Shenzhen Special Economic Zone Real Estate & Properties (Group)
Co., Ltd.
2014 Annual Report
2015-004
March 2015
2014 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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2014 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. Changes in Shares and Particulars about Shareholders............................................... 40
Section VIII. Preferred stock......................................................................................................... 46
Section IX. Directors, Supervisors, Senior Management Staffs and Employees............................. 47
Section X. Corporate Governance ................................................................................................. 53
Section XI. Internal Control .......................................................................................................... 60
Section XII. Financial Report........................................................................................................ 62
Section XIII. Documents Available for Reference....................................................................... 190
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2014 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
Company, the Company, the Group
to (Group) Co., Ltd.
Refers
The holding company Shenzhen Investment Holdings Co., Ltd.
to
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2014 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 2014. 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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2014 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
Shenzhen Stock Exchange
with
Chinese name of the
深圳经济特区房地产(集团)股份有限公司
Company
Abbr. of the Chinese
深房集团
name of the Company
English name of the
ShenZhen Special Economic Zone Real Estate&Properties (Group).co.，Ltd．
Company (if any)
Abbr. of the English name
SPG
of the Company (if any)
Legal representative of
Zhou Jianguo
the Company
Registered address 45/F-48/F, SPG Plaza, Renmin South Road, Shenzhen, Guangdong, P.R.China
Postal code for the
518001
registered 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 47/F, SPG Plaza, Renmin South
Contact address Road, Shenzhen, Guangdong, Road, Shenzhen, Guangdong,
P.R.China 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
47/F, SPG Plaza, Renmin South Road, Shenzhen, Guangdong,
Where this report is placed
P.R.China
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2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
IV. Change of the registered information
Business license Registration code Organizational
Registration date Registration place
No. of taxation code
44030019217958
Initial registration 8 Jan. 1980 Shenzhen 4403011002426 19217958-5
5
At the end of the 44030110322587 44030019217958
31 Dec. 2014 Shenzhen 19217958-5
reporting period 8 5
Changes of the main business since
Unchanged
listing (if any)
On 24 Mar. 1999, the controlling shareholder shifted from Shenzhen
Changes of the controlling Investment Management Co., Ltd. to Shenzhen Construction Investment
shareholder (if any) Holdings Co., Ltd. And 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.
Office address
8, Xi Binhe Road, Yong Ding Men, Dong Cheng District, Beijing, China
Signing accountants Cai Xiaodong, Liu Yuxiang
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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2014 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 this
2014 2013 2012
year over last year
(%)
Operating revenue (RMB
2,132,311,222.93 2,116,482,684.93 0.75% 1,030,148,729.47
Yuan)
Net profit attributable to
shareholders of the Company 298,033,316.49 228,268,271.23 30.56% 106,814,543.53
(RMB Yuan)
Net profit attributable to
shareholders of the Company
297,166,883.74 222,844,093.95 33.35% 101,232,143.75
after extraordinary gains and
losses (RMB Yuan)
Net cash flows from operating
322,162,063.36 194,953,683.40 65.25% 27,409,819.53
activities (RMB Yuan)
Basic EPS (RMB Yuan/share) 0.2946 0.2256 30.59% 0.1056
Diluted EPS (RMB
0.2946 0.2256 30.59% 0.1056
Yuan/share)
Weighted average ROE (%) 14.81% 13.05% 1.76% 6.75%
Increase or
decrease of this
As at 31 Dec. 2014 As at 31 Dec. 2013 As at 31 Dec. 2012
year-end than last
year-end (%)
Total assets (RMB Yuan) 4,375,098,314.05 4,215,099,296.67 3.80% 3,712,770,828.30
Net assets attributable to
shareholders of the Company 2,161,537,401.78 1,863,347,135.33 16.00% 1,635,376,098.73
(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
√ Applicable □ Inapplicable
Unit: RMB Yuan
Net profit attributable to shareholders of Net assets attributable to shareholders of
the Company the Company
2014 2013 Closing amount Opening amount
According to Chinese
298,033,316.49 228,268,271.23 2,161,537,401.78 1,863,347,135.33
accounting standards
Items and amounts adjusted according to international accounting standards
According to international 298,033,316.49 228,268,271.23 2,161,537,401.78 1,863,347,135.33
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2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
accounting standards
2. Differences of net profit and net assets disclosed in financial reports prepared under overseas and
Chinese accounting standards
√ Applicable □ Inapplicable
Unit: RMB Yuan
Net profit attributable to shareholders of Net assets attributable to shareholders of
the Company the Company
2014 2013 Closing amount Opening amount
According to Chinese
298,033,316.49 228,268,271.23 2,161,537,401.78 1,863,347,135.33
accounting standards
Items and amounts adjusted according to overseas accounting standards
According to overseas
298,033,316.49 228,268,271.23 2,161,537,401.78 1,863,347,135.33
accounting standards
3. Explain reasons for the differences between accounting data under domestic and overseas accounting
standards
□ Applicable √ Inapplicable
III. Items and amounts of extraordinary gains and losses
√ Applicable □ Inapplicable
Unit: RMB Yuan
Item 2014 2013 2012 Note
Gains/losses on the disposal of No fixed asset
non-current assets (including the disposal of a large
-133,442.39 5,778,882.64 -588,399.46
offset part of the asset impairment amount in the
provisions) current period.
Impairment provision reversal of
accounts receivable on which the
6,140,000.00
impairment test is carried out
separately
Non-operating income and expense
1,319,554.06 812,505.76 -130,400.83
other than the above
Less: Income tax effects 319,678.92 1,167,211.12 -161,200.07
Total 866,432.75 5,424,177.28 5,582,399.78 --
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
No such cases in the reporting period.
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2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Section IV. Report of the Board of Directors
I. Overview
2014 witnessed continuous progress of the Company. In face of the downward macro-economy, the
Board of Directors made wise decisions, the operation team worked hard as one man, the
supervision mechanism functioned effectively and all employees united in a concerted effort,
yielding great achievements in operation and management. The business results climbed to a new
level, the operation and control capability in the main business was effectively improved, and new
achievements were made in regard to corporate culture.
Looking back into 2014, new features occurred in various aspects of the Company’s work:
(I) New progress was made regarding the business results. The reporting period witnessed new
progress of the Company’s business results. The closing consolidated undistributed profit turned
positive for the first time in 16 years, with a rational asset and liability structure, a sound financial
status and controllable risks.
(II) The operation capability in the main business improved significantly. The Company further
enhanced its operation capability in its main business, with the control and key node control
capability improved significantly and control more in place. Marketing control grew more mature
through innovating upon project marketing methods, optimizing the institutional system and the
work flows, and improving customer service. Cost control was strong and effective, with further
enhanced whole-process target cost control capability, a better value creation function, effective
node control and strong measures.
(III) Projects under construction were carried forward in an orderly manner. The northern block of
the SPG Shanglin Garden Project smoothly went through completion acceptance, while planning
adjustment, land replacement and plot ratio adjustment were completed for the southern block. The
SPG Chuanqi Hill Project officially allowed moving in, successfully wrapping up the project. In
terms of the Shantou Yuejing Orient Project, completion acceptance and residents’ moving in were
completed. As for the Jingzaiwan Project, preliminary planning and land leveling were finished and
it started to invite bids for construction. Meanwhile, substantial progress was made in the Dongle
Project and the Jingtian Project, for both of which construction would kick off within 2015.
(IV) The control capability continued to improve. The Company continued to enhance its corporate
governance and internal control. The Board of Directors drew the big picture, determined the
direction and made decisions; the operational team did solid work with a remarkable result; and the
supervision mechanism worked well in all dimensions, which ensured that the Company operated in
compliance with applicable rules. The internal control system expanded to cover the whole system
of the Company. Throughout the year, the Company formulated 12 new sets of rules, revised 4 sets
and optimized 147 work flows, which further promoted the institutional culture of rule compliance.
(V) Property operation saw a steady growth. Overcoming the impact from the downward
macro-economy on its property leasehold, the Company took measures such as “stabilizing
customers, enhancing payment collection, attracting more customers and tapping potential”,
enhanced the accountability mechanism, became stricter in contract execution and strengthened
payment collection. As a result, the tasks for the year were fulfilled well.
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2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
(VI) Subsidiaries achieved great results in operation. They enhanced internal control, expanded the
markets and overcame difficulties, which enabled them to fully accomplished the budget objectives.
(VII) The Company continued to improve its talent pool. It continued to carry out the “Great Talent,
Great Team” plan, recruiting talented people by way of competition. It also enhanced professional
training and provided “SPG Lectures”, creating a good atmosphere for employees to compete in
professional proficiency.
(VIII) Impressive progress was also made in corporate culture. The Company proactively carried
out various recreational activities and organized interest groups to build a new corporate culture,
which significantly enhanced the cohesion throughout the Company.
II. Main business analysis
1. Overview
Overview of the reporting period progress of development strategies and business plans disclosed in previous
periods:
For the reporting period, the Company achieved operating revenues of RMB 2,132,311,200, up
0.75% from last year; operating profit of RMB 399,474,800, up 34.37% from last year; total profit
of RMB 400,660,900, up 31.85% from last year; and net profit of RMB 298,033,300 attributable to
shareholders of the Company, up 30.56% from last year.
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
Changes in the main operational mode:
□ Applicable √ Inapplicable
2. Revenues
Explanation:
Operating revenue and operating cost in 2014 stood at RMB 2,132,311,200 and RMB
1,409,664,900, up 0.75% and -8.89% respectively from last year, which was mainly because of the
revenue and cost from the SPG Shanglin Garden project.
Sales income from real estate stood at RMB 1,476,320,300, up 4.94% from last year, which was
mainly because of the sales income from the SPG Shanglin Garden project of the Longgang
subordinate company.
Property management income stood at RMB 118,842,900, up 18.66% from last year, which was
mainly because of the increased income of the subordinate property management company.
Is the Company's product sales revenue more than its service revenue?
√ Yes □ No
Industry Item Unit 2014 2013 YoY +/-%
Real estate Sold 84,926.85 92,336.14 -8.02%
development Produced 65,175.16 113,888.35 -42.77%
(RMB Ten
Stock 241,853.88 261,605.57 -7.55%
thousand)
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2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Reasons for any over-30% YoY movement of the data above:
□ Applicable √ Inapplicable
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) 119,173,771.38
Ratio of the total sales to the top 5 customers to
5.59%
the annual total sales (%)
Information about the top 5 customers:
√ Applicable □ Inapplicable
Serial
Name of customer Sales (RMB Yuan) Proportion in annual total sales (%)
No.
1 Corporation A 40,784,800.00 1.91%
2 Corporation B 29,987,587.93 1.41%
3 Corporation C 18,298,000.00 0.86%
4 Corporation D 16,290,000.00 0.76%
5 Corporation E 13,813,383.45 0.65%
Total -- 119,173,771.38 5.59%
Other information about the major customers
□ Applicable √ Inapplicable
3. Costs
Classified by industry:
Unit: RMB Yuan
2014 2013
Proportion in Proportion in
Industry Item YoY +/- (%)
Amount operating costs Amount operating costs
（%） （%）
Real estate 849,268,477.4 925,436,497.6
60.94% 60.37% 0.56%
7 1
461,212,716.0 495,387,515.8
Construction 33.09% 32.32% 0.78%
7 5
Leasing 29,729,040.27 2.13% 31,939,508.32 2.08% 0.05%
Property 101,337,156.5
7.27% 89,941,397.44 5.87% 1.40%
management 0
1,441,547,390. 1,542,704,919.
Subtotal 103.43% 100.64% 2.79%
31 22
Minus: internal
47,832,106.53 9,788,534.77
offset
1,393,715,283. 1,532,916,384.
Total 100.00% 100.00%
78 45
Classified by product:
Unit: RMB Yuan
2014 2013
Proportion in Proportion in
Product Item YoY +/- (%)
Amount operating costs Amount operating costs
（%） （%）
849,268,477.4 925,436,497.6
Real estate 60.94% 60.37% 0.56%
7 1
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2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Explanation:
Operating cost in 2014 stood at RMB 1,393,715,300, down 9.08% from last year, which was mainly
because the SPG Shanglin Garden project started to generate income and cost in the current period.
Major suppliers:
Total purchases from the top 5 suppliers （RMB
448,033,547.98
Yuan）
Ratio of the total purchases from the top 5
80.16%
suppliers to the annual total purchases（%）
Information about the top 5 suppliers:
√ Applicable □ Inapplicable
Procurement amount Proportion in annual total
Serial No. Name of supplier
(RMB Yuan) procurement amount (%)
1 Corporation A 351,541,978.04 62.89%
2 Corporation B 73,815,669.94 13.21%
3 Corporation C 8,275,900.00 1.48%
4 Corporation D 8,100,000.00 1.45%
5 Corporation E 6,300,000.00 1.13%
Total -- 448,033,547.98 80.16%
Other information about the major suppliers
□ Applicable √ Inapplicable
4. Expense
Financial expenses in 2014 stood at RMB 33,816,128.14, up 2257.73% from last year, mainly
because main real estate projects went through completion acceptance and interest capitalization
ceased in the current period.
Income tax expenses in 2014 stood at RMB 102,602,788.98, up 35.79% from last year, mainly
because the total profit increased.
5. R&D expenses
Naught
6. Cash flows
Unit: RMB Yuan
Item 2014 2013 YoY +/-（%）
Subtotal of cash inflows
1,867,088,183.88 2,082,643,982.89 -10.35%
from operating activities
Subtotal of cash outflows
1,544,926,120.52 1,887,690,299.49 -18.16%
from operating activities
Net cash flows from
322,162,063.36 194,953,683.40 65.25%
operating activities
Subtotal of cash inflows
24,690.00 7,704,117.81 -99.68%
from investing activities
Subtotal of cash outflows
3,016,118.70 6,079,076.26 -50.39%
from investing activities
Net cash flows from -2,991,428.70 1,625,041.55 -284.08%
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2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
investing activities
Subtotal of cash inflows
362,013,496.47 470,989,352.23 -23.14%
from financing activities
Subtotal of cash outflows
530,373,267.61 611,751,337.59 -13.30%
from financing activities
Net cash flows from
-168,359,771.14 -140,761,985.36 19.61%
financing activities
Net increase in cash and
150,835,476.59 55,570,669.67 171.43%
cash equivalents
Reasons for any over-30% YoY movement of the data above:
√ Applicable □ Inapplicable
Net cash flows from operating activities in 2014 stood at RMB 322,162,063.36, up 65.25% from
last year, which was mainly because the cash paid for goods and services decreased.
Cash inflows from investing activities in 2014 stood at RMB 24,690.00, down 99.68% from last
year, which was mainly because there were no investment retraction or large-amount disposal of
fixed assets in the current period.
Cash outflows from investing activities in 2014 stood at RMB 3,016,118.70, down 50.39% from
last year, which was mainly because the purchased fixed, intangible and other long-term assets
decreased.
Net cash flows from investing activities in 2014 stood at RMB -2,991,428.70, down 284.08% from
last year, which was mainly because the cash received from disposal of fixed, intangible and other
long-term assets and the cash paid to acquire fixed, intangible and other long-term assets both
decreased.
Net increase in cash and cash equivalents in 2014 stood at RMB 150,835,476.59, up 171.43% from
last year, which was mainly because the net cash flows from operating activities increased.
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/decrea Increase/decrea Increase/decrea
Operating Gross profit se of operating se of operating se of gross
Operating cost
revenue rate (%) revenue over cost over last profit rate over
last year (%) year (%) last year (%)
Classified by industry:
Real estate 1,476,320,296. 849,268,477.4
42.47% 4.94% -8.23% 8.25%
06 7
488,183,328.1 461,212,716.0
Construction 5.52% -6.43% -6.90% 0.47%
5 7
Leasing 78,833,382.73 29,729,040.27 62.29% -4.19% -6.92% 1.11%
Property 101,337,156.5
118,842,883.81 14.73% 18.66% 12.67% 4.54%
management 0
2,162,179,890. 1,441,547,390.
Subtotal 33.33% 2.42% -6.56% 6.41%
75 31
Minus: internal
50,540,216.49 47,832,106.53 5.36%
offset
2,111,639,674. 1,393,715,283.
Total 34.00% 0.67% -9.08% 7.08%
26 78
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2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Classified by product:
1,418,885,068. 825,568,531.8
Residences 41.82% 1.50% -10.50% 7.80%
06 7
Shops 57,435,228.00 23,699,945.60 58.74% 542.50% 677.84% -7.18%
685,859,594.6 592,278,912.8
Other products 13.64% -2.60% -4.05% 1.30%
9 4
Minus: internal
-50,540,216.49 -47,832,106.53 5.36% 276.49% 388.65%
offset
2,111,639,674. 1,393,715,283.
Total 34.00% 0.67% -9.08% 7.08%
26 78
Classified by region:
Domestic:
Guangdong 2,100,652,904. 1,384,529,733.
34.09% 2.74% -6.55% 6.55%
Province 17 71
Other 60,941,449.28 57,017,656.60 6.44% -7.37% -6.65% -0.73%
Overseas: 585,537.30 100.00% -1.79%
2,162,179,890. 1,441,547,390.
Total 33.33% 2.42% -6.56% 6.41%
75 31
Minus: internal
50,540,216.49 47,832,106.53 5.36%
offset
2,111,639,674. 1,393,715,283.
Total 34.00% 0.67% -9.08% 7.08%
26 78
Where the Company’s accounting standard of the main business data above changed during the reporting period,
give the main business data of the latest year adjusted according to the accounting standard at the end of the
reporting period:
□ Applicable √ Inapplicable
IV. Asset and liability analysis
1. Major changes of asset items
Unit: RMB Yuan
As at 31 Dec. 2014 As at 31 Dec. 2013
Proportio
Proportion Proportion n change
Explain any major change
Amount in total Amount in total
（%）
assets (%) assets (%)
Monetary 678,957,249. 525,374,372.
15.52% 12.46% 3.06%
funds 03 44
Increased 498.41% from the
Accounts 84,388,842.4 14,102,124.0 opening amount, mainly
1.93% 0.33% 1.60%
receivable 3 6 because receivable house
mortgages increased.
2,796,551,65 2,967,935,58
Inventories 63.92% 70.41% -6.49%
6.42 9.04
Investing real 454,628,505. 466,314,091.
10.39% 11.06% -0.67%
estate 97 90
Long-term
57,730,086.7 57,736,411.8
equity 1.32% 1.37% -0.05%
9 5
investment
54,321,296.2 60,715,687.7
Fixed assets 1.24% 1.44% -0.20%
2 1
17,821,748.2 12,206,598.3 Increased 46.00% from the
Prepayments 0.41% 0.29% 0.12%
3 0 opening amount, mainly
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2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
because prepayments for
materials in the current period
failed to carry over to
inventories due to
dissatisfaction of conditions.
Increased 260.35% from the
Other current 12,436,024.4 opening amount, mainly
0.28% 3,451,107.04 0.08% 0.20%
assets 0 because the land VAT was
prepaid.
Decreased 48.28% from the
opening amount, mainly
because the corresponding
Deferred
13,856,593.9 26,792,460.0 deferred income tax assets to
income tax 0.32% 0.64% -0.32%
7 2 the estimated profit from the
assets
house payment advances to the
Company recognized in
previous periods carried over.
Increased 100.00% from the
Notes 119,846,192. opening amount, mainly
2.74% 2.74%
receivable 64 because customers changed the
settlement methods.
2. Major changes of liability items
Unit: RMB Yuan
2014 2013 Proporti
Proportion Proportion on
Explain any major change
Amount in total Amount in total change
assets (%) assets (%) （%）
Increased 551.51% from the
Short-term 149,846,192. 23,000,000.0
3.42% 0.55% 2.87% opening amount, mainly because
borrowings 64 0
financings increased.
Decreased 41.17% from the
Long-term 478,985,579. 814,213,536.
10.95% 19.32% -8.37% opening amount, mainly because
borrowings 95 85
borrowings were repaid.
Increased 39.09% from the
Accounts 541,538,762. 389,345,271. opening amount, mainly because
12.38% 9.24% 3.14%
payable 36 46 the unsettled construction
payables increased.
Decreased 53.89% from the
Accounts
144,315,921. 312,967,028. opening amount, mainly because
received in 3.30% 7.42% -4.12%
34 85 the house payment advances
advance
carried over to incomes.
Decreased 34.87% from the
Taxes and fares 96,394,993.6 148,006,651. opening amount, mainly because
2.20% 3.51% -1.31%
payable 7 37 the paid taxes and fares
increased.
Increased 36.72% from the
Non-current
453,207,700. 331,482,489. opening amount, mainly because
liabilities due 10.36% 7.86% 2.50%
00 72 the long-term borrowings due
within one year
within one year increased.
3. Assets and liabilities measured at fair value
□ Applicable √ Inapplicable
16
2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
4. Major assets overseas
□ Applicable √ Inapplicable
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, the SPG Shanglin Garden project in Longgang, Shenzhen and the project
in Shantou, 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; planning,
construction, cost control, marketing capability and brand image have been effectively enhanced;
and the operational capability in the main business of real estate keeps increasing, along with the
core competitiveness. The reporting period has witnessed a consecutive sixth-year growth in the
Company’s operating revenues and profit, as well as a negative-to-positive switch of the
consolidated undistributed profit. What’s more, in 2014, the Company was honored the “Best
Enterprise in Honesty in Guangdong Province for 2013”, the “Creating and Learning Enterprise in
Guangdong Province for 2014”, etc.
VI. Investment analysis
1. Investments in equities of external parties
(1) Investments in external parties
□ Applicable √ Inapplicable
No investments in external parties in the report period.
(2) Equity-holdings in financial enterprises
□ Applicable √ Inapplicable
There was no such situation of the Company in the reporting period.
(3) Securities investments
□ Applicable √ Inapplicable
There was no such situation of the Company in the reporting period.
(4) Shareholdings in other listed companies
□ Applicable √ Inapplicable
There was no such situation of the Company in the reporting period.
17
2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
2. Wealth management entrustment, derivative investments and entrustment loans
(1) Wealth management entrustment
□ Applicable √ Inapplicable
There was no such situation of the Company in the reporting period.
(2) Derivative investments
□ Applicable √ Inapplicable
There was no such situation of the Company in the reporting period.
(3) Entrustment loans
□ Applicable √ Inapplicable
There was no such situation of the Company in the reporting period.
3. Use of raised funds
□ Applicable √ Inapplicable
There was no such situation of the Company in the reporting period.
4. Analysis to main subsidiaries and stock-participating companies
√ Applicable □ Inapplicable
Main subsidiaries and stock-participating companies:
Unit: RMB Yuan
Main
Company Company Registere Total Operating Operating
Industry products/s Net assets Net profit
name variety d capital assets revenues profit
ervices
Shenzhen
Petrel Hotel RMB 30 43,542,96 35,676,19 26,200,17 854,265.8 565,723.0
Subsidiary Service
Hotel Co., Service million 6.50 4.92 2.49 7 6
Ltd.
Shenzhen
Property Property RMB
76,454,48 16,401,36 121,614,9 2,866,432 1,426,799
Managem Subsidiary Service managem 7.25
0.11 6.49 52.03 .92 .41
ent Co., ent million
Ltd.
Shenzhen Fixing
Zhentong and
RMB 10 234,956,1 18,102,92 489,467,3 3,060,582 2,637,671
Engineeri Subsidiary Service maintenan
million 13.40 6.56 34.00 .38 .69
ng Co., ce of
Ltd. projects
Shenzhen
Constructi
Huazhan
on RMB 8 9,272,008 8,304,878 5,485,290 708,370.2 531,277.6
Constructi Subsidiary Service
supervisio million .57 .23 .16 2 7
on
n
Supervisi
18
2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
on Co.,
Ltd.
Shenzhen
SPG RMB
20,721,89 16,881,16 4,321,508 888,530.7 567,582.1
Mini-bus Subsidiary Service 10.29
0.51 9.05 .36 2 4
Rent Co., Rent of million
Ltd. mini-bus
Xin Feng Investmen Investmen
Real t t, HKD 1 356,413,6 46,869,22 179,934,8 16,969,28 12,547,84
Subsidiary
Estate managem managem million 90.47 5.51 70.00 9.43 5.03
Co., Ltd. ent ent
Great
Wall Developm
Real USD 0.5 17,864,88 -76,895,0 585,537.3 119,858.5 119,858.5
Estate Subsidiary ent of real
estate million 2.55 54.77 0 2 2
Co., Inc. estate
(U.S.)
Investmen Investmen
Xin Feng
t t and HKD 1 162,371,0 -390,959, -2,267,35 -2,270,37
Enterprise Subsidiary
managem managem million 67.90 327.43 5.09 2.84
Co., Ltd.
ent ent
Shenzhen
SPG
Developm
Longgang Real RMB 30 974,830,0 144,353,9 726,471,4 238,231,5 177,787,5
Subsidiary ent of real
Developm estate million 29.16 01.79 48.00 16.13 60.21
estate
ent Co.,
Ltd.
Shantou
Huafeng
Real Developm
Real RMB 30 328,747,0 18,273,69 -15,635,0 -11,726,3
Estate Subsidiary ent of real 0.00
estate million 77.83 9.43 67.43 00.57
Developm estate
ent 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
√ Applicable □ Inapplicable
Unit: RMB Ten thousand Yuan
Cumulative
Disclosure
Total planed Input for this actual input Project Project Disclosure
Project name index (if
investment period as at the progress earnings date (if any)
any)
period-end
Accumulativ
e carried
forward sales
SPG
254,545 16,332 233,196 100.00% revenue of
Chuanqi Hill
RMB
184,295
million
SPG Accumulativ
Shanglin 140,000 27,981 88,711 e carried
Garden forward sales
19
2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
revenue of
the north
area of RMB
72,647
million
Accumulativ
e carried
Shantou
forward sales
Yuejing 15,000 5,284 18,177 100.00%
revenue of
Dongfang
RMB 13,260
million
Shantou
Jingzaiwan 119,400 2,553 32,416
Project
Total 528,945 52,150 372,500 -- -- -- --
VII. Predict the operating results of Jan.-Mar. 2015
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
VIII. Entities controlled by the Company for special purposes
□ Applicable √ Inapplicable
IX. Outlook of the Company’s future development
In 2015, the macro economy had stepped in the key phase of development shifting and structure adjusting, which
could be interpreted as “new normalcy of economy and key year of reform” while the downward pressure of the
economy still exist and will sustain for a rather long time. The property industry had appeared the tendency such
as industry subdivision and enterprise differentiation and the China urbanization was being promoting steadily
with tremendous potential that the rigid demand for the property would be long-term and the development of the
property market would be more reasonable as well as healthier. Through the efforts of the Company of recent
years, the professional degree, the control and management level of projects, the rolling development ability and
the brand influence of the Company were had rather big enhance and received the inspection of the market and the
recognition from the customers, and the Company would seize the opportunities and strive for greater
development.
In 2015, the Company will make great efforts to grasp the following work of three aspects:
(I) Prominently ensure the professional ability construction. To accelerate and make great efforts to construct the
projects, to practically strengthen the professional ability construction by regarding the projects development and
construction as a breakthrough point, to strengthen the construction of the control ability, arrangement of the
projects and the plan management ability of the whole process of the projects development, to seize the key point
and to ensure the quality, progress and safety of the projects development products; prominently grasp well of the
marketing control and management, to practically enhance the control and management control of the
intermediary service units as well as the innovation ability of the marketing and planning based on the getting rid
of the sales rate and maintaining the inventory with great efforts, to ensure the completion of the whole year’s task;
to make great efforts to do the cost management and control, to move forward the core of the cost management
20
2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
and control, to meticulously interfere into the resource phase of the planning and design, to organic unify the
beforehand intervention, the in-process control and the afterwards settlement, to cover the whole process with
careful calculation and strict budgeting as well as to led the cost control to transfer from traditional pricing
computation to value innovation; to innovate the operation mode and to improve the economy efficiency of each
operating units.
(II) Clearing out the strategies and exploring the new path of the enterprise development. To grasp well of the
link of the development strategic planning, to execute the analysis and summary compare to the objective of a
struggle of the “12th Five-Year” strategic plan, to find out the experience and insufficient, to strive for the
complete ending, to crafting the “13th Five-Year” strategic plan and to clear out the direction as well as to decide
the major program of lasting importance for the future development; to regard the reform as the motivation of the
enterprise development, to grasp the opportunity of the deeper reform, to strengthen the professional ability, to
enhance the operation efficiency and to make use of the capital market for accelerating the developing and
expansion; to perfect and innovate the management and control system construction, to constantly innovate,
optimize and perfect the management and control system and business progress, to constantly enhance the
government level of the Company, to strengthen the internal control and to make great efforts to execute the risks
prevention and control as well as to practically improve the operating efficiency.
(III) Actively exploring the long term stimulation mechanism and strengthening the endogenous power of
development. To continually carry forward the performance culture for judging heroism, to deeper the system
reform of the labor, personnel and the salary and to form the favorable mechanism of rewarding the diligent and
punishing the lazy as well as selecting the superior and eliminating the inferior; to actively exploring the long term
stimulation mechanism, to study and explore combine with the actual situation for searching the long term
stimulation mechanism that in favor of the long-term development of the enterprises.
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
□ Applicable √ Inapplicable
XI. Explain change of the accounting policy, accounting estimate and measurement methods
as compared with the financial reporting of last year
√Applicable □ Inapplicable
(1) Changes of accounting polices
Changes of accounting polices caused by executing the new ASBE
At the beginning of Y2014, the Ministry of Finance issued No. 30 of ASBE-Fair Value Measurement, No. 30 of
ASBE -Presentation of Financial Statement (revised in 2014), No. 9 of ASBE -Employee Compensation (revised
in 2014), No. 33 of ASBE -Consolidation Financial Statement (revised in 2014), No. 40 of ABSE-Joint Venture
Arrangement, No. 2 of ASBE-Long-term Equity Investment (revised in 2014) and No. 41 of ASBE-Disclosure of
the Equity among Other Entities respectively by F-H [2014] No. 6, No. 7, No. 8, No. 10, No. 11, No. 14 and No.
16, which be required to execute within the scope of the enterprise which had been executing the ASBE and be
encouraged to execute in advance among the enterprises listed in overseas. At the same time, the Ministry of
Finance issued No. 37 of ASBE-Presentation of Financial Instruments (revised in 2014) as C-H [2014] No. 23
(hereinafter referred to as “Presentation Standard of Financial Instruments”), which be required to present the
financial instruments according to the requirements of the criterion among the financial statement in Y2014 and
21
2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
the following periods.
According to the regulations of the Ministry of Finance, the Company began to execute the above 7 new issued or
revised ASBE except for the financial instruments presentation criterion on 1 Jul. 2014, to execute the financial
instruments presentation criterion when compiling the 2014 Financial Report and had executed the adjustment
according to the requirements of each criterion link with the influences on the financial statement items and
amount of the current period and the early stage of the presentation were as follows:
Name of criterions Notes of the content and the influences The affected amount of the relevant
financial statement items on 1 Jan.
2014/of Y2013
Name of items Affected amount
Increase+/Decrease-
No. 2 of The Group had no joint control or significant Available-for-sale
ASBE–Long-term influences on the investees before executing the financial assets
17,464,240.74
Equity Investment No. 2 of ASBE–Long-term Equity Investment
(revised in 2014), and the equity investment
which had no quotation in the active market as Long-term equity
well as its fair value could be not reliable investment
measured should be measured as long-term
equity investment by cost method. After
executed the No. 2 of ASBE–Long-term Equity
Investment (revised in 2014), the Group
measured the equity investment which didn’t
-17,464,240.74
have joint control or significant influences on
the investees and had no quotation in the active
market as well as its fair value could not be
reliable measured as available-for-sale financial
assets. The Group executed the accounting
treatment of the above changes of accounting
policies by retrospective application.
No. 30 of ASBE–Presentation of Financial Other
Statement (revised in 2014) had divided the comprehensive 9,354,020.21
other comprehensive income into two income
categories: (1) other comprehensive income
items which could not be re-classified into gains
No. 30 of and losses in afterwards accounting period; (2)
ASBE–Presentation other comprehensive income items which could
not be re-classified into gains and losses when
Discounted
of Financial satisfying the specific conditions in afterwards amount of the
accounting period and at the same time specify -9,354,020.21
Statement foreign currency
the presentation of the held-to-sold items etc.
statement
The Financial Statement had presented
according to the criterion and executed
corresponding adjustment compared to the
presentation of the Annual Financial Statement.
Other accounting polices changes related to the newly issued or newly revised ASBE
① No. 9 of ASBE-Employee Compensation:
Before executing the No. 9 of ASBE-Employee Compensation (revised in 2014), if the Company had formulated
formal plan for the cancellation of labor relationship or had put forward the voluntary layoff proposal and will be
executed, and at the same time the Company could not unilateral withdrawal the cancellation of labor relationship
plan or the layoff proposal, for the dismiss welfare which of the cancellation of the labor relationship before the
due time of the worker labor contract or the advice that providing the compensations for encouraging the labor
voluntarily accepting the layoff, should recognize the estimated liabilities cause by the cancellation of the labor
relationship and include which into the current gains and losses. After executed the No. 9 of ASBE-Employee
22
2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Compensation (revised in 2014), please see the details of the accounting polices of the dismiss welfare to the
Notes IV. 24. Adopting the No. 9 of ASBE-Employee Compensation (revised in 2014) not caused significant
influences of the measurement of the financial statement. The Financial Statement had been disclosed according to
the criterion.
② No. 33 of ASBE-Consolidation of Financial Statement (revised in 2014):
No. 33 of ASBE-Consolidation of Financial Statement (revised in 2014) similarly stipulated that “the
consolidation scope of the Consolidation Financial Statement should be recognized based on the control”, but had
revised the definition “control” as “refers to the power of the investors on the invetees, which could enjoy the
variable returns through participate in the relevant activities of the investees and has the ability to use the power
on the investees to influence its return amount”. The criterion after revised required the investees to adjust the
investees based on whether the investors control the investees on deliberating all the relevant facts and situations
and provided more specific guidance on the judgment problems of the control right. The control right judgment
standard stipulated after the revise of the criterion that met with by the subsidiaries which are included in the
consolidation scope of the previous years of the Company, the changes of the former would not cause significant
influences on the financial statement of the Company.
③ No. 37 of ASBE—Presentation of Financial Instruments:
No. 37 of ASBE—Presentation of Financial Instruments (revised in 2014) increased the regulation about off-set
and the disclosure requirements as well as the disclosure requirements of the transfer of the financial assets, and
verified the disclosure requirements of the overdue period analysis of the financial assets and liabilities. The
financial statement had presented according to the ASBE and had made corresponding adjustment on the
disclosure of the notes of the comparable annual financial statement.
④ No. 39 of ASBE—Fair Value Measurement:
No. 39 of ASBE—Fair Value Measurement standardized the measurement and disclosure of the fair value. To
adopt No. 39 of ASBE—Fair Value Measurement not caused significant influence on the measure of the financial
statement items, but had led the enterprises made wider disclosure of the fair value information of the notes of the
financial statement. The financial statement had been disclosed according to regulations of the ASBE.
⑤ No. 40 of ASBE-Joint Venture Arrangement
No. 40 of ASBE-Joint Venture Arrangement stipulated the accounting treatment of the joint venture arrangement
owned joint control. The criterion stipulated two types of joint venture arrangement: joint operation and joint
ventures. The category of the joint venture depended on the rights and obligations enjoyed by the participate party
on the joint venture arrangement. Joint operation refers to the right assets related to the arrangement enjoyed by
the common operators and takes the responsibility of the joint venture arrangement of the obligations of the
liabilities related to the arrangement as well as executes the accounting treatment according to the obligations and
rights among the joint venture of the common operators; joint venture refers to the joint venture arrangement that
the common operators enjoy the rights on the net assets of the arrangement, and execute the accounting treatment
adopting equity method according to the regulations of No.2 of ASBE-Long-term Equity Investment. Adopting
the No. 40 of ASBE-Joint Venture Arrangement had not caused significant influences on the measurement of the
financial statement items.
⑥ No. 41 of ASBE—Equity Disclosure of Other Entities
No. 41 of ASBE—Equity Disclosure of Other Entities is adapted to the disclosure of the equity for the enterprises
among the subsidiaries, joint venture arrangement, joint operation and structured entities which not included in the
consolidation financial statement. To adopt No. 41 of ASBE—Equity Disclosure of Other Entities will lead the
enterprises made wider disclosure of the fair value information of the notes of the financial statement. The
financial statement had presented according to the ASBE and had made corresponding adjustment on the
23
2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
disclosure of the notes of the comparable annual financial statement.
(2) Alteration of the accounting estimate
XII. Explain retrospective restatement due to correction of significant accounting errors in
the reporting period
□ Applicable √ Inapplicable
There was no retrospective restatement due to correction of significant accounting errors of the Company in the
reporting period.
XIII. Explain change of the consolidation scope as compared with the financial reporting of
last year
□ Applicable √ Inapplicable
There was no change of the consolidation scope of the Company in the reporting period.
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
2013 Proposal on Profit Distribution of the Company was reviewed and approved by the 10th Session of the 7th
Meeting of the Board of Directors on 28 Mar. 2014 and the 2013 General Meeting of Shareholders on 23 Apr.
2014, which decided that, 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.
Special explanation of the cash dividend policy
The conditions and process of formulation of the
Whether conformed with the regulations of the Articles Retribution Plan for the Company’s Shareholders, the
of association or the requirements of the resolutions of revision of the Articles of Association was compliance and
the shareholders’ meeting: transparent with the contents met with the 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
definite and clear: and clear after revision.
Whether the relevant decision-making process and the The relevant decision-making process and system was
system were complete: completed.
The independent director executed dutifully and gave
Whether the independent director acted dutifully and
independent advice of the cash dividend policy of the
exerted the proper function:
Company.
Whether the medium and small shareholders had the
chances to fully express their suggestions and appeals, Yes
of which their legal interest had gained fully protection:
Whether the conditions and the process met the
regulations and was transparent of the adjustment or Yes
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 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;
In 2013, the net profit of 2013 will be used for covering the deficit of the previous years. And thus no profit
24
2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
distribution or capitalization of capital reserves will be conducted;
In 2014, 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 distribution of the Company over the recent three years:
Unit: RMB Yuan
The ratio
Net profit
accounting in net
belonging to The amount The proportion
profit which
shareholders of offered and offered and
Amount of cash belongs to
the listed re-purchased the re-purchased the
Dividend year dividend shareholders of
company in shares by cash shares by cash
(including tax) the listed
consolidated that included in that included in
company in
statement of the cash bonus the cash bonus
consolidated
dividend year
statement
2014 0.00 298,033,316.49 0.00% 0.00 0.00%
2013 0.00 228,268,271.23 0.00% 0.00 0.00%
2012 0.00 106,814,543.53 0.00% 0.00 0.00%
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
□Applicable √Inapplicable
The Company planed not to distribute the cash bonus and bonus shares as well as not transfer the reserved funds
into share capital.
XVI. Social responsibilities
√ Applicable □ Inapplicable
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 constructed the volunteer team and party member volunteer service team and
actively carried out the volunteer service and party member volunteer service activities; persisted in carrying out
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 donated such as money and clothes 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. In the reporting period, the Company received the
title of “Most Honest Enterprise of Guangdong Province for 2013”.
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
25
2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
□ Yes √ No □ Inapplicable
XVII. Particulars about researches, visits and interviews received in this reporting period
√ Applicable □ Inapplicable
Time of Place of Way of Main discussion and materials provided by
Visitor type Visitor
reception reception reception the Company
Consult of the annual operation situation of
the Company, and the projects development
By Individual
9 Jan. 2014 Office Individual progress as well as the influences on the
telephone investor
operation by the state and polices etc., didn’t
offer written materials
Consult of the estimated disclosure date of
By Individual the annual report of the Company and the
6 Mar. 2014 Office Individual
telephone investor sales situation of Guangming and Longgang,
didn’t offer written materials
Consult of the operation situation and the
By Individual
25 Apr. 2014 Office Individual decrease reasons of the current shares price,
telephone investor
didn’t offer written materials
Consult of the projects development
By Individual progress of the first half year and the sales
26 Jun. 2014 Office Individual
telephone investor situation of the Company, didn’t offer
written materials
Consult of the operation situation of the first
By Individual half year and the estimated disclosure date of
11 Jul. 2014 Office Individual
telephone investor the semi-annual report of the Company,
didn’t offer written materials
Consult of the projects development sales
By Individual
19 Aug. 2014 Office Individual situation of the Company, didn’t offer
telephone investor
written materials
Consult of the influences situation on the
Company of Shenzhen state-owned assets
By Individual
17 Sep. 2014 Office Individual reform of state-owned enterprises and the
telephone investor
projects development sales situation, didn’t
offer written materials
Consult of the relevant situation of the
By Individual
10 Oct. 2014 Office Individual number of the Company shareholders, didn’t
telephone investor
offer written materials
Consult of the relevant situation of the
By Individual
12 Nov. 2014 Office Individual number of the Company shareholders, didn’t
telephone investor
offer written materials
Consult of the 2014 operation situation of
the Company and the projects development
By Individual progress as well as the relevant situation of
29 Dec. 2014 Office Individual
telephone investor Shenzhen state-owned assets reform of
state-owned enterprises , didn’t offer written
materials
Reception times 10
Number of reception institutions 0
Number of reception person 10
Number of receipting other targets 0
Whether disclose, reveal or let out
No
unpublished significant information
26
2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Section V. Report of the Supervisory Committee
In 2014, 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 the inspection of the capital safety, of the follow-up reform of the engineering visas as well as of
the contacts execution 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 8th Session of the 7th Supervisory Committee was convened on 28 Mar. 2014, at which
reviewed and approved the 2013 Annual Report and its Summary, Profit Distribution Preplan for
Y2013, 2013 Annual Report of Supervisory Committee and the Proposal on 2013 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 9th Session of the 7th Supervisory Committee was convened on 23 Apr. 2014, at which
reviewed and approved the 1st Quarterly Report for 2014 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 10th Session of the 7th Supervisory Committee was convened on 23 Aug. 2014, at which
reviewed and approved the 2014 Semi-annual Report 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
27
2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
abstentions.
th
(IV) The 11th Session of the 7 Supervisory Committee was convened on 22 Oct. 2014, at which
rd
reviewed and approved the 3 Quarterly Report for 2014 and its Abstract. Four supervisors attended
the session, and the voting result of the session was as follows: 5 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 2014, 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 2014.
(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’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 150 million.
3. 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.
(V) Opinion about the Company’s self-appraisal on its internal control: In 2014, 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; and the
28
2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Company’s self-appraisal report on its internal control was in line with the actual condition of the
Company.
29
2014 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 Date of
Basic (RMB Execution Disclosure
liability Progress Ruling and influence disclosur
information Ten of ruling index
or not e
Thousand
Yuan)
① Business Tourism
Company had to pay for
the compensation RMB The
36,620 thousand and applicant
the relevant interest has
(from 14 Sept. 1998 to received
the payment day) to RMB 15.20
Xi’an Project Xi’an Fresh Peak million.
Lawsuit (For
Company within one Now
details, see
month after the Business
“Note judgment entering into Tourism
VII”—“Conting
force. If the Business Company
ent
Tourism Company has no
Events”—“1. Semi-annual
failed to pay in time, it executable
Contingent In 29 Mar. Report on
2,100 No had to pay double debt properties
liabilities due to execution 2014 www.cninfo.c
interests to Xi’an Fresh and Xi’an
pending Peak Company for the Joint om.cn
lawsuits or
overdue period; ② Commissio
arbitrations, as
well as the Xi’an Joint n on
Commission on Commerce
financial
influence Commerce had jointly has been
thereof”.) and severally obligation refusing to
of the interests of the execute the
compensation; . ③ ruling. It is
Business Tourism difficult to
Company shall bear recover the
RMB 227,500 of the rest.
acceptance fee and the
security fee.
Luofu Hill ① Luofu Hill Tourism Because the
project Lawsuit Company has paid back state-owned
(For details, see RMB 9.6 million; ② land
“Note Luofushan resource
VII”—“Conting Administration administrati Semi-annual
ent In Committee had to on cannot 29 Mar. Report on
960 No
Events”—“1. execution undertake one third of work out 2014 www.cninfo.c
Contingent the debts which the om.cn
liabilities due to Luofushan Tourism was planning
pending unable to repay; ③ key points
lawsuits or Luofu Hill Tourism for the
arbitrations, as Company shall bear sealed
30
2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
well as the RMB 167,700 of the land, the
financial case acceptance fee and land cannot
influence the security fee. be
thereof”.) auctioned.
II. Media’s questions
□ Applicable √ Inapplicable
There was no media’s question during the reporting period.
II. Occupation of the Company’s capital by the controlling shareholder and its related parties
for non-operating purposes
□ Applicable √ Inapplicable
There was no occupation of the Company’s capital by the controlling shareholder and its related parties for
non-operating purposes of the reporting period.
IV. Bankruptcy and reorganization
□ Applicable √ Inapplicable
There was no bankruptcy and reorganization of the Company of the reporting period.
V. Asset transactions
1. Asset acquisition
□ Applicable √ Inapplicable
There was no such situation.
2. Sale of assets
□ Applicable √ Inapplicable
There was no such situation.
3. Business combination
□ Applicable √ Inapplicable
There was no such situation.
VI. Implementation and influence of equity incentive plan of the Company
□ Applicable √ Inapplicable
There was no implementation and influence of equity incentive plan of the Company of the reporting period.
31
2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
VII. Significant related-party transactions
1. Related-party transactions concerning routine operation
√ Applicable □ Inapplicable
Settleme
Pricing
Type of Contents Proporti nt
principl Transact
the of the on in method
Related e of the Transact ion Date of Index of
Relation related- related-p same of the Market
transacti related- ion amount disclosu disclosu
ship party arty kind of related- price
on party party price (RMB re re
transacti transacti transacti party
transacti 0,000)
on on ons transacti
on
on
Under
The
the same
related
control Contract
Shenzhe party
of the ual
n Jianan offered
Compan Constru Negotiat amount 100.00 Bank
Group bid for 150 -
y’s ction ed price of RMB % transfer
Co., the
controlli 40,519,4
Ltd. wholly
ng 00
subsidia
sharehol
ry
der
Total -- -- 150 -- -- -- -- --
Details about return of large-amount
N/A
sales
Necessity and consistency of the The related-party transactions above were helpful to the main business of
related-party transaction, as well as the Company and they were within the normal business scope of the
the reasons why the related party is Company. They were carried out with the transaction prices determined
chosen over other parties in the according to market prices of transactions of the same kind. They were fair
market to deal with and rational, with no harm done to the interests of the Company.
Influence of the related-party
The related-party transactions above had no influence on the independency
transaction on independency of the
of the Company.
Company
The Company’s independence on the
The Company would not have to rely on or be controlled by the related
related part and the relevant
parties due to these transactions.
solutions (if any)
Where the Company classifies and
estimates the total amount of routine
related-party transactions for the
Inapplicable
reporting period, explain the actual
implementation during the reporting
period (if any)
Explain why the transaction price is
greatly different from the market Inapplicable
price
2. Related-party transactions arising from asset acquisition or sale
□ Applicable √ Inapplicable
There was no related-party transaction arising from asset acquisition or sale of the Company of the reporting
period.
32
2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
3. Significant related-party transactions concerning joint investment in external parties
□ Applicable √ Inapplicable
There was no significant related-party transaction concerning joint investment in external parties of the Company
of the reporting period.
4. Credits and liabilities with related parties
√ Applicable □ Inapplicable
Was there any non-operating credit or liability with any related party?
□ Yes √ No
Amount
Opening during the Closing
Non-operati
Type of Reason for balance reporting balance
ng capital
Related party Relation credit/liabili credit/liabili (RMB period (RMB
occupation
ty ty Thousand (RMB Thousand
(Yes/No)
Yuan) Thousand Yuan)
Yuan)
The
subsidiary
handled the
agent
Subsidiary business for
(has the
Credit
Shenzhen Xinfeng conducted Company or
receivable
Property the the No 108.48 0.24 108.72
from related
Consultant Co., Ltd employees’ Company
party
shareholdin provided
g reform) investment
or loans for
it in
previous
years
The
Company
provided
Guangdong Credit
investment
province Huizhou Joint receivable
or loans for No 1,046.52 - 1,046.52
Luofu Hill mineral venture from related
the
water Co., Ltd party
subsidiary
in previous
years
The
Company
provided
Credit
Shenzhen Runhua investment
Associated receivable
Automobile or loans for No 307.28 - 307.28
enterprise from related
Trading Co., Ltd the
party
subsidiary
in previous
years
Canada Great Wall Credit The
(Vancouver) Co., Subsidiary receivable Company No 8,903.57 - 8,903.57
Ltd from related provided
33
2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
party investment
or loans for
the
subsidiary
in previous
years
The
Company
provided
Credit
investment
Bekaton Property receivable
Subsidiary or loans for No 1,255.93 - 1,255.93
Limited from related
the
party
subsidiary
in previous
years
Credit Current
receivable accounts in
Paklid Limited Subsidiary No 1,842.81 1.81 1,844.62
from related previous
party years
Credit Current
Shenzhen Shenfang
receivable accounts in
Department Store Subsidiary No 23.76 - 23.76
from related previous
Co. Ltd.
party years
Credit Current
Shenzhen Real
receivable accounts in
Estate Consolidated Subsidiary No 108.65 - 108.65
from related previous
Service Co., Ltd.
party years
Shenzhen City
Credit Current
Shenfang
receivable accounts in
Construction and Subsidiary No 832.72 - 832.72
from related previous
Decoration
party years
Materials Ltd.
Subsidiary
(has
Credit Current
conducted
Shenzhen Ronghua receivable accounts in
the No 47.52 - 47.52
JiDian Co., Ltd from related previous
employees’
party years
shareholdin
g reform)
Credit Current
Xi’an Fresh Peak Joint receivable accounts in
No 841.92 - 841.92
Building Co. Ltd. venture from related previous
party years
Shenzhen Tefa Current
Liability
Real Estate accounts in
Subsidiary payable to No 59.80 - 59.80
Consolidated previous
related party
Service Co., Ltd. years
Shenzhen Shen Current
Liability
Fang Industrial accounts in
Subsidiary payable to No 153.49 - 153.49
Development Co., previous
related party
Ltd years
Current
Shenzhen Liability
accounts in
ZhongGang Haiyan Subsidiary payable to No 13.59 - 13.59
previous
Enterprise Ltd. related party
years
Shenzhen Liability Current
Subsidiary No 90.30 - 90.30
Dongfang New payable to accounts in
34
2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
world store Co., related party previous
Ltd years
Current
Shenzhen Xin Liability
accounts in
Dongfang Store Subsidiary payable to No 139.47 - 139.47
previous
Ltd. related party
years
Fengkai Lain Feng Current
Liability
Cement accounts in
Subsidiary payable to No 186.73 - 186.73
Manufacturing Co., previous
related party
Ltd. years
Current
Liability
Shenzhen accounts in
Subsidiary payable to No 796.47 - 796.47
CyberPort Co., Ltd previous
related party
years
ShenZhen Current
Liability
ShenFang BaoAn accounts in
Subsidiary payable to No 2,009.34 - 2,009.34
development Co., previous
related party
Ltd years
The
principal
Shenzhen Liability and interest
Controlling
Investment payable to of loans No 7,038.41 - 7,038.41
shareholder
Holdings Co., Ltd. related party from the
controlling
shareholder
There was no appropriation of funds of the Company by the controlling
Effects of the credits and
shareholder and its controlled related parties, the Company’s credits and
liabilities with related parties on
liabilities with the subsidiaries, joint ventures and associated enterprises arose
the Company’s operating results
from investment and current accounts, which had no negative influence on the
and financial situation
normal operation of the Company.
5. Other significant related-party transactions
□ Applicable √ Inapplicable
There was no other significant related-party transaction.
VIII. Particulars about significant contracts and their fulfillment
1. Particulars about trusteeship, contract and lease
(1) Trusteeship
□ Applicable √ Inapplicable
There was no such situation.
(2) Contract
□ Applicable √ Inapplicable
There was no such situation.
35
2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
(3) Lease
□ Applicable √ Inapplicable
There was no such situation.
2. Guarantees provided by the Company
√ Applicable □ Inapplicable
Unit: RMB Ten Thousand Yuan
Guarantees provided by the Company for external parties (excluding those for subsidiaries)
Disclosur
e date of
Guarant
relevant Actual
Amount Actual ee for a
announce occurrence Type of Period of Execute
Guaranteed party for guarantee related
ment on date (date of guarantee guarantee d or not
guarantee amount party or
the agreement)
not
guarantee
amount
Total actual occurred
Total external guarantee line
amount of external
approved during the 0 0
guarantee during the
reporting period (A1)
reporting period (A2)
Total external guarantee line Total actual external
that has been approved at the guarantee balance at the
0 0
end of the reporting period end of the reporting
(A3) period (A4)
Guarantees provided by the Company for its subsidiaries
Disclosur
e date of
Guarant
relevant Actual
Amount Actual ee for a
announce occurrence Type of Period of Execute
Guaranteed party for guarantee related
ment on date (date of guarantee guarantee d or not
guarantee amount party or
the agreement)
not
guarantee
amount
Shantou SEZ,
Wellam FTY, Joint
Three
Building 13,000 17 Apr. 2013 13,000 liability No No
years
Development Co., guarantee
Ltd.
Total guarantee line Total actual occurred
approved for the subsidiaries amount of guarantee for
0 0
during the reporting period the subsidiaries during the
(B1) reporting period (B2)
Total guarantee line that has Total actual guarantee
been approved for the balance for the
13,000 13,000
subsidiaries at the end of the subsidiaries at the end of
reporting period (B3) the reporting period (B4)
Total guarantee amount provided by the Company (total of the above-mentioned two kinds of guarantees)
Total actual occurred
Total guarantee line
amount of guarantee
approved during the 0 0
during the reporting
reporting period (A1+B1)
period (A2+B2)
Total guarantee line that has 13,000 Total actual guarantee 13,000
36
2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
been approved at the end of balance at the end of the
the reporting period reporting period (A4+B4)
(A3+B3)
Proportion of total guarantee amount (A4+B4) to the
6.01%
net assets of the Company
Of which:
Amount of guarantee for shareholders, actual
0
controller and related parties (C)
Amount of debt guarantee provided for the guaranteed
party whose asset-liability ratio is not less than 70% 0
directly or indirectly (D)
Part of the amount of the total guarantee over 50% of
0
net assets (E)
Total amount of the above three guarantees (C+D+E) 0
The Company offered mortgage loan guarantees for the
Explanation on possible bearing joint responsibility of commercial residential building purchaser. Up to 31 Dec.
liquidation due to immature guarantee 2013, the amount of the unsettled guarantee was of RMB
35,406.6 million.
Explanation on provision of guarantees for external
N/A
parties in 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.
2014, the amount and the term of the unsettled guarantee were as follows:
Unsettled amount (RMB Ten
Item Term
Thousand Yuan)
11,641.00
Shenzhen Properties From the issuing of the loans to the completion
of the transaction of the mortgage registration of
Chuanqi Hill Project contract of advance sales
1,072.70
Till the completion of the mortgage registration
Shenzhen Properties of property ownership certificate and should summit to
Chuanqi Hill Project the bank for custody
21,271.90
From the issuing of the loans to the completion
Shenzhen Properties of the transaction of the mortgage registration of
Shanglin Garden Project contract of advance sales
Shenzhen Properties Till the completion of the mortgage registration 1,421.00
Shanglin Garden Project of property ownership certificate and should summit to
the bank for custody
Total 35,406.60
The Company belongs to the real estate industry. As for property developer shall provide pledge loan guarantee
for property purchaser in accordance of relevant regulations of People’s Band of China, currently the Company
provides periodic joint guarantee for property purchaser. The guarantee term is from disbursement date to the date
when the Certificate of Real Estate of the property purchaser is handled by the mortgage banker. If the home
buyer mentioned above didn’t perform the debtor’s duties within the guarantee period, then the Company has the
right to take back the properties sold. Therefore, the said guarantee will not cause actual loss to the Company.
37
2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
(1) Illegal external guarantee
□ Applicable √ Inapplicable
There was no such situation.
3. Other significant contract
□ Applicable √ Inapplicable
There was no such situation.
4. Other significant transactions
□ Applicable √ Inapplicable
There was no such situation.
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
□ Applicable √ Inapplicable
There was no commitment made by the Company or shareholders holding over 5% of the Company’s shares in the
reporting period, or such commitment carried down into the reporting period.
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:
□ Applicable √ Inapplicable
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
58
Ten Thousand Yuan)
Consecutive years of the audit services
1
provided by domestic CPAs firm
Name of the certified public accountants
Cai Xiaodong, Liu Yuxiang
from the domestic CPAs firm
Name of overseas CPAs firm (if any) N/A
Remuneration of overseas CPAs firm (RMB
0
Ten Thousand Yuan) (if any)
Consecutive years of the audit services
N/A
provided by overseas CPAs firm (if any)
Name of the certified public accountants
N/A
from the overseas CPAs firm (if any)
Reengage the CPAs firm at current period or not?
38
2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
□ Yes √ No
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
□ Applicable √ Inapplicable
XII. Punishment and rectification
□ Applicable √ Inapplicable
There was no punishment and rectification of the Company of the reporting period.
XIII. Particulars about trading suspension and termination faced after the disclosure of
annual report
□ Applicable √ Inapplicable
XIV. Explanation on other significant events
√ Applicable □ Inapplicable
In 2014, according to the government plan, the land plot ratio of the Land Plot of H312-0061 of Donghu Dijing
Mingyuan Project had reduced from 10.1 to 5.8, and for compensation, the first directly authority under Urban
Planning Land and Resources Commission of Shenzhen Municipality issued a document that to replaced the
covered area of the reduced the Land Plot of H312-0061 of Donghu Dijing Mingyuan Project to the statutory plan
of No. 0.8-22 Land Plot of [Jingtian District] statutory plan with the relevant formalities were under transaction.
XV. Significant events of the subsidiaries of the Company
□ Applicable √ Inapplicable
XVI. Particulars about issuing corporate bonds by the Company
□ Applicable √ Inapplicable
39
2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Section VII. Changes in Shares and Particulars about Shareholders
I. Changes in share capital
(I) Chart on changes in share capital
Unit: Share
Before the change Increase/decrease (+, - ) After the change
Capitaliz
Issuance
Proporti Share ation of Proportio
Amount of new Other subtotal Amount
on (%) bonus capital n (%)
shares
reserve
I. Shares subject to
0 0.00% 0 0 0 0 0 0 0.00%
trading moratorium
1. State-owned shares 0 0.00% 0 0 0 0 0 0 0.00%
2. Shares held by
state-owned 0 0.00% 0 0 0 0 0 0 0.00%
corporation
3. Other shares held by
0 0.00% 0 0 0 0 0 0 0.00%
domestic investors
Including: share held
by domestic legal 0 0.00% 0 0 0 0 0 0.00%
person
Shares held by
domestic natural 0 0.00% 0 0 0 0 0 0 0.00%
person
4. Shares held by
0 0.00% 0 0 0 0 0 0.00%
foreign investors
Including: Share held
0 0.00% 0 0 0 0 0 0 0.00%
by foreign corporation
Share held by foreign
0 0.00% 0 0 0 0 0 0 0.00%
natural person
II. Shares not subject 1,011,66 1,011,66
100.00% 0 0 0 0 0 100.00%
to trading moratorium 0,000 0,000
1. RMB ordinary 891,660, 891,660,
88.14% 0 0 0 0 0 88.14%
shares 000 000
2. Domestically listed 120,000, 120,000,
11.86% 0 0 0 0 0 11.86%
foreign shares 000 000
3. Overseas listed
0 0.00% 0 0 0 0 0 0 0.00%
foreign shares
4. Others 0 0.00% 0 0 0 0 0 0 0.00%
1,011,66 1,011,66
III. Total shares 100.00% 0 0 0 0 0 100.00%
0,000 0,000
Reasons for change in share capital
□Applicable √Inapplicable
Particulars about the approval of the change in share capital
□Applicable √Inapplicable
The transfer of change in share capital
40
2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
□Applicable √Inapplicable
Change in share capital’s impacts on basic EPS and diluted EPS in recent year and recent issue, and net assets per
share attributed to equity shareholder and financial index etc.
□Applicable √Inapplicable
Other contents was necessary to the company or the securities regulators required to be disclosed
□Applicable √Inapplicable
Changes of the Company’s share number and structure, as well as the corresponding changes in its asset-liability
structure
□Applicable √Inapplicable
2. Changes in restricted shares
□Applicable √Inapplicable
II. Issuance and listing of securities
1. Issuance of securities over the past three years
□ Applicable √ Inapplicable
2. Explanation on changes in share capital & the structure of shareholders, the structure of assets and
liabilities
□ Applicable √ Inapplicable
3. Particulars about staff shares
□ Applicable √ Inapplicable
III. Particulars about the shareholders and actual controller
1. Total number of shareholders and their shareholding
Unit: share
Total number of Total number of
Total number of shareholders on preferred
shareholders at the fifth trading stockholder with
66,337 0
the reporting day before the vote right
period disclosure date of restored( if any
the annual report note 8)
Shareholding of shareholders holding more than 5% shares
Number Increase Number Number Pledged or frozen shares
Holding of and of of shares
Name of Nature of
percenta sharehol decrease shares held not Status of Number of
shareholder shareholder
ge (%) ding at of held subject shares shares
the end shares subject to
41
2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
of the during to trading
reportin reportin trading moratori
g period g period moratori um
um
SHENZHEN
INVESTMEN State-owned 642,884, 642,884,
63.55%
T HOLDINGS corporation 262 262
CO., LTD
SHENZHEN
Domestic
TOURISM 27,625,8 27,625,8
non-state-owne 2.73%
( GROUP ) 61 61
d corporation
CO., LTD.
WEN Domestic 4,250,09 4,250,09
0.42%
JIANJUN natural person 2 2
Domestic 3,220,51 3,220,51
WANG JINBO 0.32%
natural person 5 5
QIAN Domestic 2,193,25 2,193,25
0.22%
HONGRUI natural person 0 0
DACHENG
VALUE
Domestic
GROWTH 1,834,08 1,834,08
non-state-owne 0.18%
SECURITIES 5 5
d corporation
INVESTMEN
T FUND
LIN Domestic 1,594,50 1,594,50
0.16%
ZHANGYOU natural person 0 0
GUOTAI
JUNAN
Foreign 1,583,15 1,583,15
SECURITIES( 0.16%
corporation 0 0
HONGKONG)
LIMITED
Domestic 1,520,00 1,520,00
CHEN CHAO 0.15%
natural person 0 0
Domestic 1,439,68 1,439,68
GAO QIANG 0.14%
natural person 7 7
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 The Company found no relationship between the shareholders above, and also
relationship or/and persons did not find them belong to the shareholders Listed Company change in
acting in concert among the shareholding ownership Information Management Approach specified in the act
above-mentioned shareholders: in concert.
Particulars about shares held by the top ten shareholders holding shares not subject to trading moratorium
Number of tradable shares held at the year-end Type of shares
Name of shareholder
(Note 4) Type Number
SHENZHEN INVESTMENT Renminbi
642,884,262 642,884,262
HOLDINGS CO., LTD ordinary shares
SHENZHEN TOURISM Renminbi
27,625,861 27,625,861
( GROUP ) CO., LTD. ordinary shares
Renminbi
WEN JIANJUN 4,250,092 4,250,092
ordinary shares
Renminbi
WANG JINBO 3,220,515 3,220,515
ordinary shares
Renminbi
QIAN HONGRUI 2,193,250 2,193,250
ordinary shares
42
2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
DACHENG VALUE GROWTH
Renminbi
SECURITIES INVESTMENT 1,834,085 1,834,085
ordinary shares
FUND
Renminbi
LIN ZHANGYOU 1,594,500 1,594,500
ordinary shares
GUOTAI JUNAN Domestically
SECURITIES(HONGKONG) 1,583,150 listed foreign 1,583,150
LIMITED shares
Renminbi
CHEN CHAO 1,520,000 1,520,000
ordinary shares
Renminbi
GAO QIANG 1,439,687 1,439,687
ordinary shares
Explanation on associated
relationship or/and persons
The Company found no relationship between the shareholders above, and also
acting in concert among the top
did not find them belong to the shareholders Listed Company change in
ten tradable shareholders and
shareholding ownership Information Management Approach specified in the act
between the top ten tradable
in concert.
shareholders and the top ten
shareholders
Explanation on shareholders
participating in securities
The 7th and 10th shareholders participated in securities margin trading.
margin trading (if any) (See
note 4)
Whether the shareholders of a company conducted the transaction of repurchase under the agreement during the
reporting period
□ Yea √ No
The shareholders of a company did not conduct the transaction of repurchase under the agreement during the
reporting period.
2. Particulars about the controlling shareholder
Corporation
Legal
Name of controlling representative / Date of Organization Registered
Business scope
shareholder company establishment code capital
principal
State-owned equity
investment and management,
Shenzhen the government allocation of
RMB 10.9
Investment Holdings Fan Mingchun Oct. 13, 2004 76756642-1 land development and
billion
Co., Ltd. management and strategic
emerging industry investment
and service.
In the future, the Company will centre on the overall goal of transformation development
and innovative development to intensify deepening comprehensive reform; perfect corporate
Future development
governance structure, Innovate management system and mechanism, further strengthen the
strategy
construction of staff team and corporate culture, and enhance the control and influence of
state-owned capital.
Operating results,
As of 31 Dec. 2014, the Company’s total assets were RMB 316.625 billion, net assets was
financial situation,
RMB130.685 billion. In 2014 from Jan. to Dec. the Company had realized the operating
cash flow and future
income RMB 33.336 billion, and the total profit was 13.609 billion (The above data were not
development
audited).
strategy, etc.
Shares held by the SWY (000011): with a total of 380,366,000 shares held and shareholding proportion of
43
2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
controlling 63.81%;
shareholder in other SFZ (000045): with a total of 23,406,900 shares held and shareholding proportion of
listed companies by 46.21%;
holding or SSB (000019): with a total of 40,143,600 shares held and shareholding proportion of 16%;
shareholding during STD (000023): with a total of 18,134,900 shares held and shareholding proportion of 11%;
the reporting period ZGPA (601318): with a total of 481,359,600 shares held and shareholding proportion of
6.08%;
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%.
GXZQ (002736): with a total of 2,749,526,814(shares held and shareholding proportion of
33.53%.
Change of the controlling shareholder during the reporting period
□ Applicable √ Inapplicable
There was no change of controlling shareholders during the reporting period
3. Particulars about the actual controller
Corporation
Legal
Name of the actual representative / Date of Organization Registered
Business scope
controller company establishment code capital
principal
Shenzhen Perform the responsibilities of
State-owned Assets investor on behalf of the state,
Supervision and Zhang Xiaoli 1 Aug. 2004 K3172806-7 and supervise and manage the
Administration authorized state-owned assets
Commission legally.
As the special organization directly under Shenzhen Municipal Government, it performs
Future development
the responsibilities of investor on behalf of the state, and supervises and manages the
strategy
authorized state-owned assets legally.
Operating results, Shenzhen Municipal State-owned Assets Commission was established on 31 Jul. 2004, and
financial situation, changed its name as “Shenzhen Municipal People’s Government State-owned Assets
cash flow and future Supervision and Administration Bureau” in 2009, and changed its name as “Shenzhen
development Municipal People’s Government State-owned Assets Supervision and Administration
strategy, etc. Commission”.
Equity of
shareholding and
participating shares
In addition to the Company controlling shareholder - Shenzhen Investment Holding Co.,
of actual controllers
Ltd. Other domestic and overseas listed companies whose equity held by the actual
in other domestic
controllers did not rank among the top ten shareholders of the Company before.
and foreign listed
company during the
reporting period
Changes on actual controller during the reporting period
□ Applicable √ Inapplicable
There was no change of actual controlling shareholders during the reporting period
Block diagram of equity and control relationship between the company and actual controller:
44
2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
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 with shareholding proportion over 10%
□ Applicable √ Inapplicable
IV. Particulars on shareholding increase scheme during the reporting period proposed or
implemented by the shareholders and act-in-concert persons
□ Applicable √ Inapplicable
Within the scope of the Company known, there was no shareholding increase scheme during the reporting period
proposed or implemented by the shareholders and act-in-concert persons
45
2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Section VIII. Preferred stock
□ Applicable √ Inapplicable
There was no preferred stock during reporting period.
46
2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Section IX. Directors, Supervisors, Senior Management Staffs and
Employees
I. Changes in shareholding of directors, supervisors and senior management staffs
Amount Amount
Amount
Shares of shares of shares
shares
held at increased decrease
Office Tenure Ending held at
Name Sex Age Start date the at the d at the
title status date the
year-begi reporting reporting
period-en
n (share) period period
d (share)
(share) (share)
Chairma
Zhou 17 Apr. 16 Apr.
n of the Current Male 59 0 0 0 0
Jianguo 2012 2015
Board
General
Chen
Manager 17 Apr. 16 Apr.
Maozhen Current Male 50 0 0 0 0
and 2012 2015
g
Director
Zhuang Supervis 17 Apr. 16 Apr.
Current Male 59 0 0 0 0
Quan or 2012 2015
Deng
17 Apr. 16 Apr.
Kangche Director Current Male 48 0 0 0 0
2012 2015
ng
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
Zhang CFO and 17 Apr. 16 Apr.
Current Male 46 0 0 0 0
Lei Director 2012 2015
Independ
Liu 17 Apr. 16 Apr.
ent Current Male 50 0 0 0 0
Quanmin 2012 2015
Director
Independ
Song 17 Apr. 16 Apr.
ent Current Male 46 0 0 0 0
Botong 2012 2015
Director
Independ
Zhang 23 Apr. 16 Apr.
ent Current Male 48
Shunwen 2014 2015
Director
Wang Supervis 17 Apr. 16 Apr.
Current Female 52 0 0 0 0
Xiuyan or 2012 2015
Supervis 17 Apr. 16 Apr.
Li Yufei Current Female 36 0 0 0 0
or 2012 2015
Xiong
Supervis 17 Apr. 16 Apr.
Xingnon Current Male 58 0 0 0 0
or 2012 2015
g
Shi
Supervis 17 Apr. 16 Apr.
Chunron Current Male 58 0 0 0 0
or 2012 2015
g
Teng Vice 17 Apr. 16 Apr.
Current Male 57 0 0 0 0
Xianyou General 2012 2015
47
2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Manager
Vice
Wei 17 Apr. 16 Apr.
General Current Female 48 0 0 0 0
Hanping 2012 2015
Manager
Tang Vice 17 Apr. 16 Apr.
Current Male 44 0 0 0 0
Xiaoping president 2012 2015
Secretary
17 Apr. 16 Apr.
Chen Ji of the Current Male 43 0 0 0 0
2012 2015
board
Independ
Zhou 17 Apr. 23 Apr.
ent Former Male 45 0 0 0 0
Hanjun 2012 2014
Director
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. Ltd. 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. 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.
7. 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.
8. Zhang Shunwen: he acted as Director of the Shenzhen Juyuan Certified Public Accounting, now he acts as
partner of BDO China Shu Lun Pan Certified Public Accountants LLP. He acts as Independent Directors of the
Company since Apr. 2014.
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
Supervisor of the Company since Feb. 2009.
48
2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
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 acts 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
person Position in Receives
Beginning
holding any the Ending date of payment from the
Name of the shareholder’s unit date of office
post in any shareholder office term shareholder’s
term
shareholder’s ’s unit unit?
unit
Minister of
the 1
Shenzhen Investment Holdings Co.,
Wen Li department 1 Apr. 2013 Yes
Ltd.
of the
enterprise
Deputy
Shenzhen Investment Holdings Co.,
Jiang Lihua Minister of 1 Dec. 2007 Yes
Ltd.
finance
Vice
minister of
ministry of
Wang Shenzhen Investment Holdings Co.,
audit and 1 May 2013 Yes
Xiuyan Ltd.
risk
manageme
nt
Shenzhen Investment Holdings Co., Senior
Li Yufei 1 Jan. 2010 Yes
Ltd. director of
49
2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
the 1
department
of the
enterprise
Post-holding in other units
√Applicable □Inapplicable
Name of the
person Beginning
Position in Ending date of Receives payment
holding any Name of other unit date of office
other unit office term from other unit?
post in other term
units
Investment and Financing Center of Director,
Liu Quanmin Real Estate and Energy of Beijing practicing 1 Jun. 2013 Yeas
Yingke Law Firm (Shenzhen) lawyer
Infrastructure Department of
Song Botong Director, 1 Mar. 2013 Yeas
Shenzhen University
Zhang BDO China Shu Lun Pan Certified
Partner 1 Mar. 2008 Yeas
Shunwen Public Accountants LLP.
Notes to
post-holding
in No
shareholder’s
unit
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 It was executed according to the procedures stipulated in the Interim Measures for the
for the remuneration of Administration of Human Resources of the Company.
directors, supervisors and
senior management staffs
Their remuneration was decided in accordance with the Interim Provisions of the
Annual Salary System for Managers of the State-owned Enterprises in Shenzhen and
spirit of relevant documents as well as the Interim Measures for the Administration of
Determining basis for the Human Resources of the Company.
remuneration of directors, The Directors Jiang Lihua and Wen Li, and the Supervisor Wang Xiuyan and Li Yufei
supervisors and senior took posts in the shareholders’ units without drawing remuneration from the Company.
management staffs With review and approval of the Shareholders’ General Meeting 2013 convened on 23
Apr. 2014, allowance for each independent director was adjusted to RMB 7,000 (tax
included) per month since May. 2014. 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 of directors, remuneration 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 Actual
Name Position Sex Age Tenure status remuneration remuneration remuneration
gained from gained from at the
50
2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
the Company shareholder’s period-end
(Yuan) unit Yuan)
Zhou Chairman of
Male 59 Current 88.22 88.22
Jianguo the Board
General
Chen
Manager and Male 50 Current 86.32 86.32
Maozheng
Director
Zhuang
Supervisor Male 59 Current 44 44
Quan
Deng
Director Male 48 Current 67.55 67.55
Kangcheng
Wen Li Director Female 45 Current 0 0
Jiang Lihua Director Female 50 Current 0 0
CFO and
Zhang Lei Male 46 Current 43 43
Director
Independent
Liu Quanmin Male 50 Current 7.6 7.6
Director
Independent
Song Botong Male 46 Current 7.6 7.6
Director
Zhang Independent
Male 48 Current 5.6 5.6
Shunwen Director
Wang
Supervisor Female 52 Current 0 0
Xiuyan
Li Yufei Supervisor Female 36 Current 0 0
Shi
Supervisor Male 58 Current 42.56 42.56
Chunrong
Xiong
Supervisor Male 58 Current 32.05 32.05
Xingnong
Teng Vice General
Male 57 Current 67.55 67.55
Xianyou Manager
Vice General
Wei Hanping Female 48 Current 67.55 67.55
Manager
Tang Vice General
Male 44 Current 57.39 57.39
Xiaoping Manager
Secretary to
Chen Ji Male 43 Current 42.56 42.56
the Board
Independent
Zhou Hanjun Male 42 Former 2 2
Director
Total -- -- -- -- 661.55 0 661.55
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
Independent
Zhou Hanjun Former 23 Apr. 2014 Left as the service term expired
Director
Zhang Independent
Elected 23 Apr. 2014 Elected by the board of directors
Shunwen Director
51
2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
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 five staffs gaining promotion of positions, three staffs adjusted the
positions within the same level. And it introduced a total of six the project cost, accounting, civil engineering,
electrical automation and etc., of which five persons with the education level above the bachelor degree and two
persons with the professional title above the intermediate.
VI. Particulars about employers of the Company
Up to the end of 2014, the Company in total had 1,839 employees, of which 1,185 production personnel,
439technicians, 76 sales personnel, 64 financial personnel and 75 administrative personnel. Among them, 169
employers are undergraduates or above, 236 personnel are holders of associate degree, 182 graduated from
technical secondary school, 1,225 from senior high school or below.
52
2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Section X. Corporate Governance
I. Basic situation of corporate governance
In the reporting period, the Company strictly accorded with requirements of Company Law,
Securities Law, Code of Corporate Governance of Listed Companies and other laws and statutes,
continuously perfected its corporate governance, and standardized its operation. The actual situation
of corporate governance was in line with the requirements of the relevant normative documents.
The operating mechanism, of which the Board of Directors made decisions, the management team
took execution, and the Supervisory Committee implemented supervision.
(I) Preparations and holding of shareholders’ general meeting and disclosure of resolution of the
meetings were normatively in line with Articles of Association and Rules for Procedure of the
Shareholders’ General Meeting; all shareholders were on an equal position and could fully exercise
their legal rights.
(II) Directors and the Board of Directors: power of decision-making was exercised normatively;
preparations, holding and disclosure of resolution of the Board sessions were normatively in line
with the Articles of Association and Rules of Procedure for the Board of Directors; Special
committees concerning strategy, audit, nomination, remuneration and appraisal under the Board can
operate positively and effectively; all directors performed their obligations in an honest and
diligence manner. In the year of 2014, the Board of Director had completed a change of
Independent Director, the new independent director was accounting professional, which improved
the professional knowledge structure of independent director, provided a powerful guarantee for the
scientific decision of the board of directors.
(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, performed their obligations in an honest and diligence manner.
Implemented the resolution of the Board with efficient supervision and restriction and acquired
good achievement.
Whether it exists any difference between the corporate governance and the Company Law and relevant rules of
CSRC or not?
□ Yes √ No
There is no difference between the corporate governance and the Company Law and relevant rules of CSRC.
Progress of corporate governance activities, promulgation and implementation of Registration System for
Information Insiders
(I) Progress of special activities of corporate governance
1. In order to implement “Basic Standards for Internal Control” and relevant assorted guidelines, the
53
2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
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
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 Company, Shantou SEZ Wellam FTY Building development Co., Ltd., Shenzhen
SPG Longgang Development Co., Ltd. , Shenzhen engineering Tong engineering Co., Ltd.,
Shenzhen Petrel Hotel Co., Ltd., Shenzhen Property Management Co., Ltd. and Shenzhen Huazhan
Supervision 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 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 factors in internal control which exerted substantial effects
on assessment results.
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.
II. Particulars about annual shareholders’ general meetings and temporary shareholders’
general meetings in the reporting period
1. Particulars about annual shareholder
Date of
holding Resolutio Date of Index for
Meeting Name of proposal passing on the meeting
the n disclosure disclosure
meeting
2013 Annual Work Report of the Board of Announcement on
2013annu Directors, 2013 Annual Work Report of the resolution of 2013
al Supervisory Committee, 2013 Annual Report, annual
sharehold 23 Apr. 2013 Annual Financial Settlement and 2013 24 Apr. shareholders’
Approved
ers’ 2014 Annual Plan of Financial Budge; 2013 Annual 2014 general meeting
general Plan on Profit Distribution, Work Report of (Cninfo website)
meeting Independent Directors, 2013 Annual Internal www.cninfo.com.c
Control Self Assessment Report, Proposal on n
54
2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Change of Independent Director, Proposal on
Adjust the Independent Director's Remuneration,
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
3. Preferred shareholders with the recovery of voting right request for an special shareholders' meeting
□ Applicable √ Inapplicable
III. Performance of the Independent Directors during the Reporting Period
1. Particulars about the independent directors attending the board sessions and the shareholders’ general
meetings
Attendance of independent directors in board meetings
Number of
Number of Whether being
meetings
Number of meetings Number of Number of absent from
Name of independent
meetings attended in the meetings meetings meetings in
independent directors are
attended on means of attended by skipped from person two
director supposed to
the spot communicatio mandatory times in
attend during
n succession
the reporting
period
Zhou Hanjun 2 1 1 0 0 No
Liu Quanmin 5 3 1 1 0 No
Song Botong 5 3 1 1 0 No
Zhang Shunwen 3 3 0 0 0 No
Presence of independent directors
in shareholders’ general meeting 1
(times)
Explanation on failing to present in person for two consecutive sessions
Inapplicable
2. Particulars about independent directors propose objection on relevant events
Whether independent directors propose objection on relevant events or not?
□ Yes √ No
The independent directors didn’t propose objection on relevant events during the reporting period.
3. Other explanation on performance of independent directors
Whether the advices of independent directors for the Company were adopted or not?
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
Due to the Independent Director of the Company Zhou Hanjun left as the service term expired,
through deliberation of 2013 Annual Shareholders’ General Meeting on 23 Apr. 2014, the meeting
agreed to appoint Zhang Shunwen as the Independent Director of the Company. On 23 Apr. 2014,
55
2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
the Company held 20th Meeting of the 7th Session of Board of Directors. The meeting reviewed
and approved proposal on the adjustment of related committees, after the adjustment, the member of
the committee were:
Strategy committee: Zhou Jianguo, Chen Maozheng, Wen Li, Liu Quanmin (Independent Director),
Song Botong (Independent Director);
Nominating committee: Liu Quanmin (Independent Director), Deng Kangcheng, Zhang Shunwen
(Independent Director);
Remuneration and appraisal committee: Song Botong (Independent Director); Zhang Lei, 、Zhang
Shunwen (Independent Director);
Audit Committee:Zhang Shunwen (Independent Director);Jiang Lihua, Song Botong (Independent
Director).
(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
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
56
2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
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 2014 annual audit conducted by Ruihua Accounting Firm (Special
General Partnership)
In accordance with stipulations on relevant work for 2014 annual report by CSRC and Shenzhen
Stock Exchange, the Company’s Audit Committee summarized the 2014annual 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 17 Nov. 2014 to 27March 2015 as schedule.
Of which, the pre-audit and internal test lasted from 17 Nov. 2014 to 5 Jan. 2015; the substantial
test lasted from 6 Jan. 2014 to 28 Feb. 2014; the compilation of audit report, its re-check in CPAs
firm and formulation of first draft lasted from 1 Mar. 2015 to 10 Mar. 2015.
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 17 Nov. 2014, 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 2014 Annual Report on 10 March 2015, 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. 2014, and they approved the formation of 2014 Annual Report and Abstract on the
basis of the above statements; the above assessment report on internal control factually, accurately,
completely demonstrated construction results of internal control of the Company up to 31 Dec.
2014, 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 27 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
2014financial report.
(II) Duty performance of Nomination Committee under the Board of Directors
In the reporting period, due to Nomination Committee issued Opinion on the Resign of the
Company’s Independent Director on event of the resign of Independent Director Zhou Hanjun,
57
2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
meanwhile, through seriously examine and verify and discuss the research, issued Resolution of
Hiring Independent Director on the event of the employment of Zhang Shunwen as the Independent
Director of the Company agreed and submitted to the Board of Directors.
(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 2014
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
2014Annual Report was factual and accurate.
During reporting period, on the basis of Nomination Committee under the Board of Directors
examine the performance, integrity and diligence responsibility etc. and in line with remuneration
level of domestic similar listed company form Opinion about adjustment of remuneration of
Independent Directors upon the remuneration of Independent Directors.
V. Particulars about work of the supervisory committee
Whether there existed risks in the Company according to supervision of the supervisory committee
during the reporting period
□ Yes √ No
The supervisory committee held no objection to matters under supervision during the reporting
period.
VI.Independence of the Company from the controlling shareholders in business, personnel,
assets, organization and financing of the Company
(I) In respect of business, the Company possessed independent production, supply and sales system;
(II) In respect of personnel, the Company was absolutely independent in management of labor,
personnel and salaries from the controlling shareholders. All the senior executives of the Company
took no office title concurrently and drew no remunerations from the Shareholder Company.
(III) In respect of assets, the Company possessed independent and integrated assets and the property
of the Company is transparent.
(IV) In respect of organization, the Board of Directors and the Supervisory Committee operated
independently. There existed no superior-inferior relationship between the controlling shareholder
and its function department and the Company.
(V) In respect of finance, the Company has independent financial department, independently
accounted and paid taxes according to the law. The Company established a complete accounting
system, finacial accountng system and financial administrative systems. The Company opened
independent bank accounts.
VII. Particulars about horizontal competition
There objectively existed operation in the same business between the Company and Shenzhen
Properties & Resources Development (Group) Ltd. (hereinafter referred to “Properties Group”), but
substantial competition was never formed. Properties Group and our company were both founded
under the leadership 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
58
2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
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.
59
2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Section XI. Internal Control
I. Construction of internal control
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
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 Company, Shantou SEZ Wellam FTY Building development Co., Ltd., Shenzhen
SPG Longgang Development Co., Ltd. , Shenzhen engineering Tong engineering Co., Ltd., Shenzhen
Petrel Hotel Co., Ltd., Shenzhen Property Management Co., Ltd. and Shenzhen Huazhan Supervision 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 Company has already employed Rui Hua Certified Public
Accountants (Special General Partnership) to conduct independent audit of internal in 2014.
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
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
60
2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
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 28 Mar. 2015
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. 2014 in accordance with Basic
Standards for Internal Control and relevant regulations
Disclosure date of whole
article of audit report of 28 Mar. 2015
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.
61
2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Section XII. Financial Report
SHENZHEN SPECIAL ECONOMIC ZONE REAL
ESTATE & PROPERTIES (GROUP) CO., LTD.
Financial Statements with Auditors’ Report
For The Year Ended 31 December 2014
（English Translation for Reference Only）
Ruihua Shen Zi [2015] No. 48400006
CONTENTS
AUDITOR’S REPORT 1
AUDITED FINANCIAL STATEMENTS
1. Consolidated Balance Sheet 3
2. Consolidated Income Statement 5
3. Consolidated Cash Flow Statement 6
4. Consolidated Statement of Change in Owner’s Equity . 7
5. Balance Sheet 9
6. Income Statement 11
7. Cash Flow Statement 12
8. Statement of Change in Owner’s Equity 13
9. Notes to the Financial Statements 15
62
2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
通讯地址：北京市东城区永定门西滨河路 8 号院 7 号楼中海地产广场西塔 3-9 层
Postal Address:3-9/F,West Tower of China Overseas Property Plaza, Building 7,NO.8,Yongdingmen
Xibinhe Road, Dongcheng District, Beijing
邮政编码（Post Code）：100077
电话（Tel）：+86(10)88095588 传真（Fax）：+86(10)88091199
Auditor’s Report
Ruihua Shen Zi [2015]48400006
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 of
December 31, 2014, 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 include: (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 error.
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.
63
2014 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,
2014 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
Cai Xiaodong
Certified Public Accountants
Beijing. China Liu Yuxiang
March 27, 2015
64
Consolidated Balance Sheet
As of 31 December 2014
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 6.1 525,374,372.44
678,957,249.03
Notes receivable 6.2 --
119,846,192.64
Account receivables 6.3 14,102,124.06
84,388,842.43
Prepayments 6.4 12,206,598.30
17,821,748.23
Dividends receivable 6.5 1,052,192.76
1,052,192.76
Other receivables 6.6 54,672,501.81
59,528,298.21
Inventories 6.7 2,967,935,589.04
2,796,551,656.42
Other current assets 6.8 3,451,107.04
12,436,024.40
Total current assets 3,770,582,204.12 3,578,794,485.45
Non-current assets
Available- for- sale financial assets 6.9 17,464,240.74 17,464,240.74
Long-term equity investments 6.10 57,730,086.79 57,736,411.85
Investment properties 6.11 454,628,505.97 466,314,091.90
Fixed assets 6.12 54,321,296.22 60,715,687.71
Intangible assets 6.13 6,201,226.83 6,753,566.79
Long-term deferred assets 6.14 314,159.41 528,352.21
Deferred tax assets 6.15 13,856,593.97 26,792,460.02
Other non-current assets -- --
Total non-current assets 604,516,109.93 636,304,811.22
TOTAL ASSETS 4,375,098,314.05 4,215,099,296.67
65
Consolidated Balance Sheet
As at 31 December 2014
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 6.16 149,846,192.64 23,000,000.00
Notes payable 6.17 2,780,000.00 --
Accounts payable 6.18 541,538,762.36 389,345,271.46
Deferral 6.19 144,315,921.34 312,967,028.85
Employee benefits payable 6.20 38,068,842.03 37,159,445.41
Taxes payable 6.21 96,394,993.67 148,006,651.37
Interest payables 6.22 18,716,395.18 18,482,515.18
Other payables 6.23 406,871,917.76 394,687,837.29
Non-current liabilities due within one year 6.24 453,207,700.00 331,482,489.72
Total current liabilities 1,851,740,724.98 1,655,131,239.28
Non-current liabilities:
Long-term loans 6.25 478,985,579.95 814,213,536.85
Long-term payables 6.26 11,267,012.97 10,749,885.53
Total non-current liabilities 490,252,592.92 824,963,422.38
Total liabilities 2,341,993,317.90 2,480,094,661.66
Owners' equity：
Share capital 6.27 1,011,660,000.00 1,011,660,000.00
Capital reserve 6.28 978,244,910.11 978,244,858.10
Less: treasury shares --
Other comprehensive income 6.29 9,510,918.16 9,354,020.21
Surplus reserve 6.30 4,974,391.15 4,974,391.15
Undistributed profit 6.31 157,147,182.36 -140,886,134.13
Total owners' equity attributable to parent company 2,161,537,401.78 1,863,347,135.33
Minority interests -128,432,405.63 -128,342,500.32
Total owners’ equity 2,033,104,996.15 1,735,004,635.01
Total liabilities and owners’ equity 4,375,098,314.05 4,215,099,296.67
Legal representative: Person in charge of accounting:
Person in charge of accounting organ:
66
Consolidated Income Statement
For the Year 2014
Prepared by: SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE& PROPERTIES
(GROUP) CO., LTD Currency: RMB Yuan
Amount for the Amount for the
Item Note
current period prior period
Ⅰ. Total operating income 6.32 2,132,311,222.93 2,116,482,684.93
Including: Operating income 6.32 2,132,311,222.93 2,116,482,684.93
Ⅱ. Total operating Costs 1,732,830,070.97 1,819,173,771.32
Including: Operating costs 6.32 1,409,664,863.08 1,547,170,059.64
Business tax and surcharge 6.33 179,371,317.23 163,921,565.69
Selling expenses 6.34 44,525,387.33 45,139,220.41
Administrative expense 6.35 64,982,801.88 63,843,291.44
Financial expense 6.36 33,816,128.14 -1,567,205.86
Impairment losses of assets 6.37 469,573.31 666,840.00
Add: Gains from changes in fair value ("-" means loss) -- --
Investment income ("-" means loss) 6.38 -6,325.06 -25,316.71
Including: Investment income from associates and joint
6.38 -6,325.06 -25,316.71
venture
Ⅲ. Operating profit ("-" means loss) 399,474,826.90 297,283,596.90
Add: Non-operating income 6.39 1,596,644.62 7,242,022.95
Including: Gains from disposal of non-current assets 6.39 396.00 5,889,805.93
Less: Non-operating expenses 6.40 410,532.95 650,634.55
Including: Loss on disposal of non-current assets 6.40 133,838.39 110,923.29
Ⅳ .Total profit ("-" means loss) 400,660,938.57 303,874,985.30
Less: Income tax expenses 6.41 102,602,788.98 75,557,227.17
Ⅴ . Net profit ("-" means loss) 298,058,149.59 228,317,758.13
Net attributable to owners of parent company 298,033,316.49 228,268,271.23
Minority interests 24,833.10 49,486.90
Ⅵ . After-tax net of other comprehensive incomes 6.42 42,159.54 -424,620.90
After-tax net of other comprehensive incomes owned by
156,897.95 -297,234.63
owner of the parent company
(I)Other comprehensive incomes that cannot be classified
-- --
into profit and loss in the future
(II)Other comprehensive incomes that would be classified
156,897.95 -297,234.63
into profit and loss in the future
1.Loss and profit of change in fair value of
-- --
available-for-sale financial assets
2.Loss and profit of held-to-maturity investments reclassifying
-- --
into available-for-sale financial assets
3.Translation difference in the foreign currency financial
156,897.95 -297,234.63
statement
Net of tax from other comprehensive incomes owned by
-114,738.41 -127,386.27
minority stockholders
Ⅶ . Total comprehensive income 298,100,309.13 227,893,137.23
Total comprehensive income attributable to owners of
298,190,214.44 227,971,036.60
parent company
Total comprehensive income attributable to minority
-89,905.31 -77,899.37
interests
Ⅷ .Earnings per share
Basic Earnings per share 0.2946 0.2256
Diluted Earnings per share 0.2946 0.2256
67
Legal representative: Person in charge of accounting:
Person in charge of accounting organ:
Consolidated Cash Flow Statement
For the Year 2014
Prepared by：SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES
(GROUP) Co., Ltd. Currency: RMB Yuan
Items Note Amount for the Amount for the
current period prior period
Ⅰ. Cash Flow from Operating Activities：
Cash received from sales of goods or rendering of services 1,804,972,330.58 2,031,850,194.26
Refund of taxes and levies -- 697,514.50
Cash received relating to other operating activities 6.43(1) 62,115,853.30 50,096,274.13
Sub-total of Cash Inflows 1,867,088,183.88 2,082,643,982.89
Cash paid for goods and services 990,792,625.54 1,556,632,034.88
Cash paid to and on behalf of employees 138,814,983.27 127,334,091.75
Cash paid on taxes and levies 313,460,106.78 125,782,642.55
Cash paid relating to other operating activities 6.43(2) 101,858,404.93 77,941,530.31
Sub-total of Cash Outflows 1,544,926,120.52 1,887,690,299.49
Net Cash Flows from Operating Activities 322,162,063.36 194,953,683.40
Ⅱ. Cash Flows from Investing Activities:
Cash received from return of investments -- 131,473.86
Cash received investing income -- --
Net cash received from disposal of fixed assets, 7,572,643.95
intangible assets and other long assets" 24,690.00
Net cash flows from disposal subsidiary and other operating --
unite --
Other cash received relating to investing activities -- --
Sub-total of Cash Inflows 24,690.00 7,704,117.81
Cash paid to acquire fixed assets, intangible assets and other 6,079,076.26
long assets 3,016,118.70
Cash paid on investments -- --
Net cash paid on obtain subsidiary and other operating unite -- --
Cash paid on other investing activities -- --
Sub-total of Cash Outflows 3,016,118.70 6,079,076.26
Net Cash Flows from Investing Activities -2,991,428.70 1,625,041.55
Ⅲ. Cash flow from Financing Activities
Cash received from investments -- --
Including: Cash received from investments by minority interests --
of subsidiaries --
Cash received from borrowing 361,980,844.46 445,989,352.23
Cash received from issuing bonds -- --
Other cash received relating to Financing activities 6.43(3) 32,652.01 25,000,000.00
Sub-total of Cash Inflows 362,013,496.47 470,989,352.23
Cash repayments on borrowed amounts 456,502,746.62 527,190,674.71
Cash payments for distribution of dividends or profits 71,090,520.99 78,560,662.88
Including: Dividends or profit paid to minority interests of --
subsidiaries --
Cash payments on other financing activities 6.43(4) 2,780,000.00 6,000,000.00
Sub-total of cash Outflows 530,373,267.61 611,751,337.59
Net cash flows from financing activities -140,761,985.36
-168,359,771.14
Ⅳ. Effect of foreign exchange rate on cash 24,613.07 -246,069.92
Ⅴ. Net increase in cash and cash equivalents 150,835,476.59 55,570,669.67
Add: cash equivalents at the beginning of the period 519,284,372.44 463,713,702.77
Ⅵ. Cash equivalents at the end of the period 670,119,849.03 519,284,372.44
Legal representative: Person in charge of accounting:
Person in charge of accounting organ:
68
CONSOLIDATED STATEMENT OF CHANGE IN OWNER'S EQUITY
For the Year 2014
Prepared by：SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd. Currency: RMB Yuan
Attribute to the equity of parent company
Less: Other General Minority Total owners'
Items Capital Special Surplus Undistributed
Share capital Treasury comprehensive risk interests equity
reserve reserve reserve profit
shares income provision
I. Balance at the end of last
1,011,660,000.00 978,244,858.10 -- 9,354,020.21 -- 4,974,391.15 -- -140,886,134.13 -128,342,500.32 1,735,004,635.01
period
Add: Changes of accounting
-- -- -- -- -- -- -- -- -- --
policies
Prior year adjustments -- -- -- -- -- -- -- -- -- --
Corporate combination under
-- -- -- -- -- -- -- -- -- --
common control
Others -- -- -- -- -- -- -- -- --
II. Balance at the Beginning of
1,011,660,000.00 978,244,858.10 -- 9,354,020.21 -- 4,974,391.15 -- -140,886,134.13 -128,342,500.32 1,735,004,635.01
the Year
III.Increase/Decrease
movements in this Year ("-" -- 52.01 -- 156,897.95 -- -- -- 298,033,316.49 -89,905.31 298,100,361.14
means loss)
(I) Total comprehensive income -- -- -- 156,897.95 -- -- -- 298,033,316.49 -89,905.31 298,100,309.13
(II) Capital paid in and reduced by
-- 52.01 -- -- -- -- -- -- -- 52.01
the shareholders
1.Ordinary shares invested by
-- -- -- -- -- -- -- -- -- --
shareholders
2.Capital invested by the other
-- -- -- -- -- -- -- -- -- --
equity investments holders
3.Amounts of share-based
payments recognized in -- -- -- -- -- -- -- -- -- --
shareholders’ equity
4.Others -- 52.01 -- -- -- -- -- -- -- 52.01
(III) Profit distribution -- -- -- -- -- -- -- -- -- --
(IV)Internal carry-forward of
-- -- -- -- -- -- -- -- -- --
shareholders’ equity
(V) Special Reserve -- -- -- -- -- -- -- -- -- --
(VI) Others -- -- -- -- -- -- -- -- -- --
IV. Balance at the end of the
period 1,011,660,000.00 978,244,910.11 -- 9,510,918.16 -- 4,974,391.15 -- 157,147,182.36 -128,432,405.63 2,033,104,996.15
Legal representative: Person in charge of accounting: Person in charge of accounting organ:
69
CONSOLIDATED STATEMENT OF CHANGES IN OWNER'S EQUITY
For the Year 2013
Prepared by：SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd. Currency: RMB Yuan
Attribute to the equity of parent company
Less: Other General Minority Total owners'
Items Capital Surplus Special Undistributed
Share capital Treasury comprehensive risk interests equity
reserve reserve reserve profit
shares income provision
I. Balance at the end of last period 1,011,660,000.00 978,244,858.10 -- 9,651,254.84 4,974,391.15 -- -- -369,154,405.36 -128,264,600.95 1,507,111,497.78
Add: Changes of accounting policies -- -- -- -- -- -- -- -- -- --
Prior year adjustments -- -- -- -- -- -- -- -- -- --
Corporate combination under common
-- -- -- -- -- -- -- -- -- --
control
Others -- -- -- -- -- -- -- -- -- --
II. Balance at the Beginning of the
1,011,660,000.00 978,244,858.10 -- 9,651,254.84 4,974,391.15 -- -- -369,154,405.36 -128,264,600.95 1,507,111,497.78
Year
III. Increase/Decrease movements in
-- -- -- -297,234.63 -- -- -- 228,268,271.23 -77,899.37 227,893,137.23
this Year ("-" means loss)
(I) Total comprehensive income -- -- -- -297,234.63 -- -- -- 228,268,271.23 -77,899.37 227,893,137.23
(II) Capital paid in and reduced by the
-- -- -- -- -- -- -- -- -- --
shareholders
1.Ordinary shares invested by
-- -- -- -- -- -- -- -- -- --
shareholders
2.Capital invested by the other
-- -- -- -- -- -- -- -- -- --
equity investments holders
3.Amounts of share-based payments
-- -- -- -- -- -- -- -- -- --
recognized in shareholders’ equity
4.Others -- -- -- -- -- -- -- -- -- --
(III) Profit distribution -- -- -- -- -- -- -- -- -- --
(IV)Internal carry-forward of
-- -- -- -- -- -- -- -- -- --
shareholders’ equity
(V) Special Reserve -- -- -- -- -- -- -- -- -- --
(VI) Others -- -- -- -- -- -- -- -- -- --
IV. Balance at the end of the period 1,011,660,000.00 978,244,858.10 -- 9,354,020.21 4,974,391.15 -- -- -140,886,134.13 -128,342,500.32 1,735,004,635.01
Legal representative: Person in charge of accounting: Person in charge of accounting organ:
70
Balance Sheet
As at 31 December 2014
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 332,170,340.34 362,953,152.47
Accounts receivable 14.1 39,403,575.24 4,359,289.23
Prepayments 69,000.00 --
Other receivables 14.2 675,944,666.16 669,806,773.71
Inventories 1,481,149,880.16 1,830,603,734.72
Other current assets 7,961,089.71 --
Total current assets 2,536,698,551.61 2,867,722,950.13
Non-current Assets:
Available-for-sale financial assets 12,000,000.00 12,000,000.00
Long-term equity investments 14.3 316,365,042.13 316,371,367.19
Investment properties 398,040,383.57 407,900,089.95
Fixed assets 31,477,401.72 34,263,366.14
Intangible assets 1,031,266.83 1,406,066.79
Long-term deferred assets 76,395.75 132,925.95
Deferred tax assets 850,769.96 3,230,636.28
Other non-current assets -- --
Total non-current assets 759,841,259.96 775,304,452.30
Total Assets 3,296,539,811.57 3,643,027,402.43
71
Balance Sheet (Continued)
As at 31 December 2014
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 -- --
Account payable 225,934,147.53 393,715,301.47
Deferral 36,334,967.00 82,398,193.00
Employee benefits payable 13,613,754.45 11,614,479.62
Taxes payable 48,212,677.31 149,643,182.39
Interest payable 18,328,034.07 18,094,154.07
Other payables 390,836,659.90 648,978,988.66
Non-current liability due within one year 253,207,700.00 331,482,489.72
Other current liability -- --
Total current liabilities 986,467,940.26 1,635,926,788.93
Non-current liabilities：
Long-term loans 445,996,227.72 581,224,184.62
Total non-current liabilities 445,996,227.72 581,224,184.62
Total liabilities 1,432,464,167.98 2,217,150,973.55
Owners' equity:
Share capital 1,011,660,000.00 1,011,660,000.00
Capital reserve 978,244,910.11 978,244,858.10
Undistributed profit -125,829,266.52 -564,028,429.22
Total owners' equity attributable to
1,864,075,643.59 1,425,876,428.88
parent company
Total liabilities and owners' equity 3,296,539,811.57 3,643,027,402.43
Legal representative: Person in charge of accounting:
Person in charge of accounting organ:
72
Income Statement
For the Year 2014
Prepared by：SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP)
Co., Ltd. Currency: RMB Yuan
Amount for the current Amount for the prior
Item Note
period period
I. Total operating income 14.4 634,628,332.73 1,334,203,505.49
Less: Operating cost 14.4 369,071,677.90 898,116,935.10
Business tax and surcharge 43,735,811.30 107,352,413.53
Selling expenses 14,077,556.37 26,298,856.99
Administrative expense 33,934,825.55 31,312,746.27
Financial expense 18,105,774.80 1,952,132.73
Impairment losses of assets -51,045,921.78 666,840.00
Add: Gain from changes in fair value ("-" means loss) -- --
Investment income ("-" means loss) 14.5 270,602,716.90 -25,316.71
Including: Investment income from associates
14.5 -6,325.06 -25,316.71
and joint venture
II. Operating profit ("-" means loss) 477,351,325.49 268,478,264.16
Add: Non-operating income 603,903.72 603,003.89
Including: gains from disposal of non-current
-- --
assets
Less: Non-operating expenses 70,687.90 48,607.28
Including: Loss from
11,687.90 7,607.28
disposal of non-current assets
III. Total profit ("-" means loss) 477,884,541.31 269,032,660.77
Less: Income tax expenses 39,685,378.61 62,859,275.91
IV.Net profit ("-" means loss) 438,199,162.70 206,173,384.86
V. Other comprehensive income -- --
VI. Total comprehensive income 438,199,162.70 206,173,384.86
Legal representative: Person in charge of accounting:
Person in charge of accounting organ:
73
Cash Flow Statement
For the Year 2014
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
553,520,820.72 1,144,966,241.22
services
Refund of taxes and levies -- 697,514.50
Cash received relating to other operating activities 73,572,569.13 76,214,774.35
Sub-total of cash inflows 627,093,389.85 1,221,878,530.07
Cash paid for goods and services 169,494,543.93 453,758,678.80
Cash paid to and on behalf of employees 42,143,223.14 27,614,061.43
Cash paid on taxes and levies 192,165,574.72 41,219,939.77
Cash paid relating to other operating activities 33,954,055.89 302,321,288.97
Sub-total of Cash Outflows 437,757,397.68 824,913,968.97
Net Cash Flows from Operating Activities 189,335,992.17 396,964,561.10
Ⅱ. Cash Flows from Investing Activities:
Cash received from return of investments 30,000,000.00 131,473.86
Cash received investing income -- --
Net cash received from disposal of fixed assets,
10,400.00 3,000.00
intangible assets and other long assets
Other cash received relating to investing activities 17,251,324.21 15,962,247.98
Sub-total of Cash Inflows 47,261,724.21 16,096,721.84
Cash paid to acquire fixed assets, intangible assets and
828,454.00 2,342,950.46
other long assets
Cash paid on investments -- 90,000,000.00
Cash paid on other investing activities -- --
Sub-total of cash outflows 828,454.00 92,342,950.46
Net Cash Flows from Investing Activities 46,433,270.21 -76,246,228.62
Ⅲ. Cash flow from Financing Activities
Cash received from investments -- --
Cash received from borrowing 220,000,000.00 390,000,000.00
Cash received from issuing bonds -- --
Cash received from other financing activities 52.01 25,000,000.00
Sub-total of cash inflows 220,000,052.01 415,000,000.00
Cash repayments on borrowed amounts 433,502,746.62 501,190,674.71
Cash payments for distribution of dividends or profits 53,049,461.10 62,399,178.33
Cash payments on other financing activities -- 6,000,000.00
Sub-total of cash Outflows 486,552,207.72 569,589,853.04
Net cash flows from financing activities -266,552,155.71 -154,589,853.04
Ⅳ. Effect of foreign exchange rate on cash 81.20 -577.80
Ⅴ.Net increase in cash and cash equivalents -30,782,812.13 166,127,901.64
Add: cash equivalents at the beginning of the period 356,953,152.47 190,825,250.83
Ⅵ. Cash equivalents at the end of the period 326,170,340.34 356,953,152.47
Legal representative: Person in charge of accounting:
Person in charge of accounting organ:
74
Statement of Changes in Owners’ Equity
For the year 2014
Prepared by：SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd. Currency: RMB Yuan
Attribute to the equity of parent company
Less: Other General Total owners'
Items Capital Surplus Undistributed
Share capital Treasury comprehensive risk equity
reserve reserve profit
shares income provision
I. Balance at the End of Last Period 1,011,660,000.00 978,244,858.10 -- -- -- -- -564,028,429.22 1,425,876,428.88
Add: Changes of accounting policies -- -- -- -- -- -- -- --
Prior year adjustments -- -- -- -- -- -- -- --
Corporate combination under common control -- -- -- -- -- -- -- --
Others -- -- -- -- -- -- -- --
II. Balance at the Beginning of the Year 1,011,660,000.00 978,244,858.10 -- -- -- -- -564,028,429.22 1,425,876,428.88
III. Increase/Decrease movements in this Year ("-" means
-- 52.01 -- -- -- -- 438,199,162.70 438,199,214.71
loss)
(I) Total comprehensive income -- -- -- -- -- -- 438,199,162.70 438,199,162.70
(II) Capital paid in and reduced by the shareholders -- 52.01 -- -- -- -- -- 52.01
1.Ordinary shares invested by shareholders -- -- -- -- -- -- -- --
2.Capital invested by the other equity investments holders -- -- -- -- -- -- -- --
3.Amounts of share-based payments recognized in
shareholders’ equity -- -- -- -- -- -- -- --
4.Others -- 52.01 -- -- -- -- -- 52.01
(III) Profit distribution -- -- -- -- -- -- -- --
(IV)Internal carry-forward of shareholders’ equity -- -- -- -- -- -- -- --
(V) Special Reserve -- -- -- -- -- -- -- --
(VI) Others -- -- -- -- -- -- -- --
IV. Balance at the end of the period 1,011,660,000.00 978,244,910.11 -- -- -- -- -125,829,266.52 1,864,075,643.59
Legal representative: Person in charge of accounting: Person in charge of accounting organ:
75
Statement of Changes in Owners’ 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: Other General Total owners'
Items Capital Surplus Undistributed
Share capital Treasury comprehensive risk equity
reserve reserve profit
shares income provision
I. Balance at the End of Last Period 1,011,660,000.00 978,244,858.10 -- -- -- -- -770,201,814.08 1,219,703,044.02
Add: Changes of accounting policies -- -- -- -- -- -- -- --
Prior year adjustments -- -- -- -- -- -- -- --
Corporate combination under common control -- -- -- -- -- -- -- --
Others -- -- -- -- -- -- -- --
II. Balance at the Beginning of the Year 1,011,660,000.00 978,244,858.10 -- -- -- -- -770,201,814.08 1,219,703,044.02
III. Increase/Decrease movements in this Year ("-"
-- -- -- -- -- -- 206,173,384.86 206,173,384.86
means loss)
(I) Total comprehensive income -- -- -- -- -- -- 206,173,384.86 206,173,384.86
(II) Capital paid in and reduced by the shareholders -- -- -- -- -- -- -- --
1.Ordinary shares invested by shareholders -- -- -- -- -- -- -- --
2.Capital invested by the other equity investments
holders -- -- -- -- -- -- -- --
3.Amounts of share-based payments recognized in
-- -- -- -- -- -- -- --
shareholders’ equity
4.Others -- -- -- -- -- -- -- --
(III) Profit distribution -- -- -- -- -- -- -- --
(IV)Internal carry-forward of shareholders’ equity -- -- -- -- -- -- -- --
(V) Special Reserve -- -- -- -- -- -- -- --
(VI) Others -- -- -- -- -- -- -- --
IV. 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:
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2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
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 license 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 27th, 2015, which approved by Group’s
Board of Directors.
Note 2 The Basis of Preparation of Financial Statements
The financial statements of the Group have been prepared on the basis of going
concern in conformity with the Chinese Accounting Standards for Business
Enterprises –The basic standards(Issued by order No.33 of the Ministry of Finance,
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2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Revised by order No.76 of the Ministry of Finance), the 41 specified Accounting
Standards for Business Enterprise issued and revised by the Ministry of Finance of
People’s Republic of China on 15 February, 2006 and thereafter, the guidance for the
application of the Accounting Standards for Business Enterprise, the explanation for
the Accounting Standards for Business Enterprise and other relevant
regulations( thereinafter referred as “Accounting Standards for Business Enterprises”)
and Compilation Rules for Information Disclosure by Companies Offering Securities
to the Public No.15—General Provisions on Financial Reports (2014 Revision)
issued by the China Securities Regulatory Commission (CSRC).
According to the relevant accounting regulations of 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 instruments. Provision will be made if any assets
impair in accordance with relevant requirements.
Note 3 Statement of Compliance with Accounting Standards
3.1 Basis of Preparation
The financial statements of the Group are recognized and measured in accordance
with the regulations of 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 2014. In addition, the financial statements of the
Group comply, in all material respects, with the revised disclosure requirements for
financial statements and the notes of Compilation Rules for Information Disclosure by
Companies Offering Securities to the Public No.15—General Provisions on Financial
Reports (2014 Revision) issued by China Securities Regulatory Commission
(CSRC).
3.2 Going Concern
There do not exist any significant suspicious events and conditions to the Group’s
ability to operate as going concern within 12 months since the report date.
Note 4 Important Accounting Principles and Accounting Estimates
The Group and its subsidiaries are engaged in the business of real estate
development. The Group and its subsidiaries have established several specified
accounting policies and accounting estimations for its transactions and events, such
as the revenue recognition, according to the Group’s and its subsidiaries’ actual
operating characters and relevant requirements of Accounting Standards for
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2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Business Enterprises. Please refer to note 4.22- Revenue for details. For the
significant accounting judgments and estimates made by the management, please
refer to note 4.28 - Significant accounting judgments and estimates.
4.1 Accounting period
The accounting period of the Group is classified as interim period and annual period.
Interim period refers to the reporting period shorter than a complete annual period.
The accounting period of the Group is the calendar year from January 1 to December
31.
4.2 Operating cycle
The normal operating cycle refers to period from Group’s buying assets for
manufacturing to realizing the cash or cash equivalent .The Group chooses 12
months as an operating cycle. The assets and liabilities are classified as current and
non-current according to the operating cycle standards.
4.3 Monetary Unit
Renminbi (RMB) is the currency of the primary economic environment in either Group
& its domestic subsidiaries or foreign subsidiary in HK. Therefore, the Group, the
domestic subsidiaries and foreign subsidiary in HK choose RMB as their functional
currency. While the Group’s foreign subsidiary in U.S.A. chooses USD dollar as its
functional currency on the basis of the primary economic environment it operates.
The Group adopts RMB to prepare its functional statements.
4.4 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.
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2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
The assets and liabilities obtained are measured at the carrying amounts as recorded
by the enterprise being absorbed 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, including 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 if
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 the other enterprise participating in the
combination is the acquiree. Acquisition date is the date on which the acquirer
effectively obtains control of the acquiree.
For a business combination not involving enterprise under common control, the
combination cost including the sum of fair value, on 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
should be initially recognized as cost of equity securities or liability securities.
The contingent consideration related to the combination shall be booked as
combination cost at the fair value on the acquisition date. If, within the 12 months
after acquisition, new or additional information can prove the existence of related
information on acquisition date and the contingent consideration need to be adjusted
by relatively adjusting the combination goodwill.
Acquirer ‘s combination cost and the obtained identifiable net assets are measured
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2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
with the fair value on the acquisition date. The excess of the combination cost over
the fair value of identifiable net assets on the acquisition date is recorded as goodwill.
When the fair value of identifiable assets exceeds the combination cost , first of all,
the fair value of items of obtained acquiree’s identifiable assets, liabilities or
contingent liabilities and combination cost need to be reassessed. And then, when
the combination cost is still less than the fair value of identifiable net assets on the
acquisition date after reassess, the difference should be recorded in the current
year’s profit and loss.
The deductible temporary differences obtained from the acquiree which cannot be
recognized as deferred tax assets ,on the acquisition date, because some conditions
are not met. Within 12 months after the acquisition ,if new or additional information
indicate that the relevant information exist on the acquisition date and the economic
benefits related with the deductible temporary difference can be realized, the
deferred tax assets should be recognized. The goodwill should be reduced and if the
goodwill is less than the deferred tax assets recognized, the rest part should be
recorded in the current year profit and loss.
For a business combination achieved in stages that involves multiple exchange
transactions, according to the “No.5 Inform of Printing and Distributing the
Explanation of Accounting Standards issued by the Finance of Ministry (Caikuai
[2012] No.19)”and Article 51of “Chinese Accounting Standards for Business
Enterprises No.33- Consolidated financial statement”, relating with the judgment
standards of package deal( refer to note 4.5(2)), a judgment about whether it is
package deal or not should be made. If it is package deal, please refer to the note
4.13 - Long-term equity investment for accounting treatment; if it is not package deal,
distinguish them as individual financial statement and consolidated financial
statement for accounting treatment.
For the individual financial statements, the book value of the long-term equity
investment held before the acquisition date plus the newly added equity investment
on the acquisition date, and then sum should be recorded as the original investment
cost; the long-term equity investment involved with other comprehensive income held
before the acquisition date, the way to deal with the investment will be the same with
the way the acquiree directly dispose the related assets and liabilities (i.e., under the
equity method, beside the portion caused by the acquiree’s recalculated defined
benefit plan’s net assets and net liabilities, the rest are transferred into investment
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2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
income).
For the consolidated financial statements, for the shares in acquiree held before the
acquisition date, the shares are recalculated according to the fair value on the
acquisition date. The difference between the fair value and book value should be
recorded in the current year investment income; For the shares in the acquiree held
before the acquisition date involving other comprehensive income. The way to deal
with the other comprehensive income should be the same with the way the acquiree
directly dispose the relevant assets and liabilities(i.e., under the equity method,
beside the portion of changes caused by the acquiree’s recalculated defined benefit
plan’s net assets and net liabilities, the rest are transferred into investment income ).
4.5 Preparation of consolidated financial statements
(1)The standards of determining the scope of consolidation
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.
Once the changes of relevant facts and conditions result in the factors involving with
the above definition of the control, the Group will proceed to reassess.
(2)The method of preparing the consolidated financial statements
The subsidiary of the Group is included in the consolidated financial statements from
the date when the control over the net assets and business decisions of the
subsidiary is effectively obtained, and excluded from the date when the control
ceases.
For a subsidiary being 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 date (the date when the
control is obtained) are included in the consolidated income statement and
consolidated statement of cash flows, as appropriate; no adjustment is made to the
opening balance and comparative figures in the consolidated financial statements.
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2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
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 its cash flow are appropriately included in the consolidated balance
sheet and the consolidated income statement, respectively, from the beginning of the
year to the date of acquisition 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 accounting period or accounting
policies. For the subsidiaries acquired through combination involving enterprises
under non common control, the financial statements should be adjusted based on the
fair value of the indentified net assets on the acquisition date.
Intra-group balances and transactions, and any unrealized profit or loss arising from
intra-group transactions, are eliminated when 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. 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
still 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 on 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
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2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
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 4.13-Long-term equity investment and 4.9-Financial
instruments).
The Group’s losing control of subsidiaries through multistep transactions of disposing
of the long-term equity investment, need to indentify whether every transaction,
involving with disposing of the investment in subsidiary until losing the control, is
belonging to 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, it is economical when
other transactions are taken into account. If it is not package deal, every transaction
of the non-package deals is treated according to the applicable accounting standards
of “partly disposing of the long-term equity investment without losing control ”( refer to
4.13(2) ④ for detail) and “losing the control to subsidiary due to partly disposing the
equity investment or other reasons ” (see the former paragraph for details). When
every transaction involving with disposing of equity investment in subsidiary until
losing control is a package deal, they will be treated as a single deal of disposing of
the investment in subsidiary until losing control for accounting treatment. But, before
the control are lost, the difference between each receipt of every transaction and the
related shared proportion of indentified net assets are recognized as other
comprehensive income. The other comprehensive income will be transferred into
profit and loss in the period when losing control.
4.6 Joint venture arrangement classification& mutual office account treatment
Joint venture arrangement is referred to the arrangement that are under common
control of two or more participating parties. The Group classifies the joint venture
arrangement into mutual office and joint venture, according to the rights shared and
obligation undertaken in the joint venture arrangement. Mutual office represents the
joint venture arrangement that the Group shares the assets related with arrangement
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and undertakes the obligations related with the arrangement. Joint venture is referred
to the joint venture arrangement that the Group only have the right to the net assets
of the arrangement.
The Group measures the joint venture investment using the equity method. Please
refer to accounting policies listed on note 4.13 (2) ②-long-term equity investment
measured using the equity method.
As one party of the mutual office, the Group recognizes the separately owned assets
and separately assumed obligations, and the proportionate commonly held assets
and commonly assumed obligations per the company’s percentage of share interest;
recognize the revenue from the selling of the Group’s shared output of the mutual
office; recognize the common revenue generated from the selling of the common
output of the mutual office according to the Group’s share percentage; recognize the
expense separately incurred by the Group and the proportionate expense incurred by
the mutual office according to the Group’s share percentage.
When the Group sells invest or sell assets to the mutual office as one of the mutual
office party( the assets do not constitute a business, the same to below), or buys
assets from the mutual office, before the assets are sold to the third party, the Group
only recognizes the portion of profit and loss attributable to the other participating
parties. According to requirements of Chinese Accounting Standards for Business
Enterprises No.8- Asset impairment, when the assets are impaired , for the assets
invested or sold to the mutual office by the Group, the Group fully recognizes the
impairment loss; for assets that the Group bought from the mutual office, the
impairment loss is recognized according to the share percentage by the Group.
4.7 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.
4.8 Foreign exchange
(1) Translation in foreign exchange transactions
The Group’s initial recognition of the foreign currency transactions is recorded by the
functional currency translated by the spot rate (commonly refer to the middle rate of
the daily foreign currency rate publicly released by the People’s Bank of China)on the
transaction date. But the Group’s foreign currency exchange and foreign currency
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exchange relevant transactions, is recorded by the functional currency translated by
the exchange rate actually used.
(2)Translation method for foreign currency monetary items and non-monetary items.
On 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 into profit or loss, except for ①those 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; ②The
exchange difference from changes of other account balance of foreign currency
monetary items available-for-trade is recorded into profit or loss except for
amortization cost.
When preparing the consolidated financial statements involving with oversea
operation, the foreign currency difference caused by the foreign exchange rate
changes should be recorded in other comprehensive income, if it substantially
constitutes the monetary items related to net investment to the oversea operation.
When the oversea operation are disposed, the other comprehensive income should
be transferred into current year profit and loss.
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
other comprehensive income.
(3) The translation of financial statement in foreign currency
When the consolidated financial statements include foreign operation(s), if there is a
foreign currency monetary item constituting a net investment in a foreign operation,
exchange difference arising from changes in exchange rates are recognized as
“exchange differences arising on translation of financial statements denominated in
foreign currencies” in owner’s equity, and in profit or loss for the period upon disposal
of the foreign operation.
The Group translates the financial statements of its foreign operations into RMB by
following rules;
1） Assets and liabilities in the balance sheet are translated at the spot exchange
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rate prevailing on the balance sheet date; All equity items except for retained
earnings are translated at the spot exchange rates at the date 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 last period
after translation of last year.
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 between the assets and liabilities and shareholder’s equity shall
be booked as translation difference of translating foreign currency financial
statements, and shall be presented as other comprehensive income in the separate
component of equity in the balance sheet.
6） When losing control over Group’s oversea operation due to disposal, the
translation difference of translating foreign currency financial statements related with
the oversea operation which is separately presented under the shareholder’s equity
section as accumulated other comprehensive income, should be fully or
proportionately transferred into the current period profit and loss according to the
disposal percentage.
7）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.
8）The opening balance and actual figures of last year are displayed as the figures
translated last year.
9）When disposing the Group’s all shareholders’ equity of oversea operation or the
Group losing control over the oversea operation due to partial disposal of the oversea
equity investment or other reasons, the translation difference caused by the
translating of foreign currency financial statement related with the oversea operation ,
which is presented under the equity section on the balance sheet and is attributable
to the parent company’s shareholders, should be transferred to the current period
profit and loss.
10)When the partial disposal of the equity investment of oversea operation and other
reasons cause the share percentage of oversea operation to decrease without
making the power of control to disappear, the translation difference of translation
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foreign currency financial statement related with the part of oversea operation
disposed should be attributable to the minority interest and do not transfer to the
current period profit and loss. When the oversea operation disposing is a jointly run
business or joint venture, the translation difference of translating foreign currency
financial statements should be transferred to the current period profit and loss
according to the percentage of oversea operation disposal.
4.9 Financial instruments
When the Group becomes one party of the financial instrument contract, a financial
asset or financial liability should be recognized. The initial measurement of the
financial asset and financial liability is based on the fair value. For financial asset and
financial liability measured at fair value and designated its changes into current
period profit and loss, the related trading expense should be recorded in the profit
and loss. For the financial asset and financial liability of other categories, the related
trading expense should be recorded as part of initial cost.
(1) The method of determining the fair value of financial assets and financial liabilities
Fair value is the price that the market participators can get when selling an assets or
need to pay when transferring an obligation incurred in an orderly transaction on the
measurement date. When there is active market for the financial instruments, the
quotation in the active market is used as the fair value. Quotation in the active market
means the price that can be easily and periodically got from the exchange market,
broker’s agency, Guild, pricing service organization etc. It represents the actually
happened trading price in the fair trading. When there is no active market for the
financial instruments, the fair value is determined by the valuation techniques. The
valuation techniques include making a reference to the used price in recent market
trading among the parties who know the situations and is willing to trade, making a
reference to the current fair value that is used by the other substantially similar
financial assets, discounting the future cash flow and option pricing model etc.
(2) 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-sell financial assets.
1) Financial assets at fair value through profit or loss:
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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
ability to hold to maturity. Such kind of financial assets are subsequently measured at
amortized cost using the effective interest method. Gains or losses arising from
derecognition, impairment or amortization are recognized in profit or loss for the
current period.
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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-sell
Financial assets available-for-sell include non-derivative financial assets that are
designated on initial recognition as available for trade, and financial assets that are
not classified as financial assets at fair value through profit or loss, loans and
receivables or investment held-to-maturity.
Financial assets available-for-trade are subsequently measured at fair value, and
gains or losses arising from changes in the fair value are recognized as other
comprehensive income and included in the capital reserve, except that impairment
losses and exchange differences related to amortized cost of monetary financial
assets denominated in foreign currencies are recognized in profit or loss, until the
financial assets are derecognized, at which time the gains or losses are released and
recognized in profit or loss.
Interests obtained and dividends declared by the investee during the period in which
the financial assets available-for-trade are held, are recognized in investment gains.
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
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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.
(3) Impairment of financial assets (not including account receivables)
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, provision for
impairment is recorded.
The Group makes an impairment test for a financial asset that is individually
significant. For a financial asset that is not individually significant, it is included in a
group of financial assets with similar credit risk characteristics and collectively
assessed for impairment or individually assessed for impairment. If no objective
evidence of impairment incurs for an individually assessed financial asset (whether
the financial asset is individually significant or not individually significant), it is
included in a group of financial assets with similar credit risk characteristics and
collectively assessed for impairment. Assets for which an impairment loss is
individually recognized is not included in a group of financial assets with similar credit
risk characteristics and collectively assessed for impairment.
1) Impairment on held-to maturity investment, loans and receivables
The financial assets measured by cost or amortized cost write down their carrying
value by the estimated present value of future cash flow. The difference is recorded
as impairment loss. If there is objective evidence to indicate the recovery of value of
financial assets after impairment, and it is related with subsequent event after
recognition of loss, the impairment loss recorded originally can be reversed. The
carrying value of financial assets after impairment loss reversed shall not exceed the
amortized cost of the financial assets without provisions of impairment loss on the
reserving date.
2) Impairment loss on available-for-trade financial assets
When decision is made with all related factors on whether the fall of fair value
investment of an equity instrument available-for-trade is significant or non-transient, it
indicates impairment of such equity instrument investment, in which, Significant
means over 20% of fall in fair value and Non-transient means over 12 months of
subsequent fall.
When an available-for-trade financial asset is impaired, the cumulative loss arising
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from declining in fair value that had been recognized in capital reserve shall be
removed and recognized in profit or loss. The amount of the cumulative loss that is
removed shall be difference between the acquisition cost with deduction of
recoverable amount less amortized cost, current fair value and any impairment loss
on that financial asset previously recognized in profit or loss.
If, after an impairment loss has been recognized, there is objective evidence that the
value of the financial asset is recovered, and it is objectively related to an event
occurring after the impairment loss was recognized, the initial impairment loss can be
reversed and the reserved impairment loss on available-for-trade equity instrument is
recorded in the profit or loss, the reserved impairment loss on available-for-trade debt
instrument is recorded in the current profit or loss.
The equity instrument where there is no quoted price in an active market, and whose
fair value cannot be reliably measured, or impairment loss on a derivative asset that
is linked to and must be settled by delivery of such an unquoted equity instrument
shall not be reversed.
(4) Recognition and measurement of financial assets transfer
The Group derecognizes a financial asset when one of the following conditions is
met:
1) The rights to receive cash flows from the asset have expired;
2) The enterprise has transferred its rights to receive cash flows from the asset to a
third party under a “pass-through” arrangement; or
3) The enterprise has transferred its rights to receive cash flows from the asset and
either (a) has transferred substantially all the risks and rewards of the asset, or (b)
has neither transferred nor retained substantially all the risks and rewards of the
asset, but has transferred control of the asset.
If the enterprise has neither retained all the risks and rewards from the financial asset
nor control over the asset, the asset is recognized according to the extent it exists as
financial asset, and correspondent liability is recognized. The extent of existence
refers the level of risk by the financial asset changes the enterprise is facing.
For a transfer of a financial asset in its entirety that satisfies the derecognition criteria,
(a). the carrying amount of the financial asset transferred; and (b) the sum of the
consideration received from the transfer and any cumulative gain or loss that had
been recognized in other comprehensive income, is recognized in profit or loss.
If a part of the transferred financial asset qualifies for derecognition, the carrying
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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.
For the financial assets sold with recourse and the endorsed, the Group should make
a judgment whether the risks and rewards related with the financial assets’ ownership
have been almost all transferred. For the financial assets of which the risks and
rewards related with its ownership have been, in substantial, all transferred, it should
be derecognized. For the financial assets of which the risks and rewards have been,
in substantial, all retained, it should be not be derecognized. For the financial assets,
the related ownership of which have not been neither ,in substantial, all transferred
nor retained, the Group need to make a judgment about whether the control over the
financial assets have been kept or not and then deal with it according to the
standards mentioned in the previous paragraphs.
(5) Classification of the financial liabilities and measurement
The financial liabilities are classified into financial liabilities measured at fair value
with its changes into profit and loss and other financial liabilities. The initial
measurement is made at its fair value. For the financial liabilities measured at fair
value with its changes into profit and loss, the related trading expense are recorded
into current period profit and loss; for other financial liabilities, the related trading
expenses are recorded in its initial cost.
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
designated 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 designated 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
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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
Business Enterprises No. 14 - Revenue.
(6) Derecognition
The Group derecognizes a financial liability (or part of it) when the underlying present
obligation (or part of it) is discharged or cancelled or has expired. An agreement
between the Group (an existing borrower) and existing lender to replace original
financial liability with a new financial liability with substantially different terms is
accounted for as an extinguishment of the original financial liability and the
recognition of a new liability.
When the financial liabilities are fully and partially derecognized, the difference
between the carrying value of the part derecognized and consideration paid
( including the non-current assets transferred out or new financial liabilities assumed )
should be recorded in the current period profit and loss.
4.10 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:
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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.
For an account receivable that is individually significant, the asset is individually
assessed for impairment. If there is objective evidence indicating that the asset is
impaired. The impairment loss is recognized in the profit and loss at the excess of
carrying value over its predicted future cash flow (excluding the non-incurred future
credit loss ) discounted with original actual interest rate.
(2) Provisions of bad debts for accounts receivables that is individually insignificant.
For the accounts receivables that is individually insignificant, if there are signs
indicating the impairment, such as long-aging, having a dispute with the obligator or
obligator suffering serious financial difficulties, it should be individually tested for
impairment.
4.11 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
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less the estimated costs of completion, the estimated costs necessary to make the
sale and relevant taxes. Net realizable value is determined on the basis of clear
evidence obtained, and takes into consideration the purpose of holding inventories
and effect of post balance sheet events.
At the balance sheet date, inventories are measured at the lower of the cost and net
realizable value. If the net realizable value is below the cost of inventories, a
provision for decline in value of inventories is made. The provision for inventories
decline in value is determined by the difference of the cost of individual item less its
realizable value.
After the provision for decline in value of inventories is made, if the circumstances
that previously 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 maintain and renew
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.
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4.12 Held-for-sale assets
The non-current assets which can be sold at its current conditions, the Group’s
disposal decision have been made, an un-revocable transferring agreement has
been made and the transfer can be finished within one year, it should be recognized
as held-for-sale non-current assets. The amortization or depreciation will be ceased
since the day it is reclassified as held-for-sale assets. And it should be measured at
the lower of carrying amount and its fair value less cost of disposal.
The held-for-sale non-current assets include the individual assets and asset group of
disposal. If the asset group met the definition regulated in the Chinese Accounting
Standards for Business Enterprises No.8 –Asset impairment and it has been
allocated with the goodwill gained through the enterprises combination according to
the provision of the regulation, or the asset group of disposal is a business of the
asset group, the asset group should include the goodwill resulted from the enterprise
combination.
The individual non-current assets classified as held-for-sale and assets within the
asset group of disposal, should be represented individually in the current assets
section of the balance sheet; The liabilities which belong to the disposal group of
held-for-sale and is related with transferring the possession of assets, it should be
individually represented in the current liability section of the balance sheet.
Some assets or assets group of disposal that have been classified as held-for-sale
but the conditions are not met for being recognized as held-for-sale non-current
assets thereafter. The assets should be stopped being classified as held-for-sale and
should be measured at the lower of: 1) The book value of assets and asset group of
disposal before they are classified as held-for-sale, being adjusted by the
amortization, depreciation or impairment pretending that they were not initially
classified as held-for-sale; and 2) the recoverable amount on the day when decide
not to sell.
4.13 Long-term equity investments
The long-term equity investment mentioned in this section is about the equity
investment of which the Group has control, common control or significant influences
over the investee. For the investments that the Group has no control, common control
or significant influences over the investee, they will be recorded as available-for-sale
or financial instrument assets measured at fair value with its changes into profit and
loss. Please refer to note 4.9-Financial instruments for detail.
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Common control means the Group’s mutual control to the arrangement according to
the related agreement and the arrangement’s activities related decisions can be
made only after getting the mutual agreement from other parties sharing the control
power. Significant influences represent that the Group has the right to participate in
the decision of the financial and operating policies, but cannot control or control
together with other parties to make the policy related decision.
(1) Determination of investment cost
For a business combination involving enterprises under common control, the initial
investment cost of the long-term equity investment shall be carrying value of the
absorbing party’s share of the shareholder’s of the party being absorbed at the date
of combination.
For a business combination not involving enterprise under common control, the
combination cost including the sum of fair value, at the acquisition date, of the assets
given, liabilities incurred or assumed, and equity securities issued by the acquirer.
The intermediary expenses incurred by the acquirer in respect of auditing, legal
services, valuation and consultancy services etc and other associated administrative
expenses attributable to the business combination are recognized in profit or loss
when they are incurred.
The transaction cost for the equity securities or liability securities issued by the
acquirer in the business combination shall be recognized as initial amount of equity
security or liability.
The equity investments other than the long-term equity through combination shall be
initially measured by cost. The cost shall be recognized to the difference in the way of
acquisition of long-term equity 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 transferred 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. For the long-term equity
investments that the Group can have significant influence or common control on the
investee, but cannot control the investee, because of the added investments, the cost
of the long-term equity investment should be the sum of original fair value of the
investment and the cost of newly added investment.
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(2) Subsequent measurement
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. Besides, the cost method shall be adopted in a long-term equity investment
when the Group can exercise control over the investee.
1) Cost method of accounting for long-term equity investments
Under the cost method, a long-term equity investment is measured at initial
investment cost. Except for cash dividends or profits declared but not yet paid that
are included in the price or consideration actually paid upon acquisition of the
long-term equity investment, investment income is recognized in the period in
accordance with the attributable share of cash dividends or profit distributions
declared by the investee.
2) Equity method of accounting for long-term equity investments
Where the initial investment cost of a long-term equity investment exceeds the
investing enterprise’s interest in the fair values of the investee’s identifiable net
assets at the time of acquisition, no adjustment shall be made to the initial investment
cost.
Where the initial investment cost of a long-term equity investment is less than the
investing enterprise’s interest in the fair values of investee’s identifiable net assets at
the time of acquisition, the difference shall be charged to profit or loss for the current
period, and the cost of the long-term equity investment shall adjusted accordingly.
Under the equity method，the Group recognizes its share of the net profit or loss and
other comprehensive income of the investee for the period as investment income or
loss and other comprehensive income for the period and adjusts the book value of
the long-term equity investment simultaneously. The Group reduces the book value
of the long-term equity investment, according to the shared profit or cash dividends
declared by the investee. For the changes of investee’s equity beside the net profit,
other comprehensive income and profit distribution, adjust the book value of the
long-term equity investment and its capital surplus.
When determining the share percentage of investee’s net profit, it should be made
based on the fair value of investee’s identifiable assets after adjusting the investee’s
net profit on the acquisition date. When the investee’s accounting period and
accounting policies are different with the Group’s, the subsidiary’s financial
statements should be adjusted according to the Group’s and recognize the
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investment income and other comprehensive income based on it. 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. When the Group’s assets invested to joint venture and jointly run
business are a deal and the Group obtains the long-term equity investment without
getting the power of control, the initial cost of the investment is determined by fair
value of the assets invested. The difference between the initial cost and the book
value of the assets invested should be fully taken into profit and loss. When the
Group’s assets sold to joint venture and jointly run business are a deal, the
differences between the consideration received and the book value are fully taken
into the profit and loss. When the Group’s buying assets from joint venture and jointly
run business are a deal, the gain and loss would be fully recognized according to the
Accounting Standards for Business Enterprises No.20 -Enterprises combination.
When the investee is recognized net losses, reduce the carrying value of long-term
equity investments and long-term equity of net investment (in substance) in investee
to zero. In addition, the Group has the obligations on additional losses, then the
expected obligation as estimated liabilities and included in the current investment
losses. Where the net profit from investee units, restoration confirm the amount of
revenue sharing after offset the amount of unrecognized loss sharing.
For long-term equity investments in associates and joint ventures which had been
held by the Group before its first time adoption of Accounting Standards for Business
Enterprises, where the initial investment cost of a long-term equity investment
exceeds the Group’s interest in the investee’s net assets at the time of acquisition,
the excess is amortized and is recognized in profit or loss on a straight line basis over
the original remaining life.
3) Acquisition of minority interest
The difference between newly increased equity investment due to acquisition of
minority interests and portion of net asset cumulatively calculated from the acquisition
date is adjusted as capital reserve. If the capital reserve is not sufficient to absorb the
difference, the excess are adjusted against retained earnings.
4) Disposal of long-term equity investment
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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 4.5
applies.
(3) Accounting policies retailed on “the method of preparing consolidated financial
statements”
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 long-term equity investment accounted for using the equity method, when the
rest of the long-term equity investment is still accounted for using the equity method
after disposal, the other comprehensive income originally recorded into the equity
should be dealt with by the same way as the investee’s directly dealing with its assets
or liabilities. The other investee equity changes caused beside the net profit, other
comprehensive income and profit distribution should be proportionately transferred
into current year profit and loss.
For long-term equity investment accounted for using the cost method, when the rest
of the long-term equity investment is still accounted for using the cost method after
disposal, other comprehensive income recognized using the equity method or the
method of recognizing and measuring the financial instruments before obtaining the
control over the investee should be dealt with as the same way with investee’s direct
disposing of its assets and liabilities and be proportionately taken into profit and loss;
The other investee equity changes caused beside the net profit, other comprehensive
income and profit distribution should be proportionately transferred into current year
profit and loss.
When the Group loses control over the investee but still can exercise the common
control or significant influences over the investee after partial disposal of the
long-term equity investment, the equity method should be used to prepare individual
financial statements. The rest equity investment is treated as accounted using the
equity method upon the acquisition and is adjusted; If no control and significant
influences cannot be exercised, the rest equity investments should be recognized
and measured by the accounting standards to financial instruments. The difference
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between the fair value and book value is taken into current profit and loss.
For the other comprehensive income recognized under the equity method or the
financial instrument related method before obtain the control over investee, it will be
treated as the same way with investee’s directly disposing its assets or liabilities
when losing the control over investee. The equity changes under equity method
caused beside the net profit, other comprehensive income and profit distribution
should be transferred into the profit and loss when losing the control over investee.
Including, other comprehensive income and other owner’s equity should be
proportionately transferred, when the rest equity investment is accounted with equity
method; Other comprehensive income and other owner’s equity should be fully
transferred, when the rest equity investment is accounted with accounting standards
of financial instruments.
The Group loses the control and significant influences over the investee, because of
disposing of part of long-term equity investment. The difference between fair value
and book value on the day when losing the control and significant influences over the
investee should be taken into profit and loss. Other comprehensive income
recognized for the original equity investments under equity method, would be dealt
with as the same way with investee’s directly disposing of its assets and liabilities
when cease using the equity method. The equity changes caused beside the net
profit, other comprehensive income and profit distribution, should be transferred into
investment income when cease using the equity method.
For the Group’s multiple-step dealing with its long-term equity investments until losing
control, if the transactions are package deal, each transaction should be treated as a
transaction dealing with its long-term equity investments until losing control, the
difference between the consideration received and the book value of the equity
investment should be firstly recognized as other comprehensive income before losing
control over investee and then all transferred into current profit and loss.
4.14 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
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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
which consistent with that for building or land use rights.
Where self-occupied property or inventory converts into investment property, or
investment property converts into self-occupied property, the carrying amount before
the change shall be accounted as the value after conversion.
When an investment property changes into self-occupied property, it should be
converted into fixed asset or intangible asset on the date of conversion. When the
purpose of a self-occupied property changes into rental earning or capital increase,
fixed asset or intangible asset should be converted into an investment property from
the date of conversion. Where the cost model is used in the measurement of
investment property during the conversion, the carrying amount before the
conversion is accounted as the value after conversion. Where the investment
property is measured by the fair value after conversion, the fair value at the
conversion date is adopted as value after conversion.
Where an investment property is disposed or no longer in use permanently and no
economic benefits shall be obtained from the disposal, derecognized the investment
property. The income from sale, transfer or disposal of the investment property is
recorded in the profit or loss after deduction of its carrying amount and related tax.
4.15 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) Recognition and measurement of financial lease
Finance leases which transfer substantially all the risks and rewards of ownership.
The depreciation policy for assets held under finance leases should be consistent
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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
and estimated residual rate are as follows:
Category Expected useful life Estimated residual value（%） 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.
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The Group conducts a review of useful life, expected net realizable value and
depreciation methods of the fixed asset at least on an annual base. Any change is
regarded as change in accounting estimates.
4.16 Construction in progress
(1) The types of construction in progress
Construction in progress includes preparation before construction, construction
engineering in progress, installation engineering in progress, technical improvement
engineering, repair engineering etc. whose costs are determined by the actually
incurred expenditures.
(2) The standards and time of transferring the construction in progress to fixed
assets.
When the constructions in progress reach the condition of available for use, it should
be transferred to the fixed assets per the full actually incurred costs.
(3) The method of testing the impairment and the provision for impairment loss
The method of testing the impairment loss for the construction in progress and the
way to accrue the provision for the impairment loss is detailed listed on the note
4.20-“long-term assets impairment”.
4.17 Borrowing costs
(1) The standards for capitalizing the borrowing cost
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.
(2) The period of capitalizing the borrowing costs
The period of borrowing costs capitalization is calculated from the point when
borrowing costs beginning capitalizing to the time stopping capitalizing. The period
suspending capitalizing the borrowing costs are excluded.
(3) The period suspending capitalizing the borrowing costs
Capitalization of borrowing costs is suspended during periods in which the acquisition,
construction or production of a qualifying asset is interrupted by activities other than
those necessary to prepare the asset for its intended use or sale, when the
interruption is for a continuous period of more than 3 months. Borrowing costs
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incurred during these periods recognized as an expense for the current period until
the acquisition, construction or production is resumed.
(4) The method for calculating the amount of borrowing cost capitalized
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.
4.18 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
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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) The estimation of the useful life of the indefinite intangible assets
Item Estimated useful life Basement
Taxi license 38 years The recorded years of taxi license
Fixed assets, electronic and other
Software
5 years equipments useful lives
(3) The basis to judgment intangible assets whose useful lives are uncertainty
The periods of which the intangible assets can bring benefits to the Group cannot be
reasonably determined, the intangible assets will be classified as indefinite intangible
assets.
(4) Methods of impairment assessment and determining the provision for impairment
losses of intangible assets
The testing method for intangible assets impairment and the calculation of the
provision for impairment is detailed listed on the note 4.20-Long-term assets
impairment.
(5) The standards to distinguishing the research stage and development stage of
internally developed intangible assets
Research stage: the stage when the creative planned investigation and research
activities are carried on, in order to obtain and understand the new sciences and
technical knowledge;
Development stage: the stage of applying the research results and other knowledge
to the specified plan or design so as to produce new or substantially improved
materials , equipments and products before commercial production or use.
(6) The accounting of expenditures of internally researched and developed project
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
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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.
4.19 Long-term deferred assets
Long-term deferred assets represent expenses incurred that should be borne 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.
4.20 Long-term assets impairment
On each balance sheet date, the Group will make judgments to determine whether
there are signs for impairment to the fixed assets ,construction in progress, definite
intangible assets, investment properties& equity investment in subsidiaries& joint
ventures& jointly run business measured using the cost method etc. non-current and
non-financial assets. If there are signs for impairment, the impairment should be
tested by estimating the recoverable amount. Goodwill, indefinite intangible assets
and intangible assets having not reached the usable condition, should be yearly
tested for impairment no matter whether there are signs for impairment.
The result of impairment test demonstrates that the recoverable amount is less than
its carrying amount, the difference will be recorded as provision for impairment and
debited as impairment loss. The recoverable amount equals to the greater of 1) fair
value less disposal expenses and 2) present value of the predicted future cash flows.
The fair value of the assets is determined by the sale contract price of fair trade;
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When there are no sale contracts but exist active market ,the fair value will be
determined with the quotation from the buyer; When there exist neither sale contracts
nor active market, the assets fair value will be determined by the best information
available.
The disposal expenses include the legal expenses, related taxes, delivery fees and
other direct fees incurred for making the assets reach the salable condition. The
present value of the predicted future cash flows is calculated according to the
predicted future cash flows generated from the continuous use of the assets and final
disposal discounted with the applicable discounted rate. The provision for impairment
test should be recognized based on the individual asset. If it is hard to estimate the
recoverable amount to individual asset, the recoverable amount of the assets group
of which the individual assets are included should be determined. Assets group is the
smallest unit that can independently generate the cash inflow.
For the goodwill separately displayed on the financial statement, when making the
impairment test, the carry value of the goodwill should be allocated to assets group or
the group of assets group predicted to be benefit from the synergistic effect from the
enterprises combination. When the rest result shows that the recoverable of the
assets group or the group of assets group having been allocated with the relevant
goodwill is less than the carrying amount, the related impairment loss should be
recognized. The impairment losses will firstly reduce the book value of the goodwill
allocated and then reduce the book value of each asset of the assets group or the
group of assets group according to the percentage of each asset to the assets group
or the group of assets group beside the goodwill.
The impairment loss of the above assets would not be reversed back once they are
recognized.
4.21 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
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money.
Where all or some of the expenditure required to settle a provision is expected to be
reimbursed by a third party, the reimbursement is recognized as a separate asset
only when it is virtually certain that reimbursement will be received, and the amount of
reimbursement recognized does not exceed the carrying amount of the provision.
(1)Onerous contracts
An onerous contract is a contract in which the unavoidable costs of meeting the
obligations under the contract exceed the economic benefits expected to be received
under it. The exceeding part over the assets in the contract shall be recognized as a
provision when an executor contract becomes an onerous contract and the obligation
arising under the onerous contract satisfies the requirements of provisions.
(2)Restructuring Obligation
The amount of a restructuring provision shall be recognized by the total direct
expenditures arising from the restructuring when the enterprise has a detailed,
formal plan for the restructuring, and a public announcement of the plan has been
made for restructuring and above requirements for the provision mentioned above
are satisfied.
[For the restructuring obligation carried for the portion of business for sale, the
obligation related to the restructuring can only be recognized when the Group has
committed for the sales of portion of the business (signing the selling agreement with
termination)]
4.22 Revenue
(1) Revenue from sales of goods
The Group has transferred to the buyer the significant risks and rewards of ownership
of the goods; the Group retains neither continuing managerial involvement to the
degree usually associated with ownership nor effective control over the goods sold;
the associated costs incurred or to be incurred can be measured reliably.
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
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procedures;
D. Agreed in the contract of sale and transfer the property to buyers.
(2) Revenue from rendering service
When the outcome of a transaction involving the rendering of services can be
estimated reliably at the balance sheet date, revenue associated with the transaction
is recognized using the percentage of completion method, or otherwise, the revenue
is recognized to the extent of costs incurred that are expected to be recoverable. The
stage of completion of a transaction for rendering services is determined based on
[survey of work performed / services performed to the date of as a percentage of total
services to be performed / the proportion that costs incurred to date bear to the
estimated total costs of the transaction]
The outcome of a transaction involving rendering of services can be estimated
reliably when all of the following conditions are satisfied:
1) the amount of revenue can be measured reliably;
2) it is probable that the associated economic benefits will flow to the Group;
3) the stage of completion of the transaction can be measured reliably;
4) the costs incurred and to be incurred for the transaction can be measured reliably.
If the outcome of a transaction involving rendering of services cannot be estimated
reliably, the revenue is recognized by the cost incurred and estimated compensation,
and the actual cost is booked into profit and loss. No revenue is recognized if the cost
incurred cannot be recovered.
For contract or agreement entered between the Group and other enterprises with
sales of goods and rendering services, if part of goods selling and the part of
rendering service can be separated and measured individually, they are settled
separately. If the part of goods selling and the part of rendering service cannot be
separated or they can be separated but cannot be measured individually, the parts in
the contract shall be treated as goods of selling.
(3) Revenue from construction contracts
Where the outcome of a construction contract can be estimated reliably, contract
revenue and costs are recognized using the percentage of completion method at the
balance sheet date. The stage of completion of a contract is determined using the
proportion that actual contract costs incurred to date bears to the estimated total
contract costs.
The outcome of a construct contract can be measured reliably when the following
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conditions are met:
1) The total revenue of the contract can be measured reliably;
2) It is probable that the associated economic benefits will flow to the enterprise;
3) The actual cost of the contract incurred can be determined and measured reliably;
4) The stage of completion of the contract and the costs to be incurred associated
with the completion of the contract can be measured reliably.
Where the outcome of a construction contract cannot be estimated reliably, (1) if
contract costs are expected to be recoverable, contract revenue is recognized to the
extent of contract costs that are expected to be recoverable; and contract costs are
recognized as expenses in the period in which they are incurred; (2) if contract costs
are not expected to be recoverable, they are recognized as expenses immediately
when incurred and contract revenue is not recognized. When the uncertainties that
prevented the outcome of the construction contract from being estimated reliably no
longer exist, revenue and expenses associated with the construction contract are
recognized using the percentage of completion method.
If the estimated total contract costs exceed total contract revenue, the expected loss
is recognized immediately as an expense for the period.
4.23 Government Grants
Government grants are transfer of monetary assets and non-monetary assets from
the government to the Group at no consideration, excluding the capital invested by
the government as equity owner. Government grant can be classified as grant related
to the assets and grants related to the income.
If a government grant is in the form of a transfer of a monetary asset, it is measured
at the amount received or receivable. If a government grant is in the form of a
non-monetary asset, it is measured at fair value. If the fair value cannot be reliably
determined, it is measured at a nominal amount. A government grant measured at a
nominal amount is recognized immediately in profit or loss for the period.
A government grant related to an asset is recognized as deferred income, and evenly
amortized to profit or loss over the useful life of the related asset. For a government
grant related to income, if the grant is a compensation for related expenses or losses
to be incurred in subsequent period, the grant is recognized as deferred income, and
recognized in profit or loss over the periods in which the related costs are recognized.
If the grant is a compensation for related expenses or losses already incurred, the
grant is recognized immediately in profit or loss for the period.
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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.
4.24 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
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
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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
when it becomes probable that sufficient taxable profit will be available.
4.25 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
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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
costs, and unguaranteed residual value, and the aggregate of their present values, is
recognized as unearned finance income, which is amortized using the effective
interest rate method over each period during the lease term.
Finance lease receivable less unearned finance income shall be separated into
long-term liabilities and long-term liability within one year for presentation.
Unearned finance income shall be computed by the effective interest method during
the lease term. Contingent rent shall be credited into profit or loss in which actually
incurred.
4.26 Employee Benefits
The benefits of employees in the Group include short-term benefits, welfare after
demission, demission welfare and other long-term welfare.
The short-term benefits include the employees’ salary, bonus, allowance and
compensation, employee welfare, medical insurance, maternity insurance,
employment injury insurance, housing fund, labor union expense and employee
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education expense and non-currency welfare etc. The Group recognizes the actually
incurred short-term employee benefits as liability during the period when the
employees’ services are rendered, the expenses are recorded into the current period
profit and loss or related asset costs according to the benefit object. For the
non-currency welfare, it is recognized according to its fair value.
Welfare after demission mainly includes the defined contribution plan and the
defined benefit plan. The defined contribution plan and the defined benefit plan
mainly include the basic endowment insurance premium, unemployment insurance
expense and pension etc..For the defined contribution plan, the sinking fund
deposited to the an independent entity for the service provided by employee in the
accounting period on the balance sheet is recognized as the debt and included in the
current profit and loss or related asset costs according to the benefit object. There is
no defined benefit plan in the Group.
When the Group cannot unilaterally withdraw the dismissal welfare provided for the
plan on the cancellation of labor relationship or layoff proposal, or recognize the cost
or expense involved with the recombination of dismissal welfare or payment of such
dismissal welfare (whichever is earlier), the employee’s remuneration incurred by
dismissal welfare is recognized as the debt and included in the current profits and
losses or related assets cost. But when then dismissal is predicted not to be paid in
the following 12 months after the report date, it would be classified as other long-term
welfare.
Employee internal retirement plan is treated as the same way with dismissal
welfare mentioned above. The Group would record the relevant salaries and social
insurances provided to the employees under the plan into the profits and losses
(dismissal welfare) during the period from the day stopping providing the services to
the legal retirement day, when the conditions for recognizing the contingency liability
are met.
Other long-term welfare provided by the Group is referred to as the welfare beside
the short-term benefits, welfare after demission, demission welfare. It would be
recognized as the requirements of defined contribution plan, when conditions are met.
Or else, it would be recorded as defined benefit plan.
4.27 Changes in major accounting policies and accounting estimates
(1) Changes of accounting policies
There were changes of accounting policies due to complication with the new
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accounting standards.
At the beginning of the year 2014, the Ministry of Finance issued or revised the
following accounting standards by documents Caikuai [2014]
No.6,No.7,No.8,No.10,No.11,No.14 and No.16 respectively: “Accounting standards
for business enterprise No.39- Fair Value Measurement”, ”Accounting standards for
business enterprise No.30- The presentation of financial statements(revised in 2014)
“,”Accounting standards for business enterprise No.9- Employee’s benefits (revised
in 2014) “,”Accounting standards for business enterprise No33-The consolidation of
financial statements(revised in 2014)” ,”Accounting standards for business enterprise
No.40-The joint venture arrangement”, “Accounting standards for business enterprise
No.2- long-term equity investment(revised in 2014)” and ”Accounting standards for
business enterprise No.41-disclosure interest in other entities”, requiring all business
enterprises applying with the Accounting Standards for Business Enterprises to
implement it and encouraging the business enterprises listed on the foreign stock
market to implement in advance from July.1,2014. Meanwhile, the Ministry of Finance
issued the “Accounting standards for business enterprises No.37-The presentation
on financial instrument (revised in 2014)” (thereinafter referred as “The standards for
financial instrument presentation”), requiring to comply with the standards in the
financial reports of year 2014 and thereafter when presenting the financial
instrument.
According to the requirements of Ministry of Finance, the Group began to comply
with the seven newly issued or revised Accounting Standards for Business
Enterprises beside the Standards for presentation of financial instruments mentioned
above from July, 2014. The Group complied with the standards for presentation of
financial instruments and made some adjustments when preparing the financial
report of year 2014. The influences of financial statements items and amounts of
current and previous periods are listed below:
Amount influenced to financial statement
Standards The accounting policies changed and influences on the
items of Jan.1,2014/2013
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Amount
influenced
Item increase“+”
/decrease“-”
Before the “Accounting Standards for Business Enterprises
No.2-Long-term equity investments(revised in 2014)” are Available-for-sale
17,464,240.74
implemented, the Group used the cost method when no financial statement
significant influences or common control, no quotation
are available in the active market and the fair value cannot
Accounting
be reliably measured to the investment in investee. After
Standards for
the “Accounting Standards for Business Enterprise
Business
No.2-Long-term equity investments(revised in 2014) ” are
Enterprise
adapted, the investments in investees which the Group
No.2-Long-term
have no significant influences or common control, no Long-term equity
equity -17,464,240.74
quotation are available in the active market and the fair investment
investments:
value cannot be reliably measured, are classified as
available-for-sale financial assets. The Group adopted the
retroactive adjustment approach for such accounting policy
change and the comparative statements of 2014 were
restated.
Accounting “Accounting Standards for Business Enterprise No.30-
Financial statements presentation(revised in 2014)” Other comprehensive
9,354,020.21
Standards for classify the other comprehensive income into two income
categories:(1) Other comprehensive income that cannot be
Business
reclassified into profit and loss in the future; (2)Other
Enterprise comprehensive income that would be classified into profit
and loss when the specified conditions are met, Translation difference in
No.30-Financial meanwhile, regulate the presentation of the held-for-sale the foreign currency -9,354,020.21
etc.. The Group has complied with the new requirement financial statement
statements
when presenting the financial statements and restate the
presentation: comparative financial statements presented.
Accounting policies changes for other newly issued and revised Accounting
Standards for Business Enterprise.
①”Accounting Standards for Business Enterprise No.9- Employee Benefits(revised
in 2014)”:
Before the “Accounting Standards for Business Enterprise No.9- Employee
Benefits (revised in 2014)” are implemented, when the Group cannot unilaterally
withdraw the dismissal welfare provided for the plan on the cancellation of labor
relationship or layoff proposal which is officially made and will be implemented soon,
the related contingency liability incurred would be recorded into current period profits
and losses. After the “Accounting Standards for Business Enterprise No.9- Employee
Benefits (revised in 2014)” are implemented, the detailed policies about the dismissal
welfare are presented on note 2.26. The adaption of “Accounting Standards for
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Business Enterprise No.9- Employee Benefits (revised in 2014)” have no significant
influences on the Group’s current financial statements presented. The Group has
complied with the new disclosure requirements.
②” Accounting Standards for Business Enterprise No.33- Consolidated financial
statements(revised in 2014)”:
For “Accounting Standards for Business Enterprise No.33- Consolidated financial
statements(revised in 2014)”, has same regulation :”The scope of consolidated
financial statement should be specified based on the control ”,but amends the
definition of control as “the investor having the rights on the investee , can get return
through joining the relevant activity of investee and have the ability to influence the
return by using the rights”. The revised standards require the investor to make a
judgment about whether the investee is controlled based on having a comprehensive
consideration of all relevant facts and conditions and provides more guidance on
the control power judgment. The Group’s subsidiaries that had been included in the
scope of consolidation of financial statement in the previous years met the
requirements regulated by the revised standards. This change has no significant
influence on current year’s financial statements presented.
③”Accounting Standards for Business Enterprise No.37- the presentation of
financial instrument (revised in 2014)”:
“Accounting Standards for Business Enterprise No.37- the presentation of
financial instrument (revised in 2014)” adds the requirement on elimination and
disclosure, adds the disclosure requirement on transferring of financial assets,
amends the disclosure requirement for analysis on the maturity date of financial
assets and financial liabilities. Current financial statements presented have complied
with the new requirements and the disclosure on comparative financial statements
notes have also been correspondently adjusted.
④”Accounting Standards for Business Enterprise No.39-Fair value measurement”:
“Accounting Standards for Business Enterprise No.39-Fair value measurement”
regulates the fair value measurement and disclosure. The adaption of the standards
has no significant influences on the current financial statement items, but it cause the
Group to disclose more widely about the fair value information on the notes to
financial statement. The current year financial statement has complied with the
disclosure requirement.
⑤”Accounting Standards for Business Enterprise No.40-The joint venture
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arrangement”:
“Accounting Standards for Business Enterprise No.40-The joint venture arrangement”
regulate the accounting method for the joint venture having common control. The
standard regulates two kinds of joint venture arrangement: mutual office and joint
venture. The classification of the joint venture arrangement depends on the involved
parties’ rights and obligations to the joint venture arrangement. Mutual office is
referred to as the joint venture management where common operators have the right
to share and arrange the related assets and are obligated to undertake and arrange
the related liabilities. Its accounting treatment is based on common operators’ right
and obligation during the common operating. Joint venture is referred to as
the joint venture arrangement where the involving parties have the rights to the
arranged net assets and use the equity method to according to “Accounting
Standards for Business Enterprise Nno.2- Long-term equity investment”. The
adaption of the “Accounting Standards for Business Enterprise No.40-The joint
venture arrangement” has no significant influences on the current year financial
statement items presented.
⑥”Accounting Standards for Business Enterprise No.41-disclosure interest in other
equities”:
“Accounting Standards for Business Enterprise No.41-disclosure interest in other
equities” is applicable to disclose the enterprise’ interest in subsidiary, joint venture
arrangement, joint operation and structured body not included in the scope of
consolidated financial statement. The adaption of the “Accounting Standards for
Business Enterprise No.41-disclosure interest in other equities” cause the enterprise
to disclose more widely in the notes to the financial statements. The Group’s current
year financial statements have complied with the standards and make the
correspondent adjustments to the notes of comparative financial statements.
(2)Changes of accounting estimates
There were no changes of main accounting estimations during this period.
4.28 Material accounting judgments and accounting estimations
Because of the inherent uncertainties of the operating activities, the Group need to
make judgments, estimations and assumptions to the financial statement items
whose carrying amount cannot be accurately measured. Those judgments,
estimations and assumptions are made based on the management’s historical
experience and taking other relevant factors into account. Those judgments,
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estimations and assumptions would influence the reported amount of revenue,
expense, asset and liability and disclosure of the contingency liability on the balance
sheet date. However, the actual result caused by the uncertainty of these estimations
may be different with the present estimation made by the management, which may
cause significant adjustments to the carrying amount of the influenced assets and
liabilities in the future.
The Group are making periodical review on the judgments, estimations and
assumptions mentioned above based on the premise of going concern. For the
changes of estimations that only influence the current period, the influenced amount
will be recognized in the current period. For the changes of estimations that not only
influence the current period ,but also affect the future periods, the influenced amount
will be recognized in the current period and future period.
As of the balance sheet date, the material areas that need to be judged ,estimated
and assumed are listed below:
（1） The classification of lease
The lease are classified into operating lease and finance lease, according to the
“Accounting Standards for Business Enterprise No.21-Lease” .When making the
classification, the management need to make analysis and judgment about whether
all risk and reward related with the ownership of assets leased out have been
substantially transferred to the lessee or not ,or whether all risk and reward related
with the ownership of the assets leased have substantially assumed by the Group.
（2） The provision for allowance for bad debt
The Group applies the allowance method to estimate the bad debt, according to the
policy of accounts receivable. The impairment of accounts receivable is based on the
evaluation of accounts receivable’s possibility of collection. The difference between
the actual result and the original estimation would influence the accounts receivable’s
carrying value and cause the balance of allowance for bad debt to increase or
reverse back during the period when the estimation is changed.
（3） Provision for inventory
According to inventory accounting policy, the ending inventory is measured by the
lower of cost and net realizable value. When the cost is greater than the net
realizable value and the obsolete and unsalable inventory, the inventory falling price
reserve shall be reserve shall be withdrawn. Reduce the inventory to the net
realizable value is based on the evaluation the salable of the inventory and its net
realizable value. Estimates of net realizable value are based on the most reliable
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evidence available at the time the estimates are made and take into consideration the
purpose for which the inventory is held and the influences of events occurring after
the balance sheet date. The difference between the actual result and original
estimation will influence the carrying amount of the inventory and cause the provision
for inventory to increase or reverse back during the period when the estimation is
changed.
（4） The fair value of financial instrument
For the financial instrument lacking active trading market, the Group will use several
valuation methods to make sure the fair value. The methods include the model to
analyze the discounted cash flow etc. The Group will evaluate the following aspects,
such as the future cash flow, credit risk, market volatility and the relativity etc. and
then choose the applicable discounted rate, when making the evaluation. There are
uncertainties for the relevant assumptions whose changes will influence the fair value
of financial instrument.
（5） Provision for non-financial and non-current assets
The Group will make judgment on the non-current assets beside the financial assets
about whether there are signs for impairment on the balance sheet date. For the
intangible assets whose life is uncertain, when there are signs for impairment, it
should be tested for impairment, beside the yearly impairment test. Other non-current
assets beside the financial statement, when there are signs indicating that the
carrying value are unrecoverable, it should be tested for impairment.
When the carrying value of the asset or asset group is greater than the recoverable
amount (i.e., the net value of fair value less the cost of disposal and present value of
the predicted future cash flow whichever is higher), it indicates impairment.
The net value of fair value less the cost of disposal, is referred to the agreed sale
price of similar assets under fair trade or the observable market price, less the
incremental cost directly related with the disposal of the assets.
The Group need to make significant judgment to the output of assets (or assets
group), sale price, relevant operating cost and the discounted rate when estimating
the present value of future cash flows. The Group will make use of any relevant
material available when estimating the recoverable amount , including the prediction
of the output, sale price and relevant operating cost according to reasonable and
supportable assumptions.
The Group will test the goodwill for impairment at least once a year, which requires to
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estimate the present value of the future cash flows of the assets and assets group
allocated with the goodwill. When estimating the present value to the future cash flow,
the Group need to estimate the cash flows generating from the assets and assets
group, and choose the applicable discount rate to determine the present value.
（6） Depreciation and amortization
The Group use the straight-line method to depreciate and amortize the investment
real estate, fixed assets and intangible assets within the useful life after taking into
the consideration of the residual value. By the way, the amount of depreciation and
amortization during the report period are determined. The useful life is determined
based on past experience and the predicted technical changes of similar assets. If
there are significant changes of previous estimations, the depreciation and
amortization would be adjusted in the future periods.
（7） Deferred tax asset
To the degree that there are sufficient taxable profit to make up the deductible
losses, the Group will recognize the deferred tax assets for the un-used deductible
losses. It requires the management to apply massive judgments to estimate the time
and amount the taxable profits will generate in the future period combining with the
strategic of tax planning to determine the amount of deferred tax asset.
（8） Income tax
There are some uncertainties for some trades’ ultimate tax treatment and calculation.
Some items need the determination from the tax authorities about whether they are
deductible before tax or not. If the ultimate tax determination are different with the
originally estimated amount, the difference will influence the current period income
tax and the deferred income tax when the tax determination are finally made.
Note 5 Principal Taxes Applied
Taxes and their rates
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Category Taxable basis Tax rate
Value added tax (“VAT”) Goods sales income, taxi operating income 17% & 3%
Proceeds from sales of properties, leasing
Business tax 5%
income, property management income
Business tax Construction, installation income 3%
Construction tax Turnover tax 7%
Education surcharge(Local
Turnover tax 5%
Educationsurcharge)
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%.
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Note 6 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, 2014, the Closing
refers to the December 31, 2014; the items of the prior period refers to the year 2013,
the current period refers to the year 2014.
6.1 Monetary funds
Item Closing balance Opening balance
Cash on hand 61,413.08 185,502.41
Cash in bank 670,058,435.95 519,098,870.03
Other monetary funds 8,837,400.00 6,090,000.00
Total 678,957,249.03 525,374,372.44
Including amount deposited in the foreign countries 9,057,907.94 9,187,440.82
Note: (1)As of Dec.31,2014, for the funds that the Group’s ownership are restricted
they are classified in Other monetary funds (totaling :RMB 8,837,400.00 as of
Dec.31,2014) ,including RMB 57,400.00 the tender bonds margin, RMB
2,780,000.00 bank acceptance deposit and RMB 6,000,000.00 deposited in the
Company's rent escrow account for the Company's borrowings.
6.2Note receivables
(1)Note receivables by types
Item Closing balance Opening balance
Bank acceptance -- --
Trade acceptance 119,846,192.64 --
Total 119,846,192.64 --
(2)Note receivables pledged at year end
Item Amount pledged at year end
Bank acceptance --
Trade acceptance 42,812,597.17
Total 42,812,597.17
(3)Note receivables endorsed or discounted at year end and not matured yet on the
balance sheet date
Item Amt. derecognized at year end Amt. not derecognized at year end
Bank acceptance -- --
Trade acceptance -- 77,033,595.47
Total -- 77,033,595.47
Note: As of Dec.31,2014, the trade acceptance discounted but not matured is RMB
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77,033,595.47(RMB 0.00 as of Dec.31,2013), the balance of related pledged
borrowing is 77,033,595.47(RMB 0.00 as of Dec.31,2013) (referring to the note 6.16).
When the trade acceptance cannot be honored when it is mature, the bank has the
power to ask the Group to repay the amount un-settled. The Group continues to
recognize the carrying amount of the trade acceptance and records the amount
received as pledged borrowing because of the transfer, due to the Group’s
undertaking the main risk, such as credit risk, relating with the trade acceptance.
(4)There are no situations of reclassifying the note receivables to the accounts
receivables, because of the issuer dishonoring.
6.3Accounts 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
103,554,193.95 100.00 19,165,351.52 18.51
bad debts is of individually insignificant
Total 103,554,193.95 100.00 19,165,351.52 18.51
(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
33,243,243.17 100.00 19,141,119.11 57.58
bad debts is of individually insignificant
Total 33,243,243.17 100.00 19,141,119.11 57.58
(2) Accounts receivable by aging balance
Closing balance Opening balance
Amount (%) Amount (%)
Within 1 year 75,192,337.53 72.61 4,984,386.26 14.99
1-2 years 3,040,957.54 2.94 2,898,070.94 8.72
2-3 years 253,116.00 0.24 24,802.70 0.08
Over 3 years 25,067,782.88 24.21 25,335,983.27 76.21
Total 103,554,193.95 100.00 33,243,243.17 100.00
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2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
(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 is
11,574,556.00 11,574,556.00 100.00
agency business established according
House pay to be collected 84,918,300.78 6,968,694.02 8.21 to the recoverability of
each receivable with
Engineering construction funds
7,061,337.17 622,101.50 8.81 long aging and little
and others
retrievability.
Total 103,554,193.95 19,165,351.52 18.51
(4)There were no any account receivables which had been accrued fully or large
proportion provision but had been fully collected or reversed 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
Proportion of the amount
Name of entity Relationship with the Group Amount Age
to the total AR (%)
Individual No.1 Un-related party 2,830,000.00 Within 1 year 2.73
Individual No.2 Un-related party 2,420,000.00 Within 1 year 2.34
Individual No.3 Un-related party 2,290,000.00 Within 1 year 2.21
Corporate unit No.1 Un-related party 2,039,200.00 Within 1 year 1.97
Individual No.4 Un-related party 1,900,000.00 Within 1 year 1.83
Total 11,479,200.00 11.08
(8) Details for receivables due from related parties, please refer to Note 9.6.
(9) There were no any accounts receivable that have been derecognized.
(10) There were no any accounts receivable which had been securitized.
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6.4Prepayments
(1) Aging analysis
Closing balance Opening balance
Aging
Amount (%) Amount (%)
Within 1 year 17,816,263.48 99.96 12,101,114.11 99.14
1-2 years 2,735.00 0.02 100,002.35 0.82
2-3 years -- -- 196.84 0.00
Over 3 years 2,749.75 0.02 5,285.00 0.04
Total 17,821,748.23 100.00 12,206,598.30 100.00
(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
Project 1 Un-related party 2,740,340.89 Within 1 year engineering materials and
materials un-warehousing
The un-settled prepayment of
Project 2 Un-related party 2,452,145.20 Within 1 year engineering materials and
materials un-warehousing
The un-settled prepayment of
Project 3 Un-related party 2,284,781.29 Within 1 year engineering materials and
materials un-warehousing
The un-settled prepayment of
Project 4 Un-related party 1,769,232.00 Within 1 year engineering materials and
materials un-warehousing
The un-settled prepayment of
Project 5 Un-related party 1,080,000.00 Within 1 year engineering materials and
materials un-warehousing
Total 10,326,499.38
(3) No prepayments to shareholders at least 5% of the Group’s shares with voting
power during the current period.
6.5 Dividends receivables
(1) Details of dividends receivable
Item(Or name of investee) Closing balance Opening balance
Yunnan KunPeng Flight service Co., Ltd 1,052,192.76 1,052,192.76
Total 1,052,192.76 1,052,192.76
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(2) Dividends receivable aging over 1year
Reasons for
Closing Whether the amount is impaired
Item(Or name of investee) Aging uncollected
balance and the base of judgment
amounts
Yunnan KunPeng Flight service Co., Ltd 1,052,192.76 2-3 years Delay to pay
Total 1,052,192.76
6.6 Other receivables
(1) Other receivables by categories
Closing balance
Category Carrying amount Bad debt provision
Amount (%) Amount (%)
Other receivables of which provision for
162,317,209.49 68.13 148,762,358.18 91.65
bad debts is of individually significant
Other receivables of which provision for
75,916,605.39 31.87 29,943,158.49 39.44
bad debts is of individually insignificant
Total 238,233,814.88 100.00 178,705,516.67 75.01
(Continued)
Opening balance
Category Carrying amount Bad debt provision
Amount (%) Amount (%)
Other receivables of which provision for
162,299,084.48 69.70 148,744,256.33 91.65
bad debts is of individually significant
Other receivables of which provision for
70,540,348.70 30.30 29,422,675.04 41.71
bad debts is of individually insignificant
Total 232,839,433.18 100.00 178,166,931.37 76.52
(2) Other receivables by aging balance
Closing balance Opening balance
Amount (%) Amount (%)
Within 1 year 13,021,175.42 5.47 6,594,259.31 2.83
1-2 years 4,521,021.36 1.90 10,001,333.18 4.30
2-3 years 4,927,273.39 2.07 1,594,693.57 0.68
Over 3 years 215,764,344.71 90.56 214,649,147.12 92.19
Total 238,233,814.88 100.00 232,839,433.18 100.00
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(3) Bad debt provision
(a) Bad debt provision of other receivables which is of individually significant
Content of accounts Proportion of
Carrying amount Amount of bad debt Reasons for the provision
receivable provision
A separate provision is
Other receivables between established according to the
subsidiaries that are not 128,368,442.90 128,365,490.77 99.99 recoverability of each
included in the consolidated receivables with long aging
statement and little retrievability
Others 33,948,766.59 20,396,867.41 60.08
Total 162,317,209.49 148,762,358.18 91.65
(b) Bad debt provision of other receivables which is of individually insignificant
Proportion of Amount of bad
Content of other receivables Carrying amount Reasons for the provision
provision debt
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
statement receivables with long aging and
Others 74,592,469.35 28,826,842.45 38.65 little retrievability
Total 75,916,605.39 29,943,158.49 39.44
(4)There were no any account receivables which had been accrued fully or at large
proportion provision but had been fully collected or reversed 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
Proportion of the Provision for bad
Relationship with
Name of entity Amount Age amount to the debt at year end
the Group
total OR (%)
Canada Great 89,035,748.07
Subsidiary 89,035,748.07 Above 3 years 37.37
Wall( Vancouver) Co.,Ltd *
Paklid Limited * Subsidiary 18,446,223.54 Above 3 years 7.74 18,443,271.41
Bekaton property Limited * Subsidiary 12,559,290.58 Above 3 years 5.27 12,559,290.58
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Proportion of the Provision for bad
Relationship with
Name of entity Amount Age amount to the debt at year end
the Group
total OR (%)
Guangdong province Huizhou
Luofu Hill Mineral Water Joint venture 10,465,168.81 Above 3 years 4.39 10,465,168.81
Co.,Ltd
Luofu Hill Travelling 4,800,000.00
Un- related party 9,600,000.00 Above 3 years 4.03
Corporation
Total 140,106,431.00 58.80 135,303,478.87
Note: The above subsidiaries were not included in the Group’s consolidated financial
statements. Refer to Note 6.1 for details.
(8) For details of receivables due from related parties, please refer to Note 9.6.
(9) There were no any other receivables that have been derecognized.
(10) There were no any other receivables which had been securitized during the
current period.
6.7 Inventory
(1) Categories of inventory
Closing balance
Item
Carrying amount Provision for inventories Net carrying amount
Real estate development projects
Real estate developing products 206,672,758.28 -- 206,672,758.28
Real estate developed products 2,236,980,404.61 25,114,387.88 2,211,866,016.73
Real estate which are going to be developed 324,164,580.02 -- 324,164,580.02
Non real estate development projects
Raw materials 522,104.77 -- 522,104.77
Finished products 643,946.37 278,891.91 365,054.46
Low-value consumable products -- -- --
Construction in progress 52,961,142.16 -- 52,961,142.16
Total 2,821,944,936.21 25,393,279.79 2,796,551,656.42
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(Continued)
Opening 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
1,773,322,833.86 -- 1,773,322,833.86
products
Real estate which are going to
298,632,911.82 -- 298,632,911.82
be developed
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
41,821.30 -- 41,821.30
products
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
(2) Real estate developing products
Estimated total
Starting time Finished time Closing balance Opening balance
investment
DongHuDiJing Building 136,423,233.30 130,652,182.51
ShanTou Yuejing Dongfang 2008 2014 150,000,000.00 -- 128,934,749.12
Shengfang Shanglin Garden 2007 2014 1,400,000,000.00 46,371,960.75 607,303,194.82
ShanTou Fresh Peak
23,877,564.23 23,427,282.12
Building
Total 206,672,758.28 890,317,408.57
Note: (a)The decrease of the balance of developing product of ShanTou Yuejing
Dongfang and Shengfang Shanglin Garden are caused by transference into Real
estate developed products. The balance of the Shengfang Shanglin Garden
developing product is about Shengfang Shanglin Garden South area project.
(b) In 2014, according to the government planning, DongHuDiJing Building project’s
H312-0061 land parcel volume rate is decreased from 10.1 to 5.8, the related
procedures are completed. In order to compensate the Group, Shenzhen Municipal
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Land Planning Commission’s first direct authority issued the document, determining
to replace DongHuDiJing Building project’s decreased H312-0061land parcel with the
area of Jingtian, statutory chart 08-22 land parcel.
(3)Real estate developed products
Finished
Name of project Opening balance Additions Reductions Closing balance
time
Jinye Island Multi-tier villa 1997 38,933,768.09 -- -- 38,933,768.09
Jinye Island villa No.6 2007 2,961,996.22 -- -- 2,961,996.22
Jinye Island villa No.9 2009 -- -- -- --
Jinye Island villa No.10 2010 47,182,628.45 10,367.75 14,714,801.82 32,478,194.38
Jinye Island villa No.11 2008 17,891,536.90 -- 4,714,168.62 13,177,368.28
HuangPuXinChun No.1 1994 121,283.88 -- -- 121,283.88
HuangPuXinChun No.2 2007 228,961.81 -- -- 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 1,635,189,965.26 28,887,255.20 353,114,241.66 1,310,962,978.80
Shantou Yuejing Dongfang 2014 -- 223,773,286.89 106,425,625.95 117,347,660.94
Shenfang Shanglin Garden 2014 -- 1,087,883,430.03 397,927,931.07 689,955,498.96
Total 1,773,322,833.86 1,340,554,339.87 876,896,769.12 2,236,980,404.61
(4) Real estate which are going to be developed
Opening balance Additions Reductions Closing balance
Shantou Jingzaiwan 298,632,911.82 25,531,668.2 -- 324,164,580.02
Total 298,632,911.82 25,531,668.2 -- 324,164,580.02
(5) Movement of Provision of inventories
Decrease
Item Opening balance Increase Closing balance
Reversals Write-off
Shengfang Shanglin Garden 47,584,499.31 -- -- 22,470,111.43 25,114,387.88
Finished products 278,891.91 -- -- -- 278,891.91
Total 47,863,391.22 -- -- 22,470,111.43 25,393,279.79
(6) Capitalized borrowing cost at year end is RMB 101,247,068.84.
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6.8 Other current assets
Item Contents Closing balance Opening balance
Value added tax Input tax to be deducted 4,382,360.04 3,451,107.04
Business tax Tax paid for advances from customers -- --
City construction surcharge Tax paid for advances from customers 32,221.30 --
Education surcharge Tax paid for advances from customers -- --
Local education surcharge Tax paid for advances from customers -- --
Embankment Protection Fee Tax paid for advances from customers 60,353.35 --
Increment tax on land value Tax paid for advances from customers 7,961,089.71 --
Total 12,436,024.40 3,451,107.04
6.9 Available-for-sale financial assets
(1) Details of available-for-sale financial assets
Closing balance Opening balance
Item
Book balance Impairment Book value Book balance Impairment Book value
Available-for-sale debt
-- -- -- -- -- --
instrument
Available-for-sale
17,464,240.74 -- 17,464,240.74 17,464,240.74 -- 17,464,240.74
equity instrument
Including：measured by
-- -- -- -- -- --
fair value
Measured by cost 17,464,240.74 -- 17,464,240.74 17,464,240.74 -- 17,464,240.74
Others -- -- -- -- -- --
Total 17,464,240.74 -- 17,464,240.74 17,464,240.74 -- 17,464,240.74
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(2)Available-for-sale financial assets measured by cost at year end
Book balance Provision for impairment Proportion Curr.
Investee Opening rate in year
Opening bal. Increase. Decrease Closing bal. increase decrease Closing bal.
bal. investee（%） cash div.
Shantou Small &Medium Enterprises
12,000,000.00 -- -- 12,000,000.00 -- -- -- -- 10.00 --
Financing Guarantee Co., Ltd
Yunnan KunPeng Flight service Co.,Ltd 5,464,240.74 -- -- 5,464,240.74 -- -- -- -- 25.00 --
Total 17,464,240.74 -- -- 17,464,240.74 -- -- -- -- --
Note: The Group’s shareholding proportion to Yunnan Kunpeng Flight service Co., Ltd is 25%. Because the Group have no participating
right to its finance and operating policies, the Group cannot exercise the significant influence on the investee.
6.10Long-term equity investments
(1) Long-term equity investments by types
Change amount of this year
Opening Other
Invested company Additional Negative Profit and loss on investments Other equity
balance comprehensive
investment investment confirmed with equity method change
income adjustment
I.Joint ventures
Guangdong province Huizhou Luofu Hill Mineral
9,969,206.09 -- -- -- -- --
Water Co.,Ltd
Fengkai Xinhua Hotel 9,455,465.38 -- -- -- -- --
Jiangmen Xinjiang Real Estate Co., Ltd 9,037,070.89 -- -- -- -- --
Xi’an Fresh Peak Property Trading Co., Ltd 32,840,729.61 -- -- -- -- --
Dongyi Real Estate Co., Ltd 30,376,084.89 -- -- -- -- --
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Change amount of this year
Opening Other
Invested company Additional Negative Profit and loss on investments Other equity
balance comprehensive
investment investment confirmed with equity method change
income adjustment
Subtotal 91,678,556.86 -- -- -- -- --
II.Affiliated enterprises
Shenzhen Ronghua JiDian Co.,ltd 1,378,532.26 -- -- -6,325.06 -- --
Shenzhen Runhua Automobile trading Co.,Ltd 1,445,425.56 -- -- -- -- --
Subtotal 2,823,957.82 -- -- -6,325.06 -- --
III.Other equity investments 206,636,006.42 -- -- -- -- --
Subtotal 206,636,006.42 -- -- -- -- --
Total 301,138,521.10 -- -- -6,325.06 -- --
(Continuted)
Change amount of this year
Ending Provision for impairment balance
Invested company Change amount Ending
Invested company balance at year end
of this year balance
I.Joint ventures
Guangdong province Huizhou Luofu Hill Mineral
-- -- -- 9,969,206.09 9,969,206.09
Water Co.,Ltd
Fengkai Xinhua Hotel -- -- -- 9,455,465.38 9,455,465.38
Jiangmen Xinjiang Real Estate Co., Ltd -- -- -- 9,037,070.89 912,537.16
Xi’an Fresh Peak Property Trading Co., Ltd -- -- -- 32,840,729.61 20,673,831.77
Dongyi Real Estate Co., Ltd -- -- -- 30,376,084.89 21,225,715.87
Subtotal -- -- -- 91,678,556.86 62,236,756.27
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Change amount of this year
Ending Provision for impairment balance
Invested company Change amount Ending
Invested company balance at year end
of this year balance
II.Affiliated enterprises
Shenzhen Ronghua JiDian Co.,ltd -- -- -- 1,372,207.20 1,076,954.64
Shenzhen Runhua Automobile trading Co.,Ltd -- -- -- 1,445,425.56 1,445,425.56
Subtotal -- -- -- 2,817,632.76 2,522,380.2
III.Other equity investments -- -- -- 206,636,006.42 178,642,972.78
Subtotal -- -- -- 206,636,006.42 178,642,972.78
Total -- -- -- 301,132,196.04 243,402,109.25
Note: The details of other equity investments are listed on note 8.1-Equity in subsidiaries.
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6.11 Investment properties
Investment properties measured at cost.
Construction in
Item House& building Land-use right Total
progress
I.Original carrying value
1.Opening balance 748,891,106.42 94,060,385.91 -- 842,951,492.33
2.Increase in the year 8,669,256.62 308,273.42 -- 8,977,530.04
（1）Outsourcing -- -- -- --
（2）Carried over from inventory 8,669,256.62 -- -- 8,669,256.62
（3）Others -- 308,273.42 -- 308,273.42
3.Decrease in the year -- -- -- --
4.Closing balance 757,560,363.04 94,368,659.33 -- 851,929,022.37
II.Accumulative depreciation& amortization
1.Opening balance 285,309,108.18 -- -- 285,309,108.18
2.Increase in the year 20,410,101.60 -- -- 20,410,101.60
（1）Withdrawing or amortization 20,410,101.60 -- -- 20,410,101.60
（2）Carried over from assets -- -- -- --
3.Decrease in the year -- -- -- --
4. Closing balance 305,719,209.78 -- -- 305,719,209.78
III. Provision for impairment
1.Opening balance 14,128,544.62 77,199,747.63 -- 91,328,292.25
2.Increase in the year -- 253,014.37 -- 253,014.37
3.Decrease in the year -- -- -- --
4.Closing balance 14,128,544.62 77,452,762.00 -- 91,581,306.62
IV. Book value
1.Closing book value 437,712,608.64 16,915,897.33 -- 454,628,505.97
2.Opening book value 449,453,453.62 16,860,638.28 -- 466,314,091.90
Note:(a) Current year depreciation and amortization is RMB 20,410,101.60;
(b)The increase of original carrying value and provision for impairment of land-use
right is caused by the fluctuation of foreign exchange rate when translating the
foreign currency financial statements;
(c)Among the investment properties, there were house &building with carrying value
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2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
RMB 377,082,461.09 that were used as mortgage of long-term loans(including the
long-term loans that will mature within one year), referring to note 6.45 for details.
6.12 Fixed assets
Electronic
Houses& Transportation
Item equipment and Total
Buildings equipment
others
I.Original carrying value
1.Opening balance 106,068,689.59 17,588,269.60 15,932,028.71 139,588,987.90
2. Increase in the year -- 461,072.08 835,958.40 1,297,030.48
（1）Purchasing -- 461,072.08 835,958.40 1,297,030.48
（2）Transferred from the construction in
-- -- -- --
progress
3. Decrease in the year -- 2,121,872.50 2,535,154.39 4,657,026.89
（1）Disposal or discard as useless -- 2,121,872.50 2,535,154.39 4,657,026.89
（2）Decrease of cooperation combination -- -- -- --
（3）Transferred to investment property -- -- -- --
4. Closing balance 106,068,689.59 15,927,469.18 14,232,832.72 136,228,991.49
II.Accumulated depreciation
1.Opening balance 55,206,608.19 12,452,082.73 11,214,609.27 78,873,300.19
2. Increase in the year 4,616,153.46 1,420,355.50 1,411,013.22 7,447,522.18
Including：withdrawing 4,616,153.46 1,420,355.50 1,411,013.22 7,447,522.18
3. Decrease in the year -- 1,963,540.30 2,449,586.80 4,413,127.10
（1）Disposal or discard as useless -- 1,963,540.30 2,449,586.80 4,413,127.10
（2）Decrease of corporate combination -- -- -- --
（3）Transferred to investment property -- -- -- --
4. Closing balance 59,822,761.65 11,908,897.93 10,176,035.69 81,907,695.27
III. Provision for Impairment
1.Opening balance -- -- -- --
2. Increase in the year -- -- -- --
Including：Withdrawing -- -- -- --
3. Decrease in the year -- -- -- --
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Electronic
Houses& Transportation
Item equipment and Total
Buildings equipment
others
4. Closing balance -- -- -- --
IV. Book value
1. Ending book value 46,245,927.94 4,018,571.25 4,056,797.03 54,321,296.22
2. Beginning book value 50,862,081.40 5,136,186.87 4,717,419.44 60,715,687.71
Note: (1)The depreciation for the current year is RMB 7,447,522.18. There were no
constructions in progress transferred to fixed assets during the period.
(2)Details of fixed assets whose ownership are restricted
As of 31 December 2014, amounting to RMB 23,597,554.47 (original cost is RMB
49,696,185.15) of houses& buildings (book value RMB 25,171,333.23 with original
cost RMB 49,696,185.15 as of Dec.31,2013) were used as mortgage for the
long-term loans (including long-term loans that would mature within one year). Refer
to Note 6.45).
6.13 Intangible assets
Item Software Taxi license Total
I.Carrying value
1. Opening balance 2,241,800.00 6,368,000.00 8,609,800.00
2.Increase in the year -- -- --
（1）Purchased -- -- --
（2）Internally developed -- -- --
（3）Increase of corporate combination -- -- --
3. Decrease in the year -- -- --
（1）Disposal -- -- --
（2）Decrease of corporate combination -- -- --
4. Closing balance 2,241,800.00 6,368,000.00 8,609,800.00
II.Accumulated amortization
1.Opening balance 795,893.21 1,060,340.00 1,856,233.21
2. Increase in the year 384,759.96 167,580.00 552,339.96
Including：withdrawing 384,759.96 167,580.00 552,339.96
3. Decrease in the year -- -- --
（1）Disposal -- -- --
（2）Decrease of corporate combination -- -- --
4. Closing balance 1,180,653.17 1,227,920.00 2,408,573.17
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Item Software Taxi license Total
III. Provision for impairment -- -- --
1. Opening balance -- -- --
2. Increase in the year -- -- --
Including: withdrawing -- -- --
3. Decrease in the year -- -- --
4. Closing balance -- -- --
IV. Book value
1. Ending book value 1,061,146.83 5,140,080.00 6,201,226.83
2. Beginning book value 1,445,906.79 5,307,660.00 6,753,566.79
Note: The amortization for the current period is RMB 552,339.96.
6.14 Long-term deferred assets
Opening Other Closing Reason for other
Item Increase Amortization
balance reductions balance reductions
Renovation costs 380,435.47 -- 143,192.88 -- 237,242.59
Others 147,916.74 -- 70,999.92 -- 76,916.82
Total 528,352.21 -- 214,192.80 -- 314,159.41
6.15 Deferred tax assets
(1) Recognized deferred tax assets
Closing balance Opening balance
Item Deductible or taxable Deferred tax Deductible or taxable
Deferred tax assets
temporary differences assets temporary differences
Provision for impairment
6,278,596.97 25,114,387.88 11,896,124.83 47,584,499.31
losses of assets
Dismission welfare -- -- 764,437.76 3,057,751.04
Deductible loss 3,908,766.86 15,635,067.44 6,539,335.08 26,157,340.32
Sales agency fees -- -- 1,291,717.89 5,166,871.56
Expected profit for advances
2,324,965.32 9,299,861.26 6,300,844.46 25,203,377.84
from customers
Eliminated unrealized profit
when consolidating financial 1,344,264.82 5,377,059.31 -- --
statement
Total 13,856,593.97 55,426,375.89 26,792,460.02 107,169,840.07
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(2) Details of unrecognized deferred tax assets
Item Closing balance Opening balance
Deductible operating losses 1,718,556.24 10,768,552.19
Bad debt provision 49,444,405.95 49,327,012.62
Provision for decline in value of inventories 69,722.98 69,722.98
Provision for impairment of long-term investments 60,850,527.31 60,850,527.31
Provision for impairment of investment properties 22,895,326.66 22,832,073.06
Total 134,978,539.14 143,847,888.16
(3) Unrecognized deductible losses of deferred tax assets will be expire at the end of
following years
Year Closing balance Opening balance
2014 -- 36,309,943.43
2015 2,662,914.18 2,662,914.18
2016 1,008,640.93 1,008,640.93
2017 136,226.52 150,392.58
2018 2,942,317.62 2,942,317.62
2019 124,125.69 --
Total 6,874,224.94 43,074,208.74
6.16 Short-term loans
Item Closing balance Opening balance
Entrusted loan -- --
Credit Loan 30,000,000.00 23,000,000.00
Mortgage Loan -- --
Pledged Loan 119,846,192.64 --
合计 149,846,192.64 23,000,000.00
Note: Refer to note 6.2/Notes receivable for the details of pledged loan.
6.17 Notes payable
Item Closing balance Opening balance
Trade acceptance -- --
Bank acceptance 2,780,000.00 --
Total 2,780,000.00 --
Note: There were no notes payable that were mature but not paid at the end of the
year.
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6.18 Accounts payable
(1) Details of accounts payable
Item Closing balance Opening balance
Within 1 year 298,794,068.00 347,527,527.67
Over 1 year 242,744,694.36 41,817,743.79
Total 541,538,762.36 389,345,271.46
(2)There were no any accounts payable to shareholders holding at least 5% of the
Group’s shares with voting right or to related parties in the reporting period.
(3)Significant accounts payable aged more than one year is for the unsettled project
at the end of the period.
6.19 Advances from customers
(1) Details of advances from customers
Item Closing balance Opening balance
Within one year 116,587,933.19 289,325,916.04
Over one year 27,727,988.15 23,641,112.81
Total 144,315,921.34 312,967,028.85
(2) There were no any advances from customers to shareholders holding at least 5%
of the Group’s shares with voting right 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 advanced payment from housing buyers, as
such receipts have not been transferred to income at the end of the year.
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(4) Details of advances from customers
Item Closing balance Opening balance Estimated time of completion
Jinye Island villa No.6 6,500,000.00 6,500,000.00 Completed
Jinye Island villa No.10 27,191,578.00 32,853,668.00 Completed
Jinye Island villa No.11 632,624.00 12,535,317.00 Completed
Shenfang Chuanqishan 36,241,532.00 82,398,193.00 Completed
Shenfang Shanlin Garden 20,315,434.00 123,407,161.00 Completed
Yuejing dongfang 8,637,269.00 12,172,080.00 Completed
Total 99,518,437.00 269,866,419.00
6.20 Employee benefits payable
(1) Details of employee benefits payable
Item Opening balance Increase Decrease Closing balance
I.Short-term remuneration 32,824,049.00 136,082,709.56 132,115,561.90 36,791,196.66
II.Post-employment benefit-defined
1,277,645.37 9,702,623.03 9,702,623.03 1,277,645.37
benefit plans
III. Severance welfares 3,057,751.04 354,311.00 3,412,062.04 --
IV. Other benefits due within 1 year -- -- -- --
Total 37,159,445.41 146,139,643.59 145,230,246.97 38,068,842.03
(2) Details of short-term remuneration
Item Opening balance Increase Decrease Closing balance
I.Salary, bonus, allowance and subsidies 30,810,103.33 114,874,005.29 110,778,788.64 34,905,319.98
II. Employee welfare -- 6,322,851.01 6,322,851.01 --
III. Social insurance premium 1,094,679.31 6,198,647.18 6,198,647.18 1,094,679.31
Including: Medical insurance premium 1,093,804.76 5,528,016.24 5,528,016.24 1,093,804.76
Industries insurance premium 672.12 367,202.37 367,202.37 672.12
Maternity insurance premium 202.43 303,428.57 303,428.57 202.43
IV. Housing fund 4,140.10 5,417,871.83 5,417,871.83 4,140.10
V. Union expenses and employee education
915,126.26 3,269,334.25 3,397,403.24 787,057.27
expenditure
VI. Short-term paid absence -- -- -- --
VII. Short-term profit share plan -- -- -- --
Total 32,824,049.00 136,082,709.56 132,115,561.9 36,791,196.66
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(3) The details of defined contribution plans
Item Opening balance Increase Decrease Closing balance
I. Basic endowment insurance
premium 1,250,798.81 5,929,495.38 5,929,495.38 1,250,798.81
II. Unemployment insurance
premium 114.92 313,547.22 313,547.22 114.92
III. Company annuity payment 26,731.64 3,459,580.43 3,459,580.43 26,731.64
Total 1,277,645.37 9,702,623.03 9,702,623.03 1,277,645.37
Note: The Group participates in the basic endowment insurance and unemployment
plan sponsored by the government according to the regulations. Beside the monthly
payment mentioned above, the Group undertakes no further payment obligation. The
related expenses are recognized in profit and loss or the cost of relevant asset in the
current period incurred.
6. 21 Taxes payable
Item Closing balance Opening balance
Corporate income tax 71,199,952.35 67,471,436.36
Individual income tax 732,767.28 777,703.15
Property tax 1,763,706.34 1,763,706.34
Land appreciation tax 7,142,066.16 28,852,426.99
Business tax 13,509,112.94 43,433,203.80
Construction tax 856,235.33 2,930,393.52
Education surcharge 475,089.21 1,373,204.96
Local Education surcharge 298,969.54 913,809.35
Others 417,094.52 490,766.90
Total 96,394,993.67 148,006,651.37
6.22 Interest payable
Item Closing balance Opening balance
Interest of long-term loans with interest payable by
2,181,117.24 1,947,237.24
installments and principle payable on maturity
Interest payable on short-term loans -- --
Others 16,535,277.94 16,535,277.94
Total 18,716,395.18 18,482,515.18
Note: The balance of “Other” interests payable due to Shenzhen Investment Holdings
Co.，Ltd., being accrued for the loans interst. Please to note 9.6 (2).
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6.23 Other payables
(1)Details of other payables
Item Closing balance Opening balance
Land appreciation tax accrued 128,273,955.95 109,138,661.21
Payable to related parties 88,340,761.01 93,340,761.01
Deposit 48,535,401.89 46,711,864.34
Others 141,721,798.91 145,496,550.73
Total 406,871,917.76 394,687,837.29
(2) Other payables to shareholders holding at least 5% of the Group’s shares with
voting right or to related parties in the reporting period. Please refer to Note 9.6
Related party accounts receivable and payable.
(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 91,838,661.21 Unexpired No
Shenzhen Investment Holdings Co.，Ltd. 53,848,819.24 Unsettled No
Total 145,687,480.45
(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 ". As at December 31, 2014, the closing balance is
RMB 128,273,955.95.
6.24 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 6.25) 453,207,700.00 331,482,489.72
Total 453,207,700.00 331,482,489.72
(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 453,207,700.00 331,482,489.72
Total 453,207,700.00 331,482,489.72
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2)Top 5 long-term loans due within one year
Inception
Lender date of Maturity date Currency Closing balance Opening balance
loans
Huashang Bank (Shenzhen Branch) 2012.12.6 2014.12.6 RMB -- 50,000,000.00
ICBC (Guangming Branch) 2012.8.24 2014.10.17 RMB -- 61,428,572.00
2012.8.28 2015.8.27 RMB 100,000,000.00 --
CCB (Shenzhen Branch)
2012.11.21 2015.8.27 RMB 100,000,000.00 --
2014.11.27 2015.12.27 RMB 24,000,000.00 --
2014.12.1 2015.12.1 RMB 50,000,000.00 --
Shenzhen Rural Commercial Bank
2013.8.29 2015.12.21 RMB 13,200,000.00 --
2012.6.14 2015.6.14 RMB 40,909,090.94 98,181,818.16
2012.9.29 2015.12.29 RMB 20,000,000.00 20,000,000.00
Huaxia Bank (Buji Branch)
2012.10.24 2015.12.24 RMB 20,000,000.00 20,000,000.00
Bank of Shanghai (Shenzhen
2013.12.27 2015.12.27 RMB 48,000,000.00 48,000,000.00
Branch)
Zheshang Bank（Shenzhen Branch） 2013.8.23 2015.12.22 RMB 20,000,000.00 --
Total 436,109,090.94 297,610,390.16
Note: (a)Amounts repaid after the balance sheet date are RMB 62,580.10 thousand.
(b)The rates of above borrowing depend on the benchmark interest rate of the
People's Bank of China for the same period plus a certain proportion floating of the
benchmark interest rate.
6.25 Long-term loans
(1) Long-term loans categories
Item Closing balance Opening balance
Loan with mortgage 932,193,279.95 1,145,696,026.57
Less: long-term loans due within one year (Note 6.24) 453,207,700.00 331,482,489.72
Total 478,985,579.95 814,213,536.85
Note: The categories and amounts of mortgaged assets of mortgaged loans are
shown in note 6.45.
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(2)Top 5 significant long-term loans
Lender The inception of loans Maturity date Currency Closing balance Opening balance
Huashang Bank (Shenzhen
2012.12.6 2015.12.6 RMB -- 100,000,000.00
Branch)
China Construction Bank 2012.8.28 2015.8.27 RMB -- 100,000,000.00
(Shenzhen Branch) 2012.11.21 2015.8.27 RMB -- 100,000,000.00
Shenzhen Rural 2014.11.27 2019.11.27 RMB 94,000,000.00 --
Commercial Bank 2013.8.29 2018.8.29 RMB 79,200,000.00 --
2012.9.29 2017.9.29 RMB 35,000,000.00 --
Huaxia Bank (Buji Branch)
2012.10.24 2017.10.24 RMB 40,000,000.00 --
Zheshang Bank(Shenzhen
2013.8.23 2018.8.16 RMB 93,000,000.00 113,000,000.00
Branch)
Bank of Shanghai
2013.12.27 2016.12.27 RMB 54,000,000.00 102,000,000.00
(Shenzhen Branch)
Beijing Bank(Shenzhen
2014.12.9 2017.12.9 RMB 40,000,000.00 --
Branch)
Total 435,200,000.00 515,000,000.00
Note: The rates of above loans depend on the benchmark interest rate of the
People's Bank of China for the same period adding a certain floating proportion of the
benchmark interest rate.
6.26 Long-term payables
Details of long-term payables
Item Closing balance Opening balance
Maintenance fund 11,267,012.97 10,749,885.53
Total 11,267,012.97 10,749,885.53
6.27 Share capital
Changes for the period（+ 、-）
Newly Capitalization
Item Opening balance Bonus Closing balance
issued of surplus Other Subtotal
issued
shares reserve
Total shares 1,011,660,000.00 -- -- -- -- -- 1,011,660,000.00
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6.28 Capital surplus
Item Opening balance Increase Decrease Closing balance
Capital premium 557,433,036.93 -- -- 557,433,036.93
Including: Capital contributed by investors 557,433,036.93 -- -- 557,433,036.93
Other capital reserve 420,811,821.17 52.01 -- 420,811,873.18
Including: Transfer from capital reserve under the previous
420,811,821.17 -- -- 420,811,821.17
accounting system
Total 978,244,858.10 52.01 -- 978,244,910.11
6.29 Other comprehensive income
Amount incurred this year
Less:
Accrual previous
Attributable Attributable
Opening before years‘ OCI Less: Closing
Item to parent to minority
balance income transferred to income balance
company shareholders
tax this P&L in tax
after tax after tax
year current.
period
I. Other
comprehensive
income that could
-- -- -- -- -- -- --
not be classified
into profit and loss
in the future
II.Other
comprehensive
income that would
9,354,020.21 42,159.54 -- -- 156,897.95 -114,738.41 9,510,918.16
be classified into
profit and loss in
the future
including：the
difference of
foreign currency 9,354,020.21 42,159.54 -- -- 156,897.95 -114,738.41 9,510,918.16
financial statement
translation
Total 9,354,020.21 42,159.54 -- -- 156,897.95 -114,738.41 9,510,918.16
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6.30 Surplus reserve
Item Opening balance Increase Decrease Closing balance
Statutory surplus reserve 4,974,391.15 -- -- 4,974,391.15
Total 4,974,391.15 -- -- 4,974,391.15
6.31 Undistributed profit
Amount for the Amount for the prior Proportion of
Item
current period period appropriation
Before adjustment: Undistributed profits at the end of
-140,886,134.13 -369,154,405.36
prior year
Adjustment: adjust the beginning undistributed profits
-- --
(Increase +, decrease -)
After adjustment: Undistributed profits at beginning of
-140,886,134.13 -369,154,405.36
year
Plus: net profit attributable to the shareholders of the
298,033,316.49 228,268,271.23
parent company in the period
Less: Appropriation to the statutory surplus reserve -- --
Appropriation to discretionary surplus reserve -- --
Common stock dividends declared -- --
Conversion of ordinary shares’ dividends into share
-- --
capital
Undistributed profit at the end of the period 157,147,182.36 -140,886,134.13
6.32 Operating income and costs
(1) Operating income and operating costs
Item Amount for the current period Amount for the prior period
Principal operating income 2,111,639,674.26 2,097,641,366.62
Other operating income 20,671,548.67 18,841,318.31
Total of operating income 2,132,311,222.93 2,116,482,684.93
Principal operating costs 1,393,715,283.78 1,532,916,384.45
Other operating costs 15,949,579.30 14,253,675.19
Total of operating costs 1,409,664,863.08 1,547,170,059.64
(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 1,476,320,296.06 849,268,477.47 1,406,885,587.82 925,436,497.61
Construction 488,183,328.15 461,212,716.07 521,749,290.73 495,387,515.85
Leasing 78,833,382.73 29,729,040.27 82,280,047.28 31,939,508.32
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Amount for the current period Amount for the prior period
Name of industry
Operating income Operating costs Operating income Operating costs
Property management 118,842,883.81 101,337,156.50 100,150,419.76 89,941,397.44
Subtotal 2,162,179,890.75 1,441,547,390.31 2,111,065,345.59 1,542,704,919.22
Less: offset the
50,540,216.49 47,832,106.53 13,423,978.97 9,788,534.77
internal amount
Total 2,111,639,674.26 1,393,715,283.78 2,097,641,366.62 1,532,916,384.45
(3) Principal operating activities (classified by geographical areas)
Name of geographical Amount for the current period Amount for the prior period
area Operating income Operating costs Operating income Operating costs
Domestic:
GuangDong Province 2,100,652,904.17 1,384,529,733.71 2,044,677,358.30 1,481,628,032.64
Others 60,941,449.28 57,017,656.60 65,791,782.57 61,076,886.58
Overseas： 585,537.30 -- 596,204.72 --
Subtotal 2,162,179,890.75 1,441,547,390.31 2,111,065,345.59 1,542,704,919.22
Less: offset the
50,540,216.49 47,832,106.53 13,423,978.97 9,788,534.77
internal amount
Total 2,111,639,674.26 1,393,715,283.78 2,097,641,366.62 1,532,916,384.45
(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 40,784,800.00 1.91
Corporation unit No.2 29,987,587.93 1.41
Corporation unit No.3 18,298,000.00 0.86
Corporation unit No.4 16,290,000.00 0.76
Corporation unit No.5 13,813,383.45 0.65
Total 119,173,771.38 5.59
(Continued)
Amount for the prior 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
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6.33 Business taxes and surcharges
Item Amount for the current period Amount for the prior period
Business tax 101,441,087.90 96,963,676.15
City construction and maintenance tax 7,095,458.59 6,788,981.24
Education surcharges 3,165,740.76 3,037,183.43
Property tax 6,295,071.12 6,295,071.12
Land appreciation tax 58,854,846.05 48,358,322.07
Local education surcharges 1,896,642.68 1,746,934.77
Embankment Protection Fee 622,470.13 731,396.91
Total 179,371,317.23 163,921,565.69
Note: Details of business taxes and surcharges please refer to Note 5 Taxation.
6.34 Selling expenses
Item Amount for the current period Amount for the prior period
Employee benefits 5,240,288.53 3,878,801.45
Advertising expenses 13,677,234.58 23,111,772.32
Entertainment expenses 841,499.20 728,647.50
Sales agency fees and commissions 19,912,951.23 12,095,665.26
Others 4,853,413.79 5,324,333.88
Total 44,525,387.33 45,139,220.41
6.35 Administrative expenses
Item Amount for the current period Amount for the prior period
Employee benefits 39,210,987.99 35,573,985.45
Taxes 3,276,939.04 2,972,356.58
Depreciation 3,795,871.58 4,425,284.79
Entertainment expenses 3,801,841.81 4,056,167.49
Intermediary fee 1,878,341.50 2,081,388.74
Travel expense 849,727.48 853,911.15
Administrative expenses 1,369,033.33 1,308,248.38
Repair charge 903,451.80 1,140,378.95
Water and electricity charges 1,274,269.17 1,230,536.76
Other amortization 797,152.36 723,520.85
Others 7,825,185.82 9,477,512.30
Total 64,982,801.88 63,843,291.44
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6.36 Financial expenses
Item Amount for the current period Amount for the prior period
Interest expenses 71,704,900.26 80,512,861.53
Less: Interest income 6,613,297.55 5,164,403.64
Less: capitalized interest expenses 31,645,239.33 77,809,014.14
Exchange differences -33,766.19 370,385.54
Less: Capitalized exchange differences -- --
Others 403,530.95 522,964.85
Total 33,816,128.14 -1,567,205.86
6.37 Impairment losses of assets
Item Amount for the current period Amount for the prior period
Bad debt loss 469,573.31 666,840.00
6.38 Investment income
(1) Details of investment income
Amount for the current Amount for the prior
Item
period period
Investment income from long-term investments under cost method -- --
Investment income from long-term investments under equity method -6,325.06 -25,316.71
Investment income on disposal of long-term investments -- --
Investment income from holding trading financial assets -- --
Total -6,325.06 -25,316.71
(2) Income from long-term investments under equity method
Amount for the Amount for the prior
Name of investee Reasons for changes
current period period
Shenzhen Ronghua JiDian Co.,ltd -6,325.06 -25,316.71 Investee’s operating loss
Total -6,325.06 -25,316.71
6.39 Non-operating income
Amount for the Amount for the Amount included in non-recurring
Item
current period prior period profit or loss for the period
Total gains on disposal of non-current assets 396.00 5,889,805.93 396.00
Including: Gains on disposal of fixed assets 396.00 5,889,805.93 396.00
Gains on penalty 12,000.00 -- 12,000.00
Others 1,584,248.62 1,352,217.02 1,584,248.62
Total 1,596,644.62 7,242,022.95 1,596,644.62
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6.40 Non-operating expenses
Amount for the Amount for the Amount included in non-recurring
Item
current period prior period profit or loss for the period
Total losses on disposal of non-current assets 133,838.39 110,923.29 133,838.39
Including: Losses on disposal of fixed assets 133,838.39 110,923.29 133,838.39
Donations to third parties 93,000.00 79,000.00 93,000.00
Penalty expense 15,320.95 10,309.08 15,320.95
Compensation expense 12,229.96 23,752.24 12,229.96
Others 156,143.65 426,649.94 156,143.65
Total 410,532.95 650,634.55 410,532.95
6.41 Income tax expenses
(1) Details of income tax expenses
Item Amount for the current period Amount for the prior period
Current tax expense calculated according to
89,666,922.93 82,468,037.57
tax laws and relevant requirements
Adjustments to deferred tax 12,935,866.05 -6,910,810.40
Total 102,602,788.98 75,557,227.17
(2) The process of calculating the income tax based on accounting profit
Item Incurred in the
current year
Consolidated profit this year 400,660,938.57
Income tax calculated at legal or applicable tax rate 100,165,234.64
Impact of various tax rates applicable to subsidiaries --
Adjustment of impact on the income tax in the previous period -187,695.48
Impact of non-taxable income --
Impact of non-deductible cost, expense and loss 1,307,651.41
Impact of deductible losses deferred income tax assets unconfirmed in the previous use period --
Impact of the deductible temporary differences or deductible loss of unconfirmed deferred tax
1,317,598.41
assets of this year.
Changes of the deferred tax assets/liability caused by the adjustment of tax rate --
Income taxes 102,602,788.98
6.42 Other comprehensive income
Note: Please refer to note 6.29.
6.43 Notes to items in the cash flow statements
(1) Other cash receipts relating to operating activities
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Item Amount for the current period Amount for the prior period
Interest income 5,044,373.39 5,164,403.64
Cash pledge and security deposits 38,607,800.67 24,079,303.24
Security deposit for mortgage -- 8,001,929.14
Property license fee and survey fee 6,519,298.92 4,754,076.64
Others 11,944,380.32 8,096,561.47
Total 62,115,853.30 50,096,274.13
(2) Other cash payments relating to operating activities
Item Amount for the current period Amount for the prior period
Cash paid to general and administrative expenses 20,489,046.66 17,393,479.01
Cash paid to operating expenses 27,594,595.89 34,759,632.48
Cash pledge and security deposits 40,716,209.41 14,094,488.98
Property license fee and survey fee 6,161,991.56 4,060,599.71
Others 6,896,561.41 7,633,330.13
Total 101,858,404.93 77,941,530.31
(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
The guarantee deposit 32,600.00 --
Others 52.01 --
Total 32,652.01 25,000,000.00
(4)Other cash payment relating to financing activities
Amount for the current Amount for the prior
Item
period period
Regulatory capital for bank borrowings -- 6,000,000.00
The guarantee deposit 2,780,000.00 --
Total 2,780,000.00 6,000,000.00
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6.44 Supplementary information to the cash flow statement
(1) Supplementary information to the cash flow statement
Amount for the Amount for the
Item
current period prior period
I.Reconciliation of net profit to cash flows from operating activities:
Net profit 298,058,149.59 228,317,758.13
Add：Provision for asset impairment 469,573.31 666,840.00
Depreciation of fixed assets, bio-assets, and natural gas 27,855,133.72 28,321,567.87
Amortization of intangible assets 552,339.96 542,339.96
Amortization of long-term deferred expense 214,192.80 208,276.14
Losses on disposal of fixed assets, intangible assets and other long-term
121,754.49 -5,786,489.92
assets(deduct: gains)
Losses on scrapping of fixed assets (deduct: gains) 11,687.90 7,607.28
Loss of fair value variation (deduct: gains) -- --
Financial expenses (deduct: gains) 39,110,007.69 2,949,917.31
Losses from investments (deduct: gains) 6,325.06 25,316.71
Decrease in deferred tax assets (deduct: increase)） 12,935,866.05 -6,910,810.40
Increase in deferred tax liabilities (deduct: decrease) -- --
Decrease in inventories (deduct: increase) 180,053,189.23 -461,228,656.63
Decrease in operating receivables (deduct: increase) -177,878,359.98 46,031,043.85
Increase in operating payables (deduct: decrease) -59,347,796.46 361,808,973.10
Others -- --
Net cash flows from operating activities 322,162,063.36 194,953,683.40
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 670,119,849.03 519,284,372.44
Less: cash at the beginning of the period 519,284,372.44 463,713,702.77
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 150,835,476.59 55,570,669.67
(2)Information of cash and cash equivalents
Amount for the Amount for the
Item
current period prior period
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Amount for the Amount for the
Item
current period prior period
I.Cash
Including: Cash on hand 61,413.08 185,502.41
Bank deposits 670,058,435.95 519,098,870.03
Other monetary funds -- --
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 670,119,849.03 519,284,372.44
6.45 Ownership or use-right restricted assets
The reasons for
Categories of assets Item Closing balance
restriction
Subtotal of pledged or mortgaged assets:
Inventories (Real estate developed product ) Jinye Island Multi-tier villa 38,933,768.09 mortgaged
Inventories (Real estate developed product ) Real Estate Building 5-6 floor 7,492,175.18 mortgaged
Investment property Shenfang Square 246,523,284.18 mortgaged
Investment property Petrel Building 70,875,517.03 mortgaged
Investment property GuoShang North 2 floor 59,683,659.88 mortgaged
Fixed assets Shenfang Square 46-48 floor 23,597,554.47 mortgaged
Subtotal of assets whose ownership or
--
use-right are restricted by other reasons：
Monetary fund Other monetary fund 6,000,000.00 Refer to note 6.1
Monetary fund Other monetary fund 57,400.00 Refer to note 6.1
Monetary fund Other monetary fund 2,780,000.00 Refer to note 6.1
Total 455,943,358.83
6.46 The items of foreign currency
(1) Details of items of foreign currency
Balance of foreign Balance of RMB
Item Exchange rate
currency at year end converted
Monetary fund
Including：USD 156,998.36 6.1190 960,672.96
HKD 10,240,922.3 0.78887 8,078,756.37
Other accounts receivable
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Balance of foreign Balance of RMB
Item Exchange rate
currency at year end converted
Including：USD -- -- --
HKD 20,184,867.00 0.78887 15,923,236.03
Other accounts payable
Including：USD 15,465,863.08 6.1190 94,635,616.19
HKD 15,918,034.59 0.78887 12,557,259.95
（2）Oversea operating entities
The Group’s significant oversea operating entities are American Great Wall Co., Ltd
and Fresh Peak Investment Co., Ltd. American Great Wall Co., Ltd chooses the USD
as the its functional currency, for its main operating activities are in the USA; Fresh
Peak Investment Co., Ltd. chooses the RMB as its functional currency, for it is a
investment company and its main operating activities are in the mainland of China.
Note 7 The changes of the scope of consolidation
There were no changes for the Group’s consolidation scope this year.
Note 8 Equities in other entities.
8.1 Equities in the subsidiaries
(1) The formation of the Group
Main Shareholding
Reg. Business
Name of the subsidiary operating proportion（%） Method of acquiring
place nature
area Direct Indirect
Acquiring through
Shenzhen Petrel Hotel Co. Ltd. Shenzhen Shenzhen Services 68.10 31.90 establishment or investment
Shenzhen City Property Acquiring through
Shenzhen Shenzhen Services 95.00 5.00 establishment or investment
Management Ltd.
Shenzhen Zhen Tung Acquiring through
Shenzhen Shenzhen Services 73.00 27.00 establishment or investment
Engineering Ltd.
Shenzhen City We Gen Acquiring through
Shenzhen Shenzhen Services 75.00 25.00 establishment or investment
Construction Management Ltd.
Acquiring through
Shenzhen City Car Rental Ltd. Shenzhen Shenzhen Services 55.00 45.00 establishment or investment
Acquiring through
Shenzhen Shenfang Car Park
Shenzhen Shenzhen Services 70.00 30.00 establishment or investment
Ltd.
Acquiring through
Shenzhen City Shenfang
Shenzhen Shenzhen Investment 90.00 10.00 establishment or investment
Investment Ltd.
Acquiring through
Shenzhen City Shenfang Free Commecial
Shenzhen Shenzhen 95.00 5.00 establishment or investment
Trade Trading Ltd. trade
Acquiring through
Shenzhen City SPG Long Gang Shenzhen Shenzhen Real estate 95.00 5.00 establishment or investment
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Main Shareholding
Reg. Business
Name of the subsidiary operating proportion（%） Method of acquiring
place nature
area Direct Indirect
Development Ltd.
Acquiring through
Shenzhen Special Economic
establishment or investment
Zone Real Estate (Group)
Guangzhou Guangzhou Real estate 100 --
Guangzhou Property and Estate
Co., Ltd.
Acquiring through
Beijing fresh peak property
establishment or investment
development management Beijing Beijing Real estate 75.00 25.00
limited company
Acquiring through
Beijing SPG Property
Beijing Beijing Services 10.00 90.00 establishment or investment
Management Limited
Acquiring through
Shenzhen ShenWu Elebator
Shenzhen Shenzhen Services -- 100.00 establishment or investment
Co.,Ltd
Acquiring through
Shenzhen Lain Hua Industry and
Shenzhen Shenzhen Services 95.00 5.00 establishment or investment
Trading Co. Ltd.
Acquiring through
Investment
establishment or investment
Fresh Peak Holding Ltd. HongKong HongKong and 100.00 --
management
Acquiring through
Investment
Wellam Ltd. HongKong HongKong 100.00 -- establishment or investment
holding
Acquiring through
Shantou SEZ Wellam Fty Bldg.,
ShanTou ShanTou Real estate -- 100.00 establishment or investment
Dev. Co.
Acquiring through
Shantou Huafeng Estate Dev.Co. ShanTou ShanTou Real estate 100.00 -- establishment or investment
Acquiring through
Great Wall Estate Co., Inc USA USA Real estate 70.00 -- establishment or investment
Acquiring through
Investment
establishment or investment
Fresh Peak Holdings Ltd. HongKong HongKong and 100.00 --
management
Acquiring through
Fresh Peak Investment Ltd. HongKong HongKong Investment -- 55.00 establishment or investment
Investment and Acquiring through
Openice Ltd. HongKong HongKong management 20.00 80.00 establishment or investment
Acquiring through
Barenie Co. Ltd. HongKong HongKong Investment 80.00 -- establishment or investment
Acquiring through
Keyear Development Ltd. HongKong HongKong Investment -- 100.00 establishment or investment
Acquiring through
Guangzhou Huangpu Xizun real
GuangZhou GuangZhou Real estate -- 100.00 establishment or investment
estate limited company
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Main Shareholding
Reg. Business
Name of the subsidiary operating proportion（%） Method of acquiring
place nature
area Direct Indirect
Acquiring through
Fresh Peak Real Estate Dev.
WuHan WuHan Real estate -- 100.00 establishment or investment
Construction (Wuhan) Co. Ltd.*
Shantou Special Economic Zone Subsidiary acquired through
Real Estate (Group) Songshan Shantou Shantou Real estate -- 100.00 emerge under non-common
Property and Estate Co., Ltd. control
Shenzhen Shenfang Department Commecial Acquiring through
Shenzhen Shenzhen 95.00 5.00
Store Co. Ltd.* ① trade establishment or investment
Shenzhen CyberPort Co., Ltd Acquiring through
Shenzhen Shenzhen Consultant 70.00 --
*② establishment or investment
Shenzhen City SPG Bao An Acquiring through
Shenzhen Shenzhen Real estate 95.00 5.00
Development Ltd.* ③ establishment or investment
Shenzhen Real Estate
Integrated Acquiring through
Consolidated Service Co., Ltd shenzhen shenzhen 100.00 --
Services establishment or investment
*④
Shenzhen Shen Fang Industrial Acquiring through
Shenzhen Shenzhen Investment 100.00 --
Development Co., Ltd.* ⑤ establishment or investment
Shenzhen Tefa Real Estate
Acquiring through
Consolidated Service Co., Ltd.* Shenzhen Shenzhen Services 100.00 --
establishment or investment
⑥
Acquiring through
Bekaton Property Limited *⑦ Australia Australia Real estate 60.00 --
establishment or investment
Canada Great Wall ( Vancouver) Acquiring through
Canada Canada Real estate -- 60.00
*⑦ establishment or investment
Commecial Acquiring through
Paklid Limited *⑦ HongKong HongKong 100.00 --
trade establishment or investment
Shenzhen City Shenfang
Commecial Acquiring through
Construction and Decoration Shenzhen Shenzhen 100.00 --
trade establishment or investment
Materials Ltd *⑧
Shenzhen ZhongGang Haiyan Integrated Acquiring through
Shenzhen Shenzhen 68.00 --
Enterprise Ltd. *⑨ Services establishment or investment
Shenzhen Xing Dongfang Store Commecial Acquiring through
Shenzhen Shenzhen 100.00 --
Ltd.* ⑩ trade establishment or investment
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Main Shareholding
Reg. Business
Name of the subsidiary operating proportion（%） Method of acquiring
place nature
area Direct Indirect
Guangdong Province Fengkai
Guangdongf Guangdongfe Acquiring through
Lain Feng Cement Manufacturing Manufacture -- 90.00
engkai ngkai establishment or investment
Co., Ltd *
*① 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.
*② 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.
*③ 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.
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.
*④ Shenzhen Real Estate Consolidated Service Co., Ltd.
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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 February 2002 because of failing to take part
in annual inspection.
*⑤ 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 February 2002 because of failing to take part
in annual inspection.
*⑥ 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.
*⑦ Bekaton Property Limited ,Canada Great Wall ( Vancouver)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 on Dec.13, 2000.
*⑧ 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.
*⑨Shenzhen 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.
*⑩ 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.
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Accounting Investment
Investee Opening balance Changes Closing balance
Method cost
Shenzhen Shen Fang Industrial
Cost Method 4,500,000.00 4,500,000.00 -- 4,500,000.00
Development Co., Ltd
Shenzhen ZhongGang Haiyan
Cost Method 12,940,900.00 12,940,900.00 -- 12,940,900.00
Enterprise Ltd
Shenzhen Real Estate Consolidated
Cost Method 5,958,305.26 5,958,305.26 -- 5,958,305.26
Service Co., Ltd
Paklid Limited Cost Method 201,100.00 201,100.00 -- 201,100.00
Bekaton Property Limited Cost Method 906,630.00 906,630.00 -- 906,630.00
Shenzhen Tefa Real Estate
Cost Method 8,180,003.63 8,180,003.63 -- 8,180,003.63
Consolidated Service Co., Ltd
Shenzhen Xing Dongfang Store Ltd Cost Method 18,500,000.00 18,500,000.00 -- 18,500,000.00
Shenzhen City Shenfang Construction
Cost Method 2,680,000.00 2,680,000.00 -- 2,680,000.00
and Decoration Materials Ltd
Shenzhen Shenfang Department
Cost Method 10,000,000.00 10,000,000.00 -- 10,000,000.00
Store Co. Ltd
Shenzhen CyberPort Co., Ltd Cost Method 14,000,000.00 7,613,507.96 -- 7,613,507.96
Shenzhen City SPG Bao An
Cost Method 20,000,000.00 20,379,525.68 -- 20,379,525.68
Development Ltd
Shantou Huafeng Building Cost Method 68,731,560.43 58,547,652.25 -- 58,547,652.25
Guangdong Province Fengkai Lain
Cost Method 121,265,000.00 56,228,381.64 -- 56,228,381.64
Feng Cement Manufacturing Co., Ltd
Total 287,863,499.32 206,636,006.42 -- 206,636,006.42
* 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 *①, *②, *③,* , 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. The following are the details.
(Continued)
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2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Increased current
Provision for Current year
Investee year provision for Remarks
impairment cash dividends
impairment
Shenzhen Shen Fang Industrial Development Co.,
4,500,000.00 -- --
Ltd
Shenzhen ZhongGang Haiyan Enterprise Ltd 12,940,900.00 -- --
Shenzhen Real Estate Consolidated Service Co., Ltd 5,958,305.26 -- --
Paklid Limited 201,100.00 -- --
Bekaton Property Limited 906,630.00 -- --
Shenzhen Tefa Real Estate Consolidated Service
8,180,003.63 -- --
Co., Ltd
Shenzhen Xing Dongfang Store Ltd 18,500,000.00 -- --
Shenzhen City Shenfang Construction and
2,680,000.00 -- --
Decoration Materials Ltd
Shenzhen Shenfang Department Store Co. Ltd 10,000,000.00 -- --
Shenzhen CyberPort Co., Ltd -- -- --
Shenzhen City SPG Bao An Development Ltd -- -- --
Sahntou Huafeng Building 58,547,652.25 -- --
Guangdong Province Fengkai Lain Feng Cement
56,228,381.64 -- --
Manufacturing Co., Ltd
Total 178,642,972.78 -- --
(2)Significant non-wholly owned subsidiary
Current year profit and
Minority interest Current year dividends Minority interest
loss attributable to
Name of subsidiary share proportion distributed to minority equity balance at
minority interest
(%) interest shareholders the end of the year
shareholders
Great Wall Estate Co., Inc 30.00 35,957.56 -- -21,846,466.12
Fresh Peak Investment
45.00 -7,700.40 -- -104,560,254.40
Ltd.
Barenie Co. Ltd. 20.00 -3,424.06 -- -2,025,685.11
(3) The main financial information of significant non-wholly owned subsidiary
Closing balance
Name fo subsidiary Non-current Current Non-current
Current assets Total Assets Total liabilities
assets liabilities liabilities
Great Wall Estate
948,985.22 16,915,897.33 17,864,882.55 94,759,937.32 -- 94,759,937.32
Co., Inc
Fresh Peak
220,030,019.94 24,793,206.35 244,823,226.29 254,671,467.24 -- 254,671,467.24
Investment Ltd.
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2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Closing balance
Barenie Co. Ltd. 919.27 30,373,713.87 30,374,633.14 32,736,713.60 -- 32,736,713.60
(Continued)
Opening balance
Name of subsidiary Non-current Current Non-current
Current assets Total Assets Total liabilities
assets liabilities liabilities
Great Wall Estate Co.,
829,120.22 16,860,638.28 17,689,758.50 94,450,385.72 -- 94,450,385.72
Inc
Fresh Peak Investment
220,030,017.98 24,793,206.35 244,823,224.33 254,654,353.29 -- 254,654,353.29
Ltd.
Barenie Co. Ltd. 916.65 30,373,713.87 30,374,630.52 32,719,590.69 -- 32,719,590.69
(Continued)
Incurred in current year Incurred in previous year
Cash flow Cash flow
Name of Total of Total of
Operating from Operating from
subsidiary Net profit comprehensiv Net profit comprehensi
income operating income operating
e income ve income
activities activities
Great Wall
Estate Co., 585,537.30 119,858.52 -- 119,858.52 596,204.72 121,238.94 -- 121,238.94
Inc
Fresh Peak
Investment -- -17,111.99 -- -- -- -4,984.17 -- --
Ltd.
Barenie Co.
-- -17,120.29 -- -- -- -93,910.81 -- --
Ltd.
8.2 Equities in joint ventures or associated enterprises
（1）Insignificant joint ventures or associated enterprises
Closing balance/Incurred this Opening balance/Incurred last
Item
year year
Joint ventures*①：
Total investment book value 29,441,800.59 29,441,800.59
Totals of the following items calculated per
respective shareholding proportion
—Net profit -- --
—Other comprehensive income -- --
—Total comprehensive income -- --
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2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Closing balance/Incurred this Opening balance/Incurred last
Item
year year
Associated enterprises*②：
Total investment book value 295,252.56 301,577.62
Totals of the following items calculated per
respective shareholding proportion
—Net profit -6,325.06 -20,253.36
—Other comprehensive income -- --
—Total comprehensive income -- --
*① All of the Group’s joint ventures are insignificant. For details of the joint ventures,
please refer to 6.10, including:
1) Guangdong 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.
2)Fengkai Xinghua Hotel
The FengKai XingHua Hotel was announced bankruptcy by the Guangdong Province
Zhaoqing City second-middle intermediate 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.
3)Jiangmen Xinjian Real Estate Co. Ltd., Xi’an 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 Note 6.10 for details.
*② All associated enterprises of the Group are insignificant. For details of associated
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2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
enterprises, please refer to note 6.10, including:
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 prepared 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.
（2）The excess losses of the joint ventures or associated enterprises incurred.
Accumulated Accumulated
Unrecognized losses
Name of the joint ventures or associated unrecognized losses unrecognized losses
this year (or shared
enterprises as of the end of last as of the end of this
net profit this year)
year year
Shenzhen Fresh Peak property consultant Co., Ltd 741,966.91 -40,149.38 701,817.53
Note 9 Related party relationships and transactions
9.1 Parent of the Company
Related party Type of the Place of Legal
Name of the parent Business Nature
relationship entity incorporation representative
Guangdong Investment, Real
Shenzhen Investment Parent of the State-owned
province Fan Mingchun estate development,
Shareholding Co. Ltd Group Enterprises
Shenzhen Guarantee
(Continued)
Proportion of the Proportion of the
Ultimate controlling
Registered Company’s ownership Company’s voting Organization
Name of the parent party of the
capital interest held by the power held by the code
Company
parent (%) parent (%)
Shenzhen Investment RMB 10.926 63.55 63.55 State-owned assets 76756642-1
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2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Shareholding Co. billion management
Ltd commitee
9.2 Subsidiaries of the Company
Please refer to Note 8.1.
9.3 Associates and joint ventures of the entity
Please refer to Note 8.2 –Equities in joint venture or associated enterprises
9.4 Other related parties of the Company
Relationship between other related parties and the
Name of other related party Organization code
Company
Shenzhen Jian'an Group Co., Ltd. The same controlling shareholders 19219737X
9.5 Related party transactions
(1)Contracting with related parties
List of contracting item
Basis of Contracting
Name of main Type of assets Reception Expiration
pricing of income
contract issuing Name of contractor under date of date of
contracting recognized in the
party contracting contracting contracting
income current year
Shenzhen Jian'an Shenzhen Zhen Tung
Construction 2012-6-1 Negotiations 1,500,000.00
Group Co., Ltd. Engineering Ltd
（2）Guarantees with related parties
Inception Expiration Whether execution of
Guaranteed
Guarantor Guaranteed party date of date of guarantee has been
amount
guarantee guarantee completed
The Group Shantou Hualin Estate Dev. Co. 130,000,000.00 2013.4.17 2016.4.16 No
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) Compensation for key management personal
Item Amount for the current period Amount for the prior period
Total 6.6153 [million] 5.6149 [million]
9.6 Amounts due from / to related parties
(1) Amounts due from related party
Item Closing balance Opening balance
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2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Carrying Bad debt Carrying Bad debt
amount provision amount provision
Accounts receivable
Shenzhen Fresh Peak property consultant
1,087,214.22 -- 1,084,758.36 --
Co.,Ltd
Total 1,087,214.22 -- 1,084,758.36 --
Other receivables
Guangdong Province Huizhou Luofu Hill
10,465,168.81 10,465,168.81 10,465,168.81 10,465,168.81
Mineral Water Co., Ltd
Shenzhen Runhua Automobile Trading Co.,
3,072,764.42 3,072,764.42 3,072,764.42 3,072,764.42
Ltd
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 18,446,223.54 18,443,271.41 18,428,098.53 18,425,169.56
Shenzhen Shenfang Department Store Co.
237,648.82 189,179.82 237,648.82 189,179.82
Ltd.
Shenzhen Real Estate Consolidated Service
1,086,487.22 927,136.22 1,086,487.22 927,136.22
Co., Ltd.
Shenzhen City Shenfang Construction and
8,327,180.71 8,327,180.71 8,327,180.71 8,327,180.71
Decoration Materials Ltd.
Shenzhen RongHua JiDian Co.,Ltd 475,223.46 -- 475,223.46 --
Xi’an Fresh Peak property management&
8,419,205.19 -- 8,419,205.19 --
Trading Co.,Ltd
Total 152,124,940.82 143,019,740.04 152,106,815.81 143,001,638.19
(2) Amounts due to related party
Item Closing balance Opening balance
Other payables
Shenzhen Tefa Real Estate Consolidated Service Co., Ltd. 598,012.16 598,012.16
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
Shenzhen Dongfang New world store Co., Ltd 902,974.64 902,974.64
Item Closing balance Opening balance
Shenzhen Xin Dongfang Store Ltd. 1,394,704.21 1,394,704.21
Guangdong Province Fengkai Lain Feng Cement Manufacturing Co., Ltd. 1,867,348.00 1,867,348.00
Shenzhen Cyber Port Co., Ltd 7,964,749.26 7,964,749.26
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2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Shenzhen Shenfang Group BaoAn Developing Co.,Ltd 20,093,445.07 20,093,445.07
Shenzhen Investment Holding Co.,Ltd 53,848,819.24 58,848,819.24
Total 88,340,761.01 93,340,761.01
Interest payable:
Shenzhen Investment Holding Co.,Ltd 16,535,277.94 16,535,277.94
Total 16,535,277.94 16,535,277.94
Note 10 Contingencies
10.1 Contingencies arising from pending litigations or arbitrations and their
financial effects
① Xi’an project Lawsuit
Xi’an Fresh Peak Holding limited company (hereinafter referred to as “Fresh Peak
Company”) was sino-foreign joint venture set up in Xi’an city. 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 assigned the project to Xi’an Business Tourism Co., Ltd (hereinafter
referred to as “Business Tourism Company”). But the two parties had insulted a
lawsuit on compensation. The ShanXi Province High Peoples Court made a
judgement “(2000) SJ-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 2014, the book value of the investment of Xi’an Fresh Peak
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2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
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:
1)Tourism Company had to pay for Rmb 9,600 thousand to the company in 10 days
after the judgment entering into force.
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.
3)Luofushan 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 judgment 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 auctioned by the national resource
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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 auction would be surveyed and mapped (different from
land evaluation), new planning point would be made by them
as the conditions of auction. Boluo Land Bureau have surveyed and mapped Luofu
Hill Tourism site that was sealed. The cadastral map and land red line chart were
submitted to Huizhou Municipal Intermediate People's Court in June 2011. Detailed
regulation is deemed as the basis for the development of planning points, while the
preparation of detailed regulation relies on Luofushan Administration Committee.
Because the planning points were not made, the land failed to be auctioned.
As at 31 December 2014, 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.
10.2 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
9.5（2）.
②The Company provided loan guarantees for purchaser of real estate. Up to Dec
31,2014, the amount and duration of the unsettled guarantee is as follows:
Unsettled amount
Items Duration
(ten thousand)
Shenfang Chuanqishan From loans provided to registration of mortgage of pre-sale contract 11,641.00
Shenfang Chuanqishan From real estate license granted and mortgaged 1,072.70
Shenfang Shanglin Garden From loans provided to registration of mortgage of pre-sale contract 21,271.90
Shenfang Shanglin Garden From real estate license granted and mortgaged 1,421.00
Total 35,406.60
Note 11 Commitments
11.1 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 11,293,531.55 349,491,097.84
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Total 11,293,531.55 349,491,097.84
11.2 Fulfillment progress of previous commitments
The amount of significant outsourcing contracts is RMB 306,911,900.32, 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 12 Events after Balance Sheet Date
On 27 March,2015, the proposal of distributing the profit of 2014 was approved by the
Group’s board of direct. The Group’s BOD decide to use the profit to make up the
losses of previous years, without distributing the profit to shareholders and converting
the capital surplus to capital. The proposal still need to be submitted to the
Company's general meeting of stockholders for voting.
Note 13 Other material facts
As of 31 Dec,2014, there were no other material facts that need to be disclosed by
the Group.
Note 14 Notes to Items in the Financial Statements of the Company
14.1 Accounts receivable
(1) Accounts receivable by categories
Closing balance
Category Carrying amount Bad debt provision
Amount (%) Amount (%)
Accounts receivable of which provision for
-- -- -- --
bad debts is of individually significant
Accounts receivable of which provision for
46,372,269.26 100.00 6,968,694.02 15.03
bad debts is of individually insignificant
Total 46,372,269.26 100.00 6,968,694.02 15.03
(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
11,327,983.25 100.00 6,968,694.02 61.52
bad debts is of individually insignificant
Total 11,327,983.25 100.00 6,968,694.02 61.52
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(2) Accounts receivable by aging balance
Closing balance Opening balance
Item
Amount (%) Amount (%)
Within 1 year 35,580,792.53 76.72 -- --
1-2 years -- -- 766,274.00 6.76
2-3 years 253,116.00 0.55 -- --
Over 3 years 10,538,360.73 22.73 10,561,709.25 93.24
Total 46,372,269.26 100.00 11,327,983.25 100.00
(3) Bad debt provision
Bad debt provision of accounts receivable which is of individually significant
Carrying Amount of bad Proportion of
Content of accounts receivable Reasons for the provision
amount debt provision
House pay to be collected 42,791,896.78 6,968,694.02 16.29 A separate provision is established
according to the recoverability of
Rental to be collected 3,580,372.48 -- -- each receivable with long aging
and little retrievability.
Total 46,372,269.26 6,968,694.02 15.03
(4) There were no any account receivables that had been fully or at a great
proportion rate accrued for bad debt but had been fully collected or reversed back in
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 Related party 3,577,256.48 Within 1year 7.71
Individual No.1 Un-related party 2,830,000.00 Within 1year 6.10
Individual No.2 Associate 2,420,000.00 Within 1year 5.22
Individual No.3 Un-related party 2,290,000.00 Within 1year 4.94
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Relationship with the Proportion of the amount to
Name of entity Amount Age
Group the total AR (%)
Corporation No.2 Un-related party 2,039,200.00 Within 1year 4.40
Total 13,156,456.48 28.37
(8) Receivables due from related parties
Relationship with the
Name of entity Amount （%）of receivables
Group
Shenzhen Fresh Peak property consultant Co.,Ltd Associate 1,087,214.22 2.34
Shenzhen Petrol Hotel Co., Ltd Related party 3,577,256.48 7.71
Total 4,664,470.70 10.05
(9)There were no any account receivables which had been derecognized.
(10) There were no any accounting receivable which had been securitized.
14.2 Other receivables
(1) Other receivables by categories
Closing balance
Category Carrying amount Bad debt provision
Amount (%) Amount (%)
Other receivables of which provision for bad
1,463,080,604.66 98.32 799,518,692.30 54.65
debts is of individually significant
Other receivables of which provision for bad
25,011,319.74 1.68 12,628,565.94 50.49
debts is of individually insignificant
Total 1,488,091,924.40 100.00 812,147,258.24 54.58
(Continued)
Opening balance
Category Carrying amount Bad debt provision
Amount (%) Amount (%)
Other receivables of which provision for
1,474,220,614.49 98.22 818,545,417.98 55.52
bad debts is of individually significant
Other receivables of which provision for
26,760,143.14 1.78 12,628,565.94 47.19
bad debts is of individually insignificant
Total 1,500,980,757.63 100.00 831,173,983.92 55.38
(2) Other receivables by aging balance
Closing balance Opening balance
Item
Amount (%) Amount (%)
Within 1 year 86,119,834.17 5.79 332,019,493.89 22.12
1-2 years 322,059,351.67 21.64 75,700,471.51 5.04
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2-3 years 67,471,437.25 4.53 36,006,151.76 2.40
Over 3 years 1,012,441,301.31 68.04 1,057,254,640.47 70.44
Total 1,488,091,924.40 100.00 1,500,980,757.63 100.00
(3) Bad debt provision
(a) Bad debt provision of other receivables which is of individually significant
Proportion of
Content of accounts receivable Carrying amount Amount of bad debt Reasons for the provision
provision
Other receivables between
A separate provision is
subsidiaries that are included in 1,316,556,723.71 658,127,505.34 49.99
established according to
consolidated statement
the recoverability of each
Other receivables between
receivables with long
subsidiaries that are not included 120,994,319.55 120,994,319.55 100.00
aging and little
in consolidated statement
retrievability
Others 25,529,561.40 20,396,867.41 79.90
Total 1,463,080,604.66 799,518,692.30 54.65
(b) Bad debt provision of other receivables which is of individually insignificant
Proportion of Amount of bad
Content of other receivables Carrying amount Reasons for the provision
provision debt
Other receivables between
subsidiaries that are included in 9,020,576.23 -- -- A separate provision is
consolidated statement established according to
Other receivables between the recoverability of each
subsidiaries that are not included 1,324,136.04 1,116,316.04 84.31 receivable with long aging
in consolidated statement and little retrievability
Others 14,666,607.47 11,512,249.90 78.49
Total 25,011,319.74 12,628,565.94 50.49
(3) Provision for bad debt reversed back or collected
Name of entity Reversed back Method of collecting
Shenzhen Fresh Peak property consultant Co., Ltd 32,019,196.10
Shenzhen City SPG Long Gang Development Co., Ltd 19,026,725.68
Total 51,045,921.78
The company’s subsidaries, Shenzhen Fresh Peak property consultant Co., Ltd
and Shenzhen City SPG Long Gang Development Co., Ltd，realize profit. The value
of receivables originally recognized with impairment have been recovered and the
factors of impairment disappeared, so the company reversed back the bad debt
provision for the receivables listed above totaling RMB 51,045,921.78.
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(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 owning 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
Proportion of the amount
Name of Entity with the Amount Age
to the total OR (%)（%）
Group
918,538.43 Within 1 year
500,000.00 1-2 years
Fresh Peak Enterprise Co., Ltd Subsidiary 35.35
3,416,239.85 2-3 years
521,178,572.76 Over 3years
Shantou Huafeng Estate Development Co., 23,292,246.48 Within 1 year
Subsidiary 19.04
Ltd 260,000,000.00 1-2year
1,550,181.82 Within 1 year
Shenzhen ShenFang Group LongGang 60,000,000.00 1-2 years
Subsidiary 17.82
Development Co., Ltd 51,518,370.00 2-3 years
152,158,634.72 Over 3 years
American Great Wall Co., Ltd Subsidiary 101,379,954.81 Over 3 years 6.81
Canada Great Wall( Vancouver ) Co., Ltd Subsidiary 89,035,748.07 Over 3 years 5.98
Total 1,264,948,486.94 85.00
(8) Receivables due from related parties
Relationship
Name of entity Amount （%）in receivables
with the Group
Fresh Peak Enterprise Co., Ltd. Subsidiary 526,013,351.04 35.35
Shenzhen ShenFang Group LongGang Development Co.,Ltd Subsidiary 265,227,186.54 17.82
American Great Wall Co.,Ltd Subsidiary 101,379,954.81 6.81
Canada Great Wall(Vancouver) Co.,Ltd Subsidiary 89,035,748.07 5.98
Shenzhen City Shenfang Free Trade Trading Ltd. Subsidiary 32,392,459.91 2.18
Shenzhen Lian Hua Industry and Trading Co. Ltd. Subsidiary 16,170,762.46 1.09
Bekaton Property Limited Subsidiary 12,559,290.58 0.84
Paklid Limited Subsidiary 11,072,100.19 0.74
Guangdong province Huizhou Luofu Hill Mineral Water Co.,Ltd Joint venture 10,465,168.81 0.70
Shenzhen City Shenfang Construction and Decoration Materials Ltd. Subsidiary 8,327,180.71 0.56
Shenzhen City Shenfang Investment Ltd. Subsidiary 5,897,431.45 0.40
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Relationship
Name of entity Amount （%）in receivables
with the Group
Shenzhen Runhua Automobile trading Co.,Ltd Associate 3,072,764.42 0.21
Shenzhen Real Estate Consolidated Service Co., Ltd. Subsidiary 1,086,487.22 0.07
Shenzhen Ronghua JiDian Co.,ltd Associate 475,223.46 0.03
Shenzhen Shenfang Department Store Co. Ltd Subsidiary 237,648.82 0.02
Shenzhen Zhen Tung Engineering Ltd Subsidiary 4,196,603.99 0.28
Shantou Huafeng estate dev.co. Subsidiary 283,292,246.48 19.04
Shantou Hualin estate dev.co. Subsidiary 1,508,246.55 0.10
Shantou Songshan estate dev.co Subsidiary 3,315,725.69 0.22
Shenzhen Fresh Peak property consultant Co., Ltd Subsidiary 86,163,331.02 5.79
Total 1,461,888,912.22 98.24
(9)There were no any other receivables which had been derecognized in this
reporting year.
(10) There were no any other receivables which had been securitized in this reporting
year.
14.3 Long-term equity investments
(1) Long-term equity investments by types
Closing balance Opening balance
Item Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
Investment in
437,984,380.71 121,914,591.14 316,069,789.57 437,984,380.71 121,914,591.14 316,069,789.57
subsidiaries
Investment in
associates and 22,242,304.23 21,947,051.67 295,252.56 22,248,629.29 21,947,051.67 301,577.62
joint ventures
Total 460,226,684.94 143,861,642.81 316,365,042.13 460,233,010.00 143,861,642.81 316,371,367.19
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(2)investment in subsidiaries
Curr. Curr. year Closing balance of
Curr. year
Name of investee Opening balance year Closing balance impairment impairment
Increase
decrease provision provision
Shenzhen City Property Management Ltd. 12,821,791.52 -- -- 12,821,791.52 -- --
Shenzhen Petrel Hotel Co. Ltd. 20,605,047.50 -- -- 20,605,047.50 -- --
Shenzhen City Shenfang Investment Ltd. 9,000,000.00 -- -- 9,000,000.00 -- --
Fresh Peak Enterprise Ltd. 556,500.00 -- -- 556,500.00 -- --
Fresh Peak Zhiye Co., Ltd. 22,717,697.73 -- -- 22,717,697.73 -- --
Shenzhen Special Economic Zone Real Estate (Group)
20,000,000.00 -- -- 20,000,000.00 -- --
Guangzhou Property and Estate Co., Ltd.
Shenzhen Zhen Tung Engineering Ltd 11,332,321.45 -- -- 11,332,321.45 -- --
American Great Wall Co., Ltd 1,435,802.00 -- -- 1,435,802.00 -- --
Shenzhen City Shenfang Free Trade Trading Ltd. 4,750,000.00 -- -- 4,750,000.00 -- --
Shenzhen City Hua Zhan Construction Management Ltd. 6,000,000.00 -- -- 6,000,000.00 -- --
Shenzhen City Car Rental Ltd. 6,495,225.00 -- -- 6,495,225.00 -- --
QiLu Co.,Ltd 212,280.00 -- -- 212,280.00 -- --
Beijing Shenfang Property Management Co., Ltd. 500,000.00 -- -- 500,000.00 -- --
Shenzhen Lain Hua Industry and Trading Co., Ltd. 13,458,217.05 -- -- 13,458,217.05 -- --
Shenzhen City SPG Long Gang Development Ltd. 30,850,000.00 -- -- 30,850,000.00 -- --
Beijing Fresh Peak Property Development Management
64,183,888.90 -- -- 64,183,888.90 -- --
Limited Company
Shenzhen Shenfang Car Park Ltd. 29,750,000.00 -- -- 29,750,000.00 -- --
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Curr. Curr. year Closing balance of
Curr. year
Name of investee Opening balance year Closing balance impairment impairment
Increase
decrease provision provision
Shantou City Huafeng Real Estate Devepment Co., Ltd 30,000,000.00 -- -- 30,000,000.00 -- --
Shenzhen Shen Fang Industrial Development Co., Ltd 4,500,000.00 -- -- 4,500,000.00 -- 4,500,000.00
Shenzhen ZhongGang Haiyan Enterprise Ltd. 12,940,900.00 -- -- 12,940,900.00 -- 12,940,900.00
Shenzhen Real Estate Consolidated Service Co., Ltd. 5,958,305.26 -- -- 5,958,305.26 -- 5,958,305.26
Paklid Limited 201,100.00 -- -- 201,100.00 -- 201,100.00
Bekaton Property Limited 906,630.00 -- -- 906,630.00 -- 906,630.00
Shenzhen Tefa Real Estate Consolidated Service Co., Ltd. 8,180,003.63 -- -- 8,180,003.63 -- 8,180,003.63
Shenzhen Xin Dongfang Store Ltd. 18,500,000.00 -- -- 18,500,000.00 -- 18,500,000.00
Shenzhen City Shenfang Construction and Decoration
2,680,000.00 -- -- 2,680,000.00 -- 2,680,000.00
Materials Ltd.
Shenzhen Shenfang Department Store Co. Ltd. 9,500,000.00 -- -- 9,500,000.00 -- 9,500,000.00
Shenzhen CyberPort Co., Ltd 12,401,018.42 -- -- 12,401,018.42 -- --
ShenZhen ShenFang BaoAn Development Co., Ltd 19,000,000.00 -- -- 19,000,000.00 -- --
Shantou Fresh Peak Building 58,547,652.25 -- -- 58,547,652.25 -- 58,547,652.25
Total 437,984,380.71 -- -- 437,984,380.71 -- 121,914,591.14
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(3)Investment in associates and joint ventures
Changes in this period
Adjustments of Change
Investment
Name of investee Opening balance Add Reduce other s of
income under
investment investment comprehensive other
equity method
income equity
I.Joint ventures
Guangdong Huizhou Luofu Hill
9,969,206.09 -- -- -- -- --
Mineral Water Co., Ltd
Fengkai Xinghua Hotel 9,455,465.38 -- -- -- -- --
Subtotal 19,424,671.47 -- -- -- -- --
II.Associates
Shenzhen Runhua Automobile
1,445,425.56 -- -- -- -- --
Trading Co., Ltd
Shenzhen Ronghua Jidian Co., Ltd 1,378,532.26 -- -- -6,325.06 -- --
Subtotal 2,823,957.82 -- -- -6,325.06 -- --
Total 22,248,629.29 -- -- -6,325.06 -- --
(Continued)
Changes in this period Closing balance
Name of investee Cash dividend or Provision for Closing balance of impairment
Others
profit declared impairment provision
I.Joint ventures
Guangdong Huizhou Luofu Hill
-- -- -- 9,969,206.09 9,969,206.09
Mineral Water Co., Ltd
Fengkai Xinghua Hotel -- -- -- 9,455,465.38 9,455,465.38
Subtotal -- -- -- 19,424,671.47 19,424,671.47
II.Associates
Shenzhen Runhua Automobile
-- -- -- 1,445,425.56 1,445,425.56
Trading Co., Ltd
Shenzhen Ronghua Jidian Co., Ltd -- -- -- 1,372,207.20 1,076,954.64
Subtotal -- -- -- 2,817,632.76 2,522,380.2
Total -- -- -- 22,242,304.23 21,947,051.67
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14.4 Operating income and costs
(1) Operating income and operating costs
Item Amount for the current period Amount for the prior period
Principal operating income 634,382,232.73 1,333,553,618.35
Other operating income 246,100.00 649,887.14
Total of operating income 634,628,332.73 1,334,203,505.49
Principal operating costs 369,071,677.90 898,116,935.10
Other operating costs -- --
Total of operating costs 369,071,677.90 898,116,935.10
(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 569,913,978.06 346,555,648.74 1,273,471,953.82 875,844,405.12
Leasing 64,468,254.67 22,516,029.16 60,081,664.53 22,272,529.98
Total 634,382,232.73 369,071,677.90 1,333,553,618.35 898,116,935.10
(3) Principal operating activities (classified by geographical areas)
Name of geographical Amount for the current period Amount for the prior period
area Operating income Operating costs Operating income Operating costs
Shenzhen 634,382,232.73 369,071,677.90 1,333,553,618.35 898,116,935.10
Total 634,382,232.73 369,071,677.90 1,333,553,618.35 898,116,935.10
(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 (%)
Corporation No.1 40,784,800.00 6.43
Individual No.1 7,296,706.00 1.15
Individual No.2 6,403,792.00 1.01
Individual No.3 6,210,119.00 0.98
Individual No.4 6,179,028.00 0.97
Total 66,874,445.00 10.54
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(Continued)
Amount for the prior 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.5 6,220,517.00 0.47
Total 32,668,235.00 2.45
14.5 Investment income
(1) Details of investment income
Item Amount for the current period Amount for the prior period
Investment income from long-term equity investment 270,602,716.90 -25,316.71
Including：Investment income from investee’s dividend
270,609,041.96 --
distributed
Investment income from long-term investments under
-6,325.06 -25,316.71
equity method
Total 270,602,716.90 -25,316.71
(2) Investment income from investee’s dividend distributed
Amount for the current Amount for the prior
Name of investee Reasons for changes
period period
Fresh Peak Zhiye Co.,Ltd 270,609,041.96 --
Total 270,609,041.96 --
(3) Income from long-term investments under equity method
Amount for the current Amount for the prior
Name of investee Reasons for changes
period period
Shenzhen Ronghua JiDian Co.,ltd -6,325.06 -25,316.71
Total -6,325.06 -25,316.71
14.6 Supplementary information to the cash flow statement
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2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
Amount for the Amount for the
Item
current period prior period
(1) Reconciliation of net profit to cash flows from operating activities:
Net profit 438,199,162.69 206,173,384.86
Add: Provision for impairment loss of assets -51,045,921.78 666,840.00
Depreciation of fixed assets, bio-assets, and natural gas 21,333,217.10 21,290,498.10
Amortization of intangible assets 374,799.96 301,199.96
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) 11,687.90 7,607.28
Loss of fair value variation (deduct: gains) -- --
Financial expenses (deduct: gains) 20,154,884.77 1,344,930.45
Losses from investments (deduct: gains) -270,602,716.90 25,316.71
Decrease in deferred tax assets (deduct: increase) 2,379,866.32 -3,223,822.08
Increase in deferred tax liabilities (deduct: decrease) -- --
Decrease in inventories (deduct: increase) 340,784,597.95 67,118,991.33
Decrease in operating receivables (deduct: increase) -21,222,262.78 -257,412,103.70
Increase in operating payables (deduct: decrease) -291,087,853.26 360,615,187.99
Others
Net cash flows from operating activities 189,335,992.17 396,964,561.10
(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 326,170,340.34 356,953,152.47
Less: cash at the beginning of the period 356,953,152.47 190,825,250.83
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 -30,782,812.13 166,127,901.64
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Note15. Supplementary Materials
15.1 Breakdown non-recurring profit or loss
Items Amount for the current period Amount for the prior period
Profit or loss on disposal of non-current assets -133,442.39 5,778,882.64
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 -- --
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Items Amount for the current period Amount for the prior period
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 -- --
Profit or loss on entrusted loans -- --
Profit or loss on changes in the fair value of investment properties that are subsequently measured using the fair value model -- --
Effects on profit or loss of one-off adjustment to profit or loss for the period according to the period requirements of tax laws and
-- --
accounting laws and regulations
Custodian fees earned from entrusted operation -- --
Other non-operating income or expenses other than the above 1,319,554.06 812,505.76
Other profit or loss that meets the definition of non-recurring profit or loss -- --
Subtotal 1,186,111.67 6,591,388.40
Tax effects -319,678.92 -1,167,211.12
Effects attributable to minority interests (after tax) -- --
Total 866,432.75 5,424,177.28
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Note：”+” means income or gain and “-” means loss or expense
The Group defines items as non-recurring profit or loss items according to
“Information Disclosure and Presentation Rules for Companies Making Public
Offering of Securities No.1---Non-recurring Profit or Loss”(CSRC No.[2008]43)
15.2 Return rate of net assets and earning per share
Weighted return Earning per share (yuan / stock)（元/股）
Profit the in the reporting year
rate of net assets Basic EPS Diluted EPS
Net profit attributable to common stockholders 14.81% 0.2946 0.2946
Less： Net profit attributable to common
14.77% 0.2937 0.2937
stockholders after deducting non-recurring losses
15.3Differences between amounts prepared under foreign accounting
standards and China Accounting Standards (CAS)
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
companies t of listed companies
Amount for the current Amount for the prior Amount for the Amount for the prior
period period current period period
In accordance with CASs 298,033,316.49 228,268,271.23 2,161,537,401.78 1,863,347,135.33
In accordance with IFRS 298,033,316.49 228,268,271.23 2,161,537,401.78 1,863,347,135.33
15.4 List of abnormal situations and reasons for the variances of main
consolidated financial statement items
(1) Balance sheet items
The closing balance of note receivables as of 31 Dec,2014 was RMB
119,846,192.64, which increased by 100% comparing with the opening balance. It’s
mainly due to the customers’ changing of the method of settlement.
The closing balance of account receivables as of 31 Dec,2014 was RMB
84,388,842.43, which increased by 498.41% comparing with the opening balance.
The main reasons for that are the increases of receivables of mortgage payment.
The closing balance of payment in advance as of 31 Dec,2014 was RMB
17,821,748.23, which increased by 46.00%. It is mainly caused by the advance
payment for materials had not met the conditions to be transferred into inventory.
Other current assets have a balance of RMB 12,436,024.40 as of 31 Dec,2014,
which increased by 260.35% comparing with the opening balance, because of the
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2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
prepayment of current period land appreciation tax.
The ending balance of deferred tax assets was RMB 13,856,593.97 as of 31 Dec,
2014, which decreased by 48.28% compared with the opening balance. It is mainly
due to the transferring of deferred tax assets caused by the temporary deductible
differences of advances from customer for house received in previous years and
the temporary differences related with write-off of provision for the inventory.
The short-term loan balance as of 31 Dec,2014 was RMB 149,846,192.64, which
increased by 551.51% comparing with the opening balance. It’s mainly caused by
the increase of finance.
Accounts payable balance as of 31 Dec,2014 was RMB 541,538,762.36, which
increased by 39.09% compared with the beginning balance. The main reason is the
increase of unsettled project payment.
The balance of advance from customer as of as of 31 Dec, 2014 was RMB
144,315,921.34, which decreased by 53.89% compared with the opening balance
due to transferring the advances from customer to revenue.
The balance of tax payable is RMB 96,394,993.67 which decreased by 34.87%
comparing with the beginning balance. It’s mainly caused by the decreased accrual
of tax during this reporting period.
The balance of non-current liabilities that will mature within one year as of 31
Dec,2014 was RMB 453,207,700.00 which increased by 36.72%. It is mainly
caused by the increased amount of long-term loans that will mature within one year.
The balance of long-term loan as of 31 Dec,2014 was RMB 478,985,579.95 which
decreased by 41.17%.It is mainly due to some of long-term loans are repaid in the
current year.
(2)Income statement and statement of cash flow items
The financial expense incurred in 2014 is RMB 33,816,128.14 which increased by
2257.73% compared with the opening balance. The reason is that the main real
estate project have completed and interest capitalization has been terminated.
The non-operating income incurred in 2014 was RMB 1,596,644.62 which
decreased by 77.95% comparing with opening balance. It is mainly due to no
disposal of high-value fixed assets in the current reporting period.
Income tax expense incurred in 2014 was RMB 102,602,788.98, which increased
by 35.79% comparing with the balance of last year, for the current period total profit
is great than last year’s.
The current period cash inflow from operating activities is RMB 1,867,088,183.88
which decreased by 10.35% comparing with last year’s balance, because there is
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2014 Annual Report of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
some decreases of the cash receipts from selling house and the project payment .
The current period cash outflow from operating activities was RMB
1,544,926,120.52, which decreased by 18.16% comparing with the last year’s
balance, for the payment of project is less than last year’s when purchasing goods
and accepting services.
The net cash flow from operating activities incurred in 2014 was RMB
322,162,063.36, which increased by 65.25%. It’s mainly caused by the reduction of
cash for purchasing goods and accepting services.
The cash inflow from investing activities incurred in 2014 was RMB 24,690.00
which decreased by 99.68% comparing with the opening balance, for there were no
cash inflow from the investment and no disposal of high-value fixed assets.
The cash outflow from investing activities incurred in 2014 was RMB 3,016,118.70
which decreased by 50.39% comparing with the one of last year, for it is mainly
caused by the decreased purchase of fixed assets, intangible assets and other
long-term assets in this period.
The net cash flow from investing activities incurred in 2014 was RMB -2,991,428.70,
which decreased by 284.08% comparing with that of last year. It is mainly due to the
comparatively decrease of cash receipts from disposal of fixed assets, intangible
assets and other long-term assets and decrease of cash payments to purchase the
fixed assets, intangible assets and other long-term assets, comparing with that of
last year.
The cash inflow from financing incurred in 2014 was RMB 362,013,496.47, which
decreased by 23.14% comparing with that of last year, because of the decrease of
borrowing from bank.
The cash outflow from financing incurred in 2014 was RMB 530,373,267.61, which
decreased by 13.30% comparing with that of last year, for the repaying of bank
borrowing decreased.
Net increase in cash and cash equivalents was RMB 150,835,476.59 during 2014,
which increased by 171.43% comparing with prior year’s .The reason for such
increase is that the cash from operating activities have a net increase.
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Section XIII. 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.
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