(000029 SHENSHENFANG A 200029 SHENSHENFANG B)
Shenzhen Special Economic Zone Real Estate & Properties
(Group) Co., Ltd.
Annual Report 2009
(B share)
April 20, 20102
Section I Important Notes and Contents
The Board of Directors, the Supervisory Committee as well as directors, supervisors and
senior executives of Shenzhen Special Economic Zone Real Estate & Properties (Group)
Co., Ltd (hereinafter referred to as “the Company”) hereby ensure that there are no false
records, misleading statements, or significant omissions in the materials of this report,
and will assume individual and joint responsibilities concerning the authenticity, accuracy
and integrity of its contents.
None of Directors, Supervisors or Senior Executives can’t confirm the authenticity,
accuracy and integrity of annual reports’ contents or had any objections. All Directors of
the Company attended the Board Meeting.
Chairman of the Board Zhou Jianguo, person in charge of accounting work Chen
Maozheng and person in charge of accounting firm Chen Jincai hereby ensure the
authenticity and integrity of the Financial Report enclosed in the Annual Report.
The annual Report is written in both English and Chinese. In case of any discrepancy
between the two versions, Chinese version prevails.
Contents
Section II Company Profile-------------------------------------------------------------------03
Section III Summary of Accounting Highlights and Business Highlights--------------04
Section IV Change of Share Capital and Particulars about Shareholders---------------05
Section V Directors, Supervisors, Senior Executives and Employees-------------------07
Section VI Corporate Governance Structure------------------------------------------------11
Section VII Brief introduction to the Shareholders’ General Meeting------------------20
Section VIII Report of the Board of Directors----------------------------------------------21
Section IX Report of the Supervisory Committee-----------------------------------------33
Section X Significant Events------------------------------------------------------------------34
Section XI Financial Report-------------------------------------------------------------------37
Section XII Documents Available for Reference-------------------------------------------373
Section II Company Profile
(I) Legal Name of the Company:
In Chinese: 深圳经济特区房地产（集团）股份有限公司
In English: Shenzhen Special Economic Zone Real Estate & Properties (Group)
Co., Ltd.
Abbreviation in Chinese: 深房集团
Abbreviation in English: SPG
(II) Legal Representative: Zhou Jianguo
(III) Secretary to the Board: Chen Ji
Securities Affairs Representative: Feng Hongwei
Contact Address: 47/F, SPG Plaza, Renmin South Road, Shenzhen
Tel: (0755) 82293000-4718, 4715
Fax: (0755) 82294024
E-mail: spg@163.net
(IV) Registered Address: 47/F, SPG Plaza, Renmin South Road, Shenzhen
Office Address: 46/F-48/F, SPG Plaza, Renmin South Road, Shenzhen
Postal Code: 518001
E-mail: spg@163.net
Website: http://www.sfjt.com.cn
(V) Newspapers for Information Disclosure Designated by the Company:
Domestic: China Securities Journal
Overseas: Ta Kung Pao
Internet Website Designated by CSRC for Publishing the Annual Report:
http://www.cninfo.com.cn
The Place Where the Annual Report is Prepared and Placed: 47/F, SPG Plaza,
Renmin South Road, Shenzhen
(VI) Stock Exchange Listed with: Shenzhen Stock Exchange
Short Forms of the Stock: SHENSHENFANG A (Stock Code: 000029)
SHENSHENFANG B (Stock Code: 200029)
(VII) Other Information of the Company
Initial Registration Date: Jan. 8, 1980
Registration Place: Shenzhen Administration Bureau for Industry and Commerce
Registration Code of Corporate Business License: 440301103225878
Registration Code of Taxation: 440301192179585
Accounting Firms Engaged by the Company:
Name: Shenzhen Nanfang-Minhe Certified Public Accountants
Address: 7/F-8/F, Electronics Tech. Bldg., No. 2072, Shennan Middle Road,
Shenzhen
Section III Summary of Accounting Highlights and Business Highlights
Unit: RMB Yuan
(I) Profit indexes of current year
Total profit realized by the Company as of the year 2009: 36,180,282.30
Net profit: 20,217,383.624
Net profit after deducting non-recurring gains and losses: 13,119,244.63
Investment income: 5,793,517.26
Net cash flows arising from operating activities: -412,125,880.54
Net increase in cash and cash equivalents: 75,824,597.47
Items of non-recurring gains and losses
Unit: RMB Yuan
Items Amount Note (if applicable)
Gains and losses from disposal of non-current assets -5,907.20
Gains and losses from contingencies not relating to Company’s normal
business 775,000.00
Gains and losses from changes in fair value of transaction financial assets and
transaction financial responsibilities, and investment income from disposal of
transaction financial assets/responsibilities and financial assets available for
sale, excluding valid hedging business relating to normal operation.
223,407.93
Switching back impairment provisions for receivable accounts with single
impairment test 7,000,000.00
Other operating income and expense -853,571.80
Impact on income tax -40,789.94
Total 7,098,138.99 -
(II) Main accounting data and financial indices of the Company over the past three years
1. Main accounting data
Unit: RMB Yuan
2009 2008 Increase/decrease
year-on-year (%) 2007
Operating revenue 750,182,202.47 706,005,324.41 6.26% 845,127,526.44
Net profit 36,180,282.30 41,034,343.76 -11.83% 51,658,929.76
Net profit attributable to shareholders of
listed company 20,217,383.62 19,123,787.11 5.72% 39,007,992.54
Net profit attributable to shareholders of
listed company after deducting
non-recurring gains and losses
13,119,244.63 21,340,998.68 -38.53% 8,059,156.58
Operating income -412,125,880.54 -82,529,495.72 -399.37% -50,781,796.43
31 Dec. 2009 31 Dec. 2008 Increase/decrease
year-on-year (%) 31 Dec. 2007
Total assets 3,361,110,324.04 2,265,656,678.91 48.35% 2,302,724,936.60
Owners’ equity attributable to
shareholders of listed company 1,228,651,614.41 1,208,288,874.76 1.69% 1,188,146,644.01
Share capital 1,011,660,000.00 1,011,660,000.00 0.00% 1,011,660,000.00
2. Main financial indexes
Unit: RMB Yuan
2009 2008 Increase/decrease
year-on-year (%) 2007
Basic earnings per share (Yuan/share) 0.0200 0.0189 5.82% 0.0386
Diluted earnings per share (Yuan/share) 0.0200 0.0189 5.82% 0.0386
Basis earnings per share after deducting
non-recurring gains and losses (Yuan/share) 0.0130 0.0211 -38.39% 0.0080
Weighted average return on equity (%) 1.66% 1.60% 0.06% 3.35%
Weighted average return on equity after
deducting non-recurring gains and losses (%) 1.08% 1.78% -0.70% 0.69%
Net cash flow per share arising from operating
activities (Yuan/share) -0.41 -0.08 -412.50% -0.055
31 Dec. 2009 31 Dec. 2008 Increase/decrease
year-on-year (%)
31 Dec.
2007
Net assets per share attributable to shareholders
of listed companies (Yuan/share) 1.21 1.19 1.68% 1.17
Section IV Change of Share Capital and Particulars about Shareholders
I. Statement on changes of share capital
(I) The Company has completed the share merger reform on Feb. 15, 2006. In accordance
with share merger reform plan, there were 50,583,000 shares subject to moratorium were
released from trading moratorium on Feb. 26, 2007, and then 50,583,000 shares were
released on 14 Oct. 2008. On Mar. 26, 2009, all shares were released from trading
moratorium, and equity structure was adjusted as follows:
Before the change Increase/decrease (+/-) After the change
Amount Proportio
n
Issua
nce of
new
share
Bonus
shares
Capitaliz
ation of
public
reserve
Others Subtotal Amount Proportion
I. Shares subject to trading
moratorium 571,696,350 56.51% -571,696,350 -571,696,350
1. Shares held by state
2. Shares held by
state-owned corporation 571,690,800 56.51% -571,690,800 -571,690,800
3. Shares held by domestic
investors 5,550 -5,550 -5,550 0
Including: shares held by
domestic non-state-owned
corporation
0
Shares held by
domestic natural person 5,550 -5,550 -5,550 0
4. Shares held by foreign
investors 0
Including: shares held by
foreign corporation 0
Shares held by foreign
natural person 0
5. Shares held by senior
executives
II. Shares not subject to
trading moratorium 439,963,650 43.49% 571,696,350 571,696,350 1,011,660,000 100.00%
1. RMB ordinary shares 319,963,650 31.63% 571,696,350 571,696,350 891,660,000 88.14%
2. Domestically listed
foreign shares 120,000,000 11.86% 120,000,000 11.86%
3. Overseas listed foreign
shares
4. Others
III. Total shares 1,011,660,000 100.00% 1,011,660,000 100.00%
(II) Change of shares subject to moratorium
Unit: Share
Name of
shareholder
Shares subject to
moratorium at the
year-begin
Shares released
in current year
Shares
increased in
current year
Shares subject
to moratorium
at the year-end
Reason Date of
release
Shenzhen
Investment 571,690,800 571,690,800 0 0 Implementing the
commitment on releasing 26 Mar. 20096
Holdings
Corporation
from moratorium according
to share merger reform
Total 571,690,800 571,690,800 0 0 － －
II. Issuance and listing of shares
1. Over the past three years as at the end of the report period, the Company never issued
shares or derivative securities.
2. On Feb. 26, 2007, 50,583,000 shares subject to moratorium held by Shenzhen
Investment Holding Co., Ltd., the only shareholder holding non-tradable shares, was
freed from the trading moratorium, taking up 5% of the total share capital of the
Company, 7.52% of the total shares subject to moratorium, as well as 14.93% of total
shares not subject to moratorium; on Oct. 13, 2008, Shenzhen Investment Holding Co.,
Ltd released 50,583,000 shares subject to trading moratorium, taking up 5% of total
capital share, 8.13% of total shares subject to trading moratorium, as well as 12.99% of
total shares not subject to moratorium. On Mar. 26, 2009, all shares of the Company were
released from trading moratorium and listed for trade.
3. The Company’s inner employees’ shares were listed for trading through approval
on Aug. 26, 1994. At present, the Company has no inner employees’ shares.
III. About shareholders
1. Number of shareholders and shares held by shareholders
Total number of shareholders 104,844
Particulars about shares held by the top ten shareholders
Name of shareholders Nature of shareholders Proportion Total shares held Shares subject to
trading moratorium held
Share pledged
or frozen
Shenzhen Investment Holdings
Corporation State-owned corporation 63.55% 642,884,262 0 0
China Power Investment
Corporation State-owned corporation 0.26% 2,602,101 0 0
Zhang Yong Domestic Natural person 0.19% 1,911,079 0 0
Qu Yanhong Domestic Natural person 0.15% 1,480,277 0 0
Li Qiaozhi Domestic Natural person 0.14% 1,447,000 0 0
Industrial and Commercial Bank
of China-CSI Smallcap (LOF)
Domestic
non-state-owned
corporation
0.13% 1,331,180 0 0
Fan Yuehong Domestic Natural person 0.11% 1,131,600 0 0
J.P.MORGAN WHITEFRIARS
INC. Foreign corporation 0.10% 1,034,300 0 0
Ju Xinru Domestic Natural person 0.09% 960,000 0 0
Liu Nan Foreign corporation 0.09% 884,700 0 0
Particulars about shares held by the top ten shareholders holding tradable shares
Name of shareholders Number of shares not subject to
trading moratorium held Type of share
Shenzhen Investment Holdings Corporation 642,884,262 RMB ordinary share
China Power Investment Corporation 2,602,101 RMB ordinary share
Zhang Yong 1,911,079 RMB ordinary share
Qu Yanhong 1,480,277 RMB ordinary share
Li Qiaozhi 1,447,000 RMB ordinary share
Industrial and Commercial Bank of China-CSI Smallcap
(LOF) 1,331,180 RMB ordinary share
Fan Yuehong 1,131,600 RMB ordinary share7
J.P.MORGAN WHITEFRIARS INC. 1,034,300 Domestically listed foreign share
Ju Xinru 960,000 RMB ordinary share
Liu Nan 884,700 RMB ordinary share
Explanation on associated
relationship or action-in-concert
among the above shareholders
Unknown
2. Controlling shareholder of the Company: Shenzhen Investment Holdings Co., Ltd is a
sole state-funded company limited, who was founded on Oct. 13, 2004 with a registered
capital of RMB 4.6 billion as well as legal representative Chen Hongbo. Its business
scope included: providing guarantees for municipal state-owned enterprises, management
of state-owned equity, and assets restructure reformation, capital operation and equity
investment of enterprises etc. The ultimate controller of the Company was Shenzhen
State-owned Assets Supervision and Administration Bureau, which was located at
Investment Building, Shennan Av., Futian District, Shenzhen, as well as the post code
518029.
The property right and controlling relationship between the Company and the actual
controller are as follows:
Section V Directors, Supervisors, Senior Executives and Employees
I. Basic information of directors, supervisors and senior executives
Name Title Sex Age
Beginning
date of office
term
Ending date
of office
term
Number of
shares held
at the
year-begin
Number of
shares held
at the
year-end
Reason
for
change
Payment
drawn from
the Compan
in the repo
period
(RMB’000
Whether draw
payment from
shareholder
company or
other related
units
Zhou Jianguo Chairman of the
Board Male 55 11 Feb. 2009 10 Feb. 2012 0 0 0.00 Yes
Chen
Maozheng
Director and
General
Manager
Male 46 20 Oct. 2009 10 Feb. 2012 0 0 7.20 No
Xu Zhenhan
Chairman of the
Supervisory
Committee
Male 56 11 Feb. 2009 10 Feb. 2012 0 0 40.90 No
Deng
Kangcheng Directors Male 42 11 Feb. 2009 10 Feb. 2012 0 0 32.00 No
Xia Guiying Directors Female 47 11 Feb. 2009 10 Feb. 2012 0 0 0.00 Yes
Wen Li Directors Female 40 8 Sep. 2006 10 Feb. 2012 0 0 0.00 Yes
Jiang Lihua Directors Female 46 11 Feb. 2009 10 Feb. 2012 0 0 0.00 Yes
Zong Dechun Independent
Director Male 68 28 Jun. 2004 27 Jun. 2010 0 0 3.60 No
Hou Liying Independent
Director Female 55 28 Jun. 2004 27 Jun. 2010 0 0 3.60 No
Zhou Hanjun Independent Male 40 26 Feb. 2008 10 Feb. 2012 0 0 3.60 No
Shenzhen Investment Holdings Co., Ltd.
The Company
Shenzhen State-owned Assets Supervision
and Administration Bureau8
Director
Wang Xiuyan Supervisor Female 48 11 Feb. 2009 10 Feb. 2012 0 0 0.00 Yes
Xiong
Xingnong Supervisor Male 52 28 Jun. 2004 10 Feb. 2012 0 0 18.70 No
Shi Chunrong Supervisor Male 54 11 Feb. 2009 10 Feb. 2012 0 0 25.00 No
Zhang Xuxi Supervisor Male 33 11 Apr. 2006 10 Feb. 2012 0 0 18.70 No
Yang Jiayong Deputy General
Manager Male 37 21 Aug. 2006 10 Feb. 2012 0 0 33.40 No
Teng Xianyou Deputy General
Manager Male 53 1 Dec. 2009 10 Feb. 2012 0 0 2.80 No
Nie Liming Deputy General
Manager Male 39 1 Dec. 2009 10 Feb. 2012 0 0 24.80 No
Chen Ji Secretary to the
Board Male 39 28 Jan. 2009 10 Feb. 2012 0 0 25.00 No
Guo
Hongzhuang
General
Manager Male 51 21 Aug. 2006 20 Oct. 2009 0 0 42.40 No
Luo Zichao Deputy General
Manager Male 49 21 Aug. 2003 20 Oct. 2009 0 0 27.60 No
Chen Junyi Supervisor Male 52 28 Jun. 2004 11 Feb. 2009 0 0 24.00 No
Total - - - - - 0 0 - 333.30 -
Note: Director Xia Guiying, Jiang Lihua and Wen Li, as well as supervisor Wang Xiuyan
held positions in shareholding units. For their positions and office term, please refer to
following text.
II. Main experiences of current directors, supervisors and senior executives
1. Zhou Jianguo was once: Person-in-charge of the Financial Teaching and Research
Office, Vice Director of the Accounting Division and Chief of the Adult Education
Division of Jiangxi University of Finance and Economics; Vice GM of Shenzhen
Zhonglvxin Industry Co., Ltd.; Chief of the Auditing Department, Chief of the Planning
and Finance Department and President Assistant of Shenzhen Trading Investment
Holding Co., Ltd., doubling as Chairman of the Board and Secretary of the Party
Committee of Shenzhen Commercial-control Industries Co., Ltd.; Chief of the Planning
and Finance Department and Vice GM of Shenzhen Investment Holdings Co., Ltd.. He is
now Vice GM of Shenzhen Investment Holdings Co., Ltd., as well as Secretary of the
Party Committee and Chairman of the Board of Shenzhen Special Economic Zone Real
Estate & Properties (Group) Co., Ltd.
2. Mr. Chen Maozheng once was: Manager Assistant of Shenzhen Guanghua Hollow
Glass Engineering Co., Ltd..; GM of Special Economic Zone Department of Shenzhen
SDG Information Co., Ltd.; Chairman of the Board of Directors of Shenzhen Special
Economic Zone Xinhua Town Co., Ltd.; Vice Manager of Shenzhen Residence Project
Development Co., Ltd.; Manager of Shenzhen Chengjian Industrial Development Co.,
Ltd.; Vice GM of Shenzhen Aokangde Petroleum Trading Group Co., Ltd.; Vice GM,
Vice Secretary of the Party Committee, Director GM of Shenzhen City Construction
Development (Group) Co.. And he is now Vice Secretary of the Party Committee and
director as well as GM of Shenzhen Special Economic Zone Real Estate & Properties
(Group) Co., Ltd.
3. Xu Zhenhan: once had been commander-level secretary in charge, 802 Regiment,
Capital Construction Engineer Corps; clerk, Vice Secretary of Discipline Inspection
Committee, director of the CPC Office, Secretary of Discipline Inspection Committee,
Vice Secretary of the CPC in Shenzhen Mechanical Equipment Installation Company;
Vice Secretary of Discipline Inspection Committee of Shenzhen Construction Investment
Holdings Corporation. Vice Secretary in Discipline Inspection Committee of Shenzhen9
Investment Holdings Co., Ltd. From Jan. 2003 to Feb. 2009, he was director of the
Company and has been Chairman of the Supervisory Committee since Feb. 2009.
4. Deng Kangcheng: he was once technician of Shenzhen Luohu Material Trading Center;
Assistant Engineer, deputy section chief and section chief in Shenzhen Construction
Earthwork Mechanical Engineering Company; supervisor, vice director and director in
Discipline Inspection and Supervision Office of Shenzhen Construction Investment
Holdings Corporation; he acted as deputy director, director of the Office of Shenzhen
Investment Holdings Co., Ltd. From Jun. 2004 to Feb. 2009, he acted as supervisor of the
Company and acts as director, Vice Secretary of CPC and Secretary in Discipline
Inspection Committee of the Company since Feb. 2009.
5. Zhou Hanjun is a certified public accountant and certified tax agent. He once worked
as accountant and Deputy Section Chief of Financial Section in the Second People’s
Hospital of Neijiang, Sichuan; Chief accountant in Chongqing Metro Group Co., Ltd;
auditor in Shenzhen East Sea Certified Public Accountants. Now he was partner of
Shenzhen Guangxin Certified Public Accountants and Shenzhen Junxin Certified Tax
Agent Co., Ltd. He has been independent director of the Company since Feb. 2008.
6. Zong Dechun: once worked as director of the Political Department, 304 Regiment,
Capital Construction Engineer Corps; Vice Secretary of the CPC, Shenzhen No. 5
Construction Engineering Co., Ltd.; Division Chief of the HR Department and Chairman
of the Labor Union as well as Chairman of the Supervisory Committee of Shenzhen
Construction Group; Secretary of the Discipline Inspection Committee and Chairman of
the Supervisory Committee in Shenzhen Construction Investment Holdings Corporation;
in Jul. 2002, he retired; since Jun. 2004, he was engaged by the Company and held a
position of independent director
7. Hou Liying: from Aug. 1982 to Aug. 1984, acted as Assistant Economist, Development
& Design Research Institute, China National Offshore Oil Corp.; from Sep. 1984 till now,
associate professor, masters’ instructor, College of Management, Shenzhen University. In
Jun. 2004, she was engaged as the independent director of the Company.
8. Xia Guiying once was: Teacher of China Law Research Institute of China University
of Political Science and Law; Office Chief of the Committee of Legislative Affairs of the
Shenzhen People’s Congress; Manager of the Development Research Department,
Manager of the Legal Affairs Department, President Secretary, Vice Office Chief, Chief
Legal Adviser and Chief of the Legal Affairs Department of Shenzhen Investment
Management Co., Ltd.; Chief of the Legal Affairs Department and Director of the 1st
Enterprise Division of Shenzhen Investment Holdings Co., Ltd.; chairman of the Board
of Shenzhen Foreign Labour Service Co., Ltd. She has been director of the Company
since Feb. 2009.
9. Wen Li once was: an engineer in the Real Estate Development Department of
Shenzhen Zhenye (Group) Co., Ltd.; GM Assistant, Project Manager and Manager of the
Market Planning Department of Fantasia Investment Development Co., Ltd.; Vice
Manager and Deputy Chief of the Investment Department of Shenzhen Investment
Holdings Co., Ltd. She has been acting as director of the Company since Feb. 2009.
10. Jiang Lihua once was: an accountant of Zhejiang Lanqi Textile Machinery Factory; an
accountant of Shenzhen Construction Machinery Power Company; Assistant Accountant
of the Finance Department of Shenzhen Construction Group Company; an accountant,
senior accountant and Manager Assistant of the Finance Department of Shenzhen
Construction Investment Holdings Company; Vice Manager, Manager and Vice Chief of
the Finance Department of Shenzhen Investment Holdings Co., Ltd. She has been acting10
as director of the Company since Feb. 2009.
11. Wang Xiuyan once was: Deputy Chief of Property Rights Representative Business
Department, Deputy Office Chief and Chief of the Supervisory Committee, Business
Manager and Senior Business Manager of the Audit Department of Shenzhen Investment
Management Company; Audit Project Manager of the Audit Department of Shenzhen
Investment Holdings Co., Ltd. She has been acting as director of the Company since Feb.
2009.
12. Zhang Xuxi ever took the posts of Enterprise Law Adviser and Deputy Manager of
Law Affair Office in the Company. From Apr., 2006, he acted as the employee supervisor
of the Company.
13. Xiong Xingnong: Jan. 1982 to Jan. 1983, trainee, Party school, Guangzhou Railway
Administration; Jan. 1983 to Dec. 1995, office secretary, consultant, section chief,
Guangzhou Railway Administration; Jan. 1996 to Mar. 2004, office director of SPG; Mar.
2004 till now, Vice Director of Office of the Supervisory Committee. Since Jun. 2004, he
has been taking the post of supervisor of the Company.
14. Shi Chunrong ever took the posts of clerk, vice secretary of Youth League Committee
and secretary of Youth League Committee in Liannan County Science and Technology
Commission, director to Office for Economic Restructuring of Liannan County, director
to foreign economic and trade commission of Liannan County, secretary of CPC General
Branch of Liannan County, of director to executive office and assistant GM in Shenzhen
Non-Staple Foods Corporation, of vice secretary of CPC General Branch, secretary of
CPC General Branch, deputy GM and director in Shenzhen Lianhua Enterprise Co., Ltd.,
of vice secretary of discipline inspection commission, director to Office for Discipline
Supervision & Investigation, manager of Property Operation Department, director to
work departments of the Party Committee and discipline inspection commission in SPG.
Now he acts as vice secretary of the discipline inspection commission, member of CPC
Committee, director to Party-Masses Work Department and vice chairman of Labor
Union in the Company. He was elected as staff supervisor in 2009.
15. Yang Jiayong ever took the posts of Assistant Economist, Assistant of Manager of HR
Dept. in Shenzhen Tonge (Group) Co., Ltd, Director of the Office, Secretary of Party
General Branch, Manager of HR Dept. and Assistant GM in Shenzhen Cities
Construction Investment Development Corporation, Director of the Office and Assistant
GM in SPG, GM and Secretary of Party General Branch in Shenzhen SPG Tariff Free
Trade Co., Ltd. Since Jul. 2006, he has been acting as the post of Deputy GM of the
Company.
16. Teng Xianyou once was: Section Chief and Deputy Head of the No.2 Construction
Brigade of Shenzhen Municipal Engineering Corp.; Vice Manager and Manager of the
No.2 branch company of Shenzhen Municipal Engineering Corp.; GM Assistant and Vice
GM of Shenzhen Tonge Group Co., Ltd., doubling as GM of Shenzhen Municipal
Engineering Corp. And he has been Vice GM of the Company since Dec. 2009.
17. Nie Liming once was: an assistant engineer, an engineer, a vice division manager, a
division manager, a branch company manager and a factory chief of Shenzhen Kingon
(Group) Co., Ltd.; Chief of GM Office (Compliant Letter and Request Handling Office),
Office Chief for the Board of Directors of Shenzhen City Construction Development
(Group) Co.; and Office Chief and Manager of the Project Department of Shenzhen
Special Economic Zone Real Estate & Properties (Group) Co., Ltd.. And he has been
Vice GM of the Company since Dec. 2009.
18. Chen Ji once was clerk of the Comprehensive Office in Tonge Truck Transportation11
Company, secretary of the CPC Office in Shenzhen Construction Investment Holdings
Corporation and director of the CPC Office of Shenzhen Urban Construction Investment
Development Company; since Dec. 2002, he takes the posts of Secretary to the Board,
Director of the Board Office of the Company.
III. Annual remuneration
Annual payment system had been introduced into the rewards for the proprietors, whose
annual remuneration level and distribution regulation was implemented in compliance
with the relevant regulation of the State-owned Assets Supervision and Administration
Commission and municipal investment holdings company, the basic payment was RMB
20,000 per month and performance annual remuneration and encourage annual
remuneration would be distributed after approved. The remuneration level and
distribution regulation of Chairman of the Supervisory Committee of the Group
Company would be decided in line with the remuneration level of General Manager of
the Group Company that was: the basic payment was RMB 20,000 per month. The
remuneration level and distribution regulation of deputy leaders of the Group Company
was decided in line with the remuneration level as well as the performance appraisal of
the proprietors that was: the basic payment was RMB 15,000 per month.
Chairman of the Board of Directors Zhou Jianguo, directors Xia Guiying, Jiang Lihua
and Wen Li, as well the supervisor of the Company Wang Xiuyan didn’t draw their
payment from the Company.
Allowance for each independent directors for the year 2009 was RMB 36,000 (before
tax), and they received no other rewards besides this from the Company.
IV. About resign, engagement and dismissal
1. On 11 Feb. 2009, the Board of Directors and the Supervisory Committee was reelected.
Original Chairman of the Board Shao Zhihe, directors Peng Naidian, Xu Zhenhan and
original Chairman of the Supervisory Committee Zhuang Chuanghui as well as
supervisor Deng Kangcheng leaf off their posts due to expiration of office term. The
newly elected ones were Chairman Zhou Jianguo, directors Deng Kangcheng, Xia
Guiying, Jiang Lihua and Chairman of the Supervisory Committee Xu Zhenhan as well
as supervisor Wang Xiuyan and Staff supervisor Shi Chunrong.
2. On 20 Oct. 2009, the Board of Directors approved to dismiss Guo Hongzhuang from
post of General Manager and Luo Zichao from post of Vice GM, and engaged Chen
Maozheng as GM of the Company.
3. On 1 Dec. 2009, the Board of Directors elected Teng Xianyou and Nie Liming as Vice
GM of the Company.
V. Number of employees, professional composition, education background and retired
employees
At the end of 2008, the Company had totally 1,905 employees, of which 1,257 production
personnel, 51 sales personnel, 491 technicians, 48 financial personnel and 58
administrative personnel. Among them, 162 personnel are undergraduates or above, 221
personnel are holder of associate degree, 192 graduated from technical secondary school,
1330 from senior high school or below. The Company had 342 retirees.
Section VI Corporate Governance Structure12
1. Actuality of governance corporate structure of the Company
In the report period, the Company strictly accorded with requirements of Company Law,
Securities Law, Administrative Rules for Listed Companies and other laws and statutes,
in accordance with the requirements of the special campaign to Strengthen the corporate
governance form the CSRC and the rectification requirements after in-process checking
from the Shenzhen Securities Bureau, the Company continuously perfected its corporate
governance, standardized its operation. The actual situation of legal person governance
was in line with the requirements of the relevant normative documents.
(I) Preparations and holding of the shareholders’ general meeting and disclosure of
resolution of the meetings were normatively in line with Articles of Association and
Rules for Procedure of the Shareholders’ General Meeting; all shareholders were on an
equal position and could fully exercise their legal rights.
(II) Directors and the Board of Directors: power of decision-making was exercised
normally, preparations, holding and disclosure of resolution of the Board meetings were
normatively in line with the Articles of Association and Rules of Procedure for the Board
of Directors; all directors performed their obligations in an honest and diligence manner.
In order to perfect the decision-making mechanism of the Board, the Company
formulated working rules for special committees, namely strategy committee, audit
committee, nomination committee and remuneration & appraisal committee, and special
committees and their members all earnestly and diligently performed duties and actively
developed work, which guaranteed for scientific operation of the Board of Directors and
enhanced science of decision-making of directors. In Feb. 2009, the Company favorably
reelected the Board of Directors and the Supervisory Committee, and promoted ability to
perform duties through series of measures, for example, developing training for directors,
supervisors and senior executives.
(III) Supervisors and the Supervisory Committee: structure of the Supervisory Committee
was reasonable. The Supervisory Committee conducted the supervision and inspection
for the significant events of the Company strictly in accordance with the Rules for
Procedure of the Supervisory Committee, and exercised its supervision right effectively
and brought its supervision function into full play.
(IV) Manager level: the manager level of the Company was fully responsible for the
production and management of the Company, other Senior Executives performed their
obligations in an honest and diligence manner. The manager level of the Company
implemented the resolution of the Board with efficient supervision and control.
(V) Information disclosures and transparency: the Board of Directors authentically,
correctly and completely developed information disclosure strictly according to relevant
laws and statutes as well as the Articles of Association of the Company. There was
neither correction on serious accounting mistake, nor supplement of serious omissions or
correction of performance forecast. In order to improve transparency of annual report, the
Company formulated Responsibility for Serious Errors in Disclosure of Annual Report to
further define responsibility of information disclosure and strengthen responsibility for
mistakes of information disclosure.
Meanwhile, the Company paid attention to communicate with investors, opened the
Company’s communication platform, performed the obligation of information disclosure
and could publish all significant information in true, accurate, complete and timely
manner.
II. Duty performance of independent directors13
(I) Presence of independent director at the Board Meeting
Name Times of meetings
should attended
Times of attendance in
person
Times of
entrusted voting
Times of absent from
on-the-spot meeting
Zong Dechun 9 8 1 0
Hou Liying 9 9 0 0
Zhou Hanjun 9 9 0 0
(II) Setup and perfection of relevant work system for independent directors and main
content as well as duty performance
In accordance with relevant provisions stipulated in the Company Law, Guideline
Opinion on Establishment of System for Independent Directors of Listed Companies and
Articles of Association, combined with actual work, the Company formulated Work
System for Independent Directors and Work System on Annual Report for Independent
Directors, which detailed qualification, engagement and change, rights exercised and
duty performed as well as specific responsibilities and obligations in progress of
preparation and disclosure of annual report.
In the report period, independent directors of the Company was in line with requirements
in laws and statutes as well as Articles of Association, earnestly performed duties,
analyzed professionally and expressed independent opinion cautiously when the
Company made significant decision-making, and played an important role in normative
operation.
III. The Company was independent from the controlling shareholders in business,
personnel, assets, organization and financing of the Company, possessed independent
operation capabilities facing market.
(I) In respect of business, the Company possessed independent production, supply and
sales system;
(II) In respect of personnel, the Company was absolutely independent in management of
labor, personnel and salaries from the controlling shareholders. All the senior executives
of the Company took no office title concurrently and drew no remunerations from the
Shareholder Company.
(III) In respect of assets, the Company possessed independent and integrated assets and
the property of the Company is transparent.
(IV) In respect of organization, the Board of Directors and the Supervisory Committee
operated independently. There existed no superior-inferior relationship between the
controlling shareholder and its function department and the Company.
(V) In respect of finance, the Company has independent financial department,
independently accounted and paid taxes according to the law. The Company established a
complete accounting system, finacial accountng system and financial administrative
systems. The Company opened independent bank accounts.
IV. Establishment and perfecting of internal control
(I) Summary on internal control
In 2009, with effort of the Board of Directors and managements and according to
provisions in the Company Law, Securities Law, Rules for Listing Shares in Shenzhen
Stock Exchange and Articles of Association, the Company basically set up a set of
completed internal control system covering governance level to all business process,
strengthened management on internal control and risks, and formulated programming and
work plan on overall risks management system. Firstly, the Company perfected corporate14
governance structure, standardized work of the Shareholders’ General Meeting, the Board
of Directors, the Supervisor Committee and operating group. In 2009, the Company
further perfected operating mechanism of the Shareholders’ General Meeting, the Board
of Directors and the Supervisor Committee, revised rules for procedures and strengthened
financial management and accounting calculation. Audit Committee, Strategy Committee,
Remuneration & Appraisal Committee and Nomination Committee under the Board of
Directors operated normatively and formed normative operating mechanism with core of
the Board of Directors. Governance level formed decision-making mechanism of
“reasonable division of labor, definite authorization, clear responsibility and right and
scientific management”, and clarified responsibilities and rights of the Board of Directors,
the Supervisory Committee and operating team. Secondly, the Company perfected control
system and business progress combined with real estate industry and actuality of the
Company, combed authority of examination and approval, standardized all links of
production & operation, investment management, risk control and information disclosure,
and effectively actualized internal control.
(II) Setup and perfection of internal control
1. Particulars about corporate governance
In accordance with the Company Law, the Articles of Association as well as other
regulations on normative operation for listed companies, the Shareholders’ meeting, the
Board of Directors and the Supervisory Committee as well as operating team set up
relevant systems and operating process in decision-making, implementation and
supervision. There are 9 members of the Board of Directors, of which 3 ones are
independent directors operating according to Rules for Procedure of the Board of
Directors and responsible for the Shareholders’ Meeting; there are 5 supervisors, who
operates according to Rules for Procedure of the Supervisory Committee and are
responsible for shareholders’ meeting; 4 managers executed resolution of the Board
Meeting and operates according to Work Rules for General Manager. There are Strategy
Committee, Nomination Committee, Remuneration & Appraisal Committee and the
Audit Committee under the Board of Directors, and all committees formulated and
executed special rules and supported decision-making of the Board of Directors; of which
the Audit Committee was responsible for execution and supervision on internal control.
In 2009, the Company revised and perfected Rules for Procedure of the Board of
Directors, Rules for Procedure of the Supervisory Committee, Work Rules for General
Manager, and the governance level formed operating mechanism of “the Board of
Directors make decision, operating team executes and the Supervisory Committee
supervise”, realized democratic discussion, independent responsibility, normative
operation and harmonious work together. All decisions were more democratic, scientific,
normative and public, and promoted unity and accordance.
2. Organizational structure
Shareholders’ General Meeting
The Board of Directors
Management Leader
The Supervisory Committee
Audit Committee
Strategy Committee
Remuneration & Appraisal Committee15
The Company set up specific internal audit organization-Audit Supervisor Department,
which was responsible for audit on supervision, holding a post, annual operating index of
subsidiaries, operating management of Cause Department as well as management on
decision-making and operating supervision. Audit Supervisor Department has 4 personnel
in service, of which 3 ones are professional auditors qualified with rich experience in
financial and project audit.
Main business management modes are headquarters, functional departments, Cause
Departments, Project Department and branches. Business development of headquarter of
the Company was supported by planning & design department, cost control department
and project management department, charged by project department and subsidiaries, and
project departments in other place operated with branches and combined with
independent corporation.
Expert review Team
Shenzhen Special Economic Zone Real Estate (Group) Guangzhou Real Estate Co., Ltd (100%)
Shenzhen Property Management Co., Ltd. (100%)
Shenzhen Petrel Hotel Co., Ltd. (100%)
Shenzhen SPG Longgang Development Co., Ltd (100%)
Shenzhen SPG Mini-bus Rent Co., Ltd. (100%)
Shenzhen Huazhan Construction Supervision Co., Ltd. (100%)
Secretariat of the Board
Office
Party-masses Work Department
Human Resource Department
Planning Finance Department
Audit Supervisor Department
Enterprise Investment Management Dept
Design Department
Property Management Department
Engineering Technology Department
Cost Control Department
Shenzhen Zhentong Engineering Co., Ltd. (100%)
Xin Feng Property Co., Ltd (100%)
Great Wall Estate Co., Inc (70%)
Stock Participant Enterprises
Xin Feng Enterprise Co., Ltd. (100%)16
3. Human resource
After finished reformation in labor, human resource and remuneration, the Company
optimized and reallocated positions and staff of all departments with principle of
“two-way choice” and “staff following affairs”, revised and perfected 8 systems, namely
Administrative Measures on Work Attendance of Staff, Administrative Measures on
Vacation of Staff, Remuneration Schedule, Provisional Rules for Human Resource
Management, Provisional Rules for Administration on Social Insurance, Provisional
Ruled for Management on Secondment of Staff from Headquarters, Provisional Rules for
Administration on Assignment of Staff and Administrative Measures on Performance
Appraisal of leaders. The Company appraised work performance of departments and
enterprises with key events and operating index, linked performance and payment up
with use of personnel to appraise and access scientifically, and give prominence to
professional and dedication. In 2009, the Company thrice organized public engagement
of 8 posts as leaders of Shantou Branch, Office Director of the Company, Manager of
Property Management Department and Management of Finance Department in property
company, organized staff in Development Management Department to take part in the
engagement, appointed and assigned a batch of excellent professional talent to the first
line of development, and further enriched power of project development.
5. Enterprise culture
The Company considered establishment of enterprise culture as important support to
enhance enterprise cohesion and team spirit all the time, insisted human-oriented view,
made effort for realization of self-value of staff and development chance for enterprise,
and paid attention to stability, accordance and improvement of staff.
In 2009, the Company strengthened to establish new enterprise culture, proposed
consciousness of “Professional, Dedication, Unity and probity”, carried forward
performance culture and excellent culture of keeping improving, and paid attention to
education on concept and professional training; the Company improved performance
management, organized to revise measures for performance appraisal, perfected
estimation index, optimized appraisal process, focused on cooperation among
departments staffs, as well as team spirit, harmonize interests among individual, team and
the Company, appraisal performance with key events and operating index, linked
performance and remuneration up with engagement of staff, proposed excellent staff with
good performance, and encouraged to do more useful things successfully; the Company
paid attention to engagement of talent, formulated Provisional Rules for Election and
Engagement of Leaders of Subordinate Company and Medium leasders of Headquarters,
clearly stipulated principle of both ability and moral integrity, diligent and honest &
upright, recognized by mass, paying attention to actuality and choosing excellent staff,
insisted public engagement.
6. Important activities of internal control
(1) Implemented internal control system. The Company implemented management and
control on financial management, internal audit, human resource, supervision and
management on property right, overall budget, investment and actualization of projects,
strengthened management on subsidiary companies in line with principle of limited
decision-making power, examined, guided and supervised business development of all
subsidiaries, and carried out general estimation according to target responsibility
documents.
(2) Control on Authorization. The Company executed authorization of operating and
managing business according to grade. The Company combed 179 projects of business17
for review and approval enclosing with key business, formulated Statement on Authority
of Examination and Approval, defined decision-making procedures, handling process and
authority of examination and approval, confirmed responsibilities and rights of sponsors,
checker and authorizer for each business, prepared with tables, and standardized with OA
system, which was not only good for improvement of efficiency, but also public and
transparence, so was easy to supervise and account responsibility.
(3) Risk control and assessment. At complete analysis, main business of the Company
chose to bear relevant reasonable risks according to expected income of business and
undertake ability. In 2009, the Company prepared and executed Programming and Work
Plan on Establishment of Overall Risk Management System of Shenzhen Special
Economic Zone Real Estate & Properties (Group) Co., Ltd, struggled for basic setup
overall risk management system with perfect organization system, standard and strict
internal control, general and scientific risk management strategy, and sensitive response
to all risks with timely and effectively counter measure, and established culture of risk
management.
(4) Audit supervision and examination. The Company enhanced internal audit; in this
year, the Company revised and perfected Work Rules for Internal Audit, which made
internal audit be more system and standard; strengthened audit and supervision on
significant events such as operation statutes and income and expenditure of finance of
operating units and business department. The Company finished audit and check on
operating budget, performance appraisal and remuneration management of 5 subordinate
enterprises, 2 project departments and property operating departments in 2008;
respectively checked and verified distribution of remuneration, welfare and allowance of
4 enterprises in 2008; completed specific audit on operating situation and disposal of
historical problems of Shenzhen Petrel Hotel Co., Ltd and international undergrounded
parking lot from 2006 to Feb. 2009; completed specific audit on operating benefit and
implementation of internal control of three self-operated and one contract parking lots
belonging to property management company in the past three years from 2006 to 2008,
proposed auditing advice aimed at problems discovered in progress of audit, and required
audited units recertified with term to develop follow-up audit; completed audit on income
and expenditures of Shantou Project Department from 2006 to 2008, and proposed advice
of term recertification ; completed audit on operating benefit and cost control of the 2nd
phase project of Guangzhou Project Department from 2005 to 2009; examined
implementation of recertification measures for parking lot of property management
company and Shantou Project Department in 2009 as scheduled, and the reformation
gained outstanding effect; examined procedure and execution of economy contract.
(5) Tender and bidding control. The Company set up special leader team and supervisor
team for tender and biding, formulated process of execution of Administrative Measures
on Tender and Bidding Projects and Administrative Measures on Engagement of Agency,
as well as relevant authority of review and examination and business progress, strictly
implemented system and process of preview on qualification of contractor, choose of
biding units, assessment on technical bidding and commercial bidding, as well as
execution of contract, engaged agency with principle of public and transparency, and
supervisor leader supervised all process of tender and bidding.
(6) Information communication. The Company paid attention to communication of
internal and external information, formulated and implemented Administrative Measures
of Informatization, System on Report of Significant Information and Rules for Archives
Management, set up system on GM’s Meeting and System on Specific Meeting so that all18
grades of the Company know trends of the Company and ensured successful execution of
the order.
(III) Key activities on business control
1. Management on development of real estate project
In 2009, the Company developed perfection of detailed business system, reduced links of
review and approval according to relevant requirements, and basically completed revise
and perfection of administrative system of all departments. The Company carried forward
investigation on establishing informatization of management on real estate enterprises.
The Company will introduce integration system on information management of real
estate through optimization of process and perfection of work standard, and further
promote management of main business of real estate. Control system and business
progress of the Company clearly defined purchase of land resources and project
exploitation, that is, business development is discussed by real estate deliberation team,
programming and development team, tender and bidding team, cost team and marketing
programming and deliberation team, harmonize work rules and process by functional
departments, implemented by project department and supervised by project management
department, which ensured successful development of projects.
The Company adjusted and optimized control system on project development according
to strategic planning on development, land reserves, market distribution and product
positioning, and it aimed at integration of resource, promotion of efficiency and control
risks. Firstly, adjusts organization and optimize function of Real Estate Development and
Management Department in headquarters, and will integrate 4 departments into 3, define,
optimize and perfect duties of departments and business system. Secondly, in view of
operation, balance of tax, risk prevention and control and supervision of project
department of headquarters, the Company set up subsidiaries and project departments
respectively, Shenzhen SPG Longgang Development Co., Ltd was responsible for
exploration of Longang Project Department, keep Dongle Project Department, cancelled
Guangzhou Project Department and set up Guangming Project Department; redefined
duties of all project departments and declared that all project departments are subject
responsible for project development. Thirdly, Shantou Project Department was trial to
explore control mode of project development in other place. Combined with actuality, the
Company adjusted structure of Shantou Project Department, authorized Shantou Branch
to in charge of operation and management of real estate development and other business
in east of Guangdong, and relevantly formulated control system on project development
in other place. The Company researched and formulated Administrative Measures for
Shantou Branch and Rules for Organization Chart and Human Resource Management of
Shantou Branch. The Company formulated control mode for projects in other place,
roundly teased management authority of projects in other place, adjusted organization
chart of subsidiaries and parent company, combined with actuality of the Company,
founded Shantou Branch and defined authority of duties of the Company and project
department in other place, which made good cooperation between department in other
place and function departments of headquarters and improved work quality and
efficiency.
2. Significant investment
In Aug. 2009, the Company take part in the bid for use right of two lands in Guangming
New District, which was bundling sold by Urban Planning, Land and Resources19
Commission of Shenzhen Municipality with nominal quotation. Before the bid, the
Company organized specific team and engaged agency to research feasibility, and won
the two lands in Guangming New District on 28 Aug. 2009 according to relevant rules for
supervision on state-owned assets and requirements of decision-making of significant
events of listed company, through a series of normative procedure for internal
decision-making and approval from the shareholders’ general meeting. The Company
raised capital to pay RMB 600 million as initial payment for lands; new land reserves
optimized assets structure of the Company, improved operating status and release status
of lack of land resource of the Company.
3. Lease business
The Company formulated and executed Administrative Measures on Tendering and
Bidding for Lease of Property and Work Duties of Property Department as well as
business process, clearly defined control node of rent of office building, shop and
residence governed by the Company, contract, receipt of rent and customer service, and
ensured development of lease. In 2009, the Company roundly strengthened responsibility
system, strictly executed authority of examination and approval, fulfilled execution of
clauses in contract, paid attention to market analysis, strengthened customer service,
widened lease strategy, effectively took advantage of agency, enhanced communication
with government ministry and industry committee, such as management office, lease
station and street office, settled disputes in progress of lease, lease registration,
amendment and operation of equipments as well as disposal of complain of customers in
time, and ensured realization of task index. Therefore, in 2009 with complicated lease
environment and under guidance of leader, operating status of lease was good, effect was
obvious, and rent ratio and recall ratio picked up along with further fulfillment of
measures.
4. Cost control
The Company prepared operating process including Preparation Process of Target Cost,
Process of Project Budget and Settlement, Process on Management of Project Cost and
Resolution Chart on Target Cost, and cost control activities carried through the whole
process of project development. The Company focused on cost control, earnestly and
carefully carried out budget and settlement process of project, strictly implemented
process on tender and bidding, enhanced contract management, perfected systems on cost
control and adjusted process on budget and settlement of project. In 2009, the Company
formulated first draft of Administrative Measure on Target Cost, Administrative Measures
on project site visa, Administrative Measures on Project Contract, Administrative
Measures on Project Budget and Settlement and Administrative Measures on Project
Tender and Bidding as well as fitting tables. Fulfillment of the above five administrative
measures will effectively set up cost control system carrying through the whole process
of project development.
5. Management of safety production
The Company set up leader team of safety production, and Project Management
Department is responsible for safety production of all projects and other business,
formulated systems and process concerning Measures for Safety Management, Process
on Audit of Project, Assessment Table on Safety Image and Assessment Table on Control
of Quality of Project, and assured that there was no serious accident concerning safety
production. The Company did well in safety production to ensure no accidents. In 2009,
the Company earnestly carried out “The Year of Safety Production” proposed by
Shenzhen Safety Commission Office, Shenzhen State-owned Assets Supervision and20
Administration Bureau and Shenzhen Investment Holdings Co., Ltd as well as leaders of
the Company, successively formulated planning on year of safety production in May
2009, developed examination on safety production to prevent and reduce various
accidents. In 2009, there was no accident concerning safety in the Company.
6. Financial management
The Company strictly executed accounting standards uniformed by the state, enhances
basic work of accounting, paid attention to standardize financial management and control
financial risks, formulated and strictly implemented Administrative Measures for
Financial Management and preparation and process of management on budget, funds for
project, applying for reimbursement, callback of sales income and payment. The
Company focused financial risks, all investment and expenditures were controlled within
budget, paid attention to business development and balance between bank loans and
ability of payment, assets liabilities were reasonable and financial risks were under
control.
7. Related transaction
The Company fulfilled decision-making procedures on related transactions strictly in
accordance with Rules for Listing Shares in Shenzhen Stock Exchange, Articles of
Association as well as other regulations concerning related transaction. In Sep. 2009, the
principal shareholder of the Company, Shenzhen Investment Holdings Co., Ltd, provided
loan of RMB 400 million with term of being 8 months, which was approved by
independent directors and issued independent opinion, and implemented relevant
decision-making procedures and executed after disclosed.
8. External guarantee
The Company paid attention to risk control and decision-making procedures of external
guarantee, and implemented procedures of decision-making according to Circular on
Regulating External Guarantee of Listed Companies, Rules for Listing Shares in
Shenzhen Stock Exchange and Articles of Association. The Company approved
resolutions made at the Board meeting and the Shareholders’ meeting during Aug. to Sep.
2009 in line with standard decision-making procedures, approved by independent
directors with independent opinion that the Company provided guarantee for loan of
RMB 300 million for Shantou Hualin Real Estate Development Co., Ltd.
9. Capital occupation by principal shareholder
The Company focused on protection of interests of its own and all shareholders, and there
was no capital occupation by principal shareholder.
10. Information disclosure
The Company implemented information disclosure strictly in line with Rules for Listing
Shares in Shenzhen Stock Exchange and Articles of Association, and formulated System
on Internal Report of Significant Information and Administrative System for Information
Disclosure Affairs. There are no false records, misleading statements, or significant
omissions in the materials of this report, and the information disclosed are authentic,
accurate and complete.
(IV) Shortage of internal control and perfection plan
It is long-term work for the Company to strengthen internal control. Although internal
control and risk control of the Company was basically perfect, there was some problems
in system, which caused links of control was incompact and lack of fine. In 2009,
information report to Shenzhen State-owned Assets Supervision and Administration
Bureau and Shenzhen Investment Holdings Co., Ltd didn’t follow requirements from21
CRSC Shenzhen Bureau, and was criticized by Shenzhen Bureau in Jan. 2010. Therefore,
the Company will perfect information report to ensure compliance with requirements and
equality and fair to all investors. Meanwhile, the Company will in line with Basic
Standard for Enterprise Internal Control issued by Ministry of Finance together with
other ministries and Guidelines for Internal Control of Listed Companies from Shenzhen
Stock Exchange, earnestly carried out Programming on Establishing Overall Risk
Management System and Work Plan of Shenzhen Special Economic Zone Real Estate &
Properties (Group) Co., Ltd, strengthened internal control and prevention of risks,
improved control efficiency and continually promoted corporate governance of the
Company.
(V) Self-appraisal of the Board of Directors on internal control
The Board of Directors of the Company believed that the Company established perfect
internal control system in decision-making, execution and supervision as well as all key
links, systems were reasonable and effective, and internal control and risk prevention was
good. Internal control and management system need continuous perfection and
supplement due to uncertainty of macro economy and industry development, as well as
continual renew of policies and statutes. Therefore, the Company will continuously
perfect internal control in compliance with new regulations and guidelines to assure that
corporate governance was standard, internal control was effective, management
efficiency was improved and risks were under control.
(VI) Independent opinion of independent directors concerning self-appraisal on internal
control
We reviewed self-appraisal on internal control 2009 by the Board of Directors, now the
appraisal opinions are as follows: in 2009, taking the advantage of the special campaign
to further strengthen the corporate governance, the Company revised and perfected the all
kinds of rules of internal control; aiming to strengthen internal control, the Company
perfected the management and control system and business procedure, let the internal
control system covered the all operation parts and links of the Company basically,
defended, found and rectified the deviation which was possible to happen in the process
of operation, safeguarded the rights and benefits of all shareholders, confirmed the
accounting records and accounting information’ s trueness, accuracy and timeliness. The
key activities of internal control operated in conformity with the relevant regulations of
internal control in the Company. The self-evaluation of internal control was in line with
its actual situation.
V. Push normative corporate governance of the Company
The Company actively pushed corporate governance according to relevant requirements
and enhanced to complete all recertification. Details were as follows:
(I) In 2009, the Company revised the Articles of Association, Rules for Procedure of the
Board of Directors and Work Rules for General Manager, and strengthened normative
operating mechanism of corporate governance with core of the Board of Directors.
In order to enhance internal information management, do well in secrecy of inner
information, uphold principle of equality and protect equal benefit, the Company
established Administrative System on Inner Information and Insider, and reported list of
person who know non-public information to Shenzhen Bureau each month. Directors,
supervisors and senior executives as well as other insiders should control information and22
mustn’t betray inner information, nor carry out inner transaction or handle price of stock
of the Company with others. Any insider who betrayed inner information with breach of
regulations, caused serious damage to the Company and constituted a criminal offence
will transfer to the judicatory and claimed against for criminal responsibility.
(II) In 2009, information report to Shenzhen State-owned Assets Supervision and
Administration Bureau and Shenzhen Investment Holdings Co., Ltd didn’t follow
requirements from CRSC Shenzhen Bureau, and was criticized by Shenzhen Bureau in
Jan. 2010. Therefore, the Company will perfect information report to ensure compliance
with requirements and equality and fair to all investors.
(III) Aimed at problems that submitting report on property representative to controlling
shareholder caused lack of independence, the Company has completed recertification and
stopped executing property representative report system.
Section VII Brief introduction to the Shareholders’ General Meeting
The 17th Shareholders’ General Meeting (namely the Annual Shareholders’ General
Meeting for the year 2008) was held at the meeting room of the Company at 9:30 on Jun.
26, 2009, at which examined and approved the Working Report of the Board of Directors
2008, Working Report of the Supervisory Committee 2008, Profit Distribution Plan 2008,
Annual Report 2008, Proposal on Making Good Deficit of Previous Years with Surplus
Reserves, Financial Budget Plan for 2009, Proposal on Reengagement of Accounting
Firms, Proposal on Revising Articles of Association, Proposal on Revising Rules for
Procedure of the Board of Directors and Proposal on Revising Rules for Procedure of the
Supervisory Committee, and shaped relevant resolutions. Resolutions at the meeting were
published in China Securities Journal, Ta Kung Pao and website
http://www.cninfo.com.cn designated by CSRC on Jun. 27, 2009, and the Board of
Directors implemented the resolutions strictly with the authority under the shareholders’
general meeting. In the report period, there was neither profit distribution plan or
capitalization plan, nor allotments or issuance of new shares.
The 1st Provisional Shareholders’ General Meeting 2009 was held at the meeting room of
the Company on Feb. 11, 2009, at which reviewed and approved Proposal on Election at
Expiration of Office Term of the Board of Directors and Proposal on Election at
Expiration of Office Term of the Supervisory Committee, and shaped relevant resolutions.
Resolutions of the meeting was published in China Securities Journal, Ta Kung Pao and
website http://www.cninfo.com.cn designated by CSRC on Feb. 12, 2009, and the Board
of Directors implemented the resolutions strictly with the authority under the
shareholders’ general meeting.
The 2nd Provisional Shareholders’ General Meeting 2009 was held at the meeting room of
the Company on Aug. 31, 2009, at which reviewed and approved Proposal on
Formulation of Engagement System for Accounting Firms, Proposal on Providing
Guarantee for Shantou Hualin Real Estate Development and Proposal on Summiting to
Shareholders’ General Meeting for Authorization of the Board of Directors on
Decision-making, and shaped resolutions. Resolutions at the meeting were published in
China Securities Journal, Ta Kung Pao and website http://www.cninfo.com.cn designated
by CSRC on Sep. 1, 2009, and the Board of Directors implemented the resolutions
strictly with the authority under the shareholders’ general meeting.
The 3rd Provisional Shareholders’ General Meeting 2009 was held at the meeting room of
the Company on Sep. 22, 2009, at which reviewed and approved Proposal on Submitting23
Purchase of Land to Shareholders’ General Meeting for approval and shaped resolutions.
Resolutions at the meeting were published in China Securities Journal, Ta Kung Pao and
website http://www.cninfo.com.cn designated by CSRC on Sep. 23, 2009, and the Board
of Directors implemented the resolutions strictly with the authority under the
shareholders’ general meeting.
The 4th Provisional Shareholders’ General Meeting 2009 was held at the meeting room of
the Company on Nov. 5, 2009, at which reviewed and approved Proposal on Proposal on
Dismissal of post of directors of Mr. Guo Hongzhuang and Proposal on Election of Mr.
Chen Maozheng as Director of the Company, and shaped resolutions. Resolutions at the
meeting were published in China Securities Journal, Ta Kung Pao and website
http://www.cninfo.com.cn designated by CSRC on Nov. 6, 2009, and the Board of
Directors implemented the resolutions strictly with the authority under the shareholders’
general meeting.
Section VIII Report of the Board of Directors
I. Retrospect on overall operation during the report period
(I) Discussion and Analysis of the management
At the beginning of 2009, the Board of Directors and operating management leaders
reelected at expiration of office term. With influence of financial crisis, poor foundation,
weak brand image, serve lack of land reserves and situation that scale of main business
was small and distribution was unreasonable, managements of the Company lead all staff
strived for prosperity, eager to progress, overcame difficulties and paid attention to main
business, actively settled historical problems, elaborately plan to increase land reserves,
made effort on establishment of new enterprise culture, build management team with high
quality and profession, made effort for enhancing core competition of the Company; all
measures for promotion of development and reformation was effective, and formed new
accordance situation with stable development.
In 2009, the Company achieved a total profit of RMB 36.18 million, representing a
year-on-year decrease of 11.83%; and a net profit attributable to shareholders of the listed
Company reaching RMB 20.22 million, up by 5.72% as compared with that of last year.
Total profit decreased mainly due to increase of financial expenses and a year-on-year
decrease of 4.21% of comprehensive gross profit rate. To be specific, gross profit rate of
the real estate business was down by 3.2%, mainly because the subordinate enterprise
Shantou Hualin Real Estate Development Co., Ltd. mainly sold Phase Ⅺ medium-rise
buildings in the report period while it mainly sold villas with a higher gross profit rate
last year; Lease prices dropped as compared with that of last year due to the financial
crisis and gross profit rate of the lease business decreased by 6.6% due to a fixed lease
cost.
Ⅱ. Scope and status of main businesses
The Company belongs to the real estate industry and is engaged in development of real
estate and sale of commercial houses, lease and management of properties, house
decoration, retail and trade of commodities and hotel and catering service.
1. Incomes and profits of main businesses classified according to industries
Unit: (RMB) Ten thousand
Industry Operating income Operating cost Operating gross profit rate24
Amount
Increase/decrease
from last year
(%)
Amount
Increase/decrease
from last year
(%)
Gross
profit rate
(%)
Increase/decrease
from last year
(%)
Real estate 32,120 0.90 16,857 7.45 47.52 -3.20
Construction 25,602 28.88 24,335 28.71 4.95 0.13
Lease 6,289 -7.73 3,625 4.20 42.37 -6.60
Property
management 8,496 -6.21 6,930 -7.31 18.44 0.97
Hotel and
other services 2,511 -17.06 1,686 -4.50 32.84 -8.83
Total 75,018 6.26 53,433 12.93 28.77 -4.21
2. Incomes and profits of main businesses classified according to regions
Unit: (RMB) Ten thousand
Operating income Operating cost Operating gross profit
Region
2009 2008 2009 2008 2009 2008
Domestic:
Guangdong
Province
72,782 70,431
52,677 47,133 20,105 23,298
Overseas: 2,236 169 756 182 1,480 -13
Total 75,018 70,600 53,433 47,315 21,585 23,285
Ⅲ. Business performance of main wholly-owned affiliated enterprises and holding
enterprises
Name of subsidiary Place of
incorporation
Registered
capital
(RMB Ten
thousand)
Business
nature and
scope
Balance of net
actual
investment in
subsidiary
(RMB Ten
thousand)
Equity
Total assets
(RMB Ten
thousand)
Net assets
(RMB Ten
thousand)
Operating
income
(RMB Ten
thousand)
Net profit
(RMB Ten
thousand)
Shenzhen Petrel Hotel Co.,
Ltd. Shenzhen 3,000 Hotel Service 3,000 100% 5,425 3,697 2,359 34
Shenzhen Property
Management Co., Ltd. Shenzhen 725 Property
management 725 100% 7,864 1,223 9,060 212
Shenzhen Zhentong
Engineering Co., Ltd. Shenzhen 1,000
Fixing and
maintenance
of projects
1,000 100% 4,838 937 25,872 82
Shenzhen Huazhan
Construction Supervision
Co., Ltd.
Shenzhen 800 Construction
supervision 800 100% 845 745 310 1
Shenzhen SPG Mini-bus
Rent Co., Ltd. Shenzhen 1,029 Rent of
mini-bus
1,029 100% 1,736 1,410 418 90
Xin Feng Property Co., Ltd Hong Kong HKD100
Investment
and
management
9,870 100% 70,806 3,431 20,022 2,209
.Great Wall Estate Co., Inc. USA USD50 Development
of real estate 11,122 70% 1,938 -8,631 86 8
Xin Feng Enterprise Co.,
Ltd. Hong Kong HKD100
Investment
and
management
66,358 100% 25,659 -41,582 3,284 2,864
Ⅳ. Main suppliers and customers25
Unit: (RMB) Ten thousand
2009 2008
Item
Sales
Proportion in total
sales
Sales
Proportion in total
sales
Total sales to top five
ustomers 4,725 6.30% 8,486 12.02%
Ⅴ. Problems and difficulties encountered in operation, as well as solutions thereof
1. Problems and difficulties encountered in operation
(1) There stilled remained a lack of land available for development and it was rather
difficult to solve project problems left over. It was unlikely to develop historical land in
the existing land reserve due to various reasons and it would need great efforts to solve
the said problem, which restricted development of the main business; No substantial
progress was made in the land transfer issue of the Longgang Project, it was rather
difficult to solve the land planning issue of the Donghu Dijing Community Project,
re-applying for construction of the Shantou Xin Feng Building Project moved on slowly,
and the Company was still striving for planning adjustment for the Jinhu Road Project, all
of which limited further development of the main business.
(2) The Company faced great pressure on short-term funds. After the Company had
acquired the land of the Guangming Project, pressure on short-term funds was building
up. Besides funds for normal development and construction, the Company also had to
pay RMB 600 million as the phase Ⅱ of land payment.
(3) Affected by the macroeconomic control, more uncertainties would be seen in the real
estate market. It was expected that in 2010, the government would strengthen its
macroeconomic control over the real estate market. As a result, the market situation
would become uncertain with greater market risk and unfavorable conditions for sale of
real estate.
(4) The brand image of the Company was not strong enough and the Company needed to
be more professional and improve its management capability. When developing projects
in the past, the Company was able to make a good profit due to its advantage in land cost
and the professional development ability was not considered especially important.
However, the Guangming Project was obtained all through market. Prices in the real
estate market were not expected to rise considerably in the coming years with greater
product homogeneity and fiercer market competition. As such, project profits mainly
depended on our own development professional capability and it would be a long-term
task for the Company to improve such capability.
2. In order to solve problems and overcome difficulties above, the Company was to adopt
the following countermeasures and solutions:
(1) The Company will work on new modes to obtain land resources in the new situation
by widely collecting information about land transfers and cooperation and enhancing
market researches so as to obtain new land resources in a timely and proper manner;
Meanwhile, considering some problems left over by projects, the Company will
strengthen communication with the government and try to solve problems concerning
land use and construction application.
(2) The Company will improve its overall management and use of capital, strengthen
cooperation with financial enterprises and expand financing channels; At the same time,
it will strengthen activation of stock assets and sale of inventory so as to obtain more26
funds inflows and ease the financial strain.
(3) The Company will strengthen its study on the macroeconomic situation and trends in
the real estate industry so as to cope with uncertainties brought by the government’s
macroeconomic control.
(4) The management system and operation flow of the Company will be improved by
formulating operation standards, establishing an integrated information system for real
estate development and construction and building a professional development and
management team. As such, the Company’s professional development capability will be
constantly improved.
VI. Investment
1. There was no raised proceed in the report period, nor was there any proceeds raised in
previous periods yet still used in the report period.
2. Significant Investment Projects with Non-Raised Proceeds
Unit: (RMB) Ten thousand
Name of project Investment
in project Progress of project Project earnings
Shui Yun Tian Ya
Garden and Ming
Garden
570.52
Construction drawing and
construction application
accomplished
Shantou Jinye Island
International Garden
5,808.82 In a certain state of development An income of RMB 200.22 million was
carried down for the report period.
North of Jinhu Road 31.91 In planning
Land of the New
Guangming District 120,000.00 Land newly increased this year,
which is in planning
Total 126,411.25
VII. Analysis on Financial Status and Operating Results in the report period
(I) Analysis on Financial Status
As at 31 Dec. 2009, total assets of the Company stood at RMB 3,361.11 million,
representing a year-on-year growth of 48.35%. The asset structure of the Company
became more rational with a larger land reserve and better asset quality. The proportion
of operating assets such as monetary funds, inventory and investing property in total
assets reached 91.59%, which indicated a sound financial status.
1. Comparison of main financial indicators with those of last year
Unit: (RMB) Ten thousand
Project 31 Dec. 2
009
31 Dec. 200
8
Increase/decreas
e rate (%) Notes
Total assets
336,110
226,566 48.35 Increase of inventory
Inventory
208,830
94,559 120.85
In Aug. 2009, the Headquarters of the Company
won bids for use rights of two land plots in the
New Guangming District, which increased
inventory by RMB 1.2 billion.
Investing
property 60,415 71,903 -15.98 Amortization, sale and reclassification due to
changed use in report period
Long-term
deferred
expenses
36
53 -30.80 Amortization of guest room decoration expenses in
report period
Short-term
borrowings
10,000
5,920 68.92 Short-term borrowings newly increased27
Accounts
payable
73,094
23,045 217.19
The Company obtained land use rights of the New
Guangming District Project and the remaining land
payment to the Urban Planning, Land and
Resources Commission of Shenzhen Municipality
was withheld.
Taxes and fares
payable
-878
225
In the advance sale of the Shantou Jinye Island
Project, 5% of the house prepayment was prepaid
as business tax.
Interest payable
2,469
789 212.98
Interest payable arising from unsettled land
payment for the New Guangming District Project
and from loans granted by Shenzhen Investment
Holdings Co., Ltd.
Non-current
liabilities due
within 1 year
22,961
1,046 Increase of long-term borrowings due in 2010
Long-term
borrowings
58,199
33,034 76.18 New increase in long-term borrowings from Bank
of Shanghai and Bank of Communications
2. Structure comparison of main financial indicators with those of last year
Unit: (RMB) Ten thousand
31 Dec. 2009 31 Dec. 2008
Items
Amount
Proportion
in total
assets (%)
Amount
Proportion
in total
assets (%)
Increased
percentage of
proportion in total
assets
Total assets 336,111.00 100.00 226,565.67 100.00
Monetary funds 38,610.25 11.49 32,841.34 14.50 -3.01
Transactional financial assets 8.63 0.00 18.95 0.01 -0.01
Accounts receivable 1,473.24 0.44 1,493.72 0.66 -0.22
Prepayment 1,802.03 0.54 2,433.21 1.07 -0.54
Other receivables 4,929.83 1.47 4,400.42 1.94 -0.48
Inventory 208,829.89 62.13 94,559.23 41.74 20.40
Total current assets 255,653.87 76.07 135,746.87 59.92 16.15
Long-term equity investment 11,130.53 3.31 9,283.04 4.10 -0.79
Investing property 60,415.35 17.97 71,902.51 31.74 -13.76
Fixed assets 6,628.34 1.97 7,089.45 3.13 -1.16
Intangible assets 623.24 0.19 643.08 0.28 -0.10
Long-term deferred expenses 36.49 0.01 52.73 0.02 -0.01
Deferred income tax assets 1,623.21 0.48 1,848.00 0.82 -0.33
Total non-current assets 80,457.16 23.93 90,818.80 40.08 -16.15
- -
Short-term borrowings 10,000.00 2.98 5,920.00 2.61 0.36
Accounts payable 73,094.44 21.75 23,044.68 10.17 11.58
Accounts received in advance 15,711.60 4.67 13,013.45 5.74 -1.07
Payroll payable 2,449.95 0.73 2,520.22 1.11 -0.38
Taxes and fares payable -878.28 -0.26 225.19 0.10 -0.36
Interest payable 2,468.77 0.73 788.81 0.35 0.3928
Other payables 29,723.72 8.84 26,291.41 11.60 -2.76
Non-current liabilities due
within 1 year 22,960.71 6.83 1,046.18 0.46 6.37
Total current liabilities 155,530.92 46.27 72,849.94 32.15 14.12
Long-term borrowings 58,198.65 17.32 33,034.30 14.58 2.73
Long-term payables 818.59 0.24 749.02 0.33 -0.09
Accrued liabilities 219.67 0.10 -0.10
Total liabilities 214,548.16 63.83 106,852.93 47.16 16.67
(II) Analysis on Operating Results
1. In 2009, the Company achieved an operating income of RMB 750.18 million, up by
6.26% as compared with that of last year, which was mainly due to the year-on-year
growth of 28.88% and 0.90% respectively of construction income and income from real
estate sale.
Increase/decrease of the Company’s main businesses:
① A sales income of RMB 321.20 million from the Company’s dominant business of
real estate was carried down, up by 0.9% as compared with that of last year.
② Income from construction stood at RMB 256.02 million, representing a year-on-year
growth of 28.88%, which was mainly because the subsidiary Shenzhen Zhentong
Engineering Co., Ltd. undertook more construction projects from outside and won more
bids for construction projects through out the year.
③ Lease income stood at RMB 62.89 million, down by 7.73% from that of last year,
which was mainly due to decrease of property lease prices and lease space.
④ Property management income stood at RMB 84.96 million, down by 6.21% from that
of last year, which was mainly because some historical arrears were recalled.
⑤ Income from hotel and other services stood at RMB 25.11 million, representing a
year-on-year decrease of 17.06%, which was mainly due to decrease of the l occupancy
rate.
2. Taxes and expenses during report period:
Item 2009 2008
Business tax 32,269,250.54 34,066,890.14
Tax on urban maintenance 228,353.26 294,453.17
Educational surcharges 626,116.15 570,478.34
House property tax 7,554,415.54 7,597,837.35
Land value increment tax 32,871,737.39 29,800,780.19
Embankment maintenance fee 250,894.54 554,758.48
Total 73,800,767.42 72,885,197.67
① Selling expenses stood at RMB 8.78 million, down by 5.64% from that of last year,
which was mainly due to decrease of advertising expenses.
② Administrative expenses stood at RMB 70.22 million, down by 8.45% as compared
with that of last year, which was mainly due to decrease of travel expenses, commercial
expenses and other expenses.
③ Financial expenses stood at RMB 39.70 million, representing a year-on-year increase
of 34.52%, which was mainly due to increase of interest expenses arising from increased29
bank borrowings and interest paid for the remaining land payment for the New
Guangming District Project.
Classification 2009 2008
Interest expenses 48,557,467.79 37,691,766.29
Less: expenses with capitalized
interest
6,806,525.39
10,481,274.23
Less: interest income 2,213,229.24 4,222,677.14
Exchange loss 39,356.82 5,786,273.36
Less: exchange income 196,661.97 129,580.24
Others 316,855.72 866,291.09
Total 39,697,263.73 29,510,799.13
3. Asset impairment loss stood at RMB -7 million, which was mainly because the
Company recalled the loan to Shenyang Tongxin Real Estate Development Limited
Company and recovered the bad debt provision originally withdrawn for the loan.
4. Investment income stood at RMB 5.79 million, up by 109.11% as compared with that
of last year, which was mainly due to increase of dividends from investees.
5. Non-business income stood at RMB 0.96 million, down by 69.97% from that of last
year, which was mainly because in the previous year, t Company achieved an income of
RMB 2.63 million from disposing fixed assets such as houses and buildings.
Classification 2009 2008
1. Total gain from non-current assets disposal 51,840.18 3,132,015.82
Of which: Gain from fixed assets disposal 51,840.18 3,132,015.82
2. Penalty income 116,275.48 --
3. Compensation income 775,000.00 --
4. Others 18,003.56 68,056.46
Total 961,119.22 3,200,072.28
6. Non-business expenses stood at RMB 1.05 million, representing a year-on-year
decrease of 86.21%, which was mainly due to lawsuit loss of RMB 4.20 million and
RMB 2.19 million respectively on the Chen Baoming Case and the Siam Edible Bird’s
Nest Restaurant Case.
Classification 2009 2008
1. Total loss from non-current assets
disposal
57,747.38
83,755.93
Of which: loss from fixed assets
disposal
57,747.38
83,755.9330
2. Penalty expenses 377,645.42 5,871.72
3. Donation expenses 38,000.00 562,636.95
4. Compensation expenses* 542,749.92 6,785,703.66
5. Others 29,455.50 146,373.93
Total 1,045,598.22 7,584,342.19
7. Income tax expenses
Unit: (RMB) Yuan
Item 2009 2008
Income tax expenses for this year 13,715,040.27 17,928,912.10
Deferred income tax expenses 2,247,858.41 3,949,656.44
Total 15,962,898.68 21,878,568.54
8. Effect of items measured at fair value on profit
Unit: (RMB) Yuan
Item Opening amount Closing amount Changes in
report period
Effect on profit
of report period
Transactional financial
assets 189,488.50 86,269.75 103,218.75 109,106.25
9. Changes in cash flow data in report period
Unit: (RMB) Ten thousand
Item 2009 2008 Increase/decre
ase rate (%) Reasons
Net cash flows from
operating activities -41,213 -8,253 -399.37
Payment for use rights of two land plots
in the New Guangming District obtained
through bidding
Net cash flows from
investing activities 659 570 15.61 Increase of cash received as investment
income
Net cash flows from
financing activities 48,119 -4,380 More financing from banks
Ⅷ. Outlook for future development of the Company
General guidelines for operation in 2010: To fully carry out the Concept of Scientific
Development, stick to the Company’s development strategy and planning, promote
reform through development and encourage development through reform; to elaborately
work on the main business, further strengthen cost control, perfect management capability,
and build a high-quality and professional management team so as to create core
competitiveness; to improve the party conduct, the management team, enterprise culture
and cohesion so as to lay a solid foundation for realizing the five-year development
strategy and planning.
In 2010, we will work on the five central tasks as follows:
(Ⅰ) To elaborately work on the main business. Firstly, the Company will work on project
development in both Shenzhen and Shantou with equal efforts and launch high-quality31
projects. Construction of the District No.10 of the Shantou Jinye Island Project has all
been accomplished. Meanwhile, construction of the Shantou Jinhu Road Project and the
Longgang Shuiyuntian Project will begin within 2010. Preparation for the Guangming
Project has been finished and the Company will try to begin construction within the year
2010. Secondly, to make great efforts on sale of real estate. Finally, to improve
performance of all businesses.
( Ⅱ ) To further strengthen cost control. Firstly, to thoroughly strengthen budget
management, strictly control expenses, practice thrift, prevent extra-budgetary expenses
through ingenious titles, and enhance constant checks, supervision and service on budget
execution. Secondly, to thoroughly carry out target cost control on project development,
as well as control before events, examination during events and analysis after events.
Finally, to strengthen management over construction contracts, improve management
over contract signing, checking and approving, and handle affairs in strict compliance
with contracts.
(Ⅲ) To perfect management capability. Firstly, to improve corporate governance and
management rules, as well as to promote standardized operation. Secondly, to improve
various rules according to the fine management principle. Thirdly, to build a professional
management team. Fourthly, to optimize the organizational structure, explore operation
mechanisms for project development and perfect the management mode for projects.
Fifthly, to optimize performance appraisal and improve the remuneration system. Sixthly,
to strengthen financial management, improve management and use of funds, increase
efficiency of capital use, and control financial risks. Finally, to enhance risk management
and internal control by formulating and implementing a thorough risk control system,
fully carrying out the safe production responsibility mechanism and prevent various
accidents in production.
(Ⅳ) To work on and formulate a development strategy and planning for the Company.
(Ⅴ) To thoroughly strengthen party building and create a new-type enterprise culture.
IX. Routing Work of Board of Directors
(Ⅰ) Meetings convened by Board of Directors during report period and resolutions made
Details of board meetings convened in 2009 were as follows:
1. The 1st board meeting was convened at the Conference Room of the Company on 22
Jan. 2009 with 9 directors present, at which the following proposals were reviewed and
approved: the Proposal on Re-election of Board of Directors and the Proposal on
Convening 1st Provisional Shareholders’ General Meeting in 2009.
The public notice on relevant resolutions was disclosed on China Securities Journal, Ta
Kung Pao and http://www.cninfo.com.cn dated 23 Jan. 2009.
2. The 2nd board meeting was convened at the Conference Room of the Company on 11
Feb. 2009 with 9 directors present, at which the Chairman for the 6th Board of Directors
was elected and GM, Vice GM, Board Secretary and Securities Representative were
engaged.
The public notice on relevant resolutions was disclosed on China Securities Journal, Ta
Kung Pao and http://www.cninfo.com.cn dated 12 Feb. 2009.
3. The 3rd board meeting was convened at the Conference Room of the Company on 20
Apr. 2009 with 9 directors present, at which the following proposals were reviewed and
approved: the 2008 Annual Report and Its Summary, the 2008 Annual Work Report of
Board of Directors, the Preplan for Profit Distribution for Year 2008, the Proposal on32
Making up Previous Loss with Surplus Reserve, the Proposal on Financial Budget for
Year 2009, the Proposal on Withdrawing Inventory Falling Price Reserve, the Proposal on
Canceling Bad Debt Provision for Account Receivable after Verification, the Proposal on
Adjusting Committees under Board of Directors, the Self-evaluation Report on Internal
Control and the proposal on selling real estate in Guangzhou (with no public notices on
this proposal).
The public notice on relevant resolutions was disclosed on China Securities Journal, Ta
Kung Pao and http://www.cninfo.com.cn dated 22 Apr. 2009.
4. The 4th board meeting was convened by telecommunication on 21 Apr. 2009 with 9
directors attending the meeting, at which the First Quarterly Report 2009 was reviewed
and approved. No public notice was disclosed on this event.
5. The 5th board meeting was convened at the Conference Room of the Company on 5
Jun. 2009 with 9 directors present, at which the following proposals were reviewed and
approved: the Duty Report of Independent Directors, the Proposal on Renewing
Engagement with Accounting Firm, the Proposal on Amending Articles of Association of
the Company, the Proposal on Amending Rules of Procedure for Board of Directors, the
Proposal on Amending Specific Work Rules for GM, the Proposal on Financial Approval
Powers (with no public notice on this proposal) and the Proposal on Convening 2008
Annual Shareholders’ General Meeting.
The public notice on relevant resolutions was disclosed on China Securities Journal, Ta
Kung Pao and http://www.cninfo.com.cn dated 6 Jun. 2009.
6. The 6th board meeting was convened at the Conference Room of the Company on 13
Aug. 2009 with 9 directors present, at which the following proposals were reviewed and
approved: the 2009 Semi-annual Report and Its Summary, the Proposal on Re-launching
Transfer Procedure for Multi-level Garage in Friendship Plaza, the Proposal on
Formulating Rules of SPG for Engaging Accounting Firm, the Proposal on Providing
Guarantee for Loan Granted to Shantou Hualin Real Estate Development Co., Ltd., the
Proposal on Asking Shareholders’ General Meeting to Authorize Decisions Made by
Board of Directors and the Proposal on Convening 2nd Provisional Shareholders’ General
Meeting in 2009.
The public notice on relevant resolutions was disclosed on China Securities Journal, Ta
Kung Pao and http://www.cninfo.com.cn dated 15 Aug. 2009.
7. The 7th board meeting was convened at the Conference Room of the Company on 25
Aug. 2009 with eight directors present and one entrusting a proxy for voting. And it was
agreed to take part in the bidding for the land in the Shenzhen New Guangming District
at the meeting. No public notice was disclosed on this event.
8. The 8th board meeting was convened at the Conference Room of the Company on 3
Sept. 2009 with 9 directors present, at which the following proposals were reviewed and
approved: the Proposal on Referring to Shareholders’ General Meeting for Approving
Bidding for Land, the Proposal on Convening 3rd Provisional Shareholders’ General
Meeting in 2009 and the Proposal on Borrowing from Shenzhen Investment Holdings Co.,
Ltd..
The public notice on relevant resolutions was disclosed on China Securities Journal, Ta
Kung Pao and http://www.cninfo.com.cn dated 5 Sept. 2009.
9. The 9th board meeting was convened by telecommunication on 22 Sept. 2009 with
eight directors present and one absent. It was agreed to transfer 50% property rights of
the Nantian Shopping Mall in Shatoujiao, Shenzhen.
The public notice on relevant resolutions was disclosed on China Securities Journal, Ta33
Kung Pao and http://www.cninfo.com.cn dated 24 Sept. 2009.
10. The 10th board meeting was convened at the Conference Room of the Company on 20
Oct. 2009 with eight directors present and one entrusting a proxy for voting, at which the
following proposals were reviewed and approved: the Third Quarterly Report 2009, the
Proposal on Convening 4th Provisional Shareholders’ General Meeting in 2009 and
proposals on disengagement and engagement of GM and Vice GM.
The public notice on relevant resolutions was disclosed on China Securities Journal, Ta
Kung Pao and http://www.cninfo.com.cn dated 21 Oct. 2009.
11. The 11th board meeting was convened by telecommunication on 28 Oct. 2009 with
eight directors present and one absent, at which the following proposals were reviewed
and approved: the Insider Information and Insiders Management Rules.
The public notice on relevant resolutions was disclosed on China Securities Journal, Ta
Kung Pao and http://www.cninfo.com.cn dated 30 Oct. 2009.
12. The 12th board meeting was convened at the Conference Room of the Company on 1
Dec. 2009 with 9 directors present. At the meeting, the Proposal on Engaging Senior
Executives was reviewed and approved to engage two vice GMs.
The public notice on relevant resolutions was disclosed on China Securities Journal, Ta
Kung Pao and http://www.cninfo.com.cn dated 2 Dec. 2009.
(Ⅱ) Execution by Board of Directors on resolutions made at Shareholders’ General
Meeting
The 17th Shareholders’ General Meeting (the 2008 Annual Shareholders’ General Meeting)
was convened at the Conference Room of the Company at 9:30 a.m. on 26 Jun. 2009, at
which the following proposals were reviewed and approved: the 2008 Annual Work
Report of Board of Directors, the 2008 Annual Work Report of Supervisory Board, the
Profit Distribution Plan for Year 2008, the 2008 Annual Report, the Proposal on Making
up Previous Loss with Surplus Reserve, the Financial Budget for Year 2009, the Proposal
on Renewing Engagement with Accounting Firm, the Proposal on Amending Articles of
Association of the Company, the Proposal on Amending Rules of Procedure for Board of
Directors, the Proposal on Amending Rules of Procedure for Supervisory Board and other
proposals. And relevant resolutions were made and disclosed on China Securities Journal,
Ta Kung Pao and http://www.cninfo.com.cn designated by CSRC dated 27 Jun. 2009. As
authorized by the Shareholders’ General Meeting, the Board of Directors faithfully
executed the resolutions above. In the report period, the Company did not have any plan
for profit distribution or turning capital reserve into share capital without any rationed
shares or additionally issued shares.
The 1st Provisional Shareholders’ General Meeting in 2009 was convened at the
Conference Room of the Company in the morning of 11 Feb. 2009, at which the
following proposals were reviewed and approved: the Proposal on Re-election of Board
of Directors, the Proposal on Re-election of Supervisory Board and other proposals. And
relevant resolutions were made and disclosed on China Securities Journal, Ta Kung Pao
and http://www.cninfo.com.cn designated by CSRC dated 12 Feb. 2009. As authorized by
the Shareholders’ General Meeting, the Board of Directors faithfully executed the
resolutions above.
The 2nd Provisional Shareholders’ General Meeting in 2009 was convened at the
Conference Room of the Company in the morning of 31 Aug. 2009, at which the
following proposals were reviewed and approved: the Proposal on Formulating Rules for
Engaging Accounting Firm, the Proposal on Providing Guarantee for Loan Granted to34
Shantou Hualin Real Estate Development Co., Ltd., the Proposal on Asking Shareholders’
General Meeting to Authorize Decisions Made by Board of Directors and other proposals.
And relevant resolutions were made and disclosed on China Securities Journal, Ta Kung
Pao and http://www.cninfo.com.cn designated by CSRC dated 1 Sept. 2009. As
authorized by the Shareholders’ General Meeting, the Board of Directors faithfully
executed the resolutions above.
The 3rd Provisional Shareholders’ General Meeting in 2009 was convened at the
Conference Room of the Company in the morning of 22 Sept. 2009, at which the
following proposals were reviewed and approved: the Proposal on Referring to
Shareholders’ General Meeting for Approving Bidding for Land. And a relevant
resolution was made and disclosed on China Securities Journal, Ta Kung Pao and
http://www.cninfo.com.cn designated by CSRC dated 23 Sept. 2009. As authorized by the
Shareholders’ General Meeting, the Board of Directors faithfully executed the resolution
above.
The 4th Provisional Shareholders’ General Meeting in 2009 was convened at the
Conference Room of the Company in the morning of 5 Nov. 2009, at which the following
proposals were reviewed and approved: the Proposal on Dismissing Mr. Guo
Hongzhuang as Director and the Proposal on Adding Mr. Chen Maozheng as Director.
And relevant resolutions were made and disclosed on China Securities Journal, Ta Kung
Pao and http://www.cninfo.com.cn designated by CSRC dated 6 Nov. 2009. As
authorized by the Shareholders’ General Meeting, the Board of Directors faithfully
executed the resolutions above.
(Ⅲ) Duty fulfillment of Audit Committee under Board of Directors
According to the Circular of CSRC on 2009 Annual Reports of Listed Companies and
Relevant Issues, as well as the No. 2 Norms for Contents and Formats of Information
Disclosure by Listed Companies That Offer Securities to the Public 〈Contents and
Format of Annual Report〉(revised in 2007), the Audit Committee conscientiously
performed its duties in compliance with the Rules for Audit Committee Concerning
Annual Reports.
On 20 Apr. 2009, due to re-election of the Board of Directors, members of the Audit
Committee under the Board of Directors were also adjusted. After the adjustment,
members of the Audit Committee were: Zhou Hanjun (Independent Director), Hou Liying
(Independent Director) and Jiang Lihua with Zhou Hanjun as Chief of the Audit
Committee. On 25 May 2009, the Audit Committee convened a meeting and proposed to
renew engagement with Shenzhen Nanfang Minhe Certified Public Accountants Co., Ltd.
as the audit agency for the Company in 2009.
The Audit Committee issued their review opinion on the Company’s 2008 Annual
Financial Report, their review opinion on the preliminary audit opinion issued by
Shenzhen Nanfang Minhe Certified Public Accountants Co., Ltd. in the 2008 annual audit,
and a summary report on the 2008 annual audit.
Upon the start of the audit for the 2009 Annual Report, the Audit Committee actively
conducted communication with the CPA firm to determine the arrangements for the audit.
At the period-end, the Audit Committee convened two meetings, reviewing the
Company’s 2009 financial statements and issuing their opinions after the review. It also
urged the CPA firm to follow closely the audit plan, so as to make sure the smooth
accomplishment of the audit plan.
1. Two review opinions issued concerning the Company’s 2009 Annual Financial Report35
Based on their professional knowledge and experience, the members of Audit Committee
reviewed the 2009 Annual Financial Report prepared by the Company. In the report
period, according to relevant regulations of CSRC, the Audit Committee issued two
review opinions on the annual financial and accounting report.
Before the presence of the registered accountants for the 2009 annual audit, the Audit
Committee reviewed the annual financial report prepared by the Company. And the Audit
Committee was of the opinion that: According to the New Accounting Standards for
Business Enterprises, the Company chose and applied a proper accounting policy, with
reasonable accounting estimates. The Company always adopted a prudent attitude
towards the changes of the accounting policy and estimates, with no such cases as
manipulating the changes of the accounting policy and estimates to adjust the profits. And
the financial report prepared by the Company was factual and reliable with complete
contents.
After the preliminary audit opinion had been issued by the registered accountants on the
Company’s 2009 Financial Report, the Audit Committee reviewed, for a second time, the
financial report and conducted discussions with the registered accountants. And they were
of the same opinion that the 2009 Financial Report prepared by the Company was in
accordance with the requirements of the accounting standards for business enterprises,
factually and completely presenting the Company’s operating results and cash flows in
2009 and its financial position as at 31 Dec. 2009 in all major aspects.
2. The Committee’s supervising and urging the audit work of the CPA firm
Before the audit, the Audit Committee formulated a comprehensive plan for the annual
audit by discussing and determining the scope and the schedule for the audit report with
the existing CPA firm. Upon the presence of the audit team, the Committee
communicated with the people in charge of the audit project, learnt about the audit
progress and the accountant’s concerns, and timely offered the feedback to relevant
departments of the Company, so as to make sure the progress of the annual audit and
information disclosure in accordance with the set plan.
3. Summary report on the 2009 annual audit conducted by Shenzhen Nanfang Minhe
Certified Public Accountants Co., Ltd.
In accordance with the Public Notice 【2008】No.48 issued by CSRC, the Audit
Committee summarized the 2009 annual audit conducted by Shenzhen Nanfang Minhe
Certified Public Accountants Co., Ltd. (hereinafter referred to as “Nanfang Minhe”) as
follows:
(1) Preparation before the audit
A. Formulation of the audit plan
The 2009 annual audit lasted for a period of nearly four months, with the pre-audit started
at the beginning of Dec. 2009. And the schedule for the audit was detailed as follows:
Started from 21 Dec. 2009, the field audit by Nanfang Minhe on the annual report of the
Company and its holding subsidiaries was finished on 28 Feb. 2010. On 1 Apr. 2010, the
first draft of the 2009Annual Audit Report was submitted to the Audit Committee for
review. And on 20 Apr., the final version of the 2009 Annual Audit Report was issued.
B. Review of the financial statements
Before the presence of the registered accountants for the annual audit, the Audit
Committee carefully reviewed the financial statements prepared by the Company and
formed the relevant written opinion.
(2) Audit process36
From 21 Dec. 2009, the audit team from Nanfang Minhe conducted a thorough audit on
the Company and its subsidiaries. During the audit process, the Audit Committee, for
several times, urged Nanfang Minhe to closely follow the audit schedule and finish the
audit on time. Nanfang Minhe submitted to the Audit Committee the first draft of the
Audit Report of the 2009 Annual Report on 1 Apr. 2010, and its final version on 20 Apr.
2010. And this marked the end of the site audit conducted by Nanfang Minhe on the
Company’s 2009 financial report.
(3) Audit results
Nanfang Minhe issued the standard unqualified 2009 Annual Audit Report to the
Company. And the Audit Committee was of the opinion that Nanfang Minhe excellently
accomplished the audit of the Company’s 2009 Annual Financial Report.
(Ⅳ) Duty fulfillment of Remuneration and Appraisal Committee under Board of
Directors
On 20 Apr. 2009, due to re-election of the Board, members of the Remuneration and
Appraisal Committee under the Board of Directors were also adjusted. After the
adjustment, members of the Remuneration and Appraisal Committee were: Zong Dechun
(Independent Director), Zhou Hanjun (Independent Director) and Xia Guiying, with Zong
Dechun as Chief of the Committee. According to the Circular of CSRC on 2009 Annual
Reports of Listed Companies and Relevant Issues, the Remuneration and Appraisal
Committee carefully examined the annual salaries of the Company’s directors,
supervisors and other senior management personnel disclosed in the 2009 Annual Report.
And it was of the opinion that: The decision-making procedure concerning the
remuneration of the directors, supervisors and other senior management personnel was in
line with relevant regulations; The standards for remuneration paid to the Company’s
directors, supervisors and other senior management personnel complied with the
remuneration system; And the remuneration disclosed in the 2009 Annual Report was
factual and accurate.
(Ⅴ) Duty fulfillment of Nomination Committee under Board of Directors
On 20 Apr. 2009, due to re-election of the Board, members of the Nomination Committee
under the Board of Directors were also adjusted. After the adjustment, members of the
Nomination Committee were: Hou Liying (Independent Director), Zhou Hanjun
(Independent Director) and Deng Kangcheng, with Hou Liying as Chief of the
Committee. According to the Specific Implementation Rules for Nomination Committee,
the Nomination Committee performed their duties. During the report period, the
Committee convened a meeting to examine matters on engaging GM and directors and
propose such matters to the Board of Directors on 14 Oct. 2009 and on 30 Nov. 2009, it
convened a meeting to examine matters on engaging vice GMs and proposed such
matters to the Board of Directors.
Ⅹ. Pre-plan for profit distribution for Year 2009
As audited by Nanfang Minhe Certified Public Accountants, the Company achieved, in
2009, a net profit of RMB 20,217,383.62. According to relevant laws and regulations, as
well as the Articles of Association of the Company, the net profit in 2009 will be used for
covering the deficit of the previous years. And thus no profit distribution or turning
capital reserve to share capital will be conducted. After the loss make-up, the Company’s
retained profit will stand at RMB -781,357,778.86.37
Ⅺ.Cash Dividends Distributed in the last three years
Unit: RMB
Year of distribution
Amount of cash
dividends (Including
tax)
Net profit attributable
to equity holders of the
Company in the
consolidated financial
statements for the year
of distribution
Percentage Distributable profit for
the year
2008 0.00 19,123,787.11 0.00% -915,511,458.27
2007 0.00 39,007,992.54 0.00% -934,635,245.38
2006 0.00 20,150,368.49 0.00% -985,700,506.78
Percentage of aggregated cash dividends in the last three years in
the recent annual average net profit (%) 0.00%
Ⅻ. The newspapers designated by the Company for information disclosure
remained unchanged, namely, China Securities Journal for the domestic investors
and Ta Kung Pao for those overseas.
XIII. Statement and independent opinions of independent directors on the
Company’s provision of guarantees, as well as the Company’s execution of the
Circular on Relevant Issues Concerning Standardization of Fund Transfer Between
Listed Companies and Associated Parties and Provision of External Guaranty
We have reviewed information about the Company’s provision of external guarantees and
the capital occupation by related parties stated in the 2009 Annual Report and financial
report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
and other materials. And we hereby make the statement concerning the Company’s
provision of external guarantees and the capital occupation by related parties as follows:
1. The Company provided no guarantees for external parties in the report period. In the
report period, the unsettled balance of property mortgage guarantee provided by the
Company for house buyers stood at RMB 11.26 million. Such a kind of guarantee is a
common phenomenon in the real estate industry. Within the guarantee period (from the
date when the sum is set out by the mortgage banker to the date when the Certificate of
Real Estate of the property purchaser is handled by the mortgage banker), if the property
purchaser does not perform the debtor’s duties, the Company has the right to take back
the properties sold. Therefore, the said guarantee will not cause actual losses to the
Company, with slim possibility of the Company’s taking the several and joint liability.
2. There existed no occupation of the Company’s capital by its substantial shareholders. A
certain amount of receivables from the related parties was mainly resulted from the
Company’s borrowings to its subsidiaries in the previous years.
Thereupon, we are of the opinion that the Company well executed the Circular on
Relevant Issues Concerning Standardization of Fund Transfer Between Listed Companies
and Associated Parties and Provision of External Guaranty.
Section Ⅸ Report of Supervisory Board
In 2009, according to the Securities Law, the Company Law and the Company’s Articles
of Association, with great support from the Company’s Board of Directors, its
management team and shareholders, the Supervisory Board, bearing the rights and
interests of all the shareholders in mind, faithfully performed its duty of supervision by38
effectively exercising its rights of supervision at all important decision-making meetings.
Keeping its supervision focus on the Company’s core assets and major capital operation,
the Supervisory Board managed to improve the supervisory and disciplinary mechanism.
As a result, expenses and asset risks were effectively controlled. The Supervisory Board
carried forward transparent corporate operation and democratic decision-making,
continued emphasizing and implementing the principle of transparent corporate operation
in the daily work, and took part in major operation activities. Meanwhile, it conducted
various specific supervisions and examinations, as well as checks on settlement of
various contracts and execution of various resolutions. It also gave play to its function of
internal audit and supervision by performing audit on performance appraisal, operation
management, capital management, financial incomes, construction project earnings and
cost control. It enhanced supervision on information disclosure and faithfully executed
the Rules of Shenzhen Stock Exchange for Share Listing and other laws and regulations.
According to the prescribed procedure, the Supervisory Board conducted examinations
on the reports disclosed by the Company and its Board of Directors, so as to ensure the
factuality, accuracy, completeness and timeliness of the information disclosed.
Ⅰ. Meetings held by Supervisory Board in report period
(Ⅰ) The 1st meeting was convened on 22 Jan. 2009, at which the Proposal on Supervisor
Candidates for 6th Supervisory Board was reviewed and approved.
(Ⅱ) The 2nd meeting was convened on 11 Feb. 2009, at which Xu Zhenhan was elected
as Chairman of the 6th Supervisory Board by supervisors.
(Ⅲ) The 3rd meeting was convened on 20 Apr. 2009, at which the 2008 Annual Report
and Its Summary, the Profit Distribution Plan for Year 2008 and the 2008 Annual Report
of Supervisory Board were reviewed and approved.
(Ⅳ) The 4th meeting was convened on 20 Apr. 2009, at which the First Quarterly Report
2009 was reviewed and approved by telecommunication.
(Ⅴ) The 5th meeting was convened on 5 Jun. 2009, at which the revised Rules of
Procedure for Supervisory Board and the 2008 Annual Work Report of Supervisory
Board were reviewed and approved.
(Ⅵ) The 6th meeting was convened on 13 Aug. 2009, at which the 2009 Semi-annual
Report and Its Summary was reviewed and approved.
(Ⅶ) The 7th meeting was convened on 20 Oct. 2009, at which the Third Quarterly Report
2009 was reviewed and approved.
Ⅱ. Independent opinions and brief remarks on relevant matters by Supervisory Board
(Ⅰ) About the Company’s operation according to laws: In 2009, members of the
Supervisory Board sat in on all the board meetings. Chairman of the Supervisory Board
Xu Zhenhan sat in on deliberative meetings of the Company’s management, meetings of
GM and other important meetings. And the Supervisory Board was of the opinion that the
Company made decisions in accordance with relevant laws and regulations, as well as the
Company’s Articles of Association, with no behaviors harmful to shareholder interests;
that the internal management mechanism and the control system were further improved;
and that the directors and other management personnel diligently and responsibly
performed their duties.
(Ⅱ) Opinion about the Company’s self-evaluation of its internal control: In 2009, the
Company continued enhancing risk control and management mechanism. Various internal
control rules, work flows and approval rules were revised and improved, which enabled
the internal control system to cover basically all aspects of the Company’s operation. And39
the Company handled possible problems arising from operation in time. Key internal
control activities were conducted according to the Company’s rules on internal control.
And the Company’s self-evaluation report on its internal control was in line with the
actual condition of the Company.
(Ⅲ) About the Company’s financial status: The Supervisory Board was of the opinion
that the audit opinion issued by Shenzhen Nanfang Minhe Certified Public Accountants
was objective, with the financial report in line with the actual situation and factually
presenting the Company’s financial and operational position.
(Ⅳ) In the report period, the Company did not raise any funds.
(Ⅴ) In the report period, there existed a related-party transaction between the Company
and its substantial shareholder Shenzhen Investment Holdings Co., Ltd.. Considering the
financial strain after the Company had won the bidding for use rights of two land plots in
the New Guangming District in Shenzhen in the report period, the Company borrowed
RMB 400 million from Shenzhen Investment Holdings Co., Ltd.. The said related-party
transaction was helpful to the Company and the Company disclosed a public notice on
the said related-party transaction according to facts.
(Ⅵ) In the report period, Vice GM Luo Zichao was dismissed due to personal reasons.
Section Ⅹ Significant Events
Ⅰ. Significant lawsuits and arbitrations
For details of significant lawsuits and arbitrations where the Company was involved in
the report period, please refer to Note Ⅺ of the Financial Report.
Ⅱ. The Company did not conduct any major purchases or sales of assets in the report
period.
Ⅲ. For details of related parties and related transactions in the report period, please refer
to Note Ⅶ of the Financial Report.
Ⅳ. The Company did not sign any major contracts concerning entrustment, contracting
or leasing in the report period. Nor did it entrust other parties with assets management.
Ⅴ. Particulars about guarantees
Unit: (RMB) Ten thousand
External guarantees provided by the Company (excluding those for subsidiaries)
Name of entity for
which the Company
provides guarantee
Date of occurrence
(date of signing
agreement)
Amount of
guarantee
Type of
guarantee
Term of
guarantee
Accomplishe
d or not
Guarantee for related party
(yes or no)
Total guarantee amount in report period 0.00
Total guarantee balance at period-end (A) 0.00
Guarantees provided by the Company for subsidiaries
Total guarantee amount for subsidiaries in
report period 30,000.00
Total guarantee balance for subsidiaries in
report period (B) 32,320.00
Total guarantees provided by the Company (including those for subsidiaries)
Total guarantee amount (A+B) 32,320.00
Proportion of total guarantee amount in net
assets 26.31%
Of which:
Amount of guarantees provided for
shareholders, actual controller and their
related parties (C)
0.00
Amount of debt guarantees directly or 0.0040
indirectly provided for entities with an
asset-liabilities ratio over 70% (D)
Amount of total guarantees exceeding 50%
net assets (E) 0.00
Total amount of three kinds of guarantees
above (C+D+E) 0.00
Explanation on possibility of paying for joint
liability due to immature guarantees None
In the report period, the unsettled balance of property mortgage guarantee provided by
the Company for house buyers stood at RMB 11.26 million. Such a kind of guarantee is a
common phenomenon in the real estate industry. Within the guarantee period (from the
date when the sum is set out by the mortgage banker to the date when the Certificate of
Real Estate of the property purchaser is handled by the mortgage banker), if the property
purchaser does not perform the debtor’s duties, the Company has the right to take back
the properties sold. Therefore, the said guarantee will not cause actual losses to the
Company, with slim possibility of the Company’s taking the several and joint liability.
Ⅵ. Commitments made by controlling shareholder and actual controller, as well as
execution thereof
( Ⅰ ) Shenzhen Investment Holding Co., Ltd. made the following commitments
concerning the relevant matters of the share merger reform of SPG: “ 1. The Company
shall abide by the relevant laws, regulations and rules, and fulfill the legal commitments;
2. The Company hereby declares that: The promisor shall faithfully fulfill its
commitments and shoulder corresponding responsibilities; Unless the transferee agrees to
and is able to fulfill the commitments, the promisor shall not transfer the held shares. 3.
The Company hereby declares that: Should the promisor fail to fulfill its commitments
prescribed in the relevant documents, it shall compensate the other shareholders for their
losses caused thereupon.” The commitments have been fulfilled;
( Ⅱ ) Shenzhen Investment Holding Co., Ltd. made the following commitments
concerning the conditional sales of its held shares: The shares shall not be listed or
transferred within 12 months from the date when the reform plan is implemented; When
the aforesaid provision reaches its mature term, the originally non-tradable shares may be
listed for trading at securities exchanges, with the proportion of the sold amount in the
Company’s total shares not exceeding 5% within 12 months, as well as not exceeding
10% within 24 months.” And the said commitments have been fulfilled;
(Ⅲ) In the share merger reform, Shenzhen Investment Holding Co., Ltd. promised to
implement a share incentive plan, where the company was to sell its held shares (not
exceeding 10% of SPG’s total shares) to the SPG’s management on three years’
amortization. On 30 Sept. 2006, the State-Owned Assets Supervision and Administration
Commission of the State Council issued the Trial Measures for Implementing Equity
Incentive Plans by State Holding Listed Companies (Domestic) (GZFFP【2006】No. 175).
The Item 9 of the Trail Measures stipulates that the source of the subject shares for
implementing the equity incentive plan of a listed company shall not be paid by a single
state shareholder and that the state equity shall not be gratuitously quantized either.
Therefore, the equity incentive plan was unable to be implemented. Nor the concerned
commitment of Shenzhen Investment Holding Co., Ltd. was able to be fulfilled.
(Ⅳ) The Shenzhen Sate-owned Assets Supervision and Administration Commission
issued the Letter on Relevant Matters Concerning Information Disclosure of SPG to
Shenzhen Investment Holdings Co., Ltd. in Oct. 2009, making a commitment that it
would not conduct transfer of SPG share rights through agreements, asset reorganization41
or other matters (not including shareholding reduction in the secondary market) that have
significant influence on SPG in this year or the next year. The said commitment is
currently in the process of execution.
Ⅶ. Particulars about share rights incentive
When implementing the share merger reform, it was set forth that: the controlling holder
would sell its held shares (not exceeding 10% of the Company’s total shares) to the
Company’s management on three years’ amortization, with the price determined
according to the net asset value per share as most recently audited during the
implementation. However, the policies concerning the implementation of equity incentive
plan by state holding enterprises had not been introduced by the State-owned Assets
Supervision and Administration Commission of the State Council at that time. Therefore,
the Company did not execute the equity incentive plan which was stated in the share
merger reform plan. On 30 Sept. 2006, the State-Owned Assets Supervision and
Administration Commission of the State Council issued the Trial Measures for
Implementing Equity Incentive Plans by State Holding Listed Companies (Domestic). As
clearly stated in the Trial Measures, the granting price of equity of a listed company shall
not be lower than the closing price of the subject shares of the company on the trading
day before the promulgation of the equity incentive plan, or lower than the average
closing price of the subject shares of the company within 30 trading days before the
promulgation of the equity incentive plan. As a result, the concerned commitment of the
controlling shareholder was unable to be fulfilled. Nor the equity incentive plan was able
to be implemented. On 17 Mar. 2008, the State-owned Assets Supervision and
Administration Commission of Shenzhen introduced the Interim Measures of Shenzhen
on Establishment of Long-term Efficiency Incentive Mechanism by State-owned
Enterprises. According to the range of the aforesaid policy, the Company would explore
the mechanism for equity incentive.
Ⅷ. The Company engaged Shenzhen Nanfang Minhe Certified Public Accountants to
take charge of the Company’s 2009 annual audit, which had been providing annual audit
service to the Company since 2001. According to the relevant agreement, the Company
was to pay RMB 0.8 million to Shenzhen Nanfang Minhe Certified Public Accountants as
the audit fee.
Ⅸ. In the report period, the Company, the Board of Directors of the Company and its
directors received no criticism or reprimand.
Ⅹ. Interviews and visits received by the Company
Time Place Way of reception Visitor or caller Main discussion and materials provided by the Company
12 Jan. 2009 Office Room By telephone Individual investor
The investor inquired about public notices disclosed by the
Company, with no written materials provided by the
Company.
10 Feb. 2009 Office Room By telephone Individual investor
The investor inquired about the provisional shareholders’
general meeting, with no written materials provided by the
Company.
10 Mar. 2009 Office Room By telephone Individual investor
The investor inquired about the date for disclosure of the
Company’s annual report and the Company’s financial status,
with no materials provided by the Company.
20 Mar. 2009 Office Room By telephone Individual investor
The investor inquired about the unlock of shares subject to
trading moratorium held by the Company’s substantial
shareholders, with no written materials provided by the
Company.
20 Apr. 2009 Office Room By telephone Individual investor The investor inquired about the Company’s annual report,
with no written materials provided by the Company.42
8 May 2009 Office Room By telephone Individual investor
The investor inquired about reasons for the Company’s shares
reaching upper trading limit, with no materials provided by
the Company.
11 May 2009 Office Room By telephone Individual investor
The investor inquired about reasons for the Company’s shares
reaching upper trading limit, with no materials provided by
the Company.
18 Jun. 2009 Office Room By telephone Individual investor
The investor inquired about the Company’s annual
shareholders’ general meeting, with no materials provided by
the Company.
22 Jul. 2009 Office Room By telephone Individual investor
The investor inquired about the Company’s development
projects. And the communication was conducted verbally
with no materials provided by the Company.
10 Aug. 2009 Office Room By telephone Individual investor
The investor inquired about the Company’s operation. And
the communication was conducted verbally with no materials
provided by the Company.
3 Sept. 2009 Office Room By telephone Individual investor
The investor inquired about the Company’s bidding for land.
And the communication was conducted verbally with no
materials provided by the Company.
15 Sept. 2009 Office Room By telephone Individual investor
The investor inquired about the Company’s development
projects. And the communication was conducted verbally
with no materials provided by the Company.
16 Oct. 2009 Office Room By telephone Individual investor
The investor inquired about the Company’s share trading
suspension and resumption. And the communication was
conducted verbally with no materials provided by the
Company.
21 Oct. 2009 Office Room By telephone Individual investor
The investor inquired about the abnormal fluctuation of the
Company’s share prices. And the communication was
conducted verbally with no materials provided by the
Company.
25 Oct. 2009 Office Room By telephone Individual investor
The investor inquired about when trading of the Company’s
shares would be resumed. And the communication was
conducted verbally with no materials provided by the
Company.
20 Dec. 2009 Office Room By telephone Individual investor
The investor inquired about the Company’s garage auction.
And the communication was conducted verbally with no
materials provided by the Company.
Section Ⅺ. Financial Report
(Please see the attachments for the financial statements and audit report.)
Section Ⅻ. Documents Available for Reference
1. The accounting statements with personal signatures and seals of Legal Representative,
Chief Accountant and the person in charge of the accounting agency.
2. The original of the Audit Report with the seals of the CPA firm, as well as the
signatures and seals of the registered accountants.
3. The originals of all the documents and public notices disclosed on China Securities
Journal and Ta Kung Pao by the Company during the report period.
Board of Directors
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
20 April 201043
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE
& PROPERTIES (GROUP) CO., LTD.
AUDITORS’ REPORT
for the year ended 31 December 2009
CONTENTS PAGE(S)
1、AUDITORS’ REPORT 44-45
2、FINANCIAL STATEMENTS (AUDITED)
1、CONSOLIDATED BALANCE SHEET 46-47
2、CONSOLIDATED INCOME STATEMENT 48
3、CONSOLIDATED CASH FLOW STATEMENT 49
4、CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 50-51
5、BALANCE SHEET 52-53
6、INCOME STATEMENT 54
7、CASH FLOW STATEMENT 55
8、STATEMENT OF CHANGES IN EQUITY 56-57
9、NOTES TO THE FINANCIAL STATEMENTS 58-147
3、APPENDIX
1、COPIES OF AUDIT INSTITUTION’S BUSINESS LICENSE AND
PRACTICE LICENSE
2、COPIES OF AUDIT INSTITUTION’S SECURITIES RELATED
BUSINESS LICENSE &FUTURES RELATED BUSINESS LICENSE44
* Confidential *
AUDITORS’ REPORT
ShenNanCaiShenBaoZhi（2010）No.CA188
TO THE SHAREHOLDERS OF SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE &
PROPERTIES (GROUP) CO. LTD:
We have audited the accompanying consolidated financial statements of Shenzhen Special
Economic Zone Real Estate & Properties (Group) Co., Ltd. (the “Company”) and its
subsidiaries (together with the Company referred to as the “Group”), which comprise the
consolidated balance sheet as at 31 December 2009, and the consolidated income statement,
the consolidated cash flow statement, the consolidated statement of changes in equity for the
year then ended and notes to these financial statements.
1、Management responsibility for the financial statements
Management is responsible for the preparation of these financial statements in accordance
with the China Accounting Standards for Business Enterprises(2006) issued by the Ministry of
Finance of the People’s Republic of China. This responsibility includes：（ 1） designing,
implementing and maintaining internal control relevant to the preparation of financial
statements that are free from material misstatement, whether due to fraud or error（; 2）selecting
and applying appropriate accounting policies;（ 3）making accounting estimates that are
reasonable in the circumstances.
2、Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with the China Standards on Auditing for Certified
Pbblic Accounts. Those standards require that we comply with ethical requirements and plan
and perform the audit to obtain reasonable assurance whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and45
disclosures in the financial statements. The procedures selected depend on the auditor’s
judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity’s preparation of the financial statements in
order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit
also includes evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.
3、Opinion
In our opinion, the financial statements comply with the requirements of China Accounting
Standards for Business Enterprises(2006) issued by the Ministry of Finance of the People’s
Republic of China and present fairly, in all material respects, the consolidated financial
position and financial position of the Company as at 31 December 2009, and the consolidated
results of operations and results of operations and the consolidated cash flows and cash flows
of the Company for the year then ended.
Shenzhen Nanfang-Minhe CPAs Ltd. Certified Public Accountant
Certified Public Accountant
Shenzhen, China 19 April 201046
CONSOLIDATED BALANCE SHEET
As at 31 December 2009
Prepared by:SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE&
PROPERTIES (GROUP) CO., LTD. Units:Rmb Yuan
ASSETS Note Ⅴ 2009-12-31 2008-12-31
Current assets：
Cash at bank and on hand 1 386,102,533.51 328,413,393.57
Financial assets held for trading 2 86,269.75 189,488.50
Accounts receivable 3 14,732,395.84 14,937,238.37
Advances to suppliers 4 18,020,338.85 24,332,129.12
Other receivables 5 49,298,258.09 44,004,157.29
Inventories 6 2,088,298,946.63 945,592,254.25
Total current assets 2,556,538,742.67 1,357,468,661.10
Non-current assets
Long-term equity investments 7 111,305,288.02 92,830,359.32
Investment Property 8 604,153,453.42 719,025,078.32
Fixed assets 9 66,283,427.82 70,894,484.45
Intangible assets 10 6,232,380.00 6,430,760.00
Long-term deferred and prepaid expenses 11 364,901.70 527,346.90
Deferred tax assets 12 16,232,130.41 18,479,988.82
Total non-current assets 804,571,581.37 908,188,017.81
TOTAL ASSETS 3,361,110,324.04 2,265,656,678.91
The Notes on page 58 to 147 form part of these financial statemtents47
CONSOLIDATED BALANCE SHEET（Continued）
As at 31 December 2009
Prepared by:SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE&
PROPERTIES (GROUP) CO., LTD. Units:Rmb Yuan
LIABILITIES AND
SHAREHOLDERS' EQUITY
Note Ⅴ 2009-12-31 2008-12-31
Current liabilities:
Short-term borrowings 15 100,000,000.00 59,200,000.00
AccountS payable 16 730,944,352.56 230,446,779.80
Advance from customers 17 157,116,052.15 130,134,521.89
Employee benefits payable 18 24,499,493.75 25,202,232.34
Taxes payable 19 -8,782,763.56 2,251,929.90
Interest payable 20 24,687,711.65 7,888,053.54
Other payables 21 297,237,215.73 262,914,117.22
Non-current liabilities within one
year
22 229,607,155.48 10,461,764.71
Total of current liability 1,555,309,217.76 728,499,399.40
Non-current liabilities:
Long-term borrowings 23 581,986,531.34 330,343,020.83
Long-term payable 24 8,185,932.62 7,490,170.24
Accrued liabilities 25 -- 2,196,714.08
Total non-current liabilities 590,172,463.96 340,029,905.15
Total liabilities 2,145,481,681.72 1,068,529,304.55
Shareholders' equity
Share capital 26 1,011,660,000.00 1,011,660,000.00
Capital reserve 27 978,244,858.10 978,244,858.10
Less: Shares in stock -- --
Surplus reserve 28 4,974,391.15 118,910,686.94
Retained Earnings 29 -781,357,778.86 -915,511,458.27
Foreign currency translation
defferences
15,130,144.02 14,984,787.99
Total equity attributable to
equity holders of the Company
1,228,651,614.41 1,208,288,874.76
Minority interests 30 -13,022,972.09 -11,161,500.40
Total shareholders' equity 1,215,628,642.32 1,197,127,374.36
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY
3,361,110,324.04 2,265,656,678.91
The Notes on page 58 to 147 form part of these financial statemtents48
CONSOLIDATED INCOME STATEMENT
As at 31 December 2009
Prepared by:SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE&
PROPERTIES (GROUP) CO., LTD. Units:Rmb Yuan
Items Note Ⅴ 2009Year 2008Year
1、Operating Income 31 750,182,202.47 706,005,324.41
Less：Cost of sales 31 534,326,169.41 473,150,286.71
Business Taxes and Surcharges 32 73,800,767.42 72,885,197.67
Selling and distribution expenses 8,779,310.59 9,304,138.71
General and administrative expenses 70,216,553.53 76,700,466.44
Finance expenses 33 39,697,263.73 29,510,799.13
Asset impairment losses 34 -7,000,000.00 1,350,000.00
Add：Gain from changes of fair value 109,106.25 -456,411.50
Investment income 35 5,793,517.26 2,770,589.42
Including： Investment income from affiliates 35 -1,904,596.98 -761,509.69
2、Operating profit 36,264,761.30 45,418,613.67
Add：Non-operating income 36 961,119.22 3,200,072.28
Less：Non-operating expenses 37 1,045,598.22 7,584,342.19
Including： Loss from disposal of non-current assets 37 57,747.38 83,755.93
3、Profit before income tax 36,180,282.30 41,034,343.76
Less：Income tax expenses 38 15,962,898.68 21,878,568.54
4、Net profit 20,217,383.62 19,155,775.22
Attributable to equity holders of the Company 20,217,383.62 19,123,787.11
Minority profit or loss -- 31,988.11
5、Earnings per share
（1）Basic earnings per share 0.0200 0.0189
（2）Diluted earnings per share 0.0200 0.0189
6、Other comprehensive income 39 145,356.03 650,043.70
7、Total comprehensive income 20,362,739.65 19,805,818.92
Attributable to equity holders of the Company 20,362,739.65 20,142,230.75
Minority comprehensive income -- -336,411.83
The Notes on page 58 to 147 form part of these financial statemtents49
CONSOLIDATED CASH FLOW STATEMENT 2009 Year
Prepared by:SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE&
PROPERTIES (GROUP) CO., LTD. Units:Rmb Yuan
Items Note Ⅴ 2009 Year 2008 Year
1、Cash flows from operating activities
Cash received from sales of goods or rendering of services 792,025,009.11 619,939,957.74
Refund of taxes and levies -- --
Cash received relating to other operating activities 40.1 53,868,624.32 27,069,483.45
Sub-total of cash inflows 845,893,633.43 647,009,441.19
Cash paid for goods and services 40.3 1,006,695,122.36 484,498,771.96
Cash paid to and on behalf of employees 88,870,596.42 98,228,960.64
Payments of taxes and levies 95,716,486.83 76,718,146.38
Cash paid relating to other operating activities 40.2 66,737,308.36 70,093,057.93
Sub-total of cash outflows 1,258,019,513.97 729,538,936.91
Net cash flows from operating activities -412,125,880.54 -82,529,495.72
2、Cash flows from investing activities
Cash received from investment retrieving -- --
Cash received as investment gains 7,898,114.24 5,131,080.69
Net cash received from disposal of fixed assets, intangible assets
and other long-term assets 220.00 3,316,643.70
Net cash received from disposal of subsidiaries or
other operational units
-- --
Cash received relating to other investing activities -- --
Sub-total of cash inflows 7,898,334.24 8,447,724.39
Cash paid to acquire fixed assets, intangible assets and other
long-term assets
1,308,118.28 2,752,386.21
Cash paid to acquire investments -- --
Net cash received from subsidiaries and other operational units -- --
Cash paid relating to other investing activities -- --
Sub-total of cash outflows 1,308,118.28 2,752,386.21
Net cash flows from investing activities 6,590,215.96 5,695,338.18
3、Cash flows from financing activities
Cash received as investment -- --
Including： Cash received as investment from minor shareholders -- --
Cash received from borrowings 40.4 950,000,000.00 85,000,000.00
Cash received relating to other financing activities -- --
Sub-total of cash inflows 950,000,000.00 85,000,000.00
Cash repayments of borrowings 40.4 438,411,098.72 99,489,671.78
Cash payments for interest expenses and distribution of dividends
or profits
30,401,378.52 29,307,608.42
Including： Cash payments for dividends or profit to minority
shareholders of subsidiaries
-- --
Cash payments relating to other financing activities -- --
Sub-total of cash outflows 468,812,477.24 128,797,280.20
Net cash flows from financing activities 481,187,522.76 -43,797,280.20
4、Effect of foreign exchange rate changes on cash and cash
equivalents
172,739.29 -2,406,781.24
5、Net increase in cash and cash equivalents 75,824,597.47 -123,038,218.98
Add: Cash and cash equivalents at beginning of year 299,011,742.90 422,049,961.88
6、Cash and cash equivalent at end of year 40.5 374,836,340.37 299,011,742.90
The Notes on page 58 to 147 form part of these financial statemtents50
CONSOLIDATED STATEMENT OF CHANGES IN OWNER'S EQUITY
2009 YEAR
Prepared by:SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE& PROPERTIES (GROUP) CO., LTD. Units:Rmb Yuan
Attributable to equity holders of the Company
Share capital
Capital
reserve
Less：
shares
in
stock
Special
reserve
Surplus
reserves
Retained
Earnings
Foreign
currency
exchange
differences
Minority
interests
Total
1、Balance at the end of last year：： 1,011,660,000.00 978,244,858.10 -- -- 118,910,686.94 -915,511,458.27 14,984,787.99 -11,161,500.40 1,197,127,374.36
Add：Changes of accounting policy -- -- -- -- -- -- -- -- --
Error correction of the last period -- -- -- -- -- -- -- -- --
2、Balance at the beginning of the year 1,011,660,000.00 978,244,858.10 -- -- 118,910,686.94 -915,511,458.27 14,984,787.99 -11,161,500.40 1,197,127,374.36
3、Change in equity for the year -- -- -- -- -113,936,295.79 134,153,679.41 145,356.03 -1,861,471.69 18,501,267.96
(1) Net profit -- -- -- -- -- 20,217,383.62 -- 20,217,383.62
(2) Other comprehensive income -- -- -- -- -- -- 145,356.03 -- 145,356.03
sub-total（1）&（2） -- -- -- -- -- 20,217,383.62 145,356.03 -- 20,362,739.65
(3) Shareholders' contributions and decrease of
capital
-- -- -- -- -- -- -- -1,861,471.69 -1,861,471.69
1、Contributions by shareholders -- -- -- -- -- -- -- -- --
2、Equity settled share-based payment -- -- -- -- -- -- -- -- --
(4) Appropriation of profits -- -- -- -- -- -- -- -- --
1、Withdrawal of surplus reserves -- -- -- -- -- -- -- -- --
2、Distributions to shareholders -- -- -- -- -- -- -- -- --
3、Others -- -- -- -- -- -- -- -- --
（5）Transfers within equity -- -- -- -- -113,936,295.79 113,936,295.79 -- -- --
1、share capital increased by capital reserve
transfer
-- -- -- -- -- -- -- -- --
2、share capital increased by surplus reserve
transfer
-- -- -- -- -- -- -- -- --
3、Remedying loss with profit surplus -- -- -- -- -113,936,295.79 113,936,295.79 -- -- --
4、others -- -- -- -- -- -- -- -- --
4、Balance at the end of the year
report period
1,011,660,000.00 978,244,858.10 -- -- 4,974,391.15 -781,357,778.86 15,130,144.02 -13,022,972.09 1,215,628,642.32
The Notes on page 58 to 147 form part of these financial statemtents51
CONSOLIDATED STATEMENT OF CHANGES IN OWNER'S EQUITY(Continued)
2008Year
Prepared by:SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE& PROPERTIES (GROUP) CO., LTD. Units:Rmb Yuan
Attributable to equity holders of the Company
项目
Share capital
Capital
reserve
Less：
shares
in
stock
Special
reserve
Surplus
reserves
Retained
Earnings
Foreign
currency
exchange
differences
Minority
interests
Total
1、Balance at the end of last year：： 1,011,660,000.00 978,244,858.10 -- -- 118,910,686.94 -934,635,245.38 13,966,344.35 -6,774,741.72 1,181,371,902.29
Add：Changes of accounting policy -- -- -- -- -- -- -- -- --
Error correction of the last period -- -- -- -- -- -- -- -- --
2、Balance at the beginning of the year 1,011,660,000.00 978,244,858.10 -- -- 118,910,686.94 -934,635,245.38 13,966,344.35 -6,774,741.72 1,181,371,902.29
3、Change in equity for the year -- -- -- -- -- 19,123,787.11 1,018,443.64 -4,386,758.68 15,755,472.07
(1) Net profit -- -- -- -- -- 19,123,787.11 -- 31,988.11 19,155,775.22
(2) Other comprehensive income -- -- -- -- -- -- 1,018,443.64 -368,399.94 650,043.70
sub-total（1）&（2） -- -- -- -- -- 19,123,787.11 1,018,443.64 -336,411.83 19,805,818.92
(3) Shareholders' contributions and
decrease of capital
-- -- -- -- -- -- -- -4,050,346.85 -4,050,346.85
1、Contributions by shareholders -- -- -- -- -- -- -- -- --
2、Equity settled share-based payment -- -- -- -- -- -- -- -- --
(4) Appropriation of profits -- -- -- -- -- -- -- -- --
1、Withdrawal of surplus reserves -- -- -- -- -- -- -- -- --
2、Distributions to shareholders -- -- -- -- -- -- -- -- --
3、Others -- -- -- -- -- -- -- -- --
（5）Transfers within equity -- -- -- -- -- -- -- -- --
1、share capital increased by capital reserve
transfer
-- -- -- -- -- -- -- -- --
2、share capital increased by surplus reserve
transfer
-- -- -- -- -- -- -- -- --
3、Remedying loss with profit surplus -- -- -- -- -- -- -- -- --
4、others -- -- -- -- -- -- -- -- --
4、Balance at the end of the year
report period
1,011,660,000.00 978,244,858.10 -- -- 118,910,686.94 -915,511,458.27 14,984,787.99 -11,161,500.40 1,197,127,374.36
The Notes on page 58 to 147 form part of these financial statemtentsBALANCE SHEET
As at 31 December 2009
Prepared by:SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE&
PROPERTIES (GROUP) CO., LTD. Units:Rmb Yuan
ASSETS NoteⅩⅢ 2009-12-31 2008-12-31
Current assets:
Cash at bank and on hand 73,508,120.37 188,891,010.32
Financial assets held for trading 86,269.75 189,488.50
Accounts receivable 1 6,109,646.72 7,598,911.50
Advances to suppliers -- 478,423.65
Other receivables 2 469,851,675.39 607,212,015.51
Inventories 3 1,414,914,758.68 181,274,439.65
Total current assets 1,964,470,470.91 985,644,289.13
Non-current assets:
Long-term equity investments 4 302,004,763.37 302,909,360.35
Investment Property 534,718,105.50 641,638,730.03
Fixed assets 39,439,456.90 41,729,025.52
Deferred tax assets 95,455.46 4,235,725.42
Total non-current assets 876,257,781.23 990,512,841.32
TOTAL ASSETS 2,840,728,252.14 1,976,157,130.45
The Notes on page 58 to 147 form part of these financial statemtentsSHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) CO., LTD
For the year ended 31 December 2009
5 3
BALANCE SHEET（Continued）
As at 31 December 2009
Prepared by:SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE&
PROPERTIES (GROUP) CO., LTD. Units:Rmb Yuan
LIABILITIES AND OWNERS'
EQUITY NoteⅩⅢ 2009-12-31 2008-12-31
Current liabilities:
Short-term borrowings 100,000,000.00 59,200,000.00
Account payable 621,374,407.44 32,708,884.80
Advance from customers 10,696,023.60 5,211,019.92
Employee benefits payable 9,066,342.19 10,720,641.23
Taxes payable 2,915,204.83 4,250,387.71
Interest payable 24,687,711.65 7,888,053.54
Other payables 383,176,088.95 355,621,239.01
Non-current liability due in one year 206,407,155.48 10,461,764.71
Other current liability -- --
Total of current liability 1,358,322,934.14 486,061,990.92
Non-current liabilities:
Long-term borrowings 281,986,531.34 243,543,020.83
Accrued liabilities -- 2,196,714.08
Total non-current liabilities 281,986,531.34 245,739,734.91
Total liabilities 1,640,309,465.48 731,801,725.83
Owners' equity:
share capital 1,011,660,000.00 1,011,660,000.00
Capital reserve 978,244,858.10 978,244,858.10
Less: Shares in stock -- --
Surplus reserve -- 113,936,295.79
Retained Earnings -789,486,071.44 -859,485,749.27
Total owners' equity 1,200,418,786.66 1,244,355,404.62
TOTAL LIABILITIES AND
OWNER'S EQUITY 2,840,728,252.14 1,976,157,130.45
The Notes on page 58 to 147 form part of these financial statemtentsSHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) CO., LTD
For the year ended 31 December 2009
5 4
INCOME STATEMENT
2009 Year
Prepared by:SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE&
PROPERTIES (GROUP) CO., LTD. Units:Rmb Yuan
Items NoteⅩⅢ 2009 Year 2008 Year
1、Operating Income 5 154,491,683.12 120,818,309.21
Less:Cost of sales 5 97,816,242.35 50,943,414.14
Business Taxes and Surcharges 30,956,507.51 18,386,335.70
Selling and distribution expenses 2,637,181.50 2,476,251.00
General and administrative expenses 30,487,484.97 37,541,592.89
Finance expenses 30,992,954.16 29,781,446.46
Asset impairment losses -- 1,350,000.00
Add:Gain from changes of fair value 109,106.25 -456,411.50
Investment income 6 -1,790,295.30 -1,719,466.38
Incl. Investment income from affiliates 6 -1,904,596.98 -761,509.69
2、Operating profit -40,079,876.42 -21,836,608.86
Add:Non-operating income 846,597.38 1,401.00
Less:Non-operating expenses 563,068.96 6,705,364.35
Incl. Loss from disposal of non-current
assets -- --
3、Profit before income tax -39,796,348.00 -28,540,572.21
Less：Income tax expenses 4,140,269.96 6,010,028.29
4、Net profit -43,936,617.96 -34,550,600.50
5、Earnings per share
（1）Basic earnings per share -0.0434 -0.0342
（2）Diluted earnings per share -0.0434 -0.0342
6、Other comprehensive income -- --
7、Total comprehensive income -43,936,617.96 -34,550,600.50
The Notes on page 58 to 147 form part of these financial statemtentsSHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) CO., LTD
For the year ended 31 December 2009
5 5
CONSOLIDATED CASH FLOW STATEMENT 2009 Year
Prepared by:SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE&
PROPERTIES (GROUP) CO., LTD. Units:Rmb Yuan
Item NoteⅩⅢ 2009 Year 2008 Year
1、Cash flows from operating activities
Cash received from sales of goods or rendering of services 164,105,736.30 90,852,938.89
Refund of taxes and levies -- --
Cash received relating to other operating activities 316,855,422.62 46,692,789.14
Sub-total of cash inflows 480,961,158.92 137,545,728.03
Cash paid for goods and services 612,513,714.45 16,884,661.12
Cash paid to and on behalf of employees 31,565,341.58 33,977,923.45
Payments of taxes and levies 17,904,978.56 23,688,882.56
Cash paid relating to other operating activities 183,162,452.07 70,795,743.68
Sub-total of cash outflows 845,146,486.66 145,347,210.81
Net cash flows from operating activities -364,185,327.74 -7,801,482.78
2、Cash flows from investing activities
Cash received from investment retrieving -- --
Cash received as investment gains 7,698,114.24 47,026.35
Net cash received from disposal of fixed assets, intangible assets and other
long-term assets -- --
Net cash received from disposal of subsidiaries or
other operational units -- --
Cash received relating to other investing activities -- 75,695.00
Sub-total of cash inflows 7,698,114.24 122,721.35
Cash paid to acquire fixed assets, intangible assets and other long-term
assets 183,909.54 152,029.00
Cash paid to acquire investments -- --
Net cash received from subsidiaries and other operational units -- --
Cash paid relating to other investing activities -- 76,125.00
Sub-total of cash outflows 183,909.54 228,154.00
Net cash flows from investing activities 7,514,204.70 -105,432.65
3、Cash flows from financing activities
Cash received as investment -- --
Including： Cash received as investment from minor shareholders 650,000,000.00 70,000,000.00
Cash received from borrowings -- --
Cash received relating to other financing activities 650,000,000.00 70,000,000.00
Sub-total of cash inflows 374,811,098.72 68,289,671.78
Cash repayments of borrowings 21,719,734.34 24,342,687.23
Cash payments for interest expenses and distribution of dividends or profits -- --
Including： Cash payments for dividends or profit to minority shareholders
of subsidiaries 396,530,833.06 92,632,359.01
Cash payments relating to other financing activities 253,469,166.94
-22,632,359.01
Sub-total of cash outflows -- -120,295.60
Net cash flows from financing activities -103,201,956.10 -30,659,570.04
4、Effect of foreign exchange rate changes on cash and cash equivalents 165,443,883.33 196,103,453.37
5、Net increase in cash and cash equivalents 62,241,927.23 165,443,883.33
The Notes on page 58 to 147 form part of these financial statemtentsSHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) CO., LTD
For the year ended 31 December 2009
5 6
CHANGES IN OWNER'S EQUITY
2009 Year
Prepared by:SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE&
PROPERTIES (GROUP) CO., LTD. Units:Rmb Yuan
Item Share capital
Capital
reserve
Surplus
reserves
Retained
Earnings
Total
一、Balance at the end of last
year：
1,011,660,000.00 978,244,858.10 113,936,295.79 -859,485,749.27 1,244,355,404.62
Add:Changes of accounting policy -- -- -- -- --
Error correction of the last period -- -- -- -- --
2、Balance at the beginning of this
year
1,011,660,000.00 978,244,858.10 113,936,295.79 -859,485,749.27 1,244,355,404.62
3、Change in equity for the year -- -- -113,936,295.79 69,999,677.83 -43,936,617.96
(1)Net profit -- -- -- -43,936,617.96 -43,936,617.96
(2)Other comprehensive income -- -- -- -- --
sub-total（1）&（2） -- -- -- -43,936,617.96 -43,936,617.96
(3) Shareholders' contributions and
decrease of capital
-- -- -- -- --
1、Contributions by shareholders -- -- -- -- --
2、Equity settled share-based payment -- -- -- -- --
(4) Appropriation of profits -- -- -- -- --
1、Withdrawal of surplus reserves -- -- -- -- --
2、Distributions to shareholders -- -- -- -- --
（5）Transfers within equity -- -- -113,936,295.79 113,936,295.79 --
1、share capital increased by capital
reserve transfer
-- -- -- -- --
2、share capital increased by surplus
reserve transfer
-- -- -- -- --
3、Remedying loss with profit surplus -- -- -113,936,295.79 113,936,295.79 --
4、others
4、Balance at the end of this
report period
1,011,660,000.00 978,244,858.10 -- -789,486,071.44 1,200,418,786.66
The Notes on page 58 to 147 form part of these financial statemtentsSHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) CO., LTD
For the year ended 31 December 2009
5 7
CHANGES IN OWNER'S EQUITY
2008 Year
Prepared by:SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE&
PROPERTIES (GROUP) CO., LTD. Units:Rmb Yuan
Item Share capital Capital reserve
Surplus
reserves
Retained
Earnings
Total
一、Balance at the end of last year： 1,011,660,000.00 978,244,858.10 113,936,295.79 -824,935,148.77 1,278,906,005.12
Add:Changes of accounting policy -- -- -- -- --
Error correction of the last period -- -- -- -- --
2、Balance at the beginning of this year 1,011,660,000.00 978,244,858.10 113,936,295.79 -824,935,148.77 1,278,906,005.12
3、Change in equity for the year -- -- -- -34,550,600.50 -34,550,600.50
(1)Net profit -- -- -- -34,550,600.50 -34,550,600.50
(2)Other comprehensive income -- -- -- -- --
sub-total（1）&（2） -- -- -- -34,550,600.50 -34,550,600.50
(3) Shareholders' contributions and
decrease of capital
-- -- -- -- --
1、Contributions by shareholders -- -- -- -- --
2、Equity settled share-based payment
-- -- -- -- --
(4) Appropriation of profits -- -- -- -- --
1、Withdrawal of surplus reserves -- -- -- -- --
2、Distributions to shareholders -- -- -- -- --
（5）Transfers within equity
-- -- -- -- --
1、share capital increased by capital
reserve transfer
-- -- -- -- --
2、share capital increased by surplus
reserve transfer
-- -- -- -- --
3、Remedying loss with profit surplus -- -- -- -- --
4、others
4、Balance at the end of this
report period
1,011,660,000.00 978,244,858.10 113,936,295.79 -859,485,749.27 1,244,355,404.62
The Notes on page 58 to 147 form part of these financial statemtentsShenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
5 8
NOTE 1、The company's basic information
(1) COMPANY STATUS
Shenzhen Special Economic Zone Real Estate and Properties (Group) Co., Ltd. (hereafter
referred to as “Company”) was in corporate in July 1993, as approved by the Shenzhen
Municipal Government with document SFBF (1993) 724. The Company issued A shares on
15th September 1993 and issued B shares on 10 January 1994. On 31 August 1994, B
shares issued were listed in New York Exchange market as class A recommendation. The
total share capital are 1,011,660,000 shares, of which, A shares are 891,660,000 shares,
and the B shares are 120, 000,000 shares. The company business licenses registration
number is 440301103225878, and the registered capital is RMB 1,011,660,000.00.
On 13 October 2004，according to the document No.(2004) 223 “Decision on establishing
Shenzhen investment Holding Co., Ltd.” issued by State-Owned Assets Supervision and
Administration Commission of Shenzhen Municipal Government, Former major
shareholder – Shenzhen Construction Investment Holding Company with two other assests
management companies merged to form the Shenzhen Investment Holding Co., Ltd. By the
State-owned Assets Supervision and Administration Commission of the state council， and
quasi-exempt obligations tender offer as approved by China Security Regulatory
Committee with document No.(2005)116, this issue of consolidated has been authorized
and the registration changing had been done on 15 Feberary 2006. As at the end of the
reporting period, Shenzhen Investment Holding Limited holds 642,884,262 shares of the
company (63.55% of the total share capital). The shares are all selling unrestricted shares.
(2) The company's nature/business scope/main products or services
Nature of Busines: This Company belongs to the real estate industry.
Business scope：Mainly engaged in real estate development and sales, property leasing and
management, retail merchandising and trade, hotel, equipment installation and
maintenance, construction, interior decoration and so on.
The main products or services provided ： commodity housing, property leasing and
management , hotel service, construction and installation service, renovation service.
(3) Approved financial reportShenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
5 9
The financial statements were authorized for issue by the board of directors at 19
April 2010.
NOTE 2、Summary of significant accounting policies, accounting estimates and prepare the
consolidated financial statements
(1) Basis of preparation
The financial statements have been translated into English from the Company’s financial
statementss issued in Chinese.
(2) Statement of compliance
The financial statements have been prepared in accordance with the requirements of the
China Accounting Standards for Business Enterprises ( CAS (2006)) issued by the Ministry
of Finance(MOF). These financial statements present truly and completely the
consolidated financial position and financial position, the consolidated results of
operations and results of operations and the consolidated cash flows and cash flows of the
Group.
The financial statements also comply with the disclosure requirements of “ Regulation on
the Preparation of Information Disclosures of Companies Issuing Public Shares, No. 15:
General Requirements for Financial Reports and No. 9: Rate of Return(ROE) and the
caluation of earning per share” revised by the China Securities Reulatory
Commission(CSRC) in 2010.
(3) Accounting period
The accounting year of the Group is from 1 January to 31 December.
(4) Functional and presentation currency
The consoliated financial statements are presented in Renminbi Yuan, and subsidiaries
registered in foreign countries shall consider the local currency as functional and
presentation currency.
(5) Accounting basis and Accounting measurement
The accounting basis of the Group is the accrual system.
Accounting measurements consist of: historical cost, replacement cost, net realizable value,
present value, fair value. An enterprise shall generally adopt historical cost as theShenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
6 0
measurement basis for accounting elements. If the accounting elements are measured at
replacement cost, net realizable value, present value or fair value, the enterprise shall
ensure such amounts can be obtained and reliably measured.
(6) Foreign currency transactions
Foreign currency transactions are , on a inittial recognition, translated to RMB at the spot
exchange rate on the dates of the transactions.
Monetary items denominated in foreign currencies are translated into RMB at the spot
exchange rate at the balance sheet date. The resulting exchange differences are recognised
in profit or loss, except those arising from the principals and interests on foreign currency
borrowings specifically for the purpose of acquisition, construction or productions of
qualifying assests. Non-monetary items denominated in foreign currences that are
measured at historical cost are translated to RMB using the foreign exchange rate at the
transaction date.
(7) Business combination under common control and not under common control
A business combinations refers to a transaction or event that brings together of separate
enterprises into one reporting entity. Business combinations are classified into the
business combinations involving enterprise common control under and the business
combinations not involving enterprise under common control.
1. Business combination involing entities under common control
A business combination involing enterprises under common control is a business
combination in which all of the combining enterprises are ulimately controlled by the same
party or parties both before and after the business combination, and that control is not
transitory. The assests an liabilities obtained are measured at the carrying amounts as
recorder by the enterprise being absorded at the combination date. The differences between
the carrying amount of the net assest obtained and the carrying amount of consideration
paid for the combination (or the total face value of shares issued) is adjusted fo share
premiun in the capital reserve. If the balance of share primiun is insufficient, any excess is
adjusted to retained earnings. The combination date is the date on which the Group
effectively obtains control of the enterprise being absord.
2、Business combinations involing entities not under common controlShenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
6 1
A business combination involing entities not under common control is a business
combination in which all of the combining entities are not ultimately controlled by the
same party or parties both before and after the business combination. The cost of a
business combination paid for the Group is the aggregate of fair value at the acquisition
date of assests given, liabilities incurred or assumed, and equity securities issued by the
Group, in exchange for control of the acquiree plus any cost directly attributable to the
business combination. The difference between the fair value and the carrying amount of
the assests given is recognised in profit or loss. The acquisition date is the date on which
the Group effectively obtains control of the acquiree.
Any excess of the cost of a business combination over the Group’s interest in the fair value
of the acquiree’s identifiable net assest is recognised as goodwill.
Any excess of the Group’s interest in the fair value of the acquiree’s identificable net
assest over the cost of a business combination is recognized in profit or loss.
The Group, at the acquisition date, allocates the cost of the business combinationby
recognising the acquiree’s identificable assest, liabilities and contigent liabilities at their
fari value at that date.
(8) Consolidated financial statements
The consolidated financial statements comprise the company and the subisdiaries. Control
is that the company can dicide the financial and operating policy, and earn the profit from
the business of the subsidiaries.
When the company combines a subsidiary during the reporting period through a business
combination involing entities under common contorl, the financial statements of the
subsidiary are included in the cosolidated financial statements as if the combination had
occurred at the beginning of the earliest comparative period presented or, if later, at the
date that common control was established. Therefore the opening balances and the
prepartions of the consolidated financial statements are restated. In the preparation of the
consolidated financial statements, the subsidiary’s assests, liabilities and results of
operations are included in the consolidated balance sheet and the consolidated income
statements, from the date that common control was estabished.
Where the company acquires a subsidiary during the reporting perod through a businessShenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
6 2
combination involing entities not under common control, the identifiable assests,
liabilities and results of operations of the subsidiaries are consolidated into consolidated
into consolidated financial statements from the date that control commenses, base on the
fair value of those identifiable assets and liabilities at the acquisition date.
Minority interest is presented separately in the consolidated balance sheet within equity.
Net profit or loss attributable to minority shareholders is presented separately in the
consolidated income statement below the net profit line item.
Where the amount of losses attributable to the minority shareholders of a subsidiary
exceeds the minority shareholders’ portion of the equity of the subsidiary, the excess, and
any further losses arrtibutable to the minority shareholders, are allocated against the
equity attributable to the Company except to the extent thar the minority shareholders have
a binding obligation under the articles of association or an agreement and are able to make
additional investment to cover the losses. If the subsidiary subsequently reports profits,
such profits are allocated to the equity attributable to the Company until the minority
shareholders’ share of losses previously absorbed by the Company has been recovered.
When the accounting period or accounting policies of a subsidiary are different from those
of the Company, the Company makes necessary adjustments to the financial statements of
the subsidiary based on the Company’s own accounting period or accounting policies.
Intra-group balances and transactions, and any unrealised profit of loss arising from
intra-group transactions, are eliminated in preparing the onsolidated financial statememts.
Unrealised losses resulting from intra-group transactions are eliminated in the same way as
unrealized gains but only to the extent that there is no evidence of impairment.
(9) Cash and cash equivalents
Cash equivalents are short-term, highly liquid investments that are readily convertible to
known amounts of cash and that are subject to an insignificant risk of changes in value.
(10) Recognition and Measurement of financial assets and financial liability
1、Categories
Financial assets and financial liability are classified into the following categories:
financial assets and financial liability held for trading, held-to-maturity investments,
receivables, financial assets available for sale, and other financial liabilities.Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
6 3
2、Determination of the Fair Value of the financial assets and financial liability
（1）If there is an active market for a financial asset or financial liability, the quoted prices
in the active market shall be used to establish the fair value of the financial assets and
financial liability.
（2）There is no active financial instruments market, the valuation techniques used to
determine its fair value.
（3）As for the financial assets initially obtained or produced at source and the financial
liabilities assumed, the fair value thereof shall be determined on the basis of the
transaction price of the market.
（4）In applying discounted cashflow analysis to determine the fair value of a financial
instrument, it shall use the market returns ratio of other financial instruments with
essentially the same contractual stipulations and features as the rate of capitalization.
Short-term receivable and payable with no state interest rate may be measured at the actual
transaction amount when the difference between that amount and its present value is
immaterial.
3、Transaction of financial assets and financial liabilities
The initial reorganization of a financial asset or financial liability held for trading shall
measure it at fair value. Transaction costs shall be charged to the profit or loss for the
current period. The payment has been including in the declared but not yet paid cash
dividends or interest paid to the period but not yet receiving interest, recognized as
receivables. Holding companies in the trading of financial assets acquired during the
interest or dividends in cash, recognized as investment income.
The balance sheet date, adopt fair value for trading financial assets and financial liabilities,
changes of fair value will be included in current profit and loss.
The disposal of financial assets or financial liabilities, its fair value and accounted for the
initial amount of the difference recognized as investment income and changes in the fair
value adjustment of profit and loss.
4、Held-to-maturity investments
The term "held-to-maturity investment" refers to a non-derivative financial asset with aShenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
6 4
fixed date of maturity, a fixed or determinable amount of repo price and which the
enterprise holds for a definite purpose or the enterprise is able to hold until its maturity.
The following non-derivative financial assets shall not be classified as investments held to
their maturity:
(1) The designated non-derivative financial assets which, at their initial recognition, are
measured at their fair values and of which the variation is included in the current profits
and losses;
(2) The non-derivative financial assets which are designated as sellable at their initial
recognition; and
(3) Loans and account receivables.
An enterprise shall, on the balance sheet date, make an appraisal on its purpose of holding
and ability to hold. Where there is any change, it shall be dealt with according to the
present Standards.
5、Receivables
Should be receiving amount according to the take initial confirmation amount with debtors
between the contract or the agreement.
The date of the balance sheet, the receivable amount must account to the amortized cost
measurement. Disposal or recovery of receivables, the difference between actual price and
fair value will be counted as gain or loss for the current period.
6、Sellable financial assets
Sellable financial asset should be made in accordance with the fair value of financial
assets and related transaction costs and is recognized as the initial amount. To pay the
price included in the payment period has not yet received the bonds but has not yet
declared or paid cash dividends, recognized as a separate receivables.
For the sale of financial assets held by the period of interest and cash dividends, will be
included in investment income. The balance sheet date, for the sale of financial assets
should be based on fair value, and the changes in fair value will be included in capitalShenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
6 5
reserve.
7、Other financial liabilities
Other financial liabilities at fair values and relevant transaction expenses to get them are
deemed as the initial confirmation amount. The subsequent calculation adopts the
amortized cost method.
8、Impairment of Financial Assets
The end of trading on financial assets other than financial assets, there is objective
evidence that the impairment occurred, according to their expected future cash flows are
lower than the book value of the difference between the impairment provisions.
（1）Receivables
Provide of the bad debts using the allowance method. At the end of period, if have the
objective evidence to indicate that the receivable amount reduce, then the net book value
and the estimate in the future between the cash flow current value differential computation
confirmation the impairment loss.
The end of the period, receivables that are individually significant are subject to individual
impairment assessment, separate impairment test. If there is objective evidence that the
incidence of impairment, a provision for impairment of the receivable is established at the
difference between the carrying amount of the receivable and the present value of
estimated future cash flows.
The company based on the same or similar case which had the similar credit risk and actual
loss, to define the specific provision for bad debt.
The criterion of the bad debts: 1.the debtor goes bankrupt or the death, pay off the legally
after its bankrupt property or the inheritance, still that is unable to recover the funds; 2.
the debtor default overdue, and that is unable to recover the funds.
To the notes of the receivable and prepay credit，this company carries on the impairment
test alone, which has the objective evidence to indicate that it has had the impairment, will
be lower than its book value according to the future cashflow the current value the
difference, it is the impairment loss, the provision for bad debt.Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
6 6
（2）Held-to-maturity investments
Has the objective evidence to indicate that has had the impairment to the due investment,
that should be calculate this investment the cash flow current value in the future, this
current value is lower than the book vale which the difference is the revaluation deficit.
（3）Sellable financial asset
Where a sellable financial asset is impaired, even if the recognition of the financial asset
has not been terminated, the accumulative losses arising from the decrease of the fair value
of the owner’s equity which was directly included shall be transferred out and recorded
into the profits and losses of the current period. The accumulative losses that are
transferred out shall be the balance obtained from the initially obtained costs of the sold
financial asset after deducting the principals as taken back, the current fair value and the
impairment-related losses as was recorded into the profits and losses of the current period.
As for the sellable debt instruments whose impairment-related losses have been recognized,
if, within the accounting period thereafter, the fair value has risen and are objectively
related to the subsequent events that occur after the originally impairment-related losses
were recognized, the originally recognized impairment-related losses shall be reversed and
be recorded into the profits and losses of the current period.
The impairment-related losses incurred to a sellable equity instrument. Investment shall
not be reversed through profits and losses. However, the impairment-related losses
incurred to an equity instrument investment for which there is no quoted price in the active
market and whose fair value cannot be reliably measured, or incurred to a derivative
financial asset which is connected with the said equity instrument and which shall be
settled by delivering the said equity instrument, may not be reversed.
After an impairment of a financial asset, the interest incomes shall be recognized at the
interest rate which is used as the capitalization rate in the capitalization of the future cash
flow when the impairment-related losses are determined.
(11) Account Receivable and other receivables
Account receivable fund of the company comply accounts receivable and other receivables.
The provision apply the Allowance method. If there are evidences proving that the ccount
fund have devualtion. The company will recognize the difference between the book value
and the estimated cash flow in the future.Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
6 7
1． The recognizaion of account receivable( other receivable) which is significant
and the method of allownance
The ending blance of Rmb 5000 thousand or above of account receivables is Significant
accounts receivable. The ending blance of Rmb 5000 thousand or above of other receivables is
Significant other receivable. If testd the significant account receivables or other receivables
indivually, if If there are evidences proving that the ccount fund have devualtion. The
company will recognize the difference as profitbetween the book value and the estimated
cash flow in the future.
2 ． The recognizaion of account receivable( other receivable) which is
unsignificant indivually but according to the characteristics of the portfolio after
portfolio of risky accounts receivable and the method of allownance
The company made the credit policy according to the markets characteristics and clients’
risks. And form the credit risky Composition accourding to credit period and aging. The company
accrued the allownance according to the actual loss rate comparing with the similare risk
characteristics portfolio.
3．Other unsiginifcant accounts receivable and other receivables
The less risky accounts receivable and other receivables, if the aging is longer, the debtors
have serious financial difficulities and the company has dissensions with the debtors, the company
accrued the allownance individually.
（12）Inventories
1、Categories of Inventories
Inventory classification according to real estate development and non-development of
products. The real estate development products are the real estate development products
under construction development products which have been completed, the lands to be
developed, etc. The non-real estate development products including raw materials, finished
products and stocks, low-value consumable products and construction.Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
6 8
2、Measurement of Inventories:
(1) Have been completed is the development of products that have been completed,
pending the sale of the property; under construction is the development of products that
have not yet completed the sale of the property for development purposes; to develop land
is acquired by means of, has decided to be developed for sale or lease land property. To the
overall development of land in the project development, all built into the development of
products; in the project development phases, it will be part of a phased development of
land into the development of products in the building, undeveloped land is still retained in
the proposed land development.
(2) Public Facilities Fee: The cost is the actual construction cost incurred. Measured in the
non-development product account. If several estate projects benefit from the same facility,
and they stay in the same category. The cost of fee should be measured according to the
allocation of sales area. If they got benefit but in different categories, the cost measured
according to the allocation of the area under the prorated. Until the project complete, the
cost measures in the assessment into the real estate development products.
(3) Utility Reserve Fund: In special administrative region, the fund is the ratio of 2% of
the whole constructive investment that included the land price of delivery of completed
estate. Outside the region, the ratio of 2% of the whole constructive investment of the
estate. But it all measures in the non-development products.
(4) Quality Guarantees: According to the contract amount puts into the account of real
estate development. Also record in the accounts payable at the same time. The actual
payment incurs after the expiry of guarantee.
(5) Implement the perpetual inventory system; all kinds of inventories are recorded in the
actual cost, a weighted-average valuation for sell. The real estate development records in
the measurement of identification. As for the low value properties, implement one
amortization method when used.
(6) Inventories are written down to the lower of the cost and the revised net realizable
value. On the basis of comprehensive inventory, those destroyed, in whole or part outdated
or the sales price is lower than its cost. Should decline the value. And the value is the
difference from the cost and net realizable value. Longterm equity investments.
（13）Long term equity investment
1、 Long term equity investment can be classified: Investment in subsidiary; investmentShenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
6 9
in associate; investment in joint venture; other long term investment in an entity which the
investor does not have jointly control and significant influence, and also the fair value of
this long term investment can not measure reliably in the active market.
2、 Investment in subsidiary
For the investment in subsidiary, initially cost of investment should be accounted for at its
carrying value of the investing entity. The direct cost relating to the acquisition, are
recognized as expenses to income statement. The difference between the initially cost of
investment and the fair value paid for the investment should be adjusted to capital reserve.
If the capital reserve is not enough to deduct the difference, the surplus should be adjusted
to retained earnings.
For the investment in subsidiary, which is not under the same control, initially cost of
investment should be accounted for at its fair value paid for the investment and all the
direct cost relating to the investment. The difference between initially cost of investment
and carrying value of the investing entity at the date of acquisition are recognised as
profit/loss for the year. If the initially cost of investment is more than identifiable assets
and liabilities for the investment entity at the date of acquisition, the surplus should be
treated as long term investment in the investor/parent’s book. This surplus can be treated
as goodwill, recorded in the consolidated accounts. If the initial cost of investment is less
than the identifiable assets and liabilities of the investing entity at the date of acquisition,
the difference should be recognized as expense for the year.
Goodwill should not be amortized, but acquirer shall test it for impairment annually
instead. Impairment test for goodwill is part of impairment testing the cash generating
units to which it related. Once the impairment loss is recognized, it cannot be reverse back.
In the investor/parent’s financial statement, costing method is used to account for the long
term equity investment. Consolidated financial statement should be included subsidiary.
If subsidiary has the indication for impairment as at the balance sheet date, recoverable
amount should be measured. If the recoverable amount is less than its fair value,
impairment loss should be provided. Provision for impairment cannot be reverse back in
the following accounting period.
For disposal of the long term investment, the difference between sales proceeds andShenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
7 0
carrying value, recognized as profit/loss for the investment.
3、 Investment in associate and joint venture
For the investment in associate, initial cost of investment should be account for the fair
value paid for the investment and related cost for the investment.
Investment in associate is acquired by non-monetary asset, if this transaction has business
value, and the fair value of exchangeable assets can be measured reliably, therefore, initial
cost of investment should be account at fair value of the exchangeable assets and related
tax expenses. Difference of fair value and carrying value of the exchangeable assets,
should be recognized as profit and loss for the year. If the two requirements are not met,
then carrying value of the exchangeable assets and related tax expenses should be account
at initial cost of investment.
If the associate is acquired by debt restructuring, initial cost of investment should be the
market value of the shares acquired. The difference of the initial cost of investment and
carry value of the debt should be recognized as profit/loss for the year.
Equity method should be used for subsequent measurement of investment in associate.
Once measuring gain/loss for investing in associate, it should be based on the fair value of
identifiable net assets as at acquisition date. If associated company’s accounting policy
and accounting period is difference with investing company, then it should follow
investing company’s accounting policy and accounting period, and measure the investment
profit or loss.
If associated company is making a loss, carrying value of this investment and net
investment equity can be reduce to zero, except for other responsibilities to be bear by the
investing company.
If associate company has the indication for impairment as at the balance sheet date,
recoverable amount should be measured. If the recoverable amount is less than its fair
value, impairment loss should be provided. Provision for impairment cannot be reverse
back in the following accounting period.
For disposal of the long term investment, the difference between sales proceeds and
carrying value, recognized as profit/loss for the investment. Any movements which
recorded in owner’s equity, during the disposal, it should be reverse out, and recognized asShenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
7 1
profit/loss for the year proportionately.
The treatment of accounting principal for investment in joint venture is the same as
investment in associate.
4、 Other long term investment (no control and significant influence for the investing
entity; no active market price; fair value can not be measured reliably)
Investment in an entity which has no control power and significant influence, no active
market value and fair value can not be measured reliably, called other long term
investment. The recognition criteria of the initial cost of investment are same as the
investment in associate.
Costing method is used for subsequent measurement for other long term investment.
When impairment appears, the difference between net present value of the market yield for
similarity financial instrument and carrying value of the investment should be recognized
impairment loss, recorded in income statement. Impairment can not be reverse back in the
following accounting period.
For disposal of the long term investment, the difference between sales proceeds and
carrying value, recognized as profit/loss for the investment.
（14）Investment Property
1、Recognition of Investment property
Investment property shall be recognized as an assets when, and only when both of the
following conditions are satisfied: （ 1 ） The held for earn rentals and/or capital
appreciation, or both; （2）Investment property shall be capable of being measured and
sold separately; （3）The economic benefits pertinent to this investment real estate are
likely to flow into the enterprise; （4）The initial measurement of the investment real estate
shall be made at its cost.
2、Initial measurement
Investment property should be measured in cost model.
The cost of investment property from the transfer of non-monetary assets were taken intoShenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
7 2
accounts of the transfer assets and the related expenditure, if it is the real exchange with
commercial and the value of assets could be measured reliably. If not, the difference
between the fair value and cost of the transfer assets should be taken into accounts of
current profit and loss.
The costs of investment property from debt restriction use the fair value as the initial
investment cost. The difference between the cost and book value includes in current profit
and loss.
3、Subsequent Measurement
An enterprise shall use the cost model for subsequent measurement of investment property
at the balance sheet date.
4、Transfer and Disposals
Transfer to, or form, investment property shall be made when, and only when, there is a
change in use.
An investment property shall be derecognized on disposal; the enterprise shall deduct the
book value of the investment property as well as the relevant taxes from the disposal
income, and include the amount in the current profits and losses.
（15）Recognition standard of fixed assets, Classification and Depreciation
1、Standard of fixed assets
Fixed assets are tangible assets that are held for use in the production or supply of services,
for rental to others, or for administrative purposes; they have useful lives over one fiscal
year.
2、Recognition standard of fixed assets
（1）It is probable that economic benefits associated with the assets will flow to the
enterprise;
（2）The cost of the fixed assets can be measured reliably.
3、Classification of fixed assets:
The Company’s fixed assets are classified as buildings and constructions, machineryShenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
7 3
equipment, transportation equipment, other equipment and fixed assets fitment.
4、Initial measurement of fixed assets
Fixed assets are recorded at the actual cost on acquisition. The cost of fixed assets
purchased includes purchase price, import tariffs, transport and insurance and other related
costs as well as the fixed assets reached before the intended use of the necessary
expenditure. Where payment for the purchase price of a fixed asset is deferred beyond
normal credit terms, such that the arrangement is in substance of a financing nature, the
cost of the fixed asset shall be determined based on the present value of the purchase price.
The difference between the purchase price and its present value shall be recognized in
profit or loss over the period of credit, except where it is capitalized in accordance with
borrowing cost principle.
5、Depreciation method
Depreciation of fixed assets is provided for on a straight-line basis, the depreciation rate is
recognized in accordance with fix assets, estimated useful life (5% of original value) and
estimated residual rate of fixed assets. Annual depreciation rate of fixed assets by
categories are as follows：
Category Estimated useful life (year)
Annual depreciation
rate(％)
Buildings and constructions 30 3.17
Machinery equipment 7 13.57
Transportation equipment 6 15.83
Other equipment 5 19.00
6、Subsequent expenditure of fixed assets
Subsequent expenditure is only recognized as an asset when it meets two conditions at the
same time: Firstly, it is probable that future economic benefits associated with the
expenditures will flow into the enterprise. Secondly, the cost can be measured reliably. If
not meets that, the expenditures should be included in the current profit and loss.
Subsequent expenditure of operating lease should be capitalized, as long-term prepaid
expenses, which amortize in a reasonable period.
Impairment of fixed assets
fixed assets should be estimated the recoverable amount if there is an indication. TheShenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
7 4
recoverable amount is according to the high one of net value of fair value minus the
disposal with the present value of the future cash flows. The estimation should be based on
individual assets, if it is difficult to estimate the recoverable amount, change into
estimating the group of assets it belongs to. Once provision for impairment, it could not be
reversed in later accounting period.
(16) Construction-in-progress
Construction-in-progress includes the pre-construction preparation, the under construction,
installation, technical construction, overhaul project and so on. It measures in actual cost
incurred. And are taken into accounts of fixed assets to record before used.
On the balance sheet day, estimate the impairment of that long-term suspension and will
not re-started in three years. The impairment estimation is book value minus the
recoverable amount. Once provision for impairment, it could not be reversed in later
accounting period.
(17) Intangible assets
Intangible assets including intangible assets with a finite useful life and intangible assets
with an indefinite useful life.
1、Calculation method of intangible assets
An intangible asset shall be measured initially
The cost of self-developed intangible assets shall include the total expenditures incurred
during the period from the time when it meets the provisions of standards to the time when
the expected purposes of use are realized.
2、Amortization of intangible assets
（1）With regard to intangible assets with limited service life.
Useful life in the period, with the use of intangible assets related to the economic interests
of the consistent realization of the expected amortization method, not a reliable way of
determining expected to achieve, intangible assets shall be amortized by the straight-line
method.
Taxi license shall be amortized for 38 years.
（2）Intangible assets with uncertain service life may not be amortized.Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
7 5
3、Impairment of Intangible Assets
On balance sheet day, make impairment testing to the uncertain life of intangible assets.
If there is an indication of impairment on balance sheet day for intangible assets with the
finite useful life. Estimate the recoverable amount. If the amount is lower than the book
value, the carrying value of intangible assets will be written down to its recoverable
amount. And the cut amount recognized as impairment losses, included in the current
profit and loss period. Once provision for impairment, it could not be reversed in later
accounting period.
(18) Long-term prepaid expenses
Long-term prepaid expenses amortize among the benefit periods average.
(19) Borrowing costs
The borrowing costs shall include interest on borrowings, amortization of discounts or
premiums on borrowings, ancillary expenses, and exchange balance on foreign currency
borrowings.
Where the borrowing costs incurred to an enterprise can be directly attributable to the
acquisition and construction or production of assets eligible for capitalization, it shall be
capitalized and recorded into the costs of relevant assets. Other borrowing costs shall be
recognized as expenses on the basis of the actual amount incurred, and shall be recorded
into the current profits and losses.
1、Capitalized
The borrowing costs shall not be capitalized unless they simultaneously meet the following
3 requirements:
（1）expenditure for the asset are being incurred；
（2）borrowing cost are being incurred；
（3）The necessary construction or production activities to make the assets ready for use or
sales have been launched.
2、Determination of the amount of capitalized
As for specifically borrowed loans for the acquisition and construction or production ofShenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
7 6
assets eligible for capitalization, the to-be-capitalized amount of interests shall be
determined in light of the actual cost incurred of the specially borrowed loan at the present
period minus the income of interests earned on the unused borrowing loans as a deposit in
the bank or as a temporary investment.
Where a general borrowing is used for the acquisition and construction or production of
assets eligible for capitalization, the enterprise shall calculate and determine the
to-be-capitalized amount of interests on the general borrowing by multiplying the
weighted average asset disbursement of the part of the accumulative asset disbursements
minus the general borrowing by the capitalization rate of the general borrowing used. The
capitalization rate shall be calculated and determined in light of the weighted average
interest rate of the general borrowing.
3、Capitalized of Suspension
Where the acquisition and construction or production of a qualified asset is interrupted
abnormally and the interruption period lasts for more than three months, the capitalization
of the borrowing costs shall be suspended. The borrowing costs incurred during such
period shall be recognized as expenses, and shall be recorded into the profits and losses of
the current period, till the acquisition and construction or production of the asset restarts.
If the interruption is a necessary step for making the qualified asset under acquisition and
construction or production ready for the intended use or sale, the capitalization of the
borrowing costs shall continue.
4、Capitalized of ceased
When the qualified asset under acquisition and construction or production is ready for the
intended use or sale, the capitalization of the borrowing costs shall be ceased. After the
borrowing costs incurred in the current period expenses.
(20) Employee Benefits
The term “employee benefits “refers to all kinds of payments and other relevant
expenditures given by enterprises in exchange of the services offered by the employees.
Employee benefits include: (1) Wages, bonuses, allowances and subsidies for the
employees; (2) Welfare expenses for the employees; (3) Medical insurance, endowment
insurance, unemployment insurance, work injury insurance, maternity insurance and other
social insurances; (4) Housing accumulation fund ;(5) Labor union expenditure andShenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
7 7
employee education expenses; (6) Non-monetary benefits; (7) Compensations for the
cancellation of the labor relationship with the employees; and (8) Other relevant
expenditures of services offered by the employees.
During the accounting period of an employee' providing services to an enterprise, the
enterprise shall recognize the compensation payable as liabilities. Except for the
compensations for the cancellation of the labor relationship with the employee, the
enterprise shall, in accordance with beneficiaries of the services offered by the employee;
cost of product, cost of services, cost of fixed assets, intangible assets or profit or loss for
the current period, shall be recognized.
(21) Contingent liability
The obligation pertinent to a contingency shall be recognized as a provision when the
following conditions are satisfied simultaneously:
（1）the obligation is a current obligation of the enterprise;
（2）it is probable that an outflow of economic benefit will be required to settle the
obligation;
（3）the amount of the obligation can be measured reliably
A provision shall be recognized when an onerous contract and obligation to restructure
incurred by an enterprise satisfies the requirements of the above conditions.
The amount of a provision recognized of expenditure required to settle a provision is
expected to be reimbursed of the best estimates of measurement.
(22) Revenue
（ 1） revenue from sales goods shall be recognized only when all of the following
conditions are satisfied:
A、the enterprise has transferred to the buyer the significant risks and rewards of
ownership of the goods;
B、 the enterprise retains neither continuing managerial involvement to the degree usually
associated with ownership nor effective control over the goods sold;
C、the amount of revenue can be measured reliably;
D、it is probable that the economic benefits associated with the transaction will flow to theShenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
7 8
enterprise;
E、the associated costs incurred or to be incurred can be measured reliably:
According to the principles above, the Company established real estate sales revenue is
recognized, must satisfied the following four conditions at the same time:
A、Real estate is completed, and is completed checking and accepting;
B、Signed a contract of sale and make recording in land department
Installment, if it is deferred for receiving money with financing, the cost should be
measured in present value according to the contract price. Mortgage, has been received,
and have completed the first phase of the mortgage loan approval procedures;
D、Agreed in the contract of sale and transfer the property to buyers
（2）Rendering of service，In case on the preparation date of balance sheet the results
about service transaction can be reliably evaluated, the labor income will be confirmed by
the completion percentage method.
Company has estimated the costs of determining the proportion of the total cost of
providing labor services, determinate of the progress of the completion of transactions. In
case the service transaction results on the preparation date of balance sheet cannot be
reliably evaluated. In case the service costs that have occurred can be compensated, the
service income will be confirmed based on such service costs and the same amounts will
be settled as the service costs. In case the service costs that have occurred cannot be
compensated, such service costs will be accrued to the current profit and loss and will not
be confirmed as the service costs.
（3）Use by others of enterprise assets，in case the economic benefits related to the
transaction will probably flow into the enterprise and the income amounts can be reliably
calculated. The interest income amount will be calculated and determined based on the use
time of currency capital from the Company by others and actual interest rate. The income
amount of use expenses will be calculated and determined subject to the charging time and
method agreed in the relevant contracts and agreements.
(23) Government Grants
A government grant is transfer of monetary assets or non-monetary assets from the
government to an enterprise at no consideration, excluding the contribution from theShenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
7 9
government as the owner of the enterprise to enterprise. The company’s government grants
are classified into government grants relate to assets and government grants relate to
income.
If a government grant is a monetary asset, it shall be measured in the light of the received
or receivable amount. If a government grants is a non-monetary asset, it shall be measured
at its fair value. If its fair value cannot be obtained in a reliable way, it shall be measured
at its nominal amount.
The government grant pertinent to assets shall be recognized as deferred income, equally
distributed within the useful lives of the relevant assets, and included in the current profits
and losses. But the government grants measured at their nominal amounts shall be directly
included in the current profits and losses.
The government grant related to income, the grant used for compensating the related future
expenses or losses of the enterprise shall be recognized as deferred income and shall
included in the current profits and losses during the period when the relevant expenses are
recognized; the grant used for compensating the related expenses or losses incurred to the
enterprise shall be directly included in the current profits and losses.
(24) Deffered tax assests and deffered tax liabilities
The income tax of the company apply with the financial statement liability method. The
Deffered tax assests and deffered tax liabilities are recognized of the difference of book
value and tax book balance. At the balance date, the deffered tax assests and deffered tax
liabilities were calculated based on the estimated taxable income tax rate.
Deffered tax assests are recognized not more than the amount that income tax payble of the company.
Deffered tax assests and deffered tax liabilities were recognized from the temporary
difference of the subsidiaries and joint ventures. But Deffered tax assests and deffered tax
liabilities were not recognized if the time of transferred back temporary difference can be
determited and the temporary difference won’t be transferred back in the future.
(25) 1. operating leasing
Operating leasing are other leasing except for financial leasing.Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
8 0
（1）leaseholder
The rent will be caulated in gain or loss averagely. And the orignial expense will be counted
in gain or loss in current year. Contingent rent will be caulated in gain or loss when it happens.
If the lessor provids free-rental period, the total rent will be caulated in gain or loss
averagely in the whole rental period（ including the free-rental period）. The free-rental period
have to recognized the rental expense.
if the lessor bears some expense, The total rental expense which deductes the expense will be
caulated in gain or loss averagely in the whole rental period.
If the sale-leaseback transactions are defined as operating leasing, it will be dealt with
according to the next situations:
a．If there are some definite evidence show that the price of sale-leaseback transactions is
determined with fair value. The difference between the prich and the book value of the assests will
be caluated in gian or loss.
b．The price of sale-leaseback transactions is not determined with fair value. If the price is
less than fair value, the difference wil be caulated in gain or loss. But if this loss will be
compensated with the rent which are less than the market price in the future, the loss should be
deffered. And the loss will be caulated in the whole rental period with the same methoud. If the
price is more than fair value, the difference will be recognized in deffered income. And amortized
in the whole rental period.
（2）lessor
The financial statements will included the operating assests.
The rent will be caulated in gain or loss averagely. The orignial expense will be caulated in
gain or loss in current year. The poperty will be depricated according to the similar assest
deprications policy. Contingent rent will be caulated in gain or loss when it happens.
If the lessor provids free-rental period, the total rent will be caulated in gain or loss
averagely in the whole rental period（ including the free-rental period）. If the lessor bear some
expense, the rent deducting the orginal expense will be caulated in gain or loss in the whole rental
period.Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
8 1
2．Financial leasing
Financial leasing is the leaseing that actually transfer the property rights to leaseholder. And
the property rights will be transferred or not in the end.
（1）leaseholder
Ate the starting date of leasing, the less amount of the assest fair value and par value of rent
will be the book value of the rental assest in the financial statements. If the par value of rent as the
book value of long-term payables, the difference is recognized as financial expense. The expensd
which happened during the egotiation period due to the leasing project can be caulated as assests.
When caulating the par value of rent, the company use the leasing implied rate as discount
rate if it can get the leasing implied rate. Otherwise, the company use the rate which the agreement
forth as the discount rate. If the company can not get the leasing implied rate or the agreement rate,
it will use the similar loans’ rate as discount rate. The financial expense which had not been
recognized will be caulated in the whole rental period averagelly.
The leasing assest will apply the same deprication policy. If the leaseholder assure that it can
have the property right when the leasing period ends, the assests will be drpricated in the whole
use life time. And oterswise, the the assests will be drpricated in period of which the shorter of the
leasing period and use life time.
Contingent rent will be caulated in gain or loss when it happens.
（2）lessor
At the starting date of leasing, the par value of rent and the orginal expense will be counted
as long-term receivables. And record the remain unsecured amount at the same time. The
difference between the par value of rent, orginal expenses and the remain unsecured amount will
be recognized as the unfulfilment financial income. The unfulfilment financial income will be
distributed with the acual rate averagelly.
Whe each year ended, the company will test the the unfulfilment financial income. If the
unfulfilment financial income increase, it won’t be recognized. And the unfulfilment financial
income increase decrease, the company will caulate the leasing implied rate. And the reduaction
due to leasing investment will be caulated in gain or loss. The the income of each year will be
caulated according to the revised leasing investment. The net amount of leasing investment is the
difference between the par value of rent and unfulfilment financial income.Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
8 2
The amount of remain unsecured amount which had recognized as loss recover, it can be
transferred back not less than the amount. And the company habe to recaulated the leasing implied
rate. he the income of each year will be caulated according to the revised leasing investment.
Contingent rent will be caulated in gain or loss when it happens.
(26) Assests held for sale
The assests held for sale must satisfy these conditions: 1, the company had made an disposal
agreement; 2, the company had signed the irrevocable transferring agreement with the transferee;
3, the transferring will be done in 1 year.
To Assests held for sale, the company will adjust the estimated net value of this assest. And
make the estimated net value can reflect the amount equalling the amount that the fair value minus
the disposal expenses. And the amount can not excess the orginal cost of the assests. If the book
value is higher than the estimated net value, the difference will be caulated in current gain or loss.
The Assests held for sale don’t drpricated. And it is counted with the less amoun of the book
value and the amount that the fair value minus the disposal expenses.
If the Assests held for sale don’t satisfy the conditions, the company stopped reclassing it as
the Assests held for sale. And it will be caulated with the less amount of the following:
(1) the amount which caulated under the orginal method befort the assest was reclassed to the
assests held for sale.
（2）the retracting amount when the company decide not to sale.
The other uncurrent assests which satisfy the conditions will use the method mentioned above.
The other uncurrent assests don’t include defferred tax assests, the financial assests documentd in
“ enterprise principle No.22 – recognization and caulation of financial instruments “, the
properties caulated by the fair value, biological assests, the rights of the insurance agreement.
NOTE 3、Taxation
The main tax type and tax rate：
Type Taxable basis Tax rate
Business tax
proceeds from sales of properties, leasing income,
property management income
5%
Business tax Construction, installation income 3%
Value added tax (“VAT”) Goods sales income 17%
Construction tax Business tax and value added tax payable 1%Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
8 3
Education surcharge Business tax and value added tax payable 3%
Land appreciation Tax Sales revenue of properties *1
Income tax Income tax payable *2
* 1 According to Provisions of Shenzhen Municipal People’s Government and the local
Inland Revenue Department. From 1 November 2005, the company or individuals should
pay land value-added tax if they gain income from the real estate development or transfer
in Shenzhen. “Pay in advance, settlement after, refund for any overpayment or a
supplemental payment for any deficiency. In other words, prepaid the tax on the basis of
the income from real estate transfer before the project completed (the pre-charge rate of
villas, resorts, hotel–style apartment on sales of 1%, while 0.5% of other real estate sales).
Till it all completed, handle settlement after clear the account. Clearing the land valued
added tax rate of used ultra-progressive tax rate. Valued-added ratio of 50% or less by 30
percent the proportion of value-added tax( general standard of domestic value-added ratio
of less than 20% of the land exempt tax from value-added tax). Value-added ratio of more
than 50 % did not exceed 100% of parts by 40% the proportion of the levy. Value-added tax
of more than 100% does not exceed 200% of the parts by 50% the proportion of the levy.
Value-added ratio of more than 200% of the parts by 60% the proportion of the levy.
* 2、Enterprise income tax rate is as follows：
Items Income tax rate
Domestic Enterprises
- enterprises in Shenzhen 20%
- enterprises outside Shenzhen 25%
Enterprises in HK 17.50%
* According to the China’s Corporate Tncome Tax (“CIT”) law that was passed by the Standing
Committee of the Tenth National People’s Congress(“NPC”) on 16 March 2007 and the Notice of the
State Council on the Transitional Preferential Policy regarding implementation of the CIT Law (Guo Fa
[2007] No.39) issued on 26 December 2007, incomen tax rate was effect from 1 January 2008. for
certain enterprises that are entitled to preferential income tax rate of 15% before the implementation of
the CIT law, the income tax rate applicable will be 18%, 20%, 22%, 24%, 25% in 2008, 2009, 2010,
2011, 2012 and thereafter respectively.
NOTE 4、Enterprises combination and the consolidated financial statements
1、 The informations of subsidiaries are as follows:
The informations of subsidiaries in 2009 are as follows :
1. Subsidiaries acquired through new establishment or investment are as follows:Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
8 4
2009-12-31
Name of
the Subsidiary Types
Registered
place
Registered
capital (in
ten
thousand
Yuan)
Nature of
business and
principal
activities
Net
Investment
in subsidiary
in substance
(in ten
thousand
Yuan）
Net balance
of other
investment
items to the
subsidiaries
（in ten
thousand
Yuan）
Equity
holding
(%)
Voting
rights
(%)
Whether or
not
included in
consolidate
d financial
statement
Shenzhen Petrel Hotel
Co. Ltd.
Wholly-o
wned
subsidiary
shenzhen 3,000 hotel 3,000 --
100 100 YES
Shenzhen City Property
Management Ltd.
Wholly-o
wned
subsidiary
shenzhen 725
Property
management
725 --
100 100 YES
Shenzhen Zhen Tung
Engineering Ltd
Wholly-o
wned
subsidiary
shenzhen 1,000
Fitting-out
contracting and
maintenance
1,000 --
100 100
YES
Shenzhen City We Gen
Construction
Management Ltd.
Wholly-o
wned
subsidiary
shenzhen 800
Construction
project
management
800 --
100 100
YES
Shenzhen City Car
Rental Ltd.
Wholly-o
wned
subsidiary
shenzhen 1,029 Car rental 1,029 --
100 100
YES
Shenzhen Shenfang Car
Park Ltd.
Wholly-o
wned
subsidiary
shenzhen 4,250
Develop and
operate car park
4,250 --
100 100
YES
Shenzhen City Shenfang
Investment Ltd.
Wholly-o
wned
subsidiary
shenzhen 1,000
Investment and
management 1,000 --
100 100
YES
Shenzhen City Shenfang
Free Trade Trading Ltd.
Wholly-o
wned
subsidiary
shenzhen 500
Trading of Import
and export
500 --
100 100
YES
Shenzhen City SPG
Long Gang
Development Ltd.
Wholly-o
wned
subsidiary
shenzhen 3,000
Property
development
3,000 --
100 100
YES
Shenzhen Special
Economic Zone Real
Estate (Group)
Guangzhou Property
and Estate Co., Ltd.
Wholly-o
wned
subsidiary
GuangZh
ou
2,000
Property
development
2,000 --
100 100
YES
Beijing fresh peak
property development
management limited
company
Wholly-o
wned
subsidiary
BeiJing US$1,000
operating of Real
estate
7,671 --
100 100
YES
Beijing SPG Property
Management Limited
Wholly-o
wned
subsidiary
BeiJing 50
Property
management
50 --
100 100
YES
Shenzhen ShenWu
elebator Co.,Ltd
Wholly-o
wned
subsidiary
shenzhen 350
Elevator sales and
service
350 --
100 100
YES
Shenzhen Lain Hua
Industry and Trading
Co. Ltd.
Wholly-o
wned
subsidiary
shenzhen 1,000
Trading of
equipment and
provision of
renovation
material
1,000 --
100 100
YES
Fresh Peak Enterprise
Ltd.
Wholly-o
wned
subsidiary
HongKo
ng
HKD100
Investment and
management
HKD100 9,587
100 100
YES
Wellam Ltd.
Wholly-o
wned
subsidiary
HongKo
ng
HKD1
Investment
holding
HKD1 --
100 100
YES
Shantou SEZ Wellam
Fty Bldg., Dev. Co.
Wholly-o
wned
subsidiary
ShanTou US$600
Property
development
US$600 --
100 100
YES
Great Wall Estate Co., Subsidiary USA USD50 Property USD35 10,138 70 70 YESShenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
8 5
2009-12-31
Name of
the Subsidiary Types
Registered
place
Registered
capital (in
ten
thousand
Yuan)
Nature of
business and
principal
activities
Net
Investment
in subsidiary
in substance
(in ten
thousand
Yuan）
Net balance
of other
investment
items to the
subsidiaries
（in ten
thousand
Yuan）
Equity
holding
(%)
Voting
rights
(%)
Whether or
not
included in
consolidate
d financial
statement
Inc of holding
company
development
Fresh Peak Holdings
Ltd.
Wholly-o
wned
subsidiary
HongKo
ng
HKD100
Investment and
management
HKD100 62,859
100 100
YES
Skill Elite Ltd.
Wholly-o
wned
subsidiary
HongKo
ng
HKD1
corporate
financing
HKD1 --
100 100
YES
Fresh Peak Investment
Ltd.
Subsidiary
of holding
company
HongKo
ng
HKD100
Properties
investment
HKD55 -- 55 55 YES
Openice Ltd.
Wholly-o
wned
subsidiary
HongKo
ng
HKD100
Investment and
management
HKD120 --
100 100
YES
Barenie Co. Ltd.
Subsidiary
of holding
company
HongKo
ng
HKD1
Properties
investment
HKD0.8 -- 80 80 YES
Keyear Development
Ltd.
Wholly-o
wned
subsidiary
HongKo
ng
HKD100
Investment
holding
HKD100 --
100 100
YES
Guangzhou Huangpu
Xizun real estate limited
company
Wholly-o
wned
subsidiary
GuangZh
ou
HKD3980
Property
development
HKD3980 --
100 100
YES
Fresh Peak Real Estate
Dev. Construction
(Wuhan) Co. Ltd.*1
Wholly-o
wned
subsidiary
WuHan US$400
Property
development US$400 -- 55 55 YES
Shenzhen Shenfang
Department Store Co.
Ltd.*2
Wholly-o
wned
subsidiary
shenzhen 1,000
Commercial goods
supplier
1,000 --
100 100 No
Shenzhen CyberPort
Co., Ltd *3
Wholly-o
wned
subsidiary
shenzhen 2,000
Information
Technology
Advisory
1,400 -- 70 70 No
Shenzhen City SPG Bao
An Development Ltd.*4
Wholly-o
wned
subsidiary
shenzhen 2,000
Property
development
2,000 --
100 100
No
Shenzhen Real Estate
Consolidated Service
Co., Ltd *5
Wholly-o
wned
subsidiary
shenzhen 1,371
Construction
material,
consume goods
596 -- 100 100 No
Shenzhen Shen Fang
Industrial Development
Co., Ltd.*6
Wholly-o
wned
subsidiary
shenzhen 300
Invest in
industrial projects 450 -- 100 100 No
Shenzhen Tefa Real
Estate Consolidated
Service Co., Ltd.*7
Wholly-o
wned
subsidiary
shenzhen 221
Construction and
decoration
818 -- 100 100 NoShenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
8 6
2009-12-31
Name of
the Subsidiary Types
Registered
place
Registered
capital (in
ten
thousand
Yuan)
Nature of
business and
principal
activities
Net
Investment
in subsidiary
in substance
(in ten
thousand
Yuan）
Net balance
of other
investment
items to the
subsidiaries
（in ten
thousand
Yuan）
Equity
holding
(%)
Voting
rights
(%)
Whether or
not
included in
consolidate
d financial
statement
Bekaton Property
Limited *8
Subsidiary of
holding
company
Australia US$20
Property
Development
91 1,256 60 60 No
Canada Great Wall
( vancouver) *8
Subsidiary
of holding
company
Canada JOD 0.1
Property
Development
0.45 8,904 75 75 No
Paklid Limited *8
Wholly-o
wned
subsidiary
HongKo
ng
HKD50
Property
construction and
trading of
construction
materials
20 1,107
100 100
No
Shenzhen City Shenfang
Construction and
Decoration Materials
Ltd *9
Wholly-o
wned
subsidiary
shenzhen 268
construction
materials
268 --
100 100
No
Shenzhen ZhongGang
Haiyan Enterprise
Ltd.*10
Subsidiary
of holding
company
shenzhen 1,900
Tourism
Restaurant
1,294 -- 68 68 No
Shenzhen Xing
Dongfang Store Ltd.*11
Wholly-o
wned
subsidiary
shenzhen 2,000
Domestic
commercial goods
supply
1,850 --
100 100
No
Guangdong Province
Fengkai Lain Feng
Cement Manufacturing
Co., Ltd *12
Subsidiary of
holding
company
FengKai
in
GuangDo
ng
Province
US$800
Manufacturing
and trading
in cement products
12,126 -- 90 90 No
*1 Fresh Peak Real Estate Dev. Construction (Wuhan) Co. Ltd.
The company holds 100% equity of the corporation through the Subsidiary – fresh peak
investment limited which the company held 55% equity.
*2 Shenzhen Shenfang Department Store Co. Ltd.：
The shareholders meeting held on 29 October 2007 passed the resolution to terminate
business, liquidation and formed a group to carry out the liquidation prodecures. The
liquidation group issued a notice of liquidation on 7 December 2007. According to the
principle of “Enterprise Accounting Standards No.33- the Consolidation Financial
Statement”, the Store will not be include in the company’s consolidated financial statement.
The book value of the investment account of the company is zero.Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
8 7
*3 Shenzhen CyberPort Co., Ltd
The shareholders meeting held on 12 May 2008 passed the resolution to terminate business,
liquidation and formed a group to carry out the liquidation prodecures. The liquidation
group issued a notice of liquidation on 5 December 2008. According to the principle of
“Enterprise Accounting Standards No.33- the Consolidation Financial Statement”, the
corporation will not be include in the company’s consolidated financial statement. The
book value of the investment account of the company is zero.
*4 Shenzhen City SPG Bao An Development Ltd.
The shareholders meeting held on 2009-9-18 passed the resolution to terminate business,
liquidation and formed a group to carry out the liquidation prodecures. According to the
principle of “Enterprise Accounting Standards No.33- the Consolidation Financial
Statement”, the Store will not be include in the company’s consolidated financial
statement.
*5 Shenzhen Real Estate Consolidated Service Co., Ltd.
The operating period of this corporation is from 26 January 1983 to 28 August 1999. and
this company has ceased operations for many years. And the corporation had been
terminated its licenses by law on 8 Febuary 2002 because failing to take part in annual
inspection.
*6 Shenzhen Shen Fang Industrial Development Co., Ltd.
The operating period of this corporation is from 3 October 1993 to 3 October 1998. And
this company has ceased operations for many years. And the corporation had been
terminated its licenses by law on 8 Febuary 2002 because failing to take part in annual
inspection.
*7 Shenzhen Tefa Real Estate Consolidated Service Co., Ltd
The operating period of this corporation is from 7 March 1983 to 14 April 1995. And this
company has ceased operations for many years. And the corporation had been terminated
its licenses by law in 2004 because failing to take part in annual inspection.
*8 Bekaton Property Limited and Paklid Limited
These 3 subsidiaries were set up overseas in early times. The board of directors passed a
resoluction to terminate the corporations’ business.
*9 Shenzhen City Shenfang Construction and Decoration Materials Ltd
The operating period of this corporation is from 1 January 1984 to 6 July 2004. And this
company has ceased operations for many years. And the corporation had been terminatedShenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
8 8
its licenses by law on February 8, 2002 because failing to take part in annual inspection.
*10 Shenzhen ZhongGang Haiyan Enterprise Ltd
The operating period of this corporation is from 16 October 1984 to 16 October 2004. And
this company has ceased operations for many years. And the corporation had been
terminated its licenses by law in 1999 because failing to take part in annual inspection.
*11 Shenzhen Xin Dongfang Store Ltd.
The operating period of this corporation is from 7 June 1983 to 7 June 1998. And this
company has ceased operations for many years. And the corporation had been terminated
its licenses by law at 10 January 2001 because failing to take part in annual inspection.
*12 Guangdong Province Fengkai Lian Feng Cement Manufacturing Co., Ltd.
The total assets (including tangible and intangible assets) of the corporation were
auctioned for debt repayment at 22 January 2006. The company's investment in the
company's book value of zero.
Except for *1、*2 、*10, the above subsidiaries which are not includedin the company’s
cnsolidated financial statement had ceased operations for many years. And the entities of
the corporations didn’t exist. And the company have no control over its subsidiaries’
businesses. According to the principle of “Enterprise Accounting Standards No.33- the
Consolidation Financial Statement”, the corporation will not be include in the company’s
consolidated financial statement. The book value of the investment account of the
company is zero.
2. Subsidiaries acquired through combination under common control
The company have no any subsidiaries acquired through combination under common
control.
3. Subsidiaries acquired through combination under non-common control.
2009-12-31
Registered
place Types
Registered
place
Registere
d
capital
(in ten
thousand
Yuan)
Nature of
business and
principal
activities
Net
investment
in subsidiary
in substance
(in ten
thousand
Yuan）
Net balance of other
investment items to
the subsidiaries（in ten
thousand Yuan）
Equity
holding
Percenta
ge (%)
Voting
power
Whether
or not
include in
the
financial
statement
Shan Tou
Special
Wholly-own
ed
ShanTou HKD3000
Property
development
2108 -- 100 100 YesShenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
8 9
Economic Zone
Real Estate Ltd.
subsidiary
4．The company have no any Entities special purpose.
The company have no any controlling entities through the way of trustee or leasing.
2、minority interests of subsidiaries
Up to 2009-12-31
Name
minority interests
The amount
which the minority
interests writed off
the minority gain or
loss
The amount of losses
attributed to the minority
shareholders of a subsidiary
exceeds the minority
shareholders’ portion of the
equity of the subsidiary
Fresh peak investment
limited -10,995,584.63 -- -10,884.64
Barenie Co. Ltd. -2,027,387.46 -- -11,954.06
Total -13,022,972.09 -- -22,838.70
3、 Changes in the scope of combination in 2009
1．The nw subsidiaries that is included in the consolidated financial statement is as follows:
Shenzhen ShenWu elevator Limited is the Limited liability company (Corporate-owned) set
up by the company’s Wholly-owned subsidiary – shenzhen property management Co.,Ltd in 2009.
Name Net assests Current profit
Shenzhen ShenWu elevator Limited 3,615,879.12 115,879.12
2．Former subsidiaries that ceased to be consolidated during the year
The shareholders meeting held on 2009-9-18 passed the resolution to terminate business,
liquidation and formed a group to carry out the liquidation prodecures. According to the
principle of “Enterprise Accounting Standards No.33- the Consolidation FinancialShenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
9 0
Statement”, the Store will not be include in the company’s consolidated financial
statement.
Name Net assests on the disposal
day
Net profit from beginning day
to the disposal day
Shenzhen City SPG Bao An Development Ltd. 20,379,525.68 -203,871.39
NOTE 5 、Notes to the consolidated and the Company’s financial statements
1、 Cash at bank and on hand
2009-12-31 2008-12-31
Original
currency
Exchange
rate
RMB Original
currency
Exchange
rate
RMB
Cash on hand
RMB 345,780.13 345,780.13 328,739.70 328,739.70
HKD 30,480.11 0.8805 26,839.22 45,458.39 0.8825 40,118.75
USD 2,000.00 6.8282 13,656.40 2,000.00 6.8397 13,679.40
386,275.75 382,537.85
Deposit with banks
RMB 322,210,490.21 322,210,490.21 266,123,403.00 266,123,403.00
HKD 53,146,295.26 0.8805 46,795,312.96 29,920,395.95 0.8825 26,405,647.07
USD 106,432.32 6.8282 726,741.17 93,200.04 6.8397 637,460.31
CAD 197,933.41 6.4802 1,282,648.09 196,266.82 5.5973 1,098,564.27
AUD 48,827.40 6.1294 299,282.67 39,089.22 4.7304 184,907.64
371,314,475.10 294,449,982.29
Other monetary funds
RMB 14,191,779.92 14,191,779.92 33,371,352.68 33,371,352.68
HKD 238,507.72 0.8805 210,002.74 237,409.21 0.8825 209,520.75
14,401,782.66 33,580,873.43
386,102,533.51 328,413,393.57
Other monetary funds are the deposit of mortgage loan the bank asked for the company when
the properties buyers appiled the mortgage loan from the bank to buy the company’s properities.
The cash increase by Rmb 57,689.10 thousand, 17.57 % comparing to the opening balance.Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
9 1
The increase due to the additions of loans and money acquired through properties sales.
2、 Financial assets held for trading
2009-12-31 2008-12-31
stock investment 86,269.75 189,488.50
Including：Cost 90,940.00 303,265.00
Change in the fair value -4,670.25 -113,776.50
The balance of financial assests decreased by Rmb 103.20 thousand. The decrease due to sell
the financial assests held- for- trading in 2009.
3、 Accounts receivable
（1）The symbol of credit risk identified by customers categories
2009-12-31 2008-12-31
Book balance
proportion
%
Provision of bad
debts
Book balance
proportion
%
Provision of bad
debts
category 1 -- -- -- -- -- --
category 2 14,475,072.39 43.39 12,172,384.76 14,132,195.58 42.10 11,574,556.00
category 3 18,887,002.56 56.61 6,457,294.35 19,434,721.90 57.90 7,055,123.11
Total 33,362,074.95 100.00 18,629,679.11 33,566,917.48 100.00 18,629,679.11
category 1: refers to accounts receivable with significant individual amount, such
individual amount is more than 5 million yuan
category 2: individual is not a significant amount of credit risk, but according to the
characteristics of the portfolio after portfolio of risky accounts receivable, aging of such
fund in three years, and still less likely to recover the money.
category 3： Other is not significant accounts receivable
（2）Analysis of provision for bad and doubtful debts are as follow:
Book balance Provision of
bad debts
Proportion% Notes
individual is not a
significant amount of credit
risk, but according to the
14,475,072.39 12,172,384.76 84.09%
The amount are mostly the accounts
receivable of inmpor and export agency
business. The aging is long and theShenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
9 2
characteristics of the
portfolio after portfolio of
risky accounts receivable
retrievability is little. We accured the
provision accordint the retrievability of
each item individually.
Other unsinginficant
accounts receivable
18,887,002.56 6,457,294.35 34.19%
The amount is mostly properties price. We
accured the provision according to the
retrievability of each item individually.
Total 33,362,074.95 18,629,679.11
(3) The aging of accounts receivable by categories:
2009-12-31 2008-12-31
Aging
amount proportion %
Provision of bad
debts
amount
proportion
%
Provision of bad
debts
Within 1 year 3,129,531.81 9.38 -- 1,860,981.24 5.54 --
1 and 2 year 66,946.50 0.20 -- 387,433.51 1.15 --
2 and 3 year 330,779.11 0.99 -- 213,704.58 0.64 --
3and 5 year 886,529.88 2.66 -- 1,425,690.58 4.25 --
Above 5 year 28,948,287.65 86.77 18,629,679.11 29,679,107.57 88.42 18,629,679.11
Total 33,362,074.95 100.00 18,629,679.11 33,566,917.48 100.00 18,629,679.11
The provision of individual is not a significant amount of credit risk, but according to the
characteristics of the portfolio after portfolio of risky accounts receivable
2009-12-31 2008-12-31
Aging
amount proportion %
Provision of bad
debts
amount
proportion
%
Provision of bad
debts
Above 5 year 14,475,072.39 100.00 12,172,384.76 14,132,195.58 100.00 11,574,556.00
Total 14,475,072.39 100.00 12,172,384.76 14,132,195.58 100.00 11,574,556.00
（4）On 31 December 2009，the informations of accounts receivables of the company's
biggest five debtors are as follows:
Name relationship
amount
proportion
% aging Notes
ZhongHai Properties Stock
Limited Corporation
Un-related party
2,371,860.65 7.11
Within 1
year Construction billing
DaXing Auto Parts Co.,Ltd Un-related party
2,000,650.09 6.00
Above 5
The sales price ofShenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
9 3
year
Individal Un-related party
1,333,142.04 4.00
Above 5
year
Individal Un-related party
1,200,000.00 3.60
Above 5
year
Individal Un-related party
996,220.21 2.99
Above 5
year
properties which hadn’t
called back. The company
would call back the
money when the owner of
the properties finfish the
property right certificates.
Total 7,901,872.99 23.70
（5）no amount due from shareholders who hold 5% or more of the voting rights of the company is
included in the above balance of accounts receivable.
（6）Refer to Note7、(3).5 for details of the accounts receivables which due from related parities.
（7）There were no any accont reciviables which had been accured full or large proporation
provisionl transferred back in this accounting year.
（8）There were no any accounts receivable wright off in this accounting year.
（9）There were no any acconts receivables which had been terminated recognized.
（10）There were no any accounting receivable which had been Securitization.
4、 Advance to suppliers
（1）The aging of advance to suppilers by categories:
2009-12-31 2008-12-31
aging
Amount proportion % Amount proportion %
Within 1 year 10,568,061.87 58.65 13,646,498.46 56.08
1 to 2 years -- -- 2,000.00 0.01
2 to 3 years 2,000.00 0.01 27,058.00 0.11
Above 3 years 7,450,276.98 41.34 10,656,572.66 43.80
Total 18,020,338.85 100.00 24,332,129.12 100.00
（2）The informations of accounts receivables of the company's biggest five debtors
are as follows:Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
9 4
Name
relationship
amount
proportion
% aging Notes
Shenzhen Mao Ning Co.,Ltd Un-related
party
483,000.00 2.68
Above 3
years
The un-settled prepayment of
import and export business
Shenzhen LianHua Insulated
Materials trade Co.,Ltd
Un-related
party
815,168.55 4.52
Above 3
years
The un-settled prepayment of
import and export business
KaiPing FuLiHua Fashion
Co.,Ltd
Un-related
party
1,570,000.00 8.71
Above 3
years
The un-settled prepayment of
import and export business
ShangQiu City JiaHeQiangYi
Co.,Ltd
Un-related
party
500,000.00 2.77
Above 3
years
The un-settled prepayment of
import and export business
ShangQiu City QiuGe Mao Rong
Co.,Ltd
Un-related
party
1,263,486.10 7.01
Above 3
years
The un-settled prepayment of
import and export business
Toalt 4,631,654.65 25.69
（3）No amount due from shareholders who hold 5% or more of the voting rights of the
company is included in the above balance of advance suppilers.
（4）No amount due from related parties is inclued in the above balance of advance suppilers.
5、 Other receivables
（1）The symbol of credit risk identified by customers categories
2009-12-31 2008-12-31
Book balance
proportion
%
Provision of bad
debts
Book balance
proportion
%
Provision of bad
debts
Category 1 154,633,577.80 67.78 149,500,412.72 140,857,938.22 63.20 136,057,938.22
Category 2
41,104,126.23 18.02 27,865,955.59 57,157,084.50 25.65 40,820,183.82
Category 3 32,401,405.02 14.20 1,474,482.65 24,855,478.29 11.15 1,988,221.68
合计 228,139,109.05 100.00 178,840,850.96 222,870,501.01 100.00 178,866,343.72
category 1: Refers to other receivables with significant individual amount, such
individual amount is more than 5 million yuan
category 2: Individual is not a significant amount of credit risk, but according to the
characteristics of the portfolio after portfolio of risky other receivables, aging of such fundShenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
9 5
in three years, and still less likely to recover the money.
category 3：Other is not significant other receivables.
（2）The aging of accounts receivable by categories:
2009-12-31 2008-12-31
Aging
amount proportion %
Provision of bad
debts
amount proportion %
Provision of bad
debts
Within 1 year 9,336,668.77 4.09 -- 2,525,642.20 1.13 --
1 and 2 year 3,399,443.88 1.49 -- 5,911,834.18 2.65 --
2 and 3 year 1,626,202.50 0.71 -- 3,576,605.94 1.60 --
3and 5 year 1,426,952.45 0.63 -- 1,272,600.35 0.57
Above 5 year 212,349,841.45 93.08 178,840,850.96 209,583,818.34 94.05 178,866,343.72
Total 228,139,109.05 100.00 178,840,850.96 222,870,501.01 100.00 178,866,343.72
The provision of individual is not a significant amount of credit risk, but according to the
characteristics of the portfolio after portfolio of risky other receivable:
2009-12-31 2008-12-31
Aging
amount proportion %
Provision of bad
debts
amount proportion %
Provision of bad
debts
Above 5 years 41,104,126.23 100.00 27,865,955.59 57,157,084.50 100.00 40,820,183.82
（3）the provision of the other receivable which were significant or were unsignificant
indivually but tested individually.
2009-12-31
categorites
Book balance
Provision for bad
debts
proportion % NotesShenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
9 6
indivual significant other receivables 154,633,577.80 149,500,412.72 96.68%
The amount were not included in
subsidiaries which belong to the consolidate
financial statement Correspondent Payment.
The retrievability is little. We accured the
provision accordint the retrievability of each
item individually.
individual is not a significant
amount of credit risk, but according
to the characteristics of the portfolio
after portfolio of risky accounts
receivable
41,104,126.23 27,865,955.59 67.79%
The correspondent payment about unrelated
parities. The aging is long and the
retrievability is little. We accured the
provision accordint the retrievability of each
item individually.
Other unsignificant receivables 32,401,405.02 1,474,482.65 4.55%
Unsignificant other receivable, we accured
the provision accordint the retrievability of
each item individually.
Total 228,139,109.05 178,840,850.96
（4）The informations of accounts receivables of the company's biggest five debtors
are as follows:：
Name relationship Amount proportion % aging
Paklid Limited * subsidiary 19,181,797.04 8.41 Above 5 years
Bekaton property Limited * subsidiary 12,559,290.58 5.51 Above 5 years
Canada Great Wall( Vancouver) Co.,Ltd * subsidiary 89,035,748.07 39.03 Above 5 years
Guangdong province Huizhou Luofu Hill
mineral water Co.,Ltd
Joint venture
10,465,168.81 4.59 Above 5 years
Luofu Hill Travelling Corporation Un- related party 9,600,000.00 4.21 Above 5 years
Total 140,842,004.50 61.74
* The above subsidiaries were not included in the company’s consolidated financial
statement. Refer to Note 4 、(1).1 for details.Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
9 7
（5）No amount due from shareholders who hold 5% or more of the voting rights of the
company is included in the above other receivables.
（6）Refer to Note7、(3).5 for details of the other receivables which due from related parities.
（7）The information of other receivables which had been accrued full provision but
reclaimed in the accounting year is as follows:
Name The reason for orginal provision
Amount reclaimed
current year
ShenYang TongXin Property
Development Co.,Ltd
The aging was long. And the financial situation of the
debtor was getting worse and worse. And it failed to repay
the due bank loans.
Rmb 7000 thousand
Before 2009, because the aging of the other receivables was long. And the financial situation
of the corporation was getting worse and worse. And it failed to repay the due bank loans. The
company accrued full provision of the other receivable before the accounting year. Refer to Note
11、(1).5 for details of the company reclaiming the loans in 2009.
（8）There were no any other receivables wright off in this accounting year.
（9）There were no any other receivables which had been terminated recognized in the
accounting year.
（10）There were no any other receivables which had been Securitization in the accounting
year.
6、 Inventories
（1）Inventories classed by category
2009-12-31 2008-12-31
Amount provision Amount provision
Real estate development products 374,902,380.30 1,350,000.00 429,136,074.84 1,350,000.00
Real estate developing products 542,654,985.50 47,584,499.31 534,095,339.64 47,584,499.31
Real estate which are going to be
developed
1,200,170,737.09 --
--
--Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
9 8
Raw materials 861,932.89 -- 1,206,220.38 --
finished products 608,858.82 278,891.91 296,311.43 278,891.91
low-value consumable
products
11,478.74 --
37,339.94
--
Construction 18,301,964.51 -- 30,034,359.24 --
Total 2,137,512,337.85 49,213,391.22 994,805,645.47 49,213,391.22
The ending balance of inventories increased by Rmb 1,142,706. 60 thousand, 120.85%. The
increase due to the additions of land reserve.
（2）Provision
redutions
2008-12-31 additions
Transfer back Wright-off
2009-12-31
finished products 278,891.91 -- -- -- 278,891.91
ShuiYunTianYa, MingYuan 47,584,499.31 -- -- -- 47,584,499.31
HuaMin Building 1,350,000.00 -- -- -- 1,350,000.00
Total 49,213,391.22 -- -- -- 49,213,391.22
（3）Real estate development products
Finished time 2008-12-31 additions redutions 2009-12-31
Jinye Island villa No.1 1996 3,141,098.72 -- -- 3,141,098.72
Jinye Island Multi-tier villa 1997 36,331,126.65 -- 253,778.73 36,077,347.92
Jinye Island villa No.6 2007 43,022,827.06 -- 8,551,007.65 34,471,819.41
Jinye Island villa No.7 2007 18,424,926.88 -- -- 18,424,926.88
Jinye Island villa No.8 2007 19,490,877.67 -- 12,774,506.18 6,716,371.49
Jinye Island villa No.9 * 2009 -- 56,446,237.99 -- 56,446,237.99
Jinye Island villa No.11 2008 262,549,924.37 -- 123,651,923.57 138,898,000.80
HuangPuXinChun No.1 1994 121,283.88 -- -- 121,283.88
HuangPuXinChun No.2 2007 12,581,871.83 -- 5,849,466.48 6,732,405.35
HuaMin Building -- 3,020,596.68 -- -- 3,020,596.68
HuaMin Building 2000 1,631,743.64 -- -- 1,631,743.64
XingHu Garden Multi-tier 2003 381,992.20 -- 133,607.91 248,384.29
XingHu Garden No.8 2005 9,988,789.21 -- -- 9,988,789.21
XingHu Garden No.3 2008 16,922,232.10 -- 16,922,232.10 --Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
9 9
Finished time 2008-12-31 additions redutions 2009-12-31
RiYue House 854,963.28 -- 854,963.28 --
BeiJing Fresh Peak Buliding 671,820.67 -- -- 671,820.67
Friendship Multi-tier Parking
Lot ** -- 56,266,380.81 -- 56,266,380.81
JiaoHu Roan Cyber Shop ** -- 2,045,172.56 -- 2,045,172.56
Total 429,136,074.84 114,757,791.36 168,991,485.90 374,902,380.30
* The Jinye Island villa No.9 were transfreed in inventories from Real estate developing
products in Febuary 2009 when the the Jinye Island villa No.9 was completed.
** Friendship Multi-tier Parking Lot 、JiaoHu Roan Cyber Shop was reclassed to inventories
from investment poperties because the use of Friendship Multi-tier Parking Lot 、JiaoHu Roan
Cyber Shop had been changed. On 2009-1-29, Friendship Multi-tier Parking Lot were sold by
auction sucessfully with the pirce - Rmb 129,360,000.00 in Shenzhen Land Real Estate Trading
Center.
（4）Real estate developing products
Starting time Finished time 2008-12-31 2009-12-31
DongHuDiJing Building 128,932,800.58 129,832,800.58
Jinye Island villa No.9 2008 2009 47,546,989.99 --
Jinye Island villa No.10 2008 2010 69,666,035.43 118,848,416.49
ShanTou JinHu Road Project 2008 53,538,914.00 53,858,008.00
ShuiYuTianYa, MingYuan 2007 213,326,543.59 219,031,704.38
ShanTou Fresh Peak Building 21,084,056.05 21,084,056.05
Total 534,095,339.64 542,654,985.50
Among the real estate developing products, the net balance of land-use right of Jinye Island
villa No.10 is Rmb 61,548,064.64. And also, it had been as mortgage when the company borrowed
money from the bank. The mortgage ending date is 2010-7-30.
The capitalisation amount of loans was Rmb 6,806,525.39 this accounting year. And last year
was Rmb 10,481,274.23.
（5）Real estate which are going to be developed
Starting tme 2008-12-31 additions reductions 2009-12-31Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
10 0
GuangMing New District project 2011.3 -- 1,200,170,737.09 -- 1,200,170,737.09
The company bought the land-use right of Shenzhen GuangMing New District whose number
were A510-0131、A511-0025 through the listing transferring mode. The total land remise fund is
1.2 billion. And the company had paid 50% of the fund on 9 September 2009. And the remaining
fund have to be paid for in 1 year. The total area of the land is 90,737.09 square meter. FAR is 2.
The total construction area is 181,470.00 square meter. And the project is planned to be developed
at the beginning of 2011 year.ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., LTD
For The year ended at 31 December 2009
101
7、 Long-term equity investments
（1）the informations of Long-term equity investments are as follow:
Name of investees
Measured
method
Orginal cost 2008-12-31 movement 2009-12-31
Proport
ion (%)
Voting
right (%)
Dividend in
cash
The
provision
accrued
this year
Accumulated
provision
1、Associate investment
Shenzhen Shatoujiao Nantian
Store *1
equity
method
2,850,618.06 2,599,085.66
-152,851.44
2,446,234.22 50 50 -- -- --
Zhaoqing Guifeng cement
Co.,Ltd *2
equity
method
15,112,000.00 14,500,911.03
-1,776,494.00
12,724,417.03 50 50 -- -- --
Shenzhen Ronghua JiDian
Co.,ltd
equity
method
1,250,000.00 1,816,528.73
24,748.46
1,841,277.19 25 25 -- -- 1,076,954.64
Shenzhen Fresh Peak property
consultant Co.,Ltd
equity
method
600,000.00 -- -- -- 20 20 -- -- --
Shenzhen runhua automobile
trading Co.,Ltd
equity
method
1,445,425.56 1,445,425.56
--
1,445,425.56 50 50 -- -- 1,445,425.56
Shenzhen Dongfang New
world store Co.,Ltd
equity
method
15,000,000.00 -- -- -- 50 50 -- -- --
2、joint venture investmentShenZhen Special Economic Zone Real Estate & Properties (Group) Co., LTD
For The year ended at 31 December 2009
102
Name of investees
Measured
method
Orginal cost 2008-12-31 movement 2009-12-31
Proport
ion (%)
Voting
right (%)
Dividend in
cash
The
provision
accrued
this year
Accumulated
provision
Guangdong province
Huizhou Luofu Hill mineral
water Co.,Ltd
equity
method
9,969,206.09 9,969,206.09 -- 9,969,206.09 合作 合作 -- -- 9,969,206.09
Fengkai Xinhua Hotel equity
method
9,455,465.38 9,455,465.38 -- 9,455,465.38 合作 合作 -- -- 9,455,465.38
Jiangmen Xinjian Real Estate
Co. Ltd.
equity
method
9,037,070.89 9,037,070.89 -- 9,037,070.89 合作 合作 -- -- 912,537.16
Xian Fresh Peak Building Co.
Ltd.
equity
method
32,840,729.61 32,840,729.61 -- 32,840,729.61 合作 合作 -- -- 20,673,831.77
DongYi Property Co.,Ltd
equity
method
30,376,084.89 30,376,084.89 -- 30,376,084.89 合作 合作 -- -- 21,225,715.87
3、other equity investment:
Shenzhen Shen Fang Industrial
Development Co., Ltd
Cost
method
4,500,000.00 4,500,000.00
--
4,500,000.00 100 100
-- --
4,500,000.00
Shenzhen ZhongGang Haiyan
Enterprise Ltd.
Cost
method
12,940,900.00 12,940,900.00
--
12,940,900.00 68 68
-- --
12,940,900.00
Shenzhen Real Estate Cost 5,958,305.26 5,958,305.26 -- 5,958,305.26 100 100 -- -- 5,958,305.26ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., LTD
For The year ended at 31 December 2009
103
Name of investees
Measured
method
Orginal cost 2008-12-31 movement 2009-12-31
Proport
ion (%)
Voting
right (%)
Dividend in
cash
The
provision
accrued
this year
Accumulated
provision
Consolidated Service Co.,
Ltd.
method
Paklid Limited Cost
method
201,100.00 201,100.00
--
201,100.00 100 100
-- --
201,100.00
Bekaton Property Limited Cost
method
906,630.00 906,630.00
--
906,630.00 60 60
-- --
906,630.00
Canada Great Wall
(Vancouver) Co.,Ltd
Cost
method
4,526.25 --
--
-- 75 75
-- --
--
Shenzhen Tefa Real Estate
Consolidated Service Co.,
Ltd.
Cost
method
8,180,003.63 8,180,003.63
--
8,180,003.63 100 100
-- --
8,180,003.63
Shenzhen Xin Dongfang
Store Ltd. Cost
method
18,500,000.00 18,500,000.00
--
18,500,000.00 100 100
-- --
18,500,000.00
Shenzhen City Shenfang
Construction and Decoration
Materials Ltd.
Cost
method
2,680,000.00 2,680,000.00
--
2,680,000.00 100 100
-- --
2,680,000.00
Shenzhen Shenfang
Department Store Co. Ltd. Cost
method
10,000,000.00 10,000,000.00
-- 10,000,000.00
100 100
-- --
10,000,000.00ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., LTD
For The year ended at 31 December 2009
104
Name of investees
Measured
method
Orginal cost 2008-12-31 movement 2009-12-31
Proport
ion (%)
Voting
right (%)
Dividend in
cash
The
provision
accrued
this year
Accumulated
provision
Shenzhen CyberPort Co., Ltd
Cost
method
14,000,000.00 7,613,507.96
-- 7,613,507.96
70 70
-- --
--
KunShan Electrity Co.,Ltd *3
Cost
method
32,471,239.25 32,471,239.25
--
32,471,239.25 50 50 7,208,812.56 -- --
YunNan KunPeng Flight
service Co.,Ltd
Cost
method
5,464,240.74 5,464,240.74
--
5,464,240.74 25 25 375,000.00 -- --
ShenZhen ShenFang BaoAn
developmentCo.,Ltd *4
Cost
method
20,000,000.00 -- 20,379,525.68 20,379,525.68 100 100 -- -- --
Shantou Fresh Peak
Building
Cost
method
68,731,560.43 58,547,652.25
-- 58,547,652.25 100 100 -- --
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 90 90 -- -- 56,228,381.64
Total 453,740,106.04 336,232,468.57 18,474,928.70 354,707,397.27 7,583,812.56 -- 243,402,109.25Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
105
*1 Shenzhen Shatoujiao Nantian Store
The company transferred 50% equity of Shenzhen Shatoujiao Nantian Store to Shenzhen
ShaTou Jiao Business trade Co.,Ltd with a listing agreement price –Rmb 12,145 thounsand in
ShenZhen United Exchange.
*2 Zhaoqing Guifeng cement Co.,Ltd
The company held a party joint conference on 2009-2-24. The meeting passed a resolution to
dispose the 50% equity of Zhaoqing Guifeng cement Co.,Ltd the company held. With the same
conditons, the former shareholder – GuangLong Group had preferential right. The company and
GuangLong group had reached a preliminary agreement on equity transferration.
*3 KunShan Electrity Co.,Ltd
KunShan Electrity Co.,Ltd held the directors’ meeting at 2010-1-30. because the board deemed
the orginal liquidation date- 2009-6-30 had been delayed. The meeting decided the date – 2010-2-6 as
the new dissolution date. And the corporation was go into liquidation according to the procedure.
*4 ShenZhen ShenFang BaoAn developmentCo.,Ltd
ShenZhen ShenFang BaoAn developmentCo.,Ltd held a shareholders meeting at 2009-9-18. the
meeting passed the resolution to terminate business and form a group to carry out the liquidation.
According to the principle “Enterprise Accounting Standards No.33 – the Consolidation Financial
Statement”, the corporation will not included in the company’s consolidated financial statements. The
above new investment- Rmb 20,379,525.68 is the book value that the company had.
（2）Impairment Provision for Long-term equity investment are as follows:
reductions
Name of investees Opening balance addition Transfer
back
Wright-off
Closing balance
Shenzhen ronghua JiDian Co.,ltd 1,076,954.64 -- -- -- 1,076,954.64
Shenzhen Shen Fang Industrial Development Co., Ltd 4,500,000.00 -- -- -- 4,500,000.00
Shenzhen ZhongGang Haiyan Enterprise Ltd. 12,940,900.00 -- -- -- 12,940,900.00
Shenzhen Real Estate Consolidated Service Co., Ltd. 5,958,305.26 -- -- -- 5,958,305.26
Paklid Limited 201,100.00 -- -- -- 201,100.00
Bekaton Property Limited 906,630.00 -- -- -- 906,630.00
Shenzhen Tefa Real Estate Consolidated Service Co.,
d
8,180,003.63 -- -- -- 8,180,003.63Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
106
reductions
Name of investees Opening balance addition Transfer
back
Wright-off
Closing balance
Shenzhen Xin Dongfang Store Ltd. 18,500,000.00 -- -- -- 18,500,000.00
Shenzhen City Shenfang Construction and Decoration 2,680,000.00 -- -- -- 2,680,000.00
Shenzhen Shenfang Department Store Co. Ltd. 10,000,000.00 -- -- -- 10,000,000.00
Guangdong Province Fengkai Lain Feng Cement 56,228,381.64 -- -- -- 56,228,381.64
Shenzhen Runhua automobile trading Co.,Ltd 1,445,425.56 -- -- -- 1,445,425.56
Guangdong province Huizhou Luofu Hill mineral water 9,969,206.09 -- -- -- 9,969,206.09
Fengkai Xinhua hotel 9,455,465.38 -- -- -- 9,455,465.38
Jiangmen Xinjian Real Estate Co. Ltd. 912,537.16 -- -- -- 912,537.16
Xian Fresh Peak Property Management & Trading Co.
d
20,673,831.77 -- -- -- 20,673,831.77
Tung Yick Property Co., Ltd. 21,225,715.87 -- -- -- 21,225,715.87
Shantou Fresh Peak Building 58,547,652.25 -- -- -- 58,547,652.25
合计 243,402,109.25 -- -- -- 243,402,109.25
8、 Investment Property（measured according to the cost model）
2008-12-31 additions reductions 2009-12-31
Original cost
Buildings 961,678,279.84 1,660,483.00 128,483,594.25 834,855,168.59
Land use right 105,424,885.54 -- 177,257.22 105,247,628.32
total 1,067,103,165.38 1,660,483.00 128,660,851.47 940,102,796.91
Accumulated
depreciation
Buildings 246,267,118.32 29,100,388.92 39,982,158.18 235,385,349.06
Land use right -- -- -- --
total 246,267,118.32 29,100,388.92 39,982,158.18 235,385,349.06
provision for
impairment losses
Buildings 15,283,846.00 -- 1,101,491.05 14,182,354.95
Land use right 86,527,122.74 -- 145,483.26 86,381,639.48
total 101,810,968.74 -- 1,246,974.31 100,563,994.43
book valueShenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
107
Buildings 700,127,315.52 585,287,464.58
Land use right 18,897,762.80 18,865,988.84
Total 719,025,078.32 604,153,453.42
The amount of current year deprication is Rmb 29,100,388.92.
There were no any provision for impairment losses accured in this accounting year.
The reduaction of Original cost and Accumulated depreciation of building due to
reclassification because of the change of purpose. The amount of building’s reductions of orginal
cost is Rmb 128,660,851.47, of which, the amount due to be sold is Rmb 36,828,521.28. and the
amount due to reclassification to inventories is Rmb 91,655,072.97 ( the balance of Accumulated
depreciation is Rmb 33,343,519.60 ).
The reductions of land use right’s orginal cost and provision for impairment losses due to the
change of rate used in translation of foreign currencies.
Among the investment property, Rmb 313,689,907.16 of net balance of buliding were used as
mortgage for the company’s short-term/long-term loans. Refer to Note 5、14 for details.
9、 Fixed assets and Accumulated depreciation
2008-12-31 additions reductions 2009-12-31
Cost
Buildings 117,117,892.56 -- 48,200.00 117,069,692.56
Transport equipment 21,071,522.19 750,156.00 2,037,518.66 19,784,159.53
Electronic equipment and others 15,744,005.35 580,518.28 227,907.66 16,096,615.97
Total 153,933,420.10 1,330,674.28 2,313,626.32 152,950,468.06
Accumulated depreciation
Buildings 55,823,057.15 3,667,090.88 27,146.18 59,463,001.85
Transport equipment 14,274,748.44 1,597,367.61 1,921,423.37 13,950,692.68
Electronic equipment and others 12,809,402.10 596,935.65 284,720.00 13,121,617.75
Total 82,907,207.69 5,861,394.14 2,233,289.55 86,535,312.28
Provision for
impairment loss
Electronic equipment and others 131,727.96 131,727.96
Net book value
Buildings 61,294,835.41 57,606,690.71Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
108
Transport equipment 6,796,773.75 5,833,466.85
Electronic equipment and others 2,802,875.29 2,843,270.26
Total 70,894,484.45 66,283,427.82
The amount of current year deprication is Rmb 5,861,394.14. There are no any construction
in progress transferred to fixed assests.
As at 2009-12-31 , net book value Rmb 31,466,382.03 of the Buildings were used as the
short-term/long-term loans’ mortgage (includin the long-term loans). Refer to Note5、14 for details.
There are no any temporary idle fixed assests.
There are no any fixed assests acquired by financial leasing in the accounting year.
There are no any fixed assets leased out through operating leasing way.
There are no any fixed assests held for sale.
10、Intangible assets
2008-12-31 additions amortization 2009-12-31
Original cost
Software 286,200.00 31,800.00 -- 318,000.00
Taxi license 6,368,000.00 -- -- 6,368,000.00
Total 6,654,200.00 31,800.00 -- 6,686,000.00
Accumulative
amortization
Software -- 63,600.00 -- 63,600.00
Taxi license 223,440.00 166,580.00 -- 390,020.00
Total 223,440.00 230,180.00 -- 453,620.00
Book value
Software 286,200.00 254,400.00
Taxi license 6,144,560.00 5,977,980.00
Total 6,430,760.00 6,232,380.00
Provision for
impairment loss
-- --
Net amount
Software 286,200.00 254,400.00Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
109
Taxi license 6,144,560.00 5,977,980.00
Total 6,430,760.00 6,232,380.00
The amount of current year amortization is Rmb 230,180.00.
11、Long-term deferred and prepaid expenses
Original cost 2008-12-31 additions
Current year
amortization
Accumulative
amortization
2009-12-31
Decoration costs 1,808,640.24 527,346.90 -- 162,445.20 1,443,738.54 364,901.70
12、Deferred tax assets
（1）the deferred tax asset which were already recognized
2009-12-31 2008-12-31
Assests impairment provision 11,896,124.83 9,516,899.86
Employee benefits payable 807,847.20 647,628.85
Unused operating losses against tax 3,528,158.38 8,315,460.11
Total 16,232,130.41 18,479,988.82
（2）the detais of deferred tax asset which were un-recognized
2009-12-31 2008-12-31
Unused operating losses against tax 32,165,474.52 23,087,988.67
（3）the maturity year of the Unused operating losses against tax which were the un-recognized
deferred tax asset:
year 2009-12-31
2010 Year --
2011 Year 54,801,155.53
2012 Year 9,010,226.92
2013 Year 28,540,572.21
2014 Year 36,309,943.43
Total 128,661,898.09
（4）the amout of temporary difference is as follow:
the amout of temporary difference
Assests impairment provision 47,584,499.31
Employee benefits payable 4,304,271.06
Unused operating losses against tax 17,185,897.38
Total 69,074,667.75Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
110
13、Impairment provision of assets
reductions
2008-12-31
additions
Transfer back Wright-off
2009-12-31
Provision for bad debts 197,496,022.83 7,000,000.00 7,000,000.00 25,492.76 197,470,530.07
Inventories impairment
provision
49,213,391.22
--
-- --
49,213,391.22
Long-term equity investment
impairment provision
243,402,109.25
-- --
--
243,402,109.25
Investment property
impairment provision
101,810,968.74
-- -- 1,246,974.31 100,563,994.43
Fixed assets impairment
provision
131,727.96
-- --
--
131,727.96
Total 592,054,220.00 7,000,000.00 7,000,000.00 1,272,467.07 590,781,752.93
14、Restrictions on the ownership of assets
Items
Mortagage period
Book value on
2009-12-31
Deposits with bank Other monetary funds * 11,266,193.14
Inventories(work in process) JinYe Island No.10 land-use right 2009.08.31-2012.08.03 61,548,064.64
Inventories(work in process)
ShuiYunTianYa, MingYuan land-use
right
2009.12.08-2012.12.07 121,416,542.78
Inventories(work in process)
DongHu DiJing Ming Yuan land-use
right
2009.09.04-2010.02.01 112,858,904.00
Inventories(work in process) Friendship parking lot 2009.09.04-2010.02.01 56,266,380.81
Inventories(work in process) XingHu Garden No.8 2009.09.04-2010.02.01 9,988,789.21
Investment Property HuJing Building 2009.09.04-2010.02.01 12,688,936.44
Investment Property WenJin warehouse、WenJing Garden 2009.09.04-2010.02.01 17,166,501.70
Investment Property ShenFang Square 2007.06.21- 2012.03.29 197,843,557.90
Investment Property GuoShang North 2 floor 2007.05.29-2017.05.29 78,334,803.28
Investment Property Real estate Building 2007.06.21- 2010.12.04 7,656,107.84
Fixed assests ShenFang Square 46-48 floor 2007.06.21- 2010.12.04 31,466,382.03
Total 718,501,163.77
* Other monetary assets of the Company is the security deposit that the company providedShenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
111
when properties purchaser apply mortgage. Types consist with full security and Periodical
security. Periodically to ensure security of the guarantee period from the effective date of the
contract until the buyers who purchased homes in the "real estate license," registration process is
completed and the mortgage bank completed and delivered the date of the Executive Management;
the perido of full security guarantees from the effective date until the date of expiry of the loan
contract.
The Restrictions on the ownership of assets mentioned above, except for Other monetary
funds, were used as mortgage when the company borrowed money form the bank and related
parities.
15、Short-term borrowings
Nature 2009-12-31 2008-12-31
Mortgage borrowings 100,000,000.00 59,200,000.00
The short-term borrowings were borrowed form the company’s shareholder - Shenzhen
Investment Holdings Co., Ltd. Refer to Note 7、(3). 2 for details.
The company didn’t fail repaid any due short-term borrowings.
16、Accounts payable
2009-12-31 2008-12-31
Accounts payable 730,944,352.56 230,446,779.80
（1）The balance of accounts payable increased by Rmb 500,497.60 thousand, 217.19%.
The decrease due to the unpaid land remise fund to Urban Planning and Resources
Commission of Shenzhen Municipality of the GuangMing New district project.
（2）The balance of accounts payable whose aging is more than 1 year is mostly the
un-billing construction fee.
（3）No amount due to shareholders who hold 5% or more of the voting rights of the
comanpy is included in the above balance of AP.
（4）No amount due to related parities is included in the above balance of AP.
17、Advances from customersShenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
112
The aging analysis of the company’s accounts receivable is as follow:
2009-12-31 2008-12-31
aging
Amount proportion% Amount proportion %
Within 1 year 151,606,227.42 96.49 126,030,681.97 96.85
Above 1 year 5,509,824.73 3.51 4,103,839.92 3.15
Total 157,116,052.15 100.00 130,134,521.89 100.00
（1）The balance of Advances from customers increased by Rmb 2,6981.6 thousand,
20.73%. The increase due to the advance properties sales price which havn’t reached the
condition of revenue recognition.
（2）The balance whose aging were more than 1 year were mostly the import and export
agency business payment which havn’t settle with the clients.
（3）No amount due to shareholders who hold 5% or more of the voting rights of the
comanpy is included in the above balance .
（4）No amount due to related parities is included in the above balance.
At 2009-12-31，the main items of Advances from customers are as follow:
Item 2008-12-31 2009-12-31 Situation Aging
Guangzhou Huangpu yuan -- 1,751,000.00 completed Within 1 year
ShanTou Jinye Island villa No. 7 5,136,334.00 6,173,201.00 completed Within 1 year
ShanTou Jinye Island villa No. 8 5,136,334.00 -- completed Within 1 year
ShanTou Jinye Island villa No. 9 -- 35,338,525.00 completed Within 1 year
ShanTou Jinye Island villa No. 11 74,520,189.83 80,487,094.60 completed Within 1 year
Total 84,792,857.83 123,749,820.60
18、Employee benefits payable
2008-12-31 additions reductions 2009-12-31
Wages , bonuses, allowances and subsidies 17,233,458.66 72,359,815.40 72,453,831.12 17,139,442.94
Staff welfare -- 1,384,401.48 1,384,401.48 --
Social securities 1,860,036.84 10,853,357.27 10,317,497.12 2,395,896.99
including：Pension insurance 1,400,696.44 8,101,883.67 8,075,706.29 1,426,873.82Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
113
Medical insurance 459,340.40 2,292,850.59 1,783,167.82 969,023.17
Unemployement insurance -- 187,649.15 187,649.15 --
Employement injury insurance -- 121,006.15 121,006.15 --
maternity insurance -- 149,967.71 149,967.71 --
Labor union and employee education funds 800,228.65 1,336,822.89 1,504,168.78 632,882.76
Compensation to employees for termination of
employment relationship
5,262,990.06 -- 958,719.00 4,304,271.06
others 45,518.13 2,873,754.10 2,892,272.23 27,000.00
Total 25,202,232.34 88,808,151.14 89,510,889.73 24,499,493.75
（1）No amount’s nature of the employee benefits payable were arrears of wage.
（2）The amount of Labor union and employee education funds were Rmb 632,882.76. The
nature were Monetary benefits. The amount of Compensation to employees for termination of
employment relationship were Rmb 958,719.00.
19、Taxes payable
2009-12-31 2008-12-31
Value added tax (“VAT”) -3,356,801.84 -2,818,856.76
Business tax -8,775,058.40 -1,616,946.70
Construction tax -246,366.15 -220,035.78
Education surcharge -70,442.79 -91,896.23
Embankment Protection Fee -125,435.28 10,927.15
Property tax 2,069,192.63 2,081,659.05
Land value added tax 2,119,324.64 4,170,141.46
Corporate Income tax -913,790.48 267,821.39
Personal income tax 498,046.04 469,019.54
others 18,568.07 96.78
Total -8,782,763.56 2,251,929.90
The balance of taxes payable decreased by Rmb 11,034.70 thousand, 490.02%. The
decrease due to that the business tax of ShanTou JinYe Island project is prepaid in 5%
according to the advance aggregated sales price.
20、Interests payable
Name 2009-12-31 2008-12-31Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
114
Shenzhen Investment Shareholding Co.，Ltd 14,421,711.65 7,888,053.54
Urban Planning and Resources Commission of
Shenzhen Municipality
10,266,000.00 --
Total 24,687,711.65 7,888,053.54
Please refer to Note7 、(3). 2 for details of loans borrowed from the company’s controlling
shareholder - Shenzhen Investment Shareholding Co.，Ltd.
And the balance of interests payable due to Shenzhen Investment Shareholding Co.，Ltd.
were accured from the loans borrowed in the next half year of 2007、2008 and 2009. Please refer
to Note 7、(3). 3 for details.
The balance of interests payable due to Urban Planning and Resources Commission of
Shenzhen Municipality were accured form the unpaid land remise fund of the company
GuangMing New district project. And the land remise fund will be paid in 1 year. The rate is
5.31%. Refer to Note 12 for details.
21、Other payables
2009-12-31 2008-12-31
Other payables 297,237,215.73 262,914,117.22
（1）The information of other payables due to shareholders who hold 5% or more of the
voting rights of the companyare is as follows:
Name 2009-12-31 2008-12-31 Nature of other payables
Shenzhen Investment Holdings Co., Ltd. 63,848,819.24 63,848,819.24 Loan
（2）The amount whose aging were more than 1 year are mostly loans borrowed form related
parities, correspondent fund and leasing deposit.
（3）Please refer to Note 、（3）. 5 for details of the amount due to related parties.
22、 Non-current liabilities within one year
2009-12-31 2008-12-31
Long-term loans within one year
Mortgage loans 229,607,155.48 10,461,764.71Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
115
Total 229,607,155.48 10,461,764.71
(1) the company didn’t fail to repay the due long-term loans in the accounting year.
（2）the lenders of long-term loans are as follows:
lender Maturity Date currency Rate（%） 2009-12-31
Shenzhen Rural Commercial
Bank 2010.12.04 RMB 5.40 195,000,000.00
ShangHai PuDong Development Bank
ShenZhen Branch 2010.12.20 RMB 5.40 6,000,000.00
Nanyang Commercial Bank shenzhen
branch 2010.12.20 RMB 5.40 5,407,155.48
China Construction Bank ShenZhen
Branch
2010.07.10
RMB 6.21
15,000,000.00
China Construction Bank ShenZhen
Branch
2010.06.13
RMB 4.32-6.48
8,200,000.00
Total 229,607,155.48
23、Long-term Borrowings s
Loans conditions 2009-12-31 2008-12-31
Mortgage loans 811,593,686.82 340,804,785.54
Total 811,593,686.82 340,804,785.54
Including.：non-current liability within one year 229,607,155.48 10,461,764.71
long term loans 581,986,531.34 330,343,020.83
The ending balance of long-term loans by each lender are as follows:
Lender currency 2009-12-31 Conditions Maturity Date
Shenzhen Rural Commercial Bank RMB 195,000,000.00 Mortgage 2010.12.04
Nanyang Commercial Bank shenzhen branch RMB 47,893,686.82 Mortgage 2017.05.29
ShangHai Band Shenzhen Branch* RMB 200,000,000.00 Guaranteed 2012.12.07
ShangHai PuDong Development Bank RMB 45,500,000.00 Mortgage 2012.03.29Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
116
ShenZhen Branch
China Construction Bank ShenZhen Branch RMB 15,000,000.00 Mortgage 2010.07.10
China Construction Bank ShenZhen Branch RMB 8,200,000.00 Mortgage 2010.06.13
Communciation Bank ShanTou Branch RMB 300,000,000.00 Mortgage 2012.08.03
Total 811,593,686.82
* The loans borrowed from ShangHai Band Shenzhen Branch were guaranteed by the
company’s controlling shareholder – Shenzhen Investment Holdings Co., Ltd. And the company
provided counter-guarantee mortgage with ShuiYunTianYa, MingYuan land-use right. Refer to
Note5、14 for details.
24、Long-term payable
2009-12-31 2008-12-31
Maintenance fund 8,185,932.62 7,490,170.24
25、Accrued liabilities
2009-12-31 2008-12-31
Loss of lawsuit -- 2,196,714.08
The company accrued RMB 2,196,714.08 liabilities because of the XingLuo YanWo
restaurant lawsuit in 2008. The decrease of accrued liabilities due to transfer to other payment.
Refer to Notes 11、(1).4 for details.
26、Share capital
2008-12-31 additions reductions 2009-12-31
1、Shares with restriction on disposals
1)、State-owned shares 571,690,800 -- 571,690,800 --
2)、PRC legal person shares -- -- -- --
3)、PRC legal nature person shares -- -- -- --
4)、Others -- -- -- --
Total 571,690,800 -- 571,690,800 --
2、Shares without restriction on disposalsShenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
117
2008-12-31 additions reductions 2009-12-31
1)、Domestically listed PRC public shares 319,969,200 571,690,800 -- 891,660,000
2)、Domestically listed foreign shares 120,000,000 -- -- 120,000,000
3)、Overseas listed foreign shares -- -- -- --
4)、Others -- -- -- --
Total 439,969,200 571,690,800 -- 1,011,660,000
Sumtotal 1,011,660,000 1,011,660,000
The change of share capital due to the program of reformming the share structure. Part of the selling
restricted shares held by Shenzhen Investment Holding Co., Ltd were transferred to selling unrestrictd
shares.
27、Capital reserve
2008-12-31 additions reductions 2009-12-31
Capital premium 557,433,036.93 -- -- 557,433,036.93
Other capital surplus 420,811,821.17 -- -- 420,811,821.17
Total 978,244,858.10 -- -- 978,244,858.10
28、Surplus reserve
2008-12-31 additions reductions 2009-12-31
Reserve fund 118,910,686.94 -- 113,936,295.79 4,974,391.15
The decrease of surplus reserve due to remedy loss with surplus reserve according to the
company’s resolutions of shareholders.
29、Retained Earnings
2009 2008
Net profit for parent company’s shareholders 20,217,383.62 19,123,787.11
add：Retained Earnings at the beginning of year -915,511,458.27 -934,635,245.38
less：Profit distribution -- --
Including.：withdrawal legal surplus -- --
Withdrawal special surplus -- --
Distribution to ordinary shareholders -- --Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
118
Remeding loss with surplus reserve 113,936,295.79 --
Retained Earnings at the ending of year -781,357,778.86 -915,511,458.27
30、Minority Interest and profit or loss
Name of investees
Proportion of minority
shareholdings %
2009-12-31 2008-12-31
Fresh Peak Investment Ltd. 45 -10,995,584.63 -10,995,584.63
Wellam Ltd. 20 -2,027,387.46 -2,027,387.46
Shenzhen City Hua Zhan
Construction Management Ltd*
-- -- 1,861,471.69
Total -13,022,972.09 -11,161,500.40
* The decrease of minority interest of Shenzhen City Hua Zhan Construction Management
Ltd due to the monority transfer the equity to the company.
31、Turnover and cost of sales
（1）Turnover and cost of sales
2009 Year 2008 Year
Core operating Income 659,202,263.13 675,732,200.75
Other operating Income 90,979,939.34 30,273,123.66
Gross Income 750,182,202.47 706,005,324.41
Cost of sales 534,326,169.41 473,150,286.71
（2）Core operating Income（classed by industry）
operating Income operating Cost Operating margin
Industry
2009 Year 2008 year 2009 year 2008 year 2009 year 2008 year
Real estate 321,202,863.73 318,341,233.41 168,571,340.65 156,884,141.75 152,631,523.08 161,457,091.66
Construction 256,016,976.58 198,643,152.28 243,350,066.58 189,063,593.50 12,666,910.00 9,579,558.78
Leasing 62,890,575.16 68,156,645.38 36,245,475.31 34,783,068.61 26,645,099.85 33,373,576.77
Property
management
84,961,938.04 90,591,169.68 69,295,055.43 74,760,638.91 15,666,882.61 15,830,530.77
Hotel and others 25,109,848.96 30,273,123.66 16,864,231.44 17,658,843.94 8,245,617.52 12,614,279.72
Total 750,182,202.47 706,005,324.41 534,326,169.41 473,150,286.71 215,856,033.06 232,855,037.70Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
119
（3）core business（class by district）
operating Income operating Cost Operating margin
District
2009 Year 2008 year 2009 Year 2008 year 2009 Year 2008 year
Domestic:
GuangDong
Province
727,823,534.95 704,312,668.41
526,761,635.15 471,333,454.43 201,061,899.80 232,979,213.98
Overseas： 22,358,667.52 1,692,656.00 7,564,534.26 1,816,832.28 14,794,133.26 -124,176.28
Total 750,182,202.47 706,005,324.41 534,326,169.41 473,150,286.71 215,856,033.06 232,855,037.70
（4）The informations of the biggest 5 clients are as follows:
2009 year
Client
Amount proportion%
Indivual – Yao XuanXi 10,138,854.00 1.35
ShanTou HongWei Co.,Ltd 9,880,264.00 1.32
Indivual – Zhou DanYun 9,880,264.00 1.32
Indivual –Huang WeiShan 8,733,888.00 1.16
Indivual –Chen YueDiao 8,616,716.00 1.15
Total 47,249,986.00 6.30
32、Business Taxes and Surcharges
2009 Year 2008 Year
Business tax 32,269,250.54 34,066,890.14
City maintenance and construction tax 228,353.26 294,453.17
Educational surcharge 626,116.15 570,478.34
Property tax 7,554,415.54 7,597,837.35
Land value added tax 32,871,737.39 29,800,780.19
Embankment Protection Fee 250,894.54 554,758.48
Total 73,800,767.42 72,885,197.67
33、Finance expenses
2009 Year 2008 Year
Interest expenses 48,557,467.79 37,691,766.29
Less：capitalization interest 6,806,525.39 10,481,274.23
Less: interest income 2,213,229.24 4,222,677.14
Exchange losses 39,356.82 5,786,273.36Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
120
Less: exchange gains 196,661.97 129,580.24
Others 316,855.72 866,291.09
Total 39,697,263.73 29,510,799.13
The finance expenses increased by Rmb 10,186.50thousand, 34.52%. The increase due to
the additions of the bank loans and the accrued interest expenses of the remaining land remise
fund of the GuangMing New District.
34、Assets impairment losses
2009 Year 2009 Year
Impairment losses for inventories -- 1,350,000.00
Impairment losses for bad debts -7,000,000.00 --
Total -7,000,000.00 1,350,000.00
The Impairment losses for bad debts was the original provision for the ShenYang TongXin
corporaion’s loans which had been reclaimed in this accounting year. Refer to Note 11、(1).5 for
details.
35、Investment income
（1）The details of investment income are as follows:
2009 Year 2009 Year
The investment income yielded from the long-term equity
appilied with the cost method
7,583,812.56
5,080,720.23
The investment income yielded from the long-term equity
appilied with the equityt method
-1,904,596.98
-761,509.69
The investment income yielded from the disposal of the
long-term equity
--
--
The investment income yielded from the disposal of the
financial assest held for trading
114,301.68
50,360.46
others -- -1,598,981.58
Total 5,793,517.26 2,770,589.42
（2）The investment income yielded from the long-term equity appilied with the cost method
investee 2009 Year 2009 Year Reason of the movement
KunShanDiaoFeng electrity Co.,Ltd 7,208,812.56 4,530,720.23 The addition of the dividendShenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
121
YunNan KunPeng Flight Service
Co.,Ltd
375,000.00
550,000.00 The reduction of the dividend
Total 7,583,812.56 5,080,720.23
（3）The investment income yielded from the long-term equity appilied with the cost method
investee 2009 Year 2009 Year Reason of the movement
Shenzhen Shatoujiao Nantian Store -152,851.44 -251,532.40 The decrease of the loss of investee
Zhaoqing Guifeng cement Co.,Ltd -1,776,494.00 -611,088.97 The increase of the loss of investee
Shenzhen ronghua JiDian Co.,ltd 24,748.46 101,111.68 The decrease of the profit of investee
Total -1,904,596.98 -761,509.69
36、Non-operating income
2009 Year 2008 Year
1、Total gain on disposal of non current assets 51,840.18 3,132,015.82
including：Gain on disposal of fixed assets 51,840.18 3,132,015.82
2、penalty income 116,275.48 --
3、compensation income 775,000.00 --
4、others 18,003.56 68,056.46
Total 961,119.22 3,200,072.28
The Non-operting income decrease by Rmb 2,239.00 thousand，69.97%. The decrease due to
the the company earned Rmb 2,630,000.00 from the disposal of fixed assests.
37、Non-operating expenses
2009 Year 2008 Year
1、Total losses on disposal of non current assets 57,747.38 83,755.93
including：Loss on disposal of fixed assets 57,747.38 83,755.93
2、penalty expense 377,645.42 5,871.72
3、Donation expenses 38,000.00 562,636.95
4、compensation expense* 542,749.92 6,785,703.66
5、others 29,455.50 146,373.93
Total 1,045,598.22 7,584,342.19Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
122
The Non-operating expenses decreased by Rmb 6,538,700.00, 86.21%. The decrease due to
the reduction of lawsuit loss of ChenBaoMing Case ( Rmb 4,200 thousand )and XingLuo YanWo
restaurant Case（ Rmb 2,190 thousand ）. Refer to Note11、（1）. 4 for details of XingLuo YanWo
restaurant Case.
38、Income tax expenses
2009 Year 2008 Year
Current year income tax expenses 13,715,040.27 17,928,912.10
Deferred income tax expenses 2,247,858.41 3,949,656.44
Total 15,962,898.68 21,878,568.54
39、Other comprehensive income
ITEM 2009 Year 2008 Year
1、the gain/loss yeild from the disposal of financial assests avaible
for sale
-- --
Less：the effect of income tax of disposal of financial assests
avaible for sale
-- --
The amount of which had been transferred in gain and loss
which had been counted in other comprehensive income prior
period
-- --
Total -- --
2、The amount of which the investee other comprehensie income
applied with the equity method
-- --
less：the effect of income tax of The amount of which the investee
other comprehensie income applied with the equity method
-- --
The amount of which had been transferred in gain and loss
which had been counted in other comprehensive income prior
period
-- --
Total -- --
三、the gain or loss yiele from the cash flow hedging instrument -- --
less：the effect of the gain or loss yiele from the cash flow
hedging instrument
-- --
The amount of which had been transferred in gain and loss
which had been counted in other comprehensive income prior
period
-- --
The adjustment of the first recognized amout which had been -- --Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
123
ITEM 2009 Year 2008 Year
transferred in hedging instrument
Total -- --
4、the differencs of translation of foreign financial statement 145,356.03 1,018,443.64
less：the net amount of dealing with the overseas operationg
gain or loss
-- --
Total 145,356.03 1,018,443.64
5、others -- -368,399.94
less：the income tax effect of other item which had been counted in
other comprehensive income
-- --
The amount of which had been transferred in gain and loss
which had been counted in other comprehensive income prior
period
-- --
Total -- -368,399.94
Sumtotal 145,356.03 650,043.70
40、Cash flow statements
（1）Cash received from operating activities
2009 year 2008 year
interest income 2,213,229.24 4,222,677.14
Mortgage、deposits 29,982,245.17 2,418,644.77
Correspondent Payment 17,870,083.10 16,410,500.52
Maintenance fund 726,676.38 1,278,150.16
Porperty license fee、Survey Fee 2,942,111.39 2,247,310.68
Others 134,279.04 492,200.18
Total 53,868,624.32 27,069,483.45
（2）Cash paid for other operating activities
2009 year 2008 year
Cash paid to General and
administrative expenses 29,301,526.79 35,270,916.16
Cash paid to operating expenses 6,052,697.77 7,012,640.95
Mortgage and Guarantee 27,464,881.18 1,619,530.09
Porperty license fee、Survey Fee 1,802,130.48 3,332,542.47Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
124
Other Correspondent Payment 2,116,072.14 21,388,870.52
Others -- 1,468,557.74
Total 66,737,308.36 70,093,057.93
（3）Cash paid for goods and serveices
2009 year 2008 year
cash paid for goods and serveices 1,006,695,122.36 484,498,771.96
The cash increased Rmb 522,196.40 thousand, 107.78%. The increase due to paid for 50% of
the land remise fund of the GuangMing New District.
（4）Cash received from borrowings
2009 year 2008 year
Cash received from borrowings 950,000,000.00 85,000,000.00
The borrowings increase by Rmb 865,000.00, 1,017.65%. The increase due to the additions
of loans borrowed from the banks and the related parties because of the GuangMing New District
land remise fund. Refer to Note 7、(3).2 for details of the related parties’ loans.
Cash repaid the borrowings
2009 year 2008 year
Cash repaid the borrowings 438,411,098.72 99,489,671.78
The cash paid for the borrowings increased by Rmb 338,921.40 thousand, 340.66%. The
increase due to repaid the related parities’ loans. Refer to Note 7、(3).2 for details.
（5）Cash and cash equivalents
2009 year 2008 year
1、Cash 374,836,340.37 299,011,742.90
including：Cash on hand 386,275.75 382,537.85
the bank deposits for available
payment 374,450,064.62
298,629,205.05Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
125
2、Cash equivalents -- --
3、Cash and cash equivalent at end of year 374,836,340.37 299,011,742.90
The differences between cash and cash equivalents, and the one at the end of monetary
balance, mainly because of the existence of notes5, 14.
（6）Cash flow statement(continued)
Supplementary information 2009 year 2008 year
1、Reconciliation from the net profit to the cash flows
from operating activities
Net profit 20,217,383.62 19,155,775.22
Add：Provisions for assets impairment
-- 1,350,000.00
Depreciation of fixed assets and
investment property 34,272,982.02 35,743,266.25
Amortization of intangible assets 230,180.00 167,580.00
Long-term deferred and prepaid
expenses amortization 162,445.20 298,003.18
Losses on disposal of fixed assets,
intangible assets and other long-term
assets（gains used“-”） 6,389.18 -3,048,259.89
Scrapping of fixed assets losses
（gains used“-”） -- --
Exchange of fair value losses（gains used“-”）
-109,106.25 456,411.50
Finance expenses （gains used“-”）
45,929,814.53 30,483,564.39
Investment losses（gains used“-”）
-5,793,517.26 -2,770,589.42
Decrease in deferred tax assets（gains used“-”）
2,247,858.41 3,949,656.44
Increase in deferred tax liabilities
（gains used“-”） -- --
Decrease in inventories（gains used“-”）
-1,135,341,065.07 -124,467,160.34
Decrease in operating receivables
（gains used“-”） 21,892,271.99 -5,300,812.15
Increase in operating payables（gains used“-”）
604,158,483.09 -39,010,464.12
Others -- 463,533.22
Net cash flows from operating activities -412,125,880.54 -82,529,495.72
2、Investment and financing activities not involving -- --Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
126
Supplementary information 2009 year 2008 year
cash
3、Net increase/ (decrease) in cash and cash equivalents
Cash at end of the year 374,836,340.37 299,011,742.90
Less: cash at beginning of the year 299,011,742.90 422,049,961.88
Add：cash equivalents at end of the year
-- --
Less: cash equivalents at beginning of the year -- --
Net increase in cash and cash equivalents 75,824,597.47 -123,038,218.98
Note 6、segment report
Segment report of 2009 year（business segment report）：
Item
Property and
leasing
Property
management construction Hotel and others balance out Total
1 、
operating
income 388,423,665.25 90,659,618.72 261,816,123.11 27,779,798.51 -18,497,003.12 750,182,202.47
2 、
operatin
g
expense 364,726,014.99 87,447,068.76 260,990,832.19 26,267,247.55 -25,513,722.32 713,917,441.17
3 、
operatin
g profit 23,697,650.26 3,212,549.96 825,290.92 1,512,550.96 7,016,719.20 36,264,761.30
4 、total
assests
3,849,022,645.7
0 81,280,391.85 56,834,132.00 150,068,246.59 -776,095,092.10
3,361,110,324.0
4
5 、total
liabilites
3,126,724,511.3
0 74,782,493.31 40,015,653.34 89,531,742.36
-1,185,572,718.
59
2,145,481,681.7
2Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
127
Segment report of 2008 year（business segment report）：
Item
Property and
leasing
Property
management
construction Hotel and others balance out Total
1、
operating
income
406,373,043.81 93,955,234.39 221,950,305.58 29,494,024.07 -45,767,283.44 706,005,324.41
2、
operatin
g
expense
352,480,123.62 90,966,831.58 221,500,641.04 28,039,398.32 -32,400,283.82 660,586,710.74
3、
operatin
g profit
53,892,920.19 2,988,402.81 449,664.54 1,454,625.75 -13,366,999.62 45,418,613.67
4、total
assests
3,061,686,236.86 83,999,031.68 71,922,398.35 154,573,924.25 -1,106,524,912.23 2,265,656,678.91
5、total
liabilites
2,328,133,550.33 79,541,289.95 55,927,525.41 95,202,636.31 -1,490,275,697.45 1,068,529,304.55
Note 7、Related parties’ transactiom
（1）The standards of related parties recognition
Party control, joint control or the other to exert a significant impact on the other
party, as well as two or more than two parties are of the same party control, joint control or
significant influence, constitutes a related party.
（2）Related party relationships
1、 the information of the company’s controlling shareholder is as follows:
Controlling
shareholder
relationship
Enterprise
type
Place of
registration
legal
represen
tative
Nature
of
business
and
principal
Registered
code
Registered
capital
Equity
Holding
proporat
ion%
Voting
rights
%Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
128
activities
Shenzhen
Investment
Shareholdin
g Limited
controlling
shareholder
State-owne
d
Enterprises
Guangdong
province
Shenzhen
Chen
hongbo
*
76756642-
1
RMB 4
billion
63.55 63.55
* Guarantees for Municipal State-owned enterprises; stated-owned shares management
excluded from the enterprises of direct control by SAC; on assets restructurings of controlled
enterprises as well as its capital operation. Other businesses authorized by city SAC.
2、 The informations of the company’s subsidiaries. Refer to Note 4.(1) for details.Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
129
3、 The informations of the joint venture and Associate
Name of
investees
Enterpris
e type
Nature of
business
legal
represen
tative
Registered
code
Place
of
regist
ratio
n
Registered
capital
(in ten
thousand
yuan)
Equity
Holding
proporat
ion%
Voting
rights
%
The ending
total assests
The ending
total liabilities
The ending
net assests
Operating
income Net profit
1 、Associate
investment:
Shenzhen
Shatoujiao
Nantian Store
*1
limited
liability
company
Domestic
trade/material
supply
Liang
Guohon
g
19218466-7 shenz
hen 202 50 50 4,699,959.98 128,169.81 4,571,790.17 85,400.00 -305,702.87
Zhaoqing
Guifeng
cement Co.,Ltd
*2
limited
liability
company
CEMENTand
CONCRETE
production
LiangGu
angZhen 78385809-6 zhao
qing 3,023 50 50 116,018,573.53 100,409,747.81 15,608,825.72 51,435,198.22 -3,552,987.99
Shenzhen
ronghua JiDian
Co.,ltd
limited
liability
company
Elevator,
air-condition,
water-electrict
y fixing and
sales
ZhengZ
hongQin
g
19219691-6 shenz
hen 500 25 25 9,031,827.26 2,655,156.37 6,376,670.89 11,070,270.53 98,993.83
Shenzhen Fresh
Peak property
consultant
Co.,Ltd
limited
liability
company
Property
sales and
rental
ZhongX
inFa 19221684-1 shenz
hen 300 20 20 4,158,985.42 9,185,879.64 -5,026,894.22 3,007,911.50 -1,953,661.75
Shenzhen
runhua
automobile
trading Co.,Ltd
*3
limited
liability
company
Domestic car
sales( not
includen little
car)、moto
LiXueM
in 19220483-2 shenz
hen 500 50 50
Shenzhen
Dongfang New
world store
Co.,Ltd *4
limited
liability
company
Domestic
trade/material
supply
PengNai
Dian 19222948-2 shenz
hen 3,000 50 50Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
130
Name of
investees
Enterpris
e type
Nature of
business
legal
represen
tative
Registered
code
Place
of
regist
ratio
n
Registered
capital
(in ten
thousand
yuan)
Equity
Holding
proporat
ion%
Voting
rights
%
The ending
total assests
The ending
total liabilities
The ending
net assests
Operating
income Net profit
2 、joint
venture
investment:
Guangdong
province
Huizhou Luofu
Hill mineral
water Co.,Ltd *5
Cooperati
ve
Enterpris
es
Water and
other products
supply
YangHu
aiYu boluo 602 cooperat
ion
cooper
ation
Fengkai
Xinhua Hotel
*6
Cooperati
ve
Enterpris
es
tourism 、
Restaurant fengk
ai
cooperat
ion
cooper
ation
Jiangmen
Xinjian Real
Estate Co.
Ltd.*7
Cooperati
ve
Enterpris
es
Property
developing
and sales
LuoJinX
Xing
jiang
men USD660 cooperat
ion
cooper
ation
Xian Fresh
Peak Building
Co. Ltd.*7
Cooperati
ve
Enterpris
es
Developing
and operating
Xi’an trade
building
LiangW
eiGuo 62390802-3 Xi’a
n HKD3,000
cooperat
ion
cooper
ation
DongYi
Property
Co.,Ltd *7
Private
owned
enterprise
s
Property
development
and sales
hongk
ong HKD100
cooperat
ion
cooper
ation
*1 Shenzhen Shatoujiao Nantian Store
The company transferred 50% equity of Shenzhen Shatoujiao Nantian Store to Shenzhen ShaTou Jiao Business trade Co.,Ltd with a listing agreement price –RmbShenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
131
12,1450 thounsand in ShenZhen United property Exchange.
*2 Zhaoqing Guifeng cement Co.,Ltd
The company held a party joint conference at 2009-2-24. the meeting passed a resolution to dispose the 50% equity of Zhaoqing Guifeng cement Co.,Ltd the company
held. With the same conditon, the former shareholder – GuangLong Group had the right of priority in acquiring. The company had made a preliminary agreement on equity
transferration with GuangLong Group.
*3 Shenzhen runhua automobile trading Co.,Ltd
The operting period of this corporation was form 1992-2-24 to 1997-2-24. and the corporation had ceased operations because of operating loss for many years.
And the corporation had been terminated its licenses by law because it failed to pass the annual inspection. And the corporation stopped making the financial
statement. At 2009-12-31, the book value of the investment account of the company is zero. According to the assosicate agreement, the company didn’t have the
ability to bear the additional loss.
*4 Shenzhen Dongfang New world store Co.,Ltd
The operting period of this corporation was form 1993-6-7 to 1998-6-7. and the corporation had ceased operations because of operating loss for many years.
And the corporation had been terminated its licenses by law at 2001-1-10 because it failed to pass the annual inspection. And the corporation stopped making the
financial statement. At 2009-12-31, the book value of the investment account of the company is zero. According to the assosicate agreement, the company didn’t
have the ability to bear the additional loss.
*5 Guangdong province Huizhou Luofu Hill mineral water Co.,Ltd
The operting period of this corporation was form 1991-6-5 to 2001-6-4. and the corporation had ceased operations because of operating loss for many years.
And the corporation had been terminated its licenses by law at 2001-7-6 because it failed to pass the annual inspection. And the corporation stopped making the
financial statement. At 2009-12-31, the book value of the investment account of the company is zero. According to the joint venture agreement, the company didn’tShenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
132
have the ability to bear the additional loss.
*6 Fengkai Xinhua Hotel
The FengKai XingHua Hotel was announced bankruptcy by the Guangdong Province Zhaoqing City second-middle intermdediate Peoples’ court with the
document (2002)ZHFJPZ No.2. and the corporation had finished the bankruptcy procedure. At 2009-12-31, the book value of the investment account of the
company is zero. According to the joint venture agreement, the company didn’t have the ability to bear the additional loss.
*7 Jiangmen Xinjian Real Estate Co. Ltd.、Xian Fresh Peak Building Co. Ltd、DongYi Property Co.,Ltd
The above corporations were the joint ventures set up with the local partners for the properties developing projects. Because the projects had been stopped, the
joint ventures had stopped operating actvities for many years. And these corporations also stopped operation for many years and didn’t prepare financial statements.
The company had accrued corresponding privision of the investment of joint ventures. Refer to Notes 5.7.2 for details.
The above joint ventures and assosicates which number were *3、*4、*5、*6、*7 had stopped operating businesses and preparing financial statements. The
constitution and the agreement of the above corporations didn’t require the shareholders bearing the extra loss abilities except for contributing capital. Accoring to
the principle “ Enterprise Accounting Stanfard – No.2 Long-Term Investment Equity ”, the company had accured full provision of the investment according to the
corporations’ financial situations. And the company hadn’t transferred back any provision. So in the accounting period, the book value of the investment account of
the conpany is still zero.Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
13 3
（3）Related parties transactions
The related parties transactions included the emoluments、borrowings from related parties
and interest expenses. The informations were as follows:
1、 Emoluments
2009 year 2008 year
Total emoluments for key
management personnel
3096.30 thousand
3567.80 thousand
Total amount of top 3 1167.50 thousand 1200.00 thousand
The company didn’t pay any compensation to the chairment of the board.
2、 Borrowings from related parties
2009-12-31 2008-12-31
Short-term loans - shenzhen investment
holding Co.,Ltd
100,000,000.00 --
Other payables - shenzhen investment
holding Co.,Ltd
63,848,819.24 63,848,819.24
Total 163,848,819.24 63,848,819.24
The company borrowed 0.4 billion from the controlling shareholder – shenzhen investment
holding Co.,Ltd. And the company repaid 0.3 billion to shenzhen investment holding Co.,Ltd in
the accounting period.
3、 Interest paid to the related parities
2009 year 2008 year
shenzhen investment holding Co.,Ltd 3,000,000.00 4,986,746.69
Rate: the rate was 5.31% according to the loans agreement.
4、 The Assurance of the relate parities
Assurance Provider secured party relationship
Secured
amount
Secured period
shenzhen investment holding
Co.,Ltd
Shenzhen Special Economic
Zone Real Estate and
Properties (Group) Co., Ltd
Controlling
subsidiary
200,000,000 2009.12.08 to 2012.12.07
Shenzhen Special Economic ZoneShanTou HuaLin preperty Controlling 300,000,000 2009.08.31 to 2012.08.03Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
13 4
Real Estate and Properties
(Group) Co., Ltd
development Co.,Ltd subsidiary
Shenzhen Special Economic Zone
Real Estate and Properties
(Group) Co., Ltd
Shenzhen City Property
Management Ltd.
Controlling
subsidiary
8,200,000 2007.07.09 to 2010.07.10
Shenzhen Special Economic Zone
Real Estate and Properties
(Group) Co., Ltd
Shenzhen Petrel Hotel Co.
Ltd.
Controlling
subsidiary
15,000,000 2007.06.14 to 2010.06.13
5、 Receivables and Payables of related parties
2009-12-31 2008-12-31
Name of related parties
amount propotion% amount propotion%
Other receivables Luofu Hill mineral water Co.,Ltd 10,465,168.81 4.59 10,465,168.81 4.70
Shenzhen Runhua automobile trading
Co.,Ltd 3,072,764.42
1.35
3,072,764.42
1.38
Canada GreatWall（vancouver）Co.,Ltd 89,035,748.07 39.03 89,035,748.07 39.95
Bekaton Property Limited 19,181,797.04 8.41 12,559,290.58 5.64
Paklid Limited 18,211,639.09 7.98 18,211,639.09 8.17
Shenzhen Shenfang Department Store Co.
Ltd. 189,179.82
0.08
189,179.82
0.08
Shenzhen Real Estate
Consolidated Service Co., Ltd. 927,136.22
0.41
927,136.22
0.42
Shenzhen City Shenfang
Construction and Decoration
Materials Ltd. 8,327,180.71
3.65
8,327,180.71
3.74
Shenzhen RongHua JiDian Co.,Ltd 1,187,723.46 0.52 1,187,723.46 0.53
Xi’an Fresh Peak property management&
Trading Co.,Ltd
8,419,205.19 3.69 8,419,205.19 3.78
Accounts
receivable
Shenzhen Fresh Peak property consultant
Co.,Ltd
1,187,345.24 3.56 4,272,678.17 12.73
Other payables
Shenzhen Tefa Real Estate
Consolidated Service Co., Ltd. 598,012.16
0.20
598,012.16
0.23
Shenzhen Shen Fang Industrial
Development Co., Ltd
1,534,854.91 0.52 1,534,854.91 0.58
Shenzhen ZhongGang Haiyan Enterprise Ltd. 135,853.52 0.05 135,853.52 0.05
Shenzhen Dongfang New world store 902,974.64 0.30 902,974.64 0.34Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
13 5
2009-12-31 2008-12-31
Name of related parties
amount propotion% amount propotion%
Co.,Ltd
Shenzhen Xin Dongfang Store Ltd. 1,394,704.21 0.47 1,394,704.21 0.53
Guangdong Province Fengkai
Lain Feng Cement Manufacturing
Co., Ltd. 1,870,577.00
0.63
1,880,577.00
0.72
Shenzhen Shatoujiao Nantian Store 1,200,000.00 0.40 1,200,000.00 0.46
Shenzhen Cyber Port Co., Ltd 7,910,026.54 2.66 6,026,357.00 2.29
Shenzhen shenfang group BaoAn
developing Co.,Ltd
18,981,347.13 6.39 -- --
shenzhen investment holding Co.,Ltd 63,848,819.24 21.48 63,848,819.24 24.29
Short-term loans shenzhen investment holding Co.,Ltd 100,000,000.00 100.00 -- --
Interest payable shenzhen investment holding Co.,Ltd 14,421,711.65 58.42 7,888,053.54 100.00
Note 8、Exchange of non-monetary assets
No informations of exchange of non-monetary assets are needed to disclosure in 2009.
Note 9、Share-based payment
There are no any share-based payment contract in 2009.
Note 10、Debt restructurings
No informations of Debt restructurings are needed to disclosure in 2009.
Note 11、Contingencies
（1）Significant litigation
1．Guoxing Building Lawsuit
On 21 March 1997, the company singed an agreement “transferring equity of
GuoXing Building agreement” with Baoxing real Estate Development (Shenzhen)
Company limited (hereinafter referred to as “BaoXing” ). According to the agreement
specifications, the company transferred 50% of GuoXing Building project to BaoXing
with the price- Rmb 145,000 thousand . And also, the construction cost – Rmb 15,000
thousand that the company owed to GuoXing Building were undertaken by BaoXing. But
after paying Rmb 45 million to the company, the remaining equity transferring fundShenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
13 6
Rmb 100,000 thousand and the construction cost – 15,000 thousand hadn’t paid for the
company. The company instituted legal proceedings against BaoXing. After the trial of
the Guangdong High People’s Court on 28 September 2002, Baoxing had to pay for Rmb
98,948,060.00 and interest to the company according to the paper of civil judgment –“（2001）
YueGaoFaJing – ChuZhi No.7. Upon a second sue of the case in 2003, the judgement
remained unchanged.
On 2008-2-2, the company signed an agreement with BaoXing company. According to the
agreement specifications, BaoXing company paid for Rmb 15,000 thousand to the company.
and at the same time, the company gave up the distribution right and Auction Disposal right of
the LongGang District BaoXing Building. But the BaoXing Company failed to carry out the
agreement. On 2008-7-23, Baoxing Company 、the third party – Shenzhen HongMing MuYe
Co., Ltd (hereinafter referred to as HongMing Company )and the company signed the
composition agreement. According to the agreement specifications, the debts and other
responsibilities of BaoXing Company would be undertaken by HongMing company. And
HongMing Company had to paid for the company Rmb 15,000 thousand and transferred the
land-use right of N0. 1514 room ( size: 343.95 square meters) of Shenzhen international
exchange plaza. At December 2008, the company received Rmb 2,500 thousand. And the
property hadn’t finished the transferring ownership procedures. Now the case is proceeding
and there was no any new substantive progress in the reporting period.
Untill 31 December, 2009, the amount of RMB 66,201,645.33 had been called back
on the case with the execution.
2．Xi’an project Lawsuit
Xi’an Fresh Pead Holding limited company (hereinafter referred to as “Fresh Peak
Company” ) was sino-foreign joint venture set up in Xi’an city. The shareholder of the
Fresh Peak Company – Hongkong Fresh Peak Co.,Ltd was the wholly owned subsidiary
of the company. And the Hongkong Fresh Peak Co.,Ltd contributed 84% of the Fresh
Peak company’s share- capital in cash. And Xi’an trade building which was the
enterprise under the Xi’an Joint Commission on Commerce and Trade contributed 16%
of the Fresh Peak company’s share- capital with the land-use right. The core business
was property development. And the project was Xi’an Trade Building. The project was
started on 1995-11-28. But the project had been stopped in 1996 because of the 2 parties
differences on the operating policy of the project.
In 2007, the Xi’an government withdrew the Xi'an Fresh Peak investment project
compulsively and assignned the project to Xi’an Business Tourism Co.,Ltd ( hereinafter
referred to as “Business Tourism company” ). But the two parties had insulted an lawsuitShenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
13 7
on compensation. The ShanXi Province High Peoples Court made a judgement “(2000)
SJ-CZ No.25”. The judgement were as follows: 1、Business Tourism company had to
paid for the compensation Rmb 36,620 thousand to Xi’an Fresh Peak company 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. 2 、Xi’an Joint
Commission on Commerce had the joint and several obligation of the interests of the
compensation.
Untill 31 December, 2009, the amount of RMB 11,500,000.00 had been called back.
Business Tourism company and Xi’an Joint Commission on Commerce owed Xi’an
Fresh Peak company Rmb 21,540 thousand. Now the case is proceeding and there was no
any new substantive progress in the reporting period.
At 2009-12-31, the book value of the investment of Xi’an Fresh Peak Company was Rmb
12,166,897.84 . The provision for investment was Rmb 20,673,831.77. and the amount of credit
was Rmb 8,419,205.19.
3．Luofu Hill project Lawsuit
The company cooperated with Luofu Hill Tourism company ( hereinafter referred to
as “Tourism company” )cooperated on Luofu Hill Tourism project in early years. The
company instituted legal proceedings against Tourism company because the Tourism
company failed to carry out the agreement. The judgemen which issued by GuangDong
Province High Peoples Court on 2007-12-21 are as follows:
1、Tourism company had to paid for Rmb 9,600 thousand to the company in 10
days after the judgment entering into force.
2、Tourism company should paid for the interests of Rmb 9,600 thousand with The
People's Bank of China similar loans rate in 10 days after the judgment entering into
force. Of which, The interests of Rmb 4,400 thousand were caluated from 1986-5-1 to
the day the Tourism company paid off the debt. The interests of Rmb 4100 thousand
were caluated from 1988-2-1 to the day the Tourism company paid off the debt. The
interests of Rmb 1,100 thousand were caluated from 1989-6-15 to the day the Tourism
company paid off the debt. The interest of Rmb 8,580 thousand that the Tourism
company had paid for to the company can be deduct ed from the interest payable.
3、Luofushan Administration Committee had to undertake one third of the debts
which Luofushan Tourism was unable to pay ;
4、The interest of debts would be double if the Tourism company and LuofushanShenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
13 8
Administration Committee failed to fulfill their obligations within the designated period
of this judgment;
5、Tourism company undertaked all the litigation fees (RMB 167,714 ). The expense
of first instance and the second instance had to pay to the company during the duration
of payment.
There was no any new substantive progress after the judgement announced. The company
applied the GuangDong Province High people’s Court to supervise implementation at May
2009. The GuangDong Province High people’s Court issude a document “(2009) YGYZDZ No.
67 to Huizhou intermediate people’s court and asked the Huizhou intermediate people’s court to
close this case in 3 months after receiving the document. Until 2010-3-17, Huizhou intermediate
people’s court had finished the Evaluation of the land use right of the executor. The both parities
had received the Evaluation report. And the land-use right will be acution sale by the national
resource department after the einspruch.
On 2009-12-31, the book value of the investment of Tourism company was Rmb
9,600,000.00 . the provision for investment was Rmb 4,800,000.00.
4．Xianluo Yanwo Restaurant Lawsuit
Xianluo Yanwo Restaurant Lawsui and the company signed the property leasing
agreement on 2003-3-26. The property was used to as business place of Xianluo Yanwo
Restaurant. But the Xianluo Yanwo Restaurant stopped operating business on January
2006. In May 2006, the Xianluo Yanwo Restaurant instituted legal proceedings against
the company and asked for the company to compensate its operating and decoration loss.
Because the restaurant thought the company hadn’t fullfil its abilities as property owner
and management. On 2007-12-29, shenzhen luomin court issued a judgement
(2006)SLFMSCZ No.808”. according to the judgement, the company had to paid for
Rmb 2,926,714.00. The Company arrested the above judgment and appealed on 26 February
2008 to the Shenzhen Intermediate People's Court. At 2009-12-25, the Shenzhen Intermediate
People's Court made a second phrase judgement and the judgement remained the same.
On 2010-3-10, the Xianluo Yanwo Restaurant and the company reached reconciliation
agreement. According to the agreement, the company had to paid for Rmb 2,739,464.00 to
Xianluo Yanwo Restaurant after deducting the rentutility bills and management fee that the
restaurant owed the company.
The company acrrued Rmb 542,749.92 additional provision for lawsuit loss according to
the reconciliation agreement. And the case had closed.
5．Shenyang Tongxin CaseShenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
13 9
Shenyang Tongxin Real Estate Development Co., Ltd. ( hereinafter referred to as
“TongXin Company” ) was joint-venture set up in ShenYang city. The shareholder of
company – Hongkong Fresh Peak Co.,Ltd was the wholly owned subsidiary of the
ompany. And the shares Hongkong Fresh Peak Co.,Ltd held was 93.1%. TAhe core
businss of TongXin Company was to develop ShenYang Fresh Peak Businedd Plaza.
TongXin Company refinanced Rmb13,140 thousand from China Agriculture bank
ShenYang branch. And the company provideD assurance for the loan. Because
TongXin Company failed to repaid the loan in time. The China Agriculture bank
ShenYang branch instituted legal proceedings in shenyang Intermediate People's Court.
So TongXin Company borrowed money from the company to repay the loans and interests.
On 2008-1-25, Internationl economic trade Arbitration commission HuaNam branch made
a judgement. According to the judgement, TongXin Company had to repaid Rmb 14,422,440.22
and interests to the company. Now the case is proceeding. Untill 2010-1-27, the company had
called back Rmb 7,000 thousand.
Related Matters of the case: 93.1% shares of Shenyang Tongxin Company's shares held
by fresh Peak Company was auctioned sale by Shenzhen Intermediate People's Court on 22
January 2006. and fresh Peak Company didn’t hold any shares of Tongxin Company'.
（2）、Security for debts
Up to 31 December 2009, balance of guarantees is as follows:：
Currency Amount
(in ten thousand Yuan)
Internal guarantees in the group RMB 32,320
Guarantees for outstanding mortgage RMB 1,126
Note 12、Commitments
At 2009-12-31, the informations of the commitments are as follows:
Amount （in ten thousand）
The land-use right contracts which had been signed or
were going to carry out
60,000
The construction contracts which were going to carry out 6,029Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
14 0
At 2009-12-31, the company had the land-use right contract which had been signed but not
already paid for the full land remise fund. The total land remise fund is Rmb 1.2 billion. The
company had paid for RMB0.6 billion . The remaining land remise fund is Rmb 0.6 billion. The
rate is 5.31%. the remain land remise fund had to be paid before 2010-8-28.
The company had the commitments of the construction contracts which had been signed
but not carry out. Mostly were construction contracts. And the total amount of capital item
expense and investment were RMB 60,290 thousand. The money had to be paid for until the
other partner of contract carried out the responsibilities and liabilities.
NOTE 13、Notes to the parent company financial statements
1、 Accounts receivable
（1）The symbol of credit risk identified by customers categories
2009-12-31 2008-12-31
Book balance Provision of bad debts Book balance Provision of bad debts
Amount
proportion
%
Amount
proport
ion %
Amount
proportio
n %
Amount
proporti
on %
category 1 -- -- -- -- -- -- -- --
category 2 -- -- -- -- -- -- -- --
category 3 12,566,900.74 100.00 6,457,254.02 100.00 14,056,165.52 100.00 6,457,254.02 100.00
Total 12,566,900.74 100.00 6,457,254.02 100.00 14,056,165.52 100.00 6,457,254.02 100.00
category 1: refers to accounts receivable with significant individual amount, such
individual amount is more than 5 million yuan
category 2: individual is not a significant amount of credit risk, but according to the
characteristics of the portfolio after portfolio of risky accounts receivable, aging of such
fund in three years, and still less likely to recover the money.
category 3： Other is not significant accounts receivable
（2）The informations of provision for bad debts of which the amount were significant or
unsignificant but tested individually are as follows:
2009-12-31
Book balance
Provision for
bad debts
proportion
%
reasonShenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
14 1
Other unsignificant
accounts
receivable
12,566,900.74 6,457,254.02 51.38%
The sales price which were gonna reclaimed. The
company accrued the provision according to the
retrievability.
（3）The aging of accounts receivable by categories
2009-12-31 2008-12-31
Aging
Book balance proportion % Provision Book balance proportion % Provision
Within 1 year -- -- -- 65,745.71 0.47 --
1 to 2 year 65,745.71 0.52 -- 183,200.39 1.30 --
2 to 3 year 183,200.39 1.46 -- -- -- --
Above 3 years 12,317,954.64 98.02 6,457,254.02 13,807,219.42 98.23 6,457,254.02
Total 12,566,900.74 100.00 6,457,254.02 14,056,165.52 100.00 6,457,254.02
（4）No amount due from shareholders who hold 5% or more of the voting rights of the
company is included in the above balance of accounts receivable.
（5）Refer to Note7、(3).5 for details of the accounts receivables which due from related
parities.
2、 Other receivables
（1）The symbol of credit risk identified by customers categories
2009-12-31 2008-12-31
Book balance Provision of bad debts Book balance Provision of bad debts
Amount
proport
ion %
Amount
proport
ion %
Amount
propor
tion %
Amount
propor
tion %
Category 1 1,222,338,453.35 91.70 849,851,353.28 98.45 1,088,814,871.71 74.05 836,392,473.97 96.90
Category 2 12,530,185.94 0.94 12,530,185.94 1.45 16,949,438.62 1.15 15,662,615.26 1.81
Category 3 98,176,216.12 7.36 811,640.80 0.10 364,640,885.20 24.80 11,138,090.79 1.29
Total 1,333,044,855.41 100.00 863,193,180.02 100.00 1,470,405,195.53 100.00 863,193,180.02 100.00
category 1: refers to other receivables with significant individual amount, such
individual amount is more than 5 million yuan
category 2: individual is not a significant amount of credit risk, but according to theShenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
14 2
characteristics of the portfolio after portfolio of risky other receivables, aging of such fund
in three years, and still less likely to recover the money.
category 3： Other is not significant other receivables.
（2）The aging of other receivables:
2009-12-31 2008-12-31
Aging
Amount proportion % Provision Amount proportion Provision
Within 1 year 23,564,044.62 1.77 -- 64,567,287.58 4.39 --
1 to 2 year 115,288,327.28 8.65 -- 209,294,808.32 14.23 --
2 to 3 year 132,332,131.47 9.92 -- 154,786,735.85 10.53 4,001,634.89
Above 3 years 1,061,860,352. 79.66 863,193,180.02 1,041,756,363.78 70.85 859,191,545.13
Total 1,333,044,855. 100.00 863,193,180.02 1,470,405,195.53 100.00 863,193,180.02
The provision of individual is not a significant amount of credit risk, but according to the
characteristics of the portfolio after portfolio of risky other receivable:
2009-12-31 2008-12-31
Aging
amount proportion %
Provision of bad
debts
amount proportion %
Provision of bad
debts
Above 3 years 12,530,185.94 100.00 12,530,185.94 16,949,438.62 100.00 15,662,615.26
（3）the informations of provision for bad debts of which the amount were significant or
unsignificant but tested individually are as follows:
2009-12-31
Book balance Provision (%) proportion % Reason
indivual significant other
receivables
1,222,338,453.35 849,851,353.28 69.53%
The correspond money of realted parties.
The aging is long and the retrievability
is little. The company accured the
provision according to the retrievability
of each ietm.Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
14 3
individual is not a significant
amount of credit risk, but
according to the characteristics of
the portfolio after portfolio of
risky accounts receivable
12,530,185.94 12,530,185.94 100.00%
The correspond money of unrealted
parties. The aging is long and the
retrievability is little. The company
accured the full provision.
Other unsignificant receivables 98,176,216.12 811,640.80 0.83%
Other unsignificant receivable. The
company accured the provision according
to the retrievability of each item.
Total 1,333,044,855.41 863,193,180.02
（4）The informations of accounts receivables of the company's biggest five debtors are
as follows:：
Name relationship Amount proportion % aging
383,983.75 0.03 Within 1 year
977,977.04 0.07 1 to 2 year
209,738,677.28 15.73 2 to 3 year
Fresh Peak Enterprise Co., Ltd. subsidiary
417,488,892.23 31.32 Above 3 years
2,295,681.21 0.17 Within 1 year
100,703,588.09 7.55 1 to 2 year
Shenzhen ShenFang Group LongGang
Development Co.,Ltd
subsidiary
98,527,997.38 7.39 2 to 3 year
American great wall Co.,Ltd subsidiary 101,379,954.81 7.61 Above 5 years
13,606,762.15 1.02 1 to 2 year
Fresh Peak property Co., Ltd. subsidiary 761,332.16 0.06 2 to 3 year
81,499,496.51 6.11 Above 3 years
Canada Great Wall(vancouver) Co.,Ltd subsidiary 89,035,748.07 6.68 Above 3 years
Total 1,116,400,090.68 83.75
（5）No amount due from shareholders who hold 5% or more of the voting rights of the
company is included in the above balance of other receivables.
（6）Refer to Note7、(3).5 for details of the other receivables which due from related
parities.
（7）There were no any other receivables which had been terminated recognized in theShenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
For the year ended at 31 December 2009
14 4
accounting year.
（8）There were no any other receivables which had been Securitization in the accounting
year.
3、 Inventories
2009-12-31 2008-12-31
Amount
Provision
for declines
Amount
Provision for
declines
Real estate development product 86,040,542.19 1,350,000.00 53,691,639.07 1,350,000.00
Real estate developing products 130,053,479.40 -- 128,932,800.58 --
Real estate which are going to
be developed 1,200,170,737.09
--
--
--
Total 1,416,264,758.68 1,350,000.00 182,624,439.65 1,350,000.00SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) CO., LTD
For the year ended 31 December 2009
14 5
4、 Long-term equity investments
（1） the informations of long-term equtiy investments:
Name of investees
Measured
method
Orginal cost 2008-12-31 movement 2009-12-31
Proport
ion (%)
Voting
right (%)
provision
Provision
accrued
in 2009
Dividend
Subsidiaries’ investment：
Shenzhen City Property
Management Ltd.
Cost
method
12,821,791.52 12,821,791.52 -- 12,821,791.52 95 95 -- -- --
Shenzhen Petrel Hotel Co. Ltd.
Cost
method
20,605,047.50 20,605,047.50 -- 20,605,047.50 68.10 68.10 -- -- --
Shenzhen City Shenfang
Investment Ltd.
Cost
method
9,000,000.00 9,000,000.00 -- 9,000,000.00 90 90 -- -- --
Fresh Peak Enterprise Ltd.
Cost
method
556,500.00 556,500.00 -- 556,500.00 100 100 -- -- --
Fresh Peak Holdings Ltd.
Cost
method
20,824,545.77 21,717,697.73 1,000,000.00 22,717,697.73 100 100 -- -- --
Shenzhen Special Economic
Zone Real Estate (Group)
Cost
method
20,000,000.00 20,000,000.00 -- 20,000,000.00 100 100 -- -- --SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) CO., LTD
For the year ended 31 December 2009
14 6
Name of investees
Measured
method
Orginal cost 2008-12-31 movement 2009-12-31
Proport
ion (%)
Voting
right (%)
provision
Provision
accrued
in 2009
Dividend
Guangzhou Property and Estate
Co., Ltd.
Shenzhen Zhen Tung
Engineering Ltd
Cost
method
11,332,321.45 11,332,321.45 -- 11,332,321.45 73 73 -- -- --
American Great wall Co.,Ltd
Cost
method
1,435,802.00 1,435,802.00 -- 1,435,802.00 70 70 -- -- --
Shenzhen City Shenfang Free
Trade Trading Ltd.
Cost
method
4,750,000.00 4,750,000.00 -- 4,750,000.00 95 95 -- -- --
Shenzhen City Hua Zhan
Construction Management Ltd.
Cost
method
6,000,000.00 6,000,000.00 -- 6,000,000.00 75 75 -- -- --
Shenzhen City Car Rental Ltd.
Cost
method
11,809,500.00 6,495,225.00 -- 6,495,225.00 55 55 -- -- --
QiLu Co.,Ltd
Cost
method
212,280.00 212,280.00 -- 212,280.00 20 20 -- -- --
Beijing fresh peak property
development management
Cost
method
500,000.00 500,000.00 -- 500,000.00 10 10 -- -- --SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) CO., LTD
For the year ended 31 December 2009
14 7
Name of investees
Measured
method
Orginal cost 2008-12-31 movement 2009-12-31
Proport
ion (%)
Voting
right (%)
provision
Provision
accrued
in 2009
Dividend
limited company
Shenzhen Lain Hua Industry and
Trading Co. Ltd.
Cost
method
13,458,217.05 13,458,217.05 -- 13,458,217.05 95 95 -- -- --
Shenzhen City SPG Long Gang
Development Ltd.
Cost
method
30,850,000.00 30,850,000.00 -- 30,850,000.00 95 95 -- -- --
Beijing fresh peak property
development management
limited company
Cost
method 64,183,888.90 64,183,888.90 -- 64,183,888.90 75 75 -- -- --
Shenzhen Shenfang group
BaoAn development Co.,Ltd
*1
Cost
method 19,000,000.00 19,000,000.00
-19,000,000.0
0
-- 95 95 -- -- --
Shenzhen Shenfang Car Park Ltd.
Cost
method
29,750,000.00 29,750,000.00 -- 29,750,000.00 70 70 -- -- --
Joint venture investment：
Guangdong province
Huizhou Luofu Hill mineral
Equity
method
9,969,206.09 9,969,206.09 -- 9,969,206.09 cooperate cooperate 9,969,206.09 -- --SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) CO., LTD
For the year ended 31 December 2009
14 8
Name of investees
Measured
method
Orginal cost 2008-12-31 movement 2009-12-31
Proport
ion (%)
Voting
right (%)
provision
Provision
accrued
in 2009
Dividend
water Co.,Ltd
Fengkai Xinhua Hotel
Equity
method
9,455,465.38 9,455,465.38 -- 9,455,465.38 cooperate cooperate 9,455,465.38 -- --
Associate investment ： -- --
Shenzhen Shatoujiao Nantian
Store *2
Equity
method
2,850,618.06 2,599,085.66 -152,851.44 2,446,234.22 50 50 -- -- --
Zhaoqing Guifeng cement
Co.,Ltd *3
Equity
method
15,112,000.00 14,500,911.03 -1,776,494.00 12,724,417.03 50 50 -- -- --
Shenzhen runhua automobile
trading Co.,Ltd
Equity
method
1,445,425.56 1,445,425.56 -- 1,445,425.56 50 50 1,445,425.56 -- --
Shenzhen ronghua JiDian
Co.,ltd
Equity
method
1,250,000.00 1,816,528.73 24,748.46 1,841,277.19 25 25 1,076,954.64 -- --
Shenzhen Fresh Peak
property consultant Co.,Ltd
Equity
method
600,000.00 -- -- -- 20 20 -- -- --
Shenzhen Dongfang New
world store Co.,Ltd
Equity
method
15,000,000.00 -- -- -- 50 50 -- -- --SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) CO., LTD
For the year ended 31 December 2009
14 9
Name of investees
Measured
method
Orginal cost 2008-12-31 movement 2009-12-31
Proport
ion (%)
Voting
right (%)
provision
Provision
accrued
in 2009
Dividend
Other investments： -- --
Shenzhen Shen Fang
Industrial Development Co.,
Ltd
Cost
method 4,500,000.00 4,500,000.00 -- 4,500,000.00 100 100 4,500,000.00 -- --
Shenzhen ZhongGang Haiyan
Enterprise Ltd.
Cost
method
12,940,900.00 12,940,900.00 -- 12,940,900.00 68 68 12,940,900.00 -- --
Shenzhen Real Estate
Consolidated Service Co.,
Ltd.
Cost
method 5,958,305.26 5,958,305.26 -- 5,958,305.26 100 100 5,958,305.26 -- --
Paklid Limited
Cost
method
201,100.00 201,100.00 -- 201,100.00 100 100 201,100.00 -- --
Canad GreatWall (vancouver)
Co.,Ltd
Cost
method
4,526.25
-- -- -- 60 60 -- -- --
Bekaton Property Limited
Cost
method
906,630.00 906,630.00 -- 906,630.00 60 60 906,630.00 -- -
Shenzhen Tefa Real Estate Cost 8,180,003.63 8,180,003.63 -- 8,180,003.63 100 100 8,180,003.63 -- --SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) CO., LTD
For the year ended 31 December 2009
15 0
Name of investees
Measured
method
Orginal cost 2008-12-31 movement 2009-12-31
Proport
ion (%)
Voting
right (%)
provision
Provision
accrued
in 2009
Dividend
Consolidated Service Co.,
Ltd.
method
Shenzhen Xin Dongfang
Store Ltd.
Cost
method
18,500,000.00 18,500,000.00 -- 18,500,000.00 100 100 18,500,000.00 -- --
Shenzhen City Shenfang
Construction and Decoration
Materials Ltd.
Cost
method 2,680,000.00 2,680,000.00 -- 2,680,000.00 100 100 2,680,000.00 -- --
Shenzhen Shenfang
Department Store Co. Ltd.
Cost
method
9,500,000.00 9,500,000.00 -- 9,500,000.00 95 95 9,500,000.00 -- --
Shenzhen CyberPort Co., Ltd
Cost
method
14,000,000.00 12,401,018.42 -- 12,401,018.42 70 70 -- -- --
ShenZhen ShenFang BaoAn
developmentCo.,Ltd *1
Cost
method
19,000,000.00 -- 19,000,000.00 19,000,000.00 95 95 -- -- --
Shantou Fresh Peak
Building
Cost
method
68,731,560.43 58,547,652.25 -- 58,547,652.25 100 100 58,547,652.25 -- --
Total 497,875,634.85 446,771,003.16 -904,596.98 445,866,406.18 143,861,642.81 -- --SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) CO., LTD
For the year ended 31 December 2009
15 1
*1 ShenZhen ShenFang BaoAn developmentCo.,Ltd
The corporation held the shareholder meeting at 2009-9-18. the meeting passed a resolution to terminate the corporations’s business, liqudiation and form a
group to carry out the liqudiation procedures. According to the principle “ Enterprise Accounting Standards No.33 – the consolidated financial statement”, the
corporation was not included in the company’s consolidated financial statement. And the company had reclassed the investment to this corporation to other
investment.
*2 Shenzhen Shatoujiao Nantian Store
The company transferred 50% equity of Shenzhen Shatoujiao Nantian Store to Shenzhen ShaTou Jiao Business trade Co.,Ltd with a listing agreement price
–Rmb 12145 thounsand in ShenZhen United property Exchange.
*3Zhaoqing Guifeng cement Co.,Ltd
The company held a party joint conference at 2009-2-24. the meeting passed a resolution to dispose the 50% equity of Zhaoqing Guifeng cement Co.,Ltd which
the company held. under the same conditon, the former shareholder – GuangLong Group had the right of priority in acquiring. The company had made a preliminary
agreement on equity transferration with GuangLong Group.
（2）Provision for impairment of long-term equity investments:SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) CO., LTD
For the year ended 31 December 2009
15 2
Provision for impairment
Name of investees
Opening balanc additions reductions Closing balance Notes
Shenzhen ronghua JiDian Co.,ltd 1,076,954.64 -- -- 1,076,954.64 operating loss
Shenzhen Shen Fang Industrial
Development Co., Ltd
4,500,000.00 -- -- 4,500,000.00 cessation
Shenzhen ZhongGang Haiyan Enterprise
Ltd.
12,940,900.00 -- -- 12,940,900.00 cessation
Shenzhen Real Estate Consolidated
Service Co.,Ltd.
5,958,305.26 -- -- 5,958,305.26 cessation
Paklid Limited 201,100.00 -- -- 201,100.00 cessation
Bekaton Property Limited 906,630.00 -- -- 906,630.00 cessation
Shenzhen Tefa Real Estate Consolidated
Service Co., Ltd
8,180,003.63 -- -- 8,180,003.63 cessation
Shenzhen Xin Dongfang Store Ltd. 18,500,000.00 -- -- 18,500,000.00 cessation
Shenzhen City Shenfang Construction
and Decoration Materials Ltd.
2,680,000.00 -- -- 2,680,000.00 cessation
Shenzhen Shenfang Department Store 9,500,000.00 -- -- 9,500,000.00 liquiditionSHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) CO., LTD
For the year ended 31 December 2009
15 3
Co. Ltd.
Shenzhen Runhua automobile trading
Co.,Ltd
1,445,425.56 -- -- 1,445,425.56 cessation
Guangdong province Huizhou Luofu Hill
mineral water Co.,Ltd
9,969,206.09 -- -- 9,969,206.09 cessation
Fengkai Xinhua Hotel 9,455,465.38 -- -- 9,455,465.38 cessation
Shantou Fresh Peak Building 58,547,652.25 -- -- 58,547,652.25 cessation
Total 143,861,642.81 -- -- 143,861,642.81SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) CO., LTD
For the year ended 31 December 2009
14 1
5、 Turnover and cost of sales
（1）Turnover and cost of sales
2009 Year 2008 Year
Core Operating Income 108,312,014.30 119,787,686.81
Other Operating Income 46,179,668.82 1,030,622.40
Gross Income 154,491,683.12 120,818,309.21
Cost of sales 97,816,242.35 50,943,414.14
（2）Core operating Income（classed by industry）
Operating Income operating Cost Operating margin
Industry
2009 Year 2008 Year 2009 Year 2008 Year 2009 Year 2008 Year
Real estate 101,264,382.38 56,391,974.81 66,448,693.10 19,238,250.46 34,815,689.28 37,153,724.35
Leasing 53,227,300.74 64,426,334.40 31,367,549.25 31,705,163.68 21,859,751.49 32,721,170.72
Total 154,491,683.12 120,818,309.21 97,816,242.35 50,943,414.14 56,675,440.77 69,874,895.07
（3）core business（class by district）
Operating Income operating Cost Operating margin
District
2009 Year 2008 Year 2009 Year 2008 Year 2009 Year 2008 Year
Shenzhen 154,491,683.12 120,818,309.21 97,816,242.35 50,943,414.14 56,675,440.77 69,874,895.07
（4）the informations of the biggest 5 clients are as follows:
2009 Year
Amount proportion%
LiuGuo enteprise management consulting
(ShenZhen) Co.,Ltd 8,572,625.00 5.55%
Indivual – Yang XiuQun 7,943,456.00 5.14%
Indivual – Jin BaoShan 5,207,831.00 3.37%
Indivual – Hong LiHe 4,829,291.00 3.13%
Indivual – Ma XiZhen 4,659,243.00 3.02%
Total 31,212,446.00 20.20%
6、 Investment incomeSHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) CO., LTD
For the year ended 31 December 2009
14 2
（1）the details of investment income are as follows:
2009 Year 2008 Year
The investment income yielded from the long-term equity
appilied with the cost method
--
--
The investment income yielded from the long-term equity
appilied with the equityt method
-1,904,596.98
-761,509.69
The investment income yielded from the disposal of the
long-term equity
--
--
The investment income yielded from the disposal of the
financial assest held for trading
114,301.68
47,026.35
others -- -1,004,983.04
Total -1,790,295.30 -1,719,466.38
（2）The investment income yielded from the long-term equity appilied with the cost method
investees 2009 Year 2008 Year Reason of the movement
Shenzhen Shatoujiao Nantian
Store -152,851.44
-251,532.40 The decrease of the loss of
investee
Zhaoqing Guifeng cement
Co.,Ltd -1,776,494.00
-611,088.97 The increase of the loss of
investee
Shenzhen ronghua JiDian Co.,ltd
24,748.46
101,111.68 The decrease of the profit of
investee
Total -1,904,596.98 -761,509.69
7、Cash flow statement(continued)
Supplementary information 2009 year 2008 year
1、Reconciliation from the net profit to the cash flows
from operating activities
Net profit -43,936,617.96 -34,550,600.50
Add：Provisions for assets impairment -- 1,350,000.00
Depreciation of fixed assets and
investment property
29,008,183.42
28,927,422.09
Amortization of intangible assets -- --
Long-term deferred and prepaid
expenses amortization
--
--
Losses on disposal of fixed assets,
intangible assets and other long-term
--
--SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) CO., LTD
For the year ended 31 December 2009
14 3
Supplementary information 2009 year 2008 year
assets（gains used“-”）
Scrapping of fixed assets losses
（gains used“-”）
--
--
Exchange of fair value losses（gains used“-”） -109,106.25 456,411.50
Finance expenses （gains used“-”） 38,739,392.45 29,390,348.16
Investment losses（gains used“-”） 1,904,596.98 1,719,466.38
Decrease in deferred tax assets（gains used“-”） 4,140,269.96 5,936,390.67
Increase in deferred tax liabilities
（gains used“-”）
--
--
Decrease in inventories（gains used“-”） -1,233,640,319.03 -20,929,283.64
Decrease in operating receivables
（gains used“-”）
325,081,928.46
1,997,780.82
Increase in operating payables（gains used“-”） 514,626,344.23 -22,099,418.26
Others -- --
Net cash flows from operating activities -364,185,327.74 -7,801,482.78
2、Investment and financing activities not involving
cash
--
--
3、Net increase/ (decrease) in cash and cash equivalents
Cash at end of the year
62,241,927.23
165,443,883.33
Less: cash at beginning of the year 165,443,883.33 196,103,453.37
Add：cash equivalents at end of the year -- --
Less: cash equivalents at beginning of the year -- --
Net increase in cash and cash equivalents -103,201,956.10 -30,659,570.04
Note 14、 Non - regular gains and losses and financial
1、Non - regular gains and losses
According to "public offering of securities companies to disclose information
interpretative bulletin No. 1 - non-recurring gains and losses (2008)", the Company
non-recurring gains and losses are as follows:：
Item 2009 Year 2008 Year
Non-current assets disposed of profit and loss, including the
write-off part of provision for asset impairment
-5,907.20 3,048,259.89
Authority approval or non-formally approved document or -- --SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) CO., LTD
For the year ended 31 December 2009
14 4
Item 2009 Year 2008 Year
incidental tax revenue return, relief
Gains and losses included in the current period of government
subsidies, but the company is closely related to normal business, in
line with national policies and regulations, in accordance with standard
fixed or quantitative government subsidies except
-- --
Gains and losses included in current period on non-financial
enterprises occupy fees charged by funds
-- --
Enterprises to obtain subsidiaries, joint ventures and joint venture
investment is less than the cost of investment should be enjoyed by the
investment unit fair value of identifiable net assets of the revenue
generated
-- --
Non-monetary assets to exchange gains and losses -- --
Commissioned the investment or management of assets, profit
and loss
-- --
Due to force majeure factors, such as natural disasters and the
provision of the quasi-impairment of assets
-- --
Debt restructuring, profit and loss -- --
Corporate restructuring costs, such as placement of workers
spending, such as integration charges
-- --
Significant loss of fair trading price of the transaction over the
fair value of part of the profit and loss
-- --
The same under the control of mergers resulting from the merger
a subsidiary of the opening day of the current period to the net profit or
loss
-- --
Normal business with the company or have a matter arising from
unrelated to the profit and loss
775,000.00 -4,200,000.00
In addition to normal business with the company effective
hedging related business, holders of tradable financial assets,
transactions and financial liabilities arising from changes in fair value
gains and losses, as well as the disposal of trading of financial assets,
trading financial liabilities and available-for-sale financial assets
investment returns achieved
223,407.93 -406,051.04
A separate impairment test for impairment of receivables
transferred back to preparation
7,000,000.00 --SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) CO., LTD
For the year ended 31 December 2009
14 5
Item 2009 Year 2008 Year
Commissioned external loans made by the profit and loss -- --
The use of fair value measurement model of follow-up to the fair
value of real estate investment gains and losses arising from changes
-- --
According to tax, accounting and other laws and regulations the
requirements of the current profit and loss for a one-time adjustment of
the current profit and loss impact
-- --
Entrusted with the operation of the trustee to obtain fee income -- --
In addition to the above other than the operating income and
expenditure
-853,571.80 -646,826.14
Other non-recurring gains and losses in line with the definition of
profit and loss items
-- --
Total 7,138,928.93 -2,204,617.29
Less: Income tax impact of several 40,789.94 12,594.28
Profit and loss impact of the number of minority shareholders -- --
Deducting income tax, minority shareholders after the
non-recurring profit and loss profit and loss together
7,098,138.99 -2,217,211.57
The Non - regular gains and losses increased by Rmb 9315.4 thousand. The increase
due to that he company transferred back the provison of the loans lended to ShenYang
TongXin Property Development Co.,Ltd.
2、weighted Rate of return and Earnings per share
Earnings per
Items share ( yuan/share)
Profit during
the reporting
period
Net assets yield (%
(%)
basic diluted
2009 Year
the net profit Attributable to equity
holders of the Company
20,217,383.62 1.66 0.0200 0.0200
the net profit after deducting the
non-regular gian or loss
attributable to equity holders of the
Company
13,119,244.63 1.08 0.0130 0.0130
2008 YearSHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) CO., LTD
For the year ended 31 December 2009
14 6
the net profit Attributable to equity
holders of the Company
19,123,787.11 1.60 0.0189 0.0189
the net profit after deducting the
non-regular gian or loss
attributable to equity holders of the
Company
21,340,998.68 1.78 0.0211 0.0211
The calculation formula of weighted Rate of return is as follows:
weighted Rate of return =P0/(E0＋NP÷2＋Ei×Mi÷M0– Ej×Mj÷M0±Ek×Mk÷M0)
Notes: P0- the net profit attributable to holding company of the Company、the net profit after
deducting the non-regular gian or loss attributable to holding company of the Company;
NP - the net profit attributable to shareholders of the Company;
E0 – the opening balance of net assests attributable to holding company;
Ei – the balance of net assests attributed to the shares which issued in the reporting period
or debt to equity shares;
Ej – the balance of net assents attrictued to the shares which were repurchased or
decreased by distributing the cash dividend;
Mi – the accumulated amount of the months from the next month the new additional
net assests to the end month of the reporting period;
Mj - the accumulated amount of the months from the next month the net assests
reducted to the end month of the reporting period;
Ek – the movement of the net assests attrictued to the shares which due to outher
transaction;
Mk - the accumulated amount of the months from the next month the net assests happened
to the ending month of the reporting period;SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) CO., LTD
For the year ended 31 December 2009
14 7
If the company happens combination under common control, when the company calculate
the weighted average return on net assets, the net assets of the combined party are calculated form
the beginning of the reporting period ; when calculating the weighted average return on net assets
after deducting non-recurring gains and losses, the net assets of the combined party are calculated
form the next month of combination month.
When calculating the weighted average net assets during the return, the combined party's net
profit, net assets are caluated from the comparing beginning of the period; when Calculating the
the weighted average return on net assets after deducting non-recurring gains and losses, the
merged party's net assets are not counted in (weight is zero)
3、the diffenences of the domestic Financial statements comparing with the overseas financial
statement
CAS (Rmb) IFRS (Rmb)
the net profit attributable to
holding company of the
Company
20,217,383.62 20,217,383.62
the net assests attributable to
holding company of the
Company
1,228,651,614.41 1,228,651,614.41
notes No differences
English version of financial statements for the year 1 January 2009 to 31 December 2009 if there
is any conflict fo meaning between the chinese and english versions, the chinese version will
prevail.
