments
The recognization of fair value of financial assets and financial liability is set out in note III. 11.
(5) Impairment of financial assets
On the basis of expected credit losses, the Group performs impairment assessment on the following items and confirms the loss provision.
83
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
financial assets measured at amortized cost;
debt investments at fair value through other comprehensive income;
lease receivables;
Financial guarantee contract(except measured at fair value through profit or loss or forme d by continuing involvement of transferred financial
assets or the transfer does not qualify for derecognition).
Measurement of expected credit losses
The expected credit losses refers to the weighted average of the credit losses of financial instruments that are weighted by the risk of default. Credit
loss refers to the difference between all contractual cash flows receivable from the contract and all cash flows expected to be received by the Group
at the original effective interest rate, that is, the present value of all cash shortages.
The company considers reasonable and reliable information about past events, current conditions, future forecasts, and weights the risk of default to
calculate the probability -weighted amount of the present value of the difference between the cash flow receivable under the contract and the cash
flow expected to be received in recognition of the expected credit loss.
The Group separately measures the expected credit losses of financial instruments at different stages. The credit risk on a financial instrument has
not increased significantly since initial recognition, which is in the first stage. The Group shall measure the loss allowance for that financial instrument
at an amount equal To 12-month expected credit losses. If the credit risk of financial instruments has increased significantly since the initial
recognition, but no credit impairment has occurred, which is in the second stage. The Group shall measure the loss allowance for a financial
instrument at an amount equal to the lifetime expected credit losses. If the financial instrument has occurred credit impairment since initial recognition,
which is in the third stage, and the Group shall measure the loss allowance for a financial instrument at an amount equal to the lifetime expected
credit losses.
For financial instruments with lower credit risk at the balance sheet date, the Group assumes that their credit risk has not increased significantly since
the initial recognition, and shall measure the loss allowance for that financial instrument at an amo unt equal to 12-month expected credit losses.
The lifetime expected credit losses,refer to the expected credit losses caused by all possible defaults during the whole expected lifetime. The
12-month expected credit losses,refer to the expected credit losses caused by all possible defaults during the 12-month after balance sheet date(if
the expected duration of financial instrument is less than 12 months, then for the expected duration),which is part of the li fetime expected credit
losses
When measure the ex pected credit loss, the longest contract period (including the option of renewal) that the group needs to consider is the lon gest
contract period the enterprise facing credit risk.
For financial instruments in the first stages,second stages and with lower credit risk, the Group calculates interest income on the basis of their book
balances without deduction of impairment provisions and actual interest rates. For financial instruments in the third stage, the Group calculates
interest income according to their book balance minus the impairment provision and the actual interest rate.
For bills receivable and accounts receivable, whether or not there are significant financing elements, the Group shall always measure the loss
allowance for them at an amount equal to the lifetime expected credit losses.
When information on expected credit losses cannot be assessed for a single financial asset, in accordance with the characteristics of credit risk, the
group divides and combines bills receivable, accounts receivable and leased receivables. On the basis of the combination, the group calculates the
expected credit losses. The basis of determining the combination is as follows:
A ﹑ Bills receivable
Bill receivable group 1: Bank acceptance bills
Bill receivable group 2:Trade acceptance bills
B ﹑ Accounts receivable
Accounts receivable group 1: Amount receivables of related parties
Accounts receivable group 2: Amount receivables of sales of proporties
Accounts receivable group 3: Amount receivables of other custom ers
For the accounts receivable divided into group, the group refers to the historical credit losses, combines the current situation with the forecast of
future economic situation, compiles a comparison table between the age of accounts receivable and the lifetime expected credit losses rate to
calculate the expected credit losses.
84
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
For the bills receivables and contract assets divided into group, the Group refers to historical credit losses, with the curr ent situation and the forecast
of future economic situation, calculates the expected credit losses through the exposure on default and the lifetime expected credit losses rate.
Other receivables
According to the characteristics of credit risk, the group divides other receivables into group. On the basis of the combination, the group calculates
the expected credit losses. The basis of determining the combination is as follows:
Other receivables group 1: Amount receivables from government
Other receivables group 2: Amount receivables from employee’s inprest fund
Other receivables group 3: Amount receivables from the collecting and paying on another's behalf
Other receivables group 4: Amount receivables from other customers
Other receivables group 5: Amount receivables from related parties
For other receivables a divided into group, the Group calculates the expected credit losses through the exposure on default and the lifetime expected
credit losses rate or the next 12 months.
Debt investments and Other debt investments
For debt investments and other debt investments, the group calculates the expected credit losses through the exposure on default and the future
12-month or lifetime expected credit losses rate, according to the nature of the investment, the types of counterparty and risk exposure.
Assessment of Significant Increase in Credit Risk
By comparing the default risk of financial instruments on balance sheet day with that on initial recognition day, the Group d etermines the relative
change of default risk of financial instruments during the expected life of financial instruments, to evaluate whether the credit risk of financial
instruments has increased significantly since the initial recognition.
To determine whether credit risk has increased significantly since the initial recognition., the Group considers reasonable and valid information,
including forward-looking information, that can be obtained without unnecessary additional costs or efforts. Information considered by the Grou p
includes:
The debtor can’t pay principal and interest on the expiration date of the contract;
Serious deterioration of external or internal credit ratings (if any) of financial instruments that have occurred or are expected to occur;
Serious deterioration of the debtor’s operating results that have occurred or are expected to occur;
Changes in the existing or anticipated technological, market, economic or legal environment will have a significant negative impact on the
debtor’s repayment capacity.
According to the nature of financial instruments, the Group evaluates whether credit risk has increased significantly on the basis of a single financial
instrument or a combination of financial instruments. When assessing on the basis of the combination of financial instruments , the Group can classify
financial instruments based on common credit risk characteristics, such as overdue information and credit risk rating.
If the delay exceeds 30 days, the Group determines that the credit risk of financial instruments has increased significantly.
The Group considers that financial assets default in the following circumstances
The debtor is unlikely to full pay its arrears to the group, and the assessment does not take into account recourse actions t aken by the group,
such as liquidation of collateral (if held);
Financial assets have delay more than 90 days.
Financial assets that have occured credit impairment
On the balance sheet date, the Group assesses whether credit impairment has occurred in financial assets measured at amortize d cost and debt
investments measured at fair value through other comprehensive income. When one or more events adversely affect the expected future cash flow
of a financial asset occur, the financial asset becomes a financial asset with credit impairment. Evidence of credit impairment of financial assets
includes the following observable information:
Significant financial difficulties occurs to the issuer or debtor;
85
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
The debtor breaches any of the contractual stipulations, for example, fails to pay or delays the payment of interests or the principal, etc.;
For economic or contractual considerations related to the financial difficulties of the debtor, the Group grants concessions to the debtor that will
not be made under any other circumstances.
The debtor is probable to go bankrupt or undergo other financial restructuring.
Financial difficulties of issuer or debtor lead to the disappearance of financial assets active market.
Presentation of expected credit losses reserve
In order to reflect the changes happened to the credit risk of financial instruments since the initial recognition, the Group recalculates the expected
credit losses on each balance sheet day. The increase or reversal of the loss provision resulting therefrom is recognised as an impairment loss or
gain in the current profit or loss.For financial assets measured at amortized cost, loss provision offsets the carrying amount of the financial asse ts
shown on the balance sheet; for debt investments measured at fair value through other comprehensive income, the Group recognizes its loss
provision through other comprehensive income and does not offset the financial assets’ carrying amount.
Write off
If the Group no longer reasonably expects that the financial assets contract cash flow can be recovered fully or partially, the financial assets book
balance will be reduced directly. Such reduction constitute the derecognition of the financial assets. What usually occurs when the Group determines
that the debtor has no assets or sources of income to generate sufficient cash flows to pay the amount to be reduced. However, in accordance with
the Group’s procedures for recovering due payment, the financial assets reduced may still be affected by enforcement activiti es.
If the reduced financial assets are recovered later, the returns as impairment losses shall be included in the profits and losses of the recovery period.
(6) Transfer of financial assets
Transfer of financial assets refers to the transference or deliverance of financial assets to the other party (the transferee) other than the issuer of
financial assets.
The Group derecognizes a financial asset only if it transfers substantially all the risks and rewards of ownership of the fin ancial asset to the
transferee; the Group should not derecognize a financial asset if it retains substantially all the risks and rewards of ownership of the financial asset.
The Group neither transfers nor retains substantially all the risks and rewards of ownership, shows as the following circumst ances: if the Group has
forgone control over the financial assets, derecognize the financial assets and verify the assets and liabilities; if the Group retains its control of the
financial asset, the financial asset is recognized to the extent of its continuing involvement in the transferred financial asset and recognize an
associated liability is recognized.
(7) Offseting financial assets and financial liabilities
When the Group has the legal rights to offset the recognized financial assets and financial liabilities and is capable to car ry it out, the Group plans to
net settlement or realize the financial assets and pay off the financial liabilities, the financial assets and financial liabilities shall be listed separately
with the neutralized amount in balance sheet and are not allowed to be offset.
11. Fair value measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the
measurement date.
The Company measures related assets or liabilities at fair value assuming the assets or liabilities are exchanged in an orderly transaction in the
principal market; in the absence of a principal market, assuming the assets or liabilities are exchanged in an orderly transaction in the most
advantageous market. Principal market (or the most advantageous market) is the market that the Company can normally enter into a transaction on
measurement date. The Company adopts the presumptions that would be used by market participants in achieving the maximized ec onomic value of
the assets or liabilities.
For financial assets or financial liabilities with active markets, the Company uses the quoted prices in active markets as th eir fair value. Otherwise,
the Company uses valuation technique to determine their fair value.
Fair value measurement of a non-financial asset takes into account market participants’ ability to generate economic benefits using the asset in its
best way or by selling it to another market participant that would best use the asset.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value,
maximizing the use of relevant observable inputs, and using unobservable inputs only if the observable inputs aren’t availabl e or impractical.
Fair value level for assets and liabilities measured or disclosed at fair value in the financial statements are determined ac cording to the significant
86
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
lowest level input to the entire measurement: Level 1 inputs are quoted prices (unadjusted) in ac tive markets for identical assets or liabilities that the
Company can access at the measurement date; Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the
assets or liabilities, either directly or indirectly; Level 3 inputs are unobservable inputs for the assets or liabilities.
At the balance sheet date, the Company revalues assets and liabilities being measured at fair value continuously in the financial statements to
determine whether to change the levels of fair value measurement.
12. Inventories
(1) Classification
The Group's inventory is classified by real estate development and non-real estate development. Inventory is mainly real estate development projects,
development costs including development productes to be developed and development products to be developed and development products under
construction, development products, including the development costs of development products to be developed and development products under
construction, development products including completed development products and intended to sell but temporarily leased development products.
Non-real estate developments include raw materials, inventory and construction.
(2) Mesurement method of cost of inventories
The Group's inventory is valued at actual cost when acquired. The actual cost of product development includes land transfer fee, infrastructure
expenditure, construction and installation project expenditure, borrowing expenses incurred before the completion of th e development project and
other related expenses in the development process. When a product is developed and shipped, the actual cost is determined by individual pricing.
Raw materials and finished goods are calculated using weighted average method.
(3)Basis for determining the net realisable value and method for provision for obsolete inventories
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs
necessary to make the sale and relevant taxes. The net realisable value is measured based on the verified evidences and considerati ons for the
purpose of holding inventories and the effect of post balance sheet events.
Any excess of the cost over the net realisable value of of inventories is recognised as a provision for obsolete inventories, and is recognised in profit
or loss. The Company usually recognises provision for decline in value of inventories by a single inventory item. If the factors caused the value of
inventory previously written-down have disappeared, the provision for decline in value of inventories previously made is reversed.
(4)Inventory count system
The Company maintains a perpetual inventory system.
(5)Amortization methods of low-value consumables and packaging materials
Low-value consumables are charged to profit or loss when they are used.
13. Long-term equity investments
Long-term equity investments include equity investments in subsidiaries and equity investments in joint ventures and associates. An associate is an
enterprise over which the Company has significant influence.
(1)Determination of initial investment cost
The initial cost of a long-term equity investment acquired through a business combination involving enterprises under common control is the
Company’s share of the carrying amount of the subsidiary’s equity in the consolidated financial statements of the ultimate controlling party at the
combination date. For a long-term equity investment obtained through a business combination not involving enterprises under common control, the
initial cost is the combination cost.
A long-term equity investment acquired other than through a business combination: A long-term equity investment acquired other than through a
business combination is initially recognised at the amount of cash paid if the Company acquires the investment by cash, or at the fair value of the
equity securities issued if an investment is acquired by issuing equity securities.
(2) Subsequent measurement and recognition of profit or loss
Long-term equity investments in subsidiaries are accounted for using the cost method. An investment in a joint venture or an assoc iate is accounted
for using the equity method for subsequent measurement.
For a long-term equity investment which is accounted for using the cost method, Except for cash dividends or profit distributions declared but not yet
distributed that have been included in the price or consideration paid in obtaining the investments, the Company recognises its share of the cash
87
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
dividends or profit distributions declared by the investee as investment income for the current period.
For a long-term equity investment which is accounted for using the equity method, where the initial cost of a long-term equity investment exceeds the
Company’s interest in the fair value of the investee’s identifiable net assets at the date of acquisition, the investment is initially recognised at cost.
Where the initial investment cost is less than the Company’s interest in the fair value of the inv estee’s identifiable net assets at the date of acquisition,
the investment is initially recognised at the investor’s share of the fair value of the investee’s identifiable net assets, a nd the difference is recognised
in profit or loss.
Under the equity method, the Company recognises its share of the investee’s profit or loss and other comprehensive income as investment income
or losses and other comprehensive income respectively, and adjusts the carrying amount of the investment accordingly. Once the investee declares
any cash dividends or profit distributions, the carrying amount of the investment is reduced by the amount attributable to the Company. Changes in
the Company’s share of the investee’s owners’ equity, other than those arising from the investee’s net profit or loss, other comprehensive income or
profit distribution (referred to as “other changes in owners’ equity”), is recognised directly in the Company’s equity, and the carrying amount of the
investment is adjusted accordingly. In calculating its share of the investee’s net profits or losses, other comprehensive income and other changes in
owners’ equity, the Group recognises investment income and other comprehensive income after making appropriate adjustments to align the
accounting policies or accounting periods with those of the Group based on the fair value of the investee’s identifiable net assets at the date of
acquisition.
When the Company becomes capable of exercising joint control or significant influence (but not control) over an invest ee due to additional
investment or other reasons, the Company uses the fair value of the previously -held equity investment, together with additional investment cost, as
the initial investment cost under the equity method. The difference between the fair value and carrying amount of the previously -held equity
investment, and the accumulated changes in fair value included in other comprehensive income, shall be transferred to profit or loss for the current
period upon commencement of the equity method.
When the Company can no longer exercise joint control of or significant influence over an investee due to partial disposal of the equity investment or
other reasons, the remaining equity investment shall be accounting for using Accounting Standard for Business Enterprises No. 22 - Recognition and
Measurement of Financial Instruments, and the difference between the fair value and the carrying amount of the remaining equi ty investment shall be
charged to profit or loss for the current period at the date of the loss of joint control or significant influence. Any other comprehensive income
previously recognised under the equity method shall be accounted for on the same basis as would have been required if the Company had directly
disposed of the related assets or liabilities for the current period upon discontinuation of the equity method. Other movement of owner’s equity
related to original equity investment is transferred to profit or loss for the current period.
When the Company can no longer exercise control over an investee due to partial disposal of the equity investment or other reasons, and the
remaining equity after disposal can exercise joint control of or significant influence over an investee, the remaining equity is adjusted as using equity
method from acquisition. When the remaining equity can no longer exercise joint control of or significant influence over an investee, the remaining
equity investment shall be accounted for using Accounting S tandard for Business Enterprises No. 22-Recognition and Measurement of Financial
Instruments, and the difference between the fair value and the carrying amount of the remaining equity investment shall be ch arged to profit or loss
for the current period at the date of loss of control.
When the Company can no longer exercise control over an investee due to new capital injection by other investors, and the Company can exercise
joint control of or significant influence over an investee, the Company recognizes its share of the investee’s new added net assets using new
shareholding percentage. The difference between its new share of the investee’s new added net assets and its decreased shareho lding percentage
of the original investment is recognized in profit or loss. And the Company adjusts to the equity method using the new shareholding percentage as if
it uses the equity method since it obtains the investment.
Unrealized internal trading gains and losses between the group and associated enterprises and joint ventures shall be calcula ted as part of the group
according to the shareholding ratio and investment gains and losses shall be recognized on an offset basis. However, unrealized internal t rading
losses between the group and the investee shall not be offset if they are impairment losses of the transferred assets.
(3) Criteria for determining the existence of joint control or significant influence over an investee
Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require
the unanimous consent of the parties sharing control. When assessing whether the Company can exercise joint control over an investe e, the
Company first considers whether no single participant party is in a position to control the investee’s related activities unilaterally, and then considers
whether strategic decisions relating to the investee’s related activities require the unanimous consent of all participant parties that sharing of control.
All the parties, or a group of the parties, control the arrangement collectively when they must act together to direct the relevant activities. When more
than one combination of the parties can control an arrangement collectively, joint control does not exist. A party that holds only protective rights does
not have joint control of the arrangement.
Significant influence is the power to participate in the financial and operating policy decisions of an investee but does not have control or joint control
over those policies. When determining whether the Company can exercise sig nificant influence over an investee, the effect of potential voting rights
(for example, warrants, share options and convertible bonds) held by the Company or other parties that are currently exercisable or convertible shall
be considered.
When the Company, directly or indirectly through subsidiaries, owns 20% of the investee (including 20% ) or more but less than 50% of the voting
shares, it has significant influence over the investee unless there is clear evidence to show that in this case the Company c annot participate in the
production and business decisions of the investee, and cannot form a significant influence. When the Company owns less than 2 0% of the voting
88
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
shares, generally it does not have significant influence over the investee, unless there is clear evidence to show that in this case the Company can
participate in the production and business decisions of the investee so as to form a significant influence.
(4) Method of impairment testing and impairment provision
For investments in subsidiaries, associates and joint ventures, refer to Note III. 19 for the Company’s method of asset impairment.
14. Investment property
Investment properties are properties held either to earn rental income or for capital appreciation or for both. The Group's investment real estate
includes leased houses, buildings and leased land use rights. In addition, for a vacant building held by the company for operating lease, if the board
of directors (or a similar institution) makes a written resolution expressly indicatin g that it is used for operating lease and the intention of holding does
not change in the short term, it is also considered as Investment property.
Investment properties are initially measured at acquisition cost, and depreciated or amortized using the same policy as that for fixed assets or
intangible assets.
For the impairment of the investment properties accounted for using the cost model, refer to Note III.19.
Gains or losses arising from the sale, transfer, retirement or disposal of an item of investment property are determined as the difference among the
net disposal proceeds, the carrying amount of the item, related taxes and surchages, and are recognised in profit or loss for current period.
15. Fixed assets
(1) Recognition of fixed assets
Fixed assets represent the tangible assets held by the Company for use in production of goods, use in supply of services, rental or for administrative
purposes with useful lives over one accounting year.
Fixed assets are only recognised when its related economic benefits are likely to flow to the Company and its cost can be reliably measured.
Fixed asset are initially measured at cost.
(2) Depreciation of fixed assets
The cost of a fixed asset is depreciated using the straight-line method since the state of intended use, unless the fixed asset is classified as held for
sale. Not considering impairment provision, the estimated useful lives, residual value rates and depreciation rates of each class of fixed assets are as
follows:
Annual depreciation
Category Useful life （years） Residual value rate %
rate %
Plant and buildings 30 5 3.17
M otor vehicles 6 5 15.83
Electronic equipment and others 5 5 19.00
For impaired fixed assets, cumulative amount of impairment provision is deducted in determinatingf the depreciation rate.
(3) The impairment of the fixed assets is set out in Note III. 19.
(4) Recognition and measurement of fixed assets acquired under finance leases
Fixed assets under finance leases are recognised if they meet one or more of the following criteria:
①The ownership of leased assets is transferred to the Company by the end of the lease term.
②The Company has the option to purchase the asset at a price that is expected to be sufficiently lower than the fair value at the date of the option
becomes exercisable for it to be reasonably certain, at the inception of the lease, that the option will be exercised.
③Even if the ownership of assets is not transferred, the lease term covers the major part of the useful life of the ass et.
④At the inception of lease, the present value of minimum lease payments amount to substantially all of the fair value of leased asset.
89
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
⑤Leased assets are of a specialized nature that only the Company can use them without major modifications.
An asset acquired under a finance lease is measured at an amount equal to the lower of its fair value and the present value of the minimum lease
payments, each determined at the inception of the lease. Long-term payable is recorded at an amount equal to the sum of all future minimum lease
payments. The difference between the carrying amount of the leased assets and the minimum lease payments is accounted for as unrecognis ed
finance charges. Initial direct costs attributable to a finance lease incurred during the process of lease negotiation and the signing of the lease
agreement, including service charges, attorney's fees, travelling expenses and stamp duty, that are incurred by the Company are added to the
carrying amount of the leased asset. Unrecognised finance charges are recognised as finance charge for the period using the effective interest
method over the lease term.
Depreciation is accounted for in accordance with the accounting policies of fixed assets. If there is reasonable certainty th at the Company will obtain
ownership of a leased asset at the end of the lease term, the leased asset is depreciated over its estimated useful life. Otherwise, the leased asset is
depreciated over the shorter of the lease term and its estimated useful life.
(5) Useful lives, estimated residual values and depreciation methods are reviewed at least at each year -end.
The Company adjusts the useful lives of fixed assets if their expected useful lives are different with the original estimates and adjusts the estimated
net residual values if they are different from the original estimates.
（6）Overhaul costs
Overhaul costs occurred in regular inspection are recognized in the cost if there is undoubted evidence to confirm that this part meets the recognition
criteria of fixed assets, otherwise, the overhaul costs are recognized in profit or loss for the current period. Depreciation is provided during the period
of regular overhaul.
16. Construction in progress
Construction in progress is recognized based on the actual construction cost, including all expenditures incurred for construction projects, capitalised
borrowing costs and any other costs directly attributable to bringing the asset to working condition for its intended use.
Construction in progress is transferred to fixed asset when it is ready for its intended use.
The impairment of construction in progress is set out in Note III. 19.
17. Borrowing costs
（1）Capitalisation criteria
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset shall be capitalised as part of the cost
of that asset. Other borrowing costs are expensed in profit or loss as incurred. The capitalisation of borr owing costs shall commence only when the
following criteria are met:
① capital expenditures have been incurred, including expenditures that have resulted in payment of cash, transfer of other asse ts or the
assumption of interest-bearing liabilities;
② borrowing costs have been incurred;
③ the activities that are necessary to prepare the asset for its intended use or sale have commenced.
（2）Capitalisation period
The capitalisation of borrowing costs ceases when the asset under acquisition or construction becomes ready for its intended use, the borrowing
costs incurred thereafter are recognised in profit or loss for the current period.
Capitalisation of borrowing costs is suspended during periods in which the acquisition or construction of a fixed asset is interrupted abnormally and
the interruption lasts for more than 3 months, until the acquisition or construction is resumed.
(3) Capitalisation rate of borrowing costs and calculation basis of capitalised amount
For interest expense actually incurred on specific borrowings, the eligible capitalised amount is the net amount of the borrowing costs after deducting
any investment income earned before some or all of the funds are used for expenditures on the qualifying asset. To the extent that the Company
borrows funds generally and uses them for the purpose of obtaining a qualifying asset, the Company shall determine the amount of borrowing costs
eligible for capitalisation by applying a capitalisation rate to the expenditures on that asset, the capitalisa tion rate shall be the weighted average of
the borrowing costs applicable to the borrowings of the Company that are outstanding during the period, other than borrowings specifically for the
purpose of obtaining a qualifying asset.
90
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
In the capitalisation period, exchange differences of specific borrowings in foreign currency shall be capitalised; exchange differences of general
borrowings in foreign currency is recognised in profit or loss for the current period.
18. Intangible assets
Intangible assets include software, land use right, patent rights and etc.
Intangible assets are stated at actual cost upon acquisition and the useful economic lives are determined at the point of acquisition. When the
useful life is finite, amortisation method shall reflect the pattern in which the asset’s economic benefits are expected to be realised. If the pattern
cannot be determined reliably, the straight-line method shall be used. An intangible asset with an indefinite useful life shall not be amortised.
The Company shall review the useful life and amortisation method of an intangible asset with a finite useful life at least at each year end. C hanges
of useful life and amortisation method shall be accounted for as a change in accounting estimate.
An intangible asset shall be derecognised in profit or loss when it is not expected to generate future economic benefits.
The impairment of intangible assets is set out in Note III. 19.
19. Impairment of assets
The impairment of long-term equity investments in subsidiaries, associ ates and joint ventures, investment properties measured using a cost model,
fixed assets, construction in progress, productive biological assets measured using a cost model, intangible assets, goodwill, proven oil and gas
mining rights and wells and related facilities, etc. (Excluding inventories, investment property measured using a fair value model, deferred tax assets
and financial assets) is determined as follows:
At each balance sheet date, the Company determines whether there is any indication of impairment. If any indication exists, the recoverable amount
of the asset is estimated. In addition, the Company estimates the recoverable amounts of goodwill, intangible assets with ind efinite useful lives and
intangible assets not ready for use at each year-end, irrespective of whether there is any indication of impairment.
The recoverable amount of an asset is the higher of its fair value less costs to sell and its present value of expected futur e cash flows. The
recoverable amount is estimated for each individual asset. If it is not possible to estimate the recoverable amount of each individual asset, the
Company determines the recoverable amount for the asset group to which the asset belongs. An asset group is the smallest iden tifiable group of
assets that generates cash inflows that are largely independent of the cash inflows from other assets or asset groups.
An impairment loss is recognised in profit or loss when the recoverable amount of an asset is less than its carrying amount. A provision for
impairment of the asset is recognised accordingly.
For goodwill impairment test, the carrying amount of goodwill arising from a business combinati on is allocated reasonably to the relevant asset group
since the acquisition date. If the carrying amount of goodwill is unable to be allocated to asset group, the carrying amount of goodwill will be allocated
to asset portfolio. Asset group or portfolio of asset group is asset group or portfolio of asset group which can be benefit from synergies of a business
combination and is not greater than the reportable segment of the Company.
In impairment testing, if impairment indication exists in asset group or portfolio of asset group containing allocated goodwill, impairment test is first
conducted for asset group or portfolio of asset group that does not contain goodwill, and corresponding recoverable amount is estimated and any
impairment loss is recognized. Then impairment test is conducted for asset group or portfolio of asset group containing goodwill by comparing its
carrying amount and its recoverable amount. If the recoverable amount is less than the carrying amount, impairment loss of go odwill is recognized.
Once an impairment loss is recognised, it is not reversed in a subsequent period.
20. Long-term deferred expenses
Long-term deferred expenses are recorded at the actual cost, and amortized using a straight-line method within the benefit period. For long-term
deferred expense that cannot bring benefit in future period, the Company recognized its amortised cost in profit or loss for the current period.
21. Employee benefits
(1) Scope of employee benefits
Employee benefits refer to all forms of consideration or compensation given by the Company in exchange for service rendered by employees or for
the termination of employment relationship. Employee benefits include short-term employee benefits, post-employment benefits, termination benefits
and other long-term employee benefits. Benefits provided to the Company’s spouse, children, dependents, family members of deceased
employees or other beneficiaries are also part of the employee benefits.
According to liquidity, employee benefits are presented as “ employee benefits payable” and “long-term employee benefits payable” on the balance
sheet.
91
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
(2) Short-term employee benefits
In the current period, the Company has accrued for the actual wages, bonuses, medical insurance for employees based on standa rd rate, work injury
insurance and maternity insurance and other social insurance and housing fund incurred and these are recognised as liabilities and corresponding
costs in the profit or loss. If these liabilities are not expected to be fully paid 12 months after the end of the reporting period in which employee
renders the service to the Company, and if the financial impact is significant, these liabilities shall be discounted using the net present value method.
（3）Post-employment benefits
Post-employment benefit plan includes defined contribution plans and defined benefit plans. Defined contribution plans are post-employment benefit
plans under which an enterprise pays fixed contributions into a separate fund and will have no future obligations to pay the contributions. Defined
benefit plans are post-employment benefit plans other than defined contribution plans.
Defined contribution plans
Defined contribution plans include primary endowment insurance, unemployment insurance, corporation pension plan and etc.
Besides basic pension insurance, the Company establishes corporate pension plans in accordance with the related policies of c orporate pension
regulations. Employees can join the pension plan voluntarily. The Company has no other significant commitment of employees’ social security.
The Company shall recognise, in the accounting period in which an employee provides service, the contribution payable to a defined contribution
plan as a liability, with a corresponding charge to the profit or loss for the current period or the cost of a relevant asset.
Defined benefit plan
For the defined benefit plan, independent actuary uses an actuarial technique, the projected unit credit method, to make a reliable estimate of the
ultimate cost to the entity of the benefit that employees have earned in return for their service in the current and prior periods, on the balance sheet
date. The Group set the defined benefit plan including the following components:
① Service costs, including current service costs, any pas t service costs and gain or loss on settlement. Among them, the current service cost is
the increase in the present value of the defined benefit obligation resulting from employee service in the curr ent period; the past service cost is the
change in the present value of the defined benefit obligation for employee service in prior periods, resulting from a plan amendment (the introduction
or withdrawal of, or changes to, a defined benefit plan) or a curtailment (a significant reduction by the entity in the number of employees covered by a
plan).
② Net interest on the net defined benefit liability (asset) can be viewed as comprising interest income on plan assets, interes t cost on the defined
benefit obligation and interest on the effect of the asset ceiling
③ Re-measurements of the net defined benefit liability and assets.
The Group makes determining amounts to be recognized in profit or loss except other accounting standards stipulates or allows employee benefits
recorded as asset cost. Re-measurements of the changes in the net defined benefit liability (asset) recognized in other comprehensive income shall
not be reclassified to profit or loss in a subsequent period. However, the entity may transfer those amounts recognized in ot her comprehensive
income within equity, when original defined benefit plan is terminated.
(4) Termination benefits
The Company provides for termination benefits to the employees and shall recognize an employee benefits liability for termination benefits, with a
corresponding charge to the profit or loss for the current period, at the earlier of the following dates: When the Company cannot unilaterally withdr aw
the offer of the termination benefits from an employment termination plan or a redundancy proposal; the Company recognizes the costs or expenses
relating to the payment of the termination benefits.
If an employee's internal retirement plan is implemented, the economic compensation before the official retirement date is a dismissal benefit. From
the date when the employee stops providing services to the normal retirement date, the salary of the retired employee and the social insurance
premium to be paid are included in the current period at one time profit and loss. Financial compensation after the official retirement date (such as a
normal retirement pension) is treated as after-service benefits.
(5) Other long-term employee benefits
Other long-term employee benefits provided by the Company to the employees satisfied the conditions for classifying as a defined contribution plan;
those benefits shall be accounted for in accordance with the above requirements relating to defined contribution plan. When th e benefits satisfy a
defined benefit plan, it shall be accounted for in accordance with the above requirements relating to defined benefit plan, but the movement of net
92
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
liabilities or assets in re-measurement of defined defined benefit plan shall be recorded in profit or loss for the current period or cost of relevant
assets.
22. Provisions
A provision is recognised for an obligation related to a contingency if all the following conditions are satisfied:
(1) the Company has a present obligation;
(2) it is probable that an outflow of economic benefits will be required to settle the obligation;
(3) the amount of the obligation can be estimated reliably.
A provision is initially measured at the best estimate of the expenditure required to settle the related present obligation. Factors pertaining to a
contingency such as the risks, uncertainties and time value of money are taken into account as a whole in reaching the best estimate. Where the
effect of the time value of money is material, provisions are determined by discounting the expected future cash flows. The C ompany reviews the
carrying amount of a provision at the balance sheet date and adjusts the carrying amount to the current best estimate.
If all or part of the expenditure necessary for settling the provision is expected to be compensated by a third party, the am ount of compensation is
separately recognized as an asset when it is basically certain to be received. The recognized compensation amount shall not exceed the carrying
amount of the provision.
23. Revenue
(1) General principle
①Sale of goods
Revenue is recognised when all the following conditions are satisfied: significant risks and rewards of ownership of goods have been transferred to
the buyer; the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over
the goods sold; it is probable that the economic benefits will flow to the Company; and the revenue and costs can be measured reliably.
②Rendering of services
Where the outcome of a transaction involving the rendering of services can be estimated reliably, revenue is recognised by reference to the stage of
completion.
The stage of completion is based on the proportion of costs incurred to date to the estimated total costs.
Rendering of services can be estimated reliably when all the following conditions are satisfied: A. The revenue can be measured reliably; B. It is
probable that the economic benefits will flow to the Company; C. The stage of completion can be measured reliably; D. The costs incurred and to be
incurred in the transac tion can be measured reliably.
Where the outcome cannot be estimated reliably, revenues are recognised to the extent of the costs incurred that are expected to be recoverable,
and an equivalent amount is charged to profit or loss as service cost; otherwise, the costs incurred are recognised in profit or loss and no service
revenue is recognised.
③Transfer of right to use assets
Revenue is recognized when it is probable that the economic benefits will flow to the Company, and the revenue can be measured reliably.
④Revenue from construction contracts
Where the outcome of a construction contract can be estimated reliably, contract revenue and contract expenses associated wit h the construction
contract are recognised using the percentage of completion method. When the outcome of a construction contract cannot be estimated reliably, if the
contract costs can be recovered, revenue is recognised to the extent of contract costs incurred that can be recovered, and the contract costs are
recognised as contract expenses when incurred; otherwise, the contract costs are recognised as contract expenses immediately when incurred, and
no contract revenue is recognised.
If the estimated total costs exceed contract revenue, the Company recognises estimated loss in profit or loss for the current period.
The stage of completion of a contract is determined based on the proportion of contract costs incurred for work performed to date to the estimated
total contract costs.
93
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
The outcome of a construction contract can be estimated reliably when all the following conditions are satisfied: A. The contract revenue can be
measured reliably; B. It is probable that the economic benefits will flow to the Company; C. The actual contract costs incurred can be distinguished
clearly and measured reliably; D. The completion progress of the contract and the costs need to be incurred to complete the contract can be
measured reliably.
(2)Specific revenue recognition
Specific revenue recognition is as follows:
①Real estate development sales revenue recognition specific methods
1) the sales contract has been signed and filed with the land department; 2) the real estate has been completed and accepted; 3)fully one-off
payment on the first installment payment has been received; 4) completed the procedures for entering the partnership in accordance with the
requirements stipulated in the sales contract.
② Provide the specific method of property service income recognition
According to the service date agreed in the property service contract and agreement and the area and unit price corresponding to the service, the
realization of the property service income shall be confirmed when the relevant service fee has been received or evidence of payment has been
obtained.
③Rental property income recognition of the specific method
The realization of the income from the leased property shall be confirmed when the relevant rent has been received or evidenc e of collection has
been obtained according to the lease contract and agreement on the date of lease (consider the rent-free period if there is a rent-free period) and the
rent amount.
④Other income recognition methods
Including project construction income, hotel operating income, etc., according to the relevant contract, agreement, in the relevant payment has been
received or is likely to receive the realization of revenue recognition.
24. Government grants
A government grant is recognised when there is reasonable assurance that the grant will be received and that the Group will comply with the
conditions attaching to the grant.
If a government grant is in the form of a transfer of a monetary asset, it is measured at the amount received or receivable. I f a government grant is in
the form of a transfer of a non-monetary asset, it is measured at fair v alue. If fair value cannot be reliably determined, it is measured at a nominal
amount of RMB 1.
The government grants relating to assets are grants that Group purchases, construction or other methods to acquire long-term assets of government
grants. Exception of the above grants, others are related to gains.
For government grants with unspecified purpose, the amount of grants used to form a long-term asset is regarded as government grants related to
an asset, the remaining amount of grants is regarded as government grants related to income. If it is not possible to distinguish, the amount of grants
is treated as government grants related to income.
A government grant related to an asset is offset against the carrying amount of the related asset, or.recognised as deferred income and amortised to
profit or loss over the useful life of the related asset on a reasonable and systematic manner. A grant that compensates the Group for expenses or
losses already incurred is recognised in profit or loss or offset against related expenses directly. A grant that compensates the Group for expenses or
losses to be incurred in the future is recognised as deferred income, and included in profit or loss or offset against related expenses in the periods in
which the expenses or losses are recognised.
A grant related to ordinary activities is recognised as other income or offset against related expenses based on the economic substance. A grant not
related to ordinary activities is recognised as non-operating income.
When a recognised government grant is reversed, carrying amout of the related asset is adjusted if the grant was initially recognized as offset against
the carrying amount of the related asset. I f there is balance of relevant deferred income, it is offset against the c arrying amount of relevant deferred
income. Any excess of the reversal to the carrying amount of deferred income is recognised in profit or loss for the current period. For other
circumstances, reversal is directly recognized in profit or loss for the curr ent period.
25. Deferred tax assets and deferred tax liabilities
94
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Income tax comprises of current tax and deferred tax. Current tax and deferred tax are recognised in profit or loss except to the extent that they
relate to transactions or items recognised directly in equity and goodwill arising from a business combination.
Deferred tax assets and deferred tax liabilities arise from deductible and taxable temporary differences respectively, being the differences between
the carrying amounts of assets and liabilities for financial reporting purposes and their tax bases.
All the taxable temporary differences are recognized as deferred tax liabilities except for those incurred in the following t ransactions:
(1) initial recognition of goodwill, or assets or liabilities in a transaction that is not a business combination and that affects neither accounting profit
nor taxable profit (or deductible loss);
(2) taxable temporary differences associated with investments in subsidiaries, associates and joint ventures, and the Company is able to control
the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.
The Company recognises a deferred tax asset for deductible temporary differences, deductible losses and tax credits carried forward to subsequent
periods, to the extent that it is probable that future taxable profits will be available against which deductible temporary differences, deductible losses
and tax credits can be utilised, except for those incurred in the following transactions:
(1) a transaction that is not a business combination and that affects neither accounting profit nor taxable profit (or deductible loss);
(2) deductible temporary differences associated with investments in subsidiaries, associates and joint ventures, the corresponding deferred tax
asset is recognized when both of the following conditions are satisfied: it is probable that the temporary difference will reverse in the foreseeable
future; and it is probable that taxable profits will be available in the future against which the temporary difference can be utilized.
At the balance sheet date, deferred tax is measured based on the tax consequences that would follow from the expected manner of recovery or
settlement of the carrying amount of the assets and liabilities, using tax rates enacted at the reporting date that are expected to be applied in the
period when the asset is recovered or the liability is settled.
The carrying amount of a deferred tax asset is reviewed at each balance sheet date, and is reduced to the extent that it is no longer probable that the
related tax benefits will be utilised. Such reduction is reversed to the extent that it becomes probable that sufficient taxable profits will be available.
26. Operating leases and finance leases
A finance lease is a lease that transfers substantially all the risks and rewards incidental to ownership of a leased asset t o the lessee. An operating
lease is a lease other than a finance lease.
(1)As a lessor
At the commencement of the lease term, the Company recognized the aggregate of the minimum lease receipts determined at the i nception of a
lease and the initial direct costs as finance lease receivable, and recognized unguaranteed residual value at the same time. The difference between
the aggregate of the minimum lease receipts, the initial direct costs and the unguaranteed residual value, and the aggregate of their present value is
recognized as unearned finance income. Unearned finance income is allocated to each accounting period during the lease term using the effective
interest method.
Income derived from operating leases is recognized in profit or loss using the straight-line method over the lease term. Initial direct costs are charged
to profit or loss immediately.
(2)As a lessee
When the Company acquires an asset under a finance lease, the asset is measured at an amount equal to the lower of its fair v alue and the present
value of the minimum lease payments, each determined at the inception of the lease. At the commencement of the lease term, the minimum lease
payments are recorded as long-term payables. The difference between the carrying amount of the leased assets and the minimum lease payments is
accounted for as 95ecognized95d finance charges. I nitial direct costs attributable to a finance lease that are incurred by the Company are added to
the carrying amount of the leased asset. Unrecognised finance charges arising from a finance lease are 95ecognized using an effective interest
method over the lease term. Depreciation is accounted for in accordance with the accounting policies of fixed assets.
Rental payments under operating leases are recognized as part of the cost of another related asset or as expe nses on a straight-line basis over the
lease term. Initial direct costs are charged to profit or loss immediately.
27. Maintenance funds
The Group collects the maintenance funds from owners as the certain proportion of the sales amount when selling commercial housing. It shall be
included in the long-term accounts payable. The maintenance funds will reduce when it is delivered to the land and housing administration.
28. Quality guarantee deposit
95
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
The quality deposit is based on the Group’s proportion of the construction and installation contracts, the term of payment. It is deducted from the
construction payables and classified as accounts payable. Maintenance costs due to quality during the warranty period are directly expensed under
this account and will be eliminated when the warranty period ends.
29. Significant accounting estimates and judgments
The Group continues to make significant estimates and judgements with the consideration of historical experience and other factors such as
reasonable forecasts about the future. The estimates and judgements will have a huge impact on the carrying amount of assets and liabilities in the
next financial period. The main estimates and judgements are as following:
(1)Classification of financial assets
The Group’s major judgments in determining the classification of financial assets include the analysis of business models and the characteristics of
contract cash flows.
At the level of financial asset group, the Group determines the business model for managing financial assets, taking into account factors such as th e
way to evaluate and report financial assets performance to key managers, the risks affecting financial assets performance and their management
methods, and the way in which relevant business managers are paid.
In assessing whether the contract cash flow of financial assets is consistent with the basic lending arrangements, the Group has the following
judgments: whether the principal’s time distribution or amount may change during the lifetime for early repayment and other reasons; whether the
interest only includes the time value of money, credit risk, other basic lending risks and the consideration of cost and profit. For example, does the
amount of advance payment only reflect the unpaid principal and interest based on the unpaid principal, and reasonable compensation paid for the
early termination of the contract.
(2)Measurement of Expected Credit Loss of Account Receivable
The Group calculates the expected credit losses of accounts receivable by default risk exposure and expected credit losses rate of accounts
receivable, and determines the expected credit losses rate based on default probability and default loss rate. In determining the expected credit
losses rate, the Group uses internal historical credit loss and other data, and adjusts the historical data with current situ ation and forward-looking
information. In considering forward-looking information, the indicators used by the Group include the risks of economic downturn, external market
environment, technological environment and changes in customer conditions. The Group regularly monitors and reviews assumptio ns related to the
calculation of expected credit losses.
(3) Deferred income tax assets
Deferred tax assets relating to certain temporary differences and tax losses are recognised as management considers it is probable that future
taxable profit will be available against which the temporary differences or tax losses can b e utilised. The management needs significant judgment to
estimate the time and extent of the future taxable profits and tax planning strategy to recognise the appropriate amount of deferred income tax
assets.
(4)The provision of land appreciation tax
The Group is subject to land appreciation tax (“LAT”). The Group recognised LAT based on management’s best estimates, however, LAT is
recognised by tax authorities according to the interpretation of the tax rules. The final tax outcome could be different f rom the amounts that were
initially recorded, and these differences will impact tax provision in periods in which such taxes have been finalised with l ocal tax authorities.
(5) Determination of fair value of unlisted equity investment
The fair value of an unlisted equity investment is the future cash flow discounted from the current discount rate of a project with similar terms and
risks. This valuation requires the group to estimate future cash flows and discount rates. Therefore, it causes high uncertainty. In same cases, there
is insufficient information to determine fair value, or the distribution of possible estimates is wide. On the contrary, the cost represents the best
estimate of fair value within that range. As a whole, the cost can represent the a ppropriate estimate of fair value within that range.
30. Changes in significant accounting policies, accounting estimates and correction of errors in prior periods
(1) Provisions Changes in significant accounting policies
①New guidelines for financial instrument guidelines
In 2017, the Ministry of Finance has issued “Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial
Instruments (Revised)”,“Accounting S tandards for Business Enterprises No. 23 - Finance Asset Transfer (Revised)”, “Accounting S tandards for
Business Enterprises No.24 - Hedge Accounting(Revised)”, “Accounting Standards for Business Enterprises No.37 - Financial Instruments
Presentation (Revised)”(hereinafter referred to as the “New Financial Instruments Standards”). The Group has changed accounting policies, the
changed accounting policies are stated as note III. 10.
96
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
According to the new financial instruments standards, financial assets are classified into the following three categories depe nds on the Group’s
business mode of managing financial assets and cash flow characteristics of financial assets: financial assets measured at amortized cost, financial
assets at fair value through other comprehensive income and financial assets at fair value through profit or loss. If the mai n contract contained in the
mixed contract belongs to financial assets, it should not be separated from the mixed contract and embedded in derivatives, but should be applied as
a whole to the relevant provisions of the classification of financial assets.
The adoption of the new financial instrument standards for the Group has no significant impact on the accounting policy of the Group’s financial
liabilities.
On 1 January, 2019, the Group did not designate any financial assets or liabilities as financial assets or liabilities measur ed at fair value through
profits and losses, nor did it revoke its previous designation.
The new financial instrument standard replaces the method of recognising impairment provision according to actual impairment loss stipulated in the
original financial instrument standard with the method of “expected credit losses method”. The“expected credit losses method” model requires
continuous assessment of the credit risk of financial assets. Therefore, under the new financial instrument standard, the gro up’s credit loss is
recognised earlier than the original financial instrument standard.
On the basis of expected credit losses, the Group performs impairment assessment on the following items and confirms the loss provision.
Financial assets measured at amortized cost;
Debt investments at fair value through other comprehensive income;
Lease receivables;
Financial guarantee contract(except measured at fair value through profit or loss or formed by continuing involvement of transferred financial
assets or the transfer does not qualify for derecognition).
In accordance with the provisions of the new financial instrument standard, except in certain specific cases, the Group retrospectively adjusts the
classification and measurement of financial instruments (including impairment), and calculates the difference between the original book value of
financial instruments and the new book value on the date of implementation of the n new financial instrument standard (i.e. J anuary 1, 2019) into the
retained earnings or other comprehensive earnings at the beginning of 2019. At the same time, the Group did not adjust the comparative financial
statements data.
97
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
On 1 January, 2019, the results of classification and measurement of financial assets in accordance with the original financial instrument standards and the new financial instrument standards are as follows:
The original financial instrument standards The new financial instrument standards
Items Categories Book value Items Categories Book value
Other non-current financial M easured at fair value and recorded
--
To measure (an equity assets in current profit and loss
Available-for-sale financial assets 17,464,240.74
instrument) at cost. Other equity instruments M easured at fair value and recorded
30,922,155.02
investment in other comprehensive income
Receivables Amortized cost 26,678,630.82
Receivables Amortised cost 33,426,991.65 M easured at fair value and recorded
Receivables financing --
in other comprehensive income
Other current asset Amortised cost --
Other receivables Amortised cost 45,018,027.61
Other receivables Amortised cost 23,009,475.81
98
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
On 1 January 2019, the adjustment table of the financial instrument classification and book value,at the implemention of the new financial instrument
standards were as follows:
Book amount before Adjusted book
Category adjustment Reclassification Recalculation amount
(31 December 2018) (1 January 2019)
Aesset：
Cash at bank and in
2,048,522,435.93 2,282,500.00 -- 2,050,804,935.93
hand
Account receivable 33,426,991.65 -- -6,748,360.83 26,678,630.82
Other receivables 45,018,027.61 -2,282,500.00 -19,726,051.80 23,009,475.81
Available-for-sale
17,464,240.74 -17,464,240.74 -- --
financial assets
Other equity
-- 17,464,240.74 13,457,914.28 30,922,155.02
instruments investment
Deferred income tax
154,543,788.80 -- 311,694.66 154,855,483.46
assets
Liabilities： -- -- -- --
Deferred income tax
-- -- 3,364,478.58 3,364,478.58
liabilities
Entities：
Other comprehensive
10,564,385.97 -- 10,093,435.70 20,657,821.67
income
Surplus reserves 95,906,222.59 -- -416,151.43 95,490,071.16
Undistributed profit 1,235,884,122.72 -- -25,355,845.72 1,210,528,277.00
M inority equity -131,524,530.88 -- -390,720.82 -131,915,251.70
The adjustment table between the loss provision at the end of 2018 and the loss provision at the beginning of 2019 measured i n accordance with the
original rules of financial instruments is as follows:
Book amount before
Reclassific Adjusted book amount
Category adjustment Recalculation
ation (1 January 2019)
(31 December 2018)
Impairment provision for
19,243,657.51 -- 6,748,360.83 25,992,018.34
accounts receivable
Other provisions for
impairment of 174,758,743.31 -- 19,726,051.80 194,484,795.11
receivables
② Financial statement format
The Ministry of Finance issued the notice of the ministry of finance on the revision and issuance of the general financial st atement format of the year
2019 in April 2019 (No. 6 of finance and accounting [2019]), and the notice of the ministry of finance on the revision and issuance of the general
financial statement format of the year 2018 (No. 15 of finance and accounting [2018]) issued in June 2018 shall be abolished simultaneously;In
September 2019, the ministry of finance issued the notice of the minis try of finance on revising and printing the format of consolidated financial
statements (version 2019) (No. 16 of finance and accounting [2019]), and the notice of the ministry of finance on revising and printing the format of
consolidated financial statements for 2018 (No. 1 of finance and accounting [2019]) shall be abrogated simultaneously.According to accounting [2019]
No. 6 and accounting [2019] No. 16, the company has revised the financial statement format as follows:
Balance sheet, dividing the items of "notes receivable and accounts receivable" into "notes receivable" and "accounts receivable";The "notes payable
and accounts payable" line item is divided into "notes payable" and "accounts payable".
The company shall adjust the comparative data of the comparable period according to document No. 6 of accounting [2019].
99
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
The revision of the financial statement format has no effect on the company's total assets, total liabilities, net profits an d other comprehensive
income.
As of 31 December 2019, there were no other significant accounting policy changes during the reporting period.
（2）Important accounting estimate changes
The Group's significant accounting estimates have not changed during the reporting period.
（3）At the first implementation of the new financial instrument standards, the situation to adjust the relevant items of the financial statements at the
beginning of the first implementation year is as follow:
Consolidated balance sheet
Category As at 31/12/2018 As at 1/1/2019 Adjustments
Current asset：
Cash at bank and in hand 2,048,522,435.93 2,050,804,935.93 2,282,500.00
Accounts receivable 33,426,991.65 26,678,630.82 -6,748,360.83
Accounts receivable financing -- -- --
Prepayment 4,177,767.88 4,177,767.88 --
Other receivables 45,018,027.61 23,009,475.81 -22,008,551.80
Inventories 1,685,152,051.26 1,685,152,051.26 --
Other current assets 6,780,999.56 6,780,999.56 --
Total current assets 3,823,078,273.89 3,796,603,861.26 -26,474,412.63
Non-current assets
Available-for-sale financial assets 17,464,240.74 -- -17,464,240.74
Long-term equity investments 12,561,107.24 12,561,107.24 --
Other equity instruments investments -- 30,922,155.02 30,922,155.02
Investing properties 623,930,838.15 623,930,838.15 --
Fix assets 33,926,198.52 33,926,198.52 --
Long-term deferred expenses 387,066.91 387,066.91 --
Deferred income tax assets 154,543,788.80 154,855,483.46 311,694.66
Total non-current assets 842,813,240.36 856,582,849.30 13,769,608.94
Total assets 4,665,891,514.25 4,653,186,710.56 -12,704,803.69
Current liabilities：
Short term loans 17,260,103.46 17,260,103.46 --
Accounts payable 216,758,906.71 216,758,906.71 --
Advances from customers 156,426,152.86 156,426,152.86 --
Employee benefits payable 45,836,830.05 45,836,830.05 --
Taxes payable 300,547,372.98 300,547,372.98 --
Other payables 721,819,898.48 721,819,898.48 --
Total current liabilities 1,458,649,264.54 1,458,649,264.54 --
Non-current liabilities：
Long-term payable 6,507,139.20 6,507,139.20 --
Deferred income tax liabilities -- 3,364,478.58 3,364,478.58
100
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Category As at 31/12/2018 As at 1/1/2019 Adjustments
Total non-current liabilities 6,507,139.20 9,871,617.78 3,364,478.58
Total liabilities 1,465,156,403.74 1,468,520,882.32 3,364,478.58
Entities
Share capital 1,011,660,000.00 1,011,660,000.00 --
Capital reserve 978,244,910.11 978,244,910.11 --
Other comprehensive income 10,564,385.97 20,657,821.67 10,093,435.70
Surplus reserve 95,906,222.59 95,490,071.16 -416,151.43
Retained earnings 1,235,884,122.72 1,210,528,277.00 -25,355,845.72
Total owners' equity attributable to
3,332,259,641.39 3,316,581,079.94 -15,678,561.45
parent company
M inority interests -131,524,530.88 -131,915,251.70 -390,720.82
Total entieies 3,200,735,110.51 3,184,665,828.24 -16,069,282.27
Total liabilities and entities 4,665,891,514.25 4,653,186,710.56 -12,704,803.69
Balance sheet of parent company
Category As at 31/12/2018 As at 1/1/2019 Ajustments
Current asset：
Cash at bank and in hand 1,344,486,378.53 1,346,768,878.53 2,282,500.00
Accounts receivable 5,164,795.67 1,533,739.14 -3,631,056.53
Receivable financing -- -- --
Prepayment 200,000.00 200,000.00 --
Other receivables 770,374,849.84 767,188,991.98 -3,185,857.86
Inventories 543,912,100.37 543,912,100.37 --
Other current assets 215,745.41 215,745.41 --
Total current assets 2,664,353,869.82 2,659,819,455.43 -4,534,414.39
Non-current assets
Available-for-sale financial assets 12,000,000.00 -- -12,000,000.00
Long-term equity investments 235,284,776.57 235,284,776.57 --
Other equity instruments investments -- 13,297,189.66 13,297,189.66
Investing properties 511,040,299.65 511,040,299.65 --
Fix assets 21,942,842.11 21,942,842.11 --
Long-term deferred expense 346,015.72 346,015.72 --
Deferred income tax assets 16,699,980.23 16,745,319.01 45,338.78
Total non-current assets 797,313,914.28 798,656,442.72 1,342,528.44
Total assets 3,461,667,784.10 3,458,475,898.15 -3,191,885.95
Current liabilities
Accounts payable 16,743,360.96 16,743,360.96 --
Advances from customers 22,035,608.45 22,035,608.45 --
Employee benefits payable 19,687,728.50 19,687,728.50 --
Taxes payable 144,621,616.85 144,621,616.85 --
101
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Category As at 31/12/2018 As at 1/1/2019 Ajustments
Other payables 594,392,900.98 594,392,900.98 --
Total current liabilities 797,481,215.74 797,481,215.74 --
Non-current liabilities：
Deferred income tax liabilities -- 324,297.42 324,297.42
Total non-current liabilities -- 324,297.42 324,297.42
Total liabilities 797,481,215.74 797,805,513.16 324,297.42
Entities
Share capital 1,011,660,000.00 1,011,660,000.00 --
Capital reserve 964,711,931.13 964,711,931.13 --
Other comprehensive income -- 972,892.24 972,892.24
Surplus reserve 72,776,609.18 72,360,457.75 -416,151.43
Retained earnings 615,038,028.05 610,965,103.87 -4,072,924.18
Total owners' equity attributable to
2,664,186,568.36 2,660,670,384.99 -3,516,183.37
parent company
M inority interests -- -- --
Total entieies 2,664,186,568.36 2,660,670,384.99 -3,516,183.37
Total liabilities and entities 3,461,667,784.10 3,458,475,898.15 -3,191,885.95
IV. Taxation
1. Main types of taxes and corresponding tax rates
Tax type Tax basis Tax rate%
VAT Taxable income 9,6,5,3
It shall be levied on the basis of the value-added value of Four progressive rates of
the real estate transferred and the prescribed tax rate and excess rate : 30,40,50, 60
Land appreciation tax
paid in advance according to the type of real estate
product
Property tax The original value of house deducts 30% 1.2
City maintenance and
Turnover tax payable 7
construction tax
Education surcharge Turnover tax payable 3
Local education surcharge Turnover tax payable 2
Corporate income tax Taxable profits 25,16.5
Description of VAT rates for different businesses:
The group is engaged in real estate development, property management, engineering and other business income, "notice on the pilot of replacing
business tax with VAT" (Caishui [ 201636]) and other relevant provisions. Since May 1, 2016, the group's VAT taxable items and tax rates are shown
in the following table:
Type of revenue Tax Tax rate%
Sales of properties Simply filing return 5
Construction, installation income Simply filing return 9,3
Rental income of Property Simply filing return 5
102
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Income of Property M anagement Filing return generally 6
Description of enterprise income tax rates of different tax payers:
The corporate income tax rate is 25% for companies incorporated in China and 16. 5% for companies incorporated in Hong Kong.
V. Notes to the consolidated financial statements
1. Cash at bank and in hand
As at 31/12/2019 As at 31/12/2018
Item Foreign Excha Foreign
RMB Exchan RMB
currency nge currency
equivalent ge rate equivalent
amount rate amount
Cash in hand： -- -- 66,252.42 -- -- 57,979.40
RM B -- -- 66,252.42 -- -- 57,979.40
Cash at bank： -- -- 1,493,123,507.93 -- -- 1,148,464,456.53
RM B -- -- 1,485,217,117.53 -- -- 1,140,213,287.57
USD 5,532.95 6.9762 38,598.97 45,331.77 6.8845 312,086.57
HKD 8,783,167.25 0.89578 7,867,791.43 9,031,948.11 0.8790 7,939,082.39
Including ：
Deposits in finance -- -- -- -- -- --
company
Other monetary
-- -- 1,017,950,685.00 -- -- 900,000,000.00
funds:
RM B -- -- 1,017,950,685.00 -- -- 900,000,000.00
Total -- -- 2,511,140,445.35 -- -- 2,048,522,435.93
Including: Total
-- -- 7,936,545.69 -- -- 8,239,667.62
overseas deposits
Note: At the end of the year 2019, other monetary funds were RMB 1,017,950,685.00. RMB 1,000,000,000.00 was structured deposit principal
measured at amortized cost, RMB 3,950,685. 00 was interest, and RMB 14,000,000.00 was a seven-day notice deposit.
2. Accounts receivable
(1) Accounts receivable by aging balance
Aging As at 31/12/2019 As at 31/12/2018
Within 1 year 65,195,782.66 20,297,050.49
1 to 2 years 66,518.00 1,422,214.09
2 to 3 years -- 2,698,788.09
M ore than 3 years 24,956,115.96 28,252,596.49
Subtotal 90,218,416.62 52,670,649.16
Less: provision for bad and doubtful
28,159,360.94 19,243,657.51
debts
Total 62,059,055.68 33,426,991.65
（2）The classification of bad and doubtful debts
Item As at 31/12/2019
103
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Provision for bad and doubtful
Book balance
debts Carrying
Proportion Expected credit amount
Book value Book value
(%) loss(%)
Provision made on an
24,866,900.27 27.56 24,866,900.27 100.00 --
individual basis
Provision for bad and
65,351,516.35 72.44 3,292,460.67 5.04 62,059,055.68
doubtful debts collectively
Including:
Accounts receivable from
10,761,284.37 11.93 538,064.22 5.00 10,223,220.15
sales of proporties
Accounts receivable from
other customers 54,590,231.98 60.51 2,754,396.45 5.05 51,835,835.53
Total 90,218,416.62 100.00 28,159,360.94 31.21 62,059,055.68
Continued
As at 1/1/2019
Provision for bad and doubtful
Book balance
Item debts
Carrying amount
Proportio Expected
Book value Book value
n(%) credit loss(%)
Provision made on an
individual basis 24,426,477.73 46.38 24,426,477.73 100.00 --
Provision for bad and
28,244,171.43 53.62 1,565,540.61 5.54 26,678,630.82
doubtful debts collectively
Including:：
Accounts receivable from
2,330,074.80 4.42 116,503.74 5.00 2,213,571.06
sales of proporties
Accounts receivable from
25,914,096.63 49.20 1,449,036.87 5.59 24,465,059.76
other customers
Total 52,670,649.16 100.00 25,992,018.34 49.35 26,678,630.82
Provision made on an individual basis：
As at 31/12/2019
Item Provision for bad Expected credit Rationale of
Book balance and doubtful
debts loss (%) provision
Agent business payment of Expected to be not
11,574,556.00 11,574,556.00 100.00
import and export recoverable
Long-term accounts
Expected to be not
receivable from sales of 10,626,436.84 10,626,436.84 100.00
recoverable
proproties
Accounts receivable from Expected to be not
2,328,158.40 2,328,158.40 100.00
revoked subsidaries recoverable
Expected to be not
Other customers 337,749.03 337,749.03 100.00
recoverable
Total 24,866,900.27 24,866,900.27 100.00
104
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Provision for bad and doubtful debts collectively ：
Accounts receivable from sales of proporties
As at 31/12/2019
Aging Provision for bad and
Account receivable Expected credit loss(%)
doubtful debts
Within 1 year 10,690,000.00 534,500.00 5.00
1 to 2 years 71,284.37 3,564.22 5.00
Total 10,761,284.37 538,064.22 5.00
Accounts receivable from other customers
As at 31/12/2019
Aging Provision for bad and
Account receivable Expected credit loss(%)
doubtful debts
Within 1 year 54,590,231.98 2,754,396.45 5.05
As at 31/12/2018，Provision for bad and doubtful debts：
As at 31/12/2018
Provision for
Category bad and Proportion Carrying
Book value Proportion(%)
doubtful (%) amount
debts
Accounts receivable of which
provision for bad debts is of -- -- -- -- --
individually significant
Provision for bad and doubtful
-- -- -- -- --
debts collectively
Accounts receivable of which
provision for bad debts is of 52,670,649.16 100.00 19,243,657.51 36.54 33,426,991.65
individually insignificant
Total 52,670,649.16 100.00 19,243,657.51 36.54 33,426,991.65
（3）Provision, recovery or reversal of bad debt
Provision for bad and
Item
doubtful debts
As at 31/12/2018 19,243,657.51
Adjustment amount for the first implementation of the new financial instrument 6,748,360.83
guidelines
As at 1/1/2019 25,992,018.34
Provision 2,167,342.60
Recovery --
Written-off --
2019.12.31 28,159,360.94
（4）Top 5 entities with the largest balances of other receivables
Name of Entity Amount Proportion of the Bad debt
105
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
amount to the total AR provision
(%)
Corporation unit No.1 25,744,944.50 28.54 1,287,247.23
Corporation unit No.2 15,590,603.68 17.28 779,530.18
Corporation unit No.3 2,696,015.00 2.99 134,800.75
Individual No.1 2,309,255.46 2.56 115,462.77
Corporation unit No.4 2,185,557.48 2.42 109,277.87
Total 48,526,376.12 53.79 2,426,318.80
（5）At the end of the year 2019, the group has handled the factoring of accounts receivable（RMB 51,647,260. 17）, corresponding to the book value of
accounts receivable RMB 51,647, 260.17 which has not been terminated for recognition. The detail is set out in note V. 42.
3. Prepayments
(1) The aging analysis of prepayments is as follows:
As at 31/12/2019 As at 31/12/2018
Aging
Amount Proportion(%) Amount Proportion(%)
Within 1 year 19,398.17 8.82 4,177,217.88 99.99
1 and 2 years 200,000.00 90.93 -- --
M ore than 3 years 550.00 0.25 550.00 0.01
Total 219,948.17 100.00 4,177,767.88 100.00
（2）Top 5 entities with the largest balances of prepayment
The total amount of prepayment is RMB 219,072. 21, accounting for 99.60% of the total amount of the ending balance of prepayment.
4．Other receivables
Item As at 31/12/2019 As at 31/12/2018
Interest receivables -- 2,453,067.78
Dividend receivables 1,052,192.76 1,052,192.76
Other receivables 27,223,035.50 41,512,767.07
Total 28,275,228.26 45,018,027.61
(1) Interest receivables
Item As at 31/12/2019 As at 31/12/2018
Fixed deposits -- 170,567.78
Structured deposit -- 2,282,500.00
Subtotal： -- 2,453,067.78
Less：Provision for bad and doubtful debts -- --
Total -- 2,453,067.78
(2) Dividend receivables
Item As at 31/12/2019 As at 31/12/2018
106
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Yunnan KunPeng Flight service Co., Ltd 1,052,192.76 1,052,192.76
Less：Provision for bad and doubtful debts -- --
Total 1,052,192.76 1,052,192.76
Including: significant dividends receivable aging over 1 year:
Whether an
Reason for impairment
Item As at 31/12/2019 Aging uncollected occurred and the
basis for its
judgment
Yunnan KunPeng
Flight service Co., Ltd 1,052,192.76 5 years Delay to issue None
(3) Other receivables
①Other receivables by aging
Aging As at 31/12/2019 As at 31/12/2018
Within 1 year 20,256,667.46 7,746,036.15
1 to 2 years 5,670,455.80 9,382,626.85
2 to 3 years -- 1,512,791.00
M ore than 3 years 196,658,114.17 197,630,056.38
Subtotal 222,585,237.43 216,271,510.38
Less：Provision for bad and doubtful debts 195,362,201.93 174,758,743.31
Total 27,223,035.50 41,512,767.07
②Other receivables categorized by nature
As at 31/12/ 2019 As at 31/12/ 2018
Item Provision for bad Provision for bad
Carrying Carrying
Book value and doubtful Book value and doubtful
amount amount
debts debts
Amount
receivables
4,371,247.34 -- 4,371,247.34 13,272,259.19 -- 13,272,259.19
from
government
Amount
receivables from
716, 684.01 -- 716, 684.01 1,202,293.00 -- 1,202,293.00
employee’s
inprest fund
Amount
receivables from
the collecting 594, 012.08 -- 594, 012.08 684, 325.81 -- 684, 325.81
and paying on
another's behalf
Amount
receivables
56,713,292.62 35,639,303.91 21,073,988.71 41,109,356.53 17,029,617.56 24,079,738.97
from other
customers
Amount
receivables
160, 190,001.38 159, 722,898.02 467, 103.36 160, 003,275.85 157, 729,125.75 2,274,150.10
from related
parties
107
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Total 222, 585,237.43 195, 362,201.93 27,223,035.50 216, 271,510.38 174, 758,743.31 41,512,767.07
③ Provision for bad and doubtful debts
As at 31/12/2019, the provision for bad debts in the first stage :
12-month Provision for
Book Carrying
Category expected bad and Reasons
balance amount
credit loss(%) doubtful debts
Collectively assessed for
impairment based on credit risk
characteristics
Amount receivables from
4,371,247.34 -- -- 4,371,247.34
government
Amount receivables from
716,684.01 -- -- 716,684.01
employee’s inprest fund
Amount receivables from the
collecting and paying on 594,012.08 -- -- 594,012.08
another's behalf
Amount receivables from other
22,183,146.01 5.00 1,109,157.30 21,073,988.71
customers
Amount receivables from
491,687.74 5.00 24,584.38 467,103.36
related parties
Total 28,356,777.18 4.00 1,133,741.68 27,223,035.50
As at 31/12/2019, the company does not have interest receivable, dividends receivable and other receivables in the second sta ge.
As at 31/12/2019, the provision for bad debts in the third stage :
Book To lifetime expected Provision for
Carrying
Category bad and Reasons
balance credit loss amount
doubtful debts
Individually assessed for
impairment individually
Other receiables from revoked Expected to be not
3,838,281.67 100.00 3,838,281.67 --
subsidaries recoverable
Other receiables from existed Expected to be not
190,390,178.58 100.00 190,390,178.58 --
subsidaries recoverable
Including： Other receivables Expected to be not
159,698,313.64 100.00 159,698,313.64 --
from related parties recoverable
Total 194,228,460.25 100.00 194,228,460.25 --
As at 31/12/2018，Provision for bad and doubtful debts：
As at 31/12/2018
Category Provision for bad
Book value % and doubtful % Carrying amount
debts
Accounts receivable of which
provision for bad debts is of 145,114,361.44 67.10 144,780,234.62 99.77 334,126.82
individually significant
Provision for bad and doubtful -- -- -- -- --
108
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
debts collectively
Accounts receivable of which
provision for bad debts is of 71,157,148.94 32.90 29,978,508.69 42.13 41,178,640.25
individually insignificant
Total 216,271,510.38 100.00 174,758,743.31 80.81 41,512,767.07
④ Provision, recovery or reversal of bad debt
The first stage The second stage The third stage
To lifetime
To lifetime
Provision for bad and doubtful To 12-month expected credit Total
expected credit
expected credit loss (has
loss (no credit
loss occurred credit
impairment)
impairmen)
As at 31/12/2018 -- -- 174,758,743.31 174,758,743.31
Adjustment amount for the first
implementation of the new financial 352,721.66 -- 19,373,330.14 19,726,051.80
instrument guidelines
As at 31/12/2018 352,721.66 -- 194,132,073.45 194,484,795.11
Provision 805,229.49 -- 96,386.80 901,616.29
Recovery 24,209.47 -- -- 24,209.47
Written-off -- -- -- --
As at 31/12/2019 1,133,741.68 -- 194,228,460.25 195,362,201.93
⑤There were no other receivables written off in the current period.
⑥Top 5 entities with the largest balances of other receivables
Proportion of the amount Bad debt
Name of Entity Nature Amount Aging
to the total OR (%) provision
Canada Great Current M ore than 5
89,035,748.07 40.00 89,035,748.07
Wall( Vancouver) Co.,Ltd account years
Current M ore than 5
Paklid Lim ited 19,319,864.85 8.68 19,319,864.85
account years
Current M ore than 5
Bekaton property Limited 12,559,290.58 5.64 12,559,290.58
account years
Guangdong province
Current M ore than 5
Huizhou Luofu Hill M ineral 10,465,168.81 4.70 10,465,168.81
account years
Water Co.,Ltd
Xi’an Fresh Peak Property Current M ore than 5
8,419,205.19 3.78 8,419,205.19
Trading Co., Ltd account years
Total -- 139,799,277.50 -- 62.80 139,799,277.50
5. Inventories
（1）Categories of inventory
As at 31/12/2019 As at 31/12/2018
Provision for Provision
Item impairment Carrying amount for
Book value Book value Carrying amount
of impairment
inventories of
109
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
inventories
Real estate development projects
Real estate
developing 400,425,673.85 -- 400,425,673.85 517,451,829.98 -- 517,451,829.98
products
Real estate
developed 1,060,130,671.64 268,941.60 1,059,861,730.04 1,093,907,013.99 268,941.60 1,093,638,072.39
products
Subtotal 1,460,556,345.49 268,941.60 1,460,287,403.89 1,611,358,843.97 268,941.60 1,611,089,902.37
Non real estate development projects
Raw material 882,857.81 240,000.00 642,857.81 882,857.81 240,000.00 642,857.81
Finished
317,200.81 38,891.91 278,308.90 319,679.87 38,891.91 280,787.96
products
Construction
1,020,477.58 -- 1,020,477.58 73,138,503.12 -- 73,138,503.12
in progress
Subtotal 2,220,536.20 278,891.91 1,941,644.29 74,341,040.80 278,891.91 74,062,148.89
Total 1,462,776,881.69 547,833.51 1,462,229,048.18 1,685,699,884.77 547,833.51 1,685,152,051.26
（2）Provision for impairment of inventories
Additions during the Written back during the year
As at As at
Category year Reversals or
1/1/2019 others 31/12/2019
Provision others write-off
Real estate development
projects
Real estate developing costs -- -- -- -- --
Real estate developed products 268,941.60 -- -- -- 268,941.60
Non real estate development
projects
Raw material 240,000.00 -- -- -- 240,000.00
Finished products 38,891.91 -- -- -- 38,891.91
Construction in progress -- -- -- -- --
Total 547,833.51 -- -- -- 547,833.51
Provision for impairment of inventories (continued)
The basis for determining the net realizable The cause of inventory
Item value/residual consideration and the costs to depreciation provision for the
be incurred current period
The estimated selling price of the inventory minus the
Real estate developing
estimated costs upon completion, the estimated selling --
costs
expenses, and the related taxes
Real estate developed The estimated selling price of the inventory less the
--
products estimated selling cost and related taxes
The estimated selling price of the inventory minus the
Raw materials estimated costs upon completion, the estimated selling --
expenses, and the related taxes
Finished products The estimated selling price of the inventory less the --
110
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
estimated selling cost and related taxes
The estimated selling price of the inventory minus the
Construction in progress estimated costs upon completion, the estimated selling --
expenses, and the related taxes
（3）Note of the capitalized amount of borrowing costs in the ending inventory balance:
As at 31/12/2019, the Group's inventory balance contains the amount capitalized on the borrowing costs with RMB 4,910, 251. 90 (As at 31/12/2018,
RMB 37,274,519.11).
（4）Real estate developing products
Estimated Provision for
Starting Finished
Ttem total As at 31/12/2019 As at 31/12/2018 inventory
time time
investment devaluation
ChuanQi DongHu
Building(Fromer 2017 2019 51,000.00 -- 309,169,276.59 --
DongHuDiJing
Building)
ShanTou Fresh Peak
-- -- -- 25,291,908.11 25,291,908.11 --
Building
TianYue Bay No.2 2015 2021 65,485.00 375,133,765.74 182,990,645.28 --
Total 400,425,673.85 517,451,829.98 --
（5）Real estate developed products
Provision for
Finished
Item As at 1/1/2019 Increase Decrease As at 31/12/2019 inventory
time
devaluation
Jinye Island
1997 39,090,848.09 36,371.05 -- 39,127,219.14 --
M ulti-tier villa
Jinye Island villa
2010 6,079,171.97 -- 2,551,243.04 3,527,928.93 --
No.10
Jinye Island villa
2008 6,881,309.24 -- 2,540,146.75 4,341,162.49 --
No.11
YueJing dongfang
2014 9,789,881.19 -- 1,943,875.12 7,846,006.07 --
Project
Wenjin Garden 3,299,040.20 -- 3,206,827.43 92,212.77 --
Real Estate building 9,710,518.65 -- 9,710,518.65 -- --
HuaFeng Building 1,631,743.64 -- -- 1,631,743.64 --
HuangPu XinCun 289,802.88 439,627.12 -- 729,430.00 --
XingHu Garden 156,848.69 -- -- 156,848.69 --
Chuanqishan
2013 8,969,652.53 -- 8,969,652.53 -- --
Project
Shenfang Shanglin
2014 10,206,656.46 -- -- 10,206,656.46 268,941.60
Garden
111
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Beijing Fresh Peak
304,557.05 -- -- 304,557.05 --
Buliding
TianYue Bay No.1 2017 618,140,958.93 -- 142,392,835.79 475,748,123.14 --
Chuanqi Jingyuan 2018 210,020,135.85 19,914,665.39 229,934,801.24 -- --
Shengfang CuiLin
2018 169,335,888.62 -- 69,389,822.08 99,946,066.54 --
Building
Chuanqi Donghu 2019 -- 502,775,707.27 86,302,990.55 416,472,716.72 --
Total 1,093,907,013.99 523,166,370.83 556,942,713.18 1,060,130,671.64 268,941.60
Note: the decrease of Wenjing Garden and Real Estate building is caused by the transfer from the rental inventory into investment properties and
amortization.
6、Other non-current assets
Item As at 31/12/2019 As at 31/12/ 2018
Income tax 84,000,516.75 --
Advance payment of VAT
10,211,601.86 --
Pending deduct VAT 4,741,727.70 6,336,815.15
LAT 2,617,779.37 --
Business tax 353,427.19 444,184.41
Others 856,802.61 --
Total 102,781,855.48 6,780,999.56
7、Available-for-sale financial assets
As at 31/12/2019 As at 31/12/2018
Item Book Provision for Carrying Provision for Carrying
Book value
value impairment amount impairment amount
Available-for-sale equity
-- -- -- 17,464,240.74 -- 17,464,240.74
instruments
including：at cost -- -- -- 17,464,240.74 -- 17,464,240.74
Total -- -- -- 17,464,240.74 -- 17,464,240.74
112
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
8、Long-term equity investments
Movements during the year
Investment Balance of
Balance gains and Changes The Balance as at provision for
Investee Adjustment of
as at 1/1/2019 Additional Reduce losses issuance 31/12/2019 impairment as
other in other Impairment Other
investment investment confirmed equity at 31/12/2019
comprehensive of profit
by the equity
income
method
① Joint ventures
Guangdong
province Huizhou
9,969,206.09 -- -- -- -- -- -- -- -- 9,969,206.09 9,969,206.09
Luofu Hill Mineral
Water Co.,Ltd
Fengkai Xinhua 9,455,465.38 --
-- -- -- -- -- -- -- 9,455,465.38 9,455,465.38
Hotel
Subtotal 19,424,671.47 -- -- -- -- -- -- -- -- 19,424,671.47 19,424,671.47
②Associates
Shenzhen
Ronghua JiDian 1,471,164.04 -- -- 75,629.25 -- -- -- -- -- 1,546,793.29 1,076,954.64
Co.,ltd
Shenzhen
Runhua
1,445,425.56 -- -- -- -- -- -- -- -- 1,445,425.56 1,445,425.56
Automobile
trading Co.,Ltd
Dongyi Real
30,376,084.89 -- -- -- -- -- -- -- -- 30,376,084.89 30,376,084.89
Estate Co., Ltd
Subtotal 33,292,674.49 -- -- 75,629.25 -- -- -- -- -- 33,368,303.74 32,898,465.09
③ Other equity
investments
Paklid Limited 201,100.00 -- -- -- -- -- -- -- -- 201,100.00 201,100.00
Bekaton Property
906,630.00 -- -- -- -- -- -- -- -- 906,630.00 906,630.00
Limited
Shenzhen 10,000,000.00 -- -- -- -- -- -- -- -- 10,000,000.00 10,000,000.00
113
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Movements during the year
Investment Balance of
Balance gains and Changes The Balance as at provision for
Investee Adjustment of
as at 1/1/2019 Additional Reduce losses issuance 31/12/2019 impairment as
other in other Impairment Other
investment investment confirmed equity at 31/12/2019
comprehensive of profit
by the equity
income
method
Shenfang
Department Store
Co. Ltd.
Shantou Fresh
58,547,652.25 -- -- -- -- -- -- -- -- 58,547,652.25 58,547,652.25
Peak Building
Guangdong
Province Fengkai
Lain Feng Cement 56,228,381.64 -- -- -- -- -- -- -- -- 56,228,381.64 56,228,381.64
M anufacturing
Co., Ltd
Jiangmen Xinjiang
Real Estate Co., 9,037,070.89 -- -- -- -- -- -- -- -- 9,037,070.89 9,037,070.89
Ltd
Xi’an Fresh Peak
Property Trading 32,840,729.61 -- -- -- -- -- -- 12,166,897.84 -- 32,840,729.61 32,840,729.61
Co., Ltd
Subtotal 167,761,564.39 -- -- -- -- -- -- 12,166,897.84 -- 167,761,564.39 167,761,564.39
Total 167,761,564.39 -- -- -- -- -- -- 12,166,897.84 -- 167,761,564.39 167,761,564.39
Note:
1、After the suspension of Xi’an Fresh Peak Property Trading Co., Ltd, there is no sign of the resumption of business activities in the foreseeable future. Therefore, the group takes RMB 12,166,897. 84 for the long-term equity
investment of Xi 'an Xinfeng property trading co., LTD as a provision.
2、Other equity investments are the equity of the company's subsidiaries not included in the scope of the merger. These subsidiaries may or have completed the cancellation procedures, but the company has not written off its
long-term equity investment, or they ceased operations many years ago, and the company has no longer existed, the company has been unable to implement effective control over it. Refer to Note VII for details.
114
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
9、Other equity instrument investments
Item As at 31/12/2019 As at 31/12/2018
Shantou Small &M edium Enterprises Financing Guarantee
13,229,501.03 --
Co., Ltd
Yunnan KunPeng Flight service Co.,Ltd 19,897,229.01 --
Total 33,126,730.04 --
Note: Since the above equity instruments are investments that the Group plans to hold for a long time for strategic purposes, the group designates
them as financial assets measured at fair value and their changes recorded in other comprehensive income.
The amount of
Dividend The other
income The cumulative
gains cumulative comprohensive Tranfering
Item recognized for loss reserve reasons
the current
transferred into
period
retained earnings
Shantou Small &M edium
Enterprises Financing 928,200.00 3,444,300.00 -- -- --
Guarantee Co., Ltd
Yunnan KunPeng Flight -- 1,653,305.67 -- -- --
service Co.,Ltd
Total 928,200.00 5,097,605.67 -- -- --
10. Investment properties
(1) Investment properties measured using the cost model
Item Buildings Land use rights Total
Ⅰ.Cost
1.Balance as at 31/12/2018 1,010,636,392.81 106,115,418.00 1,116,751,810.81
2.Additions during the year 32,607,479.94 1,413,433.63 34,020,913.57
（1）Transfers from inventory 32,607,479.94 -- 32,607,479.94
（2）Others(exchange fluctuation) -- 1,413,433.63 1,413,433.63
3. Decrease during the year -- -- --
4.Balance as at 31/12/2019 1,043,243,872.75 107,528,851.63 1,150,772,724.38
Ⅱ .Accumulated depreciation or
amortization
1.Balance as at 31/12/2018 391,598,553.08 -- 391,598,553.08
2.Charge for the year 24,549,780.59 -- 24,549,780.59
（1）Depreciated or amortised 24,549,780.59 -- 24,549,780.59
3. Reductions during the year -- -- --
4.Balance as at 31/12/2019 416,148,333.67 -- 416,148,333.67
III.Provision for impairment
1.Balance as at 31/12/2018 14,128,544.62 87,093,874.96 101,222,419.58
2.Charge for the year -- 1,160,070.93 1,160,070.93
（ 1 ） Other additions(exchange
-- 1,160,070.93 1,160,070.93
fluctuation)
3. Reductions on disposals -- -- --
115
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Item Buildings Land use rights Total
4.Balance as at 31/12/2019 14,128,544.62 88,253,945.89 102,382,490.51
IV.Carrying amounts
1.As at 31/12/2019 612,966,994.46 19,274,905.74 632,241,900.20
2.As at 31/12/2018 604,909,295.11 19,021,543.04 623,930,838.15
Note: The original value of land use right and the amount of the increase of the impairment provision are caused by the exchange rate changes in the
translation of foreign currency statements.
11. Fixed assets
Item As at 31/12/2019 As at 31/12/2018
Fixed assets 30,522,035.11 33,926,198.52
Fixed assets to be disposed of -- --
Total 30,522,035.11 33,926,198.52
(1) Fixed assets
①Fixed assets
Electronic
Item Plant & buildings Motor vehicles equipment & Total
others
Ⅰ.Cost
1.Balance as at 31/12/2018 107,110,751.42 12,287,244.75 14,210,579.58 133,608,575.75
2.Additions during the year -- 641,365.74 613,347.76 1,254,713.50
（1）Purchases -- 641,365.74 613,347.76 1,254,713.50
3. Decrease during the year -- 2,487,543.00 897,404.55 3,384,947.55
（1）Disposals or written-offs -- 2,487,543.00 897,404.55 3,384,947.55
4.Balance as at 31/12/2019 107,110,751.42 10,441,067.49 13,926,522.79 131,478,341.70
II.Accumulated depreciation:
1.Balance as at 31/12/2018 77,203,923.01 10,932,114.25 11,546,339.97 99,682,377.23
2.Charge for the year 3,440,124.50 259,061.38 658,842.85 4,358,028.73
(1)Provision 3,440,124.50 259,061.38 658,842.85 4,358,028.73
3.Reductions for the year
(1)Disposal or written-offs -- 2,245,974.50 838,124.87 3,084,099.37
4.Balance as at 31/12/2019 80,644,047.51 8,945,201.13 11,367,057.95 100,956,306.59
III.Provision for impairment
IV.Carrying amount
1.As at 31/12/2019 26,466,703.91 1,495,866.36 2,559,464.84 30,522,035.11
2.As at 31/12/2018 29,906,828.41 1,355,130.50 2,664,239.61 33,926,198.52
12. Intangible assets
(1)Intangible assets
116
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Item Software Total
I.Cost
1.Balance as at 31/12/2018 2,241,800.00 2,241,800.00
2.Additions during the year
3.Decrease during the year
(1)Disposals
4.Balance as at 31/12/2019 2,241,800.00 2,241,800.00
II.Accumulative amortisation
1.Balance as at 31/12/2018 2,241,800.00 2,241,800.00
2.Charge for the year -- --
3.Reduction for the year -- --
4.Balance as at 31/12/2019 2,241,800.00 2,241,800.00
III.Provision for impairment
IV.Carrying amount
1.As at 31/12/2019 -- --
2.As at 31/12/2018 -- --
13. Long-term deferred expenses
Additions Decreases during the year
Item As at 31/12/2018 during the Amortisation for the Others As at 31/12/2019
year year decreases
Renovation
346,015.85 -- 183,890.13 -- 162,125.72
costs
Others 41,051.06 -- 41,051.06 -- --
Total 387,066.91 -- 224,941.19 -- 162,125.72
14. Deferred tax assets and deferred tax liabilities
(1) Deferred tax assets and deferred tax liabilities not offsetting
As at 31/12/2019 As at 31/12/2018
(1) Deductible or (2) Deductible or
taxable temporary Deferred
Item tax Deferred tax
taxable temporary
differences assets/ deferred differences assets/ deferred
tax liabilities tax liabilities
Deferred tax assets:
Provisions for impairment of
5,157,896.86 1,289,474.22 268,941.60 67,235.40
assets
Deductible loss 46,877,417.46 11,719,354.37 72,853,906.32 18,213,476.58
Provision for land appreciation tax
83,816,495.81 20,954,123.95 416,873,760.12 119,730,695.91
liquidation reserves
Expected profit for advances from
-- -- 12,937,987.44 3,234,496.86
customers
Unrealized profits of intra-group
29,309,607.92 7,327,401.98 4,419,308.84 1,104,827.21
transactions
Contract tentative estimate cost 20,603,882.91 5,150,970.73 47,474,275.32 12,193,056.84
117
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
As at 31/12/2019 As at 31/12/2018
(1) Deductible or (2) Deductible or
Item Deferred tax Deferred tax
taxable temporary taxable temporary
differences assets/ deferred differences assets/ deferred
tax liabilities tax liabilities
Sub-total 185,765,300.96 46,441,325.25 554,828,179.64 154,543,788.80
Deferred tax liabilities:
Interest on unexpired structured
3,950,685.00 987,671.25 -- --
deposits
Changes in fair value of other
15,662,489.30 3,915,622.33 -- --
equity instruments
Sub-total 19,613,174.30 4,903,293.58 -- --
(2)Details of unrecognized deferred tax assets
Item As at 31/12/2019 As at 31/12/2018
Deductible losses 31,568,944.69 30,987,611.48
Bad debt provision 218,911,499.52 194,281,292.73
Provision for impairment of long-term equity
220,084,700.95 207,917,803.11
investments
Provision for impairment of investment
102,382,490.51 101,222,419.58
properties
Total 572,947,635.67 534,409,126.90
Note: Due to the uncertainty of whether sufficient taxable income can be obtained in the future, there is no confirmation of deductible temporary
differences and deductible losses on deferred tax assets.
(3) Unrecognized deductible losses of deferred tax assets will expire at the end of following years
Year As at 31/12/2019 As at 31/12/2018 Note
2019 -- 107,123.28
2020 9,692,495.52 9,692,495.52
2021 11,349,323.06 11,349,323.06
2022 5,753,184.38 5,753,184.38
2023 4,085,485.24 4,085,485.24
2024 688,456.49 --
Total 31,568,944.69 30,987,611.48
15. Short-term loans
(1) Short-term loans by category
Category As at 31/12/2019 As at 31/12/2018
Pledged loans 51,647,260.17 15,260,103.46
Credit loans -- 2,000,000.00
Total 51,647,260.17 17,260,103.46
Note: At the end of the period, the Group discounted the account receivables amounted to RMB 51,647,260.17 by factoring to fi nancial institutions
and received cash proceeds of RMB 51,647,260.17.
16. Accounts payable
118
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Item As at 31/12/2019 As at 31/12/2018
Construction 241,850,173.72 214,354,593.64
Others 2,374,304.74 2,404,313.07
Total 244,224,478.46 216,758,906.71
17. Advances from customers
Item As at 31/12/2019 As at 31/12/2018
Housing 151,031,759.13 88,339,354.35
Construction 1,805,298.78 59,728,753.52
Others 6,645,452.52 8,358,044.99
Total 159,482,510.43 156,426,152.86
18. Employee benefits payable
Decreased
As at Accrued during As at
Item during the
31/12/2018 the year 31/12/2019
year
Short-term employee benefits 45,693,840.70 172,194,173.32 164,070,342.88 53,817,671.14
Post-employment benefits - defined
142,989.35 14,622,967.90 14,674,051.90 91,905.35
contribution plans
Total 45,836,830.05 186,817,141.22 178,744,394.78 53,909,576.49
（1）Short-term employee benefits
As at Accrued during Decreased during As at
Item
31/12/2018 the year the year 31/12/2019
Salaries, bonus, allowances 44,535,073.06 153,522,845.02 145,514,192.66 52,543,725.42
Staff welfare 39,600.00 3,670,713.73 3,672,513.73 37,800.00
Social insurances 1,578.57 4,666,822.54 4,666,822.54 1,578.57
Including：1、M edical insurance 1,503.22 4,211,966.49 4,211,966.49 1,503.22
2、Work-related injury insurance 591.04 81,950.77 81,950.77 591.04
3、M aternity insurance -515.69 372,905.28 372,905.28 -515.69
Housing Fund 628,129.71 5,974,861.65 6,019,324.53 583,666.83
Labor union fees, staff and workers’ education
489,459.36 4,358,930.38 4,197,489.42 650,900.32
fee
Total 45,693,840.70 172,194,173.32 164,070,342.88 53,817,671.14
(2) Defined contribution plans
As at Accrued during Decreased during As at
Item
31/12/2018 the year the year 31/12/2019
Post-employment benefits 142,989.35 14,622,967.90 14,674,051.90 91,905.35
Including: 1．Basic pension insurance 75,075.11 10,088,061.88 10,088,061.88 75,075.11
2．Unemployment insurance 914.12 228,826.01 228,826.01 914.12
3．Annuity 67,000.12 4,306,080.01 4,357,164.01 15,916.12
119
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Total 142,989.35 14,622,967.90 14,674,051.90 91,905.35
19. Taxes payable
Item As at 31/12/2019 As at 31/12/2018
Corporate income tax 51,397,791.31 180,717,910.92
Land appreciation tax 521,540,610.07 106,254,407.65
Value-added tax 10,221,416.88 11,361,028.95
Personal Income Tax 1,049,224.90 828,729.71
City maintenance and construction tax 632,944.99 385,048.81
Property tax 262,015.56 335,365.77
Education surcharge 335,721.66 239,105.38
Local education surcharge 119,929.86 85,955.80
Others 141,160.13 339,819.99
Total 585,700,815.36 300,547,372.98
20、Other payables
Item As at 31/12/2019 As at 31/12/2018
Interest payables 16,535,277.94 16,535,277.94
Dividend payables -- --
Other payables 260,783,896.59 705,284,620.54
Total 277,319,174.53 721,819,898.48
(1)Interest payables
As at 31/12/2019 As at 31/12/2018
Item
Non-financial institution borrowing interest (interest
16,535,277.94 16,535,277.94
payable to parent company)
Significant overdue interest as follows:
Debtor Overdue amount Overdue reason
Shenzhen Invetment Holdings Co., Ltd. 16,535,277.94 Payment hold
Note: The principal of the loan was fully repaid on 22 December 2016.
(2) Other payables
Item As at 31/12/2019 As at 31/12/2018
Provision for land appreciation tax 59,710,423.57 509,788,654.15
Rrelated parties 12,549,466.41 2,770,322.64
Deposits 105,828,118.27 100,011,180.52
Others 82,695,888.34 92,714,463.23
Total 260,783,896.59 705,284,620.54
Including significant other payables aging over 1 year
120
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Item Amount Reason for no repayment
Provision for land appreciation tax 59,710,423.57 Payment has not been liquidated
21. Long-term payables
Item As at 31/12/2019 As at 31/12/2018
Long-term payables 7,499,192.92 6,507,139.20
Special payables -- --
Total 7,499,192.92 6,507,139.20
(1) Long-term payables
Item As at 31/12/2019 As at 31/12/2018
M aintenance fund 7,499,192.92 6,507,139.20
22. Share capital (Unit: ten thousand shares)
As at Provident fund
Issued As at
Investor 31/12/2018 Bonus shares increase Others Subtotal
shares 31/12/2019
shares
Total number
101,166.00 -- -- -- -- -- 101,166.00
of shares
23. Capital reserve
Additions during the Reductions during the
Item As at 31/12/2018 As at 31/12/2019
year year
Share prem ium 557,433,036.93 -- -- 557,433,036.93
Other capital reserves 420,811,873.18 -- -- 420,811,873.18
Total 978,244,910.11 -- -- 978,244,910.11
24. Other comprehensive income
Adjusted amount for the first implementation of the new financial
instrument standard
Net-of-tax As at
As at Net-of-tax 2019.1.1
Item 31/12/2018 Pre-tax amount
Less: amount
attributable to （3）=（1）
(1) income income tax attributable to
shareholders +（2）
for the period expense non-controlling
of the interests
Company (2)
I.Items that will
not be
-- 13,457,914.28 3,364,478.58 10,093,435.70 -- 10,093,435.70
reclassified to
profit or loss
1. Changes in fair
value of other -- 13,457,914.28 3,364,478.58 10,093,435.70 -- 10,093,435.70
equity
instruments
II.Items that may 10,564,385.97 -- -- -- -- 10,564,385.97
be reclassified
121
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Adjusted amount for the first implementation of the new financial
instrument standard
Net-of-tax As at
As at Net-of-tax 2019.1.1
Item 31/12/2018 Pre-tax amount
Less: amount （3）=（1）
(1) income attributable to
income tax attributable to +（2）
shareholders
for the period expense non-controlling
of the interests
Company (2)
to profit or loss
1.Translation
differences
arising from
translation of 10,564,385.97 -- -- -- -- 10,564,385.97
foreign currency
financial
statements
Total 10,564,385.97 13,457,914.28 3,364,478.58 10,093,435.70 -- 20,657,821.67
Continued
Movements during the year
Net-of-tax As at
Net-of-tax
As at 2019.1.1 amount 2019.12.31
Item Less: amount
(1) Before-tax attributable to （3）=（1）
amount income tax attributable to
expense shareholders of +（2）
non-controlling
the Company
interests
(2)
I. Items that will
not be 10,093,435.70 2,204,575.02 551,143.75 1,653,431.27 -- 11,746,866.97
reclassified to
profit or loss
1. Changes in fair
value of other 10,093,435.70 2,204,575.02 551,143.75 1,653,431.27 -- 11,746,866.97
equity instruments
II.Items that may
be reclassified to 10,564,385.97 -1,480,248.81 -- -1,480,248.81 -349,804.55 9,084,137.16
profit or loss
1. Translation
differences arising
from translation of
10,564,385.97 -1,480,248.81 -- -1,480,248.81 -349,804.55 9,084,137.16
foreign currency
financial
statements
Total 20,657,821.67 724,326.21 551,143.75 173,182.46 -349,804.55 20,831,004.13
25. Surplus reserve
Beginning Additions during Reductions
Item As at 31/12/2018 As at 31/12/2019
adjustment the year during the year
Statutory surplus
95,906,222.59 -416,151.43 95,732,767.78 --- 191,222,838.94
reserve
Note: For the impact of changes in accounting policies on the opening surplus reserve, please refer to Note III.30
122
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
26. Retained earnings
Year ended Year ended Appropriation or
Item 31/12/2019 31/12/2018 distribution percentage
Retained earnings as at 31/12/2018
1,235,884,122.72 742,624,845.71 --
(before adjustment)
Total adjustments for opening retained
earnings （ “+” for increase; “ –” for -25,355,845.72 -- --
decrease）
Retained earnings as at 01/01/2019
1,210,528,277.00 742,624,845.71 --
(after adjustment)
Add: Net profits for the year attributable
552,452,307.59 503,498,831.60 --
to shareholders of the Company
Less: Appropriation for statutory surplus
95,732,767.78 10,239,554.59 10.00
reserve
Dividends payable to ordinary
202,332,000.00 -- --
shares
Retained earnings as at 31/12/2019 1,464,915,816.81 1,235,884,122.72 --
Note: The impact of changes in accounting policies and corrections of significant accounting errors on opening retained earnings please refer to Note
III. 30.
27. Operating income and operating cost
2019 2018
Item
Revenue Cost Revenue Cost
Principal operating 2,533,402,850.39 944,347,757.51 2,149,857,315.87 918,680,658.37
Other operating 15,337,469.10 13,404,895.03 25,329,926.73 19,705,354.72
(1) Operating income and operating costs from principal activities (classified by industries)
2019 2018
Industry
Operating income Operating cost Operating income Operating cost
Real estate 2,017,872,864.14 497,310,023.38 1,595,473,065.40 445,500,004.85
Engineering
304,837,313.46 298,315,846.77 370,298,109.36 358,335,541.20
construction
Property management 157,665,638.01 142,261,602.88 146,123,975.95 128,536,788.40
Lease 86,484,133.79 45,173,891.05 92,015,827.23 46,069,096.38
Sub-total 2,566,859,949.40 983,061,364.08 2,203,910,977.94 978,441,430.83
Less: internal offset 33,457,099.01 38,713,606.57 54,053,662.07 59,760,772.46
Total 2,533,402,850.39 944,347,757.51 2,149,857,315.87 918,680,658.37
(2) Operating income and operating costs from principal activities(classified by geographical areas)
2019 2018
Region
Operating income Operating cost Operating income Operating cost
Domestic： 2,566,271,187.43 984,319,212.90 2,203,317,074.26 978,441,430.83
Guangdong: 2,491,373,238.76 910,671,531.26 2,117,245,186.96 895,675,822.41
Others: 74,897,948.67 73,647,681.64 86,071,887.30 82,765,608.42
123
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Overseas： 588,761.97 -- 593,903.68 --
USA 588,761.97 -- 593,903.68 --
Sub-total 2,566,859,949.40 984,319,212.90 2,203,910,977.94 978,441,430.83
Less: internal offset 33,457,099.01 38,713,606.57 54,053,662.07 59,760,772.46
Total 2,533,402,850.39 945,605,606.33 2,149,857,315.87 918,680,658.37
28. Taxes and surcharges
Item 2019 2018
Land appreciation tax 725,378,098.62 422,072,101.03
Property tax 9,522,347.24 9,538,716.87
Urban maintenance and construction
8,326,655.33 6,817,766.33
tax
Education surcharge 3,646,297.05 3,169,793.46
Local education surcharge 2,266,337.54 1,970,507.72
Embankment protection fees 1,874,192.43 1,843,855.48
Business tax -- -47,598.97
Total 751,013,928.21 445,365,141.92
Note: The criteria of taxes and surcharges accrued and paid refer to Note IV. Taxation.
29. Selling and distribution expenses
Item 2019 2018
Sales agency fees and commissions 64,830,444.01 38,454,875.23
Advertising expenses 5,292,324.97 6,657,350.04
Employee benefits 4,002,688.15 3,996,226.96
Entertaiment expenses 935,889.90 900,385.69
Others 4,418,906.99 2,554,142.30
Total 79,480,254.02 52,562,980.22
30. General and administrative expenses
Item 2019 2018
Employee benefits 49,342,369.86 50,904,497.46
Depreciation 2,901,508.29 3,134,997.46
Business Hospitality 2,601,004.99 2,796,377.72
Intermediary fee 2,862,135.59 2,499,764.35
Administrative expenses 1,949,136.92 1,480,234.71
Water and electricity charges 412,641.47 1,051,402.14
Repair charge 660,950.10 925,690.83
Other amortization 486,466.27 847,356.79
Travel expense 329,477.95 359,268.65
Others 7,308,927.26 10,030,250.33
Total 68,854,618.70 74,029,840.44
124
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
31. Financial expenses
Item 2019 2018
Interest expenses 38,642.51 2,817,521.60
Less: Interest capitalized -- --
Interest income 19,686,882.13 19,825,334.08
Exchange losses/(gains) -1,744,304.53 -547,960.63
Less: Exchange losses and gains
capitalized -- --
Bank charges and others 486,394.95 320,050.95
Total -20,906,149.20 -17,235,722.16
32. Other income
Related to assets/
Item (Source of other income) 2019 2018
income
Input VAT deduction 1,163,713.00 -- Income
Subsidies of steable post 4,414.90 -- Income
Total 1,168,127.90 --
Note:
(1) The related information is set out in Note XIII.1.
(2) Among them, the input tax deduction is related to normal operations, non -incidental, and is a recurring gains or losses.
33. Investment income
Item 2019 2018
Income from long-term equity
investments accounted for using the 75,629.25 -52,651.66
equity method
Investment income from holding
-- 827,100.00
available-for-sale financial assets
Dividend from investments in other
928,200.00 --
equity instruments
Structured deposit income 31,425,651.98 16,347,157.53
Total 32,429,481.23 17,121,605.87
34. Credit impairment losses（Losses are listed with "-"）
Item 2019 2018
Account receivables -2,184,042.21 --
Other Receivables -927,215.23 --
Total -3,111,257.44 --
35. Impairment losses ("-" for losses)( Impairment losses of assets)
Item 2019 2018
Impairment of receivables -- -29,797.00
125
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Long-term equity investments -12,166,897.84 -17,274,902.75
Total -12,166,897.84 -17,304,699.75
36. Gains from assets disposal
Item 2019 2018
Gains from disposals of fixed assets
(“-’’ for losses) -- -530.20
37. Non-operating income
Amount included in
non-recurring gains or
Item 2019 2018
losses for the year
ended 31/12/2019
Gains on penalty 1,152,266.31 586,932.13 1,152,266.31
Other 193,162.18 814,611.19 193,162.18
Government grants unrelated to the
-- 10,243.00 --
Company's daily activities
Total 1,345,428.49 1,411,786.32 1,345,428.49
Details of government grants are as follows:
Related to
Item 2019 2018 Note
assets/income
Stable job Subsidies -- 10,243.00 Income
Note:
(1) The related information is set out in Note XIII.1.
(2) All non-operating income items are included in non-recurring gains and losses.
38. Non-operating expenses
Amount included
in non-recurring
Item 2019 2018 gains or losses for
the year ended
31/12/2019
Donations provided 30,000.00 330,000.00 30,000.00
Loss in damage and scrap of
169,935.95 69,209.53 169,935.95
non-current assets
Fines 1,445.39 39,016.09 1,445.39
Others 25,185.46 140,874.39 25,185.46
Total 226,566.80 579,100.01 226,566.80
39. Income tax expenses
(1) Details of income tax expenses
Item 2019 2018
Current tax expense for the year based on tax law and
81,384,471.24 295,133,757.80
regulations
126
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Changes in deferred tax assets/liabilities 109,401,829.46 -112,377,271.44
Total 190,786,300.70 182,756,486.36
(2) Reconciliation between income tax expenses and accounting profit is as follows:
Item 2019
Profits before tax 731,983,330.76
Expected income tax expenses at applicable tax rate
182,995,832.69
(profits before tax 25 %)
Effect of different tax rates applied by subsidiaries 5,114,261.95
Effect of gains or losses from joint ventures and
-30,453,128.98
associates accounted for using the equity method
Effect of non-deductible costs, expenses and losses 21,337,044.56
Effect of using the deductible temporary differences or
deductible losses for which no deferred tax asset was -661,881.43
recognized in previous (expressed in “-”)
Effect of deductible temporary differences or deductible
losses for which no deferred tax asset was 12,454,171.91
recognized this year
Income tax expenses 190,786,300.70
40、Notes to items in the cash flow statements
（1）Other cash receipts relating to operating activities
Item 2019 2018
Interest income 15,906,764.91 19,825,334.08
The collecting and paying on another's behalf 8,051,762.09 5,425,177.51
Current account and Others 55,720,858.47 32,271,657.37
Total 79,679,385.47 57,522,168.96
（2）Other cash payments relating to operating activities
Item 2019 2018
Handling fee 682,722.12 320,050.95
Cash paid expenses 97,554,049.46 68,007,623.74
Current account and Others 8,702,866.87 15,023,926.92
Total 106,939,638.45 83,351,601.61
（3）Other cash receipts relating to Investment activities
Item 2019 2018
Restricted cash recoverd in the current period –
2,200,000,000.00 600,000,000.00
structured deposit
（4）Other cash payments relating to financing activities
Item 2019 2018
Restricted cash paid in the current period 2,300,000,000.00 1,500,000,000.00
127
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
–structured deposit
（5）Other cash receipts relating to financing activities
Item 2019 2018
Restricted cash recovery - security deposit -- 290,033.83
41. Supplementary information on cash flow statement
(1) Supplement to cash flow statement:
Supplement information 2019 2018
1、 Reconciliation of net profit/loss to cash flows from
operating activities：
Net profit 541,197,030.06 499,971,564.96
Add: Provisions for impairment of assets 12,166,897.84 17,304,699.75
Provisions for impairment of credit 3,111,257.44 --
Depreciation of fixed assets, depreciation of investment
28,907,809.32 28,889,127.19
properties
Amortization of intangible assets -- 55,200.00
Amortization of long-term deferred expenses 224,941.19 199,283.75
Losses from disposal of fixed assets, intangible assets, and
other long-term assets ("-" for gains) -- 530.20
Loss from scrapping of fixed assets ("-" for gains) 169,935.95 69,209.53
Losses from changes in fair value ("-" for gains) -- --
Financial expenses ("-" for income) 38,642.51 2,269,560.97
Losses arising from investment ("-" for gains) -32,429,481.23 -17,121,605.87
Decrease in deferred tax assets ("-" for increase) 108,102,463.55 -107,053,693.61
Increase in deferred tax liabilities ("-" for decrease) 987,671.25 --
Decrease in inventories ("-" for increase) 190,315,523.14 78,934,592.68
Decrease in operating receivables ("-" for increase) -136,075,098.50 147,437,501.15
Increase in operating payables ("-" for decrease） -113,109,867.77 411,611,434.89
Others --
Net cash flows from operating activities 603,607,724.75 1,062,567,405.59
2、Investing and financing activities not requiring the use of
cash:
Conversion of debt into capital
Convertible bonds due within one year
Acquisition of fixed assets under finance leases
3、Change in cash and cash equivalents：
Cash as at 31/12/2019 1,507,189,760.35 1,148,522,435.93
Less: cash as at 31/12/2018 1,148,522,435.93 1,206,789,056.46
Add: cash equivalents as at 31/12/2019 -- --
Less: cash equivalents as at 31/12/2018 -- --
Net increase in cash and cash equivalents 358,667,324.42 -58,266,620.53
128
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
(2) Details of cash and cash equivalents
Item 2019 2018
1.Cash 1,507,189,760.35 1,148,522,435.93
Including: Cash on hand 66,252.42 57,979.40
Bank deposits available on demand 1,493,123,507.93 1,148,464,456.53
Other monetary funds available on demand 14,000,000.00 --
2. Cash equivalents
3. Cash and cash equivalents as at 31/12/2019 1,507,189,760.35 1,148,522,435.93
42. Assets with restrictive ownership title or right of use
Item As at 31/12/2019 Reason for restriction
Cash at bank and on hand 1,003,950,685.00 Unexpired structured deposits
Accounts receivable 51,647,260.17 Short-term loan pledged
Total 1,055,597,945.17
43. Foreign currency translation
（1）Items in Foreign currency
Item Original Exchange rate Amount (RMB)
Cash at bank and on hand
Including: USD 5,532.95 6.9762 38,598.97
HKD 8,783,167.25 0.89578 7,867,791.43
Accounts receivable
Including: HKD 4,905,150.10 0.89578 4,393,935.36
Other receivables
Including: HKD 20,165,086.70 0.89578 18,063,481.36
Other payables
Including: USD 655,299.33 6.9762 4,571,499.19
VI. Change of consolidation scope
There is no change in consolidation scope during the current period.
VII.Interest in other entities
1. Interests in subsidiaries
(1) Composition of the Group
Principal Shareholding%
Registration Business Acquisition
Name place of
place nature Direct Indirect method
business
Acquiring through
Shenzhen City SPG Long Real estate
Shenzhen Shenzhen 95.00 5.00 establishment or
Gang Development Ltd. development
investment
Acquiring through
American Great Wall Co., Real estate
U.S. U.S. 70.00 -- establishment or
Ltd development
investment
129
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Principal Shareholding%
Registration Business Acquisition
Name place of
place nature Direct Indirect method
business
Acquiring through
Shenzhen City Property Property
Shenzhen Shenzhen 95.00 5.00 establishment or
M anagement Ltd. management investment
Acquiring through
Shenzhen Petrel Hotel Co.
Shenzhen Shenzhen Hotel Services 68.10 31.90 establishment or
Ltd.
investment
Acquiring through
Shenzhen Zhen Tung Installation and
Shenzhen Shenzhen 73.00 27.00 establishment or
Engineering Ltd. maintenance investment
Shenzhen City We Gen Acquiring through
Construction M anagement Shenzhen Shenzhen Supervision 75.00 25.00 establishment or
Ltd. investment
M echanical & Acquiring through
Shenzhen Lain Hua Industry Electrical establishment or
Shenzhen Shenzhen 95.00 5.00
and Trading Co., Ltd. device investment
installation
Acquiring through
Hong Investment and
Fresh Peak Zhiye Co., Ltd. Hong Kong 100.00 -- establishment or
Kong management investment
Acquiring through
Xin Feng Enterprise Co., Hong Investment and
Hong Kong 100.00 -- establishment or
Ltd. Kong management
investment
Acquiring through
Shenzhen City Shenfang Commecial
Shenzhen Shenzhen 95.00 5.00 establishment or
Free Trade Trading Ltd. trade
investment
Acquiring through
Shenzhen City Shenfang
Shenzhen Shenzhen Investment 90.00 10.00 establishment or
Investment Ltd. investment
Shenzhen Special Acquiring through
Economic Zone Real Estate establishment or
(Group) Guangzhou Shenzhen Shenzhen Real estate 95.00 5.00 investment
Property and Estate Co.,
Ltd.
Beijing fresh peak property Acquiring through
development management establishment or
Beijing Beijin Real estate 75.00 25.00
limited company investment
Note:
① In consolidation scope, there are five subsidiaries in “revoked but not cancelled” condition: Beijing SPG Property Management Limited,
Guangzhou Huangpu Xizun real estate limited company, Shenzhen Special Economic Zone Real Estate (Group) Guangzhou Property and Estate
Co., Ltd., Fresh Peak Real Estate Dev. Construction (Wuhan) Co. Ltd. and Beijing Shenfang Property Management Co., Ltd. They are presented on
the basis of discontinued operations, these five subsidiaries have made full provision for impairment of debet for the companies outside the
consolidation scope.
② The cancelled, revoked and closed subsidiaries of the Company that are not included in the scope of consolidation are as follows:
Principal Shareholding%
Registration Business Acquisition
Name place of
place nature Direct Indirect method
business
Shenzhen Shenfang Commecial Acquiring through
Shenzhen Shenzhen 95.00 5.00
Department Store Co. Ltd trade establishment or
130
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Principal Shareholding%
Registration Business Acquisition
Name place of
place nature Direct Indirect method
business
investment
Acquiring through
Commecial
Paklid Lim ited Hong Kong Hong Kong 60.00 40.00 establishment or
trade
investment
Acquiring through
Bekaton Property Limited Australia Australia Real estate 60.00 -- establishment or
investment
Acquiring through
Canada Great Wall
Canada Canada Real estate -- 60.00 establishment or
( Vancouver)
investment
Guangdong Fengkai County Acquiring through
Fengkai Fengkai
Lianfeng Cement Guangdong M anufacturing -- 90.00 establishment or
Guangdong
M anufacturing Co.,Ltd. investment
Acquiring through
Jiangmen Xinjiang Real Jiangmen Jiangmen
Real estate -- 90.91 establishment or
Estate Co., Ltd Guangdong Guangdong
investment
Acquiring through
Xi’an Fresh Peak Property
Xi’an Shanxi Xi’an Shanxi Real estate -- 67.00 establishment or
Trading Co., Ltd
investment
Acquiring through
Building
Shenxi Limited Shenzhen Shenzhen 70.00 -- establishment or
Decoration
investment
Shenzhen Zhentong New M echanical and Acquiring through
Electromechanical Industry Shenzhen Shenzhen electrical 95.00 5.00 establishment or
Development Co., Ltd. engineering investment
Shenzhen Real Estate Electromechani Acquiring through
Electromechanical Shenzhen Shenzhen cal 100.00 -- establishment or
M anagement Company M anagement investment
Acquiring through
Shenzhen Nanyang Hotel Co., Hotel
Shenzhen Shenzhen 95.00 5.00 establishment or
Ltd. M anagement
investment
Shenzhen Kangtailong Acquiring through
Industrial
Industrial Electric Cooker Co., Shenzhen Shenzhen -- 100.00 establishment or
manufacturing
Ltd. investment
Shenzhen Longgang Acquiring through
Industrial
Henggang Huagang Industrial Shenzhen Shenzhen -- 79.92 establishment or
Investment
Co., Ltd. investment
Note: 1. Shenzhen Shenfang Department Store Co. Ltd held a shareholders meeting on 29 October 2007, decided to terminate the business, and
formed a group for liquidation. The liquidation group issued a liquidation report on 7 December, 2007.
2. Paklid Limited, Bekaton Property Limited and Canada Great Wall ( Vancouver), they were companies established by the group overseas in the
early years. On 13 December 2000, the gourp held a board of directors and decided to liquidate these three companies. Bekaton Property Limited
and Canada Great Wall ( Vancouver) , the cancellation procedures were completed.
3. All assets from Guangdong Fengkai County Lianfeng Cement Manufacturing Co., Ltd. (including tangible and intangible asset) was auctioned by
the court on 22 January 2019, and it became a shell company.
4. Shenxi Limited was the Group’s cancelled subsidiary Shenzhen Tefa Real Estate Consolidated Services Co., Ltd’s subsidiary, By the Group “ The
notice on the menger of Shenzhen Zhen Tung Engineering Ltd and Shenxi Limited” （Shenfang [1997] No.19）announcement, all businesses form
Shenxi Limited were undertaken by Shenzhen Zhen Tung Engineering Ltd and Shenxi Limited was revoked on 8 February 2002.
131
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
These invested companies that have not been included in the consolidation scope were either been cancelled or ceased operation many years ago,
and the company entities were no longer exist, the Group could no longer effectively control them. According to “Accounting Standard for Business
Enterprises No. 33-Consolidated Financial Statements”, the above companies are not included in the consolidated scope of the group consolidated
financial statement, the group already fully provision for impairment the investment or the book value of the net investment in these companies.
(2) Material non-wholly owned subsidiaries
Proportion of Profit or loss
Dividend declared to Balance of
ownership allocated to
non-controlling non-controlling
Name interest held by non-controlling
shareholders during interests as at
non-controlling interests during the
the year 31/12/2019
interests % year
Great Wall Estate Co., Inc 30.00 -82,021.15 -- -21,860,102.50
Fresh Peak Investment
45.00 -11,167,982.90 -- -116,154,869.74
Ltd
Barenie Co. Ltd. 20.00 -5,273.48 -- -3,876,363.60
(3) Key financial information about material non-wholly owned subsidiaries
As at 31/12/2019
Name Non-
Current Non-current Current
Total assets current Total liabilities
assets assets liabilities
liabilities
Great Wall
38,598.97 19,274,905.74 19,313,504.71 107,974,695.34 -- 107,974,695.34
Estate Co., Inc
Fresh Peak
4,817.49 36,016.90 40,834.39 256,573,564.93 -- 256,573,564.93
Investment Ltd
Barenie Co. Ltd. 1,045.70 -- 1,045.70 32,842,234.42 -- 32,842,234.42
Continued（1）：
As at 31/12/2018
Name Current Non-current Current Non-current
Total assets Total liabilities
assets assets liabilities liabilities
Great Wall
312,086.57 19,021,543.04 19,333,629.61 106,555,401.23 -- 106,555,401.23
Estate Co., Inc
Fresh Peak
873,070.13 36,016.90 909,087.03 256,549,015.66 -- 256,549,015.66
Investment Ltd
Barenie Co. Ltd. 1,024.45 21,223,344.85 21,224,369.30 32,813,474.75 -- 32,813,474.75
Continued（2）：
2019 2018
Cash flows Cash flows
Name Total Total
Operating from Operating from
Net profit comprehensive Net profit comprehensive
income operating income operating
income income
activities activities
Great Wall
Estate Co., 588, 761.97 -273,403.83 -- -273,403.83 593, 903.68 -184,610.61 -- -184,610.61
Inc
132
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Fresh Peak
Investment -- -24,533. 43 -- -- -- -20,135. 10 -- 997. 60
Ltd
Barenie Co.
-- -26,367. 40 -- -- -- -9,169,123.59 -- 1,922.53
Ltd.
2. Interests in joint ventures or associates
(1) Summarised financial information of immaterial joint ventures and associates:
As at 31/12/2018 / As at 31/12/2018 /Year
Item
Year ended 31/12/2019 ended 31/12/2018
Joint ventures: --
Aggregate carrying amount of investments 12,166,897.84
Aggregate amount of share of -- --
Net profit -- --
Other comprehensive income -- --
Total comprehensive income
Associates:
Aggregate carrying amount of investments 469,838.65 394,209.40
Aggregate amount of share of
Net profit 75,629.25 -52,651.66
Other comprehensive income -- --
Total comprehensive income -- --
(2) Excess loss from joint ventures or associates
Unrecognized loss Accumulated
Accumulated unrecognized
Investee (or share of net unrecognized loss as at
loss in prior periods
profit)for the year 31/12/2019
Shenzhen Fresh Peak property
941,374.25 154,587.30 1,095,961.55
consultant Co., Ltd
Note: Shenzhen Fresh P eak property consultant Co., Ltd was established on 15 March 1990, Registered capital of 3,000,000, the group subscribed
RMB 600,000 (20% in total capital). As at 31 December 2019, the group actually contributed RMB 600,000 and already confirmed long-term equity
invent lose RMB 600,000.
VIII. Financial instruments and risk management
The major financial instruments of the Group include cash at bank and on hand, accounts receivable, other receivable, other current assets, other
equity instrument, account payables, other payables, short-term loans，and long-term payables. The details of these financial instruments are
disclosed in the respective notes. The financial risk of these financial instruments and financial management policies used by the Group to minimize
the risk are disclosed as below. The management manages and monitors the exposure of these risks to ensure the above risks are controlled in the
limited range.
1.Objectives and policies of financial risk management
The Group’s objective in risk management is to obtain an appropriate equilibrium between risk and return. It also focuses on the unpredictability of
financial markets and seeks to minimize potential adverse effects on the Group’s financial performance. Based on the objectiv es of financial risk
management, certain policies are made to recognize and analyze risk and internal control is designed according to proper acceptable in order to
monitor the risk position of the Group. Both the policies and internal control will be reviewed and revised regularly to adap t the changes of the market
and business activities of the Group. The performance of internal control will be reviewed regularly or randomly in accordance with the financial
management policies.
133
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
The Group’s financial instrument risks mainly include credit risk, liquidity risk and market risk. (Including currency risk, interest rate risk and
commodity price risk)
The board of directors is responsible for planning and establishing the risk management structure of the Group, formulating t he Group’s risk
management policies and related guidelines, supervising the implementation of risk management measures. The Group has established risk
management policies to identify and analyze the risks faced by the Group. These risk management policies clearly define speci fic risks, covering
market risk, credit risk and liquidity risk. The Group regularly assesses changes in the market environment and the Group’s operating activities to
determine whether update risk management policies and systems.
The Group diversifies the risk of financial instruments through appropriate diversified investments and business combinations , and reduces the risk of
concentration in a single industry, a specific region or a specific counterparty by developing appropriate risk management policies.
（1）Credit risk
Credit risk refers to the risk that the counterparty to a financial instrument would fail to discharge its obligation under the terms of the financial
instrument and cause a financial loss to the Group.
Credit is managed on the grouping basis. Credit risk is mainly arising from cash at bank, accounts receivable, and other receivables.
The Group expects that there is no significant credit risk associated with cash at bank since it is deposited or will be accepted by the sate-owned
banks and other medium or large size listed banks.
The Group has policies to limit the credit risk exposure on accounts receivables and other receivables. The Group assesses the credit quality of and
sets credit limits on its customers by taking into account their financial position, the availability of guarantee from third parties, the availability of
guarantee from third parties, their credit history and other factors such as current market conditions. The credit history of the customers is regularly
monitored by the Group. In respect of customers with a poor credit history, the Group will use written payment reminders, or shorten or cancel credit
periods, to ensure the overall credit risk of the Group is limited to a controllable extent.
The Group’s debtors of account recevables are in difference industries and regions, the Group continues in evaluation the debtor’s financial status.
The highest credit risk exposed to the Group is limited to the carrying amount of each financial instrument illustrated in the balance sheet. The Group
would not provide any guarantee that might cause credit risk to the Group.
Among the accounts receivable of the Group, the bills receivable and accounts receivable of the top five customers accounted for 53.79%
(2018:30.43% ); among the other receivables of the Group, the other receivable of the top five customers accounted for 62.80% (2018:62.19% )
（2）Liquidity risk
Liquidity risk refers to the risks that the Group will not be able to meet its obligations associated with its financial liabilities that are settled by
delivering cash or other financial assets.
Cash flow forecasting is performed by Group’s finance department. The Group’s finance management monitors cash and cash equiv alents to meet
operational needs and reduce the effect of floating cash flow. The department monitors the usage of bank loan so that the Group does not breach
borrowing limits or covenants while maintaining sufficient headroom on its undrawn committed borrowing facilities from major financial institute to
meet the short-term and long-term liquidity requirements.
The Group raises working capital from its operations, bank and other borrowings. As at 31 December 2019, the amount of bank loans not yet used by
the Group is RMB 0.00. (As at 31 Dec ember 2018: RMB 28,000,000)
The financial assets and liabilities, off-balance-sheet guarantee items of the Group at 31 December 2019 are analyzed by their maturity date below at
their undiscounted contractual cash flows (RMB in ten thousand)：
As at 31/12/2019
Item
Within 1 year 1 to 5 years Over 5 years Total amount
Financial liabilities：
Short-term loans 5,164.73 -- -- 5,164.73
Accounts payable 24,422.45 -- -- 24,422.45
Interest payables 1,653.53 -- -- 1,653.53
Other payables 20,051.11 -- -- 20,051.11
Long-term payables -- 749.92 -- 749.92
134
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Guarantees for client 47,539.67 -- -- 47,539.67
Total liabilities 98,831.49 749.92 -- 99,581.41
The financial assets and liabilities, off-balance-sheet guarantee items of the Group at 31 December 2018 are analyzed by their maturity date below at
their undiscounted contractual cash flows（RMB in ten thousand）：
As at 31/12/2018
Item
Within 1 year 1 to 5 years Over 5 years Total amount
Financial liabilities：
Short-term loans 1,726.01 -- -- 1,726.01
Accounts payables 21,675.89 -- -- 21,675.89
Interest payables 1,653.53 -- -- 1,653.53
Other payables 21,203.12 -- -- 21,203.12
Long-term payables -- 650.71 -- 650.71
Guarantees for client 94,327.58 -- -- 94,327.58
Total liabilities 140,586.13 650.71 0.00 141,236.84
The amount of financial liabilities disclosed in the above table is undiscounted contractual cash flow and may differ from the carrying amount in the
balance sheet.
The maximum guarantee contract that already signed dose not represent the amount need to paid.
（3）Market risk
Market risk, includes interest rate risk and foreign currency risk, refers to the risk that the fair value or future cash flow of a financial instrument will
fluctuate because of the changes in market price.
Interest rate risk
Interest rate risk refers to the risk that the fair value or future cash flow of a financial instrument will fluctuate becaus e of the floating rate. Interest rate
risk arises from recognized interest-bearing financial instrument and unrecognized financial instrument (e. g. loan commitments).
The Group’s interest rate risk arises from long-term bank loans and other interest-bearing liabilities. Financial liabilities issued at floating rate expose
the Group to cash flows interest rate risk. Financial liabilities issued at fixed rate expose the Group to fair value interest rate risk. The Group
determines the relative proportions of its fixed rate and floating rate contracts depending on the prevailing market conditions. At the same time, the
Group monitors and maintains the combined financial instruments of fixed rate and floating rate.
During the reporting period, the Group operates by its own working capital. As at 31 December, 2019, the Group has no financi al liabilities with fixed
or floating interest rate, such as bank loan. Therefore, the Group believes that the interest rate risk is insignificant.
Interest-bearing financial instruments held by the Group (RMB in ten thousand)：
Item As at 31/12/2019 As at 31/12/2018
Fixed interest rate financial instruments
Financial liabilities -- 200.00
Including: Short-term borrowings -- 200.00
Total -- 200.00
Foreign currency risk
Foreign currency risk refers to the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign
currency rates. Foreign currency risk arises from the functional currency denominated financial instrument measured at individual entity.
The foreign currency risk is mainly comes from the group’s financial posi tion and cash flow which is affected by the fluctuations of the foreign
exchange rates. As the subsidiary establish in Hong Kong SAR and U.S. are using local currency as settlement currency, other foreign currency
assets and liabilities held by the Group c ompare with the group’s total assets and liabilities are insignificant, therefore, the Company believe the
135
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
foreign currency risk is insignificant.
2、Capital risk management
The objectives of the Group’s capital risk management are to safeguard the Group’s ability to continue as a going concern in order to provide returns
for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capit al.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders,
issue new shares or disposes assets to reduce its liabilities.
The Group monitors capital on the basis of the gearing ratio. This ratio is calculated as net liabilities divided by total capital. As at 31 December 2019,
the group’s debt to asset ratio is 28.20% . (As at 31 December 2018: 40% )
IX Fair Value
The level in which fair value measurement is categorized is determined by the level of the fair value hierarchy of the lowest level input that is
significant to the entire fair value measurement. The levels are defined as follows:
Level 1 inputs: unadjusted quoted prices in active markets that are observable at the measurement date for identical assets or liabilities.
Level 2 inputs: inputs other than Level 1 inputs that are either directly or indirectly observable for underlying assets or liabilities.
Level 3 inputs: inputs that are unobservable for underlying assets or liabilities.
（1）Fair value of assets and liabilities measured at fair value
As at 31/12/2019, assets and liabilities measured at fair value are shown as follows,
Level 1 fair Level 2 fair Level 3 fair
Item value value value Total
measurement measurement measurement
I.Recurring fair value measurement
Other Equity instruments -- -- 33,126,730.04 33,126,730.04
Total assets measured at fair value
-- -- 33,126,730.04 33,126,730.04
on a recurring basis
（2）Quantitative information about the unobservable inputs used in the fair value measurement that are significant and are reasonably available.
Fair value
Items Valuation techniques Unobservable inputs
As at 31/12/2019
Unlisted equity
33,126,730.04 Net asset method Book net assets, liquidity discount
investments
（3）Fair values of assets and liabilities not measured at fair value
The financial assets and financial liabilities of the Group measured at amortized cost mainly include: cash, accounts receivable, other receivables,
short-term loans, accounts payable, other payables and long-term payable.
In addition to above financial assets and liabilities, other financial asset and liabilities that not measured at fair value, the differ between book values
and fair value are not significant.
X. Related parties and related party transactions
1. Information about the parent of the Company
Registered
Registration Shareholding Percentage of
Name Business nature capital (RMB in
place percentage % voting rights %
ten thousand)
Shenzhen Investment, real
Shenzhen, 2,764,900.00 63.55 63.55
Invetment estate
136
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Holdings Co., Ltd. development,
Guangdong
guarantee
province
The ultimate controlling party of the company is: State-owned Assets Supervision and Management Commission of Shenzhen Municipal People’s
Government
During the reporting period, the registered capital of the parent company changed as follows:
As at As at
Addition Reduction
31/12/2018 31/12/2019
2,534,900.00 230,000.00 -- 2,764,900.00
2. Information about the subsidiaries of the Company
For information about the subsidiaries of the Company, refer to Note VII.1.
3. Information about joint ventures and associates of the Company
For information about the joint ventures and associates of the Company, refer to Note VII.2.
4. Information on other related parties
Name Related party relationship
Shenzhen Jian'an Group Co., Ltd. Same controlling shareholders
Shenzhen Dongfang New world store Co., Ltd Participating stock companies
Not included in Consolidated Financial
Statements’ Subsidiary that had been
Shenxi Limited
terminated its licenses by law but not
cancellation
Not included in Consolidated Financial
Shenzhen Zhentong New Electromechanical Industry Development Co., Ltd. Statements’ Subsidiary (Long-term without
operation)
Not included in Consolidated Financial
Statements’ Subsidiary that had been
Shenzhen Nanyang Hotel Co., Ltd.
terminated its licenses by law but not
cancellation
Not included in Consolidated Financial
Statements’ Subsidiary that had been
Shenzhen Real Estate Electromechanical M anagement Company
terminated its licenses by law but not
cancellation
Not included in Consolidated Financial
Statements’ Subsidiary that had been
Shenzhen Longgang Henggang Huagang Industrial Co., Ltd.
terminated its licenses by law but not
cancellation
5. Transactions with related parties
(1) Purchases/sales
①Purchase of goods/receiving of services
Related party Nature of transaction 2019 2018
Shenzhen RongHua
Elevator maintenance 1,339,921.80 1,390,625.62
JiDian Co.,Ltd
137
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
②Sales of goods/rendering of services
Related party Nature of transaction Year ended 31/12/2019 Year ended 31/12/2018
Shenzhen Jian'an Group
Decoration services 2,836,052.81 1,333,878.10
Co., Ltd.
Shenzhen RongHua
Property Services 68,772.00 68,772.00
JiDian Co.,Ltd
(2) Contracting arrangement
① Outsourcing with related parties
Type of Contracting
Basis of
Name of assets Reception date Expiration date
Name of pricing of income recognized
main under of of
contractor contracting
contractor outsourcin contracting contracting in the current year
income
g
year
Shantou City
Shenzhen
Huafeng
Jian'an Constructio
Real Estate 19 October 2018 1 M ay 2021 Negotiations 167,885,971.23
Group Co., n
Devepment Ltd.
Co., Ltd
(3) Funding from related party
Related party Amount of funding Reception date Expiration date Note
Funds received
The principal of the loan was
Shenzhen Investment
22 December repaid on 22 December 2016,
Shareholding Co. 16,535,277.94 09 November 2006
2016 and the remaining amount
Ltd
was interest payable.
In the end of reporting period, interest payable for Shenzhen Investment Shareholding Co. Ltd is RMB 16,535,277.94.
(4) Remuneration of key management personnel
The Company has 11 key management personnel in 2019, and 10 key management personnel in 2018. Information about remuneration is as follows:
Item 2019 (RMB in ten thousand) 2018 (RMB in ten thousand)
Remuneration of key
management 902.08 755.33
personnel
6. Receivables from and payables to related parties
(1) Receivables from related parties
As at 31/12/2019 As at 31/12/2018
Item Related party Provision for Provision for bad
Book value bad and Book value and doubtful
doubtful debts debts
Accounts Shenzhen Fresh 1,205,588.76 1,205,588.76 1,185,689.73 --
138
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
As at 31/12/2019 As at 31/12/2018
Item Related party Provision for Provision for bad
Book value bad and Book value and doubtful
doubtful debts debts
recevible Peak property
consultant Co.,Ltd
司
Guangdong
Other recevibles Province Huizhou 10,465,168.81 10,465,168.81 10,465,168.81 10,465,168.81
Luofu Hill M ineral
Water Co., Ltd
Shenzhen Runhua
Other recevibles Automobile 3,072,764.42 3,072,764.42 3,072,764.42 3,072,764.42
Trading Co., Ltd
Canada GreatWall
Other recevibles （ Vancouver ） 89,035,748.07 89,035,748.07 89,035,748.07 89,035,748.07
Co. ,Ltd
Bekaton Property
Other recevibles 12,559,290.58 12,559,290.58 12,559,290.58 12,559,290.58
Limited
Other recevibles Paklid Lim ited 19,319,864.85 19,319,864.85 19,173,003.78 19,169,123.37
Shenzhen
Other recevibles Shenfang 237,648.82 237,648.82 237,648.82 189,179.82
Department Store
Co. Ltd.
Shenzhen
Other recevibles RongHua JiDian 475,223.46 23,761.17 475,223.46 --
Co.,Ltd
Xi’an Fresh Peak
property
Other recevibles 8,419,205.19 8,419,205.19 8,419,205.19 8,419,205.19
management&
Trading Co.,Ltd
Other recevibles Shenxi Limited 7,660,529.37 7,660,529.37 7,660,529.37 6,236,505.15
Shenzhen
Other recevibles Nanyang Hotel 3,168,721.00 3,168,721.00 3,168,721.00 3,050,666.00
Co., Ltd.
Shenzhen Jian'an
Other recevibles 16,464.28 823.21 -- --
Group Co., Ltd.
(2) Payables to related parties
Item Related party As at 31/12/2019 As at 31/12/2018
Shenzhen Investment
Intrest payables Shareholding Co. Ltd 16,535,277.94 16,535,277.94
Shenzhen Jian'an Group Co.,
Accounts payable 68,172,202.04 43,446,497.68
Ltd.
Shenzhen Dongfang New
Other payables 902,974.64 902,974.64
world store Co., Ltd
Guangdong Province
Other payables 1,867,348.00 1,867,348.00
Fengkai Lain Feng Cement
139
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
M anufacturing Co., Ltd.
Shenzhen Real Estate
Other payables Electromechanical 14,981,420.99 14,981,420.99
M anagement Company
Shenzhen Zhentong New
Other payables Electromechanical Industry 8,827,940.07 8,827,940.07
Development Co., Ltd.
Shenzhen Shenfang
Other payables Department Store Co. Ltd. 639,360.38 639,360.38
Shenzhen Longgang
Other payables Henggang Huagang 165,481.09 165,481.09
Industrial Co., Ltd.
XI. Commitments and contingencies
1. Significant commitments
(1) Capital commitments
Capital commitments have been entered into but not have
As at 31/12/2019 As at 31/12/2018
not been in the financial statements
Significant outsourcing contracts 200,684,729.85 368,570,701.08
Note: The significant outsourcing contract was based on the construction contract between Shantou
Tianyuewan II Project and the contractor Shenzhen Jian'an (Group) Co., Ltd.
(2) Information on implementation of commitments in previous year
The detail is set out in Note X.5.(2) Associated Contracting.
As at 31 December 2019, there is no other material commitment to be disclosed.
2. Contingencies
(1) Contingent liabilities arising from pending arbitration and pending litigation and related financial impact
Amount of
Progress of
Plaintiff Defendant Case Appellate court the object of cases
action
Xi'an Commercial and
Investment 36.62 million
Xi’an Fresh Peak Holding Trade Commission Shaanxi Higher
compensation yuan and Pending
limited company Xi'an Commerce and disputes People's Court
interest
Tourism Co., Ltd.
Note: Xi’an Fresh Peak Holding limited company (hereinafter referred to as “Fresh Peak Company”) was sino-foreign joint venture set up in Xi’an city.
Among them, Fresh Peak Enterprise Co., Ltd made 67% of the shares in cash. Xi’an Trade Building, a company directly under the Xi'an Commercial
and Trade Commission (hereinafter referred to as "Xi'an C&T Commission"), invested 16% of the shares in land use rights. Hong Kong Dadiwang
Industrial Investment Company holds 17% of the shares. The core business was property development. And the project was Xi’an Trade Building.
The project was started on 28 November 1995. But the project had been stopped in 1996 because of the two parties differences on the operating
policy of the project. In 1997, the Xi’an government withdrew the Xi'an Fresh Peak investment project compulsively and assigned the project to Xi’an
Business Tourism Co., Ltd (hereinafter referred to as “Business Tourism Company”). But the two parties had insulted a lawsuit on compensation. The
ShanXi Province High Peoples Court made a judgement “(2000) SJ-CZ No.25”. The judgement was as follows: 1. Business Tourism Company had to
pay for the compensation Rmb 36,620 thousand to Xi’an Fresh Peak Company after the judgment entering into force. If the Busin ess Tourism
Company failed to pay in time, it had to pay double debt interests to Xi’an Fresh Peak Company. 2. Xi’an Joint Commission on Commerce had jointly
and severally obligation of the interests of the compensation.
Untill 31 December 2019, the amount of RMB 15,201, 000.00 had been called back. The company has obtained new property clues, submitted an
application for resumption of execution, this case is still pending.
140
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
As at 31 December 2019, the book value of the long-term equity investment of Xi’an Fresh Peak Company was RMB 32,840,729.61. The book
balance of assets was RMB 8,419,205.19. Both have been taken full provision for impairment loss.
(2) Contingent liabilities arising from guarantee provided to other entities and related financial effects.
As at 31 December 2019, The Group follows the real estate operating routine provides a total of 47,593.67
(RMB in ten thousand) mortgage guarantee to real estate buyers.
Item Duration Amount Note
Until the Premises Permit
Shengfang CuiLin Building mortgage registration is finished 15,819.86
and in bank custody
Until the Premises Permit
ChuanQi DongHu Building(Fromer
mortgage registration is finished 17,535.05
DongHuDiJing Building)
and in bank custody
Until the Premises Permit
TianYue Bay No.1 mortgage registration is finished 14,184.76
and in bank custody
Total 47,539.67
(2) Other contingencies
For contingent liabilities related to joint venture or associate investment, please refer to Note VII.2. (2)
As at 31 December 2019, there is no other contingency to be disclosed.
XII. Post balance sheet date events
1. Profit distribution after the balance sheet date
Based on the total share capital of 1,011,660,000 shares as of 31 December 2019, a cash dividend of RMB
1.65 (including tax) will be distributed to all shareholders for every 10 shares as total as RMB 166,923,900.00.
2. Other events after the balance sheet date
Since January 2020 pneumonia caused by COIVD-19 is spreading across the country. The prevention of pneumonia is continuing nationwide. The
Group follows the arrangement of State-owned Asstest Supervision and Administration Commission of the People’s Government of Shenzhen
Munclipal and the Shenzhen Investment Holding Co., Ltd., combined with the actual situation of the leased property within the group, planned to
make a reduction of rents for more than 300 companies and individuals for two-month, total amount about RMB10,000, 000.
As at 13 March 2020, there are no other events after the balance sheet date to be disclosed.
XIII.Other significant items
1. Government grants
(1) Government grants recognized in proft and loss, and subsequently measured using the gross method.
Recognised in Recognised in
Presentation item
profit and loss for profit and loss for Related to
Item Type recognized in profit
the year ended the year ended asset/income
and loss
31/12/2018 31/12/2019
Stabilization Government
10,243.00 4,414.90 Other income income
allowance funding
3. Others
From 14 September 2016, the Group planned the reorganization of material assets. The Group announced it
intended to buy 100% stock equity of Evergrande real estate group co., LTD by issue shares or cash payment
141
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
on 14 October 2016. Guangzhou Chiron real estate co., LTD will become the controlling shareholder of the
company after the acquisition.
The restructuring of material assets is still in process as scheduled by the financial report day.
XIV.Notes to the Company’s financial statements
1．Accounts receivable
(1) Accounts receivable by aging balance
Aging As at 31/12/2019 As at 31/12/2018
Within 1 year 4,766.37 1,105,116.03
1-2 years 66,518.00 140,732.69
2-3 years -- 293,033.67
M ore than 3 years 10,715,652.53 10,594,607.30
Sub-total 10,786,936.90 12,133,489.69
Less：Provision for bad and doubtful
10,630,001.06 6,968,694.02
debts
Total 156,935.84 5,164,795.67
（2）Accounts receivable by category
As at 31/12/2019
Provision for bad and doubtful
Book balance
Item debts
Percentage Carrying amount
Expected credit
Book value of Book value
loss(%)
provision %
Provision made on an
10,626,436.84 98.51 10,626,436.84 100.00 --
individual basis
Provision for bad and doubtful
160,500.06 1.49 3,564.22 2.22 156,935.84
debts collectively
Including:
Accounts receivable from
related parties in consolidated 89,215.69 0.83 -- -- 89,215.69
scope
Accounts receivable from sales
71,284.37 0.66 3,564.22 5.00 67,720.15
of proporties
Total 10,786,936.90 100.00 10,630,001.06 98.55 156,935.84
Continued
As at 1/1/2019
Book balance Provision for bad and doubtful debts
Item
Percentage
Expected credit Carrying amount
Book value of Book value
loss(%)
provision %
142
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
As at 1/1/2019
Book balance Provision for bad and doubtful debts
Item
Percentage
Expected credit Carrying amount
Book value of Book value loss(%)
provision %
Provision made on an
10,523,723.00 97.56 10,523,723.00 100.00 --
individual basis
Provision for bad and doubtful
1,609,766.69 14.92 76,027.55 4.72 1,533,739.14
debts collectively
Including:
Accounts receivable from
related parties in consolidated 89,215.69 0.83 -- -- 89,215.69
scope
Accounts receivable from sales
1,520,551.00 14.10 76,027.55 5.00 1,444,523.45
of proporties
Total 12,133,489.69 112.48 10,599,750.55 87.36 1,533,739.14
Provision made on an individual basis：
As at 31/12/2019
Item Provision for bad Percentage of Rationale of
Book balance
and doubtful debts provision % Provision
Amount receivables of
Expected to be not
sales of proporties for 10,523,723.00 10,523,723.00 100.00 recoverable
long-term uncollected
Provision for bad and doubtful debts collectively ：
Accounts receivable from related parties in consolidated scope
As at 31/12/2019
Aging Provision for bad and
Accounts receivable Expected credit loss(%)
doubtful debts
M ore than 3 years 89,215.69 -- --
Accounts receivable from sales of proporties
As at 31/12/2019
Aging Provision for bad and
Accounts receivable Expected credit loss(%)
doubtful debts
Within 1 year 4,766.37 238.32 5.00
1-2 years 66,518.00 3,325.90 5.00
Total 71,284.37 3,564.22 5.00
As at 31/12/2018，Provision for bad and doubtful debts：
As at 31/12/2018
Category Provision for Provision for
Book value % bad and % bad and
doubtful doubtful
143
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
debts debts
Accounts receivable of which
provision for bad debts is of -- -- -- -- --
individually significant
Provision for bad and doubtful
-- -- -- -- --
debts collectively
Accounts receivable of which
provision for bad debts is of 12,133,489.69 100.00 6,968,694.02 57.43 5,164,795.67
individually insignificant
Total 12,133,489.69 100.00 6,968,694.02 57.43 5,164,795.67
（3）Provision, recovery or reversal of bad debt:
Provision for bad and
Item
doubtful debts
As at 31/12/2018 6,968,694.02
Adjustment amount for the first implementation of the new financial instrument 3,631,056.53
guidelines
As at 1/1/2019 10,599,750.55
Provision 30,250.51
Recovery --
Written-off --
As at 31/12/2019 10,630,001.06
（4）Top 5 entities with the largest balances of other receivables
Proportion of the
Bad debt
Name of Entity Amount amount to the total AR provision
(%)
Corporation No.1 2,038,459.08 18.9 2,038,459.08
Corporation No.2 1,205,588.76 11.18 1,205,588.76
Individual No.1 1,200,000.00 11.12 1,200,000.00
Individual No.2 904,664.31 8.39 904,664.31
Individual No.3 876,864.11 8.13 876,864.11
Total 6,225,576.26 57.72 6,225,576.26
2.Other receivables
① Other receivable by aging balance
Aging As at 31/12/2019 As at 31/12/2018
Within 1 year 91,158,862.87 158,202,023.94
1-2 years 140,372,735.75 73,851,395.97
2-3 years 73,930,238.58 310,307,057.96
M ore than 3 years 1,330,808,992.53 1,023,727,012.17
Sub-total 1,636,270,829.73 1,566,087,490.04
Less：Provision for bad and doubtful debts 800,995,331.04 798,092,941.31
Total 835,275,498.69 767,994,548.73
144
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
② Other receivables categorized by nature
As at 31/12/2019 As at 31/12/2018
Provision
Item Provision for
Book for bad and Carrying Book Carrying
bad and
balance doubtful amount balance amount
doubtful debts
debts
Amount
receivables from 721,755.80 -- 721,755.80 721,755.80 -- 721,755.80
government
Accounts
receivable from
182,691.21 -- 182,691.21 30,533.81 -- 30,533.81
employee’s
inprest fund
Amount
receivables of the
collecting and 3,248.36 -- 3,248.36 3,961.49 -- 3,961.49
paying on
another's behalf
Amount
receivables of 6,818,306.11 5,744,165.49 1,074,140.62 7,318,959.85 5,388,819.48 1,930,140.37
other customers
Amount
receivables of 135,567,522.22 135,100,418.87 467,103.35 135,551,057.94 134,576,616.49 974,441.45
related parties
Amount
receivables in 1,492,977,306.03 660,150,746.68 832,826,559.35 1,422,461,221.15 658,127,505.34 764,333,715.81
consolidated
scope
Total 1,636,270,829.73 800,995,331.04 835,275,498.69 1,566,087,490.04 798,092,941.31 767,994,548.73
③Provision for bad and doubtful debts：
As at 31/12/2019, the provision for bad debts in the first stage :
To 12-month
Provision for
Book expected Carrying
Category bad and Reasons
balance credit loss doubtful debts amount
(%)
Provision for bad and doubtful
debts collectively
Amount receivables from
721,755.80 -- -- 721,755.80
government
Amount receivables from
182,691.21 -- -- 182,691.21
employee’s inprest fund
Amount receivables from the
collecting and paying on 3,248.36 -- -- 3,248.36
another's behalf
Amount receivables from
1,130,674.34 5.00 56,533.73 1,074,140.61
other customers
Amount receivables from
491,687.74 5.00 24,584.38 467,103.36
related parties
145
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
To 12-month
Provision for
Book expected Carrying
Category bad and Reasons
balance credit loss doubtful debts amount
(%)
Total 2,530,057.45 3.21 81,118.11 2,448,939.34
As at 31/12/2019, the provision for bad debts in the second stage :
To 12-month
Provision for
Book expected Carrying
Category bad and Reasons
balance credit loss amount
doubtful debts
(%)
Provision made on an individual
basis
Other receivables from
Expected to be
consolidation scope related 1,492,977,306.03 44.22 660,150,746.68 832,826,559.35
not recoverable
parties
As at 31/12/2019, the provision for bad debts in the third stage :
Provision for
Book 12-month expected Carrying
Category bad and Reasons
balance credit loss(%) amount
doubtful debts
Provision made on an
individual basis
Amount receivables of other Expected to be
5,687,631.77 100.00 5,687,631.77 --
customers not recoverable
Amount receivables of related Expected to be
135,075,834.48 100.00 135,075,834.48 --
parties not recoverable
Total 140,763,466.25 100.00 140,763,466.25 --
As at 31/12/2018, provision for bad and doubtful debts：
As at 31/12/2018
Category Provision for Provision for
Book value % bad and % bad and
doubtful debts doubtful debts
Accounts receivable of which
provision for bad debts is of
individually significant
Provision for bad and doubtful
1,546,671,462.05 98.76 786,391,511.59 50.84 760,279,950.46
debts collectively
Accounts receivable of which
provision for bad debts is of 19,416,027.99 1.24 11,701,429.72 60.27 7,714,598.27
individually insignificant
Total 1,566,087,490.04 100.00 798,092,941.31 50.96 767,994,548.73
④Provision, recovery or reversal of bad debt
Provision for bad and doubtful The first stage The second stage The third stage Total
146
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Lifetime expected Lifetime expected
12-month
credit loss (no credit loss (has
expected credit
credit occurred credit
loss
impairment) impairmen)
As at 31/12/2018 -- 658,127,505.34 139,965,435.97 798,092,941.31
Adjustment amount for the first
implementation of the new financial 105,327.58 -- 798,030.28 903,357.86
instrument guidelines
As at 1/1/2019 105,327.58 658,127,505.34 140,763,466.25 798,996,299.17
Provision -- 2,023,241.34 -- 2,023,241.34
Recovery 24,209.47 -- -- 24,209.47
Written-off -- -- -- --
As at 31/12/2019 81,118.11 660,150,746.68 140,763,466.25 800,995,331.04
⑤ There were no other receivables written off in the current period.
⑥Top 5 entities with the largest balances of other receivables
Relationship Proportion of the
Bad debt
Name of Entity with the Amount Aging amount to the provision
group total OR (%)
Shantou Huafeng Subsidary Within 1 year、1-3
Estate Development 688,028,739.83 years、M ore than 3 42.05 --
Co., Ltd years
Fresh Peak Subsidiary Within 1 year、M ore
543,327,763.52 33.21 508,377,320.74
Enterprise Co., Ltd than 3 years
American Great Wall Subsidiary
103,403,196.15 M ore than 3 years 6.32 103,403,196.15
Co., Ltd
Fresh Peak Zhiye
Subsidiary 90,363,926.75 M ore than 3 years 5.52 90,363,926.75
Co., Ltd.
Canada Great Subsidiary
Wall( Vancouver ) 89,035,748.07 M ore than 3 years 5.44 89,035,748.07
Co., Ltd
Total 1,514,159,374.32 92.54 791,180,191.71
3、Long-term equity investments
As at 31/12/2019 As at 31/12/2018
Item Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
Investment in
303,045,949.42 152,839,271.15 150,206,678.27 304,045,949.42 69,155,382.25 234,890,567.17
subsidiaries
Investment in joint
9,455,465.38 9,455,465.38 -- 19,424,671.47 19,424,671.47 --
ventures
Investment in
2,992,218.85 2,522,380.20 469,838.65 2,916,589.60 2,522,380.20 394,209.40
associates
Total 315,493,633.65 164,817,116.73 150,676,516.92 326,387,210.49 91,102,433.92 235,284,776.57
147
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
（1）Investment in subsidiaries
Curr. year Closing balance of
Curr. year Curr. year
Name of investee Opening balance Closing balance impairment impairment
Increase decrease
provision provision
Shenzhen City Property M anagement Ltd. 12,821,791.52 -- -- 12,821,791.52 -- --
Shenzhen Petrel Hotel Co. Ltd. 20,605,047.50 -- -- 20,605,047.50 -- --
Shenzhen City Shenfang Investment Ltd. 9,000,000.00 -- -- 9,000,000.00 -- --
Fresh Peak Enterprise Ltd. 556,500.00 -- -- 556,500.00 -- --
Fresh Peak Zhiye Co., Ltd. 22,717,697.73 -- -- 22,717,697.73 -- --
Shenzhen Special Economic Zone Real
Estate (Group) Guangzhou Property and 20,000,000.00 -- 1,000,000.00 19,000,000.00 19,000,000.00 19,000,000.00
Estate Co., Ltd.
Shenzhen Zhen Tung Engineering Ltd 11,332,321.45 -- -- 11,332,321.45 -- --
American Great Wall Co., Ltd 1,435,802.00 -- -- 1,435,802.00 -- --
Shenzhen City Shenfang Free Trade
4,750,000.00 -- -- 4,750,000.00 -- --
Trading Ltd.
Shenzhen City Hua Zhan Construction
M anagement Ltd. 6,000,000.00 -- -- 6,000,000.00 -- --
QiLu Co.,Ltd 212,280.00 -- -- 212,280.00 -- --
Beijing Shenfang Property M anagement
Co., Ltd. 500,000.00 -- -- 500,000.00 500,000.00 500,000.00
Shenzhen Lain Hua Industry and Trading
13,458,217.05 -- -- 13,458,217.05 -- --
Co., Ltd.
Shenzhen City SPG Long Gang
30,850,000.00 -- -- 30,850,000.00 -- --
Development Ltd.
Beijing Fresh Peak Property Development
64,183,888.90 -- -- 64,183,888.90 64,183,888.90 64,183,888.90
M anagement Limited Company
148
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Curr. year Closing balance of
Curr. year Curr. year
Name of investee Opening balance Closing balance impairment impairment
Increase decrease
provision provision
Shantou City Huafeng Real Estate
Devepment Co., Ltd 16,467,021.02 -- -- 16,467,021.02 -- --
Paklid Limited 201,100.00 -- -- 201,100.00 -- 201,100.00
Bekaton Property Limited 906,630.00 -- -- 906,630.00 -- 906,630.00
Shenzhen Shenfang Department Store Co.
9,500,000.00 -- -- 9,500,000.00 -- 9,500,000.00
Ltd.
Shantou Fresh Peak Building 58,547,652.25 -- -- 58,547,652.25 -- 58,547,652.25
Total 304,045,949.42 -- 1,000,000.00 303,045,949.42 83,683,888.90 152,839,271.15
Note：
1、 Shenzhen Special Economic Zone Real Estate (Group) Guangzhou Property and Estate Co., Ltd., the registered capital of RMB 20 million yuan, the company subscribed for RMB 19 million(95% of total shares), another
subsidiary Shenzhen City Shenfang Investment Ltd. subscribed RMB 1.0 million(5% of total shares).
2、 After the Shenzhen Special Economic Zone Real Estate (Group) Guangzhou Real Estate Co., Ltd. ceased operations, it revoked by the government on 06 December 2013. As at the report date, the cancellation progress
is not complete, and there is no sign it will be restarting operations in the foreseeable future, so the company makes a full provision of impairment.
3、After the Beijing Shenfang Property Management Co., Ltd., ceased operations, it revoked by the government on 09 December 2009. As at the report date, the cancellation progress is not complete, and there is no sign it will
be restarting operations in the foreseeable future, so the company makes a full provision of impairment.
4、After the Beijing fresh peak property development management limited company ceased operations, it revokes by the government on 12 June 2010. As at the report date, the cancellation progress is not complete, and there
is no sign it will be restarting operations in the foreseeable future, so the company makes a full provision of impairment.
（2）Investment in associates and joint ventures
Changes in this period
Additio Reduce Investment Adjustment of Changes Cash Impairm Others The ending
Opening nal invest gains and other in other dividend or ent Closing
Name of investee balance of
balance invest ment losses comprehensiv equity profit balance
impairment
ment confirmed by e declared
the equity income
149
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
method
① Joint ventures
Guangdong Huizhou
Luofu Hill Mineral 9,969,206.09 -- -- -- -- -- -- -- -9,969,206.09 -- --
Water Co., Ltd
Fengkai Xinghua
9,455,465.38 -- -- -- -- -- -- -- -- 9,455,465.38 9,455,465.38
Hotel
19,424,671.4 9,455,465.38 9,455,465.38
Subtotal -- -- -- -- -- -- -- -9,969,206.09
7
②Associates
Shenzhen Ronghua
1,471,164.04 -- -- 75,629.25 -- -- -- -- -- 1,546,793.29 1,076,954.64
Jidian Co., Ltd
Shenzhen Runhua
Automobile Trading 1,445,425.56 -- -- -- -- -- -- -- -- 1,445,425.56 1,445,425.56
Co., Ltd
Subtotal 2,916,589.60 -- -- 75,629.25 -- -- -- -- -- 2,992,218.85 2,522,380.20
22,341,261.0
Total -- -- 75,629.25 -- -- -- -- -9,969,206.09 12,447,684.23 11,977,845.58
7
Note：Guangdong province Huizhou Luofu Hill Mineral Water Co., Ltd was established on 6 June 1991 and revoked by the government on 6 June 2017, as at report date, the cancellation progress is not complete. The
registered capital is 6.02 million yuan, subsidiary Xinfeng Enterprise Co., Ltd. holds 50.00% , by employing equity method.
150
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
4、Operating income and costs
2019 2018
Item
Revenue Cost Revenue Cost
Principal operating 1,666,904,055.40 330,874,297.00 229,634,645.39 48,332,118.70
Other operating 48,857.18 -- 47,904.78 --
（1）Principal operating activities (classified by industries)
2019 2018
Name of industry
Operating income Operating cost Operating income Operating cost
Real estate 1,599,279,513.73 304,208,253.29 158,790,845.73 22,268,415.66
Leasing 67,624,541.67 26,666,043.71 70,843,799.66 26,063,703.04
Total 1,666,904,055.40 330,874,297.00 229,634,645.39 48,332,118.70
（2）Principal operating activities (classified by geographical areas)
Name of 2019 2018
geographical area Operating income Operating cost Operating income Operating cost
Guangdong province 1,666,904,055.40 330,874,297.00 229,634,645.39 48,332,118.70
5、Investment income
Item 2019 2018
Investment income from long-term investments under cost
518,700,131.64 --
method
Investment income from long-term investments under
75,629.25 -52,651.66
equity method
Investment income from available-for-sale financial assets
-- 827,100.00
during the holding period
Investment income from other equity instrument 928,200.00 --
Investment income from structured deposit 31,425,651.98 16,347,157.53
Total 551,129,612.87 17,121,605.87
XV. Supplementary information
XV. Supplementary information
1．Details of non-recurring gains or losses
Item 2019 Note
Government grants recognized in profit or loss (other
than grants which are closely related to the 1,168,127.90
Company’s business and are either in fixed amounts
or determined under quantitative methods in
151
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Item 2019 Note
accordance with the national standard)
Profit or loss on entrusted investments or assets Income from expired
31,425,651.98
management structured deposit
Interest on unexpired structured deposit 3,950,685.00
Non-operating income/(expenses) except the above 1,118,861.69
Other non-recurring gains or losses --
Total non-recurring gains or losses 37,663,326.57
Less: Effects of income tax on non-recurring gains or
9,415,831.64
losses
Net non-recurring gains or losses 28,247,494.93
Less: Effects of non-recurring gains or losses
attributable to the minority shareholders of the --
Company (after tax)
Non-recurring gains or losses attributable to the
28,247,494.93
shareholders of the Company
2、Return on net assets and earnings per share
Weighted average Earnings per share
Profit of reporting period return on net
assets% Basic earnings Diluted earnings
Net profit attributable to the Company’s
15.90% 0.5461
ordinary equity shareholders
Net loss attributable to the Company’s
ordinary equity shareholders after deduction 15.09% 0.5182
of non-recurring profit or loss
SHENZHEN SPECIAL ECONOMIC ZONE
REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
13 March 2020
152
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2019
Part XIII Documents Available for Reference
1. The financial statements signed and sealed by the legal representative, the head of financial
affairs and the head of the financial department; and
2. The original copy of the Independent Auditor’s Report signed and sealed by the CPAs, as well as
sealed by the CPA firm; and
3. The originals of all the Company’s documents and announcements which were disclosed on
Securities Time, China Securities Journal and Ta Kung Pao (HK) during the Reporting Period.
153
首页
微信公众号
证券之星APP
