2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Shenzhen Special Economic Zone Real Estate & Properties (Group)
Co., Ltd.
2012 Annual Report
2013-004
March 2013
1
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Section I. Important Notes, Contents & Explanation
The Board of Directors, the Supervisory Committee, directors, supervisors and senior
management staff of Shenzhen Special Economic Zone Real Estate & Properties
(Group) Co., Ltd. (hereinafter referred to as “the Company”) warrant that this report
does not contain any false record or misleading statement or omit any material fact
and shall hereby accept, individually and collectively, responsibility for the factuality,
accuracy and completeness of the contents carried in this report.
Zhou Jianguo, company principal, Chen Maozheng, GM, Wei Hanping, chief of the
accounting work, and Tang Xiaoping, chief of the accounting organ (chief of
accounting), hereby confirm that the Financial Report enclosed in this report is
factual, accurate and complete.
All directors have attended the board session for reviewing this report.
The Company plans not to distribute cash dividends or bonus shares or turn capital
reserve into share capital.
This report is prepared in both Chinese and English. Should there be any
understanding discrepancy between the two versions, the Chinese version shall
prevail.
2
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Contents
Section I. Important Notes, Contents & Explanation ....................................................................... 2
Section II. Company Profile............................................................................................................ 6
Section III. Accounting & Financial Highlights............................................................................... 8
Section IV. Report of the Board of Directors ................................................................................. 10
Section V. Report of the Supervisory Committee........................................................................... 26
Section VI. Significant Events ...................................................................................................... 29
Section VII. Change in Share Capital and Particulars about Shareholders...................................... 42
Section VIII. Directors, Supervisors, Senior Management Staffs and Employees .......................... 48
Section IX. Corporate Governance................................................................................................ 54
Section X. Internal Control ........................................................................................................... 61
Section XI. Financial Statements................................................................................................... 63
Section XII. Documents Available for Reference ........................................................................ 187
3
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Explanation
Term Refers to Contents
Company, the Company, the Shenzhen Special Economic Zone Real Estate & Properties
Refers to
Group (Group) Co., Ltd.
The holding company Refers to Shenzhen Investment Holdings Co., Ltd.
RSM Refers to RSM China Certified Public Accountants LLP
Zhentong Company Refers to Shenzhen Zhentong Engineering Co., Ltd.
Shantou Hualin Company Refers to Shantou Hualin Real Estate Development Co., Ltd.
Property Management Company Refers to Shenzhen Property Management Co., Ltd.
4
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Reminder of Major Risks
The future plans, development strategies and some other forward-looking statements
involved in this report shall not be considered as virtual promises of the Company to
investors. And investors are kindly reminded to pay attention to possible risks.
5
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Section II. Company Profile
I. Basic information of the Company
Stock abbreviation SSFA（SSFB） Stock code 000029（200029）
Stock exchange listed with Shenzhen Stock Exchange
Chinese name of the Company 深圳经济特区房地产(集团)股份有限公司
Abbr. of the Chinese name of the Company 深房集团
English name of the Company (if any) ShenZhen Special Economic Zone Real Estate&Properties (Group).co.，Ltd．
Abbr. of the English name of the Company (if
SPG
any)
Legal representative of the Company Zhou Jianguo
Registered address 45/F-48/F, SPG Plaza, Renmin South Road, Shenzhen, Guangdong, P.R.China
Postal code for the registered address 518001
Office address 47/F, SPG Plaza, Renmin South Road, Shenzhen, Guangdong, P.R.China
Postal code for the office address 518001
Internet website of the Company http://www.sfjt.com.cn
Email address spg@163.net
II. For Contact
Company Secretary Securities Affairs Representative
Name Mr. Chen Ji Mr. Luo Yi
47/F, SPG Plaza, Renmin South Road, 47/F, SPG Plaza, Renmin South Road,
Contact address
Shenzhen, Guangdong, P.R.China Shenzhen, Guangdong, P.R.China
Tel. （86 755）82293000-4718 （86 755）82293000-4715
Fax （86 755）82294024 （86 755）82294024
E-mail spg@163.net spg@163.net
III. About information disclosure and where this report is placed
Newspapers designated by the Company for Domestic: Securities Times
information disclosure Overseas: Ta Kung Pao (HK)
Internet website designated by CSRC for
http://www.cninfo.com.cn
disclosing this report
Where this report is placed 47/F, SPG Plaza, Renmin South Road, Shenzhen, Guangdong, P.R.China
6
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
IV. Change of the registered information
Registration code of
Registration date Registration place Business license No. Organizational code
taxation
Initial registration 8 Jan. 1980 Shenzhen 4403011002426 440300192179585 19217958-5
At the end of the
31 Dec. 2012 Shenzhen 440301103225878 440300192179585 19217958-5
reporting period
Change of the Company’s main business
N/A
since listing (if any)
On 24 Mar. 1999, the controlling shareholder shifted from Shenzhen Investment
Changes of the controlling shareholder (if
Management Co., Ltd. to Shenzhen Construction Investment Holdings Co., Ltd. And
any)
on 14 Feb. 2006, it shifted to Shenzhen Investment Holdings Co., Ltd.
V. Other information
The CPAs firm hired by the Company:
Name RSM China Certified Public Accountants LLP
3-9 F, West Tower, China Overseas Property Plaza, Building No. 7, Compound No. 8, Xi
Office address
Binhe Road, Yong Ding Men, Dong Cheng District, Beijing, China
Signing accountants Li Qiaoyi, Wang Huansen
Sponsor engaged by the Company to conduct consistent supervision during the reporting period
□ Applicable √ Inapplicable
Financial consultant engaged by the Company to conduct consistent supervision during the reporting period
□ Applicable √ Inapplicable
7
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Section III. Accounting & Financial Highlights
I. Major accounting data and financial indicators
Does the Company adjust retrospectively or restate accounting data of previous years due to change of the accounting policy or
correction of any accounting error?
□ Yes √ No
Increase or decrease of this
2012 2011 2010
year over last year (%)
Operating revenues (RMB Yuan) 1,030,148,729.47 1,026,396,104.51 0.37% 1,021,055,699.61
Net profit attributable to
shareholders of the Company 106,814,543.53 101,200,060.65 5.55% 84,760,162.75
(RMB Yuan)
Net profit attributable to
shareholders of the Company after
101,232,143.75 99,430,051.40 1.81% 73,404,299.20
extraordinary gains and losses
(RMB Yuan)
Net cash flows from operating
27,409,819.53 115,154,790.41 -76.2% -179,051,561.17
activities (RMB Yuan)
Basic EPS (RMB Yuan/share) 0.1056 0.10 5.6% 0.0838
Diluted EPS (RMB Yuan/share) 0.1056 0.10 5.6% 0.0838
ROE (%) 6.75% 6.85% -0.1% 6.12%
Increase or decrease of this
As at 31 Dec. 2012 As at 31 Dec. 2011 As at 31 Dec. 2010
year-end than last year-end (%)
Total assets (RMB Yuan) 3,712,770,828.30 3,250,580,479.74 14.22% 3,379,090,178.02
Net assets/owners’ equity
attributable to shareholders of the 1,635,376,098.73 1,528,596,536.13 6.99% 1,427,871,870.03
Company (RMB Yuan)
II. Differences between accounting data under domestic and overseas accounting standards
1. Differences of net profit and net assets disclosed in financial reports prepared under international and
Chinese accounting standards
Unit: RMB Yuan
Net profit attributable to shareholders of the Net assets attributable to shareholders of the
Company Company
2012 2011 Closing amount Opening amount
According to Chinese
106,814,543.53 101,200,060.65 1,635,376,098.73 1,528,596,536.13
accounting standards
Items and amounts adjusted according to international accounting standards
8
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
2. Differences of net profit and net assets disclosed in financial reports prepared under overseas and
Chinese accounting standards
Unit: RMB Yuan
Net profit attributable to shareholders of the Net assets attributable to shareholders of the
Company Company
2012 2011 Closing amount Opening amount
According to Chinese
106,814,543.53 101,200,060.65 1,635,376,098.73 1,528,596,536.13
accounting standards
Items and amounts adjusted according to overseas accounting standards
3. Explain reasons for the differences between accounting data under domestic and overseas accounting
standards
III. Items and amounts of extraordinary gains and losses
Unit: RMB Yuan
Items 2012 2011 2010 Notes
Gain/loss on the disposal of non-current assets (including Large amounts of fixed
-588,399.46 173,176.00 15,274,959.40
the offset part of the asset impairment provisions) assets were disposed.
Gains and losses on change in fair value from tradable
financial assets and tradable financial liabilities, as well as
investment income from disposal of tradable financial
-14,023.62 307,160.54
assets and tradable financial liabilities and financial assets
available for sales except for effective hedging related
with normal businesses of the Company
The bad-debt provision
Reversal of provision for impairment that made
6,140,000.00 for Shenyang Tongxin
impairment test independently
was reversed.
Some decoration
deposits that should not
be paid were carried
Non-operating income and expense other than the above -130,400.83 2,200,366.50 -776,320.25
down last year and there
was no such an event
this year.
Income tax effects -161,200.07 589,509.63 3,449,936.14
Total 5,582,399.78 1,770,009.25 11,355,863.55 --
Explain the reasons if the Company classifies an item as an extraordinary gain/loss according to the definition in the Explanatory
Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Extraordinary Gains and
Losses, or classifies any extraordinary gain/loss item mentioned in the said explanatory announcement as a recurrent gain/loss item
□ Applicable √ Inapplicable
9
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Section IV. Report of the Board of Directors
I. Overview
2012 marked a key year for the Company to carry out its five-year development strategic planning.
In the year, the Company encountered a complicated situation and many challenges. And also in the
year, the Company overcame difficulties and gave a remarkable performance. Following the
guideline of “making great efforts to build a strong company, striving for progress, seeking progress
while maintaining stability and trying to make the Company one of the top”, the Company adhered
to the theme of scientific development and the main line of strategic transformation and forged
ahead with incredible enthusiasm, successfully fulfilling all tasks for the year.
In the reporting period, the SPG Guangming Chuanqi Mountain, SPG Longgang Shanglin Garden
and Shantou Yuejing Dongfang projects all started construction. Sale of the SPG Chuanqi Mountain
Phase I project went well. Both of the Company’s revenues and profit increased for a fourth
consecutive year, with an improving capability for main business development and operation. The
asset-liability structure was further optimized and the financial status became increasingly sound.
The internal control mechanism was basically built up, the target cost control mechanism improved
gradually and the professionalism and management capability kept improving. Management at all
tiers and all the staff became more motivated, hard-working and capable, generating positive energy
to promote development of the Company and lay a good foundation for it to achieve “a quality
stable growth and a sustainable overall development”.
II. Main business analysis
1. Overview
For the reporting period, the Company achieved operating revenues of RMB 1,030,148,700, up
0.37% over last year; operating profit of RMB 137,976,700, up 5.38% over last year; total profit of
RMB 137,257,900, up 2.99% on a year-on-year basis; and net profit of RMB 106,814,500
attributable to shareholders of the Company, representing a year-on-year growth of 5.55%.
Overview of the reporting period progress of development strategies and business plans disclosed in previous
periods:
N/A
State the reasons why the Company’s actual business performance is 20% lower or higher than the earning
forecast for the reporting period which has been publicly disclosed earlier:
□ Applicable √ Inapplicable
10
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
2. Revenues
Explanation:
(1) Sales income from real estate stood at RMB 379,619,800, down 25.81% over last year, which
was mainly because the subordinate Shantou Hualin Company sold fewer remaining houses of the
Jinye Island Residence.
(2) Construction income stood at RMB 468.41 million, up 42.47% over last year, which was mainly
because the subordinate Zhentong Company received more engineering projects.
(3) Leasing income stood at RMB 85.11 million, up 15.72% over last year, which was mainly
because the first to fourth floors of SPG Plaza (the headquarters) were leased.
(4) Property management income stood at RMB 101.50 million, up 8.11% over last year, which was
mainly because the Company input more effort in collecting arrears and received management fees
from new buildings.
Is the Company’s goods selling revenue higher than the service revenue?
□ Yes √ No
Major orders held:
□ Applicable √ Inapplicable
Significant change or adjustment of the Company’s products or services during the reporting period:
□ Applicable √ Inapplicable
Major customers:
Total sales to the top 5 customers (RMB Yuan) 69,787,661.47
Ratio of the total sales to the top 5 customers to the annual total sales (%) 6.77%
Information about the top 5 customers:
√ Applicable □ Inapplicable
Serial No. Name of customer Sales (RMB Yuan) Proportion in annual total sales (%)
1 Corporation A 15,078,357.88 1.46%
2 Corporation B 14,737,984.00 1.43%
3 Corporation C 13,972,242.87 1.36%
4 Corporation D 13,500,000.13 1.31%
5 Corporation E 12,499,076.59 1.21%
Total —— 69,787,661.47 6.77%
3. Costs
Classified by industry:
Unit: RMB Yuan
2012 2011
Industry Item Proportion in Proportion in YoY +/- (%)
Amount operating costs Amount operating costs
（%） （%）
11
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Real estate
146,516,172.48 21.26% 254,759,053.89 37.90% -42.49%
Construction 445,160,754.08 64.6% 311,550,480.76 46.35% 42.89%
Leasing 30,961,456.12 4.49% 30,541,919.34 4.54% 1.37%
Property
86,840,214.99 12.6% 83,921,844.55 12.49% 3.48%
management
Subtotal 709,478,597.67 102.96% 680,773,298.54 101.28% 4.22%
Minus: internal
20,389,951.83 2.96% 8,636,412.40 1.28% 136.09%
offset
Total 689,088,645.84 100% 672,136,886.14 100.00% 2.52%
Classified by product:
Unit: RMB Yuan
2012 2011
Product Item Proportion in Proportion in YoY +/- (%)
Amount operating costs Amount operating costs
（%） （%）
Explanation:
N/A
Major suppliers:
Total purchases from the top 5 suppliers （RMB Yuan） 316,291,498.10
Ratio of the total purchases from the top 5 suppliers to the
89.23%
annual total purchases（%）
Information about the top 5 suppliers:
□ Applicable √ Inapplicable
4. Expense
(1) Selling expenses stood at RMB 27.54 million, up 154.35% over last year, which was mainly
because the advertising expenses on the Chuanqi Mountain project increased.
(2) Administrative expenses stood at RMB 68.12 million, up 4.59% over last year, which was
mainly because the taxes increased.
(3) Financial expenses stood at RMB 2.68 million, down 84.08% over last year, which was mainly
because the Longgang Shanglin Garden project met the conditions for capitalization of borrowing
interest.
5. R&D expenses
N/A
6. Cash flows
Unit: RMB Yuan
Item 2012 2011 YoY +/-（%）
Subtotal of cash inflows from
1,190,424,578.41 927,288,178.45 28.38%
operating activities
12
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Subtotal of cash outflows from
1,163,014,758.88 812,133,388.04 43.2%
operating activities
Net cash flows from operating
27,409,819.53 115,154,790.41 -76.2%
activities
Subtotal of cash inflows from
688,282.91 414,282.40 66.14%
investing activities
Subtotal of cash outflows from
18,682,841.12 7,974,285.87 134.29%
investing activities
Net cash flows from investing
-17,994,558.21 -7,560,003.47 -138.02%
activities
Subtotal of cash inflows from
1,036,000,000.00 20,000,000.00 5,080%
financing activities
Subtotal of cash outflows from
906,909,123.76 172,009,491.49 427.24%
financing activities
Net cash flows from financing
129,090,876.24 -152,009,491.49 184.92%
activities
Net increase in cash and cash
138,746,516.91 -46,291,626.52 399.72%
equivalents
Reasons for any over-30% YoY movement of the data above:
√ Applicable □ Inapplicable
Item 2012 2011 YoY +/-（%） Notes
Subtotal of cash outflows from operating 1,163,014,758.88 812,133,388.04 43.20%
activities Increased input for real estate
Net cash flows from operating activities 27,409,819.53 115,154,790.41 -76.20% projects
Subtotal of cash inflows from investing 688,282.91 414,282.40 66.14% Cash received as investment
activities gains increased.
Subtotal of cash outflows from investing 18,682,841.12 7,974,285.87 134.29% Investment in Shantou
activities Small-and Medium
Net cash flows from investing activities -17,994,558.21 -7,560,003.47 -138.02% Enterprise Financing
Guarantee Co., Ltd.
Subtotal of cash inflows from financing 1,036,000,000.00 20,000,000.00 5080.00% New bank borrowings
activities
Subtotal of cash outflows from financing 906,909,123.76 172,009,491.49 427.24% Mature bank borrowings
activities were repaid.
Net cash flows from financing activities 129,090,876.24 -152,009,491.49 184.92%
New bank borrowings
Net increase in cash and cash equivalents 138,746,516.91 -46,291,626.52 399.72%
Reasons for a big difference between the operating cash flows and the net profit:
□ Applicable √ Inapplicable
III. Breakdown of main business
Unit: RMB Yuan
Increase/decrease of Increase/decrease Increase/decrease of
Operating Gross profit
Operating costs operating revenues of operating costs gross profit rate
revenues rate (%)
over last year (%) over last year (%) over last year (%)
Classified by industry:
Real estate
379,619,819.21 146,516,172.48 61.4% -25.81% -42.49% 11.19%
Construction 468,407,774.16 445,160,754.08 4.96% 42.47% 42.89% -0.27%
Leasing 85,107,142.96 30,961,456.12 63.62% 15.72% 1.37% 5.15%
Property
101,495,483.27 86,840,214.99 14.44% 8.1% 3.48% 3.82%
management
Minus: internal
-22,653,694.39 -20,389,951.83 9.99% 62.49% 136.09% -28.06%
offset
13
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Classified by product:
Residences 343,588,384.21 134,375,462.54 60.89% -28.99% -44.51% 10.93%
Shops 36,031,435.00 12,140,709.94 66.31% 29.61% -3.77% -54.62%
Other products 655,010,400.39 562,962,425.19 14.05% 32% 32.15% -0.09%
Minus: internal
-22,653,694.39 -20,389,951.83 9.99% 62.49% 136.09% -28.06%
offset
Classified by region:
Domestic
Guangdong
972,965,703.54 651,456,584.54 33.04% -1.54% -1.69% 0.1%
Province
Other 61,047,686.11 58,022,013.13 4.96% 221.44% 219.99% 0.43%
Overseas: 616,829.95 100% -7.56%
Minus: internal
-22,653,694.39 -20,389,951.83 9.99% 62.49% 136.09% -28.06%
offset
Where the Company’s accounting standard of the main business data above changed during the reporting period, give the main
business data of the latest year adjusted according to the accounting standard at the end of the reporting period:
□ Applicable √ Inapplicable
IV. Asset and liability analysis
1. Major changes of asset items
Unit: RMB Yuan
As at 31 Dec. 2012 As at 31 Dec. 2011 Proportio
Proportion in Proportion in n change Explain any major change
Amount total assets Amount total assets （%）
(%) (%)
New bank borrowings were received
Monetary funds 496,805,905.01 13.38% 333,469,243.72 10.26% 3.12%
and house advances increased.
Accounts
24,413,187.02 0.66% 19,139,800.22 0.59% 0.07%
receivable
Inventories increased by 14.02% over
last year due to the development
Inventories 2,431,754,464.54 65.50% 2,132,760,206.58 65.61% -0.11% expenses on the Chuanqi Mountain,
Shanglin Garden and Shantou Yuejing
Dongfang projects.
Investing real
487,373,443.43 13.13% 508,001,693.51 15.63% -2.50%
estate
Long-term equity investment increased
by 18.75% over last year, which was
mainly because the Company made a
Long-term equity
75,225,969.30 2.03% 63,346,188.26 1.95% 0.08% new investment of RMB 12 million in
investment
Shantou Small-and Medium Enterprise
Financing Guarantee Co., Ltd. and thus
held a stake of 10% in it.
Fixed assets 63,204,808.66 1.70% 60,918,611.65 1.87% -0.17%
2. Major changes of liability items
Unit: RMB Yuan
14
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
2012 2011
Proportio
Proportion in Proportion in n change
Explain any major change
Amount total assets Amount total assets
（%）
(%) (%)
Short-term A new entrustment borrowing of RMB
96,000,000.00 2.59% 20,000,000.00 0.62% 1.97%
borrowings 70,000,000.00
Long-term 849,636,078.2
22.88% 299,621,374.64 9.22% 13.66% New bank borrowings
borrowings 5
3. Assets and liabilities measured at fair value
Unit: RMB Yuan
Gain/loss on fair Cumulative fair Impairment Purchased Sold amount in
Opening Closing
Item value change in the value change provisions in the amount in the the reporting
amount amount
reporting period recorded into equity reporting period reporting period period
Financial assets
1. Financial
assets
measured at
fair value and
of which
changes are
recorded into 0.00 0.00 0.00 0.00 0.00 0.00 0.00
current
gains/losses
(excluding
derivative
financial
assets)
2. Derivative
0.00 0.00 0.00 0.00 0.00 0.00 0.00
financial assets
3.
Available-for-s
0.00 0.00 0.00 0.00 0.00 0.00 0.00
ale financial
assets
Subtotal of
0.00 0.00 0.00 0.00 0.00 0.00 0.00
financial assets
Investing real
0.00 0.00
estate
Productive
biological 0.00 0.00
assets
Other 0.00 0.00 0.00 0.00
Total of the
0.00 0.00 0.00 0.00 0.00 0.00 0.00
above
Financial
0.00 0.00 0.00 0.00 0.00
liabilities
Did any significant change occur to the attribute of the Company’s main asset measurement during the reporting period?
□ Yes √ No
V. Core competitiveness analysis
With a history over 30 years in real estate development in Shenzhen, the Company has rich
experience in the main business of real estate development and has developed over 3 million square
meters of commercial residences and office buildings in Shenzhen. It is one of the earliest real
estate listed companies in Shenzhen and has a high brand value in Shenzhen. In recent years, with
15
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
the Chuanqi Mountain and Shanglin Garden projects as an opportunity, the Company attaches great
importance to talent attraction and development. It has cultivated and trained a professional team
for the main business of real estate development, formulated and improved a set of sound
management mechanisms and processes for project development, and significantly improved its
professionalism and management capability. The brand effects of the Company are further
demonstrated and the core competitiveness keeps rising.
VI. Investment analysis
1. Investments in equities of external parties
（1）Investments in external parties
Investments in external parties
Investment amount in 2012 (RMB Yuan) Investment amount in 2011 (RMB Yuan) +/-%
12,000,000.00 0.00 0%
Particulars about investees
Proportion of the Company’s investment in
Name of investee Main business
the investee’s total equity interests (%)
Providing enterprises and individuals with
financing guarantees such as loan
guarantees, bill acceptance guarantees,
trade financing guarantees, project
financing guarantees and L/C guarantees;
financing consulting service, financial
Shantou Small-and Medium Enterprise
consultant service and other 10%
Financing Guarantee Co., Ltd.
guarantee-related intermediary services;
making investments with its own funds
(The financing guarantee agency license
will expire on 4 Feb. 2018.) [Where a
license is required for a business, it shall
be obtained before operation.]
（2）Equity-holdings in financial enterprises
Gain/loss
Initial Opening Opening Closing Closing Closing in the
Enterprise Enterprise investment equity-hol equity-hol equity-hol equity-hol book value reporting Accountin Equity
name variety cost (RMB dings ding ratio dings ding ratio (RMB period g title source
Yuan) (share) (%) (share) (%) Yuan) (RMB
Yuan)
Total 0.00 0 -- 0 -- 0.00 0.00 -- --
(3) Securities investments
Sharehold Sharehold Gain/loss
Initial Number Number Closing
ing ing for
investmen of shares of shares book
Variety of Code of Name of percentag percentag reporting Accounti Source of
t cost held at held at value
securities securities securities e at e at period ng title stock
(RMB period-be period-en (RMB
period-be period-en (RMB
Yuan) gin d Yuan)
gin d Yuan)
Total 0.00 0 -- 0 -- 0.00 0.00 -- --
16
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Explain equity-holdings in other listed companies:
N/A
2. Wealth management entrustment, derivative investments and entrustment loans
（1）Wealth management entrustment
Unit: RMB 0,000
Actual gain Through Related-p
Payment Principal Impairme Related-p
Name of Beginnin Ending in the Actual legal arty
Amount determina actually nt arty
trustee g date date reporting gain procedure transactio
tion recovered provision relation
period or not n or not
Total 0 -- -- -- 0 0 0 -- 0 -- --
Cumulative overdue principals and gains 0
Lawsuit (if applicable) N/A
Explain the wealth management
N/A
entrustment
Explanation:
N/A
（2）Derivative investments
Position holdings of derivative investments at the end of the reporting period:
□ Applicable √ Inapplicable
Explanation:
N/A
（3）Entrustment loans
Unit: RMB 0,000
Countermeasur
Extension, es against risks
Related Amount of Guarantor or Usage of loan
Borrower Interest rate overdue loan of extension,
party or not loan pawn by borrower
or lawsuit overdue loan
or lawsuit
Total -- 0 -- -- -- -- --
Explanation:
N/A
3. Use of raised funds
（1）Overview of the use of raised funds
Unit: RMB 0,000
Total raised capital 0
Total raised capital input in the reporting period 0
Accumulative raised capital input 0
Total raised capital of which the use was changed in the
0
reporting period
17
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Accumulative raised capital of which the use was
0
changed
Proportion of accumulative raised capital of which the
0%
use was changed
Overview of the use of raised funds
N/A
（2）Projects promised to be invested with raised funds
Unit: RMB 0,000
Date
Project Investme
Accumul nt when the Material
Projects invested with changed Profit
Raised Investme Input in ative progress project Reach the change in
raised capital as or not generated
capital nt after the input up reaches expected the
promised and (includin up to the in the
input as adjustme reporting to the period-en the profit or project
investments with g reporting
promised nt (1) year period-en expected not feasibility
over-raised capital partially d (%)(3) period
d (2) usable or not
changed) ＝(2)/(1)
condition
Projects invested with raised capital as promised
Investments of over-raised capital
Total -- 0 0 0 0 -- -- 0 -- --
Reason for failing to
reach scheduled
progress or projected Naught
income (explain one
project by one project)
Explanation on
significant changes in Naught
feasibility of projects
Amount, usage and N/A
usage progress of
over-raised capital Naught
Change of the
implementation
location of any raised N/A
funds investment
project
Adjustment of the
implementation
method of any raised N/A
funds investment
project
Advance input and
exchange of any raised
N/A
funds investment
project
Idle raised capital for
temporarily
N/A
supplementing working
capital
Outstanding raised
funds in project
N/A
implementation and
reasons
（3）Change of projects invested with raised funds
Unit: RMB 0,000
18
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Total raised Material
Investment Date when
funds Actual progress up the project Profit change in
Actual input
Project planned to cumulative to the generated in Reach the the
Project after for reaches the
before be input for input by period-end the expected after-change
change reporting expected
change the project period-end reporting profit or not project
period (%)(3)＝ usable
after change (2) period feasibility
(2)/(1) condition
(1) or not
Total -- 0 0 0 -- -- 0 -- --
Reasons for change, decision-making
procedure and relevant information
N/A
disclosure (explain one project by one
project)
Reason for failing to reach scheduled
progress or projected income (explain N/A
one project by one project)
Explanation on significant changes in
N/A
feasibility of projects after change
4. Analysis to main subsidiaries and stock-participating companies
Particulars about main subsidiaries and stock-participating companies:
Operating Operating
Main Total assets Net assets
Company Company Registered revenues profit Net profit
Industry products/ser (RMB (RMB
name variety capital (RMB (RMB (RMB Yuan)
vices Yuan) Yuan)
Yuan) Yuan)
Shenzhen
Hotel RMB 30 42,545,216. 34,731,616. 23,069,409. 864,923.7
Petrel Hotel Subsidiary Service -253,711.12
Service million 86 71 85 0
Co., Ltd.
Shenzhen
Property
Property RMB 7.25 65,979,296. 14,301,546. 110,445,35 4,410,707
Subsidiary Service managemen 3,549,147.03
Managemen million 92 73 3.50 .93
t
t Co., Ltd.
Shenzhen Fixing and
Zhentong maintenanc RMB 10 104,380,71 13,417,413. 470,864,08 2,302,779
Subsidiary Service 1,637,322.31
Engineering e of million 3.65 71 5.21 .73
Co., Ltd. projects
Shenzhen
Huazhan
Constructio
Constructio RMB 8 8,190,105.2 7,588,692.1 4,475,398.7 156,426.5
Subsidiary Service n 117,319.92
n million 9 4 8 6
supervision
Supervision
Co., Ltd.
Shenzhen
SPG
RMB 10.29 19,231,306. 15,657,395. 4,499,095.0 733,842.8
Mini-bus Subsidiary Service 566,783.67
million 21 96 9 6
Rent Co., Rent of
Ltd. mini-bus
Shantou
Hualin Real Developme
US$ 15 571,465,23 315,807,51 326,076,43 111,003,2 82,918,876.7
Estate Subsidiary Real estate nt of real
million 1.98 9.68 9.49 99.27 9
Developme estate
nt Co., Ltd.
Great Wall Developme
USD 0.5 18,118,892. -79,226,047 169,292.8
Estate Co., Subsidiary Real estate nt of real 616,829.95 169,292.85
million 40 .33 5
Inc. (U.S.) estate
Investment
Xin Feng Investment
and HKD 1 196,719,75 -396,448,18 3,573,750.0 9,889,307
Enterprise Subsidiary managemen 9,887,346.06
managemen million 5.67 7.72 0 .23
Co., Ltd. t
t
Shenzhen
SPG Developme
RMB 30 464,717,73 -25,483,915 -856,971.
Longgang Subsidiary Real estate nt of real -967,434.71
million 2.58 .43 82
Developme estate
nt Co., Ltd.
19
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Explain particulars about main subsidiaries and stock-participating companies:
Subsidiaries acquired or disposed during the reporting period:
□ Applicable √ Inapplicable
5. Significant projects invested with non-raised funds
Unit: RMB Ten thousand
Cumulative actual
Project name Total investment Input for this year input as at the Project progress Project earnings
period-end
SPG Chuanqi
160,000 22,234 107,570
Mountain East
SPG Chuanqi
110,000 11,834 60,647
Mountain West
SPG Shanglin
140,000 9,988 34,610
Garden
Shantou Yuejing
15,000 1,538 7,880
Dongfang
Total 425,000 45,594 210,707 -- --
Notes to significant projects invested with non-raised funds
(1) Guangming SPG Chuanqi Mountain project: Up to 31 Dec. 2012, the main work of Building No. 6, No. 7, No. 11 and No. 12 in
the eastern district was completed and the presale license was obtained on 2 Nov. 2012. Building No. 8, No. 9 and No. 10 in the
eastern district were going through reinforcement assembling of the last couple of floors and the western district was going through
construction of the reinforced concrete structure.
(2) Longgang Shanglin Garden project: Up to 31 Dec. 2012, the earthwork excavation and the foundation pit & concrete tube pile
bracing were all completed. All buildings were going through concrete beam and slab placement. The beam & slab model
installation and the reinforcement assembling for the second floor of the club were 100% finished. And the beam & slab frame
setting up for the second floor of the kindergarten was 70% finished.
(3) Shantou Yuejing Dongfang project: Up to 31 Dec. 2012, the foundation pit bracing structure adopted double bored cast-in-place
pile retaining + treble cement mixed pile water retaining + partially reinforcement within the pit. The total designed bored
cast-in-place piles were completed 84.7%; the total designed cement mixed piles were completed 81%; and the total designed
engineering and bored cast-in-place piles were completed 62.6%.
VII. Entities controlled by the Company for special purposes
N/A
VIII. Outlook of the Company’s future development
Judging from the macro-economic situation, 2013 marks the first year after the 18th National
Congress of CPC. Various reform measures will be fully carried out, the economy will maintain a
good growth and urbanization will bring new opportunities for development of the real estate sector.
However, the new “five real estate macro-control policies of the State Council” signals its
determination to “firmly stick to the macro-control policy with no relaxation” again. As such, real
estate macro-control will be usual in the coming future, with the sector in face of new challenges.
General guideline for the work in 2013: The Company should work hard to boost the main business,
enlarge the land reserve, enhance cost control and improve the management capability. It should
20
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
also further increase its professionalism, optimize the new corporate culture, work hard to beef up
development, and strive for the thorough materialization of its five-year development strategic
planning.
(1) Operating plan for 2013
The Company will make itself more competitive, beef up its development and proactively promote
a quality stable growth and a sustainable overall development. Firstly, it should enhance the sense
of urgency for development acceleration and keep increasing its soft strength in terms of
professionalism, management capability, corporate culture, etc. Secondly, the basic philosophy of
“create wealth for the society, give returns to shareholders and create opportunities for employees”
should be established and the Company should try to resume the financing ability in the capital
market. Thirdly, the Company should create conditions to enlarge its land reserve and try to make
substantive progress in land acquisition or new project expansion in the year. Finally, the Company
should further strengthen corporate governance and enterprise management, keep increasing its
professionalism and management capability and enhance its core competitiveness.
The Company will go all out to fulfill all goals. Firstly, it will work on the progress, quality and
safety of construction in process. Secondly, it will work on marketing to ensure the accomplishment
of the sales tasks for the year. Thirdly, it will work on property management to secure stable cash
inflows. Finally, it will promote a steady development and implementation of operating
responsibilities of the subordinate companies and bring the operating objectives of the subordinates
into the big picture of the Company’s overall development.
The Company will solidify its basis, unite all employees and continue to work on the team and
corporate culture development. Firstly, it will build up a professional management team. Secondly,
it will greatly promote the doer spirit of “work hard in a proactive, bold, fast and clever manner”
and create an excellent atmosphere for work. Thirdly, it will continue to promote the corporate
culture of “professionalism, devotion, solidity and honesty”, promote the theme, gather positive
energy and build up a good enterprise image.
(II) Possible risks and countermeasures
Policy risk: 2013 will see a complicated economic situation. The State Council has unveiled the
new “five real estate macro-control policies”, not only reiterating its determination to adhere to the
macro-control policy with limited purchase and credit as its core, but also putting forward special
21
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
limited-purchase measures for cities with house prices rising too fast, the accountability mechanism
to stabilize house prices, etc. In view of that, the macro-control policy will not loose a bit in a
certain period of time.
Operating risk: In face of the severe market situation, the Company encounters great challenges in
terms of real estate sales. This may affect the Company in fulfilling the revenue and profit
objectives for 2013 and obtaining new land. Meanwhile, the accumulative loss is huge. As a listed
company, the Company loses the ability to finance in the capital market. In the long run, these will
adversely affect the implementation of the Company’s five-year development planning.
Countermeasures: Marketing is the top priority among all tasks of the Company in 2013. The
Company will keep enhancing policy study, accurately predict the market and formulate detailed
countermeasures so that the sales goal for the year can be fulfilled. Meanwhile, it will try to
increase the capital operation efficiency to ensure capital supply for the main business of project
development and land resource acquisition, as well as creating conditions to enlarge the land
reserve. It will also continue to improve its management capability and development ability for the
main business, continue to strengthen cost control in project development and increase the
profitability.
IX. Explanation of the Board of Directors concerning the “non-standard audit report” issued
by the CPAs firm for the reporting period
N/A
X. Explain change of the accounting policy, accounting estimate and measurement methods as
compared with the financial reporting of last year
N/A
XI. Explain retrospective restatement due to correction of significant accounting errors in the
reporting period
N/A
XII. Explain change of the consolidation scope as compared with the financial reporting of
last year
N/A
22
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
XIII. Profit allocation and dividend distribution
Formulation, execution or adjustment of the Company’s profit distribution policy, especially the cash dividend
policy, during the reporting period:
According to the CSRC Notice on Further Implementing Matters Related to Cash Dividend
Distribution of Listed Companies and the CSRC Shenzhen Bureau Notice on Seriously
Implementing Relevant Requirements of the Notice on Further Implementing Matters Related to
Cash Dividend Distribution of Listed Companies (Shen-Zheng-Ju-Gong-Si Zi [2012] No. 43), the
Company formulated the Work Plan on Further Implementing Matters Related to Cash Dividend
Distribution of Listed Companies on 25 Jun. 2012, and established a special team, with the
Chairman of the Board of Directors as the team leader to preside over the work on cash dividend
distribution plan and the amendment of the Articles of Association. The “Return for Shareholder
Plan for the Coming Three Years (2012-2014)” and the “Verification Report on Return for
Shareholder Plan for the Coming Three Years (2012-2014)” were reviewed and approved at the 5th
Session of the 7th Board of Directors held on 13 Aug. 2012 and the “Proposal on Revising the
Articles of Association” was reviewed and approved at the 2nd Special Shareholders’ General
Meeting for 2012 held on 30 Aug. 2012. (For details, see the announcements disclosed on
http://www.cninfo.com.cn dated 14 Aug. 2012 and 31 Aug. 2012 respectively.)
The conditions and procedures for revising the Return for Shareholder Plan and the Articles of
Association of the Company at this time are compliant and transparent, which content is line with
relevant laws, rules and the requirements of CSRC as well as the needs for operation and future
development of the Company, thus protect the legal rights of minority shareholders. The revised
criteria and proportion for dividend distribution is specific and clear, relevant decision-making
procedures and mechanism are complete. The independent directors diligently fulfill their duties,
and issue their independent opinion on the cash dividend distribution policy of the Company.
The Company’s preplans for profit distribution and turning capital reserve into share capital for the reporting
period were in compliance with relevant rules such as the Company’s Articles of Association.
The Company’s preplans or plans for profit distribution and turning capital reserve into share capital for the recent
three years (including the reporting year):
As audited by RSM China Certified Public Accountants LLP, the Company achieved, in 2012, a net
profit of RMB 106,814,543.53 attributable to owners of the Company (without subsidiaries).
23
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
According to relevant laws and regulations, as well as the Articles of Association of the Company,
the net profit in 2012 will be used for covering the deficit of the previous years. And thus no profit
distribution or capitalization of capital reserves will be conducted. After the loss make-up, the
Company’s retained profit will stand at RMB -369,154,405.36.
Since the Company still has a huge amount of uncovered loss for now, it has not distributed cash
dividends for the previous three years and this year. As its operating situation improves, the
Company will try to give cash returns to investors as soon as possible in strict compliance with its
Articles of Association and other relevant requirements.
Cash dividend distribution of the Company over the recent three years:
Unit: RMB Yuan
Net profit attributable to shareholders Ratio the amount of cash dividend to the net profit
Amount of cash dividend
Year of the Company in the consolidated attributable to shareholders of the Company in the
(tax included)
statement for the year consolidated statement (%)
2012 0.00 106,814,543.53 0%
2011 0.00 101,200,060.65 0%
2010 0.00 84,760,162.75 0%
The Company (including its subsidiaries) made profit in the reporting period and the retained profit of the
Company (without subsidiaries) was positive, but it did not put forward a preplan for cash dividend distribution:
□ Applicable √ Inapplicable
XIV. Social responsibilities
The Company is not a heavy-pollution listed company stipulated by the environmental protection
department of the government. It attaches great importance to performing its social responsibilities,
proactively protecting legal rights and interests of the creditors, employees, consumers, suppliers,
the communities and other stakeholders. In the reporting period, the Company made a total donation
of RMB 0.8196 million to the poor and those in difficulty. It also input great efforts in pollution
prevention, ecological protection, social security protection, etc. The Chuanqi Mountain project
developed by the Company was granted the Green Construction State Two Star Grade and the
Shenzhen Golden Grade. Adhering to a quality stable growth and a sustainable overall development,
the Company was honored in the reporting period as the “Most Honest Enterprise of Guangdong
Province for 2012” and the “Demonstration Enterprise of Shenzhen for Honesty and Law
Compliance”. Meanwhile, the Shantou branch of the Company was honored as the “A-Grade Tax
Payer of the Taxation Credit Rating of Guangdong” and the “Green Residence of Guangdong
Province”. The property subordinate won the titles of “Excellent Member with Outstanding
Contribution of Shenzhen Property Management Association” and “30 Advanced Enterprises of the
House Owner Satisfaction Sampling Survey of Property Management Association”. The Company
has always attached great importance to production safety. And there was no major production
24
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
safety accident during the reporting period.
XV. Particulars about researches, visits and interviews received in this reporting period
Main discussion and
Time of reception Place of reception Way of reception Visitor type Visitor materials provided by the
Company
The Company’s business
10 Jan. 2012 Office By telephone Individual Individual investor structure, didn’t offer
written materials
Inquiry about disclosure
time of annual report of the
Company and effect of
13 Mar. 2012 Office By telephone Individual Individual investor macro-control policies on
main business of the
Company, didn’t offer
written materials
Inquiry about development
and operation project of the
10 Apr. 2012 Office Written inquiry Individual Individual investor
Company, didn’t offer
written materials
Inquiry about process of
24 May 2012 Office By telephone Individual Individual investor Guangming project, didn’t
offer written materials
Inquiry about semi-annual
operation particulars of the
20 Jun. 2012 Office By telephone Individual Individual investor
Company, didn’t offer
written materials
Inquiry about effect of
macro-control policies on
operation of the Company,
particulars of semi-annual
18 Jul. 2012 Office By telephone Individual Individual investor
operation, appointed
disclosure time of
semi-annual report, didn’t
offer written materials
Operation of the Company
for the first half of the year,
19 Jul. 2012 Office By telephone Individual Individual investor
with no written materials
provided
Information about the
31 Aug. 2012 Office By telephone Individual Individual investor semi-annual report, with no
written materials provided
Data in the semi-annual
report and progress of the
5 Sept. 2012 Office By telephone Individual Individual investor investment projects, with
no written materials
provided
Progress and pre-sale time
of the SPG Chuanqi
28 Sept. 2012 Office By telephone Individual Individual investor
Mountain project, with no
written materials provided
Information about the 3rd
1 Nov. 2012 Office By telephone Individual Individual investor quarterly report, with no
written materials provided
Pre-sale of the SPG
Chuanqi Mountain project,
30 Nov. 2012 Office By telephone Individual Individual investor
with no written materials
provided
Operation in the year and
development project
28 Dec. 2012 Office By telephone Individual Individual investor
progress, with no written
materials provided
25
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Section V. Report of the Supervisory Committee
In 2012, according to 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 Committee proactively safeguarded the rights and interests of all the shareholders and
faithfully performed its duty of supervision.
I. Work of the Supervisory Committee
The Supervisory Committee effectively exercised its rights of supervision at all relevant
decision-making meetings. Keeping its supervision focus on the compliant operation of the
Company’s core assets and major capital as well as significant projects, the Supervisory Committee
managed to strengthen and improve the supervisory and disciplinary mechanism and internal
control system, create a new mode of internal supervision, and integrate the supervisory resources,
as well as carry out the supervisory joint session system. As a result, expenses and asset risks were
effectively controlled. The Supervisory Committee carried forward transparent corporate operation
and democratic decision-making, supervised the standardization and effectiveness of the rules and
procedures for decision-making, as well as supervised daily major operation activities. Meanwhile,
it conducted various specific supervisions and examination, carried out examination and disposal of
investments in other places, strengthened the attention and settlement on lawsuit cases, supervised
various project bidding activities timely, and carried out the checks on execution of various
resolutions made by the Company. It also gave play to its function of internal audit and supervision
by performing post appraisal and audit on performance appraisal, operation management, capital
management and financial incomes and expense. It enhanced supervision on information disclosure.
According to the prescribed procedure, the Supervisory Committee 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.
II. Sessions convened by the Supervisory Committee
(I) The 12th Session of the 6th Supervisory Committee was convened on 29 Mar. 2012, at which
reviewed and approved the 2011 Annual Report and Its Summary, Profit Distribution preplan for
Y2011 and 2011 Annual Report of Supervisory Committee, the Proposal on 2011 Annual
Self-appraisal Report on Internal Control, the Proposal on Explanation of the Supervisory
Committee on the Change in Accounting Policy and the Retroactive Adjustment, the Proposal on
Re-election of the Supervisory Committee. Five supervisors attended the session, and the voting
result of the session was as follows: 5 votes for, 0 against, and 0 abstention.
26
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
(II) The 1st Session of the 7th Supervisory Committee was convened on 17 Apr. 2012, at which the
1st Quarterly Report for 2012 and its Abstract was reviewed and approved and Zhuang Quan was
elected as the Chairman for the 7th Supervisory Committee. Five supervisors attended the session,
and the voting result of the session was as follows: 5 votes for, 0 against, and 0 abstention.
(III) The 2nd Session of the 7th Supervisory Committee was convened on 30 Aug. 2012, at which the
2012 Semi-annual Report and its Abstract was reviewed and approved. Five supervisors attended
the session, and the voting result of the session was as follows: 5 votes for, 0 against, and 0
abstention.
(IV) The 3rd Session of the 7th Supervisory Committee was convened on 30 Oct. 2012, at which the
3rd Quarterly Report for 2012 and its Abstract was reviewed and approved. Five supervisors
attended the session, and the voting result of the session was as follows: 5 votes for, 0 against, and 0
abstention.
III. Independent opinions on relevant matters by the Supervisory Committee
(I) About the Company’s operation according to laws: In 2012, members of the Supervisory
Committee sat in on all the board sessions. Chairman of the Supervisory Committee Zhuang Quan
sat in on deliberative sessions of the Company’s management, sessions of GM and other important
sessions. Considering the various rules, the Supervisory Committee 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 senior executives diligently, responsibly and compliantly performed their duties, with
no behaviors in violation of the laws, rules and Articles of Association or harmful to the interest of
the Company.
(II) About the Company’s financial status: During the reporting period, the Supervisory Committee
conscientiously performed its duty of supervisory the Company’s financial status, monitored the
operation and risks and issued its review opinion on all regular reports. The Supervisory Committee
was of the opinion that the financial report with the standard unqualified audit opinion issued by
RSM China Certified Public Accountants LLP upon audit was a factual and objective reflection of
the Company’s financial status and operating results for 2012.
(III) In the reporting period, the Company did not raise any funds.
(IV) In the reporting period, the related-party transactions and guarantees of the Company were as
follows:
1. In the reporting period, the Company paid RMB 162.82 million to the related party Shenzhen
Jianan Group Co., Ltd. for contracting the Chuanqi Mountain East District Project.
27
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
2. In the reporting period, the Company paid a total of RMB 747,000 to the related parties Shenzhen
Environment Engineering Science and Tech Center Co., Ltd., Shenzhen Institute of Building
Research, Shenzhen Water Resources Planning & Design Institute and Shenzhen General Institute
of Architectural Design and Research for environment supervision, design, consulting, etc.
concerning the Chuanqi Mountain and Dong Hu Ding Jing projects.
3. On 26 Jul. 2012, due to the construction engineering need, the Company secured an intra-Group
borrowing of RMB 70 million from its related party Shenzhen General Institute of Architectural
Design and Research. And the Company paid RMB 1,985,700 as interest in the reporting period.
4. On 2 Nov. 2012, the Company, its related party Shenzhen Small & Medium Enterprises Credit
Financing Guarantee Group Co., Ltd. (CGC) and other four companies (Shantou Industrial
Economic Zone Investment and Construction Co., Ltd., Shantou Dayang Group, Shantou Chaoyang
Five Stars Industry Co., Ltd. and Shantou Interstellar Commerce and Trade Co., Ltd.) signed the
“Shantou Small & Medium Enterprises Financing Guarantee Co., Ltd. Investment Agreement”. The
said six parties jointly incorporated Shantou Small & Medium Enterprises Financing Guarantee Co.,
Ltd. with investments, with the Company and CGC making a cash contribution of RMB 12 million
respectively.
5. On 31 Mar. 2012, the Company provided a joint-liability credit guarantee of RMB 88.40 million
for the engineering payment payable by its subsidiary Shenzhen SPG Longgang Development Co.,
Ltd..
(V) During the reporting period, the Company’s related-party transactions were fair and compliant
with laws and regulations. Independent directors all expressed their independent opinion on these
transactions and the related directors stepped aside in relevant voting. And no harm was done to
interests of some shareholders or the Company.
(VI) Opinion about the Company’s self-appraisal on its internal control: In 2012, the Company
continued enhancing risk control and internal control standardization. The internal control system
could cover basically all aspects and links of the Company’s operation. Key internal control
activities were conducted according to the Company’s rules on internal control, with no major
defects. In the reporting period, according to the internal control standardization requirements, the
Company adopted some necessary measures to remedy some ordinary defects and revised various
management mechanisms and business processes. And the Company’s self-appraisal report on its
internal control was in line with the actual condition of the Company.
28
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Section VI. Significant Events
I. Significant lawsuit or arbitration
√ Applicable □ Inapplicable
Involved
Projected liability Ruling and Execution of Date of Disclosure
Basic information amount Progress
or not influence ruling disclosure index
(RMB 0,000)
① BaoXing
Company shall
make an
ownership
transfer payment
of RMB 98.95
million and pay
Guoxing Building
the relevant
Lawsuit (For
interest to the
details, see “Note
Company within
VII”—“Contingent
10 days since the About RMB 81 2012
Events”—“1.
ruling takes million has been Semi-annual
Contingent
1,800 No In execution effect, or this case recovered and it 31 Aug. 2012 Report on
liabilities due to
shall be handled is difficult to www.cninfo.co
pending lawsuits
according to recover the rest. m.cn
or arbitrations, as
Article 232 of the
well as the
Law of Civil
financial influence
Procedure.
thereof”.)
② BaoXing
Company shall
bear RMB
620,000 of the
counter-action fee
and 40,000 of the
survey fee.
① Business
Tourism
Company had to
pay for the
compensation
Rmb 36,620 The applicant
thousand and the has received
relevant interest RMB 15.20
Xi’an Project
(from 14 Sept. million. Now
Lawsuit (For
1998 to the Business
details, see “Note
payment day) to Tourism
VII”—“Contingent
Xi’an Fresh Peak Company has 2012
Events”—“1.
Company within no executable Semi-annual
Contingent
2,100 No In execution one month after properties and 31 Aug. 2012 Report on
liabilities due to
the judgment Xi’an Joint www.cninfo.co
pending lawsuits
entering into Commission on m.cn
or arbitrations, as
force. If the Commerce has
well as the
Business Tourism been refusing to
financial influence
Company failed execute the
thereof”.)
to pay in time, it ruling. It is
had to pay double difficult to
debt interests to recover the rest.
Xi’an Fresh Peak
Company for the
overdue period;
② Xi’an Joint
Commission on
29
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Commerce had
jointly and
severally
obligation of the
interests of the
compensation; .③
Business Tourism
Company shall
bear RMB
227,500 of the
acceptance fee
and the security
fee.
① Luofu Hill
Tourism
Company has
paid back RMB
9.6 million; ②
Luofu Hill project
Luofushan
Lawsuit (For Because the
Administration
details, see “Note state-owned
Committee had to
VII”—“Contingent land resource
undertake one 2012
Events”—“1. administration
third of the debts Semi-annual
Contingent cannot work out
980 No In execution which Luofushan 31 Aug. 2012 Report on
liabilities due to the planning key
Tourism was www.cninfo.co
pending lawsuits points for the
unable to repay; m.cn
or arbitrations, as sealed land, the
③ Luofu Hill
well as the land cannot be
Tourism
financial influence auctioned.
Company shall
thereof”.)
bear RMB
167,700 of the
case acceptance
fee and the
security fee.
Media’s questions
□ Applicable √ Inapplicable
There was no media’s question during the reporting period.
II. Occupation of the Company’s capital by the controlling shareholder and its related parties
for non-operating purposes
Newly Total repaid
Expected
Name of Opening occupied amount in Closing Expected
Expected repaid
shareholder Time of Reason for amount amount in reporting amount time for
way of amount
or related occupation occupation (RMB Ten reporting period (RMB Ten repayment
repayment (RMB Ten
party thousand) period (RMB (RMB Ten thousand) (month)
thousand)
Ten thousand) thousand)
Total 0 0 0 0 -- 0 --
Proportion of the closing total amount
0%
in net assets (%)
III. Bankruptcy and reorganization
N/A
30
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
IV. Asset transactions
1. Asset acquisition
Net profit
Net profit Relationsh
contributed to Ratio of
contributed to ip between
the Company the net
the Company the
from the profit
from the transaction
Transacti Transacti acquisition contribut
year-begin to Related party and
on party Asset on price date to the ed by the
the period-end -party the
or acquired (RMB period-end asset to Disclosure Disclosure
Progress (RMB Ten transact Company
ultimate or Ten (RMB Ten the date index
thousand) ion or (applicable
controlle bought in thousand thousand) Compan
(applicable for not for
r ) (applicable for y to the
business related-par
business total
combinations ty
combinations profit
under the transaction
not under the (%)
same control) s)
same control)
Overview of asset acquisition:
N/A
2. Sale of assets
Relationsh
Whethe
Net profit ip
Ratio of r or not Whether
contribut between
the net the or not the
ed by the the
profit owners creditor’s
Transacti asset Gain/los transactio
contribute Related hip of right and
on price from the s on sale Pricin n party
Transact d to the -party the liabilities Disclo
Asset Date of (RMB period-be (RMB g and the Disclos
ion Company transac asset involved sure
sold sale Ten gin to the Ten princip Company ure date
party by the tion or involve have index
thousand date of thousan le (applicabl
asset sale not d has been
) sale d) e for
to the been fully
(RMB related-par
total fully transferre
Ten ty
profit (%) transfer d
thousand) transactio
red
ns)
Overview of sale of assets:
N/A
3. Business combination
N/A
V. Implementation and influence of equity incentive plan of the Company
N/A
VI. Significant related-party transactions
1. Related-party transactions concerning routine operation
Type of Contents Pricing Transacti Proportio Settlemen
Related the of the principle on n in same t method
Relations Transacti Market Date of Index of
transactio related-pa related-pa of the amount kind of of the
hip on price price disclosure disclosure
n party rty rty related-pa (RMB transactio related-pa
transactio transactio rty 0,000) ns rty
31
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
n n transactio transactio
n n
Under the
same
control of
Contractu
Shenzhen the Contracti
al amount
Jianan Company ng by the Construct Open Bank
of RMB 16,282 98.35% - -
Group ’s related ion bidding transfer
553.33
Co., Ltd. controllin party
million
g
sharehold
er
Under the
Shenzhen
same
Environm
control of
ent
the Contracti Environm Competiti Contractu
Engineeri
Company ng by the ent ve al amount Bank
ng 8.76 0.05% - -
’s related supervisio negotiatio of RMB transfer
Science
controllin party n n 195,000
and Tech
g
Center
sharehold
Co., Ltd.
er
Under the
same
control of
Shenzhen Contractu
the Contracti Competiti
Institute al amount
Company ng by the Consultin ve Bank
of of RMB 32.5 0.2% - -
’s related g negotiatio transfer
Building 1.5
controllin party n
Research million
g
sharehold
er
Under the
same
Shenzhen control of
Water the Contracti Competiti Contractu
Resources Company ng by the ve al amount Bank
Design 2.16 0% - -
Planning ’s related negotiatio of RMB transfer
& Design controllin party n 120,000
Institute g
sharehold
er
Under the
Shenzhen
same
General
control of
Institute Contractu
the Contracti Competiti
of al amount
Company ng by the ve Bank
Architect Design of RMB 31.27 0.2% - -
’s related negotiatio transfer
ural 1.16
controllin party n
Design million
g
and
sharehold
Research
er
Market
interest
Under the
Shenzhen rate for Announce
same
General Interest bank ment on
control of
Institute on a loans in related-pa
the Lending Competiti
of borrowin the same rty
Company by the ve Bank 13 Jul.
Architect g from period 198.57 1.2% - transactio
’s related negotiatio transfer 2012
ural the (15% n on
controllin party n
Design related higher www.cni
g
and party than the nfo.com.c
sharehold
Research benchmar n
er
k interest
rate)
Total -- -- 16,555.26 100% -- -- -- --
32
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Details about return of large-amount sales N/A
Necessity and consistency of the The related-party transactions above were helpful to the main business of the Company
related-party transaction, as well as the and they were within the normal business scope of the Company. They were carried out
reasons why the related party is chosen with the transaction prices determined according to market prices of transactions of the
over other parties in the market to deal same kind. They were fair and rational, with no harm done to the interests of the
with Company.
Influence of the related-party transaction The related-party transactions above had no influence on the independency of the
on independency of the Company Company.
The Company’s independence on the
The Company would not have to rely on or be controlled by the related parties due to
related part and the relevant solutions (if
these transactions.
any)
Where the Company classifies and
estimates the total amount of routine
related-party transactions for the reporting N/A
period, explain the actual implementation
during the reporting period (if any)
Explain why the transaction price is greatly
N/A
different from the market price
2. Related-party transactions arising from asset acquisition or sale
Book Evaluate
Type of value of d value Market
Transfer
related-p the of the fair Gain
Related Pricing price Settleme Disclosu Disclosu
Relation arty Contents transferr transferr value (RMB
party principle (RMB nt mode re date re index
transacti ed asset ed asset (RMB 0,000)
0,000)
on (RMB (RMB 0,000)
0,000) 0,000)
3. Significant related-party transactions concerning joint investment in external parties
Main Registered Total assets Net assets of Net profit of
Pricing Name of
Joint investor Relationship business of capital of of investee investee investee
principle investee
investee investee (RMB 0,000) (RMB 0,000) (RMB 0,000)
Providing
enterprises
and
individuals
The
with
Company
financing
intended to
guarantees
make a cash
such as loan
contribution
guarantees,
of RMB 12
bill
million,
acceptance
Shenzhen accounting
guarantees,
Small & for 10% of Shantou
Under the trade
Medium the registered Small &
same control financing
Enterprises capital of the Medium
of the guarantees, RMB 120
Credit investee. Enterprises
Company’s project million
Financing Other Financing
controlling financing
Guarantee shareholders Guarantee
shareholder guarantees
Group Co., also made Co., Ltd.
and L/C
Ltd. contributions
guarantees;
in cash and
financing
held
consulting
correspondin
service,
g stakes
financial
according to
consultant
their
service and
contributions.
other
guarantee-rel
ated
intermediary
33
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
services;
making
investments
with its own
funds (The
financing
guarantee
agency
license will
expire on 4
Feb. 2018.)
[Where a
license is
required for a
business, it
shall be
obtained
before
operation.]
Progress of any significant
The investee finished the registration with Shantou Administration for Industry and Commerce and
construction in process of
obtained the business license on 12 Mar. 2013.
the investee (if any)
4. Credits and liabilities with related parties
Was there any non-operating credit or liability with any related party?
□ Yes √ No
Amount
Non-operating
Opening during the Closing
Type of Reason for capital
Related party Relation balance (RMB reporting balance (RMB
credit/liability credit/liability occupation
0’000) period (RMB 0’000)
(Yes/No)
0’000)
The
subsidiary
handled the
Subsidiary
agent business
(has Credit
Shenzhen Fresh Peak for the
conducted the receivable
property consultant Company or No 1,112,375.8 0 1,112,496.4
employees’ from related
Co.,Ltd the Company
shareholding party
provided
reform)
investment or
loans for it in
previous years
The Company
Credit provided
Guangdong province
receivable investment or
Huizhou Luofu Hill Joint venture No 10,465,168.81 0 10,465,168.81
from related loans for the
mineral water Co.,Ltd
party subsidiary in
previous years
The Company
Credit provided
Shenzhen Runhua
Associated receivable investment or
Automobile Trading No 3,072,764.42 0 3,072,764.42
enterprise from related loans for the
Co.,Ltd
party subsidiary in
previous years
The Company
Credit provided
Canada Great Wall receivable investment or
Subsidiary No 89,035,748.07 0 89,035,748.07
(Vancouver) Co.,Ltd from related loans for the
party subsidiary in
previous years
Credit The Company
Bekaton Property
Subsidiary receivable provided No 12,559,290.58 0 12,559,290.58
Limited
from related investment or
34
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
party loans for the
subsidiary in
previous years
Credit
Current
receivable
Paklid Limited Subsidiary accounts in No 18,631,565.47 0 18,946,689.75
from related
previous years
party
Credit
Shenzhen Shenfang Current
receivable
Department Store Co. Subsidiary accounts in No 237,648.82 0 237,648.82
from related
Ltd. previous years
party
Credit
Shenzhen Real Estate Current
receivable
Consolidated Service Subsidiary accounts in No 1,086,487.22 0 1,086,487.22
from related
Co., Ltd. previous years
party
Shenzhen City Credit
Current
Shenfang Construction receivable
Subsidiary accounts in No 8,327,180.71 0 8,327,180.71
and Decoration from related
previous years
Materials Ltd. party
Subsidiary
(has Credit
Current
Shenzhen Ronghua conducted the receivable
accounts in No 475,223.46 0 475,223.46
JiDian Co., Ltd employees’ from related
previous years
shareholding party
reform)
Credit
Current
Xi’an Fresh Peak receivable
Joint venture accounts in No 8,419,205.19 0 8,419,205.19
Building Co. Ltd. from related
previous years
party
Shenzhen Tefa Real Liability Current
Estate Consolidated Subsidiary payable to accounts in No 598,012.16 598,012.16
Service Co., Ltd. related party previous years
Shenzhen Shen Fang Liability Current
Industrial Subsidiary payable to accounts in No 1,534,854.91 1,534,854.91
Development Co., Ltd related party previous years
Liability Current
Shenzhen ZhongGang
Subsidiary payable to accounts in No 135,853.52 135,853.52
Haiyan Enterprise Ltd.
related party previous years
Shenzhen Dongfang Liability Current
New world store Co., Subsidiary payable to accounts in No 902,974.64 902,974.64
Ltd related party previous years
Liability Current
Shenzhen Xin
Subsidiary payable to accounts in No 1,394,704.21 1,394,704.21
Dongfang Store Ltd.
related party previous years
Fengkai Lain Feng Liability Current
Cement Manufacturing Subsidiary payable to accounts in No 1,869,348 1,867,348
Co., Ltd. related party previous years
Liability Current
Shenzhen CyberPort
Subsidiary payable to accounts in No 7,949,749.26 7,949,749.26
Co., Ltd
related party previous years
ShenZhen ShenFang Liability Current
BaoAn development Subsidiary payable to accounts in No 20,093,445.07 20,093,445.07
Co., Ltd related party previous years
The principal
Liability and interest of
Shenzhen Investment Controlling
payable to loans from the No 80,384,097.18 80,384,097.18
Holdings Co., Ltd. shareholder
related party controlling
shareholder
Effects of the credits and liabilities There was no appropriation of funds of the Company by the controlling shareholder and its
with related parties on the Company’s controlled related parties, the Company’s credits and liabilities with the subsidiaries, joint
operating results and financial ventures and associated enterprises arose from investment and current accounts, which had
situation no negative influence on the normal operation of the Company.
35
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
5. Other significant related-party transactions
Inapplicable
The website to disclose the interim announcements on significant related-party transactions
Disclosure date of the interim
Name of the interim announcement Website to disclose the interim announcement
announcement
Announcement on External Investment &
6 Nov. 2012 www.cninfo.com.cn
Related-party Transactions
VII. Particulars about significant contracts and their fulfillment
1. Particulars about trusteeship, contract and lease
(1) Trusteeship
Explanation on the trusteeship
Inapplicable
The trusteeship whose profits reaching more than 10% of the total profits of the Company in the reporting period
□ Applicable √ Inapplicable
(2) Contract
Explanation on the contract
Inapplicable
The contract whose profits reaching more than 10% of the total profits of the Company in the reporting period
□ Applicable √ Inapplicable
(3) Lease
Explanation on the lease
Inapplicable
The lease whose profits reaching more than 10% of the total profits of the Company in the reporting period
□ Applicable √ Inapplicable
2. Guarantees provided by the Company
Unit: RMB Ten Thousand
Guarantees provided by the Company for external parties (excluding those for subsidiaries)
Disclosure
date of Guarante
Actual
relevant Actual e for a
Amount for occurrence date Type of Period of Executed
Guaranteed party announcem guarantee related
guarantee (date of guarantee guarantee or not
ent on the amount party or
agreement)
guarantee not
amount
Total external guarantee line Total actual occurred amount
approved during the reporting 0 of external guarantee during 0
period (A1) the reporting period (A2)
Total external guarantee line that Total actual external guarantee
has been approved at the end of 0 balance at the end of the 0
the reporting period (A3) reporting period (A4)
Guarantees provided by the Company for its subsidiaries
Disclosure Guarante
Actual
date of Actual e for a
Amount for occurrence date Type of Period of Executed
Guaranteed party relevant guarantee related
guarantee (date of guarantee guarantee or not
announcem amount party or
agreement)
ent on the not
36
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
guarantee
amount
Shenzhen SPG
Longgang 31 Mar. Joint liability
8,840 31 Mar. 2012 8,840 Three years No No
Development Co., 2012 guarantee
Ltd.
Shenzhen Zhentong
31 Mar. Joint liability
Engineering Co., 6,000 0 -
2012 guarantee
Ltd.
Total guarantee line approved for Total actual occurred amount
the subsidiaries during the of guarantee for the
14,840 8,840
reporting period subsidiaries during the
(B1) reporting period (B2)
Total guarantee line that has been
Total actual guarantee balance
approved for the subsidiaries at
14,840 for the subsidiaries at the end 8,840
the end of the reporting period
of the reporting period (B4)
(B3)
Total guarantee amount provided by the Company (total of the above-mentioned two kinds of guarantees)
Total guarantee line approved Total actual occurred amount
during the reporting period 14,840 of guarantee during the 8,840
(A1+B1) reporting period (A2+B2)
Total guarantee line that has been
Total actual guarantee balance
approved at the end of the
14,840 at the end of the reporting 8,840
reporting period
period (A4+B4)
(A3+B3)
Proportion of total guarantee amount (A4+B4) to the net assets
5.41%
of the Company
Of which:
Amount of guarantee for shareholders, actual controller and
0
related parties (C)
Amount of debt guarantee provided for the guaranteed party
whose asset-liability ratio is not less than 70% directly or 8,840
indirectly (D)
Part of the amount of the total guarantee over 50% of net assets
0
(E)
Total amount of the above three guarantees (C+D+E) 8,840
Explanation on possible bearing joint responsibility of At the end of reporting period, balance of guarantees for property
liquidation due to immature guarantee buyers has not settled totaling RMB 8 million.
Explanation on provision of guarantees for external parties in
Naught
violation of the prescribed procedure
Explanation on particulars about the guarantees by complex ways:
The Company belongs to the real estate industry. As for property developer shall provide pledge loan guarantee for property
purchaser in accordance of relevant regulations of People’s Band of China, currently the Company provides periodic joint guarantee
for property purchaser. The guarantee term is from disbursement date to the date when the Certificate of Real Estate of the property
purchaser is handled by the mortgage banker. If the home buyer mentioned above didn’t perform the debtor’s duties within the
guarantee period, then the Company has the right to take back the properties sold. Therefore, the said guarantee will not cause actual
loss to the Company. As to the end of the reporting period, the Company has provided an amount of RMB 8 million to the above
mentioned guarantee.
(1) Illegal external guarantee
Unit: RMB Ten Thousand
Illegal
Illegal Proportion guarantee Proportion Predicted
Predicted
Relationsh guarantee in the net amount up in the net Predicted released
Guarantee Type of Guarantee releasing
ip with the amount assets at to the assets at releasing amount
d party guarantee period date
Company (RMB period-end disclosure period-end way (RMB
(month)
0’000) (%) of annual (%) 0’000)
report
37
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
(RMB
0’000)
Total 0 0% -- -- 0 0% -- -- --
3. Other significant contract
Book Appraisal
value of value of
Name of
Name of the assets the assets
the counter Name of Base date Trading Related-pa Execution
company involved involved
company in the appraisal for Pricing price rty Relationsh situation
entering in the
entering agency (if appraisal principle (RMB transaction ip up to the
into the contract contract
into the any) (if any) 0’000) or not period-end
contract (RMB (RMB
contract
0’000) (if 0’000) (if
any) any)）
VIII. Performance of commitments
1. Commitments made by the Company or shareholders holding over 5% of the Company’s shares in the
reporting period, or such commitments carried down into the reporting period
Commitment Time of making Period of
Commitment Contents Fulfillment
maker commitment commitment
Commitment on share reform
Commitment in the acquisition report or
the report on equity changes
Commitments made upon the assets
reorganization
Commitments made upon IPO or
refinancing
Other commitments made to minority
shareholders
Executed timely or not? Yes
Detailed reason for failing to execute and
Inapplicable
the next plan
Make commitments on causing the
problems of horizontal competition and No
related-party transactions or not?
Settlement period of commitment Naught
Way of settlement Naught
Fulfillment of commitment There was no unfinished commitment.
2. The Company’s assets or projects exist profitable prediction and the reporting period is in such
prediction period, it states the profits from the assets or projects reaching original prediction and relevant
reasons:
Name of the Current Disclosure
Current actual Reason of
asset or project predicted Disclosure date index of the
Initial time of Ending time of business failing to reach
existing business of the original original
the prediction the prediction performance the prediction
profitable performance prediction prediction
(RMB 0’000) (if applicable)
prediction (RMB 0’000)
IX. Particulars about engagement and disengagement of CPAs firm
CPAs firm engaged at present
Name of domestic CPAs firm RSM China Certified Public Accountants (LLP)
Remuneration of domestic CPAs firm (RMB 0’000) 58
Consecutive years of the audit services provided by
0
domestic CPAs firm
38
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Name of the certified public accountants from the
Li Qiaoyi, Wang Huansen
domestic CPAs firm
Name of overseas CPAs firm (if any) Naught
Remuneration of overseas CPAs firm (RMB 0’000)
0
(if any)
Consecutive years of the audit services provided by
Naught
overseas CPAs firm (if any)
Name of the certified public accountants from the
Naught
overseas CPAs firm (if any)
Reengage the CPAs firm at current period or not?
√ Yes □ No
Reengage the CPAs firm in the audit period or not?
□ Yes √ No
Execute the approval procedures for changing the CPAs firm or not？
√ Yes □ No
Detailed explanation on the reengagement and change of CPAs firm:
As reviewed and approved at the 2011 Annual Shareholders’ General Meeting held on 17 May 2012 and the
Second Special Shareholders’ General Meeting for 2012 held on 30 Aug. 2012, the Company agreed to engage
China Audit International Certified Public Accountants Ltd. (hereinafter referred to as “China Audit International”)
as the audit firm for the Company’s annual financial statements and internal control. Due to the Shenzhen Branch
of China Audit International was combined with RSM China Certified Public Accountants (LLP), the combined
CPAs firm is “RSM China Certified Public Accountants (LLP)” (hereinafter referred to as “RSM China”). China
Audit International sent a letter to the Company on 6 Nov. 2012, at which applied to the Company to change to
engage RSM China as the audit firm for the Company’s financial statements and internal control in 2012; and all
the audit, capital verification and other legal business of CPAs firm as well as other business of the original
Shenzhen Branch of China Audit International would be transferred to RSM China to take over; meanwhile,
Shenzhen Branch of China Audit International made a commitment on ensuring the auditing service quality for
the Company and keeping the stability of the auditing service team.
RSM China is the first converted limited liability partnership CPAs firm in China, which has ranked in the top of
domestic CPAs firms for consecutive four years in the Top 100 CPAs Firms by Integrated Appraisal from the
Year of 2008 to 2012 issued by China Certified Public Accountant Association. Besides, China Audit
International has provided many years of annual financial audit service for the Company, both parties always
maintain good cooperative relationship. Therefore, in order to ensure the continuity of the Company’s annual
financial audit work and the normal conduction of the financial audit work in 2012, the Company agreed to
reengage RSM China as its audit firm for the financial statements and internal control in 2012 after being
reviewed and approved at the 3rd Special Shareholders’ General Meeting on 7 Dec. 2012.
Particulars on engaging the audit firm for the internal control, financial adviser or sponsor
√ Applicable □ Inapplicable
As for the work on construction of internal control, the Company engaged RSM China Certified Public
Accountants (LLP) to conduct independent audit on the internal control of the Company in 2012, the auditing fees
for the internal control of the Company agreed in the contract totaled RMB 250,000, and such account hasn’t been
paid.
39
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
X. Explanation of the Supervisory Committee and Independent Directors (if applicable) on
the “Non-standard Auditor’s Report” issued by the CPAs firm during the reporting period
Inapplicable
XI. Punishment and rectification
Type of
Conclusion (if
Name Type Reason investigation and Disclosure date Disclosure index
any)
punishment
Explanation on rectification:
Inapplicable
Particulars about the directors, supervisors, senior management staffs and shareholders holding over 5% shares of the Company
involving in illegal trading the Company’s stocks and the Company has disclose to recover the illegal income
□ Applicable √ Inapplicable
XII. Particulars about trading suspension and termination faced after the disclosure of annual
report
Inapplicable
XIII. Explanation on other significant events
1. In light that the office term of the directors for the Sixth Board of Directors would expire in Feb. 2012, the
Company convened the 16th Session of the 6th Board of Directors on 29 Mar. 2012, at which reviewed and
approved the Proposal on Re-election of the Board of Directors (for details, please refer to the Announcement on
Resolutions Made at the 16th Session of the 6th Board of Directors on http://www.cninfo.com.cn/ dated 31 Mar.
2012), and it also submitted the said proposal to the First Special Shareholders’ General Meeting for 2012 held on
17 Apr. 2012 for review and approval as well as implemented it (for details, please refer to the Announcement on
Resolutions Made at the First Special Shareholders’ General Meeting for 2012 on http://www.cninfo.com.cn/
dated 18 Apr. 2012). And the work on re-election of the Board of Directors of the Company has been completed.
2. In light that the office term of the supervisors for the Sixth Supervisory Committee would expire in Feb. 2012,
the Company convened the 12th Session of the 6th Supervisory Committee on 29 Mar. 2012, at which reviewed
and approved the Proposal on Re-election of the Supervisory Committee (for details, please refer to the
Announcement on Resolutions Made at the Session of the Supervisory Committee on http://www.cninfo.com.cn/
dated 31 Mar. 2012), and it also submitted the said proposal to the First Special Shareholders’ General Meeting
for 2012 held on 17 Apr. 2012 for review and approval as well as implemented it (for details, please refer to the
Announcement on Resolutions Made at the First Special Shareholders’ General Meeting for 2012 on
http://www.cninfo.com.cn/ dated 18 Apr. 2012). And the work on re-election of the Supervisory Committee of the
Company has been completed.
3. The 1st Session of the 7th Board of Director of the Company was convened on 17 Apr. 2012, at which reviewed
and approved the Proposal on Engagement of General Manager (for details, please refer to the Announcement on
40
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Resolutions Made at the 1st Session of the 7th Board of Director of the Company on http://www.cninfo.com.cn/
dated 19 Apr. 2012); and the 2nd Session of the 7th Board of Directors of the Company was convened on 17 May
2012, at which reviewed and approved the Proposal on Engagement of Vice General Manager, Proposal on
Engagement of CFO and Proposal on Engagement of the Secretary of the Board and the Securities Affairs
Representative, and the new session of the Board of Directors has finished all the procedures on engagement of
the managers.
XIV. Significant events of the subsidiaries of the Company
Inapplicable
XV. Particulars about issuing corporate bonds by the Company
Inapplicable
41
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Section VII. Change in Share Capital and Particulars about Shareholders
I. Particulars about the changes in share capital
Before the change Increase/decrease (+, -) After the change
Capitalizat
Issuance ion of
Proportion Bonus Proportio
Amount of new public Others Subtotal Amount
(%) shares n (%)
shares reserve
fund
I. Shares subject to trading
0 0% 0 0 0 0 0 0 0%
moratorium
1. Shares held by the State 0 0% 0 0 0 0 0 0 0%
2. Share held by
0 0% 0 0 0 0 0 0 0%
state-owned corporation
3. Shares held by other
0 0% 0 0 0 0 0 0 0%
domestic corporation
Among which: shares held
0 0% 0 0 0 0 0 0%
by domestic corporation
Shares held by domestic
0 0% 0 0 0 0 0 0 0%
natural persons
4. Shares held by foreign
0 0% 0 0 0 0 0 0%
investors
Among which: Shares held
0 0% 0 0 0 0 0 0 0%
by foreign corporation
Shares held by foreign
0 0% 0 0 0 0 0 0 0%
natural persons
5. Share held by senior
0 0% 0 0 0 0 0 0 0%
management staff
II. Shares not subject to 1,011,660, 1,011,660
100% 0 0 0 0 0 100%
trading moratorium 000 ,000
1. Renminbi ordinary 891,660,0 891,660,0
88.14% 0 0 0 0 0 88.14%
shares 00 00
2. Domestically listed 120,000,0 120,000,0
11.86% 0 0 0 0 0 11.86%
foreign shares 00 00
3. Overseas listed foreign
0 0% 0 0 0 0 0 0 0%
shares
4. Other 0 0% 0 0 0 0 0 0 0%
1,011,660, 1,011,660
III. Total amount of shares 100% 0 0 0 0 0 100%
000 ,000
Reason for the changes in share capital
Approval for changes in share capital
□ Applicable √ Inapplicable
Transfer for changes in share capital
Effects of changes in share capital on the basic EPS, diluted EPS, net assets per share attributable to common shareholders of the
Company and other financial indexes over the last year and last period
□ Applicable √ Inapplicable
Other contents that the Company considers necessary or required by the securities regulatory authorities to disclose
42
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
II. Issuance and listing of securities
1. Securities issued in the previous three years
Name of security
Issuing price (or Number of Number approved Ending date of
and its derivative Issuing date Listing date
interest rate) issuance for listing trade
security
Stock
Convertible company bonds, bonds with attached warrant, company bonds
Warrant
Explanation on securities issuance over the past three years
The Company had not issued any stocks or derivative securities over the last three years up to the period-end
2. Explanation on changes in share capital & the structure of shareholders, the structure of assets and
liabilities
On 26 Mar. 2009, all shares of the Company were released from trading moratorium and listed for trade; and the
total amount of share capital and the structure of shareholders remained unchanged during the reporting period.
3. Existent internal staffs’ shares
Issuing date of internal staffs’ Issuing amount of internal staffs’ shares
Issuing price of internal staffs’ shares (Yuan)
shares (share)
Explanation on the existent The Company’s internal staffs’ shares has been approved to list for trade since 26 Aug. 1994, so
internal staffs’ shares now the Company has no internal staffs’ shares.
III. Shareholders and actual controller
1. Total number of shareholders and their shareholding
Unit: share
Total number of shareholders at the Total number of shareholders on the fifth trading day
84,411 83,949
reporting period before the disclosure date of the annual report
Particulars about shares held by shareholders with a shareholding percentage over 5%
Total Increase Number Pledged or frozen shares
Number
shares /decreas of
of
Name of Nature of Shareholding held at e during non-trad
tradable
shareholder shareholder percentage (%) the the able
shares Status of shares Number of shares
period-e reportin shares
held
nd g period held
SHENZHEN
INVESTMENT State-owned 642,884
63.55% 0 0 0
HOLDINGS CO., corporation ,262
LTD
THE
CUSTOMER
CREDIT
TRANSACTION Domestic
3,709,9
GUARANTEE non-state-owned 0.37% 0 0 0
23
SECURITIES corporation
ACCOUNT OF
GF SECURITIES
CO., LTD.
The CUSTOMER Domestic 0.35% 3,581,3 0 0 0
43
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
CREDIT non-state-owned 64
TRANSACTION corporation
GUARANTEE
SECURITIES
ACCOUNT OF
CHINA
SECURITIES
CO., LTD.
Domestic natural 1,750,0
JING JIANJUN 0.17% 0 0 0
person 00
GUOTAI
JUNAN
Foreign 1,585,5
SECURITIES(H 0.16% 0 0 0
corporation 50
ONGKONG)
LIMITED
THECUSTOME
R CREDIT
TRANSACTION
GUARANTEE Domestic
1,279,0
SECURITIES non-state-owned 0.13% 0 0 0
00
ACCOUNT OF corporation
CHANGJIANG
SECURITIES
CO., LTD.
Domestic natural 1,239,6
XIAO JIANPING 0.12% 0 0 0
person 86
WANG Domestic natural 1,095,8
0.09% 0 0 0
ZHONGMING person 08
Foreign natural 1,092,1
WU HAOYUAN 0.09% 0 0 0
person 00
Domestic natural
LIU YONGKUI 0.08% 944,100 0 0 0
person
Strategic investor or general
corporation becoming a top ten
Naught
shareholder due to placing of new
shares (if any)
Explanation on associated
relationship or/and persons acting in
Naught
concert among the above-mentioned
shareholders:
Particulars about shares held by the top ten shareholders holding shares not subject to trading moratorium
Type of shares
Name of shareholder Number of tradable shares held at the year-end (Note 4)
Type Number
SHENZHEN INVESTMENT Renminbi
642,884,262 642,884,262
HOLDINGS CO., LTD ordinary shares
THE CUSTOMER CREDIT
TRANSACTION GUARANTEE Renminbi
3,709,923 3,709,923
SECURITIES ACCOUNT OF GF ordinary shares
SECURITIES CO., LTD.
THE CUSTOMER CREDIT
TRANSACTION GUARANTEE Renminbi
3,581,364 3,581,364
SECURITIES ACCOUNT OF ordinary shares
CHINA SECURITIES CO., LTD.
Renminbi
JING JIANJUN 1,750,000 1,750,000
ordinary shares
GUOTAI JUNAN Domestically
SECURITIES(HONGKONG) 1,585,550 listed foreign 1,585,550
LIMITED shares
The CUSTOMER CREDIT
TRANSACTION GUARANTEE
Renminbi
SECURITIES ACCOUNT OF 1,279,000 1,279,000
ordinary shares
CHANGJIANG SECURITIES CO.,
LTD.
44
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Renminbi
XIAO JIANPING 1,239,686 1,239,686
ordinary shares
Domestically
WANG ZHONGMING 1,095,808 listed foreign 1,095,808
shares
Domestically
WU HAOYUAN 1,092,100 listed foreign 1,092,100
shares
Renminbi
LIU YONGKUI 944,100 944,100
ordinary shares
Explanation on associated
relationship or/and persons acting in
concert among the top ten tradable
Unknown
shareholders and between the top ten
tradable shareholders and the top ten
shareholders
Explanation on shareholders
participating in the margin trading Naught
business (if any)
2. Particulars about the controlling shareholder
Corporation
Legal
Date of
Name of controlling representative
establishm Organization code Registered capital Business scope
shareholder / company
ent
principal
Investment, operation
and management of the
wholly-owned, holding
and shareholding
state-owned equity by
restructurings,
operation of capital,
disposals of assets and
other measure; Real
Shenzhen Investment Fan Oct. 13, estate development and
76756642-1 RMB 5.6 billion
Holdings Co., Ltd. Mingchun 2004 operation on lawful
land; Policy investment
and strategic
investment required by
Municipal SASAC;
Guarantees for
municipal state-owned
enterprises; Other
businesses authorized
by Municipal SASAC.
As of 31 Dec. 2012, the Company’s total assets was RMB 169.961 billion, the total liabilities was
RMB 100.359 billion and the owners’ equities was RMB 69.602 billion; the revenue of sales realized
in 2012 was RMB 20.629 billion, the total amount of profits was RMB 6.898 billion and the net
profits was RMB 5.451 billion, while the net cash flow from operating activities was RMB 1.514
billion (the above data has been audited).
In the future, the Company will deeply implement the view of scientific development, speed up the
Operating results, financial transformation of economic development and closely surround its functional positioning, as well as
situation, cash flow and reinforce the property right management, integration & reorganization, capital operation, strategic
future development strategy, investment and business collaboration, so as to realize large increase of the main economic indices
etc. during the planning period; it will smoothly finish the investment and financing tasks handed over by
the municipal government; it will actively conduct the investment on strategic emerging industry; it
will realized the effective centralization of system resources towards the dominant enterprises in the
fields of financial service, real estate, advanced manufacturing and strategic emerging industry, etc.,
so as to cultivate a groups of famous enterprises with core competitiveness and industrial influence;
besides, it will substantially increase the assets securitization level, so as to increase the control and
influence power of the state-owned capital.
Shares held by the SWY（000011）: with a total of 380,366,000 shares held and shareholding proportion of 63.71%；
45
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
controlling shareholder in SSB（000019）: with a total of 40,143,600 shares held and shareholding proportion of 16%；
other listed companies by SFZ（000045）: with a total of 182,611,500 shares held and shareholding proportion of 54.26%；
holding or shareholding ZGPA （601318）：with a total of 481,359,600 shares held and shareholding proportion of 6.08%；
during the reporting period SZGJ (00152, listed on the main board of HongKong Stock Exchange): with a total of 7,955,216,800
shares held and shareholding proportion of 48.59%；
Change of the controlling shareholder during the reporting period
□ Applicable √ Inapplicable
3. Particulars about the actual controller
Corporation
Legal
Date of
representative
Name of the actual controller establishm Organization code Registered capital Business scope
/ company
ent
principal
Perform the
responsibilities of
Shenzhen State-owned investor on behalf of
1 Aug.
Assets Supervision and Zhang Xiaoli K3172806-7 the state, and supervise
2004
Administration Commission and manage the
authorized state-owned
assets legally.
Shenzhen Municipal State-owned Assets Commission was established on 31 Jul. 2004, and changed
Operating results, financial its name as “Shenzhen Municipal People’s Government State-owned Assets Supervision and
situation, cash flow and Administration Bureau” in 2009, and changed its name as “Shenzhen Municipal People’s
future development strategy, Government State-owned Assets Supervision and Administration Commission”. As the special
etc. organization directly under Shenzhen Municipal Government, it performs the responsibilities of
investor on behalf of the state, and supervises and manages the authorized state-owned assets legally.
Change of the actual controller during the reporting period
□ Applicable √ Inapplicable
The property right and controlling relationship between the Company and the actual controller are as follows:
Shenzhen State-owned Assets Supervision
and Administration Commission
Shenzhen Investment Holdings Co., Ltd.
The Company
The actual controller controls the Company via trust or other ways of asset management
□ Applicable √ Inapplicable
4. Particulars about other corporate shareholders’ share holding over 10% of shares
Legal
Date of
Name of corporate representative Business scope or
establishm Organization code Registered capital
shareholder / company management activities
ent
principal
46
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
IV. Particulars on shareholding increase scheme during the reporting period proposed or
implemented by the shareholders and act-in-concert persons
Disclosure date
Name of Shares proportion Initial disclosure for the
Amount of shares Shares proportion
shareholder / to be increased Amount of shares increased actually date of the completion of
to be increased
act-in-concert actually held shareholding implementing the
holding （%） （%）
person increase scheme shareholding
increase scheme
Explanation on other situations:
Naught
47
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Section VIII. Directors, Supervisors, Senior Management Staffs
and Employees
I. Changes in shareholding of directors, supervisors and senior management staffs
Amount of Amount of
shares shares Amount of
Shares
increased decreased shares held
Tenure Ending held at the
Name Office title Sex Age Start date at the at the at the
status date year-begin
reporting reporting period-end
(share)
period period (share)
(share) (share)
Chairman
Zhou 17 Apr. 16 Apr.
of the Current Male 58 0 0 0 0
Jianguo 2012 2015
Board
General
Chen Manager 17 Apr. 16 Apr.
Current Male 49 0 0 0 0
Maozheng and 2012 2015
Director
Zhuang 17 Apr. 16 Apr.
Supervisor Current Male 58 0 0 0 0
Quan 2012 2015
Deng
17 Apr. 16 Apr.
Kangchen Director Current Male 47 0 0 0 0
2012 2015
g
17 Apr. 16 Apr.
Wen Li Director Current Female 43 0 0 0 0
2012 2015
Jiang 17 Apr. 16 Apr.
Director Current Female 49 0 0 0 0
Lihua 2012 2015
CFO and 17 Apr. 16 Apr.
Zhang Lei Current Male 45 0 0 0 0
Director 2012 2015
Zhou Independe 17 Apr. 25 Feb.
Current Male 43 0 0 0 0
Hanjun nt Director 2012 2014
Liu Independe 17 Apr. 16 Apr.
Current Male 49 0 0 0 0
Quanmin nt Director 2012 2015
Song Independe 17 Apr. 16 Apr.
Current Male 45 0 0 0 0
Botong nt Director 2012 2015
Wang 17 Apr. 16 Apr.
Supervisor Current Female 51 0 0 0 0
Xiuyan 2012 2015
17 Apr. 16 Apr.
Li Yufei Supervisor Current Female 35 0 0 0 0
2012 2015
Xiong 17 Apr. 16 Apr.
Supervisor Current Male 55 0 0 0 0
Xingnong 2012 2015
Shi 17 Apr. 16 Apr.
Supervisor Current Male 57 0 0 0 0
Chunrong 2012 2015
Vice
Yang 17 May 16 May
General Current Male 40 0 0 0 0
Jiayong 2012 2015
Manager
Vice
Teng 17 May 16 May
General Current Male 56 0 0 0 0
Xianyou 2012 2015
Manager
Vice
Wei 28 Sept. 16 May
General Current Female 47 0 0 0 0
Hanping 2012 2015
Manager
Secretary
17 May 16 May
Chen Ji to the Current Male 41 0 0 0 0
2012 2015
Board
Xu 11 Feb. 17 Apr.
Supervisor Former Male 61 0 0 0 0
Zhenhan 2009 2012
48
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Feng 11 Feb. 17 Apr.
Supervisor Former Male 42 0 0 0 0
Hongwei 2009 2012
Vice
Nie 17 May 30 Aug.
General Former Male 42 0 0 0 0
Liming 2012 2012
Manager
Total -- -- -- -- -- -- 0 0 0 0
II. Post-holding situation
Main working experience of current directors, supervisors and senior management staffs over the past five years:
1. Zhou Jianguo: he was once the Vice GM of Shenzhen Investment Holdings Co., Ltd.. And he has been the
Secretary of the Party Committee and Chairman of the Board of the Company since Feb. 2009.
2. Chen Maozheng: he once was the Vice GM, Vice Secretary of the Party Committee, Director GM of Shenzhen
City Construction Development (Group) Co.. And he has been the Vice Secretary of the Party Committee and
Director as well as GM of the Company since Oct. 2009.
3. Zhuang Quan: he once was the Vice GM of Shenzhen Shenfubao Group Co., Ltd.; Vice Chairman of the
Supervisory Committee of Shenzhen Shenfubao Group Co., Ltd. and Shenzhen Shabao Group Co., Ltd.;
Chairman of the Supervisory Committee of Shenzhen Shenfubao Group Co., Ltd. and Shenzhen Shabao Group
Co., Ltd.; Chairman of the Supervisory Committee of Shenzhen Shenfubao Group Co., Ltd.. He has been the
Chairman of the Supervisory Committee of the Company since Apr. 2012.
4. Deng Kangcheng: he was once deputy director, director of the Office of Shenzhen Investment Holdings Co.,
Ltd., and supervisor of the Company. And he has been director, Vice Secretary of CPC and Secretary in Discipline
Inspection Committee of the Company since Feb. 2009.
5. Zhang Lei: he was once the Vice GM and GM of Guotou SAST Laser Co., Ltd., Deputy Chairman of Shenzhen
Shenfei Technology Co., Ltd., and CFO and Secretary to the Board of SDIC ZHONGLU FRUIT Co., Ltd. And he
has been the Director and CFO of the Company since Oct. 2010.
6. Zhou Hanjun: he once worked as auditor in Shenzhen East Sea Certified Public Accountants, partner of
Shenzhen Guangxin Certified Public Accountants, and now he is the partner accountant of Asia (Group)
Accounting Firm. And he has been the independent director of the Company since Feb. 2008.
7. Liu Quanmin: he ever worked as the full-time lawyer of Shaanxi Hengda Law Firm, and now he is the partner
and licensed lawyer of Guangdong Shenyatai Law Firm. He has been the independent director of the Company
since Oct. 2010.
8. Song Botong: he ever took posts of Deputy Chief of Civil Engineering Department in College of Architecture
and Civil Engineering and Chairman of Labor Union of Shenzhen University. Now he acts as Secretary of CPC in
College of Architecture and Civil Engineering of Shenzhen University, Standing Deputy Director of Research
Center for Real Estate of Shenzhen University. He has been the Independent Director of the Company since Oct.
2010.
9. Wen Li: she once worked as the Vice Chief of the Investment and Development Department, Vice Director of
Management Center for Construction Project of Shenzhen Investment Holdings Co., Ltd. And she has been the
Director of the Company since Sept. 2006.
10. Jiang Lihua: she once was the Vice Manager, Manager and Vice Chief of the Finance Department of Shenzhen
49
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Investment Holdings Co., Ltd.. And she has been acting as Director of the Company since Feb. 2009.
11. Wang Xiuyan: she once was the Audit Project Manager of the Audit Department of Shenzhen Investment
Holdings Co., Ltd.. And she has been acting as Supervisor of the Company since Feb. 2009.
12. Xiong Xingnong: he once was the Secretary of the Supervisory Committee and Deputy Manager of Audit
Supervisory Department of the Company. And he has been taking the post of Supervisor of the Company since
Jun. 2004.
13. Shi Chunrong: he ever worked as the Director to Office for Discipline Supervision & Investigation, Manager
of Property Operation Department, Director of 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 of Party-Masses Work Department and Vice Chairman of Labor Union in the
Company. He has been the Supervisor of the Company since Feb. 2009.
14. Li Yufei: she ever worked as the Assistant Manager of the Investment Department and Assistant Manager &
Vice Manager of Assets Management Centre as well as Senior Management Staff of Enterprise Dept. I in
Shenzhen Investment Holdings Co., Ltd.. And she has been the Supervisor of the Company since Apr. 2012.
15. Yang Jiayong: he ever took the posts of Director of the Office and Assistant GM of the Company; GM and
Secretary of Party General Branch in Shenzhen SPG Tariff Free Trade Co., Ltd. Since Jul. 2006, he has been
acting as the Deputy GM of the Company.
16. Teng Xianyou: he once was the Assistant GM and Vice GM of Shenzhen Tonge Group Co., Ltd., and
concurrently as GM of Shenzhen Municipal Engineering Corp. And he has been Vice GM of the Company since
Dec. 2009.
17. Wei Hanping: he ever worked as the Manager of the Leasing Operation Department in Shenzhen City
Construction Development (Group) Co. and the Manager of Cost Control Department of the Company. And he
has been the Vice GM of the Company since Sept. 2012.
18. Chen Ji: he once was the Director of the CPC Office of Shenzhen City Construction Investment Development
Company. And he has been the Secretary to the Board and Director of the Secretariat of Board of the Company
since Dec. 2002.
Post-holding in shareholders’ units
√ Applicable □ Inapplicable
Name of the
person holding Beginning Receives payment
Position in the shareholder’s Ending date
any post in any Name of the shareholder’s unit date of office from the
unit of office term
shareholder’s term shareholder’s unit?
unit
Vice Director of the
Administration Centre for the
Shenzhen Investment Holdings
Wen Li Construction and Management 1 Aug. 2011 Yes
Co., Ltd.
Projects of Shenzhen
Investment Holdings Co., Ltd.
Vice Chief of the Financial
Shenzhen Investment Holdings Budget Department of
Jiang Lihua 1 Dec. 2007 Yes
Co., Ltd. Shenzhen Investment Holdings
Co., Ltd.
Audit Manager of the Audit
Shenzhen Investment Holdings
Wang Xiuyan Department of Shenzhen 1 Dec. 2007 Yes
Co., Ltd.
Investment Holdings Co., Ltd.
50
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Senior Management Staff of
Shenzhen Investment Holdings
Li Yufei Enterprise Dept. I of Shenzhen 1 Dec. 2007 Yes
Co., Ltd.
Investment Holdings Co., Ltd.
Notes to
post-holding in
Naught
shareholders’
units
Post-holding in other units
√Applicable □Inapplicable
Name of the
person holding Position in other Beginning date of Ending date of Receives payment from
Name of other unit
any post in unit office term office term other unit?
other units
Asia (Group) Accounting
Zhou Hanjun Partner accountant 1 Mar. 2012 Yes
Firm
Guangdong Shenyatai Law
Liu Quanmin Partner lawyer of 1 Apr. 2007 Yes
Firm
College of Architecture
Song Botong and Civil Engineering of Secretary of CPC 1 Dec. 2010 Yes
Shenzhen University
Notes to
post-holding in Naught
other units
III. Remuneration for directors, supervisors and senior management staffs
Decision-making procedure, determining basis and actual payment for the remuneration of directors, supervisors and senior
management staffs
Decision-making
procedure for the It was executed according to the procedures stipulated in the Interim Measures for the Administration of
remuneration of directors, Human Resources of the Company.
supervisors and senior
management staffs
Their remuneration was decided in accordance with the Interim Provisions of the Annual Salary System
for Managers of the State-owned Enterprises in Shenzhen and spirit of relevant documents as well as the
Determining basis for the Interim Measures for the Administration of Human Resources of the Company.
remuneration of directors, The Directors Jiang Lihua and Wen Li, and the Supervisor Wang Xiuyan and Li Yufei took posts in the
supervisors and senior shareholders’ units without drawing remuneration from the Company.
management staffs With review and approval of the Shareholders’ General Meeting 2010 convened on 29 Jun. 2011,
allowance for each independent director was adjusted to RMB 5,000 (tax included) per month since Jun.
2011. Besides, they received no other rewards from the Company.
Actual payment for the
remuneration of directors, The Company paid their remuneration monthly according to relevant systems for remuneration
supervisors and senior management of the Company.
management staffs
Remuneration of the directors, supervisors and senior management staffs of the Company during the reporting period
Total Total
remuneration remuneration Actual
Name Position Sex Age Tenure status gained from the gained from remuneration at
Company shareholder’s the period-end
(Yuan) unit Yuan)
Chairman of
Zhou Jianguo Male 58 Current 66.25 66.25
the Board
General
Chen
Manager and Male 49 Current 71.93 71.93
Maozheng
Director
Zhuang Quan Supervisor Male 58 Current 30.75 30.75
Deng
Director Male 47 Current 54.22 54.22
Kangcheng
51
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Wen Li Director Female 43 Current
Jiang Lihua Director Female 49 Current
CFO and
Zhang Lei Male 45 Current 40.00 40.00
Director
Independent
Zhou Hanjun Male 43 Current 6.00 6.00
Director
Independent
Liu Quanmin Male 49 Current 6.00 6.00
Director
Independent
Song Botong Male 45 Current 6.00 6.00
Director
Wang Xiuyan Supervisor Female 51 Current
Li Yufei Supervisor Female 35 Current
Xiong
Supervisor Male 55 Current 29.80 29.80
Xingnong
Shi Chunrong Supervisor Male 57 Current 38.54 38.54
Vice General
Yang Jiayong Male 40 Current 54.22 54.22
Manager
Vice General
Teng Xianyou Male 56 Current 54.22 54.22
Manager
Vice General
Wei Hanping Female 47 Current 39.90 39.90
Manager
Secretary to the
Chen Ji Male 41 Current 38.54 38.54
Board
Xu Zhenhan Supervisor Male 61 Former 10.25 10.25
Feng Hongwei Supervisor Male 42 Former 37.17 37.17
Vice General
Nie Liming Male 42 Former 40.70 40.70
Manager
Total -- -- -- -- 624.49 0.00 624.49
Particulars about the equity incentives granted for the directors, supervisors and senior management of the Company
□ Applicable √ Inapplicable
IV. Changes in engagement and dismissal of Directors, Supervisors and Senior Management
Staffs within the reporting period
Name Position Type Date Reason
Chairman of the
Xu Zhenhan Supervisory Left the office 17 Apr. 2012 Session change and retirement
Committee
Feng Hongwei Supervisor Dismissed 17 Apr. 2012 Session change
Nie Liming Vice GM Left the office 30 Aug. 2012 Resignation for personal reason
V. Particulars about changes in core technical team or key technicians during the reporting
period (not directors, supervisors or senior management staffs)
During the reporting period, there were eleven staffs gaining promotion of positions, twenty five staffs reengaged,
four staffs adjusted the positions within the same level, two staffs to be arranged, one staff engaged by demotion
of positions and one staff dismissed for the Company through the internal assessment competitive selection. And
it introduced a total of nine professional technicians in architectural design, accounting, civil engineering, law and
etc., of which six persons with the education level above the bachelor degree and four persons with the
professional title above the intermediate.
52
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
VI. Particulars about employers of the Company
Up to the end of 2012, the Company in total had 1,777 employees, of which 1,119 production
personnel, 374 technicians, 65 sales personnel, 55 financial personnel and 64 administrative
personnel. Among them, 163 employers are undergraduates or above, 206 personnel are holders of
associate degree, 195 graduated from technical secondary school, 1,213 from senior high school or
below. The Company had 398 retirees.
53
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Section IX. Corporate Governance
I. Basic situation of corporate governance
In the reporting period, the Company strictly accorded with requirements of Company Law,
Securities Law, Code of Corporate Governance of Listed Companies and other laws and statutes,
continuously perfected its corporate governance, and standardized its operation. The actual situation
of corporate governance was in line with the requirements of the relevant normative documents.
The operating mechanism, of which the Board of Directors made decisions, the management team
took execution, and the Supervisory Committee implemented supervision.
(I) Preparations and holding of 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 normatively;
preparations, holding and disclosure of resolution of the Board sessions were normatively in line
with the Articles of Association and Rules of Procedure for the Board of Directors; Special
committees concerning strategy, audit, nomination, remuneration and appraisal under the Board can
operate positively and effectively; all directors performed their obligations in an honest and
diligence manner. In the reporting period, office term of the 6th board of directors has expired.
According to rules of articles of association, the first temporary shareholders’ general meeting in
2012 reviewed and approved the 7th board of directors on 17 April and the re-election was
successfully completed.
(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 fully play. Office term of the 6th board of directors has expired. According to rules of
articles of association, the first temporary shareholders’ general meeting in 2012 reviewed and
approved the 7th board of directors on 17 April and the re-election was successfully completed.
(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 restriction. Considering the re-election of the board of directors, the
management has been newly employed according to deliberations of the board of directors on 17
April and 17 May. On 12 July 2012, Mr. Nie Liming, Vice General Manager of the Company,
submitted the resignation because of personal reasons. On 30 Aug. 2012, the 6th session of the 7th
board of directors reviewed and approved that Mr. Nie Liming resigned from his post. According to
nomination of General Manager, the 7th session of the 7th board of directors reviewed and approved
that Ms. Wei Hanping was employed as the Vice General Manager of the Company.
(V)Revise of articles of association: during the reporting period, Articles of Association were
revised two times:
1. On 29 March 2012, “Proposal on Revising Articles of Association” was reviewed and passed on
the 16th session of the 6th board of directors and submitted on 17 April 2012 to the first temporary
shareholders’ general meeting in 2012 for approval. For details about“Amendment on Articles of
Association” see announcement of resolution on the 16th session of the 6th board of directors
published on Cninfo website(www.cninfo.com.cn).
2. on 13 Aug. 2012, “Proposal on Revising Articles of Association” was reviewed and passed on the
5th session of the 7th board of directors and submitted on 30 Aug. 2012 to the second temporary
shareholders’ general meeting in 2012 for approval. For details about“Amendment on Articles of
54
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Association” see announcement of 14 Aug. 2012 on Cninfo website(www.cninfo.com.cn).
Whether there existed differences between corporate governance and relevant requirements of
CSRC
□ Yes √ No
There existed no difference between corporate governance and relevant requirements of CSRC.
Progress of special activities of corporate governance, formulation and implementation of
registration and management system of insiders
(I) Progress of special activities of corporate governance
1. In order to implement “Basic Standards for Internal Control” and relevant assorted guidelines, the
Company officially started relevant work of enterprise internal control in April 2011 and employed
Shenzhen Branch of Deloitte Touche Tohmatsu Certified Public Accountants(hereinafter referred to
as Deloitte Touche Tohmatsu) as a consultancy of internal control construction, in accordance with
the Notification on Doing a Good Job Related to Internal Control Regulation Pilot in Listed
Companies of Shenzhen(SZJGSZ No.[2011]31) from Shenzhen Securities Regulatory Bureau. In
the reporting period, construction of internal control, in conformity with relevant notifications of
Shenzhen Securities Regulatory Bureau, was fluently carried out. According to basic standards,
appraisal guidelines and other relevant laws and regulations, semi-annual and annual
self-assessment of internal control has been conducted and finished (for details of self-assessment
report on internal control see announcements published on Cninfo website www.cninfo.com.cn ).
The Company has already employed RSM China Certified Public Accountants (Special General
Partnership) to conduct independent audit of internal control.
In the reporting period, the Company established internal control for business and events within
apprisal scope,effectively implemented interal control and achieved the goals of internal control
without any significant defect. From base date of assessment report on internal control to its issue
date, there existed no significant change in internal control which exerted substantial effects on
assessment results.
2. In the reporting period, in order to carry out “Notifiction on Well Handle Protection and Publicity
Work for Investors of Listed Companies”(SZJGSZ No.[2012]60), further improve protection and
publicity work for investors, promote protection and publicity, fulfill social obligations, lead
investors to rational and long-term investment, feasibly guard legal rights and interests of investors
and establish healthy investment culture. The Company, in conformity with requirements of the
above notification, founded a leading group of protection and publicity for investors with Chairman
of the Board of Directors as the head and established an office for protection and publicity work to
be reponsible for the specific implementation of protection and publicity work for investors of listed
companies. When carrying out such activities, the Company formulated “Plan on Protection and
Publicity Work for Investors” and conveyed the relevant documents to controlling shareholders,
directors, supervisors, senior executives and employers from relevant departments and important
positions with various methods and channels such as corporate website, integrated information
system of EAS, emails, publicity posters; at the same time, the Company would change the edition
of website and improved interactive function of the column of“relationship with investors” in order
to strengthen communication with medium-sized and small investors.
(II) The formulation and implementation of registration and management system of insiders further
standardized management of inside information, behavior of selling and buying shares of the
Company by insiders. According to “Company Laws”, “Securities Laws”, “Registration and
Management Regulation of Insiders of Listed Companies”from CSRC and “Rules of Listing Shares
in Shenzhen Stock Exchange”, “Management Rules for Insiders”was reviewed and passed by the
board of directors of the Company on 28 Oct. 2009. In the reporting period, the Company, in
accordance with relevant laws, regulations and Articles of Association, conducted disclosure of
55
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
information authentically, accurately, completely, timely and fairly. The controlling shareholder of
the Company, Shenzhen Investment Holdings Co., Ltd., is under direct control of Shenzhen SASAC.
According to relevant requirements of Shenzhen State-owned Assets Supervision and
Administration Commission, the Company need send bulletins and attached lists about monthly
financial indicators to controlling shareholders. The Company has already conducted registration
and reports in line with requirements of Shenzhen Securities Regulatory Bureau and Shenzhen
Stock Exchange.
II. Particulars about annual shareholders’ general meetings and temporary shareholders’
general meetings in the reporting period
1. Particulars about annual shareholders’ general meetings in the reporting period
Name of proposal
Date of holding the
Meeting passing on the Resolution Date of disclosure Index for disclosure
meeting
meeting
2011 Annual Work
Report of the Board
of Directors, 2011
Annual Work Report
of the Supervisory
Committee, 2011
Announcement on
Annual Plan on
resolution of 2011
2011 annual Profit Distribution,
annual shareholders’
shareholders’ general 17 May 2012 2011 Annual Report, approval 18 May 2012
general meeting
meeting Work Report of
(Cninfo website)
Independent
www.cninfo.com.cn
Directors, 2012
Annual Plan of
Financial Budget,
Proposal on
continuing recruiting
accounting firm
2. Particulars about temporary shareholders’ general meetings in the reporting period
Name of proposal
Date of holding the
Meeting passing on the Resolution Date of disclosure Index for disclosure
meeting
meeting
Proposal on
Revising Articles of
Association,
Proposal on
Changing Session
the Board of
Directors, Proposal
on Providing Loans
and Mortgage
Guarantee for Announcement on
resolution of the first
Shenzhen Zhen Tong
The first temporary temporary
Engineering Co.,
shareholders’ general 17 April 2012 Ltd., Proposal on Approval 18 April 2012 shareholders’ general
meeting in 2012 meeting in 2012
Providing Credit
Guarantee for Letter (Cninfo website)
www.cninfo.com.cn
of Guarantee Paid by
Contracting Project
of Shang Lin Garden
Project of ShenZhen
Special Economic
Zone Real
Estate&Properties
(Group).co.，td．
The second Proposal on Announcement on
temporary 30 Aug. 2012 Revising Articles of Approval 31 Aug. 2012 resolution of the
shareholders’ general Association, second temporary
56
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
meeting in 2012 Proposal on shareholders’ general
Employing meeting in 2012
Accounting Firm of (Cninfo website)
Internal Control www.cninfo.com.cn
Audit.
Announcement on
Proposal on
resolution of the
Changing
The third temporary third temporary
Accounting Firm of
shareholders’ general 7 Dec. 2012 Approval 8 Dec. 2012 shareholders’ general
Annual Financial
meeting in 2012 meeting in 2012
Audit and Internal
(Cninfo website)
Control Audit
www.cninfo.com.cn
III. Duty performance of independent directors during the reporting period
1. Attendance of independent directors in board meetings and shareholders’ general meeting
Attendance of independent directors in board meetings
Number of
Number of Whether being
meetings Number of Number of Number of
meetings absent from
Name of independent independent meetings meetings meetings skipped
attended in the meetings in
director directors are attended on the attended by from
means of person two times
supposed to spot mandatary
communication in succession
attend during the
reporting period
Zhou Hanjun 12 5 7 0 0 No
Liu Quanmin 12 5 7 0 0 No
Song Botong 12 5 7 0 0 No
Number of shareholders’ general
meetings independent directors need 4
attend
Explanations about reasons of being absent from the board meetings in person two times in succession
2. Particulars about objections to relevant events of the Company raised by independent
directors
Whether independent directors raised objections to relevant events of the Company
□ Yes √ No
In the reporting period, independent directors raised no objection to relevant events of the Company.
3. Other explanations about duty performance of independent directors
Whether advices about the Company raised by independent directors were adopted
□ Yes √ No
Explanations about whether advices about the Company raised by independent directors were adopted
Non-applicable
IV. Duty performance of special committees affiliated to the board of directors during the
reporting period
(I) Duty performance of the Audit Committee under the board of directors
During the reporting period, the Audit Committee reviewed on the Company’s following issues:
Arrangement on the Annual Audit Work, Periodic Financial Report, Profit Distribution Plan,
Engagement of CPAs Firm, Written Submission of the Administration on CPAs Firm, Construction
of Internal Control, Fund Transfer Between Listed Companies and Related Parties and Guarantee
Events, etc.. Besides, it also kept full and necessary communication with the annual auditors of the
Company.
57
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Upon the start of the audit for the 2012 Annual Report, the Audit Committee actively promoted the
progress of the audit work and conducted communication with the CPAs firm to determine the
arrangements for the audit. During the reporting period, the Audit Committee has convened three
sessions, reviewed the Company’s 2012 financial statements for two times and the preliminary
auditing result issued by the annual auditors of the Company, as well as issued their opinions after
the review. The Audit Committee made the summary for the 2012 annual audit work as followings:
1. Review opinions issued concerning the Company’s 2011 Annual Financial Report
Based on their professional knowledge and experience, the members of Audit Committee reviewed
the 2011 Annual Financial Report prepared by the Company. In the reporting period, according to
relevant regulations of CSRC, the Audit Committee issued two review opinions on the annual
report.
After finishing formulating annual financial statements, the Audit Committee of the board of
directors carried out meticulous review. 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
2012 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
2012 Financial Report prepared by RSM China Certified Public Accountants (Special General
Partnership)for 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 2012 and its financial position as at 31 Dec. 2012 in all major aspects.
2.The Committee’s supervising and urging the audit work of the CPAs 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 CPAs
firm. Upon the presence of the audit team, the Committee communicated with the person 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 2012 annual audit conducted by RSM China Certified Public Accountants
(Special General Partnership)
In accordance with stipulations on relevant work for 2012 annual report by CSRC and Shenzhen
Stock Exchange, the Company’s Audit Committee summarized the 2010 annual audit conducted by
RSM China Certified Public Accountants (Special General Partnership) (hereinafter referred to as
“RSM China”) as follows:
Considering that the Company employed RSM China as the audit institution of financial audit and
internal control audit, the financial audit and internal control audit would be conducted
synchronously.
(1) Preparation before the audit
① Formulation of the audit plan
The 2012 annual audit lasted from 5 Nov. 2012 to 29 March 2013 as schedule.
Of which, the pre-audit and internal test lasted from 5 Nov. 2012 to 31 Jan. 2013; the substantial
58
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
test lasted from 31 Jan. 2012 to 28 Feb. 2013; the compilation of audit report, its re-check in CPAs
firm and formulation of first draft lasted from 1 Mar. 2012 to 15 Mar. 2012.
② 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 process
From 5 Nov. 2012, the audit team from RSM China conducted a thorough audit on the Company
and its subsidiaries. During the audit process, the Audit Committee, for several times, urged RSM
China to closely follow the audit schedule and finish the audit on time. RSM China submitted to the
Audit Committee the first draft of the Audit Report of the 2012 Annual Report on 17 March 2013,
issued preliminary audit opinions on financial accounting statements and internal control
assessment. The Audit Committee reviewed again the financial accounting statements and
assessment report on internal control after conducting preliminary audit and held the opinion that:
the above statements factually, accurately, completely demonstrated financial status and operation
results of the Company up to 31 Dec. 2012, and they approved the formation of 2012 Annual
Report and Abstract on the basis of the above statements; the above assessment report on internal
control factually, accurately, completely demonstrated construction results of internal control of the
Company up to 31 Dec. 2012, and they approved the formation of assessment report on internal
control and audit report on internal control on the basis of the above report. On 28 March 2013, the
final version of audit report was issued. And this marked the end of the site audit conducted by
RSM China on the Company’s 2011 financial report.
(3) Audit results
RSM China issued the standard unqualified 2011 Annual Audit Report to the Company. And the
Audit Committee was of the opinion that RSM China Certified Public Accountants (Special General
Partnership) excellently accomplished the audit of the Company’s 2011 Annual Financial Report.
4. In the reporting period, because of the merger of Shenzhen Branch of China Audit International
Certified Public Accountants Ltd. and RSM China Certified Public Accountants (Special General
Partnership), the Audit Committee conducted a research and formed a resolution in respect of
employing RSM China Certified Public Accountants (Special General Partnership) as accounting
firm of annual financial audit and internal control audit; agreed that this change was submitted to
shareholders’ general meeting for approval after being reviewed by the board of directors.
(II) Duty performance of Nomination Committee under the Board of Directors
In the reporting period, the office term of the 6th board of directors expired. The Nomination
Committee examined the qualifications of candidates of the 7th board of directors and widely
collected opinions; agreed that candidates of the 7th board of directors are submitted to the board of
directors and shareholders’ general meeting for deliberation; examined the qualifications of
candidates of Vice General Manager, CFO and Secretary of the Board of Directors of the Company
and widely collected opinions; agreed to submit the above candidates to the board of directors for
deliberation.
(III) Duty performance of Remuneration and Appraisal Committee under the Board of Directors
The Remuneration and Appraisal Committee under the Board carefully examined the annual
remuneration of the Company’s directors, supervisors and senior executives disclosed in the 2012
Annual Report. And it was of the opinion that: the decision-making procedure concerning the
remuneration of the directors, supervisors and senior executives was in line with relevant
regulations; the standards for remuneration paid to the Company’s directors, supervisors and senior
executives complied with the remuneration system; and the remuneration disclosed in the 2012
Annual Report was factual and accurate.
59
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
V. Particulars about work of the supervisory committee
Whether there existed risks in the Company according to supervision of the supervisory committee during the reporting period
□ Yes √ No
The supervisory committee held no objection to matters under supervision during the reporting period.
VI.Independence of the Company from the controlling shareholders in business, personnel,
assets, organization and financing of the Company
(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.
VII. Particulars about horizontal competition
There objectively existed operation in the same business between the Company and Shenzhen
Properties & Resources Development(Group) Ltd. (hereinafter referred to “Properties Group”), but
substantial competition was never formed. Properties Group and our company were both founded
under the leadship of government in order to meet the need of constructing Shenzhen Special
Economic Zone. Controlling shareholder of the Company— Shenzhen Investment Holdings Co.,
Ltd. is independent corporate enterprise wholly owned by Shenzhen SASRC, executed
shareholder’s rights to listed companies in comformity with laws; it was able to ensure the
independence of listed companies in respect of corporate governance such as decision-making,
execution, supervision; there did not exist such situations as occupying funds of listed companies
that damaged interests of our company and medium and small shareholders. On 11 Oct. 2010,
Shenzhen Investment Holdings Co., Ltd., according to requirements of Shenzhen Stock Exchange,
officially submitted “Statements and Commitments” in which it explicitly promised 10 items about
ensuring the legal and independent operation of listed companies. The Company, in strict
accordance with requiremens of normative governance of listed companies, formulated and
perfected Articles of Association and a series of systems in financing, audit, human resource,
development and sale; standardized corporate governance, independently and legally operated and
basically avoided horizontal competition with controlling shareholders, actual controller and
enterprises they belong to.
VIII. Particulars about appraisal and incentive for senior executives
In the reporting period, the Company successfully conducted change of sessions of the board of
directors, the supervisory committee and the management. The management was examined,
appraised and employed by the board of directors; in the means of open competition, the board of
directors chose and recruited a Vice General Manager inside the Company. The Company executed
annual salary system for senior executives, and did not implement stock incentive plan.
60
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Section X. Internal Control
I. Construction of internal control
The Company, according to Notification on Doing a Good Job Related to Internal Control
Regulation Pilot in Listed Companies(Letter No.[2011]31) from listing department of CSRC, and
Notification on Doing a Good Job Related to Internal Control Regulation Pilot in Listed Companies
of Shenzhen (Letter No.[2011]31) from Shenzhen Securities Regulatory Bureau, established
internal control system on the basis of “Work Plan on Implementing Internal Control Regulation”.
The board of directors is the highest decision-making institution and the final people in charge of
internal control appraisal; supervises the effective implementation and self-appraisal of internal
control; coordinate internal control audit. Leading group of internal control affiliated to the board of
directors is responsible for construction and appraisal of internal control. Internal control
construction office specifically organizes and implements internal control work under the guideline
of leading group and the specific appraisal of internal control is conducted by appraisal group of
internal control. Leading group is the decision-making unit of internal control appraisal while
internal control construction office is the management unit of internal control appraisal. The report
process of internal control appraisal: appraisal group of internal control → internal control
construction office→leading group of internal control→the board of directors.
The Company employed Shenzhen Branch of Deloitte Touche Tohmatsu Certified Public
Accountants which provided consultancy about internal control and assisted the Company in
internal control assessment and also employed RSM China Certified Public Accountants which
conducted independent audit of internal control.
II. Statement on the Responsibility for Internal Control from the Board of Directors
The Board of Directors and all its directors hereby ensure that this announcement contains no false
information, misleading statement or material omission, and shall be jointly and severally liable for
the factuality, accuracy and completeness of the information carried in this announcement.
Establishing, perfecting and effectively conducting internal control is the liability of the Board of
Directors; establishment and implementation of internal control conducted by the Board is under the
supervision of the supervisory committee; the management is responsible for organizing and
guiding daily operation of internal control.
The goals of the Company’s internal control: focus on the key business scope of the Company,
improve core business process, reasonably guarantee the legality and compliance of the Company’s
operating management, safety of assets, authenticity and completeness of financial report and
relevant information; at the same time, continuously improve efficiency of internal control design
and operation, totally improve management level of internal control to lay a solid foundation for the
development strategy of the Company. Because of the inherent limit of internal control, the above
goals only could be provided reasonable guarantee.
III. Basis of establishing internal control of financial statements
The Company, according to basic standards and mating guidelines jointly issued by five ministries
and commissions including ministry of finance, “Guidelines of Normative Operation of Listed
Companies”issued by Shenzhen Stock Exchange and requirements of Notification on Doing a Good
Job Related to Internal Control Regulation Pilot in Listed Companies of Shenzhen from Shenzhen
Securities Regulatory Bureau of CSRC (hereinafter referred to as “SZSRB”), conducted relevant
work of internal control. On the basis of regular supervision and special supervision to internal
control, the Company appraised the design and efficiency of internal control of the Company up to
31 Dec. 2012.
61
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
IV. Self-assessment report of internal control
Specific details about significant defects of internal control during the reporting period found in self-assessment report of internal
control
During the reporting period, no significant defect of internal control was found.
Disclosure date of whole article of
self-assessment report of internal 30 March 2013
control
Index for disclosure of whole
article of self-assessment report of Cninfo website (www.cninfo.com.cn) “Self-assessment Report of Internal Control”
internal control
V. Audit report of internal control
√ Applicable □ Non-applicable
Audit opinion in audit report of internal control
We believe, Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. maintained effective internal control of
financial statements in all significant aspects on 31 Dec. 2012 in accordance with Basic Standards for Internal Control and relevant
regulations.
Disclosure date of whole article of
30 March 2013
audit report of internal control
Index for disclosure of whole
article of audit report of internal Cninfo website (www.cninfo.com.cn) “Audit Report of Internal Control”
control
Whether the accounting firm issued non-standard audit report of internal control
□ Yes √ No
Whether audit report of internal control issued by accounting firm was consistent with self-assessment report of the board of directors
√ Yes □ No
VI. Establishment and implementation of institution of clarifying responsibility for major
mistakes in annual report
In order to further improve corporate governance and standardize corporate management, the
Company reviewed and passed Institution of Clarifying responsibility for major mistakes in
information disclosure of annual report in the 5th session of the 6th board of directors on 19 April
2010 and strictly implemented the institution.
During the reporting period, there existed no major mistake of information disclosure of annual
report.
62
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Section XI. Financial Statements
I. Audit report
Type of audit opinion Standard unqualified audit opinion
Date of signing audit report 28 March 2013
RSM China Certified Public Accountants (Special General
Name of audit institution
Partnership)
Reference number of audit report RSM China SZ [2013] No. 3802
Main body of audit reports
To The Board of Directors of SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE &
PROPERTIES (GROUP) CO. Ltd.：
We have audited the accompanying financial statements of SHENZHEN SPECIAL ECONOMIC
ZONE REAL ESTATE & PROPERTIES (GROUP) CO. Ltd. and its subsidiaries (hereinafter shall be
referred as “the Group”) consisting of consolidated balance sheet as at December 31, 2012, and
the consolidated income statement, cash flow statement and consolidated statement of change in
owner’s equity for the year then ended, and the notes to financial statements.
Management’s responsibility for the financial statements
It is the responsibility of the Group’s management to prepare and present fairly the financial
statements. These responsibilities includes: (a) prepare the financial statement in conformity with
the requirements of Accounting Standards Business Enterprises, the Accounting Regulations
Business Enterprises and make true and fair presentation;(b) design, perform and maintain the
internal control related to the financial statements to ensure that these financial statements are free
of material misstatement, whether caused by fraud or errors.
Auditors’ responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We
conducted our audit in accordance with relevant rules in the Chinese Auditing Standards for the
Certified Public Accountants. Those standards require that we follow the Standards of China CPA’s
Professional Ethics, plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement.
An audit includes performing audit process to obtain evidence supporting the amounts and
disclosures in the financial statements. Auditing procedures are based on the CPAs’ judgment,
including assessing the risk of material misstatement caused by accounting fraud or errors. When
63
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
assessing the risk, we consider the internal control related to the preparation of financial
statements in order to select the proper auditing process. An audit also includes assessing the
accounting principles used and significant estimates made by the Group, as well as evaluating the
overall financial statements presentation.
We believe that the evidence we obtained are appropriate and our audit provides a reasonable
basis for our opinion.
Audit opinion
In our opinion, the financial statements of the Group present fairly, in all material respects, the
Company’s and its subsidiaries’ financial position as of December 31, 2012 and the company’s
results of operation and cash flows for the year then ended in accordance with Accounting
Standards for Business Enterprises.
RSM China Certified Public Certified Public Accountant
Accountants
Beijing，China Certified Public Accountant
March 28, 2013
64
Consolidated Balance Sheet
As of 31 December 2012
Prepared by：SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Currency: RMB Yuan
Item Note Closing balance Opening balance
Current Assets：
Monetary funds 7.1 496,805,905.01 333,469,243.72
Account receivables 7.2 24,413,187.02 19,139,800.22
Prepayments 7.3 39,677,550.07 40,460,834.76
Interest receivable 7.4 -- 341,000.00
Dividends receivable 7.5 1,052,192.76 --
Other receivables 7.6 56,894,335.01 46,087,935.04
Inventories 7.7 2,431,754,464.54 2,132,760,206.58
Non-current asset due within one year -- --
Other current assets 7.8 7,780,460.78 14,453,433.68
Total current assets 3,058,378,095.19 2,586,712,454.00
Non-current assets
Long-term equity investments 7.9 75,225,969.30 63,346,188.26
Investment properties 7.10 487,373,443.43 508,001,693.51
Fixed assets 7.11 63,204,808.66 60,918,611.65
Intangible assets 7.12 5,866,106.75 6,196,086.71
Long-term deferred assets 7.13 427,321.35 591,264.09
Deferred tax assets 7.14 19,881,649.62 20,403,232.83
Other non-current assets 7.15 2,413,434.00 4,410,948.69
Total non-current assets 654,392,733.11 663,868,025.74
TOTAL ASSETS 3,712,770,828.30 3,250,580,479.74
（The Notes form part of these financial statemtents）
65
Consolidated Balance Sheet
As at 31 December 2012
Prepared by：SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Currency: RMB Yuan
Item Note Closing balance Opening balance
Current liabilities:
Short-term loans 7.18 96,000,000.00 20,000,000.00
Accounts payable 7.19 72,660,833.60 109,202,474.18
Deferral 7.20 407,194,198.80 258,976,095.57
Employee benefits payable 7.21 36,675,028.18 36,389,941.35
Taxes payable 7.22 19,958,153.14 17,423,077.33
Interest payables 7.23 18,395,916.84 16,535,277.94
Other payables 7.24 394,741,726.29 384,721,231.13
Non-current liabilities due within one year 7.25 299,261,270.80 697,095,738.47
Total current liabilities 1,344,887,127.65 1,540,343,835.97
Non-current liabilities:
Long-term loans 7.26 849,636,078.25 299,621,374.64
Long-term payables 7.27 11,136,124.62 10,308,648.22
Total non-current liabilities 860,772,202.87 309,930,022.86
Total liabilities 2,205,659,330.52 1,850,273,858.83
Owners' equity：
Share capital 7.28 1,011,660,000.00 1,011,660,000.00
Capital reserve 7.29 978,244,858.10 978,244,858.10
Less: treasury shares -- --
Surplus reserve 7.30 4,974,391.15 4,974,391.15
Undistributed profit 7.31 -369,154,405.36 -475,968,948.89
Foreign exchange translation difference 9,651,254.84 9,686,235.77
Total owners' equity attributable to parent
1,635,376,098.73 1,528,596,536.13
company
Minority interests -128,264,600.95 -128,289,915.22
Total owners’equity 1,507,111,497.78 1,400,306,620.91
Total liabilities and owners’equity 3,712,770,828.30 3,250,580,479.74
（The Notes form part of these financial statemtents）
Legal representative: Person in charge of accounting: Person in charge of accounting organ:
66
Consolidated Income Statement
For the Year Ended 31 December 2012
Prepared by: SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE& PROPERTIES (GROUP) CO., LTD
Currency: RMB Yuan
Amount for the Amount for the
Item Note
current period prior period
Ⅰ.Total operating income 7.32 1,030,148,729.47 1,026,396,104.51
Including: Operating income 7.32 1,030,148,729.47 1,026,396,104.51
Ⅱ.Total operating Costs 893,705,121.28 895,471,186.18
Including: Operating costs 7.32 701,303,623.08 686,227,987.41
Business tax and surcharge 7.33 100,203,153.09 116,349,200.67
Selling expenses 7.34 27,540,513.15 10,827,928.83
Administrative expense 7.35 68,115,069.18 65,127,791.16
Financial expense 7.36 2,682,762.78 16,856,041.31
Impairment losses of assets 7.37 -6,140,000.00 82,236.80
Add: Gains from changes in fair value
-- 19,993.75
("-" means loss)
Investment income ("-" means loss) 7.38 1,533,086.71 -14,426.70
Including: Investment income from
7.38 -120,218.96 -5,622.11
associates and joint venture
Ⅲ.Operating profit ("-" means loss) 137,976,694.90 130,930,485.38
Add: Non-operating income 7.39 80,194.63 2,556,683.36
Less: Non-operating expenses 7.40 798,994.92 208,353.64
Including: Loss on disposal of non-current assets 7.40 616,113.66 63,859.29
Ⅳ.Total profit ("-" means loss) 137,257,894.61 133,278,815.10
Less: Income tax expenses 7.41 30,403,044.98 32,079,530.68
Ⅴ.Net profit ("-" means loss) 106,854,849.63 101,199,284.42
Net attributable to owners of parent company 106,814,543.53 101,200,060.65
Minority interests 40,306.10 -776.23
Ⅵ.Earnings per share
Basic Earnings per share 7.42 0.1056 0.1000
Diluted Earnings per share 7.42 0.1056 0.1000
Ⅶ.Other comprehensive income 7.43 -49,972.76 -679,135.07
Ⅷ.Total comprehensive income 106,804,876.87 100,520,149.35
Total comprehensive income attributable to
106,779,562.60 100,724,666.10
owners of parent company
Total comprehensive income attributable to
25,314.27 -204,516.75
minority interests
As to business combination involving entities under common control during the current period，the net
profit realized by the mergied parties is RMB 0.00 before it is merged.
（The Notes form part of these financial statemtents）
Legal representative: Person in charge of accounting: Person in charge of accounting organ:
67
Consolidated Cash Flow Statement
For the Year Ended 31 December 2012
Prepared by：SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Currency: RMB Yuan
Amount for the Amount for the
Items Note
current period prior period
Ⅰ. Cash Flow from Operating Activities：
Cash received from sales of goods or rendering of
1,151,245,849.81 872,349,021.78
services
Refund of taxes and levies -- --
Cash received relating to other operating activities 7.44.(1) 39,178,728.60 54,939,156.67
Sub-total of Cash Inflows 1,190,424,578.41 927,288,178.45
Cash paid for goods and services 856,071,436.09 503,631,872.84
Cash paid to and on behalf of employees 115,682,666.59 114,301,007.98
Cash paid on taxes and levies 110,848,103.90 119,601,221.83
Cash paid relating to other operating activities 7.44.(2) 80,412,552.30 74,599,285.39
Sub-total of Cash Outflows 1,163,014,758.88 812,133,388.04
Net Cash Flows from Operating Activities 27,409,819.53 115,154,790.41
Ⅱ. Cash Flows from Investing Activities:
Cash received from return of investments -- 238,502.40
Cash received investing income 601,112.91 75,000.00
Net cash received from disposal of fixed assets,
87,170.00 100,780.00
intangible assets and other long assets"
Net cash flows from disposal subsidiary and other
-- --
operating unite
Other cash received relating to investing activities -- --
Sub-total of Cash Inflows 688,282.91 414,282.40
Cash paid to acquire fixed assets, intangible assets and
6,682,841.12 7,781,085.87
other long assets
Cash paid on investments 12,000,000.00 193,200.00
Net cash paid on obtain subsidiary and other operating
unite -- --
Cash paid on other investing activities -- --
Sub-total of Cash Outflows 18,682,841.12 7,974,285.87
Net Cash Flows from Investing Activities -17,994,558.21 -7,560,003.47
Ⅲ. Cash flow from Financing Activities
Cash received from investments -- --
Including: Cash received from investments by minority
-- --
interests of subsidiaries
Cash received from borrowing 1,036,000,000.00 20,000,000.00
Cash received from issuing bonds -- --
Sub-total of Cash Inflows 1,036,000,000.00 20,000,000.00
Cash repayments on borrowed amounts 808,292,761.31 104,671,112.24
Cash payments for distribution of dividends or profits 73,616,362.45 65,338,379.25
Including: Dividends or profit paid to minority interests of
subsidiaries -- --
Cash payments on other financing activities 7.44.(3) 25,000,000.00 2,000,000.00
Sub-total of cash Outflows 906,909,123.76 172,009,491.49
Net cash flows from financing activities 129,090,876.24 -152,009,491.49
Ⅳ. Effect of foreign exchange rate on cash 240,379.35 -1,876,921.97
Ⅴ. Net increase in cash and cash equivalents 138,746,516.91 -46,291,626.52
Add: cash equivalents at the beginning of the period 324,967,185.86 371,258,812.38
Ⅵ. Cash equivalents at the end of the period 7.45.(2) 463,713,702.77 324,967,185.86
（The Notes form part of these financial statemtents）
Legal representative: Person in charge of accounting: Person in charge of accounting organ:
68
CONSOLIDATED STATEMENT OF CHANGE IN OWNER'S EQUITY
For the Year Ended 31 December 2012
Prepared by：SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd. Currency: RMB Yuan
Attribute to the equity of parent company
Items Less: Minority Total owners'
Share capital Capital Treasury
Special Surplus Undistributed Others interests equity
reserve shares
reserve reserve profit
1.Balance at the End of Last Period 1,011,660,000.00 978,244,858.10 -- -- 4,974,391.15 -475,968,948.89 9,686,235.77 -128,289,915.22 1,400,306,620.91
Add: Changes of accounting policies -- -- -- -- -- -- -- -- --
Prior year adjustments -- -- -- -- -- -- -- -- --
Others -- -- -- -- -- -- -- -- --
2. Balance at the Beginning of the Year 1,011,660,000.00 978,244,858.10 -- -- 4,974,391.15 -475,968,948.89 9,686,235.77 -128,289,915.22 1,400,306,620.91
3.Increase/Decrease movements in this
Year ("-" means loss) -- -- -- -- -- 106,814,543.53 -34,980.93 25,314.27 106,804,876.87
(I) Net Profit -- -- -- -- -- 106,814,543.53 -- 40,306.10 106,854,849.63
(II) Gain/Loss to Owners' Equity Directly -- -- -- -- -- -- -34,980.93 -14,991.83 -49,972.76
Subtotal of (I)and (II) -- -- -- -- -- 106,814,543.53 -34,980.93 25,314.27 106,804,876.87
(III) Capital Injected and Reduced by
Owners -- -- -- -- -- -- -- -- --
a. Capital injected by owners -- -- -- -- -- -- -- -- --
b. Payment for shares included in owners'
equity -- -- -- -- -- -- -- -- --
c. Others -- -- -- -- -- -- -- -- --
(IV) Profit Distribution -- -- -- -- -- -- -- -- --
a. Withdraws of surplus reserve -- -- -- -- -- -- -- -- --
b. Distribution to owners (or shareholders) -- -- -- -- -- -- -- -- --
c. Others -- -- -- -- -- -- -- -- --
(V) Internal transfers of owners' equity -- -- -- -- -- -- -- -- --
a. Capitalisation of Additional share capital;
(or share capital) -- -- -- -- -- -- -- -- --
b. Capitalization of surplus reserve (or share
capital) -- -- -- -- -- -- -- -- --
c. Making up losses of surplus reserve -- -- -- -- -- -- -- -- --
d. Others -- -- -- -- -- -- -- -- --
(VI) Special Reserve -- -- -- -- -- -- -- -- --
a. Withdrawal of special reserve -- -- -- -- -- -- -- -- --
b. Use of special reserve -- -- -- -- -- -- -- -- --
(VII) Others -- -- -- -- -- -- -- -- --
4. Balance at the end of the period 1,011,660,000.00 978,244,858.10 -- -- 4,974,391.15 -369,154,405.36 9,651,254.84 -128,264,600.95 1,507,111,497.78
（The Notes form part of these financial statemtents）
Legal representative: Person in charge of accounting: Person in charge of accounting organ:
69
CONSOLIDATED STATEMENT OF CHANGES IN OWNER'S EQUITY
For the Year Ended 31 December 2011
Prepared by：SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd. Currency: RMB Yuan
Attributable to equity holders of the Company
Items Less: Minority Total owners'
Share capital Capital Treasury Special Surplus Undistributed Others interests equity
reserve shares reserve reserve profit
1.Balance at the End of Last Period 1,011,660,000.00 978,244,858.10 -- -- 4,974,391.15 -577,169,009.54 10,161,630.32 -128,085,398.47 1,299,786,471.56
Add: Changes of accounting policies -- -- -- -- -- -- -- -- --
Prior year adjustments -- -- -- -- -- -- -- -- --
Other -- -- -- -- -- -- -- -- --
2. Balance at the Beginning of the Year 1,011,660,000.00 978,244,858.10 -- -- 4,974,391.15 -577,169,009.54 10,161,630.32 -128,085,398.47 1,299,786,471.56
3. Increase/Decrease movements in this
Year ("-" means loss) -- -- -- -- -- 101,200,060.65 -475,394.55 -204,516.75 100,520,149.35
(I) Net Profit -- -- -- -- -- 101,200,060.65 -- -776.23 101,199,284.42
(II) Gain/Loss to Owners' Equity Directly -- -- -- -- -- -- -475,394.55 -203,740.52 -679,135.07
Subtotal of (I)and (II) -- -- -- -- -- 101,200,060.65 -475,394.55 -204,516.75 100,520,149.35
(III) Capital Injected and Reduced by
Owners -- -- -- -- -- -- -- -- --
a. Capital injected by owners -- -- -- -- -- -- -- -- --
b. Payment for shares included in owners'
equity -- -- -- -- -- -- -- -- --
c. Others -- -- -- -- -- -- -- -- --
(IV) Profit Distribution -- -- -- -- -- -- -- -- --
a. Withdrawal surplus reserve -- -- -- -- -- -- -- -- --
b. Distribution to owners (or shareholders) -- -- -- -- -- -- -- -- --
c. Others -- -- -- -- -- -- -- -- --
(V) Internal transfers of owners' equity -- -- -- -- -- -- -- -- --
a. Capitalisation of Additional share capital;
(or share capital) -- -- -- -- -- -- -- -- --
b. Capitalization of surplus reserve (or share
capital) -- -- -- -- -- -- -- -- --
c. Making up losses of surplus reserve -- -- -- -- -- -- -- -- --
d. Others -- -- -- -- -- -- -- -- --
(VI) Special Reserve -- -- -- -- -- -- -- -- --
a. Withdrawal of special reserve -- -- -- -- -- -- -- -- --
b. Use of special reserve -- -- -- -- -- -- -- -- --
(VII) Others -- -- -- -- -- -- -- -- --
4. Balance at the end of the period 1,011,660,000.00 978,244,858.10 -- -- 4,974,391.15 -475,968,948.89 9,686,235.77 -128,289,915.22 1,400,306,620.91
（The Notes form part of these financial statemtents）
Legal representative: Person in charge of accounting: Person in charge of accounting organ:
70
Balance Sheet
As of 31 December 2012
Prepared by：SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Currency: RMB Yuan
Item Note Closing balance Opening balance
Current assets
Monetary funds 223,827,179.97 153,281,158.51
Financial assets held-for-trade -- --
Accounts receivable 14.1 13,663,339.96 4,484,384.86
Prepayments 55,500.00 726,000.00
Interest receivable -- 341,000.00
Other receivables 14.2 343,568,799.28 305,330,386.21
Inventories 1,844,523,622.50 1,522,326,774.87
Total current assets 2,425,638,441.71 1,986,489,704.45
Non-current Assets:
Long-term equity investments 14.3 298,396,683.90 286,516,902.86
Investment properties 426,426,812.91 444,953,535.87
Fixed assets 33,944,334.56 36,367,166.98
Intangible assets 327,266.75 426,066.71
Long-term deferred assets 189,456.15 245,986.35
Deferred tax assets 6,814.20 6,814.20
1,376,400.00 938,400.00
Total non-current assets 760,667,768.47 769,454,872.97
Total Assets 3,186,306,210.18 2,755,944,577.42
(The Notes form part of these financial statemtents)
71
Balance Sheet (Continued)
As of 31 December 2012
Prepared by：SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Currency: RMB Yuan
LIABILITIES AND OWNERS' EQUITY Note Closing balance Opening balance
Current liabilities:
Short-term loans 70,000,000.00 --
Account payable 24,195,725.69 18,844,767.78
Deferral 280,272,668.00 12,627,059.60
Employee benefits payable 10,848,111.62 10,393,956.41
Taxes payable 6,204,121.44 1,636,872.67
Interest payable 18,020,083.50 16,535,277.94
Other payables 608,165,106.86 625,106,207.82
Non-current liability due within one year 299,261,270.80 557,095,738.47
Other current liability -- --
Total current liabilities 1,316,967,087.91 1,242,239,880.69
Non-current liabilities：
Long-term loans 649,636,078.25 299,621,374.64
Total non-current liabilities 649,636,078.25 299,621,374.64
Total liabilities 1,966,603,166.16 1,541,861,255.33
Owners' equity:
Share capital 1,011,660,000.00 1,011,660,000.00
Capital reserve 978,244,858.10 978,244,858.10
Undistributed profit -770,201,814.08 -775,821,536.01
Total owners' equity attributable to parent
1,219,703,044.02 1,214,083,322.09
company
Total liabilities and owners' equity 3,186,306,210.18 2,755,944,577.42
(The Notes form part of these financial statemtents)
Legal representative: Person in charge of accounting: Person in charge of accounting organ:
72
Income Statement
For the Year Ended 31 December 2012
Prepared by：SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Currency: RMB Yuan
Amount for the current Amount for the prior
Item Note
period period
Ⅰ.Total operating income 14.4 113,046,014.33 100,181,047.05
Less:Operating cost 14.4 41,545,002.74 42,155,178.18
Business tax and surcharge 17,665,684.67 15,437,336.62
Selling expenses 18,313,339.83 685,046.67
Administrative expense 31,242,272.24 29,145,728.87
Financial expense -1,532,671.49 -2,685,410.91
Impairment losses of assets -- --
Add: Gain from changes in fair value ("-" means
-- 19,993.75
loss)
Investment income ("-" means loss) 14.5 -120,218.96 -39,639.48
Including: Investment income from
14.5 -120,218.96 -5,622.11
associates and joint venture
II.Operating profit ("-" means loss) 5,692,167.38 15,423,521.89
Add: Non-operating income 30,233.29 1,043,014.10
Less:Non-operating expenses 15,092.50 48,624.50
Including: Loss from disposal of
92.50 17,714.50
non-current assets
III.Total profit ("-" means loss) 5,707,308.17 16,417,911.49
Less: Income tax expenses 87,586.24 916,500.07
IV.Net profit ("-" means loss) 5,619,721.93 15,501,411.42
V.Other comprehensive income -- --
VI.Total comprehensive income 5,619,721.93 15,501,411.42
(The Notes form part of these financial statemtents)
Legal representative: Person in charge of accounting: Person in charge of accounting organ:
73
Cash Flow Statement
For the Year Ended 31 December 2012
Prepared by：SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Currency: RMB Yuan
Amount for the Amount for the prior
Item Note
current period period
Ⅰ. Cash Flow from Operating Activities：
Cash received from sales of goods or rendering
376,638,380.51 86,094,093.66
of services
Refund of taxes and levies -- --
Cash received relating to other operating activities 16,840,440.53 134,590,648.46
Sub-total of cash inflows 393,478,821.04 220,684,742.12
Cash paid for goods and services 293,631,860.90 72,931,553.41
Cash paid to and on behalf of employees 27,387,097.91 29,058,869.03
Cash paid on taxes and levies 12,569,257.99 22,781,478.43
Cash paid relating to other operating activities 50,269,427.73 30,130,459.10
Sub-total of Cash Outflows 383,857,644.53 154,902,359.97
Net Cash Flows from Operating
9,621,176.51 65,782,382.15
Activities
Ⅱ. Cash Flows from Investing Activities:
Cash received from return of investments 14,212,390.33 238,502.40
Cash received investing income -- 75,000.00
Net cash received from disposal of fixed assets,
-- --
intangible assets and other long assets
Other cash received relating to investing activities 14,290,900.43 11,595,616.51
Sub-total of Cash Inflows 28,503,290.76 11,909,118.91
Cash paid to acquire fixed assets, intangible
572,801.00 1,640,777.06
assets and other long assets
Cash paid on investments 63,518,370.00 29,193,200.00
Cash paid on other investing activities -- --
Sub-total of cash outflows 64,091,171.00 30,833,977.06
Net Cash Flows from Investing Activities -35,587,880.24 -18,924,858.15
Ⅲ. Cash flow from Financing Activities
Cash received from investments -- --
Cash received from borrowing 810,000,000.00 --
Cash received from issuing bonds -- --
Cash received from other financing activities -- --
Sub-total of cash inflows 810,000,000.00 --
Cash repayments on borrowed amounts 648,292,761.31 29,871,112.24
Cash payments for distribution of dividends or
64,694,167.89 52,848,839.30
profits
Cash payments on other financing activities 25,000,000.00 2,000,000.00
Sub-total of cash Outflows 737,986,929.20 84,719,951.54
Net cash flows from financing activities 72,013,070.80 -84,719,951.54
Ⅳ. Effect of foreign exchange rate on cash -216.89 -5,238.13
Ⅴ. Net increase in cash and cash equivalents 46,046,150.18 -37,867,665.67
Add: cash equivalents at the beginning of the period 144,779,100.65 182,646,766.32
Ⅵ. Cash equivalents at the end of the period 190,825,250.83 144,779,100.65
(The Notes form part of these financial statemtents)
Legal representative: Person in charge of accounting: Person in charge of accounting organ:
74
Consolidated Balance Sheet
As of 31 December 2012
Prepared by：SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd. Currency: RMB Yuan
Less:
Special
Item Share capital Capital reserve Treasury Surplus reserve Undistributed profit Total owners' equity
reserve
shares
1.Balance at the End of Last Period 1,011,660,000.00 978,244,858.10 -- -- -- -775,821,536.01 1,214,083,322.09
Add: Changes of accounting policies -- -- -- -- -- -- --
Prior year adjustments -- -- -- -- -- -- --
Others -- -- -- -- -- -- --
2. Balance at the Beginning of the Year 1,011,660,000.00 978,244,858.10 -- -- -- -775,821,536.01 1,214,083,322.09
3. Increase/Decrease movements in this Year ("-"
-- -- -- -- -- 5,619,721.93 5,619,721.93
means loss)
(I) Net Profit -- -- -- -- -- 5,619,721.93 5,619,721.93
(II) Other comprehensive income -- -- -- -- -- -- --
Subtotal of (I)and (II) -- -- -- -- -- 5,619,721.93 5,619,721.93
(III) Capital Injected and Reduced by Owners -- -- -- -- -- -- --
a. Capital injected by owners -- -- -- -- -- -- --
b. Payment for shares included in owners' equity -- -- -- -- -- -- --
c. Others -- -- -- -- -- -- --
(IV)Profit distribution -- -- -- -- -- -- --
a. Withdrawal surplus reserve -- -- -- -- -- -- --
b. Distribution to owners (or shareholders) -- -- -- -- -- -- --
c. Others -- -- -- -- -- -- --
(V) Internal transfers of owners' equity -- -- -- -- -- -- --
a. Capitalisation of Additional share capital; (or share
-- -- -- -- -- -- --
capital)
b. Capitalisation of surplus reserve (or share capital) -- -- -- -- -- -- --
c. Making up losses of surplus reserve -- -- -- -- -- -- --
d. Others -- -- -- -- -- -- --
(VI) Special Reserve -- -- -- -- -- -- --
a. Withdrawal of current period -- -- -- -- -- -- --
b. Use of special reserve -- -- -- -- -- -- --
(VII) Others -- -- -- -- -- -- --
4. Balance at the end of the period 1,011,660,000.00 978,244,858.10 -- -- -- -770,201,814.08 1,219,703,044.02
(The Notes form part of these financial statemtents)
Legal representative: Person in charge of accounting: Person in charge of accounting organ:
75
Consolidated Balance Sheet
As of 31 December 2011
Prepared by：SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Currency: RMB Yuan
Less:
Special Surplus Total owners'
Item Share capital Capital reserve Treasury Undistributed profit
reserve reserves equity
shares
1. Balance at the end of last year: 1,011,660,000.00 978,244,858.10 -- -- -- -791,322,947.43 1,198,581,910.67
Add: Changes of accouting policy -- -- -- -- -- -- --
Error correction of the previous period -- -- -- -- -- -- --
Others -- -- -- -- -- -- --
2. Balance at the beginning of the year 1,011,660,000.00 978,244,858.10 -- -- -- -791,322,947.43 1,198,581,910.67
3. Change in equity for the year -- -- -- -- -- 15,501,411.42 15,501,411.42
(1) Net profit -- -- -- -- -- 15,501,411.42 15,501,411.42
(2) Others -- -- -- -- -- -- --
Sub-total (1)& (2) -- -- -- -- -- 15,501,411.42 15,501,411.42
(3)Shareholders’ contributions and decrease of
-- -- -- -- -- -- --
capital
a. Contributions by shareholders -- -- -- -- -- -- --
b. Equtiy settled share-based payment -- -- -- -- -- -- --
c. Others -- -- -- -- -- -- --
(4) Distribution of profits -- -- -- -- -- -- --
a. Withdraws of surplus reserves -- -- -- -- -- -- --
b. Distributions to shareholders -- -- -- -- -- -- --
c. Others -- -- -- -- -- -- --
(5) Transfers within equity -- -- -- -- -- -- --
a. Share capital increased by capital reserve transfer -- -- -- -- -- -- --
b. Share capital increased by surplus reserve transfer -- -- -- -- -- -- --
c. Remedying loss with profit surplus -- -- -- -- -- -- --
d. Others -- -- -- -- -- -- --
(6) Special reserves -- -- -- -- -- -- --
a. Extracted this year -- -- -- -- -- -- --
b. Used this year -- -- -- -- -- -- --
(7) Others -- -- -- -- -- -- --
4. Balance at the end of the year report period 1,011,660,000.00 978,244,858.10 -- -- -- -775,821,536.01 1,214,083,322.09
(The Notes form part of these financial statemtents)
Legal representative: Person in charge of accounting: Person in charge of accounting organ:
76
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Note 1 General information
1.1 Corporate introduction
Shenzhen Special Economic Zone Real Estate and Properties (Group) Co., Ltd. (the “Group” or “the
Company”) was established 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.
1.2 Corporate Information
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.
1.3 Change of Corporate transaction
There is no change for the main transactions during report period.
1.4 Financial statements publish approver & date
The Financial statement published on Mar 28th, 2013, which approved by Group’s Board of Directors.
Note 2 Basis of Preparation
The financial statements of the Group have been prepared on the basis of going concern in conformity
with Chinese Accounting Standards for Business Enterprises and the Accounting Systems for Business
Enterprises issued by the Ministry of Finance of People’s Republic of China in February 2006, and
Accounting Standards (order No.38 of the Ministry of Finance) and Compilation Rules for Information
Disclosure by Companies Offering Securities to the Public No.15—General Provisions on Financial
Reports (2010 Revision) issued by the China Securities Regulatory Commission (CSRC)
According to the relevant accounting regulations in Chinese Accounting Standards for Business
77
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Enterprises, the Group has adopted the accrual basis of accounting. The Group adopts the historical
cost as the principle of measurement in the financial statements except some financial instrument.
Provision will be made if any assets impairement incure in accordance with relevant requirements.
Note 3 Statement of Compliance with Enterprise Accounting Standards
The financial statements of the Group comply are recognized and measured in accordance with the
regulations in the Chinese Accounting Standards for Business Enterprises and they give a true and fair
view of the financial position, business result and cash flow of the Group as of 31 December 2012. in
addition, the financial statements of the and the Group comply, in all material respects, with the revised
disclosing requirements for financial statements and the notes ” Compilation Rules for Information
Disclosure by Companies Offering Securities to the Public No.15—General Provisions on Financial
Reports (2010 Revision) issued by China Securities Regulatory Commission (CSRC) in 2010.
Note 4 Important Accounting Principles and Accounting Estimates
4.1 Accounting period
The accounting period of the Group is classified as interim period and annual period. Interim period
refers to the reporting period shorter than a complete annual period. The accounting period of the
Group is the calendar year from January 1 to December 31.
4.2 Monetary Unit
Renminbi (RMB) is the currency of the primary economic environment in either Group & its domestic
subsidiaries or foreign subsidiary in HK. Therefore, the Group, the domestic subsidiaries and foreign
subsidiary in HK choose RMB as their functional currency. While the Group’s foreign subsidiary in
U.S.A. chooses USD dollar as its functional currency on the basis of the primary economic environment
it operates.The Group adopts RMB to prepare its functional statements.
4.3 Accounting treatment under common/non common control
A business combination is a transaction or event that brings together two or more separate entities into
one reporting entity. Business combinations involve enterprises under common control and non
common control.
(1) Business combination involving entities under common control
A business combination involving enterprises under common control is a business combination in
which all of the combining enterprises are ultimately controlled by the same party or parties both before
and after the combination, and that control is not transitory.
For a business combination involving enterprises under common control, the party that, on the
combination date, obtains control of another enterprise participating in the combination is the absorbing
party, while that other enterprise participating in the combination is a party being absorbed.
Combination date is the date on which the absorbing party effectively obtains control of the party being
78
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
absorbed.
The assets and liabilities obtained are measured at the carrying amounts as recorded by the enterprise
being combined at the combination date. The difference between the carrying amount of the net assets
obtained and the carrying amount of consideration paid for the combination (or the total face value of
shares issued) is adjusted to the capital premium (or share premium) in the capital reserve. If the
balance of the capital premium (or share premium) is insufficient, any excess is adjusted to retained
earnings.
The cost of a combination incurred by the absorbing party includes any costs directly attributable to the
combination shall be recognized as an expense through profit or loss for the current period when
incurred.
（2）Business combination involving entities under non common control
A business combination involving enterprises under non common control happens in the combining
enterprises are not ultimately controlled by the same party or parties both before and after the business
combination.
For a business combination not involving enterprises under common control, the party that, on the
acquisition date, obtains control of another enterprise participating in the combination is the acquirer,
while that other enterprise participating in the combination is the acquiree. Acquisition date is the date
on which the acquirer effectively obtains control of the acquiree.
For a business combination not involving enterprise under common control, the combination cost
including the sum of fair value, at the acquisition date, of the assets given, liabilities incurred or
assumed, and equity securities issued by the acquirer. The intermediary expenses incurred by the
acquirer in respect of auditing, legal services, valuation and consultancy services etc and other
associated administrative expenses attributable to the business combination are recognized in profit or
loss when they are incurred.
The transaction cost arose from issuing of equity securities or liability securities shall be initially
recognized as equity securities or liability securities.
The contingent consideration related to the combination shall be booked as combination cost at the fair
value at the acquisition date. If, within the 12 months after acquisition, additional information can prove
the existence of related information at acquisition date and the contingent consideration need to be
adjusted, goodwill can be offset.
For a business combination achieved in stages that involves multiple exchange transactions, the equity
interest in the acquiree previously held before the acquisition date re-assessed at the fair value at
the acquisition date, with any difference between its fair value and its carrying amount is recorded as
investment income. The other comprehensive income of the acquiree before the acquisition date
79
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
relating to the previously held interest in the acquiree is transferred to investment income.
Combination cost is the aggregate of the carrying amount of the equity interest held in the acquiree
prior to the acquisition date and the fair value of the cost of the additional investment at the acquisition
date.
Combination cost of the acquirer’s interest and identifiable net assets of the acquirer acquired through
the business combination shall be measured by the fair value at the acquisition date. Where the cost of
combination exceeds the acquirer’s interest in the fair value of the acquiree’s identifiable net assets,
the difference shall be recognized as goodwill. Where the cost of combination is less than the
acquirer’s interest in the fair value of the acquiree’s identifiable net assets, the difference shall be
accounted for according to the following requirements: (i) the acquirer shall reassess the measurement
of the fair values of the acquiree’s identifiable assets, liabilities and contingent liabilities and
measurement of the cost of combination; (ii) if after that reassessment, the cost of combination is still
less than the acquirer’s interest in the fair values of the acquiree’s identifiable net assets, the acquirer
shall recognize the remaining difference immediately in profit or loss for the current period.
Where the temporary difference obtained by the acquirer was not recognized due to inconformity with
the conditions applied for recognition of deferred income tax, if, within the 12 months after acquisition,
additional information can prove the existence of related information at acquisition date and the
expected economic benefits on the acquisition date arose from deductible temporary difference by the
acquiree can be achieved, relevant income tax assets can be recognized, and goodwill offset. If the
goodwill is not sufficient, the difference shall be recognized as profit of the current period.
Apart from above, the differences shall be taken into profit or loss of the current period if the recognition
of deferred income tax assets is related to the combination.
4.4 Preparation of consolidated financial statements
（1）The scope of consolidated financial statements
The scope of consolidation in the consolidated financial statements is determined on the basis of
control. Control is the power to govern the financial and operating policies of an enterprise so as to
obtain benefits from its operating activities. The scope of consolidation includes the Group and all of
the subsidiaries. Subsidiary is an enterprise or entity under the control of the Group.
（2）Preparation of the consolidated financial statements
The subsidiary of the Group is included in the consolidated financial statements from the date when the
control over the net assets and business decisions of the subsidiary is effectively obtained, and
excluded from the date when the control ceases.
For a subsidiary disposed of by the Group, the operating results and cash flows before the date of
disposal (the date when control is lost) are included in the consolidated income statement and
80
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
consolidated statement of cash flows, as appropriate. For a subsidiary disposed during the period, no
adjustment is made to the opening balance of the consolidated financial statements.
For a subsidiary acquired through a business combination not under common control, the operating
results and cash flows from the acquisition (the date when the control is obtained) are included in the
consolidated income statement and consolidated statement of cash flows, as appropriated; no
adjustment is made to the opening balance and comparative figures in the consolidated financial
statements.
Where a subsidiary was acquired during the reporting period, through a business combination involving
enterprises under common control, the financial statements of the subsidiary are included in the
consolidated financial statements. The results of operations and cash flow are included in the
consolidated balance sheet and the consolidated income statement, respectively, based on their
carrying amounts, from the date that common control was established, and the opening balances and
the comparative figures of the consolidated financial statements are restated.
When the accounting period or accounting policies of a subsidiary are different from those of the Group,
the Group makes necessary adjustments to the financial statements of the subsidiary based on the
Group’s own accounting period or accounting policies. Where a subsidiary was acquired during the
reporting period through a business combination not under common control, the financial statements
was reconciliated on the basis of the fair value of identifiable net assets at the date of acquisition.
Intra-group balances and transactions, and any unrealized profit or loss arising from intra-group
transactions, are eliminated in preparing the consolidated financial statements.
Minority interest and the portion in the net profit or loss not attributable to the Group are presented
separately in the consolidated balance sheet within shareholders’/ owners’ equity and net profit. Net
profit or loss attributable to minority shareholders in the subsidiaries is presented separately as minority
interest in the consolidated income statement below the net profit line item.
When the amount of loss for the current period attributable to the minority shareholders of a subsidiary
exceeds the minority shareholders’ portion of the opening balance of [shareholders’] [owners’] equity of
the subsidiary, the excess is allocated against the minority interests.
When the Group loses control of a subsidiary due to the disposal of a portion of an equity investment or
other reasons, the remaining equity investment is re-measured at its fair value at the date when control
is lost. The difference between 1) the total amount of consideration received from the transaction that
resulted in the loss of control and the fair value of the remaining equity investment and 2) the carrying
amounts of the interest in the former subsidiary’s net assets immediately before the loss of the control
is recognized as investment income for the current period when control is lost. The amount recognized
in other comprehensive income in relation to the former subsidiary’s equity investment is reclassified as
81
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
investment income for the current period when control is lost. The retained interest is subsequently
measured according to the rules stipulated in the “Chinese Accounting Standards for Business
Enterprises No.2—Long-term equity investment” or “Chinese Accounting Standards for Business
Enterprises No.22—Determination and measurement of financial instruments” .
4.5 Cash equivalent
Cash and cash equivalents of the Group include cash on hand, ready usable deposits and investments
having short holding term (normally will be due within three months from the day of purchase), with
strong liquidity and easy to be exchanged into certain amount of cash that can be measured reliably
and have low risks of change.
4.6 Foreign exchange
(1) Translation in foreign exchange transactions
The foreign currency transactions are recorded, on initial recognition in the functional currency, by
applying [the spot exchange rate on the date of the transaction / an exchange rate that approximates
the actual spot exchange rate on the date of transaction]. The exchange of foreign currency and
transactions related to the foreign exchange are translated at the spot exchange rate.
(2) Translation of monetary foreign currency and non-monetary foreign currency
At the balance sheet date, foreign currency monetary items are translated using the spot exchange rate
at the balance sheet date. All the exchange differences thus resulted are taken to profit or loss, except
for jthose relating to foreign currency borrowings specifically for construction and acquisition of
qualifying assets, which are capitalized in accordance with the principle of capitalization of borrowing
costs. For hedging accounting, the exchange difference related to hedging instruments for the purpose
of net oversea operating investment is recorded in the comprehensive income till the date of disposal
and recognized in profit or loss of the period；】lThe exchange difference from changes of other
account balance of foreign currency monetary items available-for-trade is recorded into profit or loss
except for amortized cost.
Non-monetary foreign currency items measured at historical cost shall still be translated at the spot
exchange rate prevailing on the transaction date, and the amount denominated in the functional
currency is not changed. Non-monetary foreign currency items measured at fair value are translated at
the spot exchange rate prevailing at the date when the fair values are determined. The exchange
difference thus resulted are recognized in profit or loss for the current period or as capital reserve.
(3) The translation of financial statement in foreign currency
When the consolidated financial statements include foreign operation(s), if there is a foreign currency
monetary item constituting a net investment in a foreign operation, exchange difference arising from
changes in exchange rates are recognized as “exchange differences arising on translation of financial
82
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
statements denominated in foreign currencies” in owner’s equity, and in profit or loss for the period
upon disposal of the foreign operation.
The Group translates the financial statements of its foreign operations into RMB by following rules;
1） Assets and liabilities in the balance sheet are translated at the spot exchange rate prevailing at the
balance sheet date; All equity items except for retained earnings are translated at the spot exchange
rates at the dates on which such items occur;
2）Income and expenses in income statement are translated at the spot exchange rates at the date of
transaction.
3）The opening undistributed profit is the closing undistributed profit of the last period after translation.
4）The closing balance of undistributed profit is calculates and presented in the basis of each
translated income statements and profit distribution item.
5）The difference arising between the assets and liabilities and shareholder’s shall be booked as
translation difference of foreign currency statements, and shall be presented as a separate component
of equity in the balance sheet.
6）On a loss of control over Group’s oversea operation due to disposal, the Group transfers the
accumulated or proportionate share of the accumulated exchange difference arising on translation of
financial statements of this oversea operation attributable to the owners’ equity of the Group and
presented under shareholder’s equity, to profit or loss in the period in which the disposal occurs.
Foreign currency cash flows and cash flow of oversea subsidiaries are translated at the spot exchange
rates.The effect of exchange rate changes on cash is separately presented as an adjustment item in
the cash flow statement.
The opening and actual amount of last year are presented in the financial statement after translation
4.7 Financial instruments
(1) Determination of financial assets and liabilities’ fair value
Fair value is the amount for which an asset could be exchanged, or a liability settled, between
knowledgeable, willing parties in an arm’s length transaction. For a financial instrument which has an
active market, the Group uses quoted price in the active market to establish its fair value. The quoted
price in the active market refers to the price that can be regularly obtained from exchange market,
agencies, industry associations, pricing authorities; it represents the fair market trading price in the
actual transaction.
For a financial instrument which does not have an active market, the Group establishes fair value by
using a valuation technique. Valuation techniques include using recent arm’s length market
transactions between knowledgeable, willing parties, reference to the current fair value of another
instrument that is substantially the same, discounted cash flow analysis and option pricing models.
83
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
(2) Classification, recognition and measurement of financial assets
All regular way purchases or sales of financial assets are recognized and derecognized on a trade date
basis. On initial recognition, the Group’s financial assets are classified into one of the four categories,
including financial assets at fair value though profit or loss, held-to maturity investments, loans and
receivables and available-for-trade financial assets. A financial asset is recognized initially at fair value.
In the case of financial assets at fair value through profit or loss, relevant transaction costs are
immediately charged to the profit and loss of the current period; transaction costs relating to financial
assets of other categories are included in the amount initially recognized.
1）Financial assets at fair value through profit or loss:
Including financial assets held-for-trade and financial assets designated at fair value through profit or
loss.
Financial asset held-for-trade is the financial asset that meets one of the following conditions:
A. the financial asset is acquired for the purpose of selling it in a short term;
B. the financial asset is a part of a portfolio of identifiable financial instruments that are collectively
managed, and there is objective evidence indicating that the enterprise recently manages this portfolio
for the purpose of short-term profits;
C. the financial asset is a derivative, except for a derivative that is designated and effective hedging
instrument, or a financial guarantee contract, or a derivative that is linked to and must be settled by
delivery of an unquoted equity instrument (without a quoted price from an active market) whose fair
value cannot be reliably measured. For such kind of financial assets, fair values are adopted for
subsequent measurement.
Financial asset is designated on initial recognition as at fair value through profit or loss only when it
meets one of the following conditions:
A. the designation eliminates or significantly reduces the inconsistency in the measurement or
recognition of relevant gains or losses that would otherwise arise from measuring the financial
instruments on different bases.
B. a group of financial instruments is managed and its performance is evaluated on a fair value basis,
and is reported to the enterprise’s key management personnels. Formal documentation regarding risk
management or investment strategy has prepared.
Financial assets at fair value through profit or loss are subsequently measured at the fair value. Any
gains or losses arising from changes in the fair value and any dividends or interest income earned on
the financial assets are recognized in the profit or loss.
1) Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets available-for-trade and those
84
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
designated as at fair value though profit or loss. The Group classifies financial assets at fair value
through profit or loss as financial assets available-for trade.
A financial asset is classified as available-for-trade if one of the following conditions is satisfied: A) It
has been acquired principally for the purpose of selling in the near term; or B) On initial recognition it is
part of a portfolio of identified financial instruments that the Group managers together and there is
objective evidence that the Group has a recent actual pattern of short-term profit taking; or C) It is a
derivative that is not designated and effective as a hedging instrument, or a financial guarantee
contract, or a derivative that is linked to and must be settled by delivery of an unquoted equity
instrument (without a quoted price in an active market) whose fair value cannot be reliably measured.
Financial assets at fair value through profit or loss are subsequently measured at far value. Any gains
or losses arising from changes in the fair value and any dividend or interest income earned on the
financial assets are recognized in profit or loss.
2）Investment held-to maturity
Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments
and fixed maturity that an entity has the positive intention and ability to hold to maturity. Such kind of
financial assets are subsequently measured at amortized cost using the effective interest method.
Gains or losses arising from derecognition, impairment or amortization are recognized in profit or loss
for the current period.
Effective interest rate is the rate that exactly discounted estimated future cash flows through the
expected life of the financial asset or financial liability or, where appropriate, a shorter period to the net
carrying amount of the financial asset or financial liability.
When calculating the effective interest rate, the Group shall estimate future cash flow considering all
contractual terms of the financial asset or financial liability without considering future credit losses, and
also consider all fees paid or received between the parties to the contract giving rise to the financial
asset and financial liability that are an integral part of the effective interest rate, transaction costs, and
premiums or discounts, etc.
3）Loans and receivables
Loans and receivables are non-derivative financial assets with fixed determinable payment that are not
quoted in an active market. Financial assets classified as loans and receivables by the Group include
note receivables, account receivables, interest receivable dividends receivable and other receivables.
Loans and receivables are subsequently measured at amortized cost using the effective interest
method. Gain or loss arising from derecognition, impairment or amortization is recognized in profit or
loss.
4）Financial assets available-for-trade
85
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Financial assets available-for-trade include non-derivative financial assets that are designated on initial
recognition as available for trade, and financial assets that are not classified as financial assets at fair
value through profit or loss, loans and receivables or investment held-to-maturity.
Financial assets available-for-trade are subsequently measured at fair value, and gains or losses
arising from changes in the fair value are recognized as other comprehensive income and included in
the capital reserve, except that impairment losses and exchange differences related to amortized cost
of monetary financial assets denominated in foreign currencies are recognized in profit or loss, until the
financial assets are derecognized, at which time the gains or losses are released and recognized in
profit or loss.
Interests obtained and dividends declared by the investee during the period in which the financial
assets available-for-trade are held, are recognized in investment gains.
(3) Impairment of financial assets
The Group assesses at the balance sheet date the carrying amount of every financial asset except for
the financial assets that measured by the fair value. If there is objective evidence indicating a financial
asset may be impaired, a provision is provided for the impairment.
The Group makes an impairment test for a financial asset that is individually significant. For a financial
asset that is not individually significant, it is included in a group of financial assets with similar credit risk
characteristics and collectively assessed for impairment or individually assessed for impairment. If no
objective evidence of impairment incurs for an individually assessed financial asset (whether the
financial asset is individually significant or not individually significant), it is included in a group of
financial assets with similar credit risk characteristics and collectively assessed for impairment. Assets
for which an impairment loss is individually recognized is not included in a group of financial assets with
similar credit risk characteristics and collectively assessed for impairment.
1) Impairment on held-to maturity investment, loans and receivables
The financial assets measured by cost or amortized cost write down their carrying value by the
estimated present value of future cash flow. The difference is recorded as impairment loss. If there is
objective evidence to indicate the recovery of value of financial assets after impairment, and it is related
with subsequent event after recognition of loss, the impairment loss recorded originally can be reversed.
The carrying value of financial assets after impairment loss reversed shall not exceed the amortized
cost of the financial assets without provisions of impairment loss on the reserving date.
2) Impairment loss on available-for-trade financial assets
When decision is made with all related factors on whether the fall of fair value investment of an equity
instrument available-for-trade is significant or non-transient, it indicates impairment of such equity
instrument investment, in which, Significant means over 20% of fall in fair value and Non-transient
86
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
means over 12 months of subsequent fall.
When an available-for-trade financial asset is impaired, the cumulative loss arising from declining in
fair value that had been recognized in capital reserve shall be removed and recognized in profit or loss.
The amount of the cumulative loss that is removed shall be difference between the acquisition cost with
deduction of recoverable amount less amortized cost, current fair value and any impairment loss on
that financial asset previously recognized in profit or loss.
If, after an impairment loss has been recognized, there is objective evidence that the value of the
financial asset is recovered, and it is objectively related to an event occurring after the impairment loss
was recognized, the initial impairment loss can be reversed and the reserved impairment loss on
available-for-trade equity instrument is recorded in the profit or loss, the reserved impairment loss on
available-for-trade debt instrument is recorded in the current profit or loss.
The equity instrument where there is no quoted price in an active market, and whose fair value cannot
be reliably measured, or impairment loss on a derivative asset that is linked to and must be settled by
delivery of such an unquoted equity instrument shall not be reversed.
(4) Recognition and measurement of financial assets transfer
The Group derecognizes a financial asset when one of the following conditions is met:
1) the rights to receive cash flows from the asset have expired;
2) the enterprise has transferred its rights to receive cash flows from the asset to a third party under
a “pass-through” arrangement; or
3) the enterprise has transferred its rights to receive cash flows from the asset and either (a) has
transferred substantially all the risks and rewards of the asset, or (b) has neither transferred nor
retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
If the enterprise has neither retained all the risks and rewards from the financial asset nor control over
the asset, the asset is recognized according to the extent it exists as financial asset, and correspondent
liability is recognized. The extent of existence refers the level of risk by the financial asset changes the
enterprise is facing.
For a transfer of a financial asset in its entirety that satisfies the derecognition criteria, (a). the carrying
amount of the financial asset transferred; and (b) the sum of the consideration received from the
transfer and any cumulative gain or loss that had been recognized in other comprehensive income, is
recognized in profit or loss.
If a part of the transferred financial asset qualifies for derecognition, the carrying amount of the
transferred financial asset is allocated between the part that continues to be recognized and the part
that is derecognized, based on the relative fair value of those parts. The difference between (a) the
carrying amount allocated to the part derecognized; and (b) the sum of the consideration received for
87
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
the part derecognized and any cumulative gain or loss allocated to the part derecognized which has
been previously recognized in other comprehensive income, is recognized in profit or loss.
(5) Classification and measurement of financial liabilities
The Group’s financial liabilities are, on initial recognition, classified into financial liabilities at fair value
through profit or loss and other financial liabilities. For financial liabilities at fair value through profit or
loss, relevant transaction costs are immediately recognized in profit or loss for the current period, and
transaction costs relating to other financial liabilities are included in the initial recognition amounts.
1) Financial liabilities measured by the fair value and the changes recorded in profit or loss
The classification by which financial liabilities held-for-trade and financial liabilities designed at the
initial recognition to be measured by the fair value follows the same criteria as the classification by
which financial assets held-for-trade and financial assets designed at the initial recognition to be
measured by the fair value and their changes are recorded in the current profit or loss.
For the financial liabilities measured by the fair value and changes recorded in the profit or loss, fair
values are adopted for subsequent measurement. All the gains or losses on the change of fair value
and the expenses on dividends or interests related to these financial liabilities are recognized in profit
or loss for the current period.
2) Other financial liabilities
Derivative financial liabilities that linked with equity instruments, which do not have a quoted price in an
active market and their fair value cannot be measured reliably, is subsequently measured by cost Other
financial liabilities are subsequently measured at amortized cost using the effective interest method.
Gains or losses arising from derecognition or amortization are recognized in profit or loss for the
current period.
3) Financial guarantee contracts
For financial guarantee contracts that are not designated as at fair value through profit or loss, or loan
commitments not designated as at fair value through profit or loss but to offer at the interest rate lower
than market level they are, after initial recognition, subsequently measured at the higher of: (i) the
amount determined according to the principles of Accounting Standards for Business Enterprises No.
13 - Contingencies, and (ii) the amount initially recognized less the accumulated amortization
determined according to the principles of Accounting Standards for Business Enterprises No. 14 -
Revenue.
(6) Derecognition
The Group derecognizes a financial liability (or part of it) when the underlying present obligation (or part
of it) is discharged or cancelled or has expired. An agreement between the Group (an existing borrower)
and existing lender to replace original financial liability with a new financial liability with substantially
88
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
different terms is accounted for as an extinguishment of the original financial liability and the
recognition of a new liability.
When the Group derecognizes a financial liability or a part of it, it recognizes the difference between
the carrying amount of the financial liability (or part of the financial liability) derecognized the
consideration paid (including any non-cash assets transferred or new financial liabilities assumed) in
profit or loss.
(8) Offsetting financial assets and financial liabilities
When the group has a legal right that is currently enforceable to set off the recognized financial assets
and financial liabilities, and intends either to settle on a net basis, or to realize the financial asset and
settle the financial liability simultaneously, a financial asset and a financial liability shall be offset and
the net amount is presented in the balance sheet. Except for the above circumstances, financial assets
and financial liabilities shall be presented separately in the balance sheet and shall not be offset.
(9) Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Group after
deducting all of its liabilities. The transaction expenses from issuing of equity instruments by the merge
party during the business combination deduct the consideration income from the equity instrument, and
then retained earning if insufficient.The consideration received from issuing equity instruments, net of
transaction costs, are added to [shareholders’ / owners’] equity.
All types of distribution (excluding stock dividends) made by the Group to holders of equity instruments
are deducted from [shareholders’ /owners’] equity. The Group does not recognize any changes in the
fair value of equity instruments.
4.8 Account receivables
The account receivable by the Group includes account receivables, and other receivables.
(1) Criteria for recognition of bad debts:
The Group carries out an inspection on the balance sheet date. Where there is any objective evidence
proving that the receivables have been impaired, an impairment provision shall be made:
1) A serious financial difficulty occurs to the issuer or debtor;
2) The debtor breaches any of the contractual stipulations, for example, fails to pay or delays the
payment of interests or the principal, etc.;
3) The debtor will probably become bankrupt or carry out other financial reorganizations;
4) Other objective evidences showing the impairment of the receivables.
(2) Method for bad debts provision
1) Provisions of bad debts in account receivables that is individually significant.
The Group treats account receivables over RMB 5,000,000.00 (including 5,000,000.00) as individually
89
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
significant item.
For an account receivable that is individually significant, the asset is individually assessed for
impairment, and the amount of impairment is recognized in profit or loss if there is objective evidence of
impairment is included in a group of financial assets with similar credit risk characteristics and
collectively assessed for impairment. An account receivable for which an impairment loss is individually
recognized is not included in a group of account receivables with similar credit risk characteristics and
collectively assessed for impairment.
2) Provisions of bad debts that is individually insignificant.
For the account receivables not individually significant, the Group assesses the account receivables
individually for impairment when are of following characteristics: if there is objective evidence indicating
the impairment, the impairment loss is recognized at the difference between the present value of future
cash flow less the carrying amount, and provision is made accordingly.
4.9 Inventories
(1) Classification of inventory
Inventory was classified according to real estate development and non-development of products. The
real estate development products are the real estate developing products, real estate developed
products and real estate which are going to be developed. The non-real estate development products
include raw materials, finished products and stocks, low-value consumable products and construction
in progress.
(2) Valuation method of inventories upon delivery
Inventories are initially carried at the actual cost. Cost of inventories comprises all costs of purchase,
costs of conversion and other costs. The actual cost of inventories transferred out is assigned by using
weighted average method, and development products by specific identification method.
(3) Basis for determining net realizable value of inventories and provision methods for decline in value
of inventories
Net realizable value is the estimated selling price in the ordinary course of business less the estimated
costs of completion, the estimated costs necessary to make the sale and relevant taxes. Net realizable
value is determined on the basis of clear evidence obtained, and takes into consideration the purpose
of holding inventories and effect of post balance sheet events.
At the balance sheet date, inventories are measured at the lower of the cost and net realizable value. If
the net realizable value is below the cost of inventories, a provision for decline in value of inventories is
made. The provision for inventories decline in value is determined by the difference of the cost of
individual item less its realizable value.
After the provision for decline in value of inventories is made, if the circumstances that previously
90
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
caused inventories to be written down below cost no longer exist so that the net realizable value of
inventories is higher than their cost, the original provision for decline in value is reversed and the
reversal is included in profit or loss for the period.
(4) Inventory count system is based on the perpetual stock system.
(5) Amortization method for low cost and short-lived consumable items and packaging materials.
Low cost and short-lived consumable items are amortized using immediate write-off method; packaging
materials are amortized using immediate write-off method。
(6) Cost of land constitutes land development costs for pure land development project;
Together with the overall development of the property, its cost is included in housing costs generally
based on the actual area.
(7)Public Facilities Fee: The cost is the actual construction cost incurred. If several estate projects
benefit from the same facility, 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 was
measured according to the allocation of the area covered.
(8)Utility reserve funds：Utility reserve funds were received by the Group and recorded in Long-term
payables. The funds were used to maintainence and renewal of communal facilities
(9)Quality Guarantees：Quality Guarantees was put into the account of real estate developing
according to the contract amount and also recorded in the accounts payable at the same time. The
actual payment incurs after the expiry of guarantee.
4.10 Long-term equity investments
(1) Determination of Investment cost
For a business combination involving enterprises under common control, the initial investment cost of
the long-term equity investment shall be carrying value of the absorbing party’s share of the
shareholder’s of the party being absorbed at the date of combination.
For a business combination not involving enterprise under common control, the combination cost
including the sum of fair value, at the acquisition date, of the assets given, liabilities incurred or
assumed, and equity securities issued by the acquirer. The intermediary expenses incurred by the
acquirer in respect of auditing, legal services, valuation and consultancy services etc and other
associated administrative expenses attributable to the business combination are recognized in profit or
loss when they are incurred.
The transaction cost for the equity securities or liability securities issued by the acquirer in the business
combination shall be recognized as initial amount of equity security or liability.
The equity investments other than the long-term equity through combination shall be initially measured
by cost. The cost shall be recognized to the difference in the way of acquisition of long-term equity
91
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
investment. Theses ways include the cash purchase price the Group actually paid, the fair value of
equity security issued by the Group, value specified in the investment contract or agreement, the fair
value or carrying value of the asset out in the transaction of non-monetary asset exchanges, and the
fair value of the long-term equity investment.
Expenses, taxes and other necessary expenditures directly attributable to the acquisition of long-term
equity investment are taken into investment cost.
(2) Subsequent Measurement
Cost method shall be adopted in a long-term equity investment where the investing enterprise does not
have common control or significant influence over the investee, the investment is not quoted in an
active market and its fair value cannot be measured reliably.
Where an investing enterprise can exercise common control or significant influence over the investee,
a long-term investment shall be accounted for using the equity method.
When an investing enterprise can no longer exercise joint control or common control nor significant
influence over the investee, and its fair value cannot be measured reliably, a long-term investment shall
be counted as financial asset ready-for trade.
A long-term equity investment where cost method is adopted in the Company’s financial statements
can exercise controls over the investee.
1) Cost method of accounting for long-term equity investments
Under the cost method, a long-term equity investment is measured at initial investment cost. Except for
cash dividends or profits declared but not yet paid that are included in the price or consideration
actually paid upon acquisition of the long-term equity investment, investment income is recognized in
the period in accordance with the attributable share of cash dividends or profit distributions declared by
the investee.
2) Equity method of accounting for long-term equity investments
Where the initial investment cost of a long-term equity investment exceeds the investing enterprise’s
interest in the fair values of the investee’s identifiable net assets at the time of acquisition, no
adjustment shall be made to the initial investment cost.
Where the initial investment cost of a long-term equity investment is less than the investing enterprise’s
interest in the fair values of investee’s identifiable net assets at the time of acquisition, the difference
shall be charged to profit or loss for the current period, and the cost of the long-term equity investment
shall adjusted accordingly.
Under the equity method, the Group recognizes its share of the net profit or loss of the investee for the
period as investment income or loss for the period. The Group recognizes it share of the investee’s net
profit or loss based on the fair value of the investee’s individual separately indentible assets, etc at the
92
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
acquisition date after making appropriate adjustments to confirm with the Group’s accounting policies
and accounting period. Unrealized profits or losses resulting from the Group’s transactions with its
associates and joint ventures are recognized as investment income or loss to the extent that those
attributable to the Group’s equity interest are eliminated. However, unrealized losses resulting from the
Group’s transactions with its investees on the transferred assets, in accordance with "Accounting
Standards for Enterprises No. 8 - Impairment of Assets", are not eliminated. Changes in owners’ equity
of the investee other than net profit or loss are correspondingly adjusted to the carrying amount of the
long-term equity investment, and recognized as other compressive income which is included in the
capital reserve.
When the investee is recognized net losses, reduce the carrying value of long-term equity investments
and long-term equity of net investment (in substance) in investee to zero. In addition, the Group has the
obligations on additional losses, then the expected obligation as estimated liabilities and included in the
current investment losses. Where the net profit from investee units, restoration confirm the amount of
revenue sharing after offset the amount of unrecognized loss sharing.
For long-term equity investments in associates and joint ventures which had been held by the Group
before its first time adoption of Accounting Standards for Business Enterprises, where the initial
investment cost of a long-term equity investment exceeds the Group’s interest in the investee’s net
assets at the time of acquisition, the excess is amortized and is recognized in profit or loss on a straight
line basis over the original remaining life.
3) Acquisition of minority interest
The difference between newly increased equity investment due to acquisition of minority interests and
portion of net asset cumulatively calculated from the acquisition date is adjusted as capital reserve. If
the capital reserve is not sufficient to absorb the difference, the excess are adjusted against returned
earnings.
4) Disposal of long-term equity investment
Where the parent company disposes long-term investment in a subsidiary without a change in control,
the difference in the net asset between the amount of disposed long-term investment and the amount
of the consideration paid or received is adjusted to the owner’s equity. If the disposal of long-term
investment in a subsidiary involves loss of control over the subsidiary, the related accounting policies in
Note 4.4 applies.
On disposal of a long-term equity investment, the difference between the proceeds actually received
and receivable and the carrying amount is recognized in profit or loss for the period. For along-term
equity investment accounted for using the equity method, the amount included in the shareholders’
equity attributable to the percentage interest disposed is transferred to profit or loss for the period.
93
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
For any retained interest, it shall be subsequently measured according to the related accounting
policies in regard of long-term equity investments or financial assets as described above if its carrying
amount is recognized as long-term equity investments or other related financial assets. Retroactive
adjustment is made on the basis of relevant policies if the retained interests are settled from cost
method to equity method.
(3) Recognition of investee under common control or significant influence
Control is the power to govern the financial and operating policies of an enterprise so as to obtain
benefits from its operating activities.
Common control is the contractually agreed sharing of control over an economic activity, and exists
only when the strategic financial and operating decisions relating to the activity require the unanimous
consent of the parties sharing control.
Significant influence is the power to participate in the financial and operating policy decisions of the
investee but is not control or joint control over those policies.
When determining whether an investing enterprise is able to exercise control or significant influence
over an investee, the effect of potential voting rights of the investee held be the investing enterprise or
other parties that are currently exercisable or convertible shall be considered.
(4) Impairment testing methods and recognition of impairment provision
The company assesses the long-term equity investment at the balance sheet date whether there is any
indication of impairment. If any indication exists that an asset may be impaired, the enterprise shall
estimate its recoverable value of the asset. If the recoverable value of the asset is less than its carrying
amount, a provision for impairment loss of the asset is recognized accordingly.
Once an impairment loss is recognized, it shall not be reversed in a subsequent period.
4.11 Investment properties
Investment property is property held to earn rental or for capital appreciation or both. It includes a land
use right that is leased out, a land use right held for transfer upon capital appreciation, and a building
that is leased out. Besides, the Group has buildings empty for operating lease. If there is a written
decision from the Board (or similar organization) with clear indication for operating lease and intension
that no change shall be made in the near future, the buildings shall be presented as investment
properties.
An investment property is measured initially at cost. Subsequent expenditures incurred for such
investment property are included in the cost of the investment property if it is probable that economic
benefits associated with an investment property will flow to the Group and the subsequent expenditures
can be measured reliably. Other subsequent expenditures are recognized in profit or loss in the period
in which they are incurred.
94
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
The Group uses the cost method for subsequent measurement of investment property, and adopts a
depreciation or amortization policy for the investment property which consistent with that for building or
land use rights.
Where self-occupied property or inventory converts into investment property, or investment property
converts into self-occupied property, the carrying amount before the change shall be accounted as the
value after conversion.
When an investment property changes into self-occupied property, it should be converted into fixed
asset or intangible asset on the date of conversion. When the purpose of a self-occupied property
changes into rental earning or capital increase, fixed asset or intangible asset should be converted into
an investment property from the date of conversion. Where the cost model is used in the measurement
of investment property during the conversion, the carrying amount before the conversion is accounted
as the value after conversion. Where the investment property is measured by the fair value after
conversion, the fair value at the conversion date is adopted as value after conversion.
Where an investment property is disposed or no longer in use permanently and no economic benefits
shall be obtained from the disposal, derecognized the investment property. The income from sale,
transfer or disposal of the investment property is recorded in the profit or loss after deduction of its
carrying amount and related tax.
4.12 Fixed assets
(1) The conditions of recognition
Fixed assets refers to the tangible assets that are held for the sake of producing commodities,
rendering labor service, renting or business management and their useful life is in excess of one fiscal
year.
(2) The method for depreciation
Fixed assets are stated at cost and consider the impact of expected costs of abandoning the initial
measurement. From the following month of state of intended use, depreciation method of the
straight-line method is used for different categories of fixed assets to take depreciation. The recognition
of the classification, useful life and estimated residual rate are as follows:
Estimated residual
Category Expected useful life Depreciation（%）
value（%）
Building & construction 30 5 3.17
Machines & equipments 7 5 13.57
Vehicles 6 5 15.83
Electronic appliances 5 5 19.00
Expected net residual value of fixed assets is the balance of the Group currently obtained from the
disposal of the asset less the estimated costs of disposal amount, assuming the asset is out of useful
life and state the expected service life in the end.
95
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
(3) Measurement and recognition of fixed assets
Fixed assets should be estimated the recoverable amount if there is an indication. The 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.
(4) Others
A fixed asset is recognized only when the economic benefits associated with the asset will probably
flow to the Company and the cost of the asset can be measured reliably. Subsequent expenditure
incurred for a fixed asset that meet the recognition criteria shall be included in the cost of the fixed
asset, and the carrying amount of the component of the fixed asset that is replaced shall be
derecognized. Otherwise, such expenditure shall be recognized in profit or loss in the period in which
they are incurred.
The revenue from selling or transferring, or disposing a fixed asset is booked into profit and loss after
deduction of carrying value and related tax.
The Group conducts a review of useful life, expected net realizable value and depreciation methods of
the fixed asset at least on an annual base. Any change is regarded as change in accounting estimates.
4.13 Construction in progress
Construction in progress is measured at its actual cost. The actual costs include various construction
expenditures during the construction perio and other relevant costs. Construction in progress is
transferred to a fixed asset when it is ready for intended use.
On the balance sheet day, estimation should be made for the impairment of the long-term suspension
project that will not be re-started in three years. The impairment estimated is book value minus the
recoverable amount. Once provision for impairment, it could not be reversed in later accounting period.
4.14 Borrowing costs
Borrowing costs include interest, amortization of discounts or premiums related to borrowings, ancillary
costs incurred in connection with the arrangement of borrowings, and exchange differences arising
from foreign currency borrowings.
The borrowing costs that are directly attributable to the acquisition, construction or production of a
qualifying asset are capitalized. The amounts of other borrowing costs incurred are recognized as an
expense in the period in which they are incurred. Qualifying assets are asset (fixed assets, investment
property and inventories, etc.) that necessarily take a substantial period of time for acquisition,
construction or production to get ready for their intended use or sale.
Where funds are borrowed for a specific-purpose, the amount of interest to be capitalized is the actual
96
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
interest expense incurred on that borrowing for the period less any bank interest earned from
depositing the borrowed funds before being used on the asset or any investment income on the
temporary investment of those funds.
Where funds are borrowed for a general-purpose, the amount of interest to be capitalized on such
borrowings is determined by applying a weighted average interest rate to the weighted average of the
excess amounts of accumulated expenditure on the asset over and above the amounts of
specific-purpose borrowings
During the capitalization period, exchange differences related to a specific-purpose borrowing
denominating in foreign currency are all capitalized. Exchange differences in connection with
general-purpose borrowings are recognized in profit or loss in the period in which they are incurred.
Assets qualified for capitalization are the fixed assets, investment properties or inventories which need
a long time of construction or production activities before ready for intended used or sale.
Capitalization of borrowing costs is suspended during periods in which the acquisition, construction or
production of a qualifying asset is interrupted by activities other than those necessary to prepare the
asset for its intended use or sale, when the interruption is for a continuous period of more than 3
months. Borrowing costs incurred during these periods recognized as an expense for the current period
until the acquisition, construction or production is resumed.
4.15 Intangible assets
(1) Recognition and calculation of intangible asset
The term “intangible asset” refers to the identifiable non-monetary assets without physical shape,
possessed or controlled by enterprises.
The intangible assets are initially measured by its cost. Expenses related to intangible assets, if the
economic benefits related to intangible assets are likely to flow into the enterprise and the cost of
intangible assets can be measured reliably, shall be recorded as cost of intangible assets. The
expenses other than this shall be booked in the profit or loss when they occur.
Land use rights that are purchased by the Group are accounted for as intangible assets. Buildings,
such as plants that are developed and constructed by the Group, and relevant land use rights and
buildings, are accounted for as intangible assets and fixed assets, respectively. Payments for the land
and buildings purchased are allocated between the land use rights and the buildings; if they cannot be
reasonably allocated, all of the land use rights and buildings are accounted for as fixed assets.
When an intangible asset with a definite useful life is available for use, its original cost less net residual
value and any accumulate impairment losses is amortized over its estimated useful life using the
straight-line method. An intangible asset with an indefinite useful life is not amortized.
For an intangible asset with a definite useful life, the Group reviews the useful life and amortization
97
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
method at the end of the period, and makes adjustment when necessary.. An additional review is also
carried out for useful life of the intangible assets with indefinite useful life. If there is evidence showing
the foreseeable limit period of economic benefits generated to the enterprise by the intangible assets,
then estimate its useful life and amortize according to the policy of intangible assets with definite useful
life.
(2) Research and development expenditure
The Group classifies the expenditure on an internal research and development project into expenditure
on the research phase and expenditure on the development phase.
Expenditure on the research phase of an internal research is recognized in profit & loss in the period in
which it is incurred.
Expenditure during the development phase that meets all of the following conditions at the same time is
recognized as intangible asset. Expenditure during development phase that does not meet the
following conditions is recognized in profit or loss for the period.
1) it is technical feasible to complete the intangible asset so that it will be available for use or sale;
2) the Group has the intention to complete the intangible asset and use or sell it;
3) the Group can demonstrate the ways in which the intangible asset will generate economic benefits
including the evidence of the existence of a market for the output of the intangible asset or the
intangible asset itself or, if it is to be used internally, the usefulness of the intangible asset;
4) the availability of adequate technical, financial and other resources to complete the development
and the ability to use or sell the intangible asset; and
5) the expenditure attributable to the intangible asset during its development phase can be reliably
measured.
If the expenditures cannot be distinguished between the research phase and development phase, the
Group recognizes all of them in profit or loss for the period.
(3) Methods of impairment assessment and determining the provision for impairment losses of
intangible assets
On balance sheet day, make impairment test for 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.
4.16 Long-term deferred assets
Long-term deferred assets represent expenses incurred that should be beared and amortized over the
98
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
current and subsequent period (together of more than one year). Long-term deferred assets are
amortized by using straight line method.
4.17 Accrued liabilities
Accrued liabilities (or Provisions) are recognized when following obligations related to a contingency
are satisfied simultaneously. They are (a) such obligation is the present obligation of the Group, (b)it is
probable that an outflow of economic benefits will be required to settle the obligation, and (c) the
amount of the obligation can be measured reliably.
The amount recognized as a provision is the best estimate of the consideration required to settle the
present obligation at the balance sheet date, taking into account factors pertaining to a contingency
such as risks, uncertainties and time value of money.
Where all or some of the expenditure required to settle a provision is expected to be reimbursed by a
third party, the reimbursement is recognized as a separate asset only when it is virtually certain that
reimbursement will be received, and the amount of reimbursement recognized does not exceed the
carrying amount of the provision.
(1)Onerous contracts
An onerous contract is a contract in which the unavoidable costs of meeting the obligations under the
contract exceed the economic benefits expected to be received under it. The exceeding part over the
assets in the contract shall be recognized as a provision when an executor contract becomes an
onerous contract and the obligation arising under the onerous contract satisfies the requirements of
provisions.
(2)Restructuring Obligation
The amount of a restructuring provision shall be recognized by the total direct expenditures arising from
the restructuring when the enterprise has a detailed, formal plan for the restructuring, and a public
announcement of the plan has been made for restructuring and above requirements for the provision
mentioned above are satisfied.
[For the restructuring obligation carried for the portion of business for sale, the obligation related to the
restructuring can only be recognized when the Group has committed for the sales of portion of the
business (signing the selling agreement with termination)]
4.18 Revenue
(1) Revenue from sales of goods
The Group has transferred to the buyer the significant risks and rewards of ownership of the goods; the
Group retains neither continuing managerial involvement to the degree usually associated with
ownership nor effective control over the goods sold; the associated costs incurred or to be incurred can
be measured reliably.
99
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
According to the principles above, the Group 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
C.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) Revenue from rendering service
When the outcome of a transaction involving the rendering of services can be estimated reliably at the
balance sheet date, revenue associated with the transaction is recognized using the percentage of
completion method, or otherwise, the revenue is recognized to the extent of costs incurred that are
expected to be recoverable. The stage of completion of a transaction for rendering services is
determined based on [survey of work performed / services performed to the date of as a percentage of
total services to be performed / the proportion that costs incurred to date bear to the estimated total
costs of the transaction]
The outcome of a transaction involving rendering of services can be estimated reliably when all of the
following conditions are satisfied:
1) the amount of revenue can be measured reliably;
2) it is probable that the associated economic benefits will flow to the Group;
3) the stage of completion of the transaction can be measured reliably;
4) the costs incurred and to be incurred for the transaction can be measured reliably.
If the outcome of a transaction involving rendering of services cannot be estimated reliably, the revenue
is recognized by the cost incurred and estimated compensation, and the actual cost is booked into
profit and loss. No revenue is recognized if the cost incurred cannot be recovered.
For contract or agreement entered between the Group and other enterprises with sales of goods and
rendering services, if part of goods selling and the part of rendering service can be separated and
measured individually, they are settled separately. If the part of goods selling and the part of rendering
service cannot be separated or they can be separated but cannot be measured individually, the parts in
the contract shall be treated as goods of selling.
(3) Revenue from construction contracts
Where the outcome of a construction contract can be estimated reliably, contract revenue and costs
are recognized using the percentage of completion method at the balance sheet date. The stage of
completion of a contract is determined using the proportion that actual contract costs incurred to date
100
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
bears to the estimated total contract costs.
The outcome of a construct contract can be measured reliably when the following conditions are met:
(1) the total revenue of the contract can be measured reliably;
(2) it is probable that the associated economic benefits will flow to the enterprise;
(3) the actual cost of the contract incurred can be determined and measured reliably;
(4) the stage of completion of the contract and the costs to be incurred associated with the completion
of the contract can be measured reliably.
Where the outcome of a construction contract cannot be estimated reliably, (1) if contract costs are
expected to be recoverable, contract revenue is recognized to the extent of contract costs that are
expected to be recoverable; and contract costs are recognized as expenses in the period in which they
are incurred; (2) if contract costs are not expected to be recoverable, they are recognized as expenses
immediately when incurred and contract revenue is not recognized. When the uncertainties that
prevented the outcome of the construction contract from being estimated reliably no longer exist,
revenue and expenses associated with the construction contract are recognized using the percentage
of completion method.
If the estimated total contract costs exceed total contract revenue, the expected loss is recognized
immediately as an expense for the period.
4.19 Government Grants
Government grants are transfer of monetary assets and non-monetary assets from the government to
the Group at no consideration, excluding the capital invested by the government as equity owner.
Government grant can be classified as grant related to the assets and grants related to the income.
If a government grant is in the form of a transfer of a monetary asset, it is measured at the amount
received or receivable. If a government grant is in the form of a non-monetary asset, it is measured at
fair value. If the fair value cannot be reliably determined, it is measured at a nominal amount. A
government grant measured at a nominal amount is recognized immediately in profit or loss for the
period.
A government grant related to an asset is recognized as deferred income, and evenly amortized to
profit or loss over the useful life of the related asset. For a government grant related to income, if the
grant is a compensation for related expenses or losses to be incurred in subsequent period, the grant is
recognized as deferred income, and recognized in profit or loss over the periods in which the related
costs are recognized. If the grant is a compensation for related expenses or losses already incurred,
the grant is recognized immediately in profit or loss for the period.
For repayment of a government grant already recognized, if there is a related deferred income, the
repayment is offset against the carrying amount of the deferred income, and any excess is recognized
101
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
in profit or loss for the period. If there is no related deferred income, the repayment is recognized
immediately in profit or loss for the period.
4.20 Deferred income tax assets and deferred income tax liabilities
（1）Income tax of the current period
At the balance sheet date, deferred tax assets and liabilities are measured at the tax rates that are
expected to apply to the period when the asset is realized or the liability is settled, according to the
requirements of tax laws. The measurement of deferred tax assets and deferred tax liabilities reflects
the tax consequences that would follow from the manner in which the Group expects at the balance
sheet date, to recover the assets or settle the liabilities.
At the balance sheet date, current income tax liabilities or assets for the current and prior periods, are
measured at the amount expected to be paid (or recovered) according to the requirements of tax laws.
The calculation for income tax expenses in the current period is based on the taxable income according
to the related tax laws after adjustment to the accounting profit reporting period.
(2) Deferred income tax assets and liabilities
For temporary differences between the carrying amount of certain assets or liabilities and their tax base,
or between the nil carrying amount of those items that are not recognized as assets or liabilities and
their tax base that can be determined according to tax laws, deferred tax assets and liabilities are
recognized using the balance sheet liability method.
For temporary differences associated with the initial recognition of goodwill and the initial recognition of
an asset or liability arising from a transaction (not a business combination) that affects neither the
accounting profit nor taxable profits (or deductible losses) at the time of transaction, no deferred tax
asset or liability is recognized.
For taxable temporary differences associated with investments in subsidiaries and associates, and
interests in joint ventures, no deferred income tax liability related is recognized except where the Group
is able to control the timing of reversal of the temporary difference and it is probable that the temporary
difference will not reverse in the foreseeable future.
All deferred income tax liabilities arising from taxable temporary differences except the ones mentioned
above are recognized.
For temporary deductible differences associated with the initial recognition of an asset or liability arising
from a transaction (not a business combination) that affects neither the accounting profit nor taxable
profits (or deductible losses) at the time of transaction, no deferred tax asset is recognized.
For taxable temporary deductible differences associated with investments in subsidiaries and
associates, and interests in joint ventures, no deferred income tax asset related is recognized if it is
impossible to reversal the temporary difference in the foreseeable future, or it is not probable to obtain
102
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
taxable income which can be used for the deduction of the temporary difference in the future.
Except mentioned above, the Group recognizes other deferred income tax assets that can deduct
temporary differences to the extent that it is probable that taxable profits will be available against which
the deductible temporary differences can be utilized.
For the deductible losses and tax credit that can be carried forward, deferred tax assets for deductible
temporary differences are recognized to the extent that it is probable that taxable profits will be
available against which the deductible temporary differences can be utilized.
At the balance sheet date, deferred tax assets and liabilities are measured at the tax rates according to
tax laws, that are expected to apply in the period in which the asset is realized or the liability is settled.
At the balance sheet date, the Group reviews the carrying amount of deferred tax assets. If it is no
longer probable that sufficient taxable profit will be available in future periods to allow the benefits of
the deferred tax assets to be used, the Group reduces the carrying amount of deferred tax assets. The
amount of such reduction is reversed when it becomes probable that sufficient taxable profit will be
available
(3) Income Tax Expenses
Income tax expenses consist of current income tax and deferred income tax.
The expenses from income tax and deferred income tax, as well as the revenue, shall be recorded into
profit or loss in current accounting period, except expense for income tax of the current period and
deferred income tax that booked into other income or equity and adjusted carrying value of deferred
income tax goodwill arose from business combination.
(4) Income Tax offset
When we have the legal right, and have intended to, to make settlement with net amount, or through
the asset acquisition and liability fulfillment simultaneously, the Group shall present the net value from
the offset between current income tax asset and current income tax liability in the financial statement.
When the Group has the legal right to make a settlement with the current income tax asset and current
income tax liability, and the deferred income tax asset and deferred income tax liability are related to
the same taxable subject under the same tax payer, or related to different taxable subject, but the
intension of net value settlement in regard of the current income tax asset and current income tax
liability, the Group shall present net value after the offset of deferred income tax asset and deferred
income tax liability.
4.21 Leases
A finance lease is a lease that transfers in substance all the risks and rewards incident to ownership of
an asset. Title may or may not eventually be transferred. An operating lease is a lease other than a
finance lease.
103
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
(1)The Group as Lessee under Operating Lease
Lease payments under an operating lease are recognized by a lessee on a straight-line basis over the
lease term, and either included in the cost of the related asset or charged to profit or loss for the current
period. The contingent rents shall be recorded in the profit or loss of the period in which they actually
arise.
(2) The Group as Leaser under Operating Lease
Lease income from operating leases shall be recognized by the leaser in profit or loss on a straight-line
basis over the lease term. Initial direct cost of significance in amount shall be capitalized when incurred.
If another basis is more systematic and rational, that basis may be used. Contingent rents are credited
to profit or loss in the period in which they actually arise.
(3) The Group as Lessee under Financing Lease
For an asset that is held under a finance lease, at the lease commencement, the leased asset is
recorded at the lower of its fair value at the lease commencement and the present value of the
minimum lease payments, and the minimum lease payment is recorded as the carrying amount of the
long-term payables; the difference between the recorded amount of the leased asset and the recorded
amount of the payable is accounted for as unrecognized finance charge, Initial direct costs incurred by
the lessee during the process of negotiating and securing the lease agreement shall be added to the
amount recognized for the leased asset.
The net amount of minimum lease payment deducted by the unrecognized finance shall be separated
into long-term liabilities and long-term liability within one year for presentation.
Unrecognized finance charge shall be computed by the effective interest method during the lease term.
Contingent rent shall be booked into profit or loss when actually incurred.
(4) In the case of the lesser of a financing lease
For an asset that is leased out under a finance lease, the aggregate of the minimum lease receipts at
the inception of the lease and the initial direct costs is recorded as a finance lease receivable, and
unguaranteed residual value is recorded at the same time; the difference between the aggregate of the
minimum lease receipt, initial direct costs, and unguaranteed residual value, and the aggregate of their
present values, is recognized as unearned finance income, which is amortized using the effective
interest rate method over each period during the lease term.
Finance lease receivable less unearned finance income shall be separated into long-term liabilities and
long-term liability within one year for presentation.
Unearned finance income shall be computed by the effective interest method during the lease term.
Contingent rent shall be credited into profit or loss in which actually incurred.
4.22 Assets ready-for-sale
104
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
The Group has made decision on disposal of some non-current assets, and signed irrecoverable
transferring agreements with buyers. The transaction is probably to be completed with one year. If so,
the non-current asset shall be counted as an asset ready-for-sale, not depreciated or amortized, and
shall be measured by the lower of carrying amount and faire value less net value of disposal expenses.
Non-current assets ready-for-sale includes individual asset and disposal group. If disposal group is an
asset group, and has allocated goodwill acquired during the combination according to the Accounting
Standard for Business Enterprises No. 8 - Impairment, or. the disposal group is an operation in the
asset group, the disposal group includes goodwill in the business combination.
Where an asset or a disposal group is classified as held-for-trade, but cannot satisfy the condition of
non-current asset ready-for-trade, the Group shall derecognize it as held-for-trade, and measure it by
the lower of the followings:
(1) the carrying amount of the asset or disposal group before it is classified as held-for-trade, the
value after the adjustment of depreciation, amortization or impairment recognized under the
assumption that it is not classified as held-for-trade;
(2) the recoverable value on the date when decided not to trade any more.
4.23 Employee Benefits
During the accounting period of an employee’ providing services to the Group, the Group recognizes
the compensation payable as liabilities.
The Group participates in the employees social security system set up by government agencies,
including pensions, medical insurance, housing fund and other social security system, and the
corresponding expenditures are included in the cost of related assets or the profit or loss.
When an enterprise terminates the employment relationship with employees before the end of the
employment contracts or provides compensation as an offer to encourage employees to accept
voluntary redundancy, a provision shall be recognized for the compensation arising from termination of
employment relationship with employees, with a corresponding charge to the profit or loss for the
current period. The enterprise cannot unilaterally withdraw from the termination plan or the redundancy
offer.
The early retirement plan adopts the same principles of termination benefits. Salaries and social
insurance from the date of ceasing services to the date of normal retirement are paid by the Group,
subject to the conditions to be recognized in profit or loss (termination benefits).
4.24 Changes in major accounting policies and accounting estimates
(1) Changes of accounting estimates
There were no changes of accounting policies that affected the Company during the period.
(2)Changes of accounting estimates
105
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
There were no changes of accounting eatimation that affected the Company during the period.
4.25 Correction of previous accounting errors
There was no previous accounting errors correction that affected the Company during the period.
4.26 Significant account judgment and estimates
The Group is required to make judgments, estimates and assumptions about the carrying amounts of
items in the financial statements that cannot be measured accurately, due to the internal uncertainties
of operation activities. These judgments, estimates and assumptions are based on historical
experiences of the Group’s management as well as other factors that are considered to be relevant.
These judgments, estimates and assumptions may affect value of the financial statements in revenue,
expenses, assets and liabilities and the disclosure of contingency at the balance sheet date. However,
the result derived from those uncertainties in estimates may lead significant adjustments to the carrying
amounts of the assets or liabilities affected in the future.
The Group has reviews the judgments, estimates and assumptions regularly on the basis of going
concern. Where the changes in accounting estimates only affect the period when changes occurred,
and they are recognized within the same period. Where the changes in accounting estimates affect
both current period and future period, the changes are recognized within the period of change and
future period.
At balance sheet date, the followings are the significant areas where the Group needs to make
judgment, estimates and assumptions over the value of items in the financial statements:
（1）Classification of lease
The Group classifies leases as operating lease and financing lease according to the rule stipulated in
the Accounting Standard for Business Enterprises No. 21--Leasing-. The management shall make
analysis and judgment on whether the risks and rewards related to the title of leased assets has been
transferred to the leaser, or whether the Group has substantially held the risks and rewards related to
the ownership of leased assets
（2）Provisions for bad debts
According to the relevant accounting policies of the Group in receivables, allowance method is used for
bad debt’s calculation. The impairment of receivables is calculated based on the assessment of
recoverable of receivables. Assurance of receivable impairment needs judgments and estimations from
the management. The difference between actual results and original estimates shall have impact on
the carrying amount of receivables and receivable bad debt provisions or the reverse during the
change of estimation.
（3）impairment of inventories
The Group measures inventories by the lower of cost and realizable net value according to the
106
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
accounting policies in regard of inventories and provisions for decline in value of inventories is made if
the cost is higher than their net realizable value, and obsolete and slow-movement inventories.
Inventories decline in value to net realizable value is the estimated selling price in the ordinary course
of business. Net realizable value is determined on the basis of clear evidence obtained, and takes into
consideration the purposes of holding inventories and effect of post balance sheet events. The
difference between the actual result and the original estimates shall have impact on reverse of the
carrying amount of the inventories and their decline in value or provisions during the period of change.
（4）The fair value of financial instruments
For a financial instrument which has no active market, the Group establishes fair value by using various
valuation methods, including of discounted cash flow analysis model. The Group needs to estimate
future cash flow, credit risk, volatility and relationship during the valuation and choose appropriate
discount rate. Such assumptions have uncertainties and their changes shall have impact on the fair
value of financial instruments.
（5）Impairment of non-financial, non-current assets
The Company assesses whether there are any indicators of impairment for all non-current assets other
than financial assets at the balance sheet date. For an intangible asset that has indefinite useful life,
impairment test is made in addition to the annual impairment test if there is any indication of impairment.
For non-current assets other than financial assets, impairment test is made when there is any
indication that its account balance cannot be recovered.
Impairment exists when the recoverable amount of an asset is the higher of its fair value less cost of
disposal and present value of the future cash flows expected to be derived from the asset.
Net value between the difference of fair value and disposal cost is determined by reference of the price
of similar product in a sale agreement in an arm’s length transaction or an observable market price less
the additional cost directly attributable to the disposal of the asset.
When estimating the present value of future cash flow, significant judgments are made over the asset’s
production, selling price and relevant operating expenses, and discount rate used to calculate present
value. All available materials that are considered to be relevant shall be used in the estimation of
recoverable value. These materials include estimations of production, selling price and operating
expenses based on reasonable and supportable assumptions.
The Group makes an impairment test for goodwill at least at each year end. This requires an estimation
of present value of future cash flow of the assets or assets group where goodwill has been allocated.
The Group shall makes estimation on the future cash flow derived from assets or assets group and
determine an appropriate discount rate for the present value of future cash flow when the estimation of
present value of future cash flow is made.
107
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
（6）Depreciation and amortization
Investment property, fixed assets and intangible assets are depreciated and amortized using the
straight-line method over their useful lives after taking into account residual value. The useful lives are
regularly reviewed to determine the depreciation and amortization costs charged in each reporting
period. The useful lives are determined based on historical experience of similar assets and the
estimated technical changes. If there is an indication that there has been a change in the factor used to
determine the depreciation or amortization, the rate of depreciation or amortization is revised.
（7）Development expenditure
When determining the capitalization value, the management of the Group shall make assumptions for
the future cash flow of related assets, discount rate applied and expected beneficial period.
（8）Deferred income tax assets
The group shall recognize all unused tax losses as deferred tax assets to the extent that it is probable
that future taxable profit will be available against which the unused tax losses and unused tax credits
can be utilized. This requires the management of the Group make a lot of judgments over the
estimation of time period, value and tax planning strategies when future taxable profit incurs so that the
value of deferred tax assets can be determined.
（9）Income tax
There are some transactions where ultimate tax treatments and calculations have uncertainties in the
Group’s everyday operation. Whether it is possible for some items to make expenditure before tax
needs approval from competent tax authorities. If there is any difference between finalized
determination value and their initial estimations value, the difference shall have the impact on the
income tax and deferred income tax of the current period during the final determination.
（10）Early retirement and supplementary retirement benefits
The value of expenditure and liabilities in the early retirement and supplementary retirement benefits of
the Group is determined by all kinds of assumptions, which include discount rate, average increase
rate of medical expenses, increasing rate of compensations for early retirement and retired people and
other factors. The difference between assumptions and actual results shall be recognized immediately
into expense when occurs. Although the management believes that they have adopted reasonable
assumptions, the changes in practical experience and assumption conditions shall still have impact on
the early retirement benefits and expenses and liabilities balance attributed to the retirement of the
Group.
（11）Provisions
The Group assesses the products quality assurance, estimated contract losses and penalties for late
delivery of goods based on the contract terms, knowledge obtained and historical experience and
108
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
makes appropriate provisions. The Group recognizes the best estimate of the expenditure required to
settle the present obligation as provision when the contingency has been presented as an obligation,
and it is probable that economic benefits will flow out when the obligation is settled. The recognition
and measurement of provisions largely rely on management’s judgment. The Group shall take into
account factors pertaining to a contingency such as risks, uncertainties and time value of money when
the judgment is made.
At the same time, the Group shall bear its clients with warranty commitment as provisions after-sale
services by selling, maintaining and transformation of sold products. Provision has the experience
repairing data into consideration, but recent experience data may not reflect future repairing status. Any
increase or decrease in the provisions shall have impact on the profit or loss of the future periods.
Note 5 Principal Taxes Applied
Taxes and their rates
Category Taxable basis Tax rate
Value added tax (“VAT”) Goods sales income, taxi operating income 17% & 3%
Proceeds from sales of properties, leasing
Business tax 5%
income, property management income
Business tax Construction, installation income 3%
Construction tax Turnover tax 7%*
Education surcharge(Local Education
surcharge) Turnover tax 5%
Progressive rates ranging
Land appreciation tax Sales revenue of properties from 30%-60%
Income tax Income tax payable 25% & 16.5%*
* For Shenzhen City Car Rental Ltd. (one of Subsidiaries of the Group), the original business tax rate is
5%. According to the relevant provisions of the Ministry of Finance, State Administration (Cai Shui
[2012] No. 71) for transportation and parts of the modern service industry in Beijing and other provinces
and cities to carry out the business tax levy VAT pilot, the value-added tax and the applicable tax rate of
3% has been applied in the Company since November 1, 2012.
**The rate of domestic enterprises is 25%, and the rate of HK enterprises is 17.5%.
109
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Note 6 Business Combination & Consolidated Financial Statements
6.1 Information of subsidiaries
(1) Subsidiaries established or acquired through investment
Balance of
Actual other items
capital that in
Reg.
Name of the subsidiary Types Biz nature Reg. captl Biz scope contribution substance
place
at the end of constitutes
the period net
investment
Shenzhen Petrel Hotel Co. Ltd. Wholly-owned subsidiary shenzhen Services 3,000 Hotel 3,000 --
Property
Shenzhen City Property Management Ltd. Wholly-owned subsidiary shenzhen Services 725 725 --
management
Fitting-out
contracting
Shenzhen Zhen Tung Engineering Ltd. Wholly-owned subsidiary shenzhen Services 1,000 1,000 --
and
maintenance
Construction
Shenzhen City We Gen Construction Management Ltd. Wholly-owned subsidiary shenzhen Services 800 project 800 --
management
Shenzhen City Car Rental Ltd. Wholly-owned subsidiary shenzhen Services 1,029 Car rental 1,029 --
Develop and
Shenzhen Shenfang Car Park Ltd. Wholly-owned subsidiary shenzhen Services 4,250 operate car 4,250 --
park
Investment
Shenzhen City Shenfang Investment Ltd. Wholly-owned subsidiary shenzhen Investment 1,000 and 1,000 --
management
Trading of
Commecial
Shenzhen City Shenfang Free Trade Trading Ltd. Wholly-owned subsidiary shenzhen 500 Import and 500 --
trade
Export
Property
Shenzhen City SPG Long Gang Development Ltd. Wholly-owned subsidiary shenzhen Real estate 3,000 3,000 --
development
110
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Balance of
Actual other items
capital that in
Reg.
Name of the subsidiary Types Biz nature Reg. captl Biz scope contribution substance
place
at the end of constitutes
the period net
investment
Shenzhen Special Economic Zone Real Estate (Group) Guangzhou Property
Wholly-owned subsidiary GuangZhou Real estate 2,000 2,000 --
Property and Estate Co., Ltd. development
Operating of
Beijing fresh peak property development management limited company Wholly-owned subsidiary BeiJing Real estate US$1,000 7,671 --
Real estate
Property
Beijing SPG Property Management Limited Wholly-owned subsidiary BeiJing Services 50 50 --
management
Elevator
Shenzhen ShenWu elebator Co.,Ltd Wholly-owned subsidiary shenzhen Services 350 sales and 350 --
service
Installation
of mechanical
Shenzhen Lain Hua Industry and Trading Co. Ltd. Wholly-owned subsidiary shenzhen Services 1,000 and electrical 1,000 --
equipment
Investment Investment
Fresh Peak Holding Ltd. Wholly-owned subsidiary HongKong and HKD100 and 100.47 3,202
management management
Investment Investment
Wellam Ltd. Wholly-owned subsidiary HongKong HKD1 1 --
holding holding
Property
Shantou SEZ Wellam Fty Bldg., Dev. Co. Wholly-owned subsidiary ShanTou Real estate USD1500 9,122.61 --
development
Subsidiary of holding Property
Great Wall Estate Co., Inc USA Real estate USD50 205.11 10,138
company development
Investment Investment
Fresh Peak Holdings Ltd. Wholly-owned subsidiary HongKong and HKD100 and 50.23 56,498
management management
Subsidiary of holding Properties
Fresh Peak Investment Ltd. HongKong Investment HKD100 100.47 --
company investment
Investment Investment
Openice Ltd. Wholly-owned subsidiary HongKong HKD100 100.47 --
and and
111
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Balance of
Actual other items
capital that in
Reg.
Name of the subsidiary Types Biz nature Reg. captl Biz scope contribution substance
place
at the end of constitutes
the period net
investment
management management
Subsidiary of holding Properties
Barenie Co. Ltd. HongKong Investment HKD1 1 --
company investment
Investment
Keyear Development Ltd. Wholly-owned subsidiary HongKong Investment HKD100 100.47 --
holding
Property
Guangzhou Huangpu Xizun real estate limited company Wholly-owned subsidiary GuangZhou Real estate HKD3980 2,845.70 --
development
Property
Fresh Peak Real Estate Dev. Construction (Wuhan) Co. Ltd.*① Wholly-owned subsidiary WuHan Real estate USD400 2,292 --
development
Commercial
Shenzhen Shenfang Department Store Co. Ltd.*② Wholly-owned subsidiary shenzhen Commecial 1,000 goods 1,000 --
trade supplier
Information
Shenzhen CyberPort Co., Ltd *③ Wholly-owned subsidiary shenzhen Consultant 2,000 Technology 1,400 --
Advisory
Property
Shenzhen City SPG Bao An Development Ltd.*④ Wholly-owned subsidiary shenzhen Real estate 2,000 2,000 --
development
Constructio
Integrated n material,
Shenzhen Real Estate Consolidated Service Co., Ltd *⑤ Wholly-owned subsidiary shenzhen 1,371 596 --
Services consume
goods
Investment
Shenzhen Shen Fang Industrial Development Co., Ltd.*⑥ Wholly-owned subsidiary shenzhen Investment 300 in industrial 450 --
projects
Construction
Shenzhen Tefa Real Estate Consolidated Service Co., Ltd.*⑦ Wholly-owned subsidiary shenzhen Services 221 and 818 --
decoration
Subsidiary of holding Property
Bekaton Property Limited *⑧ Australia Real estate USD20 Development 91 1,256
company
112
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Balance of
Actual other items
capital that in
Reg.
Name of the subsidiary Types Biz nature Reg. captl Biz scope contribution substance
place
at the end of constitutes
the period net
investment
Subsidiary of holding Property
Canada Great Wall ( vancouver) *⑧ Canada Real estate JOD 0.1 0.45 8,904
company Development
Property
construction
Paklid Limited *⑧ Wholly-owned subsidiary HongKong Commecial HKD50 and trading of 20 1,107
trade construction
materials
Commecial Construction
Shenzhen City Shenfang Construction and Decoration Materials Ltd *⑨ Wholly-owned subsidiary shenzhen 268 268 --
trade materials
Subsidiary of holding Integrated Tourism
Shenzhen ZhongGang Haiyan Enterprise Ltd.*⑩ shenzhen 1,900 1,294 --
company Services Restaurant
Domestic
Shenzhen Xing Dongfang Store Ltd.* 11 Wholly-owned subsidiary shenzhen Commecial 2,000 commercial 1,850 --
trade goods supply
Manufacturi
FengKai in ng and
Guangdong Province Fengkai Lain Feng Cement Manufacturing Co., Ltd Subsidiary of holding
GuangDong Manufacture USD800 trading in 12,126 --
*12 company
Province cement
products
（Continued）
113
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Amount of minority interest used The excess of the minority shareholders’ share of the
（%）of Voting Consolidated
Full name of subsidiary Minority interest to absorb profits or losses opening balance of owners’ equity of the subsidiary is Remark
share （%） or not
attributable to minority interests allocated against owners’ equity of parent company
Shenzhen Petrel Hotel Co. Ltd. 100 100 Yes -- -- --
Shenzhen City Property
100 100 Yes -- -- --
Management Ltd.
Shenzhen Zhen Tung Engineering
100 100 Yes -- -- --
Ltd.
Shenzhen City We Gen
100 100 Yes -- -- --
Construction Management Ltd.
Shenzhen City Car Rental Ltd. 100 100 Yes -- -- --
Shenzhen Shenfang Car Park Ltd. 100 100 Yes -- -- --
Shenzhen City Shenfang
100 100 Yes -- -- --
Investment Ltd.
Shenzhen City Shenfang Free
100 100 Yes -- -- --
Trade Trading Ltd.
Shenzhen City SPG Long Gang
100 100 Yes -- -- --
Development Ltd.
Shenzhen Special Economic Zone
Real Estate (Group) Guangzhou 100 100 Yes -- -- --
Property and Estate Co., Ltd.
Beijing fresh peak property
development management 100 100 Yes -- -- --
limited company
Beijing SPG Property Management
100 100 Yes -- -- --
Limited
Shenzhen ShenWu elebator
100 100 Yes -- -- --
Co.,Ltd
Shenzhen Lain Hua Industry and 100 100 Yes -- -- --
114
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Amount of minority interest used The excess of the minority shareholders’ share of the
（%）of Voting Consolidated
Full name of subsidiary Minority interest to absorb profits or losses opening balance of owners’ equity of the subsidiary is Remark
share （%） or not
attributable to minority interests allocated against owners’ equity of parent company
Trading Co. Ltd.
Fresh Peak Holding Ltd. 100 100 Yes -- -- --
Wellam Ltd. 100 100 Yes -- -- --
Shantou SEZ Wellam Fty Bldg.,
100 100 Yes -- -- --
Dev. Co.
Great Wall Estate Co., Inc 70 70 Yes -21,676,670.68 50,787.86 -21,676,670.68
Fresh Peak Holdings Ltd. 100 100 Yes -- --
Fresh Peak Investment Ltd. 55 55 Yes -104,550,311.12 -6,794.55 -104,550,311.12
Openice Ltd. 100 100 Yes -- --
Barenie Co. Ltd. 80 80 Yes -2,037,619.15 -3,687.21 -2,037,619.15
Keyear Development Ltd. 100 100 Yes -- -- --
Guangzhou Huangpu Xizun real
100 100 Yes -- -- --
estate limited company
Fresh Peak Real Estate Dev.
Construction (Wuhan) Co. 55 100 Yes -- - --
Ltd.*①
Shenzhen Shenfang Department
100 100 No -- -- --
Store Co. Ltd.*②
Shenzhen CyberPort Co., Ltd *③ 70 70 No -- -- --
Shenzhen City SPG Bao An
100 100 No -- -- --
Development Ltd.*④
Shenzhen Real Estate
Consolidated Service Co., Ltd 100 100 No -- -- --
*⑤
Shenzhen Shen Fang Industrial 100 100 No -- -- --
115
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Amount of minority interest used The excess of the minority shareholders’ share of the
（%）of Voting Consolidated
Full name of subsidiary Minority interest to absorb profits or losses opening balance of owners’ equity of the subsidiary is Remark
share （%） or not
attributable to minority interests allocated against owners’ equity of parent company
Development Co., Ltd.*⑥
Shenzhen Tefa Real Estate
Consolidated Service Co., 100 100 No -- -- --
Ltd.*⑦
Bekaton Property Limited *⑧ 60 60 No -- -- --
Canada Great Wall ( vancouver)
75 75 No -- -- --
*⑧
Paklid Limited *⑧ 100 100 No -- -- --
Shenzhen City Shenfang
Construction and Decoration 100 100 No -- -- --
Materials Ltd *⑨
Shenzhen ZhongGang Haiyan
68 68 No -- -- --
Enterprise Ltd.*⑩
Shenzhen Xing Dongfang Store
100 100 No -- -- --
Ltd.* 11
Guangdong Province Fengkai Lain
Feng Cement Manufacturing 90 90 No -- -- --
Co., Ltd *12
116
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
*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 included in the
Company’s consolidated financial statement. The book value of the investment account of the
Company is zero.
*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 included 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 18 September 2009 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
included 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 of 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 of 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 of failing to take part in annual inspection.
117
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
*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 terminated its licenses by law on
February 8, 2002 because of failing to take part in annual inspection.
*⑩Shenzhen 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 of 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 of 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 is zero.
Except for *②, *③, *④，*12, the above subsidiaries which are not includedin the company’s
consolidated financial statement had ceased operations for many years. And the entities of the
corporations didn’t exist. And the Company has 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 included in the Company’s consolidated financial statement. The book value of
the investment account of the Company is zero.
(2）Subsidiaries acquired through business combination under common control
There were not subsidiaries acquired through business combination under common control.
118
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
(3）Subsidiaries acquired through business combination not under common contro
Balance of
other items
Actual capital
that in
Reg. Biz contribution
Name of the subsidiary Types Reg. captl Biz scope substance
place nature at the end of
constitutes
the period
net
investment
Shan Tou Special Economic Zone Wholly-owned Property
Real estate Services HKD3000 2,108 --
subsidiary development
Real Estate Ltd.
(Continued)l
The excess of the
Amount of minority minority shareholders’
interest used to absorb share of the opening
（%）of Consolidated Minority
Full name of subsidiary Voting （%） profits or losses balance of owners’ equity Remark
share or not interest
attributable to minority of the subsidiary is
interests allocated against owners’
equity of parent company
Shan Tou Special Economic
100 100 Yes -- -- --
Zone Real Estate Ltd.
6.2 Exchange rates for translating major financial statement items of foreign operations
Assets and liabilities
Items
December 31,2011 January 1, 2011
Great Wall Estate Co., Inc USD1 = RMB 6.2855 USD1 = RMB 6.3167
Revenue,expenses and cash flow
Items
2011 2010
Great Wall Estate Co., Inc USD1 = RMB 6.3099 USD1 = RMB 6.4527
Note 7 Notes to the Consolidated Financial Statements
Unless specified, the items of the Opening in the followings (including the notes to the Company
financial statements) refers to the date of January 1, 2012, the Closing refers to the December 31,
2012; the items of the prior period refers to the year 2011, the current period refers to the year 2012.
7.1 Monetary funds
Closing balance Opening balance
Foreign Exchange Foreign Exchange
Amount in RMB Amount in RMB
currency rate currency rate
Cash on hand 336,552.84 276,080.48
RMB 298,819.57 254,443.84
USD 1,435.33 6.2855 9,021.75 3,333.32 6.3167 21,055.58
HKD 35,406.98 0.8109 28,711.52 715.39 0.8122 581.06
Cash in bank 488,243,117.58 324,467,108.26
RMB 482,281,853.10 284,705,859.96
USD 116,396.17 6.2855 731,608.14 89,448.48 6.3167 565,019.22
119
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Closing balance Opening balance
Foreign Exchange Foreign Exchange
Amount in RMB Amount in RMB
currency rate currency rate
HKD 6,449,200.07 0.8109 5,229,656.34 48,257,549.07 0.8122 39,196,229.08
Other monetary funds 8,226,234.59 8,726,054.98
RMB 8,092,202.24 8,592,057.86
HKD 165,288.38 0.8109 134,032.35 164,974.35 0.8122 133,997.12
Total 496,805,905.01 333,469,243.72
Note: (1) Cash in bank above includes RMB 33,092,202.24 ownership restricted (opening balance:
RMB 8,502,057.86).Among which, RMB 25,000,000.00 certificate of deposit was pledged for 3 years’
time loan.
(2)Other monetary funds above include RMB 8,001,929.14 mortgage loan guarantees and RMB
90,273.10 tender bonds margin.
(3)Other monetary funds above include HKD 165,288.38, that is RMB134,032.35 (opening balance:
RMB 133,997.12), is deposits of securities accounts opened by the Group in China Investment
Securities Co. Ltd., Shenzhen Aiguo Road securities business department.
(4)The fund with use restrictions, which is being kept in a foreign country, is RMB 6,002,371.76
(opening balance: RMB 39,772,294.58).
7.2 Accounts receivables
(1) Accounts receivable by categories
Closing balance
Category Carrying amount Bad debt provision
Amount (%) Amount (%)
Accounts receivable of which provision for
-- -- -- --
bad debts is of individually significant
Accounts receivable of which provision for
42,887,466.13 100.00 18,474,279.11 43.08
bad debts is of individually insignificant
Total 42,887,466.13 100.00 18,474,279.11 43.08
(Continued)
Category Opening balance
Carrying amount Bad debt provision
120
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Amount (%) Amount (%)
Accounts receivable of which provision for
-- -- -- --
bad debts is of individually significant
Accounts receivable of which provision for
37,614,079.33 100.00 18,474,279.11 49.12
bad debts is of individually insignificant
Total 37,614,079.33 100.00 18,474,279.11 49.12
(2) Accounts receivable by aging balance
Closing balance Opening balance
Amount (%) Amount (%)
Within 1 year 12,586,772.76 29.35 5,048,707.10 13.42
1-2 years 2,915,703.10 6.80 2,387,215.72 6.35
2-3 years 1,670,965.02 3.90 1,968,143.50 5.23
Over 3 years 25,714,025.25 59.95 28,210,013.01 75.00
Total 42,887,466.13 100.00 37,614,079.33 100.00
(3) Bad debt provision
Bad debt provision of accounts receivable which is of individually insignificant
Proportion of Reasons for the
Content of accounts receivable Carrying amount Amount of bad debt
provision provision
Receivables of import and export A separate
11,574,556.00 11,574,556.00 100.00
agency business provision is
House pay to be collected 18,600,646.68 6,301,854.02 33.88 established
according to the
recoverability of
Engineering construction funds each receivales
12,712,263.45 597,869.09 4.70
and others with long aging
and little
retrievability.
Total 42,887,466.13 18,474,279.11 43.08
(4)There were no any account reciviables which had been accured fully or large proporation provision
transferred back in this accounting year.
(5) There were no any significant account reciviables which had been written off in this accounting
year.
(6) 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.
(7) Top 5 entities with the largest balances of accounts receivable
121
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Relationship with the Proportion of the amount
Name of entity Amount Age
Group to the total AR (%)
Individual No.1 Un-related party 3,822,496.00 Within 1 year 8.91
Corporate unit No.1 Un-related party 2,011,731.01 1-3 years 4.69
Corporate unit No.2 Un-related party 1,845,278.76 Over 5 year 4.30
Corporate unit No.3 Un-related party 1,600,188.37 1-3 years 3.73
Individual No.2 Un-related party 1,200,000.00 Over 5 year 2.80
Total 10,479,694.14 24.43
(8) Receivables due from related parties, details please refer to Note 8.6.
(9) There were no any accounts receivable that have been derecognized.
(10) There were no any accounting receivable which had been securitization.
7.3 Prepayments
(1) Aging analysis
Closing balance Opening balance
Aging
Amount (%) Amount (%)
Within 1 year 38,665,226.47 97.44 32,278,974.66 79.779
1-2 years 38,762.35 0.10 971,011.25 2.400
2-3 years 971,011.25 2.45 550.00 0.001
Over 3 years 2,550.00 0.01 7,210,298.85 17.820
Total 39,677,550.07 100.00 40,460,834.76 100.00
122
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
(2) Top 5 entities with the largest balances of prepayments
Relationship with the Reasons for
Name of entities Amount Timing
Group unsettlement
The un-settled
Project 1 Un-related party 1,554,067.32 Within 1 year prepayment of
engineering materials
The un-settled
Project 2 Un-related party 1,420,967.69 Within 1 year prepayment of
engineering materials
The un-settled
Project 3 Un-related party 905,242.93 Within 1 year prepayment of
engineering materials
The un-settled
Project 4 Un-related party 592,568.40 Within 1 year prepayment of
engineering materials
The un-settled
Project 5 Un-related party 239,367.41 Within 1 year prepayment of
engineering materials
Total 4,712,213.75
(3) No prepayments to shareholders at least 5% of the Group’s shares with voting power during the
current period.
7.4 Interest receivables
Item Opening balance Increase Decrease Closing balance
Bank of Shanhai
Shenzhen Branch
341,000.00 -- 341,000.00 --
(Longgang
Sub-branch)
Total 341,000.00 -- 341,000.00 --
123
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
7.5 Dividends receivable
Reasons for Whether the
Opening Closing
Item Increase Decrease uncollected amount is
balance balance
amounts impaired
Aged within 1 year -- 1,052,192.76 -- 1,052,192.76
Including: YunNan
KunPeng Flight service -- 1,052,192.76 -- 1,052,192.76 No
Co.,Ltd
Total -- 1,052,192.76 -- 1,052,192.76
Note: Dividends receivable aged Aged within 1 year of the Group amounted to RMB 1,052,192.76
which is due from YunNan KunPeng Flight service Co., Ltd.
7.6 Other receivables
(1) Other receivables by categories
Closing balance
Category Carrying amount Bad debt provision
Amount (%) Amount (%)
Other receivables of which provision for
162,502,551.42 69.07 148,947,821.36 91.66
bad debts is of individually significant
Other receivables of which provision for
72,762,279.99 30.93 29,422,675.04 40.44
bad debts is of individually insignificant
Total 235,264,831.41 100.00 178,370,496.40 75.82
(Continued)
Opening balance
Category Carrying amount Bad debt provision
Amount (%) Amount (%)
Other receivables of which provision for
162,500,901.55 72.40 148,948,710.29 91.66
bad debts is of individually significant
Other receivables of which provision for
61,958,418.82 27.60 29,422,675.04 47.49
bad debts is of individually insignificant
Total 224,459,320.37 100.00 178,371,385.33 79.47
124
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
(2) Other receivables by aging balance
Closing balance Opening balance
Amount (%) Amount (%)
Within 1 year 17,424,406.66 7.41 5,742,193.32 2.56
1-2 years 2,285,080.90 0.97 4,164,398.60 1.86
2-3 years 1,788,417.79 0.76 3,276,724.27 1.46
Over 3 years 213,766,926.06 90.86 211,276,004.18 94.12
Total 235,264,831.41 100.00 224,459,320.37 100.00
(3) Bad debt provision
(a) Bad debt provision of other receivables which is of individually significant
Proportion of
Content of accounts receivable Carrying amount Amount of bad debt Reasons for the provision
provision
Other receivables between A separate provision is
subsidiares that are not included 128,553,784.83 128,550,953.95 99.99 established according to the
in the consolidated statement recoverability of each
Others 33,948,766.59 20,396,867.41 60.08 receivales with long aging
Total 162,502,551.42 148,947,821.36 91.66 and little retrievability
(c) Bad debt provision of other receivables which is of individually insignificant
Content of other Amount of bad
Carrying amount Proportion of provision Reasons for the provision
receivables debt
Other receivables
A separate provision is
between subsidiares
established according to the
that are not included in 1,324,136.04 1,116,316.04 84.31
recoverability of each
the consolidated
receivales with long aging
statement
and little retrievability
Others 71,438,143.95 28,306,359.00 39.62
Total 72,762,279.99 29,422,675.04 40.44
(4)There were no any account reciviables which had been accured fully or large proporation provision
transferred back during the current period.
(5)There were no any other material receivables written off during the current period.
(6)There were no any other receivables due from shareholders at least 5% of the Group’s shares with
voting power during the current period.
(7)Top 5 entities with the largest balances of other receivables
Name of entity Relationship with the Amount Age Proportion of the
125
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Group amount to the total OR
(%)
Canada Great
Subsidiary 89,035,748.07 Above 3 years 37.84
Wall( Vancouver) Co.,Ltd *
Paklid Limited * Subsidiary 18,631,565.47 Above 3 years 7.92
Bekaton property Limited * Subsidiary 12,559,290.58 Above 3years 5.34
Guangdong province Huizhou
Luofu Hill Mineral Water Joint venture 10,465,168.81 Above 3 years 4.45
Co.,Ltd
Luofu Hill Travelling
Un- related party 9,600,000.00 Above 3 years 4.08
Corporation
Total 140,291,772.93 59.63
Note: The above subsidiaries were not included in the Group’s consolidated financial statement. Refer
to Note 4.4for details.
(8) Receivables due from related parties, details please refer to Note 8.6.
(9) There were no any other receivables that have been derecognized.
(10)There were no any other receivables which had been securitization during the current period.
7.7 Inventory
(1) Categories of inventory
Closing balance
Item
Carrying amount Provision for decline in value of inventories Net carrying amount
Real estate development projects
Real estate developing products 2,260,222,646.19 47,584,499.31 2,212,638,146.88
Real estate developed products 187,895,424.67 -- 187,895,424.67
Real estate which are going to be developed -- -- --
Non real estate development projects
Raw materials 474,030.36 -- 474,030.36
Finished products 652,903.78 278,891.91 374,011.87
Low-value consumable products 41,821.30 -- 41,821.30
Construction in progress 30,331,029.46 -- 30,331,029.46
Total 2,479,617,855.76 47,863,391.22 2,431,754,464.54
(Continued)
Opening balance
Item
Carrying amount Provision for decline in Net carrying amount
126
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
value of inventories
Real estate development
projects
Real estate developing products 1,316,044,794.01 47,584,499.31 1,268,460,294.70
Real estate developed products 330,937,275.39 -- 330,937,275.39
Real estate which are going to
488,129,480.59 -- 488,129,480.59
be developed
Non real estate
development projects
Raw materials 456,564.13 -- 456,564.13
Finished products 592,570.73 278,891.91 313,678.82
Low-value consumable
29,985.02 -- 29,985.02
products
Construction in progress 44,432,927.93 -- 44,432,927.93
Total 2,180,623,597.80 47,863,391.22 2,132,760,206.58
(2)Real estate developing products
Estimated
Starting time Finished time total Dec 31, 2011 Dec 31, 2012
investment
DongHuDiJing Building* 130,966,363.51 130,350,182.51
ShanTou Yuejing Dongfang 2008 2014 150,000,000.00 63,427,856.39 78,795,485.51
Shengfang Shanglin Garden 2007 2014 1,400,000,000.00 246,218,888.14 346,095,674.23
ShanTou Fresh Peak Building 22,074,672.22 22,812,403.36
Shenfang Chuanqishan East
2011 2013 1,600,000,000.00 853,357,013.75 1,075,701,021.51
Zone
Shenfang Chuanqishan West
2012 2013 1,100,000,000.00 -- 606,467,879.07
Zone**
Total 1,316,044,794.01 2,260,222,646.19
Note: ①Details about DongHuDiJing Building refers to notes 12 other significant issues.
②The increase of Shenfang Chuanqishan West Zone is caused by transference from Real estate
which are going to be developed.
（3）Real estate developed products
Finished time Dec 31, 2011 Additions Redutions Dec 31, 2012
Jinye Island villa No.1 1996 602,180.72 -- 602,180.72 --
Jinye Island Multi-tier villa 1997 36,383,546.37 -- 253,778.28 36,129,768.09
Jinye Island villa No.6 2007 7,005,473.61 -- 4,043,477.39 2,961,996.22
Jinye Island villa No.7 2007 3,672,297.51 -- 3,672,297.51 --
127
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Finished time Dec 31, 2011 Additions Redutions Dec 31, 2012
Jinye Island villa No.9 2009 24,411,425.96 -- 14,172,105.06 10,239,320.90
Jinye Island villa No.10 2010 182,800,363.07 -- 97,985,073.56 84,815,289.51
Jinye Island villa No.11 2008 29,294,280.73 -- 6,749,154.05 22,545,126.68
HuangPuXinChun No.1 1994 121,283.88 -- -- 121,283.88
HuangPuXinChun No.2 2007 3,601,484.75 -- 3,331,538.61 269,946.14
HuaFeng Building 2000 1,631,743.64 -- -- 1,631,743.64
XingHu Garden Multi-tier 2003 248,384.29 -- 91,535.60 156,848.69
XingHu Garden No.8 2005 9,988,789.21 -- 9,988,789.21 --
BeiJing Fresh Peak Buliding 671,820.67 -- -- 671,820.67
JiaoHu Roan Cyber Shop 2,151,920.73 -- 2,151,920.73 --
Wenjin warehouse 1-5 floor 13,507,895.61 -- -- 13,507,895.61
Real Estate building 11,025,444.77 -- -- 11,025,444.77
Wenjing Garden 3,818,939.87 -- -- 3,818,939.87
Total 330,937,275.39 -- 143,041,850.72 187,895,424.67
(4)Provision for movement in value of inventories
Decrease
Item Opening balance Increase Closing balance
Reversals Write-off
Shengfang Shanglin
47,584,499.31 -- -- -- 47,584,499.31
Garden
Finished products 278,891.91 -- -- -- 278,891.91
Total 47,863,391.22 -- -- -- 47,863,391.22
(5) Capitalized borrowing cost at year end is RMB 123,869,852.05.
128
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
7.8 Other current assets
Item Contents Closing balance Opening balance
Value added tax Input tax to be deducted 5,686,855.14 5,068,827.11
Business tax Tax paid for advances from customers 1,680,349.06 8,333,346.56
City construction surcharge Tax paid for advances from customers 324,324.07 624,580.98
Education surcharge Tax paid for advances from customers 28,718.20 162,452.85
Local education surcharge Tax paid for advances from customers 19,227.31 112,491.43
Embankment Protection Fee Tax paid for advances from customers 40,987.00 151,734.75
Total 7,780,460.78 14,453,433.68
7.9 Long-term equity investments
(1) Long-term equity investments by types
Opening Closing
Item Increase Decrease
balance balance
invested in joint ventures 91,678,556.86 -- -- 91,678,556.86
Invested in associates 2,969,493.49 -- 120,218.96 2,849,274.53
Other equity investments 212,100,247.16 12,000,000.00 -- 224,100,247.16
Less：provisions for long-term equity
243,402,109.25 -- -- 243,402,109.25
investment impairment
Total 63,346,188.26 12,000,000.00 120,218.96 75,225,969.30
129
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
(2) Details of long-term equity investments
Changes [Increase
Name of investee Accounting method Investment cost Opening balance Closing balance
/decrease]
Shenzhen Ronghua JiDian Co.,ltd Equity method 1,250,000.00 1,524,067.93 -120,218.96 1,403,848.97
Shenzhen Runhua Automobile Trading Co.,Ltd Equity method 1,445,425.56 1,445,425.56 -- 1,445,425.56
Guangdong province Huizhou Luofu Hill mineral water Co.,Ltd Equity method 9,969,206.09 9,969,206.09 -- 9,969,206.09
Fengkai Xinhua Hotel Equity method 9,455,465.38 9,455,465.38 -- 9,455,465.38
Jiangmen Xinjian Real Estate Co. Ltd. Equity method 9,037,070.89 9,037,070.89 -- 9,037,070.89
Xi’an Fresh Peak Building Co. Ltd Equity method 32,840,729.61 32,840,729.61 -- 32,840,729.61
DongYi Property Co.,Ltd Equity method 30,376,084.89 30,376,084.89 -- 30,376,084.89
Shenzhen Shen Fang Industrial Development Co., Ltd Cost method 4,500,000.00 4,500,000.00 -- 4,500,000.00
Shenzhen ZhongGang Haiyan Enterprise Ltd Cost method 12,940,900.00 12,940,900.00 -- 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
Paklid Limited Cost method 201,100.00 201,100.00 -- 201,100.00
Bekaton Property Limited Cost method 906,630.00 906,630.00 -- 906,630.00
Shenzhen Tefa Real Estate Consolidated Service Co., Ltd Cost method 8,180,003.63 8,180,003.63 -- 8,180,003.63
Shenzhen Xin Dongfang Store Ltd Cost method 18,500,000.00 18,500,000.00 -- 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
Shenzhen Shenfang Department Store Co. Ltd. Cost method 10,000,000.00 10,000,000.00 -- 10,000,000.00
Shenzhen CyberPort Co., Ltd Cost method 14,000,000.00 7,613,507.96 -- 7,613,507.96
YunNan KunPeng Flight service Co.,Ltd Cost method 5,464,240.74 5,464,240.74 -- 5,464,240.74
ShenZhen ShenFang BaoAn developmentCo.,Ltd Cost method 20,000,000.00 20,379,525.68 -- 20,379,525.68
Shantou Fresh Peak Building Cost method 68,731,560.43 58,547,652.25 -- 58,547,652.25
Guangdong Province Fengkai Lain Feng Cement Manufacturing Co., Ltd. Cost method 121,265,000.00 56,228,381.64 -- 56,228,381.64
Shantou Small&medium Enterprises Finacing Guarantee Co. Ltd. Cost method 12,000,000.00 -- 12,000,000.00 12,000,000.00
Total 399,701,722.48 306,748,297.51 11,879,781.04 318,628,078.55
(Continued)
130
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Proportion of Proportion of Explanation of the Provision for
ownership voting power in inconsistency Provision for impairment Cash dividend
Name of investee
interest held the investee between these two impairment losses losses for the for the period
(%) (%) proportions period
Shenzhen Ronghua JiDian Co.,ltd 25 25 1,076,954.64 -- --
Shenzhen Runhua Automobile Trading Co.,Ltd 50 50 1,445,425.56 -- --
Guangdong province Huizhou Luofu Hill mineral water Co.,Ltd Co-operation Co-operation 9,969,206.09 -- --
Fengkai Xinhua Hotel Co-operation Co-operation 9,455,465.38 -- --
Jiangmen Xinjian Real Estate Co. Ltd. Co-operation Co-operation 912,537.16 -- --
Xian Fresh Peak Building Co. Ltd Co-operation Co-operation 20,673,831.77 -- --
DongYi Property Co.,Ltd Co-operation Co-operation 21,225,715.87 -- --
Shenzhen Shen Fang Industrial Development Co., Ltd 100 100 4,500,000.00 -- --
Shenzhen ZhongGang Haiyan Enterprise Ltd 68 68 12,940,900.00 -- --
Shenzhen Real Estate Consolidated Service Co., Ltd. 100 100 5,958,305.26 -- --
Paklid Limited 100 100 201,100.00 -- --
Bekaton Property Limited 100 100 906,630.00 -- --
Shenzhen Tefa Real Estate Consolidated Service Co., Ltd 100 100 8,180,003.63 -- --
Shenzhen Xin Dongfang Store Ltd 100 100 18,500,000.00 -- --
Shenzhen City Shenfang Construction and Decoration Materials Ltd. 100 100 2,680,000.00 -- --
Shenzhen Shenfang Department Store Co. Ltd. 100 100 10,000,000.00 -- --
Shenzhen CyberPort Co., Ltd 70 70 -- -- --
YunNan KunPeng Flight service Co.,Ltd* 25 25 -- -- 601,112.91
ShenZhen ShenFang BaoAn developmentCo.,Ltd 100 100 -- --
Shantou Fresh Peak Building 100 100 58,547,652.25 -- --
131
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Proportion of Proportion of Explanation of the Provision for
ownership voting power in inconsistency Provision for impairment Cash dividend
Name of investee
interest held the investee between these two impairment losses losses for the for the period
(%) (%) proportions period
Guangdong Province Fengkai Lain Feng Cement Manufacturing Co., Ltd. 90 90 56,228,381.64 -- --
Shantou Small&medium Enterprises Finacing Guarantee Co. Ltd. 10 10 -- --
Total 243,402,109.25 -- 601,112.91
Note:The proportion of ownership interest in YunNan KunPeng Flight service Co., Ltd held by the Group is 25%. Because the Group neither have control nor
have significant influence over the investee, the equity investment is accounted for using the cost method.
(3) Details of unrecognised investment losses are as follows:
Current year Prior year
Accumulated
Investee Unrecognised investment Accumulated unrecognised Unrecognised investment
unrecognised
losers for the year investment losses losers for the year
investment losses
Shenzhen Fresh Peak Property Consultant Co.,Ltd -227,348.83 769,586.20 -3,056.00 996,935.02
Total -227,348.83 769,586.20 -3,056.00 996,935.02
132
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
(4) Investments in joint ventures and associates
1) Joint ventures
Proportion
Proportion
of voting
Legal of
Registere power in
Name of investee Type of enterprise Registered place representati Nature of business ownership
d capital the
ve interest
investee
(%)
(%)
Guangdong province Huizhou Luofu Hill mineral Cooperative YangHuaiY Co-operati Co-operati
Guangdong Boluo Water and other products 602
water Co.,Ltd Enterprises u on on
Cooperative Guangdong Feng Co-operati Co-operati
Fengkai Xinhua Hotel Tourism, Restaurant
Enterprises kai on on
Cooperative Guangdong LuoJinXXin Co-operati Co-operati
Jiangmen Xinjian Real Estate Co. Ltd. Property developing and sales USD660
Enterprises Jiangmen g on on
Developing and operating Xi’an trade
Cooperative LiangWeiG HKD3,0 Co-operati Co-operati
Xi’an Fresh Peak Building Co. Ltd Xi’an building
Enterprises uo 00 on on
Hong Co-operati Co-operati
DongYi Property Co.,Ltd Private Enterprises Property development and sales HKD100
kong on on
(Continued)
133
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Total net assets Total operating Net profit
Total assets at Total liabilities at Relationship with Organization
Name of investee at the end of income for the for the
the end of year the end of year related party code
year year year
Guangdong province Huizhou Luofu Hill mineral water Co.,Ltd*① Joint venture
Fengkai Xinhua Hotel*② Joint venture
Jiangmen Xinjian Real Estate Co. Ltd.*③ Joint venture
Xi’an Fresh Peak Building Co. Ltd.*③ Joint venture 62390802-3
DongYi Property Co.,Ltd.*③ Joint venture
134
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
①Guangdong province Huizhou Luofu Hill mineral water Co., Ltd
The operting period of the company was form June 5, 1991 to June 4, 2001. And the company had
ceased operations because of operating loss for many years. And the Company had been terminated
its licenses by law at July 6, 2001 because it failed to pass the annual inspection. Besides, the
corporation stopped preparing the financial statement. As of the end of the year, the book value of the
investment account of the Company is zero. According to the joint venture agreement, the Company
didn’t have the obligation to bear the additional loss.
②Fengkai Xinghua 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. As of the end of the year, the book value of the
investment account of the Company is zero. According to the joint venture agreement, the Company
didn’t have the obligation to bear the additional loss.
③Jiangmen 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. Consider the projects had been stopped, and the joint ventures had closed
operating actvities for many years with no prepation of financial statements. Already accrued the
corresponding provision for the investment of these joint ventures. Refer to Notes7.8. (5) for details.
2) Associates
Proportion Proportion of
Type of Registered Legal Nature of Registered of voting power
Name of investee
enterprise place representative business capital ownership in the investee
interest (%) (%)
Elevator,
Shenzhen Limited air-condition,
Shen Zheng Zhong
Ronghua JiDian liability water-electric 500 25 25
zhen qing
Co.,ltd company ty fixing and
sales
Shenzhen Fresh Limited Property
Shen Zhong
Peak Property liability sales and 300 20 20
zhen XinFa
Consultant Co.,Ltd company rental
Domestic car
Shenzhen Runhua Limited
Shen LiXue sales( not
Automobile liability 500 50 50
zhen Min includen little
Trading Co.,Ltd company
car), motor
Shenzhen Limited Domestic
Shen
Dongfang New liability PengNaiDian trade/materia 3000 50 50
zhen
world Store Co.,Ltd company l supply
(Continued)
135
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Relationsh
Total liabilities Total net Total operating
Total assets at Net profit for ip with Organization
Name of investee at the end of assets at the income for the
the end of year the year related code
year end of year year
party
Shenzhen
Ronghua JiDian 12,394,202.84 7,209,624.41 5,184,578.43 15,315,343.63 -508,474.08 Associate 19219691-6
Co.,ltd*①
Shenzhen Fresh
Peak Property 5,196,277.78 9,044,208.76 -3,847,930.98 7,351,360.00 1,136,744.13 Associate 19221684-1
Consultant Co.,Ltd
Shenzhen Runhua
Automobile Associate 19220483-2
Trading Co.,Ltd
Shenzhen
Dongfang New
Associate 19222948-2
world Store
Co.,Ltd*②
*① Shenzhen Runhua Automobile Trading Co., Ltd
The operating period of this corporation was form Feb 24, 1992 to Feb 24, 1997, and it had ceased
operations because of operating loss for many years. Besides, it had been terminated its licenses by
law because it failed to pass the annual inspection and no financial statement was prepred afterwards.
As the end of the year, the book value of the investment account of the vompany is zero. According to
the assosicate agreement, the company didn’t have the obligation to bear the additional loss.
*② Shenzhen Dongfang New world store Co., Ltd
The operating period of this corporation was from June 7, 1993 to June 7, 1998, and the company had
ceased operations because of operating loss for many years. And the company had been terminated
its licenses by law at Jan 10, 2001 because it failed to pass the annual inspection. Besides, the
company stopped making the financial statement. At Dec 31, 2010, the book value of the investment
account of the company is zero. According to the assosicate agreement, the company didn’t have the
obligation to bear the additional loss.
(5)Provision for impairment of long-term investments
Item Opening balance Increase Decrease Closing balance
136
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Shenzhen ronghua JiDian Co.,ltd 1,076,954.64 -- -- 1,076,954.64
Shenzhen Shen Fang Industrial
4,500,000.00 -- -- 4,500,000.00
Development Co., Ltd
Shenzhen ZhongGang Haiyan
12,940,900.00 -- -- 12,940,900.00
Enterprise Ltd.
Shenzhen Real Estate Consolidated
5,958,305.26 -- -- 5,958,305.26
Service Co., Ltd.
Paklid Limited 201,100.00 -- -- 201,100.00
Bekaton Property Limited 906,630.00 -- -- 906,630.00
Shenzhen Tefa Real Estate
8,180,003.63 -- -- 8,180,003.63
Consolidated Service Co., Ltd.
Shenzhen Xin Dongfang Store Ltd. 18,500,000.00 -- -- 18,500,000.00
Shenzhen City Shenfang Construction
2,680,000.00 -- -- 2,680,000.00
and Decoration Materials Ltd.
Shenzhen Shenfang Department Store
10,000,000.00 -- -- 10,000,000.00
Co. Ltd.
Guangdong Province Fengkai Lain
56,228,381.64 -- -- 56,228,381.64
Feng Cement Manufacturing Co., Ltd.
Shenzhen Runhua automobile trading
1,445,425.56 -- -- 1,445,425.56
Co.,Ltd
Guangdong province Huizhou Luofu Hill
9,969,206.09 -- -- 9,969,206.09
mineral water Co.,Ltd
Fengkai Xinhua hotel 9,455,465.38 -- -- 9,455,465.38
Jiangmen Xinjian Real Estate Co. Ltd. 912,537.16 -- -- 912,537.16
Xi’an Fresh Peak Property Management
20,673,831.77 -- -- 20,673,831.77
& Trading Co. Ltd.
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
Total 243,402,109.25 -- -- 243,402,109.25
7.10 Investment properties
(1) Details of investment properties
Item Opening balance Increase Decrease Closing balance
137
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
The investment properties are
subsequently measured using the cost 602,041,034.84 -- 20,911,626.19 581,129,408.65
model
Less: Provision for impairment 94,039,341.33 -- 283,376.11 93,755,965.22
Total 508,001,693.51 -- 20,628,250.08 487,373,443.43
(2) Investment properties measured at cost
Item Opening balance Increase Decrease Closing balance
I.Total original carrying amount 846,254,642.03 -- 345,266.23 845,909,375.80
Including: Buildings 748,891,106.42 -- -- 748,891,106.42
Land use rights 97,363,535.61 -- 345,266.23 97,018,269.38
II. Total accumulated depreciation and
244,213,607.19 20,566,359.96 -- 264,779,967.15
amortization
Including: Buildings 244,213,607.19 20,566,359.96 -- 264,779,967.15
Land use rights -- -- -- --
III. Total provision for impairment 94,039,341.33 -- 283,376.11 93,755,965.22
Including: Buildings 14,128,544.62 -- -- 14,128,544.62
Land use rights 79,910,796.71 -- 283,376.11 79,627,420.60
IV. Total carrying amounts 508,001,693.51 -- -- 487,373,443.43
Including: Buildings 490,548,954.61 -- -- 469,982,594.65
Land use rights 17,452,738.90 -- -- 17,390,848.78
Note: (1) The amount of current year depreciation is Rmb 20,566,359.96.
(2) The reductions of land use right’s orginal cost and provision are due to the fluctation of exchange
rate.
(3)Among the investment property, Rmb 410,396,183.01 of net book value of building was used as
mortgage for the Group’s short-term/long-term loans. Refer to Note 7.17 for details.
7.11 Fixed assets
Item Opening balance Increase Decrease Closing balance
I.Total original cost 149,960,939.81 9,239,918.04 17,548,693.09 141,652,164.76
Including: building&
117,201,722.56 5,121,128.11 15,160,340.19 107,162,510.48
construction
Vehicles 18,619,290.60 1,479,366.00 1,229,341.00 18,869,315.60
Machines & equipments 14,139,926.65 2,639,423.93 1,159,011.90 15,620,338.68
II.accumulated
Additions Accrual
depreciation
Total accumulated --
89,042,328.16 6,275,436.71 16,870,408.77 78,447,356.10
depreciation
138
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Item Opening balance Increase Decrease Closing balance
Including: Building & --
66,289,919.14 3,242,800.58 14,572,877.98 54,959,841.74
construction
Vehicles 12,494,563.02 -- 1,824,614.82 1,167,873.95 13,151,303.89
Machines & equipments 10,257,846.00 -- 1,208,021.31 1,129,656.84 10,336,210.47
III.Total net book value 60,918,611.65 -- -- 63,204,808.66
Including: building&
50,911,803.42 -- -- 52,202,668.74
construction
Vehicles 3,882,080.65 -- -- 5,718,011.71
Machines & equipments 6,124,727.58 -- -- 5,284,128.21
IV. Total impairment provision -- -- -- --
Including: building& --
-- -- --
construction
Vehicles -- -- -- --
Machines & equipments -- -- -- --
V.Total carrying amount 60,918,611.65 -- -- 63,204,808.66
Including: building& --
50,911,803.42 -- 52,202,668.74
construction
Vehicles 3,882,080.65 -- -- 5,718,011.71
Machines & equipments 6,124,727.58 -- -- 5,284,128.21
Note: (1)The depreciation for the current year is RMB 6,275,436.71.
There were no original amount of construction in progress was transferred to fixed assets during the
period.
(2) Details of fixed assets which ownership is restricted
As at 31 December 2012, the Group has pledged real estate and land etc. amounting to RMB
26,745,111.99 (original cost is RMB 49,696,185.15) as guarantee for long-term loans within one year of
RMB 97,000,000.00 (2011: RMB 6,000,000.00) (refer to Note 7.17).
7.12 Intangible assets
Item Opening balance Increase Decrease Closing balance
I. Carrying amount 7,180,000.00 -- -- 7,180,000.00
Software 812,000.00 -- -- 812,000.00
Taxi license 6,368,000.00 -- -- 6,368,000.00
139
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Item Opening balance Increase Decrease Closing balance
II. Total accumulated amortization 983,913.29 329,979.96 -- 1,313,893.25
Software 258,733.29 162,399.96 -- 421,133.25
Taxi license 725,180.00 167,580.00 -- 892,760.00
III. Total provision for impairment -- -- -- --
Software -- -- -- --
Taxi license -- -- -- --
IV. Total net carrying amount 6,196,086.71 -- -- 5,866,106.75
Software 553,266.71 -- -- 390,866.75
Taxi license 5,642,820.00 -- -- 5,475,240.00
Note: The amortization for the current period is RMB 329,979.96.
7.13 Long-term deferred assets
Reason for
Other Closing
Item Opening balance Increase Amortization other
reductions balance
reductions
Renovation
591,264.09 -- 163,942.74 -- 427,321.35
costs
Total 591,264.09 -- 163,942.74 -- 427,321.35
7.14 Deferred tax assets and liabilities
(1) Recognized deferred tax assets
Closing balance Opening balance
Item Deductible or taxable Deductible or taxable
Deferred tax assets Deferred tax assets
temporary differences temporary differences
Provision for impairment
11,896,124.83 47,584,499.31 11,896,124.83 47,584,499.31
losses of assets
Dismission welfare 816,350.26 3,265,401.05 816,350.26 3,265,401.05
Deductible loss 6,916,174.53 27,664,698.12 7,690,757.74 30,763,030.96
Advertising expense 253,000.00 1,012,000.00 -- --
Total 19,881,649.62 79,526,598.48 20,403,232.83 81,612,931.32
140
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
(2) Details of unrecognized deferred tax assets
Item Closing balance Opening balance
Deductible losses
Deductible operating loss 17,168,115.83 19,383,074.42
Bad debt provision 49,211,193.88 49,211,416.11
Provision for decline in value of
69,722.98 69,722.98
inventories
Provision for impairment of long-term
60,850,527.31 60,850,527.31
investments
Provision for impairment of investment
23,438,991.31 23,509,835.33
properties
Total 150,738,551.31 153,024,576.15
(3) Deductible losses, for which no deferred tax assets are recognized, will expire in the following
years
Year Closing balance Opening balance Remarks
2012 -- 9,010,226.92
2013 28,540,572.21 28,540,572.21
2014 36,309,943.43 36,309,943.43
2015 2,662,914.18 2,662,914.18
2016 1,008,640.93 1,008,640.93
2017 150,392.58 --
Total 68,672,463.33 77,532,297.67
7.15 Other non-current assets
Item Contents Closing balance Opening balance
Software fees The un-settled prepayment of software system 1,214,400.00 938,400.00
Fitment fees The un-settled prepayment of fitment 1,037,034.00 3,472,548.69
Others 162,000.00 --
Total 2,413,434.00 4,410,948.69
141
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
7.16 Details of provision for impairment of assets
Decrease
Item Opening balance Increase Closing balance
Reversals Write-off
1. Bad debt provision 196,845,664.44 -- 888.93 -- 196,844,775.51
2.Provision for decline in value
47,863,391.22 -- -- -- 47,863,391.22
of inventories
3. Provision for impairment of
243,402,109.25 -- -- -- 243,402,109.25
long-term investments
4.Provision for impairment of
94,039,341.33 -- 283,376.11 -- 93,755,965.22
investment properties
Total 582,150,506.24 -- 284,265.04 -- 581,866,241.20
*The variation of impairment provision of assets is due to the fluctation of rate used in translation of
foreign currencies.
7.17 Assets of ownership or use-right restriction
Item Name of project Closing balance Reason for restriction
Subtotal of assets for Guarantee 1,864,314,370.65
Inventories(Real estate developing Land-use right of Shengfang
149,608,214.08 Mortgage
products) Shanglin Garden
Inventories(Real estate developing Land-use right of Shengfang
1,236,967,948.37 Mortgage
products) Chuangqishan
Inventories(Real estate developed
Real Estate Building 5-6 floor 7,492,175.18 Mortgage
products)
Inventories(Real estate developed
Wenjin Warehouse 1-3 floor 8,104,738.02 Mortgage
products)
Investment properties Shenfang Square 266,470,255.54 Mortgage
Investment properties Petrel Building 76,781,810.23 Mortgage
Investment properties GuoShang North 2 floor 67,144,117.24 Mortgage
Fixed assets Real estate Building 5-6 floor 26,745,111.99 Mortgage
Monetary funds Cash in bank 25,000,000.00 Mortgage
Subtotal of assets of ownership or
8,092,202.24
use-right was restricted by other reason
Monetary funds Other monetary funds 8,001,929.14 Refer notes 7.1
Monetary funds Other monetary funds 90,273.10 Refer notes 7.1
Total 1,872,406,572.89
7.18 Short-term loans
142
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Item Closing balance Opening balance
Entrusted loan 70,000,000.00 --
Loan on credit 26,000,000.00 20,000,000.00
Total 96,000,000.00 20,000,000.00
The details of Entrusted loan are shown in notes8.6.
7.19 Accounts payable
(1) Details of accounts payable
Item Closing balance Opening balance
Within one year 6,552,137.26 1,694,165.13
Over one year 66,108,696.34 107,508,309.05
Total 72,660,833.60 109,202,474.18
(2)There were no any accounts payable to shareholders holding at least 5% of the Group’s shares with
voting power or to related parties in the reporting period.
(3) Significant accounts payable aged more than one year is for the unsettled project at the end of the
period.
7.20 Advances from customers
(1) Details of advances from customers
Item Closing balance Opening balance
Within one year 384,299,219.83 219,012,465.42
Over one year 22,894,978.97 39,963,630.15
Total 407,194,198.80 258,976,095.57
(2) There were no any advances from customers to shareholders holding at least 5% of the Group’s
shares with voting power or to related parties in the reporting period.
(3) Significant advances from customers aged more than one year is the import and export agency
business payment and advance payment from housing buyers, as such receipts have not been
transferred to income at the end of the year.
143
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
(4) Details of advances from customers
Item Closing balance Opening balance
HuangPuXinChun -- 1,588,840.00 Completed
Jinye Island villa No.6 5,500,000.00 7,200,000.00 Completed
Jinye Island villa No.7 -- 3,254,703.00 Completed
Jinye Island villa No.9 25,180,000.00 5,694,800.00 Completed
Jinye Island villa No.10 28,744,765.00 145,355,609.78 Completed
Jinye Island villa No.11 8,489,464.00 4,030,624.00 Completed
Shenfang Chuanqishan 280,179,233.00 -- 2013
Total 348,093,462.00 167,124,576.78
7.21 Employee benefits payable
Item Opening balance Increase Decrease Closing balance
I. Salary, bonus,
28,486,516.43 90,127,107.46 89,055,846.45 29,557,777.44
allowances and subsidies
II.Staff welfare -- 4,467,799.10 4,467,799.10 --
III. Social security
2,507,310.22 12,459,657.05 12,481,877.59 2,485,089.68
contributions
Including:
1. Medical insurance 1,103,073.77 3,482,409.74 3,480,828.01 1,104,655.50
premium
2. Pension insurance
1,317,438.91 5,481,522.66 5,540,973.03 1,257,988.54
premium
3. Annuity premium 86,797.54 2,757,022.98 2,722,423.19 121,397.33
4.Unemployment
-- 249,046.46 248,909.92 136.54
insurance premium
Employement injury
-- 228,115.25 227,502.59 612.66
insurance
Maternity
-- 261,539.96 261,240.85 299.11
insurance
IV. Housing fund 653,496.41 5,059,640.02 5,703,071.88 10,064.55
V. Labor union fee, staff
and workers’ education 813,221.85 2,252,047.52 1,719,918.52 1,345,350.85
fee
VI. Termination benefits 3,897,639.39 206,401.08 838,639.42 3,265,401.05
VII. Others 31,757.05 1,746,309.29 1,766,721.73 11,344.61
Total 36,389,941.35 116,318,961.52 116,033,874.69 36,675,028.18
Note:①The overdue employee benefits payable is RMB 0.
144
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
②Union running costs and employee education costs are RMB 2,252,047.52, non-monetary benefits
are RMB 0, and compensations to employees for termination of employment relationship are RMB
206,401.08.
③ At the end of the year, most of the salary payable to employees is accrued wages and
bonuses,which would be paid during 2013.
7. 22 Taxes payable
Item Closing balance Opening balance
Corporate income tax 12,295,090.93 13,453,711.50
Individual income tax 387,577.98 -100,738.60
Property tax 1,723,069.64 1,723,069.64
Land appreciation tax 5,552,414.59 2,347,034.79
Total 19,958,153.14 17,423,077.33
7.23 Interest payable
Item Closing balance Opening balance
Interest of long-term loans with interest payable
by installments and principle payable on 1,726,472.23 --
maturity
Interest payable on short-term loans 134,166.67 --
Others 16,535,277.94 16,535,277.94
Total 18,395,916.84 16,535,277.94
The balance of other interests payable due to Shenzhen Investment Holdings Co.，Ltd. were accured
from the loans, refer to note 8.6.
7.24 Other payables
(1) Details of other payables
Item Closing balance Opening balance
Land appreciation tax accrued 118,306,623.12 110,531,577.92
Payable to related parties 98,325,761.01 98,327,761.01
Cash pledge 41,157,683.11 49,909,916.03
Others 136,951,659.05 125,951,976.17
Total 394,741,726.29 384,721,231.13
(2) Other payables to shareholders holding at least 5% of the Group’s shares with voting power or to
related parties in the reporting period. Please refer to Note 8.6 Related party transaction.
(3) Description of significant other payables aged more than one year
If paid after
Name of entity Amount Reason for overdue
reporting date
145
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Tax accrued- land appreciation tax 83,560,665.96 Unexpired No
Shenzhen Investment Holdings Co.，Ltd. 63,848,819.24 Unsettled No
(4) Description for significant balances of other payables
The Group made provision for LAT, according to Guo Shui Fa [2006] No. 187 "LAT liquidation
management issues of real estate development enterprises made by the State Administration of
Taxation on ". As at December 31, 2012, the closing balance is RMB 118,306,623.12.
7.25 Non-current liabilities due within one year
(1) Details of non-current liabilities due within one year
Item Closing balance Opening balance
Long-term loans due within one year (Note 7.26) 299,261,270.80 697,095,738.47
Total 299,261,270.80 697,095,738.47
(2) Long-term loan due within one year
1) Details of Long-term loan due within one year
Item Closing balance Opening balance
Loan with mortgage 299,261,270.80 57,095,738.47
Loan with guarantee -- 640,000,000.00
Total 299,261,270.80 697,095,738.47
2)Top 5 long-term loans due within one year
Inception
Maturity
Lender date of Currency Closing balance Opening balance
date
loans
Shenzhen Rural Commercial Bank 2010.11.26 2013.11.26 RMB 97,000,000.00 --
Shenzhen Rural Commercial Bank 2010.8.23 2013.8.23 RMB 86,000,000.00 --
Huashang Bank (Shenzhen Branch) 2012.12.6 2013.12.6 RMB 50,000,000.00 --
Huaxia Bank (Buji Branch) 2012.9.29 2013.12.29 RMB 25,000,000.00 --
Huaxia Bank (Buji Branch) 2012.10.24 2013.12.24 RMB 25,000,000.00 --
Bank of Shanghai (Shenzhen Branch) 2009.12.8 2012.12.7 RMB -- 200,000,000.00
Bank of Communications (Shantou Branch) 2009.8.13 2012.8.3 RMB -- 140,000,000.00
Bank of Shanghai (Shenzhen Branch) 2010.3.23 2012.12.7 RMB -- 100,000,000.00
Bank of Shanghai (Shenzhen Branch) 2010.5.24 2012.12.7 RMB -- 100,000,000.00
Bank of Shanghai (Shenzhen Branch) 2010.6.30 2012.12.7 RMB -- 100,000,000.00
Tolal 283,000,000.00 640,000,000.00
Note: Amounts repaid after the balance sheet date are RMB 39,528,213.29. The rates of above
borrowing depend on the benchmark interest rate of the People's Bank of China for the same period
and have a certain proportion floating of the benchmark interest rate.
7.26 Long-term loans
146
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
(1) Long-term loans categories
Item Closing balance Opening balance
Loan with mortgage 1,148,897,349.05 356,717,113.11
Loan with guarantee -- 640,000,000.00
Less: long-term loans due within one year (Note
299,261,270.80 697,095,738.47
7.25)
Total 849,636,078.25 299,621,374.64
Note: the categories and amounts of assets pledged with monetary assets secured borrowings are
shown in notes 7.17.
2) Top 5 significant long-term loans
Intere
Inception Maturity
Lending party st rate Currency Closing balance Opening balance
date date
(%)
Huashang Bank (Shenzhen Branch) 2012.12.6 2015.12.6 6.76 RMB 150,000,000.00 --
China Construction Bank (Shenzhen Branch) 2012.8.28 2015.9.27 6.77 RMB 100,000,000.00 --
China Construction Bank (Shenzhen Branch) 2012.11.21 2015.11.20 6.77 RMB 100,000,000.00 --
Huaxia Bank (Buji Branch) 2012.9.29 2017.9.29 6.78 RMB 75,000,000.00 --
Huaxia Bank (Buji Branch) 2012.10.24 2017.10.24 6.78 RMB 75,000,000.00 --
Shenzhen Rural Commercial Bank (Shangbu
2010.11.26 2013.11.26 6.15 RMB -- 97,000,000.00
Branch)
Shenzhen Rural Commercial Bank (Shangbu
2010.8.23 2013.8.23 6.15 RMB -- 86,000,000.00
Branch)
Industrial and Commercial Bank of China
2010.6.3 2012.9.13 6.35 RMB -- 85,700,000.00
(Guangmin Branch)
Nanyang Commercial Bank (Shenzhen
2007.5.29 2017.5.29 6.37 -- 30,921,374.64
Branch) RMB
Total 500,000,000.00 299,621,374.64
The rates of above borrowing depend on the benchmark interest rate of the People's Bank of China for
the same period and have a certain proportion of the benchmark interest rate.
7.27 Long-term payables
Details of long-term payables
Item Closing balance Opening balance
Maintenance fund 11,136,124.62 10,308,648.22
Total 11,136,124.62 10,308,648.22
147
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
7.28 Share capital
Opening balance Changes for the period Closing balance
New
Capitalization
Item issue Bonus
Amount % of surplus Other Subtotal Amount %
of issue
reserve
share
I. Restricted tradable shares -- -- -- -- -- -- -- -- --
II. Tradable shares
1.Ordinary shares
891,660,000.00 88.14 -- -- -- -- -- 891,660,000.00 88.14
denominated in RMB
2.Foreign-owned shares
120,000,000.00 11.86 -- -- -- -- -- 120,000,000.00 11.86
listed domestically
3.Foreign-owned shares
-- -- -- -- -- -- -- -- --
listed overseas
4.Others -- -- -- -- -- -- -- -- --
Total tradable shares 1,011,660,000.00 100.00 -- -- -- -- -- 1,011,660,000.00 100.00
III. Total shares 1,011,660,000.00 100.00 -- -- -- -- -- 1,011,660,000.00 100.00
7.29 Capital reserve
Item Opening balance Increase Decrease Closing balance
Capital premium 557,433,036.93 -- -- 557,433,036.93
Including:
557,433,036.93 -- -- 557,433,036.93
Capital contributed by investors
Other capital reserve 420,811,821.17 -- -- 420,811,821.17
Including:
Transfer from capital reserve
420,811,821.17 -- -- 420,811,821.17
under the previous accounting
system
Total 978,244,858.10 -- -- 978,244,858.10
7.30 Surplus reserve
Item Opening balance Increase Decrease Closing balance
Statutory surplus reserve 4,974,391.15 -- -- 4,974,391.15
Total 4,974,391.15 -- -- 4,974,391.15
7.31 Undistributed profit
Amount for the current Proportion of
Item Amount for the prior period
period appropriation
148
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Amount for the current Proportion of
Item Amount for the prior period
period appropriation
Before adjustment: Undistributed
-475,968,948.89 -577,169,009.54 --
profits at the end of prior year
Adjustment: Total undistributed profits
at beginning of year (Increase +, -- -- --
decrease -)
After adjustment: Undistributed profits
-475,968,948.89 -577,169,009.54 --
at beginning of year
Add: Net profit attributable to owners
106,814,543.53 101,200,060.65 --
of the Company for the period
Make up the loss use surplus
-- -- --
reserve
Other transfer into -- -- --
Less: Appropriation to discretionary
-- -- --
surplus reserve
Declaration of dividends on
-- -- --
ordinary shares
Conversion of ordinary shares’
-- -- --
dividends into share capital
Undistributed profits at the end of
-369,154,405.36 -475,968,948.89 --
period
7.32 Operating income and costs
(1) Operating income and operating costs
Item Amount for the current period Amount for the prior period
Principal operating income 1,011,976,525.21 993,942,895.86
Other operating income 18,172,204.26 32,453,208.65
Total of operating income 1,030,148,729.47 1,026,396,104.51
Principal operating costs 689,088,645.84 672,136,886.14
Other operating costs 12,214,977.24 14,091,101.27
Total of operating costs 701,303,623.08 686,227,987.41
(2) Principal operating activities (classified by industries)
Amount for the current period Amount for the prior period
Name of industry
Operating income Operating costs Operating income Operating costs
Real estate 379,619,819.21 146,516,172.48 511,676,477.00 254,759,053.89
Construction 468,407,774.16 445,160,754.08 328,769,774.99 311,550,480.76
Leasing 85,107,142.96 30,961,456.12 73,544,899.43 30,541,919.34
149
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Amount for the current period Amount for the prior period
Name of industry
Operating income Operating costs Operating income Operating costs
Property management 101,495,483.27 86,840,214.99 93,893,314.56 83,921,844.55
Subtotal 1,034,630,219.60 709,478,597.67 1,007,884,465.98 680,773,298.54
Less: offset the internal
22,653,694.39 20,389,951.83 13,941,570.12 8,636,412.40
amount
Total 1,011,976,525.21 689,088,645.84 993,942,895.86 672,136,886.14
(3) Principal operating activities (classified by geographical areas)
Name of geographical Amount for the current period Amount for the prior period
area Operating income Operating costs Operating income Operating costs
Domestic:
GuangDong Province 972,965,703.54 651,456,584.54 988,225,265.44 662,640,743.19
Others 61,047,686.11 58,022,013.13 18,991,917.50 18,132,555.35
Overseas： 616,829.95 -- 667,283.04 --
Subtotal 1,034,630,219.60 709,478,597.67 1,007,884,465.98 680,773,298.54
Less: offset the internal
22,653,694.39 20,389,951.83 13,941,570.12 8,636,412.40
amount
Total 1,011,976,525.21 689,088,645.84 993,942,895.86 672,136,886.14
(4) Operating income from the Company’s top 5 customers
Amount for the current period
Proportion to total operating income of
Total operating income
the Company (%)
Corporation unit No.1 15,078,357.88 1.46
Corporation unit No.2 14,737,984.00 1.43
Corporation unit No.3 13,972,242.87 1.36
Corporation unit No.4 13,500,000.13 1.31
Corporation unit No.5 12,499,076.59 1.21
Total 69,787,661.47 6.77
(Continued)
Amount for the prior period
Proportion to total operating income of
Total operating income
the Company (%)
Corporation unit No.1 65,554,000.00 6.39
150
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Corporation unit No.2 27,800,000.00 2.71
Corporation unit No.3 13,894,500.00 1.35
Corporation unit No.4 12,500,000.00 1.22
Corporation unit No.5 11,774,127.36 1.15
Total 131,522,627.36 12.82
7.33 Business taxes and surcharges
Item Amount for the current period Amount for the prior period
Business tax 42,953,955.93 45,944,638.22
City construction and maintenance tax 2,951,319.14 2,183,859.14
Education surcharges 1,448,500.23 1,169,505.63
Property tax 6,295,071.12 6,304,592.55
Land appreciation tax 44,966,121.27 59,861,391.13
Local education surcharges 542,477.07 326,825.66
Embankment Protection Fee 1,045,708.33 558,388.34
Total 100,203,153.09 116,349,200.67
Note: Details of business taxes and surcharges please refer to Note 5.
7.34 Selling expenses
Item Amount for the current period Amount for the prior period
Employee benefits 3,517,118.13 2,853,630.01
Advertising expenses 18,034,936.16 6,182,679.28
Entertainment expenses 481,883.00 622,820.90
Bank charges 701,378.03 --
Consulting fees 300,000.00 --
Marketing activities fee 925,225.80 --
Material printing costs 750,655.69 --
Others 2,829,316.34 1,168,798.64
Total 27,540,513.15 10,827,928.83
7.35 Administrative expenses
Item Amount for the current period Amount for the prior period
Employee benefits 32,665,996.69 34,852,702.09
Taxes 7,135,517.60 3,118,065.06
Depreciation 4,859,854.11 4,863,093.96
Entertainment expenses 4,417,299.60 4,772,142.72
151
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Intermediary fee 3,188,936.72 2,867,610.32
Travel expense 1,281,259.97 1,278,369.18
Administrative expenses 1,583,890.19 1,781,024.86
Repair charge 1,148,482.14 1,107,030.08
Water and electricity charges 1,105,247.92 1,572,833.92
Other amortization 607,349.93 545,338.20
Others 10,121,234.31 8,369,580.77
Total 68,115,069.18 65,127,791.16
7.36 Financial expenses
Item Amount for the current period Amount for the prior period
Interest expenses 73,616,362.45 65,254,298.32
Less: capitalized interest expenses 67,240,028.19 47,230,586.82
Less: Interest income 3,894,420.17 3,524,155.34
Exchange differences -88,711.58 2,075,380.42
Less: Capitalized exchange differences -- --
Others 289,560.27 281,104.73
Total 2,682,762.78 16,856,041.31
7.37 Impairment losses of assets
Amount for the current Amount for the prior
Item
period period
Bad debt provisions -6,140,000.00 82,236.80
Total -6,140,000.00 82,236.80
Note: The bad debt is the borrowing payment received from Shenyang Tongxin during the report period,
which was written-off before ( Due to the original borrowing has been wholly accrued provision, base
on this, need recover the original receivable balance and transfer the bad debt to current P&L).
Details refer to: Note 7 Contingencies.
7.38 Investment income
(1) Details of investment income
Amount for the current Amount for the prior
Item
period period
Investment income from long-term investments under cost
1,653,305.67 --
method
Investment income from long-term investments under equity
-120,218.96 -5,622.11
method
Investment income on disposal of long-term investments -- 25,212.78
Investment income from holding available-for-trade financial -- -34,017.37
152
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Amount for the current Amount for the prior
Item
period period
assets
Total 1,533,086.71 -14,426.70
(2) Income from long-term investments under cost method
Amount for the current
Name of investee Amount for the prior period
period
YunNan KunPeng Flight service Co.,Ltd 1,653,305.67 --
Total 1,653,305.67 --
(3) Income from long-term investments under equity method
Amount for the current Amount for the prior
Name of investee Reasons for changes
period period
Investee’s operating
Shenzhen Ronghua JiDian Co.,ltd -120,218.96 -5,622.11
loss
Total -120,218.96 -5,622.11
7.39 Non-operating income
Amount included in
Amount for the Amount for the non-recurring profit
Item
current period prior period or loss for the
period
Total gains on disposal of non-current assets 27,714.20 211,822.51 27,714.20
Including: Gains on disposal of fixed assets 27,714.20 211,822.51 27,714.20
Gains on penalty 40,331.00 845,126.00 40,331.00
Others 12,149.43 1,499,734.85 12,149.43
Total 80,194.63 2,556,683.36 80,194.63
7.40 Non-operating expenses
Amount included in
Amount for the current
Item Amount for the prior period non-recurring profit or
period
loss for the period
Total losses on disposal of non-current
616,113.66 63,859.29 616,113.66
assets
Including: Losses on disposal of fixed 616,113.66 63,859.29 616,113.66
153
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Amount included in
Amount for the current
Item Amount for the prior period non-recurring profit or
period
loss for the period
assets
Donations to third parties 74,000.00 116,765.00 74,000.00
Penalty expense 39,765.48 369.83 39,765.48
Compensation expense 45,000.00 18,810.00 45,000.00
Others 24,115.78 8,549.52 24,115.78
Total 798,994.92 208,353.64 798,994.92
7.41 Income tax expenses
Amount for the current Amount for the prior
Item
period period
Current tax expense calculated according to tax laws and
29,881,461.77 34,726,163.79
relevant requirements
Adjustments to deferred tax 521,583.21 -2,646,633.11
Total 30,403,044.98 32,079,530.68
7.42 Basic earnings per share and diluted earnings per share
The basic earning per share is calculated by having the current net profit attributable to the share of the
Group divided by weighted average of the ordinary shares. The number of new ordinary shares issued
is, according to the specific terms in the contract, is calculated from the date of consideration
receivable (normally the issuing date).
The numerator of diluted earning per share is determined by the net profit in the current period
attributable to the ordinary shares of the Group after adjustment of following factors:
1) the interest of dilutive potential ordinary shares recognized as expense of the current period;
2）the income or expense during the conversion of dilutive potential ordinary shares; and
3）the income tax effect of above adjustment related.
The denominator of diluted earning per share is the sum of followings:
1) weighted average of ordinary shares issued by the parent company in the basic earning per share;
and
2) weighted average number of ordinary shares that would have been issued assuming the conversion
of dilutive potential ordinary shares into ordinary shares.
When calculating the number of ordinary shares that would have been issued assuming the conversion
of dilutive potential ordinary shares into ordinary shares, the dilutive potential ordinary shares issued in
the prior period is assumed as conversion in the beginning of this year, while the dilutive potential
ordinary shares issued in the current year is assumed as conversion at the issuing date.
154
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
(1) Amount for basic earnings per share and diluted earnings per share in periods are as follows:
Amount for the current period Amount for the prior period
Profits for the period Basic earnings per Diluted earnings per Basic earnings per Diluted earnings per
share share share share
Net profit attributable to
ordinary shareholders of the 0.1056 0.1056 0.1000 0.1000
Company
Net profit attributable to
ordinary shareholders of the
0.1001 0.1001 0.0983 0.0983
Company after deduction
non-recurring profit or loss
(2) Calculation process of basic earnings per share and diluted earnings per share
During the reporting period, the Group had no underlying diluted ordinary shares, so the diluted
earnings per share is the same with the basic earnings per share.
1) For the purpose of calculating basic earnings per share, net profit for the current period attributable
to ordinary shareholders is as follows:
Item Amount for the current period Amount for the prior period
Net profit for the current period attributable to ordinary
106,814,543.53 101,200,060.65
shareholders
Including: Net profit from continuing operations 106,814,543.53 101,200,060.65
Net profit from discontinued operations -- --
Net profit attributable to ordinary shareholders after non
101,232,143.75 99,430,051.40
recurring profit and loss
Including: Net profit from continuing operations 101,232,143.75 99,430,051.40
Net profit from discontinued operations -- --
2) For the purpose of calculating basic earnings per share, the denominator is the weighted average
number of outstanding ordinary shares and its calculation process is as follows:
Item Amount for the prior
Amount for the current period
period
Number of ordinary shares outstanding at the beginning
1,011,660,000.00 1,011,660,000.00
of year
Add: Weighted average number of ordinary shares issued
-- --
during the period
155
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Less: Weighted average number of ordinary shares
-- --
repurchased during the period
Number of ordinary shares outstanding at the end of year 1,011,660,000.00 1,011,660,000.00
7.43 Other comprehensive income
Amount for the Amount for the prior
Item
current period period
1.Translation differences of financial statements denominated in foreign
-49,972.76 -679,135.07
currencies
Less: Net amount transferred to profit or loss for the period on
-- --
disposal of foreign operations
Total -49,972.76 -679,135.07
7.44 Notes to items in the cash flow statements
(1) Other cash receipts relating to operating activities
Amount for the current Amount for the prior
Item
period period
Interest income 2,771,676.50 3,183,155.34
Mortgage and deposits 14,615,042.62 17,222,594.84
Correspondent payment 12,951,078.83 13,133,466.50
Maintenance fund 106,027.18 649,136.70
Porperty license fee and survey fee 7,049,454.75 6,443,171.76
Implementation of GuoXing building lawsuit -- 12,500,000.00
Others 1,685,448.72 1,807,631.53
Total 39,178,728.60 54,939,156.67
156
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
(2) Other cash receipts relating to operating activities
Amount for the current Amount for the prior
Item
period period
Cash paid to general and administrative expenses 20,137,108.63 21,916,735.83
Cash paid to operating expenses 19,557,354.35 8,688,320.66
Mortgage and guarantee 13,774,729.08 19,480,607.45
Porperty license fee and survey fee 6,976,007.82 8,202,898.68
Other correspondent receivable 17,703,811.51 13,415,895.45
Others 2,263,540.91 2,894,827.32
Total 80,412,552.30 74,599,285.39
(3) Other cash receipts relating to investing activities
Amount for the current Amount for the prior
Item
period period
Guarantee fees for bank loan -- 2,000,000.00
Certificate of deposit pledged 25,000,000.00 --
Total 25,000,000.00 2,000,000.00
7.45 Supplementary information to the cash flow statement
(1) Supplementary information to the cash flow statement
Amount for the current Amount for the prior
Item
period period
I.Reconciliation of net profit to cash flows from operating
activities:
Net profit 106,854,849.63 101,199,284.42
Add: Provision for impairment loss of assets -- 82,236.80
Depreciation of fixed assets, bio-assets, and natural gas 26,841,796.67 27,286,065.58
Amortization of intangible assets 329,979.96 293,179.96
Amortization of long-term deferred expenses 163,942.74 239,667.70
Losses on disposal of fixed assets, intangible assets and
-12,598.93 -211,822.51
other long-term assets(deduct: gains)
Losses on scrapping of fixed assets (deduct: gains) 600,998.39 63,859.29
Loss of fair value variation (deduct: gains) -- -19,993.75
Financial expenses (deduct: gains) 6,133,019.38 20,373,232.45
Losses from investments (deduct: gains) -1,533,086.71 14,426.70
Decrease in deferred tax assets (deduct: increase) 521,583.21 -2,646,633.11
Increase in deferred tax liabilities (deduct: decrease) -- --
Decrease in inventories (deduct: increase) -229,893,590.87 139,409,086.73
Decrease in operating receivables (deduct: increase) -15,117,502.08 -18,862,549.07
157
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Amount for the current Amount for the prior
Item
period period
Increase in operating payables (deduct: decrease) 132,520,428.14 -152,065,250.78
Others -- --
Net cash flows from operating activities 27,409,819.53 115,154,790.41
II.Investing and financing activities that do not affect cash
receipt and payment
Liabilities converted capital -- --
Reclassify convertible bonds to be expired within one year as
-- --
current liability
Fixed assets subject to finance leases -- --
III. Net increase in cash and cash equivalents:
Cash at the end of the period 463,713,702.77 324,967,185.86
Less: cash at the beginning of the period 324,967,185.86 371,258,812.38
Add: cash equivalents at the end of the period -- --
Less: cash equivalents at the beginning of the period -- --
Net increase in cash and cash equivalents 138,746,516.91 -46,291,626.52
(2) Information of cash and cash equivalents
Amount for the current
Item Amount for the prior period
period
I.Cash
Including: Cash on hand 336,552.84 276,080.48
Bank deposits 463,243,117.58 324,467,108.26
Other monetary funds 134,032.35 223,997.12
Deposits with the central bank -- --
Deposits made with other banks -- --
Placements with banks -- --
II.Cash equivalents -- --
Including: Investments in debt securities due within three
-- --
months
III. Closing balance of cash and cash equivalents 463,713,702.77 324,967,185.86
Note 8 Related party relationships and transactions
8.1 Parent of the Company
Related party Place of Legal
Name of the parent Type of the entity Business Nature
relationship incorporation representative
Shenzhen Parent of the Gruoup State-owned Guangdong Fan Mingchun Investment, Real
158
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Investment Enterprises province estate development,
Shareholding Co. Shenzhen Guarantee
Ltd
(Continued)
Proportion of the Proportion of the
Ultimate
Name of the Registered Company’s ownership Company’s voting
controlling party Organization code
parent capital interest held by the power held by the
of the Company
parent (%) parent (%)
Shenzhen State-owned
Investment RMB 5.60 assets
63.55 63.55 76756642-1
Shareholding Co. billion management
Ltd commitee
8.2 Subsidiaries of the Company
Please refer to Note 6.1.
8.3 Associates and joint ventures of the entity
Please refer to Note 7.9.
8.4 Other related parties of the Company
Relationship between other
Name of other related party Organization code
related parties and the Company
The same controlling
Shenzhen Jian'an Group Co., Ltd. 19219737X
shareholders
Shenzhen Environmental Engineering Science Tech The same controlling
668538441
Center Co., Ltd. shareholders
Shenzhen General Institute of Architectural Design The same controlling
192244260
and Research CO.,LTD shareholders
The same controlling
Shenzhen Institute of Building Research Co., Ltd. 665899831
shareholders
The same controlling
Shenzhen Water Planning & Design Institute 672999996
shareholders
Shenzhen Small & Medium Enterprises Credit The same controlling
670019325
Financing Guarantee Group CO.LTD shareholders
159
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
8.5 Related party transactions
(1) Contracting with related parties
Name of
Basis of
main Reception Contracting
Type of assets under pricing of
contract Name of contractor date of Expiration date of contracting income recognized
contracting contracting
issuing contracting in the current year
income
party
The
Shenzhen Jian'an Group Co., Ltd. Construction 2012-2-1 2013-6-15 Biding 162,820,000.00
Group
The Shenzhen Environmental Engineering Science Tech
Environment supervision 2011-5-3 Negotiations 87,750.00
Group Center Co., Ltd
The One year after the project is completed
Shenzhen Institute of Building Research Co., Ltd. Consultancy 2012-2-10 Negotiations 325,000.00
Group and accepted
The
Shenzhen Water Planning & Design Institute Designing 2010-9-19 Negotiations 21,600.00
Group
The Shenzhen General Institute of Architectural Design and
Designing 2012-7-9 Negotiations 112,700.00
Group Research CO.,LTD
Shenzhen General Institute of Architectural Design and
The
Research CO.,LTD Designing 2012-7-28 Negotiations 200,000.00
Group
（2）Guarantees with related parties
160
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Guaranteed Inception date of Expiration date of Whether execution of guarantee has
Guarantor Guaranteed party
amount guarantee guarantee been completed
The Group Shenzhen ShenFang Group LongGang Development Co.,Ltd 88,400,000.00 2012.3.31 2015.3.31 No
(3) Borrowings/loans with related parties
Related party Amount of borrowing / loan Inception date Maturity date Remarks
Borrowed from:
Shenzhen Institute of Building Research Co., Ltd. 70,000,000.00 2012.7.26 2013.7.26
161
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
(4) Compensation for key management personal
Item Amount for the current period Amount for the prior period
Total 5.9811 [million] 5.2695 [ million]
Including: (Number in different zone)
Over 200k 12 12
150k-200k -- --
100k-150k 1 --
Below 100k 3 3
(5) Investment with other related party
On Nov’2nd, 2012, the Group signed《Shantou Small&Medium Enterprise Financing Guarantee the
limited companies investment agreement》with Shenzhen Small&Medium Enterprise Credit Financing
Guarantee Group Co., Ltd (the Group’s related party) and other four companies (including: Shantou
Industrial economic investment and construction Co., Ltd., Shantou Ocean (Group) Co., Ltd.,
ShantouChaoyang District Five star Industrial Co., Ltd.,, Shantou City star Trading Co., Ltd.). According
to the agreement, the parties jointly funded Shantou Small&Medium Enterprise financing Guarantee
Co., Ltd., where the Group and Shenzhen Small&Medium Enterprise Credit financing Guarantee Group
Co., Ltd. invest RMB 12 million individually with cash.
8.6 Amounts due from / to related parties
(1) Amounts due from related party
Closing balance Opening balance
Item Carrying Bad debt
Bad debt provision Carrying amount
amount provision
Accounts receivable
Shenzhen Fresh Peak property consultant
1,112,375.80 -- 1,112,496.40 --
Co.,Ltd
Total 1,112,375.80 -- 1,112,496.40 --
Other receivables
Guangdong Province Huizhou Luofu Hill Mineral
10,465,168.81 10,465,168.81 10,465,168.81 10,465,168.81
Water Co.,Ltd
Shenzhen Runhua Automobile Trading Co.,Ltd 3,072,764.42 3,072,764.42 3,072,764.42 3,072,764.42
Canada GreatWall（vancouver）Co.,Ltd 89,035,748.07 89,035,748.07 89,035,748.07 89,035,748.07
Bekaton Property Limited 12,559,290.58 12,559,290.58 12,559,290.58 12,559,290.58
Paklid Limited 18,631,565.47 18,628,734.59 18,946,689.75 18,629,623.52
Shenzhen Shenfang Department Store Co. Ltd. 237,648.82 189,179.82 237,648.82 189,179.82
Shenzhen Real Estate Consolidated Service Co.,
1,086,487.22 927,136.22 1,086,487.22 927,136.22
Ltd.
162
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Closing balance Opening balance
Item Carrying Bad debt
Bad debt provision Carrying amount
amount provision
Shenzhen City Shenfang Construction and
8,327,180.71 8,327,180.71 8,327,180.71 8,327,180.71
Decoration Materials Ltd.
Shenzhen RongHua JiDian Co.,Ltd 475,223.46 -- 475,223.46 --
Xi’an Fresh Peak property management& Trading
8,419,205.19 -- 8,419,205.19 --
Co.,Ltd
Total 152,310,282.75 143,205,203.22 152,625,407.03 143,206,092.15
(2) Amounts due to related party
Item Closing balance Opening balance
Other payables
Shenzhen Tefa Real Estate Consolidated
598,012.16 598,012.16
Service Co., Ltd.
Shenzhen Shen Fang Industrial Development
1,534,854.91 1,534,854.91
Co., Ltd
Shenzhen ZhongGang Haiyan Enterprise Ltd. 135,853.52 135,853.52
Shenzhen Dongfang New world store Co.,Ltd 902,974.64 902,974.64
Shenzhen Xin Dongfang Store Ltd. 1,394,704.21 1,394,704.21
Guangdong Province Fengkai Lain Feng
1,867,348.00 1,869,348.00
Cement Manufacturing Co., Ltd.
Shenzhen Cyber Port Co., Ltd 7,949,749.26 7,949,749.26
Shenzhen Shenfang Group BaoAn Developing
20,093,445.07 20,093,445.07
Co.,Ltd
Shenzhen Investment Holding Co.,Ltd 63,848,819.24 63,848,819.24
Total 98,325,761.01 98,327,761.01
Interest payable:
Shenzhen Investment Holding Co.,Ltd 16,535,277.94 16,535,277.94
Shenzhen General Institute of Architectural
134,166.67 --
Design and Research CO.,LTD
Total 16,669,444.61 16,535,277.94
163
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
(3) Short-term loans
Item Closing balance Opening balance
Shenzhen General Institute of Architectural
70,000,000.00 --
Design and Research CO.,LTD
Total 70,000,000.00 --
Note 9 Contingencies
9.1 Contingencies arising from pending litigations or arbitrations and their financial effects
① Guoxing Building Lawsuit
On 21 March 1997, the Company signed 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 68% of GuoXing
Building project to BaoXing with the price- Rmb 145,000 thousand. And also, the construction cost –
Rmb 15,000 thousands that the Company owed to GuoXing Building were undertaken by BaoXing. But
after paying Rmb 45 million to the company, Bao Xing hadn’t paid the remaining equity transferring
fund- Rmb 100,000 thousand and the construction cost – 15,000 thousand. 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 22 Feb 2008, 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 BaoXing Company failed to carry out the agreement. On 23 July 2008,
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 pay for the company Rmb 2,500
thousand and transferred the land-use right of N0. 1514 room (the property developer is Great China
International Group（China）Co., Ltd, hereinafter referred to as Great China Company) of Shenzhen
international exchange plaza instead. In December 2008, the Company received Rmb 2,500 thousand.
Great China Company did not handle with the house property certificate for the Company according to
the agreement. On November 15, 2011, another "Agreement" was signed by the Company, BaoXing
Company, HongMing Company and Great China Company. They agreed that BaoXing Company would
pay RMB 12,500 thousand Yuan in cash to the Company, and the Company receive the money in full,
the agreement signed on 22 Feb, 2008 was seemed to have been fulfilled. In 2011, the company
164
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
received RMB 12,500 thousand Yuan from Shenzhen Haotian Equity Investment Fund Management
Co., Ltd- the third-party equity interest commissioned by BaoXing Company.
As of December 31, 2012, the above realized gains and losses have been included in the relevant
year.
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 two parties differences on the operating policy of the
project.
In 1997, 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 a lawsuit on compensation. The ShanXi Province High
Peoples Court made a judgement “(2000) SJ-CZ No.25”. The judgement was as follows: 1. Business
Tourism Company had to pay 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 jointly and severally obligation of the interests of the compensation.
Untill 31 December 2011, the amount of RMB 15,201,000.00 had been called back. Because of Fresh
Peak Company’s application, ShanXi Province High Peoples Court resumed the execution on
September 5, 2011. Now the case is proceeding and there was no any new substantive progress in the
reporting period.
As at 31 December 2012, 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 debt 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”) 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
judgement which issued by GuangDong Province High Peoples Court on 2007-12-21 was as follows:
165
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
①Tourism Company had to pay for Rmb 9,600 thousand to the company in 10 days after the judgment
entering into force.
②Tourism Company should paid the interests for the occupation of Rmb 9,600 thousands with The
People's Bank of China similar loans rate in 10 days after the judgment entering into force. Of which,
the interests for the occupation of Rmb 4,400 thousand were caluated from 1986-5-1 to the day the
Tourism company paid off the debt. The interests for the occupation of Rmb 4100 thousand were
caluated from 1988-2-1 to the day the Tourism Company paid off the debt. The interests for the
occupation 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 deducted from the interest payable.
③Luofushan Administration Committee had to undertake one third of the debts which Luofushan
Tourism was unable to repay;
④Interest of debts would be double if the Tourism Company and Luofushan Administration Committee
failed to fulfill their obligations within the designated period of this judgment;
⑤Tourism company undertaked all the litigation fees (RMB 167,714.00). 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 on December 17, 2009. The
GuangDong Province High people’s Court issued 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 17 Mar 2010, Huizhou intermediate people’s court had
finished the evaluation of the land use right of the executor.On 13th October 2010, the land-use right
was acutioned by the national resource department at the price of RMB 51,200 thousand.
According to the relevant provisions of the Huizhou local authorities, auction of land should be
approved by local department of land and be implemented in real estate trading center set up under
Land Branch. Huizhou Intermediate Court has issued an official letter to inform Boluo Land Bureau of
its decision, and notify the relevant assistance. Boluo Land Bureau replied the Huizhou Intermediate
Court that the land for aution would be surveyed and mapped (different from
land evaluation), new planning point would be made by them as the conditions of auction. Boluo Land
Bureau have surveyed and mapped Luofu Hill Tourism site that was sealed. The cadastral map and
land red line chart were submitted to Huizhou Municipal Intermediate People's Court in June 2011.
Detailed regulation is deemed as the basis for the development of planning points, while the
preparation of detailed regulation relies on Luofushan Administration Committee. Because the planning
points were not made, the land failed to be auctioned.
166
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
As at 31 December 2012, the book value of the Company’s creditor rights on Tourism Company was
Rmb 9,600,000.00. The provision for bad debt was Rmb 4,800,000.00.
9.2 Contingent liabilities arising from providing debt guarantees to other entities and their
financial effects
As of December 31, 2012, the Group has guarantee balance of RMB 8,001,929.14 for installment in
moneytary funds.
Note 10 Commitments
10.1 Significant commitments
Item Amount for the current
Amount for the prior period
period
Capital commitments that have been entered into
but have not been recognized in the financial -- --
statements
- Significant outsourcing contracts 1,349,084,786.45 95,220,278.78
Total 1,349,084,786.45 95,220,278.78
10.2 Fulfillment progress of previous commitments
The amount of significant outsourcing contracts is RMB 40,259,595.35, which was paid during the
report period and has been entered into the prior period but have not been recognized in the financial
statements.
Note 11 Events after Balance Sheet Date
On 28 March, 2013, the proposal for profit distribution in the year 2012 was adopted by the board of
directors of the Group. According to the plan of the Board, the Group will not distribute profit or transfer
capital surplus to share capital, and net profit will be used to compensate the losses of previous
years. The plan still need to be submitted to the Company's general meeting of stockholders for vote.
Note 12 Other Significant Events
(1) Dong Hu Di Jing Building (with Parcel No.H312-0061) is located in Luohu District. The area is
7,970.08 s.q.m., construction land area is 5,889.7 s.q.m. and area of structure 59,486 s.q.m. Its volume
fraction is 10.1. In November 2006, the Company got the land use rights of Dong Hu Di Jing Building
Project. In September and December 2008, the
Company has received a letter from the immediate branch of Shenzhen Urban
Planning and the Shenzhen Municipal Planning Bureau (Shen Gui [2008]1069, Shen
Gui [2008] 2517).The Company was told that the municipal road works may partially occupied the red
line of the parcel of land of Dong Hu Di Jing Building Project and the development of the project was
required to suspend. On 20 January 2011, Shenzhen Urban Planning and Land Resources
Committee (hereinafter referred to as the Comission) issued "decision on disposal of idle land"Shen
167
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Gui Land Yiqu idle [2011] No. 009. According to the decision, the government will take back land use
rights by payment.
Dong Hu Di Jing Building (Parcel No. H312-0061) is located at the junction of Buxin Road and Aiguo
Road in Luohu District, Shenzhen, with a floor area of 7,970.08 s.q.m., a construction land area of
5,889.7 s.q.m., a plot ratio of 10.1 and a plot-ratio construction area of 59,486 s.q.m. In November
2006, the Company obtained the land use right of the Dong Hu Di Jing Building Project. In September
and December 2008, the Company received letters respectively from the direct branch of Shenzhen
Municipal Planning Bureau and later Shenzhen Municipal Planning Bureau itself (SGZSH [2008] No.
1069 and SGH [2008] No. 2517). The Company was told by those letters that some municipal road
project might partially occupy the red line of the Dong Hu Di Jing Building Project and the Company
was required to suspend development of its project. On 20 January 2011, the first administration
directly under Shenzhen Urban Planning and Land Resources Commission (hereinafter referred to as
the “UPLR Commission”) issued a “Decision on Idle Land” (SGTYJ [2011] No. 009). According to the
Decision, the government would take back the land use right of the parcel with compensation.
At the beginning of 2012, the UPLR Commission and the Company entrusted or hired intermediary
agencies to evaluate the land parcel. In early May, the first administration directly under the UPLR
Commission found it rather difficult to determine the land compensation, pay with the government
budgets and operate, so it notified the Company that the municipal road project would not occupy the
land parcel and suggested the Company continuing to work on the feasibility of the Dong Hu Di Jing
Building Project through revising the design under the current conditions. If the project was considered
feasible, the first administration would take back the “Decision on Idle Land” and the Company could
carry on with the project by adjusting the planning key points based on the current status of the project
and the design plan. At the end of July 2012, the Company signed the official design contract with
Shenzhen General Institute of Architectural Design and Research Co., Ltd.. In early September 2012,
the first draft of design was completed and submitted to the first administration for review and approval.
In the middle of November 2012, the Company submitted the revised design plan and planning key
points to the first administration. Upon review, the first administration decided to withdraw the “Decision
on Idle Land” first. In early 2013, the first administration reported its withdrawal decision to the UPLR
Commission for deliberation and approval. And the Company will kick off preparations for the project as
soon as the “Decision on Idle Land” is withdrawn.
(2)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 Group. And the equity Hongkong Fresh Peak Co.,
Ltd held was 93.1%. The core business of TongXin Company was to develop Shenyang Fresh Peak
Business Plaza. TongXin Company refinanced Rmb 13,140 thousand from China Agriculture Bank
ShenYang branch. And the Group provided assurance for the loan. Because TongXin Company failed
to repay the loan in time, China Agriculture Bank ShenYang branch instituted legal proceedings in
168
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Shenyang Intermediate People's Court. At last, TongXin Company borrowed money from the Group to
repay the loans and interests.
On 25 January, 2008, China 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 Group. On 27 January, 2010, the Group had called back Rmb 7,000 thousand and
RMB1,000 thousand on 18 October,2012.
In November 2012, the Shenyang Intermediate People's Court started the procedure that the land use
rights would be auctioned. On November 9, theGroup and Tongxin Company signed an greement, they
agreed on: Tongxin Company pay RMB 8.5 million to the Group within three days after the signing of
the agreement, after that, the Group will put the case to end; besides, lawsuit fees will be undertaken
by the two sides.
As of December 31, 2012, Tongxin Company had paid RMB 8,541,962. The Case came to the end.
Note 13 comparative figures
According the new disclosure format, for prepayment, an amount of RMB 4,410,948.69 of prepayment
to buy long-term assets is reclassified to other non-current assets; amount of RMB 14,453,433.68,
which is tax paid for advances from customers and input tax to be deductible and included in Taxes
and due payable last year, is reclassified to other current assets.
Note 14 Notes to Items in the Financial Statements of the Company
14.1 Accounts receivable
(1) Accounts receivable by categories
Closing balance
Category Carrying amount Bad debt provision
Amount (%) Amount (%)
Accounts receivable of which provision for
-- -- -- --
bad debts is of individually significant
Accounts receivable of which provision for
19,965,193.98 100.00 6,301,854.02 31.56
bad debts is of individually insignificant
Total 19,965,193.98 100.00 6,301,854.02 31.56
(Continued)
Closing balance
Category Carrying amount Bad debt provision
Amount (%) Amount (%)
Accounts receivable of which provision for
-- -- -- --
bad debts is of individually significant
Accounts receivable of which provision for
10,786,238.88 100.00 6,301,854.02 58.42
bad debts is of individually insignificant
169
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Total 10,786,238.88 100.00 6,301,854.02 58.42
(2) Accounts receivable by aging balance
Closing balance Opening balance
Item
Amount (%) Amount (%)
Within 1 year 9,279,924.00 46.48 -- --
1-2 years -- -- -- --
2-3 years -- -- -- --
Over 3 years 10,685,269.98 53.52 10,786,238.88 100.00
Total 19,965,193.98 100.00 10,786,238.88 100.00
(3) Bad debt provision
(a) Bad debt provision of accounts receivable which is of individually significant
Proportion of
Content of accounts receivable Carrying amount Amount of bad debt Reasons for the provision
provision
House pay to be collected 14,368,959.98 6,301,854.02 43.86 A separate provision is
established according to the
recoverability of each
Rental to be collected 5,596,234.00 -- --
receivales with long aging and
little retrievability.
Total 19,965,193.98 6,301,854.02 31.56
(4) No any significant reversals and collections during the current period
(5) There were no any significant accounts receivables written off in the current period.
(6) No amount due from shareholders at least 5% of the Company’s shares with voting power in the
reporting period
(7) Top 5 entities with the largest balances of accounts receivable
Proportion of the
Relationship with the
Name of entity Amount Age amount to the total AR
Group
(%)
Corporation No.1 Subsidiary 3,840,003.00 Within 1 year 19.23
Corporation No.2 Un-related party 1,845,278.76 Over 3 years 9.24
Individual No.1 Associate 1,200,000.00 Over 3 years 6.01
Corporation No.3 Un-related party 1,112,375.80 Over 3 years 5.57
Individual No.2 Un-related party 876,864.11 Over 3 years 4.39
Total 8,874,521.67 44.44
170
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
(8) Receivables due from related parties
Name of entity Relationship with the Group Amount （%）in receivables
Shenzhen Fresh Peak property
Associate 1,112,375.80 5.57
consultant Co.,Ltd
Shenzhen Petrel Hotel Co. Ltd. Subsidiary 3,840,003.00 19.23
Total 4,952,378.80 24.80
(9) There were no any accounts receivables which had been terminated recognization.
(10) There were no any accounting receivable which had been securitization.
14.2 Other receivables
(1) Other receivables by categories
Closing balance
Category Carrying amount Bad debt provision
Amount (%) Amount (%)
Other receivables of which provision for
1,153,502,426.18 98.19 818,545,417.98 70.96
bad debts is of individually significant
Other receivables of which provision for
21,240,357.02 1.81 12,628,565.94 59.46
bad debts is of individually insignificant
Total 1,174,742,783.20 100.00 831,173,983.92 70.75
(Continued)
Opening balance
Category Carrying amount Bad debt provision
Amount (%) Amount (%)
Other receivables of which provision for
1,119,188,964.18 98.48 818,545,417.98 73.14
bad debts is of individually significant
Other receivables of which provision for
17,315,405.95 1.52 12,628,565.94 72.93
bad debts is of individually insignificant
Total 1,136,504,370.13 100.00 831,173,983.92 73.13
(2) Other receivables by aging balance
Closing balance Opening balance
Item
Amount (%) Amount (%)
Within 1 year 76,759,697.54 6.53 40,546,035.56 3.57
1-2 years 38,253,012.23 3.26 5,016,859.43 0.44
2-3 years 6,693,182.07 0.57 8,713,096.41 0.77
Over 3 years 1,053,036,891.36 89.64 1,082,228,378.73 95.22
Total 1,174,742,783.20 100.00 1,136,504,370.13 100.00
(3) Bad debt provision
(a) Bad debt provision of other receivables which is of individually significant
171
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Proportion of Reasons for the
Content of accounts receivable Carrying amount Amount of bad debt
provision provision
Other receivables between
A separate provision is
subsidiares that are included in 1,006,978,545.23 677,154,231.02 67.25
established according
consolidated statement
to the recoverability of
Other receivables between
each receivales with
subsidiares that are not included 120,994,319.55 120,994,319.55 100.00
long aging and little
in consolidated statement
retrievability
Others 25,529,561.40 20,396,867.41 79.90
Total 1,153,502,426.18 818,545,417.98 70.96
(b) Bad debt provision of other receivables which is of individually insignificant
Content of other Reasons for the
Carrying amount Proportion of provision Amount of bad debt
receivables provision
Other receivables
between subsidiares that
2,420,150.00 -- -- A separate provision is
are included in
established according
consolidated statement
to the recoverability of
Other receivables
each receivales with
between subsidiares that
1,324,136.04 1,116,316.04 84.31 long aging and little
are not included in
retrievability
consolidated statement
Others 17,496,070.98 11,512,249.90 65.80
Total 21,240,357.02 12,628,565.94 59.46
(4) There were no any reversals and collections during the current period .
(5) There were no any other significant receivables Written off for in the current period.
(6) There were no any other receivables due from shareholders at least 5% of the Company’s shares
with voting power in the reporting period
(7) Top 5 entities with the largest balances of other receivables
Proportion of the
Relationship with the
Name of entity Amount Age amount to the total OR
Group
(%)
13,363,528.75 Within 1 year 1.14
Fresh Peak Enterprise Co., 67,650.00 1-2 years 0.01
Subsidiary
Ltd 1,993,416.69 2-3 years 0.17
551,286,632.77 Over 3 years 46.93
Shenzhen ShenFang Group Subsidiary 56,976,753.82 Within 1 year 4.85
LongGang Development 35,574,778.95 1-2 years 3.03
172
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Co.,Ltd 4,338,795.65 2-3 years 0.37
187,544,379.97 Over 3 years 15.96
American Great Wall Co.,Ltd Subsidiary 101,379,954.81 Over 3 years 8.63
Canada Great
Subsidiary 89,035,748.07 Over 3 years 7.58
Wall(vancouver) Co.,Ltd
Shenzhen City Shenfang
Subsidiary 32,392,459.91 Over 3 years 2.76
Free Trade Trading Ltd
Total 1,073,954,099.39 91.43
(8) Receivables due from related parties
Name of entity Relationship with the Group Amount （%）in receivables
Fresh Peak Enterprise Co., Ltd. Subsidiary 566,711,228.21 48.24
Shenzhen ShenFang Group
Subsidiary 284,434,708.39 24.21
LongGang Development Co.,Ltd
American Great Wall Co.,Ltd Subsidiary 101,379,954.81 8.63
Canada Great Wall(vancouver)
Subsidiary 89,035,748.07 7.58
Co.,Ltd
Shenzhen City Shenfang Free
Subsidiary 32,392,459.91 2.76
Trade Trading Ltd.
Shenzhen Lain Hua Industry and
Subsidiary 16,162,762.46 1.38
Trading Co. Ltd.
Bekaton Property Limited Subsidiary 12,559,290.58 1.07
Paklid Limited Subsidiary 11,072,100.19 0.94
Guangdong province Huizhou
Joint venture 10,465,168.81 0.89
Luofu Hill Mineral Water Co.,Ltd
Shenzhen City Shenfang
Construction and Decoration Subsidiary 8,327,180.71 0.71
Materials Ltd.
Shenzhen City Shenfang
Subsidiary 5,897,431.45 0.50
Investment Ltd.
Shenzhen Runhua Automobile
Associate 3,072,764.42 0.26
trading Co.,Ltd
Shenzhen Real Estate
Subsidiary 1,086,487.22 0.09
Consolidated Service Co., Ltd.
Shenzhen Ronghua JiDian
Associate 475,223.46 0.04
Co.,ltd
Shenzhen Shenfang Department
Subsidiary 237,648.82 0.02
Store Co. Ltd
173
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Name of entity Relationship with the Group Amount （%）in receivables
Total 1,143,310,157.51 97.32
(9) There were no any other receivables which had been terminated recognization in the accounting
year.
(10) There were no any other receivables which had been securitization in the accounting year.
14.3 Long-term equity investments
(1) Long-term equity investments by types
Opening
Item Increase Decrease Closing balance
balance
Invested in subsidiary 254,668,771.15 -- -- 254,668,771.15
Invested in joint ventures 19,424,671.47 -- -- 19,424,671.47
Invested in associates 2,969,493.49 -- 120,218.96 2,849,274.53
Other equity investments 153,315,609.56 12,000,000.00 -- 165,315,609.56
Less：provisions for long-term equity investment
143,861,642.81 -- -- 143,861,642.81
impairment
Total 286,516,902.86 12,000,000.00 120,218.96 298,396,683.90
174
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
(2) Details of long-term equity investments
Accounting Changes [Increase
Name of investee Investment cost Opening balance Closing balance
method /decrease]
Shenzhen City Property
Cost method 12,821,791.52 12,821,791.52 -- 12,821,791.52
Management Ltd.
Shenzhen Petrel Hotel
Cost method 20,605,047.50 20,605,047.50 -- 20,605,047.50
Co. Ltd.
Shenzhen City Shenfang
Cost method 9,000,000.00 9,000,000.00 -- 9,000,000.00
Investment Ltd.
Fresh Peak Enterprise
Cost method 556,500.00 556,500.00 -- 556,500.00
Ltd.
Fresh Peak Holdings Ltd. Cost method 20,824,545.77 22,717,697.73 -- 22,717,697.73
Shenzhen Special
Economic Zone Real
Estate (Group) Cost method 20,000,000.00 20,000,000.00 -- 20,000,000.00
Guangzhou Property and
Estate Co., Ltd.
Shenzhen Zhen Tung
Cost method 11,332,321.45 11,332,321.45 -- 11,332,321.45
Engineering Ltd
American Great wall
Cost method 1,435,802.00 1,435,802.00 -- 1,435,802.00
Co.,Ltd
Shenzhen City Shenfang
Cost method 4,750,000.00 4,750,000.00 -- 4,750,000.00
Free Trade Trading Ltd.
Shenzhen City Hua Zhan
Construction Cost method 6,000,000.00 6,000,000.00 -- 6,000,000.00
Management Ltd.
Shenzhen City Car Rental
Cost method 11,809,500.00 6,495,225.00 -- 6,495,225.00
Ltd.
QiLu Co.,Ltd Cost method 212,280.00 212,280.00 -- 212,280.00
Beijing Shenfang Property
Cost method 500,000.00 500,000.00 -- 500,000.00
Management Ltd.
Shenzhen Lain Hua
Industry and Trading Co. Cost method 13,458,217.05 13,458,217.05 -- 13,458,217.05
Ltd.
Shenzhen City SPG Long
Cost method 30,850,000.00 30,850,000.00 -- 30,850,000.00
Gang Development Ltd.
Beijing Fresh Peak
Property Development
Cost method 64,183,888.90 64,183,888.90 -- 64,183,888.90
Management Limited
Company
Shenzhen Shenfang Car
Cost method 29,750,000.00 29,750,000.00 -- 29,750,000.00
Park Ltd.
Guangdong province
Equity
Huizhou Luofu Hill Mineral 9,969,206.09 9,969,206.09 -- 9,969,206.09
method
Water Co.,Ltd
175
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Accounting Changes [Increase
Name of investee Investment cost Opening balance Closing balance
method /decrease]
Equity
Fengkai Xinhua Hotel 9,455,465.38 9,455,465.38 -- 9,455,465.38
method
Shenzhen Runhua
Equity
Automobile trading 1,445,425.56 1,445,425.56 -- 1,445,425.56
method
Co.,Ltd
Shenzhen Ronghua Equity
JiDian Co.,ltd method 1,250,000.00 1,524,067.93 -120,218.96 1,403,848.97
Shenzhen Shen Fang
Industrial Development Cost method 4,500,000.00 4,500,000.00 -- 4,500,000.00
Co., Ltd
Shenzhen ZhongGang
Cost method 12,940,900.00 12,940,900.00 -- 12,940,900.00
Haiyan Enterprise Ltd.
Shenzhen Real Estate
Consolidated Service Co., Cost method 5,958,305.26 5,958,305.26 -- 5,958,305.26
Ltd.
Paklid Limited Cost method 201,100.00 201,100.00 -- 201,100.00
Bekaton Property Limited Cost method 906,630.00 906,630.00 -- 906,630.00
Shenzhen Tefa Real
Estate Consolidated Cost method 8,180,003.63 8,180,003.63 -- 8,180,003.63
Service Co., Ltd.
Shenzhen Xin Dongfang
Cost method 18,500,000.00 18,500,000.00 -- 18,500,000.00
Store Ltd.
Shenzhen City Shenfang
Construction and Cost method 2,680,000.00 2,680,000.00 -- 2,680,000.00
Decoration Materials Ltd.
Shenzhen Shenfang
Cost method 9,500,000.00 9,500,000.00 -- 9,500,000.00
Department Store Co. Ltd.
Shenzhen CyberPort Co.,
Cost method 14,000,000.00 12,401,018.42 -- 12,401,018.42
Ltd
ShenZhen ShenFang
BaoAn Cost method 19,000,000.00 19,000,000.00 -- 19,000,000.00
developmentCo.,Ltd
Shantou Fresh Peak
Cost method 68,731,560.43 58,547,652.25 -- 58,547,652.25
Building
Shantou Small&medium
Enterprises Finacing 12,000,000.00 -- 12,000,000.00 12,000,000.00
Guarantee Co. Ltd.
Total 457,308,490.54 430,378,545.67 11,879,781.04 442,258,326.71
176
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
(Continued)
Proportion Proportion of Explanation of
Provision for Cash
of voting power the Provision for
impairment dividend
Name of investee ownership in the inconsistency impairment
losses for for the
interest held investee between these losses
the period period
(%) (%) two proportions
Shenzhen City Property Management Ltd. 95 95 -- -- --
Shenzhen Petrel Hotel Co. Ltd. 68.10 68.10 -- -- --
Shenzhen City Shenfang Investment Ltd. 90 90 -- -- --
Fresh Peak Enterprise Ltd. 100 100 -- -- --
Fresh Peak Holdings Ltd. 100 100 -- -- --
Shenzhen Special Economic Zone Real Estate (Group) Guangzhou Property and Estate Co., Ltd. 100 100 -- -- --
Shenzhen Zhen Tung Engineering Ltd 73 73 -- -- --
American Great wall Co.,Ltd 70 70 -- -- --
Shenzhen City Shenfang Free Trade Trading Ltd. 95 95 -- -- --
Shenzhen City Hua Zhan Construction Management Ltd. 75 75 -- -- --
Shenzhen City Car Rental Ltd. 55 55 -- -- --
QiLu Co.,Ltd 20 20 -- -- --
Beijing Shenfang Property Management Ltd. 10 10 -- -- --
Shenzhen Lian Hua Industry and Trading Co. Ltd. 95 95 -- -- --
Shenzhen City SPG Long Gang Development Ltd. 95 95 -- -- --
Beijing Fresh Peak Property Development Management Limited Company 75 75 -- -- --
Shenzhen Shenfang Car Park Ltd. 70 70 -- -- --
Guangdong province Huizhou Luofu Hill Mineral Water Co.,Ltd Co-operation Co-operation 9,969,206.09 -- --
177
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Proportion Proportion of Explanation of
Provision for Cash
of voting power the Provision for
impairment dividend
Name of investee ownership in the inconsistency impairment
losses for for the
interest held investee between these losses
the period period
(%) (%) two proportions
Fengkai Xinhua Hotel Co-operation Co-operation 9,455,465.38 -- --
Shenzhen Runhua Automobile trading Co.,Ltd 50 50 1,445,425.56 -- --
Shenzhen Ronghua JiDian Co.,ltd 25 25 1,076,954.64 -- --
Shenzhen Shen Fang Industrial Development Co., Ltd 100 100 4,500,000.00 -- --
Shenzhen ZhongGang Haiyan Enterprise Ltd. 68 68 12,940,900.00 -- --
Shenzhen Real Estate Consolidated Service Co., Ltd. 100 100 5,958,305.26 -- --
Paklid Limited 100 100 201,100.00 -- --
Bekaton Property Limited 60 60 906,630.00 -- --
Shenzhen Tefa Real Estate Consolidated Service Co., Ltd. 100 100 8,180,003.63 -- --
Shenzhen Xin Dongfang Store Ltd. 100 100 18,500,000.00 -- --
Shenzhen City Shenfang Construction and Decoration Materials Ltd. 100 100 2,680,000.00 -- --
Shenzhen Shenfang Department Store Co. Ltd. 95 95 9,500,000.00 -- --
Shenzhen CyberPort Co., Ltd 70 70 -- -- --
ShenZhen ShenFang BaoAn developmentCo.,Ltd 95 95 -- -- --
Shantou Fresh Peak Building 100 100 58,547,652.25 -- --
Shantou Small&medium Enterprises Finacing Guarantee Co. Ltd. 10 10 -- -- --
Total 143,861,642.81 -- --
178
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
(3) Provision for impairment of long-term investments
Item Opening balance Increase Decrease 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., Ltd 8,180,003.63 -- -- 8,180,003.63
Shenzhen Xin Dongfang Store Ltd. 18,500,000.00 -- -- 18,500,000.00
Shenzhen City Shenfang Construction and Decoration
Materials Ltd. 2,680,000.00 -- -- 2,680,000.00
Shenzhen Shenfang Department Store Co. Ltd. 9,500,000.00 -- -- 9,500,000.00
Shenzhen Runhua automobile trading Co.,Ltd 1,445,425.56 -- -- 1,445,425.56
Guangdong province Huizhou Luofu Hill Mineral Water
Co.,Ltd 9,969,206.09 -- -- 9,969,206.09
Fengkai Xinhua Hotel 9,455,465.38 -- -- 9,455,465.38
Shantou Fresh Peak Building 58,547,652.25 -- -- 58,547,652.25
Total 143,861,642.81 -- -- 143,861,642.81
14.4 Operating income and costs
(1) Operating income and operating costs
Item Amount for the current period Amount for the prior period
Principal operating income 113,046,014.33 87,681,047.05
Other operating income -- 12,500,000.00
Total of operating income 113,046,014.33 100,181,047.05
Principal operating costs 41,545,002.74 40,256,344.18
Other operating costs -- 1,898,834.00
Total of operating costs 41,545,002.74 42,155,178.18
179
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
(2) Principal operating activities (classified by industries)
Amount for the current period Amount for the prior period
Name of industry
Operating income Operating costs Operating income Operating costs
Real estate 50,119,629.72 18,462,245.54 33,569,135.00 16,440,350.35
Leasing 62,926,384.61 23,082,757.20 54,111,912.05 23,815,993.83
Others -- -- 12,500,000.00 1,898,834.00
Total 113,046,014.33 41,545,002.74 100,181,047.05 42,155,178.18
(3) Principal operating activities (classified by geographical areas)
Name of geographical Amount for the current period Amount for the prior period
area Operating income Operating costs Operating income Operating costs
Shenzhen 113,046,014.33 41,545,002.74 100,181,047.05 42,155,178.18
Total 113,046,014.33 41,545,002.74 100,181,047.05 42,155,178.18
(4) Operating income from the Company’s top 5 customers
Amount for the current period
Name of customers Proportion to total operating income
Operating income
of the Company (%)
Corporation unit No.1 14,737,984.00 13.04
Corporation unit No.1 9,568,633.00 8.46
Corporation unit No.2 6,631,435.00 5.87
Corporation unit No.3 6,016,656.00 5.32
Corporation unit No.4 5,503,186.00 4.87
Total 42,457,894.00 37.56
(Continued)
Amount for the prior period
Name of customers Proportion to total operating income
Operating income
of the Company (%)
Corporation unit No.1 27,800,000.00 27.75
Corporation unit No.1 12,500,000.00 12.48
Corporation unit No.2 5,860,001.00 5.85
Corporation unit No.3 4,656,542.00 4.65
Corporation unit No.4 3,406,279.00 3.40
Total 54,222,822.00 54.13
14.5 Investment income
(1) Details of investment income
180
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Amount for the current Amount for the prior
Item
period period
Investment income from long-term investments under equity
-120,218.96 -5,622.11
method
Investment income on disposal of available-for-trade financial
-- -34,017.37
assets
Total -120,218.96 -39,639.48
(2) Income from long-term investments under equity method
Amount for the current Amount for the prior
Name of investee Reasons for changes
period period
Shenzhen Ronghua JiDian Co.,ltd -120,218.96 -5,622.11
Total -120,218.96 -5,622.11
14.6 Supplementary information to the cash flow statement
Amount for the current Amount for the prior
Item
period period
(1) Reconciliation of net profit to cash flows from operating
activities:
Net profit 5,619,721.93 15,501,411.42
Add: Provision for impairment loss of assets -- --
Depreciation of fixed assets, bio-assets, and natural gas 21,246,263.88 21,782,702.08
Amortization of intangible assets 98,799.96 61,999.96
Amortization of long-term deferred expenses 56,530.20 36,663.94
Losses on disposal of fixed assets, intangible assets and
-- -190,727.96
other long-term assets(deduct: gains)
Losses on scrapping of fixed assets (deduct: gains) 92.50 17,714.50
Loss of fair value variation (deduct: gains) -- -19,993.75
Financial expenses (deduct: gains) 179,487.26 -6,212,145.09
Losses from investments (deduct: gains) 120,218.96 39,639.48
Decrease in deferred tax assets (deduct: increase) -- 916,500.07
Increase in deferred tax liabilities (deduct: decrease) -- --
Decrease in inventories (deduct: increase) -270,488,044.98 -61,883,559.61
Decrease in operating receivables (deduct: increase) -8,288,762.53 1,557,349.87
Increase in operating payables (deduct: decrease) 261,076,869.33 94,174,827.24
Others -- --
Net cash flows from operating activities 9,621,176.51 65,782,382.15
(2) Investing and financing activities that do not affect cash
181
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Amount for the current Amount for the prior
Item
period period
receipt and payment
Liabilities converted capital -- --
Reclassify convertible bonds to be expired within one year as
-- --
current liability
Fixed assets subject to finance leases -- --
(4) Net increase in cash and cash equivalents:
Cash at the end of the period 190,825,250.83 144,779,100.65
Less: cash at the beginning of the period 144,779,100.65 182,646,766.32
Add: cash equivalents at the end of the period -- --
Less: cash equivalents at the beginning of the period -- --
Net increase in cash and cash equivalents 46,046,150.18 -37,867,665.67
182
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Note15. Supplementary Materials
15.1 Breakdown non-recurring profit or loss
Amount for the current Amount for the prior
Items
period period
Profit or loss on disposal of non-current assets -588,399.46 173,176.00
Tax refunds or reductions with ultra vires approval or without official approval documents -- --
Government grants recognized in profit or loss (other than grants which are closely related to the Company’s business and are either in fixed
-- --
amounts or determined under quantitative methods in accordance with the national standard)
Income earned from lending funds to non-financial institutions and recognized in profit or loss -- --
The excess of attributable fair value of identifiable net assets over the consideration paid for the acquisition of subsidiaries, associates and joint
-- --
ventures
Profit or loss on exchange of non-monetary assets -- --
Profit or loss on entrusted investments or assets management -- --
Impairment losses on assets due to force majeure events, e.g, natural disasters -- --
Profit or loss on debt restructuring -- --
Entity restructuring expenses, e.g.,expenditure for layoff of employees, integration expenses, etc. -- --
Profit or loss attributable to the evidently unfair portion of transaction price, being transacted price in excess of fair transaction price, of a
-- --
transaction
Net profit or loss of subsidiaries from the beginning of the period up to the business combination date recognized as a result of business
-- --
combination of enterprises under common control
Profit or loss arising from contingencies other than those related to normal operating business -- --
Profit or loss on changes in the fair value of held-for-trade financial assets, and held-for-trade financial liabilities and financial assets
-- -14,023.62
available-for-sale, other than those used in the effective hedging activities relating to normal operating business
183
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Amount for the current Amount for the prior
Items
period period
Reversal of provision for account receivables that are tested for impairment losses individually 6,140,000.00 --
Profit or loss on entrusted loans -- --
Profit or loss on changes in the fair value of investment properties that are subsequently measured using the fair value model -- --
Effects on profit or loss of one-off adjustment to profit or loss for the period according to the period requirements of tax laws and accounting laws --
--
and regulations
Custodian fees earned from entrusted operation -- --
Other non-operating income or expenses other than the above -130,400.83 2,200,366.50
Other profit or loss that meets the definition of non-recurring profit or loss -- --
Subtotal 5,421,199.71 2,359,518.88
Tax effects 161,200.07 -589,509.63
Effects attributable to minority interests (after tax) -- --
Total 5,582,399.78 1,770,009.25
184
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Note：”+” means income or gain and “-” means loss or expense
The Group defines items as non-recurring profit or loss items according to “Information Disclosure
and Presentation Rules for Companies Making Public Offering of Securities No.1---Non-recurring
Profit or Loss”(CSRC No.[2008]43)
15.2 Differences between amounts prepared under foreign accounting standards and China
Accounting Standards (CAS)
(1) Differences in the net profit and net assets between those disclosed in the financial statements in
compliance with International / Hongkong Finance Reporting Standards and CAS
Net profit Net assets
Amount for the current Amount for the prior Amount for the Amount for the prior
period period current period period
In accordance with CASs 106,854,849.63 101,199,284.42 1,507,111,497.78 1,400,306,620.91
In accordance with IFRS 106,854,849.63 101,199,284.42 1,507,111,497.78 1,400,306,620.91
15.3 Return on net assets and earning per share (EPS)
Weighted average returned on net EPS
Profit for the reporting period
assets (%) Basic EPS Diluted EPS
Net profit attributable to ordinary
6.75% 0.1056 0.1056
shareholders of the Company
Net profit after deduction of
non-recurring profits or losses
attributable to ordinary 6.40% 0.1001 0.1001
shareholders of the Company
Note (1) Weighted average return on net assets =（106,814,543.53）/( 1,528,596,536.13+
（106,814,543.53-34,980.93)/2）.
Weighted average return on net asset after deduction of non-recurring profits or losses=
（101,232,143.75）/( 1,528,596,536.13+（106,814,543.53-34,980.93)/2).
(2) For calculation of basic EPS and diluted EPS, please see note 7.42
15.4 Abnormal financial statements items and description of reasons
(1) Items in the balance sheet
Monetary funds had RMB 496,805,905.01 as the closing balance at December 31, 2012, 48.98% of
increase than the opening of the year. The reason for such increase is new received loan from bank
and house pay collected during the current period.
Other current assets had RMB 7,780,460.78 as the closing balance at December 31, 2012, 46.17%of
decrease than the opening of the year. The reason for such decrease is that some turnover taxation
paid last year was carried over during the current period.
185
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Other non-current assets had RMB 2,413,434.00 as the closing balance at December 31, 2012,
45.29% of decrease than the opening of the year. The reason for such decrease is that some other
non-current assets were carried over to fixed assets during the current period.
Short-term loans had RMB 96,000,000.00 as the closing balance at December 31, 2012, 380.00% of
increase than the opening of the year. The reason for such increase is the new entrusted loan during
the current period.
Accounts payable had RMB 72,660,833.60 as the closing balance at December 31, 2012, 33.46% of
decrease than the opening of the year. The reason for such decrease is the payment of consruction
accounts payable during the current period.
Advance from customers had RMB 407,194,198.80 as the closing balance at December 31, 2012,
57.23% of increase than the opening of the year. The reason for such increase is advance payment
from housing buyers during the current period.
Taxes and due payable had RMB 12,177,692.36 as the closing balance at December 31, 2012,
310.07% of increase than the opening of the year. The reason for such increase is carry-over of tax
paid in 2011 during the current perion.
(2) Items in the Income Statement, Cash Flow Statement
Selling expenses had RMB 27,540,513.15 during 2012, 154.35% of increase than the prior year. The
reason for such increase is advertisement fees of the current period.
Financial expense had RMB 2,682,762.78 during 2012, 84.08% of decrease than the prior year. The
reason for such decrease is capitalized interest expenses of Shanglin Garden during the current
period.
Impairment losses of assets had RMB -6,140,000.00 during 2012, 7566.24% of decrease than the
prior year. The reason for such decrease is reversal of bad debt on Shenyang Tongxin Company
during the current period.
Cash received from sales of goods or rendering of services had RMB 1,151,245,849.81 during 2012,
31.97% of increase than the prior year. The reason for such increase is collection of sales from
housing buyers and from construction project.
Cash paid for goods and services had RMB 856,071,436.09 during 2012, 69.98% of increase than
the prior year. The reason for such increase is the payment of consruction accounts payable during
the current period.
186
2012 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
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 Auditor’s 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 reporting period.
187
