ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Interim Report 2020
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE &
PROPERTIES (GROUP) CO., LTD.
INTERIM REPORT 2020
2020-065
August 2020
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Interim Report 2020
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.Liu Zhengyu, chairman of the Company’s Board, Tang Xiaoping, the Company’s head forfinancial affairs, and Qiao Yanjun, head of the Company’s financial department (equivalent tofinancial manager) hereby guarantee that the Financial Statements carried in this Report arefactual, accurate and complete.All the Company’s directors have attended the Board meeting for the review of this Reportand its summary.Certain descriptions about the Company’s operating plans or work arrangements for thefuture mentioned in this Report and its summary, the implementation of which is subject tovarious factors, shall NOT be considered as promises to investors. Therefore, investors arereminded to exercise caution when making investment decisions.The Company is subject to the Guideline No. 3 of the Shenzhen Stock Exchange onInformation Disclosure by Industry—for Listed Companies Engaging in Real Estate.Risks facing the Company have been explained in detail in “X Risks Facing the Company andCountermeasures” in “Part IV Operating Performance Discussion and Analysis” herein.The Company has no interim 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. Interim Report 2020
Table of Contents
Part I Important Notes, Table of Contents and Definitions ...... 2
Part II Corporate Information and Key Financial Information ...... 5
Part III Business Summary ...... 8
Part IV Operating Performance Discussion and Analysis ...... 10
Part V Significant Events ...... 25
Part VI Share Changes and Shareholder Information ...... 33
Part VII Preferred Shares ...... 38
Part VIII Convertible Corporate Bonds ...... 39
Part IX Directors, Supervisors and Senior Management ...... 40
Part X Corporate Bonds ...... 41
Part XI Financial Statements ...... 42
Part XII Documents Available for Reference ...... 200
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Interim Report 2020
Definitions
| Term | Definition |
| “SPG”, the “Company”, the “Group” or “we” | ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. and its consolidated subsidiaries, except where the context otherwise requires |
| Holding Company | Shenzhen Investment Holdings Co., Ltd. |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Interim Report 2020
Part II Corporate Information and Key Financial Information
I Corporate Information
| Stock name | SPG, SPG-B | Stock code | 000029, 200029 |
| Stock exchange for stock listing | Shenzhen Stock Exchange | ||
| Company name in Chinese | 深圳经济特区房地产(集团)股份有限公司 | ||
| Abbr. (if any) | 深房集团 | ||
| Company name in English (if any) | ShenZhen Special Economic Zone Real Estate&Properties (Group).co.，Ltd． | ||
| Abbr. (if any) | SPG | ||
| Legal representative | Liu Zhengyu | ||
II Contact Information
| Board Secretary | Securities Representative | |
| Name | Tang Xiaoping | Luo Yi |
| Address | 47/F, SPG Plaza, Renmin South Road, Shenzhen, Guangdong, P.R.China | 47/F, SPG Plaza, Renmin South Road, Shenzhen, Guangdong, P.R.China |
| Tel. | （86 755）82293000-4638 | （86 755）82293000-4715 |
| Fax | （86 755）82294024 | （86 755）82294024 |
| Email address | tangxiaoping0086@126.com | spg@163.net |
III Other Information
1. Contact Information of the Company
Indicate by tick mark whether any change occurred to the registered address, office address and their zip codes, website address andemail address of the Company in the Reporting Period.
□ Applicable √ Not applicable
No change occurred to the said information in the Reporting Period, which can be found in the 2019 Annual Report.
2. Media for Information Disclosure and Place where this Report is KeptIndicate by tick mark whether any change occurred to the information disclosure media and the place for keeping the Company’s
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Interim Report 2020
periodic reports in the Reporting Period.
□ Applicable √ Not applicable
The newspapers designated by the Company for information disclosure, the website designated by the CSRC for disclosing theCompany’s periodic reports and the place for keeping such reports did not change in the Reporting Period. The said information canbe found in the 2019 Annual Report.IV Key Financial InformationIndicate by tick mark whether there is any retrospectively restated datum in the table below.
□ Yes √ No
| H1 2020 | H1 2019 | Change (%) | |
| Operating revenue (RMB) | 596,258,495.40 | 1,251,337,802.57 | -52.35% |
| Net profit attributable to the listed company’s shareholders (RMB) | 97,274,985.72 | 333,155,843.41 | -70.80% |
| Net profit attributable to the listed company’s shareholders before exceptional gains and losses (RMB) | 85,184,270.99 | 322,865,954.53 | -73.62% |
| Net cash generated from/used in operating activities (RMB) | -212,242,798.59 | 685,675,245.10 | -130.95% |
| Basic earnings per share (RMB/share) | 0.0962 | 0.3293 | -70.79% |
| Diluted earnings per share (RMB/share) | 0.0962 | 0.3293 | -70.79% |
| Weighted average return on equity (%) | 2.68% | 9.81% | -7.13% |
| 30 June 2020 | 31 December 2019 | Change (%) | |
| Total assets (RMB) | 4,485,810,299.86 | 4,909,669,536.09 | -8.63% |
| Equity attributable to the listed company’s shareholders (RMB) | 3,597,595,143.65 | 3,666,874,569.99 | -1.89% |
V Accounting Data Differences under Chinese Accounting Standards (CAS) andInternational Financial Reporting Standards (IFRS) and Foreign Accounting Standards
1. Net Profit and Equity Differences 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 | |||
| H1 2020 | H1 2019 | Ending amount | Beginning amount | |
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Interim Report 2020
| Under CAS | 97,274,985.72 | 333,155,843.41 | 3,597,595,143.65 | 3,666,874,569.99 |
| Adjusted as per IFRS | ||||
| Under IFRS | 97,274,985.72 | 333,155,843.41 | 3,597,595,143.65 | 3,666,874,569.99 |
2. Net Profit and Equity Differences under CAS and Foreign Accounting Standards
□ Applicable √ Not applicable
No such differences for the Reporting Period.
3. Reasons for Accounting Data Differences Above
□ Applicable √ Not applicable
XI Exceptional Gains and Losses
√ Applicable □ Not applicable
Unit: RMB
| Item | Reporting Period | Note |
| Gain or loss on disposal of non-current assets (inclusive of impairment allowance write-offs) | -19,011.53 | |
| Government subsidies charged to current profit or loss (exclusive of government subsidies given in the Company’s ordinary course of business at fixed quotas or amounts as per the government’s uniform standards) | 2,792,616.39 | Pandemic-related government subsidy |
| Gain or loss on assets entrusted to other entities for investment or management | 15,217,058.60 | Gains on investments in structured deposits at bank |
| Non-operating income and expense other than the above | -1,369,710.49 | |
| Anti-pandemic donation expenses | -500,000.00 | |
| Less: Income tax effects | 4,030,238.24 | |
| Total | 12,090,714.73 | -- |
Explanation of why the Company classifies a gain/loss item as exceptional according to the definition in the ExplanatoryAnnouncement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Exceptional Gain/LossItems, or reclassifies any exceptional item listed in the said explanatory announcement as recurrent:
□ Applicable √ Not applicable
No such cases for the Reporting Period.
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Interim Report 2020
Part III Business Summary
I Principal Activity of the Company in the Reporting PeriodThe Company primarily develops and sells residential properties in two cities, Shenzhen andShantou. In Shenzhen, the Chuanqi Donghu Mingyuan project completed the filing for completedconstruction in December 2019 and has started the hand-over and move-in process, which iscumulatively around 60% sold; and regarding the Cuilinyuan project, residential units have beensold out and the sale of commercial/retail portion is underway. In Shantou, the Tianyuewan Phase Iproject is around 60% sold cumulatively; and the Tianyuewan Phase II project has been topped out.II Significant Changes in Major Assets
1. Significant Changes in Major Assets
| Major assets | Main reason for significant changes |
| Equity assets | No significant change |
| Fixed assets | No significant change |
| Intangible assets | No significant change |
| Construction in progress | No significant change |
| Accounts payable | The ending amount was down by RMB79,913,337.00 (or 32.72%) from the beginning amount, primarily driven by the payments made for construction. |
| Advances from customers | The ending amount was down by RMB151,366,151.23 (or 94.91%) from the beginning amount, primarily driven by the reclassification to contract liabilities. |
| Taxes payable | The ending amount was down by RMB378,466,874.92 (or 64.62%) from the beginning amount, primarily driven by the payment of land VAT. |
2. Major Assets Overseas
□ Applicable √ Not applicable
III Core Competitiveness AnalysisAs one of the earliest real estate listed companies in Shenzhen, the Company has a history over 40years in real estate development in Shenzhen and rich experience in the main business of real estatedevelopment. In recent years, thanks to the experience learned from the Shenzhen-locatedChuanqishan project, Chuanqi Shanglin project, Chuanqi Jingyuan project and Chuanqi DonghuMingyuan project, as well as from the Shantou-located projects, the Company accelerates theestablishment of a modern enterprise HR management system and works hard in building a
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Interim Report 2020
professional and high-quality development team. It also keeps improving the managementmechanism and processes for project development. As a result, the professionalism andmanagement capability of the Company have improved significantly; planning, construction, costcontrol, marketing capability and brand image have been effectively enhanced; and the operationalcapability in the main business of real estate keeps increasing, along with the core competitiveness.As of the Reporting Period (inclusive), the Company has been honored jointly by the GuangdongProvincial Enterprise Confederation and the Guangdong Provincial Association of Entrepreneurs asa “Most Honest Enterprise in Guangdong Province” for eight years in a row. It has also wonaccolades from the Shenzhen Real Estate Association, namely, the “Real Estate Developer inShenzhen with the Highest Brand Value” for the past two years.
Part IV Operating Performance Discussion and Analysis
I OverviewFor the first half of 2020, the Company recorded operating revenue of RMB596 million, down
52.35% year-on-year; a profit before tax of RMB141 million, down 68.40% year-on-year; and a netprofit attributable to the listed company’s shareholders of RMB97 million, down 70.80%year-on-year. As at 30 June 2020, total assets stood at RMB4,486 million, down 8.63% from thebeginning amount; total liabilities stood at RMB1,030 million, down 25.63% from the beginningamount; and the debt/asset ratio was 22.96%, down by 5.25 percentage points from the beginningratio.Since its abrupt occurrence at the beginning of 2020, COVID-19 has continued to spreadthroughout the whole world, dragging global economy into the most severe recession since theGreat Depression. The central government has stepped up effort in regular epidemic prevention andcontrol, and promoted the resumption of work and production on all fronts. In the first quarter, withthe substantial decline in domestic consumption and investment, the economy faced greaterdownward pressure; in the second quarter, the real estate market operation exhibited a momentumof recovery. In terms of policy, the country has continued the orientation that “Houses are for livingin, not for speculating on” and implemented real estate policies appropriate to local situation,leading to an obvious trend of differentiation between urban regions.Facing the complicated and tough macro-economic environment and the fierce market competition,the Company’s operation team has braved the challenges and implemented policies in a targetedway. They have balanced between the epidemic prevention and control and business developmentand tightened effort in all work, in a bid to counter the negative impact brought by COVID-19. Ingeneral, the Company has carried out its work orderly in all aspects, including the development ofmain businesses, operations management, assets restructuring, Party building, epidemic preventionand control, and production safety.(I) Highlights in Main Business Development
1. Property sales reached the target. To weaken the negative impact of COVID-19 on property sales,the Company carried out promotion and developed customers through multiple channels, includingplacing equal focus on online and offline promotion. During the Reporting Period, the Companyoutperformed the target for new contract-based sales, laying a solid foundation for theaccomplishment for the target of the whole year.
2. Projects were advanced steadily. As at the end of the Reporting Period, landscaping of ChuanqiDonghu Mingyuan in Shenzhen was improved and handed over, and the construction andinstallation for the residence gate were completed; main works of Shantou Tianyuewan werecompleted, and landscaping of the mountain park was completed.(II) Stable Operations Management with Improvement
1. Financial management was regulated and effective. While ensuring the satisfaction of need forworking capital, the Company fully increased the efficiency of idle fund. It strengthenedcommunication with its cooperating banks to withdraw the fund from property sales. In early May,the Company successfully executed the cash dividends for 2019. During the Reporting Period, theCompany gained an income of more than RMB20 million from wealth management, includingstructured deposits and agreement-based deposits with banks.
2. Property leasing moved ahead under pressure. Under the double impact of COVID-19 andeconomic downturn, situations such as cancellation of leasing and reduction of leasing size havebeen frequent. Focusing on customers’ needs, the Company made every effort to retain existingcustomers and develop new customers in a bid to expand business while maintaining the base.
3. Breakthroughs were made in problems carried over from the past. During the Reporting Period,the Company sped up the collection of overdue payment in lawsuits involving overdue rentals andmanagement fees, and won the lawsuits with executable judgement.
4. Solid achievements were made in cost control. By firmly sticking to a full-cost, whole-processand penetrating management concept in production and operation, the Company continued tostrengthen project cost control, with satisfying results achieved.(III) Continuous Advancement of Assets RestructuringDuring the Reporting Period, the Company remained in share trading suspension due to majorassets restructuring. It continued to proactively work on fundamental matters, including duediligence for restructuring, additional audit, additional evaluation and the updating of restructuringrelated material and information. The Company disclosed the progress of those matters strictly inaccordance with regulations and went through the procedures for share trading suspension andresumption. It continued to keep in touch with all restructuring related parties, and strengthenedcommunication with regulatory authorities. In addition, it answered calls from investors patientlyand attentively, and replied to their questions on irm.cninfo.com.cn, winning their understandingand support.(IV) Realistic and Pragmatic Approach for Party BuildingThe Company persisted in synchronous research, arrangement and advancement for its efforts inParty building and business. It gave full play to the leading role of the Party committee incontrolling the direction, managing the overall situation and ensuring implementation. TheCompany attached great importance to the Party’s political theory learning and education, andensured regular and policy-based learning in the Theory Center Group of its Party committee. Allits Party committee and branches strictly implemented the “Three Meeting One Lesson” Systemand the “Five-One” Project for Party members’ education, promoted Xi Jinping Thought onSocialism with Chinese Characteristics for a New Era into the Company’s front line, andconsolidated the results of themed education. The Company continued to improve theaccountability for the development of honest and non-corruptible practice. It established a list ofkey tasks for such development, strengthened the “Two responsibility”, and continuously enforcedfull and strict discipline over its Party members.(V) Marked Achievements in Epidemic Prevention and Control
During the Reporting Period, there was no cluster infection among the Group’s more than 1,900employees, over 30 residences operated and managed by its property management subsidiary, andthousands of office workers at SPG Plaza. Additionally, the Company proactively fulfilled its socialresponsibilities as a state-owned enterprise. During the Reporting Period, it cut and exemptedproperty rentals of more than RMB10 million and donated RMB500,000 for the epidemicprevention and control in Hubei.(VI) Stable and Orderly Safe ProductionThe Company upheld the safety concept in its entire production process, implemented theaccountability system for production safety, and strengthened the roles in production safety. It kepta tight grip on the identification and management of safety hazards, persisted in zero tolerance onsafety hazards, and reinforced its defense line for production safety. Through a combination ofmeasures, the Company conducted training to promote safety knowledge to its employees as atangible step to strengthen the safety awareness among all its staff. It continued to organizeemergency drills on a regular basis to improve its emergency management capability in all aspects.During the Reporting Period, the Company’s project construction and the production situations ofits subsidiaries were stable and orderly without any major safety accident.The Company is subject to the Guideline No. 3 of the Shenzhen Stock Exchange on Information Disclosure by Industry—for ListedCompanies Engaging in Real Estate.
Currently, China is gradually getting rid of the negative impact brought by COVID-19. While itseconomic operation takes on a momentum of growth towards recovery, the future situation remainscomplicated and tough with great instability and uncertainties. The Company will actively adapt tothe macro economic development trend, and stick to the concept of pursuing progress whileensuring stability and of seeking continuous development. It will continue to focus on the goal ofbuilding a competitive and professional real estate enterprise, and speed up the development andconstruction of existing land and projects. It will prudently look for new investment opportunities,and seek a path of high quality development in the context of complicated and changeable externalenvironment and intense market competition.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 | 2.67 | 2.67 |
| Total | 0.59 | 2.67 | 2.67 |
Development status of major projects:
| City/region | Name of project | Location | Status | The Company’s interest | Time for commencement of construction | % developed | % constructed | Site area（㎡） | Planned floor area with plot ratio （㎡） | Floor area completed in the Current Period（㎡） | Cumulatively completed floor area （㎡） | Expected total investment (RMB’0,000) | Cumulative investment (RMB’0,000) |
| Shenzhen | Chuanqi Donghu Mingyuan | Luohu District | Construction completed on 18 December 2019 | 100.00% | 1 February 2016 | 100% | 100.00% | 5,890 | 45,256 | 45,256 | 45,256 | 51,000 | 41,602 |
| Shantou | Tianyuewan Phase II | Chaoyang District | Framework in construction | 100.00% | 1 October 2018 | 80% | 80.00% | 31,168 | 153,470 | 0 | 0 | 65,485 | 40,241 |
Sales status of major projects:
| City/region | Name of project | Location | Status | The Company’s interest | Floor area with plot ratio （㎡） | Floor area available for sale （㎡） | Cumulatively pre-sold/sold floor area （㎡） | Floor area pre-sold/sold in the Current Period（㎡） | Pre-sale/sales revenue generate in the Current Period (RMB’0,000) | Cumulatively settled floor area (㎡) | Floor area settled in the Current Period（㎡） | Pre-sale/sales revenue settled in the Current Period (RMB’0,000) |
| Shenzhen | Chuanqi Donghu Mingyuan | Luohu District | Ready for sale | 100.00% | 45,256 | 32,857 | 18,575 | 10,885 | 71,529 | 8,220 | 3,450 | 21,160 |
| Shenzhen | Cuilinyuan | Longgang District | Ready for sale | 100.00% | 60,111 | 56,137 | 51,507 | 813 | 2,843 | 48,427 | 7,302 | 9,147 |
| Shantou | Tianyuewan Phase I | Chaoyang District | Ready for sale | 100.00% | 153,470 | 151,594 | 82,268 | 13,070 | 7,179 | 66,668 | 13,715 | 7,558 |
Rental status of major projects:
| Name of project | Location | Use | The Company’s interest | Rentable area （㎡） | Cumulative rented area （㎡） | Average occupancy rate |
| Real Estate Mansion | Shenzhen | Commercial | 100.00% | 3,413.88 | 3,413.88 | 100.00% |
| North Block 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% | 59,462.52 | 37633.20 | 63.29% |
| SPG Plaza Podium | Shenzhen | Commercial | 100.00% | 21,449.72 | 10327.14 | 48.00% |
| Wenjin Garden | Shenzhen | Commercial | 100.00% | 3,531.60 | 3,531.60 | 100.00% |
Primary land development:
√ Applicable □ Not applicable
| Name of project | Location | The Company’s interest | Expected total investment (RMB’0,000) | Cumulative investment (RMB’0,000) | Area of land planned to be formed（㎡） | Area of land cumulatively formed（㎡） | Area of land formed in the Current Period（㎡） | Cumulatively sold floor area （㎡） | Floor area sold in the Current Period（㎡） | Cumulatively settled land area（㎡） | Land area settled in the Current Period（㎡） | Cumulative revenue from primary land development (RMB’0,000) | Revenue from primary land development in the Current Period (RMB’0,000) | Revenue collected (RMB’0,000) |
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 | |||
Development strategy and operating plan for the coming year:
Centering around the goal for 2020, the Company will set the tone of “improving operations,advancing restructuring, ensuring safety and strengthening Party building”, and make every effort inthe following four aspects.(I) Achieving Business Stability with Focus on BusinessThe Company will focus on project sales and ensure the accomplishment of its annual sales target.It will make full effort to guarantee the quality and progress of its project construction, and developprojects with fine quality. It will closely follow the land market updates, and strive to develop newland or make breakthroughs in project development within the year. In terms of property leasing,the Company will endeavor to reach the year’s leasing target by all possible means. Its subsidiariesshould drive the resumption of work and production in a steady pace, and strive towards the annualtargets.(II) Ensuring Orderly Progress of Key Work through Rational CoordinationThe Company will keep close watch on the trends of capital market and regulatory policies andstrengthen communication with regulatory authorities. It will perform its obligation of information
disclosure, properly handle its investor relations, and drive the restructuring process together withall parties of the major assets restructuring according to regulations. The Company will continue toimprove the allocation of human resources, strengthen its staff team building, optimize the agestructure and knowledge structure of its talent team, and maintain the strength and execution of theteam. It will work on the formulation of its “14th Five-Year” strategic plan as a blueprint for thenew journey of the next five-year plan. It will make solid steps to ensure the sustainability andstability of its routine operations management, and continue to enhance its management quality.(III) Implementing the Epidemic Prevention and Control and Ensuring Production Safetythrough Persistent EffortThe Company will always be on full alert and implement the epidemic prevention and control withhigh standards and strict requirements. It will ensure targeted and strong epidemic prevention andcontrol, and make full effort in the battle against the virus. The Company will promote the conceptof production safety, continue to improve the production safety management system, and advancethe standardization of production safety and the building of the “double” prevention mechanism. Itwill strengthen the accountability for production safety, step up effort in the identification of safetyhazards, and intensity safety management in key areas, so as to prevent production safety accidentand create favorable conditions for the accomplishment of the year’s business target.(IV) Strengthening the Development of Honest and Non-corruptible Practice Led by PartyBuildingThe Company will further study and implement Xi Jinping Thought on Socialism with ChineseCharacteristics for a New Era, and put into effect the guiding principles of the Party’s 19th NationalCongress and the second and third plenary sessions of its 19th Central Committee. It will strengthenthe roles of political discipline and political rules, intensify supervision, discipline implementationand accountability, and extend the strict discipline over the Party to its grassroots level. TheCompany will fully implement the decisions and arrangements of the superior Party committees,exert its leading role in controlling the direction, managing the overall situation and ensuringimplementation as a Party committee of a state-owned enterprise, and integrate Party leadership intoits corporate governance to lead itself into high quality development.Provision of guarantees for homebuyers on bank mortgages:
√ Applicable □ Not applicable
| Project | Guarantee period | Guarantee amount (RMB’0,000) | Note |
| Cuilinyuan | Until the property ownership certificate is registered as collateral and handed over to bank for keeping | 10,273.65 | |
| Chuanqi Donghu Mingyuan | Until the property ownership certificate is registered as collateral and handed over to bank for keeping | 8,116.93 | |
| Tianyuewan Phase I | Until the property ownership certificate is registered as collateral and handed over to bank for | 18,994.00 |
keepingTotal
| Total | 37,384.58 |
As at 30 June 2020, the guarantees provided by the Group for the mortgage loans of buyers of its residential units, which is a normalpractice in the real estate industry, were RMB373.8458 million in total.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
II Core Business AnalysisSee “I Overview” above.Year-on-year changes in key financial data:
Unit: RMB
| H1 2020 | H1 2019 | Change (%) | Main reason for change | |
| Operating revenue | 596,258,495.40 | 1,251,337,802.57 | -52.35% | Decrease in property sales carryforwards |
| Cost of sales | 343,908,087.46 | 437,127,976.25 | -21.33% | |
| Selling expense | 8,536,448.38 | 18,474,060.33 | -53.79% | Sales halt in Q1 caused by the pandemic |
| Administrative expense | 40,253,977.26 | 30,812,771.33 | 30.64% | |
| Finance costs | -5,747,585.98 | -6,626,259.12 | 13.26% | |
| Income tax expense | 43,599,689.97 | 112,729,793.86 | -61.32% | Decrease in profit |
| Net cash generated from/used in operating activities | -212,242,798.59 | 685,675,245.10 | -130.95% | Decrease in proceeds from sale of commodities and rendering of services |
| Net cash generated from/used in investing activities | 1,020,263,040.32 | -388,696,596.57 | 362.48% | Recovery of principal and related income of structured deposit at bank upon maturity in May |
| Net cash generated from/used in financing activities | -166,923,900.00 | -204,332,000.00 | 18.31% | Payment of the 2019 final dividend |
| Net increase in cash and cash equivalents | 641,032,673.52 | 91,958,457.22 | 597.09% | |
| Return on investment | 15,217,058.60 | 14,288,098.55 | 6.50% | Income from structured deposit at bank |
Major changes in the profit structure or sources of the Company in the Reporting Period:
□ Applicable √ Not applicable
No such cases in the Reporting Period.Breakdown of operating revenue:
Unit: RMB
| H1 2020 | H1 2019 | Change (%) | |||
| Operating revenue | As % of total operating revenue (%) | Operating revenue | As % of total operating revenue (%) | ||
| Total | 596,258,495.40 | 100% | 1,251,337,802.57 | 100% | -52.35% |
| By business segment | |||||
| Real estate | 382,458,149.70 | 64.14% | 983,278,946.94 | 78.58% | -61.10% |
| Construction service | 124,548,909.59 | 20.89% | 149,651,610.68 | 11.96% | -16.77% |
| Rental service | 21,780,551.36 | 3.65% | 32,096,693.65 | 2.56% | -32.14% |
| Property management service | 63,715,063.94 | 10.69% | 77,686,206.46 | 6.21% | -17.98% |
| Other | 3,755,820.81 | 0.63% | 8,624,344.84 | 0.69% | -56.45% |
| By product | |||||
| Housing units | 381,862,911.60 | 64.04% | 182,142,033.38 | 14.56% | 109.65% |
| Apartments | 0.00 | 0.00% | 795,797,573.30 | 63.60% | -100.00% |
| Shops and parking place | 595,238.10 | 0.10% | 6,456,714.32 | 0.52% | -90.78% |
| Other | 213,800,345.70 | 35.86% | 266,941,481.57 | 21.33% | -19.91% |
| By geographic segment | |||||
| Guangdong Province | 546,573,961.29 | 91.67% | 1,142,030,927.15 | 91.26% | -52.14% |
| Other regions in China | 49,542,269.40 | 8.31% | 108,983,973.87 | 8.71% | -54.54% |
| Overseas | 142,264.71 | 0.02% | 322,901.55 | 0.03% | -55.94% |
Operating division, product category or operating segment contributing over 10% of operating revenue 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 business segment | ||||||
| Real estate | 382,458,149.70 | 138,000,861.61 | 63.92% | -61.10% | -31.22% | -15.68% |
| Construction service | 124,548,909.59 | 122,182,750.01 | 1.90% | -16.77% | -15.20% | -1.82% |
| Rental service | 21,780,551.36 | 17,080,923.54 | 21.58% | -32.14% | 25.23% | -35.93% |
| Property management | 63,715,063.94 | 61,918,257.30 | 2.82% | -17.98% | -12.88% | -5.69% |
| service | ||||||
| Other | 3,755,820.81 | 7,648,018.09 | -103.63% | -56.45% | -0.52% | -114.49% |
| By product | ||||||
| Housing units | 381,862,911.60 | 137,763,181.19 | 63.92% | 109.65% | 63.49% | 10.19% |
| Shops and parking place | 595,238.10 | 237,680.42 | 60.07% | -90.78% | -90.76% | 60.07% |
| Other | 213,800,345.70 | 205,907,225.85 | 3.69% | -19.91% | -13.34% | -7.30% |
| By geographic segment | ||||||
| Guangdong Province | 546,573,961.29 | 294,947,142.62 | 46.04% | -52.14% | -11.27% | -24.86% |
| Other regions in China | 49,542,269.40 | 48,960,944.84 | 1.17% | -54.54% | -53.25% | -2.74% |
| Overseas | 142,264.71 | 100.00% | -55.94% | 0.00% | ||
Main business data of the most recent period restated according to changed statistical caliber for the Reporting period
□ Applicable √ Not applicable
Any over 30% YoY movements in the data above and why:
√ Applicable □ Not applicable
Affected by the COVID-19 epidemic, businesses of property sales, rental income and hotels declined year-on-year.III Non-Core Business Analysis
□ Applicable √ Not applicable
IV Analysis of Assets and Liabilities
1. Significant Changes in Asset Composition
Unit: RMB
| End of Reporting Period | End of the same period of last year | Increase/decrease in proportion | Notes to significant changes | |||
| Amount | Proportion to total assets | Amount | Proportion to total assets | |||
| Monetary assets | 2,148,222,433.87 | 47.89% | 1,240,480,893.15 | 24.47% | 23.42% | Caused by expiration of bank structured deposits |
| Accounts receivable | 49,341,432.90 | 1.10% | 39,421,868.07 | 0.78% | 0.32% | |
| Inventories | 1,435,950,855.23 | 32.01% | 1,602,436,237.11 | 31.61% | 0.40% | |
| Investment | 619,021,572.7 | 13.80% | 611,746,542.66 | 12.07% | 1.73% | |
| property | 4 | |||||
| Long-term equity investments | 469,838.65 | 0.01% | 12,561,107.24 | 0.25% | -0.24% | |
| Fixed assets | 29,086,917.96 | 0.65% | 31,903,409.26 | 0.63% | 0.02% | |
| Short-term borrowings | 45,904,965.19 | 1.02% | 21,334,705.19 | 0.42% | 0.60% | |
| Long-term borrowings | 0.00% | 0.00% | 0.00% | |||
| Accounts payable | 164,311,141.46 | 3.66% | 244,224,478.46 | 4.97% | -1.31% | |
| Taxes payable | 207,233,940.44 | 4.62% | 585,700,815.36 | 11.93% | -7.31% | Caused by payment of taxes |
2. Assets and Liabilities Measured at Fair Value
√ Applicable □ Not applicable
Unit: RMB
| Item | Beginning amount | Gain/loss on fair-value changes in the Reporting Period | Cumulative fair-value changes charged to equity | Impairment allowance for the Reporting Period | Purchased in the Reporting Period | Sold in the Reporting Period | Other changes | Ending amount |
| Financial assets | ||||||||
| 4. Investments in other equity instruments | 33,126,730.04 | -415,909.17 | 32,710,820.87 | |||||
| Total of the above | 33,126,730.04 | -415,909.17 | 32,710,820.87 | |||||
| Financial liabilities | 0.00 | 0.00 | ||||||
Other changeSignificant changes to the measurement attributes of the major assets in the Reporting Period:
□ Yes √ No
3. Restricted Asset Rights as at the Period-End
| Item | Ending carrying value | Reasons |
| Accounts receivable | 45,904,965.19 | Pledge for short-term borrowings |
| Total | 45,904,965.19 | -- |
V Investment Analysis
1. Total Investments Made
□ Applicable √ Not applicable
2. Significant Equity Investments Made in the Reporting Period
□ Applicable √ Not applicable
3. Significant Non-equity Investments Ongoing in the Reporting Period
□ Applicable √ Not applicable
4. Financial Assets at Fair Value
□ Applicable √ Not applicable
5. Financial Investments
(1) Securities Investments
□ Applicable √ Not applicable
No such cases in this Reporting Period
(2) Investment in Derivative Financial Instruments
□ Applicable √ Not applicable
No such cases in this Reporting Period
VI Sale of Major Assets and Equity Interests
1. Sale of Major Assets
□ Applicable √ Not applicable
No such cases in this Reporting Period
2. Sale of Major Equity Interests
□ Applicable √ Not applicable
VII Principal Subsidiaries and Joint Stock Companies
√ Applicable □ Not applicable
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 |
| Shenzhen SPG Longgang Development Co., Ltd. | Subsidiary | Development of real estate | 30,000,000.00 | 405,539,843.85 | 123,463,343.01 | 91,902,660.95 | 50,319,673.83 | 37,739,755.37 |
| Shantou SEZ, Wellam FTY, Building Development, Co., Ltd. | Subsidiary | Development of real estate | 91,226,120.44 | 186,989,164.26 | 98,038,844.04 | 3,894,630.45 | 1,009,239.63 | -2,231,560.52 |
| Shantou Huafeng Real Estate Development Co., Ltd. | Subsidiary | Development of real estate | 80,000,000.00 | 894,785,023.10 | 21,341,063.56 | 75,582,142.07 | 223,546.51 | 26,948.42 |
| Great Wall Estate Co., Inc. (U.S.) | Subsidiary | Lease | 2,051,146.00 | 19,124,375.28 | -87,150,881.75 | 142,264.71 | 114,909.18 | 114,909.18 |
| Shenzhen Zhentong Engineering Co., Ltd. | Subsidiary | Installation and construction | 10,000,000.00 | 179,323,533.91 | 24,337,408.63 | 125,058,062.17 | 95,637.11 | 51,854.24 |
| Shenzhen Property Management Co., Ltd. | Subsidiary | Property management | 7,250,000.00 | 96,184,885.73 | 29,594,171.03 | 65,456,729.66 | 398,666.02 | 1,575,210.74 |
| Shenzhen Petrel Hotel Co., Ltd. | Subsidiary | Hotel Service | 30,000,000.00 | 49,206,430.09 | 41,842,103.47 | 4,787,492.29 | -4,805,255.51 | -4,378,988.31 |
| Shenzhen Huazhan Construction | Subsidiary | Construction supervision | 8,000,000.00 | 9,812,000.10 | 9,397,408.54 | 1,244,103.06 | -24,889.40 | -14,889.40 |
| Supervision Co., Ltd. | ||||||||
| Xin Feng Enterprise Co., Ltd. | Subsidiary | Investment and management | 502,335.00 | 125,117,088.62 | -468,942,718.41 | 2,273,925.21 | -2,576,791.40 | -2,795,409.82 |
Subsidiaries obtained or disposed in the Reporting Period:
□ Applicable √ Not applicable
Information about principal subsidiaries and joint stock companies:
1. Except the Company, the subordinate subsidiaries engaged in real estate development mainlyinclude: Shenzhen SPG Longgang Development Co., Ltd., Shantou SEZ, Wellam FTY, BuildingDevelopment, Co., Ltd., Shantou Huafeng Real Estate Development Co., Ltd. The Cuilinyuanproject developed by Shenzhen SPG Longgang Development Co., Ltd. brought forward RMB91.47million in H1 of 2020 with an accumulated sales rate of 92%, accounting for 24% of the Company'sreal estate sector income, and 15% of the Group's combined profits. Jinyedao and YuejingDongfangdeveloped by Shantou SEZ, Wellam FTY, Building Development, Co., Ltd. were sold as remainingbuildings with relatively small percentages of sales volume and carry-over amount. And ShantouHuafeng Real Estate Development Co., Ltd. was responsible for the development of Tianyuewanproject (divided into Phase I and Phase II). Tianyuewan Phase I was opened for sale in October2016, and Phase II started construction in November 2018. The accumulated sales rate of the PhaseI as of now is 60%.
2. Shenzhen Zhentong Engineering Co., Ltd. was engaged in the business of building installationand maintenance with the operating revenues of RMB125.06 million for H1 of 2020 and of 21% tothe operating revenues of the Company with a YoY decrease of 16.80%.
3. Shenzhen Property Management Co., Ltd was engaged in the industry of property management.The operating revenues were of RMB65.46 million for H1 of 2020 that was of 11% to the operatingrevenues of the Company with a YoY decrease of 18.69%.
4. Shenzhen Petrel Hotel Co., Ltd. was engaged in hotel and rental business which was relativelyaffected most by the COVID-19 epidemic. The operating revenues were of RMB4.79 million forH1 of 2020 with a YoY decrease of 63.32%.
VIII Structured Bodies Controlled by the Company
□ Applicable √ Not applicable
IX Operating Performance Forecast for January-September 2020Warning of a forecast negative net profit for the January-September period of the current year or a considerable YoY change therein,as well as the reasons:
√ Applicable □ Not applicable
Forecast of operating results: the net profit is positive with a YoY decrease over 50%Type of forecast data: Interval data
| January-December 2020 | January-Dece | Change |
| mber 2019 | ||||||||
| Equity attributable to shareholders of the listed company (RMB’0,000) | 16,000 | -- | 22,000 | 43,952 | Down | -63.60% | -- | -49.95% |
| Basic earnings per share (RMB /share) | 0.1582 | -- | 0.2175 | 0.4344 | Down | -63.59% | -- | -49.94% |
| Note | The sales carryforwards of the Company’s real estate decreased year on year. | |||||||
X Risks Facing the Company and Countermeasures
(1) Risks Facing the Company:
1. Risks from macroeconomic environment. In 2020, the economic development of China facesunprecedented difficulties and challenges. Although, we have achieved remarkable fruits in theprevention and control of COVID-19 epidemic, the recovery of domestic economy is still underhigh pressure due to the spread of overseas epidemic and increasing uncertainty generated fromglobal and regional political friction and conflict.
2. Risks from policy on real estate industry. The Chinese government adheres to the principle that“Houses are for living in, not for speculating on”, adheres not to take the real estate as a shore-termmeasure for stimulating economy and adheres to the target of “stabilizing land prices, housingprices and expectations”. Each region implements policies based on its actual situation and adoptsdifferentiated accurate control. The real estate markets of some regions still face new challenges.
3. Potential risks from assets restructuring. The major assets restructuring of the Company is asignificant and unprecedented event with complex trading structure for involved in the ShenzhenState-owned Enterprise Reform and with large-scale assets since the underlying assets it plans topurchase are industrial leading assets. Thus, the trading of its shares has been suspended for almostfour years. At present, all matters in restructuring are steadily pushed forward. For the uncertaintyof related events, investors are reminded of the investment risks.
4. Risks from sustainable development. The Company does not increase its land reserve in recentyears, influenced by the major assets restructuring and the land reserve at present is limited. TheCompany faces major challenges in operation and development of main business.
5. Operating risks from COVID-19 epidemic. The COVID-19 epidemic has brought impacts to theCompany’s main business and affiliates to some extent, putting pressure on the annual operatingincome and performance targets.
2. Countermeasures
1. The Company will unremittingly pay attention to international and domestic macroeconomicsituation and the industrial trend, and then formulate flexible coping strategies.
2. The Company will further strengthen its ability to develop main business, raise its managementlevel and make efforts to reinforce the marketing of projects so as to stabilize the fundamental ofthe Company.
3. The Company will enhance the communication with regulators together with parties involved inthe restructuring and make full efforts to promote the process of major assets restructuring.
4. The Company will increase its land reserve timely and in an appropriate way to maintain thesustainable development of the Company in the future.
5. The Company will do well in the safety in project construction, rental property and workplace,and will properly reduce the influence of the epidemic on production and operation so as to creategood conditions for achieving the annual business goals.
Part V Significant Events
I. Annual and Extraordinary General Meeting Convened during the Reporting Period
1. General Meeting Convened during the Reporting Period
| Meeting | Type | Investor participation ratio | Convened date | Disclosure date | Index to disclosed information |
| The 1st Extraordinary General Meeting of 2020 | Extraordinary General Meeting | 63.59% | 15 January 2020 | 16 January 2020 | Resolutions of the 1st Extraordinary General Meeting of 2020 disclosed on www.cninfo.com.cn |
| The 2019 Annual General Meeting | Annual General Meeting | 63.60% | 29 April 2020 | 30 April 2020 | Resolutions of 2019 Annual General Meeting disclosed on www.cninfo.com.cn |
| The 2nd Extraordinary General Meeting of 2020 | Extraordinary General Meeting | 63.59% | 30 June 2020 | 1 July 2020 | Resolutions of the 2nd Extraordinary General Meeting of 2020 disclosed on www.cninfo.com.cn |
2. Extraordinary General Meeting Convened at Request of Preference Shareholders with Resumed VotingRights
□ Applicable √ Not applicable
II. Interim Dividend Plan for the Reporting Period
□ Applicable √ Not applicable
The Company has no interim dividend plan.
III. Commitments of the Company’s Actual Controller, Shareholders, Related Parties andAcquirer, as well as the Company and Other Commitment Makers, Fulfilled in the ReportingPeriod or still Ongoing at Period-End
□ Applicable √ Not applicable
No such cases in the Reporting Period.
IV. Engagement and Disengagement of CPAs Firm
Has the interim financial report been audited?
□Yes √ No
This interim Report is unaudited.V. Explanations Given by Board of Directors and Supervisory Committee Regarding“Modified Auditor’s Report” Issued by CPAs Firm for the Reporting Period
□ Applicable √ Not applicable
VI. Explanations Given by Board of Directors Regarding “Modified Auditor’s Report” Issuedfor Last Year
□ Applicable √ Not applicable
VII. Bankruptcy and Restructuring
□ Applicable √ Not applicable
No such cases in the Reporting Period.
VIII. Legal Matters
Significant lawsuits or arbitrations:
□ Applicable √ Not applicable
No such cases in the Reporting Period.Other legal matters:
√Applicable □ Not applicable
| Lawsuit/arbitration | Amount involved (RMB’0,000) | Estimated liabilities or not | Progress | Decision and influence | Execution of decision | Disclosure date | Index to disclosed information |
| Xi’an Project Lawsuit | 2,100 | No | In execution | ① Business Tourism 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 | The applicant has received RMB15.20 million. Now Business Tourism Company has no executable properties and Xi’an Joint Commission on Commerce has | 14 March 2020 | Annual Report 2019 (full text) on www.cninfo.com.cn |
| Fresh Peak Company within one month after the judgment entering into force. If the Business Tourism Company failed to pay in time, it had to pay double debt interests to Xi’an Fresh Peak Company for the overdue period; ② Xi’an Joint Commission on Commerce had jointly and severally obligation of the interests of the compensation; .③ Business Tourism Company shall bear RMB227,500 of the acceptance fee and the security fee. | been refusing to execute the ruling. It is difficult to recover the rest. |
IX. Media Query
□ Applicable √ Not applicable
No such cases in the Reporting Period.
X. Punishments and Rectifications
□ Applicable √ Not applicable
No such cases in the Reporting Period.XI. Credit Conditions of the Company as well as its Controlling Shareholder and ActualController
□ Applicable √ Not applicable
XII. Equity Incentive Plans, Employee Stock Ownership Plans or Other Incentive Measuresfor Employees
□ Applicable √ Not applicable
No such cases in the Reporting Period.XIII. 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. Credits and Liabilities with Related Parties
□ Applicable √ Not applicable
No such cases in the Reporting Period.
5. Other Major Related-Party Transactions
□ Applicable √ Not applicable
No such cases in the Reporting Period.XIV. Particulars about the Non-operating Occupation of Funds by the ControllingShareholder and Other Related Parties of the Company
□ 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. Significant Guarantees
□ Applicable √ Not applicable
No such cases in the Reporting Period.
3. Wealth Management Entrustment
√Applicable □Not applicable
Unit: RMB'0,000
| Type of wealth management | Funding source | Principal | Outstanding amount before maturity | Overdue amount |
| Bank financial products | Self-funded | 100,000 | 0 | 0 |
| Total | 100,000 | 0 | 0 | |
Particulars of cash entrusted for wealth management with single significant amount or low security, bad liquidity, and no capitalpreservation
□Applicable √ Not applicable
Wealth management entrustments with possible impairments including an expectedly unrecoverable principal:
□Applicable √ Not applicable
4. Other Significant Contracts
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XVI. Social Responsibilities
1. Significant Environment Protection
Indicate by tick mark whether the Company or any of its subsidiaries is a heavily polluting business identified by the environmentalprotection authorities of ChinaNoThe Company and its subsidiaries isn’t a heavily polluting business identified by the environmental protection authorities of China.
2. Targeted Measures Taken to Help People Lift Themselves Out of Poverty
(1) Plan for Targeted Measures
(2) Outline of Targeted Measures in the Reporting Period
(3) Effects of Targeted Measures
| Indicator | Measurement unit | Number/Progress |
| I. General condition | —— | —— |
| II. Itemized investment | —— | —— |
| 1. Out of poverty by industrial development | —— | —— |
| 2. Out of poverty by transferring employment | —— | —— |
| 3. Out of poverty by relocating | —— | —— |
| 4. Out of poverty by education | —— | —— |
| 5. Out of poverty by improving health | —— | —— |
| 6. Out of poverty by protecting ecological environment | —— | —— |
| 7. Subsidy for the poorest | —— | —— |
| 8. Social poverty alleviation | —— | —— |
| 9. Other items | —— | —— |
| III. Received awards(contents and rank) | —— | —— |
(4) Subsequent Targeted Measure Plans
XVII. Other Significant Events
□ Applicable √ Not applicable
Since the controlling shareholder of the Company is planning a significant event that involves theCompany, upon the application to the Shenzhen Stock Exchange, trading in the stocks of theCompany (A-stock under the name of “SPG A” and the symbol of “000029”; B-stock under the
name of “SPG B” and the symbol of “200029”) was suspended starting from the opening of 14September 2016. The Company disclosed the Announcement on Share Trading Suspension due toPlanning of Significant Event (No. 2016-022), the Announcement on Continued Share TradingSuspension due to Planning of Significant Event (No. 2016-023) and the Announcement onContinued Share Trading Suspension due to Planning of Significant Event (No. 2016-024) on 14September 2016, 22 September 2016 and 29 September 2016, respectively. Upon ascertainment, theevent constituted a material asset restructuring. The Company disclosed the Announcement onShare Trading Suspension due to Planning of Major Assets Restructuring (No. 2016-025) on 30September 2016 and the Announcement on Signing Cooperation Agreement on Restructuring andListing (No. 2016-027) on 10 October 2016.The Company convened the 33
rd Meeting of the 7
thBoard of the Directors on 11 November 2016,which the Proposal on Continued Share Trading Suspension due to Planning of Major AssetsRestructuring was reviewed and approved. For details, see the Announcement on Continued ShareTrading Suspension after Expiration of Period of Share Trading Suspension due to Planning ofMajor Assets Restructuring (No. 2016-039) disclosed on 14 November 2016.The Company convened the 1
stExtraordinary General Meeting of 2016 on 12 December 2016, onwhich the Proposal on Continued Share Trading Suspension due to Planning of Major AssetsRestructuring was reviewed and approved. For details, see the Announcement on Application forContinued Share Trading Suspension after Expiration of Period of Share Trading Suspension dueto Planning of Major Assets Restructuring (No. 2016-047) disclosed on 13 December 2016.The Company held an online illustration meeting to investors on 10 March 2017, communicatingthis major assets restructuring with them and answering questions that they were generallyconcerned about with the information allowed to be disclosed. For details, see the Announcement onOnline Illustration Meeting to Investors (No. 2017-012) disclosed on 11 March 2017.On 14 December 2019, the Company disclosed the Announcement on Signing the SupplementaryAgreement VI of the Cooperation Agreement governing Restructuring and Listing (No. 2019-090),which extends the exclusivity period and validity period stipulated in the restructuring cooperationagreement to 31 December 2020.To ensure the smooth progress of this major assets restructuring, prevent abnormal fluctuations in theprices of its stocks and protect the rights and interests of its non-controlling interests, the Companyhas applied to the Shenzhen Stock Exchange for continued share trading suspension for no more than1 month as of 14 August 2020 and expects to disclose the major assets restructuring plan or reportaccording to the requirements of the Standards for the Contents and Formats of InformationDisclosure by Companies Offering Securities to the Public No. 26-Major Assets Restructuring ofListed Companies prior to 14 December 2020. For details, see the Announcement on Delay of ShareTrading Resumption of Planning of Major Assets Restructuring (No. 2020-061) disclosed on 14August 2020.During the share trading suspension period, the Company shall disclose the progress of this majorassets restructuring at least every five trading days in strict accordance with the requirements ofapplicable laws and regulations. At present, this major assets restructuring is proceeding smoothly.This major assets restructuring is subject to great uncertainty. Therefore, investors are kindlyreminded to pay attention to possible investment risk.
XVIII. Significant Events of Subsidiaries
□ Applicable √ Not applicable
Part VI Share Changes and Shareholder Information
I. Share Changes
1. Share Changes
Unit: share
| Before the change | Increase/decrease (+/-) | After the change | |||||||
| 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 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| 1.1 Shares held by the state | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| 1.2 Shares held by state-own legal person | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| 1.3 Shares held by other domestic investors | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| Among which: shares held by domestic legal person | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0.00% | |
| Shares held by domestic natural person | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| 1.4 Oversea shareholdings | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| Among which: shares held by oversea legal person | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| Shares held by oversea natural person | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| 2. Unrestricted shares | 1,011,660,000 | 100.00% | 0 | 0 | 0 | 0 | 0 | 1,011,660,000 | 100.00% |
| 2.1 RMB ordinary shares | 891,660,000 | 88.14% | 0 | 0 | 0 | 0 | 0 | 891,660,000 | 88.14% |
| 2.2 Domestically listed foreign shares | 120,000,000 | 11.86% | 0 | 0 | 0 | 0 | 0 | 120,000,000 | 11.86% |
| 2.3 Oversea listed foreign shares | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| 2.4 Other | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| 3. Total shares | 1,011,660,000 | 100.00% | 0 | 0 | 0 | 0 | 0 | 1,011,660,000 | 100.00% |
Reasons for share changes:
□ Applicable √ Not applicable
Approval of share changes:
□ Applicable √ Not applicable
Transfer of share ownership:
□ Applicable √ Not applicable
Progress on any share repurchase:
□ Applicable √ Not applicable
Progress on reducing the repurchased shares by means of centralized bidding:
□ Applicable √ Not applicable
Effects of share changes on the basic and diluted earnings per share, equity per share attributable to the Company’s 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
□ Applicable √ Not applicable
III. Total Number of Shareholders and Their Shareholdings
Unit: share
| Total number of ordinary shareholders at the period-end | 76,442 | Total number of preference shareholders with resumed voting rights at the period-end (if any) (see Note 8) | 0 | |||||||
| Shareholding of ordinary shareholders holding more than 5% shares or the top 10 of ordinary shareholders | ||||||||||
| Name of shareholder | Nature of shareholder | Holding percentage (%) | Number of shareholdi | Increase and decrease of | Number of shares held | Number of shares held subject to | Pledged or frozen shares | |||
| Status of | Amount | |||||||||
| ng at the end of the Reporting Period | shares during Reporting Period | subject to trading moratorium | trading moratorium | shares | ||||
| Shenzhen Investment Holdings Co., Ltd. | State-owned legal person | 63.55% | 642,884,262 | 642,884,262 | ||||
| Shandong Gold Financial Holding Capital Management Co., Ltd.－Shandong Gold Financial Holding Sustaining Fund 1 | Domestic non-state-owned legal person | 1.02% | 10,300,000 | 10,300,000 | ||||
| Lu Zhigao | Domestic natural person | 0.32% | 3,246,949 | 3,246,949 | ||||
| Tan Shiqing | Domestic natural person | 0.13% | 1,286,701 | 1,286,701 | ||||
| Yang Shuilian | Domestic natural person | 0.13% | 1,273,700 | 1,273,700 | ||||
| Yang Jianxiong | Domestic natural person | 0.12% | 1,255,750 | 1,255,750 | ||||
| Central Huijin Asset Management Co., Ltd. | State-owned legal person | 0.12% | 1,165,500 | 1,165,500 | ||||
| Peng Wei | Domestic natural person | 0.11% | 1,129,082 | 1,129,082 | ||||
| Wu Haoyuan | Foreign natural person | 0.11% | 1,109,300 | 1,109,300 | ||||
| Guotai Junan Securities (Hong Kong) Limited | Foreign legal person | 0.10% | 1,015,683 | 1,015,683 | ||||
| Strategic investor or general legal person becoming a top-10 ordinary shareholder due to rights issue (if | None | |||||||
| any) (see Note 3) | |||
| Related or acting-in-concert parties among the shareholders above | The Company has found no related parties or acting-in-concert parties as defined in the Administrative Measures for Shareholding Changes in Listed Companies among the shareholders above. | ||
| Top 10 unrestricted shareholders | |||
| Name of shareholder | Unrestricted shares held at the period-end | Shares by type | |
| Type | Shares | ||
| Shenzhen Investment Holdings Co., Ltd. | 642,884,262 | RMB ordinary shares | 642,884,262 |
| Shandong Gold Financial Holding Capital Management Co., Ltd.－Shandong Gold Financial Holding Sustaining Fund 1 | 10,300,000 | RMB ordinary shares | 10,300,000 |
| Lu Zhigao | 3,246,949 | RMB ordinary shares | 3,246,949 |
| Tan Shiqing | 1,286,701 | RMB ordinary shares | 1,286,701 |
| Yang Shuilian | 1,273,700 | RMB ordinary shares | 1,273,700 |
| Yang Jianxiong | 1,255,750 | Domestically listed foreign share | 1,255,750 |
| Central Huijin Asset Management Co., Ltd. | 1,165,500 | RMB ordinary shares | 1,165,500 |
| Peng Wei | 1,129,082 | RMB ordinary shares | 1,129,082 |
| Wu Haoyuan | 1,109,300 | Domestically listed foreign share | 1,109,300 |
| Guotai Junan Securities (Hong Kong) Limited | 1,015,683 | Domestically listed foreign share | 1,015,683 |
| 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 | The Company has found no related parties or acting-in-concert parties as defined in the Administrative Measures for Shareholding Changes in Listed Companies among the shareholders above. | ||
| Top 10 ordinary shareholders involved in securities margin | The fourth shareholder holds all his shares in the Company in his accounts of collateral securities for margin trading. And the third shareholder holds some of his shares in the | ||
| trading (if any) (see Note 4) | Company in such accounts. |
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.
□ Yea √ No
No such cases in the Reporting Period.IV. Change of the Controlling Shareholder or the Actual ControllerChange of the controlling shareholder in the Reporting Period
□ Applicable √ Not applicable
There was no any change of the controlling shareholder of the Company in the Reporting Period.Change of the actual controller in the Reporting Period
□ Applicable √ Not applicable
There was no any change of the actual controller of the Company in the Reporting Period.
Part VII Preferred Shares
□ Applicable √ Not applicable
No preferred shares in the Reporting Period.
Part VIII Convertible Bonds
□ Applicable √ Not applicable
No convertible bonds in the Reporting Period.
Part IX Directors, Supervisors, Senior Management and StaffI. Changes in Shareholdings of Directors, Supervisors and Senior Management
□ Applicable √ Not applicableNo such cases in the Reporting Period. For details, see Annual Report 2019.
II. Changes in Directors, Supervisors and Senior Management
√Applicable □ Not applicable
| Name | Office title | Type of change | Date of change | Reason for change |
| Liu Zhengyu | Chairman of the Board | Elected | 15 January 2020 | |
| Dai Xianhua | Chairman of the Supervisory Board | Elected | 15 January 2020 | |
| Zhou Jianguo | Chairman of the Board | Left | 15 January 2020 | Retired |
| Zhuang Quan | Chairman of the Supervisory Board | Left | 15 January 2020 | Retired |
| Chen Maozheng | Director | Left | 30 June 2020 | Job changed |
| Chen Maozheng | General manager | Left | 30 June 2020 | Job changed |
| Song Botong | Independent director | Leave office | 30 June 2020 | Expiration of the term |
| Zhang Shunwen | Independent director | Leave office | 30 June 2020 | Expiration of the term |
| He Zuowen | Independent director | Elected | 30 June 2020 | |
| Mi Xuming | Independent director | Elected | 30 June 2020 | |
| Zhang Hongwei | Vice GM | Employed | 15 July 2020 |
Part X Corporate Bonds
Are there any corporate bonds publicly offered and listed on the stock exchange, which were undue before the approval date of thisReport or were due but could not be redeemed in full?No
Part XI Financial StatementsI. Auditor’s ReportWhether the semi-annual report has been audited?
□ Yes √ No
The semi-annual report of the Company has not been audited.II. Financial StatementsThe financial statements of the Company have been prepared in RMB.
1. Consolidated Balance Sheet
Prepared by Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
As at June 30 2020
Expressed in RMB
| Item | June 30 2020 | December 31 2019 |
| Current assets: | ||
| Cash at bank and on hand | 2,148,222,433.87 | 2,511,140,445.35 |
| Provision of Settlement fund | ||
| Funds lent | ||
| Financial assets at fair value through profit or loss | ||
| Derivative financial assets | ||
| Notes receivable | ||
| Accounts receivable | 49,341,432.90 | 62,059,055.68 |
| Accounts receivable financing | ||
| Prepayments | 3,655,533.53 | 219,948.17 |
| Insurance premiums receivables | ||
| Cession premiums receivables | ||
| Provision of cession premiums receivables | ||
| Other receivables | 21,907,433.48 | 28,275,228.26 |
| Including: Interest receivable | ||
| Dividends receivable | 1,052,192.76 | 1,052,192.76 |
| Recoursable Financial assets acquired | ||
| Inventories | 1,435,950,855.23 | 1,462,229,048.18 |
| Contractual assets | ||
| Assets held for sale | ||
| Non-current assets due within one year | ||
| Other current assets | 106,201,417.52 | 102,781,855.48 |
| Total current assets | 3,765,279,106.53 | 4,166,705,581.12 |
| Non-current assets: | ||
| Loans and payments | ||
| Investments in debt obligations | ||
| Investments in other debt obligations | ||
| Long-term receivables | ||
| Long-term equity investments | 469,838.65 | 469,838.65 |
| Investments in other equity instruments | 32,710,820.87 | 33,126,730.04 |
| Other non-current financial assets | ||
| Investment property | 619,021,572.74 | 632,241,900.20 |
| Fixed assets | 29,086,917.96 | 30,522,035.11 |
| Construction in progress | ||
| Productive living assets | ||
| Oil and gas assets | ||
| Use rights assets | ||
| Intangible assets | ||
| Development costs | ||
| Goodwill | ||
| Long-term prepaid expense | 128,119.84 | 162,125.72 |
| Deferred tax assets | 39,113,923.27 | 46,441,325.25 |
| Other non-current assets | ||
| Total non-current assets | 720,531,193.33 | 742,963,954.97 |
| Total assets | 4,485,810,299.86 | 4,909,669,536.09 |
| Current liabilities: | ||
| Short-term loans | 45,904,965.19 | 51,647,260.17 |
| Borrowings from central bank | ||
| Deposit funds |
| Financial liabilities at fair value through profit or loss | ||
| Derivative financial liabilities | ||
| Notes payable | ||
| Accounts payable | 164,311,141.46 | 244,224,478.46 |
| Advances from customers | 8,116,359.20 | 159,482,510.43 |
| Contractual liabilities | 278,989,120.12 | |
| Funds from sale of financial assets with repurchasement agreements | ||
| Deposits from customer and interbank | ||
| Funds received as an agent of stock exchange | ||
| Funds received as stock underwrite | ||
| Payroll payable | 55,807,291.16 | 53,909,576.49 |
| Taxes payable | 207,233,940.44 | 585,700,815.36 |
| Other payables | 261,098,346.11 | 277,319,174.53 |
| Including: Interest payable | 16,535,277.94 | 16,535,277.94 |
| Dividends payable | ||
| Handling charges and commissions payable | ||
| Cession premiums payables | ||
| Liabilities held for sale | ||
| Non-current liabilities due within one year | ||
| Other current liabilities | ||
| Total current liabilities | 1,021,461,163.68 | 1,372,283,815.44 |
| Non-current liabilities: | ||
| Provision for insurance contracts | ||
| Long-term loans | ||
| Debentures payable | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Lease liabilities | ||
| Long-term payables | 8,274,256.86 | 7,499,192.92 |
| Long-term employee benefits payable |
| Provisions | ||
| Deferred income | ||
| Deferred tax liabilities | 4,903,293.58 | |
| Other non-current liabilities | ||
| Total non-current liabilities | 8,274,256.86 | 12,402,486.50 |
| Total liabilities | 1,029,735,420.54 | 1,384,686,301.94 |
| Shareholders' equity: | ||
| Share capital | 1,011,660,000.00 | 1,011,660,000.00 |
| Other equity instruments | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Capital reserves | 978,244,910.11 | 978,244,910.11 |
| Less: treasury shares | ||
| Other comprehensive income | 21,200,492.07 | 20,831,004.13 |
| Specific reserve | ||
| Surplus reserves | 191,222,838.94 | 191,222,838.94 |
| General reserve | ||
| Retained earnings | 1,395,266,902.53 | 1,464,915,816.81 |
| Total equity attributable to shareholders of the Company | 3,597,595,143.65 | 3,666,874,569.99 |
| Non-controlling interests | -141,520,264.33 | -141,891,335.84 |
| Total shareholders' equity | 3,456,074,879.32 | 3,524,983,234.15 |
| Total liabilities and shareholders' equity | 4,485,810,299.86 | 4,909,669,536.09 |
Legal representative: Liu Zhengyu The person in charge of accounting affairs:
Tang Xiaoping The head of the accounting department: Qiao Yanjun
2. the Company Balance Sheet
Expressed in RMB
| Item | June 30 2020 | December 31 2019 |
| Current assets: | ||
| Cash at bank and on hand | 1,812,862,695.88 | 1,967,688,122.55 |
| Financial assets at fair value through profit or loss | ||
| Derivative financial assets |
| Notes receivable | ||
| Accounts receivable | 282,853.61 | 156,935.84 |
| Accounts receivable financing | ||
| Prepayments | 200,000.00 | 200,000.00 |
| Other receivables | 1,122,154,158.12 | 835,275,498.69 |
| Including: Interest receivable | ||
| Dividends receivable | ||
| Inventories | 368,448,151.37 | 419,453,091.86 |
| Contractual assets | ||
| Assets held for sale | ||
| Non-current assets due within one year | ||
| Other current assets | 403,864.57 | 407,560.64 |
| Total current assets | 3,304,351,723.55 | 3,223,181,209.58 |
| Non-current assets: | ||
| Investments in debt obligations | ||
| Investments in other debt obligations | ||
| Long-term receivables | ||
| Long-term equity investments | 150,676,516.92 | 150,676,516.92 |
| Investments in other equity instruments | 13,549,874.72 | 13,229,501.03 |
| Other non-current financial assets | ||
| Investment property | 510,592,141.91 | 522,038,731.16 |
| Fixed assets | 18,363,599.71 | 19,586,720.47 |
| Construction in progress | ||
| Productive living assets | ||
| Oil and gas assets | ||
| Use rights assets | ||
| Intangible assets | ||
| Development costs | ||
| Goodwill | ||
| Long-term prepaid expense |
| Deferred tax assets | 110,159.90 | 162,125.72 |
| Other non-current assets | 20,975,294.54 | 20,975,294.54 |
| Total non-current assets | 714,267,587.70 | 726,668,889.84 |
| Total assets | 4,018,619,311.25 | 3,949,850,099.42 |
| Current liabilities: | ||
| Short-term loans | ||
| Financial liabilities at fair value through profit or loss | ||
| Derivative financial liabilities | ||
| Notes payable | ||
| Accounts payable | 95,664,957.60 | 103,915,931.14 |
| Advances from customers | 59,409,454.38 | |
| Contractual liabilities | 177,754,233.70 | |
| Payroll payable | 33,640,904.52 | 25,544,403.23 |
| Taxes payable | 195,127,048.11 | 143,434,273.95 |
| Other payables | 178,640,738.31 | 190,666,487.82 |
| Including: Interest payable | 16,535,277.94 | 16,535,277.94 |
| Dividends payable | ||
| Liabilities held for sale | ||
| Non-current liabilities due within one year | ||
| Other current liabilities | ||
| Total current liabilities | 680,827,882.24 | 522,970,550.52 |
| Non-current liabilities: | ||
| Long-term loans | ||
| Debentures payable | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Lease liabilities | ||
| Long-term payables | ||
| Long-term employee benefits payable | ||
| Provisions | ||
| Deferred income | ||
| Deferred tax liabilities | 1,295,046.51 | 1,295,046.51 |
| Other non-current liabilities | ||
| Total non-current liabilities | 1,295,046.51 | 1,295,046.51 |
| Total liabilities | 682,122,928.75 | 524,265,597.03 |
| Shareholders' equity: | ||
| Share capital | 1,011,660,000.00 | 1,011,660,000.00 |
| Other equity instruments | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Capital reserves | 964,711,931.13 | 964,711,931.13 |
| Less: Treasury shares | ||
| Other comprehensive income | 1,242,499.46 | 922,125.77 |
| Specific reserve | ||
| Surplus reserves | 168,093,225.53 | 168,093,225.53 |
| Retained earnings | 1,190,788,726.38 | 1,280,197,219.96 |
| Total owners’ equity | 3,336,496,382.50 | 3,425,584,502.39 |
| Total liabilities and shareholders’ equity | 4,018,619,311.25 | 3,949,850,099.42 |
3. Consolidated Income Statement
Expressed in RMB
| Item | Jan to June 2020 | Jan to June 2019 |
| 1. Revenue | 596,258,495.40 | 1,251,337,802.57 |
| Including: Operating revenue | 596,258,495.40 | 1,251,337,802.57 |
| Interest income | ||
| Insurance premium income | ||
| Handling charge and commission income | ||
| 2. Overall Cost | 472,559,039.99 | 820,118,047.65 |
| Including: operating costs | 343,908,087.46 | 437,127,976.25 |
| Interest expense | ||
| Handling charge and commission expense | ||
| Refund of Insurance premium |
| Net payment for insurance claims | ||
| Net provision for insurance contracts | ||
| Commissions on insurance polices | ||
| Cession charges | ||
| Taxes and surcharges | 85,608,112.87 | 340,329,498.86 |
| Selling and distribution expenses | 8,536,448.38 | 18,474,060.33 |
| General and administrative expenses | 40,253,977.26 | 30,812,771.33 |
| Research and development expenses | ||
| Financial expenses | -5,747,585.98 | -6,626,259.12 |
| Including: Interest expense | 38,742.51 | |
| Interest income | 5,932,973.60 | 7,623,553.05 |
| Add: Other income | 557,379.14 | |
| Investment income ("-" for losses) | 15,217,058.60 | 14,288,098.55 |
| Including: Income from investment in associates and joint ventures ("-" for losses) | ||
| Income from the derecognition of financial assets at amortized cost (“-” for loss) | ||
| Foreign exchange gain (“-” for loss) | ||
| Net gain on exposure hedges (“-” for loss) | ||
| Gains from changes in fair value ("-" for losses) | ||
| Credit impairment loss (“-” for loss) | ||
| Impairment losses ("-" for losses) | 534,500.00 |
| Gains from assets disposal ("-" for losses) | ||
| 3. Operating profit (“-” for loss) | 140,008,393.15 | 445,507,853.47 |
| Add: Non-operating income | 2,902,033.77 | 363,709.11 |
| Less: Non-operating expense | 2,001,278.48 | 3,755.82 |
| 4. Profit before income tax ("-" for losses) | 140,909,148.44 | 445,867,806.76 |
| Less: Income tax expense | 43,599,689.97 | 112,729,793.86 |
| 5. Net profit for the year ("-" for net losses)) | 97,309,458.47 | 333,138,012.90 |
| 5.1 Classification according to operation continuity | ||
| 5.1.1 Net profit from continuing operations ("-" for net loss) | 97,309,458.47 | 333,138,012.90 |
| 5.1.2Net profit from discontinued operations ("-" for net loss) | ||
| 5.2 Classification according to attribute | ||
| 5.2.1 Shareholders of the company ("-" for net loss) | 97,274,985.72 | 333,155,843.41 |
| 5.2.1 Non-controlling interests ("-" for net loss) | 34,472.75 | -17,830.51 |
| 6. Other comprehensive income, net of tax | 706,086.70 | 121,770.51 |
| Other comprehensive income (net of tax) attributable to shareholders of the company | 369,487.94 | 85,239.36 |
| 6.1 Items that will not be reclassified to profit or loss | -415,909.17 | |
| 6.1.1 Remeasurement of defined benefit plan liability or asset | ||
| 6.1.2Share of other comprehensive income of the equity method investments | ||
| 6.1.3 Changes in the fair value of investments in other equity instruments | -415,909.17 |
| 6.1.4 Changes in the fair value of the company’s credit risks | ||
| 6.1.5 Other | ||
| 6.2 Items that may be reclassified to profit or loss | 785,397.11 | 85,239.36 |
| 6.2.1 Share of other comprehensive income of the equity method investments | ||
| 6.2.2 Changes in the fair value of investments in other debt obligations | ||
| 6.2.3 Other comprehensive income arising from the reclassification of financial assets | ||
| 6.2.4 Allowance for credit impairments in investments in other debt obligations | ||
| 6.2.5 Effective portion of gains or losses arising from cash flow hedging instruments | ||
| 6.2.6 Translation differences arising from translation of foreign currency financial statements | 785,397.11 | 85,239.36 |
| 6.2.7 Other | ||
| Other comprehensive income (net of tax) attributable to non-controlling interests | 336,598.76 | 36,531.15 |
| 7. Total comprehensive income for the year | 98,015,545.17 | 333,259,783.41 |
| Attributable to Shareholders of the company | 97,644,473.66 | 333,241,082.77 |
| Attributable to non-controlling interests | 371,071.51 | 18,700.64 |
| 8. Earnings per share | ||
| 8.1 Basic earnings per share | 0.0962 | 0.3293 |
| 8.2 Diluted earnings per share | 0.0962 | 0.3293 |
In a business combination involving enterprises under common control, (net losses)/net profit of theacquiree before the combination date is RMB 0.00, and (net losses)/net profit of the acquiree in prior
period is RMB 0.00.Legal representative: Liu Zhengyu The person in charge of accounting affairs:
Tang Xiaoping The head of the accounting department: Qiao Yanjun
4.Income Statement of the Company as the Parent
Expressed in RMB
| Item | Jan to Jun 2020 | Jan to Jun 2019 |
| 1. Operating revenue | 231,361,037.44 | 828,403,076.11 |
| Less: Cost of sales | 64,778,297.24 | 125,366,701.31 |
| Taxes and surcharges | 69,869,636.48 | 305,591,891.73 |
| Selling and distribution expenses | 3,544,826.68 | 12,219,149.43 |
| General and administrative expenses | 23,912,101.72 | 12,993,667.10 |
| Research and development expenses | ||
| Financial expenses | -21,037,122.06 | -16,493,119.65 |
| Including: Interest expense | ||
| Interest income | 17,954,071.46 | 17,457,395.53 |
| Add: Other income | 28,083.69 | |
| Investment income ("-" for losses) | 15,217,058.60 | 532,988,230.19 |
| Including: Income from investment in associates and joint ventures ("-" for losses) | ||
| Income from the derecognition of financial assets at amortized cost (“-” for loss) | ||
| Net gain on exposure hedges (“-” for loss) | ||
| Gains from changes in fair value ("-" for losses) | ||
| Credit impairment loss (“-” for loss) | ||
| Impairment losses ("-" for losses) |
| Gains from assets disposal ("-" for losses) | ||
| 2. Operating profit (“-” for loss) | 105,538,439.67 | 921,713,016.38 |
| Add: Non-operating income | 170,000.10 | 129,179.14 |
| Less: Non-operating expense | 502,140.62 | |
| 3. Profit before income tax ("-" for losses) | 105,206,299.15 | 921,842,195.52 |
| Less: Income tax expense | 27,690,892.73 | 100,591,211.17 |
| 4. Net profit for the year ("-" for net losses) | 77,515,406.42 | 821,250,984.35 |
| 4.1 Net profit from continuing operations ("-" for net loss) | 77,515,406.42 | 821,250,984.35 |
| 4.2 Net profit from discontinued operations ("-" for net loss) | ||
| 5. Other comprehensive income, net of tax | 320,373.69 | |
| 5.1 Items that will not be reclassified to profit or loss | 320,373.69 | |
| 5.1.1 Remeasurement of defined benefit plan liability or asset | ||
| 5.1.2 Share of other comprehensive income of the equity method investments | ||
| 5.1.3 Changes in the fair value of investments in other equity instruments | 320,373.69 | |
| 5.1.4 Changes in the fair value of the company’s credit risks | ||
| 5.1.5 Other | ||
| 5.2 Items that may be reclassified to profit or loss | ||
| 5.2.1 Share of other comprehensive income of the equity method investments | ||
| 5.2.2 Changes in the fair value of investments in other debt |
| obligations | ||
| 5.2.3 Other comprehensive income arising from the reclassification of financial assets | ||
| 5.2.4 Allowance for credit impairments in investments in other debt obligations | ||
| 5.2.5 Effective portion of gains or losses arising from cash flow hedging instruments | ||
| 5.2.6 Translation differences arising from translation of foreign currency financial statements | ||
| 5.2.7 Other | ||
| 6. Total comprehensive income for the year | 77,835,780.11 | 821,250,984.35 |
| 7. Earnings per share | ||
| 7.1 Basic earnings per share | ||
| 7.2 Diluted earnings per share |
5.Consolidated Cash Flow Statement
Expressed in RMB
| Item | Jan to Jun 2020 | Jan to Jun 2019 |
| 1. Cash flows from operating activities | ||
| Proceeds from sales of goods or rendering of services | 685,612,219.39 | 1,551,108,627.63 |
| Net increase deposits from customers and placements from corporations in the same industry | ||
| Net increase in loans from central bank | ||
| Net increase in loans from other financial institutions | ||
| Cash premiums received on |
| original insurance contracts | ||
| Net proceeds from reinsurance | ||
| Net increase in deposits and investments from insurers | ||
| Interest, handling charges and commissions received | ||
| Net increase in fund deposits | ||
| Net increase in proceeds from repurchase transactions | ||
| Net proceeds from acting trading of securities | ||
| Refund of taxes | 15,618.75 | |
| Proceeds from other operating activities | 42,510,375.71 | 36,673,219.30 |
| Sub-total of cash inflows | 728,138,213.85 | 1,587,781,846.93 |
| Payment for goods and services | 214,833,176.41 | 325,301,988.40 |
| Net increase in loans and payments on behalf | ||
| Net increase in deposits in central bank and interbank | ||
| Payments of claims for original insurance contracts | ||
| Net increase in fund paid | ||
| Interest, handling charges and commissions paid | ||
| Commissions on issuance policies paid | ||
| Payment to and for employees | 73,647,542.55 | 75,087,594.73 |
| Payments of various taxes | 543,169,493.34 | 372,824,861.97 |
| Payment for other operating activities | 108,730,800.14 | 128,892,156.73 |
| Sub-total of cash outflows | 940,381,012.44 | 902,106,601.83 |
| Net cash flows from operating activities | -212,242,798.59 | 685,675,245.10 |
| 2. Cash flows from investing activities: |
| Proceeds from disposal of investments | ||
| Investment returns received | 20,317,808.22 | 11,365,734.25 |
| Net proceeds from disposal of fixed assets, intangible assets and other long-term assets | 1,000.00 | |
| Net proceeds from disposal of subsidiaries and other business units | ||
| Proceeds from other investing activities | 1,000,000,000.00 | 900,000,000.00 |
| Sub-total of cash inflows | 1,020,318,808.22 | 911,365,734.25 |
| Payment for acquisition of fixed assets, intangible assets and other long-term assets | 55,767.90 | 62,330.82 |
| Payment for acquisition of investments | ||
| Net increase in pledged loans | ||
| Net payment for acquisition of subsidiaries and other business units | ||
| Payment for other investing activities | 1,300,000,000.00 | |
| Sub-total of cash outflows | 55,767.90 | 1,300,062,330.82 |
| Net cash flows from investing activities | 1,020,263,040.32 | -388,696,596.57 |
| 3. Cash flows from financing activities: | ||
| Proceeds from investors | ||
| Including: Proceeds from non-controlling shareholders of subsidiaries | ||
| Proceeds from borrowings | ||
| Proceeds from other financing activities | ||
| Sub-total of cash inflows | ||
| Repayments of borrowings | 2,000,000.00 | |
| Payment for dividends, profit | 166,923,900.00 | 202,332,000.00 |
| distributions or interest | ||
| Including: Dividends and profits paid to non-controlling shareholders of subsidiaries | ||
| Payment for other financing activities | ||
| Sub-total of cash outflows | 166,923,900.00 | 204,332,000.00 |
| Net cash flows from financing activities | -166,923,900.00 | -204,332,000.00 |
| 4. Effect of foreign exchange rate changes on cash and cash equivalents | -63,668.21 | -688,191.31 |
| 5. Net increase in cash and cash equivalents | 641,032,673.52 | 91,958,457.22 |
| Add: Cash and cash equivalents as at the year beginning | 1,507,189,760.35 | 1,148,522,435.93 |
| 6. Cash and cash equivalent as at the ended | 2,148,222,433.87 | 1,240,480,893.15 |
6. Cash Flow Statement of the Company as the Parent
Expressed in RMB
| Item | Jan to Jun 2020 | Jan to Jun 2019 |
| 1. Cash flows from operating activities: | ||
| Proceeds from sales of goods or rendering of services | 350,704,786.01 | 1,082,309,354.32 |
| Refund of taxes | ||
| Proceeds from other operating activities | 7,424,276.64 | 25,673,942.66 |
| Sub-total of cash inflows | 358,129,062.65 | 1,107,983,296.98 |
| Payment for goods and services | 14,267,901.93 | 54,302,822.21 |
| Payment to and for employees | 17,517,984.42 | 19,289,743.31 |
| Payments of various taxes | 68,674,752.15 | 135,622,840.23 |
| Payment for other operating activities | 261,704,229.68 | 26,108,489.89 |
| Sub-total of cash outflows | 362,164,868.18 | 235,323,895.64 |
| Net cash flows from operating activities | -4,035,805.53 | 872,659,401.34 |
| 2. Cash flows from investing activities: | ||
| Proceeds from disposal of investments | ||
| Investment returns received | 20,317,808.22 | 142,838,563.97 |
| Net proceeds from disposal of fixed assets, intangible assets and other long-term assets | ||
| Net proceeds from disposal of subsidiaries and other business units | ||
| Proceeds from other investing activities | 1,000,000,000.00 | 900,000,000.00 |
| Sub-total of cash inflows | 1,020,317,808.22 | 1,042,838,563.97 |
| Payment for acquisition of fixed assets, intangible assets and other long-term assets | 41,498.00 | 6,050.00 |
| Payment for acquisition of investments | ||
| Net payment for acquisition of subsidiaries and other business units | ||
| Payment for other investing activities | 1,300,000,000.00 | |
| Sub-total of cash outflows | 41,498.00 | 1,300,006,050.00 |
| Net cash flows from investing activities | 1,020,276,310.22 | -257,167,486.03 |
| 3. Cash flows from financing activities: | ||
| Proceeds from investors | ||
| Proceeds from borrowings | ||
| Cash generated from other financing activities | ||
| Sub-total of cash inflows | ||
| Repayments of borrowings | ||
| Payment for dividends, profit | 166,923,900.00 | 202,332,000.00 |
| distributions or interest | ||
| Payment for other financing activities | ||
| Sub-total of cash outflows | 166,923,900.00 | 202,332,000.00 |
| Net cash flows from financing activities | -166,923,900.00 | -202,332,000.00 |
| 4. Effect of foreign exchange rate changes on cash and cash equivalents | -191,346.36 | -676,807.86 |
| 5. Net increase in cash and cash equivalents | 849,125,258.33 | 412,483,107.45 |
| Add: Cash and cash equivalents as at the year beginning | 963,737,437.55 | 444,486,378.53 |
| 6. Cash and cash equivalent as at the ended | 1,812,862,695.88 | 856,969,485.98 |
7. Consolidated Statement of Changes in Shareholders' Equity
Expressed in RMB
| Items | Jan To Jun 2020 | ||||||||||||||
| Attributable to shareholders' equity of the parent company | Non-controlling interests | Total | |||||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserve | Surplus reserve | General reserve | Retained earnings | Others | Subtotal | |||||
| Preference shares | Perpetual bond | Other | |||||||||||||
| I. Balance at the end of last year | 1,011,660,000.00 | 978,244,910.11 | 20,831,004.13 | 191,222,838.94 | 1,464,915,816.81 | 3,666,874,569.99 | -141,891,335.84 | 3,524,983,234.15 | |||||||
| Add: Changes of accounting policies | |||||||||||||||
| Correction of prior period errors | |||||||||||||||
| Business combination involving enterprises under common control | |||||||||||||||
| Others | |||||||||||||||
| II. Balance at the Beginning of the Year | 1,011,660,000.00 | 978,244,910.11 | 20,831,004.13 | 191,222,838.94 | 1,464,915,816.81 | 3,666,874,569.99 | -141,891,335.84 | 3,524,983,234.15 | |||||||
| III. Changes in equity during the year (“- "for decrease) | 369,487.94 | -69,648,914.28 | -69,279,426.34 | 371,071.51 | -68,908,354.83 | ||||||||||
| (I) Total comprehensive income | 369,487.94 | 97,274,985.72 | 97,644,473.66 | 371,071.51 | 98,015,545.17 | ||||||||||
| (II) Shareholders' contribution |
| s and decrease of capital | |||||||||||||||
| 1.Contribution by ordinary shareholders | |||||||||||||||
| 2. Holders of other equity instruments invested capital | |||||||||||||||
| 3. Equity settled share-based payments | |||||||||||||||
| 4.Others | |||||||||||||||
| (III) Appropriation of profits | -166,923,900.00 | -166,923,900.00 | -166,923,900.00 | ||||||||||||
| 1.Appropriation for surplus |
| reserves | |||||||||||||||
| 2.Appropriation for general reserves | |||||||||||||||
| 3.Distribution to shareholders | -166,923,900.00 | -166,923,900.00 | -166,923,900.00 | ||||||||||||
| 4.Others | |||||||||||||||
| (IV)Transfer within equity | |||||||||||||||
| 1.Share capital increased by capital reserves transfer | |||||||||||||||
| 2.Share capital increased by surplus reserves transfer |
| 3.Transfer of surplus reserve to offset losses | |||||||||||||||
| 4. Remeasurement of defined benefit plan liability or asset transfer to retained earnings | |||||||||||||||
| 5. Other comprehensive income carried forward to retained earnings | |||||||||||||||
| 6. Others | |||||||||||||||
| (V) Special Reserve |
| 1. Appropriation during the year | |||||||||||||||
| 2. Utilization during the year | |||||||||||||||
| (VI) Others | |||||||||||||||
| IV. Balance at the end of the period | 1,011,660,000.00 | 978,244,910.11 | 21,200,492.07 | 191,222,838.94 | 1,395,266,902.53 | 3,597,595,143.65 | -141,520,264.33 | 3,456,074,879.32 |
Expressed in RMB
| Item | Jan To Jun 2019 | ||||||||||||||
| Attribute to the equity of parent company | Minority interests | Total owners' S equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserve | Surplus reserve | Generic risk reserve | Retained earnings | Others | Subtotal | |||||
| Preference shares | Perpetual bond | Other | |||||||||||||
| I. Balance at the end of last year | 1,011,660,000.00 | 978,244,910.11 | 10,564,385.97 | 95,906,222.59 | 1,235,884,122.72 | 3,332,259,641.39 | -131,524,530.88 | 3,200,735,110.51 | |||||||
| Add: Changes of accounting policies | |||||||||||||||
| Correction of prior period errors | |||||||||||||||
| Business combination involving enterprises under common control | |||||||||||||||
| Others | |||||||||||||||
| II. Balance at the Beginning of the Year | 1,011,660,000.00 | 978,244,910.11 | 10,564,385.97 | 95,906,222.59 | 1,235,884,122.72 | 3,332,259,641.39 | -131,524,530.88 | 3,200,735,110.51 | |||||||
| III. Changes in equity | 85,239.36 | 130,823,843.41 | 130,909,082.77 | 18,700.64 | 130,927,783.41 |
| during the year (“- "for decrease) | |||||||||||||||
| (I) Total comprehensive income | 85,239.36 | 333,155,843.41 | 333,241,082.77 | 18,700.64 | 333,259,783.41 | ||||||||||
| (II) Shareholders' contributions and decrease of capital | |||||||||||||||
| 1.Contribution by ordinary shareholders | |||||||||||||||
| 2. Holders of other equity instruments invested capital | |||||||||||||||
| 3. Equity settled |
| share-based payments | |||||||||||||||
| 4.Others | |||||||||||||||
| (III) Appropriation of profits | -202,332,000.00 | -202,332,000.00 | -202,332,000.00 | ||||||||||||
| 1.Appropriation for surplus reserves | |||||||||||||||
| 2.Appropriation for general reserves | |||||||||||||||
| 3.Distribution to shareholders | -202,332,000.00 | -202,332,000.00 | -202,332,000.00 | ||||||||||||
| 4.Others | |||||||||||||||
| (IV)Transfer within equity | |||||||||||||||
| 1.Share capital increased by |
| capital reserves transfer | |||||||||||||||
| 2.Share capital increased by surplus reserves transfer | |||||||||||||||
| 3.Transfer of surplus reserve to offset losses | |||||||||||||||
| 4. Remeasurement of defined benefit plan liability or asset transfer to retained earnings | |||||||||||||||
| 5. Other comprehensi |
| ve income carried forward to retained earnings | |||||||||||||||
| 6. Others | |||||||||||||||
| (V) Special Reserve | |||||||||||||||
| 1. Appropriation during the year | |||||||||||||||
| 2. Utilization during the year | |||||||||||||||
| (VI) Others | |||||||||||||||
| IV. Balance at the end of the period | 1,011,660,000.00 | 978,244,910.11 | 10,649,625.33 | 95,906,222.59 | 1,366,707,966.13 | 3,463,168,724.16 | -131,505,830.24 | 3,331,662,893.92 |
8. Company's Statement of Changes in Shareholders' Equity
Expressed in RMB
| Items | Jan to Jun 2020 | |||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserve | Surplus reserve | Retained earnings | Others | Total owners' S equity | |||
| Preference shares | Perpetual bond | Other | ||||||||||
| I. Balance at the end of last year | 1,011,660,000.00 | 964,711,931.13 | 922,125.77 | 168,093,225.53 | 1,280,197,219.96 | 3,425,584,502.39 | ||||||
| Add: Changes of accounting policies | ||||||||||||
| Correction of prior period errors | ||||||||||||
| Others | ||||||||||||
| II. Balance at the Beginning of the Year | 1,011,660,000.00 | 964,711,931.13 | 922,125.77 | 168,093,225.53 | 1,280,197,219.96 | 3,425,584,502.39 | ||||||
| III. Changes in equity during the year (“- "for decrease) | 320,373.69 | -89,408,493.58 | -89,088,119.89 | |||||||||
| (I) Total comprehensive income | 320,373.69 | 77,515,406.42 | 77,835,780.11 | |||||||||
| (II) Shareholders' contributions and decrease of capital | ||||||||||||
| 1.Contribution by ordinary shareholders | ||||||||||||
| 2. Holders of other equity instruments invested capital | ||||||||||||
| 3. Equity settled share-based payments | ||||||||||||
| 4.Others | ||||||||||||
| (III) appropriation of profits | -166,923,900.00 | -166,923,900.00 | ||||||||||
| 1. Appropriation for surplus reserves | ||||||||||||
| 2. Appropriation for general reserves | -166,923,900.00 | -166,923,900.00 | ||||||||||
| 3.Others |
| (IV) Transfer within equity | ||||||||||||
| 1.Share capital increased by capital reserves transfer | ||||||||||||
| 2.Share capital increased by surplus reserves transfer | ||||||||||||
| 3.Transfer of surplus reserve to offset losses | ||||||||||||
| 4. Remeasurement of defined benefit plan liability or asset transfer to retained earnings | ||||||||||||
| 5. Other comprehensive income carried forward to retained earnings | ||||||||||||
| 6. Others |
| (V) Special Reserve | ||||||||||||
| 1. Appropriation during the year | ||||||||||||
| 2. Utilization during the year | ||||||||||||
| (VI) Others | ||||||||||||
| IV. Balance at the end of the period | 1,011,660,000.00 | 964,711,931.13 | 1,242,499.46 | 168,093,225.53 | 1,190,788,726.38 | 3,336,496,382.50 |
Expressed in RMB
| Items | Jan To Jun 2019 | |||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserve | Surplus reserve | Retained earnings | Others | Total owners' S equity | |||
| Preference shares | Perpetual bond | Other | ||||||||||
| I. Balance at the end of last year | 1,011,660,000.00 | 964,711,931.13 | 72,776,609.18 | 615,038,028.05 | 2,664,186,568.36 | |||||||
| Add: Changes of accounting policies | ||||||||||||
| Correction of prior period errors | ||||||||||||
| Others | ||||||||||||
| II. Balance at the Beginning of the Year | 1,011,660,000.00 | 964,711,931.13 | 72,776,609.18 | 615,038,028.05 | 2,664,186,568.36 | |||||||
| III. Changes in equity during the year (“- "for decrease) | 618,918,984.35 | 618,918,984.35 | ||||||||||
| (I) Total comprehensive income | 821,250,984.35 | 821,250,984.35 | ||||||||||
| (II) Shareholders' contributions and decrease of capital | ||||||||||||
| 1.Contribution by ordinary shareholders | ||||||||||||
| 2. Holders of other equity instruments invested capital | ||||||||||||
| 3. Equity settled share-based payments |
| 4.Others | ||||||||||||
| (III) appropriation of profits | -202,332,000.00 | -202,332,000.00 | ||||||||||
| 1. Appropriation for surplus reserves | ||||||||||||
| 2. Appropriation for general reserves | -202,332,000.00 | -202,332,000.00 | ||||||||||
| 3.Others | ||||||||||||
| (IV) Transfer within equity | ||||||||||||
| 1.Share capital increased by capital reserves transfer | ||||||||||||
| 2.Share capital increased by surplus reserves transfer | ||||||||||||
| 3.Transfer of surplus reserve to offset losses | ||||||||||||
| 4. Remeasurement of defined benefit plan liability or |
| asset transfer to retained earnings | ||||||||||||
| 5. Other comprehensive income carried forward to retained earnings | ||||||||||||
| 6. Others | ||||||||||||
| (V) Special Reserve | ||||||||||||
| 1. Appropriation during the year | ||||||||||||
| 2. Utilization during the year | ||||||||||||
| (VI) Others | ||||||||||||
| IV. Balance at the end of the period | 1,011,660,000.00 | 964,711,931.13 | 72,776,609.18 | 1,233,957,012.40 | 3,283,105,552.71 |
III. Company informationShenzhen Special Economic Zone Real Estate and Properties (Group) Co., Ltd. (the “Group” or “theCompany”) was established in July 1993, as approved by the Shenzhen Municipal Government withdocument SFBF (1993) 724. The Company issued A shares on 15 September 1993 and issued B shareson 10 January 1994. On 31 August 1994, the issued B shares were listed in the New York Exchangemarket as class A recommendation. The total share capital is 1,011,660,000 shares, including891,660,000 of A shares, and 120,000,000 of B shares. The company business license registrationnumber is 440301103225878, and the registered capital is RMB 1,011,660,000.00. The Company’sheadquarter is at Floor 45-48, Shen Fang Plaza, Ren Min South Road, Luo Hu District, Shen Zhen,Guangdong province.On 13 October 2004, according to the document No. (2004) 223 “Decision on establishing Shenzheninvestment Holding Co., Ltd.” issued by State-Owned Assets Supervision and AdministrationCommission of Shenzhen Municipal Government, former major shareholder – Shenzhen ConstructionInvestment Holding Company with two assets management companies merged to form the ShenzhenInvestment Holding Co., Ltd. By the State-owned Assets Supervision and Administration Commissionof the state council, and quasi-exempt obligations tender offer as approved by China SecurityRegulatory Committee with document No. (2005)116, this issue of consolidated has been authorizedand the change in registration had been completed on 15 February 2006. At the end of the reportingperiod, Shenzhen Investment Holding Limited holds 642,884,262 shares of the Company (63.55% ofthe total share capital). The shares are all tradable unrestricted shares.The Company has established the corporate governance structure of the general meeting ofshareholders, the board of directors and board of supervisors with human resources department,financing plan department, marketing department, engineering management department etc. in place.The Company and its subsidiaries (hereinafter referred to as "the Group") are principally engaged inreal estate development and sales, property leasing and management, retail merchandising and trade,hotel, equipment installation and maintenance, construction, interior decoration, etc.The consolidated and company financial statements and the notes to financial statements have beenapproved by the 7
th Board of Directors in the 54
thboard meeting on 18 August 2020.The company’s consolidation scope for the current year has not changed compared with the previousyear. For details please refer to Note VIII “Changes in the scope of consolidation” and Note IX“Interests in other entities”.IV. The Basis of Preparation of Financial Statements
1. Basis of preparation
The financial statements are prepared in accordance with the Accounting Standards for BusinessEnterprises and corresponding application guidance, interpretations and other related provisions issuedby the Ministry of Finance (collectively, " Accounting Standards for Business Enterprises "). Inaddition, the Group also discloses relevant financial information in accordance with the rules ofinformation disclosure for publicly issued securities companies No. 15 - general provisions on financialreporting (revised in 2014) of the China securities regulatory commission.The Company adopts the accrual basis of accounting. Except for certain financial instruments, thefinancial statements are prepared under the historical cost convention. In the event that impairment ofassets occurs, a provision for impairment is made accordingly in accordance with the relevantregulations.
2. Going concern
The financial statements of the Company have been prepared on going concern basis.V. Significant accounting policies and accounting estimatesReminders on specific accounting policies and accounting estimates:
The company according to the new revenue standard and the characteristics of the company’sproduction and operation to determine the revenue recognition policy, the specific accounting policyplease refer to Note V.39
1. Statement of compliance with the Accounting Standards for Business EnterprisesThe financial statements have been prepared in compliance with the Accounting Standards for BusinessEnterprises to truly and completely present the Company and consolidated financial position as at June30 2020 and the Company and consolidated operating results and cash flows for 1 January 1 to 30 June2020.
2. Accounting Period
The accounting period of the Company is from 1 January to 31 December.
3. Operating Period
The operating period of the Company is 12 months.
4. Functional currency
The Company and domestic subsidiaries use Renminbi (“RMB”) as their functional currency.Offshore subsidiaries determine US Dollar (“USD”) as their functional currency according to theprimary economic environment where they operate. The financial statements of the Company havebeen prepared in RMB.
5. Accounting treatments for business combinations involving enterprises under common controland not under common control
(1) Business combinations involving enterprises under common control
For a business combination involving enterprises under common control, the assets acquired andliabilities assumed are measured based on their carrying amounts in the consolidated financialstatements of the ultimate controlling party at the combination date, except for adjustments due todifferent accounting policies. The difference between the carrying amount of the net assets acquiredand the consideration paid for the combination (or the total par value of shares issued) is adjustedagainst share premium in the capital reserve, with any excess adjusted against retained earnings.Business combinations involving enterprises under common control and achieved in stages.
In the separate financial statements, the initial investment cost is calculated based on the shareholdingportion of the assets and liabilities obtained and are measured at the carrying amounts as recorded bythe enterprise being combined at the combination date. The difference between the initial investmentcost and the sum of the carrying amount of the original investment cost and the carrying amount ofconsideration paid for the combination is adjusted to the capital reserve, if the capital reserve is notsufficient to absorb the difference, the excess difference shall be adjusted to retained earnings.In the consolidated financial statements, the assets and liabilities obtained at the combination shall bemeasured at the carrying value as recorded by the enterprise at combination date, except foradjustments of different accounting policies. The difference between the sum of the carrying valuefrom original shareholding portion and the new investment cost incurred at combination date and thecarrying value of net assets obtained at combination date shall be adjusted to capital reserve, if thebalance of capital reserve is not sufficient to absorb the differences, any excess is adjusted to retainedearnings. The long-term investment held by the combination party, the recognized profit or losecomprehensive income and other change of shareholding’s equity at the closer date of the acquisitiondate and combination date under common control shall separately offset the opening balance ofretained earnings and profit or loss during comparative statements.
(2) Business combinations involving enterprises not under common control
For business combinations involving enterprises not under common control, the consideration costsinclude acquisition-date fair value of assets transferred, liabilities incurred or assumed and equitysecurities issued by the acquirer in exchange for control of the acquiree. At the acquisition date, theacquired assets, liabilities and contingent liabilities of the acquiree are measured at their fair value. Theacquiree’s identifiable asset, liabilities and contingent liabilities, are recognised at their acquisition-datefair value.Where the combination cost exceeds the acquirer’s interest in the fair value of the acquiree’sidentifiable net assets, the difference is recognised as goodwill, and subsequently measured on the basisof its cost less accumulated impairment provisions. Where the combination cost is less than theacquirer’s interest in the fair value of the acquiree’s identifiable net assets, the difference is recognisedin profit or loss for the current period after reassessment.Business combinations involving enterprises not under common control and achieved in stagesIn the separate financial statements, the initial investment cost of the investment is the sum of thecarrying amount of the equity investment held by the entity prior to the acquisition date and theadditional investment cost at the acquisition date. The disposal accounting policy of othercomprehensive income related with equity investment prior to the purchase date recognized underequity method shall be compliance with the method when the acquiree disposes the related assets orliabilities. Shareholder’s equity due to the changes of other shareholder’s equity other than the changesof net profit, other comprehensive income and profit distribution shall be transferred to profit or lossfor current period when disposed. If the equity investment held by the entity prior to the acquisitiondate is measured at fair value, the cumulative changes in fair value recognized in other comprehensiveincome shall be transferred to profit or loss for current period when accounted for using cost method.In the consolidation financial statements, the combination cost is the sum of consideration paid atacquisition date and fair value of the acquiree’s equity investment held prior to acquisition date; thecost of equity of the acquiree held prior to acquisition date shall be re-measured at the fair value atacquisition date, the difference between the fair value and book value shall be recognized as investmentincome or loss for the current period. Other comprehensive income and changes of investment equityrelated with acquiree’s equity held prior to acquisition date shall be transferred to investment profit orloss for current period at acquisition date, besides there is other comprehensive income incurred by thechanges of net assets or net liabilities due to the re-measurement of defined benefit plan.
(3) Transaction costs for business combination
The overhead for the business combination, including the expenses for audit, legal services, valuationadvisory, and other administrative expenses, are recorded in profit or loss for the current period whenincurred. The transaction costs of equity or debt securities issued as the considerations of businesscombination are included in the initial recognition amount of the equity or debt securities.
6. Consolidated financial statements
(1) Scope of consolidated financial statements
The scope of consolidated financial statements is based on control. Control exists when the Companyhas power over the investee; exposure, or rights to variable returns from its involvement with theinvestee and has the ability to affect its returns through its power over the investee. A subsidiary is anentity that is controlled by the Company (including enterprise, a portion of an investee as a deemedseparate component, and structured entity controlled by the enterprise).
(2) Basis of preparation of consolidated financial statements
The consolidated financial statements are prepared by the Company based on the financial statementsof the Company and its subsidiaries and other relevant information. When preparing consolidatedfinancial statements, the accounting policies and accounting periods of the subsidiaries should beconsistent with those established by the Company, and all significant intra-group balances andtransactions are eliminated.Where a subsidiary or business was acquired during the reporting period, through a businesscombination involving enterprises under common control, the financial statements of the subsidiary orbusiness are included in the consolidated financial statements as if the combination had occurred at thedate that the ultimate controlling party first obtained control.Where a subsidiary or business was acquired during the reporting period, through a businesscombination involving enterprises not under common control, the identifiable assets and liabilities ofthe acquired subsidiaries or business are included in the scope of consolidation from the date thatcontrol commences.The portion of a subsidiary’s equity that is not attributable to the parent is treated as non-controllinginterests and presented separately in the consolidated balance sheet within shareholders’ equity. Theportion of net profit or loss of subsidiaries for the period attributable to non-controlling interests ispresented separately in the consolidated income statement below the “net profit” line item. When theamount of loss for the current period attributable to the non-controlling shareholders of a subsidiaryexceeds the non-controlling shareholders’ share of the opening owners’ equity of the subsidiary, theexcess is still allocated against the non-controlling interests.
(3) Changes in non-controlling interests
Where the Company acquires a non-controlling interest from a subsidiary’s non-controllingshareholders or disposes of a portion of an interest in a subsidiary without a change in control, the
transaction is treated as equity transaction, and the book value of shareholder’s equity attributed to theCompany and to the non-controlling interest is adjusted to reflect the change in the Company’s interestin the subsidiaries. The difference between the proportion interests of the subsidiary’s net assets beingacquired or disposed and the amount of the consideration paid or received is adjusted to the capitalreserve in the consolidated balance sheet, with any excess adjusted to retained earnings.
(4) Disposal of subsidiaries
When the Company loses control over a subsidiary because of disposing part of equity investment orother reasons, the remaining part of the equity investment is re-measured at fair value at the date whenthe control is lost. A gain or loss is recognised in the current period and is calculated by the aggregateof consideration received in disposal and the fair value of remaining part of the equity investmentdeducting the share of net assets in proportion to previous shareholding percentage in the formersubsidiary since acquisition date and the goodwill.Other comprehensive income related to the former subsidiary is transferred to profit or loss when thecontrol is lost, except for the comprehensive income arising from the movement of net liabilities orassets in the former subsidiary’s re-measurement of defined benefit plan.
7. Joint arrangement classification and accounting treatment for joint operationA joint arrangement is an arrangement of which two or more parties have joint control. The Companyclassifies joint arrangements into joint operations and joint ventures.
(1) Joint operations
A joint operation is a joint arrangement whereby the joint operators have rights to the assets, andobligations for the liabilities, relating to the arrangement.The Company recognizes the following items relating to its interest in a joint operation, and account forthem in accordance with relevant accounting standards:
A. its solely-held assets, and its share of any assets held jointly;B. its solely-assumed liabilities, and its share of any liabilities assumed jointly;C. its solely-assumed liabilities, and its share of any liabilities assumed jointly;D. its share of the revenue from the sale of the output by the joint operation; andE. its solely-incurred expenses, and its share of any expenses incurred jointly.
(2) Joint ventures
A joint venture is a joint arrangement whereby the joint venturers have rights to the net assets of thearrangement.The Company adopts equity method under long-term equity investment in accounting for itsinvestment in joint venture.
8. Cash and cash equivalents
Cash comprises cash in hand and deposits that can be readily withdrawn on demand. Cash equivalentsinclude short-term, highly liquid investments that are readily convertible to known amounts of cash andare subject to an insignificant risk of change in value.
9. Foreign currency transactions and translation of foreign currency financial statements
1) Foreign currency transactions
Foreign currency transactions are translated to the functional currency of the Company at the spotexchange rates on the dates of the transactions.Monetary items denominated in foreign currencies are translated to Renminbi at the spot exchange rateat the balance sheet date. The resulting exchange differences between the spot exchange rate onbalance sheet date and the spot exchange rate on initial recognition or on the previous balance sheetdate are recognised in profit or loss. Non-monetary items that are measured at historical cost in foreigncurrencies are translated to Renminbi using the exchange rate at the transaction date. Non-monetaryitems that are measured at fair value in foreign currencies are translated using the exchange rate at thedate the fair value is determined. The resulting exchange differences are recognised in profit or loss.
(2) Translation of foreign currency financial statements
When translating the foreign currency financial statements of overseas subsidiaries, assets andliabilities of foreign operation are translated to Renminbi at the spot exchange rate at the balance sheetdate. Equity items, excluding “retained earnings”, are translated to Renminbi at the spot exchange ratesat the transaction dates.Income and expenses of foreign operation are translated to Renminbi at the spot exchange rates at thetransaction dates.Cash flow statement of foreign operation is translated to Renminbi at the spot exchange rates [the ratesdetermined under a systematic and rational method that approximate the spot exchange rates] at thecash flow occurrence dates. Effect of foreign exchange rate changes on cash and cash equivalents ispresented separately as “Effect of foreign exchange rate changes on cash and cash equivalents” in thecash flow statement.The resulting translation differences are recognised in other comprehensive income in shareholders’equity of balance sheet.The translation differences accumulated in shareholders’ equity with respect to a foreign operation aretransferred to profit or loss in the period when the foreign operation is disposed.
10. Financial instruments
Financial instruments refer to the contracts of forming enterprise financial assets and other entities’financial liabilities or equity instruments.
(1) Recognition and Derecognition of financial instruments
A financial asset or financial liability is recognised when the Group becomes one party of financialinstrument contracts.If one of the following conditions is met, the financial assets are terminated:
① The right of the contract to receive the cash flows of financial assets terminates
② The financial asset has been transferred, and is in accordance with the following conditions for
derecognition.If the obligations of financial liability have been discharged in total or in part, derecognize all or part ofit. If the Group (debtor) makes an agreement with the creditor to replace the current financial liabilityof assuming new financial liability which contract provisions are different in substance, derecognizethe current financial liability and meanwhile recognize as the new financial liability.If the financial assets are traded routinely, they are recognised and derecognised at the transaction date.
(2) Classification and measurement of financial assets
Financial assets are classified into the following three categories depends on the Group’s businessmode of managing financial assets and cash flow characteristics of financial assets: financial assetsmeasured at amortized cost, financial assets at fair value through other comprehensive income andfinancial assets at fair value through profit or loss.Financial assets measured at amortised costThe Group shall classify financial assets that meet the following conditions and are not designated asfinancial assets at fair value through profit or loss as financial assets measured at amortized cost:
· The Group’s business model for managing the financial assets is to collect contractual cashflows;· The terms of the financial asset contract stipulate that cash flows generated on a specific date are
only payments of principal and interest based on the amount of outstanding principal.After initial confirmation, the real interest rate method is used to measure the amortized cost of suchfinancial assets. Profits or losses arising from financial assets measured at amortized costs and not partof any hedging relationship is included in current profits and losses when the recognition is terminated,amortized or impaired according to the Actual Interest Rate Law.Financial assets at fair value through other comprehensive incomeThe Group shall classify financial assets that meet the following conditions and are not designated asfinancial assets measured at fair value and whose changes are recorded in current profits and losses asfinancial assets measured at fair value through other comprehensive income:
· The Group’s business model for managing the financial assets is both to collect contractual cash
flows and to sell the financial assets;· The terms of the financial asset contract stipulate that cash flows generated on a specific date areonly payments of principal and interest based on the amount of outstanding principal.After initial recognition, financial assets are subsequently measured at fair value. Interest, impairmentlosses or gains and exchange gains calculated by the effective interest rate method are recognised inprofit or loss, while other gains or losses are recognised in other comprehensive gains. Whenderecognized, the accumulated gains or losses previously recognised in other comprehensive gainsare transferred from other comprehensive gains and recorded in current profits and losses.Financial assets at fair value through profit or lossIn addition to the aboving financial assets which are measured at amortized cost or at fair value athrough other comprehensive income, the Group classifies all other financial assets as financial assetsmeasured at fair value through profit or loss. When initial recognition, in order to eliminate orsignificantly reduce accounting mismatches, the Group irrevocably designates some financial assetsthat should have been measured at amortized cost or at fair value through other comprehensive gains asfinancial assets at fair value through profit or loss.After initial recognition, the financial assets are subsequently measured at fair value, and the profits orlosses (including interest and dividend income) generated from which are recognised in profit or loss,unless the financial assets are part of the hedging relationship.However, for non-tradable equity instrument investment, when initially recognized, the Groupirrevocably designates them as financial assets at fair value through other comprehensive gains. Thedesignation is made on the basis of individual investment, and the relevant investment conforms to thedefinition of equity instruments from the issuer’s point of view.After initial confirmation, financial assets are subsequently measured at fair value. Dividend incomethat meets the requirements is recognised in profit and loss, and other gains or losses and changes infair value are recognised in other comprehensive gains. When derecognized, the accumulated gains orlosses previously recognised in other comprehensive gains are transferred from other comprehensivegains to retained earnings.The business model of managing financial assets refers to how the group manages financial assets togenerate cash flow. The business model decides whether the source of cash flow of financial assetsmanaged by the Group is to collect contract cash flow, sell financial assets or both of them. Based onobjective facts and the specific business objectives of financial assets management decided by keymanagers, the Group determines the business model of financial assets management.The Group evaluates the characteristics of the contract cash flow of financial assets to determinewhether the contract cash flow generated by the relevant financial assets on a specific date is only topay principal and interest based on the amount of unpaid principal. Among them, principal refers to thefair value of financial assets at the time of initial confirmation; interest includes the consideration oftime value of money, credit risk related to the amount of unpaid principal in a specific period, and otherbasic borrowing risks, costs and profits. In addition, the Group evaluates the terms and conditions of
the contracts that may lead to changes in the time distribution or amount of cash flow in financial assetcontracts to determine whether they meet the requirements of the aboving contract cash flows.characteristicsOnly when the Group changes its business model of managing financial assets, all the financial assetsaffected shall be reclassified on the first day of the first reporting period after the business modelchanges, otherwise, financial assets shall not be reclassified after initial confirmation.Financial assets are measured at fair value at initial recognition. For financial assets that are measuredat fair value and whose changes are included in the current profit and loss, related transaction costs aredirectly included in the current profit and loss; for other types of financial assets, related transactioncosts are included in the initially recognized amount. For accounts receivable arising from the sale ofproducts or the provision of labor services that do not include or take into account significant financingcomponents, the Group considers the amount of consideration expected to be entitled as the initialrecognition amount.
(3) Classification and Measurement of financial liabilities
On initial recognition, financial liabilities are classified as: financial liabilities at fair value throughprofit or loss (FVTPL), and financial liabilities measured at amortized cost. For financial liabilities notclassified as at fair value through profit or loss, the transaction costs are recognised in the initiallyrecognised amount.Financial liabilities at fair value through profits and lossesFinancial liabilities at FVTPL include transaction financial liabilities and financial liabilities designatedas at fair value through profit or loss in the initial recognition. Such financial liabilities aresubsequently measured at fair value, all gains and losses arising from changes in fair value anddividend and interest expense relative to the financial liabilities are recognised in profit or loss for thecurrent period.Financial liabilities measured at amortized costOther financial liabilities are subsequently measured at amortized cost using the effective interestmethod; gains and losses arising from derecognition or amortization is recognised in profit or loss forthe current period.Distinction between financial liabilities and equity instrumentsThe financial liability is the liability that meets one of following criteria:
① Contractual obligation to deliver cash or other financial instruments to another entity.
② Under potential adverse condition, contractual obligation to exchange financial assets or financial
liabilities with other parties.
③ A contract that will or may be settled in the entity’s own equity instruments and is a non-derivativefor which the entity is or may be obliged to deliver a variable number of the entity’s own equity
instruments.
④ A derivative that will or may be settled other than by the exchange of a fixed amount of cash or
another financial asset for a fixed number of the entity’s own equity instruments.An equity instrument is any contract that evidences a residual interest in the assets of an entity afterdeducting all of its liabilities.If the group cannot unconditionally avoid fulfilling a contractual obligation by delivering cash or otherfinancial assets, the contractual obligation meets the definition of financial liability.If a financial instrument must or are able to be settled by the group’s own equity instrument, the groupshould consider whether the group’s equity instrument as the settlement instrument is a substitute ofcash or other financial assets or the residual interest in the assets of an entity after deducting all of itsliabilities. If the former, the tool is the group’s financial liability; if the latter, the tool is the equityinstrument of the group.
(4) Fair value of financial instruments
The recognization of fair value of financial assets and financial liability is set out in note V. 11.
(5) Impairment of financial assets
On the basis of expected credit losses, the Group performs impairment assessment on the followingitems and confirms the loss provision.· Financial assets measured at amortized cost;· Accounts receivable and debt investments measured at fair value through profit or loss that
account in other comprehensive income.· Contractual assets as defined in “Accounting Standard for Business Enterprises No.14-Revenue""· Lease receivables;· Financial guarantee contract (except measured at fair value through profit or loss or formed bycontinuing involvement of transferred financial assets or the transfer does not qualify forderecognition).Measurement of expected credit lossesThe expected credit losses refer to the weighted average of the credit losses of financial instrumentsthat are weighted by the risk of default. Credit loss refers to the difference between all contractual cashflows receivable from the contract and all cash flows expected to be received by the Group at theoriginal effective interest rate, that is, the present value of all cash shortages.The company considers reasonable and reliable information about past events, current conditions,
future forecasts, and weights the risk of default to calculate the probability-weighted amount of thepresent value of the difference between the cash flow receivable under the contract and the cash flowexpected to be received in recognition of the expected credit loss.The Group separately measures the expected credit losses of financial instruments at different stages.The credit risk on a financial instrument has not increased significantly since initial recognition, whichis in the first stage. The Group shall measure the loss allowance for that financial instrument at anamount equal to 12-month expected credit losses. If the credit risk of financial instruments hasincreased significantly since the initial recognition, but no credit impairment has occurred, which is inthe second stage. The Group shall measure the loss allowance for a financial instrument at an amountequal to the lifetime expected credit losses. If the financial instrument has occurred credit impairmentsince initial recognition, which is in the third stage, and the Group shall measure the loss allowance fora financial instrument at an amount equal to the lifetime expected credit losses.For financial instruments with lower credit risk at the balance sheet date, the Group assumes that theircredit risk has not increased significantly since the initial recognition, and shall measure the lossallowance for that financial instrument at an amount equal to 12-month expected credit losses.The lifetime expected credit losses, refer to the expected credit losses caused by all possible defaultsduring the whole expected lifetime. The 12-month expected credit losses, refer to the expected creditlosses caused by all possible defaults during the 12-month after balance sheet date (if the expectedduration of financial instrument is less than 12 months, then for the expected duration), which is part ofthe lifetime expected credit lossesWhen measure the expected credit loss, the longest contract period (including the option of renewal)that the group needs to consider is the longest contract period the enterprise facing credit risk.For financial instruments in the first stages, second stages and with lower credit risk, the Groupcalculates interest income on the basis of their book balances without deduction of impairmentprovisions and actual interest rates. For financial instruments in the third stage, the Group calculatesinterest income according to their book balance minus the impairment provision and the actual interestrate.For bills receivable and accounts receivable, whether or not there are significant financing elements,the Group shall always measure the loss allowance for them at an amount equal to the lifetime expectedcredit losses.When information on expected credit losses cannot be assessed for a single financial asset, inaccordance with the characteristics of credit risk, the group divides and combines bills receivable,accounts receivable and leased receivables. On the basis of the combination, the group calculates theexpected credit losses. The basis of determining the combination is as follows:
A. Notes receivable· Notes receivable group 1: Bank acceptance bills· Notes receivable group 2: Trade acceptance bills
B. Accounts receivable· Accounts receivable group 1: Amount receivables of related parties· Accounts receivable group 2: Amount receivables of other customersC. Contractual assets· Contractual assets group 1: Product sales· Contractual assets group 2: Engineering constructionFor the accounts receivable divided into group, the group refers to the historical credit losses, combinesthe current situation with the forecast of future economic situation, compiles a comparison tablebetween the age of accounts receivable and the lifetime expected credit losses rate to calculate theexpected credit losses.For the bills receivables and contractual assets divided into group, the Group refers to historical creditlosses, with the current situation and the forecast of future economic situation, calculates the expectedcredit losses through the exposure on default and the lifetime expected credit losses rate.Other receivables· According to the characteristics of credit risk, the group divides other receivables into group. On
the basis of the combination, the group calculates the expected credit losses. The basis ofdetermining the combination is as follows:
· Other receivables group 1: Amount receivables from employee’s inprest fund· Other receivables group 2: Amount receivables from Deposit and security deposit· Other receivables group 3: Amount receivables from related parties· Other receivables group 4: Amount receivables from other transactionsFor other receivables a divided into group, the Group calculates the expected credit losses through theexposure on default and the lifetime expected credit losses rate or the next 12 months.Debt investments and Other debt investmentsFor debt investments and other debt investments, the group calculates the expected credit lossesthrough the exposure on default and the future 12-month or lifetime expected credit losses rate,according to the nature of the investment, the types of counterparty and risk exposure.Assessment of Significant Increase in Credit RiskBy comparing the default risk of financial instruments on balance sheet day with that on initialrecognition day, the Group determines the relative change of default risk of financial instrumentsduring the expected life of financial instruments, to evaluate whether the credit risk of financialinstruments has increased significantly since the initial recognition.
To determine whether credit risk has increased significantly since the initial recognition., the Groupconsiders reasonable and valid information, including forward-looking information, that can beobtained without unnecessary additional costs or efforts. Information considered by the Groupincludes:
· The debtor cannot pay principal and interest on the expiration date of the contract;· Serious deterioration of external or internal credit ratings (if any) of financial instruments that
have occurred or are expected to occur;· Serious deterioration of the debtor’s operating results that have occurred or are expected to occur;· Changes in the existing or anticipated technological, market, economic or legal environment willhave a significant negative impact on the debtor’s repayment capacity.According to the nature of financial instruments, the Group evaluates whether credit risk has increasedsignificantly on the basis of a single financial instrument or a combination of financial instruments.When assessing on the basis of the combination of financial instruments, the Group can classifyfinancial instruments based on common credit risk characteristics, such as overdue information andcredit risk rating.If the delay exceeds 30 days, the Group determines that the credit risk of financial instruments hasincreased significantly.The Group considers that financial assets default in the following circumstances· The debtor is unlikely to full pay its arrears to the group, and the assessment does not take intoaccount recourse actions taken by the group, such as liquidation of collateral (if held);· Financial assets have delay more than 90 days.Financial assets that have occurred credit impairmentOn the balance sheet date, the Group assesses whether credit impairment has occurred in financialassets measured at amortized cost and debt investments measured at fair value through othercomprehensive income. When one or more events adversely affect the expected future cash flow of afinancial asset occur, the financial asset becomes a financial asset with credit impairment. Evidence ofcredit impairment of financial assets includes the following observable information:
· Significant financial difficulties occur to the issuer or debtor· The debtor breaches any of the contractual stipulations, for example, fails to pay or delays the
payment of interests or the principal, etc.· For economic or contractual considerations related to the financial difficulties of the debtor, the
Group grants concessions to the debtor that will not be made under any other circumstances.· The debtor is probable to go bankrupt or undergo other financial restructuring.
· Financial difficulties of issuer or debtor lead to the disappearance of financial assets active
market. Presentation of expected credit losses reserve.Presentation of provision for expected credit lossesIn order to reflect the changes happened to the credit risk of financial instruments since the initialrecognition, the Group recalculates the expected credit losses on each balance sheet day. The increaseor reversal of the loss provision resulting therefrom is recognised as an impairment loss or gain in thecurrent profit or loss. For financial assets measured at amortized cost, loss provision offsets thecarrying amount of the financial assets shown on the balance sheet; for debt investments measured atfair value through other comprehensive income, the Group recognizes its loss provision through othercomprehensive income and does not offset the financial assets’ carrying amount.Write offIf the Group no longer reasonably expects that the financial assets contract cash flow can be recoveredfully or partially, the financial assets book balance will be reduced directly. Such reduction constitutethe derecognition of the financial assets. What usually occurs when the Group determines that thedebtor has no assets or sources of income to generate sufficient cash flows to pay the amount to bereduced. However, in accordance with the Group’s procedures for recovering due payment, thefinancial assets reduced may still be affected by enforcement activities.If the reduced financial assets are recovered later, the returns as impairment losses shall be included inthe profits and losses of the recovery period.
(6) Transfer of financial assets
Transfer of financial assets refers to the transference or deliverance of financial assets to the other party(the transferee) other than the issuer of financial assets.The Group derecognizes a financial asset only if it transfers substantially all the risks and rewards ofownership of the financial asset to the transferee; the Group should not derecognize a financial asset ifit retains substantially all the risks and rewards of ownership of the financial asset.The Group neither transfers nor retains substantially all the risks and rewards of ownership, shows asthe following circumstances: if the Group has forgone control over the financial assets, derecognize thefinancial assets and verify the assets and liabilities; if the Group retains its control of the financial asset,the financial asset is recognized to the extent of its continuing involvement in the transferred financialasset and recognize an associated liability is recognized.
(7) Offsetting financial assets and financial liabilities
When the Group has the legal rights to offset the recognized financial assets and financial liabilitiesand is capable to carry it out, the Group plans to net settlement or realize the financial assets and payoff the financial liabilities, the financial assets and financial liabilities shall be listed separately with theneutralized amount in balance sheet and are not allowed to be offset.
11. Fair value measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderlytransaction between market participants at the measurement date.The Company measures related assets or liabilities at fair value assuming the assets or liabilities areexchanged in an orderly transaction in the principal market; in the absence of a principal market,assuming the assets or liabilities are exchanged in an orderly transaction in the most advantageousmarket. Principal market (or the most advantageous market) is the market that the Company cannormally enter into a transaction on measurement date. The Company adopts the presumptions thatwould be used by market participants in achieving the maximized economic value of the assets orliabilities.For financial assets or financial liabilities with active markets, the Company uses the quoted prices inactive markets as their fair value. Otherwise, the Company uses valuation technique to determine theirfair value.Fair value measurement of a non-financial asset takes into account market participants’ ability togenerate economic benefits using the asset in its best way or by selling it to another market participantthat would best use the asset.The Company uses valuation techniques that are appropriate in the circumstances and for whichsufficient data are available to measure fair value, maximizing the use of relevant observable inputs,and using unobservable inputs only if the observable inputs aren’t available or impractical.Fair value level for assets and liabilities measured or disclosed at fair value in the financial statementsare determined according to the significant lowest level input to the entire measurement: Level 1 inputsare quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company canaccess at the measurement date; Level 2 inputs are inputs other than quoted prices included withinLevel 1 that are observable for the assets or liabilities, either directly or indirectly; Level 3 inputs areunobservable inputs for the assets or liabilities.At the balance sheet date, the Company revalues assets and liabilities being measured at fair valuecontinuously in the financial statements to determine whether to change the levels of fair valuemeasurement.
12. Notes receivable
Please refer to Note V. 10 financial instruments (5) Impairment of financial assets.
13. Accounts receivable
Please refer to Note V.10 financial instruments (5) Impairment of financial assets.
14. Accounts receivable financing
Inapplicable
15. Other receivables
Determination method and accounting treatment method of expected credit loss of other receivablesPlease refer to Note V 10. financial instruments (5) Impairment of financial assets.
16. Inventories
(1) Classification
The Group's inventory is classified by real estate development and non-real estate development.Inventory is mainly for real estate development, including development costs and developmentproducts. Development cost include the development costs of development products to be developedand development products under construction. Development products includes completed developmentproducts and intended to sell but temporarily leased development products. Non-real estatedevelopments include raw materials, finished goods and construction.
(2) Measurement method of cost of inventories
Inventories are initially measured at cost. The cost of product development includes land transfer fee,infrastructure expenditure, construction and installation project expenditure, borrowing expensesincurred before the completion of the development project and other related expenses in thedevelopment process. When a product is developed and shipped, the actual cost is determined byspecific identification method.Raw materials and finished goods are calculated using weighted average method.
(3) Basis for determining the net realisable value and method for provision for obsolete inventoriesNet realisable value is the estimated selling price in the ordinary course of business less the estimatedcosts of completion and the estimated costs necessary to make the sale and relevant taxes. The netrealisable value is measured based on the verified evidences and considerations for the purpose ofholding inventories and the effect of post balance sheet events.Any excess of the cost over the net realisable value of inventories is recognised as a provision forobsolete inventories, and is recognised in profit or loss. The Company usually recognises provision fordecline in value of inventories by a single inventory item. If the factors caused the value of inventorypreviously written-down have disappeared, the provision for decline in value of inventories previouslymade is reversed.
(4) Inventory count system
The Company maintains a perpetual inventory system.
(5) Amortization methods of low-value consumables
Low-value consumables are charged to profit or loss when they are used.
17. Contractual assets
Inapplicable
18. Contractual cost
The contractual costs include the incremental cost incurred in obtaining the contract and the cost forperformance of the contractThe incremental cost incurred in obtaining the contract refers to the cost which will not incur as long asthe Group does not obtain the contract (such as sales commission, etc.) If the cost is expected to berecoverable, the Group recognizes it as a contract acquisition cost as an asset. The Group's expensesincurred in obtaining the contract other than the incremental cost expected to be recovered are includedin the current profit and loss when incurred.If the cost incurred in implementing the contract does not fall within the scope of other accountingstandards and regulations such as inventory and meets the following conditions at the same time, theGroup shall recognize it as an asset as the contract performance cost:
① The cost is directly related to a current or expected contract, including direct labor, direct materials,manufacturing expenses (or similar expenses), clearly borne by the customer, and other costs incurredsolely due to the contract;
② This cost increases the Group's resources for future performance obligations;
③ This cost is expected to be recoverable
Assets recognized for contract acquisition costs and assets recognized for contract performance costs(hereinafter referred to as "assets related to contractual cost") are amortized on the same basis as therevenue recognition of goods or services related to the asset and included in the current profit and loss.(If the amortization period does not exceed one year, it shall be included in the current profit and losswhen it incurs.When the book value of the asset related to the contractual cost is higher than the difference betweenthe following two items, the Group makes provision for impairment of the excess part and recognizes itas an asset impairment loss:
① The residual consideration that the Group expects to obtain due to the transfer of the goods orservices related to the asset;
② The costs that shall incur for transferring the related goods or services as estimated.The contract performance cost recognized as an asset is presented in the item of “inventories” with theamortization period not exceeding one year or one normal business cycle at the initial recognition,
while it is presented in the item of "other non-current assets" with the amortization period notexceeding one year or one normal operation cycle.The contract acquisition cost recognized as an asset is presented in the item of “other current assets”with the amortization period not exceeding one year or one normal business cycle at the initialrecognition, while it is presented in the item of "other non-current assets" with the amortization periodnot exceeding one year or one normal operation cycle at the initial recognition.
19. Assets held for sale
Inapplicable
20. Equity investment
Inapplicable
21. Other equity investment
Inapplicable
22. Long-term receivables
Inapplicable
23. Long-term equity investments
Long-term equity investments include equity investments in subsidiaries and equity investments injoint ventures and associates. An associate is an enterprise over which the Company has significantinfluence.
(1) Determination of initial investment cost
The initial cost of a long-term equity investment acquired through a business combination involvingenterprises under common control is the Company’s share of the carrying amount of the subsidiary’sequity in the consolidated financial statements of the ultimate controlling party at the combination date.For a long-term equity investment obtained through a business combination not involving enterprisesunder common control, the initial cost is the combination cost.A long-term equity investment acquired other than through a business combination: A long-term equityinvestment acquired other than through a business combination is initially recognised at the amount ofcash paid if the Company acquires the investment by cash, or at the fair value of the equity securitiesissued if an investment is acquired by issuing equity securities.
(2) Subsequent measurement and recognition of profit or loss
Long-term equity investments in subsidiaries are accounted for using the cost method. An investmentin a joint venture or an associate is accounted for using the equity method for subsequent measurement.
For a long-term equity investment which is accounted for using the cost method, Except for cashdividends or profit distributions declared but not yet distributed that have been included in the price orconsideration paid in obtaining the investments, the Company recognises its share of the cash dividendsor profit distributions declared by the investee as investment income for the current period.For a long-term equity investment which is accounted for using the equity method, where the initialcost of a long-term equity investment exceeds the Company’s interest in the fair value of the investee’sidentifiable net assets at the date of acquisition, the investment is initially recognised at cost. Where theinitial investment cost is less than the Company’s interest in the fair value of the investee’s identifiablenet assets at the date of acquisition, the investment is initially recognised at the investor’s share of thefair value of the investee’s identifiable net assets, and the difference is recognised in profit or loss.Under the equity method, the Company recognises its share of the investee’s profit or loss and othercomprehensive income as investment income or losses and other comprehensive income respectively,and adjusts the carrying amount of the investment accordingly. Once the investee declares any cashdividends or profit distributions, the carrying amount of the investment is reduced by the amountattributable to the Company. Changes in the Company’s share of the investee’s owners’ equity, otherthan those arising from the investee’s net profit or loss, other comprehensive income or profitdistribution (referred to as “other changes in owners’ equity”), is recognised directly in the Company’sequity, and the carrying amount of the investment is adjusted accordingly. In calculating its share of theinvestee’s net profits or losses, other comprehensive income and other changes in owners’ equity, theGroup recognises investment income and other comprehensive income after making appropriateadjustments to align the accounting policies or accounting periods with those of the Group based on thefair value of the investee’s identifiable net assets at the date of acquisition.When the Company becomes capable of exercising joint control or significant influence (but notcontrol) over an investee due to additional investment or other reasons, the Company uses the fair valueof the previously-held equity investment, together with additional investment cost, as the initialinvestment cost under the equity method. The difference between the fair value and carrying amount ofthe previously-held equity investment, and the accumulated changes in fair value included in othercomprehensive income, shall be transferred to profit or loss for the current period upon commencementof the equity method.When the Company can no longer exercise joint control of or significant influence over an investee dueto partial disposal of the equity investment or other reasons, the remaining equity investment shall beaccounting for using Accounting Standard for Business Enterprises No. 22 - Recognition andMeasurement of Financial Instruments, and the difference between the fair value and the carryingamount of the remaining equity investment shall be charged to profit or loss for the current period atthe date of the loss of joint control or significant influence. Any other comprehensive incomepreviously recognised under the equity method shall be accounted for on the same basis as would havebeen required if the Company had directly disposed of the related assets or liabilities for the currentperiod upon discontinuation of the equity method. Other movement of owner’s equity related tooriginal equity investment is transferred to profit or loss for the current period.When the Company can no longer exercise control over an investee due to partial disposal of the equityinvestment or other reasons, and the remaining equity after disposal can exercise joint control of or
significant influence over an investee, the remaining equity is adjusted as using equity method fromacquisition. When the remaining equity can no longer exercise joint control of or significant influenceover an investee, the remaining equity investment shall be accounted for using Accounting Standard forBusiness Enterprises No. 22-Recognition and Measurement of Financial Instruments, and thedifference between the fair value and the carrying amount of the remaining equity investment shall becharged to profit or loss for the current period at the date of loss of control.When the Company can no longer exercise control over an investee due to new capital injection byother investors, and the Company can exercise joint control of or significant influence over an investee,the Company recognizes its share of the investee’s new added net assets using new shareholdingpercentage. The difference between its new share of the investee’s new added net assets and itsdecreased shareholding percentage of the original investment is recognized in profit or loss. And theCompany adjusts to the equity method using the new shareholding percentage as if it uses the equitymethod since it obtains the investment.Unrealized internal trading gains and losses between the group and associated enterprises and jointventures shall be calculated as part of the group according to the shareholding ratio and investmentgains and losses shall be recognized on an offset basis. However, unrealized internal trading lossesbetween the group and the investee shall not be offset if they are impairment losses of the transferredassets.
(3) Criteria for determining the existence of joint control or significant influence over an investeeJoint control is the contractually agreed sharing of control of an arrangement, which exists only whendecisions about the relevant activities require the unanimous consent of the parties sharing control.When assessing whether the Company can exercise joint control over an investee, the Company firstconsiders whether no single participant party is in a position to control the investee’s related activitiesunilaterally, and then considers whether strategic decisions relating to the investee’s related activitiesrequire the unanimous consent of all participant parties that sharing of control. All the parties, or agroup of the parties, control the arrangement collectively when they must act together to direct therelevant activities. When more than one combination of the parties can control an arrangementcollectively, joint control does not exist. A party that holds only protective rights does not have jointcontrol of the arrangement.Significant influence is the power to participate in the financial and operating policy decisions of aninvestee but does not have control or joint control over those policies. When determining whether theCompany can exercise significant influence over an investee, the effect of potential voting rights (forexample, warrants, share options and convertible bonds) held by the Company or other parties that arecurrently exercisable or convertible shall be considered.When the Company, directly or indirectly through subsidiaries, owns 20% of the investee (including20%) or more but less than 50% of the voting shares, it has significant influence over the investeeunless there is clear evidence to show that in this case the Company cannot participate in theproduction and business decisions of the investee, and cannot form a significant influence. When theCompany owns less than 20% of the voting shares, generally it does not have significant influence overthe investee, unless there is clear evidence to show that in this case the Company can participate in the
production and business decisions of the investee so as to form a significant influence.
(4) Method of impairment testing and impairment provision
For investments in subsidiaries, associates and joint ventures, refer to Note V. 32 for the impairment ofassets.
24. Investment property
Investment property measurement methodCost methodDepreciation or amortization methodInvestment properties are properties held either to earn rental income or for capital appreciation or forboth. The Group's investment real estate includes leased houses, buildings and leased land use rights. Inaddition, for a vacant building held by the company for operating lease, if the board of directors (or asimilar institution) makes a written resolution expressly indicating that it is used for operating lease andthe intention of holding does not change in the short term, it is also considered as Investment property.Investment properties are initially measured at acquisition cost, and depreciated or amortized using thesame policy as that for fixed assets or intangible assets.For the impairment of the investment properties accounted for using the cost model, refer to Note V. 32for the impairment of assets.Gains or losses arising from the sale, transfer, retirement or disposal of an item of investment propertyare determined as the difference among the net disposal proceeds, the carrying amount of the item,related taxes and surcharges, and are recognised in profit or loss for current period.
25. Fixed assets
(1) Recognition of fixed assets
Fixed assets represent the tangible assets held by the Company for use in production of goods, use insupply of services, rental or for administrative purposes with useful lives over one accounting year.Fixed assets are only recognised when its related economic benefits are likely to flow to the Companyand its cost can be reliably measured. Fixed assets are initially measured at cost.
(2) Depreciation of fixed assets
| Category | Depreciation method | Useful life (years) | Residual value rate % | Annual depreciation rate % |
| Plant and buildings | straight-line method | 30 | 5 | 3.17% |
| Motor vehicles | straight-line method | 6 | 5 | 15.83% |
| Electronic equipment and others | straight-line method | 5 | 5 | 19.00% |
The cost of a fixed asset is depreciated using the straight-line method since the state of intended use,unless the fixed asset is classified as held for sale. Not considering impairment provision, the estimateduseful lives, residual value rates and depreciation rates of each class of fixed assets are as follows:
(3) Recognition and measurement of fixed assets acquired under finance leasesFixed assets under finance leases are recognised if they meet one or more of the following criteria:
①The ownership of leased assets is transferred to the Company by the end of the lease term.
②The Company has the option to purchase the asset at a price that is expected to be sufficiently lowerthan the fair value at the date of the option becomes exercisable for it to be reasonably certain, at theinception of the lease, that the option will be exercised.
③Even if the ownership of assets is not transferred, the lease term covers the major part of the usefullife of the asset.
④At the inception of lease, the present value of minimum lease payments amount to substantially all ofthe fair value of leased asset.
⑤Leased assets are of a specialized nature that only the Company can use them without majormodifications.An asset acquired under a finance lease is measured at an amount equal to the lower of its fair valueand the present value of the minimum lease payments, each determined at the inception of the lease.Long-term payable is recorded at an amount equal to the sum of all future minimum lease payments.The difference between the carrying amount of the leased assets and the minimum lease payments isaccounted for as unrecognised finance charges. Initial direct costs attributable to a finance leaseincurred during the process of lease negotiation and the signing of the lease agreement, includingservice charges, attorney's fees, travelling expenses and stamp duty, that are incurred by the Companyare added to the carrying amount of the leased asset. Unrecognised finance charges are recognised asfinance charge for the period using the effective interest method over the lease term.Depreciation is accounted for in accordance with the accounting policies of fixed assets. If there isreasonable certainty that the Company will obtain ownership of a leased asset at the end of the leaseterm, the leased asset is depreciated over its estimated useful life. Otherwise, the leased asset isdepreciated over the shorter of the lease term and its estimated useful life.
(4) Impairment of the fixed assets
For the impairment of the fixed assets, please refer to Note V. 32. Impairment of assetsUseful lives, estimated residual values and depreciation methods are reviewed at least at each year-end.
The Company adjusts the useful lives of fixed assets if their expected useful lives are different with theoriginal estimates and adjusts the estimated net residual values if they are different from the originalestimates.
(6) Overhaul costs
Overhaul costs occurred in regular inspection are recognized in the cost if there is undoubted evidenceto confirm that this part meets the recognition criteria of fixed assets, otherwise, the overhaul costs arerecognized in profit or loss for the current period. Depreciation is provided during the period of regularoverhaul.
26. Construction in progress
Construction in progress is recognized based on the actual construction cost, including all expendituresincurred for construction projects, capitalized borrowing costs and any other costs directly attributableto bringing the asset to working condition for its intended use.Construction in progress is transferred to fixed asset when it is ready for its intended use.The impairment of construction in progress is set out in Note V. 32. Impairment of assets
27. Borrowing costs
(1) Capitalisation criteria
Borrowing costs that are directly attributable to the acquisition, construction or production of aqualifying asset shall be capitalised as part of the cost of that asset. Other borrowing costs are expensedin profit or loss as incurred. The capitalisation of borrowing costs shall commence only when thefollowing criteria are met:
①capital expenditures have been incurred, including expenditures that have resulted in payment ofcash, transfer of other assets or the assumption of interest-bearing liabilities;
②borrowing costs have been incurred;
③the activities that are necessary to prepare the asset for its intended use or sale have commenced.
(2) Capitalisation period
The capitalisation of borrowing costs ceases when the asset under acquisition or construction becomesready for its intended use, the borrowing costs incurred thereafter are recognised in profit or loss for thecurrent period.Capitalisation of borrowing costs is suspended during periods in which the acquisition or constructionof a fixed asset is interrupted abnormally and the interruption lasts for more than 3 months, until theacquisition or construction is resumed.
(3) Capitalisation rate of borrowing costs and calculation basis of capitalised amount
For interest expense actually incurred on specific borrowings, the eligible capitalised amount is the netamount of the borrowing costs after deducting any investment income earned before some or all of thefunds are used for expenditures on the qualifying asset. To the extent that the Company borrows fundsgenerally and uses them for the purpose of obtaining a qualifying asset, the Company shall determinethe amount of borrowing costs eligible for capitalisation by applying a capitalisation rate to theexpenditures on that asset, the capitalisation rate shall be the weighted average of the borrowing costsapplicable to the borrowings of the Company that are outstanding during the period, other thanborrowings specifically for the purpose of obtaining a qualifying asset.In the capitalisation period, exchange differences of specific borrowings in foreign currency shall becapitalised; exchange differences of general borrowings in foreign currency is recognised in profit orloss for the current period.
28. Productive biological assets
Inapplicable
29. Oil and gas assets
Inapplicable
30. Use right assets
Inapplicable
31. Intangible assets
(1) Valuation, use life, and impairment
Intangible assets include software, land use right, and patent rights etc.Intangible assets are stated at actual cost upon acquisition and the useful economic lives are determinedat the point of acquisition. When the useful life is finite, amortisation method shall reflect the patternin which the asset’s economic benefits are expected to be realised. If the pattern cannot bedetermined reliably, the straight-line method shall be used. An intangible asset with an indefinite usefullife shall not be amortised.The Company shall review the useful life and amortisation method of an intangible asset with a finiteuseful life at least at each year end. Changes of useful life and amortisation method shall beaccounted for as a change in accounting estimate.An intangible asset shall be derecognised in profit or loss when it is not expected to generate futureeconomic benefits.The impairment of intangible assets is set out in NOTE V.32.Impairment of assets
(2) Accounting policy for internal research and development expenditure
32. Impairment of assets
The impairment of long-term equity investments in subsidiaries, associates and joint ventures,investment properties measured using a cost model, fixed assets, construction in progress, productivebiological assets measured using a cost model, intangible assets, goodwill, proven oil and gas miningrights and wells and related facilities, etc. (Excluding inventories, investment property measured usinga fair value model, deferred tax assets and financial assets) is determined as follows:
At each balance sheet date, the Company determines whether there is any indication of impairment. Ifany indication exists, the recoverable amount of the asset is estimated. In addition, the Companyestimates the recoverable amounts of goodwill, intangible assets with indefinite useful lives andintangible assets not ready for use at each year-end, irrespective of whether there is any indication ofimpairment.
The recoverable amount of an asset is the higher of its fair value less costs to sell and its present valueof expected future cash flows. The recoverable amount is estimated for each individual asset. If it is notpossible to estimate the recoverable amount of each individual asset, the Company determines therecoverable amount for the asset group to which the asset belongs. An asset group is the smallestidentifiable group of assets that generates cash inflows that are largely independent of the cash inflowsfrom other assets or asset groups.
An impairment loss is recognised in profit or loss when the recoverable amount of an asset is less thanit carrying amount. A provision for impairment of the asset is recognised accordingly.
For goodwill impairment test, the carrying amount of goodwill arising from a business combination isallocated reasonably to the relevant asset group since the acquisition date. If the carrying amount ofgoodwill is unable to be allocated to asset group, the carrying amount of goodwill will be allocated toasset portfolio. Asset group or portfolio of asset group is asset group or portfolio of asset group whichcan be benefit from synergies of a business combination and is not greater than the reportable segmentof the Company.
In impairment testing, if impairment indication exists in asset group or portfolio of asset groupcontaining allocated goodwill, impairment test is first conducted for asset group or portfolio of assetgroup that does not contain goodwill, and corresponding recoverable amount is estimated and anyimpairment loss is recognized. Then impairment test is conducted for asset group or portfolio of assetgroup containing goodwill by comparing it carrying amount and its recoverable amount. If therecoverable amount is less than the carrying amount, impairment loss of goodwill is recognized.
Once an impairment loss is recognised, it is not reversed in a subsequent period.
33. Long-term deferred expenses
Long-term deferred expenses are recorded at the actual cost, and amortized using a straight-line method
within the benefit period. For long-term deferred expense that cannot bring benefit in future period, theCompany recognized its amortised cost in profit or loss for the current period.
34. Contractual liabilities
Inapplicable
35. Employee benefits
(1) Scope of employee benefits
Employee benefits refer to all forms of consideration or compensation given by the Company inexchange for service rendered by employees or for the termination of employment relationship.Employee benefits include short-term employee benefits, post-employment benefits, terminationbenefits and other long-term employee benefits. Benefits provided to the Company’s spouse, children,dependents, family members of deceased employees or other beneficiaries are also part of theemployee benefits.
In the current period, the Company has accrued for the actual wages, bonuses, medical insurance foremployees based on standard rate, work injury insurance and maternity insurance and other socialinsurance and housing fund incurred and these are recognised as liabilities and corresponding costs inthe profit or loss. If these liabilities are not expected to be fully paid 12 months after the end of thereporting period in which employee renders the service to the Company, and if the financial impact issignificant, these liabilities shall be discounted using the net present value method.
(2) Post-employment benefits
Post-employment benefit plan includes defined contribution plans and defined benefit plans. Definedcontribution plans are post-employment benefit plans under which an enterprise pays fixedcontributions into a separate fund and will have no future obligations to pay the contributions. Definedbenefit plans are post-employment benefit plans other than defined contribution plans.Defined contribution plansDefined contribution plans include primary endowment insurance, unemployment insurance,corporation pension plan and etc.Besides basic pension insurance, the Company establishes corporate pension plans in accordance withthe related policies of corporate pension regulations. Employees can join the pension plan voluntarily.The Company has no other significant commitment of employees’ social security.The Company shall recognise, in the accounting period in which an employee provides service, thecontribution payable to a defined contribution plan as a liability, with a corresponding charge to theprofit or loss for the current period or the cost of a relevant asset.Defined benefit plan
For the defined benefit plan, independent actuary uses an actuarial technique, the projected unit creditmethod, to make a reliable estimate of the ultimate cost to the entity of the benefit that employees haveearned in return for their service in the current and prior periods, on the balance sheet date. The Groupset the defined benefit plan including the following components:
①Service costs, including current service costs, any past service costs and gain or loss on settlement.Among them, the current service cost is the increase in the present value of the defined benefitobligation resulting from employee service in the current period; the past service cost is the change inthe present value of the defined benefit obligation for employee service in prior periods, resulting froma plan amendment (the introduction or withdrawal of, or changes to, a defined benefit plan) or acurtailment (a significant reduction by the entity in the number of employees covered by a plan).
②Net interest on the net defined benefit liability (asset) can be viewed as comprising interest incomeon plan assets, interest cost on the defined benefit obligation and interest on the effect of the assetceiling.
③Re-measurements of the net defined benefit liability and assets.
The Group makes determining amounts to be recognized in profit or loss except other accountingstandards stipulates or allows employee benefits recorded as asset cost. Re-measurements of thechanges in the net defined benefit liability (asset) recognized in other comprehensive income shall notbe reclassified to profit or loss in a subsequent period. However, the entity may transfer those amountsrecognized in other comprehensive income within equity, when original defined benefit plan isterminated.
(3) Termination benefits
The Company provides for termination benefits to the employees and shall recognize an employeebenefits liability for termination benefits, with a corresponding charge to the profit or loss for thecurrent period, at the earlier of the following dates: When the Company cannot unilaterally withdrawthe offer of the termination benefits from an employment termination plan or a redundancy proposal;the Company recognizes the costs or expenses relating to a restructuring that involves the payment ofthe termination benefits..
If an employee's internal retirement plan is implemented, the economic compensation before theofficial retirement date is a dismissal benefit. From the date when the employee stops providingservices to the normal retirement date, the salary of the retired employee and the social insurancepremium to be paid are included in the current period at one time profit and loss. Financialcompensation after the official retirement date (such as a normal retirement pension) is treated asafter-service benefits.
(5) Other long-term employee benefits
Other long-term employee benefits provided by the Company to the employees satisfied the conditionsfor classifying as a defined contribution plan; those benefits shall be accounted for in accordance withthe above requirements relating to defined contribution plan. When the benefits satisfy a definedbenefit plan, it shall be accounted for in accordance with the above requirements relating to definedbenefit plan, but the movement of net liabilities or assets in re-measurement of defined benefit planshall be recorded in profit or loss for the current period or cost of relevant assets.
36. Lease liability
Inapplicable
37. Provisions
A provision is recognised for an obligation related to a contingency if all the following conditions aresatisfied:
(1) the Company has a present obligation;
(2) it is probable that an outflow of economic benefits will be required to settle the obligation;
(3) the amount of the obligation can be estimated reliably.
A provision is initially measured at the best estimate of the expenditure required to settle the relatedpresent obligation. Factors pertaining to a contingency such as the risks, uncertainties and time value ofmoney are taken into account as a whole in reaching the best estimate. Where the effect of the timevalue of money is material, provisions are determined by discounting the expected future cash flows.The Company reviews the carrying amount of a provision at the balance sheet date and adjusts thecarrying amount to the current best estimate.If all or part of the expenditure necessary for settling the provision is expected to be compensated by athird party, the amount of compensation is separately recognized as an asset when it is basically certainto be received. The recognized compensation amount shall not exceed the carrying amount of theprovision.
38. Share-based payment
Inapplicable
39. Other financial instruments, such as preferred shares, perpetual liabilities, etc.Inapplicable
40. Revenue
The accounting policy used for revenue recognition and measurement
(1) General principle
The Company recognizes revenue when it has satisfied the performance obligation under the contract,that is, when the customer has obtained the right to control the relevant goods or services.If a contract contains two or more performance obligations, the Company shall allocate the transactionprice to each individual performance obligation in accordance with the relative proportion of thestand-alone selling price of the goods or services promised by each individual performance obligationon the date of the contract The Company measures revenue based on the transaction price allocated toeach individual performance obligation.When one of the following conditions is met, the Group shall perform its performance obligationswithin a certain period; otherwise, it shall perform its performance obligations at a certain point intime:
① A customer obtains and consumes the economic benefits brought by the Company's performance at
the same time as the Company's performance.
② A customer may control the products under construction in the Company's performance process.
③ The goods produced by the Company during the performance of the contract have irreplaceableuses, and the Company has the right to collect payment for the cumulative performance part thathas been completed so far during the entire contract period.For performance obligations performed within a certain period of time, the Company recognizesrevenue in accordance with the performance progress during that period, except where the performanceprogress cannot be reasonably determined. The Company determines the progress of a contract byusing the output method or input method with consideration of the nature of goods or services. Whenthe performance progress cannot be reasonably determined, and the costs incurred are expected to becompensable, the Company recognizes the revenue according to the amount of the costs incurred untilthe performance progress can be reasonably determined.For performance obligations performed at a certain point of time, the Company recognizes revenue atthe point when a customer obtains control of the relevant goods or services. In judging whether acustomer has obtained control of goods or services, the Company considers the following signs:
① The Company has the current right to receive payment for the goods or services, that is, thecustomer has the current payment obligation for the goods or services.
② The Company has transferred the legal ownership of the product to the customer, that is, the
customer has the legal ownership of the product.
③ The Company has transferred the goods to the customer in kind, that is, the customer has takenpossession of the goods in kind.
④ The Company has transferred the main risks and rewards of the ownership of the goods to thecustomer, that is, the customer has obtained the main risks and rewards of the ownership of thegoods
⑤ The customer has accepted the goods or services, etc.
⑥ Other signs that the customer has obtained control of the product.
The Group has transferred goods or services to customers and has the right to receive consideration(and the right depends on other factors other than the passage of time) as contractual assets, andcontractual assets are impaired on the basis of expected credit losses (see Note V, 10 (6)) The Group'sunconditional (only depending on the passage of time) right to receive consideration from customersare listed as receivables. The Group’s obligation to transfer goods or services to customers forconsideration received or receivable from customers is regarded as contractual liabilities.Contractual assets and contractual liabilities under the same contract are listed as net amount. If the netamount is the debit balance, it is listed in the " contractual assets " or "other non-current assets" itemaccording to its liquidity; if the net amount is the credit balance, according to its liquidity, it is listed inthe items of " contractual liabilities " or "other non-current liabilities".
(2) Specific revenue recognition
Specific revenue recognition is as follows:
①Real estate development sales revenue recognition
1) the sales contract has been signed and filed with the land department; 2) the real estate has beencompleted and accepted; 3) For a lump-sum payment, all the room payment has been received, forinstallment payments, if the delayed payment has a financing nature, it shall be calculated anddetermined in accordance with the present value of the contract price, for mortgage, the firstinstallment has been received and the bank mortgage approval procedures have been completed; 4)completed the procedures for entering the partnership in accordance with the requirements stipulated inthe sales contract.
②Provide the specific method of property service income recognition
According to the service date agreed in the property service contract and agreement and the area andunit price corresponding to the service, the realization of the property service income shall beconfirmed when the relevant service fee has been received or evidence of payment has been obtained.
③Rental property income recognition of the specific method
The realization of the income from the leased property shall be confirmed when the relevant rent hasbeen received or evidence of collection has been obtained according to the lease contract andagreement on the date of lease (consider the rent-free period if there is a rent-free period) and the rentamount.
④Other income recognition methods
Including project construction income, hotel operating income, etc., according to the relevant contract,agreement, in the relevant payment has been received or is likely to receive the realization of revenuerecognition.
There are differences in revenue recognition due to different business models in the same businesses
41. Government grants
A government grant is recognised when there is reasonable assurance that the grant will be receivedand that the Group will comply with the conditions attaching to the grant.If a government grant is in the form of a transfer of a monetary asset, it is measured at the amountreceived or receivable. If a government grant is in the form of a transfer of a non-monetary asset, it ismeasured at fair value. If fair value cannot be reliably determined, it is measured at a nominal amountof RMB 1.The government grants relating to assets are grants that Group purchases, construction or othermethods to acquire long-term assets of government grants. Exception of the above grants, others arerelated to gains.For government grants with unspecified purpose, the amount of grants used to form a long-term asset isregarded as government grants related to an asset, the remaining amount of grants is regarded asgovernment grants related to income. If it is not possible to distinguish, the amount of grants is treatedas government grants related to income.A government grant related to an asset is offset against the carrying amount of the related asset, orrecognised as deferred income and amortised to profit or loss over the useful life of the related asset ona reasonable and systematic manner. A grant that compensates the Group for expenses or losses alreadyincurred is recognised in profit or loss or offset against related expenses directly. A grant thatcompensates the Group for expenses or losses to be incurred in the future is recognised as deferredincome, and included in profit or loss or offset against related expenses in the periods in which theexpenses or losses are recognised.A grant related to ordinary activities is recognised as other income or offset against related expensesbased on the economic substance. A grant not related to ordinary activities is recognised asnon-operating income.When a recognised government grant is reversed, carrying amount of the related asset is adjusted if thegrant was initially recognized as offset against the carrying amount of the related asset. If there isbalance of relevant deferred income, it is offset against the carrying amount of relevant deferredincome. Any excess of the reversal to the carrying amount of deferred income is recognised in profit orloss for the current period. For other circumstances, reversal is directly recognized in profit or loss forthe current period.
42. Deferred tax assets and deferred tax liabilities
Income tax comprises of current tax and deferred tax. Current tax and deferred tax are recognised inprofit or loss except to the extent that they relate to transactions or items recognised directly in equityand goodwill arising from a business combination.Deferred tax assets and deferred tax liabilities arise from deductible and taxable temporary differencesrespectively, being the differences between the carrying amounts of assets and liabilities for financialreporting purposes and their tax bases.All the taxable temporary differences are recognized as deferred tax liabilities except for those incurredin the following transactions:
(1) initial recognition of goodwill, or assets or liabilities in a transaction that is not a businesscombination and that affects neither accounting profit nor taxable profit (or deductible loss);
(2) taxable temporary differences associated with investments in subsidiaries, associates and jointventures, and the Company is able to control the timing of the reversal of the temporary difference andit is probable that the temporary difference will not reverse in the foreseeable future.The Company recognises a deferred tax asset for deductible temporary differences, deductible lossesand tax credits carried forward to subsequent periods, to the extent that it is probable that future taxableprofits will be available against which deductible temporary differences, deductible losses and taxcredits can be utilised, except for those incurred in the following transactions:
(1) a transaction that is not a business combination and that affects neither accounting profit nortaxable profit (or deductible loss);
(2) deductible temporary differences associated with investments in subsidiaries, associates and jointventures, the corresponding deferred tax asset is recognized when both of the following conditions aresatisfied: it is probable that the temporary difference will reverse in the foreseeable future; and it isprobable that taxable profits will be available in the future against which the temporary difference canbe utilized.At the balance sheet date, deferred tax is measured based on the tax consequences that would followfrom the expected manner of recovery or settlement of the carrying amount of the assets and liabilities,using tax rates enacted at the reporting date that are expected to be applied in the period when the assetis recovered or the liability is settled.The carrying amount of a deferred tax asset is reviewed at each balance sheet date, and is reduced tothe extent that it is no longer probable that the related tax benefits will be utilised. Such reduction isreversed to the extent that it becomes probable that sufficient taxable profits will be available.
43. Operating leases and finance leases
(1) Accounting treatments for operating lease
The Group recognizes leases that a lease has substantially transferred all risks and rewards incidental toownership of a leased asset to the lessee as financial leases. An operating lease is a lease other than afinance lease.Rental payments under operating leases are recognized as part of the cost of another related asset or asexpenses on a straight-line basis over the lease term. Initial direct costs are charged to profit or lossimmediately.
(2) Accounting treatment method for finance lease
At the commencement of the lease term, the Company 110ecognized the aggregate of the minimumlease receipts determined at the inception of a lease and the initial direct costs as finance leasereceivable, and 110ecognized unguaranteed residual value at the same time. The difference betweenthe aggregate of the minimum lease receipts, the initial direct costs and the unguaranteed residual value,and the aggregate of their present value is 110ecognized as unearned finance income. Unearnedfinance income is allocated to each accounting period during the lease term using the effective interestmethod.
When the Company acquires an asset under a finance lease, the asset is measured at an amount equal tothe lower of its fair value and the present value of the minimum lease payments, each determined at theinception of the lease. At the commencement of the lease term, the minimum lease payments arerecorded as long-term payables. The difference between the carrying amount of the leased assets andthe minimum lease payments is accounted for as 110ecognized110d finance charges. Initial directcosts attributable to a finance lease that are incurred by the Company are added to the carrying amountof the leased asset. Unrecognised finance charges arising from a finance lease are 110ecognized usingan effective interest method over the lease term. Depreciation is accounted for in accordance with theaccounting policies of fixed assets.
44. Other significant accounting policies and accounting estimates
Estimates as well as underlying assumptions involved are reviewed on an ongoing basis, based onhistorical experience and other factors, including reasonableness of estimation about future events.The followings are significant accounting estimations and key assumptions that have a significant riskof causing a material adjustment to the carrying amount of assets and liabilities within the nextfinancial year.Classification of financial assets
The Group’s major judgments in determining the classification of financial assets include the analysisof business models and the characteristics of contract cash flows.At the level of financial asset group, the Group determines the business model for managing financialassets, taking into account factors such as the way to evaluate and report financial assets performanceto key managers, the risks affecting financial assets performance and their management methods, andthe way in which relevant business managers are paid.In assessing whether the contract cash flow of financial assets is consistent with the basic lendingarrangements, the Group has the following judgments: whether the principal’s time distribution oramount may change during the lifetime for early repayment and other reasons; whether the interestonly includes the time value of money, credit risk, other basic lending risks and the consideration ofcost and profit. For example, does the amount of advance payment only reflect the unpaid principal andinterest based on the unpaid principal, and reasonable compensation paid for the early termination ofthe contract.Measurement of Expected Credit Loss of Account ReceivableThe Group calculates the expected credit losses of accounts receivable by default risk exposure andexpected credit losses rate of accounts receivable, and determines the expected credit losses rate basedon default probability and default loss rate. In determining the expected credit losses rate, the Groupuses internal historical credit loss and other data, and adjusts the historical data with current situationand forward-looking information. In considering forward-looking information, the indicators used bythe Group include the risks of economic downturn, external market environment, technologicalenvironment and changes in customer conditions. The Group regularly monitors and reviewsassumptions related to the calculation of expected credit losses.Deferred tax assetsDeferred tax assets relating to certain temporary differences and tax losses are recognised asmanagement considers it is probable that future taxable profit will be available against which thetemporary differences or tax losses can be utilised. The management needs significant judgment toestimate the time and extent of the future taxable profits and tax planning strategy to recognise theappropriate amount of Deferred tax assetsThe provision of land appreciation taxThe Group is subject to land appreciation tax (“LAT”). The Group recognised LAT based onmanagement’s best estimates, however, LAT is recognised by tax authorities according to theinterpretation of the tax rules. The final tax outcome could be different from the amounts that wereinitially recorded, and these differences will impact tax provision in periods in which such taxes havebeen finalised with local tax authorities.Determination of fair value of unlisted equity investmentThe fair value of an unlisted equity investment is the future cash flow discounted from the currentdiscount rate of a project with similar terms and risks. This valuation requires the group to estimate
future cash flows and discount rates. Therefore, it causes high uncertainty. In some cases, there isinsufficient information to determine fair value, or the distribution of possible estimates is wide. On thecontrary, the cost represents the best estimate of fair value within that range. As a whole, the cost canrepresent the appropriate estimate of fair value within that range.
45.Changes in significant accounting policies, accounting estimates and correction of errors inprior periods
(1) Changes in accounting policies.
√ Applicable □ Inapplicable
On July 5, 2017, the Ministry of Finance revised and issued the "Accounting Standards for EnterprisesNo.14-Revenue". According to the required of the Ministry of Finance, the group implemented theabove new standard and changed the accounting policy from January 1 2020, the main conditions asfollows.The Company recognizes revenue when it has satisfied the performance obligation under the contract,that is, when the customer has obtained the right to control the relevant goods or services “Obtainingthe right to control the relevant goods or services” means that it is able to dominate the use of the goodsor services and derive almost all economic benefits therefrom. When certain conditions are met, theGroup shall perform its performance obligations within a certain period of time; otherwise, it shallperform its performance obligations at a certain point in time. If a contract contains two or moreperformance obligations, the company shall allocate the transaction price to each individualperformance obligation in accordance with the relative proportion of the stand-alone selling price of thegoods or services promised by each individual performance obligation on the date of the contract TheCompany measures revenue based on the transaction price allocated to each individual performanceobligation.The group adjusted relevant accounting policies in accordance with the specific provisions of the newrevenue standards on specific matters or transactions, for example: contractual cost, quality assurance,distinction between principal and agent, sales with sales return clauses, additional purchase options,intellectual property license, repurchase arrangement, advances from customers and handling of initialfee without refund, etc.The Group has the right to receive consideration by transferring goods to customers, and this rightdepends on factors other than the passage of time as contractual assets. The Group’s obligation totransfer goods to customers for consideration received or receivable from customers is listed ascontractual liabilities.Reclassify the tax-exclusive part of the " advance form customers" that should have the deliveryobligation to the customer to contractual liabilities, and reclassify the tax part to tax payable. Thecompany will adjust the retained earnings at the beginning of the year and the amount of other relateditems in the financial statements based on the cumulative impact of the first implementation of the newincome standard when preparing the financial reports for 2020 and each period, and will not adjust theinformation for the comparable period. Please refer the table below
| Item | Dec 31 2019 | Jan 1 2020 | Adjusted amount |
| Advance form customers | 159,482,510.43 | 4,864,243.00 | -154,618,267.43 |
| contractual liabilities | 151,007,450.32 | 151,007,450.32 |
| Tax payable | 585,700,815.36 | 589,311,632.47 | 3,610,817.11 |
(2) Changes in significant accounting estimates
□ applicable √ applicable
(3) Adjustment of the relevant financial statements at the current year beginning according tothe new standards for revenues and the new standards for lease initially implementedcommencing from 2020Whether to adjust the balance sheet account at the beginning of the year
√ Yes □ No
Consolidated balance sheet
Expressed in RMB
| Item | Dec 31 2019 | Jan 1 2020 | Adjusted amount |
| Current assets: | |||
| Cash at bank and on hand | 2,511,140,445.35 | 2,511,140,445.35 | |
| Provision of Settlement fund | |||
| Funds lent | |||
| Financial assets at fair value through profit or loss | |||
| Derivative financial assets | |||
| Notes receivable | |||
| Accounts receivable | 62,059,055.68 | 62,059,055.68 | |
| Accounts receivable financing | |||
| Prepayments | 219,948.17 | 219,948.17 | |
| Insurance premiums receivables | |||
| Cession premiums receivables | |||
| Provision of cession premiums receivables | |||
| Other receivables | 28,275,228.26 | 28,275,228.26 | |
| Including: Interest receivable |
| Dividends receivable | 1,052,192.76 | 1,052,192.76 | |
| Recoursable Financial assets acquried | |||
| Inventories | 1,462,229,048.18 | 1,462,229,048.18 | |
| Contractual assets | |||
| Assets held for sale | |||
| Non-current assets due within one year | |||
| Other current assets | 102,781,855.48 | 102,781,855.48 | |
| Total current assets | 4,166,705,581.12 | 4,166,705,581.12 | |
| Non-current assets: | |||
| Loans and payments | |||
| Investments in debt obligations | |||
| Investments in other debt obligations | |||
| Long-term receivables | |||
| Long-term equity investments | 469,838.65 | 469,838.65 | |
| Investments in other equity instruments | 33,126,730.04 | 33,126,730.04 | |
| Other non-current financial assets | |||
| Investment property | 632,241,900.20 | 632,241,900.20 | |
| Fixed assets | 30,522,035.11 | 30,522,035.11 | |
| Construction in progress | |||
| Productive living assets | |||
| Oil and gas assets | |||
| Use rights assets | |||
| Intangible assets | |||
| Development costs | |||
| Goodwill | |||
| Long-term prepaid expense | 162,125.72 | 162,125.72 | |
| Deferred tax assets | 46,441,325.25 | 46,441,325.25 | |
| Other non-current assets | |||
| Total non-current assets | 742,963,954.97 | 742,963,954.97 | |
| Total assets | 4,909,669,536.09 | 4,909,669,536.09 | |
| Current liabilities: | |||
| Short-term loans | 51,647,260.17 | 51,647,260.17 | |
| Borrowings from central bank |
| Deposit funds | |||
| Financial liabilities at fair value through profit or loss | |||
| Derivative financial liabilities | |||
| Notes payable | |||
| Accounts payable | 244,224,478.46 | 244,224,478.46 | |
| Advances from customers | 159,482,510.43 | 4,864,243.00 | -154,618,267.43 |
| Contractual liabilities | 151,007,450.32 | 151,007,450.32 | |
| Funds fromsale of financial assets with repurchasement agreements | |||
| Deposits from customer and interbank | |||
| Funds received as an agent of stock exchange | |||
| Funds received as stock underwrite | |||
| Payroll payable | 53,909,576.49 | 53,909,576.49 | |
| Taxes payable | 585,700,815.36 | 589,311,632.47 | 3,610,817.11 |
| Other payables | 277,319,174.53 | 277,319,174.53 | |
| Including: Interest payable | 16,535,277.94 | 16,535,277.94 | |
| Dividends payable | |||
| Handling charges and commissions payable | |||
| Cession premiums payables | |||
| Liabilities held for sale | |||
| Non-current liabilities due within one year | |||
| Other current liabilities | |||
| Total current liabilities | 1,372,283,815.44 | 1,372,283,815.44 | |
| Non-current liabilities: | |||
| Provision for insurance contracts | |||
| Long-term loans | |||
| Debentures payable | |||
| Including: Preferred shares | |||
| Perpetual bonds | |||
| Lease liabilities | |||
| Long-term payables | 7,499,192.92 | 7,499,192.92 | |
| Long-term employee benefits payable |
| Provisions | |||
| Deferred income | |||
| Deferred tax liabilities | 4,903,293.58 | 4,903,293.58 | |
| Other non-current liabilities | |||
| Total non-current liabilities | 12,402,486.50 | 12,402,486.50 | |
| Total liabilities | 1,384,686,301.94 | 1,384,686,301.94 | |
| Shareholders' equity: | |||
| Share capital | 1,011,660,000.00 | 1,011,660,000.00 | |
| Other equity instruments | |||
| Including: Preferred shares | |||
| Perpetual bonds | |||
| Capital reserves | 978,244,910.11 | 978,244,910.11 | |
| Less: treasury shares | |||
| Other comprehensive income | 20,831,004.13 | 20,831,004.13 | |
| Specific reserve | |||
| Surplus reserves | 191,222,838.94 | 191,222,838.94 | |
| General reserve | |||
| Retained earnings | 1,464,915,816.81 | 1,464,915,816.81 | |
| Total equity attributable to shareholders of the Company | 3,666,874,569.99 | 3,666,874,569.99 | |
| Non-controlling interests | -141,891,335.84 | -141,891,335.84 | |
| Total shareholders' equity | 3,524,983,234.15 | 3,524,983,234.15 | |
| Total liabilities and shareholders' equity | 4,909,669,536.09 | 4,909,669,536.09 |
Adjustment description:
The company adjusted according to the actual situation as: Reclassifing the tax-exclusive part of "advance form customers" that should have the delivery obligation to the customer into “contractualliabilities”, and reclassifing the part for tax to tax payable.The new revenue standard takes the transfer of control as revenue recognition, and there is nosignificant change in the company’s revenue recognition.
Parent Company Balance Sheet
Expressed in RMB
| Item | Dec 31 2019 | Jan 1 2020 | Adjust amount |
| Currently assets: | |||
| Cash at bank and on hand | 1,967,688,122.55 | 1,967,688,122.55 |
| Financial assets at fair value through profit or loss | |||
| Derivative financial assets | |||
| Notes receivable | |||
| Accounts receivable | 156,935.84 | 156,935.84 | |
| Accounts receivable financing | |||
| Prepayments | 200,000.00 | 200,000.00 | |
| Other receivables | 835,275,498.69 | 835,275,498.69 | |
| Including: Interest receivable | |||
| Dividends receivable | |||
| Inventories | 419,453,091.86 | 419,453,091.86 | |
| Contractual assets | |||
| Assets held for sale | |||
| Non-current assets due within one year | |||
| Other current assets | 407,560.64 | 407,560.64 | |
| Total current assets | 3,223,181,209.58 | 3,223,181,209.58 | |
| Non-current assets: | |||
| Loans and payments | |||
| Investments in other debt obligations | |||
| Long-term receivables | |||
| Long-term equity investments | 150,676,516.92 | 150,676,516.92 | |
| Investments in other equity instruments | 13,229,501.03 | 13,229,501.03 | |
| Other non-current financial assets | |||
| Investment property | 522,038,731.16 | 522,038,731.16 | |
| Fixed assets | 19,586,720.47 | 19,586,720.47 | |
| Construction in |
| progress | |||
| Productive living assets | |||
| Oil and gas assets | |||
| Use rights assets | |||
| Intangible assets | |||
| Development costs | |||
| Goodwill | |||
| Long-term prepaid expense | |||
| Deferred tax assets | 162,125.72 | 162,125.72 | |
| Other non-current assets | 20,975,294.54 | 20,975,294.54 | |
| Total non-current assets | 726,668,889.84 | 726,668,889.84 | |
| Total assets | 3,949,850,099.42 | 3,949,850,099.42 | |
| Current liabilities: | |||
| Short-term loans | |||
| Financial liabilities at fair value through profit or loss | |||
| Derivative financial liabilities | |||
| Notes payable | |||
| Accounts payable | 103,915,931.14 | 103,915,931.14 | |
| Advances from customers | 59,409,454.38 | -59,409,454.38 | |
| Contractual liabilities | 56,580,432.74 | 56,580,432.74 | |
| Payroll payable | 25,544,403.23 | 25,544,403.23 | |
| Taxes payable | 143,434,273.95 | 146,263,295.59 | 2,829,021.64 |
| Other payables | 190,666,487.82 | 190,666,487.82 | |
| Including: Interest payable | 16,535,277.94 | 16,535,277.94 | |
| Dividends payable | |||
| Liabilities held for sale | |||
| Non-current |
| liabilities due within one year | |||
| Other current liabilities | |||
| Total current liabilities | 522,970,550.52 | 522,970,550.52 | |
| Non-current liabilities: | |||
| Long-term loans | |||
| Debentures payable | |||
| Including: Preferred shares | |||
| Perpetual bonds | |||
| Lease liabilities | |||
| Long-term payables | |||
| Long-term employee benefits payable | |||
| Provisions | |||
| Deferred income | |||
| Deferred tax liabilities | 1,295,046.51 | 1,295,046.51 | |
| Other non-current liabilities | |||
| Total non-current liabilities | 1,295,046.51 | 1,295,046.51 | |
| Total liabilities | 524,265,597.03 | 524,265,597.03 | |
| Owners’ equity: | |||
| Share capital | 1,011,660,000.00 | 1,011,660,000.00 | |
| Other equity instruments | |||
| Including: Preferred shares | |||
| Perpetual bonds | |||
| Capital reserves | 964,711,931.13 | 964,711,931.13 | |
| Less: Treasury shares | |||
| Other comprehensive income | 922,125.77 | 922,125.77 |
| Specific reserve | |||
| Surplus reserves | 168,093,225.53 | 168,093,225.53 | |
| Retained earnings | 1,280,197,219.96 | 1,280,197,219.96 | |
| Total shareholders’ equity | 3,425,584,502.39 | 3,425,584,502.39 | |
| Total liabilities and shareholders’ equity | 3,949,850,099.42 | 3,949,850,099.42 |
Adjustment description:
According to the company's revenue recognition, After the company adopts the "New RevenueStandard", no " contractual assets" will be formed; the impact of financial statement mainly is thereclassification between " contractual liabilities", "advance in customers" and "taxes payable".
(4) Note to the retroactive adjustment of the previous comparative data according to the newstandards for revenue and the new standards for lease to be implemented commencing from year2020
□ applicable √ Inapplicable
46. Other
InapplicableVI. Taxation
1. Main types of taxes and corresponding tax rates
| Tax type | Tax basis | Tax rate% |
| VAT | Taxable income | 9,6,5,3 |
| City maintenance and construction tax | Turnover tax payable | 7 |
| Corporate income tax | Taxable profits | 25,16.5 |
| Land appreciation tax | It shall be levied on the basis of the value-added value of the real estate transferred and the prescribed tax rate and paid in advance according to the type of real estate product | Four progressive rates of excess rate: 30,40,50, 60 |
| Property tax | 70% of the original value of properties | 1.2 |
| Education surcharge | Turnover tax payable | 3 |
| Local education surcharge | Turnover tax payable | 2 |
In case there were taxpayers subject to different corporate income tax rates, disclose the information：
Inapplicable
2. Tax Preferences
Inapplicable
3. Others
The corporate income tax rate for companies registered in China is 25%, and the corporate income taxrate for companies registered in Hong Kong is 16.5%.VII. Notes to items of consolidated financial statements
1. Cash at bank and on hand
Expressed in RMB
| Item | As at June 30 2020 | As at Dec 31 2019 |
| Cash in hand | 68,146.22 | 66,252.42 |
| Deposits with banks： | 426,154,287.65 | 1,493,123,507.93 |
| Other Monetary Funds | 1,722,000,000.00 | 1,017,950,685.00 |
| Total | 2,148,222,433.87 | 2,511,140,445.35 |
| Including: Total overseas deposits | 8,100,588.74 | 7,936,545.69 |
Note: At the end of the period, other monetary assets 1,722,000,000.00 are “seven-day notice deposits”
2. Transactional financial assets
Inapplicable
3. Derivative financial assets
Inapplicable
4. Notes receivable
Inapplicable
5. Accounts receivable
(1) Accounts receivables disclosed by category
Expressed in RMB
| Item | As at June 30 2020 | As at Dec 31 2019 | ||||
| Book balance | Provision for | Carryin | Book balance | Provision for bad | Carrying | |
| bad and doubtful debts | g amount | and doubtful debts | amount | |
| Amount | Proportion | Amount | Provision proportion | Amount | Proportion | Amount | Provision proportion | |||
| Individually assessed for impairment individually | 24,866,900.27 | 32.09% | 24,866,900.27 | 100.00% | 0.00 | 24,866,900.27 | 27.56% | 24,866,900.27 | 100.00% | 0.00 |
| Including: | ||||||||||
| Collectively assessed for impairment based on credit risk characteristics | 52,633,893.57 | 67.91% | 3,292,460.67 | 6.26% | 49,341,432.90 | 65,351,516.35 | 72.44% | 3,292,460.67 | 5.04% | 62,059,055.68 |
| Including: | ||||||||||
| Receivable from other customers | 52,633,893.57 | 67.91% | 3,292,460.67 | 6.26% | 49,341,432.90 | 65,351,516.35 | 72.44% | 3,292,460.67 | 5.04% | 62,059,055.68 |
| Total | 77,500,793.84 | 100.00% | 28,159,360.94 | 36.33% | 49,341,432.90 | 90,218,416.62 | 100.00% | 28,159,360.94 | 31.21% | 62,059,055.68 |
A. Provision for bad and doubtful debts for accounts receivable which are individually assessed forimpairment individually:
Expressed in RMB
| Item | As at June 30 2020 | |||
| Book balance | Provision for bad and doubtful debts | Provision proportion | Provision reason | |
| Agent for import and export business payment | 11,574,556.00 | 11,574,556.00 | 100.00% | Expected to be unrecoverable |
| Long-term receivable of selling properties | 10,626,436.84 | 10,626,436.84 | 100.00% | Expected to be unrecoverable |
| Accounts receivable from the revoked subsidiary | 2,328,158.40 | 2,328,158.40 | 100.00% | Expected to be unrecoverable |
| Other client receivable | 337,749.03 | 337,749.03 | 100.00% | Expected to be unrecoverable |
| Total | 24,866,900.27 | 24,866,900.27 | -- | -- |
A. Provision for bad and doubtful debts for accounts receivable which are individually assessed forimpairment individually:
Expressed in RMB
| Item | As at June 30 2020 | |||
| Book balance | Provision for bad and doubtful debts | Provision proportion | Provision reason | |
Accounts receivable which are collectively assessed for impairment using the aging analysis method(Receivable from other customers group) at the end of the period:
Expressedin RMB
| Item | As at June 30 2020 | ||
| Book balance | Provision for bad and doubtful debts | Provision proportion | |
| Within 1 year | 52,567,375.57 | 3,289,134.77 | 5.04% |
| 1 to 2 years | 66,518.00 | 3,325.90 | 5.00% |
| Total | 52,633,893.57 | 3,292,460.67 | -- |
Note to the basis for determining the combination:
InapplicableTotal provision for bad and doubtful debts based on portfolio:
InapplicableNote to the basis for determining the combination:
InapplicableDisclosure by aging
Expressed in RMB
| Aging | As at June 30 2020 |
| Within 1 year | 33,383,469.47 |
| Over 3 years | 44,117,324.37 |
| 3 to 4 years | 24,956,115.96 |
| Over 5 years | 19,161,208.41 |
| Total | 77,500,793.84 |
(2) Additions, recoveries or reversals of provision for bad and doubtful debts during thereporting periodInapplicable
(3) Accounts receivable written off during this period
Inapplicable
(4) the top five balance of accounts receivable at the ending
Expressed in RMB
| Item | Ending balance | Proportion in total ending balance | Ending balance of the provision for bad debts |
| China Construction Third Bureau Group Co., Ltd. | 18,581,256.93 | 23.98% | 929,062.85 |
| Wuhan Linyun Real Estate Development Co., Ltd. | 13,209,585.96 | 17.04% | 660,479.30 |
| Jiangsu Huajian Construction Co., Ltd. Shenzhen Branch | 8,147,885.22 | 10.51% | 407,394.26 |
| China Construction Eighth Engineering Bureau Co., Ltd. | 4,555,820.56 | 5.88% | 227,791.03 |
| Liu Zihua | 28,308,470.82 | 36.53% | 1,415,423.54 |
| Total | 72,803,019.49 | 93.94% |
(5) Derecognition of accounts receivable due to transfer of financial assets
Inapplicable
(6) Amount of assets and liabilities formed through transfer of account receivableAt the end of the period, the Group handled the factoring of accounts receivable. The factoring amountwas RMB 45,904,965.19, and the corresponding book value of accounts receivable was RMB45,904,965.19, which was not derecognized. For details of the pledge of accounts receivable, pleaserefer to Note VII. 81 "Ownership or Use Assets with restricted rights".
6. Accounts Receivable Financing
Inapplicable
7. Prepayments
(1) the aging analysis of prepayments is as follows:
Expressed in RMB
| Aging | As at June 30 2020 | As at Dec 31 2019 | ||
| Amount | Proportion (%) | Amount | Proportion (%) | |
| Within 1 year | 3,454,983.53 | 94.51% | 19,398.17 | 8.82% |
| 1 and 2 years | 200,000.00 | 5.47% | 200,000.00 | 90.93% |
| More than 3 years | 550.00 | 0.02% | 550.00 | 0.25% |
| Total | 3,655,533.53 | -- | 219,948.17 | -- |
Note to the reason why a significant prepayment with age exceeding 1 year not been settled:
Inapplicable
(2) Top 5 entities with the largest balances of prepayment
The total amount of prepayment is RMB3,148,820.81, accounting for 86.14% of the total amount ofthe ending balance of prepayment.Other note:
Inapplicable
8. Other receivables
Expressed in RMB
| Item | As at June 30 2020 | As at Dec 31 2019 |
| Dividend receivables | 1,052,192.76 | 1,052,192.76 |
| Other receivables | 20,855,240.72 | 27,223,035.50 |
| Total | 21,907,433.48 | 28,275,228.26 |
(1) Interest receivables
1) Classification of interest receivable
Inapplicable
2) Significant overdue interest
Inapplicable
3) Provision for bad debts
Inapplicable
(2) Dividends receivable
1) Classification of dividends receivable
Expressed in RMB
| Item | As at June 30 2020 | As at Dec 31 2019 |
| Yunnan KunPeng Flight service Co., Ltd | 1,052,192.76 | 1,052,192.76 |
| Total | 1,052,192.76 | 1,052,192.76 |
2) significant dividends receivable aging over 1 year:
Expressed in RMB
| Item | As at June 30 2020 | Aging | Reason why uncollected | Any impairment and the basis |
| Yunnan KunPeng Flight service Co., Ltd | 1,052,192.76 | 5 years | Delay to issue | No |
| Total | 1,052,192.76 | -- | -- | -- |
3) Provision for bad debts
Inapplicable
(3) Other receivables
1) Other receivables categorized by nature
Expressed in RMB
| Item | As at June 30 2020 | As at Dec 31 2019 |
| Other receivables from government | 3,687,234.61 | 4,371,247.34 |
| Other receivables from employee’s petty cash | 721,884.01 | 716,684.01 |
| Other receivables from the collecting and paying on behalf | 595,286.34 | 594,012.08 |
| Other receivables from other customers | 56,715,709.87 | 56,713,292.62 |
| Other receivables from related parties | 144,838,546.96 | 160,190,001.38 |
| Total | 206,558,661.79 | 222,585,237.43 |
2) Provision for bad and doubtful debts
Expressed in RMB
| Item | The first stage | The second stage | The third stage | Total |
| To 12-month expected credit loss | To lifetime expected credit loss (no credit impairment) | To lifetime expected credit loss (has occurred credit impairment) |
| Balance as at Jan 1 2020 | 1,133,741.68 | 194,228,460.25 | 195,362,201.93 | |
| Balance as at Jan 1 2020 in current period | —— | —— | —— | —— |
| Other changes | -10,710,973.62 | -10,710,973.62 | ||
| Balance as at June 30 2020 | 1,133,741.68 | 183,517,486.63 | 184,651,228.31 |
Changes in the book balance with significant changes in the loss provision for the current period:
InapplicableOther receivables by aging
Expressed in RMB
| Item | As at Jun 30 2020 |
| Within 1 year | 20,271,255.02 |
| 1 to 2 years | 5,424,624.80 |
| Over 3 years | 180,862,781.97 |
| 4 to 5 years | 180,862,781.97 |
| Total | 206,558,661.79 |
3) Additions, recoveries or reversals of provision for bad and doubtful debts during the year:
Provision for bad debts in the current period:
Expressed in RMB
| Item | As at Dec 31 2019 | Change in current period | As at Jun 30 2020 | |||
| additions | recoveries or reversals | Write-off | Others | |||
| Foreign currency statement translation difference | 195,362,201.93 | -10,710,973.62 | 184,651,228.31 | |||
| Total | 195,362,201.93 | -10,710,973.62 | 184,651,228.31 | |||
Note: The provision for bad debts for the current period decreased by RMB 10,710,973.62, which isthe translation difference of foreign currency statements.Including significant recoveries or reversals during the year:
Inapplicable
4) Other receivables written off during this year
Inapplicable
5) Top 5 entities with the largest balances of other receivables
Expressed in RMB
| Item | Nature | Amount | Aging | Proportion of the amount to the total OR (%) | Bad debt provision |
| Canada Great Wall (Vancouver) Co., Ltd | Current account | 89,035,748.07 | More than 5 years | 43.10% | 89,035,748.07 |
| Paklid Limited | Current account | 19,319,864.85 | More than 5 years | 9.35% | 19,319,864.85 |
| Bekaton property Limited | Current account | 12,559,290.58 | More than 5 years | 6.08% | 12,559,290.58 |
| Guangdong province Huizhou Luofu Hill Mineral Water Co., Ltd | Current account | 10,465,168.81 | More than 5 years | 5.07% | 10,465,168.81 |
| Xi’an Fresh Peak Property Trading Co., Ltd | Current account | 8,419,205.19 | More than 5 years | 4.08% | 8,419,205.19 |
| Total | -- | 139,799,277.50 | -- | 67.68% | 139,799,277.50 |
6) Accounts receivable involving government subsidy
Inapplicable
7) Other receivables with recognition terminated due to transfer of financial assetsInapplicable
8) Amount of assets and liabilities formed through transfer of account receivable and continuingto be involvedInapplicable
9. Inventories
Does the Company need to comply with the disclosure requirements of real estate industryYes
(1) Classification of inventories
The company complies with the disclosure requirements of "Shenzhen Stock Exchange Industry
Information Disclosure Guidelines No. 3-Listed Companies Engaged in Real Estate Business"Classified by nature:
Expressed in RMB
| Item | As at June 30 2020 | As at Dec 31 2019 | ||||
| Book value | Provision for impairment of inventories | Carrying amount | Book value | Provision for impairment of inventories | Carrying amount | |
| Real estate developing cost | 431,446,135.98 | 431,446,135.98 | 400,425,673.85 | 400,425,673.85 | ||
| Real estate developed products | 922,129,810.03 | 268,941.60 | 921,860,868.43 | 1,060,130,671.64 | 268,941.60 | 1,059,861,730.04 |
| Raw materials | 1,083,812.12 | 240,000.00 | 843,812.12 | 882,857.81 | 240,000.00 | 642,857.81 |
| Finished products | 358,038.92 | 38,891.91 | 319,147.01 | 317,200.81 | 38,891.91 | 278,308.90 |
| Construction in progress | 81,480,891.69 | 81,480,891.69 | 1,020,477.58 | 1,020,477.58 | ||
| Total | 1,436,498,688.74 | 547,833.51 | 1,435,950,855.23 | 1,462,776,881.69 | 547,833.51 | 1,462,229,048.18 |
The main items of " Real estate developing cost " and their interest capitalization are shown below:
Expressed in RMB
| Item | Starting time | Finished time | Estimated total investment | As at Dec 31 2019 | Less: Transfer to “Real estate developed products” | Less: Other reduction | Add: Increase in this period | As at Jun 30 2020 | Cumulative interest capitalization | Include: Amount of interest capitalized in the current period | Sources of funds |
| TianYue Bay No.2 | Sep 1 2019 | Sep 12 2020 | 654,850,000.00 | 375,133,765.74 | 31,020,462.13 | 406,154,227.87 | Others | ||||
| ShanTou Fresh Peak Building | 25,291,908.11 | 25,291,908.11 | Others | ||||||||
| Total | -- | -- | 654,850,000.00 | 400,425,673.85 | 31,020,462.13 | 431,446,135.98 | -- |
The main items of " Real estate developed products" and their interest capitalization are shown below:
Expressed in RMB
| Item | Finished time | As at Dec 31 2019 | Increase | Decrease | As at Jun 30 2020 | Cumulative interest capitalization | Include: Amount of interest capitalized in the current period |
| Jinye Island Multi-tier villa | Sep 16 1997 | 39,127,219.14 | 39,127,219.14 | ||||
| Jinye Island villa No.10 | Dec 02 2010 | 3,527,928.93 | 1,446,263.78 | 2,081,665.15 |
| Jinye Island villa No.11 | Aug 20 2008 | 4,341,162.49 | 55,252.56 | 4,285,909.93 | |||
| YueJing dongfang Project | Nov 18 2014 | 7,846,006.07 | 118,459.23 | 7,727,546.84 | |||
| Wenjin Garden | 92,212.77 | 92,212.77 | |||||
| HuaFeng Building | 1,631,743.64 | 1,631,743.64 | |||||
| HuangPu XinCun | 729,430.00 | 729,430.00 | |||||
| XingHu Garden | 156,848.69 | 156,848.69 | |||||
| Shenfang Shanglin Garden | Jan 01 2014 | 10,206,656.46 | 10,206,656.46 | 820,623.32 | |||
| Beijing Fresh Peak Buliding | 304,557.05 | 304,557.05 | |||||
| TianYue Bay No.1 | Dec 15 2017 | 475,748,123.14 | 59,486,914.47 | 416,261,208.67 | |||
| Shengfang CuiLin Building | May 8 2018 | 99,946,066.54 | 25,889,031.08 | 74,057,035.46 | |||
| Chuanqi Donghu | Dec 18 2019 | 416,472,716.72 | 51,004,940.49 | 365,467,776.23 | 2,412,880.86 | ||
| Total | -- | 1,060,130,671.64 | 0.00 | 138,000,861.61 | 922,129,810.03 | 3,233,504.18 |
The main items of " Raw material " Finished products "and “Construction in progress" are shown below:
Inapplicable
(2) Provision for impairment of inventories or provision for impairment of contract performancecosts
Expressed in RMB
| Item | Opening balance | Increase in the reporting period | Decrease in the reporting period | Ending balance | Note | ||
| Provision | Others | Reversal or Offset | Others | ||||
| Real estate developed products | 268,941.60 | 268,941.60 | |||||
| Raw material | 240,000.00 | 240,000.00 | |||||
| Finished products | 38,891.91 | 38,891.91 | |||||
| Total | 547,833.51 | 547,833.51 | -- | ||||
Classified by items:
Expressed in RMB
| Item | Opening balance | Increase in the reporting period | Decrease in the reporting period | Ending balance | Note | ||
| Provision | Others | Reversal or Offset | Others | ||||
(3) Note to the amount of capitalized borrowing costs involved in the ending balance ofinventoriesAs at June 30 2020, the Group's inventory balance contains the amount capitalized on the borrowingcosts is RMB 3,233,504.18 (As at Dec 31 2019, RMB 4,910,251.90).
(4) Inventory restrictions
Inapplicable
10. Contractual assets
Inapplicable
11. Assets held for sale
Inapplicable
12. Non-current assets due within one year
Inapplicable
13. Other non-current assets
Expressed in RMB
| Item | As at 30 Jun 2020 | As at Dec 31 2019 |
| Income tax prepaid | 71,828,974.61 | 84,000,516.75 |
| VAT overpaid or prepaid | 3,973,658.77 | 10,211,601.86 |
| Deductible input VAT | 24,829,389.60 | 4,741,727.70 |
| LAT prepaid | 4,248,831.33 | 2,617,779.37 |
| Business tax prepaid | 342,952.47 | 353,427.19 |
| Others | 977,610.74 | 856,802.61 |
| Total | 106,201,417.52 | 102,781,855.48 |
Note:
Inapplicable
14. Equity investment
Inapplicable
15. Other equity investment
Inapplicable
16. Long-term receivables
(1) About long-term accounts receivable
Inapplicable
(2) Long term account receivable with recognition terminated due to transfer of financial assets
(3) Amount of assets and liabilities formed through transfer of long-term accounts receivable andcontinuing to be involvedInapplicable
17. Long-term equity investments
Expressed in RMB
| Investees | As at 31/12/2019 | Movements during the period | As at 30 Jun 2020 | Balance of provision for impairment as June 30 2020 | |||||||
| Increase in capital | Decrease in capital | Investment income recognised under equity method | Other comprehensive income | Other equity movements | Declared distribution of cash dividends or profits | Provision for impairment | Other | ||||
| I. Joint Venture | |||||||||||
| Guangdong province Huizhou Luofu Hill Mineral Water Co., Ltd | 9,969,206.09 | 9,969,206.09 | 9,969,206.09 | ||||||||
| Fengkai Xinhua Hotel | 9,455,465.38 | 9,455,465.38 | 9,455,465.38 | ||||||||
| Subtotal | 19,424,671.47 | 19,424,671.47 | 19,424,671.47 | ||||||||
| II. Associates | |||||||||||
| Shenzhen Ronghua JiDian Co., ltd | 1,546,793.29 | 1,546,793.29 | 1,076,954.64 | ||||||||
| Shenzhen Runhua Automobile trading Co., Ltd | 1,445,425.56 | 1,445,425.56 | 1,445,425.56 | ||||||||
| Dongyi Real Estate Co., Ltd | 30,376,084.89 | 30,376,084.89 | 30,376,084.89 | ||||||||
| Subtotal | 33,368,303.74 | 33,368,303.74 | 32,898,465.09 | ||||||||
| Total | 52,792,975.21 | 52,792,975.21 | 52,323,136.56 |
Note:
Inapplicable
| Note: See the table below for other equity investments: | ||||||
| Investee | Accounting treatment | cost of investment | As at Dec 30 2019 | movement | As at Jun 30 2020 | Provision for impairment |
| Paklid Limited | Cost method | 201,100.00 | 201,100.00 | -- | 201,100.00 | 201,100.00 |
| Bekaton Property Limited | Cost method | 906,630.00 | 906,630.00 | -- | 906,630.00 | 906,630.00 |
| Shenzhen Shenfang Department Store Co. Ltd. | Cost method | 10,000,000.00 | 10,000,000.00 | -- | 10,000,000.00 | 10,000,000.00 |
| Shantou Fresh Peak Building | Cost method | 68,731,560.43 | 58,547,652.25 | -- | 58,547,652.25 | 58,547,652.25 |
| Guangdong Province Fengkai Lain Feng Cement Manufacturing Co., Ltd | Cost method | 121,265,000.00 | 56,228,381.64 | -- | 56,228,381.64 | 56,228,381.64 |
| Total | 201,104,290.43 | 125,883,763.89 | 0.00 | 125,883,763.89 | 125,883,763.89 |
Note: For other equity investments, please refer to Note IX. 1 "Equity in Subsidiaries".
18. Other equity instrument investments
Expressed in RMB
| Item | As at 30 Jun 2020 | As at Dec 31 2019 |
| Shantou Small &Medium Enterprises Financing Guarantee Co., Ltd | 13,549,874.72 | 13,229,501.03 |
| Yunnan KunPeng Flight service Co., Ltd | 19,160,946.15 | 19,897,229.01 |
| Total | 32,710,820.87 | 33,126,730.04 |
Itemized disclosure of investment in non-trading equity instruments for the current period
Expressed in RMB
| Item | Dividend income recognized for the current period | The cumulative gains | The cumulative loss | The amount of other comprehensive reserve transferred into retained earnings | Reasons for designating fair value measurement and its changes included in other comprehensive income | Transferring reasons |
| Shantou Small &Medium Enterprises Financing Guarantee Co., Ltd | 3,444,300.00 | |||||
| Yunnan KunPeng Flight service Co., Ltd | 1,653,305.67 | |||||
| Total | 5,097,605.67 |
Note:
Inapplicable
19. Other non-current financial assets
Inapplicable
20. Investment properties
(1) Investment properties measured using the cost model
√ Applicable □ Inapplicable
Expressed in RMB
| Item | Plant & buildings | Land use rights | Construction in progress | Total |
| Ⅰ. Cost | ||||
| 1.Balance as at Dec 31 2019 | 1,043,243,872.75 | 107,528,851.63 | 1,150,772,724.38 | |
| 2.Additions during the year | ||||
| (1) Purchase | ||||
| (2) Transfers from inventories/fixed assets/construction in progress | ||||
| (3) Additions due to business combinations | ||||
| 3. Decrease during the year | 1,692,421.08 | 1,692,421.08 | ||
| (1) Disposals | ||||
| (2) Other transfers out | ||||
| (3) Others（change on foreign exchange) | 1,692,421.08 | 1,692,421.08 | ||
| 4. Balance as at Jun 30 2020 | 1,043,243,872.75 | 105,836,430.55 | 1,149,080,303.30 | |
| II. Accumulated depreciation or amortization | ||||
| 1. Balance as at Dec 31 2019 | 416,148,333.67 | 416,148,333.67 | ||
| 2. Charge for the year | 12,916,955.33 | 12,916,955.33 | ||
| (1) Depreciated or amortised | 12,916,955.33 | 12,916,955.33 | ||
| 3. Reductions during the year | ||||
| (1) Disposals |
| (2) Other transfers out | ||||
| 4. Balance as at Jun 30 2020 | 429,065,289.00 | 429,065,289.00 | ||
| III. Provision for impairment | ||||
| 1. Balance as at Dec 31 2019 | 14,128,544.62 | 88,253,945.89 | 102,382,490.51 | |
| 2. Charge for the year | ||||
| (1) Provision | ||||
| 3. Reductions on disposals | 1,389,048.95 | 1,389,048.95 | ||
| (1) Disposals | ||||
| (2) Other transfers out | ||||
| (3) Others（change on foreign exchange) | 1,389,048.95 | 1,389,048.95 | ||
| 4. Balance as at Jun 30 2020 | 14,128,544.62 | 86,864,896.94 | 100,993,441.56 | |
| IV. Carrying amounts | ||||
| 1. As at Jun 30 2020 | 600,050,039.13 | 18,971,533.61 | 619,021,572.74 | |
| 2. As at Dec 31 2019 | 612,966,994.46 | 19,274,905.74 | 632,241,900.20 |
(2) Investment property measured at fair value
□ Applicable √ Inapplicable
The company complies with the disclosure requirements of "Shenzhen Stock Exchange IndustryInformation Disclosure Guidelines No. 3-Listed Companies Engaged in Real Estate Business"Does the company have investment real estate that is currently under construction?
□ Yes √ No
Whether the company has new investment real estate measured at fair value in the current period
□ Yes √ No
(3) Investment properties pending certificates of ownership
Inapplicable
21. Fixed assets
Expressed in RMB
| Item | As at 30 Jun 2020 | As at Dec 31 2019 |
| Fixed assets | 29,086,917.96 | 30,522,035.11 |
| Total | 29,086,917.96 | 30,522,035.11 |
(1) Fixed assets
Expressed in RMB
| Item | Plant & buildings | Motor vehicles | Electronic equipment and others | Total |
| cost: | ||||
| 1. Balance as at Dec 31 2019 | 107,110,751.42 | 10,441,067.49 | 13,926,522.79 | 131,478,341.70 |
| 2.Additions during the year | 342,687.96 | 184,920.76 | 527,608.72 | |
| (1) Purchases | 342,687.96 | 184,920.76 | 527,608.72 | |
| (2) Transfers from construction in progress | ||||
| (3) Additions due to business combinations | ||||
| 3. Decrease during the year | 190,900.00 | 100,087.33 | 290,987.33 | |
| (1) Disposals or written-offs | 190,900.00 | 100,087.33 | 290,987.33 | |
| 4.Balance as at Jun 30 2020 | 107,110,751.42 | 10,592,855.45 | 14,011,356.22 | 131,714,963.09 |
| II. Accumulated depreciation | ||||
| 1. Balance as at Dec 31 2019 | 80,644,047.51 | 8,945,201.13 | 11,367,057.95 | 100,956,306.59 |
| 2. Charge for the year | 1,440,244.28 | 143,086.27 | 349,710.44 | 1,933,040.99 |
| (1) Provision | 1,440,244.28 | 143,086.27 | 349,710.44 | 1,933,040.99 |
| 3. Reductions for the year | 171,334.32 | 89,968.13 | 261,302.45 | |
| (1) Disposal or written-offs | 171,334.32 | 89,968.13 | 261,302.45 |
| 4.Balance as at Jun 30 2020 | 82,084,291.79 | 8,916,953.08 | 11,626,800.26 | 102,628,045.13 |
| III. Provision for impairment | ||||
| 1. Balance as at Dec 31 2019 | ||||
| 2. Charge for the year | ||||
| (1) Provision | ||||
| 3. Reductions for the year | ||||
| (1) Disposals or written-offs | ||||
| 4.. Balance as at Jun 30 2020 | ||||
| IV. Carrying amount | ||||
| 1. As at Jun 30 2020 | 25,026,459.63 | 1,675,902.37 | 2,384,555.96 | 29,086,917.96 |
| 2.As at Dec 31 2019 | 26,466,703.91 | 1,495,866.36 | 2,559,464.84 | 30,522,035.11 |
(2) Temporarily idle fixed assets
Inapplicable
(3) Fixed assets acquired under finance leases
Inapplicable
(4) Fixed assets leased out under operating leases
Inapplicable
(5) Fixed assets pending certificates of ownership
Inapplicable
(6) Fixed assets to be disposed of
Inapplicable
22. Construction in progress
(1) Construction in progress
Inapplicable
(2) Movements of major construction projects in progress
Inapplicable
(3) Provision for impairment of construction in progress
Inapplicable
(4) Construction materials
Inapplicable
23. Productive biological assets
(1) Productive biological assets using cost measurement models
Inapplicable
(2) Productive biological assets using fair value measurement model
Inapplicable
24. Oil and gas asset
Inapplicable
25. Right to use assets
Inapplicable
26. Intangible assets
(1) Intangible assets
Expressed in RMB
| Item | Land rights | Patent right | Know-how | Software | Total |
| I.Cost | |||||
| 1.Balance as at | 2,241,800.00 | 2,241,800.00 |
| Dec 31 2019 | |||||
| 2.Additions during the year | |||||
| (1) Purchase | |||||
| (2) Internal development | |||||
| (3) Additions due to business combinations | |||||
| 3. Decrease during the year | |||||
| (1) Disposals | |||||
| 4. Balance as at Jun 30 2020 | 2,241,800.00 | 2,241,800.00 | |||
| 二. Accumulative amortisation | |||||
| 1. Balance as at Dec 31 2019 | 2,241,800.00 | 2,241,800.00 | |||
| 2. Charge for the year | |||||
| (1) Provision | |||||
| 3. Reduction for the year | |||||
| (1) Disposals | |||||
| 4. Balance as at Jun 30 2020 | 2,241,800.00 | 2,241,800.00 | |||
| III. Provision for impairment | |||||
| 1. Balance as at Dec 31 2019 | |||||
| 2. Charge for the year | |||||
| (1) Provision | |||||
| 3. Reduction for the year | |||||
| (1) Disposals | |||||
| 4. Balance as at Jun 30 2020 |
| 四. Carrying amount | |||||
| 1. As at Jun 30 2020 | |||||
| 2. As at Dec 31 2019 |
Note: Inapplicable
(2) Land use rights pending certificates of ownership
Inapplicable
27. Development costs
Inapplicable
28. Goodwill
(1) Book value of goodwill
Inapplicable
(2) Provision for impairment of the goodwill
Inapplicable
29. Long-term deferred expenses
Expressed in RMB
| Item | As at Dec 31 2019 | Additions during the year | Amortisation for the year | Others decreases | As at Jun 30 2020 |
| Leasehold improvement | 162,125.72 | 34,005.88 | 128,119.84 | ||
| Total | 162,125.72 | 34,005.88 | 128,119.84 |
Note:
30. Deferred tax assets and deferred tax liabilities
(1) Deferred income tax asset without offsetting
Expressed in RMB
| Item | As at Jun 30 2020 | As at Dec 31 2019 | ||
| (1) Deductible or taxable temporary | Deferred tax assets/ | (2) Deductible or taxable temporary | Deferred tax assets/ | |
| differences | deferred tax liabilities | differences | deferred tax liabilities | |
| Provisions for impairment of assets | 5,157,896.86 | 1,289,474.22 | 5,157,896.86 | 1,289,474.22 |
| Unrealised profits of intra-group transactions | 0.00 | 29,309,607.92 | 7,327,401.98 | |
| Deductible tax losses | 46,877,417.46 | 11,719,354.37 | 46,877,417.46 | 11,719,354.37 |
| Provision for land appreciation tax liquidation reserves | 83,816,495.81 | 20,954,123.95 | 83,816,495.81 | 20,954,123.95 |
| Accrued Contractual cost | 20,603,882.91 | 5,150,970.73 | 20,603,882.91 | 5,150,970.73 |
| Total | 156,455,693.04 | 39,113,923.27 | 185,765,300.96 | 46,441,325.25 |
(2) Deferred tax liabilities without offsetting
Expressed in RMB
| Item | As at Jun 30 2020 | As at Dec 31 2019 | ||
| (3) Deductible or taxable temporary differences | Deferred tax liabilities | (4) Deductible or taxable temporary differences | Deferred tax liabilities | |
| Changes in the fair value of other debt investments | 3,950,685.00 | 987,671.25 | ||
| Changes in the fair value of other equity instrument investments | 15,662,489.30 | 3,915,622.33 | ||
| Total | 19,613,174.30 | 4,903,293.58 | ||
(3) Deferred tax assets or deferred tax liabilities disclosed as net amount after offsetting
Expressed in RMB
| Item | As at 30 Jun 2020 | As at Dec 31 2019 | ||
| Amount of offsetting | Deferred tax assets or liabilities after offsetting | Amount of offsetting | Deferred tax assets or liabilities after offsetting | |
| Deferred tax assets | 39,113,923.27 | 46,441,325.25 | ||
| Deferred tax liabilities | 4,903,293.58 |
(5) (4) Details of unrecognized deferred tax assets
Expressed in RMB
| Item | As at 30 Jun 2020 | As at Dec 31 2019 |
| Deductible tax losses | 11,987,650.99 | 31,568,944.69 |
| Bad debt provision | 212,266,973.53 | 218,911,499.52 |
| Provision for impairment of long-term equity. | 220,084,700.95 | 220,084,700.95 |
| Provision for impairment of investment real estate | 100,993,441.56 | 102,382,490.51 |
| Total | 545,332,767.03 | 572,947,635.67 |
(5) Expiration of deductible tax losses for unrecognised deferred tax assets
Expressed in RMB
| Year | As at 30 Jun 2020 | As at Dec 31 2019 | Note |
| 2019 | |||
| 2020 | 53,561.64 | 9,692,495.52 | |
| 2021 | 9,692,495.52 | 11,349,323.06 | |
| 2022 | 11,349,323.06 | 5,753,184.38 | |
| 2023 | 5,753,184.38 | 4,085,485.24 | |
| 2024 | 4,085,485.24 | 688,456.49 | |
| Total | 30,934,049.84 | 31,568,944.69 | -- |
Note: Inapplicable
31. Other non-current assets
Inapplicable
32. Short term loans
(1) Classification of short-term loans
Expressed in RMB
| Item | As at 30 Jun 2020 | As at Dec 31 2019 |
| Pledge loan | 45,904,965.19 | 51,647,260.17 |
| Total | 45,904,965.19 | 51,647,260.17 |
Note: At the end of the period, the Group discounted the account receivables amounted to RMB45,904,965.19 by factoring to financial institutions and received cash proceeds of RMB 45,904,965.19.
(2) Past due short-term loan
Inapplicable
33. Transactional financial liabilities
Inapplicable
34. Derivative financial liabilities
Inapplicable
35. Notes payable
Inapplicable
36. Accounts payable
(1) Accounts payable by nature
Expressed in RMB
| Item | As at 30 Jun 2020 | As at Dec 31 2019 |
| Construction | 162,858,915.88 | 241,850,173.72 |
| Others | 1,452,225.58 | 2,374,304.74 |
| Total | 164,311,141.46 | 244,224,478.46 |
(2) Significant accounts payable with aging over 1 year
Inapplicable
37. Advances from customers
(1) Advances from customers by nature
Expressed in RMB
| Item | As at 30 Jun 2020 | As at Dec 31 2019 |
| Payment for goods | 351,328.33 | 351,328.33 |
| Property management fees | 3,301,364.20 | 65,874.55 |
| Rental | 29,772.00 | 29,772.00 |
| Current account from historical issues | 4,218,370.69 | 4,218,370.69 |
| Others | 215,523.98 | 198,897.43 |
| Total | 8,116,359.20 | 4,864,243.00 |
(2) Significant advances from customers with aging over 1 year
The company complies with the disclosure requirements of "Shenzhen Stock Exchange IndustryInformation Disclosure Guidelines No. 3-Listed Companies Engaged in Real Estate Business"the top five project of pre-sale amount:
Expressed in RMB
| No. | Project | As at Dec 31 2019 | As at Jun 30 2020 | Estimated completion time | Pre-sale ratio |
| 1 | ChuanQi DongHu Building | 59,409,454.38 | 186,641,945.38 | Dec 18 2019 | 56.00% |
| 2 | Shengfang CuiLin Building | 61,877,681.00 | 4,315,392.00 | May 08 2018 | 92.00% |
| 3 | TianYue Bay No.1 | 28,465,188.50 | 26,675,556.34 | Dec 15 2017 | 51.00% |
| 4 | YueJing dongfang Project | 0.00 | 30,000.00 | Apr27 2018 | 99.00% |
| 5 | Jinye Island | 1,249,435.25 | 94,666.67 | Aug 1 2010 | 99.00% |
38. Contractual liabilities
Expressed in RMB
| Item | As at 30 Jun 2020 | As at Dec 31 2019 |
| Advance in house payment | 208,664,353.85 | 145,226,181.25 |
| Advance in construction payment | 70,324,766.27 | 5,781,269.07 |
| Total | 278,989,120.12 | 151,007,450.32 |
Expressed in RMB
| Item | Change amount | Reason for change |
| Advance in house payment | 63,438,172.60 | The Shenzhen property market recovered rapidly in the second quarter. |
| Advance in construction payment | 64,543,497.20 | Project construction business resumed. |
| Total | 127,981,669.80 | —— |
39. Employee benefits payable
(1) Employee benefits payable
Expressed in RMB
| Item | As at Dec 31 2019 | Accrued during the year | Decreased during the year | As at Jun 30 2020 |
| Short-term employee benefits | 53,817,671.14 | 79,137,401.89 | 77,234,324.03 | 55,720,749.00 |
| Post-employment benefits - defined contribution plans | 91,905.35 | 2,811,709.85 | 2,817,073.04 | 86,542.16 |
| Total | 53,909,576.49 | 81,949,111.74 | 80,051,397.07 | 55,807,291.16 |
(2) Short-term employee benefits
Expressed in RMB
| Item | As at Dec 31 2019 | Accrued during the year | Decreased during the year | As at Jun 30 2020 |
| Salaries, bonus, allowances | 52,543,725.42 | 71,947,309.37 | 70,016,850.89 | 54,474,183.90 |
| Staff welfare | 37,800.00 | 1,351,134.00 | 1,351,134.00 | 37,800.00 |
| Social insurances | 1,578.57 | 1,513,741.26 | 1,513,741.26 | 1,578.57 |
| Including: 1. Medical insurance | 1,503.22 | 1,340,093.50 | 1,340,093.50 | 1,503.22 |
| 2. Work-related injury insurance | 591.04 | 5,354.76 | 5,354.76 | 591.04 |
| 3. Maternity insurance | -515.69 | 168,293.00 | 168,293.00 | -515.69 |
| Housing Fund | 583,666.83 | 2,958,902.89 | 2,958,902.89 | 583,666.83 |
| Labor union fees, staff and workers’ education fee | 650,900.32 | 1,366,314.37 | 1,393,694.99 | 623,519.70 |
| Total | 53,817,671.14 | 79,137,401.89 | 77,234,324.03 | 55,720,749.00 |
(3) Post-employment benefits - defined contribution plans
Expressed in RMB
| Item | As at Dec 31 2019 | Accrued during the year | Decreased during the year | As at Jun 30 2020 |
| Post-employment benefits | 75,075.11 | 739,590.08 | 743,399.27 | 71,265.92 |
| Including: 1. Basic pension insurance | 914.12 | 22,533.67 | 22,533.67 | 914.12 |
| 2. Unemployment insurance | 15,916.12 | 2,049,586.10 | 2,051,140.10 | 14,362.12 |
| Total | 91,905.35 | 2,811,709.85 | 2,817,073.04 | 86,542.16 |
Note: Inapplicable
40. Taxes payable
Expressed in RMB
| Item | As at 30 Jun 2020 | As at Dec 31 2019 |
| Value-added tax | 7,574,137.41 | 13,832,233.99 |
| Corporate income tax | 38,436,696.79 | 51,397,791.31 |
| Individual income tax | 676,368.15 | 1,049,224.90 |
| City maintenance and construction tax | 393,855.15 | 632,944.99 |
| Property tax | 2,369,174.67 | 262,015.56 |
| Land appreciation tax | 156,136,644.78 | 521,540,610.07 |
| Education surcharge | 353,043.72 | 455,651.52 |
| Others | 1,294,019.77 | 141,160.13 |
| Total | 207,233,940.44 | 589,311,632.47 |
Note: Inapplicable
41. Other payables
Expressed in RMB
| Item | As at 30 Jun 2020 | As at Dec 31 2019 |
| Interest payables | 16,535,277.94 | 16,535,277.94 |
| Other payables | 244,563,068.17 | 260,783,896.59 |
| Total | 261,098,346.11 | 277,319,174.53 |
(1) Interest payables
Expressed in RMB
| Item | As at 30 Jun 2020 | As at Dec 31 2019 |
| Non-financial institution borrowing | 16,535,277.94 | 16,535,277.94 |
| interest (interest payable to parent company) | ||
| Total | 16,535,277.94 | 16,535,277.94 |
Significant overdue interest outstanding:
Expressed in RMB
| Debtor | Overdue amount | Overdue reason |
| Shenzhen Investment Holdings Co., Ltd. | 16,535,277.94 | Payment suspension |
| Total | 16,535,277.94 | -- |
Note: Inapplicable
(2) Dividend payables
Inapplicable
(3) Other payables
1) Other payments by nature
Expressed in RMB
| Item | As at 30 Jun 2020 | As at Dec 31 2019 |
| Accrued land appreciation tax | 59,710,423.57 | |
| Current account to Related parties | 14,341,496.70 | 12,549,466.41 |
| Deposits | 81,152,608.21 | 105,828,118.27 |
| Others | 149,068,963.26 | 82,695,888.34 |
| Total | 244,563,068.17 | 260,783,896.59 |
2) Including significant other payables with aging over 1 year
Inapplicable
42. Held-for-sale liabilities
Inapplicable
43. Non-current liabilities due within a year
Inapplicable
44. Other current liabilities
Inapplicable
45. Long-term loans
(1) Classification of Long-term loans
Inapplicable
46. Debentures payable
(1) Debentures payable
Inapplicable
(2) Increase/Decrease of Debentures payable (excluding other financial instruments classified asfinancial liabilities, such as preferred shares, perpetual bonds, etc.)Inapplicable
(3) Note to the conditions and time of share conversion of convertible company bondsInapplicable
(4) Note to other financial instruments classified as financial liabilities
Inapplicable
47. Lease liabilities
Inapplicable
48. Long-term payables
Expressed in RMB
| Item | As at 30 Jun 2020 | As at Dec 31 2019 |
| Long-term payables | 8,274,256.86 | 7,499,192.92 |
| Total | 8,274,256.86 | 7,499,192.92 |
(1) Long-term payables
Expressed in RMB
| Item | As at 30 Jun 2020 | As at Dec 31 2019 |
| Maintenance fund | 8,274,256.86 | 7,499,192.92 |
Note: Inapplicable
(2) Special payables
Inapplicable
49. Long term payroll payable
(1) Long-term employee benefits payable by nature
Inapplicable
(2) Movement of defined benefit plans
Inapplicable
50. Provisions
Inapplicable
51. Deferred income
Inapplicable
52. Other non-current liabilities
Inapplicable
53. Share capital
Expressed in RMB
| As at Dec 31 2019 | Increase / Decrease (+/ -) | As at Jun 30 2020 | |||||
| New issuing | Bonus shares | Shares converted from reserve | Others | Sub-total | |||
| Shares | 1,011,660,000.00 | 1,011,660,000.00 | |||||
Note: Inapplicable
54. Other equity instruments
(1) Basic information on the outstanding other financial instruments, including preferred shares,perpetual bonds, etc. at the end of the reporting periodInapplicable
(2) Movement of the outstanding other financial instruments, including preferred shares,perpetual bonds, etc. at the end of the reporting periodInapplicable
55. Capital reserve
Expressed in RMB
| Item | As at Dec 31 2019 | Increase in the reporting period | Decrease in the reporting period | As at Jun 30 2020 |
| Capital premium (share 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 |
Note: Inapplicable
56. Treasury shares
Inapplicable
57. Other comprehensive income
Expressed in RMB
| Item | As at Dec 31 2019 | Jan to Jun 2020 | As at Jun 30 2020 | |||||
| Amount incurred before income tax in the reporting period | Less: the amount counted to the profit and loss during the reporting period which had been | Less: the amount counted to the retained earnings during the reporting period | Less: Income tax expense | Attributable to the parent company after tax | Attributable to minority shareholders after tax | |||
| counted to the other comprehensive income in the previous period. | which had been counted to the other comprehensive income in the previous period. | |||||||
| I. Items that will not be reclassified to profit or loss | 11,746,866.97 | -415,909.17 | -415,909.17 | 11,330,957.80 | ||||
| Changes in fair value of other equity instruments | 11,746,866.97 | -415,909.17 | -415,909.17 | 11,330,957.80 | ||||
| II. Items that may be reclassified to profit or loss | 9,084,137.16 | 785,397.11 | 0.00 | 0.00 | 785,397.11 | 336,598.76 | 9,869,534.27 | |
| Translation differences arising from translation of foreign currency financial statements | 9,084,137.16 | 785,397.11 | 785,397.11 | 336,598.76 | 9,869,534.27 | |||
| Total | 20,831,004.13 | 369,487.94 | 0.00 | 0.00 | 369,487.94 | 336,598.76 | 21,200,492.07 |
Note: Inapplicable
58. Special reserve
Inapplicable
59. Surplus reserve
Expressed in RMB
| Item | As at Dec 31 2019 | Increase in the reporting period | Decrease in the reporting period | As at Jun 30 2020 |
| Surplus reserve | 191,222,838.94 | 191,222,838.94 | ||
| Total | 191,222,838.94 | 191,222,838.94 |
Note: According to the "Company Law" and the company's articles of association, the companyappropriates a statutory surplus reserve at 10% of its net profit. It will no longer be appropriated if theaccumulative amount of statutory surplus reserve reaches more than 50% of the company's registeredcapital.
60. Retained earnings
Expressed in RMB
| Item | Jan to Jun 2020 | Jan to Jun 2019 |
| Before adjustment: Retained earnings at the end of the previous period | 1,464,915,816.81 | 1,235,884,122.72 |
| After adjustment: Retained earnings at the beginning of the reporting period | 1,464,915,816.81 | 1,235,884,122.72 |
| Plus: Net profit attributable to the parent company’s owner in the report period | 97,274,985.72 | 333,155,843.41 |
| Dividends payable to ordinary shares | 166,923,900.00 | 202,332,000.00 |
| Retained earnings at the end of the reporting period | 1,395,266,902.53 | 1,366,707,966.13 |
Statement of adjustment of retained earnings at the beginning of the reporting period:
1). Retrospective adjustments of RMB 0.00 made on beginning retained earnings in accordance withCAS and related new regulations.
2). RMB 0.00 on beginning retained earnings due to changes in accounting policies.
3). RMB 0.00 on beginning retained earnings due to corrections of significant accounting errors.
4). RMB 0.00 on beginning retained earnings due to changes in consolidation scope resulting frombusiness combinations involving entities under common control.
5). RMB 0.00 on beginning retained earnings due to other adjustments.
61. Operation Income and Costs
Expressed in RMB
| Item | Jan to Jun 2020 | Jan to Jun 2019 | ||
| Income | Costs | Income | Costs | |
| Principal activities | 592,168,994.82 | 342,975,012.09 | 1,242,185,437.00 | 435,833,288.18 |
| Other operating activities | 4,089,500.58 | 933,075.37 | 9,152,365.57 | 1,294,688.07 |
| Total | 596,258,495.40 | 343,908,087.46 | 1,251,337,802.57 | 437,127,976.25 |
Income related information:
InapplicableInformation related to performance obligations:
The Group's current real estate projects for sale are all existing properties, it usually takes 3-5 monthsfrom contract signing to online signing, mortgage loan and final deliver. The contracts that have beensigned at the end of the reporting period are expected to be implemented before the end of 2020.Information related to the transaction price allocated to the remaining performance obligations:
At the end of the reporting period, the amount of revenue corresponding to the performance obligationsthat have been signed but not yet performed or not yet completed is RMB 712,771,664.00, Among
them, RMB 712,771,664.00 yuan is expected to be recognized as revenue in 2020, RMB 0 is expectedto be recognized as revenue in the year, and RMB 0 is expected to be recognized as revenue in the year.Note:
The company complies with the disclosure requirements of "Shenzhen Stock Exchange IndustryInformation Disclosure Guidelines No. 3-Listed Companies Engaged in Real Estate Business"Information of the top five projects that the revenue recognized during the reporting period:
Expressed in RMB
| No. | Project | Income amount |
| 1 | ChuanQi DongHu Building | 211,598,844.76 |
| 2 | Shengfang CuiLin Building | 91,474,775.24 |
| 3 | TianYue Bay No.1 | 75,582,142.07 |
| 4 | Jinye Island | 3,602,387.63 |
| 5 | YueJing dongfang Project | 200,000.00 |
62. Taxes and surcharges
Expressed in RMB
| Item | Jan to Jun 2020 | Jan to Jun 2019 |
| Urban maintenance and construction tax | 1,825,068.95 | 4,231,214.16 |
| Education surcharge | 811,262.23 | 1,853,152.20 |
| Property tax | 2,110,622.87 | 4,194,843.79 |
| Land use tax | 107,733.28 | 1,777.06 |
| Vehicle and vessel usage tax | 4,710.00 | 9,300.00 |
| Stamp duty | 213,285.17 | 634,612.37 |
| Business tax | 16,283.92 | 14,811.80 |
| Land appreciation tax | 79,824,750.12 | 328,213,378.55 |
| Local education surcharge | 491,930.13 | 1,168,752.72 |
| Embankment protection fees | 202,466.20 | 7,656.21 |
| Total | 85,608,112.87 | 340,329,498.86 |
Note: The criteria of taxes and surcharges accrued and paid refer to Note XI.6 Taxation
63. Selling and distribution expenses
Expressed in RMB
| Item | Jan to Jun 2020 | Jan to Jun 2019 |
| Employee benefits | 2,823,089.29 | 1,986,157.74 |
| Advertising expenses | 1,284,043.70 | 3,495,309.87 |
| Entertainment expenses | 238,746.50 | 445,386.30 |
| Commissions | 3,615,467.32 | 10,153,801.11 |
| Others | 575,101.57 | 2,393,405.31 |
| Total | 8,536,448.38 | 18,474,060.33 |
Note: The selling and distribution expenses incurred in the current period are RMB 8,536,448.38, thereis a decrease of 53.79% over the same period of the previous period. The main reason was the impactof the COVID-19 and the decrease in the property on sale.
64. General and administrative expenses
Expressed in RMB
| Item | Jan to Jun 2020 | Jan to Jun 2019 |
| Employee benefits | 33,335,370.04 | 21,455,353.43 |
| Taxes | 381,863.80 | |
| Depreciation | 1,362,176.52 | 1,493,957.93 |
| Entertainment expenses | 820,263.83 | 855,870.94 |
| Professional fee | 337,923.08 | 748,240.08 |
| Travel expense | 16,813.77 | 160,955.48 |
| Office expenses | 628,812.36 | 889,536.21 |
| Maintenance expenses | 395,651.84 | 443,034.63 |
| Utilities | 190,945.62 | 300,958.94 |
| Amortization | 150,041.78 | 209,939.04 |
| Others | 3,015,978.42 | 3,873,060.85 |
| Total | 40,253,977.26 | 30,812,771.33 |
Note: The General and administrative expenses incurred in the current period amounted to RMB40,253,977.26, there is an increase of 30.64% over the same period of the previous period, the mainreason was the after the construction project finished the employee expense included in general andadministrative expenses.
65. R & D expenditures
Inapplicable
66. Financial expenses
Expressed in RMB
| Item | Jan to Jun 2020 | Jan to Jun 2019 |
| Interest expenses | 38,742.51 | |
| Less: Interest income | 5,932,973.60 | 7,623,553.05 |
| Less: capitalized interest | ||
| Exchange losses/-gains | -28,526.54 | 672,254.35 |
| Less: Exchange losses and gains capitalized | ||
| Bank charges and others | 213,914.16 | 286,297.07 |
| Total | -5,747,585.98 | -6,626,259.12 |
Note: Inapplicable
67. Other income
Expressed in RMB
| Item (Source of other income) | Jan to Jun 2020 | Jan to Jun 2019 |
| Input VAT deduction | 557,379.14 |
68. Investment income
Expressed in RMB
| Item | Jan to Jun 2020 | Jan to Jun 2019 |
| Dividend from investments in other equity instruments | 928,200.00 | |
| Financial product | 15,217,058.60 | 13,359,898.55 |
| Total | 15,217,058.60 | 14,288,098.55 |
Note: Inapplicable
69. Net exposure hedge income
Inapplicable
70. Income from change of the fair value
Inapplicable
71. Loss from impairment of credit
Inapplicable
72. Loss from impairment of assets
Expressed in RMB
| Item | Jan to Jun 2020 | Jan to Jun 2019 |
| I. impairment of assets, such as Receivables, Inventories | 534,500.00 | |
| Total | 534,500.00 |
Note:
73. Income from disposal of assets
Inapplicable
74. Non-operating income
Expressed in RMB
| Item | Jan to Jun 2020 | Jan to Jun 2019 | Amount counted to the current non-operating gain and loss |
| Government grants | 2,792,616.39 | 2,792,616.39 | |
| Confiscated income | 70,000.00 | 180,000.00 | 70,000.00 |
| Others | 39,417.38 | 183,709.11 | 39,417.38 |
| Total | 2,902,033.77 | 363,709.11 | 2,902,033.77 |
Government subsidy counted to the current profit and loss: +
Expressed in RMB
| Item | Issuer | Reason for issue | Subsidy nature | Does the subsidy affect the profit and loss of the year | Whether special subsidy | Current period | Jan to Jun 2019 | Related to asset/income |
| Local government subsidy for COVID-19 prevention | Luohu District Government | Subsidy | Government subsidies to avoid losses of listed companies | No | Yes | 2,792,616.39 | income |
Note: Inapplicable
75. Non-operating expenses
Expressed in RMB
| Item | Jan to Jun 2020 | Jan to Jun 2019 | Amount counted to the current non-operating gain and loss |
| Donations provided | 500,000.00 | 500,000.00 | |
| Fine | 150.00 | 0.00 | |
| Others | 1,501,278.48 | 3,605.82 | 1,501,278.48 |
| Total | 2,001,278.48 | 3,755.82 | 2,001,278.48 |
Note:
76. Income tax expense
(1) (1) Details of income tax expenses
Expressed in RMB
| Item | Jan to Jun 2020 | Jan to Jun 2019 |
| Current tax expense for the year based on tax law and regulations | 43,599,689.97 | 114,631,330.89 |
| Changes in deferred tax assets/liabilities | -1,901,537.03 | |
| Total | 43,599,689.97 | 112,729,793.86 |
(2) (2) Reconciliation between income tax expenses and accounting profit is as follows:
Expressed in RMB
| Item | Jan to Jun 2020 |
| Profits/losses before tax | 140,909,148.44 |
| Expected income tax expenses at applicable tax rate | 35,227,287.11 |
| Effect of different tax rates applied by subsidiaries | 0.00 |
| Effect of non-deductible costs, expenses and losses | 8,372,402.90 |
| Effect of deductible temporary differences or deductible losses for which no deferred tax asset was recognized this year | 0.00 |
| Income tax expenses | 43,599,689.97 |
Note:
77. Other comprehensive income
For the detail, refer to Note VII. 57.
78. Cash Flow Statement
(1) Proceeds from other operating activities
Expressed in RMB
| Item | Jan to Jun 2020 | Jan to Jun 2019 |
| Interest income | 5,407,752.35 | 5,457,487.50 |
| Deposits and security deposits | 2,919,486.01 | 4,341,166.84 |
| Maintenance Fund | 588,849.58 | 2,806,860.02 |
| Collecting fee for certifications on behalf | 259,013.65 | 318,872.66 |
| Others | 33,335,274.12 | 23,748,832.28 |
| Total | 42,510,375.71 | 36,673,219.30 |
Note to Proceeds from other operating activities:
Inapplicable
(2) Payment for other operating activities
Expressed in RMB
| Item | Jan to Jun 2020 | Jan to Jun 2019 |
| Payment for general and administrative expenses | 5,953,780.78 | 9,012,769.52 |
| Payment for selling and distribution expenses | 10,827,564.54 | 21,249,982.55 |
| Deposits and security deposits | 2,573,686.00 | 3,827,745.89 |
| Paying fee for certifications on behalf | 75,218.11 | 1,006,131.98 |
| Others | 89,300,550.71 | 93,795,526.79 |
| Total | 108,730,800.14 | 128,892,156.73 |
Note to payment for other operating activities:
Inapplicable
(3) Proceeds from other investing activities
Expressed in RMB
| Item | Jan to Jun 2020 | Jan to Jun 2019 |
| Restricted cash recovered in the current period – structured deposit | 1,000,000,000.00 | 900,000,000.00 |
| Total | 1,000,000,000.00 | 900,000,000.00 |
Note to proceeds from other investing activities:
Inapplicable
(4) Payment for other investing activities
Expressed in RMB
| Item | Jan to Jun 2020 | Jan to Jun 2019 |
| Restricted cash paid in the current period –structured deposit | 1,300,000,000.00 | |
| Total | 1,300,000,000.00 |
Note to payment for other investing activities:
Inapplicable
(5) Proceeds from other financing activities
Inapplicable
(6) Payment for other financing activities
Inapplicable
79. Supplementary information of the cash flow statement
(1) Supplementary information of the cash flow statement
Expressed in RMB
| Supplementary information | Jan to Jun 2020 | Jan to Jun 2019 |
| 1. Reconciliation of net profit/loss to cash flows from operating activities: | -- | -- |
| Net profit | 97,309,458.47 | 333,138,012.90 |
| Add: Provisions for impairment of assets | 13,145,126.03 | 13,279,140.03 |
| Amortization of the long-term expenses to be apportioned | 59,662.86 | 353,309.40 |
| Loss from scrapping of fixed assets ("-" for gains) | 17,829.60 | 774.32 |
| Financial expenses ("-" for income) | 3,135,908.80 | -143,574.86 |
| Losses arising from investment ("-" for gains) | -15,217,058.60 | -14,288,098.55 |
| Decrease of the deferred tax asset ("-" for increase) | 7,327,401.98 | -1,901,537.03 |
| Increase of deferred income tax liability ("-" for decrease) | -4,903,293.58 | |
| Decrease of inventories ("-" for increase) | 186,722,872.58 | 163,504,710.44 |
| Decrease in operating receivables ("-" for increase) | -225,749,300.15 | 53,925,974.21 |
| Increase in operating payables ("-" for decrease） | -274,147,130.87 | 139,929,891.38 |
| Others | 55,724.29 | -2,123,357.14 |
| Net cash flows from operating activities | -212,242,798.59 | 685,675,245.10 |
| 2. Investing and financing activities not requiring the use of cash: | -- | -- |
| 3. Change in cash and cash equivalents: | -- | -- |
| Cash as at Jun 30 2020 | 2,148,222,433.87 | 1,240,480,893.15 |
| Less: cash as at Dec 31 2019 | 1,507,189,760.35 | 1,148,522,435.93 |
| Net increase in cash and cash equivalents | 641,032,673.52 | 91,958,457.22 |
(2) Net cash paid to acquirement of subsidiary in the reporting period
Inapplicable
(3) Net cash received from disposal of subsidiary in the reporting period
Inapplicable
(4) Details of cash and cash equivalents
Expressed in RMB
| Items | As at Jun 30 2020 | As at Dec 31 2019 |
| I. Cash | 2,148,222,433.87 | 1,507,189,760.35 |
| Including: Cash on hand | 68,146.22 | 66,252.42 |
| Cash in bank | 426,154,287.65 | 1,493,123,507.93 |
| Other monetary fund used for payment at any time | 1,722,000,000.00 | 14,000,000.00 |
| III. Ending balance of cash and cash equivalents | 2,148,222,433.87 | 1,507,189,760.35 |
Note: Inapplicable
80. Notes to statement of changes in shareholders' equity
Specify the description of the item "others" and the adjusted amount of the balance at the end of lastyear: Inapplicable
81. Assets with restrictive ownership title or right of use
Expressed in RMB
| Items | Book value at the end of the reporting period | Reason of restriction |
| Account receivable | 45,904,965.19 | Short-term loan pledge |
| Total | 45,904,965.19 | -- |
Note: Inapplicable
82. Foreign currency translation
(1) Items in Foreign currency
Expressed in RMB
| Item | Ending balance of foreign currency | Conversion rate | Ending balance of Renminbi converted |
| Cash at bank and on hand | -- | -- | |
| Including: USD | 22,259.36 | 6.8664 | 152,841.67 |
| Euro | |||
| HKD | 8,733,756.68 | 0.9100 | 7,947,747.07 |
| Accounts receivable | -- | -- | |
| Including: USD | |||
| Euro | |||
| HKD | 4,905,150.10 | 0.9100 | 4,463,702.59 |
| Long-term Loan | -- | -- | |
| Including: USD | |||
| Euro | |||
| HKD |
| Other receivables | |||
| Including: USD | -- | ||
| HKD | 20,165,086.70 | 0.9100 | 18,350,294.68 |
| Other payables | |||
| Including: USD | 655,299.33 | 6.8664 | 4,499,547.33 |
| HKD |
Note:
The company’s important overseas business entities are Great Wall Real Estate Co., Ltd. and XinfengEnterprise Co., Ltd. Since Great Wall Real Estate Co., Ltd. is mainly operating in the United States, itchooses the US dollar as the bookkeeping currency; Xinfeng Enterprise Co., Ltd. is an investmentcompany, the main business activities of its investment entities are all in mainland China, and the RMBis used as the standard currency for bookkeeping, so it chooses RMB as the standard currency forbookkeeping.
(2) Note to overseas operating entities, including important overseas operating entities, whichshould be disclosed about its principal business place, function currency for bookkeeping andbasis for the choice. In case of any change in function currency, the cause should be disclosed.Inapplicable
83. Hedging
Disclosure of qualitative and quantitative information on hedged items, related hedging tools, andhedged risks according to hedge categories:
84. Government subsidies
(1) Basic information of government subsidies
Expressed in RMB
| Categories | Amount | Items presented | Amount counted to the current profit and loss |
| Local government subsidy for COVID-19 prevention | 2,792,616.39 | Other income | 2,792,616.39 |
(2) Refunding of the government subsidies
Inapplicable
85. Others
Inapplicable
VIII. Change in consolidation scope
1. Business combinations involving enterprises not under common control
(1) Business combinations involving enterprises not under common control occurred during theyearInapplicable
(2) Acquisition cost and goodwill
Inapplicable
(3) Identifiable assets and liabilities of the acquiree at the acquisition date
Inapplicable
(4) Gain or loss from remeasurement of equity interests held prior to acquisition date to fairvalueDoes there exist any transaction in which the enterprise consolidation is realized step by step throughseveral transactions and the control power is obtained within the reporting period.
□ Yes √ No
(5) Note to the consolidation consideration or the fair value of the distinguishable assets andliabilities of the purchase which cannot be reasonably identified as at the date of purchase or atthe end of the very period of consolidationInapplicable
(6) Other notes:
No change took place in the consolidation scope of the Company in 2020
2. Business combinations involving enterprises under common control
(1) Business combinations involving enterprises under common control during the periodInapplicable
(2) Combination cost
Inapplicable
(3) Assets and liabilities of the acquire at the combination date
Inapplicable
3. Counter purchase
Inapplicable
4. Disposal of subsidiaries
Does there exist any such situation that disposal of investments in subsidiaries through a singletransaction resulting in loss of control?
□ Yes √ No
Does there exist any such situation that disposal of investments in subsidiaries through multipletransactions resulting in loss of control during the year.
□ Yes √ No
5. Change of consolidation scope due to other reason
Note to the change in the consolidation scope (e.g. new subsidiaries, liquidation subsidiaries, etc.)caused by other reasons and relevant information:
Inapplicable
6. Others
InapplicableIX. Equity in other entities
1. Interests in subsidiaries
(1) Composition of the Group
| Subsidiaries | Principal place of business | Place of registration | Nature of business | Shareholding proportion | Way of acquisition | |
| Direct | Indirect | |||||
| Shenzhen City SPG Long Gang Development Ltd. | Shenzhen | Shenzhen | Real estate development | 95.00% | 5.00% | Acquiring through establishment or investment |
| American Great Wall Co., Ltd | U.S. | U.S. | Real estate development | 70.00% | Acquiring through establishment | |
| or investment | ||||||
| Shenzhen City Property Management Ltd. | Shenzhen | Shenzhen | Property management | 95.00% | 5.00% | Acquiring through establishment or investment |
| Shenzhen Petrel Hotel Co. Ltd. | Shenzhen | Shenzhen | Hotel Services | 68.10% | 31.90% | Acquiring through establishment or investment |
| Shenzhen Zhen Tung Engineering Ltd. | Shenzhen | Shenzhen | Installation and maintenance | 73.00% | 27.00% | Acquiring through establishment or investment |
| Shenzhen City We Gen Construction Management Ltd. | Shenzhen | Shenzhen | Supervision | 75.00% | 25.00% | Acquiring through establishment or investment |
| Shenzhen Lain Hua Industry and Trading Co., Ltd. | Shenzhen | Shenzhen | Mechanical & Electrical device installation | 95.00% | 5.00% | Acquiring through establishment or investment |
| Fresh Peak Zhiye Co., Ltd. | Hong Kong | Hong Kong | Investment and management | 100.00% | Acquiring through establishment or investment | |
| Xin Feng Enterprise Co., Ltd. | Hong Kong | Hong Kong | Investment and management | 100.00% | Acquiring through establishment or investment | |
| Shenzhen City Shenfang Free Trade Trading Ltd. | Shenzhen | Shenzhen | Commercial trade | 95.00% | 5.00% | Acquiring through establishment or investment |
| Shenzhen City Shenfang Investment Ltd. | Shenzhen | Shenzhen | Investment | 90.00% | 10.00% | Acquiring through establishment or investment |
| Shenzhen Special Economic Zone | Shenzhen | Shenzhen | Real estate | 95.00% | 5.00% | Acquiring through establishment |
| Real Estate (Group) Guangzhou Property and Estate Co., Ltd. | or investment | |||||
| Beijing fresh peak property development management limited company | Beijing | Beijing | Real estate | 75.00% | 25.00% | Acquiring through establishment or investment |
Note:
①In consolidation scope, there are five subsidiaries in “revoked but not cancelled” condition: BeijingSPG Property Management Limited, Guangzhou Huangpu Xizun real estate limited company,Shenzhen Special Economic Zone Real Estate (Group) Guangzhou Property and Estate Co., Ltd., FreshPeak Real Estate Dev. Construction (Wuhan) Co. Ltd. and Beijing Shenfang Property Management Co.,Ltd. They are presented on the basis of discontinued operations; these five subsidiaries have made fullprovision for impairment of debt for the companies outside the consolidation scope.
②The cancelled, revoked and closed subsidiaries of the Company that are not included in the scope ofconsolidation are as follows:
| Name | Principal place of business | Registration place | Business nature | Shareholding proportion | Way of acquisition | |
| Direct | Indirect | |||||
| Shenzhen Shenfang Department Store Co. Ltd | Shenzhen | Shenzhen | Commercial trade | 95.00 | 5.00 | Acquiring through establishment or investment |
| Paklid Limited | Hong Kong | Hong Kong | Commercial trade | 60.00 | 40.00 | Acquiring through establishment or investment |
| Bekaton Property Limited | Australia | Australia | Real estate | 60.00 | -- | Acquiring through establishment or investment |
| Canada Great Wall (Vancouver) | Canada | Canada | Real estate | -- | 60.00 | Acquiring through establishment or investment |
| Guangdong Fengkai County Lianfeng Cement Manufacturing Co., Ltd. | Fengkai Guangdong | Fengkai Guangdong | Manufacturing | -- | 90.00 | Acquiring through establishment or investment |
| Jiangmen Xinjiang Real Estate Co., Ltd | Jiangmen Guangdong | Jiangmen Guangdong | Real estate | -- | 90.91 | Acquiring through establishment or investment |
| Xi’an Fresh Peak Property | Xi’an Shanxi | Xi’an Shanxi | Real estate | -- | 67.00 | Acquiring through |
| Trading Co., Ltd | establishment or investment |
| Shenxi Limited | Shenzhen | Shenzhen | Building Decoration | 70.00 | -- | Acquiring through establishment or investment |
| Shenzhen Zhentong New Electromechanical Industry Development Co., Ltd. | Shenzhen | Shenzhen | Mechanical and electrical engineering | 95.00 | 5.00 | Acquiring through establishment or investment |
| Shenzhen Real Estate Electromechanical Management Company | Shenzhen | Shenzhen | Electromechanical Management | 100.00 | -- | Acquiring through establishment or investment |
| Shenzhen Nanyang Hotel Co., Ltd. | Shenzhen | Shenzhen | Hotel Management | 95.00 | 5.00 | Acquiring through establishment or investment |
| Shenzhen Kangtailong Industrial Electric Cooker Co., Ltd. | Shenzhen | Shenzhen | Industrial manufacturing | -- | 100.00 | Acquiring through establishment or investment |
| Shenzhen Longgang Henggang Huagang Industrial Co., Ltd. | Shenzhen | Shenzhen | Industrial Investment | -- | 79.92 | Acquiring through establishment or investment |
Note: 1. Shenzhen Shenfang Department Store Co. Ltd held a shareholders meeting on 29 October2007, decided to terminate the business, and formed a group for liquidation. The liquidation groupissued a liquidation report on 7 December, 2007.
2. Paklid Limited, Bekaton Property Limited and Canada Great Wall (Vancouver), they werecompanies established by the group overseas in the early years. On 13 December 2000, the group helda board of directors and decided to liquidate these three companies. Bekaton Property Limited andCanada Great Wall (Vancouver), the cancellation procedures were completed.
3. All assets from Guangdong Fengkai County Lianfeng Cement Manufacturing Co., Ltd. (includingtangible and intangible asset) was auctioned by the court on 22 January 2019, and it became a shellcompany.
4. Shenxi Limited was the Group’s cancelled subsidiary Shenzhen Tefa Real Estate ConsolidatedServices Co., Ltd.’s subsidiary, By the Group “The notice on the merger of Shenzhen Zhen TungEngineering Ltd and Shenxi Limited” (Shenfang [1997] No.19) announcement, all businesses formShenxi Limited were undertaken by Shenzhen Zhen Tung Engineering Ltd and Shenxi Limited wasrevoked on 8 February 2002.These invested companies that have not been included in the consolidation scope were either beencancelled or ceased operation many years ago, and the company entities were no longer exist, theGroup could no longer effectively control them. According to “Accounting Standard for BusinessEnterprises No. 33-Consolidated Financial Statements”, the above companies are not included in the
consolidated scope of the group consolidated financial statement, the group already fully provision forimpairment the investment or the book value of the net investment in these companies.
(2) Material non-wholly owned subsidiaries
Expressed in RMB
| Name | Proportion of ownership interest held by non-controlling interests % | Profit or loss allocated to non-controlling interests during the year | Dividend declared to non-controlling shareholders during the year | Balance of non-controlling interests as at June 30 2020 |
| Great Wall Estate Co., Inc | 30.00% | 34,472.75 | -21,825,629.75 | |
| Fresh Peak Investment Ltd | 45.00% | -7,071.37 | -116,161,941.11 | |
| Barenie Co. Ltd. | 20.00% | -3,155.03 | -3,879,518.63 |
Note: Inapplicable
(3) Key financial information about material non-wholly owned subsidiaries
Expressed in RMB
| Name | As at Jun 30 2020 | As at Dec 31 2019 | ||||||||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non- current liabilities | Total liabilities | Current assets | Non-current assets | Total assets | Current liabilities | Non- current liabilities | Total liabilities | |
| Great Wall Estate Co., Inc | 152,841.67 | 18,971,533.61 | 19,124,375.28 | 106,275,257.03 | 106,275,257.03 | 38,598.97 | 19,274,905.74 | 19,313,504.71 | 107,974,695.34 | 107,974,695.34 | ||
| Fresh Peak Investment Ltd | 220,030,128.55 | 220,030,128.55 | 254,791,710.04 | 254,791,710.04 | 220,030,114.17 | 220,030,114.17 | 254,775,981.50 | 254,775,981.50 | ||||
| Barenie Co. Ltd. | 1,064.90 | 1,064.90 | 32,858,028.84 | 32,858,028.84 | 1,045.70 | 1,045.70 | 32,842,234.42 | 32,842,234.42 | ||||
Continued
Expressed in RMB
| Name | Jan to Jun 2020 | Jan to Jun 2019 | ||||||
| Operating income | Net profit | Total comprehensive income | Cash flows from operating activities | Operating income | Net profit | Total comprehensive income | Cash flows from operating activities | |
| Great Wall Estate Co., Inc | 142,264.71 | 114,909.18 | 114,909.18 | 114,087.11 | 322,901.55 | -59,435.04 | -59,435.04 | -59,442.30 |
| Fresh Peak Investment Ltd | -15,714.16 | -15,714.16 | -14,211.32 | -14,211.32 | ||||
| Barenie Co. Ltd. | -15,775.13 | -15,775.13 | -15,975.45 | -15,975.45 |
Note: Inapplicable
(4) Material restriction on the use of the Group’s assets and the settlement of the Group’sliabilitiesInapplicable
(5) Financial support or other support provided to the structured entities incorporated in thescope of consolidated financial statementsInapplicable
2. Transactions that cause changes in the Group’s interests in subsidiaries that do not result inloss of control
(1) Changes in the Group’s interests in subsidiaries:
Inapplicable
(2) Impact from transactions with non-controlling interests and equity attributable to theshareholders of the Company:
Inapplicable
3. Interests in joint ventures or associates
(1) Material joint ventures or associates
Inapplicable
(2) Key financial information of material joint ventures:
Inapplicable
(2) Key financial information of material associates
Inapplicable
(3) Summarised financial information of immaterial joint ventures and associates:
Expressed in RMB
| Ending balance/amount incurred in the reporting period | Opening balance/amount incurred in the reporting period | |
| Joint ventures: | -- | -- |
| Aggregate amount of share of | -- | -- |
| Associates: | -- | -- |
| Aggregate carrying amount of investments | 469,838.65 | |
| Aggregate amount of share of | -- | -- |
| Net profit | 75,629.25 |
Note:
(4) Material restrictions on transfers of funds from investees to the GroupInapplicable
(5) Excess loss from joint ventures or associates
Expressed in RMB
| Investee | Accumulated unrecognized loss in prior periods | Unrecognized loss (or share of net profit) for the year | Accumulated unrecognized loss as at 31/12/2019 |
| Shenzhen Fresh Peak property consultant Co., Ltd | 941,374.25 | 154,587.30 | 1,095,961.55 |
Note: Shenzhen Fresh Peak property consultant Co., Ltd was established on 15 March 1990, Registeredcapital of 3,000,000, the group subscribed RMB 600,000 (20% in total capital). As at 31 December2019, the group contributed RMB 600,000 and already confirmed long-term equity invent lose RMB600,000.
(6) The company shall disclose its unrecognized commitments in connection with its investmentin joint ventures.InapplicableThe company shall disclose its contingent liabilities in connection with its investment in joint venturesor associates.
Inapplicable
5. Material joint operations
Inapplicable
6. Others
InapplicableX. Financial instruments and risk managementThe major financial instruments of the Group include cash at bank and on hand, accounts receivable,other receivable, other current assets, other equity instrument, account payables, other payables,short-term loans, and long-term payables. The details of these financial instruments are disclosed in therespective notes. The financial risk of these financial instruments and financial management policiesused by the Group to minimize the risk are disclosed as below. The management manages and monitorsthe exposure of these risks to ensure the above risks are controlled in the limited range.
1. Objectives and policies of financial risk management
The Group’s objective in risk management is to obtain an appropriate equilibrium between risk andreturn. It also focuses on the unpredictability of financial markets and seeks to minimize potentialadverse effects on the Group’s financial performance. Based on the objectives of financial riskmanagement, certain policies are made to recognize and analyze risk and internal control is designedaccording to proper acceptable in order to monitor the risk position of the Group. Both the policies andinternal control will be reviewed and revised regularly to adapt the changes of the market and businessactivities of the Group. The performance of internal control will be reviewed regularly or randomly inaccordance with the financial management policies.The Group’s financial instrument risks mainly include credit risk, liquidity risk and market risk.(Including currency risk, interest rate risk and commodity price risk)The board of directors is responsible for planning and establishing the risk management structure of theGroup, formulating the Group’s risk management policies and related guidelines, supervising theimplementation of risk management measures. The Group has established risk management policies toidentify and analyze the risks faced by the Group. These risk management policies clearly definespecific risks, covering market risk, credit risk and liquidity risk. The Group regularly assesses changesin the market environment and the Group’s operating activities to determine whether update riskmanagement policies and systems.The Group diversifies the risk of financial instruments through appropriate diversified investments andbusiness combinations, and reduces the risk of concentration in a single industry, a specific region or aspecific counterparty by developing appropriate risk management policies.
(1) Credit risk
Credit risk refers to the risk that the counterparty to a financial instrument would fail to discharge itsobligation under the terms of the financial instrument and cause a financial loss to the Group.Credit is managed on the grouping basis. Credit risk is mainly arising from cash at bank, accountsreceivable, and other receivablesThe Group expects that there is no significant credit risk associated with cash at bank since it isdeposited or will be accepted by the sate-owned banks and other medium or large size listed banks.The Group has policies to limit the credit risk exposure on accounts receivables and other receivables.The Group assesses the credit quality of and sets credit limits on its customers by taking into account
their financial position, the availability of guarantee from third parties, the availability of guaranteefrom third parties, their credit history and other factors such as current market conditions. The credithistory of the customers is regularly monitored by the Group. In respect of customers with a poor credithistory, the Group will use written payment reminders, or shorten or cancel credit periods, to ensure theoverall credit risk of the Group is limited to a controllable extent.The Group’s debtors of account receivables are in difference industries and regions, the Groupcontinues in evaluation the debtor’s financial status.The highest credit risk exposed to the Group is limited to the carrying amount of each financialinstrument illustrated in the balance sheet. The Group would not provide any guarantee that mightcause credit risk to the Group.Among the accounts receivable of the Group, the bills receivable and accounts receivable of the topfive customers accounted for 61.97% (2019: 53.79%); among the other receivables of the Group, theother receivable of the top five customers accounted for 67.68% (2019: 62.80%)
(2)) Liquidity risk
Liquidity risk refers to the risks that the Group will not be able to meet its obligations associated withits financial liabilities that are settled by delivering cash or other financial assets.Cash flow forecasting is performed by Group’s finance department. The Group’s finance managementmonitors cash and cash equivalents to meet operational needs and reduce the effect of floating cashflow. The department monitors the usage of bank loan so that the Group does not breach borrowinglimits or covenants while maintaining sufficient headroom on its undrawn committed borrowingfacilities from major financial institute to meet the short-term and long-term liquidity requirements.The Group raises working capital from its operations, bank and other borrowings. As at June 30 2020,the amount of bank loans not yet used by the Group is RMB 0.00.he financial assets and liabilities, off-balance-sheet guarantee items of the Group at June 30 2020 areanalyzed by their maturity date below at their undiscounted contractual cash flows (RMB in tenthousand):
| Item | As at June 30 2020 | |||
| Within 1 year | 1 to 5 years | Over 5 years | Total amount | |
| Financial liabilities: | ||||
| Short-term loans | 4,590.50 | -- | -- | 4,590.50 |
| Accounts payable | 16,431.11 | -- | -- | 16,431.11 |
| Interest payables | 1,653.53 | -- | -- | 1,653.53 |
| Other payables | 20,051.11 | -- | -- | 20,051.11 |
| Long-term payables | -- | 827.43 | -- | 827.43 |
| Guarantees for client | 37,384.58 | -- | -- | 37,384.58 |
| Total liabilities | 80,110.83 | 827.43 | -- | 80,938.26 |
The financial assets and liabilities, off-balance-sheet guarantee items of the Group as at Dec 31 2019are analyzed by their maturity date below at their undiscounted contractual cash flows (RMB in tenthousand):
| Item | 2019.12.31 | |||
| Within 1 year | 1 to 5 years | Over 5 years | Total amount | |
| Financial liabilities: | ||||
| Short-term loans | 5,164.73 | -- | -- | 5,164.73 |
| Accounts payable | 24,422.45 | -- | -- | 24,422.45 |
| Interest payables | 1,653.53 | -- | -- | 1,653.53 |
| Other payables | 20,051.11 | -- | -- | 20,051.11 |
| Long-term payables | -- | 749.92 | -- | 749.92 |
| Guarantees for client | 47,539.67 | -- | -- | 47,539.67 |
| Total liabilities | 98,831.49 | 749.92 | -- | 99,581.41 |
The amount of financial liabilities disclosed in the above table is undiscounted contractual cash flowand may differ from the carrying amount in the balance sheet.The maximum guarantee contract that already signed does not represent the amount need to paid.
(3) Market risk
Market risk, includes interest rate risk and foreign currency risk, refers to the risk that the fair value orfuture cash flow of a financial instrument will fluctuate because of the changes in market price.Interest rate riskInterest rate risk refers to the risk that the fair value or future cash flow of a financial instrument willfluctuate because of the floating rate. Interest rate risk arises from recognized interest-bearing financialinstrument and unrecognized financial instrument (e.g. loan commitments).The Group’s interest rate risk arises from long-term bank loans and other interest-bearing liabilities.Financial liabilities issued at floating rate expose the Group to cash flows interest rate risk. Financialliabilities issued at fixed rate expose the Group to fair value interest rate risk. The Group determines therelative proportions of its fixed rate and floating rate contracts depending on the prevailing marketconditions. At the same time, the Group monitors and maintains the combined financial instruments offixed rate and floating rate.During the reporting period, the Group operates by its own working capital. As at 31 December, 2019,the Group has no financial liabilities with fixed or floating interest rate, such as bank loan. Therefore,the Group believes that the interest rate risk is insignificant.Interest-bearing financial instruments held by the Group (RMB in ten thousand):
Foreign currency riskForeign currency risk refers to the risk that the fair value or future cash flows of a financial instrumentwill fluctuate because of changes in foreign currency rates. Foreign currency risk arises from thefunctional currency denominated financial instrument measured at individual entity.
The foreign currency risk is mainly comes from the group’s financial position and cash flow which isaffected by the fluctuations of the foreign exchange rates. As the subsidiary establish in Hong KongSAR and U.S. are using local currency as settlement currency, other foreign currency assets andliabilities held by the Group compare with the group’s total assets and liabilities are insignificant,therefore, the Company believe the foreign currency risk is insignificant.
2. Capital risk management
The objectives of the Group’s capital risk management are to safeguard the Group’s ability to continueas a going concern in order to provide returns for shareholders and benefits for other stakeholders andto maintain an optimal capital structure to reduce the cost of capital.In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paidto shareholders, return capital to shareholders, issue new shares or disposes assets to reduce itsliabilities.The Group monitors capital on the basis of the gearing ratio. This ratio is calculated as net liabilitiesdivided by total capital. As at June 30 2020, the group’s debt to asset ratio is 22.96%. (As at Dec 312019: 28.20%)XI. Fair Value
1. Fair value of assets and liabilities measured at fair value
Expressed in RMB
| Item | As at June 30 2020 | |||
| Level 1 fair value measurement | Level 2 fair value measurement | Level 3 fair value measurement | Total | |
| I. Recurring fair value measurement | -- | -- | -- | -- |
| (3) Other Equity instruments | 32,710,820.87 | 32,710,820.87 | ||
| III. Non-recurring fair value measurements | -- | -- | -- | -- |
| Total assets measured at fair value on a non-recurring basis | 32,710,820.87 | 32,710,820.87 | ||
2. Basis for determining the market price of the items measured based on the continuous andnon-continuous first level fair value
3. Items measured based on the continuous or uncontinuous 2nd level fair value, valuationtechnique as used, nature of important parameters and quantitative information
4. Items measured based on the continuous or uncontinuous 3rd level fair value, valuationtechnique as used, nature of important parameters and quantitative information
| Items | Fair value As at 31/12/2019 | Valuation techniques | Unobservable inputs | Range (weighted average) |
| Unlisted equity investments | 33,126,730.04 | Net asset method | Inapplicable | N/A |
5. Items measured based on the continuous 3rd level fair value, sensitivity analysis on adjustedinformation and unobservable parameters between the book value at beginning and end of theperiod
6. In case items measured based on fair value are converted between different levels incurred inthe current period, state the cause of conversion and determine conversion time point
7. Change of valuation technique incurred in the current period and cause of such change
8. Fair value of financial assets and financial liabilities not measured at fair valueThe financial assets and financial liabilities of the Group measured at amortized cost mainly include:
cash, accounts receivable, other receivables, short-term loans, accounts payable, other payables andlong-term payable.In addition to above financial assets and liabilities, other financial asset and liabilities that notmeasured at fair value, the differ between book values and fair value are not significant.
9. Others
The level in which fair value measurement is categorized is determined by the level of the fair valuehierarchy of the lowest level input that is significant to the entire fair value measurement. The levelsare defined as follows:
Level 1 inputs: unadjusted quoted prices in active markets that are observable at the measurement datefor identical assets or liabilities.Level 2 inputs: inputs other than Level 1 inputs that are either directly or indirectly observable forunderlying assets or liabilities.
Level 3 inputs: inputs that are unobservable for underlying assets or liabilities.XII. Related parties and related party transactions
1.Information about the parent of the Company
| Name | Registration place | Business nature | Registered capital (RMB in ten thousand) | Shareholding percentage % | Percentage of voting rights % |
| Shenzhen Investment Holdings Co., Ltd. | Shenzhen, Guangdong province | Investment, real estate development, guarantee | 2,764,900.00 | 63.55% | 63.55% |
The ultimate controlling party of the company is: State-owned Assets Supervision and ManagementCommission of Shenzhen Municipal People’s Government
2. Information about the subsidiaries of the Company
For information about the subsidiaries of the Company, refer to Note IX.1.
3. Information about joint ventures and associates of the Company
For information about the joint ventures and associates of the Company, refer to NoteXI.3.
4. Information on other related parties
| Name | Related party relationship |
| Shenzhen Jian ‘an Group Co., Ltd. | Same controlling shareholders |
| Shenzhen Dongfang New world store Co., Ltd | Participating stock companies |
| Shenxi Limited | Not included in Consolidated Financial Statements’ Subsidiary that had been terminated its licenses by law but not cancellation |
| Shenzhen Zhentong New Electromechanical Industry Development Co., Ltd. | Not included in Consolidated Financial Statements’ Subsidiary (Long-term without operation) |
| Shenzhen Nanyang Hotel Co., Ltd. | Not included in Consolidated Financial Statements’ Subsidiary that had been terminated its licenses by law but not cancellation |
| Shenzhen Real Estate Electromechanical Management Company | Not included in Consolidated Financial Statements’ Subsidiary that had been terminated its licenses by law but not cancellation |
| Shenzhen Longgang Henggang Huagang Industrial Co., Ltd. | Not included in Consolidated Financial Statements’ Subsidiary that had been terminated its licenses by law but not cancellation |
5. Transactions with related parties
(1) Purchases/sales
Purchase of goods/receiving of services
Expressed in RMB
| Related party | Nature of transaction | Jan to Jun 2020 | Approved transaction limit | Whether it exceeds the transaction limit | Jan to Jun 2019 |
| Shenzhen RongHua JiDian Co., Ltd | Elevator maintenance | 554,150.94 | No | 554,150.94 |
Sales of goods/rendering of services
Expressed in RMB
| Related party | Nature of transaction | Jan to Jun 2020 | Jan to Jun 2019 |
| Shenzhen Jian'an Group Co., Ltd. | Decoration services | 1,484,806.59 | 3,849,090.95 |
| Shenzhen RongHua JiDian Co., Ltd | Property Services | 34,435.70 | 41,766.60 |
(2) Trust/contracting arrangement
Asset management/contracting undertaken by the Group on behalf of related parties:
Note: InapplicableAsset management / contracting undertaken by related parties on behalf of the Group:
Expressed in RMB
| Name of trustor/main contractor | Name of related party | Type of assets entrusted/contracted | Inception date of trust/contracting | Maturity date of trust/contracting | Trust/contracting revenue | Trust/contracting revenue recognized in June 30 2020 |
| Shantou City Huafeng Real Estate Devepment Co., Ltd | Shenzhen Jian'an Group Co., Ltd. | Construction | 19 Oct 2018 | 1 May 2021 | Negotiations | 70,596,511.27 |
Note: Inapplicable
(3) Leases
Inapplicable
(4) Guarantee
Inapplicable
(5) Funding from related party
Expressed in RMB
| Related party | Amount of funding | Inception date | Maturity date | Note |
| Funds received | ||||
| Shenzhen Investment Shareholding Co. Ltd | 16,535,277.94 | Nov 11 2006 | Dec 22 2016 | The principal of the loan was repaid on 22 December 2016, and the remaining amount was interest payable. |
| Funds provided | ||||
(6) Transfer of assets and debt restructuring
Inapplicable
(7) Remuneration of key management personnel
Expressed in RMB
| Item | Jan to Jun 2020 | Jan to Jun 2019 |
| Remuneration of key management personnel | 2,252,200.00 | 3,506,900.00 |
(8) Other related party transactions
Inapplicable
6. Receivables from and payables to related parties
(1) Receivables from related parties
Expressed in RMB
| Item | Related party | As at Jun 30 2020 | As at Dec 31 2019 | ||
| Book value | Provision for bad and doubtful debts | Book value | Provision for bad and doubtful debts | ||
| Accounts receivable | Shenzhen Fresh Peak property consultant Co., Ltd | 1,223,645.89 | 1,223,645.89 | 1,205,588.76 | 1,205,588.76 |
| Other receivables | Guangdong Province Huizhou Luofu Hill Mineral | 10,465,168.81 | 10,465,168.81 | 10,465,168.81 | 10,465,168.81 |
| Water Co., Ltd | |||||
| Other receivables | Shenzhen Runhua Automobile Trading Co., Ltd | 3,072,764.42 | 3,072,764.42 | 3,072,764.42 | 3,072,764.42 |
| Other receivables | Canada GreatWall (Vancouver) Co., Ltd | 89,035,748.07 | 89,035,748.07 | 89,035,748.07 | 89,035,748.07 |
| Other receivables | Bekaton Property Limited | 12,559,290.58 | 12,559,290.58 | 12,559,290.58 | 12,559,290.58 |
| Other receivables | Paklid Limited | 19,450,684.59 | 19,450,684.59 | 19,319,864.85 | 19,319,864.85 |
| Other receivables | Shenzhen Shenfang Department Store Co. Ltd. | 237,648.82 | 237,648.82 | 237,648.82 | 237,648.82 |
| Other receivables | Shenzhen RongHua JiDian Co., Ltd | 475,223.46 | 23,761.17 | 475,223.46 | 23,761.17 |
| Other receivables | Xi’an Fresh Peak property management& Trading Co., Ltd | 8,419,205.19 | 8,419,205.19 | 8,419,205.19 | 8,419,205.19 |
| Other receivables | Shenxi Limited | 7,660,529.37 | 7,660,529.37 | 7,660,529.37 | 7,660,529.37 |
| Other receivables | Shenzhen Nanyang Hotel Co., Ltd. | 3,168,721.00 | 3,168,721.00 | 3,168,721.00 | 3,168,721.00 |
| Other receivables | Shenzhen Jian'an Group Co., Ltd. | 33,517.63 | 823.21 | 16,464.28 | 823.21 |
(2) Payables to related parties
Expressed in RMB
| Item | Related party | As at Jun 30 2020 | As at Dec 31 2019 |
| Interest payables | Shenzhen Investment Shareholding Co. Ltd | 16,535,277.94 | 16,535,277.94 |
| Accounts payable | Shenzhen Jian'an Group Co., Ltd. | 1,952,979.95 | 68,172,202.04 |
| Other payables | Shenzhen Dongfang New world store Co., Ltd | 902,974.64 | 902,974.64 |
| Other payables | Guangdong Province Fengkai Lain Feng Cement Manufacturing Co., Ltd. | 1,867,348.00 | 1,867,348.00 |
| Other payables | Shenzhen Real Estate Electromechanical Management Company | 14,981,420.99 | 14,981,420.99 |
| Other payables | Shenzhen Zhentong New Electromechanical Industry Development Co., Ltd. | 8,310,832.50 | 8,827,940.07 |
| Other payables | Shenzhen Shenfang | 639,360.38 | 639,360.38 |
| Department Store Co. Ltd. | |||
| Other payables | Shenzhen Longgang Henggang Huagang Industrial Co., Ltd. | 165,481.09 | 165,481.09 |
7. Commitments and contingencies
1. Significant commitments
(1 ) Capital commitments
| Capital commitments have been entered into but not have not been in the financial statements | As at June 30 2020 | As at Dec 31 2019 |
| Significant outsourcing contracts | 183,075,110.80 | 200,684,729.85 |
Note: The significant outsourcing contract was based on the construction contract between ShantouTianyuewan II Project and the contractor Shenzhen Jian'an (Group) Co., Ltd.
(2) Information on implementation of commitments in previous year
For details, refer Note XII, 5(2).As at June 30 2020, there is no other material commitment to be disclosed.
2. Contingencies
(1) Contingent liabilities arising from pending arbitration and pending litigation and related financialimpact
| Plaintiff | Defendant | Case | Appellate court | Amount of the object of action | Progress of cases |
| Xi’an Fresh Peak Holding limited company | Xi'an Commercial and Trade Commission Xi'an Commerce and Tourism Co., Ltd. | Investment compensation disputes | Shaanxi Higher People's Court | 36.62 million yuan and interest | Pending |
Note: Xi’an Fresh Peak Holding limited company (hereinafter referred to as “Fresh Peak Company”)was Sino-foreign joint venture set up in Xi’an city. Among them, Fresh Peak Enterprise Co., Ltd made67% of the shares in cash. Xi’an Trade Building, a company directly under the Xi'an Commercial andTrade Commission (hereinafter referred to as "Xi'an C&T Commission"), invested 16% of the shares inland use rights. Hong Kong Dadiwang Industrial Investment Company holds 17% of the shares. Thecore business was property development. And the project was Xi’an Trade Building. The project wasstarted on 28 November 1995. But the project had been stopped in 1996 because of the two parties’differences on the operating policy of the project. In 1997, the Xi’an government withdrew the Xi'anFresh Peak investment project compulsively and assigned the project to Xi’an Business Tourism Co.,Ltd (hereinafter referred to as “Business Tourism Company”). But the two parties had insulted a
lawsuit on compensation. The ShanXi Province High Peoples Court made a judgement “(2000) SJ-CZNo.25”. The judgement was as follows: 1. Business Tourism Company had to pay for the compensationRMB 36,620 thousand to Xi’an Fresh Peak Company after the judgment entering into force. If theBusiness Tourism Company failed to pay in time, it had to pay double debt interests to Xi’an FreshPeak Company. 2. Xi’an Joint Commission on Commerce had jointly and severally obligation of theinterests of the compensation.Until 31 December 2019, the amount of RMB 15,201,000.00 had been called back. The company hasobtained new property clues, submitted an application for resumption of execution, this case is stillpending.As at 31 December 2019, the book value of the long-term equity investment of Xi’an Fresh PeakCompany was RMB 32,840,729.61. The book balance of assets was RMB 8,419,205.19. Both havebeen taken full provision for impairment loss.
(2) Contingent liabilities arising from guarantee provided to other entities and related financial effects.As at 31 December 2019, The Group follows the real estate operating routine provides a total of47,593.67 (RMB in ten thousand) mortgage guarantee to real estate buyers.
| Item | Duration | Amount (In ten thousand) | Note |
| Shengfang CuiLin Building | Until the Premises Permit mortgage registration is finished and in bank custody | 10,273.65 | |
| ChuanQi DongHu Building (Former DongHuDiJing Building) | Until the Premises Permit mortgage registration is finished and in bank custody | 8,116.93 | |
| TianYue Bay No.1 | Until the Premises Permit mortgage registration is finished and in bank custody | 18,894.00 | |
| Total | 37,284.58 |
(3 ) Other contingenciesFor contingent liabilities related to joint venture or associate investment, please refer to Note IX,3(2).As at June 30 2020, there is no other contingency to be disclosed.
8. Others
InapplicableXIII. Stock payment
1. General
Inapplicable
2. Stock payment for equity settlement
Inapplicable
3. Stock payment for cash settlement
Inapplicable
4. Correction and termination of stock payment
Inapplicable
5. Others
XIV. Commitments and contingencies
1. Important commitments
Inapplicable
2. Other contingencies
(1) Significant contingencies existing as at the balance sheet date
Inapplicable
(2) Important contingencies unnecessary to be disclosed but necessary to be explainedAs of June 30, 2020, there exist no other contingencies in the Group necessary to be disclosed.
3. Others
InapplicableXV. Post balance sheet date events
1. Significant non-adjustment events
Inapplicable
2. Profit distribution
Inapplicable
3. Sales return
Inapplicable
4. Note to other matters after the balance sheet date
Since January 2020 pneumonia caused by COIVD-19 is spreading across the country. The preventionof pneumonia is continuing nationwide. The Group follows the arrangement of State-owned AssetsSupervision and Administration Commission of the People’s Government of Shenzhen Municipal andthe Shenzhen Investment Holding Co., Ltd., combined with the actual situation of the leased propertywithin the group, planned to make a reduction of rents for more than 300 companies and individuals fortwo-month, total amount about RMB10,000,000.As of the financial report issuance date, there are no other events after the balance sheet date to bedisclosed.XVI. Other significant events
1. Correction of the accounting errors in the previous period
(1) Retroactive restatement
Inapplicable
(2) Prospective application
Inapplicable
2. Liabilities restructuring
Inapplicable
3. Replacement of assets
(1) Non-monetary assets exchange
Inapplicable
(2) Other assets exchange
Inapplicable
4. Pension plan
Inapplicable
5. Discontinuing operation
Inapplicable
6. Segment information
(1) Basis for determining the reporting segments and accounting policy
Inapplicable
(2) Financial information of the reporting segments
Inapplicable
(3) In case there is no reporting segment or the total assets and liabilities of the reportingsegments cannot be disclosed, explain the reasonInapplicable
(4) Other notes
Inapplicable
7. Other significant transactions and matters that may affect investors' decision makingFrom 14 September 2016, the Group planned the reorganization of material assets. The Groupannounced it intended to buy 100% stock equity of Evergrande real estate group co., LTD by issueshares or cash payment on 14 October 2016. Guangzhou Chiron real estate co., LTD will become thecontrolling shareholder of the company after the acquisition.The restructuring of material assets is still in process as scheduled by the financial report day.
8. Others
InapplicableXVII. Notes to the parent company’s financial statements
1. Accounts receivable
(1) Accounts receivables disclosed by categories
Expressed in RMB
| Item | As at Jun 30 2020 | As at Dec 31 2019 |
| Book balance | Provision for bad and doubtful debts | Carrying amount | Book balance | Provision for bad and doubtful debts | Carrying amount | |||||
| Amount | Proportion | Amount | Provision proportion | Amount | Proportion | Amount | Provision proportion | |||
| Individually assessed for impairment individually | 10,707,224.66 | 98.12% | 10,626,436.84 | 100.00% | 80,787.82 | 10,626,436.84 | 98.51% | 10,626,436.84 | 100.00% | |
| Including: | ||||||||||
| Collectively assessed for impairment based on credit risk characteristics | 205,630.01 | 1.88% | 3,564.22 | 2.22% | 202,065.79 | 160,500.06 | 1.49% | 3,564.22 | 2.22% | 156,935.84 |
| Include: | ||||||||||
| Accounts receivable from related parties in consolidated scope | 89,215.69 | 0.82% | 0.00 | 0.00% | 89,215.69 | 89,215.69 | 0.83% | 89,215.69 | ||
| Accounts receivable from sales of properties | 116,414.32 | 1.07% | 3,564.22 | 5.00% | 112,850.10 | 71,284.37 | 0.66% | 3,564.22 | 5.00% | 67,720.15 |
| Total | 10,912,854.67 | 100.00% | 10,630,001.06 | 98.55% | 282,853.61 | 10,786,936.90 | 100.00% | 10,630,001.06 | 98.55% | 156,935.84 |
Provision made on an individual basis: Sales of properties for long-term uncollected
Expressed in RMB
| Item | As at Jun 30 2020 | |||
| Book balance | Provision for bad and doubtful debts | Percentage of provision | Rationale of Provision | |
| Amount receivables of sales of properties for long-term uncollected | 10,707,224.66 | 10,626,436.84 | 100.00% | Expected to be not recoverable |
| Total | 10,626,436.84 | 10,626,436.84 | -- | -- |
Individual provision for bad and doubtful debts:
Expressed in RMB
| Item | As at Jun 30 2020 |
| Book balance | Bad debt reserve | Provision proportion | Provision reason |
Provision for bad debts based on portfolio: Related parties within the scope of consolidation
Expressed in RMB
| Item | As at Jun 30 2020 | ||
| Book balance | Bad debt reserve | Provision proportion | |
| Over three years | 89,215.69 | 0.00% | |
| Total | 89,215.69 | -- | |
Note to the basis for determining the combination:
InapplicableTotal provision for bad and doubtful debts based on portfolio:
Expressed in RMB
| Item | As at Jun 30 2020 | ||
| Book balance | Bad debt reserve | Provision proportion | |
| Within 1 year | 49,896.32 | 238.32 | 5.00% |
| 1 to 2 years | 66,518.00 | 3,325.90 | 5.00% |
| Total | 116,414.32 | 3,564.22 | -- |
Note to the basis for determining the combination:
InapplicableTotal provision for bad and doubtful debts based on portfolio:
InapplicableNote to the basis for determining the combination:
InapplicableDisclosed based on aging
Expressed in RMB
| Aging | As at Jun 30 2020 |
| Within 1 year (with 1 year inclusive) | 125,917.77 |
| 1-2 year | 155,733.69 |
| Above 3 year | 10,631,203.21 |
| Above 5 year | 10,631,203.21 |
| Total | 10,912,854.67 |
(2) Provision, recovery or reversal of reserve for bad debts during the reporting periodInapplicable
(3) Accounts receivable written off in current period
Inapplicable
(4) Accounts receivable owed by the top five debtors based on the ending balance
Expressed in RMB
| Description of Units | As at June 30 2020 | Proportion of the ending balance of the accounts receivable | Provision for bad debts as at June 30 2020 |
| Daxing Auto Parts Co., Ltd. | 2,075,881.79 | 19.02% | 2,075,881.79 |
| Shenzhen Xinfeng Real Estate Consulting Co., Ltd. | 1,223,645.89 | 11.21% | 1,223,645.89 |
| Wang Weidong | 1,200,000.00 | 11.00% | 1,200,000.00 |
| Wang Guodong | 821,272.45 | 7.53% | 821,272.45 |
| Cai Guangyao | 876,864.11 | 8.04% | 876,864.11 |
| Total | 6,197,664.24 | 56.80% |
(5) Account receivable with recognition terminated due to transfer of financial assetsInapplicable
(6) Amount of assets and liabilities formed through transfer of account receivable and continuingto be involvedInapplicable
2. Other receivables
Expressed in RMB
| Items | As at Jun 30 2020 | As at Dec 31 2019 |
| Other receivables | 1,122,154,158.12 | 835,275,498.69 |
| Total | 1,122,154,158.12 | 835,275,498.69 |
(1) Interest receivable
1) Classification of interest receivable
Inapplicable
2) Significant overdue interest
Inapplicable
3) Provision for bad debts
Inapplicable
(2) Dividends receivable
1) Classification of dividends receivable
Inapplicable
2) Significant dividends receivable with age exceeding 1 year
Inapplicable
3) Provision for bad debts
Inapplicable
(3) Other receivables
1) Classification of other receivables based on nature of payment
Expressed in RMB
| Category | As at June 31 2020 | As at Dec 31 2019 |
| Amount receivables from government | 721,755.80 | 721,755.80 |
| Accounts receivable from employee’s inprest fund | 152,691.21 | 182,691.21 |
| Amount receivables of the collecting and paying on another's behalf | 7,472.22 | 3,248.36 |
| Amount receivables of other customers | 11,431,203.21 | 6,818,306.11 |
| Amount receivables of related parties | 143,140,616.12 | 135,567,522.22 |
| Amount receivables in consolidated scope | 1,767,695,750.60 | 1,492,977,306.03 |
| Total | 1,923,149,489.16 | 1,636,270,829.73 |
2) Provision for bad debts
Expressed in RMB
| Bad debt reserve | The 1st stage | The 2nd stage | The 3rd stage | Total |
| Predicted credit loss in the Total | Predicted credit loss in the whole duration (no | Predicted credit loss in the whole duration |
| future 12 months | credit impairment taken place) | (credit impairment already taken place) | ||
| Balance as at Jan 01 2020 | 81,118.11 | 660,150,746.68 | 140,763,466.25 | 800,995,331.04 |
| Balance as at Jan 01 2020 durning current period | —— | —— | —— | —— |
| Balance as at June 30 2020 | 81,118.11 | 660,150,746.68 | 140,763,466.25 | 800,995,331.04 |
Movement of the book balance of provision for loss with significant amount in the reporting periodInapplicableDisclosed based on aging：
Expressed in RMB
| Aging | As at Jun 30 2020 |
| Within 1 year (with 1 year inclusive) | 89,981,136.31 |
| 1 to 2 years | 140,180,572.84 |
| 2 to 3 years | 142,778,168.63 |
| Over 3 years | 1,550,209,611.38 |
| 4 to 5 years | 1,550,209,611.38 |
| Total | 1,923,149,489.16 |
3) Provision, recovery or reversal of reserve for bad debts during the reporting periodInapplicable Where the significant amount of the provision for bad debt recovered or reversed:
4) Accounts receivable actually written off in the reporting period
Inapplicable
5) Accounts receivable owed by the top five debtors based on the ending balance
Expressed in RMB
| Name of Entity | Relationship with the group | As at Jun 30 2020 | Aging | Proportion of the amount to the total OR | Bad debt provision |
| Shantou Huafeng Estate Development Co., Ltd | Subsidiary | 732,384,395.50 | Within 1 year. 1-3 years. More than 3 years | 38.08% | |
| Fresh Peak Enterprise Co., Ltd | Subsidiary | 545,999,208.06 | Within 1 year. More than 3 years | 28.39% | 508,377,320.74 |
| Shenzhen Shenfang Group Longgang Development Co., Ltd. | Subsidiary | 237,997,397.18 | Within 1 year | 12.38% | |
| American Great Wall Co., Ltd | Subsidiary | 103,403,196.15 | More than 3 years | 5.38% | 103,403,196.15 |
| Fresh Peak Zhiye Co., Ltd. | Subsidiary | 90,966,169.62 | More than 3 years | 4.73% | 90,363,926.75 |
| Total | -- | 1,710,750,366.51 | -- | 88.96% | 702,144,443.64 |
6) Accounts receivable involving government subsidy
Inapplicable
7) Other receivables with recognition terminated due to transfer of financial assetsInapplicable
8) Amount of assets and liabilities formed through transfer of account receivable and continuingto be involvedInapplicable
3. Long-term equity investments
Expressed in RMB
| Item | As at Jun 30 2020 | As at Dec 31 2019 | ||||
| Book balance | Impairment reserve | Book value | Book balance | Impairment reserve | Book value | |
| Investment in subsidiaries | 303,045,949.42 | 152,839,271.15 | 150,206,678.27 | 303,045,949.42 | 152,839,271.15 | 150,206,678.27 |
| Investment in associates and joint ventures | 12,447,684.23 | 11,977,845.58 | 469,838.65 | 12,447,684.23 | 11,977,845.58 | 469,838.65 |
| Total | 315,493,633.65 | 164,817,116.73 | 150,676,516.92 | 315,493,633.65 | 164,817,116.73 | 150,676,516.92 |
(1) Investment in subsidiaries
Expressed in RMB
| Name of investee | As at Dec 31 2019 | Increase/ Decrease (+ / -) in the Jan to Jun 2020 | As at June 30 2020 (book | As at June 30 2020 of the | |||
| Additional | Decrease of | Provision for | Others | ||||
| investment | investment | impairment | value) | provision for impairment | |||
| Shenzhen City Property Management Ltd. | 12,821,791.52 | 12,821,791.52 | |||||
| Shenzhen Petrel Hotel Co. Ltd. | 20,605,047.50 | 20,605,047.50 | |||||
| Shenzhen City Shenfang Investment Ltd. | 9,000,000.00 | 9,000,000.00 | |||||
| Fresh Peak Enterprise Ltd. | 556,500.00 | 556,500.00 | |||||
| Fresh Peak Zhiye Co., Ltd. | 22,717,697.73 | 22,717,697.73 | |||||
| Shenzhen Special Economic Zone Real Estate (Group) Guangzhou Property and Estate Co., Ltd. | 19,000,000.00 | ||||||
| Shenzhen Zhen Tung Engineering Ltd | 11,332,321.45 | 11,332,321.45 | |||||
| American Great Wall Co., Ltd | 1,435,802.00 | 1,435,802.00 | |||||
| Shenzhen City Shenfang Free Trade Trading Ltd. | 4,750,000.00 | 4,750,000.00 | |||||
| Shenzhen City Hua Zhan Construction Management Ltd. | 6,000,000.00 | 6,000,000.00 | |||||
| QiLu Co., Ltd | 212,280.00 | 212,280.00 | |||||
| Beijing Shenfang Property Management Co., Ltd. | 500,000.00 | ||||||
| Shenzhen Lain Hua Industry and Trading Co., Ltd. | 13,458,217.05 | 13,458,217.05 |
| Shenzhen City SPG Long Gang Development Ltd. | 30,850,000.00 | 30,850,000.00 | |||||
| Beijing Fresh Peak Property Development Management Limited Company | 64,183,888.90 | ||||||
| Shantou City Huafeng Real Estate Devepment Co., Ltd | 16,467,021.02 | 16,467,021.02 | |||||
| Paklid Limited | 201,100.00 | ||||||
| Bekaton Property Limited | 906,630.00 | ||||||
| Shenzhen Shenfang Department Store Co. Ltd. | 9,500,000.00 | ||||||
| Shantou Fresh Peak Building | 58,547,652.25 | ||||||
| Total | 150,206,678.27 | 150,206,678.27 | 152,839,271.15 |
(2) Investment in associates and joint ventures
Expressed in RMB
| Investees | Opening balance (book value) | Increase/ Decrease (+ / -) in the Jan to Jun 2020 | Ending balance (book value) | Ending balance of the provision for impairment | |||||||
| Additional investment | Decrease of investment | Income from equity investment recognized under equity method | Other comprehensive income adjustment | Other equity movement | Announced for distributing cash dividend or profit | Provision for impairment | Others | ||||
| I. Joint Venture | |||||||||||
| Fengkai Xinghua Hotel | 9,455,465.38 | ||||||||||
| Subtotal | 9,455,46 | ||||||||||
| 5.38 | |||||||||||
| II. Associates | |||||||||||
| Shenzhen Ronghua Jidian Co., Ltd | 469,838.65 | 469,838.65 | 1,076,954.64 | ||||||||
| Shenzhen Runhua Automobile Trading Co., Ltd | 1,445,425.56 | ||||||||||
| Subtotal | 469,838.65 | 469,838.65 | 2,522,380.20 | ||||||||
| Total | 469,838.65 | 469,838.65 | 11,977,845.58 | ||||||||
(3) Other notes
4. Operation Income and Costs
Expressed in RMB
| Items | Jan to Jun 2020 | Jan to Jun 2019 | ||
| Income | Costs | Income | Costs | |
| Principal business | 231,360,942.20 | 64,778,297.24 | 828,375,457.04 | 125,366,701.31 |
| Other businesses | 95.24 | 27,619.07 | ||
| Total | 231,361,037.44 | 64,778,297.24 | 828,403,076.11 | 125,366,701.31 |
Revenue related information:
InapplicableInformation related to performance obligations:
The Group's current real estate projects for sale are all existing properties, it usually takes 3-5 monthsfrom contract signing to online signing, mortgage loan and final deliver. The contracts that have beensigned at the end of the reporting period are expected to be implemented before the end of 2020.
Information related to the transaction price allocated to the remaining performance obligations:
Information related to the transaction price allocated to the remaining performance obligations:
At the end of the reporting period, the amount of revenue corresponding to the performance obligationsthat have been signed but not yet performed or not yet completed is RMB 641,831,187.09, Among
them, RMB 641,831,187.09 yuan is expected to be recognized as revenue in 2020, RMB 0 is expectedto be recognized as revenue in the year, and RMB 0 is expected to be recognized as revenue in the year.
5. Investment income
Expressed in RMB
| Item | Jan to Jun 2020 | Jan to Jun 2019 |
| Investment income from long-term investments under cost method | 518,700,131.64 | |
| Investment income from other equity instrument | 928,200.00 | |
| Finance product | 15,217,058.60 | 13,359,898.55 |
| Total | 15,217,058.60 | 532,988,230.19 |
6. Others
InapplicableXVIII. Supplementary information
1. Statement of non-recurring gains and losses in the reporting period
Expressed in RMB
| Items | Amount | Note |
| Gain/Loss from disposal of non-current assets | -19,011.53 | |
| The government subsidies included in the profits and losses of the current period (excluding government grants which are closely related to the Company’s business and conform with the national standard amount or quantity) | 2,792,616.39 | Local government subsidy for COVID-19 prevention |
| Profit or loss on entrusted investments or assets management | 15,217,058.60 | Bank structured deposit income |
| Non-operating income/(expenses) except the above | -1,369,710.49 | |
| Anti-epidemic donation | -500,000.00 | |
| Less: Amount affected by the income tax | 4,030,238.24 |
| Total | 12,090,714.73 | -- |
For the Company’s non-recurring gain/loss items as defined in the Explanatory Announcement No. 1on Information Disclosure for Companies Offering their Securities to the Public – Non-recurring Gainsand Losses and its non-recurring gain/loss items as illustrated in the Explanatory Announcement No. 1on Information Disclosure for Companies Offering their Securities to the Public – Non-recurring Gainsand Losses which have been defined as recurring gains and losses, it is necessary to explain the reason.Inapplicable
2. ROE and EPS
| Profit in the reporting period | Return on equity, weighted average | Earnings per share | |
| Basic earnings per share (CNY/share) | Diluted earnings per share (CNY/share) | ||
| Net profit attributable to the Company’s shareholders of ordinary shares | 2.68% | 0.0962 | 0.0962 |
| Net profit attributable to the Company’s shareholders of ordinary shares less non-recurring gains and loss | 2.35% | 0.0842 | 0.0842 |
3. Discrepancy in accounting data between IAS and CAS
(1) Discrepancy in net profit and net assets as disclosed in the financial report respectivelyaccording to IAS and CAS
Expressed in RMB
| Item | Net profit | Net assets | ||
| Jan to Jun 2020 | Jan to Jun 2019 | As at Jun 30 2020 | As at Dec 31 2019 | |
| According to CAS | 97,274,985.72 | 333,155,843.41 | 3,597,595,143.65 | 3,666,874,569.99 |
| Adjustment according to IAS | ||||
| According to IAS | 97,274,985.72 | 333,155,843.41 | 3,597,595,143.65 | 3,666,874,569.99 |
(2) Discrepancy in net profit and net assets as disclosed in the financial report respectivelyaccording to the accounting standards outside Mainland China and CASInapplicable
(3) Note to the discrepancy in accounting data under the accounting standards outside MainlandChina. In case the discrepancy in data which have been audited by an overseas auditing agenthas been adjusted, please specify the name of the overseas auditing agentInapplicable
4. Others
Inapplicable
Part XII Documents Available for Reference
1. The financial statements with the personal signatures and stamps of the Company’slegal representative, head for financial affairs and head of the financial department;and
2. The originals of all the documents and announcements disclosed by the Companyon Securities Times, China Securities Journal and Ta Kung Pao during the ReportingPeriod.