ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE &
PROPERTIES (GROUP) CO., LTD.
ANNUAL REPORT 2023
2024-009
【30 March 2024】
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
ANNUAL REPORT 2023
Part I Important Notes, Table of Contents and DefinitionsThe 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, andshall be jointly and severally liable for any misrepresentations, misleading statements ormaterial omissions therein.Tang Xiaoping, the Company’s General Manager, Wang Jianfei, the Company’s ChiefFinancial Officer, and Zhou Hongpu, head of the Company’s financial department (equivalentto financial manager) hereby guarantee that the Financial Statements carried in this Reportare factual, accurate and complete.All the Company’s directors have attended the Board meeting for the review of this Reportand its summary.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 remindedto exercise caution when making investment decisions.The Company has no final dividend plan, either in the form of cash or stock.This Report and its summary have been prepared in both Chinese and English. Should therebe any discrepancies or misunderstandings between the two versions, the Chinese versionsshall prevail.
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
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 ...... 11
Part IV Corporate Governance ...... 31
Part V Environmental and Social Responsibility ...... 48
Part VI Significant Events ...... 49
Part VII Share Changes and Shareholder Information ...... 57
Part VIII Preferred Shares ...... 64
Part IX Bonds ...... 65
Part X Financial Statements ...... 66
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
Documents Available for Reference
1. The financial statements with the personal signatures and stamps of the Company’s generalmanager, 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 SecuritiesTimes, China Securities Journal and Ta Kung Pao during the Reporting Period.
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
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. |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
Part II Corporate Information and Key Financial InformationI 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 | Tang Xiaoping | ||
| 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 |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
| 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 | Pan-China Certified Public Accounts LLP |
| Office address | 128 Xixi Road, Lingyin Street, Xihu District, Hangzhou, Zhejiang Province, China |
| Accountants writing signatures | Wang Huansen, and Cai Xiaodong |
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
| 2023 | 2022 | 2023-over-2022 change (%) | 2021 | |
| Operating revenue (RMB) | 530,887,720.68 | 634,384,561.42 | -16.31% | 1,320,790,648.45 |
| Net profit attributable to the listed company’s shareholders (RMB) | -250,839,542.09 | 153,718,805.57 | -263.18% | 220,836,309.93 |
| Net profit attributable to the listed company’s shareholders before exceptional gains and losses (RMB) | -267,984,286.36 | 21,160,405.11 | -1,366.44% | 208,306,710.37 |
| Net cash generated from/used in operating activities (RMB) | 1,045,037,248.19 | -675,775,998.76 | 254.64% | -1,205,952,107.94 |
| Basic earnings per share (RMB/share) | -0.2479 | 0.1519 | -263.20% | 0.2183 |
| Diluted earnings per share (RMB/share) | -0.2479 | 0.1519 | -263.20% | 0.2183 |
| Weighted average return on equity (%) | -6.52% | 3.88% | -10.40% | 5.72% |
| 31 December 2023 | 31 December 2022 | Change of 31 December 2023 over 31 December 2022 (%) | 31 December 2021 | |
| Total assets (RMB) | 6,485,312,507.46 | 5,689,769,802.18 | 13.98% | 6,182,498,050.43 |
| Equity attributable to the listed company’s shareholders (RMB) | 3,691,082,484.20 | 4,004,240,547.70 | -7.82% | 3,938,260,291.97 |
Indicate by tick mark whether the lower of the net profit attributable to the listed company’s shareholders before and after exceptional
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
gains and losses was negative for the last three accounting years, and the latest independent auditor’s report indicated that there wasuncertainty about 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 exceptionalgains and losses was negative.? Yes □ No
| Item | 2023 | 2022 | Remark |
| Operating revenue (RMB) | 530,887,720.68 | 634,384,561.42 | N/A |
| Amount deducted from operating revenue (RMB) | 0.00 | 0.00 | N/A |
| Operating revenue after deduction (RMB) | 530,887,720.68 | 634,384,561.42 | N/A |
VII Accounting Data Differences under China’s Accounting Standards for BusinessEnterprises (CAS) and International Financial Reporting Standards (IFRS) and ForeignAccounting Standards
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 | |||
| 2023 | 2022 | Ending amount | Beginning amount | |
| Under CAS | -250,839,542.09 | 153,718,805.57 | 3,691,082,484.20 | 4,004,240,547.70 |
| Adjusted as per IFRS | ||||
| Under IFRS | -250,839,542.09 | 153,718,805.57 | 3,691,082,484.20 | 4,004,240,547.70 |
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 | 109,155,515.74 | 154,461,263.33 | 90,700,026.78 | 176,570,914.83 |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
| Net profit attributable to the listed company’s shareholders | -35,653,798.52 | -1,464,384.29 | 686,777.00 | -214,408,136.28 |
| Net profit attributable to the listed company’s shareholders before exceptional gains and losses | -37,833,791.48 | -4,635,117.67 | -1,532,526.34 | -223,982,850.87 |
| Net cash generated from/used in operating activities | -183,238,769.33 | -8,902,178.71 | 128,807,540.45 | 1,108,370,655.78 |
Indicate by tick mark whether any of the quarterly financial data in the table above or their summations differs materially from whathave been disclosed in the Company’s quarterly or interim reports.
□ Yes ? No
IX Exceptional Gains and Losses? Applicable □ Not applicable
Unit: RMB
| Item | 2023 | 2022 | 2021 | Note |
| Gain or loss on disposal of non-current assets (inclusive of impairment allowance write-offs) | 9,940,254.23 | 161,542,599.57 | -13,451.61 | |
| Government grants recognised incurrent profit or loss (exclusive ofthose that are closely related to the Company's normal business operations and given in accordance with defined criteria and in compliance with government policies, and have a continuing impact on the Company's profit or loss) | 440,049.96 | 559,803.19 | 1,669,479.40 | |
| Gain or loss on assets entrusted to other entities for investment or management | 7,985,840.50 | 9,129,650.51 | 13,024,710.91 | |
| Reversed portions of impairment allowances for receivables which are tested individually for impairment | 3,994,030.79 | 482,790.04 | ||
| Gain or loss on debt restructuring | 2,610,128.31 | |||
| Non-operating income and expense other than the above | 393,461.44 | 1,094,190.56 | 1,542,604.01 | |
| Less: Income tax effects | 5,639,314.23 | 41,451,680.41 | 4,176,533.19 | |
| Non-controlling interests effects (net of tax) | -30,421.58 | 926,291.27 | ||
| Total | 17,144,744.27 | 132,558,400.46 | 12,529,599.56 | -- |
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 on Information Disclosure for Companies Offering Their Securities to the Public—Exceptional Gain/Loss Items:
? Applicable □ Not applicable
| Item | Amount involved (RMB) | Reason |
| Return of handling fee for personal income tax withheld | 68,364.83 | This item is recognised as a recurrent gain or loss because it occurs consistently from year to year and is not episodic in nature |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
| Over-deduction in the calculation of VAT | 58,857.60 | This item is recognised as a recurrent gain or loss because it occurs consistently from year to year and is not episodic in nature |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
Part III Management Discussion and AnalysisI Industry Overview for the Reporting PeriodThe Company is subject to the information disclosure requirements for the real estate industry in the Disciplinary and RegulatoryGuideline No. 3 of the Shenzhen Stock Exchange for Listed Companies—Industry-specific Information Disclosure.
In 2023, due to geo-frictions and trade protectionism, the global supply chain sector faced a reshuffle, and theworld economic growth slowed down. The policy of the real estate sector continued to be relaxed. Although theproperty market turnover picked up in the fourth quarter, the relationship between supply and demand haschanged significantly. The market rebound was not sustainable and weak.
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 RegulatoryGuideline No. 3 of the Shenzhen Stock Exchange for Listed Companies—Industry-specific Information Disclosure.The Company primarily develops residential properties. Its available-for-sale projects are mainly located inShenzhen, Huizhou and Shantou. They are: the Chuanqi Donghu Mingyuan project (sold out during 2023), theCuilinyuan project, and the Guangmingli project (residential units sold out as soon as they became available forsale during 2023) in Shenzhen, the Linxinyuan project located in a place in Huizhou that is close to Shenzhen, andthe Tianyuewan project, the Yuejing Dongfang project and the Jinyedao project in Shantou. In addition, theCompany’s under-construction projects are the Guangmingli project and the Linxinyuan project.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 | Cumulatively compl | Expected total investment (RMB’0,000) | Cumulative investment (RMB’0,000) |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
| the Current Period（㎡） | eted floor area （㎡） | ||||||||||||
| Huizhou | Linxinyuan Phase I | Huiyang | Framework in construction | 51% | 11 June 2021 | 96% | 96% | 64,278 | 159,761 | 0 | 0 | 115,750 | 111,077 |
| Shenzhen | SPG Guangmingli | Guangming District | Framework in construction | 100% | 19 January 2022 | 81% | 81% | 10,721 | 53,605 | 0 | 0 | 151,758 | 122,759 |
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% | 55,727 | 32,857 | 32,857 | 194 | 1,483 | 32,857 | 194 | 1,483 |
| Shenzhen | Cuilinyuan | Longgang District | Ready for sale | 100% | 60,111 | 56,137 | 54,522 | 1,638 | 807 | 54,522 | 1,638 | 807 |
| Shantou | Tianyuewan Phase I | Chaoyang District | Ready for sale | 100% | 153,470 | 160,372 | 120,017 | 5,133 | 2,963 | 108,459 | 6,804 | 3,901 |
| Shantou | Tianyuewan Phase II | Chaoyang District | Ready for sale | 100% | 127,770 | 137,059 | 37,430 | 9,159 | 5,220 | 36,572 | 11,060 | 6,276 |
| Huizhou | Linxinyuan Phase I | Huiyang District | On pre-sale | 51% | 159,761 | 159,761 | 2,421 | |||||
| Shenzhen | SPG Guangmingli | Guangming District | On pre-sale | 100% | 53,605 | 51,975 | 29,973 | 29,973 | 133,703 |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
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 | 3,413.88 | 100.00% |
| 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% | 60,391.69 | 31,598.87 | 52.32% |
| Podium of SPG Plaza | Shenzhen | Commercial | 100.00% | 19,886.30 | 14,463.75 | 72.73% |
| Wenjin Garden | Shenzhen | Commercial | 100.00% | 3,531.60 | 3,531.60 | 100.00% |
Primary land development:
□ Applicable ? Not applicable
Financing channels:
| Financing channel | Ending balance of financings | Financing cost range/average financing cost | Maturity structure | |||
| Within 1 year | 1-2 years | 2-3 years | Over 3 years | |||
| Bank loans | 21,343.43 | 3.7%-4.2% | 3,400.13 | 11,715.82 | 12.52 | 6,214.97 |
| Total | 21,343.43 | 3.7%-4.2% | 3,400.13 | 11,715.82 | 12.52 | 6,214.97 |
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 | 47.25 | |
| Cuilinyuan | Until the property ownership certificate is registered as collateral and handed over to bank for keeping | 935.87 | |
| Chuanqi Donghu Mingyuan | Until the property ownership certificate is registered as collateral and handed over to bank for keeping | 1,087.97 | |
| Tianyuewan | Until the property ownership certificate is registered as collateral and handed over to bank for keeping | 32,241.18 | |
| Guangmingli | Until the property ownership certificate is registered as collateral and handed over to bank for keeping | 75,304.40 | |
| Linxinyuan | Until the property ownership certificate is registered as collateral and handed over to bank for keeping | 1,034.00 | |
| Total | 110,650.67 | ||
Joint investments by directors, supervisors and senior management and the listed company (applicable for such investments wherethe directors, 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 | 8,950,000.00 | 39.25% | 0.90% | 0.00 | N/A | N/A |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
III Core Competitiveness AnalysisAs the earliest real estate developer founded in the Shenzhen Special Economic Zone, the Company helped buildthe early city, and has created a number of "first places" in the history of real estate development in China. Forexample, the first to use the paid state-owned land, the first to introduce the foreign investment for the cooperativeland development, the first to raise development funds by means of pre-sale of buildings, the first to carry outpublic bidding for construction projects in accordance with international practices, the first to set up a propertymanagement company to the buildings and residences developed in an all-rounded manner, as well as winning thebid in the new China’s first auction of land use rights held in the Shenzhen Special Economic Zone.After more than 40 years of development, the Company has grown into a business group with real estatedevelopment and operation as its main business, integrating engineering and construction, project supervision,asset management and other diversified operations.It has paid great efforts to the establishment of a modernenterprise HR management system and works hard in building a professional and high-quality development team.It also keeps improving the management mechanism and processes for project development. As a result, itsplanning, construction, cost control, sales ability and brand image have been effectively improved. Moreimportantly, its main business operation ability and core competitiveness have been greatly enhanced.In the Reporting Period, the Company was awarded such honorary titles as the "2023 Brand Value Enterprise ofShenzhen Real Estate Development Industry", "2023 Shenzhen CSR Benchmarking Enterprise in Real EstateDevelopment Industry", "2022 Shenzhen Willing Ox Award in Real Estate Industry", "Annual ContributionAward for Listed Companies in the Greater Bay Area", and "Top 20 Board Governance of listed companies in theGreater Bay Area".IV Core Business Analysis
1. Overview
In 2023, in the face of many difficulties and challenges such as the industry lingering at the bottom, the spill-overof real estate enterprises that had just got off the risky list, entry of enterprise reform into a deep water zone, anddeadlock in exploring future development yet to be broken, the leadership team of the Company conscientiouslyimplemented the decisions and arrangements of the State-owned Assets Supervision and AdministrationCommission of the People’s Government of Shenzhen Municipal (Municipal SASAC) and Shenzhen InvestmentHoldings Co., Ltd. (SIHC), led the staff to carry forward fighting spirit, made all-out efforts to withstand theimpact of external risks, overcame multiple internal difficulties, and thus solidly promoted sustainabledevelopment. Major work progress for the year is as follows:
First, anchoring the targets, the Company continued developing and consolidating the core business. For SPGGuangmingli project, the promotional housing sources were sold out on the property-opening day, and the annualsales targets were overfulfilled; for Donghu Mingyuan project, the properties were sold completely; for Shantou
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
Tianyuewan and other projects, good sales performance was achieved against the backdrop of the continuousdownturn in the regional market; for SPG's self-owned properties, the overall investment operation was stable andimproved, with the annual targets completed, and with the creation of "Buildings for Shenzhen-Hong KongMedical and Healthcare Specialty Industry" of SPG Plaza constantly intensified.Second, taking multiple measures simultaneously, the Company continued improving quality and efficiency.Zhentong Engineering overfulfilled the annual targets for its operating revenue and total profit; Petrel Hotelcontinued improving by expanding revenue and increasing profit; Shantou Company and Huazhan ConstructionSupervision operated stably. During the Reporting Period, the confirmation of the land rights of "XinfengBuilding" in Shantou, a task left over from history, continued being promoted, the deregistration of Xinfeng RealEstate was completed, the disposal of "non-core and non-advantageous business, and inefficient and ineffectiveassets" was orderly advanced, and good results were achieved in collecting historical arrears.Third, attaching importance to synergy, the Company continued exploring future development. Throughsynergies between internal and external resources, the Company promoted future development, and concentratedon plan for new development "curves"; to integrate into the overall development strategy of SIHC, the Companyreviewed and revised the "14th Five-Year" strategic plan; by continuously following the relevant measures of theChina Securities Regulatory Commission (the CSRC) for adjusting and optimizing real estate enterprises' equityfinancing, the Company coordinated SIHC's system resources, and strove to study and explore the futuredevelopment mode.Fourth, acting proactively, the Company continued disposing of risks. Under the circumstances that enterprisesin the industry constantly encountered risks, in combination with its project conditions, the Company madeforward-looking studies and judgment and acted proactively, made every effort to prevent and dispose ofoperational risks, and held the bottom line of without systematic risks and derivative material public opinionevents, thus sparing no effort in safeguarding the security of state-owned assets.Fifth, consolidating its foundation, the Company continued boosting management and control. The Companycompleted the change of office terms of the Board of Directors and the Board of Supervisors, and the Company'sESG report rating was upgraded to BBB; we reestablished the bidding and purchasing system as well as the costcontrol system, and newly revised (formulated) 41 management policies; we thoroughly inspected and remediedhidden safety hazards, and by drawing inferences, remedied the problems identified in third-party tour inspections;SPG optimised the human resources system, and by externally attracting and internally training talent, optimisedthe structure of the staff team; the company also strengthened financial coordination and financing to effectivelysafeguard the demand for funds.Sixth, strengthening its roots and consolidating its soul, the Company continued Party building. The Companypromoted the action of "massive interview, discussion and revelation" and advanced achievement transformation.The Company's subordinate enterprises where Party organisations "should be established as much as possible"achieved the goal. The domestic legal person enterprises were fully covered with "putting Party building intoregulations", signed a Party-building responsibility statement, strictly reported, reviewed and appraised duties, andcontinuously consolidated the "three foundations". The Company implemented the "two responsibilities",improved and was well versed in the "massive supervision" system, and thus intensified the development of clean
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
culture.
2. Revenue and Cost Analysis
(1) Breakdown of Operating Revenue
Unit: RMB
| 2023 | 2022 | Change (%) | |||
| Operating revenue | As % of total operating revenue (%) | Operating revenue | As % of total operating revenue (%) | ||
| Total | 530,887,720.68 | 100% | 634,384,561.42 | 100% | -16.31% |
| By operating division | |||||
| Property sales | 118,580,624.34 | 22.34% | 309,331,841.57 | 48.76% | -61.67% |
| Engineering and construction | 324,243,778.50 | 61.08% | 236,949,097.45 | 37.35% | 36.84% |
| Property management | 3,491,329.17 | 0.66% | 33,801,320.23 | 5.33% | -89.67% |
| Rental service | 84,571,988.67 | 15.93% | 54,302,302.17 | 8.56% | 55.74% |
| By product category | |||||
| Residential units | 108,943,731.16 | 20.52% | 277,643,154.35 | 43.77% | -60.76% |
| Shops and parking lots | 9,636,893.18 | 1.82% | 31,688,687.22 | 5.00% | -69.59% |
| Other | 412,307,096.34 | 77.66% | 325,052,719.85 | 51.24% | 26.84% |
| By operating segment | |||||
| Guangdong Province | 530,197,455.57 | 99.87% | 633,906,909.80 | 99.92% | -16.36% |
| Overseas | 690,265.11 | 0.13% | 477,651.62 | 0.08% | 44.51% |
| By marketing model | |||||
| Principal operations | 524,099,615.63 | 98.72% | 628,832,520.51 | 99.12% | -16.66% |
| Other | 6,788,105.05 | 1.28% | 5,552,040.91 | 0.88% | 22.26% |
(2) Operating Division, Product Category or Operating Segment Contributing over 10% of OperatingRevenue or 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 | 118,580,624.34 | 80,235,849.12 | 32.34% | -61.67% | -43.19% | -50.94% |
| Engineering and construction | 324,243,778.50 | 317,088,117.19 | 2.21% | 36.84% | 36.82% | 0.05% |
| Rental service | 84,571,988.67 | 44,847,244.30 | 46.97% | 55.74% | 7.97% | 357.88% |
| By product category | ||||||
| Residential units | 108,943,731.16 | 74,609,765.94 | 31.52% | -60.76% | -41.00% | -42.13% |
| By operating segment | ||||||
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
| Guangdong Province | 530,197,455.57 | 455,342,654.97 | 14.12% | -17.23% | 1.22% | -52.58% |
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 | 2023 | 2022 | Change (%) |
| Property sales | Sales volume | RMB’0,000 | 10,910 | 16,522 | -33.97% |
| Output | RMB’0,000 | 15,892 | 37,603 | -57.74% | |
| Inventory | RMB’0,000 | 430,663 | 425,681 | 1.17% |
Any over 30% YoY movements in the data above and why:
? Applicable □ Not applicableAffected by the real estate market, the Company saw less-than-expected property sales carryforwards and existingproperty sales in 2023, 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 | 2023 | 2022 | Change (%) | ||
| Cost of sales | As % of total cost of sales (%) | Cost of sales | As % of total cost of sales (%) | |||
| Property sales | 80,235,849.12 | 18.04% | 141,232,452.52 | 32.31% | -43.19% | |
| Engineering and construction | 317,088,117.19 | 71.29% | 231,754,203.03 | 53.03% | 36.82% | |
| Property management | 2,626,431.49 | 0.59% | 19,780,268.70 | 4.53% | -86.72% | |
| Rental service | 44,847,244.30 | 10.08% | 44,285,076.76 | 10.13% | 1.27% | |
| Total | 444,797,642.10 | 100.00% | 437,052,001.01 | 100.00% | 1.77% | |
Note:
Affected by markets and development cycles, property sales experienced a year-on-year drop of 43.19%; andengineering and construction projects saw new breakthroughs in expansion, resulting in a year-on-year increase of
36.82% in sales.
(6) Changes in the Scope of Consolidated Financial Statements for the Reporting Period
□Yes?No
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
(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) | 139,521,174.93 |
| Total sales to top five customers as % of total sales of the Reporting Period (%) | 26.28% |
| 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 | 55,098,804.24 | 10.38% |
| 2 | Legal person B | 26,869,725.62 | 5.06% |
| 3 | Legal person C | 19,944,916.00 | 3.76% |
| 4 | Legal person D | 19,271,404.07 | 3.63% |
| 5 | Legal person E | 18,336,325.00 | 3.45% |
| Total | -- | 139,521,174.93 | 26.28% |
Other information about major customers:
□ Applicable ? Not applicable
Major suppliers:
| Total purchases from top five suppliers (RMB) | 135,980,783.49 |
| Total purchases from top five suppliers as % of total purchases of the Reporting Period (%) | 94.52% |
| 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 | 117,030,547.22 | 81.34% |
| 2 | Legal person B | 10,654,310.21 | 7.41% |
| 3 | Legal person C | 3,447,916.26 | 2.40% |
| 4 | Legal person D | 3,088,209.80 | 2.15% |
| 5 | Legal person E | 1,759,800.00 | 1.22% |
| Total | -- | 135,980,783.49 | 94.52% |
Other information about major suppliers:
□ Applicable ? Not applicable
3. Expense
Unit: RMB
| 2023 | 2022 | Change (%) | Reason for any significant change | |
| Selling expense | 21,803,202.14 | 19,217,595.11 | 13.45% | Selling expenses on the Guangmingli project was newly added in the current year |
| Administrat | 55,965,931.72 | 55,758,749.08 | 0.37% |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
| ive expense | ||||
| Finance costs | -5,231,991.59 | -6,507,147.03 | -19.60% | Decreased average bank balances and deposit interest income, as well as new bank loan interest in the current period |
4. R&D Investments
□ Applicable ? Not applicable
5. Cash Flows
Unit: RMB
| Item | 2023 | 2022 | Change (%) |
| Subtotal of cash generated from operating activities | 1,950,984,549.76 | 668,449,932.34 | 191.87% |
| Subtotal of cash used in operating activities | 905,947,301.57 | 1,344,225,931.10 | -32.60% |
| Net cash generated from/used in operating activities | 1,045,037,248.19 | -675,775,998.76 | 254.64% |
| Subtotal of cash generated from investing activities | 139,173,390.10 | 282,766,666.00 | -50.78% |
| Subtotal of cash used in investing activities | 601,475,412.00 | 713,537.29 | 84,194.88% |
| Net cash generated from/used in investing activities | -462,302,021.90 | 282,053,128.71 | -263.91% |
| Subtotal of cash generated from financing activities | 169,486,610.82 | 111,428,077.62 | 52.10% |
| Subtotal of cash used in financing activities | 83,583,781.56 | 140,126,109.45 | -40.35% |
| Net cash generated from/used in financing activities | 85,902,829.26 | -28,698,031.83 | -399.33% |
| Net increase in cash and cash equivalents | 668,781,343.87 | -421,928,565.67 | -258.51% |
Explanation of why any of the data above varies significantly:
? Applicable □ Not applicableCash generated from operating activities increased year on year primarily driven by the cash inflow from the SPG-Guangmingliproject in the current period.Cash used in operating activities decreased year on year primarily driven by the decreased development and construction of realestate projects.Net cash generated from investing activities decreased year on year primarily driven by the increased purchase of currency fund inthe current period.Cash generated from financing activities increased year on year primarily driven by the new bank loan in the current period.Cash used infinancing activities decreased year on year primarily driven by the decreased dividend payout in the current period.
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 long time spanbetween property development, sales and revenue recognition.V Analysis of Non-Core Businesses
□ Applicable ? Not applicable
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
VI Analysis of Assets and Liabilities
1. Significant Changes in Asset Composition
Unit: RMB
| 31 December 2023 | 1 January 2023 | Change in percentage (%) | Reason for any significant change | |||
| Amount | As a % of total assets | Amount | As a % of total assets | |||
| Monetary assets | 871,019,268.83 | 13.43% | 197,663,949.74 | 3.47% | 9.96% | Return of funds from sales of the SPG Guangmingli project |
| Accounts receivable | 75,100,970.83 | 1.16% | 63,580,422.16 | 1.12% | 0.04% | |
| Contract assets | 27,352,596.92 | 0.42% | 0.00 | 0.42% | ||
| Inventories | 3,915,215,921.96 | 60.37% | 4,257,109,614.31 | 74.82% | -14.45% | Impairment on the SPG Linxinyuan project |
| Investment property | 541,542,136.17 | 8.35% | 566,873,915.07 | 9.96% | -1.61% | |
| Long-term equity investments | 0.00 | 0.00% | 93,927.64 | 0.00% | 0.00% | |
| Fixed assets | 19,928,049.77 | 0.31% | 21,425,475.05 | 0.38% | -0.07% | |
| Right-of-use assets | 99,641.48 | 0.00% | 232,496.72 | 0.00% | 0.00% | |
| Short-term borrowings | 3,550,000.00 | 0.05% | 51,138,077.62 | 0.90% | -0.85% | |
| Contract liabilities | 1,291,448,591.28 | 19.91% | 43,533,467.29 | 0.77% | 19.14% | Sales proceeds received in advance from the SPG Guangmingli project |
| Long-term borrowings | 179,431,851.02 | 2.77% | 54,261,000.00 | 0.95% | 1.82% | New bank loans |
| Lease liabilities | 53,885.23 | 0.00% | 0.00% | |||
| Held-for-trading financial assets | 879,340,201.92 | 13.56% | 408,154,361.42 | 7.17% | 6.39% | Purchase of monetary funds |
| Accounts payable | 443,259,768.78 | 6.83% | 434,601,559.67 | 7.64% | -0.81% | |
| Taxes payable | 40,908,986.48 | 0.63% | 190,951,185.99 | 3.36% | -2.73% | Payment of land VAT of Donghu Mingyuan in the current period |
| Other payables | 554,469,229.59 | 8.55% | 574,331,340.84 | 10.09% | -1.54% | |
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 allowanc | Purchased in the Reporting Period | Sold in the Reporting Period | Other changes | Ending amount |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
| e for the Reporting Period | ||||||||
| Financial assets | ||||||||
| 1. Held-for-trading financial assets (excluding derivative financial assets) | 408,154,361.42 | 7,824,348.71 | 600,000,000.00 | 136,638,508.21 | 879,340,201.92 | |||
| 4. Investments in other equity instruments | 13,839,235.57 | 485,175.78 | 14,324,411.35 | |||||
| Total of the above | 421,993,596.99 | 7,824,348.71 | 485,175.78 | 600,000,000.00 | 136,638,508.21 | 893,664,613.27 | ||
| Financial liabilities | 0.00 | 0.00 | ||||||
Other change
Significant changes to the measurement attributes of the major assets in the Reporting Period:
□ Yes ? No
3. Restricted Asset Rights as at the Period-End
| Item | Ending carrying value | Reasons for restriction |
| Monetary assets | 5,817,217.78 | Project of public facilities inside and surrounding the urban renewal project of Longgang District, Shenzhen-construction funds-land reclamation costs of SPG Guangmingli project |
| Monetary assets | 5,943,085.18 | Frozen in a lawsuit case |
| Monetary assets | 50,000.00 | Construction deposit |
| Monetary assets | 62,552.52 | Stop payments, suspend accounts |
| Accounts receivable | 27,890,361.58 | Pledged for short-term borrowings |
| Investment property | 44,297,197.87 | Mortgaged for borrowings |
| Total | 84,060,414.93 |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
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 (%) |
| 190,310,000.00 | 299,540,000.00 | -36.47% |
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
IX Principal Subsidiaries and Joint Stock Companies? Applicable □ Not applicable
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
Principal 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 | 1,532,537,012.55 | -25,433,005.65 | 0.00 | -11,810,122.07 | -9,736,449.82 |
| Shenzhen SPG Chuanqi Real Estate Development Co., Ltd. | Subsidiary | Development of real estate | 30,000,000.00 | 2,560,819,336.10 | 990,746,279.57 | 0.00 | -4,609,281.60 | -3,435,619.67 |
| Shenzhen SPG Longgang Development Co., Ltd. | Subsidiary | Development of real estate | 30,000,000.00 | 94,912,989.41 | 55,463,556.61 | 10,746,255.27 | 3,549,049.77 | -2,138,802.00 |
| Shantou SEZ, Wellam FTY, Building Development, Co., Ltd. | Subsidiary | Development of real estate | 91,226,120.44 | 85,426,747.46 | 35,280,380.10 | 1,243,939.83 | -55,021,858.71 | -55,024,437.34 |
| Shantou Huafeng Real Estate Development Co., | Subsidiary | Development of real estate | 80,000,000.00 | 780,373,794.48 | 12,827,733.61 | 94,905,140.68 | 5,194,367.78 | -4,797,165.52 |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
| Ltd. | ||||||||
| Great Wall Estate Co., Inc. (U.S.) | Subsidiary | Development of real estate | 2,051,146.00 | 19,964,537.33 | -91,827,313.73 | 690,265.11 | -351,082.24 | -351,082.24 |
| Shenzhen Zhentong Engineering Co., Ltd. | Subsidiary | Installation and maintenance | 10,000,000.00 | 139,385,580.38 | 21,570,554.27 | 328,544,298.00 | 872,314.59 | 1,402,095.23 |
| Shenzhen Petrel Hotel Co., Ltd. | Subsidiary | Hotel service | 30,000,000.00 | 48,536,863.21 | 38,928,638.00 | 17,925,482.71 | 2,218,886.38 | 2,004,316.15 |
| Shenzhen Huazhan Construction Supervision Co., Ltd. | Subsidiary | Construction supervision | 8,000,000.00 | 11,275,162.28 | 10,471,446.74 | 3,986,383.98 | 200,736.55 | 143,261.58 |
| Xin Feng Enterprise Co., Ltd. | Subsidiary | Investment and management | 502,335.00 | 337,330,256.33 | -230,256,448.73 | 0.00 | -3,885,483.26 | -3,885,483.26 |
Subsidiaries obtained or disposed in the Reporting Period:
□Applicable ? Not applicable
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 in GuangdongJianbang Group (Huiyang) Industrial Co., Ltd. The project company will develop the Linxingyuan Project with a gross site area of200,000 square meters and a total capacity building area of 0.4 million square meters, which will be developed in four phases. TheGroup has control over the project company, which will be included in the scope of consolidation in May 2021.As of 31 December2023, eight residential buildings of Phase I have been capped, the basement of Phase II has been completed, the development ofPhase III and Phase IV are to be initiated, and construction permit has not been granted for the school. There were no sales in 2023.
2. In October 2021, the Company won the bid for a land plot in Guangming District and established the project company ShenzhenSPG Chuanqi Real Estate Development Co., Ltd. to be responsible for the development and construction of the land.In 2023, actualinvestment totaled RMB158.83 million.On 22 September 2023, the Company obtained the pre-sale license for its SPG Guangmingli project and opened the sale of theproperties on 28 September. In 2023, areas sold totaled 31,143.98 square meters, amount from sales increased by RMB1,389.02million, and funds of RMB1,359.85 million were withdrawn.
3. The subordinate subsidiaries engaged in real estate development also include: Shenzhen SPG Longgang Development Co., Ltd.,Shantou SEZ, Wellam FTY, Building Development, Co., Ltd., Shantou Huafeng Real Estate Development Co., Ltd.The Cuilinyuan project developed by Shenzhen SPG Longgang Development Co., Ltd. recorded the carryover revenue of RMB8.17
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
million (cumulative sales carry-over of 96%) in 2023.Jinyedao and YuejingDongfang 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 the development ofTianyuewan project (divided into Phase I and Phase II). Tianyuewan Phase I was open for sale in October 2016 and completed inDecember 2019. The Phase II started construction in November 2018 and was completed at the end of June 2021. The overall salesprogress is relatively slow with an accumulated sales rate of about 74% for Phase I and 26% for Phase II.
4. Shenzhen Zhentong Engineering Co., Ltd. was engaged in the business of building installation and maintenance with the 2023operating revenues of RMB329 million and of 62% to the operating revenues of the Company.
5. The 2023 net profit of Xin Feng Enterprise Co., Ltd. was of RMB-3.89 million which mainly due to the changes of exchange rateand it conducts no business.
6. The 2024 net profit of Shenzhen Petrel Hotel Co., Ltd. was of RMB2 million, representing a return to profitability, which wasmainly due to the fact that the market and business environment improved during the Reporting Period.X Structured Bodies Controlled by the Company
□Applicable ? Not applicable
XI Prospects(I) Industry pattern and trendsCurrently, the real estate industry will change from a high growth rate industry to a value-driven industry, and themarket pattern is facing adjustments. The policy side is expected to continue playing its part, credit easing will bemaintained, and market trend depends on the degree of recovery of home buyers' confidence; the "Three MajorProjects", as a long-term mechanism and an important entry point to stabilize the market, will play a key role infuture market expectations.(II) Possible risks and countermeasures
1. Macroeconomic risks and countermeasures
In 2024, the world economy has insufficient growth momentum, the complexity, severity and uncertainty of theexternal environment rise, and the foundation for a sustained economic recovery and improvement is not yetsteady. The basic trend of long-term upturn in China's economy has not changed, and opportunities will coexistwith risks and challenges in future development, with more advantages than disadvantages. The Company willcontinue paying close attention to the international and domestic macroeconomic situations and proactively adjustits operation strategies.
2. Industry development risks and countermeasures
At this stage, in the real estate industry, although the financing environment has improved, and the regulatorypolicies are expected to ease, during an upcoming period, potential industry risks still exist, resources willcontinue flowing to leading quality enterprises, the industry competition pattern will present a new situation. TheCompany will continue deepening the research on industry policies, following national strategy, optimizing thedevelopment method, and innovating its operating model.
3. Business operating risks and countermeasures
The continuous downturn in the property market has led to increased difficulties in the sale of the Company'sinventory projects, meanwhile, the Company's existing reserves of development land resources are insufficient,and the expansion of new business has not yet yielded substantial results, thus putting pressure on the enterprisefor its operation and development. The Company will pay close attention to changes in the market and industrypolicies, focus on project construction and property sales, formulate targeted land expansion plans, consolidate thefoundation of the core business, and proactively explore new paths in line with the actual development of the
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
Company.(III) Development strategy and operating planIn 2024, the Company's overall work requirements are to: Enhance cohesion and forge the soul by adhering tothe Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era; comprehensively act in the spiritof the Party's 20th National Congress; thoroughly implement the guiding principles of the Central Economic WorkConference; scientifically grasp the main keynote of "seeking progress while maintaining stability, reinforcingstability with progress, and establishing the new before abolishing the old"; resolutely implement the workarrangement of the controlling shareholders; base the Company on its own resource endowment and coordinateinternal and external advantageous resources; focus on "developing and consolidating the core business,improving capabilities, preventing risks, and expanding new business"; and continuously improve value-creatingability.
1. With focus on consolidating the core business, the Company will make new strides in creating value. First,the Company will establish and improve the standardisation manual of real estate development, with the focus onoptimizing core business operations; second, the Company will strengthen project quality control, with the focuson ensuring the progress of projects; third, the Company will spare no effort to intensify project sales, with thefocus on promoting the sale of inventory; fourth, the Company will expand the influence of the brand, namely"Buildings for Shenzhen-Hong Kong Medical and Healthcare Specialty Industry" of SPG Plaza, with the focus onbuilding a platform for gathering massive health industry and on boosting leasing operation.
2. With focus on improving capabilities, the Company will make greater strides in driving reform. First, theCompany will optimise and improve the system of remuneration management and assessment and incentive, andbuild efficient teams, with the focus on enhancing "organisational capabilities"; second, the Company willoptimise and improve the operation control system, and enhance the capabilities of efficient operation of thewhole project, whole cycle and whole profession, with the focus on enhancing the "operational capabilities"; third,the Company will promote the informationisation development, and boost the effectiveness of internalmanagement and synergy operation, with the focus on enhancing "digital intelligence capabilities".
3. With focus on preventing risks, the Company will make steadier strides in proactive action. First, theCompany will pay close attention to changes in situation, timely adjust the strategies for disposing of andresponding to project risks, and accelerate risk disposal, with the focus on disposing of project risks; second, theCompany will improve and perfect the safety management system, and strengthen safety and quality management,with the focus on preventing safety risks; third, the Company will promote the development of the compliancemanagement system, perform better in fund plan and cash flow management, and guard the bottom line of withoutsystematic risks, with the focus on controlling operational risks.
4. With focus on expanding new business, the Company will take faster strides in exploring future development.First, the Company will make in-depth analysis, study and judgment, and by centring on strategic reviews andrevisions, develop the strong points and avoid the weak points to pinpoint the main battlefield for futuredevelopment; second, the Company will give play to synergistic effect, and by centring on the arrangements forreform in Shenzhen's state-owned assets and enterprises, and the strategy of SIHC, explore the future developmentpath and tap into high-quality investment opportunities; third, the Company will pay close attention to markettrends and set up a professional team of investment research to strive for the implementation of projects as soon aspossible.
5. With focus on strong leadership, the Company will make more practical strides in party building integration.First, the Company will enhance political leadership, and identify the direction of high-quality development;second, the Company will enhance ideological leadership, consolidate and deepen the achievements of thematiceducation, and build the foundation of high-quality development; third, the Company will enhance the overalleffectiveness of the development of the organisational system, strengthen the development of Party member team,
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
and forge the fortress of high-quality development. Fourth, the Company will explore new paths of integration ofparty building and business, and usher in motivating the vitality of high-quality development.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 |
| 5 January 2023 | 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 January 2023 | The Company | By telephone | Individual | Individual investor | Inquired of project sales of the Company, and didn’t offer written materials | N/A |
| 12 January 2023 | The Company | By telephone | Individual | Individual investor | Inquired of business situation, and didn’t offer written materials | N/A |
| 8 February 2023 | 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 2023 | The Company | By telephone | Individual | Individual investor | Inquired of the future development plan of the Company, and didn’t offer written materials | N/A |
| 24 February 2023 | 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 |
| 13 March 2023 | The Company | Written inquiry | Individual | Individual investor | Enquire about the number of shareholders | N/A |
| 21 March 2023 | The Company | Written inquiry | Individual | Individual investor | Enquire about the number of shareholders | N/A |
| 29 March 2023 | The Company | By telephone | Individual | Individual investor | Inquired of business situation, and didn’t offer written materials | N/A |
| 11 April 2023 | 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 |
| 19 April 2023 | The Company | By telephone | Individual | Individual investor | Inquired of project sales of the Company, and didn’t offer written materials | N/A |
| 21 April 2023 | The Company | Written inquiry | Individual | Individual investor | Enquire about the number of shareholders | N/A |
| 26 April 2023 | 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 |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
| 28 April 2023 | 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 May 2023 | The Company | Written inquiry | Individual | Individual investor | Enquire about the number of shareholders | N/A |
| 22 May 2023 | The Company | Written inquiry | Individual | Individual investor | Enquire about the number of shareholders | N/A |
| 22 May 2023 | The Company | Written inquiry | Individual | Individual investor | Enquire about the number of A-shareholders | N/A |
| 1 June 2023 | The Company | Written inquiry | Individual | Individual investor | Enquire about the number of shareholders | N/A |
| 1 June 2023 | The Company | Written inquiry | Individual | Individual investor | Enquire about the number of shareholders | N/A |
| 1 June 2023 | The Company | Written inquiry | Individual | Individual investor | Enquire about the number of shareholders | N/A |
| 12 June 2023 | The Company | Written inquiry | Individual | Individual investor | Enquire about the number of shareholders | N/A |
| 12 June 2023 | The Company | Written inquiry | Individual | Individual investor | Enquire about the number of shareholders | N/A |
| 25 June 2023 | The Company | Written inquiry | Individual | Individual investor | Enquire about the number of shareholders | N/A |
| 26 June 2023 | The Company | Written inquiry | Individual | Individual investor | Enquire about the number of shareholders | N/A |
| 3 July 2023 | The Company | Written inquiry | Individual | Individual investor | Enquire about the number of shareholders | N/A |
| 11 July 2023 | The Company | Written inquiry | Individual | Individual investor | Enquire about the number of shareholders | N/A |
| 21 July 2023 | The Company | Written inquiry | Individual | Individual investor | Enquire about the number of shareholders | N/A |
| 31 July 2023 | The Comp | By teleph | Individual | Individual investor | Inquired of business situations and strategic planning of the Company, and didn’t offer written materials | N/A |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
| any | one | |||||
| 1 August 2023 | The Company | Written inquiry | Individual | Individual investor | Enquire about the number of shareholders | N/A |
| 2 August 2023 | The Company | Written inquiry | Individual | Individual investor | Enquire about the number of shareholders | N/A |
| 7 August 2023 | The Company | By telephone | Individual | Individual investor | Inquired of business situation, and didn’t offer written materials | N/A |
| 11 August 2023 | The Company | Written inquiry | Individual | Individual investor | Enquire about the number of shareholders | N/A |
| 21 August 2023 | The Company | Written inquiry | Individual | Individual investor | Enquire about the number of shareholders | N/A |
| 28 August 2023 | The Company | By telephone | Individual | Individual investor | Inquired of horizontal competition of the Company, and didn’t offer written materials | N/A |
| 1 September 2023 | The Company | Written inquiry | Individual | Individual investor | Enquire about the number of shareholders | N/A |
| 11 September 2023 | The Company | Written inquiry | Individual | Individual investor | Enquire about the number of shareholders | N/A |
| 21 September 2023 | The Company | Written inquiry | Individual | Individual investor | Enquire about the number of shareholders | N/A |
| 10 October 2023 | The Company | Written inquiry | Individual | Individual investor | Enquire about the number of shareholders | N/A |
| 11 October 2023 | The Company | Written inquiry | Individual | Individual investor | Enquire about the number of shareholders | N/A |
| 23 October 2023 | The Company | Written inquiry | Individual | Individual investor | Inquired of project sales of the Company, and didn’t offer written materials | N/A |
| 24 October 2023 | The Company | Written inquiry | Individual | Individual investor | Enquire about the number of shareholders | N/A |
| 3 November 2023 | The Company | Written inquiry | Individual | Individual investor | Enquire about the number of shareholders | N/A |
| 13 November 2023 | The Comp | Written | Individual | Individual investor | Enquire about the number of shareholders | N/A |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
| any | inquiry | |||||
| 21 November 2023 | The Company | Written inquiry | Individual | Individual investor | Enquire about the number of shareholders | N/A |
| 23 November 2023 | The Company | By telephone | Individual | Individual investor | Inquired of the future development plan of the Company, and didn’t offer written materials | N/A |
| 29 November 2023 | The Company | Written inquiry | Individual | Individual investor | Enquire about the number of shareholders | N/A |
| 30 November 2023 | The Company | Written inquiry | Individual | Individual investor | Enquire about the number of shareholders | N/A |
| 1 December 2023 | The Company | Written inquiry | Individual | Individual investor | Enquire about the number of shareholders | N/A |
| 7 December 2023 | The Company | By telephone | Individual | Individual investor | Inquired of business situation and the future development plan of the Company, and didn’t offer written materials | N/A |
| 8 December 2023 | The Company | By telephone | Individual | Individual investor | Inquired of construction in progress and litigation, and didn’t offer written materials | N/A |
| 11 December 2023 | The Company | Written inquiry | Individual | Individual investor | Enquire about the number of shareholders | N/A |
| 12 December 2023 | The Company | By telephone | Individual | Individual investor | Inquired of construction in progress and litigation, and didn’t offer written materials | N/A |
| 15 December 2023 | The Company | By telephone | Individual | Individual investor | Inquired of litigation, and didn’t offer written materials | N/A |
| 19 December 2023 | The Company | By telephone | Individual | Individual investor | Inquired of horizontal competition of the Company, and didn’t offer written materials | N/A |
| 21 December 2023 | The Company | Written inquiry | Individual | Individual investor | Enquire about the number of shareholders | N/A |
| 25 December 2023 | The Company | By telephone | Individual | Individual investor | Inquired of the annual audit accountant of the Company, and didn’t offer written materials | N/A |
| 27 December 2023 | The Company | By telephone | Individual | Individual investor | Inquired of changes in directors and supervisors of the Company, and didn’t offer written materials | N/A |
XIII Implementation of the Action Plan for “Dual Enhancement of Quality and Profitability”
Has the Company disclosed its Action Plan for ―Dual Enhancement of Quality and Profitability‖
□Yes ?No
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
Part IV Corporate GovernanceI Basic Situation of Corporate GovernanceIn accordance with the requirements of the Company Law, the Securities Law, the Code on the Governance ofListed Companies and other laws and regulations, the Company has been improving its governance structurecontinuously, adhering to standardized operation, and an operational mechanism featuring decision-making by theboard of directors, execution by the management team, and supervision by the board of supervisors has beenformed.During the reporting period, the Company's governance institutions at all levels have carried out theirresponsibilities and authorities clearly and definitely and have performed their own functions. At the same time,they have checked and balanced each other in decision-making, implementation and supervision effectively, andhave operated in a coordinated manner.
(1) Operation of the general meeting of shareholders
The preparation, holding of the annual and extraordinary general meetings of shareholders of the Company aswell as disclosure of the resolutions made at the meetings have been carried out in strict accordance with theCompany Law, the Rules of the General Meeting of Shareholders of Listed Companies of China SecuritiesRegulatory Commission (CSRC), the Articles of Association and the Rules of Procedure of the General Meetingof Shareholders of the Company. The notification time of the meeting, the procedure of authorization, theprocedure of convening, the convener, the qualification of the personnel attending the meeting and the votingprocedure of the meeting have all been in line with relevant provisions. An on-site interaction for shareholders hasbeen set at the shareholders' meeting to ensure that the shareholders, especially the small and medium-sizedshareholders, 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 forListed Companies of Shenzhen Stock Exchange No. 1-Standardized Operation of Listed Companies on the MainBoard, the Articles of Association and the Rules of Procedure of the Board Meeting of the Company. The numberand manning of the board of directors have met the requirements of laws and regulations. The directors haveworked diligently and responsibly, and the board of directors has worked hard in making decisions and setting thedirection for the Company, and has exercised its power in accordance with the requirements for corporategovernance.
(3) Operation of the supervisory committee
The number and manning of the board of supervisors have met the requirements of laws and regulations. Allmembers of the board of supervisors of the Company have performed their duties diligently and conscientiously.They have supervised and inspected the important matters of the Company in strict accordance with the CompanyLaw, the Self-regulation Guidelines for Listed Companies of Shenzhen Stock Exchange No. 1-StandardizedOperation of Listed Companies on the Main Board, the Articles of Association and the Rules of Procedure of theBoard of Supervisors of the Company, exercised the power of supervision effectively, gave a full play to thesupervisory function, have played a substantial role in the operation and management of the Company, and haveprotected the legitimate rights and interests 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-
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
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 GeneralManager of the Company. The manager level is responsible for the production, operation and management of theCompany all-roundly. They have performed their duties diligently and conscientiously, and have carried out thedecisions of the board of directors effectively. The members at the manager level have had a clear division oflabor among them, they have 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 theCompany is transparent.(II) In respect of personnel, the Company was absolutely independent in management of labor, personnel andsalaries from the controlling shareholders. All the senior executives of the Company took no office titleconcurrently and drew no remunerations from the Shareholder Company.(III) In respect of finance, the Company has independent financial department, independently accounted and paidtaxes according to the law. The Company established a complete accounting system, financial accounting systemand financial 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 | 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) |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
| 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. | 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 1st Extraordinary General Meeting of 2023 | Extraordinary General Meeting | 62.31% | 30 March 2023 | 31 March 2023 | Resolutions of the 1st Extraordinary General Meeting of 2023 disclosed on China Securities, Securities Times and www.cninfo.com.cn (No.: 2023-014) |
| The 2022 Annual General Meeting | Annual General Meeting | 62.37% | 28 April 2023 | 29 April 2023 | Resolutions of 2022 Annual General Meeting disclosed on China Securities, Securities Times and www.cninfo.com.cn (No.: 2023-020) |
| The 2nd Extraordinary General Meeting of 2023 | Extraordinary General Meeting | 62.99% | 12 September 2023 | 13 September 2023 | Resolutions of the 2nd Extraordinary General Meeting of 2023 disclosed on China Securities, Securities Times and www.cninfo.com.cn (No.: 2023-033) |
| The 3rd Extraordinary General Meeting of 2023 | Extraordinary General Meeting | 62.44% | 30 November 2023 | 1 December 2023 | Resolutions of the 3rd Extraordinary General Meeting of 2023 disclosed on China Securities, Securities Times and www.cninfo.com.cn (No.: 2023-047) |
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 | Gender | Age | Office title | Incumbent/Former | 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 |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
| Tang Xiaoping | Male | 54 | Chairman of the Board | Incumbent | 30 March 2023 | 0 | 0 | 0 | 0 | 0 | ||
| Tang Xiaoping | Male | 54 | Director | Incumbent | 31 December 2020 | 0 | 0 | 0 | 0 | 0 | ||
| Tang Xiaoping | Male | 54 | GM | Incumbent | 14 December 2020 | 0 | 0 | 0 | 0 | 0 | ||
| Qian Zhong | Male | 50 | Director | Incumbent | 12 September 2023 | 0 | 0 | 0 | 0 | 0 | ||
| Wang Jianfei | Male | 51 | Director | Incumbent | 11 October 2021 | 0 | 0 | 0 | 0 | 0 | ||
| Wang Jianfei | Male | 51 | CFO | Incumbent | 22 September 2021 | 0 | 0 | 0 | 0 | 0 | ||
| Sun Minghui | Male | 43 | Director | Incumbent | 31 December 2020 | 0 | 0 | 0 | 0 | 0 | ||
| Zhang Manhua | Male | 49 | Director | Incumbent | 30 March 2023 | 0 | 0 | 0 | 0 | 0 | ||
| Li Wenkun | Male | 51 | Director | Incumbent | 30 November 2023 | 0 | 0 | 0 | 0 | 0 | ||
| Kang Xiaoyue | Male | 60 | Independent director | Incumbent | 15 May 2018 | 0 | 0 | 0 | 0 | 0 | ||
| He Zuowen | Male | 62 | Independent director | Incumbent | 30 June 2020 | 0 | 0 | 0 | 0 | 0 | ||
| Mi Xuming | Male | 49 | Independent director | Incumbent | 30 June 2020 | 0 | 0 | 0 | 0 | 0 | ||
| Wang Jiangtao | Male | 58 | Chairman of the Supervisory Committee | Incumbent | 17 May 2022 | 0 | 0 | 0 | 0 | 0 | ||
| Li Yufei | Female | 46 | Supervisor | Incumbent | 17 April 2012 | 0 | 0 | 0 | 0 | 0 | ||
| Wei Junfeng | Male | 45 | Supervisor | Incumbent | 30 November 2023 | 0 | 0 | 0 | 0 | 0 | ||
| Lin Jun | Female | 55 | Supervisor | Incumbent | 27 April 2016 | 0 | 0 | 0 | 0 | 0 | ||
| Lu Haiyan | Female | 47 | Supervisor | Incumbent | 28 March 2023 | 0 | 200 | 0 | 0 | 200 | ||
| Zhang Hongwei | Male | 58 | Vice GM | Incumbent | 15 July 2020 | 0 | 0 | 0 | 0 | 0 | ||
| Huang Weijun | Male | 52 | Vice GM | Incumbent | 29 July 2022 | 0 | 0 | 0 | 0 | 0 | ||
| Wu Zhiyong | Male | 52 | Vice GM | Incumbent | 29 July 2022 | 0 | 0 | 0 | 0 | 0 | ||
| Luo Yi | Male | 50 | Secretary of the Board | Incumbent | 31 December 2020 | 0 | 0 | 0 | 0 | 0 | ||
| Deng Kangcheng | Male | 58 | Director | Former | 17 April 2012 | 12 September 2023 | 7,500 | 0 | 0 | 0 | 7,500 | |
| Wen Li | Femal | 55 | Director | Former | 8 September 2006 | 30 March 2023 | 0 | 0 | 0 | 0 | 0 |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
| e | ||||||||||||
| Ren Wei | Male | 44 | Supervisor | Former | 15 May 2018 | 30 November 2023 | 2,000 | 0 | 0 | 0 | 2,000 | |
| Feng Hongwei | Male | 53 | Supervisor | Former | 2 March 2017 | 28 March 2023 | 0 | 0 | 0 | 0 | 0 | |
| Total | -- | -- | -- | -- | -- | -- | 9,500 | 200 | 0 | 0 | 9,700 | -- |
Indicate by tick mark whether any directors or supervisors left or any senior management were disengaged during the ReportingPeriod?Yes □ No
1. Due to the expiration of her term of office, Ms. Wen Li no longer holds the position of director of the Companyand does not hold any other position in the Company either; Mr. Feng Hongwei no longer holds the position ofsupervisor, and still continues to hold other management positions in the Company. For details, please refer to theAnnouncement No. 2023-017 on the Re-election of the Board of Directors and the Supervisory Committeedisclosed by the Company on 31 March 2023 on China Securities Journal, Securities Times, and Cninfo(www.cninfo.com.cn).
2. Due to job change, Mr. Deng Kangcheng no longer holds the position of director of the Company and does nothold any other position in the Company either. For details, please refer to the Announcement on Change ofDirector (Announcement No. 2023-034) disclosed by the Company on 13 September 2023 on China SecuritiesJournal, Securities Times, and Cninfo (www.cninfo.com.cn).
3. Due to job change, Mr. Ren Wei no longer holds the position of supervisor of the Company and does not holdany other position in the Company either. For details, please refer to the Announcement on Proposed Change ofSupervisor (Announcement No. 2023-045) disclosed by the Company on 14 November 2023 on China SecuritiesJournal, Securities Times, and Cninfo (www.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 |
| Tang Xiaoping | Chairman of the Board | Elected | 30 March 2023 | |
| Zhang Manhua | Director | Elected | 30 March 2023 | |
| Qian Zhong | Director | Elected | 12 September 2023 | |
| Li Wenkun | Director | Elected | 30 November 2023 | |
| Wen Li | Director | Left for expiration of term of office | 30 March 2023 | |
| Deng Kangcheng | Director | Left | 12 September 2023 | Job change |
| Lu Haiyan | Supervisor | Elected | 28 March 2023 | |
| Wei Junfeng | Supervisor | Elected | 30 November 2023 | |
| Feng Hongwei | Supervisor | Left for expiration of term of office | 28 March 2023 | |
| Ren Wei | Supervisor | Left | 30 November 2023 | Job change |
2. Biographical Information
Professional backgrounds, major work experience and current duties in the Company of the incumbent directors, supervisors andsenior management:
Tang Xiaoping: he ever act as CFO and finance minister of Shenzhen HRD Assets Management Company,minister of Financial Operations Management Department of Shenzhen Foreign Labor Service Co., Ltd. andexecutive director of Shenzhen Foreign Affairs Service Center, Manager of Financing Plan Department, deputyGM, secretary of the Board of the Company and deputy secretary of the CPC of the Company. He is currently theChairman of the Board, GM and secretary of the CPC of the Company.
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
Qian Zhong: Previously, the Director of the Office of the Board of Directors (Strategy Research Office), amember of the Discipline Inspection Commission, and the Head of the Operation Management Department ofShenZhen Properties & Resources Development (Group) Ltd.; currently, a Director, a Deputy Secretary of theParty Committee, and the Chairman of the Trade Union Federation of the Company.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 asthe director and CFO of the Company.Sun Minghui: Former the senior director of the Office of the Board of Directors of Shenzhen InvestmentHoldings Co., Ltd., and the deputy director of the Finance Department (Settlement Center); currently, he is thedirector of the Finance Department (Settlement Center) of Shenzhen Investment Holdings Co., Ltd. and a directorof the Company.Zhang Manhua: Previously, the Head of the Investment Department of Shenzhen Shenchao TechnologyInvestment Co., Ltd., a Deputy Head of the Strategic Development Department, and Deputy Head of the CapitalOperation Department of Shenzhen Investment Holdings Co., Ltd.; currently, the Director of the Legal and RiskManagement Department of Shenzhen Investment Holdings Co., Ltd. and a Director of the Company.Li Wenkun: Previously, a Deputy General Manager of Shenzhen Toukong Property Management Co., Ltd., aDirector, a Deputy Secretary of the Party Committee, and the Secretary of the Discipline Inspection Commissionof Shenzhen Shentou Environmental Protection Technology Co., Ltd., and a Director, and a Deputy Secretary ofthe Party Committee of Shenzhen Environmental Protection Technology Group Co., Ltd. (original name wasShenzhen Shentou Environmental Protection Technology Co., Ltd.); currently, a Director of Shenzhen WaterPlanning and Design Institute Co., Ltd., and a Director of the Company.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 GuangdongNew Century Law Firm (later renamed Guangdong Wancheng Law Firm). Now he serves as a senior partner ofBeijing Weiheng (Shenzhen) Law Firm and the independent director of the Company.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 deputydirector of Shenzhen Huapeng Certified Public Accountants, director and vice GM of Beijing ZhongtianHuazheng Certified Public Accountants Co., Ltd. (Dahua Certified Public Accountants) as well as head ofShenzhen Branch of it, partner of BDO Certified Public Accountants; advisory expert of Internal Control StandardCommittee of the Ministry of Finance (the 1
st, 2nd and 4
th
), expert of Shenzhen Senior Accountant ReviewCommittee, director of Shenzhen Institute of Certified Public Accountants, director of the InvestigationCommittee, member of the Shenzhen Municipal Social Organization Disciplinary Inspection Committee, member,Vice Secretary of CPC &Secretary of the Disciplinary Committee of CPC Shenzhen CPA Industry Committee,etc., Independent Director of Shenzhen Textile (Holdings) Co., Ltd., currently partner of Shenzhen DahuaInternational Certified Public Accountants, Secretary of CPC General Branch of Shenzhen Branch of DahuaCertified Public Accountants (Special General Partnership),, Chairman of Shenzhen Tianye Tax Agent Co., Ltd.,and also served as the independent director of Shenzhen Tongyi Industry Co., Ltd. and the Company. The mainsocial positions are: external master tutor of Shenzhen University, member of Shenzhen CPA Industry Committee,director of Shenzhen Certified Tax Agents Association and Member of the Capital Market Advisory ExpertCommittee of the Xinjiang Regulatory Bureau of the China Securities Regulatory Commission, expert of theexperts database of State-owned Assets Supervision and Administration Commission of the People’s Governmentof Shenzhen Municipality, Development and Reform Commission of Shenzhen Municipality, Science andTechnology Innovation Commission of Shenzhen Municipality, Shenzhen Bureau of Radio, Television, Culture,Tourism and Sports, Shenzhen United Property and Equity Exchange, etc.
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
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 independentdirectors of Shenzhen Farben Information Technology Co., Ltd., OFILM Group Co., Ltd. and the Company.Wang Jiangtao: Former Deputy General Manager and Secretary of the Party Branch of Shenzhen ForeignEconomic and Trade Investment Company, Director, Secretary of the Disciplinary Committee, Secretary of CPCand Chairman of the Supervisory Committee, of Shenzhen Architecture Design General Research Institute;currently Chairman of the Supervisory Committee, Secretary of the Disciplinary Committee and member of CPCof the Company.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.Wei Junfeng: Previously, a Senior Managing Officer of the Strategic Research Department (Office of the Boardof Directors) of Shenzhen Investment Holdings Co., Ltd.; currently, a Deputy Head of the Strategic ResearchDepartment (Office of the Board of Directors) of Shenzhen Investment Holdings Co., Ltd. and a Supervisor of theCompany.Lin Jun: She once was the Vice Chief and Chief of the Party-Mass Work Department. And she has been acting asa supervisor of the Company, the Vice Discipline Inspection Secretary and Director of Discipline Inspection andSupervision Office (Office of the Board of Supervisors).Lu Haiyan: Previously, a Deputy Head of the Financial Department and a Deputy Head of the StrategicDevelopment Department (Office of the Board of Directors) of Shenzhen Foreign Service Group Co., Ltd.;currently, a supervisor and a deputy manager of the Audit Department (presiding over the work of the AuditDepartment) of the Company.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 DevelopmentDepartment, Sales Department, Project II Department, Project Management Department; currently deputy GM ofthe Company, member of CPC, Chairman of Jianbang Group, and GM of Longgang Development Company.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 of the Committee for Discipline Inspection and Deputy GM of Shenzhen OCT Vision Inc. (concurrentlyas an executive director of Shenzhen OCT International Media Performing Co., Ltd.), and now serving as theDeputy GM, member of the CPC of the Company.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 DeputyGM, member of the CPC of the Company of the Company.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 Secretariatin the Company.
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 |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
| shareholding entity | |||||
| Sun Minghui | Shenzhen Investment Holdings Co., Ltd | Chief of Financial Department (Settlement Center) | 11 November 2020 | Yes | |
| Zhang Manhua | Shenzhen Investment Holdings Co., Ltd | Head of Legal and Risk Management | 19 October 2018 | Yes | |
| Li Yufei | Shenzhen Investment Holdings Co., Ltd | Deputy Director of Discipline Inspection Office | 9 July 2015 | Yes | |
| Wei Junfeng | Shenzhen Investment Holdings Co., Ltd | Deputy Director of Strategic Research Department (Office of the Board of Directors) | 25 June 2018 | 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 | Shenzhen Highway Passenger Transportation Service Centre Co., Ltd. | Supervisor | 16 June 2017 | No | |
| Sun Minghui | China Nanshan Development (Group) Co., Ltd. | Supervisor | 17 October 2017 | No | |
| Sun Minghui | ULTRARICHINTERNATIONAL LIMITED | Director | 11 November 2020 | 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 | Hubei SIHC Investment Development Co., Ltd. | Director | 30 June 2021 | No | |
| Sun Minghui | Shenzhen Textile (Holdings) Co., Ltd. | Director | 18 October 2021 | No | |
| Sun Minghui | Guotai Junan Securities Co.,Ltd. | Director | 26 October 2023 | No | |
| Sun Minghui | Guotai Junan Investment Management Co.,Ltd. | Director | 26 October 2023 | No | |
| Zhang Manhua | Shenzhen Properties & Resources Development (Group) Ltd. | Supervisor | 31 July 2014 | No | |
| Zhang Manhua | Shenzhen Architecture Design General Research Institute | Director | 11 July 2017 | No | |
| Zhang Manhua | Shenzhen Asset Management Co., Ltd. | Director | 23 April 2020 | No | |
| Zhang Manhua | Shenzhen Bay Area Urban Construction and Development Co., Ltd. | Director | 16 August 2021 | No | |
| Zhang Manhua | Shenzhen High-Tech Zone Investment Development Group Co., Ltd. | Director | 25 November 2022 | No | |
| Zhang Manhua | Shenzhen Corporate Compliance Association | Vice-president | 9 January 2023 | No | |
| Li Wenkun | Shenzhen Water Planning and Design Institute Co., Ltd. | Director | 4 September 2023 | 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 | |
| Wei Junfeng | Shenzhen Environmental Protection Technology Group Co., Ltd. | Supervisor | 17 October 2017 | No | |
| Wei Junfeng | Shenzhen Highway Passenger Transportation Service Centre Co., Ltd. | Director | 24 August 2023 | No |
Punishments imposed in the recent three years by the securities regulator on the incumbent directors, supervisors and senior
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
management as 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 seniormanagement:
The remuneration of the Company's directors, supervisors and senior managers shall be determined and implemented in accordancewith the regulations of the Company's remuneration management system.After the review and approval at the 2022 Annual General Meeting of Shareholders held on 28 April 2023, the allowance forindependent directors has been adjusted to RMB10,000 (pre-tax) per person per month from RMB7000 (pre-tax) per person permonth since May 2023, and independent directors will not receive any remuneration other than it from the Company.Remuneration of directors, supervisors and senior management for the Reporting Period
Unit: RMB’0,000
| Name | Gender | Age | Office title | Incumbent/Former | Total before-tax remuneration from the Company | Any remuneration from related party |
| Tang Xiaoping | Male | 54 | Chairman of the Board, GM | Incumbent | 98.7 | No |
| Qian Zhong | Male | 50 | Director | Incumbent | 22.6 | No |
| Wang Jianfei | Male | 51 | Director and CFO | Incumbent | 107.7 | No |
| Sun Minghui | Male | 43 | Director | Incumbent | 0 | Yes |
| Zhang Manhua | Male | 49 | Director | Incumbent | 0 | Yes |
| Li Wenkun | Male | 51 | Director | Incumbent | 0 | Yes |
| Kang Xiaoyue | Male | 60 | Independent director | Incumbent | 10.8 | No |
| He Zuowen | Male | 62 | Independent director | Incumbent | 10.8 | No |
| Mi Xuming | Male | 49 | Independent director | Incumbent | 10.8 | No |
| Wang Jiangtao | Male | 58 | Chairman of the Supervisory Committee | Incumbent | 111.42 | No |
| Li Yufei | Female | 46 | Supervisor | Incumbent | 0 | Yes |
| Wei Junfeng | Male | 45 | Supervisor | Incumbent | 0 | Yes |
| Lin Jun | Female | 55 | Supervisor | Incumbent | 61.86 | No |
| Lu Haiyan | Female | 47 | Supervisor | Incumbent | 41.17 | No |
| Zhang Hongwei | Male | 58 | Vice GM | Incumbent | 87.05 | No |
| Huang Weijun | Male | 52 | Vice GM | Incumbent | 70.07 | No |
| Wu Zhiyong | Male | 52 | Vice GM | Incumbent | 81.5 | No |
| Luo Yi | Male | 50 | Secretary of the Board | Incumbent | 62.76 | No |
| Deng Kangcheng | Male | 58 | Director | Former | 0 | Yes |
| Wen Li | Female | 55 | Director | Former | 0 | Yes |
| Ren Wei | Male | 44 | Supervisor | Former | 0 | Yes |
| Feng Hongwei | Male | 53 | Supervisor | Former | 62.86 | No |
| Total | -- | -- | -- | -- | 840.09 | -- |
Other notes
□Applicable ? Not applicable
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
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 77th Meeting of the 7th Board of Directors | 19 January 2023 | 20 January 2023 | Announcement on Resolutions of the 77th Meeting of the 7th Board of Directors (No.: 2023-003) disclosed on China Securities Journal, Securities Times and www.cninfo.com.cn. |
| The 78th Meeting of the 7th Board of Directors | 17 March 2023 | 18 March 2023 | Announcement on Resolutions of the 78th Meeting of the 7th Board of Directors (No.: 2023-007) disclosed on China Securities Journal, Securities Times and www.cninfo.com.cn. |
| The 1st Meeting of the 8th Board of Directors | 30 March 2023 | 31 March 2023 | Announcement on Resolutions of the 1st Meeting of the 8th Board of Directors (No.: 2023-015) disclosed on China Securities Journal, Securities Times and www.cninfo.com.cn. |
| The 2nd Meeting of the 8th Board of Directors | 28 April 2023 | 29 April 2023 | Announcement on Resolutions of the 2nd Meeting of the 8th Board of Directors (No.: 2023-021) disclosed on China Securities Journal, Securities Times and www.cninfo.com.cn. |
| The 3rd Meeting of the 8th Board of Directors | 28 July 2023 | 29 July 2023 | Announcement on Resolutions of the 3rd Meeting of the 8th Board of Directors (No.: 2023-026) disclosed on China Securities Journal, Securities Times and www.cninfo.com.cn. |
| The 4th Meeting of the 8th Board of Directors | 25 August 2023 | 28 August 2023 | Announcement on Resolutions of the 4th Meeting of the 8th Board of Directors (No.: 2023-028) disclosed on China Securities Journal, Securities Times and www.cninfo.com.cn. |
| The 5th Meeting of the 8th Board of Directors | 18 October 2023 | 19 October 2023 | Announcement on Resolutions of the 5th Meeting of the 8th Board of Directors (No.: 2023-035) disclosed on China Securities Journal, Securities Times and www.cninfo.com.cn. |
| The 6th Meeting of the 8th Board of Directors | 27 October 2023 | 28 October 2023 | Announcement on Resolutions of the 6th Meeting of the 8th Board of Directors (No.: 2023-036) disclosed on China Securities Journal, Securities Times and www.cninfo.com.cn. |
| The 7th Meeting of the 8th Board of Directors | 29 December 2023 | 30 December 2023 | Announcement on Resolutions of the 7th Meeting of the 8th Board of Directors (No.: 2023-050) disclosed on China Securities Journal, Securities Times 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 | Board meetings | Board meetings | Board meetings | Board meetings the | The director failed to | General meetings |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
| meetings the director was eligible to attend | attended on site | attended by way of telecommunication | attended through a proxy | director failed to attend | attend two consecutive board meetings (yes/no) | attended | |
| Tang Xiaoping | 9 | 7 | 2 | 0 | 0 | No | 4 |
| Qian Zhong | 3 | 1 | 2 | 0 | 0 | No | 1 |
| Wang Jianfei | 9 | 7 | 2 | 0 | 0 | No | 4 |
| Sun Minghui | 9 | 5 | 4 | 0 | 0 | No | 3 |
| Zhang Manhua | 7 | 4 | 3 | 0 | 0 | No | 3 |
| Li Wenkun | 1 | 0 | 1 | 0 | 0 | No | 0 |
| Kang Xiaoyue | 9 | 5 | 4 | 0 | 0 | No | 4 |
| He Zuowen | 9 | 6 | 3 | 0 | 0 | No | 4 |
| Mi Xuming | 9 | 6 | 3 | 0 | 0 | No | 3 |
| Deng Kangcheng | 6 | 6 | 0 | 0 | 0 | No | 3 |
| Wen Li | 2 | 1 | 1 | 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.They thoroughly mastered the Company’s production and operation, internal control, and standardized operation,and put forward relevant opinions on the Company’s major governance and operation decisions based on theirprofessional advantages. These opinions were fully communicated and discussed among the directors beforeforming consensus, which effectively promoted scientific and objective decision-making by the Board ofDirectors, and helpfully safeguarded 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 date | Content | Important opinions and suggestions raised | Other information about the performance | Details about issues |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
| convened | of duty | with objections (if any) | |||||
| Audit Committee of the Board of Directors | He Zuowen, Sun Minghui, Mi Xuming | 4 | 14 January 2023 | Deliberation on the Company’s 2022 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 2023 | Deliberation on the preliminary audit opinions of Grant Thornton China (LLP) on the Company’s 2022 financial statements | It is believed that the Company’s 2022 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 2022 and its operating results and cash flows for the year 2022 in all material respects. | |||||
| 17 March 2023 | Deliberation on the summary of the 2022 audit service provided by Grant Thornton China (LLP) for the Company | It is believed that Grant Thornton China (LLP) has completed the audit of the Company’s 2022 financial statements well. | |||||
| 19 October 2023 | Deliberation on the proposed engagement of the audit firm for 2023 | It is agreed to engage Pan-China Certified Public Accountant (LLP) as the auditor of the Company's financial statements and internal control for the year 2023, with the auditor's fee of RMB510,000 for the financial statements and RMB210,000 for the internal control. | |||||
| Remuneration and Appraisal Committee of the Board of Directors | Mi Xuming, Wang Jianfei, He Zuowen | 6 | 17 March 2023 | Deliberation on the annual remuneration of directors, supervisors and senior management as disclosed in the Company’s 2022 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 2022 annual report is true and accurate. | ||
| 30 March 2023 | Deliberation on the adjustment of the allowances for Independent Directors | It is considered that the Company's current adjustment of the allowances for Independent Directors has taken into account the standard of allowances for Independent Directors of listed companies in the same industry, and the level of economic development in the region, with the comprehensive consideration of the actual situation of the Company's operation and management, as well as the contributions made by the Independent Directors to the standardised operation and future development of the Company. As a result, the proposed adjustment of the allowances is reasonable. |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
| 23 July 2023 | Deliberation on the Program for Assessing Group Deputy General Managers Huang Weijun and Wu Zhiyong During Probationary Period | It is agreed to adopt the Program for Assessing Group Deputy General Managers Huang Weijun and Wu Zhiyong During Probationary Period. | |||||
| 18 August 2023 | Deliberation on the result for Assessing Group Deputy General Managers Huang Weijun and Wu Zhiyong During Probationary Period | It is agreed to adopt the assessment report and probationary assessment proposal of the assessment working group: Huang Weijun and Wu Zhiyong, Deputy General Managers of the Group, were identified to be "qualified" in the probationary assessment results, and were regularised on schedule. | |||||
| 12 October 2023 | Deliberation on the adjustment of Implementation Plan for Performance Appraisal of Senior Management of the Company in 2022 | It is considered that the adjusted Implementation Plan for Performance Appraisal of Senior Management in 2022 conforms to the actual situation of the Company, and the assessment indicators are set scientifically and reasonably. | |||||
| 19 October 2023 | Review of the results of performance appraisal of senior management members of SPG in 2022 and the result application plan, the Implementation Plan for Performance Appraisal of Senior Management Members in 2023 and the 2023 Statement of Responsibility of Senior Management Members for Business Performance | It is held that: 1.The plan for performance assessment and application of the Company's Senior Management for the year 2022 conforms to the actual situation, and can be used to more accurately and comprehensively evaluate the assessment objects, without circumstances of jeopardizing the interests of the Company and its shareholders, especially those of the medium and small shareholders. 2. The Implementation Plan for Performance Assessment of SPG's Senior Management for the Year 2023 satisfies the requirements put forward in the Management Measures for Business Performance Appraisal and Remuneration Management of Senior Management Members, and the assessment indicators are set scientifically and reasonably, without circumstances of jeopardizing the interests of the Company and its shareholders, especially those of the medium and small shareholders. 3. The responsibility statement of Senior Management for business performance for the year 2023 satisfies the requirements for the assessment indicators of business performance for the year 2023, is combined with the key work points for the year 2023 and the division of work among the members of the leading group, and is scientific and reasonable, without circumstances of jeopardizing the interests of the Company and its shareholders, especially those of the medium and small shareholders. | |||||
| Nomination Committee of the Board of Dire | Kang Xiaoyue, Deng Kangcheng, He Zuowen | 2 | 13 January 2023 | Deliberation on the Election of the Company’s Board of Director | Tang Xiaoping, Deng Kangcheng, Wang Jianfei, Zhang Manhua and Sun Minghui are proposed as candidates for non-independent directors of the 8th Board of Directors of the Company; Kang Xiaoyue, He Zuowen and Mi Xuming are proposed as candidates for independent directors of the 8th Board of Directors of the Company. | ||
| 18 August 2023 | Deliberation on the nomination of Qian Zhong as a director of | It is agreed to recommend Qian Zhong as a director of the Company. |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
| ctors | the Company | ||||||
| Kang Xiaoyue, Qian Zhong, He Zuowen | 1 | 19 October 2023 | Deliberation on the nomination of Li Wenkun as a director of the Company | It is agreed to recommend Li Wenkun as a director of the Company. |
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 ReportingPeriod.
□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 | 104 |
| Number of in-service employees of major subsidiaries at the period-end | 163 |
| Total number of in-service employees at the period-end | 267 |
| Total number of paid employees in the Reporting Period | 267 |
| Number of retirees to whom the Company as the parent or its major subsidiaries need to pay retirement pensions | 0 |
| Functions | |
| Function | Employees |
| Production | 127 |
| Sales | 21 |
| Technical | 15 |
| Financial | 24 |
| Administrative | 80 |
| Total | 267 |
| Educational backgrounds | |
| Category | Number |
| Doctors | 2 |
| Masters | 22 |
| Bachelors | 111 |
| College graduates | 67 |
| Technical secondary school graduates | 8 |
| High school graduates and below | 57 |
| Total | 267 |
2. Employee Remuneration Policy
The management personnel above vice general manager (including vice GM) of the Company conducted annualsalary system, other employees conducted contacting the performance with the benefit salary system.
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
3. Employee Training Plans
The Company established annual training plan in line with Measures for the Management of Employee TrainingThe Company adopts internal training, hires experts give lectures to the Company or participate professionaltraining, train the on job employees with job knowledge, professional skills, rules and regulations, the businessprocess etc., which enrich and renew the professional knowledge, enhance the comprehensive quality andbusiness 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 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 arepositive.
□Applicable ? Not applicable
Final Dividend Plan for the Reporting Period
□Applicable ? Not applicable
No such cases in the Reporting Period.
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 hascarried out internal control evaluation in accordance with the internal control matrix and documents. Inaccordance with the requirements of the standard system for enterprise internal control and relevant regulations,the Company has maintained effective internal control over financial reporting in all material respects. No majordeficiencies in internal control not related to financial reporting have been found, and no factors affecting theevaluation conclusion of internal control effectiveness have occurred. At the same time, the Company attachesgreat importance to the regulation and steering role of the big supervision system. By holding joint supervisionmeetings and carrying out key supervision and inspection, the Company has promoted the standardization levelimprovement of relevant management work. No major violations of regulations and disciplines have been found.In the future, the Company will continue to develop internal control in a standardized manner and strengthen thesupervision and inspection of internal control in order to promote the healthy and sustainable development of theCompany.
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
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 |
XIV Internal Control Evaluation Report or Independent Auditor’s Report on InternalControl
1. Internal Control Evaluation Report
| Disclosure date of the internal control self-evaluation report | 30 March 2024 | |||
| Index to the disclosed internal control self-evaluation report | 2023 Internal Control Self-Evaluation Report on www.cninfo.com.cn | |||
| Evaluated entities’ combined assets as % of consolidated total assets | 83.94% | |||
| Evaluated entities’ combined operating revenue as % of consolidated operating revenue | 99.87% | |||
| 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 | 0 | |||
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
2. Independent Auditor’s Report on Internal Control
? Applicable □ Not applicable
internal control not related to financialreporting
Opinion paragraph in the independent auditor’s report on internal control
| 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 2023 in accordance with Basic Standards for Internal Control and relevant regulations. | |
| Independent auditor’s report on internal control disclosed or not | Disclosed |
| Disclosure date | 30 March 2024 |
| 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 internalcontrol.
□Yes ? No
Indicate by tick mark whether the independent auditor’s report on the Company’s internal control is consistent with the internalcontrol self-evaluation report issued by the Company’s Board.?Yes □ No
XV Rectifications of Problems Identified by Self-inspection in the Special Action for ListedCompany Governance
1. The Company has completed the re-election of its Board of Directors and the Board of Supervisors.On 30 March 2023, the Company held the 1st extraordinary general meeting of shareholders of 2023, at which thenon-independent directors and independent directors of the 8th Board of Directors and the non-employeesupervisors of the 8th Board of Supervisors were elected, and together with the employee representativesupervisors who were elected by the workers’ congress of the Company, formed the 8th Board of Directors andthe 8th Board of Supervisors.
2. The Company has continuously improved the corporate governance system.
In 2023, in accordance with the requirements of such regulations as the Guidelines on the Articles of Associationof Listed Companies, the Management Measures for Independent Directors of Listed Companies, the Rules forStock Listing of Shenzhen Stock Exchange, and the Self-regulation Guidelines for Listed Companies of ShenzhenStock Exchange No. 1-Standardized Operation of Listed Companies on the Main Board, the Company hascompleted the revisions of four governance policies of the Company, including the articles of association, investorrelations management rules, the working system for independent directors, and the implementation rules for theStrategy Committee of the Board of Directors.
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 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 problemsduring the Reporting 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 ResponsibilityAdhering to the philosophy of "thinking of the source when drinking water", while pursuing economic benefits,the Company proactively practiced its role as a state-owned enterprise, fulfilled its social responsibility, and gaveback to the society with practical action. For details, please refer to the 2023 Environmental, Social and CorporateGovernance (ESG) Report disclosed on Cninfo (www.cninfo.com.cn).III Consolidation and Expansion of Poverty Alleviation Outcomes, and Rural RevitalizationPaying close attention to rural development, the Company proactively implemented the national targeted povertyalleviation action, and continuously carried out consumer assistance and rural revitalisation tasks. For details,please refer to the 2023 Environmental, Social and Corporate Governance (ESG) Report disclosed on Cninfo(www.cninfo.com.cn).
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
Part VI Significant Events
I Fulfillment of Commitments
1. Commitments of the Company’s De Facto Controller, Shareholders, Related Parties and Acquirers, aswell as the 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 stillwithin the 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 Partiesfor Non-Operating Purposes
□Applicable ? Not applicable
No such cases in the Reporting Period.
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
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 the Financial 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 AccountingErrors
? Applicable □ Not applicableFor details, see ―(XXXII) Significant changes in accounting policies‖ under ―III. Significant accounting policies and estimates‖ in―Part X Financial Statements‖.
VII YoY Changes to the Scope of the Consolidated Financial Statements
□Applicable ? Not applicable
No such cases in the Reporting Period.VIII Engagement and Disengagement of Independent AuditorCurrent independent auditor
| Name of the domestic independent auditor | Pan-China Certified Public Accountants (LLP) |
| The Company’s payment to the domestic independent auditor (RMB’0,000) | 72 |
| How many consecutive years the domestic independent auditor has provided audit service for the Company | 1 |
| Names of the certified public accountants from the domestic independent auditor writing signatures on the auditor’s report | Wang Huansen, Cai Xiaodong |
| How many consecutive years the certified public accountants from the domestic independent auditor have provided audit service for the Company | 1 |
Indicate by tick mark whether the independent auditor was changed for the Reporting Period.?Yes □NoIndicate by tick mark whether the independent auditor was changed in the audit period
□Yes ? No
Indicate by tick mark whether the approval procedure for changing the independent auditor was performed?Yes □NoDetailed explanation of the change of independent auditor
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
Grant Thornton China (LLP) has provided audit services for the Company for four consecutive years since 2019and issued a standard unqualified audit report for the Company for each of the years. After comprehensiveconsideration and prudent study of the Company's needs for future business development, the Company hasselected, through public bidding, Pan-China Certified Public Accountant (LLP) as the accounting firm for the year2023.The above-mentioned events have been respectively deliberated and adopted at the 6th Meeting of the 8th Boardof Directors, the 4th Meeting of the 8th Supervisory Committee, and the 3rd Extraordinary General Meeting of2023 of the Company, with the details seen in the Resolutions of the 6th Meeting of the 8th Board of Directors(Announcement No. 2023-036), the Resolutions of the 4th Meeting of the 8th Supervisory Committee(Announcement No. 2023-037), and the Announcement on Proposed Engagement of Accounting Firm for the Yearof 2023 (Announcement No. 2023-040), and the Resolutions of the 3rd Extraordinary General Meeting of 2023(Announcement No. 2023-047), dated 28 October and 1 December 2023 and disclosed on China SecuritiesJournal, Securities Times, and Cninfo (www.cninfo.com.cn).Independent auditor, financial advisor or sponsor engaged for the audit of internal controls:
? Applicable □ Not applicable
During the Reporting Period, the Company engaged Pan-China Certified Public Accountant (LLP) to provideinternal control and audit services for the Company at a service fee of RMB210,000.
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 | 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. | 28 August 2023 | Interim Report 2023 (No.: 2023-031) on www.cninfo.com.cn |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
| 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. | |||||||
| Lawsuit of bill dispute | 17,715.14 | No | Judgment was rendered in the first instance | 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 the bill dispute to the People’s Court of Huiyang District. The Huiyang District Court ruled at first instance in March 2023 that Jianbang should pay the acceptance bill amount and interest. | SPG is actively negotiating with Jianbang and the plaintiffs for an all-inclusive solution. | 28 August 2023 | Interim Report 2023 (No.: 2023-031) on www.cninfo.com.cn |
| Contractual disputes over loans | 39,568.85 | No | The verdict has been rendered in the first instance | In January 2024, the Company received a civil judgment of the first instance issued by the Shenzhen Luohu District People's Court. | The verdict has been rendered in the first instance | 3 February 2024 | Announcement on the Progress of Litigation Matters (No.: 2024-003) on www.cninfo.com.cn |
| Joint venture and cooperative real estate development contract disputes | 74,357.5 | No | The first trial has been held | The case was heard in February 2024 and has not yet been decided. | The first trial has been held | 8 December 2023 | Announcement on Litigation Matters (No.: 2023-048) on www.cninfo.com.cn |
| Contractual disputes over loans | 41,952.29 | No | The first trial has been held | The case was heard in March 2024 and has not yet been decided. | The first trial has been held | 13 January 2024 | Announcement on Litigation Matters (No.: 2024-001) on www.cninfo.com.cn |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
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 ActualController
□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 anyrelated finance 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 anyother finance business with any related parties.
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
7. Other Major Related-Party Transactions
□Applicable ? Not applicable
No such cases in the Reporting Period.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 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 |
| Shenzhen SPG Chuanqi Real Estate Develop | 18 March 2022 | 50,000 | 17 June 2022 | 15,047 | Pledge | 100% equity interests of Shenzhe | From the date of signing the guarantee | Not | Not | |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
| ment Co., Ltd. | n SPG Chuanqi Real Estate Development Co., Ltd. held by the Company | contract to the date when all guaranteed debts are unconditionally and irrevocably paid off in full. | |||||||||||
| Total approved line for such guarantees in the Reporting Period (B1) | 50,000 | Total actual amount of such guarantees in the Reporting Period (B2) | 15,047 | ||||||||||
| 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) | 15,047 | ||||||||||
| 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) | 15,047 | ||||||||||
| 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) | 15,047 | ||||||||||
| Total actual guarantee amount (A4+B4+C4) as % of the Company’s net assets | 4.08% | ||||||||||||
| 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 | 87,934.02 | 87,934.02 | 0 | 0 |
| Total | 87,934.02 | 87,934.02 | 0 | 0 | |
High-risk entrusted wealth management with significant single amount or low security and poor liquidity:
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
□Applicable ? Not applicable
Whether there is the case where the principal cannot be recovered at maturity or other case which may cause impairment forentrusted wealth 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
No such cases in the Reporting Period.
XVII Significant Events of Subsidiaries
□Applicable ? Not applicable
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
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 | 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 | 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 | 0.00 | 0.00% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00% |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
| natural person | |||||||||
| 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 ordinaryshareholders and other financial indicators of the prior year and the prior accounting period, respectively:
□Applicable ? Not applicable
Other information that the Company considers necessary or is required by the securities regulator to be disclosed:
□Applicable ? Not applicable
2. Changes in Restricted Shares
□Applicable ? Not applicable
II. Issuance and Listing of Securities
1. Securities (Exclusive of Preferred Shares) Issued in the Reporting Period
□Applicable ? Not applicable
2. Changes to Total Shares, Shareholder Structure and Asset and Liability Structures
□Applicable ? Not applicable
3. Existing Staff-Held Shares
□Applicable ? Not applicable
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
III Shareholders and Actual Controller
1. Shareholders and Their Shareholdings at the Period-End
Unit: share
| Number of ordinary shareholders | 43,107 | Number of ordinary shareholders at the month-end prior to the disclosure of this Report | 42,079 | Number of preferred shareholders with resumed voting rights | 0 | Number of preferred shareholders with resumed voting rights at the month-end prior to the disclosure of this Report | 0 | |||||||||
| Shareholding of ordinary shareholders holding more than 5% shares or the top 10 of ordinary shareholders (exclusive of shares lent in refinancing) | ||||||||||||||||
| 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 | 0 | 0 | 564,353,838 | N/A | 0 | ||||||||
| Shenzhen State-owned Equity Management Co., Ltd. | Domestic non-state-owned legal person | 6.35% | 64,288,426 | 0 | 0 | 64,288,426 | N/A | 0 | ||||||||
| Yang Jianmin | Domestic natural person | 1.10% | 11,136,977 | 1,917,300 | 0 | 11,136,977 | N/A | 0 | ||||||||
| Zhang Xiujuan | Domestic natural person | 0.47% | 4,760,400 | 659,200 | 0 | 4,760,400 | N/A | 0 | ||||||||
| Wang Yulan | Domestic natural person | 0.44% | 4,427,191 | 1,023,300 | 0 | 4,427,191 | N/A | 0 | ||||||||
| Hong Kong Securities Clearing Company Ltd. | Foreign legal person | 0.41% | 4,146,803 | 2,754,770 | 0 | 4,146,803 | N/A | 0 | ||||||||
| Pan Jun | Domestic natural person | 0.41% | 4,129,376 | -1,059,424 | 0 | 4,129,376 | N/A | 0 | ||||||||
| He Qiao | Domestic natural person | 0.38% | 3,888,886 | -116,400 | 0 | 3,888,886 | N/A | 0 | ||||||||
| Wang Zhengying | Domestic natural person | 0.29% | 2,918,100 | 0 | 2,918,100 | N/A | 0 | |||||||||
| Zhang Zi | Domestic natural person | 0.26% | 2,584,700 | 1,214,400 | 0 | 2,584,700 | N/A | 0 | ||||||||
| Strategic investor or general legal person becoming a top-10 ordinary shareholder due to rights issue | 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 | |||||||||||||||
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
| 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 among the top 10 shareholders | 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 | RMB ordinary shares | 564,353,838 | ||
| Shenzhen State-owned Equity Management Co., Ltd. | 64,288,426 | RMB ordinary shares | 64,288,426 | ||
| Yang Jianmin | 11,136,977 | RMB ordinary shares | 11,136,977 | ||
| Zhang Xiujuan | 4,760,400 | RMB ordinary shares | 4,760,400 | ||
| Wang Yulan | 4,427,191 | RMB ordinary shares | 4,427,191 | ||
| Hong Kong Securities Clearing Company Ltd. | 4,146,803 | RMB ordinary shares | 4,146,803 | ||
| Pan Jun | 4,129,376 | RMB ordinary shares | 4,129,376 | ||
| He Qiao | 3,888,886 | RMB ordinary shares | 3,732,000 | ||
| Domestically listed foreign shares | 156,886 | ||||
| Wang Zhengying | 2,918,100 | RMB ordinary shares | 2,918,100 | ||
| Zhang Zi | 2,584,700 | RMB ordinary shares | 2,584,700 | ||
| 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 | Among the top 10 shareholders of the Company, the third, fourth, eighth, ninth and 10th shareholders held 9,804,200 shares, 4,760,400 shares, 3,732,000 shares, 2,918,100 shares, and 2,496,600 shares in their respective credit securities accounts. | ||||
Top 10 shareholders involved in refinancing shares lending
□Applicable ? Not applicable
Changes in top 10 shareholders compared with the prior period? Applicable □ Not applicable
Unit: share
| Changes in top 10 shareholders compared with the end of the prior period | |||||
| Full name of shareholder | Newly added or existing from top 10 shareholders in the Reporting Period | Shares lent in refinancing and not yet returned at the period-end | Shares in the common account and credit account plus shares lent in refinancing and not yet returned at the period-end | ||
| Total shares | As % of total share capital | Total shares | As % of total share capital | ||
| Hong Kong Securities Clearing Company Ltd. | Newly added | 0 | 0.00% | 0 | 0.00% |
| Wang Zhengying | Newly added | 0 | 0.00% | 0 | 0.00% |
| Zhang Zi | Newly added | 0 | 0.00% | 0 | 0.00% |
| Cao Benming | Exiting | 0 | 0.00% | 0 | 0.00% |
| Lin Weirong | Exiting | 0 | 0.00% | 0 | 0.00% |
| China International Capital Corporation Limited | Exiting | 0 | 0.00% | 0 | 0.00% |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
Indicate by tick mark whether any of the top 10 ordinary shareholders or the top 10 unrestricted ordinary shareholders of theCompany conducted 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 | 301,410,000 shares in SZPRD A (000011), representing a stake of 50.57%;; 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%; 1,059,082,500 shares in Shenzhen International (00152) , representing a stake of 44.25%; 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%; 601,673,300 shares in EA (002183), representing a stake of 23.17%; 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%; 325,721,500 shares in SDGI (000070), representing a stake of 36.18%; 205,341,600 shares in TELLUS A (000025), representing a stake of 31.79%; 80,739,800 shares in SDGS (300917), representing a stake of 47.78%; 72,000,000 shares in MICROGATE (300319), representing a stake of 6.49%; 456,121,900 shares in CHINA MERCHANT’S SHEKOU HOLDINGS (001979), representing a stake of 5.03%. | ||||
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 Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
| 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
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
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
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
Part VIII Preference Shares
□Applicable ? Not applicable
No preference shares in the Reporting Period.
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
Part IX Bonds
□Applicable ? Not applicable
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
Part X Financial Statements
I. Auditor’s Report
| Type of the audit opinion | Unmodified unqualified opinion |
| Date of signing this report | 29 March 2024 |
| Name of the audit institution | Pan-China Certified Public Accountant (LLP) |
| Number of the audit report | PCCPAAR [2024] No. 7-160 |
| Name of the certified public accountants | Wang Huansen, Cai Xiaodong |
Text of the Auditor’s Report
Auditor’s ReportPCCPAAR [2024] No. 7-160
To the Shareholders of Shenzhen Special Economic Zone Real Estate & Properties(Group) Co., Ltd.:
I. Audit OpinionWe have audited the financial statements of Shenzhen Special Economic Zone RealEstate & Properties (Group) Co., Ltd. (the ―Company‖), which comprise theconsolidated and parent company balance sheets as at December 31, 2023, theconsolidated and parent company income statements, consolidated and parentcompany cash flow statements, and consolidated and parent company statements ofchanges in equity for the year then ended, as well as notes to financial statements.In our opinion, the accompanying financial statements present fairly, in all materialrespects, the financial position of the Company as at December 31, 2023, and itsfinancial performance and its cash flows for the year then ended in accordance withChina Accounting Standards for Business Enterprises.II. Basis for Audit OpinionWe conducted our audit in accordance with China Standards on Auditing. Ourresponsibilities under those standards are further described in the Certified PublicAccountant’s Responsibilities for the Audit of the Financial Statements section of our
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
report. We are independent of the Company in accordance with the China Code ofEthics for Certified Public Accountants, and we have fulfilled other ethicalresponsibilities. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion.
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
III. Key Audit MattersKey audit matters are those matters that, in our professional judgment, were of mostsignificance in our audit of the financial statements of the current period. Thesematters were addressed in the context of our audit of the financial statements as awhole, and in forming our opinion thereon, and we do not express a separate opinionon these matters.(I) Revenue recognition
1. Key audit matters
Please refer to section III (XXV) and V (II) 1 of notes to the financial statements fordetails.The Company is mainly engaged in real estate sales, engineering construction, andproperty leasing business. In 2023, the operating revenue amounted to 530,887,720.68yuan, of which, 118,580,624.34 yuan was from the real estate sales, accounting for
22.34%, and 324,243,778.50 yuan was from engineering construction, accounting for
61.08%.
As operating revenue is one of the key performance indicators of the Company, theremight be inherent risks that the Company’s management (the ―Management‖) adoptsinappropriate revenue recognition to achieve specific goals or expectations, andrevenue recognition involves significant judgment of the Management, we haveidentified revenue recognition as a key audit matter.
2. Responsive audit procedures
Our main audit procedures for revenue recognition are as follows:
(1) We obtained understandings of key internal controls related to revenue recognition,assessed the design of these controls, determined whether they had been executed, andtested the effectiveness of the operation;
(2) We checked main sales contracts and lease contracts, and assessed whether therevenue recognition method was appropriate;
(3) We performed analysis procedure on operating revenue and gross margin bymonth, business type, etc., so as to identify whether there are significant or abnormalfluctuations and find out the reason;
(4) We checked supporting documents related to selected items, including sales
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
contracts, housing delivery notices, lease contracts, sales invoices, etc.
(5) We selected items to check the documents including cost budget, purchasecontracts, subcontract agreements, etc. which were taken as the basis for estimatingtotal cost, so as to test whether the performance progress and the revenue recognizedbased on performance progress were accurately measured by the Management, andevaluated the reasonableness of the performance progress determined by theManagement in combination with documents including supervision reports, progressconfirmation sheets, customer statements, as well as the on-site observation oninventory counting;
(6) We performed confirmation procedures on sales amount of selected items incombination with confirmation procedure of accounts receivable and contract assets;
(7) We performed cut-off tests to check whether the revenue was recognized in theappropriate period; and
(8) We checked whether information related to operating revenue had been presentedappropriately in the financial statements.(II) Net realizable value of inventories
1. Key audit matters
Please refer to section III (XIII) and V (I) 7 of notes to the financial statements fordetails.As of December 31, 2023, the book balance of inventories amounted to4,306,986,320.68 yuan, with provision for inventory write-down of 391,770,398.72yuan, and the carrying amount amounted to 3,915,215,921.96 yuan.Inventories are measured at the lower of cost and net realizable value. The netrealizable value is determined by the Management based on the amount of theestimated selling price less the cost to be incurred upon completion, estimated sellingexpenses and relevant taxes and surcharges. As the amount of inventories issignificant and determination of net realizable value involves significant judgment ofthe Management, we have identified net realizable value of inventories as a key auditmatter.
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
2. Responsive audit procedures
Our main audit procedures for net realizable value of inventories are as follows:
(1) We obtained understandings of key internal controls related to net realizable valueof inventories, assessed the design of these controls, determined whether they hadbeen executed, and tested the effectiveness of the operation;
(2) We reviewed the outcome of the Management’s previous estimates on the netrealizable value or their subsequent re-estimations;
(3) We selected items to assess the reasonableness of the estimated selling price, andreviewed whether the estimated selling price was consistent with sales contract price,market selling price, historical data, etc.;
(4) We assessed the reasonableness of estimation on cost to be incurred uponcompletion, selling expenses and relevant taxes and surcharges made by theManagement;
(5) We tested whether the calculation of net realizable value of inventories made bythe Management was accurate;
(6) We identified whether there existed situations such as projects with slowdevelopment or sales progress, in combination with observation on inventorycounting, and assessed the reasonableness of estimations on net realizable value ofinventories made by the Management; and
(7) We checked whether information related to net realizable value of inventories hadbeen presented appropriately in the financial statements.IV. Other InformationThe Management is responsible for the other information. The other informationcomprises the information included in the Company’s annual report, but does notinclude the financial statements and our auditor’s report thereon.Our opinion on the financial statements does not cover the other information and wedo not express any form of assurance conclusion thereon.In connection with our audit of the financial statements, our responsibility is to readthe other information and, in doing so, consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained in the
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
audit or otherwise appears to be materially misstated.If, based on the work we have performed, we conclude that there is a materialmisstatement of the other information, we are required to report that fact. We havenothing to report in this regard.V. Responsibilities of the Management and Those Charged with Governance forthe Financial StatementsThe Management is responsible for preparing and presenting fairly the financialstatements in accordance with China Accounting Standards for Business Enterprises,as well as designing, implementing and maintaining internal control relevant to thepreparation of financial statements that are free from material misstatement, whetherdue to fraud or error.In preparing the financial statements, the Management is responsible for assessing theCompany’s ability to continue as a going concern, disclosing, as applicable, mattersrelated to going concern and using the going concern basis of accounting unless theManagement either intends to liquidate the Company or to cease operations, or has norealistic alternative but to do so.Those charged with governance are responsible for overseeing the Company’sfinancial reporting process.VI. Certified Public Accountant’s Responsibilities for the Audit of the FinancialStatementsOur objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement, whether due to fraud orerror, and to issue an auditor’s report that includes our opinion. Reasonable assuranceis a high level of assurance, but is not a guarantee that an audit conducted inaccordance with China Standards on Auditing will always detect a materialmisstatement when it exists. Misstatements can arise from fraud or error and areconsidered material if, individually or in the aggregate, they could reasonably beexpected to influence the economic decisions of users taken on the basis of thesefinancial statements.
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
We exercise professional judgment and maintain professional skepticism throughoutthe audit performed in accordance with China Standards on Auditing. We also:
(I) 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 resulting fromfraud is higher than for one resulting from error, as fraud may involve collusion,forgery, intentional omissions, misrepresentations, or the override of internal control.(II) Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances.(III) Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by the Management.(IV) Conclude on the appropriateness of the Management’s use of the going concernbasis of accounting and, based on the audit evidence obtained, whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany’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, tomodify our opinion. Our conclusions are based on the audit evidence obtained up tothe date of our auditor’s report. However, future events or conditions may cause theCompany to cease to continue as a going concern.(V) Evaluate the overall presentation, structure and content of the financial statements,and whether the financial statements represent the underlying transactions and eventsin a manner that achieves fair presentation.(VI) Obtain sufficient and appropriate audit evidence regarding the financialinformation of the entities or business activities within the Company to express anopinion on the financial statements. We are responsible for the direction, supervisionand performance of the group audit. We remain sole responsibility for our auditopinion.
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
We communicate with those charged with governance regarding the planned auditscope, time schedule and significant audit findings, including any deficiencies ininternal control of concern that we identify during our audit.We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence, and tocommunicate with them all relationships and other matters that may reasonably bethought to bear on our independence, and where applicable, related safeguards.From the matters communicated with those charged with governance, we determinethose matters that were of most significance in the audit of the financial statements ofthe current period and are therefore the key audit matters. We describe these mattersin our auditor’s report unless law or regulation precludes public disclosure about thematter or when, in extremely rare circumstances, we determine that a matter shouldnot be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.
Pan-China Certified Public Accountants LLP Chinese Certified Public Accountant:王焕森
(Engagement Partner)Hangzhou · China Chinese Certified Public Accountant: 蔡晓东
Date of Report: March 29, 2024
The auditor’s report and the accompanying financial statements are English translations of the Chinese auditor’sreport and statutory financial statements prepared under accounting principles and practices generally acceptedin the People’s Republic of China. These financial statements are not intended to present the financial position andfinancial performance and cash flows in accordance with accounting principles and practices generally acceptedin other countries and jurisdictions. In case the English version does not conform to the Chinese version, theChinese version prevails.
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.Consolidated balance sheet as at December 31, 2023(Expressed in Renminbi Yuan)
| Assets | Note No. | Closing balance | December 31, 2022 |
Current assets:
| Current assets: | |||
| Cash and bank balances | 1 | 871,019,268.83 | 197,663,949.74 |
| Settlement funds | |||
| Loans to other banks | |||
| Held-for-trading financial assets | 2 | 879,340,201.92 | 408,154,361.42 |
| Derivative financial assets | |||
| Notes receivable | 3 | 1,536,150.00 | |
| Accounts receivable | 4 | 75,100,970.83 | 63,580,422.16 |
| Receivables financing | |||
| Advances paid | 5 | 409,192.07 | 1,163,612.24 |
| Premiums receivable | |||
| Reinsurance accounts receivable | |||
| Reinsurance reserve receivable | |||
| Other receivables | 6 | 15,893,736.28 | 42,105,050.33 |
| Financial assets under reverse repo | |||
| Inventories | 7 | 3,915,215,921.96 | 4,257,109,614.31 |
| Contract assets | 8 | 27,352,596.92 | |
| Assets held for sale | |||
| Non-current assets due within one year | |||
| Other current assets | 9 | 87,175,263.06 | 36,778,641.42 |
| Total current assets | 5,871,507,151.87 | 5,008,091,801.62 | |
| Non-current assets: | |||
| Loans and advances | |||
| Debt investments | |||
| Other debt investments | |||
| Long-term receivables | |||
| Long-term equity investments | 10 | 93,927.64 | |
| Other equity instrument investments | 11 | 14,324,411.35 | 13,839,235.57 |
| Other non-current financial assets | |||
| Investment property | 12 | 541,542,136.17 | 566,873,915.07 |
| Fixed assets | 13 | 19,928,049.77 | 21,425,475.05 |
| Construction in progress | |||
| Productive biological assets | |||
| Oil & gas assets | |||
| Right-of-use assets | 14 | 99,641.48 | 232,496.72 |
| Intangible assets | 15 | ||
| Development expenditures | |||
| Goodwill | |||
| Long-term prepayments | 16 | 1,598,305.56 | 2,176,221.53 |
| Deferred tax assets | 17 | 36,312,811.26 | 77,036,728.98 |
| Other non-current assets | |||
| Total non-current assets | 613,805,355.59 | 681,678,000.56 | |
| Total assets | 6,485,312,507.46 | 5,689,769,802.18 |
Legal representative: 唐小平 Officer in charge of accounting: 汪健飞 Head of accounting department: 周宏普
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.Consolidated balance sheet as at December 31, 2023 (continued)(Expressed in Renminbi Yuan)
| Liabilities & Equity | Note No. | Closing balance | December 31, 2022 |
| Current liabilities: |
Short-term borrowings
| Short-term borrowings | 19 | 3,550,000.00 | 51,138,077.62 |
| Central bank loans | |||
| Loans from other banks | |||
| Held-for-trading financial liabilities | |||
| Derivative financial liabilities | |||
| Notes payable | |||
| Accounts payable | 20 | 443,259,768.78 | 434,601,559.67 |
| Advances received | 21 | 420,724.30 | 5,465,343.96 |
Contract liabilities
| Contract liabilities | 22 | 1,291,448,591.28 | 43,533,467.29 |
| Financial liabilities under repo | |||
| Absorbing deposit and interbank deposit | |||
| Deposits for agency security transaction | |||
| Deposits for agency security underwriting | |||
| Employee benefits payable | 23 | 22,247,017.36 | 35,724,203.78 |
| Taxes and rates payable | 24 | 40,908,986.48 | 190,951,185.99 |
| Other payables | 25 | 554,469,229.59 | 574,331,340.84 |
Handling fees and commissions payable
| Handling fees and commissions payable | |||
| Reinsurance accounts payable | |||
| Liabilities held for sale | |||
| Non-current liabilities due within one year | 26 | 34,056,347.93 | 6,188,794.43 |
| Other current liabilities | 27 | 136,364,529.76 | 3,882,817.68 |
| Total current liabilities | 2,526,725,195.48 | 1,345,816,791.26 | |
| Non-current liabilities: | |||
| Insurance policy reserve |
Long-term borrowings
| Long-term borrowings | 28 | 179,431,851.02 | 54,261,000.00 |
| Bonds payable | |||
| Including: Preferred shares | |||
| Perpetual bonds | |||
| Lease liabilities | 29 | 53,885.23 | |
| Long-term payables | |||
| Long-term employee benefits payable | |||
| Provisions |
Deferred income
| Deferred income | |||
| Deferred tax liabilities | 17 | 3,012,566.54 | 3,096,348.02 |
| Other non-current liabilities | |||
| Total non-current liabilities | 182,444,417.56 | 57,411,233.25 | |
| Total liabilities | 2,709,169,613.04 | 1,403,228,024.51 | |
| Equity: | |||
| Share capital | 30 | 1,011,660,000.00 | 1,011,660,000.00 |
| Other equity instruments |
Including: Preferred shares
| Including: Preferred shares | |||
| Perpetual bonds | |||
| Capital reserve | 31 | 978,244,910.11 | 978,244,910.11 |
| Less: Treasury shares | |||
| Other comprehensive income | 32 | 25,319,459.44 | 25,926,720.85 |
| Special reserve | |||
| Surplus reserve | 33 | 275,253,729.26 | 275,253,729.26 |
| General risk reserve |
Undistributed profit
| Undistributed profit | 34 | 1,400,604,385.39 | 1,713,155,187.48 |
| Total equity attributable to the parent company | 3,691,082,484.20 | 4,004,240,547.70 | |
| Non-controlling interest | 85,060,410.22 | 282,301,229.97 | |
| Total equity | 3,776,142,894.42 | 4,286,541,777.67 |
Total liabilities & equity
| Total liabilities & equity | 6,485,312,507.46 | 5,689,769,802.18 |
Legal representative: 唐小平 Officer in charge of accounting: 汪健飞 Head of accounting department: 周宏普
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.Parent company balance sheet as at December 31, 2023(Expressed in Renminbi Yuan)
| Assets | Note No. | Closing balance | December 31, 2022 |
| Current assets: | |||
| Cash and bank balances | 116,977,480.94 | 92,377,124.60 | |
| Held-for-trading financial assets | 879,340,201.92 | 408,154,361.42 | |
| Derivative financial assets | |||
| Notes receivable | |||
| Accounts receivable | 1 | 9,750,885.01 | 11,706,678.21 |
| Receivables financing | |||
| Advances paid | 200,000.00 | 200,000.00 | |
| Other receivables | 2 | 1,723,164,380.70 | 1,711,880,332.45 |
| Inventories | 315,818.69 | 4,854,703.53 | |
| Contract assets | |||
| Assets held for sale | |||
| Non-current assets due within one year | |||
| Other current assets | 810,142.59 | 1,138,065.43 | |
| Total current assets | 2,730,558,909.85 | 2,230,311,265.64 | |
| Non-current assets: | |||
| Debt investments | |||
| Other debt investments | |||
| Long-term receivables | |||
| Long-term equity investments | 3 | 1,323,365,748.39 | 1,582,275,489.49 |
| Other equity instrument investments | 14,324,411.35 | 13,839,235.57 | |
| Other non-current financial assets | |||
| Investment property | 433,172,839.90 | 455,917,024.15 | |
| Fixed assets | 12,683,997.76 | 14,046,375.35 | |
| Construction in progress | |||
| Productive biological assets | |||
| Oil & gas assets | |||
| Right-of-use assets | |||
| Intangible assets | |||
| Development expenditures | |||
| Goodwill | |||
| Long-term prepayments | 1,170,295.66 | 1,381,401.99 | |
| Deferred tax assets | 792,735.07 | 29,502,067.58 | |
| Other non-current assets | |||
| Total non-current assets | 1,785,510,028.13 | 2,096,961,594.13 | |
| Total assets | 4,516,068,937.98 | 4,327,272,859.77 |
Legal representative: 唐小平 Officer in charge of accounting: 汪健飞 Head of accounting department: 周宏普
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.Parent company balance sheet as at December 31, 2023 (continued)
(Expressed in Renminbi Yuan)
| Liabilities & Equity | Note No. | Closing balance | December 31, 2022 |
| Current liabilities: | |||
| Short-term borrowings | |||
| Held-for-trading financial liabilities | |||
| Derivative financial liabilities | |||
| Notes payable | |||
| Accounts payable | 17,535,100.83 | 17,666,752.61 | |
| Advances received | |||
| Contract liabilities | 88,985.71 | 184,985.71 | |
| Employee benefits payable | 13,431,614.17 | 21,167,813.42 | |
| Taxes and rates payable | 28,060,321.09 | 178,147,095.75 | |
| Other payables | 759,312,118.85 | 184,614,308.51 | |
| Liabilities held for sale | |||
| Non-current liabilities due within one year | 375,269.30 | ||
| Other current liabilities | 4,449.29 | 9,249.29 | |
| Total current liabilities | 818,807,859.24 | 401,790,205.29 | |
| Non-current liabilities: | |||
| Long-term borrowings | 62,398,851.02 | ||
| Bonds payable | |||
| Including: Preferred shares | |||
| Perpetual bonds | |||
| Lease liabilities | |||
| Long-term payables | |||
| Long-term employee benefits payable | |||
| Provisions | |||
| Deferred income | |||
| Deferred tax liabilities | 3,012,566.54 | 3,096,348.02 | |
| Other non-current liabilities | |||
| Total non-current liabilities | 65,411,417.56 | 3,096,348.02 | |
| Total liabilities | 884,219,276.80 | 404,886,553.31 | |
| Equity: | |||
| Share capital | 1,011,660,000.00 | 1,011,660,000.00 | |
| Other equity instruments | |||
| Including: Preferred shares | |||
| Perpetual bonds | |||
| Capital reserve | 964,711,931.13 | 964,711,931.13 | |
| Less: Treasury shares | |||
| Other comprehensive income | 1,743,308.51 | 1,379,426.68 | |
| Special reserve | |||
| Surplus reserve | 252,124,115.85 | 252,124,115.85 | |
| Undistributed profit | 1,401,610,305.69 | 1,692,510,832.80 | |
| Total equity | 3,631,849,661.18 | 3,922,386,306.46 | |
| Total liabilities & equity | 4,516,068,937.98 | 4,327,272,859.77 |
Legal representative: 唐小平 Officer in charge of accounting: 汪健飞 Head of accounting department: 周宏普
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.Consolidated income statement for the year ended December 31, 2023(Expressed in Renminbi Yuan)
| Items | Note No. | Current period cumulative | Preceding period comparative |
| I. Total operating revenue | 530,887,720.68 | 634,384,561.42 | |
| Including: Operating revenue | 1 | 530,887,720.68 | 634,384,561.42 |
| Interest income | |||
| Premiums earned | |||
| Revenue from handling fees and commissions | |||
| II. Total operating cost | 588,334,716.73 | 587,304,689.71 | |
| Including: Operating cost | 1 | 444,797,642.10 | 437,052,001.01 |
| Interest expenses | |||
| Handling fees and commissions | |||
| Surrender value | |||
| Net payment of insurance claims | |||
| Net provision of insurance policy reserve | |||
| Premium bonus expenditures | |||
| Reinsurance expenses | |||
| Taxes and surcharges | 2 | 70,999,932.36 | 81,783,491.54 |
| Selling expenses | 3 | 21,803,202.14 | 19,217,595.11 |
| Administrative expenses | 4 | 55,965,931.72 | 55,758,749.08 |
| R&D expenses | |||
| Financial expenses | 5 | -5,231,991.59 | -6,507,147.03 |
| Including: Interest expenses | 1,258,720.92 | ||
| Interest income | 4,804,313.09 | 5,315,817.53 | |
| Add: Other income | 6 | 567,272.39 | 559,803.19 |
| Investment income (or less: losses) | 7 | 10,546,418.38 | 164,986,548.17 |
| Including: Investment income from associates and joint ventures | -93,927.64 | -178,240.64 | |
| Gains from derecognition of financial assets at amortized cost | |||
| Gains on foreign exchange (or less: losses) | |||
| Gains on net exposure to hedging risk (or less: losses) | |||
| Gains on changes in fair value (or less: losses) | 8 | 7,824,348.71 | 8,970,031.50 |
| Credit impairment loss | 9 | 579,514.02 | -6,516,237.34 |
| Assets impairment loss | 10 | -392,577,463.42 | -532,397.57 |
| Gains on asset disposal (or less: losses) | 11 | -1,000.00 | |
| III. Operating profit (or less: losses) | -430,507,905.97 | 214,547,619.66 | |
| Add: Non-operating revenue | 12 | 386,425.53 | 1,534,651.38 |
| Less: Non-operating expenditures | 13 | 530,564.09 | 478,942.74 |
| IV. Profit before tax (or less: total loss) | -430,652,044.53 | 215,603,328.30 | |
| Less: Income tax expenses | 14 | 17,012,113.07 | 66,026,457.35 |
| V. Net profit (or less: net loss) | -447,664,157.60 | 149,576,870.95 | |
| (I) Categorized by the continuity of operations | |||
| 1. Net profit from continuing operations (or less: net loss) | -447,664,157.60 | 139,931,713.54 | |
| 2. Net profit from discontinued operations (or less: net loss) | 9,645,157.41 | ||
| (II) Categorized by the portion of equity ownership | |||
| 1. Net profit attributable to owners of parent company (or less: net loss) | -250,839,542.09 | 153,718,805.57 | |
| 2. Net profit attributable to non-controlling shareholders (or less: net loss) | -196,824,615.51 | -4,141,934.62 | |
| VI. Other comprehensive income after tax | -1,023,465.65 | -1,338,182.69 | |
| Items attributable to the owners of the parent company | -607,261.41 | 1,287,530.16 | |
| (I) Not to be reclassified subsequently to profit or loss | 780,086.07 | -1,314,647.75 | |
| 1. Remeasurements of the net defined benefit plan | |||
| 2. Items under equity method that will not be reclassified to profit or loss | |||
| 3. Changes in fair value of other equity instrument investments | 780,086.07 | -1,314,647.75 | |
| 4. Changes in fair value of own credit risk | |||
| 5. Others | |||
| (II) To be reclassified subsequently to profit or loss | -1,387,347.48 | 2,602,177.91 | |
| 1. Items under equity method that may be reclassified to profit or loss | |||
| 2. Changes in fair value of other debt investments | |||
| 3. Profit or loss from reclassification of financial assets into other comprehensive income | |||
| 4. Provision for credit impairment of other debt investments | |||
| 5. Cash flow hedging reserve | |||
| 6. Translation reserve | -1,387,347.48 | 2,602,177.91 | |
| 7. Others | |||
| Items attributable to non-controlling shareholders | -416,204.24 | -2,625,712.85 | |
| VII. Total comprehensive income | -448,687,623.25 | 148,238,688.26 | |
| Items attributable to the owners of the parent company | -251,446,803.50 | 155,006,335.73 | |
| Items attributable to non-controlling shareholders | -197,240,819.75 | -6,767,647.47 | |
| VIII. Earnings per share (EPS): | |||
| (I) Basic EPS (yuan per share) | -0.2479 | 0.1519 | |
| (II) Diluted EPS (yuan per share) | -0.2479 | 0.1519 |
Legal representative: 唐小平 Officer in charge of accounting: 汪健飞 Head of accounting department: 周宏普
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.Parent company income statement for the year ended December 31, 2023(Expressed in Renminbi Yuan)
| Items | Note No. | Current period cumulative | Preceding period comparative |
| I. Operating revenue | 1 | 80,149,443.14 | 207,149,569.13 |
Less: Operating cost
| Less: Operating cost | 1 | 33,500,490.21 | 66,761,336.83 |
| Taxes and surcharges | 10,031,959.33 | 34,857,919.27 | |
| Selling expenses | 1,232,057.79 | 1,693,651.82 | |
| Administrative expenses | 32,052,637.87 | 31,384,870.71 | |
| R&D expenses | |||
| Financial expenses | -31,995,210.76 | -57,765,779.16 | |
| Including: Interest expenses | 1,258,720.92 | ||
| Interest income | 29,254,205.70 | 42,340,594.39 |
Add: Other income
| Add: Other income | 417,143.48 | 290,331.32 | |
| Investment income (or less: losses) | 2 | 9,434,264.74 | 280,973,270.14 |
| Including: Investment income from associates and joint ventures | -93,927.64 | -178,240.64 | |
| Gains from derecognition of financial assets at amortized cost | |||
| Gains on net exposure to hedging risk (or less: losses) | |||
| Gains on changes in fair value (or less: losses) | 7,824,348.71 | 8,970,031.50 | |
| Credit impairment loss | -19,236,221.85 | -402,823.92 | |
| Assets impairment loss | -258,815,813.46 |
Gains on asset disposal (or less: losses)
| Gains on asset disposal (or less: losses) | |||
| II. Operating profit (or less: losses) | -225,048,769.68 | 420,048,378.70 | |
| Add: Non-operating revenue | 355,127.30 | 350,103.89 | |
| Less: Non-operating expenditures | 52,058.53 | 308,559.95 | |
| III. Profit before tax (or less: total loss) | -224,745,700.91 | 420,089,922.64 | |
| Less: Income tax expenses | 4,443,566.20 | 79,001,179.37 | |
| IV. Net profit (or less: net loss) | -229,189,267.11 | 341,088,743.27 | |
| (I) Net profit from continuing operations (or less: net loss) | -229,189,267.11 | 341,088,743.27 |
(II) Net profit from discontinued operations (or less: net loss)
| (II) Net profit from discontinued operations (or less: net loss) | |||
| V. Other comprehensive income after tax | 363,881.83 | 5,472.49 | |
| (I) Not to be reclassified subsequently to profit or loss | 363,881.83 | 5,472.49 | |
| 1. Remeasurements of the net defined benefit plan | |||
| 2. Items under equity method that will not be reclassified to profit or loss | |||
| 3. Changes in fair value of other equity instrument investments | 363,881.83 | 5,472.49 | |
| 4. Changes in fair value of own credit risk | |||
| 5. Others | |||
| (II) To be reclassified subsequently to profit or loss | |||
| 1. Items under equity method that may be reclassified to profit or loss | |||
| 2. Changes in fair value of other debt investments | |||
| 3. Profit or loss from reclassification of financial assets into other comprehensive income | |||
| 4. Provision for credit impairment of other debt investments | |||
| 5. Cash flow hedging reserve | |||
| 6. Translation reserve | |||
| 7. Others | |||
| VI. Total comprehensive income | -228,825,385.28 | 341,094,215.76 |
VII. Earnings per share (EPS):
| VII. Earnings per share (EPS): | |||
| (I) Basic EPS (yuan per share) | |||
| (II) Diluted EPS (yuan per share) |
Legal representative: 唐小平 Officer in charge of accounting: 汪健飞 Head of accounting department: 周宏普
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.Consolidated cash flow statement for the year ended December 31, 2023
(Expressed in Renminbi Yuan)
| Items | Note No. | Current period cumulative | Preceding period comparative |
I. Cash flows from operating activities:
| I. Cash flows from operating activities: | |||
| Cash receipts from sale of goods or rendering of services | 1,893,492,865.50 | 511,011,815.61 | |
| Net increase of client deposit and interbank deposit | |||
| Net increase of central bank loans | |||
| Net increase of loans from other financial institutions | |||
| Cash receipts from original insurance contract premium | |||
| Net cash receipts from reinsurance |
Net increase of policy-holder deposit and investment
| Net increase of policy-holder deposit and investment | |||
| Cash receipts from interest, handling fees and commissions | |||
| Net increase of loans from others | |||
| Net increase of repurchase | |||
| Net cash receipts from agency security transaction | |||
| Receipts of tax refund | 1,186,861.59 | 132,838,815.39 |
Other cash receipts related to operating activities
| Other cash receipts related to operating activities | 2 (1) | 56,304,822.67 | 24,599,301.34 |
| Subtotal of cash inflows from operating activities | 1,950,984,549.76 | 668,449,932.34 | |
| Cash payments for goods purchased and services received | 491,021,430.05 | 641,103,390.35 | |
| Net increase of loans and advances to clients | |||
| Net increase of central bank deposit and interbank deposit | |||
| Cash payments for insurance indemnities of original insurance contracts | |||
| Net increase of loans to others | |||
| Cash payments for interest, handling fees and commissions | |||
| Cash payments for policy bonus |
Cash paid to and on behalf of employees
| Cash paid to and on behalf of employees | 86,966,612.34 | 89,495,463.28 | |
| Cash payments for taxes and rates | 250,127,861.30 | 540,305,543.96 | |
| Other cash payments related to operating activities | 2 (2) | 77,831,397.88 | 73,321,533.51 |
| Subtotal of cash outflows from operating activities | 905,947,301.57 | 1,344,225,931.10 | |
| Net cash flows from operating activities | 1,045,037,248.19 | -675,775,998.76 | |
| II. Cash flows from investing activities: | |||
| Cash receipts from withdrawal of investments | |||
| Cash receipts from investment income | 1 (1) | 699,091.79 | 10,527,896.61 |
| Net cash receipts from the disposal of fixed assets, intangible assets and other long-term assets | 1 (2) | 29,475.62 | 2,907.50 |
| Net cash receipts from the disposal of subsidiaries & other business units | 1 (3) | 1,644,822.69 | 157,395,480.90 |
| Other cash receipts related to investing activities | 2 (3) | 136,800,000.00 | 114,840,380.99 |
| Subtotal of cash inflows from investing activities | 139,173,390.10 | 282,766,666.00 | |
| Cash payments for the acquisition of fixed assets, intangible assets and other long-term assets | 1 (4) | 1,475,412.00 | 713,537.29 |
| Cash payments for investments | |||
| Net increase of pledged borrowings |
Net cash payments for the acquisition of subsidiaries & other business units
| Net cash payments for the acquisition of subsidiaries & other business units | |||
| Other cash payments related to investing activities | 2 (4) | 600,000,000.00 | |
| Subtotal of cash outflows from investing activities | 601,475,412.00 | 713,537.29 | |
| Net cash flows from investing activities | -462,302,021.90 | 282,053,128.71 | |
| III. Cash flows from financing activities: | |||
| Cash receipts from absorbing investments | |||
| Including: Cash received by subsidiaries from non-controlling shareholders as investments | |||
| Cash receipts from borrowings | 169,486,610.82 | 111,428,077.62 | |
| Other cash receipts related to financing activities | |||
| Subtotal of cash inflows from financing activities | 169,486,610.82 | 111,428,077.62 |
Cash payments for the repayment of borrowings
| Cash payments for the repayment of borrowings | 16,200,400.38 | 50,440,116.24 | |
| Cash payments for distribution of dividends or profits and for interest expenses | 67,383,381.18 | 89,685,993.21 | |
| Including: Cash paid by subsidiaries to non-controlling shareholders as dividend or profit |
Other cash payments related to financing activities
| Other cash payments related to financing activities | |||
| Subtotal of cash outflows from financing activities | 83,583,781.56 | 140,126,109.45 | |
| Net cash flows from financing activities | 85,902,829.26 | -28,698,031.83 | |
| IV. Effect of foreign exchange rate changes on cash and cash equivalents | 143,288.32 | 492,336.21 | |
| V. Net increase in cash and cash equivalents | 668,781,343.87 | -421,928,565.67 | |
| Add: Opening balance of cash and cash equivalents | 190,365,069.48 | 612,293,635.15 | |
| VI. Closing balance of cash and cash equivalents | 859,146,413.35 | 190,365,069.48 |
Legal representative: 唐小平 Officer in charge of accounting: 汪健飞 Head of accounting department: 周宏普
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.Parent company cash flow statement for the year ended December 31, 2023(Expressed in Renminbi Yuan)
| Items | Current period cumulative | Preceding period comparative |
I. Cash flows from operating activities:
| I. Cash flows from operating activities: | ||
| Cash receipts from sale of goods and rendering of services | 86,415,239.73 | 49,012,283.37 |
| Receipts of tax refund | 1,143,272.60 | 76,682,094.30 |
| Other cash receipts related to operating activities | 689,725,513.49 | 45,702,753.43 |
| Subtotal of cash inflows from operating activities | 777,284,025.82 | 171,397,131.10 |
| Cash payments for goods purchased and services received | 3,283,183.54 | 14,097,081.25 |
| Cash paid to and on behalf of employees | 48,032,030.43 | 41,433,458.97 |
| Cash payments for taxes and rates | 150,255,838.40 | 506,294,532.81 |
| Other cash payments related to operating activities | 79,379,092.98 | 48,529,139.31 |
| Subtotal of cash outflows from operating activities | 280,950,145.35 | 610,354,212.34 |
| Net cash flows from operating activities | 496,333,880.47 | -438,957,081.24 |
| II. Cash flows from investing activities: | ||
| Cash receipts from withdrawal of investments | ||
| Cash receipts from investment income | 12,516,011.35 | 10,042,199.78 |
| Net cash receipts from the disposal of fixed assets, intangible assets and other long-term assets | 2,907.50 | |
| Net cash receipts from the disposal of subsidiaries & other business units | 196,676,700.00 | |
| Other cash receipts related to investing activities | 136,800,000.00 | 114,840,380.99 |
| Subtotal of cash inflows from investing activities | 149,316,011.35 | 321,562,188.27 |
| Cash payments for the acquisition of fixed assets, intangible assets and other long-term assets | 578,736.10 | 458,195.93 |
| Cash payments for investments | ||
| Net cash payments for the acquisition of subsidiaries & other business units | ||
| Other cash payments related to investing activities | 619,280,000.00 | |
| Subtotal of cash outflows from investing activities | 619,858,736.10 | 458,195.93 |
| Net cash flows from investing activities | -470,542,724.75 | 321,103,992.34 |
| III. Cash flows from financing activities: | ||
| Cash receipts from absorbing investments | ||
| Cash receipts from borrowings | 62,586,610.82 | |
| Other cash receipts related to financing activities | ||
| Subtotal of cash inflows from financing activities | 62,586,610.82 | |
| Cash payments for the repayment of borrowings | 62,586.60 | |
| Cash payments for distribution of dividends or profits and for interest expenses | 62,138,698.60 | 89,026,080.00 |
| Other cash payments related to financing activities | ||
| Subtotal of cash outflows from financing activities | 62,201,285.20 | 89,026,080.00 |
| Net cash flows from financing activities | 385,325.62 | -89,026,080.00 |
IV. Effect of foreign exchange rate changes on cash and cashequivalents
| IV. Effect of foreign exchange rate changes on cash and cash equivalents | ||
| V. Net increase in cash and cash equivalents | 26,176,481.34 | -206,879,168.90 |
| Add: Opening balance of cash and cash equivalents | 90,800,999.60 | 297,680,168.50 |
| VI. Closing balance of cash and cash equivalents | 116,977,480.94 | 90,800,999.60 |
Legal representative: 唐小平 Officer in charge of accounting: 汪健飞 Head of accounting department: 周宏普
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.Consolidated statement of changes in equity for the year ended December 31, 2023(Expressed in Renminbi Yuan)
| Items | Current period cumulative | ||||||||||||
| Non-controlling interest | Total equity | ||||||||||||
| Equity attributable to parent company | |||||||||||||
| Share capital | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserve | Surplus reserve | General risk reserve | Undistributed profit | ||||||
| Other equity instruments | |||||||||||||
| Preferred shares | Perpetual bonds | Others | |||||||||||
I. Balance at the end of prior year
| I. Balance at the end of prior 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 | ||||||
| Add: Cumulative changes of accounting policies |
Error correction of prior period
| Error correction of prior period | |||||||||||||
| Business combination under common control |
Others
| Others |
II. Balance at the beginning of current year
| II. Balance at the beginning of current 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 | ||||||
| III. Current period increase (or less: decrease) | -607,261.41 | -312,550,802.09 | -197,240,819.75 | -510,398,883.25 |
(I) Total comprehensive income
| (I) Total comprehensive income | -607,261.41 | -250,839,542.09 | -197,240,819.75 | -448,687,623.25 |
(II) Capital contributed or withdrawn by owners
| (II) Capital contributed or withdrawn by owners | |||||||||||||
| 1. Ordinary shares contributed by owners | |||||||||||||
| 2. Capital contributed by holders of other equity instruments |
3. Amount of share-based payment included in
equity
| 3. Amount of share-based payment included in equity | |||||||||||||
| 4. Others |
(III) Profit distribution
| (III) Profit distribution | -61,711,260.00 | -61,711,260.00 |
1. Appropriation of surplus reserve
| 1. Appropriation of surplus reserve | |||||||||||||
| 2. Appropriation of general risk reserve |
3. Appropriation of profit to shareholders
| 3. Appropriation of profit to shareholders | -61,711,260.00 | -61,711,260.00 | |||||||||||
| 4. Others |
(IV) Internal carry-over within equity
| (IV) Internal carry-over within equity |
1. Transfer of capital reserve to capital
| 1. Transfer of capital reserve to capital | |||||||||||||
| 2. Transfer of surplus reserve to capital |
3. Surplus reserve to cover losses
| 3. Surplus reserve to cover losses | |||||||||||||
| 4. Changes in defined benefit plan carried over to retained earnings | |||||||||||||
| 5. Other comprehensive income carried over to retained earnings |
6. Others
| 6. Others |
(V) Special reserve
| (V) Special reserve | |||||||||||||
| 1. Current period appropriation |
2. Current period use
| 2. Current period use |
(VI) Others
| (VI) Others | |||||||||||||
| IV. Balance at the end of current period | 1,011,660,000.00 | 978,244,910.11 | 25,319,459.44 | 275,253,729.26 | 1,400,604,385.39 | 85,060,410.22 | 3,776,142,894.42 |
Legal representative: 唐小平 Officer in charge of accounting: 汪健飞 Head of accounting department: 周宏普
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.Consolidated statement of changes in equity for the year ended December 31, 2023 (continued)
(Expressed in Renminbi Yuan)
| Items | Preceding period comparative | ||||||||||||
| Non-controlling interest | Total equity | ||||||||||||
| Equity attributable to parent company | |||||||||||||
| Share capital | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserve | Surplus reserve | General risk reserve | Undistributed profit | ||||||
| Other equity instruments | |||||||||||||
| Preferred shares | Perpetual bonds | Others | |||||||||||
I. Balance at the end of prior year
| I. Balance at the end of prior 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: Cumulative changes of accounting policies |
Error correction of prior period
| Error correction of prior period | |||||||||||||
| Business combination under common control |
Others
| Others |
II. Balance at the beginning of current year
| II. Balance at the beginning of current 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. Current period increase (or less: 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
| (I) Total comprehensive income | 1,287,530.16 | 153,718,805.57 | -6,767,647.47 | 148,238,688.26 |
(II) Capital contributed or withdrawn by owners
| (II) Capital contributed or withdrawn by owners | |||||||||||||
| 1. Ordinary shares contributed by owners | |||||||||||||
| 2. Capital contributed by holders of other equity instruments |
3. Amount of share-based payment included in
equity
| 3. Amount of share-based payment included in equity | |||||||||||||
| 4. Others |
(III) Profit distribution
| (III) Profit distribution | 34,108,874.33 | -123,134,954.33 | -89,026,080.00 |
1. Appropriation of surplus reserve
| 1. Appropriation of surplus reserve | 34,108,874.33 | -34,108,874.33 | |||||||||||
| 2. Appropriation of general risk reserve |
3. Appropriation of profit to shareholders
| 3. Appropriation of profit to shareholders | -89,026,080.00 | -89,026,080.00 | |||||||||||
| 4. Others |
(IV) Internal carry-over within equity
| (IV) Internal carry-over within equity | -11,449,773.26 | 11,449,773.26 |
1. Transfer of capital reserve to capital
| 1. Transfer of capital reserve to capital | |||||||||||||
| 2. Transfer of surplus reserve to capital |
3. Surplus reserve to cover losses
| 3. Surplus reserve to cover losses | |||||||||||||
| 4. Changes in defined benefit plan carried over to retained earnings | |||||||||||||
| 5. Other comprehensive income carried over to retained earnings |
6. Others
| 6. Others | -11,449,773.26 | 11,449,773.26 |
(V) Special reserve
| (V) Special reserve | |||||||||||||
| 1. Current period appropriation |
2. Current period use
| 2. Current period use |
(VI) Others
| (VI) Others | |||||||||||||
| IV. Balance at the end of current period | 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 representative: 唐小平 Officer in charge of accounting: 汪健飞 Head of accounting department: 周宏普
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.Parent company statement of changes in equity for the year ended December 31, 2023(Expressed in Renminbi Yuan)
| Items | Current period cumulative | ||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserve | Surplus reserve | Undistributed profit | Total equity | |||
| Preferred shares | Perpetual bonds | Others | |||||||||
I. Balance at the end of prior year
| I. Balance at the end of prior 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 | |||||
| Add: Cumulative changes of accounting policies |
Error correction of prior period
| Error correction of prior period | |||||||||||
| Others |
II. Balance at the beginning of current year
| II. Balance at the beginning of current 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 |
III. Current period increase (or less: decrease)
| III. Current period increase (or less: decrease) | 363,881.83 | -290,900,527.11 | -290,536,645.28 | ||||||||
| (I) Total comprehensive income | 363,881.83 | -229,189,267.11 | -228,825,385.28 |
(II) Capital contributed or withdrawn by owners
| (II) Capital contributed or withdrawn by owners |
1. Ordinary shares contributed by owners
| 1. Ordinary shares contributed by owners | |||||||||||
| 2. Capital contributed by holders of other equity instruments | |||||||||||
| 3. Amount of share-based payment included in equity |
4. Others
| 4. Others |
(III) Profit distribution
| (III) Profit distribution | -61,711,260.00 | -61,711,260.00 | |||||||||
| 1. Appropriation of surplus reserve |
2. Appropriation of profit to shareholders
| 2. Appropriation of profit to shareholders | -61,711,260.00 | -61,711,260.00 |
3. Others
| 3. Others | |||||||||||
| (IV) Internal carry-over within equity |
1. Transfer of capital reserve to capital
| 1. Transfer of capital reserve to capital | |||||||||||
| 2. Transfer of surplus reserve to capital |
3. Surplus reserve to cover losses
| 3. Surplus reserve to cover losses | |||||||||||
| 4. Changes in defined benefit plan carried over to retained earnings |
5. Other comprehensive income carried over to retained
earnings
| 5. Other comprehensive income carried over to retained earnings | |||||||||||
| 6. Others |
(V) Special reserve
| (V) Special reserve | |||||||||||
| 1. Current period appropriation |
2. Current period use
| 2. Current period use |
(VI) Others
| (VI) Others | |||||||||||
| IV. Balance at the end of current period | 1,011,660,000.00 | 964,711,931.13 | 1,743,308.51 | 252,124,115.85 | 1,401,610,305.69 | 3,631,849,661.18 |
Legal representative: 唐小平 Officer in charge of accounting: 汪健飞 Head of accounting department: 周宏普
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Annual Report 2023
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.Parent company statement of changes in equity for the year ended December 31, 2023 (continued)(Expressed in Renminbi Yuan)
| Items | Preceding period comparative | ||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserve | Surplus reserve | Undistributed profit | Total equity | |||
| Preferred shares | Perpetual bonds | Others | |||||||||
I. Balance at the end of prior year
| I. Balance at the end of prior 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: Cumulative changes of accounting policies |
Error correction of prior period
| Error correction of prior period | |||||||||||
| Others |
II. Balance at the beginning of current year
| II. Balance at the beginning of current 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. Current period increase (or less: decrease)
| III. Current period increase (or less: 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) Capital contributed or withdrawn by owners
| (II) Capital contributed or withdrawn by owners |
1. Ordinary shares contributed by owners
| 1. Ordinary shares contributed by owners | |||||||||||
| 2. Capital contributed by holders of other equity instruments | |||||||||||
| 3. Amount of share-based payment included in equity |
4. Others
| 4. Others |
(III) Profit distribution
| (III) Profit distribution | 34,108,874.33 | -123,134,954.33 | -89,026,080.00 | ||||||||
| 1. Appropriation of surplus reserve | 34,108,874.33 | -34,108,874.33 |
2. Appropriation of profit to shareholders
| 2. Appropriation of profit to shareholders | -89,026,080.00 | -89,026,080.00 |
3. Others
| 3. Others | |||||||||||
| (IV) Internal carry-over within equity |
1. Transfer of capital reserve to capital
| 1. Transfer of capital reserve to capital | |||||||||||
| 2. Transfer of surplus reserve to capital |
3. Surplus reserve to cover losses
| 3. Surplus reserve to cover losses | |||||||||||
| 4. Changes in defined benefit plan carried over to retained earnings |
5. Other comprehensive income carried over to retained
earnings
| 5. Other comprehensive income carried over to retained earnings | |||||||||||
| 6. Others |
(V) Special reserve
| (V) Special reserve | |||||||||||
| 1. Current period appropriation |
2. Current period use
| 2. Current period use |
(VI) Others
| (VI) Others | |||||||||||
| IV. Balance at the end of current period | 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 representative: 唐小平 Officer in charge of accounting: 汪健飞 Head of accounting department: 周宏普
Shenzhen Special Economic ZoneReal Estate & Properties (Group) Co., Ltd.
Notes to Financial StatementsFor the year ended December 31, 2023
Monetary unit: RMB Yuan
I. Company profileShenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. (the ―Company‖)was established under the approval of General Office of the Shenzhen Municipal People’sGovernment, and was reorganized into a limited liability company by shares on the basis of theformer Shenzhen Special Economic Zone Real Estate and Properties Corporation. The Companywas registered at Shenzhen Administration for Industry and Commerce in July 1993 andheadquartered in Shenzhen City, Guangdong Province. The Company currently holds a businesslicense with unified social credit code of 91440300192179585N, with registered capital of1,011,660,000.00 yuan, total share of 1,011,660,000 shares (each with par value of one yuan), ofwhich, 891,660,000 shares and 120,000,000 shares are unrestricted outstanding A shares and Bshares, respectively. The Company’s shares were listed on the Shenzhen Stock Exchangerespectively on September 15, 1993 and January 10, 1994.Shenzhen Investment Holdings Co., Ltd. is a wholly state-owned limited liability companyestablished on October 13, 2004 through the merger of its original major shareholder ShenzhenConstruction Investment Holdings Co., Ltd. and two other municipal asset managementcompanies according to the ―Decision on the Establishment of Shenzhen Investment Holdings Co.,Ltd.‖ (Shen Guo Zi Wei [2004] No. 223) issued by State-owned Assets Supervision andManagement Commission of Shenzhen Municipal People’s Government. The Company’s equitytransfer thereof was approved by the document numbered Guo Zi Chan Quan [2005] 689 issuedby State-owned Assets Supervision and Administration Commission of the State Council, and thecorresponding obligation of tender offer was exempted under the approval of the documentnumbered Zhen Jian Gong Si Zi [2005] 116 issued by China Securities Regulatory Commission,and it was registered at China Securities Depository and Clearing Co., Ltd. Shenzhen Branch onFebruary 15, 2006. As of the balance sheet date, Shenzhen Investment Holdings Co., Ltd. held564,353,838 shares of the Company (accounting for 55.78% of the total share capital of theCompany), all of which were unrestricted shares.The Company belongs to the real estate industry and is mainly engaged in real estate developmentand commercial housing sales, property leasing and management, commodity retail and trade,hotel business, equipment installation and maintenance, construction, interior decoration, etc.
The financial statements were approved and authorized for issue by the eighth meeting of theeighth session of the Board of Directors dated March 29, 2024.
II. Preparation basis of the financial statements(I) Preparation basisThe financial statements have been prepared on the basis of going concern.(II) Assessment of the ability to continue as a going concernThe Company has no events or conditions that may cast significant doubts upon the Company’sability to continue as a going concern within the 12 months after the balance sheet date.
III. Significant accounting policies and estimatesImportant note: The Company has set up accounting policies and estimates on transactions orevents such as impairment of financial instruments, inventories, depreciation of fixed assets,construction in progress, intangible assets, revenue recognition, etc., based on the Company’sactual production and operation features.(I) Statement of complianceThe financial statements have been prepared in accordance with the requirements of ChinaAccounting Standards for Business Enterprises (CASBEs), and present truly and completely thefinancial position, financial performance and cash flows of the Company.(II) Accounting periodThe accounting year of the Company runs from January 1 to December 31 under the Gregoriancalendar.(III) Operating cycleThe Company has a relatively short operating cycle for its business, an asset or a liability isclassified as current if it is expected to be realized or due within 12 months. The operating cyclefor real estate industry starts from the development of property and ends at sales, which normallyextends over 12 months and is subject to specific projects, therefore, an asset or a liability isclassified as current if it is expected to be realized or due within such operating cycle.(IV) Functional currencyThe functional currency of the Company and its subsidiaries in Hong Kong SAR is Renminbi(RMB) Yuan, while the functional currency of subsidiary Great Wall Estate Company, Inc.engaged in overseas operations is the currency of the primary economic environment in whichthey operate. The currency used by the Company in the preparation of the financial statements isRMB yuan.(V) Determination method and basis for selection of materialityThe Company prepares and discloses financial statements in compliance with the principle of
materiality. The items disclosed in notes to the financial statements involving materialityjudgements, determination method and basis for selection of materiality are as follows:
| Disclosed items involving materiality judgements | Note No. | Determination method and basis for selection of materiality |
| Significant accounts receivable with provision for bad debts made on an individual basis | V (I) 4 (2) | Accounts receivable with single amount in excess of 0.1% of total assets are identified as significant accounts receivable with provision made on an individual basis. |
| Significant provisions for bad debts of accounts receivable collected or reversed | V (I) 4 (3) | Provisions for bad debts of accounts receivable reversed with single amount in excess of 0.1% of total assets are identified as significant provisions for bad debts of accounts receivable collected or reversed. |
| Significant other receivables with provision for bad debts made on an individual basis | V (I) 6 (3) | Other receivables with single amount in excess of 0.1% of total assets are identified as significant other receivables with provision made on an individual basis. |
| Significant accounts payable with age over one year | V (I) 20 | Accounts payable with age over one year with single amount in excess of 0.1% of total assets are identified as significant accounts payable with age over one year. |
| Significant other payables with age over one year | V (I) 25 (3) | Other payables with age over one year with single amount in excess of 0.1% of total assets are identified as significant other payables with age over one year. |
| Significant cash flows from investing activities | V (Ⅲ) 1 | Cash flows from investing activities with single amount in excess of 0.1% of total assets are identified as significant cash flows from investing activities. |
| Significant subsidiaries, not wholly-owned subsidiaries | Ⅵ (I) 2 and Ⅵ (Ⅲ) 1 | Subsidiaries with total assets/total revenue/profit before tax in excess of 0.1% of the group’s total assets/total revenue/profit before tax are identified as significant subsidiaries/significant not wholly-owned subsidiaries. |
| Significant contingencies | Ⅺ (Ⅱ) | Contingencies with single amount in excess of 0.1% of total assets are identified as significant contingencies. |
| Significant events subsequent to the balance sheet date | Ⅻ (I) | Events subsequent to the balance sheet date with single amount in excess of 0.1% of total assets are identified as significant events subsequent to the balance sheet date. |
(VI) Accounting treatments of business combination under and not under common control
1. Accounting treatment of business combination under common control
Assets and liabilities arising from business combination are measured at carrying amount of thecombined party included in the consolidated financial statements of the ultimate controlling partyat the combination date. Difference between carrying amount of the equity of the combined partyincluded in the consolidated financial statements of the ultimate controlling party and that of the
combination consideration or total par value of shares issued is adjusted to capital reserve, if thebalance of capital reserve is insufficient to offset, any excess is adjusted to retained earnings.
2. Accounting treatment of business combination not under common control
When combination cost is in excess of the fair value of identifiable net assets obtained from theacquiree at the acquisition date, the excess is recognized as goodwill; otherwise, the fair value ofidentifiable assets, liabilities and contingent liabilities, and the measurement of the combinationcost are reviewed, then the difference is recognized in profit or loss.(VII) Judgement criteria for control and compilation method of consolidated financial statements
1. Judgement of control
An investor controls an investee if and only if the investor has all the following: (1) power overthe investee; (2) exposure, or rights, to variable returns from its involvement with the investee; and
(3) the ability to use its power over the investee to affect the amount of the investor’s returns.
2. Compilation method of consolidated financial statements
The parent company brings all its controlled subsidiaries into the consolidation scope. Theconsolidated financial statements are compiled by the parent company according to ―CASBE 33 –Consolidated Financial Statements‖, based on relevant information and the financial statements ofthe parent company and its subsidiaries.(VIII) Classification of joint arrangements and accounting treatment of joint operations
1. Joint arrangements include joint operations and joint ventures.
2. When the Company is a joint operator of a joint operation, it recognizes the following items inrelation to its interest in a joint operation:
(1) its assets, including its share of any assets held jointly;
(2) its liabilities, including its share of any liabilities incurred jointly;
(3) its revenue from the sale of its share of the output arising from the joint operation;
(4) its share of the revenue from the sale of the assets by the joint operation; and
(5) its expenses, including its share of any expenses incurred jointly.
(IX) Recognition criteria of cash and cash equivalentsCash as presented in cash flow statement refers to cash on hand and deposit on demand forpayment. Cash equivalents refer to short-term, highly liquid investments that can be readilyconverted to cash and that are subject to an insignificant risk of changes in value.(Ⅹ) Foreign currency translation
1. Translation of transactions denominated in foreign currency
Transactions denominated in foreign currency are translated into RMB yuan at the spot exchangerate at the transaction date at initial recognition. At the balance sheet date, monetary items
denominated in foreign currency are translated at the spot exchange rate at the balance sheet datewith difference, except for those arising from the principal and interest of exclusive borrowingseligible for capitalization, included in profit or loss; non-cash items carried at historical costs aretranslated at the spot exchange rate at the transaction date, with the RMB amounts unchanged;non-cash items carried at fair value in foreign currency are translated at the spot exchange rate atthe date when the fair value was determined, with difference included in profit or loss or othercomprehensive income.
2. Translation of financial statements measured in foreign currency
The assets and liabilities in the balance sheet are translated into RMB at the spot exchange rate atthe balance sheet date; the equity items, other than undistributed profit, are translated at the spotexchange rate at the transaction date; the revenues and expenses in the income statement aretranslated into RMB at the approximate exchange rate similar to the spot exchange rate at thetransaction date. The difference arising from the aforementioned foreign currency translation isincluded in other comprehensive income.(XI) Financial instruments
1. Classification of financial assets and financial liabilities
Financial assets are classified into the following three categories when initially recognized: (1)financial assets at amortized cost; (2) financial assets at fair value through other comprehensiveincome; (3) financial assets at fair value through profit or loss.Financial liabilities are classified into the following four categories when initially recognized: (1)financial liabilities at fair value through profit or loss; (2) financial liabilities that arise when atransfer of a financial asset does not qualify for derecognition or when the continuing involvementapproach applies; (3) financial guarantee contracts not fall within the above categories (1) and (2),and commitments to provide a loan at a below-market interest rate, which do not fall within theabove category (1); (4) financial liabilities at amortized cost.
2. Recognition criteria, measurement method and derecognition of financial assets and financialliabilities
(1) Recognition criteria and measurement method of financial assets and financial liabilitiesWhen the Company becomes a party to a financial instrument, it is recognized as a financial assetor financial liability. The financial assets and financial liabilities initially recognized by theCompany are measured at fair value; for the financial assets and liabilities at fair value throughprofit or loss, the transaction expenses thereof are directly included in profit or loss; for othercategories of financial assets and financial liabilities, the transaction expenses thereof are includedinto the initially recognized amount. However, at initial recognition, for accounts receivable thatdo not contain a significant financing component or in circumstances where the Company does notconsider the financing components in contracts within one year, they are measured at thetransaction price in accordance with ―CASBE 14 – Revenues‖.
(2) Subsequent measurement of financial assets
1) Financial assets measured at amortized cost
The Company measures its financial assets at the amortized costs using effective interest method.Gains or losses on financial assets that are measured at amortized cost and are not part of hedgingrelationships shall be included into profit or loss when the financial assets are derecognized,reclassified, amortized using effective interest method or recognized with impairment loss.
2) Debt instrument investments at fair value through other comprehensive incomeThe Company measures its debt instrument investments at fair value. Interests, impairment gainsor losses, and gains and losses on foreign exchange that calculated using effective interest methodshall be included into profit or loss, while other gains or losses are included into othercomprehensive income. Accumulated gains or losses that initially recognized as othercomprehensive income should be transferred out into profit or loss when the financial assets arederecognized.
3) Equity instrument investments at fair value through other comprehensive incomeThe Company measures its equity instrument investments at fair value. Dividends obtained (otherthan those as part of investment cost recovery) shall be included into profit or loss, while othergains or losses are included into other comprehensive income. Accumulated gains or losses thatinitially recognized as other comprehensive income should be transferred out into retainedearnings when the financial assets are derecognized.
4) Financial assets at fair value through profit or loss
The Company measures its financial assets at fair value. Gains or losses arising from changes infair value (including interests and dividends) shall be included into profit or loss, except forfinancial assets that are part of hedging relationships.
(3) Subsequent measurement of financial liabilities
1) Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include held-for-trading financial liabilities(including derivatives that are liabilities) and financial liabilities designated as at fair valuethrough profit or loss. The Company measures such kind of liabilities at fair value. The amount ofchanges in the fair value of the financial liabilities that are attributable to changes in theCompany’s own credit risk shall be included into other comprehensive income, unless suchtreatment would create or enlarge accounting mismatches in profit or loss. Other gains or losses onthose financial liabilities (including interests, changes in fair value that are attributable to reasonsother than changes in the Company’s own credit risk) shall be included into profit or loss, exceptfor financial liabilities that are part of hedging relationships. Accumulated gains or losses thatoriginally recognized as other comprehensive income should be transferred out into retainedearnings when the financial liabilities are derecognized.
2) Financial liabilities that arise when a transfer of a financial asset does not qualify forderecognition or when the continuing involvement approach appliesThe Company measures its financial liabilities in accordance with ―CASBE 23 – Transfer ofFinancial Assets‖.
3) Financial guarantee contracts not fall within the above categories 1) and 2), and commitmentsto provide a loan at a below-market interest rate, which do not fall within the above category 1)The Company measures its financial liabilities at the higher of: a. the amount of loss allowances inaccordance with impairment requirements of financial instruments; b. the amount initiallyrecognized less the amount of accumulated amortization recognized in accordance with ―CASBE14 – Revenues‖.
4) Financial liabilities at amortized cost
The Company measures its financial liabilities at amortized cost using effective interest method.Gains or losses on financial liabilities that are measured at amortized cost and are not part ofhedging relationships shall be included into profit or loss when the financial liabilities arederecognized and amortized using effective interest method.
(4) Derecognition of financial assets and financial liabilities
1) Financial assets are derecognized when:
a. the contractual rights to the cash flows from the financial assets expire; orb. the financial assets have been transferred and the transfer qualifies for derecognition inaccordance with ―CASBE 23 – Transfer of Financial Assets‖.
2) Only when the underlying present obligations of a financial liability are relieved totally orpartly may the financial liability be derecognized accordingly.
3. Recognition criteria and measurement method of financial assets transfer
Where the Company has transferred substantially all of the risks and rewards related to theownership of the financial asset, it derecognizes the financial asset, and any right or liabilityarising from such transfer is recognized independently as an asset or a liability. If it retainedsubstantially all of the risks and rewards related to the ownership of the financial asset, itcontinues recognizing the financial asset. Where the Company does not transfer or retainsubstantially all of the risks and rewards related to the ownership of a financial asset, it is dealtwith according to the circumstances as follows respectively: (1) if the Company does not retain itscontrol over the financial asset, it derecognizes the financial asset, and any right or liability arisingfrom such transfer is recognized independently as an asset or a liability; (2) if the Company retainsits control over the financial asset, according to the extent of its continuing involvement in thetransferred financial asset, it recognizes the related financial asset and recognizes the relevantliability accordingly.
If the transfer of an entire financial asset satisfies the conditions for derecognition, the differencebetween the amounts of the following two items is included in profit or loss: (1) the carryingamount of the transferred financial asset as of the date of derecognition; (2) the sum ofconsideration received from the transfer of the financial asset, and the accumulative amount of thechanges of the fair value originally included in other comprehensive income proportionate to thetransferred financial asset (financial assets transferred refer to debt instrument investments at fairvalue through other comprehensive income). If the transfer of financial asset partially satisfies theconditions for derecognition, the entire carrying amount of the transferred financial asset is,between the portion which is derecognized and the portion which is not, apportioned according totheir respective relative fair value, and the difference between the amounts of the following twoitems is included into profit or loss: (1) the carrying amount of the portion which is derecognized;
(2) the sum of consideration of the portion which is derecognized, and the portion of theaccumulative amount of the changes in the fair value originally included in other comprehensiveincome which is corresponding to the portion which is derecognized (financial assets transferredrefer to debt instrument investments at fair value through other comprehensive income).
4. Fair value determination method of financial assets and liabilities
The Company uses valuation techniques that are appropriate in the circumstances and for whichsufficient data and information are available to measure fair value. The inputs to valuationtechniques used to measure fair value are arranged in the following hierarchy and usedaccordingly:
(1) Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilitiesthat the Company can access at the measurement date;
(2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observablefor the asset or liability, either directly or indirectly. Level 2 inputs include: quoted prices forsimilar assets or liabilities in active markets; quoted prices for identical or similar assets orliabilities in markets that are not active; inputs other than quoted prices that are observable for theasset or liability, for example, interest rates and yield curves observable at commonly quotedintervals; market-corroborated inputs;
(3) Level 3 inputs are unobservable inputs for the asset or liability. Level 3 inputs include interestrate that is not observable and cannot be corroborated by observable market data at commonlyquoted intervals, historical volatility, future cash flows to be paid to fulfill the disposal obligationassumed in business combination, financial forecast developed using the Company’s own data, etc.
5. Impairment of financial instruments
The Company, on the basis of expected credit loss, recognizes loss allowances of financial assetsat amortized cost, debt instrument investments at fair value through other comprehensive income,contract assets, leases receivable, loan commitments other than financial liabilities at fair valuethrough profit or loss, financial guarantee contracts not belong to financial liabilities at fair value
through profit or loss or financial liabilities that arise when a transfer of a financial asset does notqualify for derecognition or when the continuing involvement approach applies.Expected credit losses refer to the weighted average of credit losses with the respective risks of adefault occurring as the weights. Credit loss refers to the difference between all contractual cashflows that are due to the Company in accordance with the contract and all the cash flows that theCompany expects to receive (i.e., all cash shortfalls), discounted at the original effective interestrate. Among which, purchased or originated credit-impaired financial assets are discounted at thecredit-adjusted effective interest rate.At the balance sheet date, the Company shall only recognize the cumulative changes in thelifetime expected credit losses since initial recognition as a loss allowance for purchased ororiginated credit-impaired financial assets.For leases receivable, and accounts receivable and contract assets resulting from transactionsregulated in ―CASBE 14 – Revenues‖, the Company chooses simplified approach to measure theloss allowance at an amount equal to lifetime expected credit losses.For financial assets other than the above, on each balance sheet date, the Company shall assesswhether the credit risk on the financial instrument has increased significantly since initialrecognition. The Company shall measure the loss allowance for the financial instrument at anamount equal to the lifetime expected credit losses if the credit risk on that financial instrumenthas increased significantly since initial recognition; otherwise, the Company shall measure the lossallowance for that financial instrument at an amount equal to 12-month expected credit loss.Considering reasonable and supportable forward-looking information, the Company compares therisk of a default occurring on the financial instrument as at the balance sheet date with the risk of adefault occurring on the financial instrument as at the date of initial recognition, so as to assesswhether the credit risk on the financial instrument has increased significantly since initialrecognition.The Company may assume that the credit risk on a financial instrument has not increasedsignificantly since initial recognition if the financial instrument is determined to have relativelylow credit risk at the balance sheet date.The Company shall estimate expected credit risk and measure expected credit losses on anindividual or a collective basis. When the Company adopts the collective basis, financialinstruments are grouped with similar credit risk features.The Company shall remeasure expected credit loss on each balance sheet date, and increased orreversed amounts of loss allowance arising therefrom shall be included into profit or loss asimpairment losses or gains. For a financial asset measured at amortized cost, the loss allowancereduces the carrying amount of such financial asset presented in the balance sheet; for a debt
investment measured at fair value through other comprehensive income, the loss allowance shallbe recognized in other comprehensive income and shall not reduce the carrying amount of suchfinancial asset.
6. Offsetting financial assets and financial liabilities
Financial assets and financial liabilities are presented separately in the balance sheet and are notoffset. However, the Company offsets a financial asset and a financial liability and presents the netamount in the balance sheet when, and only when, the Company: (1) currently has a legallyenforceable right to set off the recognized amounts; and (2) intends either to settle on a net basis,or to realize the asset and settle the liability simultaneously.For a transfer of a financial asset that does not qualify for derecognition, the Company does notoffset the transferred asset and the associated liability.(XII) Recognition criteria and accrual method for expected credit losses of receivables andcontract assets
1. Receivables and contract assets with expected credit losses measured on a collective basis usingsimilar credit risk features
| Categories | Basis for determination of portfolio | Method for measuring expected credit loss |
| Bank acceptance receivable | Type of notes | Based on historical credit loss experience, the current situation and the forecast of future economic conditions, the Company calculates expected credit loss through exposure at default and lifetime expected credit loss rate. |
| Trade acceptance receivable | ||
| Accounts receivable – Portfolio grouped with balances due from related parties within the consolidation scope | Nature of receivables | Based on historical credit loss experience, the current situation and the forecast of future economic conditions, the Company calculates expected credit loss through exposure at default and lifetime expected credit loss rate. |
| Accounts receivable – Portfolio grouped with property sales receivable | ||
| Accounts receivable – Portfolio grouped with balances due from other customers | ||
| Other receivables – Portfolio grouped with government funds receivable | Nature of receivables | Based on historical credit loss experience, the current situation and the forecast of future economic conditions, the Company calculates expected credit loss through exposure at default and 12-month or lifetime expected credit loss rate. |
| Other receivables – Portfolio grouped with employee petty cash receivable | ||
| Other receivables – Portfolio grouped with advances received and paid on behalf of others | ||
| Other receivables – Portfolio grouped with other intercompany balances |
| Categories | Basis for determination of portfolio | Method for measuring expected credit loss |
| receivable | ||
| Other receivables – Portfolio grouped with balances due from related parties receivable | ||
| Contract assets – Portfolio grouped with product sales | Nature of receivables | Based on historical credit loss experience, the current situation and the forecast of future economic conditions, the Company calculates expected credit loss through exposure at default and lifetime expected credit loss rate. |
| Contract assets – Portfolio grouped with engineering construction |
2. Recognition criteria for receivables and contract assets with expected credit losses measured onan individual basisFor receivables and contract assets whose credit risk is significantly different from that ofportfolios, the Company accrues expected credit losses on an individual basis.(XIII) Inventories
1. Classification of inventories
Inventories include development land held for sale or consumption during development andoperations, developed products, developed products held for sale but temporarily leased out, etc.,as well as development cost during development.
2. Accounting method for dispatched inventories
(1) Materials and equipment dispatched from storage are accounted for with specific identificationmethod.
(2) During project development, the development cost of land is calculated and allocated based onthe area occupied by the developed products and the grade coefficient of occupied land.
(3) Developed products dispatched from storage are accounted for with cost coefficient allocationmethod.
(4) Developed products held for sale but temporarily leased out and revolving houses are evenlyamortized based on the estimated useful life of similar fixed assets of the Company.
(5) If the public supporting facilities are completed earlier than the relevant developed products,the development cost is calculated and allocated based on the construction area of the relevantdevelopment projects after the completion settlement of the public supporting facilities; if thepublic supporting facilities are completed later than the relevant developed products, the publicsupporting facility fees shall be accrued, and after the completion settlement of the publicsupporting facilities, the relevant development product costs shall be adjusted based on thedifference between the actual cost incurred and cost accrued.
3. Inventory system
Physical inventory counting method is adopted.
4. Amortization method of low-value consumables and packages
(1) Low-value consumables
Low-value consumables are amortized with usage times.
(2) Packages
Packages are amortized with usage times.
5. Provision for inventory write-down
At the balance sheet date, inventories are measured at the lower of cost and net realizable value;provisions for inventory write-down are made on the excess of its cost over the net realizablevalue. The net realizable value of inventories held for sale is determined based on the amount ofthe estimated selling price less the estimated selling expenses and relevant taxes and surcharges inthe ordinary course of business; the net realizable value of inventories to be processed isdetermined based on the amount of the estimated selling price less the estimated costs ofcompletion, selling expenses and relevant taxes and surcharges in the ordinary course of business;at the balance sheet date, when only part of the same item of inventories have agreed price, theirnet realizable value are determined separately and are compared with their costs to set theprovision for inventory write-down to be made or reversed.(XIV) Long-term equity investments
1. Judgment of joint control and significant influence
Joint control is the contractually agreed sharing of control of an arrangement, which exists onlywhen decisions about the relevant activities require the unanimous consent of the parties sharingcontrol. Significant influence is the power to participate in the financial and operating policydecisions of the investee but is not control or joint control of these policies.
2. Determination of investment cost
(1) For business combination under common control, if the consideration of the combining party isthat it makes payment in cash, transfers non-cash assets, assumes its liabilities or issues equitysecurities, on the date of combination, it regards the share of the carrying amount of the equity ofthe combined party included in the consolidated financial statements of the ultimate controllingparty as the initial cost of the investment. The difference between the initial cost of the long-termequity investments and the carrying amount of the combination consideration paid or the par valueof shares issued offsets capital reserve; if the balance of capital reserve is insufficient to offset, anyexcess is adjusted to retained earnings.When long-term equity investments are obtained through business combination under commoncontrol achieved in stages, the Company determines whether it is a ―bundled transaction‖. If it is a―bundled transaction‖, stages as a whole are considered as one transaction in accounting treatment.
If it is not a ―bundled transaction‖, on the date of combination, investment cost is initiallyrecognized at the share of the carrying amount of net assets of the combined party included theconsolidated financial statements of the ultimate controlling party. The difference between theinitial investment cost of long-term equity investments at the acquisition date and the carryingamount of the previously held long-term equity investments plus the carrying amount of theconsideration paid for the newly acquired equity is adjusted to capital reserve; if the balance ofcapital reserve is insufficient to offset, any excess is adjusted to retained earnings.
(2) For business combination not under common control, investment cost is initially recognized atthe acquisition-date fair value of considerations paid.When long-term equity investments are obtained through business combination not under commoncontrol achieved in stages, the Company determined whether they are stand-alone financialstatements or consolidated financial statements in accounting treatment:
1) In the case of stand-alone financial statements, investment cost is initially recognized at thecarrying amount of the previously held long-term equity investments plus the carrying amount ofthe consideration paid for the newly acquired equity.
2) In the case of consolidated financial statements, the Company determines whether it is a―bundled transaction‖. If it is a ―bundled transaction‖, stages as a whole are considered as onetransaction in accounting treatment. If it is not a ―bundled transaction‖, the carrying amount of theacquirer’s previously held equity interest in the acquiree is remeasured at the acquisition-date fairvalue, and the difference between the fair value and the carrying amount is recognized ininvestment income; when the acquirer’s previously held equity interest in the acquiree involvesother comprehensive income under equity method, the related other comprehensive income isreclassified as income for the acquisition period, excluding other comprehensive income arisingfrom changes in net liabilities or assets from remeasurement of defined benefit plan of theacquiree.
(3) Long-term equity investments obtained through ways other than business combination: theinitial cost of a long-term equity investment obtained by making payment in cash is the purchasecost which is actually paid; that obtained on the basis of issuing equity securities is the fair valueof the equity securities issued; that obtained through debt restructuring is determined according to―CASBE 12 – Debt Restructuring‖; and that obtained through non-cash assets exchange isdetermined according to ―CASBE 7 – Non-cash Assets Exchange‖.
3. Subsequent measurement and recognition method of profit or loss
For a long-term equity investment with control relationship, it is accounted for with cost method;for a long-term equity investment with joint control or significant influence relationship, it isaccounted for with equity method.
4. Disposal of a subsidiary in stages resulting in the Company’s loss of control
(1) Judgement principles of ―bundled transaction‖
For disposal of a subsidiary in stages resulting in the Company’s loss of control, the Companydetermines whether it is a ―bundled transaction‖ based on the agreement terms for each stage,disposal consideration obtained separately, object of the equity sold, disposal method, disposaltime point, etc. If the terms, conditions and economic effect of each transaction meet one or moreof the following conditions, these transactions are usually considered as a ―bundled transaction‖:
1) these transactions are entered into at the same time or in contemplation of each other;
2) these transactions form a single transaction designed to achieve an overall commercial effect;
3) the occurrence of one transaction is dependent on the occurrence of at least one othertransaction; and
4) one transaction considered on its own is not economically justified, but it is economicallyjustified when considered together with other transactions.
(2) Accounting treatments of non-bundled transactions
1) Stand-alone financial statements
The difference between the carrying amount of the disposed equity and the consideration obtainedthereof is recognized in profit or loss. If the disposal does not result in the Company’s loss ofsignificant influence or joint control, the remained equity is accounted for with equity method;however, if the disposal results in the Company’s loss of control, joint control, or significantinfluence, the remained equity is accounted for according to ―CASBE 22 – Financial Instruments:
Recognition and Measurement‖.
2) Consolidated financial statements
Before the Company’s loss of control, the difference between the disposal consideration and theproportionate share of net assets in the disposed subsidiary from acquisition date or combinationdate to the disposal date is adjusted to capital reserve (capital premium), if the balance of capitalreserve is insufficient to offset, any excess is adjusted to retained earnings.When the Company loses control, the remained equity is remeasured at the loss-of-control-datefair value. The aggregated value of disposal consideration and the fair value of the remained equity,less the share of net assets in the disposed subsidiary held before the disposal from the acquisitiondate or combination date to the disposal date is recognized in investment income in the periodwhen the Company loses control over such subsidiary, and meanwhile goodwill is offsetcorrespondingly. Other comprehensive income related to equity investments in former subsidiaryis reclassified as investment income upon the Company’s loss of control.
(3) Accounting treatment of bundled transaction
1) Stand-alone financial statements
Stages as a whole are considered as one transaction resulting in loss of control in accountingtreatment. However, before the Company loses control over a subsidiary, the difference betweenthe disposal consideration at each stage and the carrying amount of long-term equity investmentscorresponding to the disposed investments is recognized as other comprehensive income at thestand-alone financial statements and reclassified as profit or loss in the period when the Companyloses control over such subsidiary.
2) Consolidated financial statements
Stages as a whole are considered as one transaction resulting in loss of control in accountingtreatment. However, before the Company loses control over a subsidiary, the difference betweenthe disposal consideration at each stage and the proportionate share of net assets in the disposedsubsidiary is recognized as other comprehensive income at the consolidated financial statementsand reclassified as profit or loss in the period when the Company loses control over suchsubsidiary.(XV) Investment property
1. Investment property includes land use right of leased-out property and of property held forcapital appreciation and buildings that have been leased out.
2. The initial measurement of investment property is based on its cost, and subsequentmeasurement is made using the cost model, the depreciation or amortization method is the same asthat of fixed assets and intangible assets.(XVI) Fixed assets
1. Recognition principles of fixed assets
Fixed assets are tangible assets held for use in the production of goods or rendering of services, forrental to others, or for administrative purposes, and expected to be used during more than oneaccounting year. Fixed assets are recognized if, and only if, it is probable that future economicbenefits associated with the assets will flow to the Company and the cost of the assets can bemeasured reliably.
2. Depreciation method of different categories of fixed assets
| Categories | Depreciation method | Useful life (years) | Residual value proportion (%) | Annual depreciation rate (%) |
| Buildings and structures | Straight-line method | 30 | 5.00 | 3.17 |
| Transport facilities | Straight-line method | 6 | 5.00 | 15.83 |
| Electronic equipment and others | Straight-line method | 5 | 5.00 | 19.00 |
(XVII) Construction in progress
1. Construction in progress is recognized if, and only if, it is probable that future economicbenefits associated with the item will flow to the Company, and the cost of the item can be
measured reliably. Construction in progress is measured at the actual cost incurred to reach itsdesigned usable conditions.
2. Construction in progress is transferred into fixed assets at its actual cost when it reaches thedesigned usable conditions. When the auditing of the construction in progress is not finished whilereaching the designed usable conditions, it is transferred to fixed assets using estimated value first,and then adjusted accordingly when the actual cost is settled, but the accumulated depreciation isnot to be adjusted retrospectively.(XVIII) Borrowing costs
1. Recognition principle of borrowing costs capitalization
Where the borrowing costs incurred to the Company can be directly attributable to the acquisitionand construction or production of assets eligible for capitalization, it is capitalized and included inthe costs of relevant assets; other borrowing costs are recognized as expenses on the basis of theactual amount incurred, and are included in profit or loss.
2. Borrowing costs capitalization period
(1) The borrowing costs are not capitalized unless the following requirements are all met: 1) theasset disbursements have already incurred; 2) the borrowing costs have already incurred; and 3)the acquisition and construction or production activities which are necessary to prepare the assetfor its intended use or sale have already started.
(2) Suspension of capitalization: where the acquisition and construction or production of aqualified asset is interrupted abnormally and the interruption period lasts for more than 3 months,the capitalization of the borrowing costs is suspended; the borrowing costs incurred during suchperiod are recognized as expenses, and are included in profit or loss, till the acquisition andconstruction or production of the asset restarts.
(3) Ceasing of capitalization: when the qualified asset under acquisition and construction orproduction is ready for the intended use or sale, the capitalization of the borrowing costs is ceased.
3. Capitalization rate and capitalized amount of borrowing costs
For borrowings exclusively for the acquisition and construction or production of assets eligible forcapitalization, the to-be-capitalized amount of interests is determined in light of the actual interestexpenses incurred (including amortization of premium or discount based on effective interestmethod) of the special borrowings in the current period less the interest income on the unusedborrowings as a deposit in the bank or as a temporary investment; where a general borrowing isused for the acquisition and construction or production of assets eligible for capitalization, theCompany calculates and determines the to-be-capitalized amount of interests on the generalborrowing by multiplying the weighted average asset disbursement of the excess of theaccumulative capital disbursements over the special borrowings by the capitalization rate of thegeneral borrowing used.
(XIX) Intangible assets
1. Intangible assets include software, etc. The initial measurement of intangible assets is based onits cost.
2. For intangible assets with finite useful lives, their amortization amounts are amortized withintheir useful lives systematically and reasonably, if it is unable to determine the expectedrealization pattern reliably, intangible assets are amortized by the straight-line method with detailsas follows:
| Items | Useful life and determination basis | Amortization method |
| Software | Expected realization method of economic benefits related to intangible assets, 3-5 years | Straight-line method |
3. Expenditures on the research phase of an internal project are recognized as profit or loss whenthey are incurred. An intangible asset arising from the development phase of an internal project isrecognized if the Company can demonstrate all of the followings: (1) the technical feasibility ofcompleting the intangible asset so that it will be available for use or sale; (2) its intention tocomplete the intangible asset and use or sell it; (3) how the intangible asset will generate probablefuture economic benefits, among other things, the Company can demonstrate the existence of amarket for the output of the intangible asset or the intangible asset itself or, if it is to be usedinternally, the usefulness of the intangible asset; (4) the availability of adequate technical, financialand other resources to complete the development and to use or sell the intangible asset; and (5) itsability to measure reliably the expenditure attributable to the intangible asset during itsdevelopment.(XX) Impairment of part of long-term assetsFor long-term assets such as long-term equity investments, investment property at cost model,fixed assets, construction in progress, right-of-use assets, intangible assets with finite useful lives,etc., if at the balance sheet date there is indication of impairment, the recoverable amount is to beestimated. For goodwill recognized in business combination and intangible assets with indefiniteuseful lives, no matter whether there is indication of impairment, impairment test is performedannually. Impairment test on goodwill is performed on related asset group or asset group portfolio.When the recoverable amount of such long-term assets is lower than their carrying amount, thedifference is recognized as provision for assets impairment through profit or loss.(XXI) Long-term prepaymentsLong-term prepayments are expenses that have been recognized but with amortization period overone year (excluding one year). They are recorded with actual cost, and evenly amortized withinthe beneficiary period or stipulated period. If items of long-term prepayments fail to be beneficialto the following accounting periods, residual values of such items are included in profit or loss.
(XXII) Employee benefits
1. Employee benefits include short-term employee benefits, post-employment benefits,termination benefits and other long-term employee benefits.
2. Short-term employee benefits
The Company recognizes, in the accounting period in which an employee provides service, short-term employee benefits actually incurred as liabilities, with a corresponding charge to profit orloss or the cost of a relevant asset.
3. Post-employment benefits
The Company classifies post-employment benefit plans as either defined contribution plans ordefined benefit plans.
(1) The Company recognizes in the accounting period in which an employee provides service thecontribution payable to a defined contribution plan as a liability, with a corresponding charge toprofit or loss or the cost of a relevant asset.
(2) Accounting treatment by the Company for defined benefit plan usually involves thefollowing steps:
1) In accordance with the projected unit credit method, using unbiased and mutually compatibleactuarial assumptions to estimate related demographic variables and financial variables, measurethe obligations under the defined benefit plan, and determine the periods to which the obligationsare attributed. Meanwhile, the Company discounts obligations under the defined benefit plan todetermine the present value of the defined benefit plan obligations and the current service cost;
2) When a defined benefit plan has assets, the Company recognizes the deficit or surplus bydeducting the fair value of defined benefit plan assets from the present value of the defined benefitplan obligation as a net defined benefit plan liability or net defined benefit plan asset. When adefined benefit plan has a surplus, the Company measures the net defined benefit plan asset at thelower of the surplus in the defined benefit plan and the asset ceiling;
3) At the end of the period, the Company recognizes the following components of employeebenefits cost arising from defined benefit plan: a. service cost; b. net interest on the net definedbenefit plan liability (asset); and c. changes as a result of remeasurement of the net defined benefitliability (asset). Item a and item b are recognized in profit or loss or the cost of a relevant asset.Item c is recognized in other comprehensive income and is not to be reclassified subsequently toprofit or loss. However, the Company may transfer those amounts recognized in othercomprehensive income within equity.
4. Termination benefits
Termination benefits provided to employees are recognized as an employee benefit liability fortermination benefits, with a corresponding charge to profit or loss at the earlier of the following
dates: (1) when the Company cannot unilaterally withdraw the offer of termination benefitsbecause of an employment termination plan or a curtailment proposal; or (2) when the Companyrecognizes cost or expenses related to a restructuring that involves the payment of terminationbenefits.
5. Other long-term employee benefits
When other long-term employee benefits provided to the employees satisfied the conditions forclassifying as a defined contribution plan, those benefits are accounted for in accordance with therequirements relating to defined contribution plan, while other benefits are accounted for inaccordance with the requirements relating to defined benefit plan. The Company recognizes thecost of employee benefits arising from other long-term employee benefits as the followings: (1)service cost; (2) net interest on the net liability or net assets of other long-term employee benefits;and (3) changes as a result of remeasurement of the net liability or net assets of other long-termemployee benefits. As a practical expedient, the net total of the aforesaid amounts is recognized inprofit or loss or included in the cost of a relevant asset.(XXIII) Accounting method for maintenance fundsPursuant to the relevant regulations of the place in which the development project located, themaintenance funds shall be collected from the buyer or included into the development costs ofrelevant developed products by the Company during the sales (pre-sale) of developed products,and shall be uniformly handed over to the maintenance funds management department.(XXIV) Accounting method for quality guarantee depositsThe quality guarantee deposits shall be reserved from the engineering funds of construction unit inaccordance with the provisions of the construction contract. The maintenance costs incurredduring the warranty period of the developed products shall be offset against the quality guaranteedeposits; at the expiration of the agreed warranty period for developed products, the balance of thequality guarantee deposits shall be refunded to the construction unit.(XXV) Revenue
1. Revenue recognition principles
At contract inception, the Company shall assess the contracts and shall identify each performanceobligation in the contracts, and determine whether the performance obligation should be satisfiedover time or at a point in time.The Company satisfies a performance obligation over time if one of the following criteria is met,otherwise, the performance obligation is satisfied at a point in time: (1) the customersimultaneously receives and consumes the economic benefits provided by the Company’sperformance as the Company performs; (2) the customer can control goods as they are created bythe Company’s performance; (3) goods created during the Company’s performance haveirreplaceable uses and the Company has an enforceable right to the payments for performance
completed to date during the whole contract period.For each performance obligation satisfied over time, the Company shall recognize revenue overtime by measuring the progress towards complete satisfaction of that performance obligation. Inthe circumstance that the progress cannot be measured reasonably, but the costs incurred insatisfying the performance obligation are expected to be recovered, the Company shall recognizerevenue only to the extent of the costs incurred until it can reasonably measure the progress. Foreach performance obligation satisfied at a point in time, the Company shall recognize revenue atthe time point that the customer obtains control of relevant goods or services. To determinewhether the customer has obtained control of goods, the Company shall consider the followingindications: (1) the Company has a present right to payments for the goods, i.e., the customer ispresently obliged to pay for the goods; (2) the Company has transferred the legal title of the goodsto the customer, i.e., the customer has legal title to the goods; (3) the Company has transferredphysical possession of the goods to the customer, i.e., the customer has physically possessed thegoods; (4) the Company has transferred significant risks and rewards of ownership of the goods tothe customer, i.e., the customer has obtained significant risks and rewards of ownership of thegoods; (5) the customer has accepted the goods; (6) other evidence indicating the customer hasobtained control over the goods.
2. Revenue measurement principle
(1) Revenue is measured at the amount of the transaction price that is allocated to eachperformance obligation. The transaction price is the amount of consideration to which theCompany expects to be entitled in exchange for transferring goods or services to a customer,excluding amounts collected on behalf of third parties and those expected to be refunded to thecustomer.
(2) If the consideration promised in a contract includes a variable amount, the Company shallconfirm the best estimate of variable consideration at expected value or the most likely amount.However, the transaction price that includes the amount of variable consideration only to theextent that it is high probable that a significant reversal in the amount of cumulative revenuerecognized will not occur when the uncertainty associated with the variable consideration issubsequently resolved.
(3) In the circumstance that the contract contains a significant financing component, the Companyshall determine the transaction price based on the price that a customer would have paid for if thecustomer had paid cash for obtaining control over those goods or services. The difference betweenthe transaction price and the amount of promised consideration is amortized under effectiveinterest method over contractual period.
(4) For contracts containing two or more performance obligations, the Company shall determinethe stand-alone selling price at contract inception of the distinct good underlying each
performance obligation and allocate the transaction price to each performance obligation on arelative stand-alone selling price basis.
3. Revenue recognition method
(1) Sales of real estate development
Real estate sales business is a performance obligation satisfied at a point in time, and revenue isrecognized if, and only if, the following conditions are all met: (1) the developed products havebeen completed and accepted; (2) the Company have signed sales contract and fulfilled obligationsunder the contract; (3) the Company have delivered property to the owner or the contractualdelivery date has expired after a notice or announcement of occupation has been sent to the owner;and (4) the Company has collected the full payments for the real estate and related costs incurredor to be incurred can be measured reliably.
(2) Rendering of property management services
Rendering of property management services is a performance obligation satisfied over time.Revenue from property management services is recognized by the progress towards completesatisfaction of that performance obligation, which is determined based on the time progress.
(3) Construction services
The Company provides construction services. Since the customer simultaneously receives andconsumes the economic benefits provided by the Company’s performance as the Companyperforms, and the Company has an enforceable right to the payments for performance completedto date during the whole contract period, construction services are performance obligationssatisfied over time. Revenue from construction services is recognized by the percentage ofcompletion of the performance obligations, which is determined by input method. In thecircumstance that the percentage of completion cannot be measured reasonably, but the incurredcosts are expected to be recovered, the Company recognizes revenue only to the extent of theincurred costs until it can reasonably measure the percentage of completion.
(4) Others
Other revenues include revenue from hotel operation, etc. For revenue from rendering of hotelroom services, as the customer simultaneously receives and consumes the economic benefitsprovided by the Company’s performance as the Company performs, the Company recognizes it asa performance obligation to be performed over time, and revenue is recognized based on thepercentage of completion of the performance obligation during the accounting period whenservices are provided. For revenue from rendering of other services, it is recognized when thecustomer has obtained the control over related goods, and the Company has collected thepayments or has obtained the right to the payments according to relevant contract and agreement.(XXVI) Costs of obtaining a contract and costs to fulfill a contractThe Company recognizes as an asset the incremental costs of obtaining a contract if those costs
are expected to be recovered.If the costs incurred in fulfilling a contract are not within the scope of standards related toinventories, fixed assets or intangible assets, etc., the Company shall recognize the costs to fulfill acontract as an asset if all the following criteria are satisfied:
1. The costs relate directly to a contract or to an anticipated contract, including direct labor, directmaterials, manufacturing overhead cost (or similar cost), cost that are explicitly chargeable to thecustomer under the contract, and other costs that are only related to the contract;
2. The costs enhance resources of the Company that will be used in satisfying performanceobligations in the future; and
3. The costs are expected to be recovered.
An asset related to contract costs shall be amortized on a systematic basis that is consistent withrelated goods or services, with amortization included into profit or loss.The Company shall make provision for impairment and recognize an impairment loss to the extentthat the carrying amount of an asset related to contract costs exceeds the remaining amount ofconsideration that the Company expects to receive in exchange for the goods or services to whichthe asset relates less the costs expected to be incurred. The Company shall recognize a reversal ofan impairment loss previously recognized in profit or loss when the impairment conditions nolonger exist or have improved. The carrying amount of the asset after the reversal shall not exceedthe amount that would have been determined on the reversal date if no provision for impairmenthad been made previously.(XXVII) Contract assets, contract liabilitiesThe Company presents contract assets or contract liabilities in the balance sheet based on therelationship between its performance obligations and customers’ payments. Contract assets andcontract liabilities under the same contract shall offset each other and be presented on a net basis.The Company presents an unconditional right to consideration (i.e., only the passage of time isrequired before the consideration is due) as a receivable, and presents a right to consideration inexchange for goods that it has transferred to a customer (which is conditional on something otherthan the passage of time) as a contract asset.The Company presents an obligation to transfer goods to a customer for which the Company hasreceived consideration (or the amount is due) from the customer as a contract liability.(XXVIII) Government grants
1. Government grants shall be recognized if, and only if, the following conditions are all met: (1)the Company will comply with the conditions attaching to the grants; (2) the grants will bereceived. Monetary government grants are measured at the amount received or receivable. Non-monetary government grants are measured at fair value, and can be measured at nominal amount
in the circumstance that fair value cannot be assessed.
2. Government grants related to assets
Government grants related to assets are government grants with which the Company purchases,constructs or otherwise acquires long-term assets under requirements of government. In thecircumstances that there is no specific government requirement, the Company shall determinebased on the primary condition to acquire the grants, and government grants related to assets aregovernment grants whose primary condition is to construct or otherwise acquire long-term assets.They offset carrying amount of relevant assets, or they are recognized as deferred income. Ifrecognized as deferred income, they are included in profit or loss on a systematic basis over theuseful lives of the relevant assets. Those measured at notional amount are directly included intoprofit or loss. For assets sold, transferred, disposed or damaged within the useful lives, balance ofunamortized deferred income is transferred into profit or loss of the period in which the disposaloccurred.
3. Government grants related to income
Government grants related to income are government grants other than those related to assets. Forgovernment grants that contain both parts related to assets and parts related to income, in whichthose two parts are blurred, they are thus collectively classified as government grants related toincome. For government grants related to income used for compensating the related future cost,expenses or losses, they are recognized as deferred income and included in profit or loss or used tooffset relevant cost during the period in which the relevant cost, expenses or losses are recognized;for government grants related to income used for compensating the related cost, expenses or lossesincurred to the Company, they are directly included in profit or loss or used to offset relevant cost.
4. Government grants related to the ordinary course of business shall be included into otherincome or used to offset relevant cost based on business nature, while those not related to theordinary course of business shall be included into non-operating revenue or expenditures.
5. Policy interest subvention
(1) In the circumstance that government appropriates interest subvention to lending bank, whoprovides loans for the Company with a policy subsidised interest rate, borrowings are carried atthe amount received, with relevant borrowings cost computed based on the principal and thepolicy subsidised interest rate.
(2) In the circumstance that government directly appropriates interest subvention to the Company,the subsidised interest shall offset relevant borrowing cost.(XXIX) Deferred tax assets/Deferred tax liabilities
1. Deferred tax assets or deferred tax liabilities are calculated and recognized based on thedifference between the carrying amount and tax base of assets and liabilities (and the difference ofthe carrying amount and tax base of items not recognized as assets and liabilities but with their tax
base being able to be determined according to tax laws) and in accordance with the tax rateapplicable to the period during which the assets are expected to be recovered or the liabilities areexpected to be settled.
2. A deferred tax asset is recognized to the extent of the amount of the taxable income, which ismost likely to obtain and which can be deducted from the deductible temporary difference. At thebalance sheet date, if there is any exact evidence indicating that it is probable that future taxableincome will be available against which deductible temporary differences can be utilized, thedeferred tax assets unrecognized in prior periods are recognized.
3. At the balance sheet date, the carrying amount of deferred tax assets is reviewed. The carryingamount of a deferred tax asset is reduced to the extent that it is no longer probable that sufficienttaxable income will be available to allow the benefit of the deferred tax asset to be utilized. Suchreduction is subsequently reversed to the extent that it becomes probable that sufficient taxableincome will be available.
4. The income tax and deferred tax for the period are treated as income tax expenses or incomethrough profit or loss, excluding those arising from the following circumstances: (1) businesscombination; and (2) the transactions or items directly recognized in equity.
5. Deferred tax assets and deferred tax liabilities shall offset each other and be presented on a netbasis when the following conditions are all met: (1) the Company has the legal right to settle offcurrent tax assets against current tax liabilities; (2) the deferred tax assets and the deferred taxliabilities relate to income taxes levied by the same tax authority on either: 1) the same taxableentity; or 2) different taxable entities which intend either to settle current tax liabilities and assetson a net basis, or to realize the assets and settle the liabilities simultaneously, in each future periodin which significant amounts of deferred tax assets or liabilities are expected to be recovered orsettled.(XXX) Leases
1. The Company as lessee
At the commencement date, the Company recognizes a lease that has a lease term of 12 months orless as a short-term lease, which shall not contain a purchase option; the Company recognizes alease as a lease of a low-value asset if the underlying asset is of low value when it is new. If theCompany subleases an asset, or expects to sublease an asset, the head lease does not qualify as alease of a low-value asset.For all short-term leases and leases of low-value assets, lease payments are recognized as cost orprofit or loss with straight-line method over the lease term.Apart from the above-mentioned short-term leases and leases of low-value assets with simplifiedapproach, the Company recognizes right-of-use assets and lease liabilities at the commencement
date.
(1) Right-of-use assets
The right-of-use asset is measured at cost and the cost shall comprise: 1) the amount of the initialmeasurement of the lease liabilities; 2) any lease payments made at or before the commencementdate, less any lease incentives received; 3) any initial direct costs incurred by the lessee; and 4) anestimate of costs to be incurred by the lessee in dismantling and removing the underlying asset,restoring the site on which it is located or restoring the underlying asset to the condition requiredby the terms and conditions of the lease.The Company depreciates the right-of-use asset using the straight-line method. If it is reasonableto be certain that the ownership of the underlying asset can be acquired by the end of the leaseterm, the Company depreciates the right-of-use asset from the commencement date to the end ofthe useful life of the underlying asset. Otherwise, the Company depreciates the right-of-use assetfrom the commencement date to the earlier of the end of the useful life of the right-of-use asset orthe end of the lease term.
(2) Lease liabilities
At the commencement date, the Company measures the lease liability at the present value of thelease payments that are not paid at that date, discounted using the interest rate implicit in the lease.If that rate cannot be readily determined, the Company’s incremental borrowing rate shall be used.Unrecognized financing expenses, calculated at the difference between the lease payment and itspresent value, are recognized as interest expenses over the lease term using the discount ratewhich has been used to determine the present value of lease payment and included in profit or loss.Variable lease payments not included in the measurement of lease liabilities are included in profitor loss in the periods in which they are incurred.After the commencement date, if there is a change in the following items: 1) actual fixed payments;
2) amounts expected to be payable under residual value guarantees; 3) an index or a rate used todetermine lease payments; 4) assessment result or exercise of purchase option, extension option ortermination option, the Company remeasures the lease liability based on the present value of leasepayments after changes, and adjusts the carrying amount of the right-of-use asset accordingly. Ifthe carrying amount of the right-of-use asset is reduced to zero but there shall be a furtherreduction in the lease liability, the remaining amount shall be recognized into profit or loss.
2. The Company as lessor
At the commencement date, the Company classifies a lease as a finance lease if it transferssubstantially all the risks and rewards incidental to ownership of an underlying asset. Otherwise, itis classified as an operating lease.
(1) Operating lease
Lease receipts are recognized as lease income with straight-line method over the lease term. Initial
direct costs incurred shall be capitalized, amortized on the same basis as the recognition of leaseincome, and included into profit or loss by installments. Variable lease payments related tooperating lease which are not included in the lease payment are charged as profit or loss in theperiods in which they are incurred.
(2) Finance lease
At the commencement date, the Company recognizes the finance lease payment receivable basedon the net investment in the lease (sum of the present value of unguaranteed residual value andlease receipts that are not received at the commencement date, discounted by the interest rateimplicit in the lease), and derecognizes assets held under the finance lease. The Companycalculates and recognizes interest income using the interest rate implicit in the lease over the leaseterm.Variable lease payments not included in the measurement of the net investment in the lease arecharged as profit or loss in the periods in which they are incurred.(XXXI) Segment reportingOperating segments are determined based on the structure of the Company’s internal organization,management requirements and internal reporting system. An operating segment is a component ofthe Company:
1. that engages in business activities from which it may earn revenues and incur expenses;
2. whose financial performance is regularly reviewed by the Management to make decisions aboutresource to be allocated to the segment and to assess its performance; and
3. for which accounting information regarding financial position, financial performance and cashflows is available through analysis.(XXXII) Significant changes in accounting policiesChanges in accounting policies arising from changes in CASBEsThe Company has adopted the regulations about accounting for deferred tax related to assets andliabilities arising from a single transaction to which the initial recognition exemption does notapply in the ―Interpretation of China Accounting Standards for Business Enterprises No. 16‖issued by the Ministry of Finance since January 1, 2023, and makes adjustments on such singletransactions occurring between the beginning of the earliest comparative period and the firstadoption date accordingly. Such change in accounting policies has no impact on the Company’sfinancial statements.
IV. Taxes(I) Main taxes and tax rates
| Taxes | Tax bases | Tax rates |
| Value-added tax (VAT) | The output tax calculated based on the revenue from sales of goods or rendering of services in accordance with the tax law, net of the input tax that is allowed to be deducted in the current period | 9%, 6%, 5%, 3% |
| Land appreciation tax | The incremental amount arising from the transfer of state-owned land use right and the buildings and structures that are constructed on the land | Progressive tax rates based on exceeding proportion of value-added amount |
| Housing property tax | For housing property levied on the basis of price, housing property tax is levied at the rate of 1.2% of the balance after deducting 30% of the cost; for housing property levied on the basis of rent, housing property tax is levied at the rate of 12% of lease income | 1.2%, 12% |
| Urban maintenance and construction tax | Turnover tax actually paid | 7% |
| Education surcharge | Turnover tax actually paid | 3% |
| Local education surcharge | Turnover tax actually paid | 2% |
| Enterprise income tax | Taxable income | 25%, 16.5% |
Different enterprise income tax rates applicable to different taxpayers:
| Taxpayers | Income tax rate |
| Shenzhen Huazhan Construction Supervision Co., Ltd. (the ―Huazhan Supervision‖) and Shantou Special Economic Zone Xiangshan Real Estate Development Co., Ltd. (the ―Shantou Songshan Company‖) | 20% |
| Subsidiaries registered in Hong Kong SAR | 16.5% |
| Taxpayers other than the above-mentioned | 25% |
(II) Tax preferential policiesPursuant to the ―Announcement of the Ministry of Finance and the State Taxation Administrationon the Enterprise Income Tax Preferential Policies for Small Enterprises with Meager Profit andIndividually-owned Businesses‖ (Announcement [2023] No. 6 of the Ministry of Finance and theState Taxation Administration), from January 1, 2023 to December 31, 2024, enterprise incometax for the portion of the taxable income within 1 million yuan of small enterprises with meagerprofit is levied at 20% based on 25% of that portion of income. The Company’s subsidiariesHuazhan Supervision and Shantou Songshan Company are subject to a preferential tax rate of 20%as small enterprises with meager profit.
V. Notes to items of consolidated financial statements(I) Notes to items of the consolidated balance sheet
1. Cash and bank balances
(1) Details
| Items | Closing balance | Opening balance |
| Cash on hand | 18,414.04 | 4,549.61 |
| Cash in bank | 838,926,014.14 | 163,083,275.13 |
| Other cash and bank balances | 32,074,840.65 | 34,576,125.00 |
| Total | 871,019,268.83 | 197,663,949.74 |
| Including: Deposited overseas | 5,230,453.64 | 5,840,173.03 |
(2) Other remarks
Closing balance of cash in bank with use restrictions totaled 11,872,855.48 yuan, including fundsfrozen due to lawsuits of 5,943,085.18 yuan, suspended accounts and stopped payments of 62,552.52yuan, funds for construction of public facilities in and around the urban renewal project of LonggangDistrict, Shenzhen City of 5,674,439.78 yuan, land reclamation costs of the Guangming Lane project of142,778.00 yuan, and deposits for fixed-term engineering of 50,000.00 yuan.At the balance sheet date, closing balance of other cash and bank balances of 32,074,840.65 yuan wasseven-day notice deposit.
2. Held-for-trading financial assets
| Items | Closing balance | Opening balance |
| Financial assets classified as at fair value through profit or loss | 879,340,201.92 | 408,154,361.42 |
| Including: Fund | 879,340,201.92 | 408,154,361.42 |
| Total | 879,340,201.92 | 408,154,361.42 |
3. Notes receivable
(1) Details
| Items | Closing balance | Opening balance |
| Bank acceptance | ||
| Trade acceptance | 1,536,150.00 | |
| Total | 1,536,150.00 |
(2) Provision for bad debts
| Categories | Opening balance | ||||
| Book balance | Provision for bad debts | Carrying amount | |||
| Amount | % to total | Amount | Provision proportion (%) | ||
| Receivables with provision for bad debts made on a collective basis | 1,617,000.00 | 100.00 | 80,850.00 | 5.00 | 1,536,150.00 |
| Including: Bank acceptance | |||||
| Trade acceptance | 1,617,000.00 | 100.00 | 80,850.00 | 5.00 | 1,536,150.00 |
| Total | 1,617,000.00 | 100.00 | 80,850.00 | 5.00 | 1,536,150.00 |
(3) Changes in provision for bad debts
| Items | Opening balance | Increase/Decrease | Closing balance | |||
| Accrual | Recovery or reversal | Write-off | Others | |||
| Receivables with provision for bad debts made on an individual basis | ||||||
| Receivables with provision for bad debts made on a collective basis | 80,850.00 | 80,850.00 | ||||
| Total | 80,850.00 | 80,850.00 | ||||
4. Accounts receivable
(1) Age analysis
| Ages | Closing book balance | Opening book balance |
| Within 1 year | 71,406,321.18 | 64,697,535.13 |
| 1-2 years | 9,482,461.05 | 8,701,822.68 |
| 2-3 years | 7,444,786.11 | 290,567.01 |
| 3-4 years | 169,754.01 | 5,093,814.79 |
| 4-5 years | 3,027,934.33 | |
| Over 5 years | 18,050,798.87 | 18,825,122.29 |
| Total | 109,582,055.55 | 97,608,861.90 |
(2) Provision for bad debts
1) Details on categories
| Categories | Closing balance | ||||
| Book balance | Provision for bad debts | Carrying amount | |||
| Amount | % to total | Amount | Provision proportion (%) | ||
| Receivables with provision for bad debts made on an individual basis | 24,983,383.25 | 22.80 | 24,983,383.25 | 100.00 | |
| Receivables with provision for bad debts made on a collective basis | 84,598,672.30 | 77.20 | 9,497,701.47 | 11.23 | 75,100,970.83 |
| Total | 109,582,055.55 | 100.00 | 34,481,084.72 | 31.47 | 75,100,970.83 |
(Continued)
| Categories | Opening balance | ||||
| Book balance | Provision for bad debts | Carrying amount | |||
| Amount | % to total | Amount | Provision proportion (%) | ||
| Receivables with provision for bad debts made on an individual basis | 36,722,640.73 | 37.62 | 32,006,890.24 | 87.16 | 4,715,750.49 |
| Receivables with provision for bad debts made on a collective basis | 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 |
2) Significant accounts receivable with provision made on an individual basis
| Debtors | Opening balance | Closing balance | ||||
| Book balance | Provision for bad debts | Book balance | Provision for bad debts | Provision proportion (%) | Basis for provision | |
| Payments for goods of agency import and export business | 11,574,556.00 | 11,574,556.00 | 11,574,556.00 | 11,574,556.00 | 100.00 | Expected to be irrecoverable |
| Long-term unrecovered property sales | 10,020,587.91 | 10,020,587.91 | 10,084,109.60 | 10,084,109.60 | 100.00 | Expected to be irrecoverable |
| Accounts receivable due from revoked subsidiaries | 2,328,158.40 | 2,328,158.40 | 2,314,755.46 | 2,314,755.46 | 100.00 | Expected to be irrecoverable |
| Shenzhen Hongteng Investment Management Co., Ltd. | 11,789,376.23 | 7,073,625.74 | ||||
| Balances due from other customers | 1,009,962.19 | 1,009,962.19 | 1,009,962.19 | 1,009,962.19 | 100.00 | Expected to be irrecoverable |
| Subtotal | 36,722,640.73 | 32,006,890.24 | 24,983,383.25 | 24,983,383.25 | 100.00 | |
3) Accounts receivable with provision for bad debts made on a collective basis
| Items | Closing balance | ||
| Book balance | Provision for bad debts | Provision proportion (%) | |
| Portfolio grouped with balances due from other customers | 84,598,672.30 | 9,497,701.47 | 11.23 |
| Subtotal | 84,598,672.30 | 9,497,701.47 | 11.23 |
(3) Changes in provision for bad debts
1) Details
| Items | Opening balance | Increase/Decrease | Closing balance | |||
| Accrual | Recovery or reversal | Write-off | Others | |||
| Receivables with provision for bad debts made on an individual basis | 32,006,890.24 | 3,994,030.79 | -3,029,476.20 | 24,983,383.25 | ||
| Receivables with provision for bad debts made on a collective basis | 2,021,549.50 | 4,446,675.77 | 3,029,476.20 | 9,497,701.47 | ||
| Total | 34,028,439.74 | 4,446,675.77 | 3,994,030.79 | 34,481,084.72 | ||
2) Significant provisions for bad debts collected or reversed
| Debtors | Amount collected or reversed | Reasons for reversal | Ways of collection | Basis and reasonableness for recognition of original provision for bad debts |
| Shenzhen Hongteng Investment Management Co., Ltd. | 3,994,030.79 | Project funds have been recovered. | Bank transfer | In the preceding period, provisions were made thereon on an individual basis as the recoverability was expected to be relatively low. In the current period, the provisions were reversed as the balances have been recovered. |
| Subtotal | 3,994,030.79 |
(4) Details of the top 5 debtors with largest balances of accounts receivable and contracted asset
| Debtors | Closing book balance | Proportion to the total balance of accounts receivable and contract assets (%) | Provision for bad debts of accounts receivable and provision for impairment of contract assets | ||
| Accounts receivable | Contract assets | Subtotal | |||
| Shenzhen Hongteng Investment Management Co., Ltd. | 11,882,292.92 | 11,882,292.92 | 8.62 | 3,032,263.70 | |
| Shenzhen Jiangong Group Co., Ltd. | 8,708,474.59 | 1,952,557.21 | 10,661,031.80 | 7.74 | 336,492.92 |
| Hubei Chuheng Property Co., Ltd. | 9,725,542.05 | 318,968.15 | 10,044,510.20 | 7.29 | 301,335.30 |
| Wuhan Yutian Xingye Land Co., Ltd. | 8,962,707.76 | 498,737.47 | 9,461,445.23 | 6.87 | 323,003.75 |
| China Construction Xinjiang Construction | 4,227,690.55 | 3,951,814.32 | 8,179,504.87 | 5.94 | 245,385.15 |
| Debtors | Closing book balance | Proportion to the total balance of accounts receivable and contract assets (%) | Provision for bad debts of accounts receivable and provision for impairment of contract assets | ||
| Accounts receivable | Contract assets | Subtotal | |||
| Engineering (Group) Co., Ltd. | |||||
| Subtotal | 43,506,707.87 | 6,722,077.15 | 50,228,785.02 | 36.46 | 4,238,480.82 |
(5) Other remarks
As of December 31, 2023, the balance of factoring receivables already transferred but not yetderecognized was 24,340,361.58 yaun.
5. Advances paid
(1) Age analysis
| Ages | Closing balance | |||
| Book balance | % to total | Provision for impairment | Carrying amount | |
| Within 1 year | 12,271.61 | 3.00 | 12,271.61 | |
| 1-2 years | ||||
| 2-3 years | 196,920.46 | 48.12 | 196,920.46 | |
| Over 3 years | 200,000.00 | 48.88 | 200,000.00 | |
| Total | 409,192.07 | 100.00 | 409,192.07 | |
(Continued)
| Ages | Opening balance | |||
| Book balance | % to total | Provision for impairment | Carrying amount | |
| Within 1 year | 626,155.65 | 53.80 | 626,155.65 | |
| 1-2 years | 336,699.64 | 28.94 | 336,699.64 | |
| 2-3 years | 206.95 | 0.02 | 206.95 | |
| Over 3 years | 200,550.00 | 17.24 | 200,550.00 | |
| Total | 1,163,612.24 | 100.00 | 1,163,612.24 | |
(2) Details of the top 5 debtors with largest balances
| Debtors | Book Balance | Proportion to the total balance of advances paid (%) |
| Guangdong Legal Shengbang (Shenzhen) Law Firm | 200,000.00 | 48.88 |
| Huizhou Huiyang Power Supply Bureau of Guangdong Power Grid Co., Ltd. | 98,840.29 | 24.15 |
| China Telecom Co., Ltd. | 9,493.70 | 2.32 |
| Guangdong Yuetong Card Information Technology Service Co., Ltd. | 7,850.79 | 1.92 |
| Guangdong Shenzhen Petroleum Branch of Sinopec Sales Corporation | 2,777.91 | 0.68 |
| Debtors | Book Balance | Proportion to the total balance of advances paid (%) |
| Subtotal | 318,962.69 | 77.95 |
6. Other receivables
(1) Other receivables categorized by nature
| Nature of receivables | Closing book balance | Opening book balance |
| Portfolio grouped with balances due from related parties | 161,393,309.25 | 156,470,188.49 |
| Portfolio grouped with government funds receivable | 165,460.00 | 165,460.00 |
| Portfolio grouped with employee petty cash receivable | 841,714.00 | 147,810.19 |
| Portfolio grouped with advances received and paid on behalf of others | 360,901.91 | 689,317.63 |
| Portfolio grouped with other intercompany balances receivable | 44,888,290.81 | 79,862,906.45 |
| Total | 207,649,675.97 | 237,335,682.76 |
(2) Age analysis
| Ages | Closing book balance | Opening book balance |
| Within 1 year | 6,047,963.14 | 48,019,676.18 |
| 1-2 years | 15,390,258.93 | 1,185,433.74 |
| 2-3 years | 103,956.68 | 18,023.00 |
| 3-4 years | 200.00 | 1,628,670.73 |
| 4-5 years | 100.00 | 18,120,785.56 |
| Over 5 years | 186,107,197.22 | 168,363,093.55 |
| Total | 207,649,675.97 | 237,335,682.76 |
(3) Provision for bad debts
1) Details on categories
| Categories | Closing balance | ||||
| Book balance | Provision for bad debts | Carrying amount | |||
| Amount | % to total | Amount | Provision proportion (%) | ||
| Receivables with provision made on an individual basis | 191,444,224.06 | 92.20 | 191,075,243.86 | 99.81 | 368,980.20 |
| Receivables with provision made on a collective basis | 16,205,451.91 | 7.80 | 680,695.83 | 4.20 | 15,524,756.08 |
| Subtotal | 207,649,675.97 | 100.00 | 191,755,939.69 | 92.35 | 15,893,736.28 |
(Continued)
| Categories | Opening balance | ||||
| Book balance | Provision for bad debts | Carrying amount | |||
| Amount | % to total | Amount | Provision proportion (%) | ||
| Receivables with provision made on an individual basis | 193,705,873.51 | 81.62 | 193,705,873.51 | 100.00 | |
| Receivables with provision made on a collective basis | 43,629,809.25 | 18.38 | 1,524,758.92 | 3.49 | 42,105,050.33 |
| Subtotal | 237,335,682.76 | 100.00 | 195,230,632.43 | 82.26 | 42,105,050.33 |
2) Significant other receivables with provision made on an individual basis
| Debtors | Opening balance | Closing balance | ||||
| Book balance | Provision for bad debts | Book balance | Provision for bad debts | Provision proportion (%) | Basis for provision | |
| Canada Great Wall (Vancouver) Co., Ltd. | 89,035,748.07 | 89,035,748.07 | 89,035,748.07 | 89,035,748.07 | 100.00 | Expected to be irrecoverable |
| Paklid Limited | 19,390,888.26 | 19,390,888.26 | 19,393,335.84 | 19,393,335.84 | 100.00 | Expected to be irrecoverable |
| Australia Berkton Property Limited | 12,559,290.58 | 12,559,290.58 | 12,559,290.58 | 12,559,290.58 | 100.00 | Expected to be irrecoverable |
| Guangdong Huizhou Luofushan Mineral Water Beverage Co., Ltd. | 10,465,168.81 | 10,465,168.81 | 10,465,168.81 | 10,465,168.81 | 100.00 | Expected to be irrecoverable |
| Xi’an Xinfeng Property Trading Co., Ltd. | 8,419,205.19 | 8,419,205.19 | 8,419,205.19 | 8,419,205.19 | 100.00 | Expected to be irrecoverable |
| Shenzhen Shenxi Building Decoration Co., Ltd. | 7,660,529.37 | 7,660,529.37 | 7,660,529.37 | 7,660,529.37 | 100.00 | Expected to be irrecoverable |
| Beijing SPG Property Management Co., Ltd. | 6,905,673.69 | 6,533,817.09 | 6,905,673.69 | 6,533,817.09 | 94.62 | Expected to be irrecoverable |
| Bao’an Shopping Center | 6,343,030.65 | 6,343,030.65 | 6,343,030.65 | 6,343,030.65 | 100.00 | Expected to be irrecoverable |
| Shenzhen Nanyang Hotel Co., Ltd. | 3,168,721.00 | 3,168,721.00 | 3,168,721.00 | 3,168,721.00 | 100.00 | Expected to be irrecoverable |
| Shenzhen Runhua Automobile Trading Co., Ltd. | 3,072,764.42 | 3,072,764.42 | 3,072,764.42 | 3,072,764.42 | 100.00 | Expected to be irrecoverable |
| Shenzhen Local Building Materials Co., Ltd. | 3,000,000.00 | 3,000,000.00 | 3,000,000.00 | 3,000,000.00 | 100.00 | Expected to be irrecoverable |
| Jun Xin He Co., Ltd. | 2,800,000.00 | 2,800,000.00 | 2,800,000.00 | 2,800,000.00 | 100.00 | Expected to be irrecoverable |
| Debtors | Opening balance | Closing balance | ||||
| Book balance | Provision for bad debts | Book balance | Provision for bad debts | Provision proportion (%) | Basis for provision | |
| Harbin City Power District Xinle Feed Processing Plant | 1,970,000.00 | 1,970,000.00 | 1,970,000.00 | 1,970,000.00 | 100.00 | Expected to be irrecoverable |
| Newmore Co., Ltd. | 1,868,735.45 | 1,868,735.45 | 1,868,735.45 | 1,868,735.45 | 100.00 | Expected to be irrecoverable |
| Subtotal | 176,659,755.49 | 176,287,898.89 | 176,662,203.07 | 176,290,346.47 | 99.79 | |
3) Other receivables with provision made on a collective basis
| Portfolios | Closing balance | ||
| Book balance | Provision for bad debts | Provision proportion (%) | |
| Portfolio grouped with balances due from related parties | 1,580,607.43 | ||
| Portfolio grouped with government funds receivable | 165,460.00 | ||
| Portfolio grouped with employee petty cash receivable | 841,714.00 | ||
| Portfolio grouped with advances received and paid on behalf of others | 360,901.91 | 18,045.10 | 5.00 |
| Portfolio grouped with other intercompany balances receivable | 13,256,768.57 | 662,650.73 | 5.00 |
| Subtotal | 16,205,451.91 | 680,695.83 | 4.20 |
(4) Changes in provision for bad debts
| Items | Stage 1 | Stage 2 | Stage 3 | Total |
| 12?month expected credit losses | Lifetime expected credit losses (credit not impaired) | Lifetime expected credit losses (credit impaired) | ||
| Opening balance | 2,004,832.46 | 18,194.53 | 193,207,605.44 | 195,230,632.43 |
| Opening balance in the current period | —— | —— | —— | |
| --Transferred to stage 2 | -259,933.63 | 259,933.63 | ||
| --Transferred to stage 3 | -5,182.20 | 5,182.20 | ||
| --Reversed to stage 2 | ||||
| --Reversed to stage 1 | ||||
| Provision made in the current period | -1,566,981.03 | 101,233.86 | 527,332.37 | -938,414.80 |
| Provision recovered or reversed in the current period | ||||
| Provision written off in the current period | ||||
| Other changes | -2,536,277.94 | -2,536,277.94 | ||
| Closing balance | 177,917.80 | 374,179.82 | 191,203,842.07 | 191,755,939.69 |
| Items | Stage 1 | Stage 2 | Stage 3 | Total |
| 12?month expected credit losses | Lifetime expected credit losses (credit not impaired) | Lifetime expected credit losses (credit impaired) | ||
| Provision proportion (%) | 3.46 | 4.98 | 98.05 | 92.35 |
(5) Details of the top 5 debtors with largest balances
| Debtors | Nature of receivables | Closing book balance | Ages | Proportion to the total balance of other receivables (%) | Provision for bad debts at the end of the period |
| Canada Great Wall (Vancouver) Co., Ltd. | Balances due from related parties | 89,035,748.07 | Over 5 years | 42.88 | 89,035,748.07 |
| Paklid Limited | Balances due from related parties | 19,393,335.84 | Over 5 years | 9.34 | 19,393,335.84 |
| Australia Berkton Property Limited | Balances due from related parties | 12,559,290.58 | Over 5 years | 6.05 | 12,559,290.58 |
| Guangdong Huizhou Luofushan Mineral Water Beverage Co., Ltd. | Balances due from related parties | 10,465,168.81 | Over 5 years | 5.04 | 10,465,168.81 |
| Xi’an Xinfeng Property Trading Co., Ltd. | Balances due from related parties | 8,419,205.19 | Over 5 years | 4.05 | 8,419,205.19 |
| Subtotal | 139,872,748.49 | 67.36 | 139,872,748.49 |
7. Inventories
(1) Details
| Items | Closing balance | ||
| Book balance | Provision for write-down/ impairment | Carrying amount | |
| Development costs | 3,572,697,115.80 | 391,731,506.81 | 3,180,965,608.99 |
| Developed products | 733,935,274.64 | 733,935,274.64 | |
| Raw materials | 49,504.00 | 49,504.00 | |
| Goods on hand | 304,426.24 | 38,891.91 | 265,534.33 |
| Total | 4,306,986,320.68 | 391,770,398.72 | 3,915,215,921.96 |
(Continued)
| Items | Opening balance | ||
| Book balance | Provision for write-down/ impairment | Carrying amount | |
| Development costs | 3,413,963,261.85 | 3,413,963,261.85 | |
| Developed products | 842,847,684.33 | 842,847,684.33 | |
| Raw materials | 8,458.34 | 8,458.34 | |
| Items | Opening balance | ||
| Book balance | Provision for write-down/ impairment | Carrying amount | |
| Goods on hand | 329,101.70 | 38,891.91 | 290,209.79 |
| Total | 4,257,148,506.22 | 38,891.91 | 4,257,109,614.31 |
(2) Provision for inventory write-down/provision for impairment of costs to fulfill a contract
1) Details
| Items | Opening balance | Increase | Decrease | Closing balance | ||
| Accrual | Others | Reversal or write-off | Others | |||
| Development costs | 391,731,506.81 | 391,731,506.81 | ||||
| Goods on hand | 38,891.91 | 38,891.91 | ||||
| Total | 38,891.91 | 391,731,506.81 | 391,770,398.72 | |||
2) Determination basis of net realizable value and reasons for the reversal or write-off of provisionfor inventory write-down
| Items | Determination basis of net realizable value | Reasons for reversal of provision for inventory write-down | Reasons for write-off of provision for inventory write-down |
| Development costs | Estimated selling price of inventories less costs to be incurred upon completion, estimated selling expenses, and relevant taxes and surcharges | ||
| Developed products | Net realizable value is determined based on the estimated selling price of developed products less costs, estimated selling expenses, and relevant taxes and surcharges | ||
| Goods on hand | Net realizable value is determined based on the estimated selling price of goods on hand less costs, estimated selling expenses, and relevant taxes and surcharges |
(3) Capitalization of borrowing cost
| Items | Closing capitalized amount of borrowing cost | Calculation criteria and basis of capitalized amount |
| Shenfang Linxin Community | 40,384,162.95 | Based on the interest rate agreed upon in the loan contract |
| Shenfang Guangming Lane | 5,503,824.56 | Based on the interest rate agreed upon in the loan contract |
| Subtotal | 45,887,987.51 |
(4) Other remarks
1) Inventories - development costs
| Projects | Start time | Estimated completion time | Estimated total investments (in ten thousand yuan) | Opening balance | Closing balance | Closing balance of provision for write-down |
| Shenfang Linxin Community | 2021 | 2024 | 300,000.00 | 2,290,805,229.96 | 2,310,161,672.58 | 391,731,506.81 |
| Shenfang Guangming Lane | 2022 | 2024 | 152,060.00 | 1,094,866,123.78 | 1,234,243,535.11 | |
| Shantou Xinfeng Building | / | / | / | 28,291,908.11 | 28,291,908.11 | |
| Subtotal | 452,060.00 | 3,413,963,261.85 | 3,572,697,115.80 | 391,731,506.81 |
2) Inventories - developed products
| Projects | Completion time | Opening balance | Increase | Decrease | Closing balance | Closing balance of provision for write-down |
| Tianyue Bay Phase II | 2021 | 512,790,161.79 | 48,563,878.57 | 464,226,283.22 | ||
| Tianyue Bay Phase I | 2017 | 225,653,522.83 | 27,153,581.49 | 198,499,941.34 | ||
| Golden Leaf Island Haitian Pavilion Multi Multi-Story Apartment | 1997 | 39,546,392.27 | 188,371.60 | 39,734,763.87 | ||
| Shenfang Cuilin Community | 2018 | 45,617,437.79 | 28,572,790.54 | 17,044,647.25 | ||
| Yue King Oriental Project | 2014 | 6,476,404.76 | 355,377.69 | 6,121,027.07 | ||
| Golden Leaf Island Phase X | 2010 | 5,696,007.25 | 54,728.71 | 5,641,278.54 | ||
| Golden Leaf Island Phase XI | 2008 | 2,333,281.42 | 110,505.12 | 2,222,776.30 | ||
| Beijing Xinfeng Building | 304,557.05 | 304,557.05 | ||||
| Whampoa New Village | 140,000.00 | 140,000.00 | ||||
| Chuanqi East Lake Community | 2019 | 4,289,919.17 | 4,289,919.17 | |||
| Subtotal | 842,847,684.33 | 188,371.60 | 109,100,781.29 | 733,935,274.64 |
8. Contract assets
(1) Details
| Items | Closing balance | Opening balance | ||||
| Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
| Quality guarantee deposit receivable | 28,198,553.53 | 845,956.61 | 27,352,596.92 | |||
| Total | 28,198,553.53 | 845,956.61 | 27,352,596.92 | |||
(2) Details on provision for impairment
1) Details on categories
| Categories | Closing balance | ||||
| Book balance | Provision for impairment | Carrying amount | |||
| Amount | % to total | Amount | Provision proportion (%) | ||
| Receivables with provision made on a collective basis | 28,198,553.53 | 100.00 | 845,956.61 | 3.00 | 27,352,596.92 |
| Total | 28,198,553.53 | 100.00 | 845,956.61 | 3.00 | 27,352,596.92 |
2) Contract assets with provision for impairment made on a collective basis
| Portfolios | Closing balance | ||
| Book balance | Provision for impairment | Provision proportion (%) | |
| Portfolio grouped with engineering constructions | 28,198,553.53 | 845,956.61 | 3.00 |
| Subtotal | 28,198,553.53 | 845,956.61 | 3.00 |
(3) Changes in provision for impairment
| Items | Opening balance | Increase/Decrease | Closing balance | |||
| Accrual | Recovery or reversal | Write-off | Others | |||
| On a collective basis | 845,956.61 | 845,956.61 | ||||
| Total | 845,956.61 | 845,956.61 | ||||
9. Other current assets
(1) Details
| Items | Closing balance | Opening balance | ||||
| Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
| Overpaid or prepaid enterprise income taxes | 6,212,008.00 | 6,212,008.00 | 1,692,386.28 | 1,692,386.28 | ||
| Prepaid VAT | 1,974,376.95 | 1,974,376.95 | 1,620,352.66 | 1,620,352.66 | ||
| Costs to obtain a contract | 6,815,071.01 | 6,815,071.01 | 1,212,848.49 | 1,212,848.49 | ||
| Input VAT to be credited | 64,189,088.61 | 64,189,088.61 | 29,247,467.16 | 29,247,467.16 | ||
| Land appreciation tax | 3,472,045.32 | 3,472,045.32 | 1,813,337.72 | 1,813,337.72 | ||
| Business tax | 195,546.35 | 195,546.35 | 250,719.98 | 250,719.98 | ||
| Others | 4,317,126.82 | 4,317,126.82 | 941,529.13 | 941,529.13 | ||
| Items | Closing balance | Opening balance | ||||
| Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
| Total | 87,175,263.06 | 87,175,263.06 | 36,778,641.42 | 36,778,641.42 | ||
(2) Costs to obtain a contract
| Items | Opening balance | Increase | Amortization | Provision for impairment | Closing balance |
| Shenfang Guangming Lane | 5,417,176.01 | 5,417,176.01 | |||
| Linxin Community | 1,212,848.49 | 185,046.51 | 1,397,895.00 | ||
| Subtotal | 1,212,848.49 | 5,602,222.52 | 6,815,071.01 |
10. Long-term equity investments
(1) Categories
| Items | Closing balance | Opening balance | ||||
| Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
| Investments in joint ventures | 19,424,671.47 | 19,424,671.47 | 19,424,671.47 | 19,424,671.47 | ||
| Investments in associates | 32,898,465.09 | 32,898,465.09 | 32,992,392.73 | 32,898,465.09 | 93,927.64 | |
| Other equity investments | 167,761,564.39 | 167,761,564.39 | 167,761,564.39 | 167,761,564.39 | ||
| Total | 220,084,700.95 | 220,084,700.95 | 220,178,628.59 | 220,084,700.95 | 93,927.64 | |
(2) Details
| Investees | Opening balance | Increase/Decrease | ||||
| Carrying amount | Provision for impairment | Investments increased | Investments decreased | Investment income recognized under equity method | Adjustment in other comprehensive income | |
| Joint ventures | ||||||
| Guangdong Huizhou Luofushan Mineral Water Beverage Co., Ltd. | 9,969,206.09 | |||||
| Fengkai Xinghua Hotel | 9,455,465.38 | |||||
| Subtotal | 19,424,671.47 | |||||
| Associates | ||||||
| Shenzhen Ronghua Electromechanical Engineering Co., Ltd. | 93,927.64 | 1,076,954.64 | -93,927.64 | |||
| Shenzhen Runhua Automobile Trading Co., Ltd. | 1,445,425.56 | |||||
| Dongyi Properties Co., Ltd. | 30,376,084.89 | |||||
| Subtotal | 93,927.64 | 32,898,465.09 | -93,927.64 | |||
| Investees | Opening balance | Increase/Decrease | ||||
| Carrying amount | Provision for impairment | Investments increased | Investments decreased | Investment income recognized under equity method | Adjustment in other comprehensive income | |
| Other equity investments | ||||||
| Paklid Limited | 201,100.00 | |||||
| Berkton Australia Co., Ltd. | 906,630.00 | |||||
| Shenzhen Shenfang Department Store Co., Ltd. | 10,000,000.00 | |||||
| Shantou Xinfeng Building | 58,547,652.25 | |||||
| Guangdong Fengkai Lianfeng Cement Manufacturing Co., Ltd. | 56,228,381.64 | |||||
| Jiangmen Xinjiang Real Estate Co., Ltd. | 9,037,070.89 | |||||
| Xi’an Xinfeng Property Trading Co., Ltd. | 32,840,729.61 | |||||
| Subtotal | 167,761,564.39 | |||||
| Total | 93,927.64 | 220,084,700.95 | -93,927.64 | |||
(Continued)
| Investees | Increase/Decrease | Closing balance | ||||
| Changes in other equity | Cash dividend/ Profit declared for distribution | Provision for impairment | Others | Carrying amount | Provision for impairment | |
| Joint ventures | ||||||
| Guangdong Huizhou Luofushan Mineral Water Beverage Co., Ltd. | 9,969,206.09 | |||||
| Fengkai Xinghua Hotel | 9,455,465.38 | |||||
| Subtotal | 19,424,671.47 | |||||
| Associates | ||||||
| Shenzhen Ronghua Electromechanical Engineering Co., Ltd. | 1,076,954.64 | |||||
| Shenzhen Runhua Automobile Trading Co., Ltd. | 1,445,425.56 | |||||
| Dongyi Properties Co., Ltd. | 30,376,084.89 | |||||
| Subtotal | 32,898,465.09 | |||||
| Other equity investments | ||||||
| Paklid Limited | 201,100.00 | |||||
| Berkton Australia Co., Ltd. | 906,630.00 | |||||
| Shenzhen Shenfang Department Store Co., Ltd. | 10,000,000.00 | |||||
| Investees | Increase/Decrease | Closing balance | ||||
| Changes in other equity | Cash dividend/ Profit declared for distribution | Provision for impairment | Others | Carrying amount | Provision for impairment | |
| Shantou Xinfeng Building | 58,547,652.25 | |||||
| Guangdong Fengkai Lianfeng Cement Manufacturing Co., Ltd. | 56,228,381.64 | |||||
| Jiangmen Xinjiang Real Estate Co., Ltd. | 9,037,070.89 | |||||
| Xi’an Xinfeng Property Trading Co., Ltd. | 32,840,729.61 | |||||
| Subtotal | 167,761,564.39 | |||||
| Total | 220,084,700.95 | |||||
Note: Other equity investments refer to equity of subsidiaries not brought into the consolidationscope of the Company. As these subsidiaries have completed the revocation procedures but theCompany has not written off corresponding long-term equity investments, or they ceasedoperations many years ago and no longer physically exists, the Company is no longer able toexercise effective control over them. Please refer to section VI of notes to the financial statementsfor details.
11. Other equity instrument investments
| Items | Opening balance | Increase/Decrease | |||
| Investments increased | Investments decreased | Gains or losses included into other comprehensive income in the current period | Others | ||
| Shantou SME Financing Guarantee Co., Ltd. | 13,839,235.57 | 485,175.78 | |||
| Beijing SPG Property Management Co., Ltd. | |||||
| Total | 13,839,235.57 | 485,175.78 | |||
(Continued)
| Items | Closing balance | Dividend income recognized in the current period | Accumulated gains or losses included into other comprehensive income at the end of the period |
| Shantou SME Financing Guarantee Co., Ltd. | 14,324,411.35 | 537,600.00 | 6,035,775.78 |
| Beijing SPG Property Management Co., Ltd. | |||
| Total | 14,324,411.35 | 537,600.00 | 6,035,775.78 |
12. Investment property
| Items | Buildings and structures | Land use right | Total |
| Cost | |||
| Opening balance | 1,044,744,895.39 | 107,350,053.05 | 1,152,094,948.44 |
| Increase | 1,820,354.54 | 1,820,354.54 | |
| 1) Acquisition | |||
| 2) Others (exchange rate changes) | 1,820,354.54 | 1,820,354.54 | |
| Decrease | |||
| 1) Disposal | |||
| 2) Other transfer-out | |||
| Closing balance | 1,044,744,895.39 | 109,170,407.59 | 1,153,915,302.98 |
| Accumulated depreciation and amortization | |||
| Opening balance | 482,985,291.20 | 482,985,291.20 | |
| Increase | 25,658,083.53 | 25,658,083.53 | |
| 1) Accrual or amortization | 25,658,083.53 | 25,658,083.53 | |
| 2) Others (exchange rate changes) | |||
| Decrease | |||
| 1) Disposal | |||
| 2) Other transfer-out | |||
| Closing balance | 508,643,374.73 | 508,643,374.73 | |
| Provision for impairment | |||
| Opening balance | 14,128,544.62 | 88,107,197.55 | 102,235,742.17 |
| Increase | 1,494,049.91 | 1,494,049.91 | |
| 1) Accrual | |||
| 2) Others (exchange rate changes) | 1,494,049.91 | 1,494,049.91 | |
| Decrease | |||
| 1) Disposal | |||
| 2) Other transfer-out | |||
| Closing balance | 14,128,544.62 | 89,601,247.46 | 103,729,792.08 |
| Carrying amount | |||
| Closing balance | 521,972,976.04 | 19,569,160.13 | 541,542,136.17 |
| Opening balance | 547,631,059.57 | 19,242,855.50 | 566,873,915.07 |
13. Fixed assets
| Items | Buildings and structures | Transport facilities | Electronic equipment and others | Total |
| Cost | ||||
| Opening balance | 100,422,074.10 | 8,307,455.41 | 7,403,998.70 | 116,133,528.21 |
| Increase | 377,300.00 | 930,351.56 | 1,307,651.56 | |
| 1) Acquisition | 377,300.00 | 930,351.56 | 1,307,651.56 | |
| 2) Others | ||||
| Decrease | 1,569,625.80 | 250,931.87 | 1,820,557.67 | |
| 1) Disposal/ Scrapping | 1,569,625.80 | 250,931.87 | 1,820,557.67 | |
| 2) Others | ||||
| Closing balance | 100,422,074.10 | 7,115,129.61 | 8,083,418.39 | 115,620,622.10 |
| Accumulated depreciation | ||||
| Opening balance | 81,649,438.77 | 7,111,284.47 | 5,947,329.92 | 94,708,053.16 |
| Increase | 2,166,952.87 | 256,900.46 | 340,177.55 | 2,764,030.88 |
| 1) Accrual | 2,166,952.87 | 256,900.46 | 340,177.55 | 2,764,030.88 |
| 2) Others | ||||
| Decrease | 1,546,753.88 | 232,757.83 | 1,779,511.71 | |
| 1) Disposal/ Scrapping | 1,546,753.88 | 232,757.83 | 1,779,511.71 | |
| 2) Others | ||||
| Closing balance | 83,816,391.64 | 5,821,431.05 | 6,054,749.64 | 95,692,572.33 |
| Provision for impairment | ||||
| Opening balance | ||||
| Increase | ||||
| 1) Accrual | ||||
| 2) Others | ||||
| Decrease | ||||
| 1) Disposal/ Scrapping | ||||
| 2) Others | ||||
| Closing balance | ||||
| Carrying amount | ||||
| Closing balance | 16,605,682.46 | 1,293,698.56 | 2,028,668.75 | 19,928,049.77 |
| Opening balance | 18,772,635.33 | 1,196,170.94 | 1,456,668.78 | 21,425,475.05 |
14. Right-of-use assets
| Items | Buildings and structures | Total |
| Cost | ||
| Opening balance | 431,779.61 | 431,779.61 |
| Increase | ||
| 1) Leased in | ||
| Decrease | ||
| 1) Disposal | ||
| Closing balance | 431,779.61 | 431,779.61 |
| Accumulated depreciation | ||
| Opening balance | 199,282.89 | 199,282.89 |
| Increase | 132,855.24 | 132,855.24 |
| 1) Accrual | 132,855.24 | 132,855.24 |
| Decrease | ||
| 1) Disposal | ||
| Closing balance | 332,138.13 | 332,138.13 |
| Provision for impairment | ||
| Opening balance | ||
| Increase | ||
| 1) Accrual | ||
| Decrease | ||
| 1) Disposal | ||
| Closing balance | ||
| Carrying amount | ||
| Closing balance | 99,641.48 | 99,641.48 |
| Opening balance | 232,496.72 | 232,496.72 |
15. Intangible assets
| Items | Software | Total |
| Cost | ||
| Opening balance | 2,192,000.00 | 2,192,000.00 |
| Increase | ||
| 1) Acquisition | ||
| Decrease | ||
| 1) Disposal | ||
| Closing balance | 2,192,000.00 | 2,192,000.00 |
| Items | Software | Total |
| Accumulated amortization | ||
| Opening balance | 2,192,000.00 | 2,192,000.00 |
| Increase | ||
| 1) Accrual | ||
| Decrease | ||
| 1) Disposal | ||
| Closing balance | 2,192,000.00 | 2,192,000.00 |
| Provision for impairment | ||
| Opening balance | ||
| Increase | ||
| 1) Accrual | ||
| Decrease | ||
| 1) Disposal | ||
| Closing balance | ||
| Carrying amount | ||
| Closing balance | ||
| Opening balance |
16. Long-term prepayments
| Items | Opening balance | Increase | Amortization | Other decreases | Closing balance |
| Renovation costs | 1,719,057.99 | 167,760.44 | 577,677.49 | 1,309,140.94 | |
| Others | 457,163.54 | 167,998.92 | 289,164.62 | ||
| Total | 2,176,221.53 | 167,760.44 | 745,676.41 | 1,598,305.56 |
17. Deferred tax assets and deferred tax liabilities
(1) Deferred tax assets before offset
| Items | Closing balance | Opening balance | ||
| Deductible temporary difference | Deferred tax assets | Deductible temporary difference | Deferred tax assets | |
| Provision for impairment of assets | 16,963,840.11 | 4,225,272.58 | 12,026,682.71 | 3,006,670.68 |
| Deductible losses | 43,152,112.49 | 10,788,028.12 | 69,038,992.71 | 17,259,748.18 |
| Land appreciation tax accrued | 2,140,368.96 | 535,092.24 | 117,245,335.26 | 29,311,333.82 |
| Unrealized profit from internal transactions | 80,397,191.40 | 20,099,297.85 | 86,124,778.41 | 21,531,194.60 |
| Provisional cost of contracts | 2,660,481.88 | 665,120.47 | 23,711,126.84 | 5,927,781.70 |
| Items | Closing balance | Opening balance | ||
| Deductible temporary difference | Deferred tax assets | Deductible temporary difference | Deferred tax assets | |
| Total | 145,313,994.84 | 36,312,811.26 | 308,146,915.93 | 77,036,728.98 |
(2) Deferred tax liabilities before offset
| Items | Closing balance | Opening balance | ||
| Taxable temporary difference | Deferred tax liabilities | Taxable temporary difference | Deferred tax liabilities | |
| Changes in fair value of held-for-trading financial assets | 7,824,348.72 | 1,956,087.18 | 8,970,031.50 | 2,242,507.88 |
| Undue interest | 1,901,506.08 | 475,376.52 | 1,576,125.00 | 394,031.25 |
| Changes in fair value of other equity instrument investments | 2,324,411.36 | 581,102.84 | 1,839,235.57 | 459,808.89 |
| Total | 12,050,266.16 | 3,012,566.54 | 12,385,392.07 | 3,096,348.02 |
(3) Details of unrecognized deferred tax assets
| Items | Closing balance | Opening balance |
| Deductible temporary difference | 927,951,667.74 | 519,864,173.99 |
| Deductible losses | 68,296,307.42 | 54,027,120.82 |
| Total | 996,247,975.16 | 573,891,294.81 |
(4) Maturity years of deductible losses of unrecognized deferred tax assets
| Maturity years | Closing balance | Opening balance | Remarks |
| Year 2023 | 4,085,485.24 | ||
| Year 2024 | 688,456.49 | 688,456.49 | |
| Year 2025 | 1,629.25 | 1,629.25 | |
| Year 2026 | 346,891.06 | 346,891.06 | |
| Year 2027 | 48,904,614.38 | 48,904,658.78 | |
| Year 2028 | 18,354,716.24 | ||
| Total | 68,296,307.42 | 54,027,120.82 |
18. Assets with title or use right restrictions
(1) Details
1) Details on assets with restrictions at the balance sheet date
| Items | Closing book balance | Closing carrying amount | Type of restrictions | Reasons for restrictions |
| Cash and bank balances | 5,817,217.78 | 5,817,217.78 | Seized | Construction funds for urban renewal projects and surrounding public facilities projects in Longgang District, Shenzhen City; land reclamation expenses for Shenfang Guangming Lane Project |
| Cash and bank balances | 5,943,085.18 | 5,943,085.18 | Frozen | Frozen due to litigation |
| Cash and bank balances | 50,000.00 | 50,000.00 | Seized | Deposits for construction |
| Cash and bank balances | 62,552.52 | 62,552.52 | Seized | Payments have been stopped and the account has been suspended. |
| Accounts receivable | 27,890,361.58 | 27,890,361.58 | Pledged | Pledged for short-term borrowings |
| Investment property | 103,165,591.84 | 44,297,197.87 | Mortgaged | Mortgaged for borrowings |
| Total | 142,928,808.90 | 84,060,414.93 |
2) Details on assets with restrictions at the beginning of the period
| Items | Opening book balance | Opening carrying amount | Type of restrictions | Reasons for restrictions |
| Cash and bank balances | 5,674,439.78 | 5,674,439.78 | Seized | Construction funds for urban renewal projects and surrounding public facilities projects in Longgang District, Shenzhen City |
| Cash and bank balances | 48,315.48 | 48,315.48 | Frozen | Frozen due to litigation |
| Accounts receivable | 51,138,077.62 | 51,138,077.62 | Pledged | Pledged for short-term borrowings |
| Inventories | 965,000,000.00 | 965,000,000.00 | Mortgaged | Land mortgaged for project development loans |
| Total | 1,021,860,832.88 | 1,021,860,832.88 |
19. Short-term borrowings
| Items | Closing balance | Opening balance |
| Factoring of accounts receivable | 3,550,000.00 | 51,138,077.62 |
| Total | 3,550,000.00 | 51,138,077.62 |
20. Accounts payable
(1) Details
| Items | Closing balance | Opening balance |
| Engineering funds | 442,529,992.29 | 432,902,243.31 |
| Others | 729,776.49 | 1,699,316.36 |
| Items | Closing balance | Opening balance |
| Total | 443,259,768.78 | 434,601,559.67 |
(2) Significant accounts payable with age over one year
| Items | Closing balance | Reasons for unsettlement |
| China Railway Second Bureau Group Co., Ltd. | 104,922,084.43 | Not yet settled |
| Huizhou Jinlongsheng Industry Co., Ltd. | 84,950,000.00 | Not yet settled |
| Huizhou Huiyang Hongfa Industry & Trade Co., Ltd. | 50,350,000.00 | Not yet settled |
| Huizhou Mingxiang Economic Information Consulting Co., Ltd. | 41,851,375.00 | Not yet settled |
| Guangzhou Mingji Construction Co., Ltd. | 12,572,856.16 | Not yet settled |
| Subtotal | 294,646,315.59 |
21. Advances received
| Items | Closing balance | Opening balance |
| Payments for goods of agency import and export business | 214,630.00 | 4,218,370.69 |
| Others | 206,094.30 | 1,246,973.27 |
| Total | 420,724.30 | 5,465,343.96 |
22. Contract liabilities
(1) Details
| Items | Closing balance | Opening balance |
| Payments for house sale received in advance | 1,290,868,600.78 | 43,431,327.09 |
| Room charges received in advance | 56,197.55 | 102,140.20 |
| Payments for goods received in advance | 351,328.33 | |
| Engineering funds received in advance | 172,464.62 | |
| Total | 1,291,448,591.28 | 43,533,467.29 |
(2) Reasons for significant changes in the carrying amount of contract liabilities in the currentperiod
| Items | Amount of changes | Reasons for changes |
| Payments for house sale received in advance | 1,247,437,273.69 | Pre-sale of Shenfang Guangming Lane Real Estate Project in the current period |
| Subtotal | 1,247,437,273.69 |
(3) Receipts from significant projects of pre-sale real estate
| Items | Closing balance | Opening balance | Estimated completion date | Proportion of pre-sales (%) |
| Shenfang Guangming Lane | 1,247,568,338.53 | At the end of 2024 | 86.41 | |
| Subtotal | 1,247,568,338.53 |
23. Employee benefits payable
(1) Details
| Items | Opening balance | Increase | Decrease | Closing balance |
| Short-term employee benefits | 35,672,352.37 | 62,983,861.06 | 76,461,955.28 | 22,194,258.15 |
| Post-employment benefits - defined contribution plan | 51,851.41 | 9,560,744.06 | 9,559,836.26 | 52,759.21 |
| Total | 35,724,203.78 | 72,544,605.12 | 86,021,791.54 | 22,247,017.36 |
(2) Details of short-term employee benefits
| Items | Opening balance | Increase | Decrease | Closing balance |
| Wage, bonus, allowance and subsidy | 35,211,378.77 | 49,975,207.75 | 63,235,706.50 | 21,950,880.02 |
| Employee welfare fund | 220,742.00 | 2,730,234.83 | 2,800,976.83 | 150,000.00 |
| Social insurance premium | 3,654,435.09 | 3,654,435.09 | ||
| Including: Medicare premium | 3,376,353.73 | 3,376,353.73 | ||
| Occupational injuries premium | 68,212.91 | 68,212.91 | ||
| Maternity premium | 209,868.45 | 209,868.45 | ||
| Security fund for the disabled | 51,939.70 | 51,939.70 | ||
| Housing provident fund | 5,458,412.13 | 5,458,412.13 | ||
| Trade union fund and employee education fund | 240,231.60 | 1,113,631.56 | 1,260,485.03 | 93,378.13 |
| Subtotal | 35,672,352.37 | 62,983,861.06 | 76,461,955.28 | 22,194,258.15 |
(3) Details of defined contribution plan
| Items | Opening balance | Increase | Decrease | Closing balance |
| Basic endowment insurance premium | 6,002,162.13 | 6,002,162.13 | ||
| Unemployment insurance premium | 67,304.44 | 67,304.44 | ||
| Company annuity payment | 51,851.41 | 3,491,277.49 | 3,490,369.69 | 52,759.21 |
| Subtotal | 51,851.41 | 9,560,744.06 | 9,559,836.26 | 52,759.21 |
24. Taxes and rates payable
| Items | Closing balance | Opening balance |
| VAT | 6,952,681.57 | 3,843,704.80 |
| Enterprise income tax | 25,379,573.98 | 61,927,050.99 |
| Items | Closing balance | Opening balance |
| Individual income tax withheld for tax authorities | 666,822.33 | 1,611,643.13 |
| Urban maintenance and construction tax | 1,379,662.47 | 734,949.61 |
| Land appreciation tax | 4,646,137.48 | 121,891,472.74 |
| Housing property tax | 250,796.18 | 287,141.98 |
| Education surcharge | 592,022.63 | 316,008.58 |
| Local education surcharge | 382,272.44 | 197,568.44 |
| Others | 659,017.40 | 141,645.72 |
| Total | 40,908,986.48 | 190,951,185.99 |
25. Other payable
(1) Details
| Items | Closing balance | Opening balance |
| Interest payable | 16,535,277.94 | 16,535,277.94 |
| Other payables | 537,933,951.65 | 557,796,062.90 |
| Total | 554,469,229.59 | 574,331,340.84 |
(2) Interest payable
1) Details
| Items | Closing balance | Opening balance |
| Interest of borrowings from non-financial institutions (interest payable to parent company) | 16,535,277.94 | 16,535,277.94 |
| Subtotal | 16,535,277.94 | 16,535,277.94 |
2) Significant interest payable overdue but unpaid
| Creditors | Amount overdue | Reasons for overdue |
| Shenzhen Investment Holdings Co., Ltd. | 16,535,277.94 | Not yet paid |
| Subtotal | 16,535,277.94 |
(3) Other payables
1) Details
| Items | Closing balance | Opening balance |
| Balances due to non-related parties | 177,620,294.46 | 166,065,259.07 |
| Balances due to related parties | 234,129,312.99 | 232,502,015.42 |
| Deposits | 27,861,196.50 | 28,723,844.16 |
| Others | 98,323,147.70 | 130,504,944.25 |
| Subtotal | 537,933,951.65 | 557,796,062.90 |
2) Significant other payables with age over one year
| Items | Closing balance | Reasons for unsettlement |
| Guangzhou Bopi Enterprise Management Consulting Co., Ltd. | 206,903,717.13 | Not yet settled |
| Huizhou Guirong Investment Information Consulting Co., Ltd. | 102,197,564.38 | Not yet settled |
| Huizhou Huiyang Hongfa Industry & Trade Co., Ltd. | 26,894,095.89 | Not yet settled |
| Huizhou Mingxiang Economic Information Consulting Co., Ltd. | 26,131,960.68 | Not yet settled |
| Subtotal | 362,127,338.08 |
26. Non-current liabilities due within one year
| Items | Closing balance | Opening balance |
| Long-term borrowings due within one year | 34,001,293.81 | 6,105,770.99 |
| Lease liabilities due within one year | 55,054.12 | 83,023.44 |
| Total | 34,056,347.93 | 6,188,794.43 |
27. Other current liabilities
| Items | Closing balance | Opening balance |
| Output VAT to be recognized | 115,574,168.18 | 2,265,817.68 |
| Factoring of accounts receivable | 20,790,361.58 | |
| Endorsed but undue notes not yet derecognized | 1,617,000.00 | |
| Total | 136,364,529.76 | 3,882,817.68 |
28. Long-term borrowings
| Items | Closing balance | Opening balance |
| Mortgaged borrowings | 213,433,144.83 | 60,366,770.99 |
| Less: Long-term borrowings due within one year | 34,001,293.81 | 6,105,770.99 |
| Total | 179,431,851.02 | 54,261,000.00 |
29. Lease liabilities
| Items | Closing balance | Opening balance |
| Lease payments | 55,054.12 | 136,908.67 |
| Less: Lease liabilities due within one year | 55,054.12 | 83,023.44 |
| Total | 53,885.23 |
30. Share capital
| Items | Opening balance | Movements (less: decrease) | Closing balance | ||||
| Issue of new shares | Bonus shares | Reserve transferred to shares | Others | Subtotal | |||
| Total | 1,011,660,000.00 | 1,011,660,000.00 | |||||
31. Capital reserve
| Items | Opening balance | Increase | Decrease | Closing balance |
| Share/capital premium | 557,433,036.93 | 557,433,036.93 | ||
| Other capital reserve | 420,811,873.18 | 420,811,873.18 | ||
| Total | 978,244,910.11 | 978,244,910.11 |
32. Other comprehensive income (OCI)
| Items | Opening balance | Current period cumulative | Closing balance | |||||
| Net OCI after tax | Less: OCI previously recognized but transferred to retained earnings in the current period (attributable to parent company after tax) | |||||||
| Current period cumulative before income tax | Less: OCI previously recognized but transferred to profit or loss in the current period | Less: Income tax expenses | Attributable to parent company | Attributable to non-controlling shareholders | ||||
| Items not to be reclassified subsequently to profit or loss | 1,379,426.68 | 1,040,114.76 | 260,028.69 | 780,086.07 | 2,159,512.75 | |||
| Including: Remeasurements of the defined benefit plan | ||||||||
| OCI not to be transferred to profit or loss under equity method | ||||||||
| Changes in fair value of other equity instrument investments | 1,379,426.68 | 1,040,114.76 | 260,028.69 | 780,086.07 | 2,159,512.75 | |||
| Changes in fair value of the Company’s own credit risk | ||||||||
| Items to be reclassified subsequently to profit or loss | 24,547,294.17 | -1,803,551.72 | -1,387,347.48 | -416,204.24 | 23,159,946.69 | |||
| Including: OCI to be transferred to profit or loss under equity method | ||||||||
| Changes in fair value of other debt investments | ||||||||
| OCI arising from financial assets reclassification | ||||||||
| Provision for credit impairment loss of other debt investments | ||||||||
| Cash flow hedging reserves | ||||||||
| Items | Opening balance | Current period cumulative | Closing balance | |||||
| Net OCI after tax | Less: OCI previously recognized but transferred to retained earnings in the current period (attributable to parent company after tax) | |||||||
| Current period cumulative before income tax | Less: OCI previously recognized but transferred to profit or loss in the current period | Less: Income tax expenses | Attributable to parent company | Attributable to non-controlling shareholders | ||||
| Translation reserves | 24,547,294.17 | -1,803,551.72 | -1,387,347.48 | -416,204.24 | 23,159,946.69 | |||
| Total | 25,926,720.85 | -763,436.96 | 260,028.69 | -607,261.41 | -416,204.24 | 25,319,459.44 | ||
33. Surplus reserve
| Items | Opening balance | Increase | Decrease | Closing balance |
| Statutory surplus reserve | 275,253,729.26 | 275,253,729.26 | ||
| Total | 275,253,729.26 | 275,253,729.26 |
34. Undistributed profit
| Items | Current period cumulative | Preceding period comparative |
| Balance before adjustment at the end of preceding period | 1,713,155,187.48 | 1,671,121,562.98 |
| Add: Increase due to adjustment (or less: decrease) | ||
| Opening balance after adjustment | 1,713,155,187.48 | 1,671,121,562.98 |
| Add: Net profit attributable to owners of the parent company | -250,839,542.09 | 153,718,805.57 |
| Less: Appropriation of statutory surplus reserve | 34,108,874.33 | |
| Dividend payable on ordinary shares | 61,711,260.00 | 89,026,080.00 |
| Others | -11,449,773.26 | |
| Closing balance | 1,400,604,385.39 | 1,713,155,187.48 |
(II) Notes to items of the consolidated income statement
1. Operating revenue/Operating cost
(1) Details
| Items | Current period cumulative | Preceding period comparative | ||
| Revenue | Cost | Revenue | Cost | |
| Main operations | 524,099,615.63 | 442,138,382.34 | 628,832,520.51 | 434,304,905.37 |
| Other operations | 6,788,105.05 | 2,659,259.76 | 5,552,040.91 | 2,747,095.64 |
| Total | 530,887,720.68 | 444,797,642.10 | 634,384,561.42 | 437,052,001.01 |
| Including: Revenue from contracts with customers | 446,315,732.01 | 399,950,397.80 | 580,082,259.25 | 392,766,924.25 |
(2) Breakdown of revenue
1) Breakdown of revenue from contracts with customers by goods or services
| Items | Current period cumulative | Preceding period comparative | ||
| Revenue | Cost | Revenue | Cost | |
| Real estates | 118,580,624.34 | 80,235,849.12 | 309,331,841.57 | 141,232,452.52 |
| Engineering and construction | 324,243,778.50 | 317,088,117.19 | 236,949,097.45 | 231,754,203.03 |
| Property management | 3,491,329.17 | 2,626,431.49 | 33,801,320.23 | 19,780,268.70 |
| Subtotal | 446,315,732.01 | 399,950,397.80 | 580,082,259.25 | 392,766,924.25 |
2) Breakdown of revenue from contracts with customers by operating regions
| Items | Current period cumulative | Preceding period comparative | ||
| Revenue | Cost | Revenue | Cost | |
| Guangdong Province | 445,625,466.90 | 399,950,397.80 | 579,604,607.63 | 392,766,924.25 |
| The United States | 690,265.11 | 477,651.62 | ||
| Subtotal | 446,315,732.01 | 399,950,397.80 | 580,082,259.25 | 392,766,924.25 |
3) Breakdown of revenue from contracts with customers by time of transferring goods orrendering services
| Items | Current period cumulative | Preceding period comparative |
| Recognized at a point in time | 118,580,624.34 | 309,331,841.57 |
| Recognized over time | 327,735,107.67 | 270,750,417.68 |
| Subtotal | 446,315,732.01 | 580,082,259.25 |
2. Taxes and surcharges
| Items | Current period cumulative | Preceding period comparative |
| Land appreciation tax | 59,631,025.69 | 68,994,085.35 |
| Housing Property tax | 5,921,317.90 | 7,527,796.10 |
| Urban maintenance and construction tax | 2,033,111.82 | 1,984,035.04 |
| Education surcharge | 805,738.62 | 845,915.69 |
| Local education surcharge | 603,255.93 | 563,479.01 |
| Land use tax | 1,078,003.07 | 987,303.57 |
| Stamp duty and other taxes | 927,479.33 | 880,876.78 |
| Total | 70,999,932.36 | 81,783,491.54 |
3. Selling expenses
| Items | Current period cumulative | Preceding period comparative |
| Sales agency fees and commissions | 6,411,581.44 | 9,153,738.82 |
| Employee benefits | 3,456,886.44 | 3,840,229.00 |
| Property management fees | 2,885,601.45 | |
| Business expenses | 399,643.39 | 1,381,173.87 |
| Advertising costs | 8,162,439.28 | 4,350,998.80 |
| Others | 487,050.14 | 491,454.62 |
| Total | 21,803,202.14 | 19,217,595.11 |
4. Administrative expenses
| Items | Current period cumulative | Preceding period comparative |
| Employee benefits | 41,241,958.09 | 39,755,710.03 |
| Agency fees | 2,496,191.21 | 2,752,109.58 |
| Business entertainment fees | 1,705,735.91 | 2,425,452.83 |
| Depreciation | 2,558,956.30 | 2,785,592.23 |
| Office expenses | 1,600,402.92 | 1,849,010.18 |
| Repairing costs | 390,746.46 | 336,048.95 |
| Business travelling expenses | 463,694.27 | 520,782.12 |
| Other amortizations | 399,870.13 | 481,562.84 |
| Utilities | 347,076.86 | 359,004.64 |
| Others | 4,761,299.57 | 4,493,475.68 |
| Total | 55,965,931.72 | 55,758,749.08 |
5. Financial expenses
| Items | Current period cumulative | Preceding period comparative |
| Interest expenses | 1,258,720.92 | |
| Including: Bank loans | 1,258,720.92 | |
| Less: Interest income | 4,804,313.09 | 5,315,817.53 |
| Including: Deposits in financial institutions | 4,804,313.09 | 5,315,817.53 |
| Gains and losses on foreign exchange | -1,846,042.29 | -1,384,499.52 |
| Handling fees | 159,642.87 | 193,170.02 |
| Total | -5,231,991.59 | -6,507,147.03 |
6. Other income
| Items | Current period cumulative | Preceding period comparative | Amount included in non-recurring profit or loss |
| Government grants related to income | 440,049.96 | 266,152.38 | 440,049.96 |
| Refund of handling fees for withholding individual income tax | 68,364.83 | 225,814.59 | |
| VAT extra deductions | 58,857.60 | 67,836.22 | |
| Total | 567,272.39 | 559,803.19 | 440,049.96 |
7. Investment income
| Items | Current period cumulative | Preceding period comparative |
| Investment income from long-term equity investments under equity method | -93,927.64 | -178,240.64 |
| Investment income from disposal of long-term equity investments | 9,941,254.23 | 161,581,081.50 |
| Investment income from held-for-trading financial assets | 161,491.79 | 159,619.01 |
| Dividend income from other equity instrument investments | 537,600.00 | 813,960.00 |
| Investment income from debt restructuring | 2,610,128.30 | |
| Total | 10,546,418.38 | 164,986,548.17 |
8. Gains on changes in fair value
| Items | Current period cumulative | Preceding period comparative |
| Held-for-trading financial assets | 7,824,348.71 | 8,970,031.50 |
| Including: Gains on changes in fair value of derivative financial instruments | ||
| Gains on changes in fair value of financial assets designated as at fair value through profit or loss | 7,824,348.71 | 8,970,031.50 |
| Total | 7,824,348.71 | 8,970,031.50 |
9. Credit impairment loss
| Items | Current period cumulative | Preceding period comparative |
| Bad debts on accounts receivable | -439,750.78 | -3,434,265.84 |
| Bad debts on other receivables | 938,414.80 | -5,865,350.35 |
| Bad debts on notes receivable | 80,850.00 | 2,783,378.85 |
| Total | 579,514.02 | -6,516,237.34 |
10. Assets impairment loss
| Items | Current period cumulative | Preceding period comparative |
| Inventory write-down loss | -391,731,506.81 | -532,397.57 |
| Impairment loss of contract assets | -845,956.61 | |
| Total | -392,577,463.42 | -532,397.57 |
11. Gains on asset disposal
| Items | Current period cumulative | Preceding period comparative | Amount included in non-recurring profit or loss |
| Gains on disposal of fixed assets | -1,000.00 | -1,000.00 | |
| Total | -1,000.00 | -1,000.00 |
12. Non-operating revenue
| Items | Current period cumulative | Preceding period comparative | Amount included in non-recurring profit or loss |
| Gains on damage or retirement of non-current assets | 1,269.60 | 1,269.60 | |
| Exempted payments | 362,451.86 | 1,156,843.63 | 362,451.86 |
| Fines, default income | 4,000.00 | 370,000.00 | 4,000.00 |
| Others | 18,704.07 | 7,807.75 | 18,704.07 |
| Total | 386,425.53 | 1,534,651.38 | 386,425.53 |
13. Non-operating expenditures
| Items | Current period cumulative | Preceding period comparative | Amount included in non-recurring profit or loss |
| Donation expenditures | 30,000.00 | 306,474.53 | 30,000.00 |
| Losses on damage or retirement of non-current assets | 18,906.04 | 38,481.92 | 18,906.04 |
| Compensation costs | 96,000.00 | 96,000.00 | |
| Overdue fines and penalties | 302,110.62 | 302,110.62 | |
| Others | 83,547.43 | 133,986.29 | 83,547.43 |
| Total | 530,564.09 | 478,942.74 | 530,564.09 |
14. Income tax expenses
(1) Details
| Items | Current period cumulative | Preceding period comparative |
| Current period income tax expenses | -23,506,729.22 | -20,528,623.91 |
| Deferred income tax expenses | 40,518,842.29 | 86,555,081.26 |
| Total | 17,012,113.07 | 66,026,457.35 |
(2) Reconciliation of accounting profit to income tax expenses
| Items | Current period cumulative | Preceding period comparative |
| Profit before tax | -430,652,044.53 | 215,603,328.30 |
| Income tax expenses based on tax rate applicable to the parent company | -107,663,011.13 | 53,900,832.08 |
| Effect of different tax rate applicable to subsidiaries | 472,597.65 | 148,585.06 |
| Effect of prior income tax reconciliation | 2,575,454.03 | -6,828,454.83 |
| Effect of non-taxable income | -4,485,954.26 | -187,757.40 |
| Effect of non-deductible costs, expenses and losses | 651,725.02 | 621,871.15 |
| Effect of utilization of deductible losses not previously recognized as deferred tax assets | -155,580.87 | -598,646.13 |
| Effect of deducible temporary differences or deductible losses not recognized as deferred tax assets in the current period | 125,616,882.63 | 18,970,027.42 |
| Income tax expenses | 17,012,113.07 | 66,026,457.35 |
15. Other comprehensive income, net of income tax
Please refer to section V (I) 32 of notes to the financial statements for details.
(III) Notes to items of the consolidated cash flow statement
1. Cash receipts or payments related to significant investing activities
(1) Cash receipts from investment income
| Items | Current period cumulative | Preceding period comparative |
| Dividend income from other equity instrument investments | 537,600.00 | 10,527,896.61 |
| Investment income from held-for-trading financial assets | 161,491.79 | |
| Subtotal | 699,091.79 | 10,527,896.61 |
(2) Net cash receipts from the disposal of fixed assets, intangible assets and other long-term assets
| Items | Current period cumulative | Preceding period comparative |
| Disposal of long-term assets | 29,475.62 | 2,907.50 |
| Subtotal | 29,475.62 | 2,907.50 |
(3) Net cash receipts from the disposal of subsidiaries & other business units
| Items | Current period cumulative | Preceding period comparative |
| Cash and cash equivalents received in the current period for subsidiary disposal in the current period | 214,862,911.00 | |
| Including: Shenzhen Property Management Co., Ltd. | 196,676,700.00 | |
| Less: Cash and cash equivalents held by subsidiaries at the loss-of-control date | 57,467,430.10 | |
| Including: Shenzhen Property Management Co., Ltd. | 57,467,430.10 | |
| Add: Cash and cash equivalents received in the current period for subsidiary disposal in prior periods | 1,644,822.69 | |
| Including: Shenzhen Property Management Co., Ltd. | 1,644,822.69 | |
| Net cash receipts from disposal of subsidiaries in the current period | 1,644,822.69 | 157,395,480.90 |
(4) Cash payments for the acquisition of fixed assets, intangible assets and other long-term assets
| Items | Current period cumulative | Preceding period comparative |
| Acquisition of fixed assets | 1,475,412.00 | 713,537.29 |
| Subtotal | 1,475,412.00 | 713,537.29 |
2. Other cash receipts or payments related to operating activities, investing activities and financingactivities
(1) Other cash receipts related to operating activities
| Items | Current period cumulative | Preceding period comparative |
| Interest income | 4,804,313.09 | 5,315,817.53 |
| Intercompany balances and others | 51,500,509.58 | 19,283,483.81 |
| Total | 56,304,822.67 | 24,599,301.34 |
(2) Other cash payments related to operating activities
| Items | Current period cumulative | Preceding period comparative |
| Handling fees | 156,436.95 | 192,970.02 |
| Out-of-pocket expenses | 27,059,079.63 | 28,511,217.46 |
| Intercompany balances and others | 50,615,881.30 | 44,617,346.03 |
| Total | 77,831,397.88 | 73,321,533.51 |
(3) Other cash receipts related to investing activities
| Items | Current period cumulative | Preceding period comparative |
| Fund management products | 136,800,000.00 | 114,840,380.99 |
| Total | 136,800,000.00 | 114,840,380.99 |
(4) Other cash payments related to investing activities
| Items | Current period cumulative | Preceding period comparative |
| Fund management products | 600,000,000.00 | |
| Total | 600,000,000.00 |
3. Supplementary information to the cash flow statement
| Supplementary information | Current period cumulative | Preceding period comparative |
| (1) Reconciliation of net profit to cash flows from operating activities: | ||
| Net profit | -447,664,157.60 | 149,576,870.95 |
| Add: Provision for assets impairment | 391,997,949.40 | 7,048,634.91 |
| Depreciation of fixed assets, oil and gas assets, productive biological assets | 28,422,114.41 | 28,470,523.13 |
| Depreciation of right-of-use assets | 132,855.24 | 132,855.25 |
| Amortization of intangible assets | ||
| Amortization of long-term prepayments | 745,676.41 | 716,814.19 |
| Losses on disposal of fixed assets, intangible assets and other long-term assets (Less: gains) | 1,000.00 | |
| Fixed assets retirement loss (Less: gains) | 17,636.44 | 38,481.92 |
| Losses on changes in fair value (Less: gains) | -7,824,348.71 | -8,970,031.50 |
| Financial expenses (Less: gains) | 1,258,720.92 | 492,336.21 |
| Investment losses (Less: gains) | -10,546,418.38 | -164,986,548.17 |
| Decrease of deferred tax assets (Less: increase) | 40,723,917.72 | 92,983,372.80 |
| Increase of deferred tax liabilities (Less: decrease) | -205,075.43 | -6,428,291.54 |
| Decrease of inventories (Less: increase) | -49,837,814.46 | -222,176,051.69 |
| Decrease of operating receivables (Less: increase) | -104,577,562.13 | -15,439,705.92 |
| Increase of operating payables (Less: decrease) | 1,202,392,754.36 | -537,235,259.30 |
| Others | ||
| Net cash flows from operating activities | 1,045,037,248.19 | -675,775,998.76 |
| (2) Significant investing and financing activities not related to cash receipts and payments: | ||
| Conversion of debt into capital | ||
| Convertible bonds due within one year | ||
| Fixed assets leased in under finance leases | ||
| (3) Net changes in cash and cash equivalents: | ||
| Cash at the end of the period | 859,146,413.35 | 190,365,069.48 |
| Less: Cash at the beginning of the period | 190,365,069.48 | 612,293,635.15 |
| Add: Cash equivalents at the end of the period | ||
| Less: Cash equivalents at the beginning of the period |
| Supplementary information | Current period cumulative | Preceding period comparative |
| Net increase of cash and cash equivalents | 668,781,343.87 | -421,928,565.67 |
4. Composition of cash and cash equivalents
(1) Details
| Items | Closing balance | Opening balance |
| 1) Cash | 859,146,413.35 | 190,365,069.48 |
| Including: Cash on hand | 18,414.04 | 4,549.61 |
| Cash in bank on demand for payment | 829,127,999.31 | 157,360,519.87 |
| Other cash and bank balances on demand for payment | 30,000,000.00 | 33,000,000.00 |
| Central bank deposit on demand for payment | ||
| Deposit in other banks | ||
| Loans to other banks | ||
| 2) Cash equivalents | ||
| Including: Bond investments maturing within three months | ||
| 3) Cash and cash equivalents at the end of the period | 859,146,413.35 | 190,365,069.48 |
| Including: Cash and cash equivalents of parent company or subsidiaries with use restrictions |
(2) Cash and cash equivalents with use restrictions
| Items | Closing balance | Opening balance | Reasons for use restrictions and for considered as cash and cash equivalents |
| Cash and bank balances | 5,817,217.78 | 5,674,439.78 | Construction funds for urban renewal projects and surrounding public facilities projects in Longgang District, Shenzhen City |
| Cash and bank balances | 5,943,085.18 | 48,315.48 | Frozen due to litigation |
| Cash and bank balances | 50,000.00 | Deposits for construction | |
| Cash and bank balances | 62,552.52 | Payments have been stopped and the account has been suspended. | |
| Subtotal | 11,872,855.48 | 5,722,755.26 |
5. Changes in liabilities related to financing activities
| Items | Opening balance | Increase | Decrease | Closing balance | ||
| Changes in cash | Changes in non-cash | Changes in cash | Changes in non-cash | |||
| Short-term borrowings | 51,138,077.62 | 47,588,077.62 | 3,550,000.00 | |||
| Long-term borrowings (including long-term borrowings due within one year) | 60,366,770.99 | 169,486,610.82 | 34,001,293.81 | 16,781,586.60 | 33,639,944.19 | 213,433,144.83 |
| Lease liabilities (including lease liabilities due | 136,908.67 | 55,054.12 | 89,555.32 | 47,353.35 | 55,054.12 | |
| Items | Opening balance | Increase | Decrease | Closing balance | ||
| Changes in cash | Changes in non-cash | Changes in cash | Changes in non-cash | |||
| within one year) | ||||||
| Subtotal | 111,641,757.28 | 169,486,610.82 | 34,056,347.93 | 16,871,141.92 | 81,275,375.16 | 217,038,198.95 |
(Ⅳ) Others
1. Monetary items in foreign currencies
| Items | Closing balance in foreign currencies | Exchange rate | RMB equivalent at the end of the period |
| Cash and bank balances | 5,325,942.57 | ||
| Including: USD | 24,472.95 | 7.0827 | 173,334.56 |
| HKD | 5,685,824.65 | 0.90622 | 5,152,608.01 |
| Accounts receivable | 233,729.10 | ||
| Including: USD | 33,000.00 | 7.0827 | 233,729.10 |
| Other receivables | 18,140,929.57 | ||
| Including: HKD | 20,018,240.13 | 0.90622 | 18,140,929.57 |
| Other payables | 8,531,588.80 | ||
| Including: USD | 722,044.70 | 7.0827 | 5,114,026.00 |
| HKD | 3,771,228.62 | 0.90622 | 3,417,562.80 |
2. Leases
(1) The Company as lessee
1) Please refer to section V (I) 14 of notes to the financial statements for details on right-of-useassets.
2) Please refer to section III (XXX) of notes to the financial statements for details on theCompany’s accounting policies on short-term leases and leases for which the underlying asset is oflow value. The amounts of short-term leases and low-value asset leases included into profit or lossare as follows:
| Items | Current period cumulative | Preceding period comparative |
| Expense relating to short-term leases | 1,001,337.95 | 443,919.05 |
| Total | 1,001,337.95 | 443,919.05 |
3) Profit or loss and cash flows related to leases
| Items | Current period cumulative | Preceding period comparative |
| Interest expenses on lease liabilities | 6,548.09 | 10,987.90 |
| Total cash outflows related to leases | 1,142,112.85 | 556,823.00 |
4) Please refer to section Ⅷ (II) of notes to the financial statements for details on maturity
analysis of lease liabilities and related liquidity risk management.
(2) The Company as lessor
1) Operating lease
a. Lease income
| Items | Current period cumulative | Preceding period comparative |
| Lease income | 60,531,148.28 | 46,657,985.12 |
| Including: Income relating to variable lease payments not included in the measurement of the lease liabilities |
b. Assets leased out under operating leases
| Items | Closing balance | December 31, 2022 |
| Investment property | 541,542,136.17 | 566,873,915.07 |
| Subtotal | 541,542,136.17 | 566,873,915.07 |
c. Undiscounted lease payments to be received arising from non-cancellable leases based on thelease contract signed with lessee
| Remaining years | Closing balance | December 31, 2022 |
| Within 1 year | 56,542,470.24 | 61,340,377.67 |
| 1-2 years | 52,190,140.08 | 56,542,470.24 |
| 2-3 years | 33,173,087.70 | 52,190,140.08 |
| 3-4 years | 18,585,822.03 | 33,173,087.70 |
| 4-5 years | 10,612,435.91 | 18,585,822.03 |
| Over 5 years | 17,600,507.53 | 10,612,435.91 |
| Total | 188,704,463.49 | 232,444,333.63 |
VI. Interest in other entities(I) Composition of the consolidation scope
1. The Company has brought 13 subsidiaries including Shenzhen SPG Longgang DevelopmentCo., Ltd. and Great Wall Estate Company, Inc. into the consolidation scope.
2. Basic information of significant subsidiaries
| Subsidiaries | Registered capital (in ten thousand yuan) | Main operating place and place of registration | Business nature | Holding proportion (%) | Acquisition method | |
| Direct | Indirect | |||||
| Shenzhen SPG Longgang Development Co., Ltd. | 3,000.00 | Shenzhen | Real estate | 95.00 | 5.00 | Establishment |
| Great Wall Estate Company, Inc. | USD 500,000 | U.S. | Real estate | 70.00 | Establishment | |
| Shenzhen Petrel Hotel Co., Ltd. | 3,000.00 | Shenzhen | Hotel services | 68.10 | 31.90 | Establishment |
| Shenzhen Zhentong | 1,000.00 | Shenzhen | Construction | 73.00 | 27.00 | Establishment |
| Subsidiaries | Registered capital (in ten thousand yuan) | Main operating place and place of registration | Business nature | Holding proportion (%) | Acquisition method | |
| Direct | Indirect | |||||
| Engineering Co., Ltd. | ||||||
| Shenzhen Huazhan Construction Supervision Co., Ltd. | 800.00 | Shenzhen | Construction | 75.00 | 25.00 | Establishment |
| Shenzhen Lianhua Enterprise Co., Ltd. | 1,000.00 | Shenzhen | Construction | 95.00 | 5.00 | Establishment |
| Xinfeng Real Estate Co., Ltd. | Hong Kong SAR | Investment and management | 100.00 | Establishment | ||
| Xinfeng Enterprise Co., Ltd. | TWD 5.00 million | Hong Kong SAR | Investment and management | 100.00 | Establishment | |
| Shenzhen SPG Free Trading Co., Ltd. | 500.00 | Shenzhen | Import and export trade | 95.00 | 5.00 | Establishment |
| Shenzhen SPG Investment Co., Ltd. | 1,000.00 | Shenzhen | Investment | 90.00 | 10.00 | Establishment |
| Beijing Xinfeng Real Estate Management & Development Co., Ltd. | USD 10.00 million | Beijing | Real estate | 75.00 | 25.00 | Establishment |
| Guangdong Jianbang Group (Huiyang) Industrial Co., Ltd. | 280.00 | Huizhou | Real estate | 51.00 | Business combination not under common control | |
| Shenzhen SPG Chuanqi Real Estate Development Co., Ltd. | 3,000.00 | Shenzhen | Real estate | 100.00 | Establishment | |
(2) Other remarks
The Company has brought the following 3 subsidiaries which have been suspended for a long timeand whose business license has been revoked but not cancelled into the consolidation scope:
Guangzhou Huangpu Xincun Real Estate Development Co., Ltd., Xinfeng Real EstateDevelopment and Construction (Wuhan) Co., Ltd. and Beijing Xinfeng Real Estate Development& Management Co., Ltd. The above subsidiaries have been presented as discontinued operations,with full provision for impairment on their creditor’s right to debtors beyond the consolidationscope of the Company.(Ⅱ) Changes in the consolidation scope due to other reasonsEntities excluded from the consolidation scope
| Entities | Equity disposal method | Equity disposal date | Disposal-date net assets | Net profit from the period beginning to the disposal date |
| Beijing SPG Property Management Co., Ltd. | Loss of control | January 1, 2023 | -8,121,334.67 |
(III) Significant not wholly-owned subsidiaries
1. Details
| Subsidiaries | Holding proportion of non-controlling shareholders | Non-controlling shareholders’ profit or loss | Dividend declared to non-controlling shareholders | Closing balance of non-controlling interest |
| Great Wall Estate Company, Inc. | 30.00% | -105,324.87 | -22,809,939.62 | |
| Xinfeng Investment Co., Ltd. | 45.00% | 5.09 | -116,179,868.81 | |
| Baiwei Real Estate Co., Ltd. | 20.00% | 3.03 | -3,892,111.41 | |
| Guangdong Jianbang Group (Huiyang) Industrial Co., Ltd. | 49.00% | -196,719,298.76 | 227,942,330.06 |
2. Main financial information of significant not wholly-owned subsidiaries
(1) Assets and liabilities
| Subsidiaries | Closing balance | |||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
| Great Wall Estate Company, Inc. | 395,377.20 | 19,569,160.13 | 19,964,537.33 | 111,791,851.06 | 111,791,851.06 | |
| Xinfeng Investment Co., Ltd. | 69,786.71 | 36,016.90 | 105,803.61 | 258,283,372.85 | 258,283,372.85 | |
| Baiwei Real Estate Co., Ltd. | 1,061.18 | 1,061.18 | 32,920,988.91 | 32,920,988.91 | ||
| Guangdong Jianbang Group (Huiyang) Industrial Co., Ltd. | 1,525,466,547.38 | 7,070,465.17 | 1,532,537,012.55 | 1,557,970,018.20 | 1,557,970,018.20 | |
(Continued)
| Subsidiaries | Opening balance | |||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
| Great Wall Estate Company, Inc. | 157,276.13 | 19,242,855.50 | 19,400,131.63 | 109,489,015.64 | 109,489,015.64 | |
| Xinfeng Investment Co., Ltd. | 4,814.12 | 36,016.90 | 40,831.02 | 258,218,411.56 | 258,218,411.56 | |
| Baiwei Real Estate Co., Ltd. | 1,046.02 | 1,046.02 | 32,920,988.91 | 32,920,988.91 | ||
| Guangdong Jianbang Group (Huiyang) Industrial Co., Ltd. | 1,480,299,811.47 | 5,502,260.78 | 1,485,802,072.25 | 1,501,444,742.85 | 53,885.23 | 1,501,498,628.08 |
(2) Profit or loss and cash flows
| Subsidiaries | Current period cumulative | |||
| Operating revenue | Net profit | Total comprehensive income | Cash flows from operating activities | |
| Great Wall Estate Company, Inc. | 690,265.11 | -351,082.24 | -1,738,429.72 | 10,516.97 |
| Xinfeng Investment Co., Ltd. | 11.30 | 11.30 | ||
| Baiwei Real Estate Co., Ltd. | 15.16 | 15.16 | ||
| Subsidiaries | Current period cumulative | |||
| Operating revenue | Net profit | Total comprehensive income | Cash flows from operating activities | |
| Guangdong Jianbang Group (Huiyang) Industrial Co., Ltd. | -9,736,449.82 | -9,736,449.82 | -26,899,080.84 | |
(Continued)
| Subsidiaries | Preceding period comparative | |||
| Operating revenue | Net profit | Total comprehensive income | Cash flows from operating activities | |
| Great Wall Estate Company, Inc. | 477,651.62 | -431,973.10 | -431,973.10 | -384,413.25 |
| Xinfeng Investment Co., Ltd. | 1,141.56 | 1,141.56 | ||
| Baiwei Real Estate Co., Ltd. | -12,025.38 | -12,025.38 | ||
| Guangdong Jianbang Group (Huiyang) Industrial Co., Ltd. | -8,184,594.48 | -8,184,594.48 | -161,865,625.76 | |
(Ⅳ) Interest in joint ventures or associates
1. Aggregated financial information of insignificant joint ventures and associates
| Items | Closing balance/Current period cumulative | Opening balance/Preceding period comparative |
| Joint ventures | ||
| Total carrying amount of investments | ||
| Proportionate shares in the following items | ||
| Net profit | ||
| Other comprehensive income | ||
| Total comprehensive income | ||
| Associates | ||
| Total carrying amount of investments | 93,927.67 | |
| Proportionate shares in the following items | ||
| Net profit | -93,927.67 | -178,240.64 |
| Other comprehensive income | ||
| Total comprehensive income | -93,927.67 | -178,240.64 |
2. Excess losses incurred by joint ventures or associates
| Joint ventures or associates | Accumulated unrecognized losses in prior periods | Unrecognized losses in the current period (net profit shared in the current period) | Unrecognized losses at the balance sheet date |
| Shenzhen Xinfeng Real Estate Consulting Co., Ltd. | 2,217,955.89 | 2,217,955.89 |
VII. Government grants(Ⅰ) Government grants increased in the current period
| Items | Amount |
| Government grants related to income | 440,049.96 |
| Including: Included into other income | 440,049.96 |
| Total | 440,049.96 |
(II) Government grants included into profit or loss
| Items | Current period cumulative | Preceding period comparative |
| Government grants included into other income | 440,049.96 | 266,152.38 |
| Total | 440,049.96 | 266,152.38 |
VIII. Risks related to financial instrumentsIn risk management, the Company aims to seek the appropriate balance between the risks andbenefits from its use of financial instruments and to mitigate the adverse effects that the risks offinancial instruments have on the Company’s financial performance, so as to maximize the profitsof shareholders and other equity investors. Based on such risk management objectives, theCompany’s risk management policies are established to identify and analyze the risks faced by theCompany, to set appropriate risk limits and controls, and to monitor risks and adherence to limitson a timely and reliable basis.The Company has exposure to the following risks from its use of financial instruments, whichmainly include: credit risk, liquidity risk, and market risk. The Management has deliberated andapproved policies concerning such risks, and details are:
(I) Credit riskCredit risk is the risk that one party to a financial instrument will cause a financial loss for theother party by failing to discharge an obligation.
1. Credit risk management practice
(1) Evaluation method of credit risk
At each balance sheet date, the Company assesses whether the credit risk on a financial instrumenthas increased significantly since initial recognition. When assessing whether the credit risk hasincreased significantly since initial recognition, the Company takes into account reasonable andsupportable information, which is available without undue cost or effort, including qualitative andquantitative analysis based on historical data, external credit risk rating, and forward-lookinginformation. The Company determines the changes in default risk of financial instruments duringthe estimated lifetime through comparison of the default risk at the balance sheet date and theinitial recognition date, on an individual basis or a collective basis.The Company considers the credit risk on a financial instrument has increased significantly when
one or more of the following qualitative and quantitative standards are met:
1) Quantitative standard mainly relates to the scenario in which, at the balance sheet date, theprobability of default in the remaining lifetime has risen by more than a certain percentagecompared with the initial recognition;
2) Qualitative standard mainly relates to significant adverse changes in the debtor’s operation orfinancial position, present or expected changes in technology, market, economy or legalenvironment that will have significant adverse impact on the debtor’s repayment ability;
(2) Definition of default and credit-impaired assets
A financial instrument is defined as defaulted when one or more following events have occurred,of which the standard is consistent with that for credit-impairment:
1) significant financial difficulty of the debtor;
2) a breach of binding clause of contract;
3) it is very likely that the debtor will enter bankruptcy or other financial reorganization;
4) the creditor of the debtor, for economic or contractual reasons relating to the debtor’s financialdifficulty, having granted to the debtor a concession(s) that the creditor would not otherwiseconsider.
2. Measurement of expected credit losses
The key factors in the measurement of expected credit loss include the probability of default, lossgiven default, and exposure to default risk. The Company develops a model of the probability ofdefault, loss given default, and exposure to default risk on the basis of quantitative analysis ofhistorical data (e.g., counterparty rating, guarantee measures and collateral type, payment method,etc.) and forward-looking information.
3. Please refer to section V (I) 3, 4, 6 and 8 of notes to the financial statements for details on thereconciliation table of opening balance and closing balance of provision for losses of financialinstrument.
4. Exposure to credit risk and concentration of credit risk
The Company’s credit risk is primarily attributable to cash and bank balances and receivables. Inorder to control such risks, the Company has taken the following measures:
(1) Cash and bank balances
The Company deposits its bank balances and other cash and bank balances in financial institutionswith relatively high credit levels, hence, its credit risk is relatively low.
(2) Receivables and contract assets
The Company performs credit assessment on customers using credit settlement on a regular basis.The Company selects credible and well-reputed customers based on credit assessment result, and
conducts ongoing monitoring on balance of receivables, to avoid significant risks in bad debts.As the Company’s credit risks fall into several business partners and customers, the Companymanages credit risk aggregated by customers. As of December 31, 2023, the Company has certainconcentration of credit risk, and 36.46% (December 31, 2022: 55.65%) of the total accountsreceivable and contract assets was due from the five largest customers of the Company. TheCompany held no collateral or other credit enhancement on balance of receivables or contractassets.The maximum amount of exposure to credit risk of the Company is the carrying amount of eachfinancial asset at the balance sheet.(II) Liquidity riskLiquidity risk is the risk that the Company may encounter deficiency of funds in meetingobligations associated with cash or other financial assets settlement, which is possibly attributableto failure in selling financial assets at fair value on a timely basis, or failure in collecting liabilitiesfrom counterparties of contracts, or early redemption of debts, or failure in achieving estimatedcash flows.In order to control such risk, the Company comprehensively utilizes financing tools such as notessettlement, bank borrowings, etc. and adopts long-term and short-term financing methods tooptimize financing structures, and finally maintains a balance between financing sustainability andflexibility. The Company has obtained credit limit from several commercial banks to meetworking capital requirements and expenditures.
1. Financial liabilities classified based on remaining time period till maturity
| Items | Closing balance | ||||
| Carrying amount | Contract amount not yet discounted | Within 1 year | 1-3 years | Over 3 years | |
| Short-term borrowings | 3,550,000.00 | 3,683,125.00 | 3,683,125.00 | ||
| Accounts payable | 443,259,768.78 | 443,259,768.78 | 443,259,768.78 | ||
| Other payables | 554,469,229.59 | 554,469,229.59 | 554,469,229.59 | ||
| Non-current liabilities due within one year | 34,056,347.93 | 41,741,101.03 | 41,741,101.03 | ||
| Other current liabilities | 20,790,361.58 | 20,790,361.58 | 20,790,361.58 | ||
| Long-term borrowings | 179,431,851.02 | 187,773,026.94 | 122,834,289.80 | 64,938,737.14 | |
| Subtotal | 1,235,557,558.90 | 1,251,716,612.92 | 1,063,943,585.98 | 122,834,289.80 | 64,938,737.14 |
(Continued)
| Items | December 31, 2022 | ||||
| Carrying amount | Contract amount not yet discounted | Within 1 year | 1-3 years | Over 3 years | |
| Short-term borrowings | 51,138,077.62 | 53,055,755.53 | 53,055,755.53 | ||
| Accounts payable | 434,601,559.67 | 434,601,559.67 | 434,601,559.67 | ||
| Other payables | 574,331,340.84 | 574,331,340.84 | 574,331,340.84 | ||
| Non-current liabilities due within one year | 6,188,794.43 | 8,693,727.50 | 8,693,727.50 | ||
| Long-term borrowings | 54,261,000.00 | 56,719,813.11 | 56,719,813.11 | ||
| Lease liabilities | 53,885.23 | 53,885.23 | 53,885.23 | ||
| Subtotal | 1,120,574,657.79 | 1,127,456,081.88 | 1,070,736,268.77 | 56,719,813.11 | |
(III) Market riskMarket risk is the risk that the Company may encounter fluctuation in fair value or future cashflows of financial instruments due to changes in market price. Market risk mainly includes interestrisk and foreign currency risk.
1. Interest risk
Interest risk is the risk that an enterprise may encounter fluctuation in fair value or future cashflows of financial instruments due to changes in market interest rates. The Company’s fair valueinterest risks arise from fixed-rate financial instruments, while the cash flow interest risks arisefrom floating-rate financial instruments. The Company determines the proportion of fixed-ratefinancial instruments and floating-rate financial instruments based on the market environment, andmaintains a proper financial instruments portfolio through regular review and monitoring. TheCompany’s interest risk in cash flows relates mainly to bank borrowings with floating interest rate.As of December 31, 2023, balance of borrowings with interest accrued at floating interest ratetotaled 62,398,851.02 yuan (December 31, 2022: 0 yuan). If interest rates had been 50 basis pointshigher/lower and all other variables were held constant, the Company’s gross profit and equity willnot be significantly affected.
2. Foreign currency risk
Foreign currency risk is the risk arising from changes in fair value or future cash flows of financialinstrument resulted from changes in exchange rate. The Company’s foreign currency risk relatesmainly to foreign currency monetary assets and liabilities. When short-term imbalance occurred toforeign currency assets and liabilities, the Company may trade foreign currency at marketexchange rate when necessary, in order to maintain the net risk exposure within an acceptablelevel.The exchange rate risk mainly refers to the impact of foreign exchange rate fluctuations on thefinancial condition and cash flow of the Company. Except for subsidiaries established in Hong
Kong SAR that hold assets denominated in Hong Kong dollars, the Company only engages insmall-scale Hong Kong market investment business. The proportion of foreign currency assets andliabilities held by the Company to the overall assets and liabilities is insignificant, hence, theCompany considers that the exposure to exchange rate risk is not material.Please refer to section V (IV) 1 of notes to the financial statements for details on foreign currencyfinancial assets and liabilities at the end of the period.
IX. Fair value disclosure(I) Details of fair value of assets and liabilities at fair value at the balance sheet date
| Items | Fair value as at the balance sheet date | |||
| Level 1 fair value measurement | Level 2 fair value measurement | Level 3 fair value measurement | Total | |
| Recurring fair value measurement | ||||
| 1. Held-for-trading financial assets and other non-current financial assets | 879,340,201.92 | 879,340,201.92 | ||
| (1) Financial assets classified as at fair value through profit or loss | ||||
| Fund management | 879,340,201.92 | 879,340,201.92 | ||
| (2) Financial assets designated as at fair value through profit or loss | ||||
| Debt instrument investments | ||||
| 2. Other equity instrument investments | 14,324,411.35 | 14,324,411.35 | ||
| Total assets at recurring fair value measurement | 879,340,201.92 | 14,324,411.35 | 893,664,613.27 | |
(II) Basis for determining level 1 fair value at recurring and non-recurring fair value measurementHeld-for-trading financial assets of the Company are fund management products purchased fromChina Construction Bank Co., Ltd., and the Company can obtain unadjusted quotes for the sameassets in active markets on the balance sheet date.(III) Qualitative and quantitative information of valuation technique(s) and key input(s) for level 2fair value at recurring and non-recurring fair value measurementNone.(IV) Qualitative and quantitative information of valuation technique(s) and key input(s) for level 3fair value at recurring and non-recurring fair value measurementFor receivables financing not traded in active markets, the remaining maturity is short and thecarrying amount is similar to the fair value, so the carrying amount is adopted as its fair value. Forother equity instrument investments not traded in active markets, the investment amount is smalland there is little change in the net assets of the investees, and the carrying amount is similar to thefair value, so the carrying amount is adopted as its fair value.
(V) Items for level 3 recurring fair value measurement, a reconciliation from the opening balancesto the closing balances, and sensitive analysis on unobservable inputsNone.(VI) Items at recurring fair value measurement with inter-level transfer, and reasons and policiesfor determining inter-level transfer timeNone.(VII) Changes in valuation techniques in the current period and reasons for changesNone.(VIII) Fair value of financial assets and liabilities not at fair valueThe Company’s financial assets and liabilities measured at amortized costs mainly include: cashand bank balances, notes receivable, accounts receivable, other receivables, short-term borrowings,accounts payable, other payables, long-term borrowings, lease liabilities, etc.The difference between the carrying amount and fair value of financial assets and liabilities notmeasured at fair value is very small.
X. Related party relationships and transactions(I) Related party relationships
1. Parent company
(1) Details
| Parent company | Place of registration | Business nature | Registered capital (in ten thousand yuan) | Holding proportion over the Company (%) | Voting right proportion over the Company (%) |
| Shenzhen Investment Holdings Co., Ltd. | Shenzhen, Guangdong | Investment, real estate development, guarantee | 3,235,900.00 | 55.78 | 55.78 |
(2) The Company’s ultimate controlling party is the State-owned Assets Supervision andManagement Commission of the of Shenzhen Municipal People’s Government.
2. Please refer to section VI of notes to the financial statements for details on the Company’ssubsidiaries.
3. Joint ventures and associates of the Company
(1) Joint ventures and associates of the Company
Please refer to section VI of notes to the financial statements for details on the Company’ssignificant joint ventures and associates.
4. Other related parties of the Company
| Related parties | Relationships with the Company |
| Shenzhen Jian’an (Group) Co., Ltd. | Controlling subsidiary of the parent company |
| Shenzhen Oriental New World Department Store Co., Ltd. | Investee |
| Shenzhen Shenxi Building Decoration Co., Ltd. | Revoked but not canceled controlling subsidiary not brought into the consolidation scope |
| Shenzhen Zhentong New Electromechanical Industrial Development Co., Ltd. | Long-term discontinued controlling subsidiary not brought into the consolidation scope |
| Shenzhen Nanyang Hotel Co., Ltd. | Revoked but not canceled controlling subsidiary not brought into the consolidation scope |
| Shenzhen Real Estate Electromechanical Management Co., Ltd. | Revoked but not canceled controlling subsidiary not brought into the consolidation scope |
| Shenzhen Longgang Henggang Huagang Industrial Co., Ltd. | Revoked but not canceled controlling subsidiary not brought into the consolidation scope |
| Guangzhou Bopi Enterprise Management Consulting Co., Ltd. | Shareholder of subsidiaries |
| Shenzhen Property Management Co., Ltd. | Controlling subsidiary of the parent company |
| Guoren Property Insurance Co., Ltd. | Controlling subsidiary of the parent company |
| Shenzhen Water Planning and Design Institute Co., Ltd. | Controlling subsidiary of the parent company |
| Shenzhen General Institute of Architectural Design and Research Co., Ltd. | Controlling subsidiary of the parent company |
| Shenzhen SPG Property Cleaning Co., Ltd. | Controlling subsidiary of the parent company |
| Shenzhen Property Management Co., Ltd. Shantou Branch | Controlling subsidiary of the parent company |
| Shenzhen Guomao Property Management Co., Ltd. | Controlling subsidiary of the parent company |
| Shenzhen Xinfeng Real Estate Consulting Co., Ltd. | Investee |
| Guangdong Huizhou Luofushan Mineral Water Beverage Co., Ltd. | Investee |
| Shenzhen Runhua Automobile Trading Co., Ltd. | Investee |
| Canada Great Wall (Vancouver) Co., Ltd. | Investee |
| Australia Berkton Property Limited | Investee |
| Paklid Limited | Investee |
| Shenzhen Shenfang Department Store Co., Ltd. | Investee |
| Shenzhen Ronghua Electromechanical Engineering Co., Ltd. | Investee |
| Xi’an Xinfeng Property Trading Co., Ltd. | Investee |
| Fengkai Lianfeng Cement Manufacturing Co., Ltd. | Investee |
| Beijing SPG Property Management Co., Ltd. | Investee |
(II) Related party transactions
1. Purchase and sale of goods, rendering and receiving of services
(1) Details
1) Purchase of goods and receiving of services
| Related parties | Content of transactions | Current period cumulative | Preceding period comparative |
| Shenzhen Water Planning and Design Institute Co., Ltd. | Testing services | 678,902.77 | 554,056.60 |
| Shenzhen General Institute of Architectural Design and Research Co., Ltd. | Design services | 622,641.51 | 5,329,811.33 |
| Guoren Property Insurance Co., Ltd. | Insurance services | 80,263.00 | |
| Guoren Property Insurance Co., Ltd. | Leasing services | 283,018.87 | |
| Shenzhen Property Management Co., Ltd. | Property services | 6,482,286.26 | 11,530,169.32 |
| Shenzhen SPG Property Cleaning Co., Ltd. | Cleaning services | 459,622.70 | |
| Shenzhen Property Management Co., Ltd. Shantou Branch | Property services | 2,789,916.70 | 2,668,895.66 |
| Subtotal | 10,654,010.24 | 20,825,574.48 |
2) Sale of goods and rendering of services
| Related parties | Content of transactions | Current period cumulative | Preceding period comparative |
| Guoren Property Insurance Co., Ltd. | Leasing services | 843,039.96 | 812,102.75 |
| Shenzhen Property Management Co., Ltd. | Leasing services | 2,663,510.39 | 4,290,671.33 |
| Shenzhen SPG Property Cleaning Co., Ltd. | Leasing services | 39,999.97 | 37,142.83 |
| Subtotal | 3,546,550.32 | 5,139,916.91 |
2. Related party leases
(1) Details
The Company as the lessor
| Lessees | Types of assets leased | Lease income for the current period | Lease income for the preceding period |
| Shenzhen Property Management Co., Ltd. | Buildings and structures | 2,663,510.39 | 4,290,671.33 |
| Shenzhen SPG Property Cleaning Co., Ltd. | Buildings and structures | 39,999.97 | 37,142.83 |
| Guoren Property Insurance Co., Ltd. | Buildings and structures | 843,039.96 | 812,102.75 |
| Subtotal | 3,546,550.32 | 5,139,916.91 |
3. Call loans between related parties
| Related parties | Amount | Commencement date | Maturity date | Remarks |
| Call loans from related parties | ||||
| Guangzhou Bopi Enterprise Management Consulting Co., Ltd. | May 20, 2021 | May 20, 2023 | Interest accrued for the current period was 3,638,451.63 yuan. |
4. Assets transfer and debt restructuring of the related parties
| Related parties | Content of related party transactions | Current period cumulative | Preceding period comparative |
| Shenzhen Guomao Property Management Co., Ltd. | Transfer of property management company | 196,676,700.00 |
5. Key management’s emoluments
Unit: in ten thousand yuan
| Items | Current period cumulative | Preceding period comparative |
| Key management’s emoluments | 967.69 | 812.36 |
6. Other related party transactions
In order to advocate core employees to share the operating results of market-oriented projects andassumption of operational risks, stimulate their internal motivation to enhance efficiency andincrease benefits, improve asset management efficiency and achieve the preservation andappreciation of state-owned assets, the Company has formulated the ―Management Measures forEmployee’s Co-investment in the SPG Linxi County Project‖. Pursuant to the aforementioneddocument, the co-investment matter will constitute a joint investment of related party transactionswith certain directors, supervisors and senior executives of the Company. As of December 31,2023, the Company’s directors, supervisors and senior executives have jointly invested 8.95million yuan in the SPG Linxin Community Project.(III) Balances due to or from related parties
1. Balances due from related parties
| Items | Related parties | Closing balance | Opening balance | ||
| Book balance | Provision for bad debts | Book balance | Provision for bad debts | ||
| Accounts receivable | |||||
| Shenzhen Xinfeng Real Estate Consulting Co., Ltd. | 1,215,543.75 | 1,215,543.75 | 1,201,345.82 | 1,201,345.82 | |
| Subtotal | 1,215,543.75 | 1,215,543.75 | 1,201,345.82 | 1,201,345.82 | |
| Other receivables | |||||
| Items | Related parties | Closing balance | Opening balance | ||
| Book balance | Provision for bad debts | Book balance | Provision for bad debts | ||
| Guangdong Huizhou Luofushan Mineral Water Beverage Co., Ltd. | 10,465,168.81 | 10,465,168.81 | 10,465,168.81 | 10,465,168.81 | |
| Shenzhen Runhua Automobile Trading Co., Ltd. | 3,072,764.42 | 3,072,764.42 | 3,072,764.42 | 3,072,764.42 | |
| Canada Great Wall (Vancouver) Co., Ltd. | 89,035,748.07 | 89,035,748.07 | 89,035,748.07 | 89,035,748.07 | |
| Australia Berkton Property Limited | 12,559,290.58 | 12,559,290.58 | 12,559,290.58 | 12,559,290.58 | |
| Paklid Limited | 19,393,335.84 | 19,393,335.84 | 18,689,545.58 | 18,689,545.58 | |
| Shenzhen Shenfang Department Store Co., Ltd. | 237,648.82 | 237,648.82 | 237,648.82 | 237,648.82 | |
| Shenzhen Ronghua Electromechanical Engineering Co., Ltd. | 475,223.46 | 475,223.46 | 475,223.46 | 475,223.46 | |
| Xi’an Xinfeng Property Trading Co., Ltd. | 8,419,205.19 | 8,419,205.19 | 8,419,205.19 | 8,419,205.19 | |
| Shenzhen Shenxi Building Decoration Co., Ltd. | 7,660,529.37 | 7,660,529.37 | 7,660,529.37 | 7,660,529.37 | |
| Shenzhen Nanyang Hotel Co., Ltd. | 3,168,721.00 | 3,168,721.00 | 3,168,721.00 | 3,168,721.00 | |
| Beijing SPG Property Management Co., Ltd. | 6,905,673.69 | 6,533,817.09 | |||
| Subtotal | 161,393,309.25 | 161,021,452.65 | 153,783,845.30 | 153,783,845.30 | |
2. Balances due to related parties
| Items | Related parties | Closing balance | Opening balance |
| Interest payable | |||
| Shenzhen Investment Holdings Co., Ltd. | 16,535,277.94 | 16,535,277.94 | |
| Subtotal | 16,535,277.94 | 16,535,277.94 | |
| Accounts payable | |||
| Shenzhen Jian’an (Group) Co., Ltd. | 10,654,310.21 | ||
| Shenzhen Property Management Co., Ltd. | 17,053,636.61 | 11,053,366.80 | |
| Subtotal | 17,053,636.61 | 21,707,677.01 | |
| Other payables | |||
| Shenzhen Property Management Co., Ltd. | 358,178.26 | 148,908.08 | |
| Shenzhen Oriental New World Department Store Co., Ltd. | 902,974.64 | 902,974.64 | |
| Fengkai Lianfeng Cement Manufacturing Co., Ltd. | 1,867,348.00 | 1,867,348.00 | |
| Shenzhen Real Estate Electromechanical | 14,981,420.99 | 14,981,420.99 |
| Items | Related parties | Closing balance | Opening balance |
| Management Co., Ltd. | |||
| Shenzhen Zhentong New Electromechanical Industrial Development Co., Ltd. | 8,310,832.50 | 8,310,832.50 | |
| Shenzhen Shenfang Department Store Co., Ltd. | 639,360.38 | 639,360.38 | |
| Shenzhen Longgang Henggang Huagang Industrial Co., Ltd. | 165,481.09 | 165,481.09 | |
| Guangzhou Bopi Enterprise Management Consulting Co., Ltd. | 206,903,717.13 | 203,345,881.60 | |
| Subtotal | 234,129,312.99 | 230,362,207.28 |
XI. Commitments and contingencies(I) Significant commitmentsAs of December 31, 2023, the Company has signed a capital commitment of 273,712,730.19 yuan,which has not yet been recognized in the financial statements.(II) Contingencies
1. Contingent liabilities incurred by pending lawsuit/arbitration and the financial effect
| Plaintiffs | Defendants | Cause of action | Court seized of the case | Amount of subject | Remarks |
| Xi’an Xinfeng Property Trading Co., Ltd. | Xi’an Municipal Commission of Commerce and Trade, Xi’an Commerce and Tourism Co., Ltd. | Dispute over investment compensation | Shaanxi Provincial High People’s Court | 21.54 million yuan and interest thereof | Progress of the case: under execution; Details: [Note 1] |
| Huizhou Mingxiang Economic Information Consulting Co., Ltd., Huizhou Hongfa Industry and Trade Co., Ltd. and Huizhou Jinlongsheng Industrial Co., Ltd. | Guangdong Jianbang Group (Huiyang) Industrial Co., Ltd. | Dispute over bill payment claim | People’s Court of Huiyang District, Huizhou City | Principal of 177.15 million yuan and interest of 2.85 million yuan | Progress of the case: judgment completed, pending execution; Details: [Note 2] |
| The Company | Guangzhou Bopi Enterprise Management Consulting Co., Ltd., Evergrande Real Estate Company Pearl River Delta Real Estate Development Co., Ltd., Shenzhen Qijin Investment Co., Ltd., with Guangdong Jianbang Group (Huiyang) Industrial Co., Ltd. as the third party | Dispute over joint venture and cooperative real estate development contracts | Intermediate People’s Court of Huizhou City, Guangdong Province | 743.58 million yuan | Case progress: the case was heard and currently in the first instance; Details: [Note 3] |
| The Company | Guangdong Jianbang Group (Huiyang) Industrial Co., Ltd. | Loan contract dispute | People’s Court of Luohu District, Shenzhen City | Principal and interest totaling 395.69 million yuan | Case progress: First instance judgment completed; Details: [Note 4] |
| The Company | Guangdong Jianbang Group (Huiyang) Industrial Co., Ltd., Guangzhou Bopi Enterprise Management Consulting Co., Ltd., Evergrande Real Estate Company Pearl River Delta Real Estate Development Co., Ltd., Shenzhen Qijin Investment Co., Ltd. | Loan contract dispute | People’s Court of Huiyang District, Huizhou City | Principal and interest totaling 419.52 million yuan | Case progress: the case was heard and currently in the first instance; Details: [Note 5] |
Note 1: Xi’an Xinfeng Property Trading Co., Ltd. (the ―Xi’an Xinfeng Company‖) is a jointventure with overseas investments co-established in Xi’an by the Company’s wholly-ownedsubsidiary Xinfeng Enterprise Co., Ltd. with shareholding of 67% with cash contribution, by
Xi’an Commerce and Trade Building, a subsidiary of Xi’an Municipal Commission of Commerceand Trade (the ―Xi’an MCCT‖), with shareholding of 16% with land use rights contribution, andby Hong Kong Dadiwang Industrial Investment Co., Ltd. with shareholding of 17%. The jointventure is mainly engaged in real estate development and its development project is Xi’anCommerce and Trade Building. The project started construction on November 28, 1995, but wasforced to be suspended in 1996 due to serious disagreements between the cooperating parties onproject management policies. In 1997, the Xi’an Municipal People’s Government forciblywithdrew the investments made by Xi’an Commerce and Trade Building from Xi’an XinfengCompany and transferred the investments to Xi’an Commerce and Tourism Co., Ltd. (the―Commerce and Tourism Company‖), an affiliated entity of Xi’an MCCT. However, a lawsuitregarding the investments compensation arose therefor. On December 19, 2001, the ShaanxiProvincial High People’s Court issued a judgment numbered 2000 Shaan Jing Yi Chu Zi 25: a. theCommerce and Tourism Company should pay a compensation of 36.62 million yuan and interestthereof to Xi’an Xinfeng Company one month after the judgment came into effect. In case ofoverdue performance, the debt interest during the delayed performance period should be doubled;b. the Xi’an MCCT should bear joint and several liability for the interest on the aforementionedcompensation.The assets of the Commerce and Tourism Company were auctioned off in this case, and 15.20million yuan has been recovered through execution. Based on the property clues obtained, theCompany submitted multiple applications to the Shaanxi Provincial High People’s Court forresumption of execution. As of December 31, 2023, this case is in the execution stage.As of December 31, 2023, the Company’s book balance of long-term equity investments of Xi’anXinfeng Company was 32,840,729.61 yuan, with full provision for impairment made. The bookbalance of creditor’s right was 8,419,205.19 yuan, with full provision for impairment made.Note 2: Guangdong Jianbang Group (Huiyang) Industrial Co., Ltd. (―Jianbang Company‖) is asubsidiary of the Company with shareholding of 51%. Due to Jianbang Company’s inability toredeem trade acceptance due in January 2022 totaling 177.15 million yuan, the plaintiffs filed alawsuit on dispute over the bill payment claim with the People’s Court of Huiyang District,Huizhou City. The judgement was completed on March 14, 2023 and Jianbang Company wasordered to pay trade acceptance and overdue interests to three plaintiffs within 15 days (includingbearing litigation and preservation costs of approximately 1.03 million yuan).As of December 31, 2023, Building 2 and Building 4 of the first phase of the Linxin Communityproject with an estimated registered price of 220 million yuan, totaling 153 units, were seized.Jianbang Company is currently negotiating a settlement with the plaintiff.Note 3: On April 30, 2021, the Company signed the ―Cooperative Development Agreement‖ and―Entrusted Management Agreement‖ with Guangzhou Bopi Enterprise Management Consulting
Co., Ltd. (the ―Guangzhou Bopi‖), Evergrande Real Estate Company Pearl River Delta RealEstate Development Co., Ltd. (the ―Evergrande Pearl River Delta‖) and Jianbang Company.Guangzhou Bopi promised that Jianbang Company shall achieve cumulative net profits no lessthan 1.25 billion yuan from 2021 to 2025. If Guangzhou Bopi fails to fulfill its profit commitment,it shall make up for the difference. On June 30, 2021, due to the acquisition of 51% of equity ofGuangzhou Bopi by Shenzhen Qijin Investment Co., Ltd. (the ―Shenzhen Qijin‖), the Company,Guangzhou Bopi, Evergrande Pearl River Delta, and Shenzhen Qijin jointly signed SupplementaryAgreement I to the ―Cooperative Development Agreement‖, stipulating that Shenzhen Qijin shallbear joint and several liability with Evergrande Pearl River Delta for Guangzhou Bopi’s profitcommitment to the Company and balance replenishment matters stipulated in the ―CooperativeDevelopment Agreement‖. Due to the fundamental breach of contract by Guangzhou Bopi andEvergrande Pearl River Delta and their actual loss of performance ability, causing the failure toachieve the purpose and expected benefits of the contract, the Company filed a lawsuit. This casewas heard in February 2024 and is currently in the first instance.Note 4: In 2021, the Company acquired 51% of the defendant’s equity held by the person otherthan involved in the case and agreed to provide interest-bearing loans to Jianbang Company basedon the holding proportion. Later, Jianbang Company made borrowings from the Company in twoinstallments and signed the ―Loan Agreement‖. After the agreement was signed, the Companyprovided borrowings to Jianbang Company in accordance with the agreement and fulfilled itslending obligations. Both borrowings have already expired, but have not been repaid by JianbangCompany, which constitutes a breach of contract. As a state-owned listed company, the Companyfiled a lawsuit to protect state-owned assets from losses. The first instance judgment of this casewas made in December 2023. In January 2024, the Company received a civil judgment made bythe People’s Court of Luohu District, Shenzhen City, Guangdong Province, stating that JianbangCompany shall repay the principal of borrowings of 344,696,200.26 yuan and pay interest to theCompany within ten days from the effective date of the judgment; Jianbang Company shall payliquidated damages to the Company within ten days from the effective date of the judgment.Note 5: In 2021, the Company acquired 51% equity of Jianbang Company held by GuangzhouBopi, and agreed to provide interest bearing borrowings to Jianbang Company based on theholding proportion. Later, five parties signed an agreement, stipulating that the Company willprovide borrowings to Jianbang Company, and the latter will provide corresponding collateral. Atthe same time, Guangzhou Bopi, Evergrande Pearl River Delta and Shenzhen Qijin shall bear jointand several guarantee responsibilities for 49% of the total borrowing amount as well as interestand liquidated damages. After the agreement was signed, the Company provided borrowings toJianbang Company in accordance with the agreement and fulfilled its lending obligations.However, Jianbang Company was unable to repay the borrowings. As a state-owned listedcompany, the Company filed a lawsuit to protect state-owned assets from losses. This case was
heard in March 2024 and is currently in the first instance.
2. Contingent liabilities incurred by providing debt guarantees for other entities and the financialeffectAs of December 31, 2023, the Company provided mortgaged guarantees of 1106.51 million yuanfor purchasers of commercial housing in accordance with real estate business practices.
| Guaranteed parties | Financial institutions granting borrowings | Amount of borrowings guaranteed (in ten thousand yuan) | Maturity date of guarantees | Remarks |
| Homebuyer | China Construction Bank | 47.25 | Until the mortgage registration of the property certificate is completed and handed over to the bank for safekeeping | Shanglin Community |
| Homebuyer | China Construction Bank and Agricultural Bank of China | 935.87 | Until the mortgage registration of the property certificate is completed and handed over to the bank for safekeeping | Cuilin Community |
| Homebuyer | China Construction Bank, Industrial and Commercial Bank of China | 1,087.97 | Until the mortgage registration of the property certificate is completed and handed over to the bank for safekeeping | Chuanqi Donghu Garden |
| Homebuyer | China Construction Bank, Bank of Communications, Industrial and Commercial Bank of China, Bank of China, China Everbright Bank, Postal Savings Bank of China | 32,241.18 | Until the mortgage registration of the property certificate is completed and handed over to the bank for safekeeping | Tianyue Bay |
| Homebuyer | Industrial and Commercial Bank of China, Huaxia Bank, Agricultural Bank of China, Postal Savings Bank of China, China Merchants Bank, Bank of China | 75,304.40 | Until the mortgage registration of the property certificate is completed and handed over to the bank for safekeeping | Guangming Lane |
| Homebuyer | China Merchants Bank and Bank of China | 1,034.00 | Until the mortgage registration of the property certificate is completed and handed over to the bank for safekeeping | Linxin Community |
| Subtotal | 110,650.67 |
XII. Events after the balance sheet dateSignificant non-adjusting events
| Items | Contents | Effects on financial position and operating results | Reasons for effects being unable to be estimated |
| Disposal of subsidiaries | In January 2024, the Company cancelled its subsidiary Xinfeng Real Estate Co., Ltd. | Not applicable |
XIII. Other significant eventsSegment informationThe Company’s main business is development, construction, and sales of real estate products,collection of lease and management fees for properties leased out, with its operating resultsmanaged and evaluated on an integral basis. Therefore, the Company is not required to disclosesegment information. Please refer to section V (II) 1 of notes to the financial statements for detailson the Company’s revenues.
XIV. Notes to items of parent company financial statements(I) Notes to items of parent company balance sheet
1. Accounts receivable
(1) Age analysis
| Ages | Closing book balance | Opening book balance |
| Within 1 year | 15,636,256.41 | 12,426,543.02 |
| Over 5 years | 4,450,138.62 | 9,653,566.27 |
| Total | 20,086,395.03 | 22,080,109.29 |
(2) Provision for bad debts
1) Details on categories
| Categories | Closing balance | ||||
| Book balance | Provision for bad debts | Carrying amount | |||
| Amount | % to total | Amount | Provision proportion (%) | ||
| Receivables with provision made on an individual basis | 10,084,109.60 | 50.20 | 10,084,109.60 | 100.00 | |
| Receivables with provision made on a collective basis | 10,002,285.43 | 49.80 | 251,400.42 | 2.51 | 9,750,885.01 |
| Total | 20,086,395.03 | 100.00 | 10,335,510.02 | 51.46 | 9,750,885.01 |
(Continued)
| Categories | Opening balance | ||||
| Book balance | Provision for bad debts | Carrying amount | |||
| Amount | % to total | Amount | Provision proportion (%) | ||
| Receivables with provision made on an individual basis | 10,020,587.91 | 45.38 | 10,020,587.91 | 100.00 | |
| Receivables with provision made on a collective basis | 12,059,521.38 | 54.62 | 352,843.17 | 2.93 | 11,706,678.21 |
| Total | 22,080,109.29 | 100.00 | 10,373,431.08 | 46.98 | 11,706,678.21 |
2) Significant accounts receivable with provision made on an individual basis
| Debtors | Opening balance | Closing balance | ||||
| Book balance | Provision for bad debts | Book balance | Provision for bad debts | Provision proportion (%) | Basis for provision | |
| Long-term unrecovered property sales | 10,020,587.91 | 10,020,587.91 | 10,084,109.60 | 10,084,109.60 | 100.00 | Expected to be irrecoverable |
| Subtotal | 10,020,587.91 | 10,020,587.91 | 10,084,109.60 | 10,084,109.60 | 100.00 | |
3) Accounts receivable with provision for bad debts made on a collective basis
| Items | Closing balance | ||
| Book balance | Provision for bad debts | Provision proportion (%) | |
| Portfolio grouped with property sales receivable | 5,028,008.59 | 251,400.42 | 5.00 |
| Portfolio grouped with balances due from related parties within the consolidation scope | 4,974,276.84 | ||
| Subtotal | 10,002,285.43 | 251,400.42 | 2.51 |
(3) Changes in provision for bad debts
| Items | Opening balance | Increase/Decrease | Closing balance | |||
| Accrual | Recovery or reversal | Write-off | Others | |||
| Receivables with provision for bad debts made on an individual basis | 10,020,587.91 | 63,521.69 | 10,084,109.60 | |||
| Receivables with provision for bad debts made on a collective basis | 352,843.17 | -101,442.75 | 251,400.42 | |||
| Total | 10,373,431.08 | -37,921.06 | 10,335,510.02 | |||
(4) Details of the top 5 debtors with largest balances of accounts receivable and contract assets
| Debtors | Closing book balance | Proportion to the total balance of accounts receivable and contract assets (%) | Provision for bad debts of accounts receivable and provision for impairment of contract assets | ||
| Accounts receivable | Contract assets | Subtotal | |||
| Shenzhen Petrel Hotel Co., Ltd. | 4,974,276.84 | 4,974,276.84 | 24.76 | ||
| Daxing Auto Parts Co., Ltd. | 2,059,090.42 | 2,059,090.42 | 10.25 | 2,059,090.42 | |
| Shenzhen Xinfeng Real Estate Consulting Co., Ltd. | 1,215,543.75 | 1,215,543.75 | 6.05 | 1,215,543.75 | |
| Wang Weidong | 1,200,000.00 | 1,200,000.00 | 5.97 | 1,200,000.00 | |
| Wang Guodong | 913,820.47 | 913,820.47 | 4.55 | 913,820.47 | |
| Subtotal | 10,362,731.48 | 10,362,731.48 | 51.58 | 5,388,454.64 | |
2. Other receivables
(1) Details
| Items | Closing balance | Opening balance |
| Dividend receivable | 29,222,722.88 | 39,222,722.88 |
| Other receivables | 1,693,941,657.82 | 1,672,657,609.57 |
| Total | 1,723,164,380.70 | 1,711,880,332.45 |
(2) Dividend receivable
1) Details
| Items | Closing balance | Opening balance |
| Shenzhen SPG Longgang Development Co., Ltd. | 29,222,722.88 | 39,222,722.88 |
| Subtotal | 29,222,722.88 | 39,222,722.88 |
2) Significant balance with age over one year
| Items | Closing balance | Ages | Reasons for balances | Whether impaired and judgement basis |
| Shenzhen SPG Longgang Development Co., Ltd. | 29,222,722.88 | 1-2 years | The payment is postponed temporarily. | No |
| Subtotal | 29,222,722.88 |
(3) Other receivables
1) Other receivables categorized by nature
| Nature of receivables | Closing book balance | Opening book balance |
| Portfolio grouped with balances due from related parties | 2,371,906,725.11 | 2,466,661,819.14 |
| Portfolio grouped with government funds receivable | 165,460.00 | 165,460.00 |
| Portfolio grouped with employee petty cash receivable | 62,454.80 | 39,400.00 |
| Portfolio grouped with advances received and paid on behalf of others | 67,200.00 | 21,733.60 |
| Portfolio grouped with other intercompany balances receivable | 142,185,626.87 | 6,940,862.88 |
| Subtotal | 2,514,387,466.78 | 2,473,829,275.62 |
2) Age analysis
| Ages | Closing book balance | Opening book balance |
| Within 1 year | 92,173,735.70 | 347,340,209.70 |
| 1-2 years | 333,456,337.77 | 475,880,860.11 |
| 2-3 years | 456,845,625.71 | 105,934,643.85 |
| 3-4 years | 104,875,297.41 | 77,979,518.30 |
| 4-5 years | 70,181,566.47 | 137,618,682.95 |
| Ages | Closing book balance | Opening book balance |
| Over 5 years | 1,456,854,903.72 | 1,329,075,360.71 |
| Total | 2,514,387,466.78 | 2,473,829,275.62 |
3) Provision for bad debts
a. Details on categories
| Categories | Closing balance | ||||
| Book balance | Provision for bad debts | Carrying amount | |||
| Amount | % to total | Amount | Provision proportion (%) | ||
| Receivables with provision made on an individual basis | 820,414,389.79 | 32.63 | 820,414,389.79 | 100.00 | |
| Receivables with provision made on a collective basis | 1,693,973,076.99 | 67.37 | 31,419.17 | 1,693,941,657.82 | |
| Subtotal | 2,514,387,466.78 | 100.00 | 820,445,808.96 | 32.63 | 1,693,941,657.82 |
(Continued)
| Categories | Opening balance | ||||
| Book balance | Provision for bad debts | Carrying amount | |||
| Amount | % to total | Amount | Provision proportion (%) | ||
| Receivables with provision made on an individual basis | 816,573,394.13 | 33.01 | 800,992,839.69 | 98.09 | 15,580,554.44 |
| Receivables with provision made on a collective basis | 1,657,255,881.49 | 66.99 | 178,826.36 | 0.01 | 1,657,077,055.13 |
| Subtotal | 2,473,829,275.62 | 100.00 | 801,171,666.05 | 32.39 | 1,672,657,609.57 |
b. Other receivables with provision made on a collective basis
| Portfolios | Closing balance | ||
| Book balance | Provision for bad debts | Provision proportion (%) | |
| Portfolio grouped with balances due from related parties | 1,693,116,778.79 | ||
| Portfolio grouped with government funds receivable | 165,460.00 | ||
| Portfolio grouped with employee petty cash receivable | 62,454.80 | ||
| Portfolio grouped with advances received and paid on behalf of others | 67,200.00 | 3,360.00 | 5.00 |
| Portfolio grouped with other intercompany balances receivable | 561,183.40 | 28,059.17 | 5.00 |
| Subtotal | 1,693,973,076.99 | 31,419.17 | |
4) Changes in provision for bad debts
| Items | Stage 1 | Stage 2 | Stage 3 | Total |
| 12?month expected credit losses | Lifetime expected credit losses (credit not impaired) | Lifetime expected credit losses (credit impaired) | ||
| Opening balance | 139,907.19 | 801,031,758.86 | 801,171,666.05 | |
| Opening balance in the current period | —— | —— | —— | |
| --Transferred to stage 2 | ||||
| --Transferred to stage 3 | ||||
| --Reversed to stage 2 | ||||
| --Reversed to stage 1 | ||||
| Provision made in the current period | -139,907.19 | 19,414,050.10 | 19,274,142.91 | |
| Provision recovered or reversed in the current period | ||||
| Provision written off in the current period | ||||
| Other changes | ||||
| Closing balance | 820,445,808.96 | 820,445,808.96 | ||
| Provision proportion (%) | 100.00 | 32.63 |
5) Details of the top 5 debtors with largest balances
| Debtors | Nature of receivables | Closing book balance | Ages | Proportion to the total balance of other receivables (%) | Provision for bad debts at the balance sheet date |
| Shantou Huafeng Real Estate Development Co., Ltd. | Balances due from subsidiaries | 754,160,642.87 | Within 1 year, over 5 years | 29.99 | |
| Guangdong Jianbang Group (Huiyang) Industrial Co., Ltd. | Balances due from subsidiaries | 822,043,317.96 | 2-3 years | 32.69 | |
| Xinfeng Enterprise Co., Ltd. | Balances due from subsidiaries | 535,782,669.79 | Over 5 years | 21.31 | 535,782,669.79 |
| Great Wall Estate Company, Inc. | Balances due from subsidiaries | 104,981,769.07 | Over 5 years | 4.18 | 104,981,769.07 |
| Hualin Co., Ltd. | Balances due from subsidiaries | 90,686,884.30 | 3-4 years | 3.61 | |
| Subtotal | 2,307,655,283.99 | 91.78 | 640,764,438.86 |
3. Long-term equity investments
(1) Details
| Items | Closing balance | Opening balance | ||||
| Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
| Investments in subsidiaries | 1,715,520,833.00 | 392,155,084.61 | 1,323,365,748.39 | 1,716,020,833.00 | 133,839,271.15 | 1,582,181,561.85 |
| Investments in associates and joint ventures | 11,977,845.58 | 11,977,845.58 | 12,071,773.22 | 11,977,845.58 | 93,927.64 | |
| Total | 1,727,498,678.58 | 404,132,930.19 | 1,323,365,748.39 | 1,728,092,606.22 | 145,817,116.73 | 1,582,275,489.49 |
(2) Investments in subsidiaries
| Investees | Opening balance | Increase/Decrease | Closing balance | |||||
| Carrying amount | Provision for impairment | Investments increased | Investments decreased | Provision for impairment | Others | Carrying amount | Provision for impairment | |
| Shenzhen Petrel Hotel Co., Ltd. | 20,605,047.50 | 20,605,047.50 | ||||||
| Shenzhen SPG Investment Co., Ltd. | 9,000,000.00 | 9,000,000.00 | ||||||
| Xinfeng Enterprise Co., Ltd. | 556,500.00 | 556,500.00 | ||||||
| Xinfeng Real Estate Co., Ltd. | 22,717,697.73 | 22,717,697.73 | ||||||
| Shenzhen Zhentong Engineering Co., Ltd. | 11,332,321.45 | 11,332,321.45 | ||||||
| Great Wall Estate Company, Inc. | 1,435,802.00 | 1,435,802.00 | ||||||
| Shenzhen SPG Free Trading Co., Ltd. | 4,750,000.00 | 4,750,000.00 | ||||||
| Shenzhen Huazhan Construction Supervision Co., Ltd. | 6,000,000.00 | 6,000,000.00 | ||||||
| Beijing SPG Property Management Co., Ltd. | 500,000.00 | |||||||
| Shenzhen Lianhua Enterprise Co., Ltd. | 13,458,217.05 | 13,458,217.05 | ||||||
| Shenzhen SPG Longgang Development Co., Ltd. | 30,850,000.00 | 30,850,000.00 | ||||||
| Beijing Xinfeng Real Estate Management & Development Co., Ltd. | 64,183,888.90 | 64,183,888.90 | ||||||
| Shantou Huafeng Real Estate Development Co., Ltd. | 16,467,021.02 | 16,467,021.02 | ||||||
| Paklid Limited | 201,100.00 | 201,100.00 | ||||||
| Australia Berkton Property Limited | 906,630.00 | 906,630.00 | ||||||
| Shenzhen Shenfang Department Store Co., Ltd. | 9,500,000.00 | 9,500,000.00 | ||||||
| Shantou Xinfeng Building | 58,547,652.25 | 58,547,652.25 | ||||||
| Guangdong Jianbang Group (Huiyang) Industrial Co., Ltd. | 450,000,000.00 | 258,815,813.46 | 191,184,186.54 | 258,815,813.46 | ||||
| Shenzhen SPG Chuanqi Real | 995,000,000.00 | 995,000,000.00 | ||||||
| Investees | Opening balance | Increase/Decrease | Closing balance | |||||
| Carrying amount | Provision for impairment | Investments increased | Investments decreased | Provision for impairment | Others | Carrying amount | Provision for impairment | |
| Estate Development Co., Ltd. | ||||||||
| Hualin Co., Ltd. | 8,955.10 | 8,955.10 | ||||||
| Subtotal | 1,582,181,561.85 | 133,839,271.15 | 258,815,813.46 | 1,323,365,748.39 | 392,155,084.61 | |||
(3) Investments in associates and joint ventures
| Investees | Opening balance | Increase/Decrease | ||||
| Carrying amount | Provision for impairment | Investments increased | Investments decreased | Investment income recognized under equity method | Adjustment in other comprehensive income | |
| Joint ventures | ||||||
| Fengkai Xinghua Hotel | 9,455,465.38 | |||||
| Subtotal | 9,455,465.38 | |||||
| Associates | ||||||
| Shenzhen Ronghua Electromechanical Engineering Co., Ltd. | 93,927.64 | 1,076,954.64 | -93,927.64 | |||
| Shenzhen Runhua Automobile Trading Co., Ltd. | 1,445,425.56 | |||||
| Subtotal | 93,927.64 | 2,522,380.20 | -93,927.64 | |||
| Total | 93,927.64 | 11,977,845.58 | -93,927.64 | |||
(Continued)
| Investees | Increase/Decrease | Closing balance | ||||
| Changes in other equity | Cash dividend/ Profit declared for distribution | Provision for impairment | Others | Carrying amount | Provision for impairment | |
| Joint ventures | ||||||
| Fengkai Xinghua Hotel | 9,455,465.38 | |||||
| Subtotal | 9,455,465.38 | |||||
| Associates | ||||||
| Shenzhen Ronghua Electromechanical Engineering Co., Ltd. | 1,076,954.64 | |||||
| Shenzhen Runhua Automobile Trading Co., Ltd. | 1,445,425.56 | |||||
| Subtotal | 2,522,380.20 | |||||
| Total | 11,977,845.58 | |||||
(4) Impairment test on long-term equity investments
1) Recoverable amount determined based on the fair value less costs of disposal
| Items | Carrying amount | Recoverable amount | Provision for impairment in the current period |
| Guangdong Jianbang Group (Huiyang) Industrial Co., Ltd. | 450,000,000.00 | 191,184,186.54 | 258,815,813.46 |
| Subtotal | 450,000,000.00 | 191,184,186.54 | 258,815,813.46 |
(Continued)
| Items | Determination method of fair value and costs of disposal | Key parameters and determination basis |
| Guangdong Jianbang Group (Huiyang) Industrial Co., Ltd. | The fair value is determined by the assets-based method, and the relevant costs of disposal are determined by the estimated costs of disposal rate. | Estimated selling price, sales volume, costs of production and other related expenses. |
| Subtotal |
2) Other remarks
At the end of reporting period, the Company performed an impairment test on GuangdongJianbang Group (Huiyang) Industrial Co., Ltd. with signs of impairment, and made provision forimpairment on assets that may suffer losses based on the principle of prudence.
(II) Notes to items of the parent company income statement
1. Operating revenue/Operating cost
(1) Details
| Items | Current period cumulative | Preceding period comparative | ||
| Revenue | Cost | Revenue | Cost | |
| Main operations | 80,116,913.98 | 33,500,490.21 | 207,117,745.27 | 66,761,336.83 |
| Other operations | 32,529.16 | 31,823.86 | ||
| Total | 80,149,443.14 | 33,500,490.21 | 207,149,569.13 | 66,761,336.83 |
| Including: Revenue from contracts with customers | 14,830,961.90 | 886,697.76 | 161,658,149.52 | 27,249,452.24 |
(2) Breakdown of revenue from contracts with customers
1) Breakdown of revenue by goods or services
| Items | Current period cumulative | Preceding period comparative | ||
| Revenue | Cost | Revenue | Cost | |
| Real estates | 14,830,961.90 | 886,697.76 | 161,658,149.52 | 27,249,452.24 |
| Subtotal | 14,830,961.90 | 886,697.76 | 161,658,149.52 | 27,249,452.24 |
2) Breakdown of revenue by operating regions
| Items | Current period cumulative | Preceding period comparative | ||
| Revenue | Cost | Revenue | Cost | |
| Guangdong Province | 14,830,961.90 | 886,697.76 | 161,658,149.52 | 27,249,452.24 |
| Subtotal | 14,830,961.90 | 886,697.76 | 161,658,149.52 | 27,249,452.24 |
3) Breakdown of revenue by time of transferring goods or rendering services
| Items | Current period cumulative | Preceding period comparative |
| Recognized at a point in time | 14,830,961.90 | 161,658,149.52 |
| Subtotal | 14,830,961.90 | 161,658,149.52 |
2. Investment income
| Items | Current period cumulative | Preceding period comparative |
| Investment income from long-term equity investments under equity method | -93,927.64 | -178,240.64 |
| Investment income from long-term equity investments under cost method | 7,012,181.03 | 76,727,761.73 |
| Investment income from disposal of long-term equity investments | 1,816,919.56 | 203,360,562.19 |
| Investment income from held-for-trading financial assets | 161,491.79 | 159,619.01 |
| Dividend income from other equity instrument investments | 537,600.00 | 813,960.00 |
| Investment income from debt restructuring | 89,607.85 | |
| Total | 9,434,264.74 | 280,973,270.14 |
XV. Other supplementary information(I) Non-recurring profit or loss
1. Schedule of non-recurring profit or loss
(1) Details
| Items | Amount | Remarks |
| Gains on disposal of non-current assets, including write-off of provision for impairment | 9,940,254.23 | |
| Government grants included in profit or loss (excluding those closely related to operating activities of the Company, satisfying government policies and regulations, enjoyed based on certain standards, and continuously affecting gains or losses of the Company) | 440,049.96 | |
| Gains on changes in fair value of financial assets and financial liabilities held by non-financial enterprises, and gains from disposal of financial assets and financial liabilities, excluding those arising from hedging business |
| Items | Amount | Remarks |
| related to operating activities | ||
| Fund possession charge from non-financial entities and included in profit or loss | ||
| Gains on assets consigned to the third party for investment or management | 7,985,840.50 | |
| Gains on designated loans | ||
| Losses on assets incurred due to force majeure such as natural disasters | ||
| Reversed provision for impairment of receivables based on impairment testing on an individual basis | 3,994,030.79 | |
| Gains on acquisition of subsidiaries, joint ventures and associates due to the surplus of acquisition-date fair value of net identifiable assets in acquiree over the acquisition cost | ||
| Net profit on subsidiaries acquired through business combination under common control from the beginning of the period to the combination date | ||
| Gains on non-cash assets exchange | ||
| Gains on debt restructuring | ||
| One-off expenses incurred due to the discontinuation of relevant operating activities, such as severance payments | ||
| One-off effects on profit or loss due to amendments of laws and regulations on taxation, accounting, etc. | ||
| Share-based payments recognized at one time due to cancellation or modification of equity incentive plan | ||
| Gains arising from changes in the fair value of employee benefits payable after the vesting date for cash-settled share-based payment | ||
| Gains on changes in fair value of investment properties with subsequent measurement using the fair value model | ||
| Gains on transactions with unfair value | ||
| Contingent gains on non-operating activities | ||
| Management charges for consigned operations | ||
| Other non-operating revenue or expenditures | 393,461.44 | |
| Other profit or loss satisfying the definition of non-recurring profit or loss | ||
| Subtotal | 22,753,636.92 | |
| Less: Enterprise income tax affected | 5,639,314.23 | |
| Non-controlling interest affected (after tax) | -30,421.58 | |
| Net non-recurring profit or loss attributable to shareholders of the parent company | 17,144,744.27 |
2. Remarks on the exception that the Company recognized non-recurring profit or loss as listed inthe ―Interpretation Pronouncement on Information Disclosure Criteria for Public Companies No. 1– Non-Recurring Profit or Loss (2023 Edition)‖ as recurring profit or loss based on relevantdefinition and principle are as follows:
| Items | Amount | Reasons |
| Refund of handling fees for withholding individual income tax | 68,364.83 | As it occurs continuously from year to year and is not accidental, it is recognized as recurring profit or loss. |
| VAT extra deductions | 58,857.60 | As it occurs continuously from year to year and is not accidental, it is recognized as recurring profit or loss. |
3. Effect on non-recurring profit or loss in 2022 due to implementation of ―InterpretationPronouncement on Information Disclosure Criteria for Public Companies No. 1 – Non-RecurringProfit or Loss (2023 Edition)‖
| Items | Amount |
| Net non-recurring profit or loss attributable to the owner of the parent company in 2022 | 132,558,400.46 |
| Net non-recurring profit or loss attributable to the owner of the parent company calculated based on the ―Interpretation Pronouncement on Information Disclosure Criteria for Public Companies No. 1 – Non-Recurring Profit or Loss (2023 Edition)‖ in 2022 | 132,264,749.65 |
| Difference | 293,650.81 |
(II) ROE and EPS
1. Details
| Profit of the reporting period | Weighted average ROE (%) | EPS (yuan/share) | |
| Basic EPS | Diluted EPS | ||
| Net profit attributable to shareholders of ordinary shares | -6.52 | -0.2479 | -0.2479 |
| Net profit attributable to shareholders of ordinary shares after deducting non-recurring profit or loss | -6.96 | -0.2649 | -0.2649 |
2. Calculation process of weighted average ROE
| Items | Symbols | Current period cumulative |
| Net profit attributable to shareholders of ordinary shares | A | -250,839,542.09 |
| Non-recurring profit or loss | B | 17,144,744.27 |
| Net profit attributable to shareholders of ordinary shares after deducting non-recurring profit or loss | C=A-B | -267,984,286.36 |
| Opening balance of net assets attributable to shareholders of ordinary shares | D | 4,004,240,547.70 |
| Net assets attributable to shareholders of ordinary shares increased due to offering of new shares or conversion of debts into shares | E | |
| Number of months counting from the next month when the net assets were increased to the end of the reporting period | F | |
| Net assets attributable to shareholders of ordinary shares decreased due to share repurchase or cash dividends appropriation | G | 61,711,260.00 |
| Items | Symbols | Current period cumulative | |
| Number of months counting from the next month when the net assets were decreased to the end of the reporting period | H | 6 | |
| Others | Others | I | -607,261.41 |
| Number of months counting from the next month when the net assets were increased or decreased to the end of the reporting period | J | 6 | |
| Number of months in the reporting period | K | 12 | |
| Weighted average net assets | L= D+A/2+ E×F/K-G×H/K±I×J/K | 3,847,661,515.95 | |
| Weighted average ROE | M=A/L | -6.52% | |
| Weighted average ROE after deducting non-recurring profit or loss | N=C/L | -6.96% | |
3. Calculation process of basic EPS and diluted EPS
(1) Calculation process of basic EPS
| Items | Symbols | Current period cumulative |
| Net profit attributable to shareholders of ordinary shares | A | -250,839,542.09 |
| Non-recurring profit or loss | B | 17,144,744.27 |
| Net profit attributable to shareholders of ordinary shares after deducting non-recurring profit or loss | C=A-B | -267,984,286.36 |
| Opening balance of total shares | D | 1,011,660,000.00 |
| Number of shares increased due to conversion of reserve to share capital or share dividend appropriation | E | |
| Number of shares increased due to offering of new shares or conversion of debts into shares | F | |
| Number of months counting from the next month when the shares were increased to the end of the reporting period | G | |
| Number of shares decreased due to share repurchase | H | |
| Number of months counting from the next month when the shares were decreased to the end of the reporting period | I | |
| Number of shares decreased in the reporting period | J | |
| Number of months in the reporting period | K | 12 |
| Weighted average of outstanding ordinary shares | L=D+E+F×G/K-H×I/K-J | 1,011,660,000.00 |
| Basic EPS | M=A/L | -0.2479 |
| Basic EPS after deducting non-recurring profit or loss | N=C/L | -0.2649 |
(2) Calculation process of diluted EPS
The calculation process of diluted EPS is the same as that of basic EPS.
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
March 30, 2024