SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE &
PROPERTIES (GROUP) CO., LTD.
ANNUAL REPORT 2022
2023-010
【March 2023】
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 thefactuality, accuracy and completeness of the contents of this Report and its summary, and shall bejointly and severally liable for any misrepresentations, misleading statements or materialomissions therein.Tang Xiaoping, the Company’s General Manager, Wang Jianfei, the Company’s Chief FinancialOfficer, and Qiao Yanjun, head of the Company’s financial department (equivalent to financialmanager) 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 itssummary.Certain descriptions about the Company’s operating plans or work arrangements for the futurementioned in this Report and its summary, the implementation of which is subject to variousfactors, shall NOT be considered as promises to investors. Therefore, investors are reminded toexercise caution when making investment decisions.The Board has approved a final dividend plan as follows: based on the total share capital of1,011,660,000 shares, a cash dividend of RMB0.61 (tax inclusive) per 10 shares is to be distributedto 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 beany discrepancies or misunderstandings between the two versions, the Chinese versions shallprevail.
Table of Contents
Part I Important Notes, Table of Contents and Definitions ...... 2
Part II Corporate Information and Key Financial Information ...... 6
Part III Management Discussion and Analysis ...... 10
Part IV Corporate Governance ...... 30
Part V Environmental and Social Responsibility ...... 47
Part VI Significant Events ...... 48
Part VII Share Changes and Shareholder Information ...... 56
Part VIII Preference Shares ...... 62
Part IX Bonds ...... 63
Part X Financial Statements ...... 64
Documents Available for Reference
1. The financial statements with the personal signatures and stamps of the Company’s general manager,Chief Financial Officer and head of the financial department;
2. The original of the Auditor’s Report with the stamp of the CPA firm, as well as the personalsignatures and stamps of the CPAs; and
3. The originals of all the documents and announcements disclosed by the Company on Securities Times,China Securities Journal and Ta Kung Pao during the Reporting Period.
Definitions
| Term | Definition |
| “Shenzhen SASAC” or the “Municipal SASAC” | The State-owned Assets Supervision and Administration Commission of the People’s Government of Shenzhen Municipal |
| SIHC | Shenzhen Investment Holdings Co., Ltd. |
| The “Company”, the “Group”, “SPG” or “we” | ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. and its consolidated subsidiaries, except where the context otherwise requires |
| Shenzhen Property Management | Shenzhen Property Management Co., Ltd. |
| Petrel Hotel | Shenzhen Petrel Hotel Co., Ltd. |
| Zhentong Engineering | Shenzhen Zhentong Engineering Co., Ltd. |
| Huazhan Construction Supervision | Shenzhen Huazhan Construction Supervision Co., Ltd. |
| Jianbang Group | Guangdong Jianbang Group (Huiyang) Industrial Co., Ltd. |
| Chuanqi Real Estate Development | Shenzhen SPG Chuanqi Real Estate Development Co., Ltd. |
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, Luohu District, Shenzhen, Guangdong, P.R.China | ||
| Zip code | 518001 | ||
| Changes of the registered address | N/A | ||
| Office address | 47/F, SPG Plaza, Renmin South Road, Luohu District, Shenzhen, Guangdong, P.R.China | ||
| Zip code | 518001 | ||
| Company website | http://www.sfjt.com.cn | ||
| Email address | spg@sfjt.sihc.com.cn | ||
II Contact Information
| Board Secretary | Securities Representative | |
| Name | Luo Yi | Hong Lu |
| Address | 47/F, SPG Plaza, Renmin South Road, Luohu District, Shenzhen, Guangdong, P.R.China | 47/F, SPG Plaza, Renmin South Road, Luohu District, Shenzhen, Guangdong, P.R.China |
| Tel. | （86 755）25108897 | （86 755）25108837 |
| Fax | （86 755）82294024 | （86 755）82294024 |
| Email address | spg@sfjt.sihc.com.cn | spg@sfjt.sihc.com.cn |
III Media for Information Disclosure and Place where this Report Is Lodged
| Stock exchange website where this Report is disclosed | Shenzhen Stock Exchange (http://www.szse.cn/) |
| Newspaper and website where this Report is disclosed | Domestic: Securities Times, China Securities Journal, and http://www.cninfo.com.cn Overseas: Ta Kung Pao (HK) |
| Place where this Report is lodged | 47/F, SPG Plaza, 3005 Renmin South Road, Luohu District, Shenzhen, Guangdong, P.R.China |
IV Change to Company Registered Information
| Unified social credit code | 91440300192179585N |
| Change to principal activity of the Company since going public (if any) | No change |
| Every change of controlling shareholder since incorporation (if any) | On 24 March 1999, the controlling shareholder was changed from Shenzhen Investment Management Co., Ltd. to Shenzhen Construction Investment Holdings Co., Ltd. And on 14 February 2006, it was changed to Shenzhen Investment Holdings Co., Ltd. |
V Other InformationThe 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 | Zhao Juanjuan and Jiang Xiaoming |
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 InformationIndicate by tick mark whether there is any retrospectively restated datum in the table below.
□ Yes ? No
| 2022 | 2021 | 2022-over-2021 change (%) | 2020 | |
| Operating revenue (RMB) | 634,384,561.42 | 1,320,790,648.45 | -51.97% | 1,615,009,713.88 |
| Net profit attributable to the listed company’s shareholders (RMB) | 153,718,805.57 | 220,836,309.93 | -30.39% | 290,229,772.23 |
| Net profit attributable to the listed company’s shareholders before exceptional gains and losses (RMB) | 21,160,405.11 | 208,306,710.37 | -89.84% | 253,595,334.11 |
| Net cash generated from/used in operating activities (RMB) | -675,775,998.76 | -1,205,952,107.94 | 43.96% | 285,164,013.17 |
| Basic earnings per share (RMB/share) | 0.1519 | 0.2183 | -30.42% | 0.2869 |
| Diluted earnings per share (RMB/share) | 0.1519 | 0.2183 | -30.42% | 0.2869 |
| Weighted average return on equity (%) | 3.88% | 5.72% | -1.84% | 7.81% |
| 31 December 2022 | 31 December 2021 | Change of 31 December 2022 over 31 December 2021 (%) | 31 December 2020 | |
| Total assets (RMB) | 5,689,769,802.18 | 6,182,498,050.43 | -7.97% | 4,936,916,746.74 |
| Equity attributable to the listed company’s shareholders (RMB) | 4,004,240,547.70 | 3,938,260,291.97 | 1.68% | 3,797,512,488.22 |
Indicate by tick mark whether the lower of the net profit attributable to the listed company’s shareholders before and after exceptional gainsand losses was negative for the last three accounting years, and the latest independent auditor’s report indicated that there was uncertaintyabout the Company’s ability to continue as a going concern.
□ Yes ? No
Indicate by tick mark whether the lower of the net profit attributable to the listed company’s shareholders before and after exceptional gainsand losses was negative.
□ Yes ? No
VII Accounting Data Differences under China’s Accounting Standards for Business Enterprises(CAS) and International Financial Reporting Standards (IFRS) and Foreign AccountingStandards
1. Net Profit and Equity under CAS and IFRS
? Applicable □ Not applicable
Unit: RMB
| Net profit attributable to the listed company’s shareholders | Equity attributable to the listed company’s shareholders | |||
| 2022 | 2021 | Ending amount | Beginning amount | |
| Under CAS | 153,718,805.57 | 220,836,309.93 | 4,004,240,547.70 | 3,938,260,291.97 |
| Adjusted as per IFRS | ||||
| Under IFRS | 153,718,805.57 | 220,836,309.93 | 4,004,240,547.70 | 3,938,260,291.97 |
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: RMB
| Q1 | Q2 | Q3 | Q4 | |
| Operating revenue | 272,594,952.10 | 93,589,546.80 | 160,169,563.23 | 108,030,499.29 |
| Net profit attributable to the listed company’s shareholders | 162,278,083.59 | -17,149,753.45 | -20,007,368.55 | 28,597,843.98 |
| Net profit attributable to the listed company’s shareholders before exceptional gains and losses | 37,225,453.61 | -20,086,291.05 | -20,271,993.00 | 24,293,235.55 |
| Net cash generated from/used in operating activities | -461,062,516.92 | -87,052,626.42 | -62,497,846.24 | -65,163,009.18 |
Indicate by tick mark whether any of the quarterly financial data in the table above or their summations differs materially from what havebeen disclosed in the Company’s quarterly or interim reports.
□ Yes ? No
IX Exceptional Gains and Losses? Applicable □ Not applicable
Unit: RMB
| Item | 2022 | 2021 | 2020 | Note |
| Gain or loss on disposal of non-current assets (inclusive of impairment allowance write-offs) | 161,542,599.57 | -13,451.61 | 11,429.23 | Mainly due to income from disposal of interest in subsidiary in 2022 |
| Government subsidies charged to current profit or loss (exclusive of government subsidies consistently given in the Company’s ordinary course of business at fixed quotas or amounts as per government policies or standards) | 559,803.19 | 1,669,479.40 | 3,370,769.21 | Government grants received |
| Gain or loss on assets entrusted to other entities for investment or management | 9,129,650.51 | 13,024,710.91 | 15,217,058.60 | Change in fair value of monetary fund investments and return on investment |
| Gain or loss on debt restructuring | 2,610,128.31 | Debt restructuring income | ||
| Reversed portions of impairment allowances for receivables which are tested individually for impairment | 482,790.04 | |||
| Non-operating income and expense other than the above | 1,094,190.56 | 1,542,604.01 | 29,009,657.60 | |
| Other gains and losses that meet the definition of exceptional gain/loss | 1,237,002.86 | |||
| Less: Income tax effects | 41,451,680.41 | 4,176,533.19 | 12,211,479.38 | |
| Non-controlling interests effects (net of tax) | 926,291.27 | |||
| Total | 132,558,400.46 | 12,529,599.56 | 36,634,438.12 | -- |
Details of other gains and losses that meet the definition of exceptional gain/loss:
□ Applicable ? Not applicable
No such cases for the Reporting Period.Explanation of why the Company reclassifies as recurrent an exceptional gain/loss item listed in the Explanatory Announcement No. 1 onInformation Disclosure for Companies Offering Their Securities to the Public—Exceptional Gain/Loss Items:
□ Applicable ? Not applicable
No such cases for the Reporting Period.
Part III Management Discussion and Analysis
I Industry Overview for the Reporting Period
The Company is subject to the information disclosure requirements for the real estate industry in the Disciplinary and Regulatory GuidelineNo. 3 of the Shenzhen Stock Exchange for Listed Companies—Industry-specific Information Disclosure.The real estate sector embraced a policy recovery in 2022, thanks to a constant number of favorable policies introducedby the regulatory authorities to advance the sound and steady development of the real estate market. Specifically, thecombo of policies focusing on three financing channels, namely credit, bonds, and equities, was put in place inNovember, re-opening the refinancing channels for the listed real estate enterprises and listed enterprises engaged inreal estate business, which was expected to relieve the financial pressure on the real-estate enterprises. Concurrently,cities across China implemented policies based on local conditions. To restore house purchasers’ confidence, thegovernment decreased the downpayment percentage and house loan interest rate and increased the provident fund loanlimit. Finally, the policies’ effectiveness gradually manifested.II Principal Activity of the Company in the Reporting PeriodThe Company is subject to the information disclosure requirements for the real estate industry in the Disciplinary and Regulatory GuidelineNo. 3 of the Shenzhen Stock Exchange for Listed Companies—Industry-specific Information Disclosure.The Company primarily develops residential properties. During the Reporting Period, it had six available-for-saleprojects, which are mainly located in Shenzhen, Huizhou and Shantou. They are: the Chuanqi Donghu Mingyuanproject and the Cuilinyuan project in Shenzhen, the Linxinyuan Phase I project located in a place in Huizhou that isclose to Shenzhen, and the Tianyuewan project, the Yuejing Dongfang project and the Jinyedao project in Shantou. Inaddition, the Company had two under-construction projects, i.e. the Guangmingli project in Guangming District,Shenzhen, and the Linxinyuan project located in a place in Huizhou that is close to Shenzhen.
New additions to the land bank:
| Name of land lot or project | Location | Planned use of land | Site area（㎡） | Floor area with plot ratio （㎡） | How the land is obtained | The Company’s interest | Total land price (RMB’0,000) | Consideration of the Company’s interest (RMB’0,000) |
Cumulative land bank:
| Name of project/area | Site area（0,000 ㎡） | Floor area（0,000 ㎡） | Floor area available for development（0,000 ㎡） |
| Xinfeng Building in Shantou | 0.59 | 2.66 | 2.66 |
| Linxinyuan Phase II | 2.57 | 7.72 | 7.72 |
| Linxinyuan Phase III | 4.31 | 9.57 | 9.57 |
| Linxinyuan Phase IV | 3.23 | 6.45 | 6.45 |
| Total | 10.70 | 26.40 | 26.40 |
Development status of major projects:
| City/region | Name of project | Location | Status | The Company’s interest | Time for commencement of construction | % developed | % constructed | Site area（㎡） | Planned floor area with plot ratio | Floor area completed in the Current | Cumulatively completed floor area | Expected total investment (RMB’0,000 | Cumulative investment (RMB’0,000) |
| （㎡） | Period（㎡） | （㎡） | ) | ||||||||||
| Huizhou | Linxinyuan Phase I | Huiyang | Framework in construction | 51.00% | 11 June 2021 | 94% | 94.00% | 64,278 | 159,761 | 115,750 | 109,127 | ||
| Shenzhen | SPG Guangmingli | Guangming District | Foundation pit being built | 100.00% | 19 January 2022 | 70% | 70.00% | 10,721 | 53,605 | 151,758 | 106,876 |
Sales status of major projects:
| City/region | Name of project | Location | Status | The Company’s interest | Floor area with plot ratio （㎡） | Floor area available for sale （㎡） | Cumulatively pre-sold/sold floor area （㎡） | Floor area pre-sold/sold in the Current Period（㎡） | Pre-sale/sales revenue generate in the Current Period (RMB’0,000) | Cumulatively settled floor area (㎡) | Floor area settled in the Current Period（㎡） | Pre-sale/sales revenue settled in the Current Period (RMB’0,000) |
| Shenzhen | Chuanqi Donghu Mingyuan | Luohu District | Ready for sale | 100.00% | 55,727 | 32,857 | 32,663 | 246 | 1,606 | 32,663 | 2,651 | 16,166 |
| Shenzhen | Cuilinyuan | Longgang District | Ready for sale | 100.00% | 60,111 | 56,137 | 52,884 | 915 | 2,755 | 52,884 | 915 | 2,469 |
| Shantou | Tianyuewan Phase I | Chaoyang District | Ready for sale | 100.00% | 153,470 | 160,372 | 114,884 | 4,998 | 2,844 | 101,655 | 9,131 | 4,793 |
| Shantou | Tianyuewan Phase II | Chaoyang District | Ready for sale | 100.00% | 127,770 | 137,059 | 28,271 | 11,580 | 6,537 | 25,512 | 13,995 | 7,295 |
| Huizhou | Linxinyuan Phase I | Huiyang District | On pre-sale | 51.00% | 159,761 | 159,761 | 2,792 | 2,236 | 2,558 |
Rental status of major projects:
| Name of project | Location | Use | The Company’s interest | Rentable area （㎡） | Cumulative rented area （㎡） | Average occupancy rate |
| Real Estate Mansion | Shenzhen | Commercial | 100.00% | 3,413.88 | 2,436.60 | 71.37% |
| North Tower of Guoshang Mansion | Shenzhen | Commercial | 100.00% | 4,819.71 | 4,819.71 | 100.00% |
| Petrel Building | Shenzhen | Commercial | 100.00% | 22,475.47 | 22,475.47 | 100.00% |
| SPG Plaza | Shenzhen | Office building | 100.00% | 61,005.82 | 30,523.92 | 50.03% |
| Podium of SPG Plaza | Shenzhen | Commercial | 100.00% | 19,896.30 | 16,123.49 | 81.04% |
| Wenjin Garden | Shenzhen | Commercial | 100.00% | 3,531.60 | 3,531.60 | 100.00% |
Primary land development:
□ Applicable ? Not applicable
Financing channels:
| Financing | Ending balance | Financing cost | Maturity structure |
| channel | of financings | range/average financing cost | Within 1 year | 1-2 years | 2-3 years | Over 3 years |
| Bank loans | 60,366,770.99 | 4.15%-4.20% | 6,105,770.99 | 54,261,000.00 | ||
| Total | 60,366,770.99 | 6,105,770.99 | 54,261,000.00 |
Development strategy and operating plan for the coming year:
Please refer to “XI Prospects” in this part of the Report.Provision of guarantees for homebuyers on bank mortgages:
? Applicable □ Not applicable
| Project | Guarantee period | Guarantee amount (RMB’0,000) | Note |
| Shanglinyuan | Until the property ownership certificate is registered as collateral and handed over to bank for keeping | 107.49 | |
| Cuilinyuan | Until the property ownership certificate is registered as collateral and handed over to bank for keeping | 2,174.37 | |
| Chuanqi Donghu Mingyuan | Until the property ownership certificate is registered as collateral and handed over to bank for keeping | 1,820.33 | |
| Tianyuewan | Until the property ownership certificate is registered as collateral and handed over to bank for keeping | 36,056.20 | |
| Total | 40,158.39 |
Joint investments by directors, supervisors and senior management and the listed company (applicable for such investments where thedirectors, supervisors and senior management are the major source of investment):
? Applicable □ Not applicable
| Project | Type of investor | Investment amount (RMB) | As % of total investment | As % of the peak of project funds | Cumulative returns (RMB) | Disinvestment | Compatibility of actual investment and returns |
| Linxinyuan | Director, supervisor or senior management of the Company | 8,950,000.00 | 39.25% | 0.90% | 0.00 | N/A | N/A |
III Core Competitiveness AnalysisAs a pioneer of real estate development enterprises in Shenzhen, the Company has created a number of "first places" inthe history of real estate development in China. For example, the first to use the paid state-owned land, the first tointroduce the foreign investment for the cooperative land development, the first to raise development funds by meansof pre-sale of buildings, the first to carry out public bidding for construction projects in accordance with internationalpractices, the first to set up a property management company to the buildings and residences developed in an all-rounded manner, the first to win the bid in the auction of land use rights held in the Shenzhen Special Economic Zone,etc.Over the past 40 years, the Company has developed more than 100 high-rise buildings, 500 multi-storey residentialbuildings, and 400 garden villas, with a cumulative building area of more than 4 million square meters. It has paid greatefforts to the establishment of a modern enterprise HR management system and works hard in building a professionaland high-quality development team. It also keeps improving the management mechanism and processes for projectdevelopment. As a result, its planning, construction, cost control, sales ability and brand image have been effectivelyimproved. More importantly, its main business operation ability and core competitiveness have been greatly enhanced.The Company has been granted the titles of “Socially Responsible Company” and “Honest (Quality) Company”in the real estate sector of Shenzhen for two consecutive years.
IV Core Business Analysis
1. Overview
In 2022, strictly following relevant laws, regulations, and the Company’s policies and adhering to the principle of beingresponsible for all shareholders of the Company, the Board of Directors of the Company kept improving its corporategovernance capability and strictly implemented all resolutions of the Shareholders’ General Meeting, thereby operatingin a standard and efficient manner. All directors of the Company earnestly performed their duties and responsibilitiesgranted by shareholders, effectively safeguarding the legitimate rights and interests of the Company and itsshareholders.A. Operating results of the CompanyDuring the Reporting Period, the Company recorded operating revenue of RMB634.3846 million, down 51.97% yearon year; and a net profit attributable to shareholders of the Company as the parent of RMB153.7188 million, down
30.39% year on year. As of the end of the Reporting Period, equity attributable to shareholders of the Company as theparent stood at RMB4,004.2405 million, representing an increase of RMB65.9803 million as compared to a year ago.B. Review of Operations Management in 2022Facing an increasingly complex external context and tougher reform and development tasks in 2022, the Companyconscientiously implemented the decisions and arrangements of the State-owned Assets Supervision andAdministration Commission of the People’s Government of Shenzhen Municipal (Municipal SASAC) and ShenzhenInvestment Holdings Co., Ltd. (SIHC). Concurrently, all SPG employees worked in unity and stayed determined toimprove operations management and advance various tasks in all respects. With all these unremitting efforts, a newchapter in the high-quality development of the Group was written. Major work progress for the Reporting Period is asfollows:
a. Focusing on development projects, the Company achieved new progress in the core businessProject construction: By strengthening the coordination with municipally-owned enterprises, including ShenzhenGeneral Institute of Architectural and Research Co., Ltd., Shenzhen Water Planning & Design Institute Co., Ltd., andShenzhen Municipal Engineering Corp., the construction of the Guangmingli project progressed rapidly, with thesoldier piles, engineering piles, earthmoving, and anchor cable and breast beam works having been completed and thefloor underlayment and anti-floating anchors in construction. Additionally, the structures of Buildings 1 to 8 ofLinxinyuan Phase I and the basements of Phase II were completed.Real estate sales: The Company strengthened project promotion through multiple channels for the purpose of customerbase expansion. It also accelerated the pace of destocking. As a result, Chuanqi Donghu Mingyuan and Cuilinyuan inShenzhen had only a few housing units left for sale. Concerning the Shantou Tianyuewan project, approximately 75%of units in Phase I and 20% in Phase II were sold. Concurrently, the units in Linxinyuan that have been sold representapproximately 3% of the total of the project. The sales area for the year totaled 20.1 thousand square meters, and thenew contracted sales reached RMB165 million.Rental business: The Company took pronged measures to expand the customer source. As a result, it recordedRMB53.8703 million in rental revenue for the year. Additionally, SPG Plaza was included among the “Buildings forShenzhen-Hong Kong Medical and Healthcare Specialty Industry”.b. Focusing on the maintenance of stable safety protection, the Company newly consolidated the safety barrier
First, the Company fully assumed its principal responsibility for safe production by requiring all levels, ranging fromthe Chairman to general employees, to sign the safe production responsibility letter, doing so to ensure that the safeproduction accountability system for all employees would be thoroughly implemented. To this end, the Companycarried out 254 potential risk inspections throughout the year, with more than 1,000 potential risks inspected andremedied. Additionally, 52 educational and training activities on safe production were organized in the year, providingtraining for more than 2,800 employees. Thanks to these efforts, the line of defense for safe production was fullystrengthened, with no safety incidents occurring in the Group throughout the year. Second, the Company organized andcarried out work for public opinion management, complaint petition response, information publicity, cybersecurity, andconfidentiality management. As a result, no material negative public opinion incidents occurred during the ReportingPeriod.c. Focusing on guarantee services, the Company newly maintained the corporate stabilityFirst, the Company renewed the liability insurance for directors, supervisors, and senior managers in 2022 to provide anecessary guarantee for the performance of duties by directors, supervisors, and senior managers of the Company. Itpurchased critical illness insurance and group accident supplementary medical insurance for employees to enhanceemployees’ ability to resist risks. Second, the Company completed talent introduction for ten urgent positions, furtherenhancing workforce development. Third, project financing was put in place. The development loan project ofRMB500 million for Chuanqi Real Estate Development was completed, fully guaranteeing project development andoperation. Fourth, accounts receivable management was strengthened, with RMB414 million of funds recovered intotal, guaranteeing the Company’s operation. Fifth, the Company fulfilled its tax obligation by laws and regulations. Itpaid RMB619 million in taxes and got RMB132 million in tax rebates. Sixth, the Company upgraded its officialwebsite and OA system, effectively improving its brand image and office efficiency.d. Focusing on internal control and internal audit, the Company newly strengthened the operationsmanagementFirst, the Company prepared the key tasks for 2022 and decomposed business targets and key tasks. Additionally, itheld work meetings every month to make unified arrangements for the completion of key tasks and supervise theimplementation of these arrangements. Second, the Company proactively advanced the streamlining of its policies andprocedures. It drafted and revised eight policies for safe production and human resource management, furtherstandardizing its policy management system. Third, the Company completed the disclosure of 50 items on theprocurement platform and ten public bidding invitations in strict accordance with the procurement managementregulations. Fourth, the Company stepped up efforts at internal audit. It completed seven special audits and audits,respectively. Fifth, contract review was strengthened. The Company reviewed 313 contracts throughout the year,achieving a contract review rate of 100%. Concurrently, it properly dealt with 15 lawsuits. Sixth, the Companyattached great importance to the budget and settlement regarding major projects. Statistically, it prepared 17 budgetsand completed 21 settlement audits, and the reduction in the budget and settlement upon review reached RMB8.13million.e. Focusing on the affiliates, the Company added new impetus to its business developmentFirst, market expansion: Zhentong Engineering recorded 43 contracted projects throughout the year, with the contractvalue totaling RMB140 million. Petrel Hotel successfully achieved tourism transformation, and Floors 16, 19, and 28of Petrel Building, with a combined area of 3,600 square meters, were successfully leased out. Huazhan ConstructionSupervision secured the project supervision business of the Guangmingli project. Second, business management: Petrel
Hotel pushed ahead with “downsizing for efficiency” to strengthen workforce management and improve efficiency.Zhentong Engineering advanced risk control in all respects and achieved positive progress in the recovery of funds forconstruction projects that had been tied up and the notes receivable due. Huazhan Construction Supervision refined itsrisk control system and strengthened on-site supervision to improve the quality and safety of construction projects.Shantou branch improved its performance appraisal mechanism to motivate employees. Additionally, the Companysuccessfully completed the transfer of equities of Shenzhen Property Management and Yunnan Kunpeng Air ServiceCo., Ltd. and properly handled complicated issues, such as the profit audit during the transition period and settlementof legacy accounts receivable and payable. Existing real estate, including the land of Great Wall Estate Co., Inc. (U.S.)and Guoshang Mansion, was listed on The Stock Exchange of Hong Kong Limited, marking a breakthrough in qualityand efficiency improvement.f. Focusing on the leadership of Party building, the Company newly strengthened Party buildingFirst, the implementation of the responsibilities for Party building was strengthened. Party organizations of the Groupthoroughly learned the guiding principles of the 20th National Congress of the Communist Party of China through the“First Topics”. They adhered to the leadership of the guiding principles of the 20th National congress of theCommunist Party of China and elevated the leading role of Party organizations to a new high. Special remediation wasadvanced strictly and rapidly, with 170 special remediation tasks on the list completed effectively and efficiently.Additionally, the development of the “One Brand for One Enterprise” Party building brand was advanced on anongoing basis via the construction of the “Safe SPG Bright Project”. Moreover, the “massive learning, thoroughresearch, and full implementation” working mechanism was implemented. Specifically, 35 leadership members of theGroup conducted in-depth research at the paired enterprises. In the process, issues such as community-level Partybuilding and services for the community level were addressed. The “I do practical things for the masses” practicalactivity was carried out regularly. Additionally, the renovation of Xiabei Village Primary School in Longdu Town,Chenghai District, Shantou City and the helpful project of improving the learning and living environment of primaryschool students in Longdu Town were completed according to the arrangements of the Party Committee of SIHC, fullydemonstrating the Company’s sense of responsibility as a state-owned enterprise.Second, the constraint of rigorous Party self-governance was enhanced. The Company persevered with the “oneposition and two responsibilities” system and arranged for the signature of the responsibility letter for improving Partyconduct and ensuring integrity to decompose and fully implement the responsibilities. It strictly practiced the principlesof the central Party leadership’s eight-point decision on improving conduct and implemented the regulations of thesuperior unit regarding the holidays. Moreover, close attention was paid to the “pointless formalities, bureaucratism,hedonism, and extravagance” issue tending to occur during major holidays to ensure the supervision of conductimprovement during holidays. Additionally, the Integrity Education and Learning Activity Program was drafted andissued to guide the educational and learning activities of the Group for the year. The implementation of the mandatoryintegrity topic system in the Party branch’s learning activities was promoted to carry out practice integrity learning andeducation from multiple perspectives and at multiple levels. By doing so, the “no desire to be corrupt” self-disciplinemechanism was further enhanced, and thus the ideological line of defense for integrity and self-discipline wasconsolidated.
2. Revenue and Cost Analysis
(1) Breakdown of Operating Revenue
Unit: RMB
| 2022 | 2021 | Change (%) | |||
| Operating revenue | As % of total operating revenue (%) | Operating revenue | As % of total operating revenue (%) | ||
| Total | 634,384,561.42 | 100% | 1,320,790,648.45 | 100% | -51.97% |
| By operating division | |||||
| Property sales | 309,331,841.57 | 48.76% | 876,161,088.60 | 66.34% | -64.69% |
| Engineering and construction | 241,209,525.79 | 38.02% | 200,259,571.16 | 15.16% | 20.45% |
| Property management | 36,660,871.83 | 5.78% | 162,526,580.18 | 12.31% | -77.44% |
| Rental service | 53,870,265.26 | 8.49% | 81,791,161.56 | 6.19% | -34.14% |
| Other | 5,552,040.91 | 0.88% | 15,776,937.12 | 1.19% | -64.81% |
| Eliminated internal transactions and accounts | -12,239,983.94 | -1.93% | -15,724,690.17 | -1.19% | 22.16% |
| By product category | |||||
| Residential units | 277,643,154.35 | 43.77% | 875,153,000.99 | 66.26% | -68.27% |
| Shops and parking lots | 31,688,687.22 | 5.00% | 1,008,087.61 | 0.08% | 3,043.45% |
| Other | 337,292,703.79 | 53.17% | 460,354,250.02 | 34.85% | -26.73% |
| Eliminated internal transactions and accounts | -12,239,983.94 | -1.93% | -15,724,690.17 | -1.19% | 22.16% |
| By operating segment | |||||
| Guangdong Province | 640,594,852.83 | 100.98% | 1,308,786,001.07 | 99.09% | -51.05% |
| Other regions in China | 5,552,040.91 | 0.88% | 27,096,812.69 | 2.05% | -79.51% |
| Overseas | 477,651.62 | 0.08% | 632,524.86 | 0.05% | -24.48% |
| Eliminated internal transactions and accounts | -12,239,983.94 | -1.93% | -15,724,690.17 | -1.19% | 22.16% |
| By marketing model | |||||
| Principal operations | 641,072,504.45 | 101.05% | 1,320,738,401.50 | 100.00% | -51.46% |
| Other | 5,552,040.91 | 0.88% | 15,776,937.12 | 1.19% | -64.81% |
| Eliminated internal transactions and accounts | -12,239,983.94 | -1.93% | -15,724,690.17 | -1.19% | 22.16% |
(2) Operating Division, Product Category or Operating Segment Contributing over 10% of Operating Revenueor Operating Profit
? Applicable □ Not applicable
Unit: RMB
| Operating revenue | Cost of sales | Gross profit margin | YoY change in operating revenue (%) | YoY change in cost of sales (%) | YoY change in gross profit margin (%) | |
| By operating division | ||||||
| Property sales | 309,331,841.57 | 144,720,332.63 | 53.22% | -64.69% | -50.48% | -13.42% |
| Engineering and construction | 241,209,525.79 | 236,074,624.77 | 2.13% | 20.45% | 26.64% | -4.79% |
| Rental service | 53,870,265.26 | 46,657,985.12 | 13.39% | -34.14% | 31.26% | -43.15% |
| Property | 36,660,871.83 | 22,415,236.68 | 38.86% | -77.44% | -84.64% | 28.63% |
| management | ||||||
| By product category | ||||||
| Residential units | 277,643,154.35 | 126,448,366.58 | 54.46% | -68.27% | -56.72% | -12.15% |
| Shops and parking lots | 31,688,687.22 | 18,271,966.05 | 42.34% | 3,043.45% | 23,570.78% | -50.00% |
| By operating segment | ||||||
| Guangdong Province | 640,594,852.83 | 449,868,179.20 | 29.77% | -51.05% | -43.70% | -9.18% |
| By marketing model | ||||||
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 | 2022 | 2021 | Change (%) |
| Property sales | Sales volume | RMB’0,000 | 16,522 | 69,045 | -76.07% |
| Output | RMB’0,000 | 37,603 | 204,708 | -81.63% | |
| Inventory | RMB’0,000 | 425,681 | 403,220 | 5.57% | |
Any over 30% YoY movements in the data above and why:
? Applicable □ Not applicable
Affected by the real estate market, the Company saw less-than-expected property sales carryforwards and existingproperty sales in 2022, resulting in a decrease in property investment and development.
(4) Execution Progress of Major Signed Sales or Purchase Contracts in the Reporting Period
□ Applicable ? Not applicable
(5) Breakdown of Cost of Sales
By operating division
Unit: RMB
| Operating division | Item | 2022 | 2021 | Change (%) | ||
| Cost of sales | As % of total cost of sales (%) | Cost of sales | As % of total cost of sales (%) | |||
| Property sales | 144,720,332.63 | 33.11% | 292,260,823.05 | 43.86% | -50.48% | |
| Engineering and construction | 236,074,624.77 | 54.02% | 186,409,100.14 | 27.97% | 26.64% | |
| Property management | 22,415,236.68 | 5.13% | 145,898,235.49 | 21.90% | -84.64% | |
| Rental service | 46,657,985.12 | 10.68% | 35,545,938.32 | 5.33% | 31.26% | |
| Other | 2,747,095.64 | 0.63% | 22,151,678.03 | 3.32% | -87.60% | |
| Eliminated internal transactions and accounts | -15,563,273.83 | -3.56% | -15,917,413.55 | -2.39% | 2.22% | |
| Total | 437,052,001.01 | 100.00% | 666,348,361.48 | 100.00% | -34.41% | |
Note:
Affected by markets and development cycles, property sales experienced a year-on-year drop; engineering andconstruction projects saw new breakthroughs in expansion, resulting in a year-on-year increase in sales; and propertymanagement revenue registered a drop due to the disposal of subsidiary Shenzhen Property Management Co., Ltd.
(6) Changes in the Scope of Consolidated Financial Statements for the Reporting Period
? Yes □ NoSee “VI Changes in the Scope of Consolidated Financial Statements” in “Part X Financial Statements”.
(7) Major Changes to the Business Scope or Product or Service Range in the Reporting Period
□ Applicable ? Not applicable
(8) Major Customers and Suppliers
Major customers:
| Total sales to top five customers (RMB) | 87,448,833.82 |
| Total sales to top five customers as % of total sales of the Reporting Period (%) | 13.78% |
| Total sales to related parties among top five customers as % of total sales of the Reporting Period (%) | 0.00% |
Information about top five customers:
| No. | Customer | Sales revenue contributed for the Reporting Period (RMB) | As % of total sales revenue (%) |
| 1 | Legal person A | 26,856,591.42 | 4.23% |
| 2 | Legal person B | 23,269,448.58 | 3.67% |
| 3 | Legal person C | 15,851,434.16 | 2.50% |
| 4 | Legal person D | 11,879,250.66 | 1.87% |
| 5 | Legal person E | 9,592,109.00 | 1.51% |
| Total | -- | 87,448,833.82 | 13.78% |
Other information about major customers:
□ Applicable ? Not applicable
Major suppliers:
| Total purchases from top five suppliers (RMB) | 278,248,909.89 |
| Total purchases from top five suppliers as % of total purchases of the Reporting Period (%) | 53.63% |
| Total purchases from related parties among top five suppliers as % of total purchases of the Reporting Period (%) | 0.00% |
Information about top five suppliers:
| No. | Supplier | Purchase in the Reporting Period (RMB) | As % of total purchases (%) |
| 1 | Legal person A | 175,935,982.19 | 33.91% |
| 2 | Legal person B | 72,443,947.18 | 13.96% |
| 3 | Legal person C | 15,035,235.49 | 2.90% |
| 4 | Legal person D | 7,503,316.74 | 1.45% |
| 5 | Legal person E | 7,330,428.29 | 1.41% |
| Total | -- | 278,248,909.89 | 53.63% |
Other information about major suppliers:
□ Applicable ? Not applicable
3. Expense
Unit: RMB
| 2022 | 2021 | Change (%) | Reason for any significant change | |
| Selling expense | 19,217,595.11 | 42,737,748.22 | -55.03% | Decreased property sales |
| Administrative expense | 55,758,749.08 | 98,307,831.60 | -43.28% | New project development and staff structure adjustments |
| Finance costs | -6,507,147.03 | -18,083,491.01 | 64.02% | Decreased bank balances and deposit interest income |
4. R&D Investments
□ Applicable ? Not applicable
5. Cash Flows
Unit: RMB
| Item | 2022 | 2021 | Change (%) |
| Subtotal of cash generated from operating activities | 668,449,932.34 | 1,805,846,506.24 | -62.98% |
| Subtotal of cash used in operating activities | 1,344,225,931.10 | 3,011,798,614.18 | -55.37% |
| Net cash generated from/used in operating activities | -675,775,998.76 | -1,205,952,107.94 | 43.96% |
| Subtotal of cash generated from investing activities | 282,766,666.00 | 799,855,541.48 | -64.65% |
| Subtotal of cash used in investing activities | 713,537.29 | 1,751,621,932.29 | -99.96% |
| Net cash generated from/used in investing activities | 282,053,128.71 | -951,766,390.81 | 129.63% |
| Subtotal of cash generated from financing activities | 111,428,077.62 | 266,256,968.76 | -58.15% |
| Subtotal of cash used in financing activities | 140,126,109.45 | 164,908,415.94 | -15.03% |
| Net cash generated from/used in financing activities | -28,698,031.83 | 101,348,552.82 | -128.32% |
| Net increase in cash and cash equivalents | -421,928,565.67 | -2,056,810,291.67 | 79.49% |
Explanation of why any of the data above varies significantly:
? Applicable □ Not applicable
Cash generated from operating activities decreased year on year primarily driven by the decreased property sales.Cash used in operating activities decreased year on year primarily driven by the land payment made last year.Net cash generated from investing activities increased year on year primarily driven by the large-amount paymentmade for equity acquisition and the purchase of currency funds last year.Net cash generated from financing activities decreased year on year primarily driven by the receipt of loan by projectcompany from minority shareholder last year.
Reason for any big difference between the net operating cash flow and the net profit for this Reporting Period? Applicable □ Not applicableThere is a big difference between the net operating cash flow and the net profit for the year, primarily due to the longtime span between property development, sales and revenue recognition.V Analysis of Non-Core Businesses
□ Applicable ? Not applicable
VI Analysis of Assets and Liabilities
1. Significant Changes in Asset Composition
Unit: RMB
| 31 December 2022 | 1 January 2022 | Change in percentage (%) | Reason for any significant change | |||
| Amount | As a % of total assets | Amount | As a % of total assets | |||
| Monetary assets | 197,663,949.74 | 3.47% | 564,358,824.63 | 9.13% | -5.66% | Payment of land VAT of Donghu Mingyuan in the current period |
| Accounts receivable | 63,580,422.16 | 1.12% | 61,048,785.11 | 0.99% | 0.13% | |
| Inventories | 4,257,109,614.31 | 74.82% | 4,034,933,562.62 | 65.26% | 9.56% | Development of projects |
| Investment property | 566,873,915.07 | 9.96% | 588,865,777.16 | 9.52% | 0.44% | |
| Long-term equity investments | 93,927.64 | 0.00% | 272,168.28 | 0.00% | 0.00% | |
| Fixed assets | 21,425,475.05 | 0.38% | 23,920,424.55 | 0.39% | -0.01% | |
| Right-of-use assets | 232,496.72 | 0.00% | 365,351.97 | 0.01% | -0.01% | |
| Short-term borrowings | 51,138,077.62 | 0.90% | 50,440,116.24 | 0.82% | 0.08% | |
| Contract liabilities | 43,533,467.29 | 0.77% | 199,965,490.08 | 3.23% | -2.46% | Carryforwards from homebuyer payments received in advance to revenue |
| Long-term borrowings | 54,261,000.00 | 0.95% | 0.95% | |||
| Lease liabilities | 53,885.23 | 0.00% | 125,920.77 | 0.00% | 0.00% | |
| Held-for-trading financial assets | 408,154,361.42 | 7.17% | 514,024,710.91 | 8.31% | -1.14% | Redemption of currency funds |
| Notes payable | 247,376,403.56 | 4.00% | -4.00% | Honoring of commercial acceptance notes and transfer of certain such notes that had become mature to accounts payable | ||
| Accounts payable | 434,601,559.67 | 7.64% | 141,447,559.24 | 2.29% | 5.35% | Transfer of certain such notes that had become mature to accounts payable |
| Taxes payable | 190,951,185.99 | 3.36% | 600,540,872.48 | 9.71% | -6.35% | Payment of land VAT of Donghu Mingyuan in the current period |
| Other payables | 574,331,340.84 | 10.09% | 581,377,415.64 | 9.40% | 0.69% |
Indicate whether overseas assets account for a high proportion of total assets.
□ Applicable ? Not applicable
2. Assets and Liabilities at Fair Value
? Applicable □ Not applicable
Unit: RMB
| Item | Beginning amount | Gain/loss on fair-value changes in the Reporting Period | Cumulative fair-value changes charged to equity | Impairment allowance for the Reporting Period | Purchased in the Reporting Period | Sold in the Reporting Period | Other changes | Ending amount |
| Financial assets | ||||||||
| 1. Held-for-trading financial assets (excluding derivative financial | 514,024,710.91 | 8,970,031.50 | 114,840,380.99 | 408,154,361.42 | ||||
| assets) | ||||||||
| 4. Investments in other equity instruments | 36,322,704.33 | 1,839,235.57 | 22,490,765.41 | 13,839,235.57 | ||||
| Total of the above | 550,347,415.24 | 8,970,031.50 | 1,839,235.57 | 137,331,146.40 | 421,993,596.99 | |||
| Financial liabilities | 0.00 | 0.00 |
Other changeSignificant 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 for restriction |
| Monetary assets | 5,674,439.78 | Project of public facilities inside and surrounding the urban renewal project of Longgang District, Shenzhen-construction funds |
| Monetary assets | 48,315.48 | Frozen in a lawsuit case |
| Accounts receivable | 51,138,077.62 | Put in pledge for short-term borrowings |
| Inventories | 965,000,000.00 | Lands mortgaged for project development loans |
| Total | 1,021,860,832.88 |
VII Investments Made
1. Total Investment Amount
? Applicable □ Not applicable
| Total investment amount in the Reporting Period (RMB) | Total investment amount in last year (RMB) | Change (%) |
| 299,540,000.00 | 2,047,080,000.00 | -85.37% |
2. Significant Equity Investments Made in the Reporting Period
□Applicable ? Not applicable
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.VIII Sale of Major Assets and Equity Interests
1. Sale of Major Assets
□Applicable ? Not applicable
No such cases in the Reporting Period.
2. Sale of Major Equity Interests
? Applicable □ Not applicable
| Counterparty | Equity interests sold | Date of sale | Selling price (RMB’0,000) | Amount contributed by the equity interests to net income of the Company from period-beginning to date of sale (RMB’0,000) | Effect of the sale on the Company | Amount contributed by the sale to net income of the Company as a percentage of the Company’s net income (%) | Pricing principle | Related-party transaction or not | Relationship between counterparty and the Company | Ownership fully transferred or not | Executed as scheduled or not, if not, state reason and actions taken | Disclosure date | Index to disclosed information |
| Shenzhen International Trade Center Property Management Co., Ltd. | 100% of equity interests of Shenzhen Property Management Co., Ltd. | 11 February 2022 | 19,667.67 | 964.52 | This transaction is in line with the Company’s development strategies and is conducive to the Company’s further optimization and adjustment of its industry structure, enrichment of capital reserves, expansion of new profit growth areas, and continuous improvement of its quality. During the Reporting Period, the counterparty has | 81.02% | The transaction price is determined based on the net asset valuation assessed by the evaluation agency on the base date of 30 June | Yes | Shenzhen International Trade Center Property Management Co., Ltd. (hereinafter referred to as “ITC Property Management”) is a wholly-owned subsidiary of ShenZh | Yes | Yes | 30 September 2022 | Announcement on the Completion of the Related-party Transaction regarding the Transfer of 100% of Equity Intere |
| paid 90% (RMB177,009,000) of the equity transfer payment to the Group in accordance with the equity transfer agreement. After the equity transfer, the Company derecognized the said equity and confirmed the investment income of RMB161,581,100 in consolidated financial statements. The matter has a positive impact on the Company cash flow and operating results in 2022. | 2021. | en Properties & Resources Development (Group) Ltd. “hereinafter referred to as “SZPRD” and both SZPRD and the Company are majority-owned subsidiaries of Shenzhen Investment Holdings Co., Ltd. Thus, an association relationship is formed. | sts of Shenzhen Property Management Co., Ltd. (2022-032) disclosed on www.cninfo.com.cn |
IX Principal Subsidiaries and Joint Stock Companies? Applicable □ Not applicablePrincipal subsidiaries and joint stock companies with an over 10% effect on the Company’s net profit:
Unit: RMB
| Company name | Relationship with the Company | Main business scope | Registered capital | Total assets | Net assets | Operating revenue | Operating profit | Net profit |
| Guangdong Jianbang Group (Huiyang) Industrial Co., Ltd. | Subsidiary | Development of real estate | 2,800,000.00 | 1,485,802,072.25 | -15,696,555.83 | -10,306,937.48 | -8,184,594.48 | |
| Shenzhen SPG Chuanqi Real Estate Development Co., Ltd. | Subsidiary | Development of real estate | 30,000,000.00 | 1,101,813,520.17 | 994,181,899.24 | -169,495.37 | -191,631.91 | |
| Shenzhen SPG Longgang Development Co., Ltd. | Subsidiary | Development of real estate | 30,000,000.00 | 130,226,700.89 | 57,602,358.61 | 26,662,120.02 | 3,757,227.19 | 11,138,816.55 |
| Shantou SEZ, Wellam FTY, Building Development, Co., Ltd. | Subsidiary | Development of real estate | 91,226,120.44 | 97,248,372.66 | 90,304,817.44 | 2,410,093.12 | -32,256,218.54 | -32,256,218.54 |
| Shantou Huafeng Real Estate Development Co., | Subsidiary | Development of real estate | 80,000,000.00 | 832,020,757.11 | 17,624,899.13 | 121,021,739.63 | -3,144,032.12 | -3,413,873.32 |
| Ltd. | ||||||||
| Great Wall Estate Co., Inc. (U.S.) | Subsidiary | Development of real estate | 2,051,146.00 | 19,400,131.63 | -90,088,884.01 | 477,651.62 | -431,973.10 | -431,973.10 |
| Shenzhen Zhentong Engineering Co., Ltd. | Subsidiary | Installation and maintenance | 10,000,000.00 | 128,018,261.20 | 20,168,334.04 | 242,326,338.13 | 535,875.61 | 345,974.37 |
| Shenzhen Petrel Hotel Co., Ltd. | Subsidiary | Hotel service | 30,000,000.00 | 46,978,263.33 | 36,924,321.85 | 13,401,432.09 | -3,353,411.41 | -2,521,866.37 |
| Shenzhen Huazhan Construction Supervision Co., Ltd. | Subsidiary | Construction supervision | 8,000,000.00 | 10,884,988.58 | 10,328,185.16 | 3,802,892.48 | 306,693.47 | 292,964.25 |
| Xin Feng Enterprise Co., Ltd. | Subsidiary | Investment and management | 502,335.00 | 339,071,513.82 | -226,370,965.47 | -12,934,886.25 | -12,934,886.25 |
Subsidiaries obtained or disposed in the Reporting Period:
? Applicable □ Not applicable
| Name | Way of gaining and disposing subsidiaries | Influence on overall production and operation as well as performance |
| Shenzhen Property Management Co., Ltd. | Negotiating transfer | Refer to Note VIII Sale of Major Assets and Equity Interests |
Information about major majority- and minority-owned subsidiaries:
1. In May 2021, through the payment of consideration of RMB450 million, the Group acquired 51% equity interest inGuangdong Jianbang Group (Huiyang) Industrial Co., Ltd. The project company will develop the Linxingyuan Projectwith a gross site area of 200,000 square meters and a total capacity building area of 0.4 million square meters, whichwill be developed in four phases and is expected to achieve revenue of RMB6 billion and total profit of approximatelyRMB1.8 billion from 2023 to 2025. The Group has control over the project company, which will be included in thescope of consolidation in May 2021. As at the end of 2022, eight residential buildings of Phase I have been capped, thebasement of Phase II has been completed, the development of Phase III and Phase IV are to be initiated, andconstruction permit has not been granted for the school. In 2022, new areas sold totaled 2,236 square meters, incomefrom sales increased by RMB25.58 million, and RMB22.29 million was withdrawn.
2. In October 2021, the Company won the bid for a land plot in Guangming District and established the projectcompany Shenzhen SPG Chuanqi Real Estate Development Co., Ltd. to be responsible for the development andconstruction of the land. In 2022, actual investment totaled RMB74.81 million, which was mainly made in primarysupporting piles and groundworks.
3. The subordinate subsidiaries engaged in real estate development also include: Shenzhen SPG LonggangDevelopment Co., Ltd., Shantou SEZ, Wellam FTY, Building Development, Co., Ltd., Shantou Huafeng Real EstateDevelopment Co., Ltd. The Cuilinyuan project developed by Shenzhen SPG Longgang Development Co., Ltd. broughtforward RMB24.69 million in 2022 (the percentage of accumulative sales carried forward was 96%). Jinyedao andYuejingDongfang developed by Shantou SEZ, Wellam FTY, Building Development, Co., Ltd. left a few amount ofremaining buildings for sale. And Shantou Huafeng Real Estate Development Co., Ltd. was responsible for thedevelopment of Tianyuewan project (divided into Phase I and Phase II). Tianyuewan Phase I was completed inDecember 2019. The Phase II started construction in November 2018 and was completed at the end of June 2021. Theoverall sales progress is relatively slow with an accumulated sales rate of about 74% for Phase I and 19% for Phase II.
4. Shenzhen Zhentong Engineering Co., Ltd. was engaged in the business of building installation and maintenance withthe 2022 operating revenues of RMB242 million and of 38.20% to the operating revenues of the Company.
5. The 2022 net profit of Xin Feng Enterprise Co., Ltd. was of RMB-12.93 million which mainly due to the changes ofexchange rate and it conducts no business.
6. The 2022 net profit of Shenzhen Petrel Hotel Co., Ltd. was of RMB-2.52 million which mainly due to the fact thatthe hotel industry is generally facing difficulties in the business operation during the Reporting Period.X Structured Bodies Controlled by the Company
□Applicable ? Not applicable
XI Prospects
(I) Industrial Pattern and TrendThe real estate industry is still the pillar industry of China’s national economy. After a series of strong macro-control,the industry is undergoing a gradual return to the track of sound and healthy development. Since the end of last year,loose policies have been introduced for real estate credits, bonds, equities and overseas loans under domesticguarantees, so China’s urbanization will still be in a stage of rapid development in the next period of time, and therewill be enough space for demands to support the steady development of the real estate industry and the real estatemarket is expected to recover step by step.(II) Potential Risks and Countermeasures
1. Macroeconomic risks and countermeasures
The real estate industry has a greater correlation with the macroeconomy and is more influenced by the macroeconomiccycle. The geopolitical situation is now volatile, the risk of the world economy going downward is rising, and thedomestic economy is repeatedly impacted by multiple factors that go beyond expectations. Pressures from shrinkingdemand, supply shock and weakening expectations continue to evolve, and the development environment is gainingcomplexity, severity and uncertainty. The Company will continue to pay attention to the international and domesticmacroeconomic situation and actively adjust its business strategy.
2. Industry regulation risks and countermeasures
On the whole, industry regulation has been relaxed and policies are gradually shifting, but there are little changes in thepolicies of tier-one cities represented by Beijing, Shanghai, Guangzhou and Shenzhen. Market sentiment andhomebuyer confidence remain low. The Company will continue to deepen its research on industry policies, follow thenational strategies, innovate its operating model and optimize its development method while continuing to studyindustry-university-institute cooperation, strenuously exploring new areas and actively cultivating new business models.
3. Business operating risks and countermeasures
The land space in Shenzhen, where the Company’s business focus is located, is limited, while project expansionrequires a large amount of capital, so the Company faces challenges in adding land reserves. The Company will payclose attention to the market and industry policy changes, formulate targeted land expansion plans, and the Companywill pay close attention to the quality and efficiency improvement of existing assets, and maintain a good operatingrevenue scale and performance level.(III) Development strategy and operating planThe year 2023 is the first year for implementing the spirit of the 20th National Congress of the Communist Party ofChina, a crucial year for connecting the past and the next in the 14th Five-year Plan, and a critical year for theCompany to deepen reform and seek development. Based on the high-quality development strategies of the central
government, the provincial government and the municipal government, the Company will earnestly implement thedeployment requirements of the State-owned Assets Supervision and Administration Commission of the People’sGovernment of Shenzhen Municipal (“Shenzhen SASAC) and Shenzhen Investment Holdings Co., Ltd. (“SIHC”),further analyze and study the situation based on its own development, face up to challenges, seize opportunities,strengthen overall planning, and promote the high-quality development of the Group to a new level.The Company has made an overall operating plan for 2023. Guided by the Xi Jinping Thought on Socialism withChinese Characteristics for a New Era, the Company will conscientiously implement the spirit of the 20th NationalCongress of the Communist Party of China, the Central Economic Working Conference and important addresses ofGeneral Secretary Xi Jinping, make overall plans, highlight implementation, carry out reform and innovation, forgeahead and exert all efforts to promote the steady and long-term high-quality development of Shenzhen PropertiesGroup (“SPG”) in accordance with the decisions and arrangements of Shenzhen Municipal Party Committee andGovernment, Shenzhen SASAC and SIHC, adhering to the idea of seeking progress while maintaining stability andrealizing sustainable development, centering on the overall objective of “consolidating primary business, exploringdevelopment paths, preventing and mitigating risks and making plans of high-quality and sustainable development”and following the leadership of Party building.In 2023, the Company will focus on the following five aspects:
1. Deepening implementation and going all out to achieve performance targets
First, it will endeavor to the sales of Guangmingli and Tianyuewan projects and existing real estate projects to ensurequick withdrawal of funds and smooth achievement of performance targets. Second, it will intensify leasing business toachieve the annual leasing target. Third, it will advance land sales in the United States to promote the realization ofinefficient assets overseas. Fourth, it will exert more efforts in recovering arrears to boost revenue and profit realization.Fifth, it will strengthen the operation management of its affiliates to ensure the completion of all business targets.
2. Making a sound overall plan and implementing key tasks on all fronts
First, it will complete the re-election of members of the Board of Directors and the Party Committee and improve thestructure of its corporate governance. Second, it will highlight project construction and ensure smooth implementationof project development plans. Third, it will promptly define the right of the land for Xinfeng Building in Shantou andgo through the construction application procedure as soon as possible. Fourth, it will promote the cleaning-up of“zombie enterprises” and properly address problems carried over from the past. Fifth, it will advance the constructionof the “Buildings for Shenzhen-Hong Kong Medical and Healthcare Specialty Industry” and take the initiative to createthe “Massive Health” ecological economic circle centering on SPG Plaza.
3. Taking multiple measures at the same time and making every effort to ensure business operationFirst, it will well manage funds and financing to provide a solid guarantee for the Company’s capital turnover. Second,it will optimize talent and organization structures to improve work efficiency from all aspects. Third, it will intensifyperformance appraisal and promote the establishment and improvement of a medium- and long-term incentivemechanism. Fourth, it will effectively respond to litigations and executions to mitigate potential risks. Fifth, it willemphasize security and stability maintenance related to safe production, stability maintenance and public opinioncontrol, so as to guard the Company’s business operation and management.
4. Enhancing synergy and actively exploring future development paths
The Company will, sticking to the development strategies of the central government, provincial government andmunicipal government, earnestly implement the decisions and deployments of superiors, intensify industrial research
centering on the development directions of controlling shareholders, enhance strategic and collaborative developmentof SIHC and synergetic development with system houses, and strive to make breakthroughs in the process ofsupporting and serving the development strategy of SIHC and form the Company’s new core competitiveness.
5. Following the leadership of Party building and leading overall high-quality developmentGuided by the Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, the Company willcontinue to organize the study, publicity and implementation of the spirit of the 20th National Congress of theCommunist Party of China, and turn the effects of such study, publicity and implementation into a powerful drivingforce for its reform and development. On top of that, the Company will strengthen its Party organization theoreticallyand organizationally, improve the Party organization’s conduct, and effectively integrate Party leadership intocorporate governance to lead to high-quality development of the Company.XII Communications with the Investment Community such as Researches, Inquiries andInterviews during the Reporting Period? Applicable □ Not applicable
| Date of visit | Place of visit | Way of visit | Type of visitor | Visitor | Contents and materials provided | Index to main inquiry information |
| 4 January 2022 | The Company | By telephone | Individual | Individual investor | Inquired of the future development plan of the Company, and didn’t offer written materials | N/A |
| 18 January 2022 | The Company | By telephone | Individual | Individual investor | Inquired of project sales of the Company, and didn’t offer written materials | N/A |
| 24 January 2022 | The Company | By telephone | Individual | Individual investor | Inquired of the land reserves and projects progress of the Company, and didn’t offer written materials | N/A |
| 10 February 2022 | The Company | By telephone | Individual | Individual investor | Inquired of business situations and strategic planning of the Company, and didn’t offer written materials | N/A |
| 15 February 2022 | The Company | By telephone | Individual | Individual investor | Inquired of the future development plan of the Company, and didn’t offer written materials | N/A |
| 21 February 2022 | The Company | By telephone | Individual | Individual investor | Inquired of business situations and strategic planning of the Company, and didn’t offer written materials | N/A |
| 1 March 2022 | The Company | By telephone | Individual | Individual investor | Inquired of business situation, and didn’t offer written materials | N/A |
| 9 March 2022 | The Company | By telephone | Individual | Individual investor | Inquired of the land reserves and projects progress of the Company, and didn’t offer written materials | N/A |
| 25 March 2022 | The Company | By telephone | Individual | Individual investor | Inquired of the future development plan of the Company, and didn’t offer written materials | N/A |
| 30 March 2022 | The Company | By telephone | Individual | Individual investor | Inquired of business situation, and didn’t offer written materials | N/A |
| 8 April 2022 | The Company | By telephone | Individual | Individual investor | Inquired of business situations and strategic planning of the Company, and didn’t offer written materials | N/A |
| 11 April 2022 | The Company | By telephone | Individual | Individual investor | Inquired of project sales of the Company, and didn’t offer written materials | N/A |
| 18 April 2022 | The Company | By telephone | Individual | Individual investor | Inquired of the future development plan of the Company, and didn’t offer written materials | N/A |
| 21 April 2022 | The Company | By telephone | Individual | Individual investor | Inquired of the land reserves and projects progress of the Company, and didn’t offer written materials | N/A |
| 10 May 2022 | The Company | By telephone | Individual | Individual investor | Inquired of business situations and strategic planning of the Company, and didn’t offer written materials | N/A |
| 12 May 2022 | The Company | By telephone | Individual | Individual investor | Inquired of project sales of the Company, and didn’t offer written materials | N/A |
| 23 May 2022 | The Company | By telephone | Individual | Individual investor | Inquired of the future development plan of the Company, and didn’t offer written materials | N/A |
| 2 June 2022 | The Company | By telephone | Individual | Individual investor | Inquired of the land reserves and projects progress of the Company, and didn’t offer written materials | N/A |
| 14 June 2022 | The Company | By telephone | Individual | Individual investor | Inquired of business situations and strategic planning of the Company, and didn’t offer written materials | N/A |
| 16 June 2022 | The Company | By telephone | Individual | Individual investor | Inquired of business situations and strategic planning of the Company, and didn’t offer written materials | N/A |
| 20 June 2022 | The Company | By telephone | Individual | Individual investor | Inquired of project sales of the Company, and didn’t offer written materials | N/A |
| 22 June 2022 | The Company | By telephone | Individual | Individual investor | Inquired of business situations and strategic planning of the Company, and didn’t offer written materials | N/A |
| 29 June 2022 | The Company | By telephone | Individual | Individual investor | Inquired of project sales of the Company, and didn’t offer written materials | N/A |
| 4 July 2022 | The Company | By telephone | Individual | Individual investor | Inquired of business situations and strategic planning of the Company, and didn’t offer written materials | N/A |
| 20 July 2022 | The Company | By telephone | Individual | Individual investor | Inquired of the future development plan of the Company, and didn’t offer written materials | N/A |
| 25 July 2022 | The Company | By telephone | Individual | Individual investor | Inquired of the project sales and future development plan of the Company, and didn’t offer written materials | N/A |
| 10 August 2022 | The Company | By telephone | Individual | Individual investor | Inquired of project sales of the Company, and didn’t offer written materials | N/A |
| 24 August 2022 | The Company | By telephone | Individual | Individual investor | Inquired of the future development plan of the Company, and didn’t offer written materials | N/A |
| 5 September 2022 | The Company | By telephone | Individual | Individual investor | Inquired of the future development plan of the Company, and didn’t offer written materials | N/A |
| 8 September 2022 | The Company | By telephone | Individual | Individual investor | Inquired of the land reserves and projects progress of the Company, and didn’t offer written materials | N/A |
| 14 September 2022 | The Company | By telephone | Individual | Individual investor | Inquired of business situations and strategic planning of the Company, and didn’t offer written materials | N/A |
| 11 October 2022 | The Company | By telephone | Individual | Individual investor | Inquired of the future development plan of the Company, and didn’t offer written materials | N/A |
| 17 October 2022 | The Company | By telephone | Individual | Individual investor | Inquired of project sales of the Company, and didn’t offer written materials | N/A |
| 20 October 2022 | The Company | By telephone | Individual | Individual investor | Inquired of the future development plan of the Company, and didn’t offer written materials | N/A |
| 1 November 2022 | The Company | By telephone | Individual | Individual investor | Inquired of the land reserves and projects progress of the Company, and didn’t offer written materials | N/A |
| 2 November 2022 | The Company | By telephone | Individual | Individual investor | Inquired of project sales of the Company, and didn’t offer written materials | N/A |
| 15 November 2022 | The Company | By telephone | Individual | Individual investor | Inquired of the future development plan of the Company, and didn’t offer written materials | N/A |
| 15 December 2022 | The Company | By telephone | Individual | Individual investor | Inquired of the land reserves and projects progress of the Company, and didn’t offer written materials | N/A |
| 19 December 2022 | The Company | By telephone | Individual | Individual investor | Inquired of project sales of the Company, and didn’t offer written materials | N/A |
| 28 December 2022 | The Company | Field research | Individual | Individual investor | Inquired of the future development plan of the Company, and didn’t offer written materials | N/A |
Part IV Corporate GovernanceI Basic Situation of Corporate Governance
In accordance with the requirements of the Company Law, the Securities Law, the Code on the Governance of ListedCompanies and other laws and regulations, the Company has been improving its governance structure continuously,adhering to standardized operation, and an operational mechanism featuring decision-making by the board of directors,execution by the management team, and supervision by the board of supervisors has been formed.During the reporting period, the Company's governance institutions at all levels have carried out their responsibilitiesand authorities clearly and definitely and have performed their own functions. At the same time, they have checked andbalanced each other in decision-making, implementation and supervision effectively, and have operated in acoordinated manner.
(1) Operation of the general meeting of shareholders
The preparation, holding of the annual and extraordinary general meetings of shareholders of the Company as well asdisclosure of the resolutions made at the meetings have been carried out in strict accordance with the Company Law,the Rules of the General Meeting of Shareholders of Listed Companies of China Securities Regulatory Commission(CSRC), the Articles of Association and the Rules of Procedure of the General Meeting of Shareholders of theCompany. The notification time of the meeting, the procedure of authorization, the procedure of convening, theconvener, the qualification of the personnel attending the meeting and the voting procedure of the meeting have allbeen in line with relevant provisions. An on-site interaction for shareholders has been set at the shareholders' meetingto ensure that the shareholders, especially the small and medium-sized shareholders, can exercise their legitimate rights.
(2) Operation of the board of directors
The preparation and holding of the board meeting of the Company and the disclosure of the resolution made at themeeting have been carried out in strict accordance with the Company Law, the Self-regulation Guidelines for ListedCompanies of Shenzhen Stock Exchange No. 1-Standardized Operation of Listed Companies on the Main Board, theArticles of Association and the Rules of Procedure of the Board Meeting of the Company. The number and manning ofthe board of directors have met the requirements of laws and regulations. The directors have worked diligently andresponsibly, and the board of directors has worked hard in making decisions and setting the direction for the Company,and has exercised its power in accordance with the requirements for corporate governance.
(3) Operation of the supervisory committee
The number and manning of the board of supervisors have met the requirements of laws and regulations. All membersof the board of supervisors of the Company have performed their duties diligently and conscientiously. They havesupervised and inspected the important matters of the Company in strict accordance with the Company Law, the Self-regulation Guidelines for Listed Companies of Shenzhen Stock Exchange No. 1-Standardized Operation of ListedCompanies on the Main Board, the Articles of Association and the Rules of Procedure of the Board of Supervisors ofthe Company, exercised the power of supervision effectively, gave a full play to the supervisory function, have playeda substantial role in the operation and management of the Company, and have protected the legitimate rights andinterests of the Company and the shareholders.
(4) Operation at manager level
The manager level of the Company has performed its duties in strict accordance with the Company Law, the Self-regulation Guidelines for Listed Companies of Shenzhen Stock Exchange No. 1-Standardized Operation of ListedCompanies on the Main Board, the Articles of Association and the Detailed Working Rules for the General Manager ofthe Company. The manager level is responsible for the production, operation and management of the Company all-roundly. They have performed their duties diligently and conscientiously, and have carried out the decisions of theboard of directors effectively. The members at the manager level have had a clear division of labor among them, theyhave worked diligently and conscientiously, and there has not existed any situation of "control under insiders ".Indicate by tick market whether there is any material incompliance with laws, administrative regulations andregulations governing the governance of listed companies issued by the CSRC.
□Yes ? No
No such cases in the Reporting Period.
II The Company’s Independence from Its Controlling Shareholder and Actual Controller inBusiness, Personnel, Asset, Organization and Financial Affairs
(I) In respect of assets, the Company possessed independent and integrated assets and the property of the Company istransparent.(II) In respect of personnel, the Company was absolutely independent in management of labor, personnel and salariesfrom the controlling shareholders. All the senior executives of the Company took no office title concurrently and drewno remunerations from the Shareholder Company.(III) In respect of finance, the Company has independent financial department, independently accounted and paid taxesaccording to the law. The Company established a complete accounting system, financial accounting system andfinancial administrative systems. The Company opened independent bank accounts.(IV) In respect of organization, the Board of Directors and the Supervisory Board operated independently. Thereexisted no superior-inferior relationship between the controlling shareholder and its function department and theCompany.(V) In respect of business, the Company possessed independent production, supply and sales system.III Horizontal Competition
? Applicable □ Not applicable
| Type | Relationship with the Company | Company name | Company nature | Course | Countermeasures | Progress and follow-up plan |
| Horizontal competition | Controlling shareholder | Shenzhen Investment Holdings Co., Ltd. | Other | The Company and ShenZhen Properties & Resources Development (Group) Ltd. (hereinafter referred to as “SZPRD”) are majority-owned subsidiaries of Shenzhen Investment Holdings Co., Ltd. The Company and SZPRD are operating real estate development and commercial property sales business, which belong to the same industry. There is horizontal competition. | For the Company’s existing business that has horizontal competition with ShenZhen Properties & Resources Development (Group) Ltd., Shenzhen Investment Holdings Co., Ltd. will, within the scope permitted by laws and regulations, timely launch one or several of the following solutions that is practically feasible, and complete the implementation of the relevant solution(s) before 9 November 2024 to solve the existing horizontal competition problem: (1) Solve the horizontal competition between the two through asset sales or asset replacement; (2) Solve the horizontal competition between the two through equity transfer; (3) Take other measures that can effectively solve the problem of horizontal competition. | Refer to the Announcement on Receiving the Avoiding Horizontal Competition Commitment Letter from the Controlling Shareholder (No.: 2021-032) disclosed by the Company on 11 September 2021 and the Announcement on Resolutions of the 1st Extraordinary General Meeting of 2021 (No.: 2021-34) disclosed by ShenZhen Properties & Resources Development (Group) Ltd. on 27 September 2021 for details. |
IV Annual and Extraordinary General Meeting Convened during the Reporting Period
1. General Meetings Convened during the Reporting Period
| Meeting | Type | Investor participation ratio | Convened date | Disclosure date | Index to disclosed information |
| The 2021 Annual General Meeting | Annual General Meeting | 63.56% | 17 May 2022 | 18 May 2022 |
Resolutions of 2021 Annual General Meetingdisclosed on China Securities, Securities Times,Ta Kung Pao and www.cninfo.com.cn (No.:
2022-018)
| The 1st Extraordinary General Meeting of 2022 | Extraordinary General Meeting | 56.27% | 16 November 2022 | 17 November 2022 | Resolutions of the 1st Extraordinary General Meeting of 2022 disclosed on China Securities, Securities Times, Ta Kung Pao and www.cninfo.com.cn (No.: 2022-041) |
2. Extraordinary General Meeting Convened at Request of Preference Shareholders with Resumed VotingRights
□Applicable ? Not applicable
V Directors, Supervisors and Senior Management
1. Basic Information
| Name | Office title | Incumbent/Former | Gender | Age | Start of tenure | End of tenure | Beginning shareholding (share) | Increase in the Reporting Period (share) | Decrease in the Reporting Period (share) | Other increase/decrease (share) | Ending shareholding (share) | Reason for change |
| Tang Xiaoping | Director | Incumbent | Male | 53 | 31 December 2020 | 0 | 0 | 0 | 0 | 0 | ||
| Tang Xiaoping | GM | Incumbent | Male | 53 | 14 December 2020 | 0 | 0 | 0 | 0 | 0 | ||
| Deng Kangcheng | Director | Incumbent | Male | 57 | 17 April 2012 | 10,000 | 0 | 2,500 | 0 | 7,500 | Personal financial arrangement | |
| Wang Jianfei | Director | Incumbent | Male | 50 | 11 October 2021 | 0 | 0 | 0 | 0 | 0 | ||
| Wang Jianfei | CFO | Incumbent | Male | 50 | 22 September 2021 | 0 | 0 | 0 | 0 | 0 | ||
| Wen Li | Director | Incumbent | Female | 54 | 8 September 2006 | 0 | 0 | 0 | 0 | 0 | ||
| Sun Minghui | Director | Incumbent | Male | 42 | 31 December 2020 | 0 | 0 | 0 | 0 | 0 | ||
| Kang Xiaoyue | Independent director | Incumbent | Male | 59 | 15 May 2018 | 0 | 0 | 0 | 0 | 0 | ||
| He Zuowen | Independent director | Incumbent | Male | 61 | 30 June 2020 | 0 | 0 | 0 | 0 | 0 | ||
| Mi Xuming | Independent director | Incumbent | Male | 48 | 30 June 2020 | 0 | 0 | 0 | 0 | 0 | ||
| Wang Jiangtao | Chairman of the Supe | Incumbent | Male | 57 | 17 May 2022 | 0 | 0 | 0 | 0 | 0 |
| rvisory Committee | ||||||||||||
| Ren Wei | Supervisor | Incumbent | Male | 43 | 15 May 2018 | 2,000 | 0 | 0 | 0 | 2,000 | ||
| Li Yufei | Supervisor | Incumbent | Female | 45 | 17 April 2012 | 0 | 0 | 0 | 0 | 0 | ||
| Feng Hongwei | Supervisor | Incumbent | Male | 52 | 2 March 2017 | 0 | 0 | 0 | 0 | 0 | ||
| Lin Jun | Supervisor | Incumbent | Female | 54 | 27 April 2016 | 0 | 0 | 0 | 0 | 0 | ||
| Zhang Hongwei | Vice GM | Incumbent | Male | 57 | 15 July 2020 | 0 | 0 | 0 | 0 | 0 | ||
| Huang Weijun | Vice GM | Incumbent | Male | 51 | 29 July 2022 | 0 | 0 | 0 | 0 | 0 | ||
| Wu Zhiyong | Vice GM | Incumbent | Male | 51 | 29 July 2022 | 0 | 0 | 0 | 0 | 0 | ||
| Luo Yi | Secretary of the Board | Incumbent | Male | 49 | 31 December 2020 | 0 | 0 | 0 | 0 | 0 | ||
| Liu Zhengyu | Chairman of the Board | Former | Male | 53 | 15 January 2020 | 1 November 2022 | 0 | 0 | 0 | 0 | 0 | |
| Li Lian | Chairman of the Supervisory Committee | Former | Female | 56 | 31 December 2020 | 17 May 2022 | 0 | 0 | 0 | 0 | 0 | |
| Wei Hanping | Vice GM | Left | Female | 57 | 28 September 2012 | 7 June 2022 | 0 | 0 | 0 | 0 | 0 | |
| Total | -- | -- | -- | -- | -- | -- | 12,000 | 0 | 2,500 | 0 | 9,500 | -- |
Indicate by tick mark whether any directors or supervisors left or any senior management were disengaged during the Reporting Period?Yes □ No
1. Chairman Mr. Liu Zhengyu of the Company no longer serves as the Chairman of the Board of Directors or a directorof the Company due to job changes. For details, please refer to the Announcement on Leave of Chairman and Electionof A Director to Act as the Chairman (Announcement No. 2022-040) disclosed by the Company on 2 November 2022,on cninfo.com.cn.
2. Chairman Ms. Li Lian of the Board of Supervisors of the Company has gone through the procedure to get retired,and no longer serves as the Chairman of the Board of Supervisors or a supervisor of the Company. For details, pleaserefer to the Announcement on Change of Supervisor and Chairman of the Board of Supervisors (Announcement No.2022-020) disclosed by the Company on 18 May 2022 on cninfo.com.cn.
3. Deputy General Manager Ms. Wei Hanping of the Company has gone through the procedure to get retired, and nolonger serves as the Deputy General Manager of the Company. For details, please refer to the Announcement onRetirement and Leave of Deputy General Manager (Announcement No. 2022-021) disclosed by the Company on 8June 2022, on cninfo.com.cn.Change of Directors, Supervisors and Senior Management? Applicable □ Not applicable
| Name | Office title | Type of change | Date of change | Reason for change |
| Liu Zhengyu | Chairman of the Board | Left | 1 November 2022 | Job change |
| Li Lian | Chairman of the Supervisory Committee | Left | 17 May 2022 | Retirement |
| Wei Hanping | Vice GM | Left | 7 June 2022 | Retirement |
| Wang Jiangtao | Chairman of the Supervisory Committee | Elected | 18 May 2022 | |
| Huang Weijun | Vice GM | Engaged | 29 July 2022 | |
| Wu Zhiyong | Vice GM | Engaged | 29 July 2022 |
2. Biographical Information
Professional backgrounds, major work experience and current duties in the Company of the incumbent directors, supervisors and seniormanagement:
1. Tang Xiaoping: he ever act as CFO and finance minister of Shenzhen HRD Assets Management Company, ministerof Financial Operations Management Department of Shenzhen Foreign Labor Service Co., Ltd. and executive directorof Shenzhen Foreign Affairs Service Center, Manager of Financing Plan Department, deputy GM, secretary of theBoard of the Company and deputy secretary of the CPC of the Company. He is currently the director, GM andsecretary of the CPC of the Company.
2. Deng Kangcheng: he was once deputy director, director of the Office of Shenzhen Investment Holdings Co., Ltd.,and supervisor of the Company. And now he acts as the director, Vice Secretary of CPC and Chairman of the TradeUnion Federation of the Company.
3. Wang Jianfei: he was once the minister of the Financial Management Department of Shenzhen ConstructionDevelopment (Group) Company, vice GM of Hubei SIHC Investment Development Co., Ltd. And now he acts as thedirector and CFO of the Company.
4. Wen Li: she once worked as the vice chief of the Investment and Development Department, vice director ofManagement Center for Construction Project and Minister of Enterprise Department I of Shenzhen InvestmentHoldings Co., Ltd. Now, she serves as the director, GM and vice secretary of CPC in Shenzhen Bay TechnologyDevelopment Co., Ltd. and the director of the Company.
5. Sun Minghui: Former the senior director of the Finance Department and the Office of the Board of Directors ofShenzhen Investment Holdings Co., Ltd., and the deputy director of the Finance Department (Settlement Center);currently, he is the director of the Finance Department (Settlement Center) of Shenzhen Investment Holdings Co., Ltd.and a director of the Company.
6. Kang Xiaoyue: he was once the staff member of Department of Justice of Jiangxi Province, a reporter, editor andhead of Special Issue Department of Shenzhen Legal Newspaper. Chief Lawyer, senior partner of Guangdong NewCentury Law Firm (later renamed Guangdong Wancheng Law Firm). Now he serves as a senior partner of BeijingWeiheng (Shenzhen) Law Firm and the independent director of the Company.
7. He Zuowen: formerly associate professor of accounting, deputy director of teaching and research section andmember of the Disciplinary Committee of Changsha University of Science & Technology, partner and deputy directorof Shenzhen Huapeng Certified Public Accountants, director and vice GM of Beijing Zhongtian Huazheng CertifiedPublic Accountants Co., Ltd. (Dahua Certified Public Accountants) as well as head of Shenzhen Branch of it, partner ofBDO Certified Public Accountants; advisory expert of Internal Control Standard Committee of the Ministry of Finance(the 1
st
, 2
nd
and 4
th), director of Shenzhen Institute of Certified Public Accountants, director of the Investigation
Committee, member of the Shenzhen Municipal Social Organization Disciplinary Inspection Committee, member ofCPC, Vice Secretary of CPC & Secretary of the Disciplinary Committee of Shenzhen CPA Industry Committee, etc.,currently partner of Dahua Certified Public Accountants (Special General Partnership), Secretary of CPC GeneralBranch of Shenzhen Branch, Chairman of Shenzhen Tianye Tax Agent Co., Ltd., and also served as the independentdirector of Shenzhen Textile (Group) Co., Ltd., Shenzhen Bioeasy Biotechnology Co., Ltd., Shenzhen Tongyi IndustryCo., Ltd. and the Company. The main social positions are: judge of the Shenzhen Municipal Senior Accountant ReviewCommittee, external master tutor of Shenzhen University, member of Shenzhen CPA Industry Committee, director ofShenzhen Certified Tax Agents Association and Member of the Capital Market Advisory Expert Committee of theXinjiang Regulatory Bureau of the China Securities Regulatory Commission, expert of the experts database of State-owned Assets Supervision and Administration Commission of the People’s Government of Shenzhen Municipality,Development and Reform Commission of Shenzhen Municipality, Science and Technology Innovation Commission ofShenzhen Municipality, Shenzhen Bureau of Radio, Television, Culture, Tourism and Sports, Shenzhen UnitedProperty and Equity Exchange, etc.
8. Mi Xuming: Former lecturer and associate professor at Shenzhen University, post-doctor of post-doctoral mobilestation for applied economics of School of Economics of Xiamen University, visiting scholar at the University ofExeter; currently professor and master tutor of Shenzhen University, and at the same time as the independent directorsof Shenzhen Farben Information Technology Co., Ltd. and the Company.
9. Wang Jiangtao: Former Deputy General Manager and Secretary of the Party Branch of Shenzhen Foreign Economicand Trade Investment Company, Director, Secretary of the Disciplinary Committee, Secretary of CPC and Chairman ofthe Supervisory Committee, of Shenzhen Architecture Design General Research Institute; currently Chairman of theSupervisory Committee, Secretary of the Disciplinary Committee and member of CPC of the Company.
10. 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 ofAudit Department of Shenzhen Investment Holdings Co., Ltd. and the supervisor of the Company.
11. Li Yufei: she ever worked as the Assistant to the Manager of the Investment Department and Assistant to theManager & Vice Manager of Assets Management Centre as well as the Senior Management Staff of EnterpriseDepartment I and Enterprise Department II (Journal Center) in Shenzhen Investment Holdings Co., Ltd. Now, sheserves as the deputy director of Discipline Inspection Office in Shenzhen Investment Holdings Co., Ltd. and thesupervisor of the Company.
12. Feng Hongwei: he once was the Vice Chief of the Board Secretariat, the Securities Representative and Minister ofAudit Department. Now he acts as the supervisor, member of the Disciplinary Committee and Manager of AssetManagement Center of the Company.
13. Lin Jun: She once was the Vice Chief and Chief of the Party-Mass Work Department. And she has been acting as asupervisor of the Company, the Vice Discipline Inspection Secretary and Director of Discipline Inspection andSupervision Office (Office of the Board of Supervisors).
14. Zhang Hongwei: once served as GM of Shenzhen Urban Construction Investment Development Co., Ltd., HefeiRuifa Urban Construction Investment Development Co., Ltd., manager of the Company's Development Department,Sales Department, Project II Department, Project Management Department; currently deputy GM of the Company,member of CPC, Chairman of Jianbang Group, and GM of Longgang Development Company.
15. Huang Weijun: Once served as a member of the Party Committee, Secretary of the Committee for DisciplineInspection and Deputy GM of Shenzhen Guangming Group Co., Ltd., a member of the Party Committee, Secretary ofthe Committee for Discipline Inspection and Deputy GM of Shenzhen OCT Vision Inc. (concurrently as an executive
director of Shenzhen OCT International Media Performing Co., Ltd.), and now serving as the Deputy GM of theCompany.
16. Wu Zhiyong: Once served as the Chairman and GM of Shenzhen Petrel Hotel Co., Ltd. and Deputy Manager ofProperty Management Department and Asset Operation Center of the Company, and now serving as the Deputy GM ofthe Company.
17. Luo Yi: He was once the Vice GM, Deputy Director of Board Secretariat and Securities Representative in theShantou branch of the Company. And he now serves as the Board Secretary and Director of the Board Secretariat in theCompany.Offices held concurrently in shareholding entities:
? Applicable □ Not applicable
| Name | Shareholding entity | Office held in the shareholding entity | Start of tenure | End of tenure | Remuneration or allowance from the shareholding entity |
| Sun Minghui | Shenzhen Investment Holdings Co., Ltd | Chief of Financial Department (Settlement Center) | 11 November 2020 | Yes | |
| Ren Wei | Shenzhen Investment Holdings Co., Ltd | Vice minister of Audit Department | 18 September 2017 | Yes | |
| Li Yufei | Shenzhen Investment Holdings Co., Ltd | Deputy Director of Discipline Inspection Office | 9 July 2015 | Yes |
Offices held concurrently in other entities:
? Applicable □ Not applicable
| Name | Other entity | Office held in the entity | Start of tenure | End of tenure | Remuneration or allowance from the entity |
| Sun Minghui | China Nanshan Development (Group) Co., Ltd. | Supervisor | 17 October 2017 | No | |
| Sun Minghui | Shenzhen Highway Passenger Transportation Service Centre Co., Ltd. | Supervisor | 16 June 2017 | No | |
| Sun Minghui | ULTRARICH INTERNATIONAL LIMITED | Director | 11 November 2020 | No | |
| Sun Minghui | Shenzhen Chiwan Industry Development Co., Ltd. | Supervisor | 30 June 2021 | No | |
| Sun Minghui | Hubei SIHC Investment Development Co., Ltd. | Director | 11 November 2020 | No | |
| Sun Minghui | Shenzhen Textile (Holdings) Co., Ltd. | Director | 10 February 2021 | No | |
| Sun Minghui | Shenzhen Shenzhen-Hong Kong Science and Technology Innovation Cooperation Zone Development Co., Ltd. | Director | 18 October 2021 | No | |
| Ren Wei | Shenzhen Sungang China Resources Land Development Co., Ltd. | Supervisor | 17 October 2017 | No | |
| Li Yufei | Shenzhen Dapengwan Huaqiao Tomb | Director | 19 November 2015 | No | |
| Li Yufei | Shenzhen Shentou Cultural Investment Co., Ltd. | Director | 2 September 2022 | No | |
| Kang Xiaoyue | Beijing Weiheng (Shenzhen) Law Firm | Senior partner | 2 December 2019 | Yes | |
| He Zuowen | Dahua Certified Public Accountants (Special General Partnership) | Partner | 1 December 2002 | Yes | |
| He Zuowen | Shenzhen Tianye Tax Agency Co., Ltd. | Chairman of the Board | 1 December 2008 | Yes | |
| He Zuowen | Shenzhen JPT Opto-Electronics Co., Ltd. | Independent director | 1 June 2017 | 20 April 2022 | Yes |
| He Zuowen | Shenzhen Textile (Holdings) Co., Ltd. | Independent director | 19 July 2017 | Yes |
| He Zuowen | Shenzhen Bioeasy Biotechnology Co., Ltd. | Independent director | 1 October 2017 | Yes | |
| He Zuowen | Shenzhen Tongyi Industry Co., Ltd. | Independent director | 11 October 2018 | Yes | |
| Mi Xuming | Shenzhen University | Professor and master tutor | 1 December 2009 | Yes | |
| Mi Xuming | ChinaLin Securities Co., Ltd. | Independent director | 10 April 2017 | 16 May 2022 | Yes |
| Mi Xuming | Shenzhen Farben Information Technology Co., Ltd. | Independent director | 29 January 2021 | Yes |
Punishments imposed in the recent three years by the securities regulator on the incumbent directors, supervisors and senior managementas well as those who left in the Reporting Period:
□Applicable ? Not applicable
3. Remuneration of Directors, Supervisors and Senior Management
Decision-making procedure, determination basis and actual payments of remuneration for directors, supervisors and senior management:
The remuneration of the Company's directors, supervisors and senior managers shall be determined and implemented in accordance withthe regulations of the Company's remuneration management system.After the review and approval at the 2013 Annual General Meeting of Shareholders held on 23 April 2014, the allowance for independentdirectors has been adjusted to RMB7000 (tax included) per person per month since May 2014, and independent directors will not receiveany remuneration other than it from the Company.Remuneration of directors, supervisors and senior management for the Reporting Period
Unit: RMB’0,000
| Name | Office title | Gender | Age | Incumbent/Former | Total before-tax remuneration from the Company | Any remuneration from related party |
| Tang Xiaoping | Director and GM | Male | 53 | Incumbent | 111.51 | No |
| Deng Kangcheng | Director | Male | 57 | Incumbent | 56.4 | No |
| Wang Jianfei | Director and CFO | Male | 50 | Incumbent | 74.4 | No |
| Wen Li | Director | Female | 54 | Incumbent | 0 | No |
| Sun Minghui | Director | Male | 42 | Incumbent | 0 | No |
| Kang Xiaoyue | Independent director | Male | 59 | Incumbent | 0 | No |
| He Zuowen | Independent director | Male | 61 | Incumbent | 0 | No |
| Mi Xuming | Independent director | Male | 48 | Incumbent | 0 | No |
| Wang Jiangtao | Chairman of the Supervisory Committee | Male | 57 | Incumbent | 40 | No |
| Ren Wei | Supervisor | Male | 43 | Incumbent | 0 | No |
| Li Yufei | Supervisor | Female | 45 | Incumbent | 0 | No |
| Feng Hongwei | Supervisor | Male | 52 | Incumbent | 62.12 | No |
| Lin Jun | Supervisor | Female | 54 | Incumbent | 62.09 | No |
| Zhang Hongwei | Vice GM | Male | 57 | Incumbent | 97.31 | No |
| Huang Weijun | Vice GM | Male | 51 | Incumbent | 28.19 | No |
| Wu Zhiyong | Vice GM | Male | 51 | Incumbent | 73.02 | No |
| Luo Yi | Secretary of the Board | Male | 49 | Incumbent | 64.12 | No |
| Liu Zhengyu | Chairman of the Board | Male | 53 | Former | 0 | No |
| Li Lian | Chairman of the Supervisory Committee | Female | 56 | Former | 83.2 | No |
| Wei Hanping | Vice GM | Female | 57 | Former | 59.9 | No |
| Total | -- | -- | -- | -- | 812.26 | -- |
VI Performance of Duty by Directors in the Reporting Period
1. Board Meeting Convened during the Reporting Period
| Meeting | Date of the meeting | Disclosure date | Index to disclosed information |
| The 70th Meeting of the 7th Board of Directors | 28 February 2022 | 1 March 2022 | Announcement on Resolutions of the 70th Meeting of the 7th Board of Directors (No.: 2022-002) disclosed on China Securities Journal, Securities Times, Ta Kung Pao and www.cninfo.com.cn. |
| The 71st Meeting of the 7th Board of Directors | 17 March 2022 | 18 March 2022 | Announcement on Resolutions of the 71st Meeting of the 7th Board of Directors (No.: 2022-003) disclosed on China Securities Journal, Securities Times, Ta Kung Pao and www.cninfo.com.cn. |
| The 72nd Meeting of the 7th Board of Directors | 29 April 2022 | 30 April 2022 | Announcement on Resolutions of the 72nd Meeting of the 7th Board of Directors (No.: 2022-014) disclosed on China Securities Journal, Securities Times, Ta Kung Pao and www.cninfo.com.cn. |
| The 73rd Meeting of the 7th Board of Directors | 29 July 2022 | 30 July 2022 | Announcement on Resolutions of the 73rd Meeting of the 7th Board of Directors (No.: 2022-024) disclosed on China Securities Journal, Securities Times, Ta Kung Pao and www.cninfo.com.cn. |
| The 74th Meeting of the 7th Board of Directors | 25 August 2022 | 26 August 2022 | Announcement on Resolutions of the 74th Meeting of the 7th Board of Directors (No.: 2022-027) disclosed on China Securities Journal, Securities Times, Ta Kung Pao and www.cninfo.com.cn. |
| The 75th Meeting of the 7th Board of Directors | 28 October 2022 | 29 October 2022 | Announcement on Resolutions of the 75th Meeting of the 7th Board of Directors (No.: 2022-034) disclosed on China Securities Journal, Securities Times, Ta Kung Pao and www.cninfo.com.cn. |
| The 76th Meeting of the 7th Board of Directors | 7 December 2022 | 8 December 2022 | Announcement on Resolutions of the 76th Meeting of the 7th Board of Directors (No.: 2022-043) disclosed on China Securities Journal, Securities Times, Ta Kung Pao and www.cninfo.com.cn. |
2. Attendance of Directors at Board Meetings and General Meetings
| Attendance of directors at board meetings and general meetings | |||||||
| Director | Total number of board meetings the director was eligible to attend | Board meetings attended on site | Board meetings attended by way of telecommunication | Board meetings attended through a proxy | Board meetings the director failed to attend | The director failed to attend two consecutive board meetings (yes/no) | General meetings attended |
| Tang Xiaoping | 7 | 0 | 7 | 0 | 0 | No | 2 |
| Deng Kangcheng | 7 | 0 | 7 | 0 | 0 | No | 2 |
| Wang Jianfei | 7 | 0 | 7 | 0 | 0 | No | 2 |
| Wen Li | 7 | 0 | 7 | 0 | 0 | No | 2 |
| Sun Minghui | 7 | 0 | 7 | 0 | 0 | No | 2 |
| Kang Xiaoyue | 7 | 0 | 7 | 0 | 0 | No | 2 |
| He Zuowen | 7 | 0 | 7 | 0 | 0 | No | 2 |
| Mi Xuming | 7 | 0 | 7 | 0 | 0 | No | 2 |
| Liu Zhengyu | 6 | 0 | 6 | 0 | 0 | No | 0 |
Why any independent director failed to attend two consecutive board meetings:
Not applicable
3. Objections Raised by Directors on Matters of the Company
Indicate by tick mark whether any directors raised any objections on any matter of the Company.
□Yes ? No
No such cases in the Reporting Period.
4. Other Information about the Performance of Duty by Directors
Indicate by tick mark whether any suggestions from directors were adopted by the Company.?Yes □ NoSuggestions from directors adopted or not adopted by the Company:
During the Reporting Period, all directors of the Company performed their duties diligently and conscientiously. Theythoroughly mastered the Company’s production and operation, internal control, and standardized operation, and putforward relevant opinions on the Company’s major governance and operation decisions based on their professionaladvantages. These opinions were fully communicated and discussed among the directors before forming consensus,which effectively promoted scientific and objective decision-making by the Board of Directors, and helpfullysafeguarded the legitimate rights and interests of the Company and all shareholders.VII Performance of Duty by Specialized Committees under the Board in the Reporting Period
| Committee | Members | Number of meetings convened | Convened date | Content | Important opinions and suggestions raised | Other information about the performance of duty | Details about issues with objections (if any) |
| Audit Committee of the Board of Directors | He Zuowen, Sun Minghui, Mi Xuming | 4 | 14 January 2022 | Deliberation on the Company’s 2021 financial statements | It is believed that the Company has chosen and applied appropriate accounting policies and made reasonable accounting estimates in accordance with the provisions of the new Accounting Standards for Business Enterprises. The Company has always been cautious about changes in accounting policies and accounting estimates. There is no use or abuse of changes in accounting policies or accounting estimates to adjust profits. The financial statements prepared by the Company are true and reliable with complete contents. | ||
| 10 March 2022 | Deliberation on the preliminary audit opinions of Grant Thornton China (LLP) on the Company’s 2021 financial statements | It is believed that the Company’s 2021 financial statements prepared by Grant Thornton China (LLP) comply with all provisions of the Accounting Standards for Business Enterprises, and truly and completely represent the Company’s financial position as of 31 December 2021 and its operating results and cash flows for the year 2021 in all material respects. | |||||
| 17 | Deliberation on the | It is believed that Grant Thornton China (LLP) has completed the audit |
| March 2022 | summary of the 2021 audit service provided by Grant Thornton China (LLP) for the Company | of the Company’s 2021 financial statements well. | |||||
| 21 October 2022 | Deliberation on the proposed renewal of the audit firm | It is believed that Grant Thornton China (LLP) (hereinafter referred to as “Grant Thornton”) possesses independence, professional competence, the ability to protect investors, and the experience and capability of providing audit services for listed companies. During the audit of the Company’s 2021 financial statements and internal control, Grant Thornton was able to earnestly perform its duties in accordance with the requirements of the auditing standards and the Basic Code for Internal Control of Enterprises. It independently, objectively and fairly evaluated the Company’s financial position and operating results, demonstrating occupational ethics and professional competence. Therefore, it is proposed to the Company’s Board of Directors that Grant Thornton should be renewed as the auditing agency for the Company’s 2022 financial statements and internal control. | |||||
| Remuneration and Appraisal Committee of the Board of Directors | Mi Xuming, Wang Jianfei, He Zuowen | 4 | 22 February 2022 | Deliberation on the Proposal on Formulating the Management Measures for Business Performance Appraisal and Remuneration Management of Senior Management Members (Trial) | It is held that the Management Measures for Business Performance Appraisal and Remuneration Management of Senior Management Members (Trial) formulated by the Company is in line with the income distribution policy for state-owned enterprises and the relevant regulations of Shenzhen SASAC, can effectively enhance the loyalty and diligence consciousness of the management team, further improve the performance appraisal and incentive and restraint mechanism for senior management members and advance the Company’s corporate governance, and is conducive to the Company’s long-lasting and healthy development. | ||
| 17 March 2022 | Deliberation on the annual remuneration of directors, supervisors and senior management as disclosed in the Company’s 2021 annual report | It is believed that the remuneration decision-making procedures for the Company’s directors, supervisors and senior management are compliant, the remuneration payment standards for the Company’s directors, supervisors and senior management are in line with the regulations of the remuneration system, and that the remuneration disclosed in the 2021 annual report is true and accurate. | |||||
| 29 April 2022 | Review of the Implementation Plan for Performance | It is held that: 1. The Implementation Plan for Performance Appraisal of Senior Management Members in 2021 is in |
| Appraisal of Senior Management Members in 2021, the Implementation Plan for Performance Appraisal of Senior Management Members in 2022 and the 2022 Statement of Responsibility of Senior Management Members for Business Performance | 2. The Implementation Plan for Performance Appraisal of Senior Management Members in 2022 is in line with the Company requirements put forward in the Management Measures for Business Performance Appraisal and Remuneration Management of Senior Management Members, the appraisal indicators are scientifically and reasonably set, and the plan is conducive to further improving the incentive and restraint mechanism for senior management members. 3. The 2022 Statement of Responsibility of Senior Management Members for Business Performance is in line with the Company’s Articles of Association and the Management Measures for Business Performance Appraisal and Remuneration Management of Senior Management Members, and is conducive to further improving the incentive and restraint mechanism for senior management members and promoting the Company’s long-lasting and healthy development. | ||||||
| 7 December 2022 | Review of the results of performance appraisal of senior management members of SPG in 2021 and the result application plan | It is held that the decision-making process of the performance appraisal of senior management members of the Company in 2021 conforms to the relevant laws and regulations of China and the Company’s Articles of Association and Management Measures for Business Performance Appraisal and Remuneration Management of Senior Management Members, and has caused no damage to the interests of the Company or its shareholders. Therefore, the Committee recognizes the above and agrees to submit them to the 76th Meeting of the 7th Board of Directors of the Company for deliberation. | |||||
| Nomination Committee of the Board of Directors | Kang Xiaoyue, Deng Kangcheng, He Zuowen | 1 | 22 July 2022 | Deliberation on the nomination of Mr. Huang Weijun and Mr. Wu Zhiyong as the Company’s vice managers | It is believed that Mr. Huang Weijun and Mr. Wu Zhiyong are not involved in the circumstances stipulated in the Company Law that prohibit them from serving as a director, a supervisor or a senior management member, have never received punishment by the China Securities Regulatory Commission and other relevant authorities or disciplinary action by the stock exchange, have not been placed on file for |
investigation by judicial organs forsuspected crimes or placed on file forinspection by the China SecuritiesRegulatory Commission for suspectedviolations of laws and regulations, arenot a defaulter, are not a person heldliable or punished for dishonesty, andhave the qualifications required byrelevant laws, administrativeregulations, departmental rules, andnormative documents. It is agreed thatMr. Huang Weijun and Mr. WuZhiyong may be recommended as theCompany’s vice managers.
VIII Performance of Duty by the Supervisory CommitteeIndicate 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.
IX Employees
1. Number, Functions and Educational Backgrounds of Employees
| Number of in-service employees of the Company as the parent at the period-end | 112 |
| Number of in-service employees of major subsidiaries at the period-end | 164 |
| Total number of in-service employees at the period-end | 276 |
| Total number of paid employees in the Reporting Period | 273 |
| Number of retirees to whom the Company as the parent or its major subsidiaries need to pay retirement pensions | 0 |
| Functions | |
| Function | Employees |
| Production | 137 |
| Sales | 14 |
| Technical | 15 |
| Financial | 32 |
| Administrative | 78 |
| Total | 276 |
| Educational backgrounds | |
| Category | Number |
| Doctors | 2 |
| Masters | 21 |
| Bachelors | 103 |
| College graduates | 72 |
| Technical secondary school graduates | 11 |
| High school graduates and below | 67 |
| Total | 276 |
2. Employee Remuneration Policy
The management personnel above vice general manager (including vice GM) of the Company conducted annual salarysystem, 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 TheCompany adopts internal training, hires experts give lectures to the Company or participate professional training, trainthe on job employees with job knowledge, professional skills, rules and regulations, the business process etc., whichenrich and renew the professional knowledge, enhance the comprehensive quality and business skills of the employees.
4. Labor Outsourcing
□Applicable ? Not applicable
X Profit Distributions (in the Form of Cash and/or Stock)How the profit distribution policy, especially the cash dividend policy, was formulated, executed or revised in the Reporting Period:
? Applicable □ Not applicableAs audited by Grant Thornton Certified Public Accountants (Special General Partnership), ShenZhen SpecialEconomic Zone Real Estate & Properties (Group) Co., Ltd. as the parent recorded retained earnings ofRMB1,474,557,043.86 at the beginning of 2022. This, plus the net profit of RMB341,088,743.27 in 2022, and minusthe 10% statutory surplus reserve of RMB34,108,874.33 and the payout in 2022 of the 2021 dividend ofRMB89,026,080.00, equals the distributable profit of RMB1,692,510,832.80.According to the Company’s Articles of Association and taking into account the actual situation and futuredevelopment of the Company, a final dividend plan for 2022 has been proposed as follows: based on the total sharecapital of 1,011,660,000 shares at 31 December 2022, a cash dividend of RMB0.61 (tax inclusive) per 10 shares is tobe distributed to the shareholders, with no bonus issue from either profit or capital reserves.A total of RMB61,711,260.00 of cash dividends will be distributed, accounting for 40.15% of the consolidated netprofit of RMB153,718,805.57 attributable to the Company as the parent for the year. And the retained earnings ofRMB1,630,799,572.80 will be carried forward to the next accounting period.
| Special statement about the cash dividend policy | |
| In compliance with the Company’s Articles of Association and resolution of general meeting | Yes |
| Specific and clear dividend standard and ratio | Yes |
| Complete decision-making procedure and mechanism | Yes |
| Independent directors faithfully performed their duties and played their due role | Yes |
| Non-controlling interests are able to fully express their opinion and desire and their legal rights and interests are fully protected | Yes |
| In case of adjusting or changing the cash dividend policy, the conditions and procedures involved are in compliance with applicable regulations and transparent | Not applicable |
Indicate by tick mark whether the Company fails to put forward a cash dividend proposal for shareholders despite the facts that theCompany has made profits in the Reporting Period and the profits of the Company as the parent distributable to shareholders are positive.
□Applicable ? Not applicable
Final Dividend Plan for the Reporting Period? Applicable □ Not applicable
| Bonus shares for every 10 shares (share) | 0 |
| Dividend for every 10 shares (RMB) (tax inclusive) | 0.61 |
| Total shares as the basis for the profit distribution proposal (share) | 1,011,660,000 |
| Cash dividends (RMB) (tax inclusive) | 61,711,260.00 |
| Cash dividends in other forms (such as share repurchase) (RMB) | 0.00 |
| Total cash dividends (including those in other forms) (RMB) | 61,711,260.00 |
| Distributable profit (RMB) | 1,692,510,832.80 |
| 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 2022 was reviewed and approved by the 78th Meeting of the 7th Board of Directors held on 17 March 2023, and intended to be submitted to The 2022 Annual General Meeting for review. Based on the total 1,011,660,000 shares of the Company as at 31 December 2022, a cash dividend of RMB0.61 (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 Meeting of the Company. | |
XI Equity Incentive Plans, Employee Stock Ownership Plans or Other Incentive Measures forEmployees
□Applicable ? Not applicable
No such cases in the Reporting Period.XII Establishment and Execution of the Internal Control System for the Reporting Period
1. Establishment and Execution of the Internal Control System
The Company has established a relatively complete and continuously effective internal control system, and has carriedout internal control evaluation in accordance with the internal control matrix and documents. In accordance with therequirements of the standard system for enterprise internal control and relevant regulations, the Company hasmaintained effective internal control over financial reporting in all material respects. No major deficiencies in internalcontrol not related to financial reporting have been found, and no factors affecting the evaluation conclusion of internalcontrol effectiveness have occurred. At the same time, the Company attaches great importance to the regulation andsteering role of the big supervision system. By holding joint supervision meetings and carrying out key supervision andinspection, the Company has promoted the standardization level improvement of relevant management work. No majorviolations of regulations and disciplines have been found. In the future, the Company will continue to develop internalcontrol in a standardized manner and strengthen the supervision and inspection of internal control in order to promotethe healthy and sustainable development of the Company.
2. Material Internal Control Weaknesses Identified for the Reporting Period
□Yes ? No
XIII Management and Control over Subsidiaries by the Company for the Reporting Period
| Subsidiary | Integration plan | Integration progress | Problem | Countermeasures taken | Settlement progress | Follow-up settlement plan |
| N/A | N/A | N/A | N/A | N/A | N/A | N/A |
Note: 1. No new subsidiary was purchased during the Reporting Period.
XIV Internal Control Self-Evaluation Report or Independent Auditor’s Report on InternalControl
1. Internal Control Self-Evaluation Report
| Disclosure date of the internal control self-evaluation report | 18 March 2023 | |
| Index to the disclosed internal control self-evaluation report | 2022 Internal Control Self-Evaluation Report on www.cninfo.com.cn | |
| Evaluated entities’ combined assets as % of consolidated total assets | 81.50% | |
| Evaluated entities’ combined operating revenue as % of consolidated operating revenue | 95.37% | |
| Identification standards for internal control weaknesses | ||
| Type | Weaknesses in internal control over financial reporting | Weaknesses in internal control not related to financial reporting |
| Nature standard | The Company in line with the actual situation, when the follows events or indications happen, which means there probably existing serious or important defects in the financial report; (1) the directors, supervisors and senior executives were fraud. (2) Certified Public Accountant find that there is a significant error in the financial report, however, the internal control did not discover it when conducting internal control; (3) The Audit Committee under the Board and Internal Audit Service's supervision to the internal control is invalid. (4) The accounting personnel were without necessary qualities to complete the preparation of financial statements. | 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 and other factors. If the follows events or indicators occur, there may be serious or important defects of internal control in the non-financial statements:(1) Lack democratic decision-making process, if lack significant problem decision-making, important appointment and dismissal of cadres, significant project investment decision-making; usage of large capital (three important, one large); (2) Unscientific decision-making process, such as the major decision-making errors, has caused a serious property loss to the company; (3) Seriously violating state laws and regulations; (4) Loss of key management personnel or important talent; (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. |
| Quantitative standard | 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 assets<the defects, or defect group may lead to the financial results misstatement or potential losses ≤ 3% of net assets; General defects: the defects, or defect group may lead to the financial results misstatement or potential losses ≤ 1% of net assets. | The criterion of quantity of the recognition of defects of internal control in the non-financial statements mainly were amount of direct economy losses, in line with the criterion of quantity of the recognition of defects of internal control in financial report of the Company. |
| Number of material weaknesses in internal control over financial reporting | 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 | |
2. 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 2022 in accordance with Basic Standards for Internal Control and relevant regulations. | |
| Independent auditor’s report on internal control disclosed or not | Disclosed |
| Disclosure date | 18 March 2023 |
| Index to such report disclosed | Report on Internal Control disclosed on www.cninfo.com.cn. |
| Type of the auditor’s opinion | Unmodified unqualified opinion |
| Material weaknesses in internal control not related to financial reporting | No |
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 controlself-evaluation report issued by the Company’s Board.?Yes □ NoXV Rectifications of Problems Identified by Self-inspection in the Special Action for ListedCompany Governance
1. In accordance with the requirements of relevant laws, regulations and regulatory rules and in light of the reality ofthe Company, the Company completed the revision of ten governance policies including the Rules of Procedure of theGeneral Meeting of Shareholders, the Rules of Procedure of the Board Meeting, the Rules of Procedure of the Board ofSupervisors, the implementation rules of the special committees under the Board of Directors, the Work Policy forIndependent Directors, the Registration and Administration Policy for Persons with Insider Information, and theInformation Disclosure Affairs Management Policy in 2021.
2. The Company held the 77
th Meeting of the 7
th Board of Directors and the 51
st Meeting of the 7
th
SupervisoryCommittee on 19 January 2023, to deliberate the matters concerning the election at the expiration of the office term ofthe 7
th
Board of Directors and the 7
thSupervisory Committee. On 15 March 2023, the Company issued the notice ofconvention of the 1
stExtraordinary General Meeting in 2023 and decided to hold the meeting to deliberate proposalsconcerning the election at the expiration of the office term of the Board of Directors and the Supervisory Committee on30 March 2023.
Part V Environmental and Social ResponsibilityI Major Environmental IssuesIndicate by tick mark whether the Company or any of its subsidiaries is a heavily polluting business identified by the environmentalprotection authorities of China.
□Yes ? No
Administrative penalties imposed for environmental problems during the Reporting Period
| Name | Reason | Case | Result | Influence on production and operation | Rectification measures |
| N/A | N/A | N/A | N/A | N/A | N/A |
Other environmental information disclosed with reference to the heavily polluting businessThe Company and its subsidiaries are not imposed any administrative penalties for environmental problems during theReporting Period.Measures taken to decrease carbon emission in the Reporting Period and corresponding effects
□Applicable ? Not applicable
Reason for failure of disclosing other environmental informationThe Company and its subsidiaries isn’t a heavily polluting business identified by the environmental protectionauthorities of China.II Social ResponsibilityAs a listed company controlled by Shenzhen SASAC, the Company always remains true to our original aspiration,takes the initiative to assume social responsibility, actively participates in social charity activities and promotes theharmonious development of society with practical actions within our capacity. In 2022, the Company (including allsubsidiaries) invested a total of RMB358,700 in public welfare; all party member of the Company in Shenzhencompleted the online “Double Check-in” at the place of residence and the workplace community; the party memberemployees participated in 48 volunteer activities with accumulated 243 participants and 1,159.50 hours.
III Consolidation and Expansion of Poverty Alleviation Outcomes, and Rural Revitalization
During the Reporting Period, the Company actively participated in the special action of poverty alleviation throughconsumption and helped consolidated the achievement in poverty alleviation with poverty alleviation products worthRMB714,000 purchased in the system; supported the rural revitalization of Longdu through completing thetransformation of Xiabei Village Primary School, Longdu Town, Chenghai District, Shantou and caring the study andliving state of students in this school according to the deployment of the Party Committee of SIHC, which fullydemonstrated the responsibility of a state-owned enterprise. The Company held the “Improve People’s Livelihood withLove from SPG” public welfare activity to encourage clothing donation and environment protection receiving nearly500 clothes, books and school supplies. All the clothes donated will be sorted out and disinfected by cooperativeagencies and sent to Southern Xinjiang regions.
Part VI Significant EventsI Fulfillment of Commitments
1. Commitments of the Company’s De Facto Controller, Shareholders, Related Parties and Acquirers, as well asthe Company Itself and Other Entities Fulfilled in the Reporting Period or Ongoing at the Period-End? Applicable □ Not applicable
| Commitment | Promisor | Type of commitment | Details of commitment | Date of commitment making | Term of commitment | Fulfillment | |
| Other commitments made to minority interests | Shenzhen Investment Holdings Co., Ltd. | Avoiding horizontal competition | To avoid horizontal competition, Shenzhen Investment Holdings Co., Ltd. made such a commitment: For the Company’s existing business that has horizontal competition with ShenZhen Properties & Resources Development (Group) Ltd., Shenzhen Investment Holdings Co., Ltd. will, within the scope permitted by laws and regulations, timely launch one or several of the following solutions that is practically feasible, and complete the implementation of the relevant solution(s) before 9 November 2024 to solve the existing horizontal competition problem: (1) Solve the horizontal competition between the two through asset sales or asset replacement; (2) Solve the horizontal competition between the two through equity transfer; (3) Take other measures that can effectively solve the problem of horizontal competition. Above commitment came into force upon the review and approval on the shareholders’ meeting of ShenZhen Properties & Resources Development (Group) Ltd. (dated 27 September 2021). | 10 September 2021 | Before 9 November 2024 | Ongoing | |
| Fulfilled on time | Yes | ||||||
| Specific reasons for failing to fulfill commitments on time and plans for next step (if any) | N/A | ||||||
2. Where there had been an earnings forecast for an asset or project and the Reporting Period was still withinthe forecast period, explain why the forecast has been reached for the Reporting Period.
□Applicable ? Not applicable
II Occupation of the Company’s Capital by the Controlling Shareholder or Its Related Parties forNon-Operating Purposes
□Applicable ? Not applicable
No such cases in the Reporting Period.III Irregularities in the Provision of Guarantees
□Applicable ? Not applicable
No such cases in the Reporting Period.
IV Explanations Given by the Board of Directors Regarding the Latest “Modified Opinion” on theFinancial Statements
□Applicable ? Not applicable
V Explanations Given by the Board of Directors, the Supervisory Board and the IndependentDirectors (if any) Regarding the Independent Auditor's “Modified Opinion” on the FinancialStatements of the Reporting Period
□Applicable ? Not applicable
VI YoY Changes to Accounting Policies, Estimates or Correction of Material Accounting Errors? Applicable □ Not applicableFor details, see “33. Significant Accounting Policies and Estimates” under “V Significant Accounting Policies and Estimates” in “Part XFinancial Statements”.
VII YoY Changes to the Scope of the Consolidated Financial Statements? Applicable □ Not applicablePlease refer to “VI Changes to the Scope of the Consolidated Financial Statements” in Part X Financial Statements” for details.VIII Engagement and Disengagement of Independent AuditorCurrent independent auditor
| Name of the domestic independent auditor | Grant Thornton China (LLP) |
| The Company’s payment to the domestic independent auditor (RMB’0,000) | 53 |
| How many consecutive years the domestic independent auditor has provided audit service for the Company | 4 |
| Names of the certified public accountants from the domestic independent auditor writing signatures on the auditor’s report | Zhao Juanjuan, Jiang Xiaoming |
| How many consecutive years the certified public accountants from the domestic independent auditor have provided audit service for the Company | 4 |
Indicate by tick mark whether the independent auditor was changed for the Reporting Period.
□Yes ? No
Independent auditor, financial advisor or sponsor engaged for the audit of internal controls:
□Applicable ? Not applicable
IX Possibility of Delisting after Disclosure of this Report
□Applicable ? Not applicable
X Insolvency and Reorganization
□Applicable ? Not applicable
No such cases in the Reporting Period.
XI Major Legal Matters
? Applicable □ Not applicable
| General information | Involved amount (RMB’0,000) | Provision | Progress | Decisions and effects | Execution of decisions | Disclosure date | Index to disclosed information |
| Xi’an Project Lawsuit | 2,154 | No | In execution | ? Xi’an Business Tourism Company Limited (hereinafter referred to as “Business Company”) had to pay for the compensation RMB36.62 million and the relevant interest (from 14 September 1998 to the payment day) to Xi’an Fresh Peak Company within one month after the judgment entering into force. If the Business Company failed to pay in time, it had to pay double debt interests to Xi’an Fresh Peak Company for the overdue period; ② Xi’an Joint Commission on Commerce had jointly and severally obligation of the interests of the compensation; .③ Business Company shall bear RMB227,500 of the acceptance fee and the security fee. | Shaanxi High People’s Court Sold all assets of Business Company by auction in accordance with laws in 2004. The applicant has received RMB15.20 million. Now Business Company has no executable properties and Xi’an Joint Commission on Commerce has been refusing to execute the ruling. It is difficult to recover the rest. | 26 August 2022 | Interim Report 2022 (full text) (No.: 2022-030) on www.cninfo.com.cn |
| Dispute over the right to claim payment on bills | 17,999.96 | No | At law | As Jianbang Group is incapable of paying the commercial bills due in January 2022, which total RMB177,151,400, Huizhou Mingxiang Economic Information Consulting Co., Ltd., Huizhou Huiyang Hongfa Industry & Trade Co., Ltd. and Huizhou Jinlongsheng Industrial Co., Ltd. brought a lawsuit on dispute over the right to claim payment on bills to the People’s Court of Huiyang District. This case is still pending, and SPG is negotiating with Jianbang and the plaintiffs for an all-inclusive solution. | Pending |
XII Punishments and Rectifications
□Applicable ? Not applicable
No such cases in the Reporting Period.
XIII Credit Quality of the Company as well as Its Controlling Shareholder and Actual Controller
□Applicable ? Not applicable
XIV Major Related-Party Transactions
1. Continuing Related-Party Transactions
□Applicable ? Not applicable
No such cases in the Reporting Period.
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. Amounts Due to and from Related Parties
□Applicable ? Not applicable
No such cases in the Reporting Period.
5. Transactions with Related Finance Companies
□Applicable ? Not applicable
The Company did not make deposits in, receive loans or credit from and was not involved in any other finance business with any relatedfinance company or any other related parties.
6. Transactions with Related Parties by Finance Companies Controlled by the Company
□Applicable ? Not applicable
The finance company controlled by the Company did not make deposits, receive loans or credit from and was not involved in any otherfinance business with any related parties.
7. Other Major Related-Party Transactions
? Applicable □ Not applicable
The Company transferred 100% equity interests of Shenzhen Property Management Co., Ltd. to Shenzhen InternationalTrade Center Property Management Co., Ltd. which was a related-party transaction and was reviewed and approved onthe 69th Meeting of the 7
th
Board of Directors and the 3
rdExtraordinary General Meeting of 2021 of the Company. Thesaid issue has been completed during the Reporting Period.
Index to announcements on major related-party transactions
| Announcement | Disclosure time | Disclosure website |
| Announcement on Resolutions of the 69th Meeting of the 7th Board of Directors (No.: 2021-049) | 14 December 2021 | www.cninfo.com.cn |
| Announcement on Progress of the Related-Party Transaction regarding the Transfer of 100% of Equity Interests in Shenzhen Property Management Co., Ltd. (No.: 2021-052) | 24 December 2021 | www.cninfo.com.cn |
| Announcement on Resolutions of the 3rd Extraordinary General Meeting of 2021 (No.: 2021-053) | 30 December 2021 | www.cninfo.com.cn |
| Announcement on Progress of the Related-Party Transaction regarding the Transfer of 100% of Equity Interests in Shenzhen Property Management Co., Ltd. (No.: 2022-001) | 15 February 2022 | www.cninfo.com.cn |
| Announcement on Completion of the Related-Party Transaction regarding the Transfer of 100% of Equity Interest in Shenzhen Property Management Co., Ltd. (No.: 2022-032) | 30 September 2022 | www.cninfo.com.cn |
XV 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
Unit: RMB’0,000
| Guarantees provided by the Company as the parent and its subsidiaries for external parties (exclusive of those for subsidiaries) | ||||||||||
| Obligor | Disclosure date of the guarantee line announcement | Line of guarantee | Actual occurrence date | Actual guarantee amount | Type of guarantee | Collateral (if any) | Counter guarantee (if any) | Term of guarantee | Having expired or not | Guarantee for a related party or not |
| Guarantees provided by the Company as the parent for its subsidiaries | ||||||||||
| Obligor | Disclosure date of the | Line of guarantee | Actual occurrence date | Actual guarantee | Type of guarantee | Collateral (if any) | Counter guarante | Term of guarantee | Having expired or not | Guarantee for a related |
| guarantee line announcement | amount | e (if any) | party or not | |||||||
| Shenzhen SPG Chuanqi Real Estate Development Co., Ltd. | 18 March 2022 | 50,000 | 17 June 2022 | 6,036.68 | Pledge | 100% equity interests of Shenzhen SPG Chuanqi Real Estate Development Co., Ltd. held by the Company | From the date of signing the guarantee contract to the date when all guaranteed debts are unconditionally and irrevocably paid off in full. | Not | Not | |
| Total approved line for such guarantees in the Reporting Period (B1) | 50,000 | Total actual amount of such guarantees in the Reporting Period (B2) | 6,036.68 | |||||||
| Total approved line for such guarantees at the end of the Reporting Period (B3) | 50,000 | Total actual balance of such guarantees at the end of the Reporting Period (B4) | 6,036.68 | |||||||
| Guarantees provided between subsidiaries | ||||||||||
| Obligor | Disclosure date of the guarantee line announcement | Line of guarantee | Actual occurrence date | Actual guarantee amount | Type of guarantee | Collateral (if any) | Counter guarantee (if any) | Term of guarantee | Having expired or not | Guarantee for a related party or not |
| Total guarantee amount (total of the three kinds of guarantees above) | ||||||||||
| Total guarantee line approved in the Reporting Period (A1+B1+C1) | 50,000 | Total actual guarantee amount in the Reporting Period (A2+B2+C2) | 6,036.68 | |||||||
| Total approved guarantee line at the end of the Reporting Period (A3+B3+C3) | 50,000 | Total actual guarantee balance at the end of the Reporting Period (A4+B4+C4) | 6,036.68 | |||||||
| Total actual guarantee amount (A4+B4+C4) as % of the Company’s net assets | 1.51% | |||||||||
| Of which: | ||||||||||
| Balance of guarantees provided for shareholders, actual controller and their related parties (D) | 0 | |||||||||
| Balance of debt guarantees provided directly or indirectly for obligors with an over 70% debt/asset ratio (E) | 0 | |||||||||
| Amount by which the total guarantee amount exceeds 50% of the Company’s net assets (F) | 0 | |||||||||
| Total of the three amounts above (D+E+F) | 0 | |||||||||
Compound guarantees
3. Cash Entrusted to Other Entities for Management
(1) Cash Entrusted for Wealth Management
? Applicable □ Not applicableOverview of cash entrusted for wealth management in the Reporting Period
Unit: RMB’0,000
| Type | Funding source | Amount | Undue amount | Unrecovered overdue amount | Unrecovered overdue amount with provision for impairment |
| Others | Self-owned funds | 51,604.89 | 40,815.44 | 0 | 0 |
| Total | 51,604.89 | 40,815.44 | 0 | 0 | |
High-risk entrusted wealth management with significant single amount or low security and poor liquidity:
□Applicable ? Not applicable
Whether there is the case where the principal cannot be recovered at maturity or other case which may cause impairment for entrustedwealth management
□Applicable ? Not applicable
(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.XVI Other Significant Events? Applicable □ Not applicable
1. During the Reporting Period, Shenzhen Investment Holdings Co., Ltd., a controlling shareholding of the Company,carried out share reduction. From 30 August to 30 December 2022, SIHC reduced its holdings of 14,241,998 shares ofthe Company through call auction, accounting for 1.4078% of the total share capital of the Company. As at the end ofthe Reporting Period, SIHC was still holding 564,353,838 shares of the Company, accounting for 55.78% of the totalshare capital of the Company. For more details, please refer to the Pre-disclosure on Reduction of Shares Held byControlling Shareholders (Announcement No. 2022-026), Progress on Reduction of Shares Held by ControllingShareholders (Announcement No. 2022-031), Announcement on Half Time Left for Reduction of Shares Held byControlling Shareholders (Announcement No. 2022-033), Announcement on 1% Reduction of Shares Held byControlling Shareholders (Announcement No. 2022-046) and Announcement on Expiration of Reduction of SharesHeld by Controlling Shareholders (Announcement No. 2023-001) disclosed on 30 July, 3 September, 28 October, 10December 2022, and 4 January 2023, respectively.
2. During the Reporting Period, Chairman Mr. Liu Zhengyu of the Company no longer serves as the Chairman of theBoard of Directors or a director of the Company due to job changes. Upon joint recommendation of all the currentdirectors of the Company, Director and General Manager Mr. Tang Xiaoping of the Company will exercise the duties
of Chairman from 1 November 2022 to the date when the new chairman is elected by the Board of Directors of theCompany. For details, please refer to the Announcement on Leave of Chairman and Election of A Director to Act asthe Chairman (Announcement No. 2022-040) disclosed by the Company on 2 November 2022.XVII Significant Events of Subsidiaries
□Applicable ? Not applicable
Part VII Share Changes and Shareholder InformationI Share Changes
1. Share Changes
Unit: share
| Before | Increase/decrease (+/-) | After | |||||||
| Shares | Percentage (%) | New issues | Shares as dividend converted from profit | Shares as dividend converted from capital reserves | Other | Subtotal | Shares | Percentage (%) | |
| 1. Restricted shares | 0.00 | 0.00% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00% |
| 1.1 Shares held by the state | 0.00 | 0.00% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00% |
| 1.2 Shares held by state-own Legal-person | 0.00 | 0.00% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00% |
| 1.3 Shares held by other domestic investors | 0.00 | 0.00% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00% |
| Among which: shares held by domestic legal person | 0.00 | 0.00% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00% | |
| Shares held by domestic natural person | 0.00 | 0.00% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00% |
| 1.4 Oversea shareholdings | 0.00 | 0.00% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00% | |
| Among which: shares held by oversea legal person | 0.00 | 0.00% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00% |
| Shares held by oversea natural person | 0.00 | 0.00% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00% |
| 2. Unrestricted shares | 1,011,660,000.00 | 100.00% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 1,011,660,000.00 | 100.00% |
| 2.1 RMB ordinary shares | 891,660,000.00 | 88.14% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 891,660,000.00 | 88.14% |
| 2.2 Domestically listed foreign shares | 120,000,000.00 | 11.86% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 120,000,000.00 | 11.86% |
| 2.3 Oversea listed foreign shares | 0.00 | 0.00% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00% |
| 2.4 Other | 0.00 | 0.00% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00% |
| 3. Total shares | 1,011,660,000.00 | 100.00% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 1,011,660,000.00 | 100.00% |
Reasons for share changes:
□Applicable ? Not applicable
Approval of share changes:
□Applicable ? Not applicable
Transfer of share ownership:
□Applicable ? Not applicable
Effects of share changes on the basic and diluted earnings per share, equity per share attributable to the Company’s ordinary shareholdersand 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
III Shareholders and Actual Controller
1. Shareholders and Their Shareholdings at the Period-End
Unit: share
| Number of ordinary shareholders | 50,795 | Number of ordinary shareholders at the month-end prior to the disclosure of this Report | 48,403 | Number of preferred shareholders with resumed voting rights (if any) (see note 8) | 0 | Number of preferred shareholders with resumed voting rights at the month-end prior to the disclosure of this Report (if any) (see note 8) | 0 | ||||
| Shareholding of ordinary shareholders holding more than 5% shares or the top 10 of ordinary shareholders | |||||||||||
| Name of shareholder | Nature of shareholder | Holding percentage (%) | Number of shareholding at the end of the Reporting Period | Increase and decrease of shares during Reporting Period | Number of restricted shares | Number of unrestricted shares | Pledged, marked or frozen shares | ||||
| Status of shares | Amount | ||||||||||
| Shenzhen Investment Holdings Co., Ltd | State-owned legal person | 55.78% | 564,353,838.00 | -14,241,998 | 0 | 564,353,838.00 | |||||
| Shenzhen State-owned Equity Management Co., Ltd. | Domestic non-state-owned legal person | 6.35% | 64,288,426.00 | 64,288,426.00 | |||||||
| Yang Jianmin | Domestic natural person | 0.91% | 9,219,677.00 | 4,705,000 | 9,219,677.00 | ||||||
| Pan Jun | Domestic natural | 0.51% | 5,188,800.00 | 1,899,900 | 5,188,800.00 | ||||||
| person | |||||||||
| Zhang Xiujuan | Domestic natural person | 0.41% | 4,101,200.00 | 503,900 | 4,101,200.00 | ||||
| He Qiao | Domestic natural person | 0.40% | 4,005,286.00 | 2,278,300 | 4,005,286.00 | ||||
| Wang Yulan | Domestic natural person | 0.34% | 3,403,891.00 | 1,074,200 | 3,403,891.00 | ||||
| Cao Benming | Domestic natural person | 0.33% | 3,356,800.00 | 2,010,300 | 3,356,800.00 | ||||
| Lin Weirong | Domestic natural person | 0.26% | 2,600,000.00 | -516,400 | 2,600,000.00 | ||||
| China International Capital Corporation Limited | State-owned legal person | 0.21% | 2,147,724.00 | 2,147,724.00 | |||||
| Strategic investor or general legal person becoming a top-10 ordinary shareholder due to rights issue (if any) (see note 3) | None | ||||||||
| Related or acting-in-concert parties among the shareholders above | Among the top 10 shareholders of the Company, Shenzhen State-owned Equity Management Co., Ltd. is a wholly-owned subsidiary of Shenzhen Investment Holdings Co., Ltd. The Company does not know whether there exists associated relationship among the other shareholders, or whether they are persons acting in concert as prescribed in the Administrative Measures for the Acquisition of Listed Companies. | ||||||||
| Explain if any of the shareholders above was involved in entrusting/being entrusted with voting rights or waiving voting rights | None | ||||||||
| Special account for share repurchases (if any) among the top 10 shareholders (see note 10) | None | ||||||||
| Top 10 unrestricted shareholders | |||||||||
| Name of shareholder | Unrestricted shares held at the period-end | Shares by type | |||||||
| Type | Shares | ||||||||
| Shenzhen Investment Holdings Co., Ltd | 564,353,838.00 | RMB ordinary shares | 564,353,838.00 | ||||||
| Shenzhen State-owned Equity Management Co., Ltd. | 64,288,426.00 | RMB ordinary shares | 64,288,426.00 | ||||||
| Yang Jianmin | 9,219,677.00 | RMB ordinary shares | 9,219,677.00 | ||||||
| Pan Jun | 5,188,800.00 | RMB ordinary shares | 5,188,800.00 | ||||||
| Zhang Xiujuan | 4,101,200.00 | RMB ordinary shares | 4,101,200.00 | ||||||
| He Qiao | 3,852,600 | RMB ordinary shares | 3,852,600 | ||||||
| He Qiao | 152,686 | Domestically listed foreign shares | 152,686 | ||||||
| Wang Yulan | 3,403,891.00 | RMB ordinary shares | 3,403,891.00 | ||||||
| Cao Benming | 3,356,800.00 | RMB ordinary | 3,356,800.0 | ||||||
| shares | 0 | |||
| Lin Weirong | 2,600,000.00 | RMB ordinary shares | 2,600,000.00 | |
| China International Capital Corporation Limited | 2,147,724.00 | RMB ordinary shares | 2,147,724.00 | |
| Related or acting-in-concert parties among top 10 unrestricted public shareholders, as well as between top 10 unrestricted public shareholders and top 10 shareholders | Among the top 10 unrestricted public shareholders of the Company, Shenzhen State-owned Equity Management Co., Ltd. is a wholly-owned subsidiary of Shenzhen Investment Holdings Co., Ltd. The Company does not know whether there exists associated relationship among the other shareholders, or whether they are persons acting in concert as prescribed in the Administrative Measures for the Acquisition of Listed Companies. | |||
| Top 10 ordinary shareholders involved in securities margin trading (if any) (see Note 4) | Among the top 10 shareholders of the Company, the third, fifth, sixth and eighth shareholders respectively held 5,368,800 shares, 4,101,200 shares, 3,666,300 shares, and 3,351,800 shares in their credit securities accounts. | |||
Indicate by tick mark whether any of the top 10 ordinary shareholders or the top 10 unrestricted ordinary shareholders of the Companyconducted any promissory repo during the Reporting Period.
□Yes ? No
No such cases in the Reporting Period.
2. Controlling Shareholder
Nature of the controlling shareholder: Controlled by a local state-owned legal personType of the controlling shareholder: legal person
| Name of controlling shareholder | Legal representative/person in charge | Date of establishment | Unified social credit code | Principal activity |
| Shenzhen Investment Holdings Co., Ltd. | He Jianfeng | 13 October 2004 | 767566421 | Investment in equities on behalf of the government and management of those investments; development and operation of government-allocated land; and investment in and provision of services for strategic emerging industries |
| Controlling shareholder’s holdings in other listed companies at home or abroad in the Reporting Period | 234,070,000 shares in STHC (000045) , representing a stake of 46.21%; 8,210,000 shares in Shenzhen Universe A (000023) , representing a stake of 5.91%; 962,720,000 shares in Ping An (601318) , representing a stake of 5.27%; 3,223,110,000 shares in Guosen Securities (002736) , representing a stake of 33.53%; 609,430,000 of A shares and 103,370,000 of H shares in Guotai Junan (601211) , representing a stake of 8%; 195,030,000 shares in Telling Holding (000829) , representing a stake of 19.03%; 1,058,720,000 shares in Shenzhen International (00152) , representing a stake of 44.34%; 604,820,000 shares in BEAUTYSTAR (002243), representing a stake of 49.96%; 315,830,000 shares in Infinova (002528), representing a stake of 26.35%; 388,450,000 shares in EA (002183), representing a stake of 14.96%; 64,350,000 shares in SWPD (301038), representing a stake of 37.50%; 6,770,000 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 (300197), representing a stake of 4.04%; 77,270,000 shares in Vanke (02202), representing a stake of 0.66%; 696,160,000 shares in SEG (000058), representing a stake of 56.54%. | |||
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 managementType of the actual controller: legal person
| Name of actual controller | Legal representative/person in charge | Date of establishment | Unified social credit code | Principal activity |
| Shenzhen State-owned Assets Supervision and Administration Commission | Wang Yongjian | 31 July 2004 | K3172806-7 | Perform the responsibilities of investor on behalf of the state, and supervise and manage the authorized state-owned assets legally. |
| Other listed companies at home or abroad controlled by the actual controller in the Reporting Period | In addition to the Company controlling shareholder - Shenzhen Investment Holding Co., Ltd. Other domestic and overseas listed companies whose equity held by the actual controllers did not rank among the top ten shareholders of the Company. | |||
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:
Indicate by tick mark whether the actual controller controls the Company via trust or other ways of asset management.
□Applicable ? Not applicable
4. Number of Accumulative Pledged Shares held by the Company’s Controlling Shareholder or the LargestShareholder as well as Its Acting-in-Concert Parties Accounts for 80% of all shares of the Company held byThem
□Applicable ? Not applicable
5. Other 10% or Greater Corporate Shareholders
□Applicable ? Not applicable
6. Limitations on Shareholding Decrease by the Company’s Controlling Shareholder, Actual Controller,Reorganizer and Other Commitment Makers
□Applicable ? Not applicable
IV Specific Implementation of Share Repurchase during the Reporting PeriodProgress on any share repurchase:
□Applicable ? Not applicable
Progress on reducing the repurchased shares by means of centralized bidding:
□Applicable ? Not applicable
Part VIII Preference Shares
□Applicable ? Not applicable
No preference shares in the Reporting Period.
Part IX Bonds
□Applicable ? Not applicable
Part X Financial Statements
| Type of the audit opinion | Unmodified unqualified opinion |
| Date of signing this report | 17 March 2023 |
| Name of the audit institution | Grant Thornton Accounting Firm (LLP) |
| Number of the audit report | GTCNSZ（2023）NO.441A000022 |
| Name of the certified public accountants | Zhao Juanjuan, Jiang Xiaoming |
Auditor’s Report
GTCNSZ（2023）NO.441A000022
To the Shareholders of Shenzhen Special Economic Zone Real Estate & Properties(Group) Co., Ltd:
Opinion
We have audited the financial statement of Shenzhen Special Economic Zone RealEstate & Properties (Group) Co., Ltd (the "Group"), which comprise the consolidatedstatement of financial position as at 31 December 2022, and the consolidated statementof comprehensive income, consolidated statement of changes in equity and consolidatedstatement of cash flows for the year then ended, and the notes to the consolidatedfinancial statements.In our opinion, the accompanying consolidated financial statement present fairly, in allmaterial respects, the consolidated financial position of the group as at 31 December 2022,and its consolidated financial performance and its consolidated cash flows for the yearthen ended in accordance with Accounting Standards for Business Enterprises.Basis for Opinion
We conducted our audit in accordance with China Standards on Auditing. Ourresponsibilities under those standards are further described in the Auditor’sResponsibilities for the Audit of the Financial Statement Section of our report. We areindependent of the Group in accordance with the Code of Ethics for Chinese CertifiedPublic Accountant (Ethics Code) together with the ethical requirements that are relevantto our audit of the financial statements, and we fulfilled our other ethical responsibilitiesin accordance with these requirements and the Ethics Code. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for our opinion.Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most
significance in our audit of the consolidated financial statements of the current period. Thesematters were addressed in the context of our audit of the consolidated financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separateopinion on these matters.I. Recognition of revenue from sales of properties
The relevant information disclosure is detailed in Note III. 24 and Note V.35.
1. Description of the matter
In 2022, the revenue from sales of properties is CNY 3.09 billion, which accounts for 48.76%of total revenue of the Group.The Group recognizes the revenue of sales of properties when all of the followingconditions have been met: ①sales contract is signed and filed with housing constructionbureau;②properties were completed and passed acceptance inspection; ③for lump-sum settlement, payment has been received in full; for mortgage, the first installmentpayment has been received and approval procedures of bank mortgage have beencompleted;④the procedures of housing delivery have completed in accordance with therequirements of the sales contract.Due to the importance of revenue from sales of properties, and any misstatements inrevenue recognition will have a significant impact on the profit of the Group. Therefore,the recognition of revenue from sales of properties is identified as a key audit matter.
2. Audit response
Our audit procedures for the recognition of revenue from sales of properties include:
① Understanding, assessing and testing the design and implementation of key internalcontrols about the progress of contract performance and revenue recognition.
② Examining the main clauses in sales contracts to evaluate the appropriateness of theGroup’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 order 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 thebalance sheet date by checking to sales contracts, revenue collection and the letter ofadmission, for the appropriateness of the period of revenue recognition
⑤Calculating average house price and comparing it with the price from last year to analyzethe reasonableness of revenue and gross profit.
⑥Evaluating the appropriateness of accounting treatment, presentation and disclosureof the revenue recognition of sales of properties and other relevant information by theGroup in the financial statements.II. Provision of land appreciation tax
The relevant information disclosure is detailed in Note III、32、Note IV 、tax and Note V、36.
1. Description of the matter
Land appreciation tax is one of the major tax of the group. The amount of land value-added tax during reporting period is CYN 68.99 million.The sale of developed real estate is subject to land value-added tax at a progressive rateof 30% - 60% on the land appreciation. At the end of each financial reporting period, themanagement needs to estimate the accrued amount of land appreciation tax. Whenmaking estimation judgments, the main factors to be considered include the provisionsand interpretations of relevant tax laws and regulations, and the estimated income fromthe sale of properties minus estimated deductible land costs, real estate developmentcosts, interest expenses, development expenses, etc. When Shenzhen Real EstateGroup settles and settles the land appreciation tax, the actual tax payable may bedifferent from the amount estimated by Shenzhen Real Estate Group.Due to the importance of the LAT accrual to the consolidated financial statements, andmanagement's judgment when making estimates includes consideration of relevant taxlaws and regulations and practical practices. Therefore, we identified the accrual of LATof the Group as a key audit matter.
2. Audit response
For the provision and evaluation of land value-added tax, we mainly performed the followingaudit procedures:
① Evaluating the design and effectiveness of key internal controls related to themeasurement of LAT;
② Involving our internal tax specialists in the PRC to assess the provision of LAT on 31December 2022 on basis of our experience, knowledge, understanding of the practicaloperation of relevant tax laws by local tax authorities, to evaluate the Group’sassumptions and judgments;
③ Evaluating the management's expected estimates of the estimated income from thesale of real estate and the amount of deductible items, and assess the Group’sassumptions and judgments;
④ Recalculating the amount of provision of LAT and comparing it to management estimate.III. Assessment of Inventory’s net realizable value
The relevant information disclosure is detailed in Note III. 12 and Note V.7.
1. Description of the matter
The Group’s finished goods, work in progress and products to be developed (hereinafterreferred to as "Inventory"), are measured at the lower of cost and net realizable value.The ending balance of inventory was 4.257 billion yuan, accounting for 74.82% of theending balance of the Group’s total assets.Management determines the net realizable value of each inventory item at the balancesheet date. In determining the net realizable value of inventory, management is requiredto provide an up-to-date estimate of the construction costs to be incurred for eachproduct to be developed and work in progress until completion, and to estimate theexpected future net selling price (with reference to the recent transaction price of the realestate project in the vicinity) and the future selling costs as well as the related sales taxfor each inventory.
Due to the importance of inventories to the assets of the Group and the inherent risks ofestimating the construction costs and future net selling prices to be incurred wheninventory items reach completion status, especially in view of the current economicenvironment, the assessment of the net realizable value of the group's inventory isidentified as a key audit matter.
2. Audit response
For assessing the net realizable value of inventory, we mainly performed the followingaudit procedures:
① Understanding and evaluating the design and operational effectiveness of key internalcontrols related to real estate development cost budgeting, dynamic cost management,and estimates of net realizable value;
② Organizing filed trips to real estate development projects based on selected samples, andask the development progress and dynamic cost budget of these projects
③ Evaluating the management's calculation method of expected future selling price,future selling cost and related sales taxes, such as by comparing the estimated sellingprice with market availability data and the project's sales budget plan;
④ Reconciling the actual costs of inventory in current real estate development projectswith the latest project budget, and comparing the latest budgeted costs as of 31December 2022 with those as of 31 December 2021, to evaluate the accuracy ofmanagement forecasts;
⑤ Recalculating the net realizable value of inventory and comparing it to managementestimate.Other Information
Management of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co.,Ltd (the "Management") is responsible for the other information. The other informationcomprises the information included in the Annual Report of 2022, but does not includethe financial statements and our auditor’s report thereon.
Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.In connection with our audit of financial statements, our responsibility is to read the otherinformation and, in doing so, consider whether the other information is materially inconsistentwith the financial statements or our knowledge obtained in the audit or otherwise appears tobe materially misstated.If, based on the work we have performed, we conclude that there is materialmisstatement of this other information, we are required to report that fact. We havenothing to report in this regard.Responsibilities of Management and Those Charge with Governance for the FinancialStatementThe Management is responsible for the preparation and fair presentation of the financialstatement in accordance with Accounting Standards for Business Enterprises, and for suchinternal control as management determines in necessary to enable the preparation offinancial statements that are free form material misstatement, whether due to fraud or error.In preparing the financial statements, management is responsible for assessing theGroup’s ability to continue as a going concern, disclosing, as applicable, matters relatedto going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Group or to cease operations, or has no realistic alternativebut to do so.Those charge with governance are responsible for overseeing the Group’s financial reportingprocess.Auditor’s Responsibilities for the Audit of the Financial Statement
Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement, whether due to fraud or error,and to issue an auditor’s report that includes our opinion. Reasonable assurance is ahigh level of assurance, but is not a guarantee that an audit conducted in accordancewith China Standards on Auditing will always detect a material misstatement 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 theeconomic decisions of users taken on the basis of these financial statements.As part of an audit in accordance with China Standards on Auditing, we exerciseprofessional judgment and maintain professional skepticism throughout the audit. We also:
? Identify and assess the risks of material misstatement of the financial statements,whether due to fraud or error, design and perform audit procedures responsive tothose risks, and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resultingfrom fraud is higher than for one resulting from error, as fraud may involve collus ion,forgery, intentional omissions, misrepresentations, or the override of internal control.
? Obtain an understanding of 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 ofaccounting estimates and related disclosures made by management.
? Conclude on the appropriateness of management’s use of the going concern basis
of accounting and, based on the audit evidence obtained, whether a materialuncertainty exists related to events or conditions that may cast significant doubt onthe Group’s ability to continue as a going concern. If we conclude that a materialuncertainty exists, we are required to draw attention in our auditor’s report to therelated disclosures in the financial statements or, if such disclosures are inadequate,to modify our opinion. Our conclusions are based on the audit evidence obtained upto the date of our auditor’s report. However, further events or conditions may causethe Group to cease to continue as a going concern.
? Evaluate the overall presentation, structure and content of the financial statements,
and whether the financial statements represent the underlying transactions andevents in a manner that achieves fair presentation.
? Obtain sufficient appropriate audit evidence regarding the financial information ofthe entities or business activities within Group to express an opinion on theconsolidated financial statements. We are responsible for the direction, supervisionand performance of the group audit. We remain solely responsible for our auditopinion.
We communicate with those charged with governance regarding, among other matters,the planned scope and timing of the audit and significant audit findings, including anysignificant deficiencies in internal control that we identify during our audit.We also provide those charged with governance a statement that we have complied withthe ethical requirements relating to our independence and communicate to thosecharged with governance relationships and other matters that may reasonably bebelieved to affect our independence, as well as the relevant precautions, if applicable.From the matters we communicated with those charged with governance, we determinedwhich matters were most material to the audit of the financial statements for the currentperiod and thus constituted the key audit matters. We describe such matters in our auditreports, unless laws and regulations prohibit public disclosure of such matters or, in rarecircumstances, we determine that we should not communicate a matter in our auditreport if it is reasonably expected that the negative consequences of communicatingsuch matter in our audit report would outweigh the benefits in the public interest.
| Grant Thornton China ·Beijing | Auditor's signature and stamp：Zhao Juanjuan Auditor's signature and stamp：Jiang Xiaoming |
| 17 March 2023 |
Balance Sheet
Prepared by：Shenzhen Special Economic Zone Real Estate and Properties (Group) Co., Ltd Expressed in CNY
| Item | Note | As at 31/12/2022 | As at 31/12/2021 | ||
| Consolidated | Company | Consolidated | Company | ||
| Current assets: Cash at bank and on hand Trading financial assets Bills receivable Accounts receivable Accounts receivable financing Prepayments Other receivables including：interests receivables dividends receivables Inventories Contract assets Assets held for sale Non-current assets due within one year Other current assets Total current assets Non-current assets: Debt investments Other debt investments Long-term receivables Long-term equity investments Investment in other equity instruments Other financial non-current assets Investment properties Fixed assets Construction in progress Productive biological assets Oil and gas assets Right of use assets Intangible assets Development costs Goodwill Long-term deferred expenses Deferred tax assets Other non-current assets Total non-current assets Total assets | V、1 | 197,663,949.74 | 92,377,124.60 | 564,358,824.63 | 304,130,181.74 |
| V、2 | 408,154,361.42 | 408,154,361.42 | 514,024,710.91 | 514,024,710.91 | |
| V、3 | 1,536,150.00 | - | 3,530,537.37 | - | |
| V、4 | 63,580,422.16 | 11,706,678.21 | 61,048,785.11 | 9,708,285.93 | |
| - | - | - | - | ||
| V、5 | 1,163,612.24 | 200,000.00 | 4,899,011.32 | 200,000.00 | |
| V、6 | 42,105,050.33 | 1,711,880,332.45 | 30,614,008.08 | 1,587,300,891.76 | |
| - | - | - | - | ||
| - | 39,222,722.88 | 1,052,192.76 | - | ||
| V、7 | 4,257,109,614.31 | 4,854,703.53 | 4,034,933,562.62 | 42,348,499.39 | |
| - | - | - | - | ||
| V、8 | - | - | 78,940,232.10 | 12,821,791.52 | |
| - | - | - | - | ||
| V、9 | 36,778,641.42 | 1,138,065.43 | 68,216,887.04 | 7,144,189.24 | |
| 5,008,091,801.62 | 2,230,311,265.64 | 5,360,566,559.18 | 2,477,678,550.49 | ||
| - | - | - | - | ||
| - | - | - | - | ||
| - | - | - | - | ||
| V、10 | 93,927.64 | 1,582,275,489.49 | 272,168.28 | 1,582,657,055.03 | |
| V、11 | 13,839,235.57 | 13,839,235.57 | 36,322,704.33 | 13,831,938.92 | |
| - | - | - | - | ||
| V、12 | 566,873,915.07 | 455,917,024.15 | 588,865,777.16 | 476,622,089.39 | |
| V、13 | 21,425,475.05 | 14,046,375.35 | 23,920,424.55 | 15,722,627.74 | |
| - | - | - | - | ||
| - | - | - | - | ||
| - | - | - | - | ||
| V、14 | 232,496.72 | - | 365,351.97 | - | |
| V、15 | - | - | - | - | |
| - | - | - | - | ||
| - | - | - | - | ||
| V、16 | 2,176,221.53 | 1,381,401.99 | 2,164,963.18 | 1,167,500.83 | |
| V、17 | 77,036,728.98 | 29,502,067.58 | 170,020,101.78 | 134,299,017.38 | |
| - | - | - | - | ||
| 681,678,000.56 | 2,096,961,594.13 | 821,931,491.25 | 2,224,300,229.29 | ||
| 5,689,769,802.18 | 4,327,272,859.77 | 6,182,498,050.43 | 4,701,978,779.78 | ||
Balance Sheet(continued)
Prepared by：Shenzhen Special Economic Zone Real Estate and Properties (Group) Co., Ltd Expressed in CNY
| Item | Note | As at 31/12/2022 | As at 31/12/2021 | ||
| Consolidated | Company | Consolidated | Company | ||
| Current liabilities: Short-term loans Trading financial liabilities Bills payable Accounts payable Advances from customers Contract liabilities Employee benefits payable Taxes payable Other payables Including: interests payables dividends payables Liabilities held for sale Non-current liabilities due within one year Other current liabilities Total current liabilities Non-current liabilities: Long-term loans Debentures payable Leased liabilities Long-term payables Provisions Deferred income Deferred tax liabilities Other non-current liabilities Total non-current liabilities Total liabilities Share capital Capital reserve Less: treasury shares Other comprehensive income Specific reserve Surplus reserve Retained earnings Total equity attributable to shareholders of the Non-controlling interests Total shareholders' equity Total liabilities and shareholders' equity | V、18 | 51,138,077.62 | - | 50,440,116.24 | - |
| - | - | - | - | ||
| V、19 | - | - | 247,376,403.56 | - | |
| V、20 | 434,601,559.67 | 17,666,752.61 | 141,447,559.24 | 29,750,790.44 | |
| V、21 | 5,465,343.96 | - | 6,411,427.04 | - | |
| V、22 | 43,533,467.29 | 184,985.71 | 199,965,490.08 | 159,752,627.50 | |
| V、23 | 35,724,203.78 | 21,167,813.42 | 43,926,711.78 | 33,496,830.45 | |
| V、24 | 190,951,185.99 | 178,147,095.75 | 600,540,872.48 | 588,031,923.05 | |
| V、25 | 574,331,340.84 | 184,614,308.51 | 581,377,415.64 | 207,613,656.49 | |
| 16,535,277.94 | 16,535,277.94 | 16,535,277.94 | 16,535,277.94 | ||
| - | - | - | - | ||
| V、8 | - | - | 65,752,452.06 | - | |
| V、26 | 6,188,794.43 | - | 83,023.44 | - | |
| V、27 | 3,882,817.68 | 9,249.29 | 8,196,849.13 | 7,987,260.50 | |
| 1,345,816,791.26 | 401,790,205.29 | 1,945,518,320.69 | 1,026,633,088.43 | ||
| V、28 | 54,261,000.00 | - | - | - | |
| - | - | - | - | ||
| V、29 | 53,885.23 | - | 125,920.77 | - | |
| - | - | - | - | ||
| - | - | - | - | ||
| - | - | - | - | ||
| V、17 | 3,096,348.02 | 3,096,348.02 | 9,524,639.56 | 5,027,520.65 | |
| - | - | - | - | ||
| 57,411,233.25 | 3,096,348.02 | 9,650,560.33 | 5,027,520.65 | ||
| 1,403,228,024.51 | 404,886,553.31 | 1,955,168,881.02 | 1,031,660,609.08 | ||
| V、30 | 1,011,660,000.00 | 1,011,660,000.00 | 1,011,660,000.00 | 1,011,660,000.00 | |
| V、31 | 978,244,910.11 | 964,711,931.13 | 978,244,910.11 | 964,711,931.13 | |
| - | - | - | - | ||
| V、32 | 25,926,720.85 | 1,379,426.68 | 36,088,963.95 | 1,373,954.19 | |
| - | - | - | - | ||
| V、33 | 275,253,729.26 | 252,124,115.85 | 241,144,854.93 | 218,015,241.52 | |
| V、34 | 1,713,155,187.48 | 1,692,510,832.80 | 1,671,121,562.98 | 1,474,557,043.86 | |
| 4,004,240,547.70 | 3,922,386,306.46 | 3,938,260,291.97 | 3,670,318,170.70 | ||
| 282,301,229.97 | - | 289,068,877.44 | - | ||
| 4,286,541,777.67 | 3,922,386,306.46 | 4,227,329,169.41 | 3,670,318,170.70 | ||
| 5,689,769,802.18 | 4,327,272,859.77 | 6,182,498,050.43 | 4,701,978,779.78 | ||
Legal reprensentative: The person in charge of accounting affairs: The head of the accounting department:
Income StatementFor the year ended 31December 2022
Prepared by：Shenzhen Special Economic Zone Real Estate and Properties (Group) Co., Ltd Expressed in CNY
| Item | Note | Year ended 31/12/2022 | Year ended 31/12/2021 | ||
| Consolidated | Company | Consolidated | Company | ||
| Less: operating costs Taxes and surcharges Selling and distribution expenses General and administrative expenses Research and development expenses Financial expenses Including: Interest expenses Interest income Add: Other income Investment income ("-" for losses) Including: Income from investment in associates and joint ventures ("-" for losses) Gain from derecognition of financial assets measured at amortized cost ("-" for losses) Net exposure hedging gains ("-" for losses) Gains from changes in fair value ("-" for losses) Credit impairment losses ("-" for losses) Impairment losses ("-" for losses) Gains from assets disposal ("-" for losses) II. Operating profit ("-" for losses) Add: Non-operating income Less: Non-operating expenses III. Profit before income tax ("-" for losses) Less: Income tax expenses IV. Net profit for the year ("-" for net losses) (1) Classification according to operation continuity Including: Net profit from continuing operations ("-" for net loss) Net profit from discontinued operations ("-" for net loss) (2) Classification according to attibute Including: Members of the parent entity("-" for net loss) Non-controlling interests("-" for net loss) V. Other comprehensive income, net of tax Other comprehensive income (net of tax) attributable to members of the parent entity A. Items that will not be reclassified to profit or loss a. Changes in fair value of other equity instrument investments B. Items that may be reclassified to profit or loss a. Translation differences arising from translation of foreign currency financial statements Other comprehensive income (net of tax) attributable to non- controlling interests VI. Total comprehensive income for the year Attributable to: members of the parent entity Non-controlling interests VII. Earnings per share (1) Basic earnings per share (2)Diluted earnings per share | V、35 | 634,384,561.42 | 207,149,569.13 | 1,320,790,648.45 | 774,065,610.33 |
| V、35 | 437,052,001.01 | 66,761,336.83 | 666,348,361.48 | 198,814,980.86 | |
| V、36 | 81,783,491.54 | 34,857,919.27 | 254,360,315.85 | 239,589,346.99 | |
| V、37 | 19,217,595.11 | 1,693,651.82 | 42,737,748.22 | 25,703,001.79 | |
| V、38 | 55,758,749.08 | 31,384,870.71 | 98,307,831.60 | 62,162,730.22 | |
| - | - | - | - | ||
| V、39 | -6,507,147.03 | -57,765,779.16 | -18,083,491.01 | -35,842,822.63 | |
| - | - | 9,920.46 | - | ||
| 5,315,817.53 | 42,340,594.39 | 28,863,878.27 | 41,651,307.37 | ||
| V、40 | 559,803.19 | 290,331.32 | 1,669,479.40 | 41,188.24 | |
| V、41 | 164,986,548.17 | 280,973,270.14 | 1,783,839.07 | 1,783,839.07 | |
| -178,240.64 | -178,240.64 | -105,321.37 | -105,321.37 | ||
| - | - | - | - | ||
| - | - | - | - | ||
| V、42 | 8,970,031.50 | 8,970,031.50 | 11,828,130.44 | 11,828,130.44 | |
| V、43 | -6,516,237.34 | -402,823.92 | -7,795,219.71 | -153,318.35 | |
| V、44 | -532,397.57 | - | 268,941.60 | - | |
| V、45 | - | - | -8,852.73 | - | |
| 214,547,619.66 | 420,048,378.70 | 284,866,200.38 | 297,138,212.50 | ||
| V、46 | 1,534,651.38 | 350,103.89 | 1,746,134.87 | 1,584,736.54 | |
| V、47 | 478,942.74 | 308,559.95 | 208,129.74 | 32,989.65 | |
| 215,603,328.30 | 420,089,922.64 | 286,404,205.51 | 298,689,959.39 | ||
| V、48 | 66,026,457.35 | 79,001,179.37 | 68,804,535.78 | 74,484,146.80 | |
| 149,576,870.95 | 341,088,743.27 | 217,599,669.73 | 224,205,812.59 | ||
| 139,931,713.54 | 341,088,743.27 | 214,252,742.25 | 224,205,812.59 | ||
| 9,645,157.41 | 3,346,927.48 | ||||
| 153,718,805.57 | 341,088,743.27 | 220,836,309.93 | 224,205,812.59 | ||
| -4,141,934.62 | -3,236,640.20 | ||||
| -1,338,182.69 | 5,472.49 | 8,837,349.05 | 242,802.45 | ||
| 1,287,530.16 | 5,472.49 | 7,925,913.82 | 242,802.45 | ||
| -1,314,647.75 | 5,472.49 | -891,117.14 | 242,802.45 | ||
| -1,314,647.75 | 5,472.49 | -891,117.14 | 242,802.45 | ||
| 2,602,177.91 | - | 8,817,030.96 | - | ||
| 2,602,177.91 | - | 8,817,030.96 | - | ||
| -2,625,712.85 | 911,435.23 | ||||
| 148,238,688.26 | 341,094,215.76 | 226,437,018.78 | 224,448,615.04 | ||
| 155,006,335.73 | 341,094,215.76 | 228,762,223.75 | 224,448,615.04 | ||
| -6,767,647.47 | -2,325,204.97 | ||||
| 0.1519 | 0.2183 | ||||
| 0.1519 | 0.2183 | ||||
Legal reprensentative: The person in charge of accounting affairs: The head of the accounting department:
Cash Flow StatementFor the year ended 31 December 2022
Prepared by：Shenzhen Special Economic Zone Real Estate and Properties (Group) Co., Ltd Expressed in CNY
| Item | Note | Year ended 31/12/2022 | Year ended 31/12/2021 | ||
| Consolidated | Company | Consolidated | Company | ||
| I.Cash flows from operating activities | |||||
| Proceeds from sales of goods or rendering of services | 511,011,815.61 | 49,012,283.37 | 1,427,249,424.24 | 800,728,093.14 | |
| Refund of taxes | 132,838,815.39 | 76,682,094.30 | - | - | |
| Proceeds from other operating activities | V、49 | 24,599,301.34 | 45,702,753.43 | 378,597,082.00 | 55,262,411.37 |
| Sub-total of cash inflows | 668,449,932.34 | 171,397,131.10 | 1,805,846,506.24 | 855,990,504.51 | |
| Payment for goods and services | 641,103,390.35 | 14,097,081.25 | 2,301,256,194.02 | 53,822,715.55 | |
| Payment to and for employees | 89,495,463.28 | 41,433,458.97 | 191,511,263.39 | 55,225,745.09 | |
| Payments of various taxes | 540,305,543.96 | 506,294,532.81 | 235,554,836.77 | 276,459,274.35 | |
| Payment for other operating activities | V、49 | 73,321,533.51 | 48,529,139.31 | 283,476,320.00 | 472,880,097.57 |
| Sub-total of cash outflows | 1,344,225,931.10 | 610,354,212.34 | 3,011,798,614.18 | 858,387,832.56 | |
| Net cash flows from operating activities | -675,775,998.76 | -438,957,081.24 | -1,205,952,107.94 | -2,397,328.05 | |
| II.Cash flows from investing activities | |||||
| Proceeds from disposal of investments | - | - | - | ||
| Investment income received | 10,527,896.61 | 10,042,199.78 | 1,889,160.44 | 1,889,160.44 | |
| Net proceeds from disposal of fixed assets, intangible assets and other long-term assets | 2,907.50 | 2,907.50 | 162,961.51 | 1,253.56 | |
| Net proceeds from disposal of subsidiaries and other business units | 157,395,480.90 | 196,676,700.00 | - | - | |
| Proceeds from other investing activities | V、49 | 114,840,380.99 | 114,840,380.99 | 797,803,419.53 | 797,803,419.53 |
| Sub-total of cash inflows | 282,766,666.00 | 321,562,188.27 | 799,855,541.48 | 799,693,833.53 | |
| Payment for acquisition of fixed assets, intangible assets and other long-term assets | 713,537.29 | 458,195.93 | 1,845,495.54 | 1,283,857.85 | |
| Payment for acquisition of investments | - | - | - | ||
| Net payment for acquisition of subsidiaries and other business units | - | - | 449,776,436.75 | 1,444,894,678.60 | |
| Payment for other investing activities | V、49 | - | - | 1,300,000,000.00 | 1,300,000,000.00 |
| Sub-total of cash outflows | 713,537.29 | 458,195.93 | 1,751,621,932.29 | 2,746,178,536.45 | |
| Net cash flows from investing activities | 282,053,128.71 | 321,103,992.34 | -951,766,390.81 | -1,946,484,702.92 | |
| III.Cash flows from financing activities | |||||
| Proceeds from investors | - | - | - | - | |
| Including: Proceeds from non-controlling shareholders of subsidiaries | - | - | - | - | |
| Proceeds from borrowings | 111,428,077.62 | - | 50,440,116.24 | - | |
| Proceeds from other financing activities | V、49 | - | - | 215,816,852.52 | 22,800,000.00 |
| Sub-total of cash inflows | 111,428,077.62 | - | 266,256,968.76 | 22,800,000.00 | |
| Repayments of borrowings | 50,440,116.24 | - | 76,893,995.94 | - | |
| Payment for dividends, profit distributions or interest | 89,685,993.21 | 89,026,080.00 | 88,014,420.00 | 88,014,420.00 | |
| Including: Dividends and profits paid to non-controlling shareholders of subsidiaries | - | - | - | ||
| Payment for other financing activities | - | - | - | ||
| Sub-total of cash outflows | 140,126,109.45 | 89,026,080.00 | 164,908,415.94 | 88,014,420.00 | |
| Net cash flows from financing activities | -28,698,031.83 | -89,026,080.00 | 101,348,552.82 | -65,214,420.00 | |
| IV.Effect of foreign exchange rate changes on cash and cash equivalents | 492,336.21 | - | -440,345.74 | - | |
| V.Net increase in cash and cash equivalents | -421,928,565.67 | -206,879,168.90 | -2,056,810,291.67 | -2,014,096,450.97 | |
| Add: Cash and cash equivalents at the beginning of the year | 612,293,635.15 | 297,680,168.50 | 2,669,103,926.82 | 2,311,776,619.47 | |
| VI.Cash and cash equivalent at the end of the year | 190,365,069.48 | 90,800,999.60 | 612,293,635.15 | 297,680,168.50 | |
Legal reprensentative: The person in charge of accounting affairs: The head of the accounting department:
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
Consolidated Statement of Changes in Shareholders' Equity
For the year ended 31 December 2022
Prepared by：Shenzhen Special Economic Zone Real Estate and Properties (Group) Co., Ltd Expressed in CNY
| Item | Year ended 31/12/2022 | |||||||||
| Attributable to shareholders' equity of the parent company | Non-controlling interests | Total | ||||||||
| Share capital | Capital reserve | Less: treasury shares | Other comprehensive | Specific reserve | Surplus reserve | Retained earnings | ||||
| I.Balance at the end of last year | 1,011,660,000.00 | 978,244,910.11 | - | 36,088,963.95 | - | 241,144,854.93 | 1,671,121,562.98 | 289,068,877.44 | 4,227,329,169.41 | |
| Add：Changes in accounting policies | - | - | - | - | - | - | - | - | - | |
| Correction of prior period errors | - | - | - | - | - | - | - | - | - | |
| business combinations under common control | - | - | - | - | - | - | - | - | - | |
| Other | - | - | - | - | - | - | - | - | - | |
| II.Balance at the beginning of the year | 1,011,660,000.00 | 978,244,910.11 | - | 36,088,963.95 | - | 241,144,854.93 | 1,671,121,562.98 | 289,068,877.44 | 4,227,329,169.41 | |
| III.Changes in equity during the year( "- "for decrease) | - | - | - | -10,162,243.10 | - | 34,108,874.33 | 42,033,624.50 | -6,767,647.47 | 59,212,608.26 | |
| (I)Total comprehensive income | - | - | - | 1,287,530.16 | - | - | 153,718,805.57 | -6,767,647.47 | 148,238,688.26 | |
| (II)Shareholders' contributions and decrease of capital | - | - | - | - | - | - | - | - | - | |
| 1.Contribution by ordinary shareholders | - | - | - | - | - | - | - | - | - | |
| 2. Equity settled share-based payments | - | - | - | - | - | - | - | - | - | |
| 3. Others | - | - | - | - | - | - | - | - | - | |
| (III) Appropriation of profits | - | - | - | - | - | 34,108,874.33 | -123,134,954.33 | - | -89,026,080.00 | |
| 1. Appropriation for surplus reserves | - | - | - | - | - | 34,108,874.33 | -34,108,874.33 | - | - | |
| 2. Distributions to shareholders | - | - | - | - | - | - | -89,026,080.00 | - | -89,026,080.00 | |
| 3. Others | - | - | - | - | - | - | - | - | - | |
| (IV) Transfer within equity | - | - | - | -11,449,773.26 | - | - | 11,449,773.26 | - | - | |
| 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 | - | - | - | -11,449,773.26 | - | - | 11,449,773.26 | - | - | |
| (V)Specific Reserve | - | - | - | - | - | - | - | - | - | |
| 1. Appropriation during the year | - | - | - | - | - | - | - | - | - | |
| 2.Utilisation during the year | - | - | - | - | - | - | - | - | - | |
| (VI)Others | - | - | - | - | - | - | - | - | - | |
| IV.Balance at the end of the year | 1,011,660,000.00 | 978,244,910.11 | - | 25,926,720.85 | - | 275,253,729.26 | 1,713,155,187.48 | 282,301,229.97 | 4,286,541,777.67 | |
Legal reprensentative: The person in charge of accounting affairs: The head of the accounting department:
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
Prepared by：Shenzhen Special Economic Zone Real Estate and Expressed in CNY
| Item | Year ended 31/12/2021 | ||||||||
| Attributable to shareholders' equity of the parent company | Non-controlling interests | Total | |||||||
| Share capital | Capital reserve | Less: treasury shares | Other comprehensiv | Specific reserve | Surplus reserve | Retained earnings | |||
| I.Balance at the end of last year | 1,011,660,000.00 | 978,244,910.11 | - | 28,163,050.13 | - | 218,724,273.67 | 1,560,720,254.31 | -140,425,233.06 | 3,657,087,255.16 |
| Add：Changes in accounting policies | - | - | - | - | - | - | - | - | - |
| Correction of prior period errors | - | - | - | - | - | - | - | - | - |
| business combinations under common control | - | - | - | - | - | - | - | - | - |
| Other | - | - | - | - | - | - | - | - | - |
| II.Balance at the beginning of the year | 1,011,660,000.00 | 978,244,910.11 | - | 28,163,050.13 | - | 218,724,273.67 | 1,560,720,254.31 | -140,425,233.06 | 3,657,087,255.16 |
| III.Changes in equity during the year( "- "for decrease) | - | - | - | 7,925,913.82 | - | 22,420,581.26 | 110,401,308.67 | 429,494,110.50 | 570,241,914.25 |
| (I)Total comprehensive income | - | - | - | 7,925,913.82 | - | - | 220,836,309.93 | -2,325,204.97 | 226,437,018.78 |
| (II)Shareholders' contributions and decrease of capital | - | - | - | - | - | - | - | - | - |
| 1.Contribution by ordinary shareholders | - | - | - | - | - | - | - | - | - |
| 2. Equity settled share-based payments | - | - | - | - | - | - | - | - | - |
| 3. Others | - | - | - | - | - | - | - | - | - |
| (III) Appropriation of profits | - | - | - | - | - | 22,420,581.26 | -110,435,001.26 | - | -88,014,420.00 |
| 1. Appropriation for surplus reserves | - | - | - | - | - | 22,420,581.26 | -22,420,581.26 | - | - |
| 2. Distributions to shareholders | - | - | - | - | - | - | -88,014,420.00 | - | -88,014,420.00 |
| 3. 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 | - | - | - | - | - | - | - | 431,819,315.47 | 431,819,315.47 |
| IV.Balance at the end of the year | 1,011,660,000.00 | 978,244,910.11 | - | 36,088,963.95 | - | 241,144,854.93 | 1,671,121,562.98 | 289,068,877.44 | 4,227,329,169.41 |
Legal reprensentative: The person in charge of accounting affairs: The head of the accounting department:
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
Statement of Changes in Shareholders' Equity
For the year ended 31 December 2022Prepared by：Shenzhen Special Economic Zone Real Estate and Properties (Group) Co., Ltd Expressed in CNY
| Item | Year ended 31/12/2022 | |||||||
| Share capital | Capital reserve | Less: treasury | Other comprehensiv | Specific reserve | Surplus reserve | Retained earnings | Total | |
| I.Balance at the end of last year | 1,011,660,000.00 | 964,711,931.13 | - | 1,373,954.19 | - | 218,015,241.52 | 1,474,557,043.86 | 3,670,318,170.70 |
| Add：Changes in accounting policies | - | - | - | - | - | - | - | - |
| Correction of prior period errors | - | - | - | - | - | - | - | - |
| Others | - | - | - | - | - | - | - | - |
| II.Balance at the beginning of the year | 1,011,660,000.00 | 964,711,931.13 | - | 1,373,954.19 | - | 218,015,241.52 | 1,474,557,043.86 | 3,670,318,170.70 |
| III.Changes in equity during the year( "- "for decrease) | - | - | - | 5,472.49 | - | 34,108,874.33 | 217,953,788.94 | 252,068,135.76 |
| (I)Total comprehensive income | - | - | - | 5,472.49 | - | - | 341,088,743.27 | 341,094,215.76 |
| (II)Shareholders' contributions and decrease of capital | - | - | - | - | - | - | - | - |
| 1.Contribution by ordinary shareholders | - | - | - | - | - | - | - | - |
| 2. Equity settled share-based payments | - | - | - | - | - | - | - | - |
| 3. Others | - | - | - | - | - | - | - | - |
| (III) Appropriation of profits | - | - | - | - | - | 34,108,874.33 | -123,134,954.33 | -89,026,080.00 |
| 1. Appropriation for surplus reserves | - | - | - | - | - | 34,108,874.33 | -34,108,874.33 | - |
| 2. Distributions to shareholders | - | - | - | - | - | - | -89,026,080.00 | -89,026,080.00 |
| 3. 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 the end of the year | 1,011,660,000.00 | 964,711,931.13 | - | 1,379,426.68 | - | 252,124,115.85 | 1,692,510,832.80 | 3,922,386,306.46 |
Legal reprensentative: The person in charge of accounting affairs: The head of the accounting department:
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
Prepared by：Shenzhen Special Economic Zone Real Estate a
Statement of Changes in Shareholders' Equity
For the year ended 31 December 2022
Expressed in CNY
| Item | Year ended 31/12/2021 | |||||||
| Share capital | Capital reserve | Less: treasury | Other comprehensive | Specific reserve | Surplus reserve | Retained earnings | Total | |
| I.Balance at the end of last year | 1,011,660,000.00 | 964,711,931.13 | - | 1,131,151.74 | - | 195,594,660.26 | 1,360,786,232.53 | 3,533,883,975.66 |
| Add：Changes in accounting policies | - | - | - | - | - | - | - | - |
| Correction of prior period errors | - | - | - | - | - | - | - | - |
| Others | - | - | - | - | - | - | - | - |
| II.Balance at the beginning of the year | 1,011,660,000.00 | 964,711,931.13 | - | 1,131,151.74 | - | 195,594,660.26 | 1,360,786,232.53 | 3,533,883,975.66 |
| III.Changes in equity during the year( "- "for decrease) | - | - | - | 242,802.45 | - | 22,420,581.26 | 113,770,811.33 | 136,434,195.04 |
| (I)Total comprehensive income | - | - | - | 242,802.45 | - | - | 224,205,812.59 | 224,448,615.04 |
| (II)Shareholders' contributions and decrease of capital | - | - | - | - | - | - | - | - |
| 1.Contribution by ordinary shareholders | - | - | - | - | - | - | - | - |
| 2. Equity settled share-based payments | - | - | - | - | - | - | - | - |
| 3. Others | - | - | - | - | - | - | - | - |
| (III) Appropriation of profits | - | - | - | - | - | 22,420,581.26 | -110,435,001.26 | -88,014,420.00 |
| 1. Appropriation for surplus reserves | - | - | - | - | - | 22,420,581.26 | -22,420,581.26 | - |
| 2. Distributions to shareholders | - | - | - | - | - | - | -88,014,420.00 | -88,014,420.00 |
| 3. 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 the end of the year | 1,011,660,000.00 | 964,711,931.13 | - | 1,373,954.19 | - | 218,015,241.52 | 1,474,557,043.86 | 3,670,318,170.70 |
Legal reprensentative: The person in charge of accounting affairs: The head of the accounting department:
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
Notes to the Financial StatementsI. Company Information
1. Company‘s profile
Shenzhen Special Economic Zone Real Estate and Properties (Group) Co., Ltd. (the―Group‖or―theCompany‖) was established in July 1993, as approved by the Shenzhen Municipal Government withdocument SFBF (1993) 724. The Company issued A shares on 15 September 1993 and issued Bshares on 10 January 1994. On 31 August 1994, the issued B shares were listed in the New YorkExchange market as class A recommendation. The total share capital is 1,011,660,000 shares, including891,660,000 of A shares, and 120,000,000 of B shares. The company business license registrationnumber is 91440300192179585N, and the registered capital is CNY 1,011,660,000.00. The Company‘sheadquarter is located at Floor 45-48, Shen Fang Plaza, Ren Min South Road, Luo Hu District, ShenZhen, Guangdong province.On 13 October 2004, according to the document No. (2004) 223―Decision on establishing Shenzheninvestment Holding Co., Ltd.‖ issued by State-Owned Assets Supervision and AdministrationCommission of Shenzhen Municipal Government, the former major shareholder – ShenzhenConstruction Investment Holding Company with two assets management companies merged, and theShenzhen Investment Holding Co., Ltd formed, which causes the Company's equity to change. By theState-owned Assets Supervision and Administration Commission of the state council, and quasi-exemptobligations 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 beencompleted on 15 February 2006. At the end of the reporting period, Shenzhen Investment HoldingLimited holds 564,353,838 shares of the Company (55.78% of the total share capital). The shares areall tradable unrestricted shares.The Company has established the corporate governance structure of the general meeting ofshareholders, the board of directors and the board of supervisors. At present, it has human resources,financing plan department, marketing department, engineering management department etc.The Company and its subsidiaries (hereinafter referred to as "the Group") are principally engaged inreal estate development and sales, property leasing and management, retail merchandising and trade,hotel, equipment installation and maintenance, construction, interior decoration, etc.These financial statements and notes to the financial statements were approved by the Board ofDirectors of the Group at the 78
thBoard meeting dated on 17 March 2023.
2. Scope of consolidated financial statements
For details about the scope of consolidated statements, please refer to Note VII―Interests in otherentities‖.Refer to Note VI and VII for changes in consolidation scope in current period.II. The Basis of Preparation of Financial StatementsThe financial statements are prepared in accordance with the Accounting Standards for BusinessEnterprises and corresponding application guidance, interpretations and other related provisions issuedby the Ministry of Finance (collectively, " Accounting Standards for Business Enterprises "). In addition,
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
the Group also discloses relevant financial information in accordance with the China SecuritiesRegulatory Commission's "Information Disclosure and Reporting Rules for Companies that PublicIssued Securities" No. 15 - General Provisions on Financial Reporting (revised in 2014).
These financial statements are presented on going concern basis.The Group adopts the accrual basis of accounting. Except for certain financial instruments, the financialstatements are prepared under the historical cost convention. In the event that impairment of assetsoccurs, a provision for impairment is made accordingly in accordance with the relevant regulations.III. Significant accounting policies and accounting estimatesThe company take its own operation and production characteristics into consideration to determine therevenue recognition policy. Please refer to Note III.24.
1. Statement of compliance with the Accounting Standards for Business EnterprisesThe financial statements have been prepared in compliance with the Accounting Standards for BusinessEnterprises to truly and completely present the Group‘s and the Company‘s financial position as at 31December 2022 and the Group‘s and the Company‘s operating results and cash flows for the yearended 31 December 2022.
2. Accounting period
The accounting period of the Group is from 1 January to 31 December.
3. Operating cycle
The Group's operating cycle is 12 months.
4. Functional currency
The Group and domestic subsidiaries (including Hong Kong) use Chinese Yuan(―CNY‖) as theirfunctional currency. Offshore subsidiaries, Great Wall Estate Co. LTD, determine American dollar astheir functional currency according to the primary economic environment where they operate. Thefinancial statements of the Group have been prepared in CNY.
5. Accounting treatments for business combinations involving enterprises under common control andbusiness combinations not involving enterprises under common control
（1） Business combinations involving enterprises under common control
For a business combination involving enterprises under common control, the assets acquired andliabilities assumed are measured based on their carrying amounts in the consolidated financialstatements of the ultimate controlling party at the combination date, except for adjustments due todifferent accounting policies. The difference between the carrying amount of the net assets acquiredand the consideration paid for the combination is adjusted against share premium in the capital reserve,with any excess adjusted against retained earnings.Business combination involving enterprises under common control through step by step multipletransactions.
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
In individual financial statements, the share of the net assets of the consolidated party in the book valueof the consolidated financial statements of the ultimate controlling party of the net assets of theconsolidated party on the consolidation date, calculated by the shareholding ratio on the consolidationdate, shall be taken as the initial investment cost of the investment; the difference between the initialinvestment cost and the sum of the book value of the investment held before the merger plus the bookvalue of the newly consideration paid shall be adjusted for the capital reserve. If the capital reserve isinsufficient to be written down, the retained earnings shall be adjusted.In the consolidated financial statement, the assets and liabilities of the consolidated party shall bemeasured according to the book value of the consolidated financial statement of the ultimate controllingparty on the merger date, except for the adjustment due to different accounting policies; the balancebetween the book value of the investment held before the merger and the book value of the newlyconsideration paid and the book value of the net assets obtained during the merger shall be adjusted forcapital reserves. If the capital reserves are insufficient to be written down, the retained earnings shall beadjusted. For long-term equity investment held by the merging party prior to acquiring control of themerged party, the relevant profit and loss, other comprehensive income and other changes in owners'equity which have been recognized by the merging party from later of the date on which the originalequity was acquired and the date on which the merging party and the merged party are ultimately underthe control of the same party to the merging date, shall offset the beginning retained earnings or profitsand losses of the current period.
（2） Business combinations involving enterprises not under common control
For business combinations involving enterprises not under common control, the consideration costsinclude acquisition-date fair value of assets transferred, liabilities incurred or assumed and equitysecurities issued by the acquirer in exchange for control of the acquiree. At the acquisition date, theacquired assets, liabilities and contingent liabilities of the acquiree are measured at their fair value. Theacquiree‘s identifiable asset, liabilities and contingent liabilities, are recognised at their acquisition-datefair value.Where the combination cost exceeds the acquirer‘s interest in the fair value of the acquiree‘s identifiablenet assets, the difference is recognised as goodwill, and subsequently measured on the basis of its costless accumulated impairment provisions. Where the combination cost is less than the acquirer‘s interestin the fair value of the acquiree‘s identifiable net assets, the difference is recognised in profit or loss forthe current period after reassessment.Business combination involving enterprises not under common control through step by step multipletransactions.In individual financial statements, the sum of the book value of the equity investment held by thepurchaser before the purchase date and the cost of the newly added investment on the purchase date istaken as the initial investment cost of the investment. If other comprehensive income of equityinvestment held before the purchase date is recognized by using the equity method, such othercomprehensive income will not be treated on the purchase date, and the investment will be treated onthe same basis as the direct disposal of relevant assets or liabilities by the invested entity. The owners'equity recognized as a result of changes in owners' equity other than net profit and loss, othercomprehensive income and profit distribution of the investee shall be transferred to the current profitand loss during the disposal period at the time of disposal of the investment. If the equity investmentheld before the purchase date is measured at fair value, the accumulated change in fair value originally
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
recorded in other comprehensive income is transferred to the profit and loss of the current period whenit is calculated by the cost method.In the consolidated financial statement, the consolidated cost is the sum of the consideration paid on thepurchase date and the fair value on the purchase date of the equity held by the Purchaser prior to thepurchase date. For the equity held by the Purchaser before the purchase date, it shall be re-measuredaccording to the fair value of the equity on the purchase date, and the difference between the fair valueand the book value shall be recorded into the current income; The equity held by the Purchaser beforethe purchase date involves other comprehensive income, and other changes in owners' equity turn intocurrent income on the purchase date, except for other comprehensive income generated by changes innet liabilities or net assets of the remeasured income plan of the investee.
（3） Transaction costs for business combination
The overhead for the business combination, including the expenses for audit, legal services, valuationadvisory, and other administrative expenses, are recorded in profit or loss for the current period whenincurred. The transaction costs of equity or debt securities issued as the considerations of businesscombination 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 Group haspower over the investee; exposure, or rights to variable returns from its involvement with the investeeand has the ability to affect its returns through its power over the investee. A subsidiary is an entity thatis controlled by the Group (including enterprise, a portion of an investee as a deemed separatecomponent, and structured entity controlled by the enterprise).
（2） Basis of preparation of consolidated financial statements
The consolidated financial statements are prepared by the Group based on the financial statements ofthe Group and its subsidiaries and other relevant information. When preparing consolidated financialstatements, the accounting policies and accounting periods of the subsidiaries should be consistent withthose established by the Group, and all significant intra-group balances and transactions are eliminated.Where a subsidiary or business was acquired during the reporting period, through a businesscombination involving enterprises under common control, the financial statements of the subsidiary orbusiness are included in the consolidated financial statements as if the combination had occurred at thedate that the ultimate controlling party first obtained control.Where a subsidiary or business was acquired during the reporting period, through a businesscombination involving enterprises not under common control, the identifiable assets and liabilities of theacquired subsidiaries or business are included in the scope of consolidation from the date that controlcommences.The portion of a subsidiary‘s equity that is not attributable to the parent is treated as non-controllinginterests and presented separately in the consolidated balance sheet within shareholders‘ equity. Theportion of net profit or loss of subsidiaries for the period attributable to non-controlling interests ispresented separately in the consolidated income statement below the―net profit‖line item. When the
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
amount of loss for the current period attributable to the non-controlling shareholders of a subsidiaryexceeds the non-controlling shareholders‘ share of the opening owners‘ equity of the subsidiary, theexcess is still allocated against the non-controlling interests.
（3） Acquisiton equity from non-controlling shareholder in Subsidiaries
Where the Group acquires a non-controlling interest from a subsidiary‘s non-controlling shareholders ordisposes of a portion of an interest in a subsidiary without a change in control, the transaction is treatedas equity transaction, and the book value of shareholder‘s equity attributed to the Group and to the non-controlling interest is adjusted to reflect the change in the Group‘s interest in the subsidiaries. Thedifference between the proportion interests of the subsidiary‘s net assets being acquired or disposedand the amount of the consideration paid or received is adjusted to the capital reserve in theconsolidated balance sheet, with any excess adjusted to retained earnings.
（4） Disposal of subsidiaries
When the Group loses control over a subsidiary because of disposing part of equity investment or otherreasons, the remaining part of the equity investment is re-measured at fair value at the date when thecontrol is lost. A gain or loss is recognised in the current period and is calculated by the aggregate ofconsideration received in disposal and the fair value of remaining part of the equity investmentdeducting the share of net assets in proportion to previous shareholding percentage in the formersubsidiary since acquisition date and the goodwill.Other comprehensive income related to the former subsidiary is transferred to profit or loss when thecontrol is lost, except for the comprehensive income arising from the movement of net liabilities orassets in the former subsidiary‘s re-measurement of defined benefit plan.
7. Joint arrangement classification and accounting treatment for joint operationA joint arrangement is an arrangement of which two or more parties have joint control. The Groupclassifies joint 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, andobligations for the liabilities, relating to the arrangement.The Group recognizes the following items relating to its interest in a joint operation, and account forthem in accordance with relevant 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; andE. its solely-incurred expenses, and its share of any expenses incurred jointly.
（2） Joint ventures
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
A joint venture is a joint arrangement whereby the joint venturers have rights to the net assets of thearrangement.The Group adopts equity method under long-term equity investment in accounting for its investment injoint venture.
8. Cash and cash equivalents
Cash comprises cash in hand and deposits that can be readily withdrawn on demand. Cash equivalentsinclude short-term, highly liquid investments that are readily convertible to known amounts of cash andare 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 Group at the spotexchange rates on the dates of the transactions.Monetary items denominated in foreign currencies are translated to Renminbi at the spot exchange rateat the balance sheet date. The resulting exchange differences between the spot exchange rate onbalance sheet date and the spot exchange rate on initial recognition or on the previous balance sheetdate are recognised in profit or loss. Non-monetary items that are measured at historical cost in foreigncurrencies are translated to Renminbi using the exchange rate at the transaction date. Non-monetaryitems that are measured at fair value in foreign currencies are translated using the exchange rate at thedate 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 andliabilities of foreign operation are translated to Renminbi at the spot exchange rate at the balance sheetdate. Equity items, excluding―retained earnings‖, are translated to Renminbi at the spot exchange ratesat the transaction dates.Income and expenses of foreign operation are translated to Renminbi at the spot exchange rates at thetransaction dates.Cash flow statement of foreign operation is translated to Renminbi at the spot exchange rates at thecash flow occurence dates. Effect of foreign exchange rate changes on cash and cash equivalents ispresented separately as―Effect of foreign exchange rate changes on cash and cash equivalents‖in thecash flow statement.The resulting translation differences are recognised in other comprehensive income inshareholders‘ equity of balance sheet.The translation differences accumulated in shareholders‘ equity with respect to a foreign operation aretransferred to profit or loss in the period when the foreign operation is disposed.
10. Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one enterprise and a financialliability or an equity instrument of another enterprise.
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
（1） Recognition and derecognition of financial instruments
A financial asset or a financial liability is recognized when the Group becomes a party to the contractualprovisions of a financial instrument.If one of the following criteria is met, a financial asset is derecognised:
①the contractual rights to the cash flows from the financial asset expire; or②The financial asset was transferred, and the transfer qualifies for derecognition in accordance withcriteria set out below in―Transfer of Financial Assets‖.A financial liability (or part of it) is derecognized when its contractual obligation (or part of it) isdischarged or cancelled or expires. If the Group (as a debtor) makes an agreement with the creditor toreplace the current financial liability with assuming a new financial liability, and contractual provisionsare different in substance, the current financial liability is derecognized and a new financial liability isrecognized.If the financial assets are traded regularly, the financial assets are recognized and derecognized at thetransaction date.
（2） Classification and measurement of financial assets
The Group classifies financial assets as subsequently measured at amortized cost, fair value throughother comprehensive income or fair value through profit or loss at initial recognition on the basis of boththe entity‘s business model for managing the financial assets and the contractual cash flowcharacteristics of the financial asset.Financial assets measured at amortized costThe Group classifies the financial assets that meet the following conditions and are not designated asmeasured at fair value through profit or loss as financial assets measured at amortized cost:
? The Group's business model of managing the financial assets is to collect contractual cash flowsas the target;? The contractual terms of the financial asset give rise on specified dates to cash flows that aresolely payments of principal and interest on the principal amount outstanding.After the initial recognition, the effective interest rate method is adopted to measure the amortized costof such financial assets. Gains or losses arising from financial assets that are measured at amortizedcost and are not part of any hedging relationship shall be recorded in the current profit or loss when therecognition is terminated, amortized according to the effective interest method or the impairment isrecognized.Financial assets measured at fair value through other comprehensive incomeThe Group classifies the financial assets that simultaneously meet the following conditions and are notspecified as measured at fair value through profit or loss as financial assets measured at fair valuethrough other comprehensive income:
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
? The Group's business model of managing the financial asset aims at both collecting the contractcash flow and selling the financial asset.? The contractual terms of the financial asset give rise on specified dates to cash flows that aresolely payments of principal and interest on the principal amount outstanding.After the initial recognition, this type of financial assets are subsequently measured at fair value. Theinterest, impairment loss or gain and exchange loss or gain calculated using the effective interest ratemethod are included in the current profit or loss, while other gains or losses are included in othercomprehensive income. When derecognized, the accumulated gains or losses previously recorded inother comprehensive income shall be transferred out from other comprehensive income and recorded inthe current profit or loss.Financial assets measured at fair value through profit or lossIn addition to the above financial assets measured at amortized cost and measured at fair value throughother comprehensive income, the Group classifies all other financial assets as financial assetsmeasured at fair value through profit or loss. At the time of initial recognition, in order to eliminate orsignificantly reduce accounting mismatches, the Group irrevocably designates some financial assetsthat should have been measured at amortized cost or measured at fair value through othercomprehensive income as financial assets measured at fair value through profit or loss.After the initial recognition, this kind of financial asset is subsequently measured at its fair value, and thegains or losses (including interest and dividend income) generated are recorded into the current profit orloss, unless the financial asset is part of the hedging relationship.However, for non-trading equity instrument investment, the Group irrevocably designates it as afinancial asset measured at fair value through other comprehensive income at the time of initialrecognition. The designation is made on a single investment basis and the relevant investments meetthe definition of an equity instrument from issuer's perspective.After the initial recognition, this kind of financial assets are subsequently measured at fair value.Satisfied dividend income is included in the profit or loss, other gains or losses and changes in fair valueare included in other comprehensive income. When derecognized, the accumulated gains or lossespreviously recorded in other comprehensive income are transferred out and recorded in retainedearnings.The business model of managing financial assets refers to how the group manages financial assets togenerate cash flows. The business model determines whether the cash flow from the financial assetsunder management of the Group is derived from the receipt of contractual cash flows, the sale offinancial assets or a combination of both. The Group determines its business model for managingfinancial assets on the basis of objective facts and the specific business objectives for the managementof financial assets determined by key management personnel.The Group assesses the contractual cash flow characteristics of financial assets to determine whetherthe contractual cash flows generated by the relevant financial assets on specified dates are solelypayments of principal and interest on the principal amount outstanding. Principal refers to the fair valueof financial assets at initial recognition. Interest includes consideration for the time value of money, thecredit risk associated with the amount of principal outstanding over a given period, and other basiclending risks and costs, as well as a profit margin. In addition, the Group assesses contractual termsthat may cause a change in the time distribution or amount of the contractual cash flows of financial
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
assets to determine whether they meet the requirements of the above contractual cash flowcharacteristics.Only when the Group changes the business model of managing financial assets, all affected relatedfinancial assets shall be reclassified on the first day of the first reporting period after the change of thebusiness model, otherwise the financial assets shall not be reclassified after the initial recognition.Financial assets are measured at fair value at the time of initial recognition. For financial assetsmeasured at fair value through profit or loss, relevant transaction costs are directly recorded into currentprofit or loss; for other classes of financial assets, the relevant transaction costs are included in theinitial recognition amount. For accounts receivable arising from the sale of products or provision ofservices, which do not contain or do not take into account the material financing component, the Groupis entitled to collect the consideration amount as expected as the initial recognition amount.
（3） Classification and measurement of financial liabilities
At the time of initial recognition, the financial liabilities of the Group are classified as: financial liabilitiesmeasured at fair value through current profit or loss, and financial liabilities measured at amortized cost.For financial liabilities that are not classified as measured at fair value through profit or loss, relevanttransaction costs are included in their initial recognized amounts.Financial liabilities measured at fair value through profit or lossFinancial liabilities measured at fair value through profit or loss include trading financial liabilities andfinancial liabilities designated at the time of initial recognition as measured at fair value through profitor loss. For such financial liabilities, the subsequent measurement shall be made according to the fairvalue, and the gains or losses caused by changes in the fair value as well as the dividends and interestexpenses related to such financial liabilities shall be recorded into current profit or loss.Financial liabilities measured at amortized costFor other financial liabilities, the effective interest rate method shall be adopted, and the subsequentmeasurement shall be made at the amortized cost, and the gains or losses arising from derecognition oramortization shall be recorded into current profit or loss.The distinction between financial liabilities and equity instrumentsFinancial liabilities refer to liabilities that meet one of the following conditions:
① A contractual obligation to deliver cash or other financial assets to other parties.
② a contractual obligation to exchange financial assets or financial liabilities with another party underpotentially adverse conditions.
③ Non-derivative instrument contracts that will be settled with or available to the firm's own equityinstruments in the future, under which the firm will deliver a variable number of its own equityinstruments.
④ a derivative contract in which the firm's own equity instruments are to be settled or used in thefuture, except for a derivative contract in which a fixed number of its own equity instruments are to beexchanged for a fixed amount of cash or other financial assets.
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
An equity instrument is a contract that certifies ownership of the remaining interest in an enterprise'sassets after all liabilities have been deducted.If the Group cannot unconditionally avoid fulfilling a contractual obligation by delivering cash or otherfinancial assets, such contractual obligation meets the definition of a financial liability.If a financial instrument is to be settled with or available to the Group's own equity instrument,consideration needs to be given to whether the Group's own equity instrument used to settle theinstrument is to be used as a substitute for cash or other financial assets or to give the holder of theinstrument the remaining interest in the Issuer's assets after deduction of all liabilities. If the former, theinstrument is a financial liability of the group; If it is the latter, the instrument is an equity instrument ofthe Group.
（4） Fair value of financial instruments
For the determination of fair value of financial assets and financial liabilities, see Note III. 11.
（5） Impairment of financial assets
On the basis of expected credit losses, the Group conducts impairment accounting treatment for thefollowing items and confirms the loss provision:
? Financial assets measured at amortized cost;? Receivables and creditor's rights investments measured at fair value and accounted for in othercomprehensive income;? Contract assets as defined in the Accounting Standards for Business Enterprises No. 14 - Revenue;? Lease receivables;? Financial guarantee contract (measured at fair value and its changes included in the current profitand loss, except the financial asset transfer does not meet the conditions for termination of recognitionor continues to involve the transferred financial asset).Measurement of expected credit lossesThe term "expected credit loss" refers to the weighted average of the credit loss of a financial instrumentweighted by the risk of default. Credit loss refers to the difference between all contractual cash flowsreceivable under the contract and all cash flows expected to be collected by the Group discounted atthe original effective interest rate, that is, the present value of all cash shortages.The Group calculates the probabilistic weighted amount of the present value of the difference betweenthe cash flows receivable under the Contract and the cash flows expected to be received andrecognizes the expected credit loss, taking into account reasonable and evidential informationconcerning past events, current conditions and Itemions of future economic conditions, and weightingthe risk of default.The Group measures the expected credit losses of financial instruments at different stages. If the creditrisk of the financial instrument has not increased significantly since the initial recognition, the Groupshall measure the loss provision in accordance with the expected credit loss in the next 12 months in
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
the first stage;If the credit risk of a financial instrument has increased significantly since the initialrecognition but no credit impairment has occurred, it is in the second stage, and the Group measuresthe loss provision according to the expected credit loss of the entire life period of the instrument; If creditimpairment has occurred to a financial instrument since its initial recognition, it is in the third stage, andthe Group shall measure the loss provision according to the expected credit loss of the entire life periodof the instrument.For financial instruments with low credit risk at the balance sheet date, the Group assumes that thecredit risk has not increased significantly since the initial recognition, and measures the loss provision inaccordance with the expected credit loss for the next 12 months.The term "expected credit loss over the entire expected life of a financial instrument" refers to theexpected credit loss resulting from all possible events of default during the entire expected life of afinancial instrument. The expected credit loss within the next 12 months refers to the expected creditloss caused by the default event of the financial instrument that may occur within 12 months after thedate of the balance sheet (or the expected duration of the financial instrument if the expected durationof the financial instrument is less than 12 months) and is part of the expected credit loss over the entirematurity period.When measuring expected credit losses, the Group shall take into account the longest contract period(including the option to renew the contract) for which the enterprise is exposed to credit risk.The Group calculates interest income on the basis of the book balance before impairment provisionsand the effective interest rate for financial instruments in stage I and stage II and with lower credit risk.For financial instruments in the third stage, the interest income is calculated on the basis of theamortized cost of the book balance less the impairment provision and the effective interest rate.For notes receivable, accounts receivable and contract assets, regardless of whether there is a materialfinancing component, the Group always measures its loss provision in accordance with the amountequivalent to the expected credit loss within the whole duration period.When a single financial asset cannot assess the information of expected credit loss at a reasonable cost,the Group divides the notes receivable and accounts receivable into portfolios according to the creditrisk characteristics, calculates the expected credit loss on the basis of the portfolios, and determines theportfolios based on the following:
A. Notes receivable? Notes receivable portfolio 1: banker acceptance notes? Notes receivable portfolio 2: commercial acceptance notesB、Receivables? Accounts receivable portfolio 1: related parties receivable? Accounts Receivable Portfolio 2: Receivable from property sales? Accounts receivable portfolio 3: receivable from other customersC. Contract assets
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
? Contract Portfolio 1: Product Sales? Contract Portfolio 2: Works ConstructionFor the notes receivable and contract assets divided into portfolios, the Group calculates the expectedcredit loss through default risk exposure and the expected credit loss rate over the entire duration byreferring to the historical credit loss experience, combining the current situation and the forecast of thefuture economic situation.For the receivables divided into portfolios, the Group refers to the historical credit loss experience andcombines the current situation with the forecast of the future economic situation to compile acomparison table between the age of receivables/overdue days and the expected credit loss rate of theentire duration period to calculate the expected credit loss.Other receivablesThe Group divides other receivables into several portfolios according to the credit risk characteristics,and calculates the expected credit loss on the basis of the portfolio. The basis for determining theportfolio is as follows:
? Other Receivables Portfolio 1: Receivables from government agencies? Other Receivables Portfolio 2: Other receivables from employee‘s petty cash? Other receivables portfolio 3: Other receivables from the collecting and paying on behalf? Other receivables portfolio 4: Other receivables from other customers? Other receivables portfolio 5: Receivables from related partiesFor other receivables divided into portfolios, the Group calculates the expected credit loss by default riskexposure and the expected credit loss rate over the next 12 months or the entire duration.Debt investment and Other debt investmentFor debt investment and other debt investment, the Group calculates the expected credit loss based onthe default risk exposure and the expected credit loss rate within the next 12 months or the entireduration according to the nature of the investment and the various types of counterparties and riskexposures.An assessment of a significant increase in credit riskBy comparing the risk of default of financial instruments on the balance sheet date with the risk ofdefault on the initial recognition date, the Group determines the relative change of default risk within theexpected duration of financial instruments, so as to evaluate whether the credit risk of financialinstruments has significantly increased since the initial recognition.In determining whether credit risk has increased significantly since the initial recognition, the Groupconsiders reasonable and informed information, including forward-looking information that can beobtained without unnecessary additional cost or effort. Information considered by the Group includes:
? The debtor fails to pay the principal and interest as due under the contract;
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
? A material deterioration, if any, of the external or internal credit rating of the financial instrument thathas occurred or is expected;? A serious deterioration of the debtor's business results occurred or is expected;? A change in the existing or anticipated technological, market, economic or legal environment whichwill have a material adverse effect on the debtor's ability to repay the Group.According to the nature of financial instruments, the Group evaluates whether credit risk increasessignificantly on the basis of individual financial instruments or a combination of financial instruments.When assessing on the basis of a portfolio of financial instruments, the Group may classify financialinstruments based on common credit risk characteristics, such as overdue information and credit riskrating.If overdue for more than 30 days, the Group determines that the credit risk of the financial instrumenthas increased significantly.The Group believes that the financial assets are in default under the following circumstances:
? The Borrower is unlikely to pay its arrears to the Group in full and this assessment does not takeinto account any recourse actions taken by the Group, such as liquidating the collateral (if held); or? Financial assets are more than 90 days overdue.A financial asset whose credit has been impairedOn the balance sheet date, the Group evaluates whether credit impairment has occurred in financialassets measured at amortized cost and debt investments measured at fair value and whose changesare included in other comprehensive income. When one or more events which have an adverse effecton the expected future cash flow of a financial asset occur, the financial asset becomes a financial assetwith credit impairment. Evidence of credit impairment of financial assets includes the followingobservable information:
? Major financial difficulties occur to the issuer or the debtor;? A breach of contract by the debtor, such as a default or late payment of interest or principal;? The Group, for economic or contractual considerations relating to the debtor's financial difficulties,gives concessions that the debtor would not have made under any other circumstances;? The debtor is likely to go bankrupt or undergo other financial restructuring;? The financial difficulties of the issuer or debtor result in the disappearance of an active market forthe financial asset.Presentation of expected credit loss provisionsIn order to reflect the change of the credit risk of financial instruments since the initial recognition, theGroup re-measures the expected credit loss on each balance sheet date, and the increase or rollebackamount of the loss provision thus formed shall be recorded into the current profit and loss as animpairment loss or profit. For a financial asset measured at amortized cost, the loss provision shalloffset the carrying value of the financial asset as stated in the balance sheet; For the debt investmentmeasured at fair value and its changes included in other comprehensive income, the Group recognizes
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
its loss provision in other comprehensive income and does not deduct the book value of the financialasset.Written-offIf the Group no longer reasonably expects that the contractual cash flow of a financial asset can berecovered in whole or in part, the carrying balance of the financial asset shall be directly written down.Such writedowns constitute termination recognition of the relevant financial assets. This usually occurswhen the Group determines that the debtor does not have assets or sources of income that generatesufficient cash flow to repay the amount to be written down. However, in accordance with the Group'sprocedures for recovering amounts due, the financial assets that have been written down may still beaffected by the execution activities.If a financial asset that has been written down is recovered later, it shall be carried back as animpairment loss and recorded in the profit and loss of the current period.
（6） Transfer of financial asset
Transfer of financial assets is the transfer or delivery of financial assets to another party (the transferee)other than the issuer of financial assets.A financial asset is derecognised if the Group transfers substantially all the risks and rewards ofownership of the financial asset to the transferee. A financial asset is not derecognised if the Groupretains substantially all the risks and rewards of ownership of the financial asset to the transferee.The Group neither transfers nor retains substantially all the risks and rewards of ownership of thefinancial asset, and the accounting treatment is shown as following: if the Group has forgone controlover the financial asset, the financial assets is derecognized, and new assets and liabilities arerecognized. If the Group retains control over the financial asset, the financial asset is recognised to theextent of its continuing involvement in the transferred financial asset, and an associated liability isrecognised.
（7） Offset of financial assets and financial liabilities
Where the Group has the legal right to set off the recognized financial asset and financial liability, and iscurrently able to enforce such legal right, and the Group plans to settle the financial asset on a net basisor simultaneously realize the financial asset and pay off the financial liability, the financial asset andfinancial liability shall be shown in the balance sheet with the offset amount. In addition, financial assetsand financial liabilities shall be separately presented in the balance sheet and shall not be set offagainst each other.
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 orderlytransaction between market participants at the measurement date.The Group measures related assets or liabilities at fair value assuming the assets or liabilities areexchanged 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 advantageousmarket. Principal market (or the most advantageous market) is the market that the Group can normallyenter into a transaction on measurement date. The Group adopts the presumptions that would be usedby market participants in achieving the maximized economic value of the assets or liabilities.
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
For financial assets or financial liabilities with active markets, the Group uses the quoted prices in activemarkets as their fair value. Otherwise, the Group uses valuation technique to determine their fair value.Fair value measurement of a non-financial asset takes into account market participants‘ ability togenerate economic benefits using the asset in its best way or by selling it to another market participantthat would best use the asset.The Group uses valuation techniques that are appropriate in the circumstances and for which sufficientdata are available to measure fair value, maximizing the use of relevant observable inputs, and usingunobservable inputs only if the observable inputs aren‘t available or impractical.Fair value level for assets and liabilities measured or disclosed at fair value in the financial statementsare determined according to the significant lowest level input to the entire measurement: Level 1 inputsare quoted prices (unadjusted) in active markets for identical assets or liabilities that the Group canaccess at the measurement date; Level 2 inputs are inputs other than quoted prices included withinLevel 1 that are observable for the assets or liabilities, either directly or indirectly; Level 3 inputs areunobservable inputs for the assets or liabilities.At the balance sheet date, the Group revalues assets and liabilities being measured at fair valuecontinuously in the financial statements to determine whether to change the levels of fair valuemeasurement.
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, including development costs and developmentproducts. Development cost include the development costs of development products to be developedand development products under construction. Development products include completed developmentproducts and development products intended for sell but temporarily leased. Non-real estatedevelopment projects include raw materials, finished goods and engineering construction.
（2） Measurement method of cost of inventories
The group‘s inventories are measured at actual cost when acquired. The actual cost of developing aproduct includes land transfer fee, infrastructure expenditure, construction and installation projectexpenditure, borrowing expenses incurred before the completion of the development project and otherrelated expenses in the development process.。When a product is developed and shipped, the actualcost is determined by specific identification method.Raw materials and finished goods are calculated using weighted average method.
（3） Basis for determining the net realizable value and method for provision for obsolete inventoriesNet realizable value is the estimated selling price in the ordinary course of business less the estimatedcosts of completion and the estimated costs necessary to make the sale and relevant taxes. The netrealizable value is measured based on the verified evidences and considerations for the purpose ofholding 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 forobsolete inventories, and is recognised in profit or loss. The Group usually recognises provision for
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
decline in value of inventories by a single inventory item. If the factors caused the value of inventorypreviously written-down have disappeared, the provision for decline in value of inventories previouslymade is reversed.
（4） Inventory count system
The Group maintains a perpetual inventory system
（5） Amortization methods of low-value consumables and packaging materials
Low-value consumables are amortized at the point of use.
13. Long-term equity investments
Long-term equity investments include equity investments in subsidiaries and equity investments in jointventures and associates. An associate is an enterprise over which the Group has significant influence.
（1） Determination of initial investment cost
The initial cost of a long-term equity investment acquired through a business combination involvingenterprises under common control is the Group‘s share of the carrying amount of the subsidiary‘s equityin the consolidated financial statements of the ultimate controlling party at the combination date. For along-term equity investment obtained through a business combination not involving enterprises undercommon control, the initial cost is the combination cost.A long-term equity investment acquired other than through a business combination: A long-term equityinvestment acquired other than through a business combination is initially recognised at the amount ofcash paid if the Group acquires the investment by cash, or at the fair value of the equity securitiesissued 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 ina joint venture or an associate 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 cashdividends or profit distributions declared but not yet distributed that have been included in the price orconsideration paid in obtaining the investments, the Group recognises its share of the cash dividends orprofit 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 costof a long-term equity investment exceeds the Group‘s interest in the fair value of the investee‘sidentifiable net assets at the date of acquisition, the investment is initially recognised at cost. Where theinitial investment cost is less than the Group‘s interest in the fair value of the investee‘s identifiable netassets at the date of acquisition, the investment is initially recognised at the investor‘s share of the fairvalue of the investee‘s identifiable net assets, and the difference is recognised in profit or loss.Under the equity method, the Group recognises its share of the investee‘s profit or loss and othercomprehensive 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 cashdividends or profit distributions, the carrying amount of the investment is reduced by the amountattributable to the Group. Changes in the Group‘s share of the investee‘s owners‘ equity, other than
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
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 Group‘s equity, and thecarrying amount of the investment is adjusted accordingly. In calculating its share of the investee‘s netprofits or losses, other comprehensive income and other changes in owners‘ equity, the Grouprecognises investment income and other comprehensive income after making appropriate adjustmentsto align the accounting policies or accounting periods with those of the Group based on the fair value ofthe investee‘s identifiable net assets at the date of acquisition.When the Group becomes capable of exercising joint control or significant influence (but not control)over an investee due to additional investment or other reasons, the Group uses the fair value of thepreviously-held equity investment, together with additional investment cost, as the initial investment costunder 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 comprehensiveincome, shall be transferred to profit or loss for the current period upon commencement of the equitymethod.When the Group can no longer exercise control over an investee due to partial disposal of the equityinvestment or other reasons, and the remaining equity after disposal can exercise joint control of orsignificant influence over an investee, the remaining equity is adjusted as using equity method fromacquisition. When the remaining equity can no longer exercise joint control of or significant influenceover an investee, the remaining equity investment shall be accounted for using Accounting Standard forBusiness Enterprises No. 22-Recognition and Measurement of Financial Instruments, and the differencebetween the fair value and the carrying amount of the remaining equity investment shall be charged toprofit or loss for the current period at the date of loss of control.When the Group can no longer exercise control over an investee due to new capital injection by otherinvestors, and the Group can exercise joint control of or significant influence over an investee, theGroup 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 decreasedshareholding percentage of the original investment is recognized in profit or loss. And the Group adjuststo the equity method using the new shareholding percentage as if it uses the equity method since itobtains the investment.Unrealised profits and losses resulting from transactions between the Group and its associates or jointventures are eliminated to the extent of the Group‘s interest in the associates or joint ventures.Unrealised losses resulting from transactions between the Group and its associates or joint ventures areeliminated in the same way as unrealised gains but only to the extent that there is no impairment.
（3） Criteria for determining the existence of joint control or significant influence over an investeeJoint control is the contractually agreed sharing of control of an arrangement, which exists only whendecisions about the relevant activities require the unanimous consent of the parties sharing control.When assessing whether the Group can exercise joint control over an investee, the Group firstconsiders whether no single participant party is in a position to control the investee‘s related activitiesunilaterally, and then considers whether strategic decisions relating to the investee‘s related activitiesrequire the unanimous consent of all participant parties that sharing of control. All the parties, or a groupof the parties, control the arrangement collectively when they must act together to direct the relevantactivities. When more than one combination of the parties can control an arrangement collectively, jointcontrol does not exist. A party that holds only protective rights does not have joint control of thearrangement.
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
Significant influence is the power to participate in the financial and operating policy decisions of aninvestee but does not have control or joint control over those policies. When determining whether theGroup can exercise significant influence over an investee, the effect of potential voting rights (forexample, warrants, share options and convertible bonds) held by the Group or other parties that arecurrently exercisable or convertible shall be considered.When the Group, directly or indirectly through subsidiaries, owns 20% of the investee (including 20%) ormore but less than 50% of the voting shares, it has significant influence over the investee unless thereis clear evidence to show that in this case the Group cannot participate in the production and businessdecisions of the investee, and cannot form a significant influence. When the Group owns less than 20%of the voting shares, generally it does not have significant influence over the investee, unless there isclear evidence to show that in this case the Group can participate in the production and businessdecisions 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. 20 for the Group‘smethod of asset impairment.
14. Assets held for sale and discontinued operations Long-term equity investments
(1) Classification and measurement of non-current assets or disposal groups held for saleThe Group classifies a non-current asset or disposal group as held for sale when the carrying amount ofthe non-current asset or disposal group will be recovered through a sale transaction (including anexchange transaction of non-monetary assets with commercial substance) rather than throughcontinuing use.Above mentioned non-current assets do not include investment properties subsequently measured withthe fair value model, biological assets measured at fair value less costs to sell, assets arising fromemployee benefits, financial assets, deferred tax assets and contractual rights under insurancecontracts.The disposal group is a group of assets to be disposed of, by sale or otherwise, together as a whole in asingle transaction, and liabilities directly associated with those assets that will be transferred in thetransaction. In certain circumstances, disposal groups include goodwill acquired in a businesscombination.A non-current asset or disposal group is classified as held for sale when all the following criteria are met:
According to the customary practices of selling such asset or disposal group in similar transactions, thenon-current asset or disposal group is available for immediate sale in its present condition; The sale ishighly probable to occur, that is, the Group has made a resolution on a sale plan and entered into alegally binding purchase agreement with other parties. The sale is expected to be completed within oneyear. The Group that is committed to a sale plan involving loss of control of a subsidiary classifies all theinvestment in that subsidiary as held for sale in its separate financial statements, and classifies all theassets and liabilities of that subsidiary as held for sale in its consolidated financial statements, when theclassification criteria for held for sale are met, regardless of whether the Group retains a non-controllinginterest in its former subsidiary after the sale.Non-current assets or disposal groups held for sale are initially and subsequently measured at the lowerof carrying amount and fair value less costs to sell. Any excess of the carrying amount over the fair
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
value less costs to sell is recognised as an impairment loss in profit or loss. The impairment lossrecognised for a disposal group firstly reduces the carrying amount of goodwill allocated to the disposalgroup, and then reduces the carrying amount of other non-current assets pro rata on the basis of thecarrying amount of each non-current asset in the disposal group.The Group recognises a gain for any subsequent increase in fair value less costs to sell of an asset, butnot in excess of the cumulative impairment loss that has been recognised after classified as held forsale. The reduced carrying amount of goodwill is not recovered.The Group does not depreciate (or amortise) a non-current asset while it is classified as held for sale orwhile it is part of a disposal group classified as held for sale. Interest and other expenses attributable tothe liabilities of a disposal group classified as held for sale continue to be recognised. If an investmentor a part of investment in an associate or a joint venture is classified as held for sale, equity method isnot used for the part classified as held for sale, while equity method is used for the rest part (the part notclassified as held for sale) continuely. When the Group does not have material impact on an associateor a joint venture due to the sale transaction, it stops using equity method.The Group measures a non-current asset that ceases to be classified as held for sale at the lower of:
① its carrying amount before the asset or disposal group was classified as held for sale, adjustedfor any depreciation, amortisation or impairment that would have been recognised had the asset ordisposal group not been classified as held for sale.
② its recoverable amount.
(2) Discontinued operations
The Group classifies a component as a discontinued operation either upon disposal of the operation orwhen the operation meets the criteria to be classified as held for sale if it is separately identifiable andsatisfies one of the following conditions:
① It represents a separate major line of business or a separate geographical area of operations;
② It is part of a single co-ordinated plan to dispose of a separate major line of business or a separategeographical area of operations;
③ It is a subsidiary acquired exclusively with a view to resale.
(3) Presentation
The Group presents a non-current asset classified as held for sale and the assets of a disposal groupclassified as held for sale as―Assets held for sale‖in balance sheet. The liabilities of a disposal groupclassified as held for sale is presented as―Liabilities held for sale‖in balance sheet.The Group presents profit or loss from discontinued operations separately from profit or loss fromcontinuing operations in income statement. Impairment loss and reversal amount and any disposal gainor loss of a non-current asset or disposal group classified as held for sale that does not meet thedefinition of a discontinued operation is included in profit or loss from continuing operations. Any gain orloss from continuing operation of discontinued operations, including impairment loss and reversalamount, and disposal gain or loss is included in profit or loss from discontinued operations.
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
A disposal group which is planned to cease operation rather than for sale, and meets the criteria of apart of discontinued operation, the Group presents it as discontinued operation from the date ofcessation.Where an operation is classified as discontinued in the current period, profit or loss from continuingoperations and profit or loss from discontinued operations are separately presented in the incomestatement for the current period. If the Group ceases to classify a discontinued operation as held forsale, the information previously presented in discontinued operations is reclassified and included inincome from continuing operations for all periods presented.
15. Investment property
Investment properties are properties held either to earn rental income or for capital appreciation or forboth. The Group‘s investment properties include leased houses, leased buildings, leased land use rights.In addition, for a vacant building held by the company for operating lease, if the board of directors (or asimilar institution) makes a written resolution expressly indicating that it is used for operating lease andthe 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 thesame 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.20.The balance of the disposal income from the sale, transfer, scrapping or damage of the investment realestate after deducting its book value and relevant taxes and fees shall be recorded into the current profitand loss.
16. Fixed assets
（1） Recognition of fixed assets
Fixed assets represent the tangible assets held by the Group for use in production of goods, use insupply 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 Group andits cost can be reliably measured.Fixed asset are initially measured at cost.Subsequent expenses related to fixed assets shall be recorded into cost of fixed assets when its relatedeconomic benefits are likely to flow to the Group and its cost can be reliably measured; the cost of dailyrepairs to fixed assets that do not meet the conditions for subsequent expenditures for capitalization offixed assets, at the time of occurrence, shall be recorded into the profit or loss of the current period orthe cost of the related assets. For the part that is replaced, its carrying amount is derecognized
（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 estimateduseful lives, residual value rates and depreciation rates of each class of fixed assets are as follows:
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
| Class | （years） | Residual value rate % | Depreciation rate % | |
| Plant and buildings | 30 | 5 | 3.17 | |
| Motor 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 determinating thedepreciation rate.
(3) For the impairment of the fixed assets, please refer to Note III.20.
(4) Useful lives, estimated residual values and depreciation methods are reviewed at least at each year-end.The Group adjusts the useful lives of fixed assets if their expected useful lives are different with theoriginal estimates and adjusts the estimated net residual values if they are different from the originalestimates.
(5) Disposal of fixed asset
When a fixed asset is disposed of, or when it is expected that no economic benefit will be generatedthrough the use or disposal, the fixed asset shall be derecognised. Proceeds from the disposal of fixedassets sold, transferred, scrapped or damaged, net of their carrying amount and associated taxes, shallbe recorded in the profit or loss for the current period.
17. Construction in progress
Construction in progress is recognized based on the actual construction cost, including all expendituresincurred for construction Items, capitalised borrowing costs and any other costs directly attributable tobringing 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.For the impairment of construction in progress, please refer to Note III.20.
18. Borrowing costs
（1） Capitalisation criteria
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifyingasset shall be capitalised as part of the cost of that asset. Other borrowing costs are expensed in profitor loss as incurred. The capitalisation of borrowing costs shall commence only when the followingcriteria are met:
①capital expenditures have been incurred, including expenditures that have resulted in payment ofcash, transfer of other assets or the assumption of interest-bearing liabilities;②borrowing costs have been incurred;③the activities that are necessary to prepare the asset for its intended use or sale have commenced.
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
（2） Capitalisation period
The capitalisation of borrowing costs ceases when the asset under acquisition or construction becomesready for its intended use, the borrowing costs incurred thereafter are recognised in profit or loss for thecurrent period.Capitalisation of borrowing costs is suspended during periods in which the acquisition or construction ofa fixed asset is interrupted abnormally and the interruption lasts for more than 3 months, until theacquisition 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 netamount of the borrowing costs after deducting any investment income earned before some or all of thefunds are used for expenditures on the qualifying asset. To the extent that the Group borrows fundsgenerally and uses them for the purpose of obtaining a qualifying asset, the Group shall determine theamount of borrowing costs eligible for capitalisation by applying a capitalisation rate to the expenditureson that asset, the capitalisation rate shall be the weighted average of the borrowing costs applicable tothe borrowings of the Group that are outstanding during the period, other than borrowings specificallyfor the purpose of obtaining a qualifying asset.In the capitalisation period, exchange differences of specific borrowings in foreign currency shall becapitalised; exchange differences of general borrowings in foreign currency is recognised in profit orloss for the current period.
19. Intangible assets
Intangible assets include software, etc.Intangible assets are stated at actual cost upon acquisition and the useful economic lives aredetermined at the point of acquisition. When the useful life is finite, amortisation method shall reflect thepattern in which the asset‘s economic benefits are expected to be realised. If the pattern cannot bedetermined reliably, the straight-line method shall be used. An intangible asset with an indefinite usefullife shall not be amortised.The Group shall review the useful life and amortisation method of an intangible asset with a finite usefullife at least at each year end. Changes of useful life and amortisation method shall be accounted for asa change in accounting estimate.An intangible asset shall be derecognised in profit or loss when it is not expected to generate futureeconomic benefits.For the impairment of intangible assets, please refer to Note III.20.
20. Impairment of assets
The impairment of long-term equity investments in subsidiaries, associates and joint ventures,investment properties measured using a cost model, fixed assets, construction in progress, productivebiological assets measured using a cost model, intangible assets, goodwill, proven oil and gas miningrights and wells and related facilities, etc. (Excluding inventories, investment property measured using afair value model, deferred tax assets and financial assets) is determined as follows:
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
At each balance sheet date, the Group determines whether there is any indication of impairment. If anyindication exists, the recoverable amount of the asset is estimated. In addition, the Group estimates therecoverable amounts of goodwill, intangible assets with indefinite useful lives and intangible assets notready 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 valueof expected future cash flows. The recoverable amount is estimated for each individual asset. If it is notpossible to estimate the recoverable amount of each individual asset, the Group determines therecoverable amount for the asset group to which the asset belongs. An asset group is the smallestidentifiable group of assets that generates cash inflows that are largely independent of the cash inflowsfrom other assets or asset groups.An impairment loss is recognised in profit or loss when the recoverable amount of an asset is less thanits 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 combination isallocated reasonably to the relevant asset group since the acquisition date. If the carrying amount ofgoodwill is unable to be allocated to asset group, the carrying amount of goodwill will be allocated toasset portfolio. Asset group or portfolio of asset group is asset group or portfolio of asset group whichcan be benefit from synergies of a business combination and is not greater than the reportable segmentof the Group.In impairment testing, if impairment indication exists in asset group or portfolio of asset group containingallocated goodwill, impairment test is first conducted for asset group or portfolio of asset group that doesnot contain goodwill, and corresponding recoverable amount is estimated and any impairment loss isrecognized. Then impairment test is conducted for asset group or portfolio of asset group containinggoodwill by comparing its carrying amount and its recoverable amount. If the recoverable amount is lessthan the carrying amount, impairment loss of goodwill is recognized.Once an impairment loss is recognised, it is not reversed in a subsequent period.
21. Long-term deferred expenses
Long-term deferred expenses are recorded at the actual cost, and amortized using a straight-linemethod within the benefit period. For long-term deferred expense that cannot bring benefit in futureperiod, the Group recognized its amortised cost in profit or loss for the current period.
22. Employee benefits
(1) Scope of employee benefits
Employee benefits refer to all forms of consideration or compensation given by the Group in exchangefor service rendered by employees or for the termination of employment relationship. Employee benefitsinclude short-term employee benefits, post-employment benefits, termination benefits and other long-term employee benefits. Benefits provided to the Group‘s spouse, children, dependents, familymembers 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-termemployee benefits payable‖ on the balance sheet.
(2) Short-term employee benefits
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
In the current period, the Group has accrued for the actual wages, bonuses, medical insurance foremployees based on standard rate, work injury insurance and maternity insurance and other socialinsurance and housing fund incurred and these are recognised as liabilities and corresponding costs inthe profit or loss.
(3) Post-employment benefits
Post-employment benefit plan includes defined contribution plans and defined benefit plans. Definedcontribution plans are post-employment benefit plans under which an enterprise pays fixed contributionsinto a separate fund and will have no future obligations to pay the contributions. Defined benefit plansare post-employment benefit plans other than defined contribution plans.Defined contribution plansDefined contribution plans include primary endowment insurance, unemployment insurance andcorporate pension plan, etc.Besides basic pension insurance, the Group establishes corporate pension plans in accordance with therelated policies of corporate pension regulations. Employees can join the pension plan voluntarily. TheGroup has no other significant commitment of employees‘ social security.The Group shall recognise, in the accounting period in which an employee provides service, thecontribution payable to a defined contribution plan as a liability, with a corresponding charge to the profitor loss for the current period or the cost of a relevant asset.Defined benefit plansFor a defined benefit plan, an actuarial valuation is performed by an independent actuary at the annualbalance sheet date to determine the cost of providing benefits using the expected accrued benefit unitmethod. The employee compensation cost caused by the benefit plan of the Group includes thefollowing components:
① Service cost, including current service cost, past service cost and settlement profit or loss. Including,the current service cost refers to the increase in the present value of the defined benefit plan obligationcaused by the current provision of services by employees; The past service cost refers to the increaseor decrease in the present value of the defined benefit plan obligations related to the employee servicesof the previous period as a result of the modification of the defined benefit plan.
② Set the net interest on the net liabilities or net assets of the benefit plan, including the interestincome on the plan assets, the interest expense on the defined benefit plan obligations and the intereston the impact of the asset cap.
③ The changes caused by the remeasurement of the net liabilities or net assets of the benefit plan.Unless other accounting standards require or allow the cost of employee benefits to be included in thecost of assets, the Group will include items ① and ② above in the current profit and loss; Item ③is included in other comprehensive income and will not be turned back to profit and loss in subsequentaccounting periods. When the originally defined benefit plan is terminated, the part originally included inother comprehensive income within the scope of equity is carried forward to undistributed profit.
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
(4) Termination benefits
The Group provides for termination benefits to the employees and shall recognise an employee benefitsliability for termination benefits, with a corresponding charge to the profit or loss for the current period, atthe earlier of the following dates: When the Group cannot unilaterally withdraw the offer of thetermination benefits because of an employment termination plan or a redundancy proposal; or when theGroup recognises the costs or expenses relating to a restructuring that involves the payment of thetermination benefits.For employees who implement the internal retirement plan, the economic compensation before theofficial retirement date belongs to dismiss welfare. During the normal retirement date when theemployees stop providing services, the salary and social insurance premium to be paid by theemployees who retire within the Group shall be included in the profit and loss of the current period in alump sum. Economic compensation after the official retirement date (such as the normal pension) shallbe treated as after-service benefits.
(5) Other long-term employee benefits
Other long-term employee benefits provided by the Group to the employees satisfied the conditions forclassifying as a defined contribution plan; those benefits shall be accounted for in accordance with theabove requirements relating to defined contribution plan. When the benefits satisfied a defined benefitplan, it shall be accounted for in accordance with the above requirements relating to defined benefit plan,but the movement of net liabilities or assets in re-measurement of defined defined benefit plan shall berecorded in profit or loss for the current period or cost of relevant assets.
23. Provisions
A provision is recognised for an obligation related to a contingency if all the following conditions aresatisfied:
(1) the Group has a present obligation;
(2) it is probable that an outflow of economic benefits will be required to settle the obligation; and
(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 relatedpresent obligation. Factors pertaining to a contingency such as the risks, uncertainties and time value ofmoney are taken into account as a whole in reaching the best estimate.Where the effect of the timevalue of money is material, provisions are determined by discounting the expected future cash flows.The Group reviews the carrying amount of a provision at the balance sheet date and adjusts thecarrying amount to the current best estimate.If all or part of the expenditure necessary for settling the provision is expected to be compensated by athird party, the amount of compensation is separately recognized as an asset when it is basically certainto be received. The recognized compensation amount shall not exceed the carrying amount of theprovision.
24. Revenue
(1) General principles
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
The Group has fulfilled its contractual obligation to recognize revenue when the customer acquirescontrol of the relevant goods or services.If the contract contains two or more performance obligations, the Group shall, on the commencementdate of the contract, allocate the transaction price to each single performance obligation according tothe relative proportion of the individual selling price of the commodity or service committed by eachsingle performance obligation, and measure the income according to the transaction price allocated toeach single performance obligation.If one of the following conditions is satisfied, the Group shall perform its obligations within a certainperiod of time; otherwise, it belongs to the performance obligation at a certain point:
① The Client obtains and consumes the economic benefits brought by the Group's performance at thesame time of the Group's performance.
② The customer can control the goods under construction during the performance of the Group.
③ The commodities produced by the Group during the performance of the Contract have irreplaceablepurposes, and the Group has the right to collect payment for the accumulated part of the performancecompleted so far during the whole period of the Contract.For the performance obligations performed within a certain period of time, the Group shall recognize theincome in accordance with the performance progress within that period. If the performance progresscannot be reasonably determined and the Group is expected to be compensated for the costs alreadyincurred, the revenue shall be recognized according to the amount of the costs already incurred until theperformance progress can be reasonably determined.For performance obligations performed at a certain point, the Group recognizes revenue at the pointwhen the customer acquires control of the relevant goods or services. In determining whether acustomer has acquired control of goods or services, the Group will take into account the followingindications:
① The Group has a current right to receive payment for the goods or services, that is, the Customerhas a current obligation to pay for the goods.
② The Group has transferred the legal ownership of the commodity to the customer, that is, thecustomer has the legal ownership of the commodity.
③ The Group has transferred the goods in kind to the customer, that is, the customer has physicalpossession of the goods.The Group has transferred the main risks and rewards on the ownership of the commodity to thecustomer, that is, the customer has acquired the main risks and rewards on the ownership of thecommodity.
⑤ The customer has accepted the goods or services.
⑥ Other indications that the customer has acquired control of the product.
The Group's right to receive consideration for goods or services transferred to a customer (and this rightdepends on other factors other than the passage of time) is a contract asset which is subject to
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
impairment on the basis of expected credit losses (see Note III, 10 (5)). The Group's right, unconditional(depending only on the passage of time) to collect consideration from customers is shown as areceivable. The Group's obligation to transfer goods or services to customers for which it has receivedor receivable consideration is a contractual liability.The contract assets and contract liabilities under the same contract shall be presented on a net basis. Ifthe net amount is the debit balance, it shall be presented under the item of "Contract Assets" or "OtherNon-current Assets" according to its liquidity; If the net amount is a credit balance, it shall be shownunder the item "Contract Liabilities" or "Other Non-current Liabilities" according to its liquidity.
（2）Specific methods
The specific methods of the Group's revenue recognition are as follows:
① The method for recognizing revenue from property sales
(1) the sale contract has been signed and filed with housing construction bureau; (2) the propertydevelopment is completed and pass the acceptance; (3) For Lump-sum payment, revenue is recognizedby the group when the consideration is fully received. For instalment payment, revenue is recognizedwhen the first installment has been received and the bank mortgage approval procedures have beencompleted. (4) completed the procedures for entering the partnership in accordance with therequirements stipulated in sale contract.
② The method for recognizing revenue from property services provided
According to property service contract, agreed service period, area served and unit price, revenue isrecognized evenly within agreed service period.
③ The method for recognizing revenue from construction activities
As the customer can control the goods under construction during the performance of the Group, thegroup shall recognize the income in accordance with the performance progress within a certain periodof time (except for performance progress cannot be reasonably determined). The group shall determinethe performance progress based on cost incurred. If the performance progress cannot be reasonablydetermined and the Group is expected to be compensated for the costs already incurred, the revenueshall be recognized according to the amount of the costs already incurred until the performanceprogress can be reasonably determined. If the contract costs cannot be recovered, the cost should berecognized immediately in current period when incurred. When the estimated total cost of the contract islikely to exceed the total revenue of the contract, the cost of the main business and the estimatedliabilities shall be recognized in accordance with the unexecuted loss contract. The loss shall berecognized as current cost and put into provisions.
④ The method for recognizing revenue from other income
Revenue from other income include income from hotel operations, etc. Rooms revenue from hoteloperations shall be recognized in accordance with the performance progress within agreed period, asthe client obtains and consumes the economic benefits brought by the Group‘s performance and thegroup‘s performance obligations has performed at a certain period of time. For other income, the grouprecognizes revenue at the point when the customer acquires control of the relevant goods or services,which indicate the group has a right to receive payment for services or goods provided in accordancewith the relevant contract.
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
25. Contract costs
Contract costs include incremental costs incurred to obtain the contract and contract performance costs.Incremental costs incurred to obtain a contract are costs (such as sales commissions, etc.) that theGroup would not have incurred without the contract. If the cost is expected to be recovered, the Groupwill recognize it as an asset as the contract acquisition cost. Other expenses incurred by the Group forthe acquisition of contracts, other than the incremental costs expected to be recovered, are recordedinto the profit and loss of the current period when incurred.If the cost incurred for the performance of the contract does not fall within the scope of accountingstandards for inventories and other enterprises and meets the following conditions at the same time, theGroup will recognize it as an asset as the contract performance cost:
① The costs are directly related to a current or prospective contract and include direct labor, directmaterials, overhead (or similar), costs that are expressly borne by the customer and other costsincurred solely in connection with the contract;
② This cost increases the Group's future resources for fulfilling its performance obligations;
① The cost is expected to be recovered.
Assets with contract acquisition cost recognition and assets with contract performance cost recognition(hereinafter referred to as "assets related to contract cost") shall be amortized on the same basis asincome recognition of goods or services related to such assets and shall be recorded into current profitand loss. If the amortization period does not exceed one year, it will be recorded in the current profit andloss at the time of occurrence.When the book value of the assets related to the contract cost is higher than the difference between thefollowing two items, the Group shall make provision for impairment of the excess part and recognize itas impairment loss of the assets:
① the remaining consideration that the Group is expected to obtain as a result of the transfer of thegoods or services related to the asset;
② Estimate the costs to be incurred for the transfer of the relevant goods or services.The contract performance cost recognized as an asset shall be shown in the "Inventory" item with anamortization period of no more than one year or one normal operating cycle at the time of initialrecognition, while the amortization period exceeding one year or one normal operating cycle at the timeof initial recognition shall be shown in the item of "Other Non-current Assets".The contract acquisition cost recognized as an asset shall be shown in the item of "Other CurrentAssets" with an amortization period of less than one year or one normal operating cycle at the time ofinitial recognition, and shall be shown in the item of "Other Non-current Assets" with an amortizationperiod of more than one year or one normal operating cycle at the time of initial recognition.
26. Government grants
A government grant is recognised when there is reasonable assurance that the grant will be receivedand that the Group will comply with the conditions attaching to the grant.
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
If a government grant is in the form of a transfer of a monetary asset, it is measured at the amountreceived or receivable. If a government grant is in the form of a transfer of a non-monetary asset, it ismeasured at fair value. If fair value cannot be reliably determined, it is measured at a nominal amount ofCNY 1.Government grants related to assets are grants whose primary condition is that the Group qualifying forthem should purchase, construct or otherwise acquire long-term assets. Government grants related toincome are grants other than those related to assets.For government grants with unspecified purpose, the amount of grants used to form a long-term asset isregarded as government grants related to an asset, the remaining amount of grants is regarded asgovernment grants related to income. If it is not possible to distinguish, the amount of grants is treatedas 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 asseton a reasonable and systematic manner. A grant that compensates the Group for expenses or lossesalready incurred is recognised in profit or loss or offset against related expenses directly. A grant thatcompensates the Group for expenses or losses to be incurred in the future is recognised as deferredincome, and included in profit or loss or offset against related expenses in the periods in which theexpenses or losses are recognised. The Group applies a consistent approach to same or similargovernment grant transactions.A grant related to ordinary activities is recognised as other income or offset against related expensesbased 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 thegrant was initially recognized as offset against the carrying amount of the related asset. If there isbalance of relevant deferred income, it is offset against the carrying amount of relevant deferred income.Any excess of the reversal to the carrying amount of deferred income is recognised in profit or loss forthe current period. For other circumstances, reversal is directly recognized in profit or loss for thecurrent period.
27. Deferred tax assets and Deferred tax liabilities
Income tax comprises of current tax and deferred tax. Current tax and deferred tax are recognised inprofit or loss except to the extent that they relate to transactions or items recognised directly in equityand goodwill arising from a business combination.Deferred tax assets and deferred tax liabilities arise from deductible and taxable temporary differencesrespectively, being the differences between the carrying amounts of assets and liabilities for financialreporting purposes and their tax bases.All the taxable temporary differences are recognized as deferred tax liabilities except for those incurredin the following transactions:
(1) initial recognition of goodwill, or assets or liabilities in a transaction that is not a businesscombination and that affects neither accounting profit nor taxable profit (or deductible loss);
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
(2) taxable temporary differences associated with investments in subsidiaries, associates and jointventures, and the Group is able to control the timing of the reversal of the temporary difference and it isprobable that the temporary difference will not reverse in the foreseeable future.The Group recognises a deferred tax asset for deductible temporary differences, deductible losses andtax credits carried forward to subsequent periods, to the extent that it is probable that future taxableprofits will be available against which deductible temporary differences, deductible losses and taxcredits 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 nortaxable profit (or deductible loss);
(2) deductible temporary differences associated with investments in subsidiaries, associates and jointventures, the corresponding deferred tax asset is recognized when both of the following conditions aresatisfied: it is probable that the temporary difference will reverse in the foreseeable future; and it isprobable that taxable profits will be available in the future against which the temporary difference can beutilized.At the balance sheet date, deferred tax is measured based on the tax consequences that would followfrom 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 theasset 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 tothe extent that it is no longer probable that the related tax benefits will be utilised. Such reduction isreversed to the extent that it becomes probable that sufficient taxable profits will be available.
28. Leases
(1) Identification of leases
On the commencement date of the contract, the Group, as lessee or lessor, assesses whether thecustomer under the contract is entitled to receive almost all the economic benefits arising from the useof the identified assets during the use period and to direct the use of the identified assets during the useperiod.The Group considers the contract to be a lease or an inclusive lease if one of the parties to thecontract relinquishes control over the use of one or more identified assets for a certain period of time inexchange for consideration.
(2) The Group acts as the lessee
On the commencement date of the lease, the Group recognizes the right-of-use assets and leaseliabilities for all leases, except for simplified short-term leases and leases of low value assets.For the accounting policy of the Right-of-use assets, see Note III.29.Lease liabilities are initially measured at the present value of the outstanding lease payments at thecommencement date of the lease at the embedded interest rate on the lease. The rental paymentamount includes: fixed payment amount and substantial fixed payment amount. If there is leaseincentive amount, the relevant amount of lease incentive amount will be deducted. Variable leasepayments depending on an index or ratio; The exercise price of the Option provided that the Lessee isreasonably certain that the Option will be exercised; The amount to be paid to exercise the option toterminate the lease if the lease term reflects that the lessee will exercise the option to terminate the
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
lease; And the amount expected to be payable based on the residual value of the security provided bythe Lessee. The interest expense of the lease liability in each period of the lease term shall becalculated in accordance with the fixed periodic interest rate and recorded into the profit and loss of thecurrent period. The variable lease payment not included in the measurement of lease liabilities shall berecorded into the current profit and loss when actually incurred.Short term leaseShort-term tenancy is a tenancy for a period of not more than 12 months at the commencement date ofthe tenancy, except for tenancies that include a purchase option.The Group will record the lease payment amount of short-term lease into the cost of relevant assets orcurrent profit and loss in each period of the lease term according to the straight-line method [or othersystemically reasonable method].For short-term lease, the Group chooses to adopt the above simplified treatment method for the itemsthat meet the short-term lease conditions in the following asset types according to the categories ofleased assets.Low value asset leasingLeasing of low-value assets refers to the leasing of a single leased asset whose value is less than CNY40,000.00 when it is a brand-new asset.The Group will include the lease payment of the low-value asset lease into the cost of the relevant assetor current profit and loss in each period of the lease term according to the straight-line method.For low-value asset leases, the Group chooses to adopt the above simplified treatment methodaccording to the specific situation of each lease.Change of LeaseIf the lease is changed and the following conditions are met at the same time, the group accounts forthe change as a separate lease: 1 the change extends the scope of the lease by adding the right to useone or more leased assets; 2 the increased consideration is equivalent to the amount of the individualprice of the extended portion of the lease, adjusted in accordance with the circumstances of the contract.If the lease change is not accounted for as a separate lease, on the effective date of the lease change,the company redistributes the consideration of the contract after the change and redetermines the leaseterm, the lease liability is recalculated at the present value of the changed lease payment and therevised discount rate.If the lease scope is reduced or the lease period is shortened as a result of the lease change, thecompany shall adjust the book value of the right-to-use assets accordingly, and record the relevantgains or losses related to the partial or complete termination of the lease in the current profit and loss.If other lease changes result in lease liabilities being re-measured, the company shall adjust the bookvalue of the right-to-use assets accordingly.
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
(3) The Group acts as the lessor
When the Group acts as the lessor, the leases that substantially transfer all the risks and rewardsrelated to the ownership of the assets are recognized as financial leases, and other leases other thanfinancial leases are recognized as operating leases.Finance leaseIn the case of financial leasing, the Group takes the net lease investment as the book value of thereceivable finance lease funds at the beginning of the lease period, and the net lease investment is thesum of the unguaranteed residual value and the present value of the unreceived lease income at thebeginning of the lease period discounted at the embodied interest rate.The Group, as the lessor,calculates and recognizes interest income for each period of the lease term at a fixed periodic rate.Thevariable lease payment obtained by the Group as the lessor and not included in the measurement of thenet lease investment shall be recorded into the current profit and loss when actually incurred.The termination recognition and impairment of financial lease receivable shall be accounted for inaccordance with the provisions of the Accounting Standards for Business Enterprises No. 22 -Recognition and Measurement of Financial Instruments and the Accounting Standards for BusinessEnterprises No. 23 - Transfer of Financial Assets.Operating leaseFor the rent in the operating lease, the Group shall recognize the profits and losses of the current periodin accordance with the straight-line method during each period of the lease term. The initial directexpenses incurred in connection with the operating lease shall be capitalized, allocated on the samebasis as the recognition of rental income during the lease term and recorded into the current profit andloss in installments. The variable lease payments obtained in connection with the operating lease andnot included in the lease receipts shall be recorded into the current profit and loss when actuallyincurred.Change of LeaseIf there is a change in the operating lease, the group shall, as of the effective date of the change, treat itas a new lease, the amount received in advance or in respect of the lease receivable relating to thelease prior to the change shall be deemed to be the amount received for the new lease.If the financial lease is changed and the following conditions are met at the same time, the groupaccounts for the change as a separate lease: 1 the change extends the scope of the lease by addingthe right to use one or more leased assets; 2 the increased consideration is equivalent to the amount ofthe individual price of the extended portion of the lease, adjusted in accordance with the circumstancesof the contract.Where a change in a financial lease is not accounted for as a separate lease, the group shall treat thechanged lease as follows: 1 if the change becomes effective on the lease commencement date, if thelease will be classified as an operating lease, the group will treat it as a new lease from the effectivedate of the lease change, the book value of the leased asset shall be the net investment in the leaseprior to the effective date of the lease change. 2 if the change takes effect on the effective date of thelease, the lease will be classified as a financial lease, the accounting treatment of the group is inaccordance with the provisions of the "Accounting Standards for enterprises No. 22-recognition andmeasurement of financial instruments" concerning modification or renegotiation of contracts.
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
29. Right-of-use assets
(1) Conditions for the confirmation of the right-of-use assets
The Group's right-of-use assets refer to the Group's right to use the leased assets during the lease termas the lessee.On the beginning date of the lease period, the right-of-use assets shall be initially measured at cost. Thecost includes: the initial measurement amount of the lease liability; For the amount of lease paymentpaid on or before the commencement date of the lease term, if there is a lease incentive, the relevantamount of lease incentive already enjoyed will be deducted; Initial direct expenses incurred by theGroup as the lessee; The costs which the Group, as the Lessee, expects to incur in dismantling andremoving the Leased Assets, restoring the premises on which the Leased Assets are located orrestoring the Leased Assets to the state agreed in the Lease Terms. The Group, as the lessee, shallconfirm and measure the costs of demolition and restoration in accordance with the AccountingStandards for Business Enterprises No. 13 - Contingencies. Subsequent adjustments are made for anyremeasurement of lease liabilities.
(2) Depreciation method of the right-of-use assets
The Group uses the straight line method of depreciation. Where the Group, as the lessee, canreasonably determine that it obtains the ownership of the leased assets upon expiration of the leaseterm, depreciation shall be accrued over the remaining service life of the leased assets. Where it isimpossible to reasonably determine that the ownership of the leased asset can be acquired at theexpiration of the lease term, depreciation shall be accrued in the shorter period between the lease termand the remaining useful life of the leased asset.
(3) See Note III.20 for the impairment test method of the right-of-use assets and the provision forimpairment.
30. Maintenance Fund
When the Group collects the maintenance fund from the owners according to a certain proportion of thesales amount of commercial houses, it shall be included in other payables for accounting; When thecollected maintenance funds are handed over to the land and housing administrative departments inaccordance with the regulations, the maintenance funds collected on behalf of them shall be reduced.
31. Quality Deposit
The Group shall keep the quality deposit in proportion to the payment period stipulated in the contract ofcivil engineering and installation engineering, and deduct it from the civil engineering and installationItem payment, which shall be classified as other payables. The maintenance expenses incurred due toquality during the warranty period shall be directly charged under this item and liquidated after thewarranty period.
32. Accounting judgments and estimates
The Group conducts an ongoing evaluation of the significant accounting estimates and key assumptionsused in the light of historical experience and other factors, including reasonable expectations of futureevents. Important accounting estimates and key assumptions that are likely to result in the risk of amaterial adjustment in the carrying value of assets and liabilities during the next fiscal year are set outbelow:
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
Classification of financial assetsThe Group's major judgments in determining the classification of financial assets include the analysis ofbusiness models and contractual cash flow characteristics.The Group determines the business model for the management of financial assets at the level of itsfinancial portfolio, taking into account factors such as the way in which the performance of financialassets is evaluated and reported to key managers, the risks affecting the performance of financialassets and their management methods, and the way in which managers of related businesses areremunerated.When evaluating whether the contractual cash flow of financial assets is consistent with the basiclending arrangement, the Group has the following main judgments: whether the time distribution oramount of the principal in the duration period may change due to reasons such as prepayment; Doesinterest include only the time value of money, credit risk, other fundamental borrowing risks, andconsideration for costs and profits? For example, does the prepayment amount only reflect theoutstanding principal and interest based on the outstanding principal and reasonable compensation forearly termination of the contract.Measurement of expected credit losses in accounts receivableThe Group calculates the expected credit loss of accounts receivable through the default risk exposureof accounts receivable and the expected credit loss rate, and determines the expected credit loss ratebased on the default probability and the default loss rate. In determining the expected credit loss rate,the Group uses data such as internal historical credit loss experience, and adjusts the historical data incombination with the current situation and forward-looking information. When considering forward-looking information, the indicators used by the Group include the risk of an economic downturn,changes in the external market environment, the technological environment and customer conditions.The Group regularly monitors and reviews assumptions relating to the calculation of expected creditlosses.Deferred tax assetsDeferred tax assets should be recognized for all unutilized tax losses to the extent that there is likely tobe sufficient taxable profit to offset the loss. This requires management to use a great deal of judgmentto estimate when and how much future taxable profits will occur, in combination with tax planningstrategies, to determine the amount of deferred tax assets that should be recognized.The provision of land appreciation taxThe Group is subject to land appreciation tax(―LAT‖). The accrual of LAT is subject to management‘sestimation which is made based on its understanding of the requirements of relevant tax laws andregulations. However, the actual LAT is levied by tax authorities according to the interpretation of the taxrules. The group is not stepping on formulating the final tax plan with relevant tax authorities, hence thefinal tax outcome could be different from the amount that was initially recorded, and these differenceswill have an impact on tax provision in current period.Determination of fair value of unlisted equity investmentsThe fair value of an unlisted equity investment is the estimated future cash flows discounted at thecurrent discount rate for Items with similar terms and risk characteristics. This valuation requires theGroup to estimate expected future cash flows and the discount rate and is therefore subject to
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
uncertainty. In limited circumstances, if the information used to determine the fair value is insufficient, orif the possible estimates of the fair value are spread over a wide range and the cost represents the bestestimate of the fair value within that range, the cost may represent the appropriate estimate of the fairvalue within that range.
33. Changes in significant accounting policies and accounting estimates
(1) Significant changes in accounting policies
① Interpretation of Accounting Standards for Business Enterprises No. 15
The Ministry of Finance issued the Interpretation of Accounting Standards for Business Enterprises No.15 (Finance and Accounting [2021] No. 35) (hereinafter referred to as "Interpretation No. 15") inDecember 2021.According to Interpretation No. 15, if an enterprise sells its fixed assets to the outside world (hereinafterreferred to as trial operation sales) before the fixed assets reach the scheduled usable state or theproducts or by-products produced in the course of research and development, in accordance with theprovisions of accounting standards for Enterprises No. 14-income and Accounting Standards forenterprises No. 1-inventory, the revenue and costs related to the trial sales shall be accounted forseparately, after accounting for the current profit and loss, the net amount of the revenue related to thetrial run sales after offsetting the relevant costs shall not be offset against the cost of fixed assets or R &D expenses. The relevant products or by-products of the trial operation output shall be recognized asinventory if they comply with the provisions of the accounting standards for enterprises No. 1-inventorybefore they are sold abroad, the relevant assets shall be recognized as those that meet therequirements for the recognition of the relevant assets in other relevant enterprise accounting standards.
② Interpretation of Accounting Standards for Business Enterprises No. 16
The Ministry of Finance issued the Interpretation of Accounting Standards for Business Enterprises No.16 (Finance and Accounting [2022] No. 31) (hereinafter referred to as "Interpretation No. 16") inNovember 2022.According to Interpretation No. 16, for financial instruments such as perpetual debt classified as equityinstruments, an enterprise shall recognize the income tax effects related to dividends when recognizingdividends payable. The income tax effect of the dividend shall be included in the profit and loss of thecurrent period for the distribution of profits derived from previous transactions or events that generateprofits and losses; The income tax effect of a dividend derived from a transaction or event previouslyrecognized in an owner's equity shall be included in the owner's equity item.The Group's financial instruments classified as equity instruments recognized dividends payable in thecurrent year, involving income tax effects in accordance with the above-mentioned Interpretation No. 16accounting treatment, retroactive adjustment of income tax effects in respect of financial instrumentsthat occurred prior to 1 January 2022 and that had not been terminated on 1 January 2022.Interpretation No. 16 stipulates that if an enterprise modifies the terms and conditions in the agreementon share payment settled in cash to make it pay in shares settled in equity, on the date of revision, anenterprise shall, in accordance with the fair value of the equity instrument granted on the date of itsaward, account for the acquired services as part of the capital reserve, at the same time, shares that arerecognized for cash settlement are terminated for payment of liabilities recognized at the date of
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
modification, and the difference between the two is included in the current profit and loss. If the waitingperiod is extended or shortened due to the modification, the enterprise shall carry out the above-mentioned accounting treatment according to the modified waiting period (without considering therelevant accounting treatment provisions of the adverse modification) .The cash-settled share payments in the current year of the Group shall be changed to equity-settledshare payments, and shall be handled in accordance with the above-mentioned Interpretation no. 16,for transactions of this type that occurred prior to 1 January 2022, retained earnings and other relatedfinancial statement items as at 1 January 2022 are not adjusted for information for comparable periods.The adoption of Interpretation no. 16 has not had a significant impact on the company's financialposition and operating results.
(2) Changes in significant accounting estimates
During reporting period, there is no changes in significant accounting estimate.IV. Taxation
1. Main types of taxes and corresponding tax rates
| Tax Type | Tax Basis | Tax Rate% |
| VAT | Taxable income | 9/6/5/3 |
| Land appreciation tax | It shall be levied on the basis of the added value of the real estate transferred | Four progressive rates of excess rate: 30,40,50, 60 |
| Property tax | 70% of the original value of properties | 1.2 |
| City maintenance and construction tax | Turnover tax payable | 7 |
| Education surcharge | Turnover tax payable | 3 |
| Local education surcharge | Turnover tax payable | 2 |
| Corporate income tax | Taxable profits | 25/ 16.5 |
Explanation for the VAT rate of different business activities:
With regards to revenue from property development, property management and construction activities,
from May 1
st
, 2016, the group‘s taxable items and tax rates are shown in the following table, which in
accordance with the relevant regulations of《Notice on Comprehensively Promoting the Trial of
Replacing Business Tax with Value-Added Tax》(No. 36 of CaiKuai [2016]):
| Taxable income | Means to calculate Tax | Tax Rate% |
| Revenue from property sales | Simplified Tax Method | 5 |
| Revenue from construction | Simplified Tax Method | 9/ 3 |
| Rental income | Simplified Tax Method | 5 |
| Revenue from property management | General Tax Method | 6 |
Explanation of corporate income tax rates for different taxpayers:
The corporate income tax rate for companies registered in mainland China is 25%, while the corporate
profits tax rate for companies registered in Hong Kong is 16.5%.
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
2. Tax preferential treatments and approval documents
Subsidiaries of the Group, Shenzhen Huazhan Construction Supervision Co., Ltd. and Shantou SpecialEconomic Zone Xiangshan Real Estate Development Co., Ltd. are applicable to the preferential tax rateof 20% for small and low-profit enterprises.V. Notes to the consolidated financial statements
1. Cash at bank and Cash Equivalent
| Item | 2022.12.31 | 2021.12.31 |
| Cash in hand | 4,549.61 | 12,082.00 |
| Deposits with banks | 163,083,275.13 | 316,834,778.45 |
| Other monetary funds | 34,576,125.00 | 247,511,964.18 |
| Total | 197,663,949.74 | 564,358,824.63 |
| Including: Total overseas deposits | 5,840,173.03 | 5,970,125.18 |
At the end of year 2022, there were CNY 7,298,880.26 of restricted funds in the bank deposits, of whichCNY 48,315.48 were the funds frozen by the lawsuit and CNY 5,674,439.78 were the funds for theconstruction of public facilities in and around the city of Longgang district.At the end of year 2022, the balance of other monetary funds of CNY 34,576,125.00 is seven-day noticedeposit, including principal of CNY 33,000,000.00 and interest of CNY 1,576,125.00.
2. Trading financial assets
| Item | 2022.12.31 | 2021.12.31 |
| Financial Fund | 408,154,361.42 | 514,024,710.91 |
3. Notes receivable
| Types of notes | 2022.12.31 | 2021.12.31 | ||||
| Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | |
| Banker acceptance notes | -- | -- | -- | -- | -- | -- |
| Commercial acceptance notes | 1,617,000.00 | 80,850.00 | 1,536,150.00 | 6,394,766.22 | 2,864,228.85 | 3,530,537.37 |
| Total | 1,617,000.00 | 80,850.00 | 1,536,150.00 | 6,394,766.22 | 2,864,228.85 | 3,530,537.37 |
Note:
(1) There is no notes receivable pledged by the Group at the end of the period
(2) Outstanding endorsed or discounted notes that have not matured at the end of the year
| Types | Derecognized Amount at the end of the period | Amount that is not derecognized at the end of the period |
| Banker acceptance notes | -- | -- |
| Commercial acceptance notes | -- | 1,617,000.00 |
| Total | -- | 1,617,000.00 |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
(3) Notes receivable transferred to accounts receivable by the Group due to the drawer's non-performance at the end of the period
| Types | Amount transferred to accounts receivable at the end of the period |
| Commercial acceptance notes | 11,789,376.23 |
(4) Classified by bad debt provision method
Types
2022.12.31Book balance Bad debt provisionAmount
Percentage
Amount
Expected credit
Book balance
an individual basisa combination basis
notes
Continued:
| 2021.12.31 | |||||
| Types | Book balance | Bad debt provision | Book balance | ||
| Amount | Percentage (%) | Amount | Expected credit loss rate (%) | ||
| an individual basis | 4,626,346.44 | 72.35 | 2,775,807.86 | 60.00 | 1,850,538.58 |
| Bad debt provisions made on a combination basis | 1,768,419.78 | 27.65 | 88,420.99 | 5.00 | 1,679,998.79 |
| Including: | |||||
| Banker acceptance notes | -- | -- | -- | -- | -- |
| Commercial acceptance notes | 1,768,419.78 | 27.65 | 88,420.99 | 5.00 | 1,679,998.79 |
| 合 计 | 6,394,766.22 | 100.00 | 2,864,228.85 | 44.79 | 3,530,537.37 |
Note：
Bad debt provision made on an individual basis：
2022.12.31Item
Book balance
Bad debtprovision
Expected credit
loss rate (%)
ReasonShenzhen Hongteng InvestmentManagement Co., Ltd.
-- -- --
| (%) | loss rate (%) | |||
| Bad debt provisions made on -- | -- | -- | -- | -- |
| Bad debt provisions made on 1,617,000.00 | 100.00 | 80,850.00 | 5.00 | 1,536,150.00 |
| Including Banker acceptance notes 1,617,000.00 | 100.00 | 80,850.00 | 5.00 | 1,536,150.00 |
| Commercial acceptance -- | -- | -- | -- | -- |
| Total 1,617,000.00 | 100.00 | 80,850.00 | 5.00 | 1,536,150.00 |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
provision
Continued:
Item
Shenzhen Hongteng
Book balance
Bad debt
2021.12.31Expected creditloss rate (%)
Reason
Low recoverability isInvestment ManagementCo., Ltd.
4,626,346.44 2,775,807.86 60.00
expected
Bad debt provision made on a combination basis:
Combined withdrawal item: commercial acceptance notes
| 2022.12.31 | 2021.12.31 | |||||
| Item | Notes receivable | Bad debt provision | Expected credit loss rate (%) | Notes receivable | Bad debt provision | Expected credit loss rate (%) |
| Within one year | 1,617,000.00 | 80,850.00 | 5.00 | 1,768,419.78 | 88,420.99 | 5.00 |
(5) Additions, recoveries or reversals of provision for the current period
| Bad debt provision | |
| 2021.12.31 | 2,864,228.85 |
| Additions | -- |
| Recoveries or reversals | 2,783,378.85 |
| Written-off | -- |
| 2022.12.31 | 80,850.00 |
4. Accounts receivable
(1) Disclosure by Aging
| Aging | 2022.12.31 | 2021.12.31 |
| Within 1 year | 64,697,535.13 | 67,970,511.50 |
| 1 to 2 year | 8,701,822.68 | 290,567.01 |
| 2 to 3 years | 290,567.01 | -- |
| More than 3 years | 23,918,937.08 | 23,975,620.75 |
| Subtotal | 97,608,861.90 | 92,236,699.26 |
| Less: Bad Debt Provision | 34,028,439.74 | 31,187,914.15 |
| Total | 63,580,422.16 | 61,048,785.11 |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
(2) Classified by bad debt provision method
Types
2022.12.31Book balance Bad debt provisionAmount
Percentage
Amount
Expected credit
Book value
an individual basisa combination basis
corporate customers
Continued:
Types
2021.12.31Book balance Bad debt provisionAmount
Percentage
Amount
Expected credit
Book value
an individual basisa combination basis
sales s
corporate customers s
Bad debt provision made on an individual basis:
| 2022.12.31 | ||||
| Item | Book balance | Bad debt provision | Expected credit loss rate (%) | Reason |
| Agent for import and export business payment | 11,574,556.00 | 11,574,556.00 | 100.00 | Could be uncollectible |
| Long-term receivable of property sale | 10,020,587.91 | 10,020,587.91 | 100.00 | Could be uncollectible |
| Shenzhen Hongteng Investment Management Co., Ltd. | 11,789,376.23 | 7,073,625.74 | 60.00 | recoverability is relatively small |
| Receivable from revoked subsidiaries | 2,328,158.40 | 2,328,158.40 | 100.00 | Could be uncollectible |
| Receivable from other customers | 1,009,962.19 | 1,009,962.19 | 100.00 | Could be uncollectible |
| Total | 36,722,640.73 | 32,006,890.24 | 87.16 | |
| (%) | loss rate (%) | |||
| Bad debt provisions made on 36,722,640.73 | 37.62 | 32,006,890.24 | 87.16 | 4,715,750.49 |
| Bad debt provisions made on 60,886,221.17 | 62.38 | 2,021,549.50 | 3.32 | 58,864,671.67 |
| Including: -- | -- | -- | -- | -- |
| Receivable from property sales | ||||
| Receivable from other 60,886,221.17 | 62.38 | 2,021,549.50 | 3.32 | 58,864,671,67 |
| Total 97,608,861.90 | 100.00 | 34,028,439.74 | 34.86 | 63,580,422.16 |
| (%) | loss rate (%) | |||
| Bad debt provisions made on 32,550,436.93 | 35.29 | 29,212,403.37 | 89.75 | 3,338,033.56 |
| Bad debt provisions made on 59,686,262.33 | 64.71 | 1,975,510.78 | 3.31 | 57,710,751.55 |
| Including: -- | -- | -- | -- | -- |
| Receivable from property 1,064,220.18 | 1.15 | 53,211.01 | 5.00 | 1,011,009.17 |
| Receivable from other 58,622,042.15 | 63.56 | 1,922,299.77 | 3.28 | 56,699,742.38 |
| Total 92,236,699.26 | 100.00 | 31,187,914.15 | 33.81 | 61,048,785.11 |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
Continued:
| 2021.12.31 | ||||
| Item | Book balance | Bad debt provision | Expected credit loss rate (%) | Reason |
| Agent for import and export business payment | 11,574,556.00 | 11,574,556.00 | 100.00 | Could be uncollectible |
| Long-term receivable of property sale | 9,649,415.20 | 9,649,415.20 | 100.00 | Could be uncollectible |
| Shenzhen Hongteng Investment Management Co., Ltd. | 8,345,083.91 | 5,007,050.35 | 60.00 | Low recyclability |
| Receivable from revoked subsidiaries | 2,328,158.40 | 2,328,158.40 | 100.00 | Could be uncollectible |
| Other customer payments | 653,223.42 | 653,223.42 | 100.00 | Could be uncollectible |
| Total | 32,550,436.93 | 29,212,403.37 | 89.75 | |
Bad debt provision made on a combination basis:
Combined withdrawal item: property sales receivable
| 2022.12.31 | 2021.12.31 | |||||
| re | Accounts ceivable | Bad debt provision | Expected credit loss rate (%) | Accounts receivable | Bad debt provision | Expected credit loss rate (%) |
| Within 1 year | -- | -- | -- | 1,064,220.18 | 53,211.01 | 5.00 |
Combined withdrawal item: other customers receivables
| 2022.12.31 | 2021.12.31 | |||||
| Accounts receivable | Bad debt provision | Expected credit loss rate (%) | Accounts receivable | Bad debt provision | Expected credit loss rate (%) | |
| Within 1 year | 60,886,221.17 | 2,021,549.50 | 3.32 | 58,622,042.15 | 1,922,299.77 | 3.28 |
(3) Additions, recoveries or reversals of provision for the current period
| Bad debt provision | |
| 2021.12.31 | 31,187,914.15 |
| Additions | 3,434,265.84 |
| Recoveries or reversals | -- |
| Written-off | -- |
| Adjustment to asset held for sale | 593,740.25 |
| 2022.12.31 | 34,028,439.74 |
(4) The top five units with the ending balance of accounts receivable collected by the debtor
| Name of the entity | Accounts receivable The ending balance | % of the total closing balance of accounts receivable | Bad debt provision The ending balance |
| Wuhan Yutian Xingye Land Co., LTD | 18,325,336.29 | 18.77 | 549,760.09 |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
| Name of the entity | Accounts receivable The ending balance | % of the total closing balance of accounts receivable | Bad debt provision The ending balance | |
| Wuhan 249 Poly Real Estate Development Co., Ltd. | 13,125,855.00 | 13.45 | 393,775.65 | |
| Shenzhen Hongteng Investment Management Co., Ltd. | 11,789,376.23 | 12.08 | 7,073,625.74 | |
| Wuhan Linhong Real Estate Co., Ltd. | 8,106,562.33 | 8.31 | 243,196.87 | |
| Shenzhen Huatang Famous Wine City Investment Co., Ltd. | 2,963,112.00 | 3.04 | 148,155.60 | |
| Total | 54,310,241.85 | 55.65 | 8,408,513.95 |
At the end of the period, due to the factoring of accounts receivable, the factoring amount is CNY51,138,077.62. At the same time, the book value of accounts receivable is CNY 51,138,077.62 was notderecognized. For pledge of accounts receivable, please refer to Note V.51.
5. Prepayments
(1) The aging analysis of prepayments is as follows:
| Aging | 2022.12.31 | 2021.12.31 | ||
| Amount | % | Amount | % | |
| Within 1 year | 626,155.65 | 53.81 | 4,698,254.37 | 95.90 |
| 1 to 2 years | 336,699.64 | 28.94 | 206.95 | 0.00 |
| 2 to 3 years | 206.95 | 0.02 | -- | -- |
| More than 3 years | 200,550.00 | 17.24 | 200,550.00 | 4.10 |
| Total | 1,163,612.24 | 100.00 | 4,899,011.32 | 100.00 |
(2) The top five units of the ending balance of prepayments
The sum of the top five prepayments collected by prepaid objects at the end of the period is CNY1,091,841.23, which accounts for 93.83 % of the total ending balance of prepayments.
6. Other receivables
| Item | 2022.12.31 | 2021.12.31 |
| Interest receivable | -- | -- |
| Dividends receivable | -- | 1,052,192.76 |
| Other receivables | 42,105,050.33 | 29,561,815.32 |
| Total | 42,105,050.33 | 30,614,008.08 |
(1) Dividends receivable
| Items | 2022.12.31 | 2021.12.31 |
| Yunnan Kunpeng Air Service Co., LTD | -- | 1,052,192.76 |
| Less: Bad Debt Provision | -- | -- |
| Total | -- | 1,052,192.76 |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
(2) Other receivable
① Disclosure by aging
| Aging | 2022.12.31 | 2021.12.31 |
| Within 1 year | 48,019,676.18 | 29,436,729.02 |
| 1 to 2 years | 1,185,433.74 | 905,350.96 |
| 2 to 3 years | 18,023.00 | 106,096.34 |
| More than 3 years | 188,112,549.84 | 188,306,797.86 |
| Subtotal | 237,335,682.76 | 218,754,974.18 |
| Less: Bad Debt Provision | 195,230,632.43 | 189,193,158.86 |
| Total | 42,105,050.33 | 29,561,815.32 |
② Disclosure by nature
| 2022.12.31 | 2021.12.31 | |||||
| Item | Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value |
| Other receivables from employee‘s petty cash | 147,810.19 | -- | 147,810.19 | 580,911.83 | -- | 580,911.83 |
| Other receivables from the collecting and paying on behalf | 689,317.63 | -- | 689,317.63 | 627,681.27 | -- | 627,681.27 |
| Other receivables from other customers | 80,028,366.45 | 38,760,443.94 | 41,267,922.51 | 48,840,482.91 | 20,487,260.69 | 28,353,222.22 |
| Other receivables from related parties | 156,470,188.49 | 156,470,188.49 | - | 168,705,898.17 | 168,705,898.17 | -- |
| Total | 237,335,682.76 | 195,230,632.43 | 42,105,050.33 | 218,754,974.18 | 189,193,158.86 | 29,561,815.32 |
③ Bad Debt Provision
At the end of the period, bad debt provision at the first stage:
| Types | Book balance | Expected credit loss rate over the entire duration (%) | Bad debt provision | Book value | Reason |
| Bad debt provisions made on an individual basis | -- | -- | -- | -- | |
| Bad debt provisions made on a combination basis |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
| Types | Book balance | Expected credit loss rate over the entire duration (%) | Bad debt provision | Book value | Reason | |
| employee‘s petty cash | 147,810.19 | -- | -- | 147,810.19 | ||
| behalf | 384,124.22 | -- | -- | 384,124.22 | ||
| Other receivables from other customers | 43,097,874.84 | 3.54 | 1,524,758.92 | 41,573,115.92 | ||
| Total | 43,629,809.25 | 3.50 | 1,524,758.92 | 42,105,050.33 |
At the end of the period, the Company does not have interest receivable, dividends receivable and otherreceivables at the second stageAt the end of the period, bad debt provisions at the third stage:
| Types | Book balance | Expected credit loss rate over the entire duration (%) | Bad debt provision | Book value | Reason |
| Bad debt provisions made on an individual basis | |||||
| Other receivable from other revoked subsidiary | 19,579,543.90 | 100.00 | 19,579,543.90 | -- | Could be uncollectible |
| Other receivable from other surviving subsidiary | Could be uncollectible | ||||
| Including : Other receivables from related parties | 155,601,920.01 | 100.00 | 155,601,920.01 | -- | Could be uncollectible |
| Other receivables from unrelated parties | 18,524,409.60 | 100.00 | 18,524,409.60 | -- | Could be uncollectible |
| Total | 193,705,873.51 | 100.00 | 193,705,873.51 | -- | Could be uncollectible |
As at December 31, 2021, bad debt provision at the first stage:
| Types | Book balance | Expected credit loss rate over the next 12 months (%) | Bad debt provision | Book value | Reason |
| on a individual basis | -- | -- | -- | -- | |
| Bad debt provisions is drawn on a combination basis | 31,053,532.26 | 4.80 | 1,491,716.94 | 29,561,815.32 | |
| Other receivables from employee‘s petty cash | 580,911.83 | -- | -- | 580,911.83 | |
| Other receivables from the collecting and paying on behalf | 627,681.27 | -- | -- | 627,681.27 | |
| Other receivables from other customers | 29,844,939.16 | 5.00 | 1,491,716.94 | 28,353,222.22 | |
| Total | 31,053,532.26 | 4.80 | 1,491,716.94 | 29,561,815.32 |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
As of December 31, 2021, the Company does not have interest receivable, dividends receivable andother receivables at the second stage.As of December 31, 2021, bad debt provisions at the third stage:
| Types | Book balance | Expected credit loss rate over the next 12 months (%) | Bad debt provision | Book value | Reason |
| Bad debt provisions shall be made on an individual basis | 187,701,441.92 | 100.00 | 187,701,441.92 | -- | |
| Other receivable from other revoked subsidiary | 3,838,281.67 | 100.00 | 3,838,281.67 | -- | Could be uncollectible |
| Other receivable from other surviving subsidiary | 183,863,160.25 | 100.00 | 183,863,160.25 | -- | Could be uncollectible |
| Including :Other receivables from related parties | 168,705,898.17 | 100.00 | 168,705,898.17 | -- | Could be uncollectible |
| Total | 187,701,441.92 | 100.00 | 187,701,441.92 | -- |
④ Bad debt provisions in the current period
| The first stage | The second stage | The third stage | ||
| Bad debt provision | Expected credit losses over the next 12 months | Expected credit losses over the entire duration (no credit impairment occurred) | Expected credit loss over the entire duration (credit impairment has occurred) | Total |
| Balance as at December 31, 2021 | 1,491,716.94 | -- | 187,701,441.92 | 189,193,158.86 |
| The balance as at December 31, 2021 is in the current period | -- | -- | -- | -- |
| -- Turn to the second stage | -- | -- | -- | -- |
| -- Transfer to the third stage | -- | -- | -- | -- |
| -- Go back to the second stage | -- | -- | -- | -- |
| -- Go back to the first stage | -- | -- | -- | -- |
| Current period | 233,494.96 | 5,631,855.39 | 5,865,350.35 | |
| Return the current | -- | -- | -- | -- |
| The current reseller, | -- | -- | -- | -- |
| This verification | -- | -- | -- | -- |
| Other changes | 200,452.98 | -- | -372,576.20 | -172,123.22 |
| Balance as of December 31, 2022 | 1,524,758.92 | -- | 193,705,873.51 | 195,230,632.43 |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
⑤ The top five units of ending balance of other receivables
| Name of the entity | Nature of other receivables | of other receivables | Aging | receivables (%) | provision |
| Canada Great Wall (Vancouver) Co., Ltd | Other receivables from related parties | 89,035,748.07 | More than 5 years | 37.52 | 89,035,748.07 |
| Paklid Limited | Other receivables from related parties | 18,870,785.54 | More than 5 years | 7.95 | 18,870,785.54 |
| Australia Bekaton property Limited | Other receivables from related parties | 12,559,290.58 | More than 5 years | 5.29 | 12,559,290.58 |
| Guangdong province Huizhou Luofu Hill Mineral Water Co.,Ltd | Other receivables from related parties | 10,465,168.81 | More than 5 years | 4.41 | 10,465,168.81 |
| Xi‘an Fresh Peak Property Trading Co., Ltd | Other receivables from related parties | 8,419,205.19 | More than 5 years | 3.55 | 8,419,205.19 |
| Total | -- | 139,350,198.19 | -- | 58.72 | 139,350,198.19 |
7. Inverntories
(1) Inventory classification
2022.12.31 2021.12.31
Item
Book
Provision for
pricedecline/provisi
on for
The book
Book balance
Provision
for pricedecline/prov
ision for
The book
costdevelopment
materialsInventorygoods
329,101.70 38,891.91 290,209.79 334,040.04 38,891.91 295,148.13Constructions -- -- -- 2,425,128.90 -- 2,425,128.90Subtotals 337,560.04 38,891.91 298,668.13 2,767,627.28 38,891.91 2,728,735.37Total 4,257,148,506.22 38,891.91 4,257,109,614.31 4,034,972,454.53 38,891.91 4,034,933,562.62
| balance impairment of contract performance cost | value | impairment of contract performanc e cost | value |
| Real estate development： Development 3,413,963,261.85 -- | 3,413,963,261.85 | 3,037,991,969.96 | -- 3,037,991,969.96 |
| Product 842,847,684.33 -- | 842,847,684.33 | 994,212,857.29 | -- 994,212,857.29 |
| Subtotals 4,256,810,946.18 -- Non-real estate development items: | 4,256,810,946.18 | 4,032,204,827.25 | -- 4,032,204,827.25 |
| Raw 8,458.34 -- | 8,458.34 | 8,458.34 | -- 8,458.34 |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
(2) Provision for inventories
Item 2022.01.01
Increase in current The reducedprovision Others
To turn back or
resell
Others
2022.12.31
Non-real estate development items:
RawmaterialsInventorygoods
-- -- -- -- -- --
38,891.91 532,397.57 -- -- 532,397.57 38,891.91
Total 38,891.91 532,397.57 -- -- 532,397.57 38,891.91
Provision for Decline in Inventory (continued)
| Item | Specific basis for determining net realizable/residual consideration and costs to be incurred | Current roll-back or roll-off Reasons for inventory depreciation provision |
| Development cost | The amount of estimated selling price minus the estimated costs to be incurred at completion, estimated selling expenses, and related taxes | -- |
| Product development | The amount of estimated selling price minus estimated selling expenses and related taxes | -- |
| Raw materials | The amount of estimated selling price minus the estimated costs to be incurred at completion, estimated selling expenses, and related taxes | -- |
| Inventory goods | The amount of estimated selling price minus estimated selling expenses and related taxes | -- |
| Construction | The amount of estimated selling price minus the estimated costs to be incurred at completion, estimated selling expenses, and related taxes | -- |
(3) The ending balance of inventory contains the explanation of the capitalized amount of borrowingexpenses:
As at 31st December 2022, the Group's inventory balance contains capitalized borrowing costs at CNY33,933,525.93.
(4) Development cost
| Project name | Starting time | Estimated completion time | Expected total investment | 2022.12.31 | 2021.12.31 | Ending provision |
| ShanTou Fresh Peak Building | -- | -- | -- | 28,291,908.11 | 28,291,908.11 | -- |
| Shenfang Lin Xin Garden | In 2021 | In 2023 | 300,000.00 | 2,290,805,229.96 | 2,015,750,061.85 | -- |
| Shenfang GuangmingLi | In 2022 | In 2024 | 152,060.00 | 1,094,866,123.78 | 993,950,000.00 | -- |
| Total | 452,060.00 | 3,413,963,261.85 | 3,037,991,969.96 | -- |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
(5) Product development
| The item name | ion | 2022.01.01 | current | The reduced | 2022.12.31 | End of the fall |
| Jinye Island Multi-tier villa | 1997 | 39,494,762.60 | 51,629.67 | -- | 39,546,392.27 | -- |
| Jinye Island villa No.10 | 2010 | 5,696,007.25 | -- | -- | 5,696,007.25 | -- |
| Jinye Island villa No.11 | 2008 | 2,333,281.42 | -- | -- | 2,333,281.42 | -- |
| YueJing dongfang Project | 2014 | 7,305,619.37 | -- | 829,214.61 | 6,476,404.76 | -- |
| HuangPu XinCun | -- | 140,000.00 | -- | -- | 140,000.00 | -- |
| Shenfang Shanglin Garden | 2014 | -- | -- | -- | -- | -- |
| Beijing Fresh Peak Buliding | -- | 304,557.05 | -- | -- | 304,557.05 | -- |
| TianYue Bay No.1 | 2017 | 270,542,054.67 | 2,240.00 | 44,890,771.84 | 225,653,522.83 | -- |
| Shengfang CuiLin Building | 2018 | 58,669,056.16 | -- | 13,051,618.37 | 45,617,437.79 | -- |
| Chuanqi Donghu | 2019 | 41,834,057.24 | -- | 37,544,138.07 | 4,289,919.17 | -- |
| TianYue Bay No.2 | 2021 | 567,893,461.53 | -- | 55,103,299.74 | 512,790,161.79 | -- |
| Total | 994,212,857.29 | 53,869.67 | 151,419,042.63 | 842,847,684.33 | -- |
8. Assets and liabilities held for sale
| 2022.12.31 | 2021.12.31 | |||||
| Item | Book value | Provision for impairment | Carrying amount | Book value | Provision for impairment | Carrying amount |
| 1) Non-current assets held for sale | -- | -- | -- | -- | -- | -- |
| (2) Assets included in disposal groups held for sale | -- | -- | -- | -- | -- | -- |
| Including： Shenzhen Property Management Co., Ltd. | -- | -- | -- | 78,940,232.10 | -- | 78,940,232.10 |
| Total | -- | -- | -- | 78,940,232.10 | -- | 78,940,232.10 |
| Item | 2022.12.31 | 2021.12.31 |
| Liabilities held for sale: | -- | -- |
| Liabilities included in disposal groups held for sale | -- | -- |
| Including： Shenzhen Property Management Co., Ltd. | -- | 65,752,452.06 |
| Total | -- | 65,752,452.06 |
In order to optimize and adjust the industrial structure, on 30 December, 2021, the Company and its
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
subsidiary Shenzhen Shenfang Investment Co., Ltd. and Shenzhen Guomao Property Management Co.,Ltd. signed the Equity Acquisition Agreement to transfer a total of 100% of the equity of ShenzhenProperty Management Co., Ltd. to Shenzhen Guomao Property Management Co., Ltd., with a transferprice of CNY 196.6767 million. The transfer of equity was completed in February 2022.
9. Other current assets
| Item | 2022.12.31 | 2021.12.31 |
| Income tax overpaid or prepaid | 1,692,386.28 | 3,205,104.33 |
| VAT prepaid | 1,620,352.66 | 7,643,969.22 |
| Contract acquisition cost | 1,212,848.49 | -- |
| Input tax to be deducted | 29,247,467.16 | 53,061,826.30 |
| Land appreciation tax | 1,813,337.72 | 2,481,541.71 |
| Business Tax | 250,719.98 | 259,308.30 |
| Other | 941,529.13 | 1,565,137.18 |
| Total | 36,778,641.42 | 68,216,887.04 |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
10. Long-term equity investments
| Movements during the year | |||||||||||
| Investee | 2020.12.31 | Increase in capital | Decrease in capital | Investment income recognised under equity method | ther comprehensive incom | Other equity movements | Declared distribution of cash dividends or profits | Provision for impairment | Other | 2022.12.31 | Balance of provision for impairment as at 2022.12.31 |
| ① Joint ventures | |||||||||||
| Guangdong province Huizhou Luofu Hill Mineral Water Co., Ltd | 9,969,206.09 | -- | -- | -- | -- | -- | -- | -- | -- | 9,969,206.09 | 9,969,206.09 |
| Fengkai Xinhua Hotel | 9,455,465.38 | -- | -- | -- | -- | -- | -- | -- | -- | 9,455,465.38 | 9,455,465.38 |
| Subtotal | 19,424,671.47 | -- | -- | -- | -- | -- | -- | -- | -- | 19,424,671.47 | 19,424,671.47 |
| ②Associates | |||||||||||
| Shenzhen Ronghua JiDian Co., ltd | 1,349,122.92 | -- | -- | -178,240.64 | -- | -- | -- | -- | -- | 1,170,882.28 | 1,076,954.64 |
| Shenzhen Runhua Automobile trading Co., Ltd | 1,445,425.56 | -- | -- | -- | -- | -- | -- | -- | -- | 1,445,425.56 | 1,445,425.56 |
| Dongyi Real Estate Co., Ltd | 30,376,084.89 | -- | -- | -- | -- | -- | -- | -- | -- | 30,376,084.89 | 30,376,084.89 |
| Subtotal | 33,170,633.37 | -- | -- | -178,240.64 | -- | -- | -- | -- | -- | 32,992,392.73 | 32,898,465.09 |
| ③Other equity investment | - | ||||||||||
| Paklid Limited | 201,100.00 | -- | -- | -- | -- | -- | -- | -- | -- | 201,100.00 | 201,100.00 |
| Australia Bekaton Property Limited | 906,630.00 | -- | -- | -- | -- | -- | -- | -- | -- | 906,630.00 | 906,630.00 |
| Shenzhen Shenfang Department Store Co. Ltd. | 10,000,000.00 | -- | -- | -- | -- | -- | -- | -- | -- | 10,000,000.00 | 10,000,000.00 |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
| Movements during the year | ||||||||||||
| Investee | 2020.12.31 | Increase in capital | Decrease in capital | income recognised under equity method | ther comprehensive incom | Other equity movements | of cash dividends or profits | Provision for impairment | Other | 2022.12.31 | Balance of provision for impairment as at 2022.12.31 | |
| Shantou Fresh Peak Building | 58,547,652.25 | -- | -- | -- | -- | -- | -- | -- | -- | 58,547,652.25 | 58,547,652.25 | |
| Guangdong Province kaiFeng Lian Feng Cement Manufacturing Co., Ltd | 56,228,381.64 | -- | -- | -- | -- | -- | -- | -- | -- | 56,228,381.64 | 56,228,381.64 | |
| Jiangmen XinJiang real estate compnay | 9,037,070.89 | -- | -- | -- | -- | -- | -- | -- | -- | 9,037,070.89 | 9,037,070.89 | |
| Xian Xinfeng property trading ltd. | 32,840,729.61 | -- | -- | -- | -- | -- | -- | -- | 32,840,729.61 | 32,840,729.61 | ||
| Subtotal | 167,761,564.39 | -- | -- | -- | -- | -- | -- | -- | 167,761,564.39 | 167,761,564.39 | ||
| Total | 220,356,869.23 | -- | -- | -178,240.64 | -- | -- | -- | -- | -- | 220,178,628.59 | 220,084,700.95 | |
Note：Other equity investment items are the equity of the Company's subsidiaries which are not included in the scope of the merger. Some of these subsidiarieswere winded up, but the Group hasn‘t write off its long-term equity investment. Some of these subsidiaries have ceased operating for many years and no longerexist, the group could not implement effective management control over them. Refer to Note VII for more details.
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
11. Investment in other equity instruments
| Item | 2022.12.31 | 2021.12.31 |
| Shantou SME Financing Guarantee Co., Ltd. | 13,839,235.57 | 13,831,938.92 |
| Yunnan Kun Peng Aviation Service Limited Corporation | -- | 22,490,765.41 |
| Total | 13,839,235.57 | 36,322,704.33 |
Note: Since the Group plans to hold the above equity investment for a long term for strategic purposes,the Group designates them as financial assets measured at fair value and the change in it is included inother comprehensive income.
| Item | Dividend income recognized during the current period | The cumulative gains | The cumulative loss | The amount of other comprehensive income transferred into retained earnings | To reason |
| Shantou SME Financing Guarantee Co., Ltd. | 813,960.00 | 5,550,600.00 | -- | -- | -- |
| Yunnan Kun Peng Aviation Service Limited Corporation | -- | 11,449,773.26 | -- | 11,449,773.26 | Disposal of the investment |
12. Investment Properties
(1) Investment properties measured using the cost model
| Item | Buildings | Land use rights | Total |
| Ⅰ.Cost | |||
| 1.2021.12.31 | 1,042,912,022.39 | 98,272,942.19 | 1,141,184,964.58 |
| 2.Additions during the year | 1,832,873.00 | 9,077,110.86 | 10,909,983.86 |
| （1）Transfers from inventories | 1,832,873.00 | -- | 1,832,873.00 |
| （2）Other transfers(exchange rate movement) | -- | 9,077,110.86 | 9,077,110.86 |
| 3. Decrease during the year | -- | -- | -- |
| 4.2022.12.31 | 1,044,744,895.39 | 107,350,053.05 | 1,152,094,948.44 |
| " .Accumulated depreciation or amortization | |||
| 1.2021.12.31 | 457,533,453.68 | -- | 457,533,453.68 |
| 2.Charge for the year | 25,451,837.52 | -- | 25,451,837.52 |
| （1）Depreciated or amortised | 25,451,837.52 | -- | 25,451,837.52 |
| 3. Reductions during the year | -- | -- | -- |
| 4.2022.12.31 | 482,985,291.20 | -- | 482,985,291.20 |
| III.Provision for impairment | |||
| 1.2021.12.31 | 14,128,544.62 | 80,657,189.12 | 94,785,733.74 |
| 2.Charge for the year | -- | 7,450,008.43 | 7,450,008.43 |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
| Item | Buildings | Land use rights | Total | ||
| （1）Other additions (exchange rate movement） | -- | 7,450,008.43 | 7,450,008.43 | ||
| 3. Reductions on disposals | -- | -- | -- | ||
| 4.2022.12.31 | 14,128,544.62 | 88,107,197.55 | 102,235,742.17 | ||
| IV.Carrying amounts | |||||
| 1. As at 2022.12.31 | 547,631,059.57 | 19,242,855.50 | 566,873,915.07 | ||
| 2. As at 2021.12.31 | 571,250,024.09 | 17,615,753.07 | 588,865,777.16 |
Note: The reduction in the original value of land use rights and impairment provisions is caused byexchange rate movement at the time of translation of foreign currency statements.
13. Fixed assets
| Item | 2022.12.31 | 2021.12.31 |
| Fixed assets | 21,425,475.05 | 23,920,424.55 |
| Disposal of fixed assets | -- | -- |
| Total | 21,425,475.05 | 23,920,424.55 |
① Fixed assets
| Item | Plant & buildings | Machinery & equipment | Electronic device and others | Total |
| I.Cost | ||||
| 1.2021.12.31 | 100,117,808.10 | 8,307,455.41 | 7,273,579.83 | 115,698,843.34 |
| 2.Additions during the year | 304,266.00 | -- | 225,891.54 | 530,157.54 |
| （1）Purchases | 304,266.00 | -- | 225,891.54 | 530,157.54 |
| 3. Decrease during the year | -- | -- | 95,472.67 | 95,472.67 |
| （1）Disposals or written-offs | -- | -- | 95,472.67 | 95,472.67 |
| 4.2022.12.31 | 100,422,074.10 | 8,307,455.41 | 7,403,998.70 | 116,133,528.21 |
| II.Accumulated depreciation: | ||||
| 1.2021.12.31 | 79,191,129.84 | 6,864,681.16 | 5,722,607.79 | 91,778,418.79 |
| 2.Charge for the year | 2,458,308.93 | 246,603.31 | 313,773.37 | 3,018,685.61 |
| (1)Provision | 2,458,308.93 | 246,603.31 | 313,773.37 | 3,018,685.61 |
| 3.Reductions for the year | -- | -- | 89,051.24 | 89,051.24 |
| (1)Disposal or written-offs | -- | -- | 89,051.24 | 89,051.24 |
| 4.2022.12.31 | 81,649,438.77 | 7,111,284.47 | 5,947,329.92 | 94,708,053.16 |
| III.Provision for impairment | -- | -- | -- | -- |
| IV.Carrying amount | ||||
| 1. As at 2022.12.31 | 18,772,635.33 | 1,196,170.94 | 1,456,668.78 | 21,425,475.05 |
| 2. As at 2021.12.31 | 20,926,678.26 | 1,442,774.25 | 1,550,972.04 | 23,920,424.55 |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
14. Right-of-use assets
| project | Houses and Buildings |
| I. Original book value: | |
| 2021.12.31 | 431,779.61 |
| 2. Additions during the year | -- |
| 3. Decrease during the year | -- |
| 4. 2022.12.31 | 431,779.61 |
| II. Accumulative depreciation | |
| 1.2021.12.31 | 66,427.64 |
| 2. Additions during the year | 132,855.25 |
| （1）Provision | 132,855.25 |
| 3. Decrease during the year | -- |
| 4. 2022.12.31 | 199,282.89 |
| III. Impairment Provisions | -- |
| IV.Carrying amount | |
| 1. As at 2022.12.31 | 232,496.72 |
| 2. As at 2021.12.31 | 365,351.97 |
15. Intangible assets
(1) Intangible assets
| Item | Software |
| I.Cost | |
| 1. 2021.12.31 | 2,192,000.00 |
| 2.Additions during the year | -- |
| 3.Decrease during the year | -- |
| 4.2022.12.31 | 2,192,000.00 |
| II.Accumulative amortization | |
| 1. 2021.12.31 | 2,192,000.00 |
| 2.Additions during the year | -- |
| 3.Decrease during the year | -- |
| 4.2022.12.31 | 2,192,000.00 |
| III.Provision for impairment | -- |
| IV.Carrying amount | |
| 1. As at 2022.12.31 | -- |
| 2. As at 2021.12.31 | -- |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
16. Long-term deferred expenses
| Additions during the year | Decreases during the year | ||||
| Item | 2021.12.31 | Amortisation for the year | Others decreases | 2022.12.31 | |
| Renovation costs | 1,703,967.55 | 548,981.45 | 533,891.01 | -- | 1,719,057.99 |
| Others | 460,995.63 | 179,091.09 | 182,923.18 | -- | 457,163.54 |
| Total | 2,164,963.18 | 728,072.54 | 716,814.19 | -- | 2,176,221.53 |
17. Deferred tax assets and deferred tax liabilities
(1) Deferred tax assets and deferred tax liabilities that are not offset
| 2022.12.31 | 2021.12.31 | |||
| Item | Deductible/Taxable Temporary Differences | Deferred tax assets/liabilities | Deductible/Taxable Temporary Differences | Deferred tax assets/liabilities |
| Deferred tax assets: | ||||
| Provision for impairment | 12,026,682.71 | 3,006,670.68 | 11,676,505.43 | 2,919,126.36 |
| Pre-tax recoverable operating losses | 69,038,992.71 | 17,259,748.18 | 60,853,662.72 | 15,213,415.68 |
| appreciation tax | 117,245,335.26 | 29,311,333.82 | 537,081,594.36 | 134,270,398.59 |
| Unrealised profits of intra-group transactions | 86,124,778.41 | 21,531,194.60 | 48,439,321.68 | 12,109,830.42 |
| Accrued Contractual cost | 23,711,126.84 | 5,927,781.70 | 22,029,322.92 | 5,507,330.73 |
| Subtotal | 308,146,915.93 | 77,036,728.98 | 680,080,407.11 | 170,020,101.78 |
| Deferred tax liabilities: | ||||
| Unmatured interest | 1,576,125.00 | 394,031.25 | 7,411,964.20 | 1,852,991.05 |
| Changes in the fair value of other equity investments | 1,839,235.57 | |||
| 459,808.89 | 18,858,463.59 | 4,714,615.90 | ||
| Changes in the fair value of trading financial assets | 8,970,031.50 | 2,242,507.88 | 11,828,130.44 | 2,957,032.61 |
| Subtotal | 12,385,392.07 | 3,096,348.02 | 38,098,558.23 | 9,524,639.56 |
(2) Details of unrecognized deferred tax assets
| Item | 2022.12.31 | 2021.12.31 |
| Deductible losses | 54,027,120.82 | 10,875,646.42 |
| Bad debt provision | 197,543,730.87 | 211,607,688.34 |
| Impairment provision for long-term equity investments | 220,084,700.95 | 220,084,700.95 |
| Impairment provision for Investment property | 102,235,742.17 | 94,785,733.74 |
| Total | 573,891,294.81 | 537,353,769.45 |
Note：Due to the uncertainty of future taxable income, the Group did not recognize deferred tax assetsfor the temporary deductible differences and deductible losses.
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
(3) Expiration of deductible tax losses for unrecognised deferred tax assets
| Year | 2022.12.31 | 2021.12.31 | Note |
| 2022 | —— | 5,753,184.38 | |
| 2023 | 4,085,485.24 | 4,085,485.24 | |
| 2024 | 688,456.49 | 688,456.49 | |
| 2025 | 1,629.25 | 1,629.25 | |
| 2026 | 346,891.06 | 346,891.06 | |
| 2027 | 48,904,658.78 | —— | |
| Totao | 54,027,120.82 | 10,875,646.42 |
18. Short-term loans
(1) Classification of short-term loans
| Item | 2022.12.31 | 2021.12.31 |
| Pledge loans | 51,138,077.62 | 50,440,116.24 |
Note: The ending balance of loan is related to factoring loan applied by the group for accountsreceivable.
19. Notes payable
| Item | 2022.12.31 | 2021.12.31 |
| Commercial acceptance notes | -- | 247,376,403.56 |
| Banker acceptance notes | -- | -- |
| Total | -- | 247,376,403.56 |
Note: The notes payable due but unpaid at the year end is CNY 222,341,886.44. It has been adjusted toaccount payable.
20. Accounts payable
| Item | 2022.12.31 | 2021.12.31 |
| Construction | 432,902,243.31 | 139,000,203.58 |
| Other | 1,699,316.36 | 2,447,355.66 |
| Total | 434,601,559.67 | 141,447,559.24 |
21. Advances from customers
| Item | 2022.12.31 | 2021.12.31 |
| Payment for goods-import and export | 4,218,370.69 | 4,218,370.69 |
| Others | 1,246,973.27 | 2,193,056.35 |
| Total | 5,465,343.96 | 6,411,427.04 |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
22. Contractual liabilities
| Item | 2022.12.31 | 2021.12.31 |
| Advance collection of house sales | 43,431,327.09 | 199,909,796.88 |
| Room charges in advance | 102,140.20 | 55,693.20 |
| Total | 43,533,467.29 | 199,965,490.08 |
23. Employee benefits payable
| Item | 2021.12.31 | Accrued during the year | Decreased during the year | 2022.12.31 |
| Short-term employee benefits | 43,791,988.37 | 71,499,532.64 | 79,619,168.64 | 35,672,352.37 |
| Post-employment benefits - defined contribution plans | 134,723.41 | 9,793,422.64 | 9,876,294.64 | 51,851.41 |
| Total | 43,926,711.78 | 81,292,955.28 | 89,495,463.28 | 35,724,203.78 |
(1) Short-term employee benefits
| Item | 2021.12.31 | Accrued during the year | Decreased during the year | 2022.12.31 | ||
| Salaries, bonus, allowances | 43,636,961.65 | 56,562,279.75 | 64,987,862.63 | 35,211,378.77 | ||
| Staff welfare | 35,800.00 | 3,847,923.24 | 3,662,981.24 | 220,742.00 | ||
| Social insurances | -- | 3,912,890.25 | 3,912,890.25 | -- | ||
| Including：1. Medical insurance | -- | 3,682,819.92 | 3,682,819.92 | -- | ||
| 2. Work-related injury insurance | -- | 50,853.63 | 50,853.63 | -- | ||
| 3. Maternity insurance | -- | 179,216.70 | 179,216.70 | -- | ||
| Housing Fund | 31,040.32 | 5,791,378.33 | 5,822,418.65 | -- | ||
| Labor union fees, staff and workers‘ education fee | 88,186.40 | 1,385,061.07 | 1,233,015.87 | 240,231.60 | ||
| Total | 43,791,988.37 | 71,499,532.64 | 79,619,168.64 | 35,672,352.37 |
(2) Defined contribution plans
| Item | 2021.12.31 | Accrued during the year | Decreased during the year | 2022.12.31 | ||
| Post-employment benefits | 134,723.41 | 9,793,422.64 | 9,876,294.64 | 51,851.41 | ||
| Including: 1. Basic pension insurance | 72,000.00 | 6,322,580.45 | 6,394,580.45 | -- | ||
| 2．Unemployment insurance | -- | 70,260.71 | 70,260.71 | -- | ||
| 3．Annuity | 62,723.41 | 3,400,581.48 | 3,411,453.48 | 51,851.41 | ||
| Total | 134,723.41 | 9,793,422.64 | 9,876,294.64 | 51,851.41 |
24. Taxes payable
| Item | 2022.12.31 | 2021.12.31 | |
| Corporate income tax | 61,927,050.99 | 55,260,539.21 | |
| Land appreciation tax | 121,891,472.74 | 541,127,363.69 |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
| Item | 2022.12.31 | 2021.12.31 |
| Value-added tax | 3,843,704.80 | 2,364,703.76 |
| Individual income tax | 1,611,643.13 | 741,740.25 |
| City maintenance and construction tax | 734,949.61 | 243,387.84 |
| Property tax | 287,141.98 | 262,015.56 |
| Education surcharge | 316,008.58 | 105,021.26 |
| Local Education surcharge | 197,568.44 | 56,806.29 |
| Other | 141,645.72 | 379,294.62 |
| Total | 190,951,185.99 | 600,540,872.48 |
25. Other payables
| Item | 2022.12.31 | 2021.12.31 |
| Interest payables | 16,535,277.94 | 16,535,277.94 |
| Dividend payables | -- | -- |
| Other payables | 557,796,062.90 | 564,842,137.70 |
| Total | 574,331,340.84 | 581,377,415.64 |
(1) Interest payable
| Item | 2022.12.31 | 2021.12.31 |
| Non-financial institution borrowing interest (interest payable to parent company) | 16,535,277.94 | 16,535,277.94 |
Significant overdue interest outstanding:
| Debtor | Overdue amount | Overdue reason |
| Shenzhen Investment Holdings Co., Ltd. | 16,535,277.94 | Defer payment |
(2) Other payable
| Item | 2022.12.31 | 2021.12.31 |
| Non-related party transactions | 166,065,259.07 | 161,537,615.36 |
| Accrued land appreciation tax | -- | 36,447,111.94 |
| Related party transactions | 232,502,015.42 | 215,460,862.07 |
| Deposits | 28,723,844.16 | 48,106,373.19 |
| Others | 130,504,944.25 | 103,290,175.14 |
| Total | 557,796,062.90 | 564,842,137.70 |
(3) significant other payables aging over 1 year
| Item | Amount | Aging | Reason |
| Guangzhou Bopi Enterprise Management Consulting Co., LTD | 202,424,649.66 | Within 1 year, 1-2 years | Unexpired settlement |
| Huizhou Guirong Investment Information Consulting Co., LTD | 99,553,857.53 | Within 1 year, 1-2 years | Unexpired settlement |
| Total | 301,978,507.19 |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
26. Non-current liabilities due within one year
| Item | 2022.12.31 | 2021.12.31 |
| A long-term loan that due within one year | 6,105,770.99 | -- |
| Lease liabilities due within one year | 83,023.44 | 83,023.44 |
| Total | 6,188,794.43 | 83,023.44 |
27. Other current liabilities
| Item | 2022.12.31 | 2021.12.31 |
| Output tax to be transferred | 2,265,817.68 | 8,196,849.13 |
| Notes receivable that have been endorsed but cannot be terminated for recognition | 1,617,000.00 | -- |
| Total | 3,882,817.68 | 8,196,849.13 |
28. Long-term loans
| Item | 2022.12.31 | Range of interest rate | 2021.12.31 | Range of interest rate |
| Mortgage loan | 60,366,770.99 | 4.15%-4.20% | -- | |
| Subtotal | 60,366,770.99 | -- | ||
| Less: long-term loans due within one year | 6,105,770.99 | -- | ||
| Total | 54,261,000.00 | -- |
29. Lease liabilities
| Item | 2022.12.31 | 2022.01.01 |
| Buildings | 136,908.67 | 208,944.21 |
| Subtotal | 136,908.67 | 208,944.21 |
| Less: lease liabilities due within one year | 83,023.44 | 83,023.44 |
| Total | 53,885.23 | 125,920.77 |
30. Capital stock (unit: 10,000 shares)
| Increase or decrease of current period (+, -) | |||||||
| Item | 2021.12.31 | New shares | Stock dividand | Conversion from reserve to shares | Others | Subtotal | 2022.12.31 |
| The total number of shares | 101,166.00 | -- | -- | -- | -- | -- | 101,166.00 |
31. Capital reserve
| Item | 2020.12.31 | Additions during the year | Reductions during the year | 2021.12.31 |
| Share premium | 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 |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
32. Other comprehensive income
Other comprehensive income attributable to the parent company in the balance sheet.
| Current amount | ||||
| Item | 2021.12.31 （1） | The current income tax before the amount (2) | Minus: early entry into other comprehensive income into the current period of profit and loss (3) | 2022.12.31 （4）=（1）+（2） -（3） |
| Other comprehensive income that cannot be reclassified into profits and losses | 14,143,847.69 | -1,314,647.75 | 11,449,773.26 | 1,379,426.68 |
| 1. Changes in the fair value of other equity instrument investments | 14,143,847.69 | -1,314,647.75 | 11,449,773.26 | 1,379,426.68 |
| Other comprehensive income which is reclassified into profit and loss | 21,945,116.26 | 2,602,177.91 | -- | 24,547,294.17 |
| 1. Difference in translation of foreign currency financial statements | 21,945,116.26 | 2,602,177.91 | -- | 24,547,294.17 |
| Total other comprehensive income | 36,088,963.95 | 1,287,530.16 | 11,449,773.26 | 25,926,720.85 |
Other comprehensive income attributable to the parent company in the income statement.
Current amountMinus: earlyentry into other
After tax, it
After-taxItem
2021.12.31 (1)
comprehensiveincome into the
current period
of profit and
Minus:
income taxexpense (3)
belongs to
minorityshareholders
(4)attributable
to parentcompany（5）=（1）-（2）-（3）-（4）
reclassified into profit and
income
Note: The net after-tax amount of other comprehensive income during reporting period is CNY-1,338,182.69,including CNY 1,287,530.16 attributable to the shareholders of the parent company andCNY 2,625,712.85 attributable to minority shareholders.
| loss (2) | ||||
| Other comprehensive income that cannot be reclassified into -1,752,863.67 profits and losses 1. Changes in the fair value | -- | -438,215.92 | -- | -1,314,647.75 |
| of other equity instrument -1,752,863.67 | -- | -438,215.92 | -- | -1,314,647.75 |
| investments Other comprehensive | ||||
| income which is -29,418.67 | -- | -5,883.73 | -2,625,712.85 | 2,602,177.91 |
| loss 1. Difference in translation of | ||||
| foreign currency financial -29,418.67 statements | -- | -5,883.73 | -2,625,712.85 | 2,602,177.91 |
| Total other comprehensive -1,782,282.35 | -444,099.65 | -2,625,712.85 | 1,287,530.16 | |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
33. Surplus reserve
| Item | Opening balance | Additions during the year | Reductions during the year | Ending balance |
| Statutory surplus reserve | 241,144,854.93 | 34,108,874.33 | -- | 275,253,729.26 |
| Total | 241,144,854.93 | 34,108,874.33 | -- | 275,253,729.26 |
34. Retained earnings
| Item | Year ended 2022.12.31 | Year ended 2021.12.31 | or distribution percentage |
| Retained earnings as at 31/12/2021(before adjustment) | 1,671,121,562.98 | 1,560,720,254.31 | -- |
| Total adjustments for opening retained earnings（―+‖ for increase; ―–‖ for decrease） | -- | -- | -- |
| Retained earnings as at 01/01/2021 (after adjustment) | 1,671,121,562.98 | 1,560,720,254.31 | -- |
| Add: Net profits for the year attributable to shareholders of the Group | 153,718,805.57 | 220,836,309.93 | -- |
| Less: Appropriation for statutory surplus reserve | 34,108,874.33 | 22,420,581.26 | 10% |
| Appropriation for ordinary share dividend | 89,026,080.00 | 88,014,420.00 | -- |
| Other | -11,449,773.26 | -- | -- |
| Retained earnings as at 2022.12.31 | 1,713,155,187.48 | 1,671,121,562.98 | -- |
Note: the other CNY 11,449,773.26 of undistributed profits in this period is due to the investment ofother equity instruments, which includes the disposal profits as retained earnings.
35. Operating revenue and operating costs
(1) Operating revenue and operating costs
| Item | Current amount | Amount of previous period | ||
| Income | Cost | Income | Cost | |
| Main business | 628,832,520.51 | 434,304,905.37 | 1,305,013,711.33 | 644,196,683.45 |
| Other business | 5,552,040.91 | 2,747,095.64 | 15,776,937.12 | 22,151,678.03 |
| Total | 634,384,561.42 | 437,052,001.01 | 1,320,790,648.45 | 666,348,361.48 |
(2) Operating revenue and operating costs are divided by industry (or product type)
| Main Industry name | Current amount | Amount of previous period | ||
| income | The cost of | income | The cost of | |
| Real estate | 309,331,841.57 | 144,720,332.63 | 876,161,088.60 | 280,828,284.77 |
| Construction | 241,209,525.79 | 236,074,624.77 | 200,259,571.16 | 194,607,475.30 |
| Property Management | 36,660,871.83 | 22,415,236.68 | 162,526,580.18 | 145,898,235.49 |
| Lease | 53,870,265.26 | 46,657,985.12 | 81,791,161.56 | 38,780,101.44 |
| subtotal | 641,072,504.45 | 449,868,179.20 | 1,320,738,401.50 | 660,114,097.00 |
| Less：Internal offset | 12,239,983.94 | 15,563,273.83 | 15,724,690.17 | 15,917,413.55 |
| Total | 628,832,520.51 | 434,304,905.37 | 1,305,013,711.33 | 644,196,683.45 |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
Management
(3) The revenue and cost of main business shall be divided by region (if not applicable, it shall bedeleted)
| Current amount | Amount of previous period | |||
| Main business area | Main business revenue | Main business cost | Main business revenue | Main business cost |
| Domestic： | 640,594,852.83 | 449,868,179.20 | 1,320,105,876.64 | 660,114,097.00 |
| Guangdong Province | 640,594,852.83 | 449,868,179.20 | 1,308,786,001.07 | 652,104,794.06 |
| Other | -- | -- | 11,319,875.57 | 8,009,302.94 |
| Overseas： | 477,651.62 | -- | 632,524.86 | -- |
| America | 477,651.62 | -- | 632,524.86 | -- |
| Subtotal | 641,072,504.45 | 449,868,179.20 | 1,320,738,401.50 | 660,114,097.00 |
| Less：Internal offset | 12,239,983.94 | 15,563,273.83 | 15,724,690.17 | 15,917,413.55 |
| Total | 628,832,520.51 | 434,304,905.37 | 1,305,013,711.33 | 644,196,683.45 |
(4) Business revenue decomposition information
Item
Current amountReal estate Construction
Property
Leases Other Total
revenue
a certain pointtimeincome
36. Taxes and surcharges
| Item | Current amount | Amount of previous period |
| Land appreciation tax | 68,994,085.35 | 234,706,353.29 |
| Property tax | 7,527,796.10 | 9,928,730.40 |
| Urban maintenance and construction tax | 1,984,035.04 | 4,235,765.07 |
| education surcharge | 845,915.69 | 1,910,215.37 |
| Local education surcharge | 563,479.01 | 1,081,322.37 |
| Embankment protection fees | 1,868,180.35 | 2,497,929.35 |
| Total | 81,783,491.54 | 254,360,315.85 |
Note: the tax and additional payment standards are detailed in Note IV. Tax.
37. Selling expense
| Item | Current amount | Amount of previous period |
| Sales agency fee and commission | 9,153,738.82 | 26,587,685.99 |
| Employee benefits | 3,840,229.00 | 9,474,880.74 |
Main business
309,331,841.57
| Main business 309,331,841.57 | 236,949,097.45 | 36,436,288.21 | 46,115,293.28 | -- | 628,832,520.51 |
| Including: Confirm at 309,331,841.57 | -- | -- | -- | -- | 309,331,841.57 |
| Confirm at a certain -- | 236,949,097.45 | 36,436,288.21 | 46,115,293.28 | -- | 319,500,678.94 |
| Other business -- | -- | -- | -- | 5,552,040.91 | 5,552,040.91 |
| Total 309,331,841.57 | 236,949,097.45 | 36,436,288.21 | 46,115,293.28 | 5,552,040.91 | 634,384,561.42 |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
| Item | Current amount | Amount of previous period | |
| Entertainment expenses | 1,381,173.87 | 3,261,755.78 | |
| Advertising expenses | 4,350,998.80 | 2,932,966.45 | |
| Other | 491,454.62 | 480,459.26 | |
| Total | 19,217,595.11 | 42,737,748.22 |
38. Administrative expenses
| Item | Current amount | Amount of previous period |
| Employee benefits | 39,755,710.03 | 79,343,163.63 |
| Agency fee | 2,752,109.58 | 4,027,178.08 |
| Entertainment expenses | 2,425,452.83 | 2,857,097.54 |
| Depreciation expense | 2,785,592.23 | 2,567,845.33 |
| Office expenses | 1,849,010.18 | 2,364,940.64 |
| Maintenance expenses | 336,048.95 | 985,033.96 |
| Office expenses | 520,782.12 | 496,794.63 |
| Other Amortization | 481,562.84 | 421,749.41 |
| water and electricity | 359,004.64 | 273,581.21 |
| Other | 4,493,475.68 | 4,970,447.17 |
| Total | 55,758,749.08 | 98,307,831.60 |
39. Financial expenses
| Item | Current amount | Amount of previous period |
| The interest payments | 21,696,059.62 | 12,247,386.77 |
| Minus: Capitalization of interest | 21,696,059.62 | 12,237,466.31 |
| Interest income | 5,315,817.53 | 28,863,878.27 |
| Exchange gains and losses | -1,384,499.52 | 9,320,742.60 |
| Minus: Capitalization of exchange gains and losses | -- | -- |
| Commission charges and others | 193,170.02 | 1,449,724.20 |
| Total | -6,507,147.03 | -18,083,491.01 |
40. Other income
| Subsidies (other sources of revenue) | Current amount | Amount of previous period | With respect to assets / Related to revenue |
| VAT deduction | 67,836.22 | 1,483,095.28 | Related to revenue |
| Subsidies for job-for-training | 86,775.00 | 165,000.00 | Related to revenue |
| Additional deductions for input tax | -- | 11,384.12 | Related to revenue |
| Renovation of back streets and alleys around farmers' markets (public health fund) | -- | 10,000.00 | Related to revenue |
| Subsidies for keeping people in their jobs | 162,265.76 | -- | Related to revenue |
| Refund of procedure fee of personal income tax | 225,814.59 | -- | Related to revenue |
| Subsidies for assisting enterprises in obtaining employment | 10,000.00 | -- | Related to revenue |
| Other | 7,111.62 | -- | Related to revenue |
| Total | 559,803.19 | 1,669,479.40 |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
41. Investment Income
| Item | Current amount | Amount of previous period |
| Long-term equity investment income calculated by the equity method | -178,240.64 | -105,321.37 |
| Dividend income from investments in other equity instruments | 813,960.00 | 692,580.00 |
| Yield on maturity of structured deposits | 159,619.01 | 1,196,580.44 |
| Investment income from disposal of subsidiaries | 161,581,081.50 | -- |
| Investment income from debt restructuring | 2,610,128.30 | -- |
| Total | 164,986,548.17 | 1,783,839.07 |
42. Income from changes in fair value
| The source of the fair value change income | Current amount | Amount of previous period |
| Trading financial assets | 8,970,031.50 | 11,828,130.44 |
43. Credit impairment loss (loss marked with "-")
| Item | Current amount | Amount of previous period |
| Accounts receivable bad debt loss | -3,434,265.84 | -4,433,371.85 |
| Other losses on receivable bad debts | -5,865,350.35 | -2,362,779.29 |
| Bad debt losses on notes receivable | 2,783,378.85 | -999,068.57 |
| Total | -6,516,237.34 | -7,795,219.71 |
44. Impairment loss of assets (loss is marked with "-")
| Item | Current amount | Amount of previous period |
| Losses from falling inventory prices | -532,397.57 | 268,941.60 |
45. Income from asset disposal
| Item | Current amount | Amount of previous period |
| Gain on disposal of fixed assets (loss is marked with "-")） | -- | -8,852.73 |
46. Non-operating income
| Item | Current amount | Amount of previous period | Amount booked into current non-recurring profits and losses |
| Compensation | 1,156,843.63 | -- | 1,156,843.63 |
| Penalty income | 370,000.00 | 1,506,996.67 | 370,000.00 |
| Other | -- | 210,438.20 | -- |
| Income from sale of waste | 7,807.75 | 28,700.00 | 7,807.75 |
| Total | 1,534,651.38 | 1,746,134.87 | 1,534,651.38 |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
47. Non-operating expenses
| Item | Current amount | Amount of previous period | current non-recurring profits and losses |
| Public welfare donation expenditure | 306,474.53 | 31,464.96 | 306,474.53 |
| Loss of non-current assets damaged and scrapped | 38,481.92 | 16,439.20 | 38,481.92 |
| Penalty | 50.00 | 85,686.90 | 50.00 |
| Other | 133,936.29 | 74,538.68 | 133,936.29 |
| Total | 478,942.74 | 208,129.74 | 478,942.74 |
48. Income tax expenses
(1) Income tax expense details
| Item | Current amount | Amount of previous period |
| Current income tax calculated according to the tax law and relevant provisions | -20,528,623.91 | 125,965,276.65 |
| Deferred tax expense | 86,555,081.26 | -57,160,740.87 |
| Total | 66,026,457.35 | 68,804,535.78 |
(2) The relationship between income tax expense and total profit is listed as follows :(inapplicable itemscan be deleted, and "other" amounts should not be too large)
| Item | Current amount | Amount of previous period |
| Profit total | 215,603,328.30 | 286,404,205.51 |
| Income tax expense at statutory (or applicable) rate (gross profit *25%) | 53,900,832.08 | 71,601,051.38 |
| Impact of different tax rates applied to certain subsidiaries | 148,585.06 | -810,905.02 |
| Adjustment of income tax for the current period of the previous period | -6,828,454.83 | -378,391.66 |
| The profits and losses of joint ventures and associated enterprises calculated by equity method | 44,560.16 | 26,330.35 |
| Tax-free income (marked with "-") | -232,317.56 | -173,145.00 |
| Non-deductible costs, expenses and losses | 621,871.15 | 563,064.63 |
| Take advantage of the tax impact of unrecognized deductible losses and deductible temporary differences in previous years (fill in with "-") | -598,646.13 | -2,131,851.54 |
| Tax effects of deductible losses and deductible temporary differences are not recognized | 18,970,027.42 | 108,382.64 |
| Income tax expense | 66,026,457.35 | 68,804,535.78 |
49. Notes for items in the statement of cash flows
(1) Receipt of other cash related to operating activities
| Item | Current amount | Amount of previous period |
| Interest Income | 5,315,817.53 | 39,813,057.28 |
| Receivables and others | 19,283,483.81 | 338,784,024.72 |
| Total | 24,599,301.34 | 378,597,082.00 |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
(2) Other cash payments related to operating activities
| Item | Current amount | Amount of previous period |
| Charges | 192,970.02 | 1,449,724.20 |
| Out-of-pockets expenses | 28,511,217.46 | 50,267,187.02 |
| Payables and others | 44,617,346.03 | 231,759,408.78 |
| Total | 73,321,533.51 | 283,476,320.00 |
(3) Receipt of other cash related to investment activities
| Item | Current amount | Amount of previous period |
| Financing products and etc. | 114,840,380.99 | 797,803,419.53 |
(4) Other cash payments related to investment activities
| Item | Current amount | Amount of previous period |
| Financing products and etc. | -- | 1,300,000,000.00 |
(5) Receipt of other cash in connection with financing activities
| Item | Current amount | Amount of previous period |
| Borrowings from subsidiary shareholders | -- | 193,016,852.52 |
| fund from Linxijun employees | -- | 22,800,000.00 |
| Total | -- | 215,816,852.52 |
50. Supplementary information to the statement of cash flows
(1) Supplementary information of the cash flow statement
| Additional information | Current amount | Amount of previous period |
| 1. Adjust net profit to cash flow from operating activities | ||
| Net profit | 149,576,870.95 | 217,599,669.73 |
| Plus: impairment loss on assets | 532,397.57 | -268,941.60 |
| Credit impairment loss | 6,516,237.34 | 7,795,219.71 |
| Depreciation of Fixed Assets, Depreciation of Usability Assets, Depreciation of Investment Real Estate, Depreciation of Oil and Gas Assets, Depreciation of Productive Biological Assets (Items not applicable can be deleted) | 28,470,523.13 | 29,162,034.64 |
| Amortization of intangible assets | 132,855.25 | -- |
| Amortization of long-term prepaid expenses | -- | -- |
| Loss on disposal of fixed assets, intangible assets and other long-term assets (marked with "-" for gains) | 716,814.19 | 240,227.24 |
| Loss on the scrapping of fixed assets (marked with "-" for income) | -- | 13,451.61 |
| Loss from changes in fair value (marked with "-" for earnings) | 38,481.92 | 16,439.20 |
| Financial expenses (revenue marked with "-") | -8,970,031.50 | -11,828,130.44 |
| Loss on investment (marked with "-" for income) | 492,336.21 | 450,266.20 |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
| Additional information | Current amount | Amount of previous period |
| Deferred tax assets decreased (marked with "-" for increase) | -164,986,548.17 | -1,783,839.07 |
| Deferred tax liability increased (marked with "-" for decrease) | 92,983,372.80 | -57,380,478.73 |
| Decrease in stock (marked with "-" for increase) | -6,428,291.54 | 85,543.83 |
| Decrease of operating receivable items (marked with "-" for increase) | -222,176,051.69 | -1,600,400,189.74 |
| Increase in operational payable items (marked with "-" for decrease) | -15,439,705.92 | 79,815,735.11 |
| other | -537,235,259.30 | 130,530,884.37 |
| Net cash flow from operating activities | -- | -- |
| 2. Major investment and financing activities that do not involve cash receipts and expenditures: | -675,775,998.76 | -1,205,952,107.94 |
| Debt to capital | ||
| A convertible corporate bond maturing within one year | -- | -- |
| Leasing of fixed assets through financing | -- | -- |
| 3. Net changes in cash and cash equivalents: | -- | -- |
| Ending balance of cash | ||
| Minus: Opening balance of cash | 190,365,069.48 | 612,293,635.15 |
| Plus: ending balance of cash equivalents | 612,293,635.15 | 2,669,103,926.82 |
| Minus: Beginning balance of cash equivalents | -- | -- |
| Net increase in cash and cash equivalents | -- | -- |
| -421,928,565.67 | -2,056,810,291.67 |
（2） Net cash received from disposal of subsidiaries and other business units in the current period
| Item | Current amount |
| Cash or cash equivalents received from disposal of subsidiaries in the current period | 214,862,911.00 |
| Including: Shenzhen City Property Management Ltd. | 196,676,700.00 |
| Minus: Cash and cash equivalents held by the subsidiary on the date of loss of control | 57,467,430.10 |
| Including: Shenzhen City Property Management Ltd. | 57,467,430.10 |
| Plus: Disposal of cash or cash equivalents received by the subsidiary in the current period during the previous period | -- |
| The net amount of cash received by the disposal subsidiary | 157,395,480.90 |
（3） Composition of cash and cash equivalents
| Item | Ending balance | Opening balance |
| 1. Cash | 190,365,069.48 | 612,293,635.15 |
| Including: cash on hand | 4,549.61 | 12,082.00 |
| Bank deposits available for payment at any time | 157,360,519.87 | 372,181,553.15 |
| Other monetary fund readily available for payment | 33,000,000.00 | 240,100,000.00 |
| 2. Cash equivalents | -- | -- |
| Including: bond investments maturing within three months | -- | -- |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
| Item | Ending balance | Opening balance |
| 3. Closing cash and cash equivalents balance | 190,365,069.48 | 612,293,635.15 |
| Where: the parent company or a subsidiary of the group uses restricted cash and cash equivalents | -- | -- |
51. Assets whose ownership or use rights are restricted
| Item | Ending book value | Reason for limitation |
| Cash at bank and Cash Equivalent | 5,674,439.78 | funds for the construction of public facilities in and around the city of Longgang District |
| Cash at bank and Cash Equivalent | 48,315.48 | Frozen by litigation |
| Accounts receivables | 51,138,077.62 | Pledge of short-term loans |
| Inventories | 965,000,000.00 | Land Mortgage for project development loan |
| Total | 1,021,860,832.88 |
52. Foreign currency monetary items
(1) Foreign currency monetary items
| Item | Ending Foreign Currency Balance | Exchange rate | Balance converted into CNY at the end |
| Monetary fund | |||
| Including: US dollar | 14,982.22 | 6.9646 | 104,345.17 |
| Hong Kong dollars | 6,387,228.27 | 0.8933 | 5,705,711.01 |
| Accounts receivable | - | ||
| Including: US dollar | 8,000.00 | 6.9646 | 55,716.80 |
| Hong Kong dollars | 4,905,150.10 | 0.8933 | 4,381,770.58 |
| Prepayments | - | ||
| Including: Hong Kong dollars | 253.12 | 0.8933 | 226.11 |
| Accounts payable | - | ||
| Including: Hong Kong dollars | 2,000.00 | 0.8933 | 1,786.60 |
| Other payables | - | ||
| Including: US dollar | 11,781.17 | 6.9646 | 82,051.14 |
53. Government subsidies
The government subsidies accounted into the current profits and losses by the total amount method
| Subsidy Item | species | Amount booked into profit and loss in the previous period | Amount booked into profit and loss for the current period | Reporting items included in profit and loss | Relating to assets/earnings |
| Tax subsidy | Fiscal allotment | 1,494,479.40 | 67,836.22 | Other Income | Related to earnings |
| Employment subsidies | Fiscal allotment | 165,000.00 | 86,775.00 | Other Income | Related to earnings |
| Total | 1,659,479.40 | 154,611.22 |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
VI. Changes to the scope of consolidation
1. Disposal of subsidiaries
（1）Reduction of subsidiaries from single disposal to loss of control
| Name of subsidiary | Equity Disposal Price | Percentage of equity disposal | Equity Disposal Method | The point at which control is lost | The basis for determining the point of loss of control | The difference between the disposal price and the share of the subsidiary's net assets at the consolidated financial statement level corresponding to the disposal investment | The goodwill associated with the subsidiary in the Consolidate d Financial Statements |
| Shenzhen Property Management Co. , Ltd | 196,676,700.00 | 100.00 | Assignment by agreement | February 11,2022 | The completion of industrial and commercial change registration | 161,581,081.49 | -- |
Continued (1)：
| Name of subsidiary | The percentage of shares remaining at the date of loss of control | The book value of the remaining equity at the date of loss of control | The fair value of the remaining equity at the date of loss of control | Gains/losses arising from the re-measurem ent at fair value | The method and main assumptions for determining the fair value of the remaining equity on the date of loss of control |
The amount of othercomprehensive gains
related to the equity
investment of theAtomic Companytransferred to theinvestment gains and
losses
| Shenzhen Property Management Co. , Ltd | -- | -- | -- | -- | -- | -- |
2. Other
In 2022, the group cancelled a total of 3 subsidiaries and subsidiaries that had been revoked and hadno business, namely Shenzhen Special Economic Zone Real Estate (Group) Guangzhou Property andEstate Co., Ltd., QiLu Co., Ltd., and QiYi Development Co., Ltd..VII. Interest in other entitiesVII. Interests in subsidiaries
(1) Composition of the Group
| Name | Principal place of business | Registration place | Business nature | Shareholding% | Acquisition method | |
| Direct | Indirect | |||||
| Shenzhen City SPG Long Gang Development Ltd. | Shenzhen | Shenzhen | Real estate development | 95.00 | 5.00 | Acquiring through establishment or investment |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
| Name | Principal place of business | Registration place | Business nature | Shareholding% | Acquisition method | |
| Direct | Indirect | |||||
| American Great Wall Co., Ltd | U.S. | U.S. | Real estate development | 70.00 | -- | investment |
| Shenzhen Petrel Hotel Co., Ltd. | Shenzhen | Shenzhen | Hotel Services | 68.10 | 31.90 | Acquiring through establishment or investment |
| Shenzhen Zhen Tung Engineering Ltd. | Shenzhen | Shenzhen | Installation and maintenance | 73.00 | 27.00 | Acquiring through establishment or investment |
| Shenzhen City We Gen Construction Management Ltd. | Shenzhen | Shenzhen | Supervision | 75.00 | 25.00 | Acquiring through establishment or investment |
| Shenzhen Lain Hua Industry and Trading Co., Ltd. | Shenzhen | Shenzhen | Mechanical & Electrical device installation | 95.00 | 5.00 | Acquiring through establishment or investment |
| Fresh Peak Enterprises Ltd. | Hong Kong | Hong Kong | Investment and management | 100.00 | -- | Acquiring through establishment or investment |
| Fresh Peak Holdings Ltd. | Hong Kong | Hong Kong | Investment and management | 100.00 | -- | Acquiring through establishment or investment |
| Shenzhen City Shenfang Free Trade Trading Ltd. | Shenzhen | Shenzhen | Commercial trade | 95.00 | 5.00 | Acquiring through establishment or investment |
| Shenzhen City Shenfang Investment Ltd. | Shenzhen | Shenzhen | Investment | 90.00 | 10.00 | Acquiring through establishment or investment |
| company | Beijing | Beijing | Real estate operation | 75.00 | 25.00 | Acquiring through establishment or investment |
| Co., Ltd. | Huizhou | Huizhou | Real estate operation | 51.00 | Acquiring through business acquisition | |
| Chuanqi Real Estate Development Co., Ltd. | Shenzhen | Shenzhen | Real estate operation | 100.00 | Acquired through establishment or investmen | |
Note：
①In consolidation scope, there are five subsidiaries in “revoked but not cancelled” condition: BeijingSPG Property Management Limited, Guangzhou Huangpu Xicun real estate limited company, FreshPeak Real Estate Dev. Construction (Wuhan) Co. Ltd. and Beijing Shenfang Property Management Co.,
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
Ltd. They are presented on the basis of discontinued operations; these four subsidiaries have made fullprovision for impairment of debt for the companies outside the consolidation scope.
① The cancelled, revoked and closed subsidiaries of the Company that are not included in the scopeof consolidation are as follows:
| Name | Principal place of business | Registration place | Business nature | Shareholding% | Acquisitio metho | |
| Direct | Indirect | |||||
| Shenzhen Shenfang Department Store Co. Ltd | Shenzhen | Shenzhen | Commercial trade | 95.00 | 5.00 | Acquiring through establishment or investment |
| Paklid Limited | Hong Kong | Hong Kong | Commercial trade | 60.00 | 40.00 | Acquiring through establishment or investment |
| Bekaton Property Limited | Australia | Australia | Real estate | 60.00 | -- | Acquiring through establishment or investment |
| Canada Great Wall (Vancouver) | Canada | Canada | Real estate | -- | 60.00 | investment |
| Guangdong Fengkai County Lianfeng Cement Manufacturing Co., Ltd. | Fengkai Guangdong | Fengkai Guangdong | Manufacturing | -- | 90.00 | Acquiring through establishment or investment |
| Jiangmen Xinjiang Real Estate Co., Ltd | Jiangmen Guangdong | Jiangmen Guangdong | Real estate | -- | 90.91 | Acquiring through establishment or investment |
| Xi‘an Fresh Peak Property Trading Co., Ltd | Xi‘an Shanxi | Xi‘an Shanxi | Real estate | -- | 67.00 | Acquiring through establishment or investment |
| Shenxi Limited | Shenzhen | Shenzhen | Building Decoration | 70.00 | -- | Acquiring through establishment or investment |
| Shenzhen Zhentong New Electromechanical Industry Development Co., Ltd. | Shenzhen | Shenzhen | Mechanical and electrical engineering | 95.00 | 5.00 | Acquiring through establishment or investment |
| Shenzhen Real Estate Electromechanical Management Company | Shenzhen | Shenzhen | Mechanical and electrical Management | 100.00 | -- | Acquiring through establishment or investment |
| Shenzhen Nanyang Hotel Co., Ltd. | Shenzhen | Shenzhen | Hotel Management | 95.00 | 5.00 | Acquiring through establishment or investment |
| Shenzhen Kangtailong Industrial Electric Cooker Co., Ltd. | Shenzhen | Shenzhen | Industrial manufacturing | -- | 100.00 | Acquiring through establishment or investment |
| Shenzhen Longgang Henggang Huagang Industrial Co., Ltd. | Shenzhen | Shenzhen | Industrial Investment | -- | 79.92 | Acquiring through establishment or investment |
Note：
1. Shenzhen Shenfang Department Store Co. Ltd called a shareholder meeting on 29 October 2007,decided to terminate the business and establish a liquidation team to conduct the liquidation. Theliquidation team issued a liquidation report on 7 December, 2007.
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
2. Paklid Limited, Bekaton Property Limited and Canada Great Wall (Vancouver) were established bythe group abroad in the early years. On 13 December 2000, the group held a board meeting anddecided to liquidate these three companies. Bekaton Property Limited and Canada Great Wall(Vancouver) have been winded up.
3. All assets from Guangdong Fengkai County Lianfeng Cement Manufacturing Co., Ltd. (includingtangible and intangible asset) were auctioned by the court on 22 January 2019, becoming a shellcompany.
4. Shenxi Limited was a holding subsidiary of Shenzhen Tefa Real Estate Consolidated Services Co.,Ltd. which is a deregistered subsidiary of the group. By the Group‘s announcement,―The notice on themerger of Shenzhen Zhen Tung Engineering Ltd and Shenxi Limited‖ (Shenfang [1997] No.19),all businesses form Shenxi Limited were undertaken by Shenzhen Zhen Tung Engineering Ltd andShenxi Limited and were revoked on 8 February 2002.The group could no longer effectively control these invested companies which have not been included inthe consolidation scope were either been cancelled or ceased operation many years ago, and were nolonger exist. According to―Accounting Standard for Business Enterprises No. 33-Consolidated FinancialStatements‖, the group already accrued full amount of impairment for the book value of the netinvestment in above companies which are not included in the consolidated scope.
(2) Material non-wholly owned subsidiaries
| Name | Proportion ofownership interest held by non-controlling interests % | Profit or loss allocated to non-controlling interests during the year | Dividend declared to non-controlling shareholders during the year | Balance of non-controlling interests as at 2021.12.31 |
| American Great Wall Co., Ltd | 30.00 | -129,591.94 | -- | -22,288,410.51 |
| Xinfeng Investment Co., Ltd. | 45.00 | 513.70 | -- | -116,179,873.90 |
| BARENIE CO.,Ltd | 20.00 | -2,405.08 | -- | -3,892,114.44 |
| Guangdong Jianbang Group (Huiyang) Industrial Co., Ltd. | 49.00 | -4,010,451.30 | -- | 424,661,628.82 |
(3 )Key financial information about material non-wholly owned subsidiaries
| Ending balance | ||||||
| Name | Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities |
| American Great Wall Co., Ltd | 157,276.13 | 19,242,855.50 | 19,400,131.63 | 109,489,015.64 | -- | 109,489,015.64 |
| Fresh Peak investment Ltd | 220,030,110.80 | -- | 220,030,110.80 | 254,831,542.93 | -- | 254,831,542.93 |
| BARENIE CO.,Ltd | 1,046.02 | -- | 1,046.02 | 32,920,988.91 | -- | 32,920,988.91 |
| Guangdong Jianbang Group (Huiyang) Industrial Co., Ltd. | 1,468,798,461.17 | 5,502,260.78 | 1,474,300,721.95 | 1,489,943,392.55 | 53,885.23 | 1,489,997,277.78 |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
| assets | liabilities |
CO.,Ltd
CO.,Ltdinvestment Ltd
investment Ltd
Continued(1)：
Name
American Great
Current assets
Non-current
Ending balance of the previous yearTotal assets Current liabilities
Non-current
Total liabilitiesWall Co., Ltd
585,669.06 17,615,753.07 18,201,422.13 99,105,956.86 -- 99,105,956.86Fresh Peak
4,748.07 36,016.90 40,764.97 258,219,487.07 -- 258,219,487.07BARENIE
957.41 -- 957.41 32,908,874.92 -- 32,908,874.92GuangdongJianbang Group(Huiyang)Industrial Co.,Ltd.
1,190,571,804.12 3,795,473.63 1,194,367,277.75 1,201,698,603.08 125,920.77 1,201,824,523.85
Continued(2)：
| Current amount | Amount of previous period | |||||||
| Name | Operating income | Net profit | Total comprehen sive income | Cash flows from operating activities | Operating income | Net profit | Total comprehens ive income | Cash flows from operating activities |
| America n Great Wall Co., Ltd | 477,651.62 | -431,973.10 | -431,973.10 | -485,720.61 | 632,524.86 | -284,455.30 | -284,455.30 | 352,837.90 |
| Fresh Peak investme nt Ltd | -- | 1,141.56 | 1,141.56 | -- | - | -3,056.24 | -3,056.24 | -20.98 |
| Baiwei Real Estate Co., Ltd. | -- | -12,025.38 | -12,025.38 | -- | - | -13,464.76 | -13,464.76 | -28.15 |
| Guangdo ng Jianbang Group (Huiyang ) Industrial Co., Ltd. | -- | -8,184,594.48 | -8,184,594.48 | -158,541,081.30 | - | -6,368,214.03 | -6,368,214.03 | -748,387,911.00 |
2. Interests in joint ventures or associates
（1） Summarised financial information of immaterial joint ventures and associates:
| Item | As at/Year ended 2022.12.31 | As at/Year ended 2021.12.31 |
| Joint ventures: | ||
| Aggregate carrying amount of investments | -- | -- |
| Aggregate amount of share of | -- | -- |
| Net profit | -- | -- |
| Other comprehensive income | -- | -- |
| Total comprehensive income | -- | -- |
| Associates： | ||
| Aggregate carrying amount of investments | 93,927.67 | 272,168.28 |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
| Item | As at/Year ended 2022.12.31 | As at/Year ended 2021.12.31 |
| Aggregate amount of share of | ||
| Net profit | -178,240.64 | -105,321.37 |
| Other comprehensive income | -- | -- |
| Total comprehensive income | -- | -- |
（2） Excess loss from joint ventures or associates
| Investee | Accumulated unrecognized loss in prior periods | Unrecognized loss (or share of net profit)for the year | Accumulated unrecognized loss as at 2021.12.31 |
| Shenzhen Fresh Peak property consultant Co., Ltd | 2,217,955.89 | -- | 2,217,955.89 |
Note:
Shenzhen Fresh Peak property consultant Co., Ltd was established on 15 March 1993 with registeredcapital of CNY 3,000,000. The group subscribed CNY 600,000 (20% in total capital). As at 31December 2021, the actual investment is CNY 600,000 the Company has recognized long-term equityinvent lose for CNY 600,000.VIII. Risk Management of Financial Instruments
The Group's main financial instruments include the monetary funds, notes receivable, other receivables,trading financial assets, other current assets, accounts receivable, other equity instrument investments,accounts payable, other payables, short-term borrowing, long-term payables. Details of the variousfinancial instruments are disclosed in the relevant notes. The risks associated with these financialinstruments and the risk management policies adopted by the Group to mitigate these risks aredescribed below. The management of the Group manages and monitors these exposures to ensure thatthese risks are contained within the limits specified.
1. Risk management objectives and policies
The Group's goal in risk management is to strike an appropriate balance between risks and benefits,and strive to reduce the adverse impact of financial risks on the Group's financial performance. Basedon this risk management objective, the Group has developed a risk management policy to identify andanalyze the risks faced by the Group, set an appropriate acceptable risk level and design thecorresponding internal control procedures to monitor the risk level of the Group. The Group regularlyreviews these risk management policies and the relevant internal control systems to adapt to marketconditions or changes in the Group's business activities. The Group's internal audit department alsoregularly or randomly checks whether the implementation of the internal control system complies withthe risk management policy.The main risks arising from the Group's financial instruments are credit risk, liquidity risk, market risk(including exchange rate risk, interest rate risk and commodity price risk).The Board of Directors is responsible for planning and establishing the Group's risk managementstructure, formulating the Group's risk management policies and relevant guidelines and overseeing theimplementation of risk management measures. The Group has developed risk management policies toidentify and analyze the risks faced by the Group. These risk management policies clearly stipulatespecific risks, covering market risk, credit risk, liquidity risk management and many other aspects. The
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
Group regularly evaluates changes in the market environment and the Group's business activities todetermine whether to update its risk management policies and systems.The Group diversifies the risks of financial instruments through appropriate diversification of its portfolioof investments and businesses, and reduces the risk of concentration in a single industry, a specificregion or a specific counterparty through the development of appropriate risk management policies.
（1） Credit risk
Credit risk refers to the risk of financial loss to the Group resulting from the failure of the counterparty tofulfill its contractual obligations.The Group manages credit risks according to portfolio classification. Credit risks mainly arise from bankdeposits, notes receivable, accounts receivable, other receivables.The Group's bank deposits are mainly held in state-owned banks and other large and medium-sizedlisted banks (or mainly in financial institutions with good reputations and high credit ratings), and theGroup does not expect that the bank deposits will pose a significant credit risk.For notes receivable, accounts receivable, other receivables and long-term receivables, the Group setspolicies to control credit risk exposure. The Group evaluates customers' credit qualifications and setscredit periods based on their financial status, credit history and other factors such as current marketconditions. The Group will regularly monitor the credit records of customers. For customers with poorcredit records, the Group will use written methods to urge payment, shorten the credit period or cancelthe credit period to ensure that the overall credit risk of the Group is within a controllable range.The debtors of the Group's accounts receivable are customers distributed in different industries andregions. The Group continuously conducts credit assessments on the financial position of accountsreceivable and, where appropriate, takes out credit guarantee insurance.The maximum credit risk exposure of the Group is the carrying amount of each financial asset on thebalance sheet. The Group does not provide any other security which may expose the Group to a creditrisk.Of the Group's accounts receivable, the accounts receivable of the top five customers account for 55.65%of the Group's total accounts receivable (in 2021: 56.87%); Among other receivables of the Group, otherreceivables from the top five companies in arrears amount to 58.72% (2021: 63.70%) of the totalamount of other receivables of the Group.
（2） Liquidity risk
Liquidity risk refers to the risk that the Group will encounter a shortage of funds when fulfilling itsobligations to settle by delivering cash or other financial assets.In managing liquidity risks, the Group maintains and monitors cash and cash equivalents deemedsufficient by the management to meet the operational needs of the Group and to reduce the impact ofcash flow fluctuations. The Group's management monitors the use of bank borrowings and ensurescompliance with borrowing agreements. It also secured a commitment from major financial institutionsto provide adequate standby funds to meet short - and long-term funding needs.
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
The Group finances its working capital through funds generated from its operations and bank and otherborrowings. As at 31 December 2022, the Group's unutilized bank loan amount is CNY 439.71 million(31 December 2021: CNY 0 million).At the end of the period, the maturity analysis of the financial assets, financial liabilities and off-balancesheet guarantee items held by the Group according to the undiscounted remaining contract cash flow isas follows (unit: CNY 10,000) :
| Ending balance | ||||
| Item | year | years | years | Total |
| Financial liabilities: | ||||
| Short-term loans | 5,113.81 | 5,113.81 | ||
| Notes payable | 42,478.79 | 42,478.79 | ||
| Accounts payable | 56,761.54 | 56,761.54 | ||
| Interest payables | 618.88 | 618.88 | ||
| Other payables | 5,426.10 | 5,426.10 | ||
| Liabilities held for sale | 5.39 | 5.39 | ||
| Guarantees for client | 40,158.39 | 40,158.39 | ||
| Total financial liabilities and contingent liabilities | 150,562.90 | 150,562.90 | ||
At the beginning of the period, the maturity analysis of the financial assets, financial liabilities and off-balance sheet guarantee items held by the Group according to the undiscounted remaining contractcash flow is as follows (unit: CNY 10,000) :
| Ending balance of the previous year | ||||
| Item | Within one year | One to Five years | More than five years | Total |
| Financial liabilities: | ||||
| Short-term loans | 5,044.01 | -- | -- | 5,044.01 |
| Accounts payable | 24,737.64 | -- | -- | 24,737.64 |
| Interest payables | 14,144.76 | -- | -- | 14,144.76 |
| Other payables | 1,653.53 | -- | -- | 1,653.53 |
| Long-term payables | 56,484.21 | -- | -- | 56,484.21 |
| Guarantees for client | 5,791.56 | 783.69 | -- | 6,575.25 |
| Liabilities held for sale | 39,237.82 | -- | -- | 39,237.82 |
| Total financial liabilities and contingent liabilities | 147,093.53 | 783.69 | -- | 147,877.22 |
The amount of financial liabilities disclosed in the above table is undiscounted contractual cash flowsand may be different from the carrying amount on the balance sheet.The maximum amount of a guarantee contract that has been signed does not represent the amount tobe paid.
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
（3） Market risks
The market risk of financial instruments refers to the risk that the fair value or future cash flow offinancial instruments will fluctuate due to market price changes, including interest rate risk, exchangerate risk and other price risks.Interest rate riskInterest rate risk refers to the risk that the fair value of a financial instrument or future cash flow willfluctuate due to changes in market interest rates. Interest rate risk can arise from recognized interest-bearing financial instruments and from unrecognized financial instruments (such as certain loancommitments).The interest rate risk of the Group mainly arises from long-term bank borrowings. Floating interest ratefinancial liabilities expose the Group to cash flow interest rate risk, while fixed interest rate financialliabilities expose the Group to fair value interest rate risk. The Group determines the relative proportionof fixed and floating rate contracts based on prevailing market conditions and maintains an appropriatemix of fixed and floating rate instruments through regular review and monitoring.During the reporting period, the Group operates by its own working capital. As at 31 December 2022,the Group has no financial liabilities with fixed or floating interest rate, such as bank loan. Therefore, theGroup believes that the interest rate risk is insignificantCurrency riskThe term "exchange rate risk" refers to the risk that the fair value of a financial instrument or future cashflow will fluctuate due to changes in foreign exchange rates. Exchange rate risk can arise from financialinstruments denominated in a foreign currency other than the standard currency.Exchange rate risk is mainly the Group's financial position and cash flows are affected by foreignexchange rate fluctuations. In addition to the subsidiary established in Hong Kong holding assets inHong Kong dollar as the settlement currency, only a small amount of Hong Kong market investmentbusiness, the group's foreign currency assets and liabilities accounted for the overall assets andliabilities of the proportion is not significant. Therefore, the Group believes that the exchange rate risk isnot significant.
2. Capital management
The objective of the Group's capital management policy is to ensure that the Group can continue as agoing concern, thereby providing a return to shareholders and benefiting other stakeholders, whilemaintaining an optimal capital structure to reduce the cost of capital.In order to maintain or adjust its capital structure, the Group may adjust its financing method, adjust theamount of dividends paid to shareholders, return capital to shareholders, issue new shares and otherequity instruments or sell assets to reduce its debt.The Group monitors the capital structure on the basis of the debt-to-asset ratio (i.e., total liabilitiesdivided by total assets). As at 31 December 2022, the Group's liability to asset ratio was 24.66% (31December 2021: 31.62%).
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
IX. Fair value
The level in which fair value measurement is categorised is determined by the level of the fair valuehierarchy of the lowest level input that is significant to the entire fair value measurement. The levels aredefined as follows:
Level 1 inputs: unadjusted quoted prices in active markets that are observable at the measurement datefor identical assets or liabilities.Level 2 inputs: inputs other than Level 1 inputs that are either directly or indirectly observable forunderlying assets or liabilities.Level 3 inputs: inputs that are unobservable for underlying assets or liabilities.
(1) Items and amounts measured at fair value
At the end of the period, the assets and liabilities measured at fair value are listed as follows accordingto the above three levels :
| Item | fair value measurement | value measurement | fair value measurement | Total |
| I.Recurring fair value measurement | ||||
| (1) Trading financial assets | 408,154,361.42 | -- | -- | 408,154,361.42 |
| (2) Investment in other equity instruments | -- | -- | 13,839,235.57 | 13,839,235.57 |
| Total assets measured at fair value on a recurring basis | 408,154,361.42 | - | 13,839,235.57 | 421,993,596.99 |
(2) Quantification information of important unobservable input values used in the third level of fair valuemeasurement
| Within the capacity | Ending fair value | Valuation techniques | The input value cannot be observed | Range (weighted mean) |
| Equity instrument investment:： | ||||
| Non-listed equity investments: | 13,839,235.57 | Net asset method | Book value of net assets with discount of liquidity | N/A |
(3) Items and amounts that are not measured at fair value but disclose their fair valueThe financial assets and financial liabilities of the Group measured at amortized cost mainly includemonetary funds, notes receivable, accounts receivable, other receivables, short-term borrowings, notespayable, accounts payable, other payables, etc.Except for the following financial assets and financial liabilities, the carrying value of other financialassets and financial liabilities which are not measured at fair value varies very little from fair value.X. Related parties and related party transactions
1. Information about the parent of the Group
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
| Name | Registration place | Business nature | Registered capital (CNY0,000) | Shareholding percentage % | Percentage of voting rights % |
| Shenzhen Investment Holdings Co., Ltd. | Shenzhen, Guangdong province | guarantee | 2,800,900.00 | 55.78 | 55.78 |
The ultimate controlling party of the Group is State-owned Assets Supervision and ManagementCommission of Shenzhen Municipal People‘s Government.In the reporting period, the changes in the registered capital of the parent company are as follows:
| Opening balance | Accrued during the year | Decreased during the year | Ending balance |
| 2,800,900.00 | -- | -- | 2,800,900.00 |
2. Information about the subsidiaries of the Group
For information about the subsidiaries of the Group, refer to NoteⅦ.1
3. Information about the joint ventures and associates of the Group
For information about the joint ventures and associates of the Group, refer to NoteⅦ.2
4. Information on other related parties
| Name | Related party relationship |
| Shenzhen Jian ?an Group Co., Ltd. | Both controlled by the parent company |
| Shenzhen Dongfang New world store Co., Ltd. | Participating stock companies |
| Shenxi Limited | Not included in Consolidated Financial Statements‘ Subsidiary that had been terminated its licenses by law but not cancellation |
| Shenzhen Zhentong New Electromechanical Industry Development Co., Ltd. | Not included in Consolidated Financial Statements‘ Subsidiary (Long-term without operation) |
| Shenzhen Nanyang Hotel Co., Ltd. | Not included in Consolidated Financial Statements‘ Subsidiary that had been terminated its licenses by law but not cancellation |
| Shenzhen Real Estate Electromechanical Management Company | Not included in Consolidated Financial Statements‘ Subsidiary that had been terminated its licenses by law but not cancellation |
| Shenzhen Longgang Henggang Huagang Industrial Co., Ltd. | Not included in Consolidated Financial Statements‘ Subsidiary that had been terminated its licenses by law but not cancellation |
| Guangzhou Bobi Enterprise Management Consulting Co., Ltd. | Shareholder of Guangdong Jianbang Group (Huiyang) Industrial Co., Ltd. |
| Directors, Supervisors, CFO and Board secretary | Key management personnel |
| Shenzhen Property Management Co. , Ltd. | Both controlled by the parent company |
| Guoren Property Insurance Co. , Ltd. | Both controlled by the parent company |
| Shenzhen Water Planning & Design Institute Co., Ltd. | Both controlled by the parent company |
| Shenzhen General Institute of Architectural Design and Research Co., Ltd. | Both controlled by the parent company |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
5. Transactions with related parties
(1) Purchases/sales
①Purchase of goods/receiving of services
| Related party | Nature of transaction | Current amount | Amount of previous period |
| Shenzhen Water Planning & Design Institute Co., Ltd. | Foundation pit support design of Shenfang Guangmingli project | 554,056.60 | -- |
| Shenzhen General Institute of Architectural Design and Research Co., Ltd. | Construction engineering design of Shenfang Guangmingli project | 5,329,811.33 | -- |
| Guoren Property Insurance Co. , Ltd. | Insurance services | 283,018.87 | -- |
| Shenzhen Property Management Co. , Ltd. | Property service | 11,530,169.32 | -- |
| Shenzhen Shenfang Property Cleaning Co., Ltd. | Cleaning service | 459,622.70 | -- |
| Shenzhen Property Management Co. , Ltd. Shantou branch | Property service | 2.668.895.66 | -- |
| Shenzhen RongHua JiDian Co., Ltd | Elevator maintenance | -- | 1,329,886.76 |
②Sales of goods/rendering of services
| Related party | Nature of transaction | Current amount | Amount of previous period |
| Shenzhen Jian'an Group Co., Ltd. | Decoration services | -- | 7,614,678.90 |
| Shenzhen RongHua JiDian Co., Ltd | Property Services | -- | 68,772.00 |
| Guoren Property Insurance Co. , Ltd. | Leasing services | 812,102.75 | -- |
| Shenzhen Property Management Co. , Ltd. | Leasing services | 4,290,671.33 | -- |
| Shenzhen Shenfang Property Cleaning Co., Ltd. | Leasing services | 37,142.83 | -- |
(2) Lease
① The Group acts as the lessor
| Name of the lessee | Types of leased assets | Rental income recognized in the current period | Rental income recognized in the previous period |
| Shenzhen Property Management Co., Ltd. | Buildings | 4,290,671.33 | -- |
| Shenzhen Shenfang Property Cleaning Co., Ltd. | Buildings | 37,142.83 | -- |
| Guoren Property Insurance Co. , Ltd. | Buildings | 812,102.75 | -- |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
(3) Funding from related party
| Related party | Amount of funding | Inception date | Maturity date | Note |
| Funds received | ||||
| Shenzhen Investment Shareholding Co. Ltd | 16,535,277.94 | 9 November 2006 | 22 December 2016 | The principal of the loan was repaid on 22 December 2016, and the remaining amount is interest payable. |
| Guangzhou Bopi Enterprise Management Consulting Co. , Ltd. | 170,979,386.21 | 20 May 2020 | 20 May 2023 | The amount of interest to be charged is CNY 32,285,879.29 |
Note: at the end of the reporting period, the balance of interest on loan to Shenzhen Investment HoldingCo. , Ltd. is CNY 16,535,277.94, and the amount of principal and interest payable to Guangzhou BopiEnterprise Management Consulting Co. , Ltd. is CNY 203,265,265.50.
(4) Assets Transfer and debt restructuring
| Related party | Nature of transaction | Current amount | Amount of previous period |
| Shenzhen Guomao Real Estate Management Co. , Ltd. | Transfer the property company | 196,676,700.00 | -- |
(5) Remuneration of key management personnel
The Group has 10 key management personnel in 2021, and 13 key management personnel in 2020.Information about remuneration is as follows:
| Item | Current amount （In ten thousand） | Amount of previous period （In ten thousand） |
| Remuneration of key management personnel | 812.36 | 844.64 |
（6）In order to encourage the core employees of the group to share the operating results of themarket-oriented projects with the company, share the operating risks, stimulate the endogenousmotivation of improving efficiency and increasing benefits, enhance the efficiency of asset management,and realize the preservation and appreciation of the value of state-owned assets, the company hasformulated the "Management Measures for Investment From the Staff of Shenfang Group Linxi JunProject". According to the above-mentioned management measures, the related party transactions willform a joint investment with some directors, supervisors and senior executives of the company. As of 31December 2022, the company's directors, supervisors and senior executives had invested a total ofCNY 8.95 million.
6. Receivables from and payables to related parties
(1) Receivables from related parties
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
| Ending balance | Ending balance of previous year | |||||
| Item | Related party | Book value | Provision for bad and doubtful debts | Book value | Provision for bad and doubtful debts | |
| Accounts receivable | Shenzhen Fresh Peak property consultant Co., Ltd | 1,201,345.82 | 1,201,345.82 | 1,118,383.88 | 1,118,383.88 | |
| Other receivables | Mineral Water Co., Ltd | 10,465,168.81 | 10,465,168.81 | 10,465,168.81 | 10,465,168.81 | |
| Other receivables | Shenzhen Runhua Automobile Trading Co., Ltd | 3,072,764.42 | 3,072,764.42 | 3,072,764.42 | 3,072,764.42 | |
| receivables | (Vancouver) Co., Ltd | 89,035,748.07 | 89,035,748.07 | 89,035,748.07 | 89,035,748.07 | |
| Other receivables | Australia Bekaton Property Limited | 12,559,290.58 | 12,559,290.58 | 12,559,290.58 | 12,559,290.58 | |
| Other receivables | Bekaton Property Limited | 18,689,545.58 | 18,870,785.54 | 18,689,545.58 | 18,870,785.54 | |
| Other receivables | Shenzhen Shenfang Department Store Co. Ltd. | 237,648.82 | 237,648.82 | 237,648.82 | 237,648.82 | |
| Other receivables | Shenzhen RongHua JiDian Co., Ltd | 475,223.46 | 475,223.46 | 475,223.46 | 475,223.46 | |
| Other receivables | Xi‘an Fresh Peak property management& Trading Co., Ltd | 8,419,205.19 | 8,419,205.19 | 8,419,205.19 | 8,419,205.19 | |
| Other receivables | Shenzhen Shenxi Architectural Decoration Company | 7,660,529.37 | 7,660,529.37 | 7,660,529.37 | 7,660,529.37 | |
| Other receivables | Shenzhen Jian'an Group Co., Ltd. | 3,168,721.00 | 3,168,721.00 | 3,168,721.00 | 3,168,721.00 | |
（2）Payables to related parties
| Item | Related party | Ending balance | Ending balance of previous year |
| Interest payables | Shenzhen Investment Shareholding Co. Ltd | 16,535,277.94 | 16,535,277.94 |
| Accounts payable | Shenzhen Jian'an Group Co., Ltd. | 10,654,310.21 | 25,576,607.95 |
| Accounts payable | Shenzhen Property Management Co. , Ltd. | 11,053,366.80 | -- |
| Other payables | Shenzhen Dongfang New world store Co., Ltd | 902,974.64 | 902,974.64 |
| Other payables | Guangdong Province Fengkai Lain Feng Cement Manufacturing Co., Ltd. | 1,867,348.00 | 1,867,348.00 |
| Other payables | Shenzhen Real Estate Electromechanical Management Company | 14,981,420.99 | 14,981,420.99 |
| Other payables | Shenzhen Zhentong New Electromechanical Industry Development Co., Ltd. | 8,310,832.50 | 8,827,940.07 |
| Other payables | Shenzhen Shenfang Department Store Co. Ltd. | 639,360.38 | 639,360.38 |
| Other payables | Shenzhen Longgang Henggang Huagang Industrial Co., Ltd. | 165,481.09 | 165,481.09 |
| Interest payables | Shenzhen Investment Shareholding Co. Ltd | 203,345,881.60 | 193,016,852.52 |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
XI. Commitments and contingencies
1. Significant commitments
(1) Capital commitments
| Capital commitments entered into but not recognized in the financial statements | Ending balance | Ending balance of previous year |
| Material sales or purchases contracts | 328,654,477.52 | 475,137,087.80 |
As at 31 December 2022, there is no other commitment to be disclosed.
2. Contingencies
(1) Contingent liabilities arising from pending arbitration and pending litigation and related financialimpact
| Plaintiff | Defendant | Case | Appellate court | Amount of the object of action | Progress of cases |
| Xi‘an Fresh Peak Holding limited company | Xi'an Commercial and Trade Commission Xi'an Commerce and Tourism Co., Ltd. | Investment compensation disputes | Shaanxi Higher People's Court | CNY 36.62 million and interest | Pending |
Xi‘an Fresh Peak Holding limited company (hereinafter referred to as―Fresh Peak Company‖) wasSino-foreign joint venture set up in Xi‘an. Among them, Fresh Peak Enterprise Co., Ltd made 67% of theshares in cash. Xi‘an Trade Building, a company directly under the Xi'an Commercial and TradeCommission (hereinafter referred to as "Xi'an C&T Commission"), invested 16% of the shares in landuse rights. Hong Kong Dadiwang Industrial Investment Company holds 17% of the shares. The corebusiness was property development. And the project was Xi‘an Trade Building. The project was startedon 28 November 1995. But the project had been stopped in 1996 because of the two parties‘ differenceson the operating policy of the project. In 1997, the Xi‘an government withdrew the Xi'an Fresh Peakinvestment project compulsively and assigned the project to Xi‘an Business Tourism Co., Ltd(hereinafter referred to as―Business Tourism Company‖). But two parties had insulted a lawsuit oncompensation. The ShanXi Province High Peoples Court made a judgement―(2000) SJ-CZ No.25‖. Thejudgement was as follows: 1. Business Tourism Company had to pay for the compensation CNY 36,620thousand to Xi‘an Fresh Peak Company after the judgment entering into force. If the Business TourismCompany 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 thecompensation.By auctioning assets of Business Tourism Company, the amount of CNY 15,201,000.00 had been calledback. The company has obtained new property clues, submitted an application for resumption ofexecution, this case is still pending until 31 December 2022.As at 31 December 2022, the book value of the long-term equity investment of Xi‘an Fresh PeakCompany is CNY 32,840,729.61. The book balance of assets was CNY 8,419,205.19. Both have beentaken full provision for impairment loss
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
| Plaintiff | Defendant | Case | Appellate court | Amount of the object of action | Progress of cases |
| Huizhou Mingxiang Economic Information Consulting Co., Ltd., Huizhou Huiyang Hongfa Industry and Trade Co., Ltd., Huizhou Jinlongsheng Industrial Co., Ltd. | Guangdong Jianbang Group (Huiyang) Industrial Co. , Ltd. | Bill payment claim dispute litigation | Huiyang District People's Court | The principal amount is CNY 177,151,400 with interest of CNY 2,848,200 | Unsentenced |
Guangdong Jianbang Group (Huiyang) Industrial Co. , Ltd.（hereinafter referred to as "JianbangCompany"） is a subsidiary of the Group holding 51% of the shares. Because Jianbang Company wasunable to honor the commercial acceptance bill due in January 2022, with a total amount of CNY177,151,400.00, the plaintiff company filed a lawsuit against the Huiyang District People's Court for thedispute of bill payment claim. At present, the court has not yet ruled. Shenfang Group and Jianbang arenegotiating a package solution with the plaintiff.Contingent liabilities arising from guarantee provided toother entities and related financial effects.
(2) Contingent liabilities arising from guarantee provided to other entities and related financial effectsAs at 31 December 2022, the Group provides commercial housing purchaser with guarantees at CNY401,583,900.00 for the following loans:
| Item | Duration | Amount (In ten thousand) | Note |
| ShangLin Building | Until the Premises Permit mortgage registration is finished and in bank custody | 107.49 | |
| Shengfang CuiLin Building | Until the Premises Permit mortgage registration is finished and in bank custody | 2,174.37 | |
| ChuanQi DongHu Building (Former DongHuDiJing Building) | Until the Premises Permit mortgage registration is finished and in bank custody | 1,820.33 | |
| TianYue Bay | Until the Premises Permit mortgage registration is finished and in bank custody | 36,056.20 | |
| Total | 40,158.39 |
(3) Other contingencies（Not including contingent liabilities that are highly unlikely to result in anoutflow of economic benefits from the business）For information about contingency of joint venture or joint venture investment, refer to Note VII 2. (2).As at 31 December 2022, there is no other contingency to be disclosed.XII. Post balance sheet date events
1. Profit appropriations plans after the balance sheet date
The company intends to pay a cash dividend of CNY 0.61(including tax) , totaling CNY60,699,600.00, toall shareholders on 61,711,260.00 shares as at 31 December 2022.
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
XIII. Other significant items
1. Termination of operation
| Item | Current amount | Amount of previous period |
| Income from Termination of Operations (A) | 24,974,689.94 | 163,141,074.63 |
| Less: termination expenses (B) | 11,143,092.65 | 160,034,977.84 |
| Gross profit from terminated operations (C) | 12,867,988.21 | 4,470,327.62 |
| Minus: Income tax expense for termination of operations (D) | 3,222,830.80 | 1,123,400.14 |
| Net profit from operating activities (E=C-D) | 9,645,157.41 | 3,346,927.48 |
| Impairment loss on assets/(reverse) (F) | -- | -- |
| Gross disposal proceeds (G) | -- | -- |
| Disposal of related income tax expense (H) | -- | -- |
| Net profit on disposal (I= g-h) | -- | -- |
| Net profit from terminated operations (J=E+F+I) | 9,645,157.41 | 3,346,927.48 |
| Including: profit from terminated operations attributable to shareholders of the parent company | 9,645,157.41 | 3,346,927.48 |
| Termination profit attributable to minority shareholders | -- | -- |
| Net cash flow from operating activities | -7,047,804.38 | -3,487,467.47 |
| Net cash flow from investment activities | -5,980.00 | -528,491.28 |
| Net cash flow from financing activities | -- | -- |
Note: The above items are the financial data of Shenzhen Property Management Co. , Ltd. Ltd. inJanuary 2022.XIV. Notes for main items in the parent company's financial statements
1. Accounts Receivable
(1) Disclosed by aging
| Aging | Ending balance | Ending balance of previous year |
| Within one year | 12,426,543.02 | 9,893,622.09 |
| One to two years | -- | -- |
| Two to three years | -- | -- |
| More than three years | 9,653,566.27 | 9,710,249.94 |
| Subtotal | 22,080,109.29 | 19,603,872.03 |
| Less: bad debt provision | 10,373,431.08 | 9,895,586.10 |
| Total | 11,706,678.21 | 9,708,285.93 |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
(2) Disclosed by categories
Item
Ending balanceBook balance Bad debt provisionAmount Proportion Amount
Provision
Book value
an individual basisa combination basis
customers
Continued：
Item
Ending balance of previous yearBook balance Bad debt provisionAmount Proportion Amount
Provision
Book value
an individual basisa combination basis
customers
Bad debt provision made on an individual basis:
| Ending balance | ||||
| Item | Book balance | Bad debt provision | Expected credit loss rate (%) | Reason |
| long-term accounts receivable from property sales | 10,020,587.91 | 10,020,587.91 | 100.00 | Uncollected is expected |
Continued：
| Ending balance of previous year | ||||
| Item | Book balance | Bad debt provision | Expected credit loss rate (%) | Reason |
| long-term accounts receivable from property sales | 9,649,415.20 | 9,649,415.20 | 100.00 | Uncollected is expected |
| proportion | ||||
| Bad debt provisions made on 10,020,587.91 | 45.38 | 10,020,587.91 | 100.00 | -- |
| Bad debt provisions made on 12,059,521.38 | 54.62 | 352,843.17 | 2.93 | 11,706,678.21 |
| Including： | ||||
| Receivables from related parties within consolidated 5,002,657.79 | 22.66 | -- | -- | 5,002,657.79 |
| scope | ||||
| Receivables from other 7,056,863.59 | 31.96 | 352,843.17 | 5.00 | 6,704,020.42 |
| Total 22,080,109.29 | 100.00 | 10,373,431.08 | 46.98 | 11,706,678.21 |
| proportion | ||||
| Bad debt provisions made on 9,649,415.20 | 49.22 | 9,649,415.20 | 100.00 | -- |
| Bad debt provisions made on 9,954,456.83 | 50.78 | 246,170.90 | 2.47 | 9,708,285.93 |
| Including： -- | -- | -- | -- | -- |
| Receivables from related parties within consolidated 5,031,038.74 | 25.67 | -- | -- | 5,031,038.74 |
| scope | ||||
| Receivables from other 4,923,418.09 | 25.11 | 246,170.90 | 5.00 | 4,677,247.19 |
| Total 19,603,872.03 | 100.00 | 9,895,586.10 | 50.48 | 9,708,285.93 |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
Bad debt provision made on a combination basis:
Combined withdrawal item: related parties in consolidation scope
| Ending balance | Ending balance of previous year | |||||
| Aging | Accounts receivable | Bad debt provision | Expected credit loss rate (%) | Accounts receivable | Bad debt provision | Expected credit loss rate (%) |
| Within 1 year | 5,002,657.79 | -- | -- | 5,031,038.74 | -- | -- |
Combined withdrawal item: receivables from other customers
| Aging | Ending balance | Ending balance of previous year | ||||
| Accounts receivable | Bad debt provision | Expected credit loss rate (%) | Accounts receivable | Bad debt provision | Expected credit loss rate (%) | |
| Within 1 year | 7,056,863.59 | 352,843.17 | 5.00 | 4,923,418.09 | 246,170.90 | 5.00 |
(3) Additions, recoveries or reversals of provision for the current period
| Bad debt provision | |
| Opening balance | 9,895,586.10 |
| Additions | 477,844.98 |
| Recoveries or reversals | -- |
| Written-off | -- |
| Other | -- |
| Ending balance | 10,373,431.08 |
(4) The top five units with the ending balance of accounts receivable collected by the debtor
| Name of the entity | Accounts receivable The ending balance | % of the total closing balance of accounts receivable | Bad debt provision The ending balance |
| Shenzhen Petrel Hotel Co., Ltd. | 5,002,657.79 | 22.66 | -- |
| Daxing Automotive parts Co., Ltd. | 2,029,665.76 | 9.19 | 2,029,665.76 |
| Shenzhen Xinfeng Real Estate Consulting Co., Ltd. | 1,201,345.82 | 5.44 | 1,201,345.82 |
| Weidong Wang | 1,200,000.00 | 5.43 | 1,200,000.00 |
| Guodong Wang | 900,761.86 | 4.08 | 900,761.86 |
| Total | 10,334,431.23 | 46.80 | 5,331,773.44 |
2. Other receivables
| Item | Ending balance | Ending balance of previous year |
| Interest receivable | -- | |
| Dividends receivable | 39,222,722.88 | -- |
| Other receivables | 1,672,657,609.57 | 1,587,300,891.76 |
| Total | 1,711,880,332.45 | 1,587,300,891.76 |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
(1) Dividends receivable
| Name of the invested entity | Ending balance | Ending balance of previous year |
| Shenzhen City SPG Long Gang Development Ltd. | 39,222,722.88 | -- |
| Subtotal | 39,222,722.88 | -- |
| Less: bad debt provision | -- | -- |
| Total | 39,222,722.88 | -- |
At the end of the period, the Group has no significant dividends receivable with an account age of morethan 1 year.
(2) Other receivables
Disclosure by aging
| Aging | Ending balance | Ending balance of previous year |
| Within 1 year | 347,340,209.70 | 568,919,874.78 |
| 1 to 2 years | 475,880,860.11 | 209,903,464.26 |
| 2 to 3 years | 105,934,643.85 | 78,698,092.26 |
| More than 3 years | 1,544,673,561.96 | 1,522,297,306.33 |
| Subtotal | 2,473,829,275.62 | 2,379,818,737.63 |
| Less: bad debt provision | 801,171,666.05 | 792,517,845.87 |
| Total | 1,672,657,609.57 | 1,587,300,891.76 |
Disclosure by nature
Ending balance Ending balance of previous yearItem
Book balance
Bad debt
Book Value Book balance
Bad debt
Book Value
and paying on
Bad Debt ProvisionAt the end of the period, bad debt provision at the first stage:
| Types | Book balance | Expected credit loss rate over the next 12 months (%) | Bad debt provision | Book value | Reason |
| Bad debt provisions made on an individual basis | -- | -- | -- | -- |
| provision | provision | ||||
| Other receivables from the collecting 61,133.60 | -- | 61,133.60 | 203,659.15 | -- | 203,659.15 |
| behalf Other receivables from other 7,106,322.88 | 3,506,320.84 | 3,600,002.04 | 4,801,159.55 | 4,056,565.36 | 744,594.19 |
| customers Other receivables from related 137,686,536.98 | 137,686,536.98 | -- | 137,211,313.52 | 137,211,313.52 | -- |
| parties Other receivables in consolidation 2,328,975,282.16 scope | 659,978,808.23 | 1,668,996,473.93 | 2,237,602,605.41 | 651,249,966.99 | 1,586,352,638.42 |
| Total 2,473,829,275.62 | 801,171,666.05 | 1,672,657,609.57 | 2,379,818,737.63 | 792,517,845.87 | 1,587,300,891.76 |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
| Types | Book balance | Expected credit loss rate over the next 12 months (%) | Bad debt provision | Book value | Reason |
| made on a combination basis | 3,839,962.00 | 4.66 | 178,826.36 | 333,641.16 | |
| Other receivables from the collecting and paying on behalf | 39,400.00 | -- | -- | 39,400.00 | |
| Other receivables from other customers | 21,733.60 | -- | -- | 21,733.60 | |
| Other receivables from related parties | 3,778,828.40 | 4.73 | 178,826.36 | 3,600,002.04 | |
| Total | 3,839,962.00 | 4.66 | 178,826.36 | 3,661,135.64 |
At the end of the period, bad debt provision at the second stage:
| Types | Book balance | Expected credit loss rate over the next 12 months (%) | Bad debt provision | Book value | Reason |
| on an individual basis | -- | -- | -- | -- | Could be uncollectible |
| Bad debt provisions made on a combination basis | 2,328,975,282.16 | 28.34% | 659,978,808.23 | 1,668,996,473.93 | Could be uncollectible |
| consolidation scope | 2,328,975,282.16 | 28.34% | 659,978,808.23 | 1,668,996,473.93 | Could be uncollectible |
| Total | 2,328,975,282.16 | 28.34% | 659,978,808.23 | 1,668,996,473.93 | Could be uncollectible |
At the end of the period, bad debt provisions at the third stage:
| Types | Book balance | Expected credit loss rate over the next 12 months (%) | Bad debt provision | Book value | Reason |
| Bad debt provisions made on an individual basis | -- | -- | -- | -- | |
| Bad debt provisions made on a combination basis | 141,014,031.46 | 100.00 | 141,014,031.46 | -- | |
| Other receivables from other customers | 137,686,536.98 | 100.00 | 137,686,536.98 | -- | Could be uncollectible |
| Other receivables from related parties | 3,327,494.48 | 100.00 | 3,327,494.48 | -- | Could be uncollectible |
| Total | 141,014,031.46 | 100.00 | 141,014,031.46 | -- | Could be uncollectible |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
At the end of previous period, bad debt provision at the first stage:
| Types | Book balance | Expected credit loss rate over the next 12 months (%) | Bad debt provision | Book value | Reason |
| Bad debt provisions made on an individual basis | -- | -- | -- | -- | |
| made on a combination basis | 987,442.51 | 3.97 | 39,189.17 | 948,253.34 | |
| Other receivables from government | -- | -- | -- | -- | |
| Other receivables from the collecting and paying on behalf | 203,659.15 | -- | -- | 203,659.15 | |
| Other receivables from other customers | 783,783.36 | 5.00 | 39,189.17 | 744,594.19 | |
| Total | 987,442.51 | 3.97 | 39,189.17 | 948,253.34 |
At the end of previous period, bad debt provisions at the second stage:
| Types | Book balance | Expected credit loss rate over the next 12 months (%) | Bad debt provision | Book value | Reason |
| Bad debt provisions made on an individual basis | -- | -- | -- | -- | |
| Bad debt provisions made on a combination basis | 2,237,602,605.41 | 29.10 | 651,249,966.99 | 1,586,352,638.42 | Could be uncollectible |
| Other receivables in consolidation scope | 2,237,602,605.41 | 29.10 | 651,249,966.99 | 1,586,352,638.42 | Could be uncollectible |
| Total | 2,237,602,605.41 | 29.10 | 651,249,966.99 | 1,586,352,638.42 |
At the end of previous period, bad debt provisions at the third stage:
| Types | Book balance | Expected credit loss rate over entire duration (%) | Bad debt provision | Book value | Reason |
| Bad debt provisions made on an individual basis | -- | -- | -- | -- | |
| Bad debt provisions made on a combination basis | -- | ||||
| 141,228,689.71 | 100.00 | 141,228,689.71 | |||
| receivables from other customers | 4,017,376.19 | 100.00 | 4,017,376.19 | -- | Could be uncollectible |
| receivables from related parties | 137,211,313.52 | 100.00 | 137,211,313.52 | -- | Could be uncollectible |
| Total | 141,228,689.71 | 100.00 | 141,228,689.71 | -- |
Bad debt provisions in the current period
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
| The first stage | The second stage | The third stage | ||
| Bad debt provision | Expected credit losses over the next 12 months | Expected credit losses over the entire duration (no credit impairment occurred) | Expected credit loss over the entire duration (credit impairment has occurred) | Total |
| Balance as at December 31, 2021 | 39,189.17 | 651,249,966.99 | 141,228,689.71 | 792,517,845.87 |
| The opening balance in the current period | -- | -- | -- | -- |
| Shift to the second stage | -- | -- | -- | -- |
| Shift to the third stage | -- | -- | -- | -- |
| Turn back to the second stage | -- | -- | -- | -- |
| Turn back to the first stage | -- | -- | -- | -- |
| Current period | 139,637.19 | 139,637.19 | ||
| Current roll-back | -- | -- | 214,658.25 | 214,658.25 |
| Current Resale | -- | -- | -- | -- |
| This verification | -- | -- | -- | -- |
| Other changes | -- | -8,728,841.24 | -- | -8,728,841.24 |
| Balance as of December 31, 2021 | 178,826.36 | 659,978,808.23 | 141,014,031.46 | 801,171,666.05 |
Note：Other changes were mainly due to the exchange rate movements.The top five units of ending balance of other receivables
| Name of the entity | Nature of other receivables | Ending balance of other receivables | Aging | Proportion of total ending balance of other receivables (%) | Ending balance of bad debt provision |
| Huafeng Real Estate Devepment Co., Ltd | Receivables from subsidiary | 756,160,642.87 | 1 to 3 years, more than 3 years | 30.57 | -- |
| Guangdong Jianbang Group (Huiyang) Industrial Co., Ltd. | Receivables from subsidiary | 766,912,600.18 | Within 2 years | 31.00 | -- |
| Xinfeng enterprise Limited. | Receivables from subsidiary | 523,734,882.60 | Within 2 years, more than 5 years | 21.17 | 508,377,320.74 |
| American Great Wall Co., Ltd. | Receivables from subsidiary | 103,231,257.70 | More than 5 years | 4.17 | 103,231,257.70 |
| Xinfeng Real Estate Co. , Ltd. | Receivables from subsidiary | 90,213,483.43 | Within 3 years | 3.65 | -- |
| Total | 2,240,252,866.78 | 90.56 | 611,608,578.44 |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
3. Long-term equity investment
| Item | Ending balance | Ending balance of previous year | ||||
| Book balance | Impairment loss | The book value | Book balance | Impairment loss | The book value | |
| Invest in subsidiaries | 1,716,020,833.00 | 133,839,271.15 | 1,582,181,561.85 | 1,735,224,157.90 | 152,839,271.15 | 1,582,384,886.75 |
| Investment in joint ventures | 9,455,465.38 | 9,455,465.38 | -- | 9,455,465.38 | 9,455,465.38 | -- |
| Invest in associated enterprises | 2,616,307.84 | 2,522,380.20 | 93,927.64 | 2,794,548.48 | 2,522,380.20 | 272,168.28 |
| Total | 1,728,092,606.22 | 145,817,116.73 | 1,582,275,489.49 | 1,747,474,171.76 | 164,817,116.73 | 1,582,657,055.03 |
(1) Invest in subsidiaries
| Investee unit | Opening balance | Increase in current | The reduced | Ending balance | Provision for impairment in the current period | Impairment loss The ending balance |
| Shenzhen Property Management Co., Ltd. | -- | -- | -- | |||
| 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 | -- | -- | ||
| Xinfeng enterprise Limited. | 556,500.00 | 556,500.00 | -- | -- | ||
| Xinfeng Real Estate Co. , Ltd. | 22,717,697.73 | 22,717,697.73 | -- | -- | ||
| Shenzhen Special Economic Zone Real Estate (Group) Guangzhou Property and Estate Co., Ltd. | 19,000,000.00 | 19,000,000.00 | -- | -- | -- | |
| Shenzhen Zhentong New Electromechanical Industry Development Co., Ltd. | 11,332,321.45 | 11,332,321.45 | -- | -- | ||
| American Great Wall Co., Ltd | 1,435,802.00 | 1,435,802.00 | -- | -- | ||
| Shenzhen Shenfang Free Trade Co., Ltd. | 4,750,000.00 | 4,750,000.00 | -- | -- | ||
| Shenzhen Huazhan Construction Supervision Co., Ltd. | 6,000,000.00 | 6,000,000.00 | -- | -- | ||
| QiLu Co., Ltd. | 212,280.00 | 212,280.00 | -- | -- | -- | |
| Beijing Shenfang Property Management Co., Ltd. | 500,000.00 | 500,000.00 | -- | 500,000.00 | ||
| Shenzhen Lianhua Enterprise Co., Ltd. | 13,458,217.05 | 13,458,217.05 | -- | -- | ||
| Shenzhen Longgang Industrial Co., Ltd. | 30,850,000.00 | 30,850,000.00 | -- | -- |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
| Investee unit | Opening balance | Increase in current | The reduced | Ending balance | Provision for impairment in the current period | Impairment loss The ending balance |
| Beijing fresh peak property development management limited company | 64,183,888.90 | 64,183,888.90 | -- | 64,183,888.90 | ||
| Shantou City Huafeng Real Estate Devepment Co., Ltd | 16,467,021.02 | 16,467,021.02 | -- | -- | ||
| Bekaton Property Limited | 201,100.00 | 201,100.00 | -- | 201,100.00 | ||
| Australia Bekaton Property Limited | 906,630.00 | 906,630.00 | -- | 906,630.00 | ||
| Shenzhen Shenfang Department Store Co., Ltd. | 9,500,000.00 | 9,500,000.00 | -- | 9,500,000.00 | ||
| ShanTou Fresh Peak Building | 58,547,652.25 | 58,547,652.25 | -- | 58,547,652.25 | ||
| Guangdong Jianbang Group (Huiyang) Industrial Co., Ltd. | 450,000,000.00 | 450,000,000.00 | -- | -- | ||
| Shenzhen Shenfang Chuanqi Real Estate Development Co., Ltd. | 995,000,000.00 | 995,000,000.00 | -- | -- | ||
| Wellam Co., Ltd. | 8,955.10 | 8,955.10 | -- | -- | ||
| Total | 1,735,224,157.90 | 8,955.10 | 19,212,280.00 | 1,716,020,833.00 | -- | 133,839,271.15 |
(2) Investment in joint ventures and joint ventures
| Change of increase or decrease in current period | |||||||||||
| Investee unit | Opening bala nce | Additional /new investment | Reduce investment | Under the equity method To confirm the Investment profit and loss | Other comprehensive Income adjustment | Changes in other interests | Declare payment of cash dividends or profits | Provision for impairment To prepare | other | Ending balan ce | Ending balance of impairment provision |
| ① joint ventures | |||||||||||
| Fengkai Xinhua Hotel | 9,455,465.38 | -- | -- | -- | -- | -- | -- | -- | -- | 9,455,465.38 | 9,455,465.38 |
| subtotal | 9,455,465.38 | -- | -- | -- | -- | -- | -- | -- | -- | 9,455,465.38 | 9,455,465.38 |
| ② Joint venture | |||||||||||
| Shenzhen Ronghua | 1,349,122.95 | -- | -- | -178,240.64 | -- | -- | -- | -- | -- | 1,170,882.31 | 1,076,954.64 |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
| Change of increase or decrease in current period | |||||||||||
| Investee unit | Opening bala nce | Additional /new investment | Reduce investment | Under the equity method To confirm the Investment profit and loss | Other comprehensive Income adjustment | Changes in other interests | Declare payment of cash dividends or profits | Provision for impairment To prepare | other | Ending balan ce | Ending balance of impairment provision |
| JiDian Co., ltd | |||||||||||
| Shenzhen Runhua Automobile trading Co., Ltd | 1,445,425.56 | -- | -- | -- | -- | -- | -- | -- | -- | 1,445,425.56 | 1,445,425.56 |
| subtotal | 2,794,548.51 | -- | -- | -178,240.64 | -- | -- | -- | -- | -- | 2,616,307.87 | 2,522,380.20 |
| Total | 12,250,013.89 | -- | -- | -178,240.64 | -- | -- | -- | -- | -- | 12,071,773.25 | 11,977,845.58 |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
4. Operating Income and Operating Costs
| Item | Current amount | Amount of previous period | ||
| Income | Cost | Income | Cost | |
| Main business | 207,117,745.27 | 66,761,336.83 | 774,049,479.78 | 198,814,980.86 |
| Other business | 31,823.86 | -- | 16,130.55 | -- |
| Total | 207,149,569.13 | 66,761,336.83 | 774,065,610.33 | 198,814,980.86 |
(1) Operating revenue and operating costs are divided by industry
| Industry type | Current amount | Amount of previous period | ||
| income | The cost of | income | The cost of | |
| Real estate | 161,658,149.52 | 27,249,452.24 | 706,622,743.82 | 166,178,270.82 |
| Lease | 45,459,595.75 | 39,511,884.59 | 67,426,735.96 | 32,636,710.04 |
| Total | 207,117,745.27 | 66,761,336.83 | 774,049,479.78 | 198,814,980.86 |
(2) The revenue and cost of main business shall be divided by region
| Current amount | Amount of previous period | |||
| Main business area | Main business revenue | Main business cost | Main business revenue | Main business cost |
| Guangdong Province | 207,117,745.27 | 66,761,336.83 | 774,049,479.78 | 198,814,980.86 |
5. Investment Income
| Item | Current amount | Amount of previous period |
| Long-term equity investment income calculated by the equity method | -178,240.64 | -105,321.37 |
| Dividend income from investments in other equity instruments | 813,960.00 | 692,580.00 |
| Investment gains from structured deposit | 159,619.01 | 1,196,580.44 |
| Investment gains from debt restructuring | 89,607.85 | -- |
| Investment gains from disposal of long-term equity investment | 203,360,562.19 | -- |
| Long-term equity investment income accounted by cost method | 76,727,761.73 | -- |
| Total | 280,973,270.14 | 1,783,839.07 |
XV. Supplementary Information
1. Statement of non-recurring gains and losses for the current period
| Item | Current amount | instructions |
| Gains and losses on disposal of illiquid assets | 161,542,599.57 | Investment gains recognized for disposal of subsidiary equity in 2022 |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2022
| Item | Current amount | instructions | |
| Government subsidies included in current profits and losses (except government subsidies that are closely related to the normal business of the Group and are continuously enjoyed in accordance with national policies and certain standard quota or quantitative amount) | 559,803.19 | Government subsidies | |
| Profit or loss on entrusted investments or assets management | 9,129,650.51 | Changes in fair value and investment income arising from investments in monetary funds | |
| Profit and loss from debt restructuring | 2,610,128.31 | Profits from debt restructuring | |
| Other non-operating income and expenses other than those mentioned above | 1,094,190.56 | ||
| Total non-recurring gains and losses | 174,936,372.14 | ||
| Minus: income tax impact of non-recurring gains and losses | 41,451,680.41 | ||
| Net non-recurring gains and losses | 133,484,691.73 | ||
| Minus: impact of non-recurring net gains and losses attributable to minority shareholders (after tax) | 926,291.27 | ||
| common shareholders of the Group | 132,558,400.46 |
2. Return on equity and earnings per share
| Weighted Average Net Assets Yield % | Earnings per share | ||
| Profit in reporting period | Basic earnings per share | Diluted earnings per share | |
| Net income attributable to the common shareholders of the Group | 3.88% | 0.1519 | 0.1519 |
| Net profit attributable to common shareholders of a company after deducting non-recurring gains and losses | 0.53% | 0.0209 | 0.0209 |