SHENZHEN PROPERTIES & RESOURCES DEVELOPMENT (GROUP) LTD.
THE THIRD QUARTERLY REPORT 2010
§1 Important Notice
1.1 The Board of Directors, the Supervisory Committee as well as directors, supervisors and senior executives of the Company guarantee that there are no any omissions, fictitious or serious misleading statements carried in the report and will take all responsibilities, individual and/or joint for the authenticity, accuracy and integrality of the whole contents.
1.2 No directors, supervisors and senior managers have objections to the report of the true, accurate and complete.
1.3 All directors of the Company attended the meeting.
1.4 The Financial Report of the Third Quarter of 2010 has not been audited.
1.5 Chairman of the Board of Directors of the Company Mr. Chen Yugang, Person in charge of Accounting Work Mr. Wang Hangjun, CFO Mr. Gong Xinsi and Manager of Financial Department Ms. Shen Xueying hereby confirmed that the Financial Report enclosed in the Quarterly Report is true and complete.
§2. Company Profile
2.1 Main accounting data and financial indices
As at 30 Sep. 2010
As at 31 Dec. 2009
Increase/decrease (%)
Total assets (RMB)
2,895,753,931.05
2,834,417,954.60
2.16%
Owners’ equity attributable to shareholders of listed company (RMB)
797,246,704.06
661,442,553.12
20.53%
Share capital (share)
595,979,092.00
595,979,092.00
0.00%
Net assets per share attributable to shareholders of listed company (RMB/share)
1.3377
1.1098
20.54%
Jul.-Sep. 2010
Increase/decrease year-on-year (%)
Jan.-Sep. 2010
Increase/decrease year-on-year (%)
Total operation income (RMB)
138,287,948.76
-37.72%
835,716,532.43
10.14%
Net profit attributable to shareholders of listed company (RMB)
8,502,563.44
-84.25%
135,254,986.97
-15.61%
Net cash flows generated from operating activities (RMB)
-
-
-65,504,159.02
-111.54%
Net cash flows per share generated from operating activities (RMB/share)
-
-
-0.1099
-111.54%
1Basic earnings per share (RMB/share)
0.0143
-84.22%
0.2269
-15.62%
Diluted earnings per share (RMB/share)
0.0143
-84.22%
0.2269
-15.62%
Weighted average return on net assets (%)
1.17%
-7.13%
18.54%
-6.09%
Weighted average return on net assets after deducting extraordinary gains and losses (%)
1.15%
-7.16%
17.27%
-7.34%
Items of non-recurring gains and losses
Amount from year-begin to the end of this report period
Notes
Gains and losses from disposal of non-current assets, including the offset part of the impaired assets;
3,639,394.41
Note 1
Enterprises’ reorganization fees, such as staffing expenses and integration fees
-302,693.00
Note 2
Gains and losses from contingencies irrelevant to routine operation of the Company
279,047.46
Note 3
Profit or loss from change in fair value by holding tradable financial assets and liabilities, and investment income from disposal of tradable financial assets and liabilities as well as salable financial assets, excluding the effective hedging businesses related with the normal operations of the company
39,900.00
Note 4
Other non-operating income and expenses besides the above items
5,959,880.02
Note 5
Effect on income tax after deducting non-recurring gains and losses
-282,639.01
Total
9,332,889.88
Note 1: “Gains and losses from disposal of non-current assets, including offset that has been withdrew as impairment reserve of assets” incurred in the report period was gains and loss from disposal of long-term equity investment and invested property.
Note 2: “Enterprises’ reorganization fees, such as staffing expenses and integration fees” incurred in the report period was projected welfare amount for dismissal of employees as formulated formerly. The event implemented in accordance with relevant document on state-owned enterprise of Shenzhen, which was in line with definition of non-recurring gains and losses in Explanation Public Notice on Information Disclosure of Public Offering Shares Companies No. 1-Non-recurring Gains and Losses [2008] : “Gains and losses from transactions and events that influenced correct judgment on operating achievements and profitability of the Company according to financial statements owing to its special nature and chance”.
Note 3: “Gains and losses from contingencies irrelevant to routine operation of the Company” incurred in the report period was switching back original projected liabilities withdrew for check by CSRC.
Note 4: “Gains and losses from change in fair value by holding tradable financial assets and liabilities, and investment income from disposal of tradable financial assets and liabilities as well as salable financial assets, excluding the effective hedging businesses related with the normal operations of the company” incurred in the report period was gains and losses from change of fair
2value of transaction financial assets
Note 5: “Other non-operating income and expenses” incurred in the report period means rent deposit for breaching of faith and payment not have to pay.
2.2 Total number of shareholders and shares held by the top ten shareholders not subject to trading moratorium
Unit: Share
Total number of shareholders
As at the end of reporting period, the Company has 48202 shareholders in total, including 38402 ones of A-share and 9800 ones of B-share.
Shares held by the top ten shareholders not subject to trading moratorium
Name of shareholder
Number of tradable shares held
Type of share
Zeng Ying
4,530,000
Domestically listed foreign shares
Taiyuan Tangdu Hotel Co., Ltd
1,664,573
RMB ordinary shares
Shenzhen Jinniuhong Trade Co., Ltd
1,550,000
RMB ordinary shares
Wang Lin
1,324,436
RMB ordinary shares
Liu Jiang
1,262,255
RMB ordinary shares
Xu Yihong
1,022,371
RMB ordinary shares
Bo Jiarong
1,010,300
RMB ordinary shares
Liu Yunde
836,300
RMB ordinary shares
Zhou Fanglan
774,500
RMB ordinary shares
Liu Yong
627,800
RMB ordinary shares
Explanation on associated relationship among the aforesaid shareholders or acting-in-concert
The Company was unknown whether there exists associated relationship among the top ten shareholders of tradable share
§3. Significant events
3.1 Particular about large-margin change in main item of accounting statement and financial index and reason for change
√Applicable □Inapplicable
1. Monetary capital at the period-end was RMB 578,400,142.19, down by 30.32% over the year-beginning, mainly because the Company paid fund for new land purchased from the year-beginning to the end of the report period;
2. Account paid in advance at the end of period amounted to RMB 287,481,116.15, up by 513.45% over the year-beginning, mainly because the Company paid payment for land in Dongguan in advance from the year-beginning to the end of the report period;
3. Short-term borrowings at the end of period amounted to RMB50,000,000.00, down by 75.00% over the year-beginning, which was mainly because the Company paid back borrowings from the year-beginning to the end of the report period;
4. Accounts payable at the end of period amounted to RMB 151,311,687.11, up by 34.53% over the year-beginning, which was mainly because the Company suspended to pay account payable for Xinhua Town when it was finished;
5. Payroll payable at the end of period amounted to RMB23,726,595.93, down by 54.36% over the year-beginning, mainly because the Company paid salary payable to staff from the year-beginning to the report period;
36. Non-current liabilities due within one year at the end of period amounted to RMB 0.00, down by 100.00% over the year-beginning, which was mainly because the Company returned the borrowings from the year-beginning to the report period;
7. Long-term borrowings at the end of period amounted to RMB 464,340,000.00, up by 76.23% over the year-beginning, mainly because loan for project increased from the year-beginning to the report period;
8. Retained profit at the period-end was RMB 109,218,116.58, up by 519.47% over the year-beginning, which was mainly because net profit realized by the Company from year-beginning to the end of report period increased;
9. Operating cost of the Company from Jan. to Sep. 2010 was RMB 576,782,431.01, with an increase of 62.45% year-on-year, mainly because area of real estate carried forward from the year-beginning to the end of report period increased year-on-year;
10. Business tax and surcharge from Jan. to Sep. 2010 was RMB 67,068,515.89, with a decrease of 50.92% year-on-year, mainly because gross profit ratio of real estate carried forward from the year-beginning to the report period decreased year-on-year, which caused the decrease of land value-added tax withdrawn;
11. Sales expense from Jan. to Sep. 2010 was RMB 9,675,675.91, with a decrease of 30.47% year-on-year, mainly because the Company transferred some expense for subsidiary Shenzhen ITC Food Co., Ltd into operating cost for calculation according to relevant regulations;
12. Financial expense from Jan. to Sep. 2010 was RMB -1,085,097.82, with a decrease of 108.57% year-on-year, mainly because loan for current assets decreased, executed loan interest rate lowered and interest income increased from year-beginning to the end of report period increased;
13. Assets impairment loss from Jan. to Sep. 2010 was RMB -26,007,128.89, with a decrease of 587.20% year-on-year, mainly because land impairment reserves for Shenhui Garden switched back from the year-beginning to the end of report period;
14. Income from change of fair value from Jan. to Sep. 2010 amounted to RMB 39,900.00, with a decrease of 97.81% year-on-year, mainly because number of stocks held by the Company reduced year-on-year;
15. Income form investment on affiliated enterprise and jointly enterprise from year-beginning to period-end was RMB 1,182,014.80, with a decrease of 47.28% year-on-year, mainly because profit realized by joint enterprise-Shenzhen ITC Tian’an Properties Co., Ltd decreased compared with the same period of last year;
16. Net non-operating income and expenditure from Jan. to Sep. 2010 amounted to RMB 6,507,722.99, up by 90.49% year-on-year, mainly because rent deposit for breaching of faith and payment not have to pay increased from year-beginning to period-end;
17. Other comprehensive income from Jan. to Sep. 2010 amounted to RMB 549,163.97, up by 768.02% year-on-year, mainly because Foreign exchange difference increased year-on-year;
18. Net cash flow arising from operating activities from Jan. to Sep. 2010 amounted to RMB -65,504,159.02, with a decrease of 111.54% year-on-year, mainly because cash from sales of goods decreased, but payment for land purchase and taxes increased from the year-beginning to the end of report period;
19. Net cash flow arising from investment activities from Jan. to Sep. 2010 amounted to RMB -11,074,336.63, with an increase of 1956.32% year-on-year, mainly because cash paid for new taxes increased compared with the same period of last year;
420. Net cash flow arising from financing activities from Jan. to Sep. 2010 amounted to RMB -251,655,446.06, with a decrease of 167.07% year-on-year, mainly because from the year-beginning to the end of report period cash from sales of goods decreased, but payment for land purchase and taxes increased compared with the same period of last year;
3.2 Progress and influence of significant events, as well as analysis on relevant solutions
√Applicable □Inapplicable
(1) No new significant lawsuit or arbitration occurred in the report period.
(2) Progress of previously disclosed significant lawsuits and arbitrations during the report period
① Concerning the “Haiyi Company” Case persistently disclosed by the Company in its annual reports from Y2000 to Y2009 and its semi-annual report for Y2010
On 15 Jul. 2010, the Supreme People’s Court sent another 32 civil judgment letters to the Company, ruling that the Guangdong Higher People’s Court should retry the case and the execution of the original judgment should be suspended. For more details, please refer to the Public Notice on Progress on Haiyi Company Case disclosed by the Company on 19 Jul. 2010.
On 4 Aug. 2010, the Shenzhen Intermediate People’s Court sent the Civil Judgment Letters (2009) SZFHZ Zi No.364—377, No.379—390 and No.392—397 to the Company, stating that “the execution procedure of the case shall be terminated”. For more details, please refer to the Public Notice on Progress on Haiyi Company Case disclosed by the Company on 6 Aug. 2010.
In Oct. 2010, the Company entered into the Settlement Agreement with Haiyi Industrial (Shenzhen) Co., Ltd. and other seven enterprises. According to the Agreement, the Company shall pay RMB 58 million to Haiyi Company and other seven enterprises; as soon as all parties fulfill their duties stated in the Settlement Agreement, the dispute concerning all the 34 cases shall come to an end; and no party shall claim any rights to any other party concerning the 34 cases. For more details, please refer to the Public Notice on Progress on Haiyi Company Case disclosed by the Company on 14 Oct. 2010.
② No new progress occurred in the report period in terms of the other lawsuits previously disclosed. For more details, please refer to the “Section Ⅵ Significant Events” of the Semi-annual Report 2010 disclosed by the Company on http://cninfo.com.cn dated 31 Jul. 2010.
(3) The Company got state-owned construction land use right of Block No. 2010-001 located in Tongshan County, Xuzhou City on Feb. 10, 2010. The Company disclosed the above event on Feb. 11, 2010, and public notice published in Securities Times, Ta Kung Pao and http://www.cninfo.com.cn.
The Company afterwards signed Contract on Transfer of State-owned Land Use Right with Tongshan State-owned Land and Resources Bureau, contract amount was RMB 192.3 million and with area of 96,869 square meters. Usage of the land is residence and land use right term is seventy years. For details, please refer to “3.5.6 Significant Contracts” of the First Quarterly Report 2010 disclosed on Apr. 26, 2010.
In order to be convenient for development of land in Xuzhou and build up and generalize brand of “Property of Shenwuye”, the Company set up Xuzhou Dapeng Real Estate Development Co., Ltd, which is responsible for development and operation of real estate projects of the Company in Xuzhou. For more details, please refer to the Public Notice on Incorporating Wholly-owned Subsidiary in Xuzhou disclosed by the Company on 12 Apr. 2010.
(4) On 10 May 2010, CSRC sent the Written Decision of Administrative Punishments (CF Zi
5No.[2010] 12) to the Company. According to the Decision, ① the penalty of RMB 250,849.80 originally stated in the Pre-notice on Administrative Punishments shall be canceled upon the recheck; and ② the company’s illegal incomes of RMB 250,849.80 from buying and selling securities via personal accounts and HKD 8,544,744.97 from buying and selling B-shares via other corporate accounts shall be confiscated. And the Company disclosed the relevant provisional public notice on Securities Times, Ta Kung Pao and the website designated for information disclosure (http://cninfo.com.cn) dated 12 May 2010.
On 18 May 2010, the Company paid RMB 250,849.80 and HKD 8,544,744,97 from sales of B shares (which equal to RMB 7,500,577.13 according to exchange rate when received Written Decision of Administrative Punishments on May 10, 2010) to CSRC. For more details, please refer to the “Section Ⅵ Significant Events” of the Semi-annual Report 2010 disclosed by the Company on 31 Jul. 2010.
(5) On 15 Jun. 2010, the Company acquired use right of state-owned land No. 2010G048 located in Dalang Town, Dongguan City. The Company disclosed the above on 19 Jul. 2010, and relevant public notice was published in Securities Times, Ta Kung Pao and http://www.cninfo.com.cn.
In order to facilitate land development in Dongguan, the Company incorporated Dongguan Guomao Changsheng Real Estate Development Co., Ltd. to take charge of the development and operation of the Dongguan Dalang Project. For more details, please refer to the Public Notice on Incorporating Wholly-owned Subsidiary in Dongguan disclosed by the Company on 12 Apr. 2010.
(6) Mr. Liu Yinhua, an original vice GM of the Company, applied to the Board of Directors for resignation from the position due to job rotation. For more details, please refer to the Public Notice on Resolutions Made at Board Meeting disclosed by the Company on 21 Jul. 2010.
(7) For Y2009, the real estate income accounted for 69.54% of the Company’s total operating income. According to the relevant regulations of Shenzhen Stock Exchange on listed companies’ changing industry types, and after the company’s application was approved by Shenzhen Stock Exchange, the industry type of the Company was changed from “M Comprehensive” to “J01 Real Estate Development and Operation” since 16 Aug. 2010. For more details, please refer to the Public Notice on Changing Industry Type disclosed by the Company on 14 Aug. 2010.
(8) Due to job change, Mr. Wang Peng applied to the Company’s Board of Directors for resignation from the position of director. For more details, please refer to the Public Notice on Resignation of Director disclosed by the Company on 11 Sept. 2010.
(9) Due to the need of operation and management, according to relevant provisions of the Company Law and the Company’s Articles of Association, and upon the review and approval at the 27th Meeting of the 6th Board of Directors, Mr. Gong Sixin was engaged by the Board of Directors as CFO. For more details, please refer to the Public Notice on Resolutions Made by Board Meeting disclosed by the Company on 18 Sept. 2010.
3.3 Fulfillment of commitments made by the Company, shareholders and the actual controller
√Applicable □Inapplicable
Shenzhen Construction Investment Holdings Co. (hereinafter referred to as “Construction Holdings”) and Shenzhen Investment Management Co. (hereinafter referred to as “Investment Management Company”) were nominal shareholders of the Company (Shares of the Company are registered under the name of these two companies.). Later, these two companies and Shenzhen Trade & Commerce Investment Holdings Co. combined on a legal basis and became one company known as Shenzhen Investment Holdings Co., Ltd. (hereinafter referred to as “Investment 6Holdings”). However, due to various reasons, the Company’s shares held by Construction Holdings and Investment Management Company has not been transferred to Investment Holdings, which is the actual controller of the Company.
1. Investment Holdings stated that it would establish and perfect the internal control over undisclosed information of the listed company known by it, urge relevant insiders not to trade the shares of the Company by making use of the undisclosed information, not suggest other buying and selling shares of the Company, nor leak any undisclosed information of the Company. Meanwhile, it would provide an insider name list to the Company in a timely, factual, accurate and complete way so that the Company could submit the name list to the Shenzhen Bureau of CSRC and the Stock Exchange for records.
Execution situation: In the report period, it was found that no actual controller of the Company or insiders bought and sold stocks of the Company by taking advantage of undisclosed information of the Company. And the Company submitted monthly the particulars about the parties to which the undisclosed information had been submitted to CSRC Shenzhen Bureau for reference.
2. Commitments made by non-tradable share holders in the share merger reform
(1) Construction Holdings and Investment Management Company made a common commitment to abide by laws, regulations and rules and perform prescribed commitment duties. And they also made special commitments as follows:
Non-tradable shares held by Construction Holdings and Investment Management Company would not be traded or transferred within 36 months since they acquired right of trade. After expiration of the aforesaid commitment, originally non-tradable shares sold through the listing and trading system on the Shenzhen Stock Exchange should not exceed 5 percents of total shares of the Company within 12 months, as well as not exceed 10 percents within 24 months. In case these companies acted against the above commitment and sold shares of the Company, the income from sales of the shares would belong to the Company.
Execution situation: As at the date of issuing the announcement, Construction Holdings and Investment Management Company failed to sell the shares of the Company.
(2) Investment Holdings made another commitment to abide by laws, regulations and rules and perform prescribed commitment duties. And it also made special commitments as follows:
① Non-tradable shares held by Investment Holdings would not be traded or transferred within 36 months since they acquired right of trade. After expiration of the aforesaid commitment, originally non-tradable shares sold through the listing and trading system on the Shenzhen Stock Exchange should not exceed 5 percents of total shares of the Company within 12 months, as well as not exceed 10 percents within 24 months. In case these companies acted against the above commitment and sold shares of the Company, the income from sales of the shares would belong to the Company.
Execution situation: As at the date of issuing the announcement, Investment Holdings failed to sell the shares of the Company that are actually controlled by it.
② Within one year since the non-tradable shares held by Construction Holdings and Investment Management Company controlled by Investment Holdings acquired the right of trading, Shenzhen Investment Holdings Co., Ltd will start up capital injection to the Company, that is, Shenzhen Investment Holdings Co., Ltd will inject legitimate capital no less than RMB 500 million including land resource in lump sum or in batches by replace or other legitimate way, will increase land reserves of the Company and enhance profitability in the future. In case the aforesaid capital failed to start completely within one year, Shenzhen Investment Holdings Co., Ltd will compensate 20%
7of reorganization capital failing to start to the Company within 30 days when expiration of 1 year, and continued to implement the capital injection which had been started. As for the capital injection failing to start, Shenzhen Investment Holdings Co., Ltd will not implement. Note: Startup of capital injection means capital injection program has been reviewed and approved by the Shareholders’ General Meeting of the Company. Shenzhen Investment Holdings Co., Ltd was willing to entrust China Securities Depository and Clearing Corporation Limited Shenzhen Branch to freeze 30 million shares of the Company, which was under name of Shenzhen Construction Investment Holdings and actually controlled by Shenzhen Investment Holdings Co., Ltd, as guarantee for the above commitment.
Execution situation: For the purpose of performing the commitment, the Company and Investment Holdings jointly planned and prepared and launched relevant matters, and the Company disclosed the Suggestive Public Notice on Carrying out Commitment of the Share Merger Reform to Perform Assets Replacement and Significant Related Party Transaction on 21 July 2010. The Company intends to replace the part of building properties held by it and its wholly-owned subsidiary — Shenzhen Huangcheng Real Estate Co., Ltd. with the plot T102-0237 located in Yueliang Bay and 100% equities of Shenzhen Shenxin Taxi Co., Ltd. held by Investment Holdings. The balance between assets swapped out and ones swapped in shall be covered in cash. The ultimate trade price shall be decided in accordance with assessment result after auditing and assessing the underlying assets by Certified Public Accountants and Assets Evaluation Organization with qualification for the business of securities and reporting to State-Owned Assets Supervision Administration Department of Shenzhen. On 17 Sep. 2010, the Company disclosed the Public Notice on Carrying out Commitment of the Share Merger Reform to Perform Assets Replacement and Significant Related Party Transaction, in accordance with audit report and appraisal report, the assessed value of assets swapped out by the Company is RMB 306,563,279.00, and the assessed value of assets swapped in is RMB 304,090,432.77, the corresponding balance of RMB 2,472,846.23 shall be covered in cash by Investment Holdings (Meanwhile, Investment Holdings expressed that it shall strictly abide by the commitment made the share merger reform, and compensated cash to the Company with 20% of the balance performed in this time and in commitment). The said scheme had been approved at the 1st Provisional Shareholders’ General Meeting 2010. For details, please see the Public Notice on the Resolution of the 1st Provisional Shareholders’ General Meeting 2010 published on 14 Oct. 2010.
In Nov. 2009, Investment Holdings had applied to the China Securities Depository and Clearing Corporation Limited Shenzhen Branch for freezing 30 million shares of the Shen Wuye that are actually controlled by its and are registered under the name of Construction Holdings.
③ Since non-tradable shares held by Shenzhen Investment Holdings Co., Ltd, Shenzhen Construction Investment Holdings and Shenzhen Investment Co., Ltd acquired right to trade within 24 months, Shenzhen Investment Holdings Co., Ltd commit that they will support balance no less than RMB 500 million with method of entrust loan in line with relevant provisions of laws and administrative statutes to release nervous capital of the Company. The aforesaid balance means accumulative incurred amount within 24 months since the date when non-tradable shares held by Shenzhen Investment Holdings Co., Ltd, Shenzhen Construction Investment Holdings and Shenzhen Investment Co., Ltd acquired right to trade, and each entrust loan for support will not be less than 12 months; the above cash support of RMB 500 million excluded entrust loan offered before the date when non-tradable shares held by Shenzhen Investment Holdings Co., Ltd, Shenzhen Construction Investment Holdings and Shenzhen Investment Co., Ltd acquired right to
8trade.
Execution situation: As at the date of issuing the announcement, Investment Holdings provided the Company with entrustment loans of RMB 50 million through bank, which occurred before the date that non-tradable shares obtained the right to list and trade. On 18 Mar. 2010, the Company held the Shareholders’ General Meeting 2009, at which the proposal on application to the controlling shareholder for entrustment loans was reviewed and approved. The shareholders’ general meeting authorized the Board of Directors, in accordance with actual demand of the Company’s operation, and on the basis of negotiation among the Company, Investment Holdings and relevant banks, to handle such matters as conclusion of agreement on entrustment loan no less than RMB 500 million, extension of refinance, retiring old debt with new credit facilities and repayment. The Company had disclosed the said matter on 19 Mar. 2010 in Securities Times, Ta Kung Pao and http://www.cninfo.com.cn.
The Board of Directors of the Company will apply to Investment Holdings for entrustment loan at the proper time.
④ In case that net profit of the Company in any year of 2010, 2011 and 2012 was less than 2009, Shenzhen Investment Holdings Co., Ltd will make up balance of net profit between the year and 2009 with cash.
Execution situation: The implementation of the said commitment depends on the net profit as of year 2010.
3.4 Warnings of possible loss or large-margin change of the accumulated net profit made during the period from the beginning of the year to the end of the next report period compared with the same period of the last year according to prediction, as well as explanations on the reasons
√Applicable □Inapplicable
Performance forecast
Increase substantially over the same period of the last year
Items
1 Jan. 2010-31 Dec. 2010
1 Jan. 2009-31 Dec. 2009
Increase/ decrease (%)
Estimated accumulative net profit (RMB’0000)
15,000～17,000
9,693
54.75%～75.38%
Basic earnings per share (RMB/share)
0.2517～0.2852
0.1626
54.80%～75.40%
Notes to performance forecast
According to preliminary estimation, net profit as of the year 2010 was expected to achieve between RMB 150,000,000 and RMB 170,000,000, with an increase between 54.75% and 75.38% than that of last year. The increase in performance is for the following reasons: first, the Company held the market opportunity to intensify the efforts in marketing and capital-collection, resulting in increase of income from real estate carried down in this year compared with the same period of last year; second, the proposal on carrying out Commitment of the Share Merger Reform to Perform Assets Replacement and Significant Related Party Transaction had been reviewed and approved at the shareholders’ general meeting, resulting in the reversal of falling price reserve of assets swapped out, which was withdrawn formerly; third, after many efforts were made from 9various sides such as the Company, and through relevant court’s presiding and coordination, “Haiyi” lawsuit was closed and the settlement agreement was reached by consensus, therefore, the actual executing money was less than the original withholding of book value.
Details concerned with the financial data would be disclosed in the Company’s Annual Report of 2010.
3.5 Other significant events that need to be explained
3.5.1 Securities investment
√Applicable □Inapplicable
No.
Stock variety
Stock code
Short form of Stock
Initial investment amount
(RMB Yuan)
Shares held
Book value at period-end
Proportion in total securities investment at period-end (%)
Profits and losses in reporting period
2
Shenzhen A Share
000030
ST Sunrise
268,735.50
30,000
272,100.00
100.00
39,900.00
Other securities investment held at the end of period
Investment gains/(losses) arising from securities that have be sold
----
----
----
----
0.00
Total
268,735.50
----
272,100.00
100.00
39,900.00
3.5.2 Equity of other listed companies held by the Company
√Applicable □Inapplicable
Stock code
Short form of Stock
Initial investment amount
Ratio to equity of invested company (%)
Book value at year-end
Profits and losses in the reporting period
Change of owners’ equity in the reporting period
Accounting subject
Source of stock
000509
S*ST T.H.
2,962,500.00
0.33%
802,199.55
0.00
0.00
Long-term equity investment
Purchasing legal person shares directionally
Total
2,962,500.00
-
802,199.55
0.00
0.00
3.5.3 Equity of Pre-IPO and unlisted financial enterprises held by the Company
□Applicable √Inapplicable
3.5.4 Offering capital to controlling shareholders or related parties and external guarantee in violation of the procedure specified
□Applicable √Inapplicable
103.5.5 Shareholders holding shares exceeding 30% proposed or implemented plan on increasing shares in the report period
□Applicable √Inapplicable
3.5.6 Significant contracts
√Applicable □Inapplicable
1. For the purpose of performing commitment of the share merger reform, the Company signed the Assets Replacement Agreement with its controlling shareholder — Shenzhen Investment Holdings Co., Ltd. (hereinafter referred to as “Investment Holdings”), in which the Company intends to replace the part of building properties held by it and its wholly-owned subsidiary — Shenzhen Huangcheng Real Estate Co., Ltd. with the plot T102-0237 located in Yueliang Bay and 100% equities of Shenzhen Shenxin Taxi Co., Ltd. held by Investment Holdings. The balance between assets swapped out and ones swapped in shall be covered in cash. For details, please refer to the Public Notice on Carrying out Commitment of the Share Merger Reform to Perform Assets Replacement and Significant Related Party Transaction disclosed by the Company on 17 Sep. 2010.
2. In Oct. 2010, the Company reached a conciliatory agreement with eight companies such as Haiyi Industrial (Shenzhen) Co., Ltd., in which the Company is required to pay RMB 58 million to such eight companies, i.e. Haiyi; such 34 serial cases on “Haiyi” lawsuit were closed after all parties fulfilled their obligations given in the settlement agreement, and all parties no longer claimed any right to opposite parties with 34 cases. For details, please refer to the Public Notice on Progress of Haiyi Lawsuit disclosed by the Company on 14 Oct. 2010.
3.5.7 Reception of research, interviews and visits in the reporting period
Date
Place
Reception way
Reception object
Major discussion content and the information provided by the Company
5 Jan. 2010
The Office of BOD
Communication by Telephone
Individual investor
Asked about the basic information of the Company and sales of Shengang No.1 Project
27 Jan. 2010
The Office of BOD
Communication by Telephone
Individual investor
Asked about the basic information of the Company and when to start the assets restructuring committed in the Share Merger Reform
2 Feb. 2010
The Office of BOD
Communication by Telephone
Individual investor
Asked about the basic information of the Company and time of disclosing annual report
10 Mar. 2010
The Office of BOD
Communication by Telephone
Individual investor
Asked about the basic information of the Company and progress of the assets restructuring committed in the Share Merger Reform
25 Mar. 2010
The Office of BOD
Communication by Telephone
Individual investor
Asked about the basic information of the Company and whether the project “Xinhua Town” can be carried down in 2010 or not
7 Apr. 2010
The Office of BOD
Communication by Telephone
Individual investor
Asked about the basic information of the Company and relevant story in the clarifying public notice
12 Apr. 2010
The Office of BOD
Communication by Telephone
Individual investor
Asked about the basic information of the Company and the progress of the “Haiyi” Lawsuit
19 Apr. 2010
The Office of BOD
Communication by Telephone
Individual investor
Asked about reason for share price falling and progress of the assets restructuring committed in the Share Merger Reform
1128 Apr. 2010
The Office of BOD
Communication by Telephone
Individual investor
Acquainted when the share merger reform started and ended with one year
5 May 2010
The Office of BOD
Communication by Telephone
Individual investor
Acquainted whether reorganization of share merger reform had progress;
20 May 2010
The Office of BOD
Communication by Telephone
Individual investor
Acquainted about achievement of the first half year of 2010 of the Company;
27 May 2010
The Office of BOD
Communication by Telephone
Individual investor
Whether there were some programs for share merger reform
9 Jun. 2010
The Office of BOD
Communication by Telephone
Individual investor
Acquainted whether punishment from CSRC would influence achievement of the Company;
28 Jun. 2010
The Office of BOD
Communication by Telephone
Individual investor
Acquainted about land reserves of the Company;
8 Jul. 2010
The Office of BOD
Communication by Telephone
Individual investor
Acquainted about progress of assets replacement;
12 Jul. 2010
The Office of BOD
Communication by Telephone
Individual investor
Acquainted about when stock of the Company relisted.
22 Jul. 2010
The Office of BOD
Communication by Telephone
Individual investor
Inquired whether business of Shenxin Taxi Co., Ltd has relationship with the Company in progress of assets replacement.
22 Jul. 2010
The Office of BOD
Communication by Telephone
Individual investor
Inquired when the title deed for land located moon bay would be completed;
22 Jul. 2010
The Office of BOD
Communication by Telephone
Individual investor
Inquired when the Company held the Shareholders’ General Meeting to review and approve assets replacement scheme?
17 Aug. 2010
The Office of BOD
Communication by Telephone
Individual investor
21st Century Business Herald considered that the assets swapped out from the Company were undervalued, while the assets swapped in to the company were overvalued, whether the principle shareholders encroach upon the interests of the company.
3 Sep. 2010
The Office of BOD
Communication by Telephone
Individual investor
In the semi-annual report, the profit was mainly from main business or investment income?
21 Sep. 2010
The Office of BOD
Communication by Telephone
Individual investor
There is no difference between scheme on assets replacement disclosed in this public notice and that in the suggestive notice on 21 July, why does the Company held the Board meeting again?
8 Oct. 2010
The Office of BOD
Communication by Telephone
Individual investor
Inquired when the Company held the Shareholders’ General Meeting to take a vote on assets replacement scheme?
11 Oct. 2010
The Office of BOD
Communication by Telephone
Individual investor
Whether the performance in the third quarterly report increased by a big margin than that of the semi-annual report?
13 Oct. 2010
The Office of BOD
Communication by Telephone
Individual investor
Acquainted about network voting procedure by trading system
13 Oct. 2010
The Office of BOD
Communication by Telephone
Individual investor
Whether the shareholders of B-share have a right to take a vote on assets replacement scheme? 1214 Oct. 2010
The Office of BOD
Communication by Telephone
Individual investor
Whether there existed an associative relationship between the reconciliation of “Haiyi” lawsuit and assets replacement scheme?
20 Oct. 2010
The Office of BOD
Communication by Telephone
Individual investor
Whether the “Haiyi” Lawsuit is fully closed or not?
The Company answered the aforesaid phone calls for consultation in strict compliance with requirements and principles of the Guide on Fair Information Disclosure for Listed Companies, and protected the investors’ right to get the information equally. All the investors were treated fairly and no undisclosed information was leaked to the investors.
§4 Attachment
4.1 Balance sheet
Prepared by Shenzhen Properties & Resources Development (Group) Ltd
30 Sep. 2010 Unit: RMB Yuan
Closing balance
Opening balance
Items
Consolidation
Parent company
Consolidation
Parent company
Current assets:
Monetary funds
578,400,142.19
2,770,317.50
830,055,588.25
2,539,358.76
Transactional financial assets
272,100.00
272,100.00
232,200.00
232,200.00
Notes receivable
Account receivable
73,367,472.85
59,186,954.03
66,938,998.94
61,464,246.43
Advances to suppliers
287,481,116.15
220,871,793.00
46,862,874.11
500,000.00
Dividend receivable
192,180,496.74
325,739,041.74
Other receivables
49,293,151.47
307,183,492.94
54,030,054.90
89,557,866.50
Financial assets purchased under agreements to resell
Inventories
1,310,674,712.84
54,214,125.47
1,255,676,772.24
66,446,135.31
Non-current assets due within 1 year
Other current assets
Total current assets
2,299,488,695.50
836,679,279.68
2,253,796,488.44
546,478,848.74
Non-current assets:
Loans and advance
Available for sale financial assets
Held to maturity investments
Long-term account receivable
Long-term equity investment
80,879,424.78
250,059,424.78
79,697,503.62
178,877,503.62
Investment real estate
280,276,444.96
206,383,187.42
257,105,965.94
173,874,690.52
13Fixed asset
82,656,962.62
38,422,585.80
76,985,792.12
39,860,661.03
Project in construction
Engineering material
Fixed asset disposal
Bearer biological asset
Oil and gas assets
Intangible assets
108,197,258.22
112,893,677.12
Development expense
Goodwill
Long-term expense to be apportioned
2,205,446.88
2,205,446.88
2,243,026.34
2,243,026.34
Deferred income tax assets
42,049,698.09
51,695,501.02
Other non-current assets
Total of non-current assets
596,265,235.55
497,070,644.88
580,621,466.16
394,855,881.51
Total assets
2,895,753,931.05
1,333,749,924.56
2,834,417,954.60
941,334,730.25
Current liabilities:
Short-term borrowings
50,000,000.00
50,000,000.00
200,000,000.00
50,000,000.00
Transactional financial liabilities
Notes payable
Accounts payable
151,311,687.11
33,840,924.60
112,470,139.39
37,032,127.61
Advances from customers
817,792,165.86
122,312.00
745,527,226.22
1,026,694.63
Financial assets sold under agreements to repurchase
Handling charges and commissions payable
Payroll payable
23,726,595.93
1,974,609.37
51,982,204.97
9,345,999.43
Taxes and fares payable
173,387,676.59
1,258,228.48
205,331,877.94
2,912,148.33
Dividend payable
Interest payable
Other accounts payable
233,786,448.84
514,188,631.42
208,240,882.65
125,331,899.26
Non-current liabilities due within 1 year
200,000,000.00
Other current liabilities
Total current liabilities
1,450,004,574.33
601,384,705.87
1,723,552,331.17
225,648,869.26
Non-current liabilities:
Long-term borrowings
464,340,000.00
263,480,000.00
Debentures payable
Long-term payables
Specific-purpose account payables
Accrued liabilities
61,254,234.44
61,254,234.44
69,284,708.83
69,284,708.83
Deferred income tax
14liabilities
Other non-current liabilities
122,046,331.16
12,315,309.38
115,796,274.42
12,315,309.38
Total non-current liabilities
647,640,565.60
73,569,543.82
448,560,983.25
81,600,018.21
Total liabilities
2,097,645,139.93
674,954,249.69
2,172,113,314.42
307,248,887.47
Owner’s equity (or Shareholders’ equity)
Paid-in capital (or share capital)
595,979,092.00
595,979,092.00
595,979,092.00
595,979,092.00
Share capital
25,332,931.52
226,883.79
25,332,931.52
226,883.79
Less: Treasury Stock
Surplus reserve
69,712,050.51
69,712,050.51
69,712,050.51
69,712,050.51
General risk provision
Retained earnings
109,218,116.58
-7,122,351.43
-26,036,870.39
-31,832,183.52
Foreign exchange difference
-2,995,486.55
-3,544,650.52
Total owners' equity attributable to holding company
797,246,704.06
658,795,674.87
661,442,553.12
634,085,842.78
Minority interests
862,087.06
862,087.06
Total owners’ equity
798,108,791.12
658,795,674.87
662,304,640.18
634,085,842.78
Total liabilities and owners’ equity
2,895,753,931.05
1,333,749,924.56
2,834,417,954.60
941,334,730.25
4.2 Income statement
4.2.1 Income statement as of the reporting period
Prepared by Shenzhen Properties & Resources Development (Group) Ltd
Jul. – Sep. 2010 Unit: RMB Yuan
Jul. – Sep. 2010
Jul. – Sep. 2009
Items
Consolidation
Parent company
Consolidation
Parent company
I. Total operating income
138,287,948.76
9,071,980.88
222,046,484.96
6,415,277.36
Including: operating income
138,287,948.76
9,071,980.88
222,046,484.96
6,415,277.36
II. Total operating cost
126,684,835.44
11,902,691.55
159,624,740.32
20,572,232.28
Including: operating cost
92,687,520.16
4,108,198.02
103,598,632.69
3,038,058.60
Taxes and associate charges
11,081,224.02
295,741.06
39,464,878.39
334,427.45
Selling and distribution expenses
3,924,851.92
4,257,141.47
Administrative expenses
19,964,071.98
7,902,803.20
13,525,908.87
6,399,205.80
Financial expenses
-972,832.64
-404,050.73
3,263,353.78
604,066.69
Asset impairment loss
-4,485,174.88
10,196,473.74
Add: Gain/(loss) from
-359,337.99
38,400.00 15change in fair value (“-” means loss)
Gain/(loss) from investment (“-” means loss)
559,533.40
559,533.40
378,963.49
522,375,831.60
Including: income form investment on affiliated enterprises and jointly-run enterprises
559,533.40
559,533.40
375,831.60
375,831.60
Foreign exchange difference (“-” means loss)
III. Business profit (“-” means loss)
12,162,646.72
-2,271,177.27
62,441,370.14
508,257,276.68
Add: non-operation income
161,847.62
-96,915.64
330,917.73
46,112.38
Less: non-business expense
11,728.47
24,696.48
1,500.00
Including: loss from non-current asset disposal
-75,917.52
-33,459.88
IV. Total profit (“-” means loss)
12,312,765.87
-2,368,092.91
62,747,591.39
508,301,889.06
Less: Income tax expense
3,810,202.43
8,763,241.11
V. Net profit (“-” means loss)
8,502,563.44
-2,368,092.91
53,984,350.28
508,301,889.06
Attributable to parent company
8,502,563.44
-2,368,092.91
53,984,469.28
508,301,889.06
Minority interests
-119.00
VI. Earnings per share
(I) basic earnings per share
0.0143
-0.0040
0.0906
0.8529
(II) diluted earnings per share
0.0143
-0.0040
0.0906
0.8529
Ⅶ. Other comprehensive income
793,918.33
-118,543.99
Ⅷ. Total comprehensive income
9,296,481.77
-2,368,092.91
53,865,806.29
508,301,889.06
Attributable to owners of parent company
9,296,481.77
-2,368,092.91
53,865,925.29
508,301,889.06
Attributable to minority shareholders
-119
4.2.2 Income statement for the period from the year-begin to the period-end
Prepared by Shenzhen Properties & Resources Development (Group) Ltd
Jan. – Sep. 2010 Unit: RMB Yuan 16Jan. – Sep. 2010
Jan. – Sep. 2009
Items
Consolidation
Parent company
Consolidation
Parent company
I. Total operating income
835,716,532.43
26,821,184.05
758,785,069.84
20,096,196.29
Including: operating income
835,716,532.43
26,821,184.05
758,785,069.84
20,096,196.29
II. Total operating cost
679,762,744.29
7,643,986.73
565,921,369.82
49,134,504.25
Including: operating cost
576,782,431.01
10,832,217.15
355,041,716.72
8,113,376.34
Taxes and associate charges
67,068,515.89
1,339,787.98
136,650,044.93
1,047,555.03
Selling and distribution expenses
9,675,675.91
13,915,047.48
Administrative expenses
53,328,348.19
21,712,042.99
51,440,568.19
22,258,370.55
Financial expenses
-1,085,097.82
1,180,432.67
12,658,522.18
3,228,971.99
Asset impairment loss
-26,007,128.89
-27,420,494.06
-3,784,529.68
14,486,230.34
Add: Gain/(loss) from change in fair value (“-” means loss)
39,900.00
39,900.00
1,823,215.31
127,500.00
Gain/(loss) from investment (“-” means loss)
2,721,921.16
2,721,921.16
2,466,183.21
524,242,065.68
Including: income form investment on affiliated enterprises and jointly-run enterprises
1,182,014.80
1,182,014.80
2,242,065.68
2,242,065.68
Foreign exchange difference (“-” means loss)
III. Business profit (“-” means loss)
158,715,609.30
21,939,018.48
197,153,098.54
495,331,257.72
Add: non-operation income
6,746,321.52
2,495,502.29
2,334,498.25
432,305.91
Less: non-business expense
238,598.53
-275,311.32
282,396.86
105,579.53
Including: loss from non-current asset disposal
47,253.80
1,173.62
58,162.01
20,619.65
IV. Total profit (“-” means loss)
165,223,332.29
24,709,832.09
199,205,199.93
495,657,984.10
Less: Income tax expense
29,968,345.32
38,923,621.82
V. Net profit (“-” means loss)
135,254,986.97
24,709,832.09
160,281,578.11
495,657,984.10
Attributable to parent company
135,254,986.97
24,709,832.09
160,281,697.11
495,657,984.10
Minority interests
-119.00
VI. Earnings per share
17(I) basic earnings per share
0.2269
0.0415
0.2689
0.8317
(II) diluted earnings per share
0.2269
0.0415
0.2689
0.8317
Ⅶ. Other comprehensive income
549,163.97
-82,207.12
Ⅷ. Total comprehensive income
135,804,150.94
24,709,832.09
160,199,370.99
495,657,984.10
Attributable to owners of parent company
135,804,150.94
24,709,832.09
160,199,489.99
495,657,984.10
Attributable to minority shareholders
-119.00
4.3 Cash flow statement
Prepared by Shenzhen Properties & Resources Development (Group) Ltd
Jan. - Sep. 2010 Unit: RMB Yuan
Jan. - Sep. 2010
Jan. - Sep. 2009
Items
Consolidation
Parent company
Consolidation
Parent company
I. Cash flows from operating activities:
Cash received from sale of commodities and rendering of service
984,120,100.57
723,601.97
1,152,493,954.60
9,433,475.49
Net increase of disposal of tradable financial assets
Tax refunds received
Other cash received relating to operating activities
32,488,543.33
11,677,780.58
30,596,062.36
123,541,662.46
Sub-total of cash inflows
1,016,608,643.90
12,401,382.55
1,183,090,016.96
132,975,137.95
Cash paid for goods and services
736,526,756.08
113,634.53
321,051,235.62
1,086,052.30
Cash paid to and for employees
132,503,460.60
214,006.50
140,065,715.71
6,718,933.04
Various taxes paid
161,287,133.40
103,261.35
120,821,212.52
3,243,068.96
Other cash paid relating to operating activities
51,795,452.84
11,588,142.93
33,503,147.69
8,532,134.72
Sub-total of cash outflows
1,082,112,802.92
12,019,045.31
615,441,311.54
19,580,189.02
Net cash flows from operating activities
-65,504,159.02
382,337.24
567,648,705.42
113,394,948.93
II. Cash flows from investing activities
Cash received from disposals
1,550,000.00
1,054,529.64 18of investments
Cash received from returns on investments
20,000,000.00
23,108.60
Net cash received from disposals of fixed assets and intangible assets
5,553,429.84
892,136.54
890,741.54
Net cash received from disposal of subsidiaries and other business units
Other cash received relating to investing activities
Sub-total of cash inflows
7,103,429.84
20,000,000.00
1,969,774.78
890,741.54
Cash paid to purchase fixed assets, intangible assets and other long-term assets
18,177,766.47
151,254.58
2,451,156.10
1,082,133.46
Cash paid for investments
20,000,000.00
57,169.68
Net increase in pledged loans
Net cash paid from obtaining subsidiaries andother business units
Cash paid relating to other investing activities
Sub-total of cash outflows
18,177,766.47
20,151,254.58
2,508,325.78
1,082,133.46
Net cash flows from investing activities
-11,074,336.63
-151,254.58
-538,551.00
-191,391.92
III. Cash flows from financing activities
Cash received from absorbing investment
Including: Cash received by subsidiaries from increase in minority interests
Cash received from borrowings
212,000,000.00
319,000,000.00
119,000,000.00
Cash received from issuing debentures
Other cash received relating to financing activities
Sub-total of cash inflows
212,000,000.00
319,000,000.00
119,000,000.00
Cash repayments of borrowings
361,140,000.00
472,369,343.34
235,000,000.00
Cash payments for interest expenses and distribution of dividends or profits
21,712,828.47
36,211,928.38
2,459,239.50 1920
Including: Cash payments for dividends or profits to minority shareholders of subsidiaries
Cash payments relating to other financing activities
4,132,926.00
2,326,312.50
Sub-total of cash outflows
386,985,754.47
510,907,584.22
237,459,239.50
Net cash flows from financing activities
-174,985,754.47
-191,907,584.22
-118,459,239.50
IV. Effect of foreign exchange rate changes on cash and cash equivalents
-91,195.94
-123.92
-681.37
-19.06
V. Net (decrease)/increase in cash and cash equivalents
-251,655,446.06
230,958.74
375,201,888.83
-5,255,701.55
Add: Cash and cash equivalents at beginning of year
830,055,588.25
2,539,358.76
271,708,727.86
7,802,612.88
VI. Cash and cash equivalent at end of year
578,400,142.19
2,770,317.50
646,910,616.69
2,546,911.33
4.4 Auditor’s report
Auditor’s opinion: un-audited
Board of Directors of
Shenzhen Properties & Resources Development (Group) Ltd
25 Oct. 2010
