2013 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Shenzhen Special Economic Zone Real Estate & Properties (Group)
Co., Ltd.
2013 Annual Report
2014-007
March 2014
1
2013 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Section I. Important Reminders, Catalogue & 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 is factual, accurate and complete without any
false record, misleading statement or material omission. And they shall be jointly and severally
liable for that.
All directors 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.
Zhou Jianguo, board chairman, Chen Maozheng, GM, Tang Xiaoping, chief of the accounting work,
and Qiao Yanjun, chief of the accounting organ (chief of accounting), hereby confirm that the
Financial Report enclosed in this report is factual, accurate and complete.
This report involves futures plans, development strategies and some other forward-looking
statements, which shall not be considered as virtual promises to investors. Investors are kindly
reminded to pay attention to possible risks.
This report is prepared in both Chinese and English. Should there be any discrepancy between the
two versions, the Chinese version shall prevail.
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2013 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Catalogue
Section I. Important Reminders, Catalogue & Explanation...........................................2
Section II. Company Profile........................................................................................... 6
Section III. Accounting & Business Highlights............................................................. 8
Section IV. Report of the Board of Directors............................................................... 10
Section V. Report of the Supervisory Committee........................................................ 27
Section VI. Significant Events......................................................................................30
Section VII. Change in Share Capital and Particulars about Shareholders................. 41
Section VIII. Directors, Supervisors, Senior Management Staffs and Employees..... 47
Section XI. Financial Statements..................................................................................61
Section XII. Documents Available for Reference...................................................... 182
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2013 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Explanation
Refers
Term Contents
to
Refers Shenzhen Special Economic Zone Real Estate & Properties (Group) Co.,
Company, the Company, the Group
to Ltd.
Refers
The holding company Shenzhen Investment Holdings Co., Ltd.
to
Refers
Zhentong Company Shenzhen Zhentong Engineering Co., Ltd.
to
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2013 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Reminder of Major Risks
China Securities Journal, Ta Kung Pao (HK) and www.cninfo.com.cn were designated by the
Company as the media for information disclosure for 2013. All information of the Company shall
be subject to what was disclosed by the Company on the said media. And Investors are kindly
reminded to pay attention to possible investment risks.
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2013 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 abbreviation after
---
change (if any)
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
深房集团
the Company
English name of the Company
ShenZhen Special Economic Zone Real Estate&Properties (Group).co.，Ltd．
(if any)
Abbr. of the English name of
SPG
the Company (if any)
Legal representative of the
Zhou Jianguo
Company
Registered address 45/F-48/F, SPG Plaza, Renmin South Road, Shenzhen, Guangdong, P.R.China
Postal code for the registered
518001
address
Office address 47/F, SPG Plaza, Renmin South Road, Shenzhen, Guangdong, P.R.China
Postal code for the office
518001
address
Internet website of the
http://www.sfjt.com.cn
Company
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: China Securities Journal
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
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2013 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. 2013 Shenzhen 440301103225878 440300192179585 19217958-5
reporting period
Changes of the main business since listing
Unchanged
(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 Ruihua Certified Public Accountants LLP
9 F, West Tower, China Overseas Property Plaza, Building No. 7, Compound No. 8, Xi Binhe
Office address
Road, Yong Ding Men, Dong Cheng District, Beijing, China
Signing accountants Tian Jingliang, Li Hua
Sponsor engaged by the Company to conduct sustained supervision during the reporting period
□ Applicable √ Inapplicable
Financial consultant engaged by the Company to conduct sustained supervision during the reporting period
□ Applicable √ Inapplicable
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2013 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Section III. Accounting & Business 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
2013 2012 this year over last year 2011
(%)
Operating revenue (RMB Yuan) 2,116,482,684.93 1,030,148,729.47 105.45% 1,026,396,104.51
Net profit attributable to
shareholders of the Company 228,268,271.23 106,814,543.53 113.71% 101,200,060.65
(RMB Yuan)
Net profit attributable to
shareholders of the Company after
222,844,093.95 101,232,143.75 120.13% 99,430,051.40
extraordinary gains and losses
(RMB Yuan)
Net cash flows from operating
194,953,683.40 27,409,819.53 611.25% 115,154,790.41
activities (RMB Yuan)
Basic EPS (RMB Yuan/share) 0.2256 0.1056 113.64% 0.1
Diluted EPS (RMB Yuan/share) 0.2256 0.1056 113.64% 0.1
Weighted average ROE (%) 13.05% 6.75% 6.3% 6.85%
Increase or decrease of
As at 31 Dec. 2013 As at 31 Dec. 2012 this year-end than last As at 31 Dec. 2011
year-end (%)
Total assets (RMB Yuan) 4,215,099,296.67 3,712,770,828.30 13.53% 3,250,580,479.74
Net assets attributable to
shareholders of the Company 1,863,347,135.33 1,635,376,098.73 13.94% 1,528,596,536.13
(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
2013 2012 Closing amount Opening amount
According to Chinese
228,268,271.23 106,814,543.53 1,863,347,135.33 1,635,376,098.73
accounting standards
Items and amounts adjusted according to international accounting standards
According to international
228,268,271.23 106,814,543.53 1,863,347,135.33 1,635,376,098.73
accounting standards
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2013 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
2013 2012 Closing amount Opening amount
According to Chinese
228,268,271.23 106,814,543.53 1,863,347,135.33 1,635,376,098.73
accounting standards
Items and amounts adjusted according to overseas accounting standards
According to overseas
228,268,271.23 106,814,543.53 1,863,347,135.33 1,635,376,098.73
accounting standards
3. Explain reasons for the differences between accounting data under domestic and overseas accounting
standards
N/A
III. Items and amounts of extraordinary gains and losses
Unit: RMB Yuan
Item 2013 2012 2011 Note
Gains/losses on the disposal of non-current Mainly gain on
assets (including the offset part of the asset 5,778,882.64 -588,399.46 173,176.00 disposal of self-owned
impairment provisions) properties
Government grants recognized in the current
period, except for those acquired in the
ordinary course of business or granted at 0.00 0.00
certain quotas or amounts according to the
government’s unified standards
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
assets and tradable financial liabilities and
financial assets available for sales except for
effective hedging related with normal
businesses of the Company
Impairment provision reversal of accounts
receivable on which the impairment test is 6,140,000.00
carried out separately
Non-operating income and expense other
812,505.76 -130,400.83 2,200,366.50
than the above
Less: Income tax effects 1,167,211.12 -161,200.07 589,509.63
Total 5,424,177.28 5,582,399.78 1,770,009.25 --
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
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2013 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Section IV. Report of the Board of Directors
I. Overview
2013 marked the first year after the 18th National Congress of CPC, as well as a new phase of
deepened macro-control over the real estate market. Various difficulties and challenges surrounded
the Company in the year. At the beginning of the year, the Board of Directors set the operating
goals of proactively pushing forward a quality and stable growth, adopting a sustainable and
all-round development strategy, and doubling both the operating revenue and profit. In the reporting
period, the sales of the SPG Chuanqi Hill was carried forward as scheduled, sale of the northern
part of the SPG Shanglin Garden and the Shantou Yuejing Dongfang project commenced, and the
main operating indicators set by the Board of Directors were over-fulfilled. 2013 witnessed a
leap-frog development of the Company on the basis of a sustained growth for 4 years in a row, the
shift from a full recovery to a full development in the main business, the outstanding achievements
in corporate culture improvement, and a new stage for the Company’s development.
II. Main business analysis
1. Overview
In 2013, the Company seized market opportunities to achieve a considerable growth in its operating
results, with the SPG Chuanqi Hill project going on well and generating sales income. For the
reporting period, the Company achieved operating revenue of RMB 2,116,482,700, up 105.45%
from last year; operating profit of RMB 297,283,600, up 115.46% from last year; total profit of
RMB 303,875,000, up 121.39% from last year; and net profit of RMB 228,268,300 attributable to
shareholders of the Company, up 113.71% from last year.
Overview of the reporting period progress of development strategies and business plans disclosed in previous
periods:
Inapplicable
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
2. Revenues
Explanation:
Operating revenue and operating cost in 2013 stood at RMB 2,116,482,700 and RMB
1,547,170,100, up 105.45% and 120.61% respectively from last year, which was mainly because of
the revenue and cost from the SPG Chuanqi Hill project.
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2013 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Sales income from real estate stood at RMB 1,406,885,600, up 270.60％ from last year, which was
mainly because of the sales income from the SPG Chuanqi Hill project.
Construction income stood at RMB 521,749,300, up 11.39% from last year, which was mainly
because of the increased construction income of subordinate Zhentong Company.
Is the Company's product sales revenue more than its service revenue?
√ Yes □ No
Industry Item 2013 2012 YoY +/-%
Sold 92,336.14 14,304.19 545.52%
Real estate development
Produced 113,888.35 94,417.79 20.62%
(RMB Ten thousand)
Stock 261,605.57 240,053.36 8.98%
Reasons for any over-30% YoY movement of the data above:
√ Applicable □ Inapplicable
Mainly because the SPG Chuanqi Hill project generated sales income in the reporting period.
Major orders on hand:
□ 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) 112,920,363.17
Ratio of the total sales to the top 5 customers to the
5.33%
annual total sales (%)
Information about the top 5 customers:
√ Applicable □ Inapplicable
Serial No. Name of customer Sales (RMB Yuan) Proportion in annual total sales (%)
1 Corporation A 41,353,108.34 1.95%
2 Corporation B 28,920,000.00 1.37%
3 Corporation C 18,700,000.00 0.88%
4 Corporation D 13,618,979.81 0.64%
5 Corporation E 10,328,275.02 0.49%
Total -- 112,920,363.17 5.33%
3. Costs
Classified by industry:
Unit: RMB Yuan
2013 2012
Industry Item Proportion in Proportion in YoY +/- (%)
Amount operating costs Amount operating costs
（%） （%）
Real estate 925,436,497.61 60.37% 146,516,172.48 21.26% 531.63%
Construction 495,387,515.85 32.32% 445,160,754.08 64.6% 11.28%
Leasing 31,939,508.32 2.08% 30,961,456.12 4.49% 3.16%
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2013 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Property
89,941,397.44 5.87% 86,840,214.99 12.6% 3.57%
management
Subtotal 1,542,704,919.22 100.64% 709,478,597.67 102.96% 117.44%
Minus: internal
9,788,534.77 0.64% 20,389,951.83 2.96% -51.99%
offset
Total 1,532,916,384.45 100.00% 689,088,645.84 100% 122.46%
Classified by product:
Unit: RMB Yuan
2013 2012
Product Item Proportion in Proportion in YoY +/- (%)
Amount operating costs Amount operating costs
（%） （%）
Explanation:
Operating cost in 2013 stood at RMB 1,547,170,100, up 120.61% from last year, which was mainly
because the SPG Chuanqi Hill project started to generate income and cost.
Major suppliers:
Total purchases from the top 5 suppliers （RMB Yuan） 946,732,857.50
Ratio of the total purchases from the top 5 suppliers to the
91.57%
annual total purchases（%）
Information about the top 5 suppliers:
√ Applicable □ Inapplicable
Procurement amount (RMB Proportion in annual total procurement
Serial No. Name of supplier
Yuan) amount (%)
1 Corporation A 411,082,434.00 39.76%
2 Corporation B 287,570,532.50 27.81%
3 Corporation C 204,930,822.11 19.82%
4 Corporation D 39,418,348.89 3.81%
5 Corporation E 3,730,720.00 0.36%
Total -- 946,732,857.50 91.57%
4. Expense
Selling expenses in 2013 stood at RMB 45,139,200, up 63.90% from last year, which was mainly
because the marketing expenses and the agency commissions increased.
Administrative expenses in 2013 stood at RMB 63,843,300, down 6.27% from last year, which was
mainly because the non-production management expenses decreased.
Financial expenses in 2013 stood at RMB -1,567,600, down 158.42% from last year, which was
mainly because the interest income increased.
5. R&D expenses
Naught
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2013 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
6. Cash flows
Unit: RMB Yuan
Item 2013 2012 YoY +/-（%）
Subtotal of cash inflows from
2,082,643,982.89 1,190,424,578.41 74.95%
operating activities
Subtotal of cash outflows from
1,887,690,299.49 1,163,014,758.88 62.31%
operating activities
Net cash flows from operating
194,953,683.40 27,409,819.53 611.25%
activities
Subtotal of cash inflows from
7,704,117.81 688,282.91 1,019.32%
investing activities
Subtotal of cash outflows from
6,079,076.26 18,682,841.12 -67.46%
investing activities
Net cash flows from investing
1,625,041.55 -17,994,558.21 109.03%
activities
Subtotal of cash inflows from
470,989,352.23 1,036,000,000.00 -54.54%
financing activities
Subtotal of cash outflows from
605,751,337.59 906,909,123.76 -32.55%
financing activities
Net cash flows from financing
-134,761,985.36 129,090,876.24 -209.04%
activities
Net increase in cash and cash
61,570,669.67 138,746,516.91 -59.95%
equivalents
Reasons for any over-30% YoY movement of the data above:
√ Applicable □ Inapplicable
Cash inflows from operating activities in 2013 stood at RMB 2,082,643,982.89, up 74.95% from
last year, which was mainly because the product selling and service provision income from sale of
houses and construction increased.
Cash outflows from operating activities in 2013 stood at RMB 1,887,690,299.49, up 62.31% from
last year, which was mainly because the product purchase and service acceptance payment for
construction increased.
Net cash flows from operating activities in 2013 stood at RMB 194,953,683.40, up 611.25% from
last year, which was mainly because the net cash inflows among the cash received for sale of goods
and provision of service and the cash paid for purchase of goods and acceptance of service
increased.
Cash inflows from investing activities in 2013 stood at RMB 7,704,117.81, up 1,019.32% from last
year, which was mainly because the income from disposal of fixed assets increased.
Cash outflows from investing activities in 2013 stood at RMB 6,079,076.26, down 67.46% from
last year, which was mainly because the Company invested in Shantou Small-and Medium
Enterprise Financing Guarantee Co., Ltd. last year while there was no new investment in the
reporting period.
Net cash flows from investing activities in 2013 stood at RMB 1,625,041.55, up 109.03% from last
year, which was mainly because the net cash received from disposal of fixed assets increased and
no new investment resulted in the decreased cash paid for investment.
Cash inflows from financing activities in 2013 stood at RMB 470,989,352.23, down 54.54% from
last year, which was mainly because bank borrowings decreased.
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2013 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Cash outflows from financing activities in 2013 stood at RMB 611,751,337.59, down 32.55% from
last year, which was mainly because repaid bank borrowings decreased.
Net cash flows from financing activities in 2013 stood at RMB -140,761,985.36, down 209.04%
from last year, which was mainly because bank borrowings decreased considerably.
Net increase in cash and cash equivalents in 2013 stood at RMB 55,570,669.67, down 59.95% from
last year, which was mainly because bank borrowings decreased considerably and thus net cash
flows from financing activities decreased accordingly.
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 Increase/decrease
Increase/decrease
Operating Gross profit rate of operating of gross profit
Operating cost of operating cost
revenue (%) revenue over last rate over last year
over last year (%)
year (%) (%)
Classified by industry:
Real estate 1,406,885,587.82 925,436,497.61 34.22% 270.6% 531.63% -27.18%
Construction 521,749,290.73 495,387,515.85 5.05% 11.39% 11.28% 0.09%
Leasing 82,280,047.28 31,939,508.32 61.18% -3.32% 3.16% -2.44%
Property
100,150,419.76 89,941,397.44 10.19% -1.33% 3.57% -1.79%
management
Subtotal 2,111,065,345.59 1,542,704,919.22 26.92% 104.04% 117.54% -4.25%
Minus: internal
13,423,978.97 9,788,534.77 27.08% -40.74% -51.99% 17.09%
offset
Total 2,097,641,366.62 1,532,916,384.45 26.92% 107.28% 122.46% -4.98%
Classified by product:
Residences 1,397,946,247.82 922,389,610.38 34.02% 306.87% 586.43% -26.87%
Shops 8,939,340.00 3,046,887.23 65.92% -75.19% -74.9% -0.39%
Other products 704,179,757.77 617,268,421.61 12.34% 7.51% 9.65% -1.71%
Minus: internal
-13,423,978.97 -9,788,534.77 27.08% -40.74% -51.99% 17.09%
offset
Total 2,097,641,366.62 1,532,916,384.45 26.92% 107.28% 122.46% -4.98%
Classified by region:
Domestic:
Guangdong
2,044,677,358.30 1,481,628,032.64 27.54% 110.15% 127.43% -5.51%
Province
Other 65,791,782.57 61,076,886.58 7.17% 7.77% 5.27% 2.21%
Overseas: 596,204.72 100% -3.34%
Total 2,111,065,345.59 1,542,704,919.22 26.92% 104.04% 117.44% -4.5%
Minus: internal
13,423,978.97 9,788,534.77 27.08% -40.74% -51.99% 17.09%
offset
Total 2,097,641,366.62 1,532,916,384.45 26.92% 107.28% 122.46% -4.98%
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
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2013 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
reporting period:
□ Applicable √ Inapplicable
IV. Asset and liability analysis
1. Major changes of asset items
Unit: RMB Yuan
As at 31 Dec. 2013 As at 31 Dec. 2012
Proportio
Proportion in Proportion in n change Explain any major change
Amount total assets Amount total assets （%）
(%) (%)
525,374,372.4
Monetary funds 12.46% 496,805,905.01 13.38% -0.92%
4
Accounts receivable stood at
14,102,124.06 as at 31 Dec. 2013,
Accounts down 42.24% from the opening
14,102,124.06 0.33% 24,413,187.02 0.66% -0.33%
receivable amount, which was mainly because the
house payment and rental arrears were
collected.
Inventories stood at 2,967,935,589.04
as at 31 Dec. 2013, up 22.05% from
2,967,935,589. 2,431,754,464. the opening amount, which was mainly
Inventories 70.41% 65.5% 4.91%
04 54 because the Company purchased some
land for reserve and paid for
construction.
Investing real 466,314,091.9
11.06% 487,373,443.43 13.13% -2.07%
estate 0
Long-term equity
75,200,652.59 1.78% 75,225,969.30 2.03% -0.25%
investment
Fixed assets 60,715,687.71 1.44% 63,204,808.66 1.7% -0.26%
Construction in
0.00 0.00
progress
Prepayments stood at 12,206,598.30 as
at 31 Dec. 2013, down 69.24% from
Prepayments 12,206,598.30 0.29% 39,677,550.07 1.07% -0.78% the opening amount, which was mainly
because the prepayments for materials
were carried forward to inventories.
Other current assets stood at
3,451,107.04 as at 31 Dec. 2013, down
Other current
3,451,107.04 0.08% 7,780,460.78 0.21% -0.13% 55.64% from the opening amount,
assets
which was mainly because the turnover
tax was carried forward.
Deferred income tax assets stood at
26,792,460.02 as at 31 Dec. 2013, up
34.76% from the opening amount,
Deferred income which was mainly because the
26,792,460.02 0.64% 19,881,649.62 0.54% 0.1%
tax assets corresponding deferred income tax
assets of the expected profit from the
advance house payments to real estate
subsidiaries were recognized.
2. Major changes of liability items
Unit: RMB Yuan
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2013 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
2013 2012
Proportio
Proportion in Proportion in n change Explain any major change
Amount total assets Amount total assets （%）
(%) (%)
Short-term borrowings stood at
23,000,000.00 as at 31 Dec. 2013,
down 76.04% from the opening
Short-term
23,000,000.00 0.55% 96,000,000.00 2.59% -2.04% amount, which was mainly because the
borrowings
entrustment loan of RMB
70,000,000.00 last year was repaid in
the reporting period.
Long-term 814,213,536.8
19.32% 849,636,078.25 22.88% -3.56%
borrowings 5
Accounts payable stood at
389,345,271.46 as at 31 Dec. 2013, up
389,345,271.4 435.84% from the opening amount,
Accounts payable 9.24% 72,660,833.60 1.96% 7.28%
6 which was mainly because the
outstanding construction payables
increased.
Taxes and fares payable stood at
148,006,651.37 as at 31 Dec. 2013, up
641.58% from the opening amount,
Taxes and fares 148,006,651.3 which was mainly because the
3.51% 19,958,153.14 0.54% 2.97%
payable 7 operating revenue and total profit
increased considerably, causing a
higher turnover tax and enterprise
income tax.
3. Assets and liabilities measured at fair value
Unit: RMB Yuan
Gain/loss on
Cumulative fair Impairment Amount
fair value Amount sold in
Opening value change provisions in purchased in Closing
Item change in the the reporting
amount recorded into the reporting the reporting amount
reporting period
equity period period
period
Financial assets
1. Financial assets
measured at fair
value and of which
changes are recorded
0.00 0.00
into current
gains/losses
(excluding derivative
financial assets)
2. Derivative
0.00 0.00
financial assets
3. Available-for-sale
0.00 0.00
financial assets
Subtotal of financial
0.00 0.00
assets
Investing real estate 0.00 0.00 0.00 0.00
Productive biological
0.00 0.00
assets
Other 0.00 0.00
Total of the above 0.00 0.00 0.00 0.00
Financial liabilities 0.00 0.00 0.00 0.00
16
2013 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
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
As one of the earliest real estate listed companies in Shenzhen, the Company has a history over 30
years in real estate development in Shenzhen and rich experience in the main business of real estate
development. In recent years, thanks to the experience learned from the SPG Chuanqi Hill project
in Guangming, Shenzhen, and the SPG Shanglin Garden project in Longgang, Shenzhen, the
Headquarters of the Company has been greatly improved in planning, construction, cost control,
marketing capability and brand image; and thanks to the projects in Shantou, the offsite
development management mode is growing mature. The Company accelerates the establishment of
a modern enterprise HR management system and works hard in building a professional and
high-quality development team. It also keeps improving the management mechanism and processes
for project development. As a result, the professionalism and management capability of the
Company have improved significantly, and the core competitiveness of its main business of real
estate development keeps increasing.
VI. Investment analysis
1. Investments in equities of external parties
(1) Investments in external parties
Investments in external parties
Investment amount in 2013 (RMB Yuan) Investment amount in 2012 (RMB Yuan) +/-%
30,000,000.00 12,000,000.00 250%
Particulars about investees
Proportion of the Company’s investment in
Name of investee Main business
the investee’s total equity interests (%)
Shantou Huafeng Real Estate Development
Real estate development 100%
Co., Ltd.
(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 -- --
17
2013 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
(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 -- --
Disclosure date of the board
Disclosure date of the general
meeting announcement on
approval of the securities
investment (if any)
Explain equity-holdings in other listed companies:
□ Applicable √ Inapplicable
2. Wealth management entrustment, derivative investments and entrustment loans
(1) Wealth management entrustment
Unit: RMB Ten Thousand Yuan
Actual
Related-p Impairme
Payment Principal gain/loss
Name of arty Product Amount Beginnin Ending nt Predicted
Relation determina actually in
trustee transactio variety entrusted g date date provision gain
tion recovered reporting
n or not (if any)
period
Total 0 -- -- -- 0 0 0 0
Source of the entrusted funds 0
Cumulative overdue principals and gains 0
Disclosure date of the board announcement
Disclosure date of the general meeting
announcement on approval of the wealth
management investment (if any)
(2) Derivative investments
Unit: RMB Ten Thousand Yuan
Proportion of
Closin the closing
Actual
Related-p Type of Impairme g investment
Initial Opening gain/loss
arty derivative Beginnin Ending nt invest amount in
Operator Relation investmen investmen in
transactio investmen g date date provision ment the
t amount t amount reporting
n or not t (if any) amoun Company’s
period
t closing net
assets (%)
Total 0 -- -- 0 0 0 0% 0
Capital source for derivative investment 0
Disclosure date of the board announcement
approving the derivative investment (if
any)
18
2013 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Disclosure date of the general meeting
announcement approving the derivative
investment (if any)
(3) Entrustment loans
Unit: RMB Ten Thousand Yuan
Related
Amount of Interest Usage of loan by
Borrower party or Guarantor or pawn
loan rate borrower
not
Total -- 0 -- -- --
Disclosure date of the board announcement approving
Disclosure date of the general meeting announcement
approving the entrustment loans (if any)
3. Use of raised funds
(1) Overview of the use of raised funds
Unit: RMB Ten Thousand Yuan
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
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
Inapplicable
(2) Projects promised to be invested with raised funds
Unit: RMB Ten Thousand Yuan
Investme Date
Project
Accumul nt when the Material
Projects invested with changed Profit
Raised Investme Input in ative project Reach the change in
raised capital as or not progress generated
capital nt after the input up up to the reaches expected the
promised and (includin in the
input as adjustme reporting to the period-en the profit or project
investments with g reporting
promised nt (1) year period-en d (%)(3) expected not feasibility
over-raised capital partially 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 -- --
Amount, usage and Inapplicable
usage progress of
over-raised capital
Change of the Inapplicable
19
2013 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
implementation
location of any raised
funds investment
project
Adjustment of the
implementation
method of any raised
funds investment
project
Advance input and
exchange of any raised
funds investment
project
Idle raised capital for Inapplicable
temporarily
supplementing working
capital
Amount, usage and
usage progress of
over-raised capital
Change of the Inapplicable
implementation
location of any raised
funds investment
project
Adjustment of the Inapplicable
implementation
method of any raised
funds investment
project
Advance input and
exchange of any raised
funds investment
project
Idle raised capital for Inapplicable
temporarily
supplementing working
capital
(3) Change of projects invested with raised funds
Unit: RMB Ten Thousand Yuan
Total raised Material
Investment Date when
funds Actual Profit change in
Actual input progress up the project
Project planned to cumulative to the generated in Reach the the
Project after for reaches the
before be input for input by period-end expected the expected after-change
change reporting
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)
4. Analysis to main subsidiaries and stock-participating companies
Particulars about main subsidiaries and stock-participating companies:
20
2013 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Unit: RMB Yuan
Main
Company Registered Operating Operating
Company name Industry products/se Total assets Net assets Net profit
variety capital revenues profit
rvices
Shenzhen Petrel Hotel RMB 30
Subsidiary Service 39,463,675.85 35,110,471.86 25,183,988.60 624,798.54 378,855.15
Hotel Co., Ltd. Service million
Shenzhen
Property
Property RMB 7.25
Subsidiary Service manageme 78,330,970.95 14,974,567.08 108,484,008.06 460,088.09 673,020.35
Management Co., million
nt
Ltd.
Shenzhen Fixing and
Zhentong maintenanc RMB 10
Subsidiary Service 98,145,642.56 15,465,254.87 523,890,316.52 2,483,701.64 2,047,841.16
Engineering Co., e of million
Ltd. projects
Shenzhen
Huazhan Constructio
RMB 8
Construction Subsidiary Service n 8,491,163.92 7,773,600.56 5,079,770.40 246,544.56 184,908.42
million
Supervision Co., supervision
Ltd.
Shenzhen SPG
RMB 10.29
Mini-bus Rent Subsidiary Service Rent of 19,964,620.48 16,313,586.91 4,445,157.79 881,480.36 656,190.95
million
Co., Ltd. mini-bus
Shantou SEZ,
Wellam FTY, Developme
Real US$ 15 599,677,791.3 35,563,222.2 21,568,905.5
Building Subsidiary nt of real 337,376,425.20 133,413,634.00
estate million 3 0 2
Development estate
Co., Ltd.
Developme
Great Wall Estate Real USD 0.5
Subsidiary nt of real 17,689,758.50 -76,760,627.22 596,204.72 121,238.94 121,238.94
Co., Inc. (U.S.) estate million
estate
Investme Investment
Xin Feng
nt and HKD 1 200,902,848.6
Enterprise Co., Subsidiary -388,688,954.59 145,500.00 1,875,121.81 7,746,117.91
managem manageme million 8
Ltd.
ent nt
Shenzhen SPG
Developme
Longgang Real RMB 30 645,081,251.9 -10,154,786. -7,949,742.9
Subsidiary nt of real -33,433,658.41 0.00
Development estate million 0 03 8
estate
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 Yuan
Cumulative actual
Total planed
Project name Input for this period input as at the Project progress Project earnings
investment
period-end
Carried forward
SPG Chuanqi Hill 254,545 48,548 216,864 100% sales revenue of
RMB 1,273,330,000
SPG Shanglin
140,000 26,121 60,730
Garden
Shantou Yuejing
15,000 5,014 12,893
Dongfang
21
2013 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Shantou Jingzaiwan
119,400 29,863 29,863
Project
Total 528,945 109,546 320,350 -- --
VII. Predict the operating results of Jan.-Mar. 2014
Warning of possible loss or considerable YoY change of the accumulated net profit made during the period-begin to the end of the
next reporting period according to prediction, as well as explanations on the reasons:
√ Applicable □ Inapplicable
Prediction: Synthetic and substantial ascent
Type of the predicted data: interval data
Jan.-Mar. 2014 Jan.-Mar. 2013 +/- (%)
Predicted accumulative net
2,000 -- 2,300 350.87 Increase 470.01% -- 555.51%
profit (RMB Ten thousand)
Basic EPS (RMB Yuan/share) 0.0198 -- 0.0227 0.0035 Increase 465.71% -- 548.57%
Explanation about the
Sales of the SPG Chuanqi Hill of the Company carried forward normally.
predictions
VIII. Entities controlled by the Company for special purposes
N/A
IX. Outlook of the Company’s future development
2014 is the year of China Reform and the Central Economic Working Conference introduced significant policies
and measures such as “Seek improvement in stability, reform and innovation, maintaining the continuity and
stability of macroeconomic policies, debt risk prevention”. From the point of view of the real estate industry,
Chinese macroeconomic was risks coexisted with challenges and the real estate market would maintain a certain
development trend in first-tier cities. However, the difficulties and the challenges of the whole industry were still
rather big; we should have level-headed understanding, do at our convenience, seek a smooth and rapid
development, plan and place the whole year’s work.
Guideline for the work in 2014: The Company should work hard to boost the main business, enlarge the land
reserve, enhance cost control and improve the management capability. It should also grasp and take the advantage
of the historic opportunities of comprehensively deepen reform, and do at our convenience, accelerate the
development and powerfully promote the profitability for further stage.
Working arrangement of 2014:
(I) Promoting the enterprise innovation and development driven by the reform
1. Effectively enhance the sense of urgency of the reform. It should accelerate the development of the enterprise
driven by the reform, to continuously enhance the professional ability and management and control level, to
strengthen the soft power of the enterprise, as well as to grasp the opportunities and realize the enterprise
innovation and development.
2. Continuously perfecting the reform of labor, personnel and salary system. It should continuously perfecting the
management methods of performance assessment, so thus to form a favorable system of rewarding the diligent
and punishing the lazy as well as selecting the superior and eliminating the inferior.
(II) Continuously enhancing the core competitiveness of enterprise
22
2013 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Firstly is to continuously enhance the management and control ability of the enterprise. Strengthen the corporate
governance and internal control and to improve the decision-making level and the risk prevention and control
ability according to the benchmarking enterprises standard. Reinforce the financial management, well manage and
flexibly use the funds, prevent and control the financial risks. Strengthen the objective cost of the construction of
the control system according to the value creating standard; implement the intensification of the cost control with
careful calculation and strict budgeting. Strengthen the planning and management of the project development; the
time when well executing the existing project in construction management, in the meanwhile, well execute the
preliminary work such as the planning, design, budgeting, bid inviting and application. Reinforce the coordination
supervision and execute the assessment of the executive situation of the annual development plan of each item.
Continuously perfect the bidding work; implement the system of responsibility in safe production, so thus to avoid
various significant production safety accident. Specify the contracts management, and reinforce the checking and
supervision of the executive situation of the engineering development contracts. Continuously strengthen the team
construction, rational allocate the human resources; adjust the personnel structure according to the items layout as
well as perfect the performance appraisal system. Continuously integrate the supervision power and execute well
of the inspection of the special audit and the executive force. Perfect the benchmarking management system,
strengthen the process benchmarking and professional benchmarking, and continuously execute the construction
plan of the comprehensive risks management system. It should enlarge the power to solve the problems left over
by history and enlarge the power to promote the execution of the successful cases.
Secondly is to strengthen the policy study of the capital market and to create conditions for resuming the financing
function.The Company would reinforce the strategy management and the policy study such as the capital market
financing, capital operation and state-owned enterprise reform to promote the innovation and development of the
enterprise; we will enlarge the power to promote the benefits so thus to create conditions for resuming the
financing function.
(III) Seeking a smooth and rapid development to step on to a new stage of the dominant business
Firstly is to regard the marketing work as the priority among priorities of the whole year’s work. Clearly identify
the work schedule and roadmap, and make sure of the individual responsibility, so thus to ensure the completion
of the whole year’s sales quest. Secondly is to seek a smooth and rapid development when well executing the
projects construction, and to highlight the “rapid” as much as possible under the premise of the schedule, quality
and safety of the projects under construction and to shoot at the operation and construction of the two
projects—Southern Area of Shenzhen Properties Shanglin Project and Jingzai Wan within this year. Thirdly is to
increase the land reserves. Positively collect and analyze the land information and project information of the target
cities, and carry out the inspection and feasibility research, so thus to strive for the newly increase of the land
reserves. Fourthly is to enlarge the power to grasp the property operation. It should strengthen the management
and enhance the service, enlarge the strength of historical arrears collection, and improve the rental rate as well as
the rental recovery rate. Lastly is to guide, support and assist the owned enterprises to grasp well of the reform and
development work, to improve the economy profits, with each enterprise should make every endeavor to complete
the various tasks transmitted from the Group.
(IV) Strengthen the construction of the enterprise culture and forging the soft strength of the enterprise reform and
development
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.
23
2013 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
X. Explanation by the Board of Directors and the Supervisory Committee about the
“non-standard audit report” issued by the CPAs firm for the reporting period
Inapplicable
XI. Explain change of the accounting policy, accounting estimate and measurement methods
as compared with the financial reporting of last year
Inapplicable
XII. Explain retrospective restatement due to correction of significant accounting errors in
the reporting period
Inapplicable
XIII. Explain change of the consolidation scope as compared with the financial reporting of
last year
During the reporting period, the Company made a new investment of RMB 30,000,000.00 to incorporate Shantou
Huafeng Real Estate Development Co., Ltd. as a wholly-funded subsidiary of the Company, which was included
in the consolidation scope.
XIV. 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
√ Applicable □ Inapplicable
2012 Proposal on Profit Distribution of the Company was reviewed and approved by the 12th Session of the 7th
Meeting of the Board of Directors on 28 Mar. 2013 and the 2012 General Meeting of Shareholders on 23 Apr.
2013, which decided that, the net profit of 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.
Special explanation of the cash dividend policy
The conditions and process of formulation of the Retribution Plan for the
Whether conformed with the regulations of the Articles
Company’s Shareholders, the revision of the Articles of Association
of association or the requirements of the resolutions of
was compliance and transparent with the contents met with the
the shareholders’ meeting:
requirements of the relevant laws and regulations as well as CSRC.
Whether the dividend standard and the proportion were The dividend standard and the proportion were definite and clear after
definite and clear: revision.
Whether the relevant decision-making process and the
The relevant decision-making process and system was completed.
system were complete:
Whether the independent director acted dutifully and The independent director executed dutifully and gave independent
exerted the proper function: advice of the cash dividend policy of the Company.
Whether the medium and small shareholders had the
chances to fully express their suggestions and appeals, of Yes
which their legal interest had gained fully protection:
Whether the conditions and the process met the Yes
regulations and was transparent of the adjustment or
24
2013 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
altered of the cash dividend policy:
Pre-plan or plan for profit distribution and turning capital reserve into share capital in recent 3 years (including the reporting period)
In 2011, the net profit of 2011 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-475,968,948.89;
In 2012, the net profit of 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;
In 2013, the net profit of 2013 will be used for covering the deficit of the previous years. And thus no profit
distribution or capitalization of capital reserves will be conducted.
Cash dividend in the recent three years
Unit: RMB Yuan
The ratio accounting in net
Net profit belonging to
profit which belongs to
Amount of cash dividend shareholders of the listed
Dividend year shareholders of the listed
(including tax) company in consolidated
company in consolidated
statement of dividend year
statement (%)
2013 0.00 228,268,271.23 0%
2012 0.00 106,814,543.53 0%
2011 0.00 101,200,060.65 0%
Although the company obtains profits and the parent company’s undistributed profit is positive during the reporting period, no cash
dividend distribution pre-plan is put forward.
□Applicable √Inapplicable
XV. Preplan for profit distribution and turning capital reserve into share capital in the
reporting period
Equity base of the preplan for distribution (shares) 0
Total of cash bonus (RMB Yuan) (including tax) 0.00
Attributable profit (RMB Yuan) 0.00
Proportion of cash bonus in the total of profit
0%
distribution (%)
Cash dividend policy:：
Other
Specific explanation of preplan for profit distribution or preplan for turning capital reserve into share capital
Audited by Ruihua Certified Accountants (LLP), the net profits of 2013 that the Company realized and belongs to the parent
company was of RMB 228,268,271.23; according the relevant regulations and the articles stipulation of the Company, the net profit
of 2013 will be used for covering the deficit of the previous years. And thus no profit distribution or capitalization of capital
reserves will be conducted.
XVI. Social responsibilities
The Company 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 positively organized and anticipated in the 8th Session of the donation activity
of “Hand in hand of the municipal state-owned enterprises and heart to heart for caring and assistance”, and
granted condolence payments for the party member in difficulties, employees and staffs in hospital as well as
25
2013 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
donated to the Lakeview Community of Luohu District; the Company also positively carried out badminton, table
tennis, mountaineering and basketball interest group activities, and held activities such as health knowledge
lectures for advocating the staffs of the new trend of healthy life and happy work.
During the reporting period, the Company was honored of several honorary titles as the “Demonstration
Enterprise of Guangdong Province for Honesty and Law Compliance” jointly granted by nine departments such as
Guangdong Provincial Party Committee Propaganda Department and the “Most Honest Enterprise of Guangdong
Province for 2012” granted by Guangdong Enterprises Association and MGEA.
Whether the listed company and its subsidiaries were belongs to the heavily polluting industries stimulated by the state department of
environmental protection
□ Yes √ No □ Inapplicable
Whether there were any significant society security problems of the listed company and its subsidiaries
□ Yes √ No □ Inapplicable
Whether had been administrative punished in the reporting period
□ Yes √ No □ Inapplicable
XVII. Particulars about researches, visits and interviews received in this reporting period
Time of Place of Way of
Visitor type Visitor Main discussion and materials provided by the Company
reception reception reception
Individual The Company’s business structure, didn’t offer written
25 Jan. 2013 Office By telephone Individual
investor materials
Individual The Company’s 2012 operating situation and projects
14 Mar. 2013 Office By telephone Individual
investor progress situation, didn’t offer written materials
The Company’s 2013 operating situation and
Individual
5 Apr. 2013 Office By telephone Individual conferencing arrangement of general meeting of
investor
shareholders, didn’t offer written materials
Individual The Company’s projects progress and sales situation of
20 May 2013 Office By telephone Individual
investor Guangming and Longgang, didn’t offer written materials
Individual The Company’s first half year of the operation situation of
28 Jun. 2013 Office By telephone Individual
investor 2013, didn’t offer written materials
The influence of the macro-economy policy on the
Individual
18 Jul. 2013 Office By telephone Individual Company’s operation and whether the Company had asset
investor
restructuring plan, didn’t offer written materials
The operation situation of the first half year of 2013 and
日 6 Aug. Individual
Office By telephone Individual the appointed disclosure date of the semi-annual report,
2013 investor
didn’t offer written materials
Investigated the problems of the transformation from B
shares to H shares, and the relevant information had
18 Sep. 2013 Office Field research Institution TodayIR
reported to the Investor Relations Platform of Shenzhen
Stock Exchange as required
Inquire of the relevant information of the three quarterly
Individual
24 Oct. 2013 Office By telephone Individual reports announcement of the Company, didn’t offer
investor
written materials
Individual The Company’s 2013 operation situation and the change
12 Dec. 2013 Office By telephone Individual
investor reasons of the share prices, didn’t offer written materials
The Company’s 2013 operation situation and the progress
Individual
31 Dec. 2013 Office By telephone Individual situation of the projects development, didn’t offer written
investor
materials
26
2013 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Section V. Report of the Supervisory Committee
In 2013, 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, continuously 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 cleaning and examination of project license and strengthened the supervision 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 4th Session of the 7th Supervisory Committee was convened on 28 Mar. 2013, at which
reviewed and approved the 2012 Annual Report and its Summary, Profit Distribution Preplan for
Y2012, 2012 Annual Report of Supervisory Committee and the Proposal on 2012 Annual
Self-appraisal Report on Internal Control. Five supervisors attended the session, and the voting
result of the session was as follows: 5 votes for, 0 votes against, and 0 abstentions.
(II) The 5th Session of the 7th Supervisory Committee was convened on 23 Apr. 2013, at which
reviewed and approved the 1st Quarterly Report for 2013 and its Abstract. Five supervisors attended
the session, and the voting result of the session was as follows: 5 votes for, 0 votes against, and 0
abstentions.
(III) The 6th Session of the 7th Supervisory Committee was convened on 20 Aug. 2013, at which
reviewed and approved the 2013 Semi-annual Report and its Abstract. Four supervisors attended
27
2013 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
the session, and the voting result of the session was as follows: 4 votes for, 0 votes against, and 0
abstentions.
(IV) The 7th Session of the 7th Supervisory Committee was convened on 22 Oct. 2013, at which
reviewed and approved the 3rd Quarterly Report for 2013 and its Abstract. Four supervisors attended
the session, and the voting result of the session was as follows: 4 votes for, 0 votes against, and 0
abstentions.
III. Independent opinions on relevant matters by the Supervisory Committee
(I) About the Company’s operation according to laws: In 2013, 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 2013.
(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. During the reporting period, there was no non-operating situation of the occupation of the
Company’s funds of the controlling shareholders, actual controller and other related parties; there
was also no situation that the Company offered guarantee for the controlling shareholders and other
related parties, as well as any non-legal entities or individual.
2. During the reporting period, the Company paid RMB 411.0824 million to the related party
Shenzhen Jianan Group Co., Ltd. for contracting the Chuanqi Mountain East District Project.
3. During the reporting period, the Company’s wholly owned company Zhentong Company
undertook the construction of the engineering of the related party Shenzhen Jianan Group Co.,
Ltd.(total package contractor of the SPG Chuanqi Hill of the Company), which received the project
funds of RMB 28.92 million.
4. 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
28
2013 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Design and Research; during the reporting period, the Company paid RMB 1,220,916.68 as
interests for Shenzhen General Institute of Architectural Design and Research, and paid in advance
of the above loans on 22 Mar. 2013.
5. During the reporting period, the Company provided the joint liability credit guarantee at the
maximum amount of RMB 0.13 billion for the Branch of Shantou Guoxin of Bank of
Communication of the wholly owned Shantou Wellam Company.
(V) During the reporting period, the Company’s related-party transactions were fair and compliant
with laws and regulations. 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 2013, the Company
continued enhancing risk control and internal control standardization. The internal control system
covered 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 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.
29
2013 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
amount Projected
Execution of Date of Disclosure
Basic information (RMB Ten liability or Progress Ruling and influence
ruling disclosure index
Thousand not
Yuan)
① Business Tourism
Company had to pay for
the compensation RMB
36,620 thousand and the
relevant interest (from 14
Sept. 1998 to the The applicant
payment day) to Xi’an has received
Fresh Peak Company RMB 15.20
Xi’an Project
within one month after million. Now
Lawsuit (For
the judgment entering Business
details, see “Note
into force. If the Business Tourism
VII”—“Contingent
Tourism Company failed Company has 2012
Events”—“1.
to pay in time, it had to no executable Semi-annual
Contingent In
2,100 No pay double debt interests properties and 21 Aug. 2013 Report on
liabilities due to execution
to Xi’an Fresh Peak Xi’an Joint www.cninfo.c
pending lawsuits
Company for the overdue Commission on om.cn
or arbitrations, as
period; ② Xi’an Joint Commerce has
well as the
Commission on been refusing to
financial influence
Commerce had jointly execute the
thereof”.)
and severally obligation ruling. It is
of the interests of the difficult to
compensation; .③ recover the rest.
Business Tourism
Company shall bear
RMB 227,500 of the
acceptance fee and the
security fee.
① Luofu Hill Tourism
Luofu Hill project Company has paid back
Lawsuit (For RMB 9.6 million; ② Because the
details, see “Note Luofushan state-owned
VII”—“Contingent Administration land resource
2012
Events”—“1. Committee had to administration
Semi-annual
Contingent In undertake one third of the cannot work out
980 No 21 Aug. 2013 Report on
liabilities due to execution debts which Luofushan the planning key
www.cninfo.c
pending lawsuits Tourism was unable to points for the
om.cn
or arbitrations, as repay; ③ Luofu Hill sealed land, the
well as the Tourism Company shall land cannot be
financial influence bear RMB 167,700 of the auctioned.
thereof”.) case acceptance fee and
the security fee.
II. Media’s questions
□ Applicable √ Inapplicable
There was no media’s question during the reporting period.
30
2013 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
II. Occupation of the Company’s capital by the controlling shareholder and its related parties
for non-operating purposes
Unit: RMB Ten Thousand Yuan
Newly
Name of Total repaid Expected
occupied Expected Expected
shareholder Time of Reason for Opening amount in Closing time for
amount in way of repaid
or related occupation occupation amount) reporting amount repayment
reporting repayment amount
party period (month)
period
0 0 0 0 0 --
Total 0 0 0 0 -- 0 --
Proportion of the latest period of the
closing total amount in the audited net 0%
assets (%)
Relevant decision-making process Inapplicable
The newly increased shareholders of
the current period and the explanation
of the reason, investigation of the
person in charge and the planed Inapplicable
adopting measures of the
non-operating funds occupation
situation of its affiliated enterprise
The explanation of the reason,
investigation of the person in charge
and the planed adopting measures of Inapplicable
the non-operating funds occupation
which was unable to settled as planned
Disclosure index of the special audit
opinion of the funds occupation of the Inapplicable
CPA
IV. Bankruptcy and reorganization
Inapplicable
V. Asset transactions
1. Asset acquisition
Net profit
Net profit
contribute
contribute
d to the
d to the Relationsh
Company
Company ip between
from the
from the Ratio of the
acquisition
year-begin the net transaction
date to the
to the profit party and
Transactio Asset Transactio period-end Related-pa
period-end contribute the
n party or acquired n price (RMB Ten rty Disclosure Disclosure
Progress (RMB Ten d by the Company
ultimate or bought (RMB Ten thousand) transaction date index
thousand) asset to the (applicable
controller in thousand) (applicable or not
(applicable Company for
for
for to the total related-par
business
business profit (%) ty
combinatio
combinatio transaction
ns not
ns under s)
under the
the same
same
control)
control)
31
2013 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
2. Sale of assets
Relation
Net Whether
Ratio of ship
profit Whether or not
the net between
contribu or not the
profit the
ted by the creditor’
Transact contribu transacti
the asset Gain/los ownersh s right
ion ted to Related- on party
from the s on sale ip of the and
Transact price the Pricing party and the Disclos
Asset Date of period-b (RMB asset liabilitie Disclos
ion (RMB Compan principl transacti Compan ure
sold sale egin to Ten involve s ure date
party Ten y by the e on or y index
the date thousan d has involved
thousan asset not (applica
of sale d) been have
d) sale to ble for
(RMB fully been
the total related-
Ten transferr fully
profit party
thousan ed transferr
(%) transacti
d) ed
ons)
3. Business combination
Inapplicable
VI. Implementation and influence of equity incentive plan of the Company
Inapplicable
VII. Significant related-party transactions
1. Related-party transactions concerning routine operation
Pricing Settlemen
Type of Content
principle Transacti Proportio t method
the s of the
Related of the on n in same of the
related-p related- Transactio Market Date of Index of
transactio Relationship related-p amount kind of related-pa
arty party n price price disclosure disclosure
n party arty (RMB transactio rty
transacti transacti
transactio 0,000) ns transactio
on on
n n
Under the
Contract Contractu
Shenzhen same control
ing by al amount
Jianan of the Constru Open Bank
the of RMB 41,108.24 93.17% -
Group Company’s ction bidding transfer
related 553,330,0
Co., Ltd. controlling
party 00
shareholder
The
related
Under the
party Contractu
Shenzhen same control
offered al amount
Jianan of the Constru Negotiate Bank
bid for of RMB 2,892 6.55% -
Group Company’s ction d price transfer
the 40,519,40
Co., Ltd. controlling
wholly 0
shareholder
subsidiar
y
Shenzhen Under the Lending Interest Competit Market Announce
General same control by the on a ive interest Bank 13 Jul. ment on
Institute of the borrowi rate for 122.09 0.28% - related-pa
related negotiati transfer 2012
of Company’s party ng from on bank rty
Architect controlling the loans in transactio
32
2013 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
ural shareholder related the same n on
Design party period www.cnin
and (15% fo.com.cn
Research higher
than the
benchmar
k interest
rate)
Total -- -- 44,122.33 -- -- -- -- --
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 Inapplicable
period, explain the actual implementation
during the reporting period (if any)
Explain why the transaction price is greatly
Inapplicable
different from the market price
2. Related-party transactions arising from asset acquisition or sale
Book
Evaluate
value of
d value Market
Type of the Transfer
of the fair Gain
related-p transferr price
Related Pricing transferr value Settleme (RMB Disclosu Disclosu
Relation arty Contents ed asset (RMB
party principle ed asset (RMB nt mode Thousan re date re index
transacti (RMB Thousan
(RMB Thousan d Yuan)
on Ten d Yuan)
Thousan d Yuan)
Thousan
d Yuan)
d Yuan)
Reason for great discrepancy between
transfer price and book value or Inapplicable
estimated value (if any)
Information about influence on
corporation business performance and N/A
financial situation
3. Significant related-party transactions concerning joint investment in external parties
Total assets Net assets of Net profit of
Main Registered of investee investee investee
Pricing Name of
Joint investor Relationship business of capital of (RMB (RMB (RMB
principle investee
investee investee Thousand Thousand Thousand
Yuan) Yuan) Yuan)
Progress of any significant
construction in process of N/A
the investee (if any)
33
2013 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
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 balance (RMB reporting balance (RMB
Related party Relation
credit/liability credit/liability occupation Thousand period (RMB Thousand
(Yes/No) Yuan) Thousand Yuan)
Yuan)
The
subsidiary
handled the
Subsidiary
agent business
(has Credit
Shenzhen Fresh Peak for the
conducted the receivable
property consultant Company or No 111.24 -2.76 108.48
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 1,046.52 1,046.52
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 307.28 307.28
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 8,903.57 8,903.57
(Vancouver) Co., Ltd from related loans for the
party subsidiary in
previous years
The Company
Credit provided
Bekaton Property receivable investment or
Subsidiary No 1,255.93 1,255.93
Limited from related loans for the
party subsidiary in
previous years
Credit
Current
receivable
Paklid Limited Subsidiary accounts in No 1,863.16 20.35 1,842.81
from related
previous years
party
Credit
Shenzhen Shenfang Current
receivable
Department Store Co. Subsidiary accounts in No 23.76 23.76
from related
Ltd. previous years
party
Credit
Shenzhen Real Estate Current
receivable
Consolidated Service Subsidiary accounts in No 108.65 108.65
from related
Co., Ltd. previous years
party
Shenzhen City Credit Current
Shenfang Construction Subsidiary receivable accounts in No 832.72 832.72
and Decoration from related previous years
34
2013 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Materials Ltd. party
Subsidiary
(has Credit
Current
Shenzhen Ronghua conducted the receivable
accounts in No 47.52 47.52
JiDian Co., Ltd employees’ from related
previous years
shareholding party
reform)
Credit
Current
Xi’an Fresh Peak receivable
Joint venture accounts in No 841.92 841.92
Building Co. Ltd. from related
previous years
party
Shenzhen Tefa Real Liability Current
Estate Consolidated Subsidiary payable to accounts in No 59.8 59.8
Service Co., Ltd. related party previous years
Shenzhen Shen Fang Liability Current
Industrial Subsidiary payable to accounts in No 153.49 153.49
Development Co., Ltd related party previous years
Liability Current
Shenzhen ZhongGang
Subsidiary payable to accounts in No 13.59 13.59
Haiyan Enterprise Ltd.
related party previous years
Shenzhen Dongfang Liability Current
New world store Co., Subsidiary payable to accounts in No 90.3 90.3
Ltd related party previous years
Liability Current
Shenzhen Xin
Subsidiary payable to accounts in No 139.47 139.47
Dongfang Store Ltd.
related party previous years
Fengkai Lain Feng Liability Current
Cement Manufacturing Subsidiary payable to accounts in No 186.73 186.73
Co., Ltd. related party previous years
Liability Current
Shenzhen CyberPort
Subsidiary payable to accounts in No 794.97 1.5 796.47
Co., Ltd
related party previous years
ShenZhen ShenFang Liability Current
BaoAn development Subsidiary payable to accounts in No 2,009.34 2,009.34
Co., Ltd related party previous years
The principal
Liability and interest of
Shenzhen Investment Controlling
payable to loans from the No 8,038.41 500 7,538.41
Holdings Co., Ltd. shareholder
related party controlling
shareholder
Related party
under the
Shenzhen General The principal
same control Liability
Institute of and interest of
of the payable to 7,013.42 7,013.42 0
Architectural Design loans from the
Company’s related party
and Research 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.
5. Other significant related-party transactions
N/A
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
35
2013 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
VIII. Particulars about significant contracts and their fulfillment
1. Particulars about trusteeship, contract and lease
(1) Trusteeship
Explanation on the trusteeship
N/A
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
N/A
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
N/A
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 Yuan
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
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
Shenzhen SPG
Longgang 31 Mar. Joint liability
8,840 31 Mar. 2012 8,840 Three years No No
Development Co., 2012 guarantee
Ltd.
Shantou SEZ, Joint liability
Wellam FTY, 13,000 17 Apr. 2013 13,000 Three years No No
guarantee
Building
36
2013 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Development Co.,
Ltd.
Total guarantee line approved for Total actual occurred amount
the subsidiaries during the of guarantee for the
reporting period 0 13,000
subsidiaries during the
(B1) reporting period (B2)
Total guarantee line that has been
Total actual guarantee balance
approved for the subsidiaries at
21,840 for the subsidiaries at the end 21,840
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 0 of guarantee during the 13,000
(A1+B1) reporting period (A2+B2)
Total guarantee line that has been
approved at the end of the Total actual guarantee balance
reporting period 21,840 at the end of the reporting 21,840
period (A4+B4)
(A3+B3)
Proportion of total guarantee amount (A4+B4) to the net assets
11.72%
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
The Company offered mortgage loan guarantees for the
Explanation on possible bearing joint responsibility of
commercial residential building purchaser. Up to 31 Dec. 2013,
liquidation due to immature guarantee
the amount of the unsettled guarantee was of RMB 329,922,000.
Explanation on provision of guarantees for external parties in
N/A
violation of the prescribed procedure
Explanation on particulars about the guarantees by complex ways:
The Company offered mortgage loan guarantees for the commercial residential building purchaser. Up to 31 Dec. 2013, the amount
and the term of the unsettled guarantee were as follows:
Unsettled amount (RMB
Item Term
Ten Thousand Yuan)
From the issuing of the loans to the completion of the
Shenzhen Properties transaction of the mortgage registration of contract of
Chuanqi Hill Project advance sales 30,104.50
Till the completion of the mortgage registration of
Shenzhen Properties property ownership certificate and should summit to the
Chuanqi Hill Project bank for custody 2,019.70
From the issuing of the loans to the completion of the
Longgang Shanglin Garden transaction of the mortgage registration of contract of
Project advance sales 868.00
Total 32,992.20
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
37
2013 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
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.
(1) Illegal external guarantee
Unit: RMB Ten Thousand Yuan
Illegal
Proportion guarantee Proportion
in the amount up in the Predicted
Relationsh Illegal Predicted Predicted
Guarantee audited net Type of Guarantee to the end audited net releasing
ip with the guarantee releasing released
d party assets of guarantee period of the assets of date
Company amount way amount
the latest period of the latest (month)
period (%) annual period (%)
report
Total 0 0% -- -- 0 0% -- -- --
3. Other significant contract
Book Appraisal
value of value of
Name of the assets the assets
Trading
Name of the involved involved Execution Name of
Name of Base date price Related-p
company counter in the in the situation company
appraisal for Pricing (RMB arty Relations
entering company contract contract up to the entering
agency (if appraisal principle Ten transactio hip
into the entering (RMB (RMB period-en into the
any) (if any) Thousand n or not
contract into the Ten Ten d contract
Yuan)
contract Thousand Thousand
Yuan) (if Yuan) (if
any) any)
4. Other significant transactions
N/A
IX. 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
Commitments made upon the assets
Commitments made upon IPO or
Other commitments made to minority
shareholders
Executed timely or not? Yes
38
2013 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
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:
Current
Current actual
Name of the predicted
business Reason of Disclosure
asset or project business Disclosure date
Initial time of Ending time of performance failing to reach index of the
existing performance of the original
the prediction the prediction (RMB Ten the prediction original
profitable (RMB Ten prediction
Thousand (if applicable) prediction
prediction Thousand
Yuan)
Yuan)
X. Particulars about engagement and disengagement of CPAs firm
CPAs firm engaged at present
Name of domestic CPAs firm Ruihua Certified Public Accountants (LLP)
Remuneration of domestic CPAs firm (RMB Ten
58
Thousand Yuan)
Consecutive years of the audit services provided by
0
domestic CPAs firm
Name of the certified public accountants from the
Tian Jingliang, Li Hua
domestic CPAs firm
Name of overseas CPAs firm (if any) N/A
Remuneration of overseas CPAs firm (RMB Ten
0
Thousand Yuan) (if any)
Consecutive years of the audit services provided by
N/A
overseas CPAs firm (if any)
Name of the certified public accountants from the
N/A
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:
The Company originally engaged RSM China Certified Public Accountants (LLP) (hereinafter referred to as
“RSM China”) as the 2013 audit institution for the Company’s annual financial statements and internal control,
and recently due to the combination of RSM China and Crowe Horwath International (LLP) (hereinafter referred
to as Crowe Horwath) which formed into the ethical brand certified accountants Ruihua Certified Public
Accountants (LLP) (hereinafter referred to as Ruihua), the staffs and business which originally belongs to the
RSM China will transfer to the nominal of Ruihua Certified Public Accountants (LLP) that offer service for the
clients.
Ruihua Certified Public Accountants (LLP) has securities practice qualification and experience as well as ability
to offer audit service for the listed companies. It could satisfy the requirements of the 2013 annual financial
statement and the internal control of the Company, and also could execute the audit of the financial statement and
internal control independently. For guarantee the continuity and audit quality of the annual audit business, the
Company agreed to changed the 2013 annual financial audit and internal control audit institution to Ruihua
Certified Public Accountants (LLP), with the audit expenses and the regulations of the service agreement
39
2013 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
unchanged.
The event was reviewed and approved by the Board of Directors on 22 Oct. 2013 and the extraordinary general
meeting on 17 Nov. 2013 and disclosed on the appointed information disclosure media.
Particulars on engaging the audit firm for the internal control, financial adviser or sponsor
√ Applicable □ Inapplicable
In the reporting period, the Company engaged Ruihua Certified Public Accountants(LLP) to offer the internal
control audit service with the service expenses of RMB 0.25 million.
XI. 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
XII. 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
XIII. Particulars about trading suspension and termination faced after the disclosure of
annual report
Inapplicable
XIV. Explanation on other significant events
Inapplicable
XV. Significant events of the subsidiaries of the Company
Inapplicable
XVI. Particulars about issuing corporate bonds by the Company
Inapplicable
40
2013 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
Unit：Share
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 1,011,660, 1,011,660
100% 0 0 0 0 0 100%
management staff 000 ,000
II. Shares not subject to 891,660,0 891,660,0
88.14% 0 0 0 0 0 88.14%
trading moratorium 00 00
1. Renminbi ordinary 120,000,0 120,000,0
11.86% 0 0 0 0 0 11.86%
shares 00 00
2. Domestically listed
0 0% 0 0 0 0 0 0 0%
foreign 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
41
2013 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
disclose
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
Not issued
Convertible company bonds, bonds with attached warrant, company bonds
Not issued
Warrant
Not issued
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 on the fifth trading
Total number of shareholders at the
78,539 day before the disclosure date of the annual 77,585
reporting period
report
Particulars about shares held by shareholders with a shareholding percentage over 5%
Total Pledged or frozen shares
Increase/d Number
Shareholdi shares Number of
ecrease of
Name of Nature of ng held at tradable
during the non-trada
shareholder shareholder percentage the shares Status of shares Number of shares
reporting ble shares
(%) period-en held
period held
d
SHENZHEN State-owned 63.55% 642,884,2 0 0 0
YANG Domestic natural 0.18% 1,823,600 1,823,600 0 0
SHUILIAN person
GUOTAI Foreign 0.15% 1,539,650 -45,900 0 0
42
2013 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
ZHONG Domestic natural 0.14% 1,400,000 1,400,000 0 0
PENG Domestic natural 0.12% 1,173,517 1,173,517 0 0
WU HAOYUAN Foreign natural 0.11% 1,109,300 17,200 0 0
WANG Domestic natural 0.11% 1,095,808 0 0 0
LIN LIPING Domestic natural 0.1% 1,026,710 1,026,710 0 0
XUE Domestic natural 0.09% 896,556 1,600 0 0
TAN LIANXIA Domestic natural 0.08% 826,856 0 0 0
Strategic investor or general
corporation becoming a top ten
Naught
shareholder due to placing of new
shares (if any) (See note 3)
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
Renminbi
YANG SHUILIAN 1,823,600 1,823,600
ordinary shares
GUOTAI JUNAN Domestically
SECURITIES(HONGKONG) 1,539,650 listed foreign 1,539,650
LIMITED shares
Renminbi
ZHONG LAIQUN 1,400,000 1,400,000
ordinary shares
Renminbi
PENG QIONGHUI 1,173,517 1,173,517
ordinary shares
Domestically
WU HAOYUAN 1,109,300 listed foreign 1,109,300
shares
Domestically
WANG ZHONGMING 1,095,808 listed foreign 1,095,808
shares
Renminbi
LIN LIPING 1,026,710 1,026,710
ordinary shares
Renminbi
XUE HAOYUAN 896,556 896,556
ordinary shares
Domestically
TAN LIANXIA 826,856 listed foreign 826,856
shares
Explanation on associated
relationship or/and persons acting in
The Company found no relationship between the shareholders above, and also did not find
concert among the top ten tradable
them belong to the shareholders Listed Company change in shareholding ownership
shareholders and between the top ten
Information Management Approach specified in the act in concert.
tradable shareholders and the top ten
shareholders
Explanation on shareholders
participating in the margin trading Naught
business (if any) (See note 4)
Whether the shareholders of the Company in the trade agreement to buy back during the reporting period
□ Yes √ No
43
2013 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
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
State-owned equity
investment and
management, the
government allocation
Shenzhen Investment Fan Oct. 13,
76756642-1 RMB 10.9 billion of land development
Holdings Co., Ltd. Mingchun 2004
and management and
strategic emerging
industry investment and
service.
As of 31 Dec. 2013, the Company’s total assets was RMB 198.591 billion, net assets was RMB
83.232 billion. In 2013 from Jan. to Dec. the Company had realized the operating income RMB
Operating results, financial
28.627 billion, and the total profit was 8.559 billion (The above data were not audited). In the future,
situation, cash flow and
the Company will centre on the overall goal of transformation development and innovative
future development strategy,
development to intensify deepening comprehensive reform; perfect corporate governance structure,
etc.
Innovate management system and mechanism, further strengthen the construction of staff team and
corporate culture, and enhance the control and influence of state-owned capital.
SWY（000011）: with a total of 380,366,000 shares held and shareholding proportion of 63.81%；
Shares held by the SFZ（000045）: with a total of 23,406,900 shares held and shareholding proportion of 46.21%；深
controlling shareholder in SSB（000019）: with a total of 40,143,600 shares held and shareholding proportion of 16%；
other listed companies by STD（000023）: with a total of 18,134,900 shares held and shareholding proportion of 13.07%；中
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.
44
2013 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Shares held by the actual
controlling shareholder in In addition to the Company controlling shareholder - Shenzhen Investment Holding Co., Ltd. Other
other listed companies by domestic and overseas listed companies whose equity held by the actual controllers did not rank
holding or shareholding among the top ten shareholders of the Company before.
during the reporting period
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
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
Amount of shares Shares proportion Shares proportion Initial disclosure for the
shareholder / date of the
to be increased to be increased Amount of shares increased actually completion of
act-in-concert actually held shareholding implementing the
holding （%） （%）
person increase scheme shareholding
increase scheme
Explanation on other situations:
Naught
45
2013 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 59 0 0 0 0
Jianguo 2012 2015
Board
General
Chen Manager 17 Apr. 16 Apr.
Current Male 50 0 0 0 0
Maozheng and 2012 2015
Director
Zhuang 17 Apr. 16 Apr.
Supervisor Current Male 59 0 0 0 0
Quan 2012 2015
Deng
17 Apr. 16 Apr.
Kangchen Director Current Male 48 0 0 0 0
2012 2015
g
17 Apr. 16 Apr.
Wen Li Director Current Female 45 0 0 0 0
2012 2015
Jiang 17 Apr. 16 Apr.
Director Current Female 50 0 0 0 0
Lihua 2012 2015
CFO and 17 Apr. 16 Apr.
Zhang Lei Current Male 46 0 0 0 0
Director 2012 2015
Zhou Independe 17 Apr. 25 Feb.
Current Male 45 0 0 0 0
Hanjun nt Director 2012 2014
Liu Independe 17 Apr. 16 Apr.
Current Male 50 0 0 0 0
Quanmin nt Director 2012 2015
Song Independe 17 Apr. 16 Apr.
Current Male 46 0 0 0 0
Botong nt Director 2012 2015
Wang 17 Apr. 16 Apr.
Supervisor Current Female 52 0 0 0 0
Xiuyan 2012 2015
17 Apr. 16 Apr.
Li Yufei Supervisor Current Female 36 0 0 0 0
2012 2015
Xiong 17 Apr. 16 Apr.
Supervisor Current Male 58 0 0 0 0
Xingnong 2012 2015
Shi 17 Apr. 16 Apr.
Supervisor Current Male 59 0 0 0 0
Chunrong 2012 2015
Vice
Teng 17 May 16 May
General Current Male 57 0 0 0 0
Xianyou 2012 2015
Manager
Vice
Wei 28 Sept. 16 May
General Current Female 48 0 0 0 0
Hanping 2012 2015
Manager
Tang Vice Current Male 44 22 Oct. 16 May 0 0 0 0
46
2013 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Xiaoping president 2013 2015
Secretary
17 May 16 May
Chen Ji of the Current Male 43 0 0 0 0
2012 2015
board
Yang Deputy Left the 17 May 20 Aug.
Male 42 0 0 0 0
Jiayong GM post 2012 2013
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 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 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 the partner and
licensed lawyer of Guangdong Shenyatai Law Firm. Now he is the director of the center for real estate investment
and financing in Shenzhen Yingke 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 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
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 vice minister of ministry of audit and risk management and she has been acting as
47
2013 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
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. 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.
16. 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.
17. Tang Xiaoping: he ever act as CFO of Shenzhen HRD Assets Management Company, minister of Financial
Operations Management Department of Shenzhen Foreign Labor Service Co., Ltd. Legal representative, the
executive director of the Shenzhen Foreign Affairs Service Center, and financing plan department manager of the
Company. Since 22 Dec. 2013 he act as deputy GM of the Company.
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
Receives payment
person holding any Name of the shareholder’s Position in the shareholder’s Beginning date Ending date of
from the
post in any unit unit of office term office term
shareholder’s unit?
shareholder’s unit
Shenzhen Investment Minister of the 1 department
Wen Li 1 Apr. 2013 Yes
Holdings Co., Ltd. of the enterprise
Shenzhen Investment
Jiang Lihua Deputy Minister of finance 1 Dec. 2007 Yes
Holdings Co., Ltd.
Shenzhen Investment Vice minister of ministry of
Wang Xiuyan 1 May 2013 Yes
Holdings Co., Ltd. audit and risk management
Shenzhen Investment Senior director of the 1
Li Yufei 1 Jan. 2010 Yes
Holdings Co., Ltd. department of the enterprise
Notes to
post-holding in Naught
shareholders’ units
Post-holding in other units
48
2013 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
√Applicable □Inapplicable
Name of the
person holding Position in Beginning date Ending date of Receives payment
Name of other unit
any post in other unit of office term office term from other unit?
other units
Partner
Zhou Hanjun Asia (Group) Accounting Firm 1 Mar. 2012 Yes
accountant
Real Estate Investment & Financing
Liu Quanmin Chief 1 Jun. 2013 Yes
Center of Shenzhen Yingke Law Firm
Infrastructure Department of Shenzhen
Song Botong Chief 1 Mar. 2013 Yes
University
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 remuneration of directors, It was executed according to the procedures stipulated in the Interim Measures for the
supervisors and senior Administration of Human Resources of the Company.
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
Determining basis for the as well as 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
supervisors and senior the 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 The Company paid their remuneration monthly according to relevant systems for remuneration
remuneration of directors, management of the Company.
supervisors and senior
management staffs
Remuneration of the directors, supervisors and senior management staffs of the Company during the reporting
period
Unit：Ten thousand Yuan
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 59 Current 72 72
the Board
General
Chen
Manager and Male 50 Current 69.6 69.6
Maozheng
Director
Zhuang Quan Supervisor Male 59 Current 42.5 42.5
Deng
Director Male 48 Current 54 54
Kangcheng
Wen Li Director Female 44 Current 0 0
Jiang Lihua Director Female 50 Current 0 0
CFO and
Zhang Lei Male 46 Current 43 43
Director
Independent
Zhou Hanjun Male 44 Current 6 6
Director
Liu Quanmin Independent Male 50 Current 6 6
49
2013 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Director
Independent
Song Botong Male 46 Current 6 6
Director
Wang Xiuyan Supervisor Female 52 Current 0 0
Li Yufei Supervisor Female 36 Current 0 0
Xiong
Supervisor Male 56 Current 28.99 28.99
Xingnong
Shi Chunrong Supervisor Male 58 Current 38.5 38.5
Vice General
Teng Xianyou Male 57 Current 54 54
Manager
Vice General
Wei Hanping Female 48 Current 51.78 51.78
Manager
Vice General
Tang Xiaoping Male 44 Current 39.82 39.82
Manager
Secretary to the
Chen Ji Male 43 Current 38.5 38.5
Board
Vice General
Yang Jiayong Male 42 Former 40.48 40.48
Manager
Total -- -- -- -- 591.17 0 591.17
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
Vice General
Yang Jiayong Former 20 Aug. 2013 Quitted due to job change
Manager
Vice General Internal competition and appointed by the board of
Tang Xiaoping Elected 22 Oct. 2013
Manager directors
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 nine staffs gaining promotion of positions, six staffs reengaged, six staffs
adjusted the positions within the same level, and one staff dismissed for the Company through the internal
assessment competitive selection. And it introduced a total of ten professional technicians in architectural design,
accounting, civil engineering, law and etc., of which nine persons with the education level above the bachelor
degree and six persons with the professional title above the intermediate.
VI. Particulars about employers of the Company
Up to the end of 2013, the Company in total had 1,736 employees, of which 1,107 production personnel, 421
technicians, 65 sales personnel, 55 financial personnel and 64 administrative personnel. Among them, 170
employers are undergraduates or above, 233 personnel are holders of associate degree, 190 graduated from
technical secondary school, 1,143 from senior high school or below. The Company had 417 retirees.
50
2013 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.
(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.
(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. The Company’s deputy general manager Mr. Yang Jiayong due
to job changes offered resign to the Company, which was review and approved by the 16th meeting
of 7th session of the board of director on 20 Aug. 2013. According to the Company's internal public
competition and the general manager nominated, the Company held the 17th meeting of 7th session
of the board of director on 22 Oct. 2013 and the meeting review and appointed Tang Xiaoping as
the deputy GM of the Company.
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 in accordance
with the Notification on Doing a Good Job Related to Internal Control Regulation Pilot in Listed
51
2013 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Companies of Shenzhen(SZJGSZ No.[2011]31) from Shenzhen Securities Regulatory Bureau. In
the reporting period, on the basis of the original internal control unit, the Company will
incorporated the wholly owned Shenzhen engineering Tong engineering Co., Ltd. in the scope of
implementation, including the total assets, net profit and proportion of the operating income in the
Company’s total amount of consolidated statement over the internal control standard and
implementation guidelines. The construction of internal control, in conformity with relevant
notifications of Shenzhen Securities Regulatory Bureau, was fluently carried out. The Company has
already employed Rui Hua Certified Public Accountants (Special General Partnership) to conduct
independent audit of internal. In the reporting period, the Company established internal control for
business and events within appraisal scope, effectively implemented internal 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, the Company took part in Shenzhen Listed Company Insider Trading
prevention and Control Work Conference organized by the Shenzhen Securities Regulatory Bureau,
learnt the rule of law and related cases of insider trading, made clear the specific requirements of
the insider trading prevention and control work; after the meeting, the Company conveyed the
information to the directors ,supervisors, the senior executives and staffs in key position through
e-mail, and made a project report in the 13th meeting of the 7th session of the board of the directors
on 23 Apr. 2013. The Company took part in the Shenzhen Listed Company Financial Accounting
Basic Training on 31 May 2013, organized by the Shenzhen Securities Regulatory Bureau, made
clear about the financial director in the Company's financial accounting basic work and ensured
quality of accounting information true, complete and accurate. On 13 Sep. 2013 in the Shenzhen
Listed Companies Investor Relations Interactive Platform and Online Collective Open Day activity
held by Shenzhen Securities Regulatory Bureau, the Company actively responded, meticulous
preparation, updated the basis data of investors interactive platform, seriously answered the
questions the investors asked in the activity, and the online group Open Day activity had achieved
good results. The Company’s chief of supervisor, chief of supervisor of actual controlling
shareholders and a deputy GM employed in the reporting period had participated in Director and
Supervisors Training held by Shenzhen Securities Regulatory Bureau, all of the three had passed the
exam of the training.
II. The formulation and implementation of registration and management system of insiders
In order to 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 information authentically, accurately, completely, timely and fairly. In the
reporting period, the relevant works are strictly in accordance with the system and the Shenzhen
Securities Regulatory Bureau and the relevant requirements of Shenzhen Stock Exchange to
perform.
52
2013 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
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
Date of
Name of proposal passing on Date of
Meeting holding the Resolution Index for disclosure
the meeting disclosure
meeting
2012 Annual Work Report of
the Board of Directors, 2012
Annual Work Report of the
Supervisory Committee,
Announcement on
2012 Annual Plan on Profit
2012 annual resolution of 2012 annual
Distribution, 2012 Annual
shareholders’ 23 Apr. 2013 approval 24 Apr. 2013 shareholders’ general
Report, Work Report of
general meeting meeting (Cninfo website)
Independent Directors, 2013
www.cninfo.com.cn
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 Index for
Meeting passing on the Resolution Date of disclosure
the meeting disclosure
meeting
Announcement
on resolution of
Proposal on the first
The first Changing the temporary
temporary Company's Annual
shareholders’
shareholders’ 12 Nov. 2013 Financial Audit and approval 12 Nov. 2013
Internal Control general meeting
general meeting
Audit Certified in 2013 (Cninfo
in 2013
Public Accountants website)
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 Whether being
Number of meetings Number of meetings Number of Number of absent from
Name of independent meetings
meetings attended in the meetings meetings in
independent directors are attended on means of attended by skipped from person two
director supposed to attend the spot communicatio mandatory times in
during the reporting n succession
period
Zhou Hanjun 7 5 1 1 0 No
Liu Quanmin 7 6 1 0 0 No
Song Botong 7 5 1 1 0 No
Number of shareholders’ general
meetings independent directors need 2
attend
Explanations about reasons of being absent from the board meetings in person two times in succession
53
2013 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
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.
Upon the start of the audit for the 2013 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 2013financial 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 2013 annual audit work as followings:
1. Review opinions issued concerning the Company’s 2013 Annual Financial Report
Based on their professional knowledge and experience, the members of Audit Committee reviewed
the 2013 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
54
2013 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
2013 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
2013 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 2013and its financial position as at 31 Dec. 2013 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 2013 annual audit conducted by Ruihua Accounting Firm (Special
General Partnership)
In accordance with stipulations on relevant work for 2013 annual report by CSRC and Shenzhen
Stock Exchange, the Company’s Audit Committee summarized the 2013annual audit conducted by
Ruihua Accounting Firm (Special General Partnership) (hereinafter referred to as “Ruihua”) 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 2013 annual audit lasted from 5 Nov. 2013 to 28March 2014 as schedule.
Of which, the pre-audit and internal test lasted from 5 Nov. 2012 to 5 Jan. 2014; the substantial 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 25 Feb. 2013 to 10 Mar. 2014.
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. 2013, the audit team from Ruihua conducted a thorough audit on the Company and its
subsidiaries. During the audit process, the Audit Committee, for several times, urged Ruihua to
closely follow the audit schedule and finish the audit on time. Ruihua submitted to the Audit
Committee the first draft of the Audit Report of the 2013 Annual Report on 10 March 2014, 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. 2013, and they approved the formation of 2013 Annual Report and Abstract on the
basis of the above statements; the above assessment report on internal control factually, accurately,
55
2013 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
completely demonstrated construction results of internal control of the Company up to 31 Dec.
2013, 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 2014, the final version of audit report
was issued. And this marked the end of the site audit conducted by Ruihua on the Company’s
2013financial report.
(3) Audit results
Ruihua issued the standard unqualified 2013Annual Audit Report to the Company. And the Audit
Committee was of the opinion that Ruihua Certified Public Accountants (Special General
Partnership) excellently accomplished the audit of the Company’s 2013 Annual Financial Report.
4. In the reporting period, because the Company originally employed RSM China Certified Public
Accountants (Special General Partnership) (Hereinafter referred to as RSM ) and Guofu Haohua
Certified Public Accountants (Special General Partnership) (Hereinafter referred to as Guofu
Haohua ) merged to form Ruihua China Certified Public Accountants (Special General Partnership),
the Audit Committee conducted a research and formed a resolution in respect of employing Ruihua
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, due to Yang Jiayong resign the deputy GM of the Company for job changes,
the Nomination Committee of the Board conducted a research and formed a resolution in respect of
Work Plan of Hiring Deputy General Manager, also participated in the whole process, the new
public competition of deputy general manager, qualification examination. After the widely soliciting
opinions, the Nomination Committee of the Board had form a resolution in respect of employing
the Company’s deputy GM and agreed to submit to the board of directors of the company.
(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 2013
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
2013Annual Report was factual and accurate.
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,
56
2013 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
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 conformity 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 requirements 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.
57
2013 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.
In 2013 the Company hired Rui hua Certified Public Accountants (Special General Partnership), an
independent audit of internal control.
II. Statement on the Responsibility for Internal Control from the Board of Directors
According to requirement of the enterprise internal control standard system, establishing, perfecting
and effectively conducting internal control, evaluate its effectiveness and accurately disclose
internal control evaluation report are 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 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.
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.
Besides, the change of situation may lead to internal control become inappropriate or reducing the
degree of control policies and procedures following. There is a certain future risk in Speculating the
effectiveness of internal control in the future according to the result of internal control evaluation.
III. Basis of establishing internal control of financial statements
According to requirement of the enterprise internal control standard system, combined with the
enterprise internal control system and evaluation method, the Company organized the internal
control evaluation.
The Company’s board of directors according to requirement to major defects, the cognizance of the
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2013 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
important defect and general defect of the enterprise internal control standard system, combining
with the size of the company, industry characteristics, factors such as risk appetite and risk
tolerance, to separate the internal control over financial report from internal control over
non-financial report, study and determine the suitable for the Company's internal control defects
specific standards and consistent with the previous year.
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 9 March 2014
report of internal control
Index for disclosure of whole
Cninfo website (www.cninfo.com.cn) “Self-assessment Report of Internal
article of self-assessment
Control”
report of 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. 2013 in accordance with
Basic Standards for Internal Control and relevant regulations.
Disclosure date of whole
article of audit report of 9 March 2014
internal control
Index for disclosure of whole
article of audit report of Cninfo website (www.cninfo.com.cn) “Audit Report of Internal Control”
internal 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.
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2013 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Section XI. Financial Statements
Auditor’s Report
Ruihua Shen Zi [2014]48270005
To The Board of Directors of SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE &
PROPERTIES (GROUP) CO. Ltd.：
We have audited the accompanying consolidated financial statements of
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES
(GROUP) CO. Ltd. and its subsidiaries (hereinafter shall be referred as “the
Group”) consisting of the company’s and the consolidated balance sheet as at
December 31, 2013, 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.
60
2013 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
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 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, 2013 and the company’s results of operation and cash flows for the year then
ended in accordance with Accounting Standards for Business Enterprises.
Ruihua Certified Public Accountants Certified Public Accountants
Tian Jingliang
Certified Public Accountants
China. Beijing Li Hua
March 28, 2014
61
Consolidated Balance Sheet
As of 31 December 2013
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 5.1 525,374,372.44 496,805,905.01
Account receivables 5.2 14,102,124.06 24,413,187.02
Prepayments 5.3 12,206,598.30 39,677,550.07
Dividends receivable 5.4 1,052,192.76 1,052,192.76
Other receivables 5.5 54,672,501.81 56,894,335.01
Inventories 5.6 2,967,935,589.04 2,431,754,464.54
Other current assets 5.7 3,451,107.04 7,780,460.78
Total current assets 3,578,794,485.45 3,058,378,095.19
Non-current assets
Long-term equity investments 5.8 75,200,652.59 75,225,969.30
Investment properties 5.9 466,314,091.90 487,373,443.43
Fixed assets 5.10 60,715,687.71 63,204,808.66
Intangible assets 5.11 6,753,566.79 5,866,106.75
Long-term deferred assets 5.12 528,352.21 427,321.35
Deferred tax assets 5.13 26,792,460.02 19,881,649.62
Other non-current assets 5.14 -- 2,413,434.00
Total non-current assets 636,304,811.22 654,392,733.11
TOTAL ASSETS 4,215,099,296.67 3,712,770,828.30
62
Consolidated Balance Sheet
As at 31 December 2013
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 5.17 23,000,000.00 96,000,000.00
Accounts payable 5.18 389,345,271.46 72,660,833.60
Deferral 5.19 312,967,028.85 407,194,198.80
Employee benefits payable 5.20 37,159,445.41 36,675,028.18
Taxes payable 5.21 148,006,651.37 19,958,153.14
Interest payables 5.22 18,482,515.18 18,395,916.84
Other payables 5.23 394,687,837.29 394,741,726.29
Non-current liabilities due within one year 5.24 331,482,489.72 299,261,270.80
Total current liabilities 1,655,131,239.28 1,344,887,127.65
Non-current liabilities:
Long-term loans 5.25 814,213,536.85 849,636,078.25
Long-term payables 5.26 10,749,885.53 11,136,124.62
Total non-current liabilities 824,963,422.38 860,772,202.87
Total liabilities 2,480,094,661.66 2,205,659,330.52
Owners' equity：
Share capital 5.27 1,011,660,000.00 1,011,660,000.00
Capital reserve 5.28 978,244,858.10 978,244,858.10
Less: treasury shares -- --
Surplus reserve 5.29 4,974,391.15 4,974,391.15
Undistributed profit 5.30 -140,886,134.13 -369,154,405.36
Foreign exchange translation difference 9,354,020.21 9,651,254.84
Total owners' equity attributable to parent company 1,863,347,135.33 1,635,376,098.73
Minority interests -128,342,500.32 -128,264,600.95
Total owners’ equity 1,735,004,635.01 1,507,111,497.78
Total liabilities and owners’ equity 4,215,099,296.67 3,712,770,828.30
Legal representative: Person in charge of accounting:
Person in charge of accounting organ:
63
Consolidated Income Statement
For the Year 2013
Prepared by: SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE& PROPERTIES (GROUP) CO.,
LTD Currency: RMB Yuan
Item Note Amount for the current period Amount for the prior period
Ⅰ.Total operating income 5.31 2,116,482,684.93 1,030,148,729.47
Including: Operating income 5.31 2,116,482,684.93 1,030,148,729.47
Ⅱ.Total operating Costs 1,819,173,771.32 893,705,121.28
Including: Operating costs 5.31 1,547,170,059.64 701,303,623.08
Business tax and surcharge 5.32 163,921,565.69 100,203,153.09
Selling expenses 5.33 45,139,220.41 27,540,513.15
Administrative expense 5.34 63,843,291.44 68,115,069.18
Financial expense 5.35 -1,567,205.86 2,682,762.78
Impairment losses of assets 5.36 666,840.00 -6,140,000.00
Add: Gains from changes in fair value ("-" means loss) -- --
Investment income ("-" means loss) 5.37 -25,316.71 1,533,086.71
Including: Investment income from associates and joint venture 5.37 -25,316.71 -120,218.96
Ⅲ.Operating profit ("-" means loss) 297,283,596.90 137,976,694.90
Add: Non-operating income 5.38 7,242,022.95 80,194.63
Less: Non-operating expenses 5.39 650,634.55 798,994.92
Including: Loss on disposal of non-current assets 5.39 110,923.29 616,113.66
Ⅳ.Total profit ("-" means loss) 303,874,985.30 137,257,894.61
Less: Income tax expenses 5.40 75,557,227.17 30,403,044.98
Ⅴ.Net profit ("-" means loss) 228,317,758.13 106,854,849.63
Net attributable to owners of parent company 228,268,271.23 106,814,543.53
Minority interests 49,486.90 40,306.10
Ⅵ.Earnings per share -- --
Basic Earnings per share 5.41 0.2256 0.1056
Diluted Earnings per share 5.41 0.2256 0.1056
Ⅶ.Other comprehensive income 5.42 -424,620.90 -49,972.76
Ⅷ.Total comprehensive income 227,893,137.23 106,804,876.87
Total comprehensive income attributable to owners of parent company 227,971,036.60 106,779,562.60
Total comprehensive income attributable to minority interests -77,899.37 25,314.27
Legal representative: Person in charge of accounting:
Person in charge of accounting organ:
64
Consolidated Cash Flow Statement
For the Year 2013
Prepared by：SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co.,
Ltd. Currency: RMB Yuan
Amount for the current Amount for the prior
Items Note
period period
Ⅰ. Cash Flow from Operating Activities：
Cash received from sales of goods or rendering of services 2,031,850,194.26 1,151,245,849.81
Refund of taxes and levies 697,514.50 --
Cash received relating to other operating activities 5.43 50,096,274.13 39,178,728.60
Sub-total of Cash Inflows 2,082,643,982.89 1,190,424,578.41
Cash paid for goods and services 1,556,632,034.88 856,071,436.09
Cash paid to and on behalf of employees 127,334,091.75 115,682,666.59
Cash paid on taxes and levies 125,782,642.55 110,848,103.90
Cash paid relating to other operating activities 5.43 77,941,530.31 80,412,552.30
Sub-total of Cash Outflows 1,887,690,299.49 1,163,014,758.88
Net Cash Flows from Operating Activities 194,953,683.40 27,409,819.53
Ⅱ. Cash Flows from Investing Activities:
Cash received from return of investments 131,473.86 --
Cash received investing income -- 601,112.91
Net cash received from disposal of fixed assets,
7,572,643.95 87,170.00
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 7,704,117.81 688,282.91
Cash paid to acquire fixed assets, intangible assets and other long assets 6,079,076.26 6,682,841.12
Cash paid on investments -- 12,000,000.00
Net cash paid on obtain subsidiary and other operating unite -- --
Cash paid on other investing activities -- --
Sub-total of Cash Outflows 6,079,076.26 18,682,841.12
Net Cash Flows from Investing Activities 1,625,041.55 -17,994,558.21
Ⅲ. Cash flow from Financing Activities
Cash received from investments -- --
Including: Cash received from investments by minority interests of subsidiaries -- --
Cash received from borrowing 445,989,352.23 1,036,000,000.00
Cash received from issuing bonds -- --
Other cash received relating to Financing activities 5.43 25,000,000.00 --
Sub-total of Cash Inflows 470,989,352.23 1,036,000,000.00
Cash repayments on borrowed amounts 527,190,674.71 808,292,761.31
Cash payments for distribution of dividends or profits 78,560,662.88 73,616,362.45
Including: Dividends or profit paid to minority interests of subsidiaries -- --
Cash payments on other financing activities 5.43 6,000,000.00 25,000,000.00
Sub-total of cash Outflows 611,751,337.59 906,909,123.76
Net cash flows from financing activities -140,761,985.36 129,090,876.24
Ⅳ. Effect of foreign exchange rate on cash -246,069.92 240,379.35
Ⅴ. Net increase in cash and cash equivalents 5.44 55,570,669.67 138,746,516.91
Add: cash equivalents at the beginning of the period 5.44 463,713,702.77 324,967,185.86
Ⅵ. Cash equivalents at the end of the period 5.44 519,284,372.44 463,713,702.77
Legal representative: Person in charge of accounting:
Person in charge of accounting organ:
65
CONSOLIDATED STATEMENT OF CHANGE IN OWNER'S EQUITY
For the Year 2013
Prepared by：SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd. Currency: RMB Yuan
Attribute to the equity of parent company
Less: Foreign exchange Minority Total owners'
Items Capital Special Surplus Undistributed
Share capital Treasury translation interests equity
reserve reserve reserve profit
shares difference
1.Balance at the End of Last 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
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 -369,154,405.36 9,651,254.84 -128,264,600.95 1,507,111,497.78
3.Increase/Decrease movements in this
-- -- -- -- -- 228,268,271.23 -297,234.63 -77.899.37 227,893,137.23
Year ("-" means loss)
(I) Net Profit -- -- -- -- -- 228,268,271.23 -- 49,486.90 228,317,758.13
(II) Other comprehensive income -- -- -- -- -- -- -297,234.63 -127,386.27 -424,620.90
Subtotal of (I)and (II) -- -- -- -- -- 228,268,271.23 -297,234.63 -77,899.37 227,893,137.23
(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 -- -- -- -- -- -- -- -- --
66
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 -140,886,134.13 9,354,020.21 -128,342,500.32 1,735,004,635.01
Legal representative: Person in charge of accounting: Person in charge of accounting organ:
CONSOLIDATED STATEMENT OF CHANGES IN OWNER'S EQUITY
For the Year 2012
Prepared by：SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd. Currency: RMB Yuan
Attributable to equity holders of the Company
Foreign Minority Total owners'
Items Less:
Capital Special Surplus Undistributed exchange interests equity
Share capital Treasury
reserve reserve reserve profit translation
shares
difference
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 -- -- -- -- -- -- -- -- --
Other -- -- -- -- -- -- -- -- --
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 ("-"
-- -- -- -- -- 106,814,543.53 -34,980.93 25,314.27 106,804,876.87
means loss)
(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. 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 -- -- -- -- -- -- -- -- --
67
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
Legal representative: Person in charge of accounting: Person in charge of accounting organ:
68
Balance Sheet
As at 31 December 2013
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 362,953,152.47 223,827,179.97
Accounts receivable 10.1 4,359,289.23 13,663,339.96
Prepayments -- 55,500.00
Other receivables 10.2 669,806,773.71 343,568,799.28
Inventories 1,830,603,734.72 1,844,523,622.50
Total current assets 2,867,722,950.13 2,425,638,441.71
Non-current Assets:
Long-term equity investments 10.3 328,371,367.19 298,396,683.90
Investment properties 407,900,089.95 426,426,812.91
Fixed assets 34,263,366.14 33,944,334.56
Intangible assets 1,406,066.79 327,266.75
Long-term deferred assets 132,925.95 189,456.15
Deferred tax assets 3,230,636.28 6,814.20
Other non-current Assets -- 1,376,400.00
Total non-current assets 775,304,452.30 760,667,768.47
Total Assets 3,643,027,402.43 3,186,306,210.18
69
Balance Sheet (Continued)
As at 31 December 2013
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 393,715,301.47 24,195,725.69
Deferral 82,398,193.00 280,272,668.00
Employee benefits payable 11,614,479.62 10,848,111.62
Taxes payable 149,643,182.39 6,204,121.44
Interest payable 18,094,154.07 18,020,083.50
Other payables 648,978,988.66 608,165,106.86
Non-current liability due within one year 331,482,489.72 299,261,270.80
Other current liability --
Total current liabilities 1,635,926,788.93 1,316,967,087.91
Non-current liabilities：
Long-term loans 581,224,184.62 649,636,078.25
Total non-current liabilities 581,224,184.62 649,636,078.25
Total liabilities 2,217,150,973.55 1,966,603,166.16
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 -564,028,429.22 -770,201,814.08
Total owners' equity attributable to parent 1,425,876,428.88
1,219,703,044.02
company
Total liabilities and owners' equity 3,643,027,402.43 3,186,306,210.18
Legal representative: Person in charge of accounting:
Person in charge of accounting organ:
70
Income Statement
For the Year 2013
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 10.4 1,334,203,505.49 113,046,014.33
Less: Operating cost 10.4 898,116,935.10 41,545,002.74
Business tax and surcharge 107,352,413.53 17,665,684.67
Selling expenses 26,298,856.99 18,313,339.83
Administrative expense 31,312,746.27 31,242,272.24
Financial expense 1,952,132.73 -1,532,671.49
Impairment losses of assets 666,840.00 --
Add: Gain from changes in fair value ("-" means loss) -- --
Investment income ("-" means loss) 10.5 -25,316.71 -120,218.96
Including: Investment income from associates
10.5 -25,316.71 -120,218.96
and joint venture
II. Operating profit ("-" means loss) 268,478,264.16 5,692,167.38
Add: Non-operating income 603,003.89 30,233.29
Less: Non-operating expenses 48,607.28 15,092.50
Including: Loss from disposal of non-current
7,607.28 92.50
assets
III. Total profit ("-" means loss) 269,032,660.77 5,707,308.17
Less: Income tax expenses 62,859,275.91 87,586.24
IV.Net profit ("-" means loss) 206,173,384.86 5,619,721.93
V. Other comprehensive income -- --
VI. Total comprehensive income 206,173,384.86 5,619,721.93
Legal representative: Person in charge of accounting:
Person in charge of accounting organ:
71
Cash Flow Statement
For the Year 2013
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. Cash Flow from Operating Activities：
Cash received from sales of goods or rendering of services 1,144,966,241.22 376,638,380.51
Refund of taxes and levies 697,514.50 --
Cash received relating to other operating activities 76,214,774.35 16,840,440.53
Sub-total of cash inflows 1,221,878,530.07 393,478,821.04
Cash paid for goods and services 453,758,678.80 293,631,860.90
Cash paid to and on behalf of employees 27,614,061.43 27,387,097.91
Cash paid on taxes and levies 41,219,939.77 12,569,257.99
Cash paid relating to other operating activities 302,321,288.97 50,269,427.73
Sub-total of Cash Outflows 824,913,968.97 383,857,644.53
Net Cash Flows from Operating Activities 396,964,561.10 9,621,176.51
Ⅱ. Cash Flows from Investing Activities:
Cash received from return of investments 131,473.86 14,212,390.33
Cash received investing income -- --
Net cash received from disposal of fixed assets, intangible assets and
3,000.00 --
other long assets
Other cash received relating to investing activities 15,962,247.98 14,290,900.43
Sub-total of Cash Inflows 16,096,721.84 28,503,290.76
Cash paid to acquire fixed assets, intangible assets and other long
2,342,950.46 572,801.00
assets
Cash paid on investments 90,000,000.00 63,518,370.00
Cash paid on other investing activities -- --
Sub-total of cash outflows 92,342,950.46 64,091,171.00
Net Cash Flows from Investing Activities -76,246,228.62 -35,587,880.24
Ⅲ. Cash flow from Financing Activities
Cash received from investments -- --
Cash received from borrowing 390,000,000.00 810,000,000.00
Cash received from issuing bonds -- --
Cash received from other financing activities 25,000,000.00 --
Sub-total of cash inflows 415,000,000.00 810,000,000.00
Cash repayments on borrowed amounts 501,190,674.71 648,292,761.31
Cash payments for distribution of dividends or profits 62,399,178.33 64,694,167.89
Cash payments on other financing activities 6,000,000.00 25,000,000.00
Sub-total of cash Outflows 569,589,853.04 737,986,929.20
Net cash flows from financing activities -154,589,853.04 72,013,070.80
Ⅳ. Effect of foreign exchange rate on cash -577.80 -216.89
Ⅴ. Net increase in cash and cash equivalents 166,127,901.64 46,046,150.18
Add: cash equivalents at the beginning of the period 190,825,250.83 144,779,100.65
Ⅵ. Cash equivalents at the end of the period 356,953,152.47 190,825,250.83
Legal representative: Person in charge of accounting:
Person in charge of accounting organ:
72
Consolidated Balance Sheet
For the year 2013
Prepared by：SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd. Currency: RMB Yuan
Capital Less: Treasury Special Surplus Undistributed Total owners'
Item Share capital
reserve shares reserve reserve profit equity
1.Balance at the End of Last Period 1,011,660,000.00 978,244,858.10 -- -- -- -770,201,810.08 1,219,703,044.02
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 -- -- -- -770,201,810.08 1,219,703,044.02
3. Increase/Decrease movements in this Year ("-" means
-- -- -- -- -- 206,173,384.86 206,173,384.86
loss)
(I) Net Profit -- -- -- -- -- 206,173,384.86 206,173,384.86
(II) Other comprehensive income -- -- -- -- -- -- --
Subtotal of (I)and (II) -- -- -- -- -- 206,173,384.86 206,173,384.86
(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 -- -- -- -- -- -- --
73
(VII) Others -- -- -- -- -- -- --
4. Balance at the end of the period 1,011,660,000.00 978,244,858.10 -- -- -- -564,028,429.22 1,425,876,428.88
Legal representative: Person in charge of accounting: Person in charge of accounting organ:
Consolidated Balance Sheet
For the year 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 reserves Undistributed profit Total owners' equity
reserve
shares
1. Balance at the end of last year: 1,011,660,000.00 978,244,858.10 -- -- -- -775,821,536.01 1,210,083,322.09
Add: Changes of accounting 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 -- -- -- -775,821,536.01 1,210,083,322.09
3. Change in equity for the year -- -- -- -- -- 5,619,721.93 5,619,721.93
(1) Net profit -- -- -- -- -- 5,619,721.93 5,619,721.93
(2) Others -- -- -- -- -- -- --
Sub-total (1)& (2) -- -- -- -- -- 5,619,721.93 5,619,721.93
(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 -- -- -- -- -- -- --
74
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 -- -- -- -770,201,810.08 1,219,703,044.02
Legal representative: Person in charge of accounting: Person in charge of accounting organ:
75
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
Note 1 General information
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 assets 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 February 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.
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.
The parent of the Company is Shenzhen Investment Holdings Co., Ltd.
The Financial statement published on Mar 28th, 2014, which approved by Group’s
Board of Directors.
Note 2 Important Accounting Principles and Accounting Estimates
2.1 Basis of Preparation
The financial statements of the Group have been prepared on the basis of going
76
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
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 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
impair in accordance with relevant requirements.
2.2 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 2013. 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.
2.3 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.
2.4 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.
77
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
The Group adopts RMB to prepare its functional statements.
2.5 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 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
78
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
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 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
79
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
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.
2.6 Specific accounting policy about lose control step by step
(1) Principle judgments of package deal
Several transactions should be accounted for as a package deal if conditions and the
economic impact of disposal of investments in subsidiaries are in compliance with
one or more of the following circumstances: ① These transactions are considered
simultaneously or ② these transactions as a whole in order to reach a complete
business results; another case of the occurrence of the impact of entering into a
transaction depends ③ had at least one other transaction; ④ see a transaction
alone is not economical, but, Other transactions are taken into account when the
economy.
(2) Accounting treatment of package deal
Disposal of the equity investment until the loss of control of a subsidiary of the
transactions belonging to a package deal, the transaction will be accounted as a
disposal of a subsidiary and the loss of control; However, before losing control, the
difference between the price and share in the net assets of the subsidiary's should be
recognized as other comprehensive income. When losing control, it will be
transferred into profit/loss.
(3) Accounting treatment of non-package deal
For a non-package deal, each of the transaction is separately accounted in
accordance with: partial disposal of long-term equity investment in a subsidiary
80
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
without losing control (See Note 2, 13, (2) ④) or; loss of control of a subsidiary due to
the disposal of partial equity investments or other reasons " (See Note 2, 7) principles
applicable accounting treatment.
2.7Preparation 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.
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 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
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SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
accounting policies. Where a subsidiary was acquired during the reporting period
through a business combination not under common control, the financial statements
was reconciled 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 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” (see note 2.13).
2.8 Cash and 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.
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SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
2.9 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.
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 those 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；】The
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.
(2) 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 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
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SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
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
2.10 Financial instruments
(1) Classification 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.
(2) Recognition and measurement of 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
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SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
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 personnel.
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.
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
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SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
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
derecognizion, 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
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
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SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
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.
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 is 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
87
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
Business Enterprises No. 14 - Revenue.
(3) 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 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.
(4) 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 different terms is
accounted for as an extinguishment of the original financial liability and the
88
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
recognition of a new liability.
(5) Impairment of financial assets (not including account receivables)
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.
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
89
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
means over 20% of fall in fair value and Non-transient 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.
2.11 Account receivables
The account receivable by the Group includes account receivables, and other
receivables.
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.
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 significant item.
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SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
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.
2.12 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
91
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
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 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.
2.13 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.
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SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
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 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
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SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
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 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
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SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
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.
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.
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SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
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.
2.14 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.
The Group uses the cost method for subsequent measurement of investment
property, and adopts a depreciation or amortization policy for the investment property
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SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
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.
2.15 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) Recognization and measurement of financial lease
Finance leases which transfer substantially all the risks and rewards of ownershipThe
depreciation policy for assets held under finance leases should be consistent with
that for owned assets. If there is no reasonable certainty that the lessee will obtain
ownership at the end of the lease – the asset should be depreciated over the shorter
of the lease term or the life of the asset
(3) 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
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SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
and estimated residual rate are as follows:
Estimated residual value
Category Expected useful life Depreciation（%）
（%）
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.
(4) Measurement and recognition of fixed assets impairment
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.
(5) 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.
2.16 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
98
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
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.
2.17 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 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
99
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
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.
2.18 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 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.
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SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
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.
2.19 Long-term deferred assets
Long-term deferred assets represent expenses incurred that should be beared and
amortized over the current and subsequent period (together of more than one year).
Long-term deferred assets are amortized by using straight line method.
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SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
2.20 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)]
2.21 Revenue
(1) Revenue from sales of goods
The Group has transferred to the buyer the significant risks and rewards of ownership
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SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
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.
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
103
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
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 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.
2.22 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
104
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
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 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.
2.23 Deferred income tax assets and deferred income tax liabilities
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.
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
105
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
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 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
106
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
when it becomes probable that sufficient taxable profit will be available.
2.24 Leases
(1) Operating Lease
①The 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.
②The 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.
(2)Financing Lease
①The Group as Lessee under Operating 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.
②The Group as Leaser under Operating 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
107
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
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.
2.25 Assets ready-for-sale
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.
2.26 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
108
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
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).
2.27 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
There were no changes of accounting estimation that affected the Company during
the period.
2.28 Correction of previous accounting errors
There was no previous accounting errors correction that affected the Company
during the period.
Note3 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 income,
Business tax 5%
property management income
Business tax Construction, installation income 3%
Construction tax Turnover tax 7%
Education surcharge(Local Education
surcharge) Turnover tax 5%
Income tax Income tax payable 25% & 16.5%
Progressive rates ranging
Land appreciation tax Sales revenue of properties from 30%-60%
*The rate of domestic enterprises is 25%, and the rate of HK enterprises is 16.5%.
109
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
Note 4 Business Combination & Consolidated Financial Statements
4.1 Information of subsidiaries
(1) Subsidiaries established or acquired through investment Currency: RMB ten thousands yuan
Reg. Actual capital Balance of other items
Name of the subsidiary Types Biz nature Reg. captl Biz scope contribution at the end that in substance
place of the period constitutes net investment
Shenzhen Petrel Hotel Co. Ltd. Wholly-owned subsidiary shenzhen Services 3,000 Hotel 3,000 --
Shenzhen City Property Management Ltd. Wholly-owned subsidiary shenzhen Services 725 Property management 725 --
Fitting-out contracting
Shenzhen Zhen Tung Engineering Ltd. Wholly-owned subsidiary shenzhen Services 1,000 1,000 --
and maintenance
Shenzhen City We Gen Construction Management
Wholly-owned subsidiary shenzhen Services 800 Supervision 800 --
Ltd.
Shenzhen City Car Rental Ltd. Wholly-owned subsidiary shenzhen Services 1,029 Car rental 1,029 --
Develop and operate car
Shenzhen Shenfang Car Park Ltd. Wholly-owned subsidiary shenzhen Services 4,250 4,250 --
park
Shenzhen City Shenfang Investment Ltd. Wholly-owned subsidiary shenzhen Investment 1,000 Investment 1,000 --
Commecial Trading of Import and
Shenzhen City Shenfang Free Trade Trading Ltd. Wholly-owned subsidiary shenzhen 500 500 --
trade Export
Shenzhen City SPG Long Gang Development Ltd. Wholly-owned subsidiary shenzhen Real estate 3,000 Property development 3,000 --
Shenzhen Special Economic Zone Real Estate
Wholly-owned subsidiary GuangZhou Real estate 2,000 Property development 2,000 --
(Group) Guangzhou Property and Estate Co., Ltd.
Beijing fresh peak property development USD
Wholly-owned subsidiary BeiJing Real estate Operating of Real estate 7,671 --
management limited company 1,000
Beijing SPG Property Management Limited Wholly-owned subsidiary BeiJing Services 50 Property management 50 --
Elevator sales and
Shenzhen ShenWu Elebator Co.,Ltd Wholly-owned subsidiary shenzhen Services 350 350 --
service
Installation of
Shenzhen Lain Hua Industry and Trading Co. Ltd. Wholly-owned subsidiary shenzhen Services 1,000 mechanical and electrical 1,000 --
equipment
Fresh Peak Holding Ltd. Wholly-owned subsidiary HongKong Investment and HKD100 Investment and 100.47 3,202
110
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
Reg. Actual capital Balance of other items
Name of the subsidiary Types Biz nature Reg. captl Biz scope contribution at the end that in substance
place of the period constitutes net investment
management management
Investment
Wellam Ltd. Wholly-owned subsidiary HongKong HKD1 Investment holding 1 --
holding
Shantou SEZ Wellam Fty Bldg., Dev. Co. Wholly-owned subsidiary ShanTou Real estate USD1,500 Property development 9,122.61 --
Shantou Huafeng Estate Dev.Co. Wholly-owned subsidiary ShanTou Real estate 3,000 Property development 3,000 --
Subsidiary of holding
Great Wall Estate Co., Inc USA Real estate USD50 Property development 205.11 10,138
company
Investment and Investment and
Fresh Peak Holdings Ltd. Wholly-owned subsidiary HongKong HKD100 50.23 56,498
management management
Subsidiary of holding
Fresh Peak Investment Ltd. HongKong Investment HKD100 Properties investment 100.47 --
company
Investment and Investment and
Openice Ltd. Wholly-owned subsidiary HongKong HKD100 100.47 --
management management
Subsidiary of holding
Barenie Co. Ltd. HongKong Investment HKD1 Properties investment 1 --
company
Keyear Development Ltd. Wholly-owned subsidiary HongKong Investment HKD100 Investment holding 100.47 --
Guangzhou Huangpu Xizun real estate limited
Wholly-owned subsidiary GuangZhou Real estate HKD3980 Property development 2,845.70 --
company
Fresh Peak Real Estate Dev. Construction
Wholly-owned subsidiary WuHan Real estate USD400 Property development 2,292 --
(Wuhan) Co. Ltd.*①
Commecial Commercial goods
Shenzhen Shenfang Department Store Co. Ltd.*② Wholly-owned subsidiary shenzhen 1,000 1,000 --
trade supplier
Information Technology
Shenzhen CyberPort Co., Ltd *③ Wholly-owned subsidiary shenzhen Consultant 2,000 1,400 --
Advisory
Shenzhen City SPG Bao An Development Ltd.*④ Wholly-owned subsidiary shenzhen Real estate 2,000 Property development 2,000 --
Shenzhen Real Estate Consolidated Service Co., Integrated Construction material,
Wholly-owned subsidiary shenzhen 1,371 596 --
Ltd *⑤ Services consume goods
Shenzhen Shen Fang Industrial Development Co., Wholly-owned subsidiary shenzhen Investment 300 Investment in industrial 450 --
111
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
Reg. Actual capital Balance of other items
Name of the subsidiary Types Biz nature Reg. captl Biz scope contribution at the end that in substance
place of the period constitutes net investment
Ltd.*⑥ projects
Shenzhen Tefa Real Estate Consolidated Service Construction and
Wholly-owned subsidiary shenzhen Services 221 818 --
Co., Ltd.*⑦ decoration
Subsidiary of holding
Bekaton Property Limited *⑧ Australia Real estate USD20 Property Development 91 1,256
company
Subsidiary of holding
Canada Great Wall ( Vancouver) *⑧ Canada Real estate CAD 0.1 Property Development 0.45 8,904
company
Property construction
Commecial and trading of
Paklid Limited *⑧ Wholly-owned subsidiary HongKong HKD50 construction 20 1,107
trade
materials
Shenzhen City Shenfang Construction and Commecial
Wholly-owned subsidiary shenzhen 268 Construction materials 268 --
Decoration Materials Ltd *⑨ trade
Subsidiary of holding Integrated
Shenzhen ZhongGang Haiyan Enterprise Ltd.*⑩ shenzhen 1,900 Tourism Restaurant 1,294 --
company Services
Commecial Domestic commercial
Shenzhen Xing Dongfang Store Ltd.* 11 Wholly-owned subsidiary shenzhen 2,000 1,850 --
trade goods supply
FengKai in Manufacturing and
Guangdong Province Fengkai Lain Feng Cement Subsidiary of holding
GuangDong Manufacture USD800 trading in cement 12,126 --
Manufacturing Co., Ltd *12 company
Province products
（Continued）
（%）of Consolidated or Minority Profits or losses attributable to minority shareholder deducted from
Full name of subsidiary Voting （%） Remark
share not interest minority interest
Shenzhen Petrel Hotel Co. Ltd. 100 100 Yes -- --
Shenzhen City Property Management Ltd. 100 100 Yes -- --
Shenzhen Zhen Tung Engineering Ltd. 100 100 Yes -- --
Shenzhen City We Gen Construction Management Ltd. 100 100 Yes -- --
112
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
（%）of Consolidated or Minority Profits or losses attributable to minority shareholder deducted from
Full name of subsidiary Voting （%） Remark
share not interest minority interest
Shenzhen City Car Rental Ltd. 100 100 Yes -- --
Shenzhen Shenfang Car Park Ltd. 100 100 Yes -- --
Shenzhen City Shenfang Investment Ltd. 100 100 Yes -- --
Shenzhen City Shenfang Free Trade Trading Ltd. 100 100 Yes -- --
Shenzhen City SPG Long Gang Development Ltd. 100 100 Yes -- --
Shenzhen Special Economic Zone Real Estate (Group) Guangzhou Property and
100 100 Yes -- --
Estate Co., Ltd.
Beijing fresh peak property development management limited company 100 100 Yes -- --
Beijing SPG Property Management Limited 100 100 Yes -- --
Shenzhen ShenWu Elebator Co., Ltd 100 100 Yes -- --
Shenzhen Lian Hua Industry and Trading Co. Ltd. 100 100 Yes -- --
Fresh Peak Holding Ltd. 100 100 Yes -- --
Wellam Ltd. 100 100 Yes -- --
Shantou SEZ Wellam Fty Bldg., Dev. Co. 100 100 Yes -- --
Shantou Huafeng Estate Dev.Co. 100 100 Yes -- --
Great Wall Estate Co., Inc 70 70 Yes -2,176.77 3.64
Fresh Peak Holdings Ltd. 100 100 Yes -- --
Fresh Peak Investment Ltd. 55 55 Yes -10,455.26 -0.22
Openice Ltd. 100 100 Yes -- --
Barenie Co. Ltd. 80 80 Yes -202.23 1.54
Keyear Development Ltd. 100 100 Yes -- --
Guangzhou Huangpu Xizun real estate limited company 100 100 Yes -- --
113
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
（%）of Consolidated or Minority Profits or losses attributable to minority shareholder deducted from
Full name of subsidiary Voting （%） Remark
share not interest minority interest
Fresh Peak Real Estate Dev. Construction (Wuhan) Co. Ltd.*① 55 55 Yes -- --
Shenzhen Shenfang Department Store Co. Ltd.*② 100 100 No -- --
Shenzhen CyberPort Co., Ltd *③ 70 70 No -- --
Shenzhen City SPG Bao An Development Ltd.*④ 100 100 No -- --
Shenzhen Real Estate Consolidated Service Co., Ltd *⑤ 100 100 No -- --
Shenzhen Shen Fang Industrial Development Co., Ltd.*⑥ 100 100 No -- --
Shenzhen Tefa Real Estate Consolidated Service Co., Ltd.*⑦ 100 100 No -- --
Bekaton Property Limited *⑧ 60 60 No -- --
Canada Great Wall ( vancouver) *⑧ 75 75 No -- --
Paklid Limited *⑧ 100 100 No -- --
Shenzhen City Shenfang Construction and Decoration Materials Ltd *⑨ 100 100 No -- --
Shenzhen ZhongGang Haiyan Enterprise Ltd.*⑩ 68 68 No -- --
Shenzhen Xing Dongfang Store Ltd.* 11 100 100 No -- --
Guangdong Province Fengkai Lain Feng Cement Manufacturing Co., Ltd *12 90 90 No -- --
114
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
*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
procedures. 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 procedures. 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
procedures. 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
115
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
in annual inspection.
*⑦ Shenzhen Tefa Real Estate Consolidated Service Co., Ltd
The operating period of this corporation is from 7 March 1983 to 10 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.
*⑧ Bekaton Property Limited and Paklid Limited
These 3 subsidiaries were set up overseas in early times. The board of directors
passed a resolution 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 included 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.
116
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
(2）Subsidiaries acquired through business combination under common control
There were not subsidiaries acquired through business combination under common
control.
117
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
(3）Subsidiaries acquired through business combination not under common contro
Balance of
Actual capital other items
Reg. contribution at that in
Reg.
Name of the subsidiary Types Biz nature capital(ten Biz scope the end of the substance
place
thousands) period(ten constitutes
thousands) net
investment
Shan Tou Special Economic Zone Wholly-owned Property
Real estate Services HKD3000 2,108 --
Real Estate Ltd. subsidiary development
(Continued)l
Amount of minority interest
Consolidated or Minority used to absorb profits or
Full name of subsidiary （%）of shareVoting （%） Remark
not interest losses attributable to
minority interests
Shan Tou Special Economic Zone
100 100 Yes -- --
Real Estate Ltd.
4.2 Special purpose entities or operational entities whose control power are
formed through entrusted operation or lease.
There are no Special purpose entities or operational entities whose control power are
formed through entrusted operation or lease.
4.3、The explanation for merge scope modification
The Company in this year has expanded the merge scope for this year, because the
new establishment of Shantou Huafeng estate Dev. Co. with registered capital of
RMB 30,000,000.00.
4.4 The entity newly merged into the scope and the main body not merged into
scope for this period
The newly merged sub companies, special purpose main bodies and operational
entities with the control power formed via entrusted operation and lease in this period
Name Net asset as of Dec 31, 2013 Net profit 2013
Shantou Huafeng estate Dev. Co. 30,000,000.00 --
Shantou Huafeng estate Dev. Co. is a new established subsidiary of the Company in
2013. (note 4.1）。
4.5 Merger of enterprises under the same controller
There is no merger of enterprises under the same controller during the reporting
period.
4.6、Merger of enterprises not under the same controller
There is no merger of enterprises not under the same controller during the reporting
118
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
period.
4.7 Subsidiaries not included in the scope of consolidation because of not
being controlled through sale
There are no subsidiaries not included in the scope of consolidation because of not
being controlled through sale during the reporting period.
4.8 Reverse purchase occurred during the reporting period
There is no reverse purchase occurred during the reporting period.
4.9 Merger occurred during the reporting period
There is no merger occurred during the reporting period.
4.10 Exchange rates for translating major financial statement items of foreign
operations
Assets and liabilities
Items
December 31,2013 December 31, 2012
Great Wall Estate Co., Inc USD1 = RMB 6.0969 USD1 = RMB 6.2855
Revenue, expenses and cash flow
Items
2013 2012
Great Wall Estate Co., Inc USD1 = RMB 6.1912 USD1 = RMB 6.3099
Note 5 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, 2013, the Closing
refers to the December 31, 2013; the items of the prior period refers to the year 2012,
the current period refers to the year 2013.
5.1 Monetary funds
Closing balance Opening balance
Exchange Exchange
Foreign currency Amount in RMB Foreign currency Amount in RMB
rate rate
Cash on hand 185,502.41 336,552.84
RMB 172,180.27 298,819.57
USD 100.09 6.0969 610.24 1,435.33 6.2855 9,021.75
HKD 16,168.79 0.7862 12,711.90 35,406.98 0.8109 28,711.52
Cash in bank 519,098,870.03 488,243,117.58
RMB 509,911,429.21 482,281,853.10
119
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
Closing balance Opening balance
Exchange Exchange
Foreign currency Amount in RMB Foreign currency Amount in RMB
rate rate
USD 137,953.58 6.0969 841,089.20 116,396.17 6.2855 731,608.14
HKD 10,616,066.68 0.7862 8,346,351.62 6,449,200.07 0.8109 5,229,656.34
Other monetary funds 6,090,000.00 8,226,234.59
RMB 6,090,000.00 8,092,202.24
HKD -- -- -- 165,288.38 0.8109 134,032.35
Total 525,374,372.44 496,805,905.01
Note: (1) Cash in bank above includes RMB 6,090,000.00 ownership restricted
(opening balance: RMB 33,092,202.24). Among the other monetary funds, there is
RMB 90,000.00 tender bonds margin, RMB 6,000,000.00 was deposited in the
Company's rent escrow account for the Company's borrowings.
(2) The fund with use restrictions, which is being kept in a foreign country, is RMB
9,187,440.82 (opening balance: RMB 6,002,371.76).
5.2 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 bad
33,243,243.17 100.00 19,141,119.11 57.58
debts is of individually insignificant
Total 33,243,243.17 100.00 19,141,119.11 57.58
(Continued)
Opening 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 bad
42,887,466.13 100.00 18,474,279.11 43.08
debts is of individually insignificant
Total 42,887,466.13 100.00 18,474,279.11 43.08
(2) Accounts receivable by aging balance
Closing balance Opening balance
Amount (%) Amount (%)
Within 1 year 4,984,386.26 14.99 12,586,772.76 29.35
120
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
1-2 years 2,898,070.94 8.72 2,915,703.10 6.80
2-3 years 24,802.70 0.08 1,670,965.02 3.90
Over 3 years 25,335,983.27 76.21 25,714,025.25 59.95
Total 33,243,243.17 100.00 42,887,466.13 100.00
(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 provision
11,574,556.00 11,574,556.00 100.00
agency business is established
according to the
House pay to be collected 10,811,709.25 6,968,694.02 64.46 recoverability of each
receivable with long
Engineering construction funds and aging and little
10,856,977.92 597,869.09 5.51
others retrievability.
Total 33,243,243.17 19,141,119.11 57.58
(4)There were no any account receivables which had been accrued fully or large
proportion provision transferred back in this accounting year.
(5) There were no any significant account receivables 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
Relationship with the Proportion of the amount to
Name of entity Amount Age
Group the total AR (%)
Corporate unit No.1 Un-related party 1,788,042.67 Above 3 years 5.38
Individual No.1 Un-related party 1,200,000.00 Above 3 years 3.61
Corporate unit No.2 Associates 1,084,758.36 Above 3 years 3.26
Individual No.2 Un-related party 876,864.11 Above 3 years 2.64
Individual No.3 Un-related party 793,529.98 Above 3 years 2.39
Total 5,743,195.12 17.28
(8) Receivables due from related parties, details please refer to Note 6.6.
(9) There were no any accounts receivable that have been derecognized.
(10) There were no any accounting receivable which had been securitization.
5.3 Prepayments
(1) Aging analysis
Closing balance Opening balance
Aging
Amount (%) Amount (%)
121
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
Within 1 year 12,101,114.11 99.14 38,665,226.47 97.44
1-2 years 100,002.35 0.82 38,762.35 0.10
2-3 years 196.84 0.00 971,011.25 2.45
Over 3 years 5,285.00 0.04 2,550.00 0.01
Total 12,206,598.30 100.00 39,677,550.07 100.00
(2) Top 5 entities with the largest balances of prepayments
Name of entities Relationship with the Group Amount Timing Reasons for unsettlement
The un-settled prepayment of engineering
Project 1 Un-related party 3,625,116.73 Within 1 year
materials
The un-settled prepayment of engineering
Project 2 Un-related party 1,071,034.33 Within 1 year
materials
The un-settled prepayment of engineering
Project 3 Un-related party 872,933.48 Within 1 year
materials
The un-settled prepayment of engineering
Project 4 Un-related party 679,250.00 Within 1 year
materials
The un-settled prepayment of engineering
Project 5 Un-related party 843,856.95 Within 1 year
materials
Total 7,092,191.49
(3) No prepayments to shareholders at least 5% of the Group’s shares with voting
power during the current period.
5.4 Dividends receivable
Reasons for
Whether the
Item Opening balance Increase Decrease Closing balance uncollected
amount is impaire
amounts
Aged above 1 year 1,052,192.76 -- -- 1,052,192.76
Including:YunNan KunPeng Flight
1,052,192.76 -- -- 1,052,192.76 No
service Co.,Ltd
Total 1,052,192.76 -- -- 1,052,192.76
Note: The balance was due from YunNan KunPeng Flight service Co., Ltd.
5.5 Other receivables
(1) Other receivables by categories
Closing balance
Category Carrying amount Bad debt provision
Amount (%) Amount (%)
Other receivables of which provision for bad
162,299,084.48 69.70 148,744,256.33 91.65
debts is of individually significant
Other receivables of which provision for bad
70,540,348.70 30.30 29,422,675.04 41.71
debts is of individually insignificant
Total 232,839,433.18 100.00 178,166,931.37 76.52
(Continued)
122
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
Opening balance
Category Carrying amount Bad debt provision
Amount (%) Amount (%)
Other receivables of which provision for bad
162,502,551.42 69.07 148,947,821.36 91.66
debts is of individually significant
Other receivables of which provision for bad
72,762,279.99 30.93 29,422,675.04 40.44
debts is of individually insignificant
Total 235,264,831.41 100.00 178,370,496.40 75.82
(2) Other receivables by aging balance
Closing balance Opening balance
Amount (%) Amount (%)
Within 1 year 6,594,259.31 2.83 17,424,406.66 7.41
1-2 years 10,001,333.18 4.30 2,285,080.90 0.97
2-3 years 1,594,693.57 0.68 1,788,417.79 0.76
Over 3 years 214,649,147.12 92.19 213,766,926.06 90.86
Total 232,839,433.18 100.00 235,264,831.41 100.00
(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 subsidiaries
A separate provision is
that are not included in the 128,350,317.89 128,347,388.92 99.99
established according to the
consolidated statement
recoverability of each receivables
Others 33,948,766.59 20,396,867.41 60.08 with long aging and little
retrievability
Total 162,299,084.48 148,744,256.33 91.65
(b) Bad debt provision of other receivables which is of individually insignificant
Content of other receivables Carrying amount Proportion of provision Amount of bad debt Reasons for the provision
Other receivables between A separate provision is
subsidiaries that are not established according to the
1,324,136.04 1,116,316.04 84.31
included in the consolidated recoverability of each receivables
statement with long aging and little
Others 69,216,212.66 28,306,359.00 40.90 retrievability
Total 70,540,348.70 29,422,675.04 41.71
(4)There were no any account receivables which had been accrued fully or large
proportion 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
123
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
Relationship with the Proportion of the amount to
Name of entity Amount Age
Group the total OR (%)
Canada Great Wall( Vancouver)
Subsidiary 89,035,748.07 Above 3 years 38.24
Co.,Ltd *
Paklid Limited * Subsidiary 18,428,098.53 Above 3 years 7.91
Bekaton property Limited * Subsidiary 12,559,290.58 Above 3 years 5.39
Guangdong province Huizhou
Joint venture 10,465,168.81 Above 3 years 4.49
Luofu Hill Mineral Water Co.,Ltd
Luofu Hill Travelling Corporation Un- related party 9,600,000.00 Above 3 years 4.12
Total 140,088,305.99 60.15
Note: The above subsidiaries were not included in the Group’s consolidated financial
statement. Refer to Note 4.1 for details.
(8) Receivables due from related parties, details please refer to Note 6.6.
(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.
5.6 Inventory
(1) Categories of inventory
Closing balance
Item
Carrying amount Provision for inventories Net carrying amount
Real estate development projects
Real estate developing products 890,317,408.57 47,584,499.31 842,732,909.26
Real estate developed products 1,773,322,833.86 -- 1,773,322,833.86
Real estate which are going to be developed 298,632,911.82 -- 298,632,911.82
Non real estate development projects
Raw materials 515,963.06 -- 515,963.06
Finished products 582,298.50 278,891.91 303,406.59
Low-value consumable products 41,821.30 -- 41,821.30
Construction in progress 52,385,743.15 -- 52,385,743.15
Total 3,015,798,980.26 47,863,391.22 2,967,935,589.04
(Continued)
Opening balance
Item
Carrying amount Provision for 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 -- -- --
124
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
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
(2)Real estate developing products
Finished Estimated total
Starting time Opening balance Closing balance
time investment
DongHuDiJing Building* 130,350,182.51 130,652,182.51
ShanTou Yuejing Dongfang 2008 2014 150,000,000.00 78,795,485.51 128,934,749.12
Shengfang Shanglin Garden 2007 2014 1,400,000,000.00 346,095,674.23 607,303,194.82
ShanTou Fresh Peak Building 22,812,403.36 23,427,282.12
Shenfang Chuanqishan East Zone 2011 Finished 1,075,701,021.51 --
Shenfang Chuanqishan West Zone** 2012 Finished 606,467,879.07 --
Total 2,260,222,646.19 890,317,408.57
Note: The decrease of Shenfang Chuanqishan West Zone and East Zone is caused
by transference into Real estate developed products.
（3）Real estate developed products
Finished
Opening balance Additions Redutions Closing balance
time
Jinye Island Multi-tier villa 1997 36,129,768.09 2,804,000.00 -- 38,933,768.09
Jinye Island villa No.6 2007 2,961,996.22 -- -- 2,961,996.22
Jinye Island villa No.9 2009 10,239,320.90 -- 10,239,320.90 --
Jinye Island villa No.10 2010 84,815,289.51 -- 37,632,661.06 47,182,628.45
Jinye Island villa No.11 2008 22,545,126.68 -- 4,653,589.78 17,891,536.90
HuangPuXinChun No.1 1994 121,283.88 -- -- 121,283.88
HuangPuXinChun No.2 2007 269,946.14 -- 40,984.33 228,961.81
HuaFeng Building 2000 1,631,743.64 -- -- 1,631,743.64
XingHu Garden Multi-tier 2003 156,848.69 -- -- 156,848.69
BeiJing Fresh Peak Buliding 671,820.67 -- -- 671,820.67
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
Shenfang Chuanqishan 2013 -- 2,505,984,773.39 870,794,808.13 1,635,189,965.26
Total 187,895,424.67 2,508,788,773.39 923,361,364.20 1,773,322,833.86
(4) Real estate which are going to be developed
125
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
Opening balance Additions Reductions Closing balance
Shantou Jingzaiwan -- 298,632,911.82 -- 298,632,911.82
Total -- 298,632,911.82 -- 298,632,911.82
In July 2013, the Company acquired the land use right through open biding, land is
located in Jingzai Wan, Bright Village, Peace Town, Chaoyang District, Shantou City.
The Company has paid 276,711,000.00 for the land in full. The acreage of the land is
56,248.00 square meters, and the designing volume ratio is 5.0. As of the date of
this report quoted, The Company has obtained the certificates of the land use right.
(5)Provision for movement in value of inventories
Decrease
Item Opening balance Increase Closing balance
Reversals Write-off
Shengfang Shanglin Garden 47,584,499.31 -- -- -- 47,584,499.31
Finished products 278,891.91 -- -- -- 278,891.91
Total 47,863,391.22 -- -- -- 47,863,391.22
(6) Capitalized borrowing cost at year end is RMB 131,372,204.30.
126
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
5.7 Other current assets
Item Contents Closing balance Opening balance
Value added tax Input tax to be deducted 3,451,107.04 5,686,855.14
Business tax Tax paid for advances from customers -- 1,680,349.06
City construction surcharge Tax paid for advances from customers -- 324,324.07
Education surcharge Tax paid for advances from customers -- 28,718.20
Local education surcharge Tax paid for advances from customers -- 19,227.31
Embankment Protection Fee Tax paid for advances from customers -- 40,987.00
Total 3,451,107.04 7,780,460.78
5.8 Long-term equity investments
(1) Long-term equity investments by types
Item Opening balance Increase Decrease Closing balance
Invested in joint ventures 91,678,556.86 -- -- 91,678,556.86
Invested in associates 2,849,274.53 -- 25,316.71 2,823,957.82
Other equity investments 224,100,247.16 -- -- 224,100,247.16
Less：provisions for long-term equity investment
243,402,109.25 -- -- 243,402,109.25
impairment
Total 75,225,969.30 -- 25,316.71 75,200,652.59
127
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
(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 1,403,848.97 -25,316.71 1,378,532.26
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 Lian Feng Cement Manufacturing Co., Ltd. Cost method 121,265,000.00 56,228,381.64 -- 56,228,381.64
128
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
Changes [Increase
Name of investee Accounting method Investment cost Opening balance Closing balance
/decrease]
Shantou Small&medium Enterprises Financing Guarantee Co. Ltd. Cost method 12,000,000.00 12,000,000.00 -- 12,000,000.00
Total 399,701,722.48 318,628,078.55 -25,316.71 318,602,761.84
(Continued)
Proportion of Proportion of voting Explanation of the Provision for
Provision for Cash dividend
Name of investee ownership interest power in the inconsistency between impairment losses
impairment losses for the period
held (%) investee (%) these two proportions for the 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 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. 100 100 10,000,000.00 -- --
Shenzhen CyberPort Co., Ltd 70 70 -- -- --
129
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
Proportion of Proportion of voting Explanation of the Provision for
Provision for Cash dividend
Name of investee ownership interest power in the inconsistency between impairment losses
impairment losses for the period
held (%) investee (%) these two proportions for the period
YunNan KunPeng Flight service Co.,Ltd* 25 25 -- -- --
ShenZhen ShenFang BaoAn developmentCo.,Ltd 100 100 -- -- --
Shantou Fresh Peak Building 100 100 58,547,652.25 -- --
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 -- --
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 unrecognized investment losses are as follows:
Current year Prior year
Investee Unrecognized investment losers Accumulated unrecognized Unrecognized investment losers Accumulated unrecognized
for the year investment losses for the year investment losses
Shenzhen Fresh Peak Property Consultant Co., Ltd -27,619.29 741,966.91 -227,348.83 769,586.20
Total -27,619.29 741,966.91 -227,348.83 769,586.20
(4) Investments in joint ventures and associates
1) Joint ventures
Proportion of
Registered Proportion of
Legal voting power in
Name of investee Type of enterprise Registered place Nature of business capital(the ownership
representative the investee
thousands yuan) interest (%)
(%)
Guangdong province Huizhou Luofu Hill mineral water Co.,
Cooperative Enterprises Guangdong Boluo YangHuaiYu Water and other products 602 Co-operation Co-operation
Ltd
Fengkai Xinhua Hotel Cooperative Enterprises Guangdong Feng kai Tourism, Restaurant Co-operation Co-operation
130
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
Jiangmen Xinjian Real Estate Co. Ltd. Cooperative Enterprises Guangdong Jiangmen LuoJinXing Property developing and sales USD660 Co-operation Co-operation
Developing and operating Xi’an trade
Xi’an Fresh Peak Building Co. Ltd Cooperative Enterprises Xi’an LiangWeiGuo building HKD3,000 Co-operation Co-operation
DongYi Property Co., Ltd Private Enterprises Hong kong Property development and sales HKD100 Co-operation Co-operation
(Continued)
Total assets at Total liabilities at Total net assets at Total operating Net profit for Relationship with Organization
Name of investee
the end of year the end of year the end of year income for the year the year related party code
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
131
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
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 activities for many years with no preparation of
financial statements. Already the corresponding provision for the investment of these
joint ventures was accrued. Refer to Notes5.8. (5) for details.
2) Associates
Registered
Proportion of Proportion of
Type of Legal Nature of capital(the
Name of investee Registered place ownership voting power in
enterprise representative business thousands
interest (%) the investee (%)
yuan)
Elevator,
Shenzhen Ronghua Limited liability Shen Zheng Zhong air-condition,
500 25 25
JiDian Co.,ltd company zhen qing water-electricty
fixing and sales
Shenzhen Fresh Peak Shen Zhong
Limited liability Property sales
Property Consultant 300 20 20
company zhen XinFa and rental
Co.,Ltd
Domestic car
Shenzhen Runhua Shen LiXue
Limited liability sales( not
Automobile Trading 500 50 50
company zhen Min includen little
Co.,Ltd
car), motor
Shenzhen Dongfang Shen Domestic
Limited liability
New world Store PengNaiDian trade/material 3000 50 50
company zhen
Co.,Ltd supply
132
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
(Continued)
Total operating Relationship
Total assets at the Total liabilities at Total net assets Net profit for the Organization
Name of investee income for the with related
end of year the end of year at the end of year year code
year party
Shenzhen Ronghua
14,674,214.89 9,572,143.84 5,102,071.05 18,936,536.42 -82,507.38 Associate 19219691-6
JiDian Co.,ltd*①
Shenzhen Fresh Peak
Property Consultant 2,853,091.27 6,544,412.78 -3,691,321.51 4,609,834.90 138,096.47 Associate 19221684-1
Co.,Ltd
Shenzhen Runhua
Automobile Trading Associate 19220483-2
Co.,Ltd
Shenzhen Dongfang
New world Store Associate 19222948-2
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 company is zero. According to the associate
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 associate 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
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.,
8,180,003.63 -- -- 8,180,003.63
Ltd.
133
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
Item Opening balance Increase Decrease Closing balance
Shenzhen Xin Dongfang Store Ltd. 18,500,000.00 -- -- 18,500,000.00
Shenzhen City Shenfang Construction and Decoration
2,680,000.00 -- -- 2,680,000.00
Materials Ltd.
Shenzhen Shenfang Department Store Co. Ltd. 10,000,000.00 -- -- 10,000,000.00
Guangdong Province Fengkai Lain Feng Cement
56,228,381.64 -- -- 56,228,381.64
Manufacturing Co., Ltd.
Shenzhen Runhua automobile trading Co.,Ltd 1,445,425.56 -- -- 1,445,425.56
Guangdong province Huizhou Luofu Hill mineral water
9,969,206.09 -- -- 9,969,206.09
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 & Trading Co.
20,673,831.77 -- -- 20,673,831.77
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
5.9 Investment properties
(1) Details of investment properties
Item Opening balance Increase Decrease Closing balance
The investment properties are subsequently
581,129,408.65 -- 23,487,024.50 557,642,384.15
measured using the cost model
Less: Provision for impairment 93,755,965.22 -- 2,427,672.97 91,328,292.25
Total 487,373,443.43 -- 21,059,351.53 466,314,091.90
(2)Investment properties measured at cost
Item Opening balance Increase Decrease Closing balance
I. Total original carrying amount 845,909,375.80 -- 2,957,883.47 842,951,492.33
Including: Buildings 748,891,106.42 -- -- 748,891,106.42
Land use rights 97,018,269.38 -- 2,957,883.47 94,060,385.91
II. Total accumulated depreciation
264,779,967.15 20,529,141.03 -- 285,309,108.18
and amortization
Including: Buildings 264,779,967.15 20,529,141.03 -- 285,309,108.18
Land use rights -- -- -- --
III. Total provision for impairment 93,755,965.22 -- 2,427,672.97 91,328,292.25
Including: Buildings 14,128,544.62 -- -- 14,128,544.62
Land use rights 79,627,420.60 -- 2,427,672.97 77,199,747.63
IV. Total carrying amounts 487,373,443.43 466,314,091.90
Including: Buildings 469,982,594.65 449,453,453.62
Land use rights 17,390,848.78 16,860,638.28
134
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
Note: (1) The amount of current year depreciation is Rmb 20,529,141.03.
(2) The reductions of land use right’s original cost and provision are due to the
fluctuation of exchange rate.
(3)Among the investment property, Rmb 392,996,646.21 of net book value of building
was used as mortgage for the Group’s long-term loan (including Long-term loan due
within one year). Refer to Note 5.16 for details.
5.10 Fixed assets
Item Opening balance Increase Decrease Closing balance
I. Total original cost 141,652,164.76 7,708,578.63 9,771,755.49 139,588,987.90
Including: building& construction 107,162,510.48 5,588,512.83 6,682,333.72 106,068,689.59
Vehicles 18,869,315.60 1,203,766.00 2,484,812.00 17,588,269.60
Machines & equipments 15,620,338.68 916,299.80 604,609.77 15,932,028.71
II. accumulated
Additions Accrual
depreciation
Total accumulated --
78,447,356.10 7,792,426.84 7,366,482.75 78,873,300.19
depreciation
Including: Building & construction 54,959,841.74 -- 4,678,314.54 4,431,548.09 55,206,608.19
Vehicles 13,151,303.89 -- 1,671,975.22 2,371,196.38 12,452,082.73
Machines & equipments 10,336,210.47 -- 1,442,137.08 563,738.28 11,214,609.27
III.Total net book value 63,204,808.66 60,715,687.71
Including: building& construction 52,202,668.74 50,862,081.40
Vehicles 5,718,011.71 5,136,186.87
Machines & equipments 5,284,128.21 4,717,419.44
IV. Total impairment provision --
Including: building& construction -- -- -- --
Vehicles -- -- -- --
Machines & equipments -- -- -- --
V.Total carrying amount 63,204,808.66 60,715,687.71
Including: building& construction 52,202,668.74 50,862,081.40
Vehicles 5,718,011.71 5,136,186.87
Machines & equipments 5,284,128.21 4,717,419.44
Note: (1)The depreciation for the current year is RMB 7,792,426.84.
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 2013, amounting to RMB 25,171,333.23 (original cost is RMB49,
135
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
696,185.15) of real estate was used for mortgage, including long-term loans and
loans within one year. Refer to Note 5.16).
5.11 Intangible assets
Item Opening balance Increase Decrease Closing balance
I. Carrying amount 7,180,000.00 1,429,800.00 8,609,800.00
Software 812,000.00 1,429,800.00 -- 2,241,800.00
Taxi license 6,368,000.00 -- -- 6,368,000.00
II. Total accumulated amortization 1,313,893.25 542,339.96 -- 1,856,233.21
Software 421,133.25 374,759.96 -- 795,893.21
Taxi license 892,760.00 167,580.00 -- 1,060,340.00
III. Total provision for impairment -- -- -- --
Software -- -- -- --
Taxi license -- -- -- --
IV. Total net carrying amount 5,866,106.75 6,753,566.79
Software 390,866.75 1,445,906.79
Taxi license 5,475,240.00 5,307,660.00
Note: The amortization for the current period is RMB 542,339.96.
5.12 Long-term deferred assets
Reason for other
Item Opening balance Increase Amortization Other reductions Closing balance
reductions
Renovation costs 427,321.35 96,307.00 143,192.88 -- 380,435.47
Others -- 213,000.00 65,083.26 -- 147,916.74
Total 427,321.35 309,307.00 208,276.14 -- 528,352.21
5.13 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 losses
11,896,124.83 47,584,499.31 11,896,124.83 47,584,499.31
of assets
Dismission welfare 764,437.76 3,057,751.04 816,350.26 3,265,401.05
Deductible loss 6,539,335.08 26,157,340.32 6,916,174.53 27,664,698.12
Advertising expense -- 253,000.00 1,012,000.00
Sales agency fees 1,291,717.89 5,166,871.56 -- --
136
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
Expected profit for advances
6,300,844.46 25,203,377.84 -- --
from customers
Total 26,792,460.02 107,169,840.07 19,881,649.62 79,526,598.48
(2) Details of unrecognized deferred tax assets
Item Closing balance Opening balance
Deductible losses
Deductible operating loss 10,768,552.19 17,168,115.83
Bad debt provision 49,327,012.62 49,211,193.88
Provision for decline in value of inventories 69,722.98 69,722.98
Provision for impairment of long-term
60,850,527.31 60,850,527.31
investments
Provision for impairment of investment
22,832,073.06 23,438,991.31
properties
Total 143,847,888.16 150,738,551.31
(3) Deductible losses, for which no deferred tax assets are recognized, will expire in
the following years
Year Closing balance Opening balance Remarks
2013 -- 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 150,392.58 150,392.58
2018 2,942,317.62 --
Total 43,074,208.74 68,672,463.33
5.14 Other non-current assets
Item Contents Closing balance Opening balance
Software fees The un-settled prepayment of software system -- 1,214,400.00
Fitment fees The un-settled prepayment of fitment -- 1,037,034.00
Others Others -- 162,000.00
Total -- 2,413,434.00
137
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
5.15 Details of provision for impairment of assets
Decrease
Item Opening balance Increase Closing balance
Reversals Write-off
1. Bad debt provision 196,844,775.51 666,840.00 203,565.03 -- 197,308,050.48
2.Provision for decline in value of
47,863,391.22 -- -- -- 47,863,391.22
inventories
3. Provision for impairment of
243,402,109.25 -- -- -- 243,402,109.25
long-term investments
4.Provision for impairment of
93,755,965.22 -- 2,427,672.97 -- 91,328,292.25
investment properties
Total 581,866,241.20 666,840.00 2,631,238.00 -- 579,901,843.20
*The variation of impairment provision of assets is due to the fluctuation of rate used
in translation of foreign currencies.
5.16 Assets of ownership or use-right restriction
Item Name of project Closing balance Reason for restriction
Subtotal of assets for Guarantee 464,593,922.71
Inventories(Real estate developed products) Jinye Island Multi-tier villa 38,933,768.09 Mortgage
Inventories(Real estate developed products) Real Estate Building 5-6 floor 7,492,175.18 Mortgage
Investment properties Shenfang Square 255,754,094.02 Mortgage
Investment properties Petrel Building 73,828,663.63 Mortgage
Investment properties GuoShang North 2 floor 63,413,888.56 Mortgage
Fixed assets Shenfang Square 46-48 floor 25,171,333.23 Mortgage
Subtotal of assets of ownership or use-right was
6,090,000.00
restricted by other reason
Monetary funds Other monetary funds 90,000.00 Refer notes 5.1
Monetary funds Other monetary funds 6,000,000.00 Refer notes 5.1
Total 470,683,922.71
5.17 Short-term loans
Item Closing balance Opening balance
Entrusted loan -- 70,000,000.00
Loan on credit 23,000,000.00 26,000,000.00
Total 23,000,000.00 96,000,000.00
5.18 Accounts payable
(1) Details of accounts payable
Item Closing balance Opening balance
Within one year 347,527,527.67 6,552,137.26
138
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
Over one year 41,817,743.79 66,108,696.34
Total 389,345,271.46 72,660,833.60
(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.
(1) Significant accounts payable aged more than one year is for the unsettled
project at the end of the period.
5.19 Advances from customers
(1) Details of advances from customers
Item Closing balance Opening balance
Within one year 289,325,916.04 384,299,219.83
Over one year 23,641,112.81 22,894,978.97
Total 312,967,028.85 407,194,198.80
(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.
(4) Details of advances from customers
Estimated time of
Item Closing balance Opening balance
completion
Jinye Island villa No.6 6,500,000.00 5,500,000.00 Completed
Jinye Island villa No.9 -- 25,180,000.00 Completed
Jinye Island villa No.10 32,853,668.00 28,744,765.00 Completed
Jinye Island villa No.11 12,535,317.00 8,489,464.00 Completed
Shenfang Chuanqishan 82,398,193.00 280,179,233.00 Completed
Shenfang Shanlin Garden 123,407,161.00 -- 2014
Yuejing dongfang 12,172,080.00 -- 2014
Total 269,866,419.00 348,093,462.00
5.20 Employee benefits payable
Item Opening balance Increase Decrease Closing balance
I. Salary, bonus, allowances and subsidies 29,557,777.44 98,845,074.71 97,592,916.54 30,809,935.61
II. Staff welfare -- 4,811,119.16 4,811,119.16 --
III. Social security contributions 2,485,089.68 14,453,245.82 14,566,010.82 2,372,324.68
Including:
1,104,655.50 3,364,177.04 3,375,027.78 1,093,804.76
1. Medical insurance premium
2. Pension insurance premium 1,257,988.54 7,330,175.89 7,337,365.62 1,250,798.81
139
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
Item Opening balance Increase Decrease Closing balance
3. Annuity premium 121,397.33 2,808,910.45 2,903,576.14 26,731.64
4.Unemployment insurance premium 136.54 442,138.83 442,160.45 114.92
Employment injury insurance 612.66 229,457.19 229,397.73 672.12
Maternity insurance 299.11 278,386.42 278,483.10 202.43
IV. Housing fund 10,064.55 5,120,033.26 5,125,957.71 4,140.10
V. Labor union fee, staff and workers’ education fee 1,345,350.85 2,029,423.92 2,459,648.51 915,126.26
VI. Termination benefits 3,265,401.05 650,012.70 857,662.71 3,057,751.04
VII. Others 11,344.61 1,809,397.23 1,820,574.12 167.72
Total 36,675,028.18 127,718,306.80 127,233,889.57 37,159,445.41
Note:①The overdue employee benefits payable is RMB 0.
② Union running costs and employee education costs are RMB2,029,423.92,
non-monetary benefits are RMB 0, and compensations to employees for termination
of employment relationship are RMB 650,012.70.
③ At the end of the year, most of the salary payable to employees is accrued
wages and bonuses, which would be paid during 2014.
5. 21 Taxes payable
Item Closing balance Opening balance
Corporate income tax 67,471,436.36 12,295,090.93
Individual income tax 777,703.15 387,577.98
Property tax 1,763,706.34 1,723,069.64
Land appreciation tax 28,852,426.99 5,552,414.59
Business tax 43,433,203.80 --
Construction tax 2,930,393.52 --
Education surcharge 1,373,204.96 --
Local Education surcharge 913,809.35 --
Others 490,766.90 --
Total 148,006,651.37 19,958,153.14
5.22 Interest payable
Item Closing balance Opening balance
Interest of long-term loans with interest payable by
1,947,237.24 1,726,472.23
installments and principle payable on maturity
Interest payable on short-term loans -- 134,166.67
Others 16,535,277.94 16,535,277.94
Total 18,482,515.18 18,395,916.84
The balance of other interests payable due to Shenzhen Investment Holdings Co.，
140
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
Ltd. were accured from the loans, refer to note 6.6.(2).
5.23 Other payables
(1) Details of other payables
Item Closing balance Opening balance
Land appreciation tax accrued 109,138,661.21 118,306,623.12
Payable to related parties 93,340,761.01 98,325,761.01
Cash pledge 46,711,864.34 41,157,683.11
Others 145,496,550.73 136,951,659.05
Total 394,687,837.29 394,741,726.29
(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 6.6
Related party transaction.
(3) Description of significant other payables aged more than one year
Name of entity Amount Reason for overdue If paid after reporting date
Tax accrued- land appreciation tax 88,890,020.66 Unexpired No
Shenzhen Investment Holdings Co.，Ltd. 58,848,819.24 Unsettled No
Total 147,738,839.90
(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, 2013, the closing balance
is RMB 109,138,661.21.
5.24 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 5.25) 331,482,489.72 299,261,270.80
Total 331,482,489.72 299,261,270.80
(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 331,482,489.72 299,261,270.80
Total 331,482,489.72 299,261,270.80
2)Top 5 long-term loans due within one year
Inception
Lender Maturity date Currency Closing balance Opening balance
date of loans
Shenzhen Rural Commercial Bank 2010.11.26 2013.11.26 RMB -- 97,000,000.00
141
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
Shenzhen Rural Commercial Bank 2010.8.23 2013.8.23 RMB -- 86,000,000.00
Shenzhen Rural Commercial Bank 2012.6.14 2014.12.21 RMB 98,181,818.16 --
Huashang Bank (Shenzhen Branch) 2012.12.6 2014.12.6 RMB 50,000,000.00 50,000,000.00
Huaxia Bank (Buji Branch) 2012.9.29 2014.12.29 RMB 20,000,000.00 25,000,000.00
Huaxia Bank (Buji Branch) 2012.10.24 2014.12.24 RMB 20,000,000.00 25,000,000.00
ICBC (Guangming Branch) 2012.8.24 2014.10.17 RMB 61,428,572.00 --
Bank of Shanghai (Shenzhen Branch) 2013.12.27 2014.12.27 RMB 48,000,000.00 --
Tolal 297,610,390.16 283,000,000.00
Note: Amounts repaid after the balance sheet date are RMB 66,973.90 thousand.
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.
5.25 Long-term loans
(1) Long-term loans categories
Item Closing balance Opening balance
Loan with mortgage 1,145,696,026.57 1,148,897,349.05
Less: long-term loans due within one year (Note 5.24) 331,482,489.72 299,261,270.80
Total 814,213,536.85 849,636,078.25
Note: the categories and amounts of assets pledged with monetary assets secured
borrowings are shown in notes 5.16.
2) Top 5 significant long-term loans
Lending party Inception date Maturity date Currency Closing balance Opening balance
Huashang Bank (Shenzhen Branch) 2012.12.6 2015.12.6 RMB 100,000,000.00 150,000,000.00
China Construction Bank (Shenzhen Branch) 2012.8.28 2015.9.27 RMB 100,000,000.00 100,000,000.00
China Construction Bank (Shenzhen Branch) 2012.11.21 2015.11.20 RMB 100,000,000.00 100,000,000.00
Huaxia Bank (Buji Branch) 2012.9.29 2017.9.29 RMB -- 75,000,000.00
Huaxia Bank (Buji Branch) 2012.10.24 2017.10.24 RMB -- 75,000,000.00
China Zheshang Bank (Shenzhen Branch) 2013.8.23 2018.8.22 RMB 113,000,000.00
Bank of Shanghai (Shenzhen Branch) 2013.12.27 2016.12.27 RMB 102,000,000.00
Total 515,000,000.00 500,000,000.00
① 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.
② The resolution about borrowing money from China Zheshang Bank (Shenzhen
Branch) was carried at the Fifteenth meeting of the seventh Board of Directors. As of
142
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
December 31, 2013, the loan balance was RMB 127,000,000.00.
5.26 Long-term payables
Details of long-term payables
Item Closing balance Opening balance
Maintenance fund 10,749,885.53 11,136,124.62
Total 10,749,885.53 11,136,124.62
5.27 Share capital
Opening balance Changes for the period Closing balance
New
Item Capitalization
issue Bonus
Amount % of surplus Other Subtotal Amount %
of issue
reserve
share
I. Restricted tradable shares -- -- -- -- -- -- -- -- --
II. Tradable shares
1.Ordinary shares denominated
891,660,000.00 88.14 -- -- -- -- -- 891,660,000.00 88.14
in RMB
2.Foreign-owned shares listed
120,000,000.00 11.86 -- -- -- -- -- 120,000,000.00 11.86
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
5.28 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:
420,811,821.17 -- -- 420,811,821.17
Transfer from capital reserve under the previous accounting system
978,244,858.10
Total 978,244,858.10 -- --
5.29 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
5.30 Undistributed profit
Amount for the current Amount for the prior Proportion of
Item
period period appropriation
Before adjustment: Undistributed profits at the end of prior -369,154,405.36 -475,968,948.89 --
143
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
Amount for the current Amount for the prior Proportion of
Item
period period appropriation
year
Adjustment: Total undistributed profits at beginning of year
-- -- --
(Increase +, decrease -)
After adjustment: Undistributed profits at beginning of year -369,154,405.36 -475,968,948.89 --
Add: Net profit attributable to owners of the Company for the
228,268,271.23 106,814,543.53 --
period
Make up the loss use surplus reserve -- -- --
Other transfer into -- -- --
Less: Appropriation to statutory surplus reserve -- -- --
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 period -140,886,134.13 -369,154,405.36 --
5.31 Operating income and costs
(1) Operating income and operating costs
Item Amount for the current period Amount for the prior period
Principal operating income 2,097,641,366.62 1,011,976,525.21
Other operating income 18,841,318.31 18,172,204.26
Total of operating income 2,116,482,684.93 1,030,148,729.47
Principal operating costs 1,532,916,384.45 689,088,645.84
Other operating costs 14,253,675.19 12,214,977.24
Total of operating costs 1,547,170,059.64 701,303,623.08
(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 1,406,885,587.82 925,436,497.61 379,619,819.21 146,516,172.48
Construction 521,749,290.73 495,387,515.85 468,407,774.16 445,160,754.08
Leasing 82,280,047.28 31,939,508.32 85,107,142.96 30,961,456.12
Property management 100,150,419.76 89,941,397.44 101,495,483.27 86,840,214.99
Subtotal 2,111,065,345.59 1,542,704,919.22 1,034,630,219.60 709,478,597.67
Less: offset the internal
13,423,978.97 9,788,534.77 22,653,694.39 20,389,951.83
amount
Total 2,097,641,366.62 1,532,916,384.45 1,011,976,525.21 689,088,645.84
(3) Principal operating activities (classified by geographical areas)
Amount for the current period Amount for the prior period
Name of geographical area
Operating income Operating costs Operating income Operating costs
144
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
Amount for the current period Amount for the prior period
Name of geographical area
Operating income Operating costs Operating income Operating costs
Domestic:
GuangDong Province 2,044,677,358.30 1,481,628,032.64 972,965,703.54 651,456,584.54
Others 65,791,782.57 61,076,886.58 61,047,686.11 58,022,013.13
Overseas： 596,204.72 -- 616,829.95 --
Subtotal 2,111,065,345.59 1,542,704,919.22 1,034,630,219.60 709,478,597.67
Less: offset the internal
13,423,978.97 9,788,534.77 22,653,694.39 20,389,951.83
amount
Total 2,097,641,366.62 1,532,916,384.45 1,011,976,525.21 689,088,645.84
(4) Operating income from the Company’s top 5 customers
Amount for the current period
Total operating income Proportion to total operating income of the Company (%)
Corporation unit No.1 41,353,108.34 1.95
Corporation unit No.2 28,920,000.00 1.37
Corporation unit No.3 18,700,000.00 0.88
Corporation unit No.4 13,618,979.81 0.64
Corporation unit No.5 10,328,275.02 0.49
Total 112,920,363.17 5.33
(Continued)
Amount for the prior period
Proportion to total operating income of the
Total operating income
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
5.32 Business taxes and surcharges
Item Amount for the current period Amount for the prior period
Business tax 96,963,676.15 42,953,955.93
City construction and maintenance tax 6,788,981.24 2,951,319.14
Education surcharges 3,037,183.43 1,448,500.23
Property tax 6,295,071.12 6,295,071.12
Land appreciation tax 48,358,322.07 44,966,121.27
Local education surcharges 1,746,934.77 542,477.07
Embankment Protection Fee 731,396.91 1,045,708.33
145
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
Total 163,921,565.69 100,203,153.09
Note: Details of business taxes and surcharges please refer to Note 3.
5.33 Selling expenses
Item Amount for the current period Amount for the prior period
Employee benefits 3,878,801.45 3,517,118.13
Advertising expenses 23,111,772.32 18,034,936.16
Entertainment expenses 728,647.50 481,883.00
Sales agency fees and commissions 12,095,665.26 701,378.03
Others 5,324,333.88 4,805,197.83
Total 45,139,220.41 27,540,513.15
5.34 Administrative expenses
Item Amount for the current period Amount for the prior period
Employee benefits 35,573,985.45 32,665,996.69
Taxes 2,972,356.58 7,135,517.60
Depreciation 4,425,284.79 4,859,854.11
Entertainment expenses 4,056,167.49 4,417,299.60
Intermediary fee 2,081,388.74 3,188,936.72
Travel expense 853,911.15 1,281,259.97
Administrative expenses 1,308,248.38 1,583,890.19
Repair charge 1,140,378.95 1,148,482.14
Water and electricity charges 1,230,536.76 1,105,247.92
Other amortization 723,520.85 607,349.93
Others 9,477,512.30 10,121,234.31
Total 63,843,291.44 68,115,069.18
5.35 Financial expenses
Item Amount for the current period Amount for the prior period
Interest expenses 80,512,861.53 73,616,362.45
Less: Interest income 5,164,403.64 3,894,420.17
Less: capitalized interest expenses 77,809,014.14 67,240,028.19
Exchange differences 370,385.54 -88,711.58
Less: Capitalized exchange differences -- --
Others 522,964.85 289,560.27
Total -1,567,205.86 2,682,762.78
5.36 Impairment losses of assets
Item Amount for the current period Amount for the prior period
146
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
Item Amount for the current period Amount for the prior period
Bad debt loss 666,840.00 -6,140,000.00
5.37 Investment income
(1) Details of investment income
Item Amount for the current period Amount for the prior period
Investment income from long-term investments under cost method -- 1,653,305.67
Investment income from long-term investments under equity method -25,316.71 -120,218.96
Investment income on disposal of long-term investments -- --
Investment income from holding available-for-trade financial assets -- --
Total -25,316.71 1,533,086.71
(2) Income from long-term investments under cost method
Name of investee Amount for the current period Amount for the prior 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
Name of investee Amount for the prior period Reasons for changes
period
Shenzhen Ronghua JiDian Co.,ltd -25,316.71 -120,218.96 Investee’s operating loss
Total -25,316.71 -120,218.96
5.38 Non-operating income
Amount included in
Amount for the current Amount for the prior
Item non-recurring profit or
period period
loss for the period
Total gains on disposal of non-current assets 5,889,805.93 27,714.20 5,889,805.93
Including: Gains on disposal of fixed assets 5,889,805.93 27,714.20 5,889,805.93
Gains on penalty -- 40,331.00 --
Others 1,352,217.02 12,149.43 1,352,217.02
Total 7,242,022.95 80,194.63 7,242,022.95
5.39 Non-operating expenses
Amount included in
Amount for the current
Item Amount for the prior period non-recurring profit or loss
period
for the period
Total losses on disposal of non-current assets 110,923.29 616,113.66 110,923.29
Including: Losses on disposal of fixed assets 110,923.29 616,113.66 110,923.29
Donations to third parties 79,000.00 74,000.00 79,000.00
Penalty expense 10,309.08 39,765.48 10,309.08
Compensation expense 23,752.24 45,000.00 23,752.24
147
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
Amount included in
Amount for the current
Item Amount for the prior period non-recurring profit or loss
period
for the period
Others 426,649.94 24,115.78 426,649.94
Total 650,634.55 798,994.92 650,634.55
5.40 Income tax expenses
Item Amount for the current period Amount for the prior period
Current tax expense calculated according to tax laws and relevant
82,468,037.57 29,881,461.77
requirements
Adjustments to deferred tax -6,910,810.40 521,583.21
Total 75,557,227.17 30,403,044.98
5.41 Basic earnings per share and diluted earnings per share
The basic earnings 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 earnings 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;
3）the income tax effect of above adjustment related.
The denominator of diluted earnings per share is the sum of followings:
1) Weighted average of ordinary shares issued by the parent company in the basic
earnings 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.
(1) Amount for basic earnings per share and diluted earnings per share in periods
148
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
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
0.2256 0.2256 0.1056 0.1056
shareholders of the Company
Net profit attributable to ordinary
shareholders of the Company
0.2203 0.2203 0.1001 0.1001
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
228,268,271.23 106,814,543.53
shareholders
Including: Net profit from continuing operations 228,268,271.23 106,814,543.53
Net profit from discontinued operations -- --
Net profit attributable to ordinary shareholders after non
222,844,093.95 101,232,143.75
recurring profit and loss
Including: Net profit from continuing operations 222,844,093.95 101,232,143.75
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 current Amount for the prior
period period
Number of ordinary shares outstanding at the beginning of year 1,011,660,000.00 1,011,660,000.00
Add: Weighted average number of ordinary shares issued during the period -- --
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
5.42 Other comprehensive income
Amount for the prior
Item Amount for the current period
period
1. Translation differences of financial statements denominated in foreign
-424,620.90 -49,972.76
currencies
Less: Net amount transferred to profit or loss for the period on disposal of
-- --
foreign operations
Total -424,620.90 -49,972.76
149
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
5.43 Notes to items in the cash flow statements
(1) Other cash receipts relating to operating activities
Item Amount for the current period Amount for the prior period
Interest income 5,164,403.64 2,771,676.50
Cash pledge and security deposits 24,079,303.24 14,615,042.62
Security deposit for mortgage 8,001,929.14 --
Property license fee and survey fee 4,754,076.64 7,049,454.75
Others 8,096,561.47 14,742,554.73
Total 50,096,274.13 39,178,728.60
(2) Other cash receipts relating to operating activities
Item Amount for the current period Amount for the prior period
Cash paid to general and administrative expenses 17,393,479.01 20,137,108.63
Cash paid to operating expenses 34,759,632.48 19,557,354.35
Cash pledge and security deposits 14,094,488.98 13,774,729.08
Property license fee and survey fee 4,060,599.71 6,976,007.82
Others 7,633,330.13 19,967,352.42
Total 77,941,530.31 80,412,552.30
(3) Other cash receipts relating to financing activities
Item Amount for the current period Amount for the prior period
Certificate of deposit pledged 25,000,000.00 --
Total 25,000,000.00 --
150
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
(4) Other cash payment relating to financing activities
Item Amount for the current period Amount for the prior period
Regulatory capital for bank borrowings 6,000,000.00 --
Certificate of deposit pledged -- 25,000,000.00
Total 6,000,000.00 25,000,000.00
5.44 Supplementary information to the cash flow statement
(1) Supplementary information to the cash flow statement
Item Amount for the current period Amount for the prior period
I.Reconciliation of net profit to cash flows from operating activities:
Net profit 228,317,758.13 106,854,849.63
Add: Provision for impairment loss of assets 666,840.00 --
Depreciation of fixed assets, bio-assets, and natural gas 28,321,567.87 26,841,796.67
Amortization of intangible assets 542,339.96 329,979.96
Amortization of long-term deferred expenses 208,276.14 163,942.74
Losses on disposal of fixed assets, intangible assets and other
-5,786,489.92 -12,598.93
long-term assets(deduct: gains)
Losses on scrapping of fixed assets (deduct: gains) 7,607.28 600,998.39
Loss of fair value variation (deduct: gains) -- --
Financial expenses (deduct: gains) 2,949,917.31 6,133,019.38
Losses from investments (deduct: gains) 25,316.71 -1,533,086.71
Decrease in deferred tax assets (deduct: increase) -6,910,810.40 521,583.21
Increase in deferred tax liabilities (deduct: decrease) -- --
Decrease in inventories (deduct: increase) -461,228,656.63 -229,893,590.87
Decrease in operating receivables (deduct: increase) 46,031,043.85 -15,117,502.08
Increase in operating payables (deduct: decrease) 361,808,973.10 132,520,428.14
Others -- --
Net cash flows from operating activities 194,953,683.40 27,409,819.53
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 519,284,372.44 463,713,702.77
Less: cash at the beginning of the period 463,713,702.77 324,967,185.86
Add: cash equivalents at the end of the period -- --
Less: cash equivalents at the beginning of the period -- --
151
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
Item Amount for the current period Amount for the prior period
Net increase in cash and cash equivalents 55,570,669.67 138,746,516.91
(2) Information of cash and cash equivalents
Item Amount for the current period Amount for the prior period
I. Cash
Including: Cash on hand 185,502.41 336,552.84
Bank deposits 519,098,870.03 463,243,117.58
Other monetary funds -- 134,032.35
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 519,284,372.44 463,713,702.77
Note 6 Related party relationships and transactions
6.1 Parent of the Company
Related party Place of
Name of the parent Type of the entity Legal representative Business Nature
relationship incorporation
Shenzhen Investment Guangdong Investment, Real estate
State-owned
Shareholding Co. Parent of the Group province Fan Mingchun development,
Enterprises
Ltd Shenzhen Guarantee
(Continued)
Proportion of the
Proportion of the Company’s Ultimate controlling
Registered Company’s voting
Name of the parent ownership interest held by party of the Organization code
capital power held by the
the parent (%) Company
parent (%)
Shenzhen Investment State-owned assets
RMB 10.926
Shareholding Co. 63.55 63.55 management 76756642-1
billion
Ltd commitee
6.2 Subsidiaries of the Company
Please refer to Note 4.1.
6.3 Associates and joint ventures of the entity
Please refer to Note 5.8.（4）
6.4 Other related parties of the Company
Relationship between other related
Name of other related party Organization code
parties and the Company
Shenzhen Jian'an Group Co., Ltd. The same controlling shareholders 19219737X
152
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
Shenzhen Environmental Engineering Science Tech
The same controlling shareholders 668538441
Center Co., Ltd.
Shenzhen General Institute of Architectural Design
The same controlling shareholders 192244260
and Research CO.,LTD
Shenzhen Institute of Building Research Co., Ltd. The same controlling shareholders 665899831
Shenzhen Water Planning & Design Institute The same controlling shareholders 672999996
Shenzhen Small & Medium Enterprises Credit
The same controlling shareholders 670019325
Financing Guarantee Group CO.LTD
153
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
6.5 Related party transactions
(1) Contracting with related parties
① List of contracting item
Name of main Reception Contracting income
Basis of pricing of contracting
contract issuing Name of contractor Type of assets under contracting date of Expiration date of contracting recognized in the
income
party contracting current year
Shenzhen Jian'an
Shenzhen Zhen Tung Engineering Ltd Construction 2012-6-1 Negotiations 28,920,000.00
Group Co., Ltd.
② List of issuing item
Name of main Reception Contracting income
Basis of pricing of contracting
contract issuing Name of contractor Type of assets under contracting date of Expiration date of contracting recognized in the
income
party contracting current year
The group Shenzhen Jian'an Group Co., Ltd. Construction 2012-2-1 2013-6-15 Biding 411,082,434.00
（2）Guarantees with related parties
Whether execution of guarantee has been
Guarantor Guaranteed party Guaranteed amount Inception date of guarantee Expiration date of guarantee
completed
The Group Shenzhen ShenFang Group LongGang Development Co.,Ltd 88,400,000.00 2012.3.31 2015.3.31 No
The Group Shantou Hualin Estate Dev. Co. 130,000,000.00 2013.4.17 2016.4.16 No
The Company provided joint and several liability of credit guarantee for its subsidiary, Shenzhen ShenFang Group LongGang
Development Co., Ltd.
The Company provided the maximum amount of guarantee for all the main contracts by its subsidiary, Shantou Hualin Estate Dev.
Co and Bank of Communications (Shantou Guoxin Branch) from 17 April 2013 to 16 April 2016. The maximum amount of debt
guaranteed by the Company is RMB 130,000,000.00.
(3) Borrowings/loans with related parties
154
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
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
The Company paid the interest of RMB 1,220,916.68 and principal to Shenzhen Institute of Building Research Co., Ltd. in March 22,
2013, ahead of maturity date.
155
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
(4) Compensation for key management personal
Item Amount for the current period Amount for the prior period
Total 5.6149 [million] 5.9811 [million]
Including: (Number in different zone)
Over 200k 11 12
150k-200k -- --
100k-150k 1 1
Below 100k 3 3
6.6 Amounts due from / to related parties
(1) Amounts due from related party
Closing balance Opening balance
Item
Carrying amount Bad debt provision Carrying amount Bad debt provision
Accounts receivable
Shenzhen Fresh Peak property consultant Co.,Ltd 1,084,758.36 -- 1,112,375.80 --
Total 1,084,758.36 -- 1,112,375.80 --
Other receivables
Guangdong Province Huizhou Luofu Hill Mineral Water
10,465,168.81 10,465,168.81 10,465,168.81 10,465,168.81
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 18,428,098.53 18,425,169.56 18,631,565.47 18,628,734.59
Shenzhen Shenfang Department Store Co. Ltd. 237,648.82 189,179.82 237,648.82 189,179.82
Shenzhen Real Estate Consolidated Service Co., Ltd. 1,086,487.22 927,136.22 1,086,487.22 927,136.22
Shenzhen City Shenfang Construction and Decoration
8,327,180.71 8,327,180.71 8,327,180.71 8,327,180.71
Materials Ltd.
Shenzhen RongHua JiDian Co.,Ltd 475,223.46 -- 475,223.46 --
Xi’an Fresh Peak property management& Trading Co.,Ltd 8,419,205.19 -- 8,419,205.19 --
Total 152,106,815.81 143,001,638.19 152,310,282.75 143,205,203.22
(2) Amounts due to related party
Item Closing balance Opening balance
Other payables
Shenzhen Tefa Real Estate Consolidated Service Co.,
598,012.16 598,012.16
Ltd.
Shenzhen Shen Fang Industrial Development Co., Ltd 1,534,854.91 1,534,854.91
Shenzhen ZhongGang Haiyan Enterprise Ltd. 135,853.52 135,853.52
156
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
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 Cement
1,867,348.00 1,867,348.00
Manufacturing Co., Ltd.
Shenzhen Cyber Port Co., Ltd 7,964,749.26 7,949,749.26
Shenzhen Shenfang Group BaoAn Developing Co.,Ltd 20,093,445.07 20,093,445.07
Shenzhen Investment Holding Co.,Ltd 58,848,819.24 63,848,819.24
Total 93,340,761.01 98,325,761.01
Interest payable:
Shenzhen Investment Holding Co.,Ltd 16,535,277.94 16,535,277.94
Shenzhen General Institute of Architectural Design and
-- 134,166.67
Research CO.,LTD
Total 16,535,277.94 16,669,444.61
(3) Short-term loans
Item Closing balance Opening balance
Shenzhen General Institute of Architectural Design and
-- 70,000,000.00
Research CO.,LTD
Total -- 70,000,000.00
Note 7 Contingencies
7.1 Contingencies arising from pending litigations or arbitrations and their
financial effects
① Xi’an project Lawsuit
Xi’an Fresh Pead Holding limited company (hereinafter referred to as “Fresh Peak
157
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
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 2013, 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.
②Luofu 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:
①Tourism Company had to pay for Rmb 9,600 thousand to the company in 10 days
after the judgment entering into force.
158
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
② Tourism 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;
④ Interest 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;
⑤ Tourism company undertaked all the litigation fees (RMB 167,710.00). 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
159
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
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.
As at 31 December 2013, 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.
7.2 Contingent liabilities arising from providing debt guarantees to other
entities and their financial effects
① The company provided debt guarantees for its related parties, please refer to note
6.5（2）.
② The Company provided loan guarantees for purchaser of real estate. Up to Dec
31,2013, the amount and duration of the unsettled guarantee is as follows:
Unsettled amount (ten
Items Duration
thousand)
From loans provided to registration of mortgage of pre-sale
Shenfang Chuanqishan contract 30,104.50
Shenfang Chuanqishan From real estate license granted and mortgaged 2,019.70
From loans provided to registration of mortgage of pre-sale
Shanglin Garden contract 868.00
Total 32,992.20
Note 8 Commitments
8.1 Significant commitments
Item Amount for the current period Amount for the prior period
Capital commitments that have been entered into but have
-- --
not been recognized in the financial statements
- Significant outsourcing contracts 349,491,097.84 1,349,084,786.45
Total 349,491,097.84 1,349,084,786.45
8.2 Fulfillment progress of previous commitments
The amount of significant outsourcing contracts is RMB 675,698,558.12, which was
paid during the report period and has been entered into the prior period but has not
been recognized in the financial statements.
Note 9 Events after Balance Sheet Date
9.1 Explanation of the distribution of profits after Balance Sheet Date
160
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
On 28 March, 2014, the proposal for profit distribution in the year 2013 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.
9.2 In the early 2014, the Ministry of Finance issued Cai Kuai [2014] No. 6, 7, 8, 10,
11, released these provision: "Enterprise Accounting Standards No. 39 - measured at
fair value," "
Accounting Standard for Business Enterprises No. 30 - Presentation of financial stat
ements (revised2014)","
Accounting Standard for Business Enterprises No. 9 – Employee compensation (re
vised 2014)”, " enterprise Accounting Standards No. 33 - Consolidated Financial
Statements (revised 2014) "and" enterprise accounting Standards No. 40 - the joint
venture arrangement ".According to these provision ,all enterprises enterprise-wide
accounting standards are required to implement them from July 1, 2014, and the
enterprises listed overseas to go into effect in advance.
The Company will perform the above criteria from July 1, 2014, and change related
accounting policies in accordance with them. The expected results of the main effects
are as follows:
(1)Accounting Standard for Business Enterprises No. 9 – Employee compensation (r
evised 2014) has completely specified the accounting treatment of post-employment
benefits, and the employment benefit plans are classified as defined contribution
plans and defined benefit plans. Under a defined contribution plans, entity put fixed
contributions into a fund, but has no legal or constructive obligation to make further
payments; Under a defined benefit plan, these are post-employment benefit plans
other than a defined contribution plans. For defined contribution plans, the amount
recognized in the period is the contribution payable in exchange for service rendered
by employees during the period; for defined benefit plans, the measurement of a net
defined benefit liability or assets requires the application of an actuarial valuation
method, the attribution of benefits to periods of service, and the use of actuarial
assumptions. The present value of an entity's defined benefit obligations and related
service costs is determined using the 'projected unit credit method. In addition, the
revised standard also enriches accounting treatment of short-term remuneration and
termination benefits, introduces other long-term employee benefits, and completely
161
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
standardizes the accounting treatment of employee benefits. Adoption of this
standard is not expected to have a material impact on the Company's financial
statements.
(2)Accounting Standard for Business Enterprises No. 30 - Presentation of financial st
atements (revised2014) further standardizes the presentation of financial statements,
revises and improves the presentation of going concern assessment, the normal
operating cycle, enrich note disclosures and so on. The amendment has
supplementary information of income statement as a mandatory disclosure, where
expenses are classified in accordance with the nature. The standard requires that
other comprehensive income should be divided into two categories for the
presentation: ① subsequent projects will not be reclassified to profit or loss; ② in
case that certain conditions are met, the follow-up may be reclassified to profit or loss.
The Company will change the presentation of financial statement in line with the
revised guidelines.
（3）Enterprise Accounting Standards No. 33 - Consolidated Financial Statements
(revised 2014) established control as the basis for determined which entities are
consolidated in the consolidated financial statements. An investor controls an
investee when it is exposed, or has rights, to variable returns from its involvement
with the investee and has the ability to affect those returns through its power over the
investee. The criteria give more guidance than the original one for defining the
principle of control. In accordance with the guidelines, the management teams are
required to make important judgments whether entity can control over the investee.
The Company's management believes that the Company's prior year judgment meet
the revised standards, so this change will not place a material impact on the
Company's financial statements.
（ 4 ） Enterprise Accounting Standards No. 40 - the joint venture arrangement,
standardize the identification, classification and measurement of common control by
two or more participating parties. The standards set out the accounting for an entity's
interests in various forms of joint ventures: jointly controlled operations, and jointly
controlled entities. Jointly controlled operations involve the use of assets and
undertake of liability. For jointly controlled entity, the joint venture has only the rights
to the arrangement of the net assets of the joint venture. The standard permits jointly
controlled entities to be accounted for using the equity method. The standards
require that the venturer should recognize in its financial statements the assets
(including its share of any joint assets), liabilities (including its share of any liabilities
162
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
incurred jointly with the other venturers), the expenses and the income (including
expenses incurred directly in respect of its interest in the joint venture) by the joint
venture.Adoption of the guidelines is not expected to have a material impact on the
financial statements.
（5）Enterprises Accounting Standards No. 39 -Fair value measurement defines fair
value, set out a framework definitely for measuring fair value, establishes a fair value
hierarchy that categories into three levels the inputs to valuation techniques used to
measure fair value, and makes specific requirements about disclosure of related
information. However, the standard does not change the provisions of other
accounting Standards under which whether fair value measurement should be used.
The management of the Company believes that adoption of this standard will result in
amendments to policies and procedures associated with the fair value measurement,
and wider disclosure of fair value information. In addition, the adoption of this
standard is not expected to have a significant impact on the recognition and
measurement of the Company's financial statements.
Note 10 Notes to Items in the Financial Statements of the Company
10.1 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 bad
11,327,983.25 100.00 6,968,694.02 61.52
debts is of individually insignificant
Total 11,327,983.25 100.00 6,968,694.02 61.52
(Continued)
Opening 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 bad
19,965,193.98 100.00 6,301,854.02 31.56
debts is of individually insignificant
Total 19,965,193.98 100.00 6,301,854.02 31.56
(2) Accounts receivable by aging balance
Closing balance Opening balance
Item
Amount (%) Amount (%)
163
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
Within 1 year -- -- 9,279,924.00 46.48
1-2 years 766,274.00 6.76 -- --
2-3 years -- -- -- --
Over 3 years 10,561,709.25 93.24 10,685,269.98 53.52
Total 11,327,983.25 100.00 19,965,193.98 100.00
(3) Bad debt provision
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 11,055,009.25 6,968,694.02 63.04 A separate provision is established
according to the recoverability of
Rental to be collected 272,974.00 -- -- each receivable with long aging and
little retrievability.
Total 11,327,983.25 6,968,694.02 61.52
(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
Relationship with the Proportion of the amount to
Name of entity Amount Age
Group the total AR (%)
Corporation No.1 Subsidiary 1,788,042.67 Above 3 years 15.78
Individual No.1 Un-related party 1,200,000.00 Above 3 years 10.59
Corporation No.2 Associate 1,084,758.36 Above 3 years 9.58
Individual No.2 Un-related party 876,864.11 Above 3 years 7.74
Individual No.3 Un-related party 793,529.98 Above 3 years 7.01
Total 5,743,195.12 50.70
(8)Receivables due from related parties
Name of entity Relationship with the Group Amount （%）of receivables
Shenzhen Fresh Peak property consultant
Associate 1,084,758.36 9.58
Co.,Ltd
Total 1,084,758.36 9.58
(9) There were no any accounts receivables which had been terminated
recognization.
(10) There were no any accounting receivable which had been securitization.
164
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
10.2 Other receivables
(1) Other receivables by categories
Closing balance
Category Carrying amount Bad debt provision
Amount (%) Amount (%)
Other receivables of which provision for bad debts
1,474,220,614.49 98.22 818,545,417.98 55.52
is of individually significant
Other receivables of which provision for bad debts
26,760,143.14 1.78 12,628,565.94 47.19
is of individually insignificant
Total 1,500,980,757.63 100.00 831,173,983.92 55.38
(Continued)
Opening balance
Category Carrying amount Bad debt provision
Amount (%) Amount (%)
Other receivables of which provision for bad debts
1,153,502,426.18 98.19 818,545,417.98 70.96
is of individually significant
Other receivables of which provision for bad debts
21,240,357.02 1.81 12,628,565.94 59.46
is of individually insignificant
Total 1,174,742,783.20 100.00 831,173,983.92 70.75
(2) Other receivables by aging balance
Closing balance Opening balance
Item
Amount (%) Amount (%)
Within 1 year 332,019,493.89 22.12 76,759,697.54 6.53
1-2 years 75,700,471.51 5.04 38,253,012.23 3.26
2-3 years 36,006,151.76 2.40 6,693,182.07 0.57
Over 3 years 1,057,254,640.47 70.44 1,053,036,891.36 89.64
Total 1,500,980,757.63 100.00 1,174,742,783.20 100.00
(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 subsidiaries
that are included in consolidated 1,327,696,733.54 677,154,231.02 51.00
A separate provision is
statement
established according to
Other receivables between subsidiaries the recoverability of each
that are not included in consolidated 120,994,319.55 120,994,319.55 100.00 receivales with long aging
statement and little retrievability
Others 25,529,561.40 20,396,867.41 79.90
Total 1,474,220,614.49 818,545,417.98 55.52
(b) Bad debt provision of other receivables which is of individually insignificant
165
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
Content of other receivables Carrying amount Proportion of provision Amount of bad debt Reasons for the provision
Other receivables between
subsidiaries that are included 7,468,639.72 -- --
in consolidated statement A separate provision is
established according to
Other receivables between
the recoverability of each
subsidiaries that are not
1,324,136.04 1,116,316.04 84.31 receivable with long aging
included in consolidated
and little retrievability
statement
Others 17,967,367.38 11,512,249.90 64.07
Total 26,760,143.14 12,628,565.94 47.19
(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
Relationship with the Proportion of the amount to
Name of entity Amount Age
Group the total OR (%)
500,000.00 With 1 year
3,416,239.85 1-2 years
Fresh Peak Enterprise Co., Ltd Subsidiary 37.48
67,650.00 2-3 years
558,624,859.12 Above 3 years
64,812,667.55 With 1 year
Shenzhen ShenFang Group 56,976,753.82 1-2 years
Subsidiary 23.27
LongGang Development Co.,Ltd 35,574,778.95 2-3 years
191,883,175.62 Above 3 years
Shantou Huafeng estate dev.co. Subsidiary 260,000,000.00 With 1 year 17.32
American Great Wall Co.,Ltd Subsidiary 101,379,954.81 Above 3 years 6.75
Canada Great Wall(vancouver)
Subsidiary 89,035,748.07 Above 3 years 5.93
Co.,Ltd
Total 1,362,271,827.79 90.75
(8) Receivables due from related parties
Name of entity Relationship with the Group Amount （%）in receivables
Fresh Peak Enterprise Co., Ltd. Subsidiary 562,608,748.97 37.48
Shenzhen ShenFang Group LongGang
Subsidiary 349,247,375.94 23.27
Development Co.,Ltd
American Great Wall Co.,Ltd Subsidiary 101,379,954.81 6.75
166
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
Name of entity Relationship with the Group Amount （%）in receivables
Canada Great Wall(Vancouver) Co.,Ltd Subsidiary 89,035,748.07 5.93
Shenzhen City Shenfang Free Trade
Subsidiary 32,392,459.91 2.16
Trading Ltd.
Shenzhen Lian Hua Industry and
Subsidiary 16,170,762.46 1.08
Trading Co. Ltd.
Bekaton Property Limited Subsidiary 12,559,290.58 0.84
Paklid Limited Subsidiary 11,072,100.19 0.74
Guangdong province Huizhou Luofu
Joint venture 10,465,168.81 0.70
Hill Mineral Water Co.,Ltd
Shenzhen City Shenfang Construction
Subsidiary 8,327,180.71 0.55
and Decoration Materials Ltd.
Shenzhen City Shenfang Investment
Subsidiary 5,897,431.45 0.39
Ltd.
Shenzhen Runhua Automobile trading
Associate 3,072,764.42 0.20
Co.,Ltd
Shenzhen Real Estate Consolidated
Subsidiary 1,086,487.22 0.07
Service Co., Ltd.
Shenzhen Ronghua JiDian Co.,ltd Associate 475,223.46 0.03
Shenzhen Shenfang Department Store
Subsidiary 237,648.82 0.02
Co. Ltd
Shenzhen Zhen Tung Engineering Ltd Subsidiary 4,198,603.99 0.28
Shantou Huafeng estate dev.co. Subsidiary 260,000,000.00 17.32
Shantou Hualin estate dev.co. Subsidiary 849,885.73 0.06
Shantou Songshan estate dev.co Subsidiary 2,420,150.00 0.16
Total 1,471,496,985.54 98.03
(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.
10.3 Long-term equity investments
(1) Long-term equity investments by types
Item Opening balance Increase Decrease Closing balance
Invested in subsidiary 254,668,771.15 30,000,000.00 -- 284,668,771.15
Invested in joint ventures 19,424,671.47 -- -- 19,424,671.47
Invested in associates 2,849,274.53 -- 25,316.71 2,823,957.82
Other equity investments 165,315,609.56 -- -- 165,315,609.56
Less：provisions for long-term equity investment
143,861,642.81 -- -- 143,861,642.81
impairment
Total 298,396,683.90 30,000,000.00 25,316.71 328,371,367.19
167
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
(2) Details of long-term equity investments
Changes [Increase
Name of investee Accounting method Investment cost Opening balance Closing balance
/decrease]
Shenzhen City Property Management Ltd. Cost method 12,821,791.52 12,821,791.52 -- 12,821,791.52
Shenzhen Petrel Hotel Co. Ltd. Cost method 20,605,047.50 20,605,047.50 -- 20,605,047.50
Shenzhen City Shenfang Investment Ltd. Cost method 9,000,000.00 9,000,000.00 -- 9,000,000.00
Fresh Peak Enterprise Ltd. Cost method 556,500.00 556,500.00 -- 556,500.00
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) Guangzhou Property and Estate Co., Ltd. Cost method 20,000,000.00 20,000,000.00 -- 20,000,000.00
Shenzhen Zhen Tung Engineering Ltd Cost method 11,332,321.45 11,332,321.45 -- 11,332,321.45
American Great wall Co.,Ltd Cost method 1,435,802.00 1,435,802.00 -- 1,435,802.00
Shenzhen City Shenfang Free Trade Trading Ltd. Cost method 4,750,000.00 4,750,000.00 -- 4,750,000.00
Shenzhen City Hua Zhan Construction Management Ltd. Cost method 6,000,000.00 6,000,000.00 -- 6,000,000.00
Shenzhen City Car Rental Ltd. Cost method 11,809,500.00 6,495,225.00 -- 6,495,225.00
QiLu Co.,Ltd Cost method 212,280.00 212,280.00 -- 212,280.00
Beijing Shenfang Property Management Ltd. Cost method 500,000.00 500,000.00 -- 500,000.00
Shenzhen Lain Hua Industry and Trading Co. Ltd. Cost method 13,458,217.05 13,458,217.05 -- 13,458,217.05
Shenzhen City SPG Long Gang Development Ltd. Cost method 30,850,000.00 30,850,000.00 -- 30,850,000.00
Beijing Fresh Peak Property Development Management Limited Company Cost method 64,183,888.90 64,183,888.90 -- 64,183,888.90
Shenzhen Shenfang Car Park Ltd. Cost method 29,750,000.00 29,750,000.00 -- 29,750,000.00
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
Shenzhen Runhua Automobile trading Co.,Ltd Equity method 1,445,425.56 1,445,425.56 -- 1,445,425.56
Shenzhen Ronghua JiDian Co.,ltd Equity method 1,250,000.00 1,403,848.97 -25,316.71 1,378,532.26
Shenzhen Shen Fang Industrial Development Co., Ltd Cost method 4,500,000.00 4,500,000.00 -- 4,500,000.00
168
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
Changes [Increase
Name of investee Accounting method Investment cost Opening balance Closing balance
/decrease]
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 9,500,000.00 9,500,000.00 -- 9,500,000.00
Shenzhen CyberPort Co., Ltd Cost method 14,000,000.00 12,401,018.42 -- 12,401,018.42
ShenZhen ShenFang BaoAn developmentCo.,Ltd Cost method 19,000,000.00 19,000,000.00 -- 19,000,000.00
Shantou Fresh Peak Building Cost method 68,731,560.43 58,547,652.25 -- 58,547,652.25
Shantou Small&medium Enterprises Finacing Guarantee Co. Ltd. Cost method 12,000,000.00 12,000,000.00 -- 12,000,000.00
Shantou Huafeng estate dev.co. Cost method 30,000,000.00 -- 30,000,000.00 30,000,000.00
Total 487,308,490.54 442,258,326.71 29,974,683.29 472,233,010.00
169
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
(Continued)
Proportion of Proportion of Explanation of the Provision for Cash
ownership voting power in inconsistency Provision for impairment dividend
Name of investee
interest held the investee between these impairment losses losses for the for the
(%) (%) two proportions period period
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 -- --
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 -- --
170
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
Proportion of Proportion of Explanation of the Provision for Cash
ownership voting power in inconsistency Provision for impairment dividend
Name of investee
interest held the investee between these impairment losses losses for the for the
(%) (%) two proportions period period
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 -- -- --
Shantou Huafeng estate dev.co. 100 100 --
Total 143,861,642.81 -- --
171
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
(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
143,861,642.81
Total -- --
143,861,642.81
10.4 Operating income and costs
(1) Operating income and operating costs
Item Amount for the current period Amount for the prior period
Principal operating income 1,333,553,618.35 113,046,014.33
Other operating income 649,887.14 --
Total of operating income 1,334,203,505.49 113,046,014.33
Principal operating costs 898,116,935.10 41,545,002.74
Other operating costs -- --
Total of operating costs 898,116,935.10 41,545,002.74
(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 1,273,471,953.82 875,844,405.12 50,119,629.72 18,462,245.54
Leasing 60,081,664.53 22,272,529.98 62,926,384.61 23,082,757.20
Total 1,333,553,618.35 898,116,935.10 113,046,014.33 41,545,002.74
(3) Principal operating activities (classified by geographical areas)
172
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
Amount for the current period Amount for the prior period
Name of geographical area
Operating income Operating costs Operating income Operating costs
Shenzhen 1,333,553,618.35 898,116,935.10 113,046,014.33 41,545,002.74
Total 1,333,553,618.35 898,116,935.10 113,046,014.33 41,545,002.74
(4) Operating income from the Company’s top 5 customers
Amount for the current period
Name of customers
Operating income Proportion to total operating income of the Company (%)
Individual No.1 7,003,851.00 0.52
Individual No.2 6,607,234.00 0.50
Individual No.3 6,580,394.00 0.49
Individual No.4 6,256,239.00 0.47
Individual No.4 6,220,517.00 0.47
Total 32,668,235.00 2.45
(Continued)
Amount for the prior period
Name of customers Proportion to total operating income of the
Operating income
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
10.5 Investment income
(1) Details of investment income
Item Amount for the current period Amount for the prior period
Investment income from long-term investments under equity method -25,316.71 -120,218.96
Total -25,316.71 -120,218.96
(2) Income from long-term investments under equity method
Amount for the current
Name of investee Amount for the prior period Reasons for changes
period
Shenzhen Ronghua JiDian Co.,ltd -25,316.71 -120,218.96
Total -25,316.71 -120,218.96
173
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
10.6 Supplementary information to the cash flow statement
Item Amount for the current period Amount for the prior period
(1) Reconciliation of net profit to cash flows from operating activities:
Net profit 206,173,384.86 5,619,721.93
Add: Provision for impairment loss of assets 666,840.00 --
Depreciation of fixed assets, bio-assets, and natural gas 21,290,498.10 21,246,263.88
Amortization of intangible assets 301,199.96 98,799.96
Amortization of long-term deferred expenses 56,530.20 56,530.20
Losses on disposal of fixed assets, intangible assets and other
-- --
long-term assets(deduct: gains)
Losses on scrapping of fixed assets (deduct: gains) 7,607.28 92.50
Loss of fair value variation (deduct: gains) --
Financial expenses (deduct: gains) 1,344,930.45 179,487.26
Losses from investments (deduct: gains) 25,316.71 120,218.96
Decrease in deferred tax assets (deduct: increase) -3,223,822.08 --
Increase in deferred tax liabilities (deduct: decrease) -- --
Decrease in inventories (deduct: increase) 67,118,991.33 -270,488,044.98
Decrease in operating receivables (deduct: increase) -257,412,103.70 -8,288,762.53
Increase in operating payables (deduct: decrease) 360,615,187.99 261,076,869.33
Others -- --
Net cash flows from operating activities 396,964,561.10 9,621,176.51
(2) 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 -- --
(4) Net increase in cash and cash equivalents:
Cash at the end of the period 356,953,152.47 190,825,250.83
Less: cash at the beginning of the period 190,825,250.83 144,779,100.65
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 166,127,901.64 46,046,150.18
174
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
Note11. Supplementary Materials
11.1 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 5,778,882.64 -588,399.46
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 available-for-sale, other than those
-- --
used in the effective hedging activities relating to normal operating business
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 -- --
175
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
Amount for the current Amount for the prior
Items
period period
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 812,505.76 -130,400.83
Other profit or loss that meets the definition of non-recurring profit or loss -- --
Subtotal 6,591,388.40 5,421,199.71
Tax effects -1,167,211.12 161,200.07
Effects attributable to minority interests (after tax) -- --
Total 5,424,177.28 5,582,399.78
176
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
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)
11.2 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 attributable to shareholders of listed Net assets attributable to shareholders of listed
companies t companies
Amount for the current Amount for the Amount for the prior
Amount for the prior period
period current period period
In accordance with CASs 228,268,271.23 106,814,543.53 1,863,347,135.33 1,635,376,098.73
In accordance with IFRS 228,268,271.23 106,814,543.53 1,863,347,135.33 1,635,376,098.73
11.3 Return on net assets and earnings per share (EPS)
EPS
Weighted average returned on net
Profit for the reporting period Basic Diluted
assets (%)
EPS EPS
Net profit attributable to ordinary shareholders of the Company 13.05% 0.2256 0.2256
Net profit after deduction of non-recurring profits or losses attributable to ordinary
12.74% 0.2203 0.2203
shareholders of the Company
Note (1) Weighted average return on net assets attributable to common shareholders
=228,268,271.23/(1,635,376,098.73+（228,268,271.23-297,234.63)/2）.
Weighted average return on net asset attributable to common shareholders after deduction
of non-recurring profits or losses=222,844,093.95/(1,635,376,098.73+
（228,268,271.23-297,234.63)/2).
(2) For calculation of basic EPS and diluted EPS, please see note 5.40
11.4 Abnormal financial statements items and description of reasons
(1) Items in the balance sheet
Account receivables had RMB 14,102,124.06 as the closing balance at December 31, 2013,
42.24% of decrease than the opening of the year. The reason for such decrease is newly
received rental and house payment during the current period.
Prepayments had RMB 12,206,598.30 as the closing balance at December 31, 2013,
177
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
69.24% of decrease than the opening of the year. The reason for such decrease is that
Prepayments was transferred into inventory.
Inventory had RMB 2,967,935,589.04 as the closing balance at December 31, 2013,
22.05% of increase than the opening of the year. The reason for such increase is the new
land reserves and payment of construction accounts.
Other current assets had RMB 3,451,107.04 as the closing balance at December 31, 2013,
55.64% 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.
Deferred tax assets had RMB 26,792,460.02 as the closing balance at December 31, 2013,
34.76% of increase than the opening of the year. The reason for such increase is that the
Company advances from the customers for the housing fund and confirm the profit during
the period.
Other non-current assets had RMB 0 as the closing balance at December 31, 2013,
100.00% 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 and intangible assets
during the current period.
Short-term loans had RMB 23,000,000.00 as the closing balance at December 31, 2013,
76.04% of decrease than the opening of the year. The reason for such decrease is that the
Company repaid previous year’s entrusted loan of RMB 70,000,000.00 during the current
period.
Accounts payable had RMB 389,345,271.46 as the closing balance at December 31, 2013,
435.84% of increase than the opening of the year. The reason for such increase is the
payment of construction accounts payable during the current period.
Taxes payable had RMB 148,006,651.37 as the closing balance at December 31, 2013,
641.58% of increase than the opening of the year. The reason for such increase is the
increased turnover tax caused by increased income and total profit during the current
period.
(2) Items in the Income Statement, Cash Flow Statement
Operating income had RMB 2,116,482,684.93 during 2013, 105.45% of increase than the
prior year. Operating cost had RMB 1,547,170,059.64 during 2013, 120.61% of increase
than the prior year. The reason for such increase is that income and cost from Shenfang
Chuanqishan Project was carried over during the current period.
Business tax and surcharge had RMB 163,921,565.69 during 2013, 63.59% of increase
178
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
than the prior year. The reason for such increase is the increased turnover tax caused by
increased income during the current period.
Selling expenses had RMB 45,139,220.41 during 2013, 63.90% of increase than the prior
year. The reason for such increase is advertisement fees and commission of the current
period.
Financial expense had RMB -1,567,205.86 during 2013, 158.42% of decrease than the
prior year. The reason for such decrease is the increased interest income during the current
period.
Non-operating income had RMB 7,242,022.95 during 2013, 8,930.56% of increase than the
prior year. The reason for such increase is disposal of fixed assets during the current
period.
Income tax expenses had RMB 75,557,227.17during 2013, 148.52% of increase than the
prior year. The reason for such increase is increased profit during the current period.
Cash inflow from Operating Activities had RMB 2,082,643,982.89 during 2013, 74.95% of
increase than the prior year. The reason for such increase is collection of sales from
housing buyers and from construction project.
Cash outflow from Operating Activities had RMB 1,887,690,299.49 during 2013, 62.31% of
increase than the prior year. The reason for such increase is the payment of construction
accounts payable during the current period.
Cash inflow from Operating Activities had RMB 194,953,683.40during 2013, 611.25%% of
increase than the prior year. The reason for such increase is more Cash received from
sales of goods or rendering of services than Cash paid for goods and service.
Cash inflows from Investing Activities had RMB 7,704,117.81 during 2013, 1,019.32% of
increase than the prior year. The reason for such increase is that more fixed assets were
disposed during the current period.
Cash outflows from Investing Activities had RMB 6,079,076.26 during 2013, 67.46% of
decrease than the prior year. The reason for such decrease is that the Company invested a
new entity last year while not during the current period.
Net Cash Flows from Investing Activities had RMB 1,625,041.55 during 2013, 109.03% of
increase than the prior year. The reason for such increase is that cash inflow from disposal
of fixed assets during the current period is more than cash outflow by investment last year.
Cash inflow from Financing Activities had RMB 470,989,352.23 during 2013, 54.54% of
decrease than the prior year. The reason for such decrease is less borrowing by the
179
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
Company during the current period.
Cash outflow from Financing Activities had RMB 611,751,337.59during 2013, 32.55% of
decrease than the prior year. The reason for such decrease is that the Company repaid less
borrowing during the current period.
Net cash flows from financing activities had RMB-140,761,985.36 during 2013, 209.04% of
decrease than the prior year. The reason for such decrease is less borrowing by the
Company during the current period.
Net increase in cash and cash equivalents had RMB 55,570,669.67 during 2013, 59.95% of
decrease than the prior year. The reason for such decrease is that less borrowing by the
Company led to less net cash flows from financing activities during the current period.
180
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Notes to the Financial Statements for the year 2013 (In RMB yuan except for otherwise specified)
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.
181
