ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES
(GROUP) CO., LTD.
SEMI-ANNUAL REPORT 2017
2017-059
August 2017
1
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Section I Important Statements, Contents and Definitions
The board of directors (the “Board”), the supervisory board (the “Supervisory Board”) as
well as the directors, supervisors and senior management of Shenzhen Special Economic Zone
Real Estate & Properties (Group) Co., Ltd. (the “Company”) hereby guarantee the factuality,
accuracy and completeness of the contents of this Report, and shall be jointly and severally
liable for any false representation, misleading statements or material omissions in this Report.
Zhou Jianguo, Board Chairman, Chen Maozheng, GM, Tang Xiaoping, accounting head for
this Report, and Qiao Yanjun, head of the accounting organ (head of accounting), hereby
guarantee that the Financial Report carried in the Report is factual, accurate and complete.
All the directors attended the board meeting for the review of this Report.
The Company plans not to distribute cash dividends or bonus shares or convert capital
reserve into share capital.
This Report has been prepared in both Chinese and English. Should there be any
discrepancies or misunderstandings between the two versions, the Chinese version shall
prevail.
2
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Table of Contents
Section I Important Statements, Contents and Definitions............................................................ 2
Section II Corporate Profile and Key Operating Results .............................................................. 5
Section III Business Profile ............................................................................................................... 8
Section IV Performance Discussion and Analysis ......................................................................... 10
Section V Significant Events ........................................................................................................... 22
Section VI Share Changes and Shareholders’ Profile .................................................................. 28
Section VII Preference Shares ........................................................................................................ 32
Section VIII Directors, Supervisors and Senior Management .................................................... 33
Section IX Corporate Bonds ........................................................................................................... 34
Section X Financial Report ............................................................................................................. 35
Section XI Documents Available for Reference .......................................................................... 140
3
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Definitions
Term Definition
ShenZhen Special Economic Zone Real Estate & Properties (Group)
Company, the Company, Group, the Group
Co., Ltd.
The holding company of the Company Shenzhen Investment Holdings Co., Ltd.
4
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Section II Corporate Profile and Key Operating Results
I Corporate Information
Stock name SPG A, SPG B Stock code 000029, 200029
Changed stock name (if
---
any)
Stock exchange Shenzhen Stock Exchange
Company name in
深圳经济特区房地产(集团)股份有限公司
Chinese
Abbr. (if any) 深房集团
Company name in
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
English (if any)
Abbr. (if any) SPG
Legal representative Zhou Jianguo
II Contact Information
Board Secretary Securities Representative
Name Mr. Chen Ji Mr. Luo Yi
47/F, SPG Plaza, Renmin South 47/F, SPG Plaza, Renmin South
Address Road, Shenzhen, Guangdong Road, Shenzhen, Guangdong
Province, P.R.China Province, 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 Other Information
1. Ways to Contact the Company
Indicate by tick mark whether any changes occur to the registered address, office address and their postal codes,
website address and email address of the Company during the Reporting Period.
□ Applicable √ Not applicable
No changes occurred to the said information during the Reporting Period, which can be found in the 2016 Annual
Report.
2. Information Disclosure Media and Place where this Report is Kept
Indicate by tick mark whether any changes occurred to the information disclosure media and the place where this
Report was kept during the Reporting Period.
□ Applicable √ Not applicable
The newspapers designated by the Company for information disclosure, the website designated by the CSRC for
5
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
disclosing this Report and the location where this Report was placed did not change during the Reporting Period.
The said information can be found in the 2016 Annual Report.
IV Key Consolidated Operating Results
Indicate by tick mark whether the Company needs to retroactively restate any of its accounting data.
□ Yes √ No
Reporting Period Same period of last year +/- (%)
Operating revenue (RMB) 731,306,982.03 1,097,886,969.68 -33.39%
Net profit attributable to
137,226,601.84 134,761,121.51 1.83%
shareholders of the Company (RMB)
Net profit attributable to
shareholders of the Company before 137,080,046.11 127,321,586.10 7.66%
exceptional gains and losses (RMB)
Net cash from operating activities
-97,700,697.19 426,167,980.76 -122.93%
(RMB)
Basic earnings per share
0.1356 0.1332 1.80%
(RMB/share)
Diluted earnings per share
0.1356 0.1332 1.80%
(RMB/share)
Weighted average return on equity
5.06% 5.62% -0.56%
(%)
End of Reporting Period End of last year +/- (%)
Total assets (RMB) 3,795,348,770.68 3,785,600,783.23 0.26%
Net assets attributable to
2,782,523,104.61 2,643,860,443.09 5.24%
shareholders of the Company (RMB)
V Differences in Accounting Data under Chinese and Foreign Accounting Standards
1. Differences in Net Profit and Net Assets Disclosed in Financial Reports Prepared under Chinese and
International Accounting Standards
√ Applicable □ Not applicable
Unit: RMB
Net profit attributable to shareholders of Net assets attributable to shareholders of
the Company the Company
Same period of last
Reporting Period Closing amount Opening amount
year
According to Chinese
137,226,601.84 134,761,121.51 2,782,523,104.61 2,643,860,443.09
accounting standards
Items and amounts adjusted according to international accounting standards
According to international
137,226,601.84 134,761,121.51 2,782,523,104.61 2,643,860,443.09
accounting standards
2. Differences in Net Profit and Net Assets Disclosed in Financial Reports Prepared under Chinese and Foreign
Accounting Standards
√ Applicable □ Not applicable
Unit: RMB
6
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Net profit attributable to shareholders of Net assets attributable to shareholders of
the Company the Company
Same period of last
Reporting Period Closing amount Opening amount
year
According to Chinese
137,226,601.84 134,761,121.51 2,782,523,104.61 2,643,860,443.09
accounting standards
Items and amounts adjusted according to foreign accounting standards
According to foreign
137,226,601.84 134,761,121.51 2,782,523,104.61 2,643,860,443.09
accounting standards
3. Reasons for Accounting Data Differences under Chinese and Foreign Accounting Standards
□ Applicable √ Not applicable
VI Exceptional Gains/Losses
√ Applicable □ Not applicable
Unit: RMB
Item Reporting Period Note
Gains/losses on disposal of non-current assets (including
-58,187.56
offset asset impairment provisions)
Other gains/losses that meet definition of exceptional
253,595.20
gains/losses
Less: Income tax effects 48,851.91
Total 146,555.73 --
Explanation of why the Company classified an item as an exceptional gain/loss according to the definition in the
Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the
Public—Exceptional Gains and Losses, or reclassified any exceptional gain/loss item given as an example in the
said explanatory announcement as a recurrent gain/loss:
□ Applicable √ Not applicable
No such cases in the Reporting Period.
7
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Section III Business Profile
I Main Business Scope for Reporting Period
Is the Company subject to any disclosure requirements for special industries?
Yes, because the Company engages in real estate.
The Company concentrated on developing housing real estate, strictly controlled the quality and
progress of its products, and made efforts to build exquisite projects. As a result, more and more
brand effects have started to show, the operating performance has been improving steadily, and the
development and operation of the main business has entered a virtuous cycle.
The Company develops and sells real estate mainly in Shenzhen and Shantou, both cities in the
Guangdong province. In regard with projects in Shenzhen, the Cuilinyuan and Tianju Jingtian
Apartment Block projects have sealed their roofs atop the concrete and steel frames; the Chuanqi
Donghu Mingyuan project has its basement level in construction; the Chuanqishan project has been
almost sold out; and there are only a few units left for the Chuanqi Shanglin project. As for projects
located in Shantou, Phase I of the Tianyuewan project has finished roof capping on January 9, 2017
and is expected to be completed for acceptance by the end of this year, and design for Phase II has
been finished by the end of last year; and all the other projects are mostly underway as scheduled.
II Significant Changes in Main Assets
1. Significant Changes in Main Assets
Main assets Reason for significant change in Reporting Period
Equity assets No significant changes
Fixed assets No significant changes
Intangible assets No significant changes
Construction in progress No significant changes
RMB16,405,895.50 on June 30, 2017, down by RMB4,200,883.41 (20.39%)
Notes receivable from opening amount, mainly resulted by decrease in discounted undue
trade acceptances
RMB183,877,575.95 on June 30, 2017, up by RMB75,579,525.55 (69.79%)
Accounts receivable from opening amount, mainly resulted by increased mortgaged loans
receivable from banks
RMB24,607,282.73 on June 30, 2017, up by RMB8,742,143.40 (55.10%)
Prepayments from opening amount, mainly resulted by increased prepayments for
construction
2. Main Assets Overseas
□ Applicable √ Not applicable
8
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
III Core Competitiveness Analysis
Is the Company subject to any disclosure requirements for special industries?
Yes, because the Company engages in real estate.
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 Chuanqishan 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.
In 2016, the Company was rated as the Best Faithful Enterprise in Guangdong Province, and one of
the Top 500 Enterprises in Guangdong Province by Guangdong Provincial Enterprise Confederation
and Guangdong Provincial Association of Entrepreneurs, rated as one of the Top Ten Enterprises
with Comprehensive Strength in Shenzhen Real Estate Industry by Shenzhen Real Estate
Association, and was rated as a Two-Star Unit in the 1st Social Responsibility Rating Activity in
Shenzhen by Shenzhen Municipal Association of Promoting Corporate Social Responsibility.
9
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Section IV Performance Discussion and Analysis
I Summary
(I) Business Review for Reporting Period
2017 marks the second year of the Company’s 13th five-year plan for development, as well as a key
year for the Company to carry out its significant asset reorganization program. In the first half of the
year, the growth slowdown in the macro economy and continued government controls weighed on
the real estate sector. Under such circumstances, in addition to proactively and carefully carrying
forward its significant asset reorganization program, the Company adhered to the thinking of
“Carefully Draw up Development Strategies, Particularly Focus on Main Business, Strictly Control
Costs and Continuously Improve Management Capability” and put greater efforts into promoting
project construction and marketing, so as to achieve stable development.
In the Reporting Period, the Company made a concerted effort to overcome difficulties and steadily
promote project construction. As a result, for this period, the Company achieved, on a consolidated
basis, operating revenue of RMB731 million, down 33.39% compared to the same period of last
year; a gross profit of RMB184 million, representing a year-on-year growth of 1.86%; and a net
profit attributable to shareholders of the Company of RMB137 million, increasing 1.83% from a
year earlier. As of June 30, 2017, net assets attributable to shareholders of the Company were equal
to RMB2.783 billion, a 5.24% rise compared to the corresponding figure as of the end of last year.
1. 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 Chuanqishan
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. During the reporting period, the key projects of the Company
focused on Shenzhen and Shantou, and the construction of projects basically meets expectation. The
Company pays close attention to product quality and progress, and timely adjusts marketing
strategies. The development and sales of projects are under smooth progress, and the development
and operation of the main industry are in good order.
2. The Company further improves the development and management system, focuses on
management of safety in production and tightens cost control. For projects in Shenzhen area, roof
capping of main structure of the Cuilinyuan project and the Tianju Jingtian Apartment Block project
has been completed, and basement of the Chuanqi Donghu Mingyuan project is under construction.
Roof capping of main structure of Shantou Tianyuewan Phase I has been completed, and acceptance
of the project is expected to be completed by the end of the year; while planning and design of the
second phase will be completed before the end of the year.
10
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
During the Reporting Period, the main real estate projects under construction of the Company
include the Cuilinyuan project (south section of the SPG Shanglin project), the Tianju Jingtian
Apartment Block project, the Chuanqi Donghu Mingyuan project, the Shantou Tianyuewan project,
etc. The details are as follows:
Total Accumul
Building Complete expected ated
The Covering area with d
Loca Type of investmen investme
Project Status Compan
tion project area（㎡ ） plot ratio building t nt
y’s stake
（㎡ ） area（㎡ ） (RMB’0,0 (RMB’0,
00) 000)
Cuilinyu Shen Housing Under 100% 16,424.29 60,450 0 57,000 33,890
an zhen constru
ction
Tianju Shen Apartment Under 49% 4,243.34 42,412 0 24,865 9,969
Jingtian zhen block constru
Apartme ction
nt Block
Shantou Shant Housing Under 100% 31,167.50 153,578.51 0 79,801 49,386
Tianyue ou constru
wan ction
Phase I
Chuanqi Shen Housing Under 100% 5,889.7 45,043.72 0 73,200 14,923
Donghu zhen constru
Mingyu ction
an
3. Land reserves for future development by the end of the Reporting Period:
Locatio Building area with plot
Project Land area（㎡ ）
n ratio （㎡ ）
Shantou Tianyuewan Shantou 33,362 127,661
Phase II
Shantou Xinfeng Building Shantou 5,920 26,640
Total 39,282 154,301
Note: The Company's real estate projects do not involve primary land development.
(II) Management Review for First Half of 2017
1. The Company fundamentals remain stable and healthy with reasonable debt structure, good
financial condition and ample cash flow. During the reporting period, macro-economy is facing
downward pressure, and sustained control of real estate forces the industry to continue to face the
pressure of destocking on a national scale. The Company's real estate development and sales mainly
concentrate in Shenzhen and Shantou. The sales revenue and profit in the region of Shenzhen,
where overall sales are good, accounted for more than 90%. Thus the future destocking pressure
mainly exists in Shantou region, of which sales revenue and profit account for a much smaller
proportion. Therefore, the future business performance and profitability of the Company are less
affected.
(1) Financing of the Company:
① Trade acceptance
Item Closing balance (RMB’0,000)
Trade acceptance 1,640.59
Pledged loan 11,666.00
As of June 30, 2017, the trade acceptance discounted but not matured is RMB16,405,900, and the
balance of related pledged borrowing is RMB16,405,900. When the trade acceptance cannot be
11
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
honored when it is mature, the bank has the power to ask the Company to repay the amount
un-settled. The Company continues to recognize the carrying amount of the trade acceptance and
records the amount of RMB116.66 million received as pledged borrowing because of the transfer,
due to the Company’s undertaking the main risk, such as credit risk, relating with the trade
acceptance.
② Bank borrowing
Amount (RMB’0,000)
Interest
No Financing Currenc Remaining Rate
Term Cred Drawin Principal at End Purpose
. Category y Range
it g of Reporting (%)
Period
1 Bank 1 year RMB 2,960 2,960 2,960 Short-term credit 4.79-5.44
borrowing borrowing
2 Bank 3-5 RMB 32,00 32,000 15,800 Medium and 5.235
borrowing years 0 long-term
borrowing
Total RMB 34,69 34,690 18,490
0
2. The main industry develops in a good order. The Company further improves the development and
management system, focuses on management of safety in production and tightens cost control.
During the Reporting Period, construction of real estate projects of the Company are under order
progress. As for Shenzhen region, external scaffolding of the Cuilinyuan project has been removed;
Foundation pit excavation of the Chuanqi Donghu Mingyuan project has been finished, and main
structure of basement is under construction; the Tianju Jingtian Apartment Block is currently in the
construction phase of installation engineering. As for the Shantou Tianyuewan Phase I project, roof
capping has been finished, and acceptance is expected to be completed before the end of the year.
Industry, product or regional situation accounting for more than 10% of the Company's operation
revenue or operation profit:
Unit: RMB’0,000
Operation
Gross Margin
Revenue Operation Cost
Increased or
Increased or Increased or
Operation Operation Gross Decreased over
Decreased Decreased over
Revenue Cost Margin the Same
over the Same the Same Period
Period Last
Period of Last of Last Year
Year
Year
By industry
Real estate 39,519 19,799 49.90% -25.63% -34.46% 6.75%
Engineering 23,007 22,354 2.84% -51.28% -50.33% -1.87%
construction
By product
House 37,388 19,217 48.60% -20.82% -29.93% 6.69%
Shop 2,130 582 72.69% -64.00% 79.09% 19.70%
By region
Guangdong 70,495 46,869 33.51% -32.96% -39.32% 6.98%
province
3. Real estate sales basically meet expectations. The Company is concerned about policy and
market dynamics, and adjusts marketing strategies based on regulatory policies and market changes.
Project sales basically meet the early year plan. Opening sales of the Cuilinyuan project began in
12
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
June in accordance with the schedule of early year plan; the Jinyedao project’s remaining suites and
the Chuanqi Shanglin project’s villas basically achieve the sales target, while sales of the Shantou
Yuejing Dongfang project and the Shantou Tianyuewan project is slightly behind schedule.
(1) Carryover and sales of major real estate projects in the Reporting Period
Unit: RMB’0,000
Region Operation Operation Operation Gross Margin
Revenue Cost Margin (%)
Shenzhe 9,989 9,408 48.50
SPG Chuanqishan 19,397
n
Shenzhe 8,149 9,570 54.01
SPG Shanglin Garden 17,719
n
Shantou Jinyedao Shantou 578 215 363 62.80
Shantou Yuejing Shantou 1,446 379 20.77
1,825
Dongfang
Total 39,519 19,799 19,720 49.90
(2) Sales of real estate projects in the Reporting Period
Unit: square meters
Sales Area
Equit Current Current
Market Available at the
No. Name of Project y Region Sold Settlemen
Opening Beginning of the
Ratio Area t Area
Year
1 SPG Chuanqishan November 100% Shenzhe 625 279 3,969
2012 n
2 SPG Shanglin Garden October 2013 100% Shenzhe 3,852 2,895 5,912
n
3 Yuejing Dongfang December 100% Shantou 5,000 3,648 2,090
2013
4 Jinyedao July 1996 100% Shantou 5,000 3,161 600
5 Tianyuewan Phase I October 2016 100% Shantou 40,000 2,257
6 SPG Cuilinyuan June 2017 100% Shenzhe 18,000
n
Total 72,477 12,240 12,571
4. Real estate rental of the Company is stable with steadily rising rental price as well as good
occupancy rate and rental recovery rate. The main rental items are as follows:
Unit: square meters
Rentable Rented Occupan Type of Land Equity
Region Name of Building
Area Area cy Rate Operation Ownership Ratio
Shenzhe Real estate 100% Commercial The 100%
n Mansion 3,413.88 3,413.88 Building Company
Shenzhe North Block of 4,819.71 4752.98 98.62% Commercial The 100%
n Guoshang Building Company
Mansion
Shenzhe Petrel Building 100% Commercial The 100%
n 22,475.47 22,475.4 Building Company
7
Shenzhe SPG Plaza 59774.17 51344.7 86% Office The 100%
n Building Company
Shenzhe SPG Plaza Podium 21456.72 21456.72 100% Commercial The 100%
n Building Company
Shenzhe Wenjin Garden 3,531.60 100% Commercial The 100%
n 3,531.60 Building Company
Total 115,471.5 106,975.
5 35
13
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
5. Enterprises affiliated strengthen their management and improve their service level to expand the
market. The operation management of the enterprises basically meet expected targets in the
reporting period.
(III) Outlook of the Company's Future Development
In the second half of 2017, the Company will work hard to overcome the sales pressure brought by
the macro-control and adjust the business strategies according to local conditions. Main items for
sales include the new buildings of the Cuilinyuan project, remaining villas of the Chuanqishan
project, remaining villas and shops of the Chuanqi Shanglin project, as well as Shantou Tianyuewan
Phase I, remaining suites of the Jinyedao project and the Yuejing Dongfang project. Working plan
of the second half of the year is as follows:
1. Enhance project development, coordinate management and control capacity, promote project
construction according to plan, and push forward project construction on the premise of ensuring
safety and quality. Acceptance of the Shantou Tianyuewan Phase I project will be completed before
the end of year. Construction application and tender of the second phase will be accelerated, and
construction will begin according to actual situation. Acceptance of the Tianju Jingtian Apartment
Block will be completed before the end of the year. Adjust marketing strategies, strengthen
promotion and sales to achieve the expected real estate sales target.
2. Promote the Company's major asset reorganization in accordance with regulatory requirements.
3. Carry out the special governance activities of "inaction", strengthen enterprise management and
cost control, and constantly enhance execution of the whole Company.
4. Strengthen financial management, reasonably balance debt structure, prevent and control
financial risks and tighten internal control.
5. Enhance rental management, constantly improve rental and platform leasing work, and focus on
raising occupancy rate and rental recovery rate.
II Analysis of Main Business
See “I Summary” above.
Year-on-year changes of key consolidated financial data:
Unit: RMB
Reporting Same period of
+/-% Main reason for change
Period last year
Operating Decreased sales of ready houses and construction
731,306,982.03 1,097,886,969.68 -33.39%
revenues services
Decreased sales of ready houses and construction
Operating costs 494,949,797.89 816,027,244.11 -39.35%
services
Selling expense 6,832,803.76 5,107,741.43 33.77% Marketing of new houses ready for sale
Administrative Decreased intermediary fees and adjustments to tax
24,719,238.69 26,957,331.77 -8.30%
expense accounting
Decreased interest income and capitalized interest
Finance costs -2,635,571.58 -7,048,153.64 -62.61%
on new real estate projects that began construction
Income taxes 47,173,139.72 46,284,687.48 1.92%
Net cash from
Decrease in cash generated from sale of goods and
operating -97,700,697.19 426,167,980.76 -122.93%
rendering of services
activities
Net cash from 424,910.51 -20,267.34 -2,196.53 Decrease in cash paid to acquire fixed assets,
14
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
investing % intangible assets and other long-term assets
activities
Net cash from
financing -4,191,437.88 -99,464,268.41 -95.79% Decreased debt repayments in cash
activities
Net increase in
-101,713,852.5 Decrease in cash generated from sale of goods and
cash and cash 326,931,012.56 -131.11%
6 rendering of services
equivalents
Business taxes
23,913,311.23 86,368,209.71 -72.31% Decreased real estate revenue
and surtaxes
Asset
Reversal of bad-debt provisions in same period of
impairment 0.00 -4,800,000.00 -100.00%
last year
losses
Legal compensation paid to Luofu Mountain
Non-operating
317,021.43 5,213,457.94 -93.92% Travel Corp. was reclaimed in same period of last
income
year
Major changes to the profit structure or sources of the Company in the Reporting Period:
□ Applicable √ Not applicable
No such cases in the Reporting Period.
Breakdown of main business:
Unit: RMB
Operating Gross profit
Operating Gross profit Operating cost:
Operating cost revenue: YoY margin: YoY
revenue margin YoY +/-%
+/-% +/-%
By business segment
Real estate 395,186,856.6 197,989,501.6
49.90% -25.63% -34.46% 6.75%
8 7
Construction 230,070,127.9 223,538,547.7
2.84% -51.28% -50.33% -1.87%
service 4 5
Rental service 39,832,678.73 13,767,769.29 65.44% 0.49% -23.02% 10.55%
Property
management 69,319,461.17 64,661,883.21 6.72% 26.51% 26.89% -0.28%
service
Other 13,457,954.75 9,935,401.97 26.17% -13.49% -0.26% -9.80%
747,867,079.2 509,893,103.8
Subtotal 31.82% -32.84% -38.63% 6.43%
7 9
Less: offset
internal -16,560,097.24 -14,943,306.00 9.76% 5.38% 0.50% 4.38%
transactions
731,306,982.0 494,949,797.8
Total 32.32% -33.39% -39.35% 6.65%
3 9
By product
373,881,925.6 192,171,413.6
Housing units 48.60% -20.82% -29.93% 6.69%
8 7
Shops 21,304,931.00 5,818,088.00 72.69% -64.00% -79.09% 19.70%
352,680,222.5
Other products 311,903,602.22 11.56% -39.43% -41.02% 2.38%
9
747,867,079.2 509,893,103.8
Subtotal 31.82% -32.84% -38.63% 6.43%
7 9
Less: offset
internal -16,560,097.24 -14,943,306.00 9.76% 5.38% 0.50% 4.38%
transactions
731,306,982.0 494,949,797.8
Total 32.32% -33.39% -39.35% 6.65%
3 9
15
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
By geographic segment
Guangdong 704,953,389.4 468,691,762.9
33.51% -32.96% -39.32% 6.98%
Province 3 2
Other regions
42,609,599.62 41,201,340.97 3.31% -31.09% -29.50% -2.19%
in China
Overseas 304,090.22 100.00% 6.25% 0.00%
747,867,079.2 509,893,103.8
Subtotal 31.82% -32.84% -38.63% 6.43%
7 9
Less: offset
internal -16,560,097.24 -14,943,306.00 9.76% 5.38% 0.50% 4.38%
transactions
731,306,982.0 494,949,797.8
Total 32.32% -33.39% -39.35% 6.65%
3 9
III Non-Core Business Analysis
□ Applicable √ Not applicable
IV Analysis of Assets and Liabilities
1. Significant Changes in Asset Composition
Unit: RMB
End of Reporting Period End of same period of last year
As a As a Change in
Main reason for
percentage of percentage of percentage
Amount Amount significant change
total assets total assets (%)
(%) (%)
Monetary 1,164,343,471.8
30.68% 1,502,687,318.92 33.56% -2.88%
funds 4
Accounts
183,877,575.95 4.84% 158,963,445.82 3.55% 1.29%
receivable
1,765,951,891.1
Inventories 46.53% 2,031,681,084.13 45.38% 1.15%
4
Investment
405,102,784.35 10.67% 425,276,998.07 9.50% 1.17%
property
Long-term
equity 37,447,267.61 0.99% 57,705,013.77 1.29% -0.30%
investments
Fixed assets 42,507,617.00 1.12% 49,014,628.32 1.09% 0.03%
Short-term
143,560,032.01 3.78% 122,284,378.21 2.73% 1.05%
borrowings
Long-term
114,000,000.00 3.00% 325,399,708.82 7.27% -4.27%
borrowings
2. Assets and Liabilities Measured at Fair Value
□ Applicable √ Not applicable
3. Restricted Asset Rights as of End of the Reporting Period
Item Closing book value Reason for restriction
16
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Monetary funds 290,033.83 See item 1 under Note 7
Notes receivable 16,405,895.50 As pledges for short-term borrowings
Inventories
Fixed assets
Intangible assets
Accounts receivable 100,079,290.62 As pledges for short-term borrowings
Investment property
64,969,223.83 As mortgages for long-term borrowings
(Petrel Building)
Investment property (SPG
223,598,885.86 As mortgages for long-term borrowings
Plaza)
Total 405,343,329.64 --
V Investment Analysis
1. Total Investments Made
□ Applicable √ Not applicable
2. Significant Equity Investments Made in This Reporting Period
□ Applicable √ Not applicable
3. Significant Non-equity Investments Ongoing in This Reporting Period
□ Applicable √ Not applicable
4. Financial Investments
(1) Securities Investments
□ Applicable √ Not applicable
No such cases in this Reporting Period
(2) Investment in Derivative Financial Instruments
□ Applicable √ Not applicable
No such cases in this Reporting Period
VI Sale of Major Assets and Equity Interests
1. Sale of Major Assets
□ Applicable √ Not applicable
No such cases in this Reporting Period.
17
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
2. Sale of Major Equity Interests
□ Applicable √ Not applicable
VII Main Controlled and Joint Stock Companies
√ Applicable □ Not applicable
Main subsidiaries and joint stock companies with an over 10% influence on the Company’s net profit
Unit: RMB
Relationshi Main
Company Industry Registere Total assets Net assets Operating Operatin Net profit
p with the business
name scope d capital revenues g profit
Company
Shenzhen
Hotel RMB30 43,909,349.4 40,396,352 745,380.3 1,023,01
Petrel Hotel Subsidiary Service 574,847.86
Service million 4 .24 6 3.38
Co., Ltd.
Shenzhen
Property
Property RMB7.25 91,540,659.8 20,974,283 70,143,62 1,480,26 1,227,419.4
Subsidiary Service managem
Management million 3 .58 5.24 4.97 0
ent
Co., Ltd.
Fixing
Shenzhen
and
Zhentong RMB 10 454,224,394. 22,236,242 230,533,0 2,112,88 1,747,489.3
Subsidiary Service maintenan
Engineering million 85 .51 85.34 8.75 2
ce of
Co., Ltd.
projects
Shenzhen
Constructi
Huazhan
on RMB 8 8,494,269. 1,983,012 25,370.4
Construction Subsidiary Service 8,945,940.98 19,027.80
supervisio million 19 .12 0
Supervision
n
Co., Ltd.
Shenzhen
SPG RMB
Rent of 16,095,251.1 13,748,669 1,696,526 269,011.
Mini-bus Subsidiary Service 10.29 162,295.31
mini-bus 4 .46 .31 10
Rent Co., million
Ltd.
Investmen Investmen
Xin Feng
t t and HKD1 292,515,241. 34,418,681 24,031,25 1,671,46 1,443,271.3
Real Estate Subsidiary
managem managem million 57 .22 4.66 1.99 2
Co., Ltd
ent ent
Great Wall Developm
Real USD0.5 19,300,969.9 -85,550,34 304,090.2 -89,772.
Estate Co., Subsidiary ent of real -89,772.94
estate million 4 9.70 2 94
Inc. (U.S.) estate
Investmen Investmen
Xin Feng
t t and HKD1 151,207,730. -416,674,8 2,572,15 2,569,037.0
Enterprise Subsidiary 26,100.00
managem managem million 62 04.18 9.05 0
Co., Ltd.
ent ent
Shenzhen
SPG Developm
Real RMB 30 666,667,720. 109,038,04 177,187,5 81,048,1 62,574,498.
Longgang Subsidiary ent of real
estate million 73 0.46 69.11 38.44 41
Development estate
Co., Ltd.
Shantou
Developm
Huafeng Real RMB 30 684,600,535. 4,860,619. -3,379,3 -2,534,536.
Subsidiary ent of real
Real Estate estate million 02 16 81.86 39
estate
Development
18
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Co., Ltd.
Subsidiaries obtained or disposed in this Reporting Period
□ Applicable √ Not applicable
Information about the main controlled and joint stock companies
1. The subordinate subsidiaries engaged in real estate development mainly include: Shenzhen SPG Longgang
Development Co., Ltd., Shantou SEZ, Wellam FTY, Building Development, Co., Ltd. and Shantou Huafeng Real
Estate Development Co., Ltd. The Longgang Company was responsible for the development of the SPG Shanglin
Garden Project with the carried forward sales of the first half year of 2017 of RMB0.177 billion for the north area,
and the proportion of the operating income to that of the Group Company of 24.23% as well as the proportion of
the net profits which was of RMB 0.063 billion to that of the Group Company of 45.61%. Shantou Wellam
Company took the responsibility of developing the projects such as the Jinyedao and Yuejing Dongfang, with the
first half year of 2017 carried forward sales of the Yuejing Dongfang Project of RMB 0.018 billion, and the carried
forward sales of the remaining building of Jinyedao of RMB 0.006 billion. Shantou Huafeng Company took the
responsibility of developing the Tianyuewan Project (namely the Shantou Jingzaiwan Project), of which the Phase
I was capped, and is expected to be completed before the end of the year. Its operating profit of RMB-3.38 million
was because the sales revenue has not been carried forward yet.
2. Shenzhen Zhentong Engineering Co., Ltd. was engaged in the business of building installation and maintenance
with the first half year of 2017 operating income of RMB0.23 billion, and of 31.52% to the operating income of
the Group Company.
3. The first half year of 2017 operating income of Shenzhen Property Management Co., Ltd. was of RMB0.07
billion that was of 9.59% to the operating income of the Group Company.
4. The first half year of 2017 net profits of Xin Feng Enterprise Co., Ltd. was of RMB2.57 million which mainly
due to the profits or losses of the exchange rate changes
VIII Structured Bodies Controlled by the Company
□ Applicable √ Not applicable
IX Performance Forecast for January-September 2017
Warning of possible loss or considerable YoY change in the accumulative net profit made during the
period-beginning to the end of the next reporting period, as well as the reasons:
√ Applicable □ Not applicable
Forecast: Considerable decrease at the same direction
Type of the forecast data: Interval number
January-Sept
January-September 2017 +/- (%)
ember 2016
Forecast accumulative net
13,000 -- 15,000 23,686 Decrease 36.67% -- 45.12%
profit (RMB'0,000)
Basic earnings per share
0.1285 -- 0.1483 0.2341 Decrease 36.66% -- 45.11%
(RMB/share)
The sales of carry forward of the real estate of the Company decreased from the year
Notes to the forecast
earlier in the Reporting Period.
19
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
X Risks Facing the Company and Countermeasures
Risks facing the Company:
(I) The impact of macroeconomic policies and situation on the Company. In a certain time of the future, it is
expected that the global economic situation is still complex and serious, and the recovery is slow. The
effectiveness of domestic supply side reform and economic restructuring will become the new normal. The
economic downward pressure is difficult to be alleviated in short term. These factors pose a pressure on the
Company's sustained and stable development.
(II) From the real estate industry, macro-control policies result in a certain impact on the Company’s main
business development and sales. Overall, the Continuous implementation of real estate purchasing and credit
limitation policies, and the management’s clear statement of "house is for living instead of speculating", to a
considerable extent inhibit investment demand. Moreover, the recent introduction of "rental right" policy has
aroused widespread concern. These policies play a positive role to regulate the real estate market and meanwhile
increase the watch-and-wait and rational sentiment of customers, thus form pressure to the Company in further
destocking and revenue achievement.
(III) Potential risks associated with major assets reorganization. Major assets reorganization of the Company
involves in the reform of state-owned enterprises in Shenzhen with proposed purchase of large-scale assets and
complex transaction structure. It is a major precedent of certain particularity in the acquisition of asset size and
scope. The Company has its share suspended for more than 11 months since Sep 14, 2016. During the suspension,
the Company actively promote audit, assessment, legal and other work concerning the reorganization, and
discloses the progress and applies for delay of trading resumption in accordance with regulatory requirements.
Due to long-term share suspension of the Company, investors, all circles in the society and regulators are very
concerned about the progress of reorganization, and there is still a lot of uncertainty about the subject.
Countermeasures:
First, the Company will carefully study and assess the macroeconomic situation to formulate flexible coping
strategies. Secondary, the Company will strengthen enterprise management and internal control, increase efforts to
promote main business development and sales efforts to ensure the stability of company fundamentals. Thirdly,
the Company will tighten financial management and fund management to maintain good debt structure and
financial situation and enhance risk resistance capacity. Fourthly, the Company will communicate actively with
regulators and investors in accordance with regulatory requirements to promote asset reorganization. Fifthly, the
Company will scale up party building and staff ideological and political work to ensure staff stability of the
Company.
XI Researches, Visits and Interviews Received in the Reporting Period
√ Applicable □ Not applicable
Way of Visitor Main discussion and materials provided by
Time Place Visitor
reception type the Company
By Inquired of the basic information and the
Office of the Individu Individual
01/16/2017 telephon progress of assets reorganization and didn’t
Company al investor
e offer written materials.
Inquired of the sales progress of projects
By
Office of the Individu Individual development, the progress of assets
02/08/2017 telephon
Company al investor reorganization and didn’t offer written
e
materials
Office of the By Individu Individual Inquired of annual operating conditions of the
02/28/2017
Company telephon al investor Company, estimated disclosed time of annual
20
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
e report, and the progress of assets
reorganization, estimated relisting time and
didn’t offer written materials
Inquired of the relisting time of assets
By
Office of the Individu Individual reorganization and relevant matters of
03/09/2017 telephon
Company al investor explanation session of investors and didn’t
e
offer written materials
By Inquired of the progress of assets
Office of the Individu Individual
03/28/2017 telephon reorganization and relisting time and didn’t
Company al investor
e offer written materials
By Inquired of the progress of assets
Office of the Individu Individual
04/11/2017 telephon reorganization and relisting time and didn’t
Company al investor
e offer written materials
By Inquired of the progress of assets
Office of the Individu Individual
04/14/2017 telephon reorganization and relisting time and didn’t
Company al investor
e offer written materials
By Inquired of the relevant matters of Annual
Office of the Individu Individual
04/20/2017 telephon Meetings of Shareholders and didn’t offer
Company al investor
e written materials
By Inquired of the progress of assets
Office of the Individu Individual
05/10/2017 telephon reorganization and relisting time and didn’t
Company al investor
e offer written materials
By Inquired of the progress of assets
Office of the Individu Individual
05/25/2017 telephon reorganization and relisting time and didn’t
Company al investor
e offer written materials
By Inquired of the progress of assets
Office of the Individu Individual
06/09/2017 telephon reorganization and relisting time and didn’t
Company al investor
e offer written materials
By Inquired of the progress of assets
Office of the Individu Individual
06/22/2017 telephon reorganization and relisting time and didn’t
Company al investor
e offer written materials
Inquired of semi-annual operating conditions
By
Office of the Individu Individual of the Company, the progress of assets
06/30/2017 telephon
Company al investor reorganization, relisting time and didn’t offer
e
written materials
21
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Section V Significant Events
I Annual and Special Meetings of Shareholders Convened during the Reporting Period
1. Meetings of Shareholders Convened during the Reporting Period
Investor Convened Disclosure
Meeting Type Index to disclosed information
participation ratio date date
2016 Annual Annual Resolutions of 2016 Annual Meeting
04/25/201
Meeting of Meeting of 63.55% 04/26/2017 of Shareholders disclosed on
7
Shareholders Shareholders www.cninfo.com.cn
2. Special Meetings of Shareholders Convened at Request of Preference Shareholders with Resumed Voting
Rights
□ Applicable √ Not applicable
II Proposal for Profit Distribution and Converting Capital Reserve into Share Capital for the
Reporting Period
□ Applicable √ Not applicable
For the Reporting Period, the Company plans not to distribute cash dividends or bonus shares or convert capital
reserve into share capital.
III Commitments of the Company’s Actual Controller, Shareholders, Related Parties and
Acquirer, as well as the Company and Other Commitment Makers, Fulfilled in the Reporting
Period or still Ongoing at Period-End
□ Applicable √ Not applicable
No such cases in the Reporting Period.
IV Engagement and Disengagement of CPAs Firm
Has the semi-annual financial report been audited?
□Yes √ No
This Semi-Annual Report is unaudited.
V Explanations Given by Board of Directors and Supervisory Board Regarding “Modified
Auditor’s Report” Issued by CPAs Firm for the Reporting Period
□ Applicable √ Not applicable
22
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
VI Explanations Given by Board of Directors Regarding “Modified Auditor’s Report” Issued
for Last Year
□ Applicable √ Not applicable
VII Bankruptcy and Restructuring
□ Applicable √ Not applicable
No such cases in the Reporting Period.
VIII Legal Matters
Significant lawsuits or arbitrations:
□ Applicable √ Not applicable
No such cases in the Reporting Period.
Other legal matters:
√Applicable □ Not applicable
Estimat
Amount
ed Index to
Lawsuit/ar involved Execution of Disclosure
liabiliti Progress Decision and influence disclosed
bitration (RMB’0, decision date
es or information
000)
not
① Business Tourism
Company had to pay for
the compensation
RMB36.62 million and the
relevant interest (from The applicant
September 14, 1998 to the has received
payment day) to Xi’an RMB15.20
Fresh Peak Company million. Now
within one month after the Business
judgment entering into Tourism
force. If the Business Company has
Tourism Company failed no executable Annual
to pay in time, it had to properties and Report
Xi’an
In pay double debt interests Xi’an 03/30/201 2016 (full
Project 2,100 No Joint
execution to Xi’an Fresh Peak Commission 7 text) on
Lawsuit
Company for the overdue on Commerce www.cninf
o.com.cn
period; ② Xi’an Joint has been
Commission on refusing to
Commerce had jointly and execute the
severally obligation of the ruling. It is
interests of the difficult to
compensation; . ③ recover the
Business Tourism rest.
Company shall bear
RMB227,500 of the
acceptance fee and the
security fee.
23
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
IX Punishments and Rectifications
□ Applicable √ Not applicable
No such cases in the Reporting Period.
X Credit Conditions of the Company as well as its Controlling Shareholder and Actual
Controller
□ Applicable √ Not applicable
XI Equity Incentive Plans, Employee Stock Ownership Plans or Other Incentive Measures for
Employees
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XII Significant Related Transactions
1. Related Transactions Relevant to Routine Operations
□ Applicable √ Not applicable
2. Related Transactions Regarding Purchase or Sales of Assets or Equity Interests
□ Applicable √ Not applicable
No such cases in the Reporting Period.
3. Related Transactions Regarding Joint Investments in Third Parties
□ Applicable √ Not applicable
No such cases in the Reporting Period.
4. Credits and Liabilities with Related Parties
□ Applicable √ Not applicable
No such cases in the Reporting Period.
5. Other Significant Related Transactions
□ Applicable √ Not applicable
No such cases in the Reporting Period.
24
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
XIII. Particulars about the Non-operating Occupation of Funds by the Controlling
Shareholder and Other Related Parties of the Company
□ Applicable √ Not applicable
The Company was not involved in the non-operating occupation of funds by the controlling shareholder and other
related parties during the Reporting Period.
XIV. Significant Contracts and Execution
1. Entrustment, Contracting and Leasing
(1) Entrustment
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(2) Contracting
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(3) Leasing
□ Applicable √ Not applicable
No such cases in the Reporting Period.
2. Significant Guarantees
□ Applicable √ Not applicable
No such cases in the Reporting Period.
3. Other Significant Contracts
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XV. Social Responsibilities
1. Targeted Measures Taken to Help People Lift Themselves Out of Poverty
(1) Outline of Targeted Measures in the Reporting Period
(2) List of Targeted Measures of Listed Companies in the Reporting Period
Indicator Measurement Number/Progress
25
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
unit
I. General condition —— ——
II. Itemized investment —— ——
1. Out of poverty by industrial development —— ——
2. Out of poverty by transferring employment —— ——
3. Out of poverty by relocating —— ——
4. Out of poverty by education —— ——
5. Out of poverty by improving health —— ——
6. Out of poverty by protecting ecological environment —— ——
7. Subsidy for the poorest —— ——
8. Social poverty alleviation —— ——
9. Other items —— ——
III. Received awards(contents and rank) —— ——
(3) Subsequent Targeted Measure Plans
2. Significant Environmental Protection
Indicate by tick mark whether the Company or any of its subsidiaries is a heavily polluting business identified by
the environmental protection authorities of China
No
XVI. Other Significant Events
√Applicable□ Not applicable
Because Shenzhen Investment Holdings Co., Ltd., the controlling shareholder of ShenZhen Special
Economic Zone Real Estate & Properties (Group) Co., Ltd. (“SPG” or the “Company”), were
planning a significant event that involved the Company, the Company’s stock (A-stock: stock name:
SPG A, stock code: 000029; B-stock: stock name: SPG B, stock code: 200029) has been suspended
since the opening of September 14, 2016. On September 30, 2016, the Company disclosed the
Announcement on Share Trading Suspension Due to Significant Asset Reorganization (No.
2016-025), and continued the suspension due to major assets reorganization since the market
opening on September 30, 2016.
The Company is organizing relevant intermediaries to conduct supplementary due diligence on the
parties to the reorganization of assets and trading, carry out supplementary audit and evaluation
work, and update the major asset restructuring plan or report (draft) and other relevant documents.
The major assets reorganization of the Company involves in the reform of state-owned enterprises
in Shenzhen with proposed purchase of large-scale assets and complex transaction structure. It is a
major precedent of certain particularity in the acquisition of asset size and scope. Thus, related job
requirements of the reorganization are high, and the Company still needs to communicate with
regulatory authorities for further discussion, demonstration and improvement. On the specific
circumstances of reorganization of the Company, please keep an eye on the Company's follow-up
announcements.
During the continued suspension, the Company will keep promoting the work of this major asset
reorganization with parties concerned, paying full attention to the progress of the issue and fulfilling
the obligation of timely information disclosure in strict accordance with the provisions and
requirements of relevant laws and regulations, that is, the Company will disclose the progress of
related matters at least every five trading days.
There is considerable uncertainty for the major assets restructuring prepared by the Company.
Investors are kindly reminded to pay attention to investment risk.
26
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
XVII. Significant Events of Subsidiaries
□ Applicable √ Not applicable
27
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Section VI Share Changes and Shareholders’ Profile
I. Share Changes
1. Share Changes
Unit: share
Before the change Increase/decrease (+/-) After the change
Capitaliz
Newly
Proporti Bonus ed Proporti
Amount issue Others Subtotal Amount
on shares Capital on
share
reserves
I. Restricted shares 0 0.00% 0 0 0 0 0 0 0.00%
1.Shares held by the
0 0.00% 0 0 0 0 0 0 0.00%
state
2. Shares held by
0 0.00% 0 0 0 0 0 0 0.00%
state-own Legal-person
3. Shares held by other
0 0.00% 0 0 0 0 0 0 0.00%
domestic investors
Among which: shares
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.Oversea
0 0.00% 0 0 0 0 0 0.00%
shareholdings
Among which: shares
held by oversea legal 0 0.00% 0 0 0 0 0 0 0.00%
person
Shares held by oversea
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. Oversea listed
0 0.00% 0 0 0 0 0 0 0.00%
foreign shares
4. Other 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
Reason for the change in shares
□ Applicable √ Not applicable
Approval of the change in shares
□ Applicable √ Not applicable
Transfers in share changes
□ Applicable √ Not applicable
Influence of share changes towards financial indexes in the latest year and latest period such as basic EPS and
28
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
diluted EPS, and net assets per share belonging to shareholder with ordinary share
□ Applicable √ Not applicable
Other contents that the Company thinks necessary or is asked by securities regulators to be disclosed
□ Applicable √ Not applicable
2. Changes in Restricted Shares
□ Applicable √ Not applicable
II. Issuance and Listing of Securities
□ Applicable √ Not applicable
III. Total Number of Shareholders and Their Shareholdings
Unit: share
Total number of preferred
Total number of stockholder with vote right
shareholders at the 76,442 0
restored (if any)（refer to
Reporting Period
note 8）
Shareholding of common shareholders holding more than 5% shares or the top 10 of common shareholders
Number Number Pledged or frozen shares
Increase Number
of of shares
and of shares
sharehol held
Holding decrease held
Name of Nature of ding at subject
percentag of shares subject to Status of
shareholder shareholder the end to Amount
e (%) during trading shares
of the trading
Reporting moratoriu
Reportin moratori
Period m
g Period um
Shenzhen
Investment State-owned 642,884, 642,884,2
63.55%
Holdings Co., corporation 262 62
Ltd
Shandong
Gold
Financial
Holding
Capital
Management Domestic
10,300,0 10,300,00
Co., Ltd. － non-state-owne 1.02%
00 0
Shandong d corporation
Gold
Financial
Holding
Sustaining
Fund 1
Domestic 3,246,94
Lu Zhigao 0.32% 3,246,949
individual 9
Domestic 1,286,70
Tan Shiqing 0.13% 1,286,701
individual 1
Yang Domestic 1,273,70
0.13% 1,273,700
Shuilian individual 0
29
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Yang Domestic 1,255,75
0.12% 1,255,750
Jianxiong individual 0
Central
Huijin Asset State-owned 1,165,50
0.12% 1,165,500
Management corporation 0
Co., Ltd.
Domestic 1,129,08
Peng Wei 0.11% 1,129,082
individual 2
Foreign 1,109,30
Wu Haoyuan 0.11% 1,109,300
individual 0
Guotai
Junan
Foreign 1,015,68
Securities 0.10% 1,015,683
corporation 3
(Hong Kong)
Limited
Strategic investors or the
general legal person due to the
placement of new shares N/A
become the top 10 common
shareholders (if any) (note 3)
The Company has found no related parties or act-in-concert parties as defined in
Explanation on associated
the Administrative Measures for Shareholding Changes in Listed Companies
relationship or/and persons
among the shareholders above.
Particulars about shares held by top 10 common shareholders not subject to trading moratorium
Number of shares held not subject to trading Type of share
Name of shareholder
moratorium at the end of the period Type of share Amount
Shenzhen Investment Holdings RMB ordinary
642,884,262 642,884,262
Co., Ltd shares
Shandong Gold Financial
Holding Capital Management
RMB ordinary
Co., Ltd. － Shandong Gold 10,300,000 10,300,000
shares
Financial Holding Sustaining
Fund 1
RMB ordinary
Lu Zhigao 3,246,949 3,246,949
shares
RMB ordinary
Tan Shiqing 1,286,701 1,286,701
shares
Yang Shuilian 1,273,700 1,273,700
Domestically
Yang Jianxiong 1,255,750 listed foreign 1,255,750
share
Central Huijin Asset RMB ordinary
1,165,500 1,165,500
Management Co., Ltd. shares
RMB ordinary
Peng Wei 1,129,082 1,129,082
shares
Domestically
Wu Haoyuan 1,109,300 listed foreign 1,109,300
shares
Domestically
Guotai Junan Securities
1,015,683 listed foreign 1,015,683
(Hong Kong) Limited
shares
Explanation on associated
relationship among the top ten The Company has found no related parties or act-in-concert parties as defined in
shareholders of tradable share the Administrative Measures for Shareholding Changes in Listed Companies
not subject to trading among the shareholders above.
moratorium, as well as among
30
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
the top ten shareholders of
tradable share not subject to
trading moratorium and top ten
shareholders, or explanation on
acting-in-concert
Particular about shareholder
Shareholder No. 4 holds all his shares in the Company in his account of
participate in the securities
collateral securities for margin trading. Shareholder No.3 holds some of his
lending and borrowing
shares in the Company in such an account.
business (if any) (note 4)
Whether the shareholders of a company conducted the transaction of repurchase under the agreement during the
Reporting Period
□ Yes √ No
There was no shareholder of a company conduct the transaction of repurchase under the agreement during the
Reporting Period.
IV. Change of the Controlling Shareholder or the Actual Controller
Change of the controlling shareholder during the Reporting Period
□ Applicable √ Not applicable
The controlling shareholder did not change during the Reporting Period.
Change of the actual controller during the Reporting Period
□ Applicable √ Not applicable
The actual controller did not change during the Reporting Period.
31
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Section VII Preference Shares
□ Applicable √ Not applicable
No preference shares in the Reporting Period.
32
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Section VIII Directors, Supervisors and Senior Management
I Changes in Shareholdings of Directors, Supervisors and Senior Management
□ Applicable √ Not applicable
No such cases in the Reporting Period. For details, see Annual Report 2016.
II Changes in Directors, Supervisors and Senior Management
√ Applicable □ Not applicable
Name Position Type Date Reason
Employee
Feng Hongwei Elected 03/02/2017 Elected by the congress of workers and staff
supervisor
Xiong Employee
Leave office 03/02/2017 Passed away because of illness
Xingnong supervisor
33
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Section IX Corporate Bonds
Are there any corporate bonds publicly offered and listed on the stock exchange, which were undue before the
approval date of this Report or were due but could not be redeemed in full?
No
34
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Section X Financial Report
Note 1.Audit Report
The semi annual report has not been audited.
Note 2.Financial Statements
The units in the financial statements are: RMB yuan
Consolidated Balance Sheet
As of 30 June 2017
Prepared by：SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd
Currency: RMB Yuan
Item Closing balance Opening balance
Current Assets：
Monetary funds 1,164,343,471.84 1,266,057,324.40
Notes receivable 16,405,895.50 20,606,778.91
Account receivables 183,877,575.95 108,298,050.40
Prepayments 24,607,282.73 15,865,139.33
Dividends receivable 1,052,192.76 1,052,192.76
Other receivables 81,089,530.53 67,514,794.65
Inventories 1,765,951,891.14 1,734,553,042.10
Other current assets 14,568,268.07 13,358,714.45
Total current assets 3,251,896,108.52 3,227,306,037.00
Non-current assets
Available- for- sale financial assets 17,464,240.74 17,464,240.74
Long-term equity investments 37,447,267.61 37,447,267.61
Investment properties 405,102,784.35 416,227,686.30
Fixed assets 42,507,617.00 45,531,813.41
Intangible assets 4,891,710.00 5,146,080.00
Long-term deferred assets 661,163.81 695,720.30
Deferred tax assets 35,377,878.65 35,781,937.87
Other non-current assets -- --
Total non-current assets 543,452,662.16 558,294,746.23
TOTAL ASSETS 3,795,348,770.68 3,785,600,783.23
35
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Consolidated Balance Sheet
As at 30 June 2017
Prepared by：SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Currency: RMB Yuan
Item Closing balance Opening balance
Current liabilities:
Short-term loans 143,560,032.01 111,709,916.44
Notes payable -- --
Accounts payable 104,379,487.80 168,614,299.95
Deferral 221,308,424.08 325,851,112.54
Employee benefits payable 31,237,063.39 38,949,995.06
Taxes payable 81,953,235.13 65,765,997.90
Interest payables 16,535,277.94 17,142,210.94
Other payables 373,768,457.86 358,208,718.03
Non-current liabilities due within one year 44,000,000.00 37,234,933.67
Total current liabilities 1,016,741,978.21 1,123,477,184.53
Non-current liabilities:
Long-term loans 114,000,000.00 136,000,000.00
Long-term payables 9,388,738.81 10,156,728.82
Total non-current liabilities 123,388,738.81 146,156,728.82
Total liabilities 1,140,130,717.02 1,269,633,913.35
Owners' equity：
Share capital 1,011,660,000.00 1,011,660,000.00
Capital reserve 978,244,910.11 978,244,910.11
Less: treasury shares
Other comprehensive income 12,088,591.37 10,652,531.69
Surplus reserve 59,394,668.24 59,394,668.24
Undistributed profit 721,134,934.89 583,908,333.05
Total owners' equity attributable to parent company 2,782,523,104.61 2,643,860,443.09
Minority interests -127,305,050.95 -127,893,573.21
Total owners’ equity 2,655,218,053.66 2,515,966,869.88
Total liabilities and owners’ equity 3,795,348,770.68 3,785,600,783.23
Legal representative: Zhou Jianguo Person in charge of accounting: Tang Xiaoping
Person in charge of accounting organ:Qiao Yanjun
36
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Balance Sheet
As at 30 June 2017
Currency: RMB Yuan
Item Closing balance Opening balance
Current assets
Monetary funds 808,062,651.48 818,261,250.52
Accounts receivable 53,660,340.96 7,327,250.98
Prepayments 21,794.87 --
Dividends receivable 169,393,952.18
Other receivables 853,696,899.50 844,149,690.07
Inventories 469,776,083.61 538,828,597.52
Other current assets 92,644.87 1,884,516.01
Total current assets 2,354,704,367.47 2,210,451,305.10
Non-current Assets:
Available-for-sale financial assets 12,000,000.00 12,000,000.00
Long-term equity investments 297,461,748.63 297,461,748.63
Investment properties 351,416,063.75 360,712,864.13
Fixed assets 25,550,230.11 26,785,752.21
Intangible assets 165,600.00 331,200.00
Long-term deferred assets 539,643.12 623,881.08
Deferred tax assets 3,313,320.43 3,313,320.43
Other non-current assets -- --
Total non-current assets 690,446,606.04 701,228,766.48
Total Assets 3,045,150,973.51 2,911,680,071.58
37
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Balance Sheet (Continued)
As at 30 June 2017
Currency: RMB Yuan
LIABILITIES AND OWNERS' EQUITY Closing balance Opening balance
Current liabilities:
Short-term loans -- --
Account payable 20,457,214.77 32,687,289.94
Deferral 93,435.00 96,638,512.60
Employee benefits payable 14,232,241.65 16,433,909.11
Taxes payable 38,999,069.56 30,504,993.33
Interest payable 16,535,277.94 17,142,210.94
Other payables 229,599,552.03 232,434,218.15
Non-current liability due within one year 44,000,000.00 37,234,933.67
Other current liability -- --
Total current liabilities 363,916,790.95 463,076,067.74
Non-current liabilities：
Long-term loans 114,000,000.00 136,000,000.00
Total non-current liabilities 114,000,000.00 136,000,000.00
Total liabilities 477,916,790.95 599,076,067.74
Owners' equity:
Share capital 1,011,660,000.00 1,011,660,000.00
Capital reserve 978,244,910.11 978,244,910.11
Surplus reserve 36,265,054.83 36,265,054.83
Undistributed profit 541,064,217.62 286,434,038.90
Total owners' equity attributable to parent company 2,567,234,182.56 2,312,604,003.84
Total liabilities and owners' equity 3,045,150,973.51 2,911,680,071.58
38
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Consolidated Income Statement
For the First half year of 2017
Currency: RMB Yuan
Amount for the Amount for the
Item
current period prior period
Ⅰ. Total operating income 731,306,982.03 1,097,886,969.68
Including: Operating income 731,306,982.03 1,097,886,969.68
Ⅱ. Total operating Costs 547,779,579.99 922,612,373.38
Including: Operating costs 494,949,797.89 816,027,244.11
Tax and surcharge 23,913,311.23 86,368,209.71
Selling expenses 6,832,803.76 5,107,741.43
Administrative expense 24,719,238.69 26,957,331.77
Financial expense -2,635,571.58 -7,048,153.64
Impairment losses of assets -- -4,800,000.00
Add: Gains from changes in fair value ("-" means loss) -- --
Investment income ("-" means loss) 650,000.00 625,209.41
Including: Investment income from associates and joint venture -63,790.59
Ⅲ. Operating profit ("-" means loss) 184,177,402.04 175,899,805.71
Add: Non-operating income 317,021.43 5,213,457.94
Including: Gains from disposal of non-current assets -- --
Less: Non-operating expenses 121,613.79 100,577.40
Including: Loss on disposal of non-current assets 58,187.56 2,647.50
Ⅳ .Total profit ("-" means loss) 184,372,809.68 181,012,686.25
Less: Income tax expenses 47,173,139.72 46,284,687.48
Ⅴ . Net profit ("-" means loss) 137,199,669.96 134,727,998.77
Net attributable to owners of parent company 137,226,601.84 134,761,121.51
Minority interests -26,931.88 -33,122.74
Ⅵ . After-tax net of other comprehensive incomes 2,051,513.82 -2,241,980.77
After-tax net of other comprehensive incomes owned by owner of the
parent company 1,436,059.68 -1,569,386.54
(I)Other comprehensive incomes that cannot be classified into profit
and loss in the future -- --
(II)Other comprehensive incomes that would be classified into profit
and loss in the future 1,436,059.68 -1,569,386.54
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 statement 1,436,059.68 -1,569,386.54
Net of tax from other comprehensive incomes owned by minority
stockholders 615,454.14 -672,594.23
Ⅶ . Total comprehensive income 139,251,183.78 132,486,018.00
Total comprehensive income attributable to owners of parent company 138,662,661.52 133,191,734.97
39
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Amount for the Amount for the
Item
current period prior period
Total comprehensive income attributable to minority interests 588,522.26 -705,716.97
Ⅷ .Earnings per share -- --
Basic Earnings per share 0.1356 0.1332
Diluted Earnings per share 0.1356 0.1332
The net profit realized by the merged party before the merger is 0 yuan In the event of business combination under
the same control during this period, net profit realized by the merged party on the previous period is 0 yuan.
Legal representative: Zhou Jianguo Person in charge of accounting: Tang Xiaoping
Person in charge of accounting organ:Qiao Yanjun
40
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Income Statement
For the First half year of 2017
Currency: RMB Yuan
Amount for the current Amount for the prior
Item
period period
I. Total operating income 229,557,159.39 312,137,584.07
Less: Operating cost 111,270,162.44 180,246,091.18
Tax and surcharge 5,845,366.82 33,549,009.04
Selling expenses 964,585.37 2,389,189.40
Administrative expense 11,294,643.69 13,326,156.37
Financial expense -12,619,614.38 -10,461,577.56
Impairment losses of assets -- -4,800,000.00
Add: Gain from changes in fair value ("-" means loss) -- --
Investment income ("-" means loss) 170,043,952.18 625,209.41
Including: Investment income from associates and joint venture -- -63,790.59
II. Operating profit ("-" means loss) 282,845,967.63 98,513,925.05
Add: Non-operating income 2.69 5,011,250.66
Including: gains from disposal of non-current assets -- --
Less: Non-operating expenses 12,574.69 19,500.00
Including: Loss from disposal of non-current assets -- --
III. Total profit ("-" means loss) 282,833,395.63 103,505,675.71
Less: Income tax expenses 28,203,216.91 25,727,865.80
IV.Net profit ("-" means loss) 254,630,178.72 77,777,809.91
V.Other comprehensive income -- --
VI.Total comprehensive income 254,630,178.72 77,777,809.91
Ⅷ.Earnings per share
Basic Earnings per share 0.2517 0.0768
Diluted Earnings per share 0.2517 0.0768
41
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Consolidated Cash Flow Statement
For the First half year of 2017
Prepared by：SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Currency: RMB Yuan
Amount for the Amount for the
Items
current period prior period
Ⅰ. Cash Flow from Operating Activities：
Cash received from sales of goods or rendering of services 620,215,163.04 1,212,918,536.86
Refund of taxes and levies --
Cash received relating to other operating activities 25,245,970.46 44,769,823.54
Sub-total of Cash Inflows 645,461,133.50 1,257,688,360.40
Cash paid for goods and services 510,142,331.49 564,049,988.12
Cash paid to and on behalf of employees 77,473,040.09 72,485,115.73
Cash paid on taxes and levies 85,002,656.01 157,912,370.17
Cash paid relating to other operating activities 70,543,803.10 37,072,905.62
Sub-total of Cash Outflows 743,161,830.69 831,520,379.64
Net Cash Flows from Operating Activities -97,700,697.19 426,167,980.76
Ⅱ. Cash Flows from Investing Activities:
Cash received from return of investments -- --
Cash received investing income 650,000.00 689,000.00
Net cash received from disposal of fixed assets,
14,976.00 -2,100.00
intangible assets and other long assets"
Net cash flows from disposal subsidiary and other operating unite -- --
Other cash received relating to investing activities -- --
Sub-total of Cash Inflows 664,976.00 686,900.00
Cash paid to acquire fixed assets, intangible assets and other long assets 240,065.49 707,167.34
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 240,065.49 707,167.34
Net Cash Flows from Investing Activities 424,910.51 -20,267.34
Ⅲ. Cash flow from Financing Activities
Cash received from investments -- --
Including: Cash received from investments by minority interests of
-- --
subsidiaries
Cash received from borrowing 20,900,000.00 12,000,000.00
Cash received from issuing bonds -- --
Other cash received relating to Financing activities -- --
Sub-total of Cash Inflows 20,900,000.00 12,000,000.00
Cash repayments on borrowed amounts 20,216,016.22 96,321,590.52
Cash payments for distribution of dividends or profits 4,875,421.66 15,142,677.89
Including: Dividends or profit paid to minority interests of subsidiaries -- --
Cash payments on other financing activities -- --
Sub-total of cash Outflows 25,091,437.88 111,464,268.41
Net cash flows from financing activities -4,191,437.88 -99,464,268.41
Ⅳ. Effect of foreign exchange rate on cash -246,628.00 247,567.55
Ⅴ. Net increase in cash and cash equivalents -101,713,852.56 326,931,012.56
Add: cash equivalents at the beginning of the period 1,265,767,290.57 1,169,756,306.36
1,164,053,438.0
Ⅵ. Cash equivalents at the end of the period 1,496,687,318.92
1
42
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Cash Flow Statement
For the First half year of 2017
Prepared by：SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Currency: RMB Yuan
Amount for the current Amount for the prior
Item
period period
Ⅰ. Cash Flow from Operating Activities：
Cash received from sales of goods or rendering of services 98,370,357.73 397,674,177.93
Refund of taxes and levies --
Cash received relating to other operating activities 11,306,698.94 192,943,696.66
Sub-total of cash inflows 109,677,056.67 590,617,874.59
Cash paid for goods and services 35,773,557.77 55,812,480.05
Cash paid to and on behalf of employees 20,853,392.88 17,319,567.98
Cash paid on taxes and levies 36,541,949.79 80,736,138.65
Cash paid relating to other operating activities 7,663,760.55 95,666,930.78
Sub-total of Cash Outflows 100,832,660.99 249,535,117.46
Net Cash Flows from Operating Activities 8,844,395.68 341,082,757.13
Ⅱ. Cash Flows from Investing Activities:
Cash received from return of investments -- --
Cash received investing income 650,000.00 689,000.00
Net cash received from disposal of fixed assets,
-- --
intangible assets and other long assets
Other cash received relating to investing activities -- --
Sub-total of Cash Inflows 650,000.00 689,000.00
Cash paid to acquire fixed assets, intangible assets and
48,675.00 21,395.00
other long assets
Cash paid on investments -- --
Cash paid on other investing activities -- --
Sub-total of cash outflows 48,675.00 21,395.00
Net Cash Flows from Investing Activities 601,325.00 667,605.00
Ⅲ. Cash flow from Financing Activities
Cash received from investments -- --
Cash received from borrowing -- --
Cash received from issuing bonds -- --
Cash received from other financing activities -- --
Sub-total of cash inflows -- --
Cash repayments on borrowed amounts 15,216,016.22 81,321,590.52
Cash payments for distribution of dividends or profits 4,413,190.66 14,396,606.42
Cash payments on other financing activities -- --
Sub-total of cash Outflows 19,629,206.88 95,718,196.94
Net cash flows from financing activities -19,629,206.88 -95,718,196.94
Ⅳ. Effect of foreign exchange rate on cash -15,112.84 14,432.03
Ⅴ.Net increase in cash and cash equivalents -10,198,599.04 246,046,597.22
Add: cash equivalents at the beginning of the period 818,261,250.52 852,492,165.42
Ⅵ. Cash equivalents at the end of the period 808,062,651.48 1,098,538,762.64
43
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
CONSOLIDATED STATEMENT OF CHANGE IN OWNER'S EQUITY
For the First half year of 2017
Prepared by：SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd. Currency: RMB Yuan
The amount in current year
Attribute to the equity of parent company
Other Minority Total owners'
Items Less: Generic
comprehensive Special Surplus Undistributed interests equity
Share capital Capital reserve Treasury risk
income reserve reserve profit
shares reserve
I. Balance at the end of last 1,011,660,000.00 978,244,910.11 -- 10,652,531.69 -- 59,394,668.24 -- 583,908,333.05 -127,893,573.21 2,515,966,869.88
period
Add: Changes of accounting -- -- -- -- -- -- -- -- -- --
policies
Prior year adjustments -- -- -- -- -- -- -- -- -- --
Corporate combination under -- -- -- -- -- -- -- -- -- --
common control
Others -- -- -- -- -- -- -- -- -- --
II. Balance at the Beginning of 1,011,660,000.00 978,244,910.11 -- 10,652,531.69 -- 59,394,668.24 -- 583,908,333.05 -127,893,573.21 2,515,966,869.88
the Year
III.Increase/Decrease
movements in this Year ("-" -- -- -- 1,436,059.68 -- -- -- 137,226,601.84 588,522.26 139,251,183.78
means loss)
(I) Total comprehensive income -- -- -- 1,436,059.68 -- -- -- 137,226,601.84 588,522.26 139,251,183.78
(II) Capital paid in and reduced -- -- -- -- -- -- -- -- -- --
by the shareholders
(III) Profit distribution -- -- -- -- -- -- -- -- -- --
1.Draw statutory surplus reserve -- -- -- -- -- -- -- -- -- --
2.Draw generic risk reserve -- -- -- -- -- -- -- -- -- --
3.Distribution to shareholders -- -- -- -- -- -- -- -- -- --
4.Others -- -- -- -- -- -- -- -- -- --
(IV)Internal carry-forward of -- -- -- -- -- -- -- -- -- --
shareholders’ equity
(V) Special Reserve -- -- -- -- -- -- -- -- -- --
(VI) Others -- -- -- -- -- -- -- -- -- --
IV. Balance at the end of the 1,011,660,000.00 978,244,910.11 -- 12,088,591.37 -- 59,394,668.24 721,134,934.89 -127,305,050.95 2,655,218,053.66
period
44
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
CONSOLIDATED STATEMENT OF CHANGE IN OWNER'S EQUITY
For the First half year of 2017
Prepared by：SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd. Currency: RMB Yuan
The amount brought from the previous year
Attribute to the equity of parent company
Other Minority Total owners'
Items Less: Generic
Capital Special Surplus Undistributed interests equity
Share capital Treasury comprehensive risk
reserve income reserve reserve profit
shares reserve
I.Balance at the end of last 1,011,660,000.00 978,244,910.11 -- 10,063,591.61 -- 40,823,841.35 -- 290,911,773.00 -128,256,319.64 2,203,447,796.43
period
Add: Changes of accounting -- -- -- -- -- -- -- -- -- --
policies
Prior year adjustments -- -- -- -- -- -- -- -- -- --
Corporate combination under -- -- -- -- -- -- -- -- -- --
common control
Others -- -- -- -- -- -- -- -- -- --
II. Balance at the Beginning of 1,011,660,000.00 978,244,910.11 -- 10,063,591.61 -- 40,823,841.35 -- 290,911,773.00 -128,256,319.64 2,203,447,796.43
the Year
III.Increase/Decrease
movements in this Year ("-" -- -- -- -1,569,386.54 -- -- -- 134,761,121.51 -705,716.97 132,486,018.00
means loss)
(I) Total comprehensive income -- -- -- -1,569,386.54 -- -- -- 134,761,121.51 -705,716.97 132,486,018.00
(II) Capital paid in and reduced -- -- -- -- -- -- -- -- -- --
by the shareholders
(III) Profit distribution -- -- -- -- -- -- -- -- -- --
1.Draw statutory surplus -- -- -- -- -- -- -- -- -- --
reserve
2.Draw generic risk reserve -- -- -- -- -- -- -- -- -- --
3.Distribution to shareholders -- -- -- -- -- -- -- -- -- --
4.Others -- -- -- -- -- -- -- -- -- --
(IV)Internal carry-forward of -- -- -- -- -- -- -- -- -- --
shareholders’ equity
(V) Special Reserve -- -- -- -- -- -- -- -- -- --
(VI) Others -- -- -- -- -- -- -- -- -- --
IV. Balance at the end of the 1,011,660,000.00 978,244,910.11 -- 8,494,205.07 -- 40,823,841.35 425,672,894.51 -128,962,036.61 2,335,933,814.43
period
45
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Statement of Changes in Owners’ Equity
For the First half year of 2017
Prepared by：SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd. Currency: RMB Yuan
The amount in current year
Less: Other Generic
Items Surplus Undistributed Total owners'
Share capital Capital reserve Treasury comprehensiv risk
reserve profit equity
shares e income reserve
ⅠBalance at the End of Last Period 1,011,660,000.00 978,244,910.11 -- -- 36,265,054.83 286,434,038.90 2,312,604,003.84
Add: Changes of accounting policies -- -- -- -- -- -- -- --
Prior year adjustments -- -- -- -- -- -- -- --
Corporate combination under common control -- -- -- -- -- -- -- --
Others -- -- -- -- -- -- -- --
II. Balance at the Beginning of the Year 1,011,660,000.00 978,244,910.11 -- -- 36,265,054.83 286,434,038.90 2,312,604,003.84
III. Increase/Decrease movements in this Year ("-" means loss) -- -- -- -- -- -- 254,630,178.72 254,630,178.72
(I) Total comprehensive income -- -- -- -- -- -- 254,630,178.72 254,630,178.72
(II) Capital paid in and reduced by the shareholders -- -- -- -- -- -- -- --
(III) Profit distribution -- -- -- -- -- -- -- --
1.Draw statutory surplus reserve -- -- -- -- -- -- -- --
2.Draw generic risk reserve -- -- -- -- -- -- -- --
3.Distribution to shareholders -- -- -- -- -- -- -- --
4.Others -- -- -- -- -- -- -- --
(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 -- -- 36,265,054.83 541,064,217.62 2,567,234,182.56
46
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Statement of Changes in Owners’ Equity
For the First half year of 2017
Prepared by：SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd. Currency: RMB Yuan
The amount brought from the previous year
Items Less: Other Generic
Capital Surplus Undistributed Total owners'
Share capital Treasury comprehensive risk
reserve reserve profit equity
shares income reserve
ⅠBalance at the End of Last Period 1,011,660,000.00 978,244,910.11 -- -- 17,694,227.94 -- 119,296,596.91 2,126,895,734.96
Add: Changes of accounting policies -- -- -- -- -- -- -- --
Prior year adjustments -- -- -- -- -- -- -- --
Corporate combination under common control -- -- -- -- -- -- -- --
Others -- -- -- -- -- -- -- --
II. Balance at the Beginning of the Year 1,011,660,000.00 978,244,910.11 -- -- -17,694,227.94 -- 119,296,596.91 2,126,895,734.96
III. Increase/Decrease movements in this Year ("-"
-- -- -- -- -- -- 77,777,809.91 77,777,809.91
means loss)
(I) Total comprehensive income -- -- -- -- -- -- 77,777,809.91 77,777,809.91
(II) Capital paid in and reduced by the shareholders -- -- -- -- -- -- -- --
(III) Profit distribution -- -- -- -- -- -- -- --
1.Draw statutory surplus reserve -- -- -- -- -- -- -- --
2.Draw generic risk reserve -- -- -- -- -- -- -- --
3.Distribution to shareholders -- -- -- -- -- -- -- --
4.Others -- -- -- -- -- -- -- --
(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 -- -- -17,694,227.94 -- 197,074,406.82 2,204,673,544.87
47
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Note 3 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 Aug 29th, 2017, which approved by Group’s Board of Directors.
27 units were consolidated into the Group for the first half year of 2017, detailed in this note. " Equities
in other entities". The company did not change the range of consolidation this year compared with last
year.
Note 4 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, 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
48
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
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 5 Important Accounting Policy And Accounting Estimates 3.1 Basis of Preparation
The company and its subsidiaries engaged in real estate development business. According to the
actual operational characteristics and the relevant enterprise accounting standards,the company and
its subsidiaries made a number of specific accounting policies and accounting estimates about
transactions and events in revenue recognition.For detail refer to Note 5.28 "revenue". For description
of significant accounting judgements and estimates made by management, refer to notes 5.34 for
"major accounting decisions and estimates".
5.1 Statement of Compliance with Accounting Standards
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 30 June 2017. 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).
5.2 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 June 30.
5.3 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.
5.4 Monetary Unit
Renminbi (RMB) is the currency of the primary economic environment in either Group & its domestic
subsidiaries or foreign subsidiary in HK. Therefore, the Group, the domestic subsidiaries and foreign
49
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
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.
5.5 Accounting Treatment Under Common/Non-common control
A business combination is a transaction or event that brings together two or more separate entities into
one reporting entity. Business combinations involve enterprises under common control and
non-common control.
(1) Business combination involving entities under common control
A business combination involving enterprises under common control is a business combination in
which all of the combining enterprises are ultimately controlled by the same party or parties both before
and after the combination, and that control is not transitory.
For a business combination involving enterprises under common control, the party that, on the
combination date, obtains control of another enterprise participating in the combination is the absorbing
party, while that other enterprise participating in the combination is a party being absorbed.
Combination date is the date on which the absorbing party effectively obtains control of the party being
absorbed.
The assets and liabilities obtained are measured at the carrying amounts as recorded by the enterprise
being 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
50
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
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 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 5.6(2)), a judgment about whether it is package deal or not should be made.
If it is package deal, please refer to the note 5.14 - 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
51
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
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 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 ).
5.6 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.
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
52
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
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 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
5.14-Long-term equity investment and 5.10-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
53
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
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 5.14(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.
5.7 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 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 5.14 (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
54
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
according to the share percentage by the Group.
5.8Cash 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.
5.9 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 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 other comprehensive income 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
55
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
statements denominated in foreign currencies” are recognized in other comprehensive income, and in
profit or loss for the period upon disposal of the foreign operation.
The Group translates the financial statements of its foreign operations into RMB by following rules;
1） Assets and liabilities in the balance sheet are translated at the spot exchange rate prevailing 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 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
56
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
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.
5.10 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:
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
57
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
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.
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
58
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
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 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
59
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
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 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.
60
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
If a part of the transferred financial asset qualifies for derecognition, the carrying amount of the
transferred financial asset is allocated between the part that continues to be recognized and the part
that is derecognized, based on the relative fair value of those parts. The difference between (a) the
carrying amount allocated to the part derecognized; and (b) the sum of the consideration received for
the part derecognized and any cumulative gain or loss allocated to the part derecognized which has
been previously recognized in other comprehensive income, is recognized in profit or loss.
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 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
61
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
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.
5.11 Account receivables
1) Provisions of bad debts in account receivables that is individually significant.
The judgment basis or standard of a
The Group treats account receivables over RMB 5,000,000.00 (including
single amount in account receivables
5,000,000.00) as individually significant item.
that is individually significant
For an account receivable that is individually significant, it will be
individually subject to an impairment test. If there is objective evidence
The method for calculating the indicating that the asset is impaired. The impairment loss is recognized in the
provision of bad debts in account profit and loss at the excess of carrying value over its predicted future cash
receivables that is individually flow (excluding the non-incurred future credit loss ) discounted with original
significant actual interest rate.
2) Provisions of bad debts in account receivables that is combined by credit risk characteristics
In combination,provision for bad debts by the aging analysis:
□ applicable √ Not applicable
In combination,provision for bad debts by using the balance percentage method :
□ applicable √ Not applicable
In combination, provision for bad debts by other means :
□ applicable √ Not applicable
3) Provisions of bad debts for accounts receivables that is individually insignificant.
62
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Signs indicated the impairment, such as long-aging,
The reason for individual provision of bad debt having a dispute with the obligator or obligator
suffering serious financial difficulties.
The method for calculating the provision of bad debts Individually test for impairment.
5.12 Inventories
(1) Classification of inventory
Inventory was classified according to real estate development and non-development of products. The
real estate development products are the real estate developing products, real estate developed
products and real estate which are going to be developed. The non-real estate development products
include raw materials, finished products and stocks, low-value consumable products and construction
in progress.
(2) Valuation method of inventories upon delivery
Inventories are initially carried at the actual cost. Cost of inventories comprises all costs of purchase,
costs of conversion and other costs. The actual cost of inventories transferred out is assigned by using
weighted average method, and development products by specific identification method.
(3) Basis for determining net realizable value of inventories and provision methods for decline in value
of inventories
Net realizable value is the estimated selling price in the ordinary course of business less the estimated
costs of completion, the estimated costs necessary to make the sale and relevant taxes. Net realizable
value is determined on the basis of clear evidence obtained, and takes into consideration the purpose
of holding inventories and effect of post balance sheet events.
At the balance sheet date, inventories are measured at the lower of the cost and net 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
63
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
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.
5.13 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.
5.14 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 5.10-Financial instruments for detail.
64
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
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.
(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
65
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
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
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
66
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
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
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 5.6 applies.
On disposal of a long-term equity investment, the difference between the proceeds actually received
and receivable and the carrying amount is recognized in its 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;
67
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
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 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.
5.15 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
68
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
decision from the Board (or similar organization) with clear indication for operating lease and intension
that no change shall be made in the near future, the buildings shall be presented as investment
properties.
An investment property is measured initially at cost. Subsequent expenditures incurred for such
investment property are included in the cost of the investment property if it is probable that economic
benefits associated with an investment property will flow to the Group and the subsequent expenditures
can be measured reliably. Other subsequent expenditures are recognized in profit or loss in the period
in which they are incurred.
The Group uses the cost method for subsequent measurement of investment property, and adopts a
depreciation or amortization policy for the investment property which consistent with that for building or
land use rights.
The detailed of impairment test methods for investment property and the methods for preparing
impairment reserves are in notes 5. 22.
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.
5.16 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. 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.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
69
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
service life in the end. The recognition of the classification, useful life and estimated residual rate are
as follows:
(2) The method for depreciation
Estimated
Depreciation
Category Depreciation method Expected useful life residual value
（%）
（%）
Building & construction Straight-line method 30 5 3.17
Machines & equipments Straight-line method 7 5 13.57
Vehicles Straight-line method 6 5 15.83
Electronic appliances Straight-line method 5 5 19.00
(3) Impairment test method for fixed assets and method for preparing impairment reserves and others
The details of method for Impairment test and preparing impairment reserves about fixed assets refer
to No 5.22-Long-term assets impairment.
A fixed asset is recognized only when the economic benefits associated with the asset will probably
flow to the Company and the cost of the asset can be measured reliably. Subsequent expenditure
incurred for a fixed asset that meet the recognition criteria shall be included in the cost of the fixed
asset, and the carrying amount of the component of the fixed asset that is replaced shall be
derecognized. Otherwise, such expenditure shall be recognized in profit or loss in the period in which
they are incurred.
The revenue from selling or transferring, or disposing a fixed asset is booked into profit and loss after
deduction of carrying value and related tax.
The Group conducts a review of useful life, expected net realizable value and depreciation methods of
the fixed asset at least on an annual base. Any change is regarded as change in accounting estimates.
5.17Construction 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.
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.
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 5.22-“long-term assets impairment”.
5.18Borrowing costs
Borrowing costs include interest on loans, amortization of discounts or premiums, ancillary costs, and
exchange differences arising from borrowing from foreign currencies. Borrowing costs capitalization
begins when its meet the circumtance that capital expenditure has occurred, borrowing costs have
70
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
already occurred and the purchase, construction or production activities necessary to enable the asset
to reach its intended, available or marketable status have started.The assets constructed or produced
stop capitalization when it in a predetermined state of use or in a marketable state.The remaining
borrowing costs are recognised as expenses during the current period.
The amount of interest charged for the actual borrowing of the current period shall be deducted on the
amount of the investment income obtained from the interest earned in the bank or the temporary
investment obtained from the unused loan funds.the occupied general borrowing is multiplied by the
capitalization rate which is determinde by the weighted average of the asset expenditures of the
accumulated asset expenditure over the specific borrowing portion.The capitalization rate is calculated
according to the weighted average interest rate of the general borrowing.
During the capitalization period, exchange differences related to a specific-purpose borrowing
denominating in foreign currency are all capitalized. Exchange differences in connection with
general-purpose borrowings are recognized in profit or loss in the period in which they are incurred.
Assets that meet capitalization requirements refer to assets such as fixed assets, investments, real
estate and inventories that require a considerable period of purchase or construction or production
activities to achieve the intended use or sale.
If the qualified assets in the acquisition and construction or production process is interrupted
abnormally, and the interruption lasts for more than 3 months,the capitalization of borrowing costs
suspended until the assets of the acquisition and construction or production activities starts.
5.19 Biological assets
5.20 Oil and gas assets
5.21 Intangible assets
(1) Recognition and calculation of intangible asset
The term “intangible asset” refers to the identifiable non-monetary assets without physical shape,
possessed or controlled by enterprises.
The intangible assets are initially measured by its cost. Expenses related to intangible assets, if the
economic benefits related to intangible assets are likely to flow into the enterprise and the cost of
intangible assets can be measured reliably, shall be recorded as cost of intangible assets. The
expenses other than this shall be booked in the profit or loss when they occur.
Land use rights that are purchased by the Group are accounted for as intangible assets. Buildings,
such as plants that are developed and constructed by the Group, and relevant land use rights and
buildings, are accounted for as intangible assets and fixed assets, respectively. Payments for the land
and buildings purchased are allocated between the land use rights and the buildings; if they cannot be
reasonably allocated, all of the land use rights and buildings are accounted for as fixed assets.
When an intangible asset with a definite useful life is available for use, its original cost less net residual
value and any accumulate impairment losses is amortized over its estimated useful life using the
straight-line method. An intangible asset with an indefinite useful life is not amortized.
71
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
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
Software 5 years Fixed assets, electronic and other 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) The expenditure of internal research and development project is divided into research stage,
expenditure and development stage.
Expenditure on the research phase of an internal research is recognized in profit & loss in the period in
which it is incurred.
Expenditure during the development phase that meets all of the following conditions at the same time is
recognized as intangible asset. Expenditure during development phase that does not meet the
following conditions is recognized in profit or loss for the period.
1) it is technical feasible to complete the intangible asset so that it will be available for use or sale;
2) the Group has the intention to complete the intangible asset and use or sell it;
3) the Group can demonstrate the ways in which the intangible asset will generate economic benefits
including the evidence of the existence of a market for the output of the intangible asset or the
intangible asset itself or, if it is to be used internally, the usefulness of the intangible asset;
4) the availability of adequate technical, financial and other resources to complete the development
and the ability to use or sell the intangible asset; and
5) the expenditure attributable to the intangible asset during its development phase can be reliably
measured.
If the expenditures cannot be distinguished between the research phase and development phase, the
Group recognizes all of them in profit or loss for the period.
(5) 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 5.22-Long-term assets impairment.
72
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
5.22 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; 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.
5.23 Long-term deferred assets
73
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
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.
5.24 Employee Benefits
(1)The accounting method of short-term 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 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.
(2)The accounting method of Welfare after demission
Welfare after demission mainly includes basic pension insurance, unemployment insurance and
annuities.Welfare after demission includes the defined contribution plan.For the defined contribution
plan,the appropriate amount to be deposited shall be included in the relevant asset costs or current
profits and losses at occurrence.
(3)The accounting method of termination benefits
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.
(4)Others
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.
74
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
5.25 Accrued liabilities
Accrued liabilities (or Provisions) are recognized when following obligations related to a contingency
are satisfied simultaneously. They are (a) such obligation is the present obligation of the Group, (b)it is
probable that an outflow of economic benefits will be required to settle the obligation, and (c) the
amount of the obligation can be measured reliably.
The amount recognized as a provision is the best estimate of the consideration required to settle the
present obligation at the balance sheet date, taking into account factors pertaining to a contingency
such as risks, uncertainties and time value of money.
Where all or some of the expenditure required to settle a provision is expected to be reimbursed by a
third party, the reimbursement is recognized as a separate asset only when it is virtually certain that
reimbursement will be received, and the amount of reimbursement recognized does not exceed the
carrying amount of the provision.
(1) Onerous contracts
An onerous contract is a contract in which the unavoidable costs of meeting the obligations under the
contract exceed the economic benefits expected to be received under it. The exceeding part over the
assets in the contract shall be recognized as a provision when an executor contract becomes an
onerous contract and the obligation arising under the onerous contract satisfies the requirements of
provisions.
(2) Restructuring Obligation
The amount of a restructuring provision shall be recognized by the total direct expenditures arising from
the restructuring when the enterprise has a detailed, formal plan for the restructuring, and a public
announcement of the plan has been made for restructuring and above requirements for the provision
mentioned above are satisfied.
[For the restructuring obligation carried for the portion of business for sale, the obligation related to the
restructuring can only be recognized when the Group has committed for the sales of portion of the
business (signing the selling agreement with termination)]
5.26 Share-based Payment
5.27 Other financial instruments, such as preferred stock, perpetual debt, etc.
5.28 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
75
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
satisfied the following four conditions at the same time:
A. Real estate is completed, and is completed checking and accepting;
B. Signed a contract of sale and make recording in land department
C. Installment, if it is deferred for receiving money with financing, the cost should be measured in
present value according to the contract price. Mortgage, has been received, and have completed the
first phase of the mortgage loan approval procedures;
D. Agreed in the contract of sale and transfer the property to buyers.
(2) Revenue from rendering service
When the outcome of a transaction involving the rendering of services can be estimated reliably at the
balance sheet date, revenue associated with the transaction is recognized using the percentage of
completion method, or otherwise, the revenue is recognized to the extent of costs incurred that are
expected to be recoverable. The stage of completion of a transaction for rendering services is
determined based on [survey of work performed / services performed to the date of as a percentage of
total services to be performed / the proportion that costs incurred to date bear to the estimated total
costs of the transaction]
The outcome of a transaction involving rendering of services can be estimated reliably when all of the
following conditions are satisfied:
1) the amount of revenue can be measured reliably;
2) it is probable that the associated economic benefits will flow to the Group;
3) the stage of completion of the transaction can be measured reliably;
4) the costs incurred and to be incurred for the transaction can be measured reliably.
If the outcome of a transaction involving rendering of services cannot be estimated reliably, the revenue
is recognized by the cost incurred and estimated compensation, and the actual cost is booked into
profit and loss. No revenue is recognized if the cost incurred cannot be recovered.
For contract or agreement entered between the Group and other enterprises with sales of goods and
rendering services, if part of goods selling and the part of rendering service can be separated and
measured individually, they are settled separately. If the part of goods selling and the part of rendering
service cannot be separated or they can be separated but cannot be measured individually, the parts in
the contract shall be treated as goods of selling.
(3) Revenue from construction contracts
Where the outcome of a construction contract can be estimated reliably, contract revenue and costs
are recognized using the percentage of completion method at the balance sheet date. The stage of
completion of a contract is determined using the proportion that actual contract costs incurred to date
bears to the estimated total contract costs.
The outcome of a construct contract can be measured reliably when the following conditions are met:
76
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
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.
5.29 Government Grants
(1) the judgment basis and accounting methods of government grants related to assets;
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.
Government grants related to assets are government grants that are acquired and used to build or form
long-term assets in other ways by the company .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.
(2) the judgment basis and accounting methods of government grants related to income;
Income related government grants are the government grants that the company receives to
compensate for the costs and losses incurred or would be incurred in the future.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.
77
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
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.
5.30 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 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
78
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
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.
5.31 Leases
(1) Operating Lease
①The Group as Lessee under Operating Lease
Lease payments under an operating lease are recognized by a lessee on a straight-line basis over the
lease term, and either included in the cost of the related asset or charged to profit or loss for the current
period. The contingent rents shall be recorded in the profit or loss of the period in which they actually
arise.
②The Group as Leaser under Operating Lease
Lease income from operating leases shall be recognized by the leaser in profit or loss on a straight-line
basis over the lease term. Initial direct cost of significance in amount shall be capitalized when incurred.
If another basis is more systematic and rational, that basis may be used. Contingent rents are credited
to profit or loss in the period in which they actually arise.
(2)Financing Lease
①The Group as Lessee under Operating Lease
For an asset that is held under a finance lease, at the lease commencement, the leased asset is
recorded at the lower of its fair value at the lease commencement and the present value of the
minimum lease payments, and the minimum lease payment is recorded as the carrying amount of the
long-term payables; the difference between the recorded amount of the leased asset and the recorded
amount of the payable is accounted for as unrecognized finance charge, Initial direct costs incurred by
the lessee during the process of negotiating and securing the lease agreement shall be added to the
amount recognized for the leased asset.
The net amount of minimum lease payment deducted by the unrecognized finance shall be separated
into long-term liabilities and long-term liability within one year for presentation.
Unrecognized finance charge shall be computed by the effective interest method during the lease term.
Contingent rent shall be booked into profit or loss when actually incurred.
②The Group as Leaser under Operating Lease
79
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
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.
5.32 Changes in other accounting policies and accounting estimates
There were no changes of other accounting policies and accounting estimations during this period.
5.33 Changes in major accounting policies and accounting estimates
(1)Changes in accounting policies
□Applicable √ Not applicable
(2)Changes in main accounting estimations
□Applicable √ Not applicable
5.34 Others
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,
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
80
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
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 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 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.
81
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
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 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 6 Principal Taxes Applied
Taxes and their rates
Category Taxable basis Tax rate
82
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Category Taxable basis Tax rate
Proceeds from sales of properties, leasing income,
Value added tax (“VAT”) property management income,Construction,
installation income 5%，3%，6%
Construction tax Turnover tax 7%
Income tax* Income tax payable 25% & 16.5%
Education surcharge(Local
Turnover tax 5%
Education surcharge)
Progressive rates ranging
Land appreciation tax Sales revenue of properties
from 30%-60%
Property tax The residual value 1.2%
*The rate of domestic enterprises is 25%, and the rate of HK enterprises is 16.5%.
The main products or services provided: commodity housing, property leasing and management, hotel
service, construction and installation service etc. As the inform No.36—pilot about business tax
replacing with VAT popularized (2016 Revision) ,issued by Finance and Taxation Ministry , the
categories and rates of VAT about The Group and its subsidiaries are as follow .
Tax rate before Business
Category of income The way of tax calculation Tax rate
Tax Replacing with VAT
Sales of properties Simply filling return 5% 5%
Construction, installation income Simply filling return 3% 3%
Rental income of Property Simply filling return 5% 5%
Income of Property Management Filling return generally 6% 5%
Note 7 Notes to the Consolidated Financial Statements
7.1 Monetary funds
Item Closing balance Opening balance
Cash on hand 57,189.68 33,954.55
Cash in bank 1,163,996,248.33 1,265,733,336.02
Other monetary funds 290,033.83 290,033.83
Total 1,164,343,471.84 1,266,057,324.40
Including amount deposited in the foreign countries 8,923,194.68 9,274,974.64
Note: (1)Other monetary funds that the Group’s ownership are the deposits about letter of guarantee
setting up by bank.
7.2Financial instrument assets measured at fair value with its changes into profit and loss
7.3Derivative financial assets
83
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
□ Applicable Not Applicable
7.4Note receivables
(1)Note receivables by types
Item Closing balance Opening balance
Bank acceptance -- --
Trade acceptance 16,405,895.50 20,606,778.91
Total 16,405,895.50 20,606,778.91
(2)Note receivables pledged at the end of term
At the end of term, there were no any note receivables which had been pledged.
(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 -- 16,405,895.50
Total -- 16,405,895.50
Note: As of June 30,2017, the trade acceptance discounted but not matured is RMB16,405,895.50, the
balance of related pledged borrowing is 16,405,895.50 (referring to the note 7.31).
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.
7.5Accounts receivables
(1) Accounts receivable by categories
Closing balance
Category Carrying amount Bad debt provision
book value
Amount (%) Amount (%)
Accounts receivable of which
provision for bad debts is of -- -- -- --
individually significant
Accounts receivable of which
provision for bad debts is of 203,121,233.46 100.00% 19,243,657.51 9.45% 183,877,575.95
individually insignificant
Total 203,121,233.46 100.00% 19,243,657.51 9.45% 183,877,575.95
(Continued)
84
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Opening balance
Category Carrying amount Bad debt provision
book value
Amount (%) Amount (%)
Accounts receivable of which
provision for bad debts is of -- -- -- -- --
individually significant
Accounts receivable of which
provision for bad debts is of 127,541,707.91 100.00 19,243,657.51 15.09 108,298,050.40
individually insignificant
Total 127,541,707.91 100.00 19,243,657.51 15.09 108,298,050.40
(2)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 period.
(3) There were no any significant account receivables which had been written off in this period.
(4) 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 (%)
Corporate unit No.1 Un-related party 53,824,539.46 Within 1 year 26.50
Corporate unit No.2 Un-related party 26,618,769.11 Within 1 year 13.10
Corporate unit No.3 Un-related party 21,747,051.94 Within 1 year 13.10
Individual No.1 Un-related party 12,410,000.00 Within 1 year 6.11
Individual No.2 Un-related party 9,550,000.00 Within 1 year 4.70
Total 124,150,360.51 63.52
(5) There were no any account receivables due to termination of the transfer of financial assets during
this period.
(6) There were non transferred accounts receivable and continued involvement in the formation of
assets and liabilities during this period.
Details of pledge of accounts receivable are as follows: Note 7.77 and Note 10.2
7.6Prepayments
(1) Aging analysis
Closing balance Opening balance
Aging
Amount (%) Amount (%)
Within 1 year 24,606,521.28 100.00% 15,864,377.88 100.00
1-2 years -- -- -- --
2-3 years -- -- -- --
85
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Over 3 years 761.45 -- 761.45 --
Total 24,607,282.73 -- 15,865,139.33 --
(2) Top 5 entities with the largest balances of prepayments
Name of entities Relationship with the Group Amount Timing Reasons for unsettlement
9,903,967.12 The un-settled prepayment of
Project 1 Un-related party Within 1 year engineering materials and
materials un-warehousing
1,939,611.38 The un-settled prepayment of
Project 2 Un-related party Within 1 year engineering materials and
materials un-warehousing
1,769,955.00 The un-settled prepayment of
Project 3 Un-related party Within 1 year engineering materials and
materials un-warehousing
1,739,932.43 The un-settled prepayment of
Project 4 Un-related party Within 1 year engineering materials and
materials un-warehousing
1,016,389.50 The un-settled prepayment of
Project 5 Un-related party Within 1 year engineering materials and
materials un-warehousing
Total 16,369,855.43
7.7 Interest receivable
7.8 Dividends receivable
(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
(2) Dividends receivable aging over 1year
Reasons for Whether the amount is
Closing
Item(Or name of investee) Aging uncollected impaired and the base of
balance
amounts judgment
Yunnan KunPeng Flight service Co., Ltd 1,052,192.76 4-5 years Delay to pay No
Total 1,052,192.76
7.9 Other receivables
(1) Other receivables by categories
86
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Closing balance
Category Carrying amount Bad debt provision
Book value
Amount (%) Amount (%)
Other receivables of which
provision for bad debts is of 153,393,321.71 57.85 153,237,764.83 99.90 155,556.88
individually significant
Other receivables of which
provision for bad debts is of 111,747,084.57 42.15 30,813,110.92 27.57 80,933,973.65
individually insignificant
Total 265,140,406.28 100.00 184,050,875.75 69.42 81,089,530.53
(Continued)
Closing balance
Category Carrying amount Bad debt provision
Book value
Amount (%) Amount (%)
Other receivables of which
provision for bad debts is of 153,572,058.35 61.05 153,237,764.83 99.78 334,293.52
individually significant
Other receivables of which
provision for bad debts is of 97,993,612.05 38.95 30,813,110.92 31.44 67,180,501.13
individually insignificant
Total 251,565,670.40 100.00 184,050,875.75 73.16 67,514,794.65
Bad debt provision of other receivables which is of individually significant
Content of accounts Amount of bad Proportion of
Carrying amount Reasons for the provision
receivable debt provision
Other receivables between A separate provision is established
subsidiaries that are not according to the recoverability of
129,039,776.11 129,039,776.11 100.00%
included in the each receivables with long aging
consolidated statement and little retrievability
Others 24,353,545.60 24,197,988.72 99.36%
Total 153,393,321.71 153,237,764.83 --
(2) There were no other receivables had been fully collected or reversed back during the current period.
(3) There were no any other material receivables written off during the current period.
(4)Other receivables by nature
Nature Closing balance Opening balance
87
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Other receivables between subsidiaries that
129,039,776.11 131,022,651.26
are not included in the consolidated statement
Others 136,100,630.17 120,543,019.14
Total 265,140,406.28 251,565,670.40
(5)Top 5 entities with the largest balances of other receivables
Proportion of Provision for
Name of entity Nature Amount Age the amount to bad debt at
the total OR (%) year end
Canada Great
current account 89,035,748.07 Above 5 years 33.58 89,035,748.07
Wall( Vancouver) Co.,Ltd *
Paklid Limited * current account 19,299,472.87 Above 5 years 7.28 19,299,472.87
Bekaton property Limited * current account 12,559,290.58 Above 5 years 4.74 12,559,290.58
Guangdong province
Huizhou Luofu Hill Mineral current account Above 5 years 3.95 10,465,168.81
10,465,168.81
Water Co.,Ltd
ShenFang Construction
current account 8,327,180.71 Above 5 years 3.14 8,327,180.71
and Decoration Co.,Ltd
Total 139,686,861.04 52.68 139,686,861.04
(6) There were no any other receivables about government subsidies that have been involved.
(7) There were no any other receivables due to the transfer of financial assets that have been
derecognized.
(8) There were no any other receivables which had transferred to continued involvement in assets or
liabilities.
7.10 Inventory
(1) Categories of inventory
Closing balance
Item
Carrying amount Provision for inventories Net carrying amount
Real estate development projects
Real estate developing products 1,266,820,026.47 -- 1,266,820,026.47
Real estate developed products 429,302,593.86 715,234.71 428,587,359.15
Non real estate development projects
Raw materials 877,232.66 -- 877,232.66
Finished products 365,059.56 278,891.91 86,167.65
Low-value consumable products -- -- --
88
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Closing balance
Item
Carrying amount Provision for inventories Net carrying amount
Construction in progress 69,581,105.21 69,581,105.21
Total 1,766,946,017.76 994,126.62 1,765,951,891.14
(Continued)
Opening balance
Item
Carrying amount Provision for inventories Net carrying amount
Real estate development projects
Real estate developing products 1,073,019,786.16 -- 1,073,019,786.16
Real estate developed products 628,939,860.63 3,170,419.94 625,769,440.69
Non real estate development projects
Raw materials 877,232.66 -- 877,232.66
Finished products 365,059.56 278,891.91 86,167.65
Low-value consumable products -- -- --
Construction in progress 34,800,414.94 -- 34,800,414.94
1,738,002,353.9
Total 3,449,311.85 1,734,553,042.10
5
Real estate developing products and its Capitalization
Increase
Among：
(Real Accumul
Estimat Capitaliz
Starti estate ated
Finished ed total Opening Closing ation of Funds
ng developi amount
time investm balance balance interest provided
time ng of
ent in this
products interest
period
) capitaliz
ation
ChuanQi
DongHu
201 149,23 Bank
Building(From 2018.12.2 73,200 132,866 16,365, 4,811,3
6.06 2,287.4 -- Loan;ot
er 1 .00 ,426.21 861.19 27.74
.20 0 her
DongHuDiJing
Building)
JingTian 201 2017.12.3 24,685.0 84,830,62 14,856,5 99,687,1 1,408,81 -- Bank
89
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Increase
Among：
(Real Accumul
Estimat Capitaliz
Starti estate ated
Finished ed total Opening Closing ation of Funds
ng developi amount
time investm balance balance interest provided
time ng of
ent in this
products interest
period
) capitaliz
ation
Heaven 5.09 1 0 4.67 42.10 66.77 9.10 Loan;ot
International .28 her
Apartment
Shengfang 201
2018.03.1 57,000.0 264,012,5 74,886,3 338,898, 7,970,35 4,776,38
CuiLin 5.12 Other
8 0 63.15 28.23 891.38 4.61 8.91
Building .10
201
2017.12.3 79,801. 406,736,8 87,120,6 493,857, 13,869,1 10,675,2
TianYue Bay 5.07 Other
1 00 28.44 50.60 479.04 94.88 29.18
No.1 .17
201
65,275. 159,731,3 570,858. 160,302,
TianYue Bay 8.01 -- -- Other
40 69.75 19 227.94
No.2 .01
ShanTou
24,841,97 24,841,9
Fresh Peak -- -- -- Other
3.94 73.94
Building
299,958 1,073,019 193,800, 1,266,82 28,059,6 15,451,6
—
Total .40 ,786.16 240.31 0,026.47 96.33 18.09
Real estate developed products
Name of project Finished time Opening balance Additions Reductions Closing balance
Jinye Island Multi-tier villa 1997 38,933,768.09 -- -- 38,933,768.09
Jinye Island villa No.6 2007 2,961,996.22 18,490.73 -- 2,980,486.95
Jinye Island villa No.10 2010 21,314,854.70 -- 1,569,546.81 19,745,307.89
Jinye Island villa No.11 2008 12,378,814.65 87,966.33 -- 12,466,780.98
YueJing dongfang Project 2014 54,478,152.69 -- 14,865,723.84 39,612,428.85
Wenjing Garden 3,648,312.01 -- -- 3,648,312.01
Real Estate building 10,593,039.36 -- -- 10,593,039.36
90
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Name of project Finished time Opening balance Additions Reductions Closing balance
HuaFeng Building 1,631,743.64 -- -- 1,631,743.64
HuangPuXinCun 289,802.88 439,627.12 -- 729,430.00
XingHu Garden 156,848.69 -- -- 156,848.69
Chuanqishan Project 2013 304,062,761.98 -- 99,965,506.24 204,097,255.74
Shenfang Shanglin Garden 2014 178,185,208.67 -- 83,782,574.06 94,402,634.61
BeiJing Fresh Peak Buliding 304,557.05 -- -- 304,557.05
Total 628,939,860.63 546,084.18 200,183,350.95 429,302,593.86
(2)Movement of Provision of inventories
Provision of inventories by Nature
Increase Decrease
Item Opening balance Closing balance
Provision other Reversals Write-off
Real estate developed
3,170,419.94 -- -- 2,455,185.23 -- 715,234.71
products
Finished products 278,891.91 -- -- -- -- 278,891.91
Total 3,449,311.85 -- -- 2,455,185.23 -- 994,126.62
Provision of inventories by Project
Increase Decrease
Item Opening balance Closing balance
Provision other Reversals Write-off
Shenfang Shanglin Garden 3,170,419.94 -- -- 2,455,185.23 -- 715,234.71
Finished products 278,891.91 -- -- -- -- 278,891.91
Total 3,449,311.85 -- -- 2,455,185.23 -- 994,126.62
(3)The capitalization rate of borrowing costs in the ending balance of inventories
Capitalized borrowing cost at year end is RMB 45,782,070.06.The capitalization and capitalization
rates of each project are as follow：
Project Opening balance Additions Reductions Closing balance Capital
ization
rate
YueJing dongfang Project 1,100,799.33 -- 166,585.85 934,213.48 1.49
Chuanqishan Project 4,034,969.06 -- 2,882,120.76 1,152,848.30 5.66
Shenfang Shanglin Garden 5,157,897.45 -- 3,870,364.19 1,287,533.26 7.10
Shengfang CuiLin Building 3,193,965.70 4,776,388.91 -- 7,970,354.61 3.02
TianYue Bay No.1 26,074,291.68 10,675,229.18 -- 36,749,520.86 3.41
ChuanQi DongHu 4,811,327.74 -- -- 4,811,327.74 3.62
91
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Project Opening balance Additions Reductions Closing balance Capital
ization
rate
Building(Fromer
DongHuDiJing Building)
JingTian Heaven 1,408,819.10 -- -- 1,408,819.10 1.66
International Apartment
合计 45,782,070.06 15,451,618.09 6,919,070.81 54,314,617.34 5.33
(4)Restricted inventory
(5)Completed and unsettled assets resulting from the construction contract at the end of the period
Item Amount
Accumulated cost incurred 128,735,949.00
Accumulated gross profit 6,531,580.19
Amount already settled 50,206,445.85
Completed outstanding assets formed by the construction contract 85,061,083.34
The company don’t comply with the disclosure requirements of the Shenzhen stock exchange industry
information disclosure guideline No. fourth - listed companies engaged in seed industry and planting
business.
7.11Assets classified as held for sale
7.12Non current assets expiring within one year
7.13Other current assets
Item Closing balance Opening balance
Value added tax 9,098,639.10 6,960,582.51
Business tax 1,596,382.82 1,404,931.73
City construction surcharge 688,723.62 441,450.97
Education surcharge 347,643.21 162,693.21
Local education surcharge 234,420.65 154,330.63
Embankment Protection Fee 14,240.46 947,804.87
Increment tax on land value 2,588,218.21 1,286,920.53
Financial products of trust -- 2,000,000.00
Total 14,568,268.07 13,358,714.45
7.14Available-for-sale financial assets
(1) Details of available-for-sale financial assets
Item Closing balance Opening balance
92
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
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
93
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
(2)Available-for-sale financial assets measured by cost at year end
Book balance Provision for impairment Proportion
Curr. year
Investee Opening Closing rate in
Opening bal. Increase. Decrease Closing bal. increase decrease cash div.
bal. bal. investee（%）
Shantou Small &Medium Enterprises
12,000,000.00 -- -- 12,000,000.00 -- -- -- -- 10.00 689,000.00
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 -- -- -- -- 689,000.00
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.
7.15 Held-to-maturity investment
7.16 Long-term receivables
7.17 Long-term equity investments
(1) Long-term equity investments by types
Change amount of this year
Invested company Opening balance Additional Negative Profit and loss on investments Other comprehensive Other equity
investment investment confirmed with equity method income adjustment change
I.Joint ventures
Guangdong province Huizhou Luofu Hill Mineral
9,969,206.09 -- -- -- -- --
Water Co.,Ltd
Fengkai Xinhua Hotel 9,455,465.38 -- -- -- -- --
94
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Change amount of this year
Invested company Opening balance Additional Negative Profit and loss on investments Other comprehensive Other equity
investment investment confirmed with equity method income adjustment change
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 -- -- -- -- --
Subtotal 91,678,556.86 -- -- -- -- --
II.Affiliated enterprises
Shenzhen Ronghua JiDian Co.,ltd 1,468,913.70 -- -- -- -- --
Shenzhen Runhua Automobile trading Co.,Ltd 1,445,425.56 -- -- -- -- --
Subtotal 2,914,339.26 -- -- -- -- --
III.Other equity investments 186,256,480.74 -- -- -- -- --
Subtotal 186,256,480.74 -- -- -- -- --
Total 280,849,376.86 -- -- -- -- --
(Continuted)
Change amount of this year Provision for impairment
Invested company Ending balance
Invested company Change amount of this year Ending balance balance at year end
I.Joint ventures
Guangdong province Huizhou Luofu Hill Mineral Water Co.,Ltd -- -- -- 9,969,206.09 9,969,206.09
Fengkai Xinhua Hotel -- -- -- 9,455,465.38 9,455,465.38
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
95
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Dongyi Real Estate Co., Ltd -- -- -- 30,376,084.89 21,225,715.87
Subtotal -- -- -- 91,678,556.86 62,236,756.27
Change amount of this year Provision for impairment
Invested company Ending balance
Invested company Change amount of this year Ending balance balance at year end
II.Affiliated enterprises
Shenzhen Ronghua JiDian Co.,ltd -- -- -- 1,468,913.70 1,076,954.64
Shenzhen Runhua Automobile trading Co.,Ltd -- -- -- 1,445,425.56 1,445,425.56
Subtotal -- -- -- 2,914,339.26 2,522,380.20
III.Other equity investments -- -- -- 186,256,480.74 178,642,972.78
Subtotal -- -- -- 186,256,480.74 178,642,972.78
Total -- -- -- 280,849,376.86 243,402,109.25
The details of other equity investments are listed on note 9.1-Equity in subsidiaries.
96
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Investee Accounting Method Investment cost Opening balance Changes Closing balance Impairment provision
Shenzhen Shen Fang Industrial Development Co., Ltd Cost Method 4,500,000.00 4,500,000.00 -- 4,500,000.00 4,500,000.00
Shenzhen ZhongGang Haiyan Enterprise Ltd Cost Method 12,940,900.00 12,940,900.00 -- 12,940,900.00 12,940,900.00
Shenzhen Real Estate Consolidated Service Co., Ltd Cost Method 5,958,305.26 5,958,305.26 -- 5,958,305.26 5,958,305.26
Paklid Limited Cost Method 201,100.00 201,100.00 -- 201,100.00 201,100.00
Bekaton Property Limited Cost Method 906,630.00 906,630.00 -- 906,630.00 906,630.00
Shenzhen Tefa Real Estate Consolidated Service
Cost Method 8,180,003.63 8,180,003.63 -- 8,180,003.63 8,180,003.63
Co., Ltd
Shenzhen Xing Dongfang Store Ltd Cost Method 18,500,000.00 18,500,000.00 -- 18,500,000.00 18,500,000.00
Shenzhen City Shenfang Construction and
Cost Method 2,680,000.00 2,680,000.00 -- 2,680,000.00 2,680,000.00
Decoration Materials Ltd
Shenzhen Shenfang Department Store Co. Ltd Cost Method 10,000,000.00 10,000,000.00 -- 10,000,000.00 10,000,000.00
Shenzhen CyberPort Co., Ltd Cost Method 14,000,000.00 7,613,507.96 -- 7,613,507.96 --
Shantou Huafeng Building Cost Method 68,731,560.43 58,547,652.25 -- 58,547,652.25 58,547,652.25
Guangdong Province Fengkai Lain Feng Cement
Cost Method 121,265,000.00 56,228,381.64 -- 56,228,381.64 56,228,381.64
Manufacturing Co., Ltd
Total 267,863,499.32 206,636,006.42 -20,379,525.68 186,256,480.74 178,642,972.78
97
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
7.18 Investment properties
Investment properties measured at cost.
Construction in
Item House& building Land-use right Total
progress
I.Original carrying value
1.Opening balance 757,560,363.04 106,924,635.73 -- 864,484,998.77
2.Increase in the year -- -- -- --
3.Decrease in the year -- 2,506,262.91 -- 2,506,262.91
（1）Disposing -- -- -- --
（2）Other roll out -- -- -- --
（3）Others -- 2,506,262.91 -- 2,506,262.91
4.Closing balance 757,560,363.04 104,418,372.82 -- 861,978,735.86
II. Accumulative depreciation& amortization
1.Opening balance 346,370,730.15 -- -- 346,370,730.15
2.Increase in the year 10,675,645.95 -- -- 10,675,645.95
（1）Withdrawing or amortization 10,675,645.95 -- -- 10,675,645.95
（2）Carried over from assets -- -- -- --
3.Decrease in the year -- -- -- --
4. Closing balance 357,046,376.10 -- -- 357,046,376.10
III. Provision for impairment
1.Opening balance 14,128,544.62 87,758,037.70 -- 101,886,582.32
2.Increase in the year -- -- -- --
3.Decrease in the year -- 2,057,006.91 -- 2,057,006.91
（1）Disposing -- -- -- --
（2）Other roll out -- -- -- --
（3）Others -- 2,057,006.91 -- 2,057,006.91
4.Closing balance 14,128,544.62 85,701,030.79 -- 99,829,575.41
IV. Book value
1.Closing book value 386,385,442.32 18,717,342.03 -- 405,102,784.35
2.Opening book value 397,061,088.27 19,166,598.03 -- 416,227,686.30
Note:(a) Current year depreciation and amortization is RMB 10,675,645.95;
(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;
98
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
(c)Among the investment properties, there were house &building with carrying value RMB
288,568,109.69 that were used as mortgage of long-term loans(including the long-term loans that will
mature within one year), referring to note 7.76 for details.
7.19 Fixed assets
Houses& Transportation Electronic equipment
Item Total
Buildings equipment and others
I.Original carrying value
1.Opening balance 107,110,751.42 16,955,508.53 14,700,628.05 138,766,888.00
2. Increase in the year -- -- 250,648.72 250,648.72
（1）Purchasing -- -- 250,648.72 250,648.72
（2）Transferred from the construction in progress -- -- -- --
3. Decrease in the year -- 1,350,270.00 47,134.45 1,397,404.45
（1）Disposal or discard as useless -- 1,350,270.00 47,134.45 1,397,404.45
（2）Decrease of cooperation combination -- -- -- --
（3）Transferred to investment property -- -- -- --
4. Closing balance 107,110,751.42 15,605,238.53 14,904,142.32 137,620,132.27
II. Accumulated depreciation
1.Opening balance 68,954,824.16 12,886,994.04 11,393,256.39 93,235,074.59
2. Increase in the year 1,499,771.45 520,385.74 1,181,524.37 3,201,681.56
Including：withdrawing 1,499,771.45 520,385.74 1,181,524.37 3,201,681.56
3. Decrease in the year -- 1,279,463.15 44,777.73 1,324,240.88
（1）Disposal or discard as useless -- 1,279,463.15 44,777.73 1,324,240.88
（2）Decrease of corporate combination -- -- -- --
（3）Transferred to investment property -- -- -- --
4. Closing balance 70,454,595.64 12,127,916.59 12,530,003.04 95,112,515.27
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 36,656,155.78 3,477,321.94 2,374,139.28 42,507,617.00
99
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Houses& Transportation Electronic equipment
Item Total
Buildings equipment and others
2. Beginning book value 38,155,927.26 4,068,514.49 3,307,371.66 45,531,813.41
Note: (1)The depreciation for the current year is RMB 3,201,681.56.The disposal of fixed asset is RMB
1,397,404.45.
（2）There was no any fixed assets whose ownership are restricted.
（3）There was no any fixed assets lying idle temporary.
7.20 Construction in process
7.21 Construction materials
7.22 Liquidation of fixed assets
7.23 Biological assets
7.24 Oil and gas assets
7.25 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 1,900,640.00 1,563,080.00 3,463,720.00
2. Increase in the year 170,580.00 83,790.00 254,370.00
Including：withdrawing 170,580.00 83,790.00 254,370.00
3. Decrease in the year -- -- --
（1）Disposal -- -- --
（2）Decrease of corporate combination -- -- --
4. Closing balance 2,071,220.00 1,646,870.00 3,718,090.00
III. Provision for impairment --
100
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Item Software Taxi license Total
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 170,580.00 4,721,130.00 4,891,710.00
2. Beginning book value 341,160.00 4,804,920.00 5,146,080.00
7.26 Development expenditure
7.27 Goodwill
7.28 Long-term deferred assets
Item Opening balance Increase Amortization Other reductions Closing balance
Renovation costs 623,881.08 87,751.34 114,610.79 -- 597,021.63
Others 71,839.22 -- 7,697.04 -- 64,142.18
Total 695,720.30 87,751.34 122,307.83 -- 661,163.81
7.29 Deferred tax assets/Deferred tax Liability
(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
3,170,419.92 792,604.98 3,170,419.92 792,604.98
losses of assets
Eliminated unrealized profit
when consolidating financial 4,991,161.76 1,247,790.44 4,995,618.75 1,248,904.69
statement
Deductible loss 38,519,586.27 9,629,896.57 30,139,792.64 7,534,948.16
Expected profit for advances
14,118,236.27 3,529,559.07 24,109,809.80 6,027,452.45
from customers
Provision for land appreciation
80,712,110.35 20,178,027.59 80,712,110.35 20,178,027.59
tax liquidation reserves
Total 141,511,514.57 35,377,878.65 143,127,751.46 35,781,937.87
101
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
(2) Details of unrecognized deferred tax assets
Reciprocal amount of Ending balance of Reciprocal amount of Opening balance of
deferred income tax deferred income tax deferred income tax deferred income tax
Item
assets and liabilities at assets or liabilities after assets and liabilities at assets or liabilities
the terminal offsetting the beginning after offsetting
Deferred tax assets -- 35,377,878.65 -- 35,377,878.65
(3) Details of unrecognized deferred tax assets
Item Closing balance Opening balance
Deductible operating losses 2,295,692.70 2,295,692.70
Bad debt provision 49,203,437.93 49,203,437.93
Provision for impairment of long-term investments 60,850,527.31 60,850,527.31
Provision for impairment of investment properties 25,471,645.58 25,471,645.58
Total 137,821,303.52 137,821,303.52
(4) Unrecognized deductible losses of deferred tax assets will be expire at the end of following years
Year Closing balance Opening balance
2017 150,392.58 150,392.58
2018 1,665,661.89 1,665,661.89
2019 124,125.69 124,125.69
2020 9,717,123.98 9,717,123.98
2021 13,457,192.98 13,457,192.98
2022 -- --
Total 25,114,497.12 25,114,497.12
7.30 Other non-current assets
7.31 Short-term loans
Item Closing balance Opening balance
Entrusted loan -- --
Credit Loan 26,900,000.00 18,000,000.00
Mortgage Loan -- --
Pledged Loan 116,660,032.01 93,709,916.44
合计 143,560,032.01 111,709,916.44
Note:(1) Refer to note 7.4-Notes receivable for the details of pledged loan and note 7.76.
(2)There was no short term loan overdue which had not repaid
7.32 Financial liabilities measured by the fair value and changes recorded in the profit or loss
102
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
7.33 Derivative financial liabilities
7.34 Notes payable
7.35 Accounts payable
(1) Details of accounts payable
Item Closing balance Opening balance
Within 1 year 2,981,113.71 29,598,921.11
Over 1 year 101,398,374.09 139,015,378.84
Total 104,379,487.80 168,614,299.95
Significant accounts payable aged more than one year is for the unsettled project at the end of the
period.
Closing balance is RMB 104,379,487.80 which decreased by 38.10% comparing with the beginning
balance, mainly for the settlement of account payable about the developed product.
7.36 Advances from customers
(1) Details of advances from customers
Item Closing balance Opening balance
Within one year 148,565,089.08 307,957,346.19
Over one year 72,743,335.00 17,893,766.35
Total 221,308,424.08 325,851,112.54
(2)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.
(3)Completed and unsettled assets resulting from the construction contract at the end of the period
Item Amount
Accumulated cost incurred 128,735,949.00
Accumulated gross profit 6,531,580.19
Amount already settled 50,206,445.85
Completed outstanding assets formed by the construction contract 85,061,083.34
Details of advances from customers
Item Closing balance Opening balance Estimated time of completion
Jinye Island villa No.6 7,452,380.95 7,452,380.95 Completed
Jinye Island villa No.10 20,744,471.97 12,655,156.17 Completed
Jinye Island villa No.11 9,163,200.21 6,216,792.91 Completed
Shenfang Chuanqishan -- 96,545,077.60 Completed
Shenfang Shanlin Garden 693,109.00 71,252,710.00 Completed
TianYue Bay No.1 58,768,910.07 25,882,870.91 2017
103
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Yuejing dongfang 25,603,053.20 12,322,575.19 Completed
Total 122,425,125.40 232,327,563.73
7.37 Employee benefits payable
(1) Details of employee benefits payable
Item Opening balance Increase Decrease Closing balance
I.Short-term remuneration 38,751,315.00 73,517,555.89 81,067,788.11 31,201,082.78
II. Post-employment benefit-defined
198,680.06 7,197,625.83 7,360,325.28 35,980.61
benefit plans
III. Severance welfares -- -- -- --
IV. Other benefits due within 1 year -- -- -- --
Total 38,949,995.06 80,715,181.72 88,428,113.39 31,237,063.39
(2) Details of short-term remuneration
Item Opening balance Increase Decrease Closing balance
I.Salary, bonus, allowance and subsidies 36,873,428.94 67,119,856.94 74,414,501.88 29,578,784.00
II. Employee welfare -- -- -- --
III. Social insurance premium 1,103,162.47 2,238,967.13 2,239,571.68 1,102,557.92
Including: Medical insurance premium 1,102,449.06 1,951,400.04 1,952,357.32 1,101,491.78
Industries insurance premium 591.04 104,673.03 105,076.70 187.37
Maternity insurance premium 122.37 182,894.06 182,137.66 878.77
IV. Housing fund 93,186.50 3,033,960.03 3,126,172.03 974.50
V. Union expenses and employee education
681,537.09 1,124,771.79 1,287,542.52 518,766.36
expenditure
VI. Short-term paid absence -- -- -- --
VII. Short-term profit share plan -- -- -- --
Total 38,751,315.00 73,517,555.89 81,067,788.11 31,201,082.78
104
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
(3) The details of defined contribution plans
Item Opening balance Increase Decrease Closing balance
I. Basic endowment insurance premium 99,801.11 5,012,980.17 5,108,183.22 4,598.06
II. Unemployment insurance premium 520.80 174,152.46 173,908.86 764.40
III. Company annuity payment 98,358.15 2,010,493.20 2,078,233.20 30,618.15
Total 198,680.06 7,197,625.83 7,360,325.28 35,980.61
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.
7. 38 Taxes payable
Item Closing balance Opening balance
VAT 9,932,902.45 2,295,383.33
Corporate income tax 47,476,169.22 46,310,814.92
Individual income tax 676,681.46 1,063,872.01
Construction tax 724,667.81 140,826.84
Business tax 431,696.78 117,565.81
Property tax 1,742,011.80 1,707,091.48
Land appreciation tax 19,613,653.40 13,611,992.49
Education surcharge 409,164.34 93,226.93
Local Education surcharge 208,856.69 34,770.45
Others 737,431.18 390,453.64
Total 81,953,235.13 65,765,997.90
7.39 Interest payable
Item Closing balance Opening balance
Interest of long-term loans with interest payable by -- 606,933.00
installments and principle payable on maturity
Interest payable on short-term loans -- --
Others 16,535,277.94 16,535,277.94
Total 16,535,277.94 17,142,210.94
Note: The balance of “Other” interests payable due to Shenzhen Investment Holdings Co.，Ltd., being
accrued for the loans interst. Please refer refer to note 12.6 (2).
7.40 Dividends payable
105
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
7.41 Other payables
(1)Details of other payables
Item Closing balance Opening balance
Land appreciation tax accrued 171,207,827.06 164,866,771.56
Payable to related parties 14,398,496.70 14,398,496.70
Deposits 83,126,753.11 83,026,568.62
Others 105,035,380.99 95,916,881.15
Total 373,768,457.86 358,208,718.03
(2)Description of significant other payables aged more than one year
Name of entity Amount Reason for overdue
Tax accrued- land appreciation tax 171,207,827.06 Unexpired
Total 171,207,827.06
(3) 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 June 30, 2017, the closing balance is RMB 171,207,827.06.
7.42 Liabilities are held for sale
7.43 Non-current liabilities due within one year
Item Closing balance Opening balance
Long-term loans due within one year (Note 6.24) 44,000,000.00 37,234,933.67
Total 44,000,000.00 37,234,933.67
Details of non-current liabilities due within one year
The inception Opening
Lender Maturity date Currency Closing balance
of loans balance
Huashang Bank (Shenzhen
2015.5.7 2020.5.6 RMB 20,000,000.00 10,000,000.00
Branch)
Shenzhen Rural Commercial
2014.11.12 2019.11.11 RMB 24,000,000.00 24,000,000.00
Bank
Nanyang Commercial Bank 2007.5.29 2017.5.29 -- 3,234,933.67
RMB
(Shenzhen Branch)
Total 44,000,000.00 37,234,933.67
7.44 Other current liabilities
7.45 Long-term loans
(1) Long-term loans categories
106
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Item Closing balance Opening balance
Loan with mortgage 114,000,000.00 136,000,000.00
Total 114,000,000.00 136,000,000.00
(2)Top 5 significant long-term loans
The inception
Lender Maturity date Currency Closing balance Opening balance
of loans
Huashang Bank (Shenzhen Branch) 2015.5.7 2020.5.6 RMB 80,000,000.00 90,000,000.00
Shenzhen Rural Commercial Bank 2014.11.12 2019.11.11 RMB 34,000,000.00 46,000,000.00
Total 114,000,000.00 136,000,000.00
Note:①The 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.
②The closing balance is RMB 114,000,000.00,which dedected 16.18% compared with the beginning
balance ,mainly for the return of long-term borrowings at maturity.
7.46 Bonds payable
7.47 Long-term payables
Details of long-term payables
Item Closing balance Opening balance
Maintenance fund 9,388,738.81 10,156,728.82
Total 9,388,738.81 10,156,728.82
7.48 Long-term Employee benefits payable
7.49 Account payable special funds
7.50 Accrued liabilities
7.51 Deferred income
7.52 Other non current liabilities
7.53 Share capital
Changes for the period（+ 、-）
Newly Capitalization
Item Opening balance Bonus Closing balance
issued of surplus Other Subtotal
issued
shares reserve
1,011,660,000.0
Total shares 1,011,660,000.00 -- -- -- -- --
0
7.54 Other equity instruments
7.55 Capital surplus
Item Opening balance Increase Decrease Closing balance
Capital premium 557,433,036.93 -- -- 557,433,036.93
107
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Other capital reserve 420,811,873.18 -- -- 420,811,873.18
Total 978,244,910.11 -- -- 978,244,910.11
7.56 Treasury stock
7.57 Other comprehensive income
Amount incurred this year
Less: previous
Accrual Attributable Attributable
Opening years‘ OCI Less: Closing
Item before to parent to minority
balance transferred to income balance
income tax company shareholder
P&L in tax
this year after tax s after tax
current. period
I. Other
comprehensive
income that
could not be -- -- -- -- -- -- --
classified into
profit and loss
in the future
II. Other
comprehensive
income that
would be 10,652,531.69 2,051,513.82 -- -- 1,436,059.68 615,454.14 12,088,591.37
classified into
profit and loss
in the future
including：the
difference of
foreign
currency 10,652,531.69 2,051,513.82 -- -- 1,436,059.68 615,454.14 12,088,591.37
financial
statement
translation
Total 10,652,531.69 2,051,513.82 -- -- 1,436,059.68 615,454.14 12,088,591.37
7.58 Special reserve
7.59 Surplus reserve
Item Opening balance Increase Decrease Closing balance
108
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Item Opening balance Increase Decrease Closing balance
Statutory surplus reserve 59,394,668.24 -- -- 59,394,668.24
Total 59,394,668.24 -- -- 59,394,668.24
Note:According to the company law and articles of association, the company reserves legal surplus
fund by 10% of the net profit. The statutory surplus reserveIf could not be withdrawn if the accumulated
amount of it is more than 50% of the registered capital of the company.
The company may withdraw any surplus reserve fund after the withdrawal of the statutory surplus
reserve fund. An approved surplus fund may be used to make up for prior year losses or increase
equity.
7.60 Undistributed profit
Amount for the Amount for the Proportion of
Item
current period prior period appropriation
Before adjustment: Undistributed profits at the end of prior year 583,908,333.05 290,911,773.00
After adjustment: Undistributed profits at beginning of year 583,908,333.05 290,911,773.00
Plus: net profit attributable to the shareholders of the parent
137,226,601.84 134,761,121.51
company in the period
Undistributed profit at the end of the period 721,134,934.89 425,672,894.51
7.61 Operating income and costs
(1) Operating income and operating costs
Amount for the current period Amount for the prior period
Item
income costs income costs
Principal operating 727,183,146.15 493,647,637.36 1,082,674,647.12 806,066,310.73
Other operating 4,123,835.88 1,302,160.53 15,212,322.56 9,960,933.38
Total 731,306,982.03 494,949,797.89 1,097,886,969.68 816,027,244.11
7.62 Taxes and surcharges
Item Amount for the current period Amount for the prior period
City construction and maintenance tax 2,255,618.74 3,064,682.10
Education surcharges 996,755.33 1,433,871.60
Property tax 3,327,020.32 3,067,735.56
Vehicle and vessel usage tax 6,000.00 --
Stamp duty 24,463.50 --
Business tax 859,907.11 44,633,179.90
Land appreciation tax 15,825,612.34 33,110,656.95
Local education surcharges 606,413.00 871,353.80
109
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Item Amount for the current period Amount for the prior period
Embankment Protection Fee 11,520.89 186,729.80
Total 23,913,311.23 86,368,209.71
Note: Details of business taxes and surcharges please refer to Note 11.6 Taxation.
7.63 Selling expenses
Item Amount for the current period Amount for the prior period
Employee benefits 1,707,531.15 1,949,636.81
Advertising expenses 3,847,364.06 873,616.00
Cost of operation 448,735.60 346,619.50
Sales agency fees and commissions 56,665.76 1,469,750.06
Others 772,507.19 468,119.06
Total 6,832,803.76 5,107,741.43
Note: The amount for the current period 6,832,803.76 yuan increased by 33.77% comparing with the
prior period, mainly for the raise of Advertising expenses.
7.64 Administrative expenses
Item Amount for the current period Amount for the prior period
Employee benefits 13,427,835.61 13,493,611.11
Taxes 642,583.97 1,878,051.29
Depreciation 1,544,544.45 1,640,917.98
Entertainment expenses 1,099,378.23 1,234,043.90
Intermediary fee 850,413.87 1,606,081.53
Travel expense 205,266.91 268,286.15
Administrative expenses 436,364.81 611,089.04
Repair charge 443,258.96 394,372.96
Water and electricity charges 180,904.51 335,834.38
Other amortization 391,561.10 348,472.10
Others 5,497,126.27 5,146,571.33
Total 24,719,238.69 26,957,331.77
7.75 Financial expenses
Item Amount for the current period Amount for the prior period
Interest expenses 19,728,425.13 26,540,177.38
Less: Interest income 7,399,712.00 18,885,542.00
Less: capitalized interest expenses 15,451,618.09 14,548,928.60
Exchange differences 333,780.08 -334,107.73
110
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Less: Capitalized exchange differences -- --
Others 153,553.30 180,247.31
Total -2,635,571.58 -7,048,153.64
Note: The amount of Financial expenses is RMB -2,635,571.58 for the current period decreased
62.61% comparing with the prior period, mainly for interest capitalization of project and the deduction of
Interest income.
7.76 Impairment losses of assets
Item Amount for the current period Amount for the prior period
Bad debt loss -- -4,800,000.00
Total -- -4,800,000.00
Note: There was no Impairment losses of assets during this period.The amount for the prior period was
brought form reversing the provision for uncollectible accounts at the end of Luofu Hill Travelling
Corporation’s lawsuit.
7.77 Income from changes in fair value
7.78 Investment income
(1) Details of investment income
Amount for the Amount for the prior
Item
current period period
Investment income from long-term investments under equity method -- -63,790.59
Investment income for the sale of financial assets during the holding period 650,000.00 689,000.00
Total 650,000.00 625,209.41
(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 -- 57,988.93 Investee’s operating profit
Total -- 57,988.93
(3) Income for the sale of financial assets during the holding period
Amount for the Amount for the Reasons for
Name of investee
current period prior period changes
Shantou Small &Medium Enterprises Financing Guarantee Co., Ltd 650,000.00 689,000.00 Profit for the year
Total 650,000.00 689,000.00
7.79 Other gains
7.80 Non-operating income
111
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Amount for the Amount for the Amount included in non-recurring
Item
current period prior period profit or loss for the period
Gains on penalty 74,635.68 175,149.92 74,636.68
Others 242,385.75 5,038,308.02 242,385.75
Total 317,021.43 5,213,457.94 317,021.43
Note: The amount for the current period 317,021.43 yuan decreased 93.92% comparing with the prior
period, mainly for the gain of execution lawsuit about Luofu Hill Travelling Corporation for the prior
period.
7.81 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 58,187.56 2,647.50 58,187.56
Including: Losses on disposal of fixed assets 58,187.56 2,647.50 58,187.56
Donations to third parties 20,851.54 19,500.00 20,851.54
Penalty expense 10,000.00 -- 10,000.00
Compensation expense 10,000.00 6,115.17 10,000.00
Others 22,574.69 72,314.73 22,574.69
Total 121,613.79 100,577.40 121,613.79
7.82 Income tax expenses
(1) Details of income tax expenses
Item Amount for the current period Amount for the prior period
Current Income Tax Expense 48,017,985.19 47,293,403.64
Deferred Income Tax Expense -844,845.47 -1,008,716.16
Total 47,173,139.72 46,284,687.48
(2) The process of calculating the income tax based on accounting profit
Item Incurred in the
current year
Consolidated profit this year 184,372,809.68
Income tax calculated at legal or applicable tax rate 46,093,202.42
Impact of non-taxable income 2,324.75
Impact of non-deductible cost, expense and loss 503,689.37
Impact of the deductible temporary differences or deductible loss of unconfirmed deferred tax
573,923.18
assets of this year.
Income taxes 47,173,139.72
112
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
7.83 Other comprehensive income
Note: Please refer to note 7.57.
7.84 Notes to items in the cash flow statements
(1) Other cash receipts relating to operating activities
Item Amount for the current period Amount for the prior period
Interest income 10,938,611.05 11,295,056.29
Cash pledge and security deposits 4,169,257.32 10,370,363.90
The collecting on another's behalf 1,963,519.00 183,644.67
Others 8,174,583.09 22,920,758.68
Total 25,245,970.46 44,769,823.54
Note: The amount of other cash receipts relating to operating activities for the current period decreased
by 43.61% comparing with the prior period, mainly for the reduction of Cash pledge and security
deposits and others.
(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 11,613,292.21 16,286,386.18
Cash paid to operating expenses 3,233,124.58 3,080,233.10
Cash pledge and security deposits 4,557,072.05 10,701,125.01
The collecting and paying on another's behalf 724,088.98 1,077,699.15
Others 50,416,225.28 5,927,462.18
Total 70,543,803.10 37,072,905.62
Note: The amount Other cash payments relating to operating activities for the current period
70,543,803.10 yuan increased 90.28% comparing with the prior period, mainly for the raise of
engineering funds payment of Muqiang Company.
(3)Other cash receipts relating to investment activities
(4)Other cash payments relating to investment activities
(5)Other cash receipts relating to financing activities
(6)Other cash payment relating to financing activities
7.85 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 137,199,669.96 134,727,998.77
Add：Provision for asset impairment -- -4,800,000.00
113
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Amount for the Amount for the
Item
current period prior period
Depreciation of fixed assets, bio-assets, and natural gas 12,436,112.05 13,626,249.37
Amortization of intangible assets 254,370.00 254,370.00
Amortization of long-term deferred expense 1,147,347.42 127,522.43
Losses on disposal of fixed assets, intangible assets and other long-term
24,018.05 --
assets(deduct: gains)
Losses on scrapping of fixed assets (deduct: gains) 264.47 1,934.79
Loss of fair value variation (deduct: gains) -- --
Financial expenses (deduct: gains) 4,276,807.04 18,699,884.75
Losses from investments (deduct: gains) -650,000.00 -625,209.41
Decrease in deferred tax assets (deduct: increase)） -844,845.47 1,688,845.85
Increase in deferred tax liabilities (deduct: decrease) -- --
Decrease in inventories (deduct: increase) -13,302,973.16 298,465,327.85
Decrease in operating receivables (deduct: increase) -93,695,521.42 73,591,766.23
Increase in operating payables (deduct: decrease) -144,604,199.24 -109,590,709.87
Others 58,253.11 --
Net cash flows from operating activities -97,700,697.19 426,167,980.76
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 1,164,053,438.01 1,496,687,318.92
Less: cash at the beginning of the period 1,265,767,290.57 1,169,756,306.36
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 -101,713,852.56 326,931,012.56
(2)Net cash flow received from subsidiaries for the current period
(3)Net cash flow received from disposal subsidiaries of the current period
(4)Information of cash and cash equivalents
Amount for the Amount for the prior
Item
current period period
I.Cash 1,164,053,438.01 1,265,767,290.57
Including: Cash on hand 57,189.68 33,954.55
Bank deposits 1,163,996,248.33 1,265,733,336.02
114
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Amount for the Amount for the prior
Item
current period period
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 1,164,053,438.01 1,265,767,290.57
7.77 Ownership or use-right restricted assets
Categories of assets Item Closing balance The reasons for restriction
Monetary fund 290,033.83 Refer to note 7.1
Notes receivable 16,405,895.50 Short-term loan mortgaged
Accounts receivable 100,079,290.62 Short-term loan mortgaged
Investment property Shenfang Square 64,969,223.83 Long-term loan mortgaged
Investment property GuoShang North 2 floor 223,598,885.86 Long-term loan mortgaged
Total 405,343,329.64
7.78 The items of foreign currency
(1) Details of items of foreign currency
Item Balance of foreign currency at year end Exchange rate Balance of RMB converted
Monetary fund
Including：USD 86,195.49 6.7742 583,909.70
HKD 10,164,120.40 0.8724 8,867,472.73
HKD 4,905,150.10 0.8724 4,279,394.87
Other accounts receivable
Including：USD -- -- --
HKD 25,524,951.11 0.8724 22,268,705.90
Other accounts payable
Including：USD -- -- --
HKD 20,097,370.62 0.8724 17,533,527.63
（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
115
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
of China.
7.78 Hedging
7.79 Others
Note 8 The changes of the scope of consolidation
There were no changes for the Group’s consolidation scope this year.
Note 9 Equities in other entities.
9.1 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
Management Ltd. establishment or investment
Shenzhen Zhen Tung Acquiring through
Shenzhen Shenzhen Services 73.00 27.00
Engineering Ltd. establishment or investment
Shenzhen City We Gen Acquiring through
Shenzhen Shenzhen Services 75.00 25.00
Construction Management Ltd. establishment or investment
Acquiring through
Shenzhen City Car Rental Ltd. Shenzhen Shenzhen Services 55.00 45.00
establishment or investment
Shenzhen Shenfang Car Park Acquiring through
Shenzhen Shenzhen Services 70.00 30.00
Ltd. establishment or investment
Shenzhen City Shenfang Acquiring through
Shenzhen Shenzhen Investment 90.00 10.00
Investment Ltd. establishment or investment
Shenzhen City Shenfang Free Commecial Acquiring through
Shenzhen Shenzhen 95.00 5.00
Trade Trading Ltd. trade establishment or investment
Shenzhen City SPG Long Gang Acquiring through
Shenzhen Shenzhen Real estate 95.00 5.00
Development Ltd. establishment or investment
Shenzhen Special Economic Acquiring through
Zone Real Estate (Group) establishment or investment
Guangzhou Guangzhou Real estate 100 --
Guangzhou Property and Estate
Co., Ltd.
116
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Main Shareholding
Reg. Business
Name of the subsidiary operating proportion（%） Method of acquiring
place nature
area Direct Indirect
Beijing fresh peak property Acquiring through
development management Beijing Beijing Real estate 75.00 25.00 establishment or investment
limited company
Beijing SPG Property Acquiring through
Beijing Beijing Services 10.00 90.00
Management Limited establishment or investment
Shenzhen ShenWu Elebator Acquiring through
Shenzhen Shenzhen Services -- 100.00
Co.,Ltd establishment or investment
Shenzhen Lain Hua Industry and Acquiring through
Shenzhen Shenzhen Services 95.00 5.00
Trading Co. Ltd. establishment or investment
Investment Acquiring through
Fresh Peak Holding Ltd. HongKong HongKong and 100.00 -- establishment or investment
management
Investment Acquiring through
Wellam Ltd. HongKong HongKong 100.00 --
holding establishment or investment
Shantou SEZ Wellam Fty Bldg., Acquiring through
ShanTou ShanTou Real estate -- 100.00
Dev. Co. establishment or investment
Shantou Huafeng Estate Acquiring through
ShanTou ShanTou Real estate 100.00 --
Dev.Co. establishment or investment
Acquiring through
Great Wall Estate Co., Inc USA USA Real estate 70.00 --
establishment or investment
Investment Acquiring through
Fresh Peak Holdings Ltd. HongKong HongKong and 100.00 -- establishment or investment
management
Acquiring through
Fresh Peak Investment Ltd. HongKong HongKong Investment -- 55.00
establishment or investment
Investment and Acquiring through
Openice Ltd. HongKong HongKong 20.00 80.00
management 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
Guangzhou Huangpu Xizun real GuangZhou GuangZhou Real estate -- 100.00 Acquiring through
117
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Main Shareholding
Reg. Business
Name of the subsidiary operating proportion（%） Method of acquiring
place nature
area Direct Indirect
estate limited company establishment or investment
Fresh Peak Real Estate Dev. Acquiring through
WuHan WuHan Real estate -- 100.00
Construction (Wuhan) Co. Ltd.* establishment or investment
Shantou Special Economic
Subsidiary acquired through
Zone Real Estate (Group)
Shantou Shantou Real estate -- 100.00 emerge under non-common
Songshan Property and Estate
control
Co., Ltd.
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
③
Shenzhen Shen Fang Industrial Acquiring through
Shenzhen Shenzhen Investment 100.00 --
Development Co., Ltd.* ④ establishment or investment
Shenzhen Tefa Real Estate
Acquiring through
Consolidated Service Co., Ltd.* Shenzhen Shenzhen Services 100.00 --
establishment or investment
⑤
Acquiring through
Bekaton Property Limited *⑥ Australia Australia Real estate 60.00 --
establishment or investment
Canada Great Wall ( Vancouver) Acquiring through
Canada Canada Real estate -- 60.00
*⑥ establishment or investment
Commecial Acquiring through
Paklid Limited *⑥ 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 *⑦
Shenzhen ZhongGang Haiyan Integrated Acquiring through
Shenzhen Shenzhen 68.00 --
Enterprise Ltd. *⑧ Services establishment or investment
118
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Main Shareholding
Reg. Business
Name of the subsidiary operating proportion（%） Method of acquiring
place nature
area Direct Indirect
Shenzhen Xing Dongfang Store Commecial Acquiring through
Shenzhen Shenzhen 100.00 --
Ltd.* ⑨ trade establishment or investment
Guangdong Province Fengkai
Guangdongf Guangdongf Acquiring through
Lain Feng Cement Manufacture -- 90.00
engkai engkai establishment or investment
Manufacturing Co., Ltd *⑩
*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 Real Estate Consolidated Service Co., Ltd.
The operating period of this corporation is from 26 January 1983 to 28 August 1999. And this Company
has ceased operations for many years. And the corporation had been terminated its licenses by law on
8 February 2002 because of failing to take part in annual inspection.
*④ 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.
*⑤ 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.
* ⑥Bekaton Property Limited ,Canada Great Wall ( Vancouver)and Paklid Limited
119
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
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.
*⑦ 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.
*⑧Shenzhen 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.
*⑨ Shenzhen Xin Dongfang Store Ltd
The operating period of this corporation is from 14 November 1995 to 14 November 2025. And this
company has ceased operations for many years. And the corporation had been terminated its licenses
by law at 1999 because of failing to take part in annual inspection.
*⑩ 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,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.
120
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Accounting Investment Opening Closing
Investee Changes
Method cost balance balance
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
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 267,863,499.32 186,256,480.74 -- 186,256,480.74
(Continued)
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
121
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Increased current
Provision for Current year
Investee year provision for Remarks
impairment cash dividends
impairment
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 -- -- --
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
Minority interest Current year profit and Current year dividends Minority interest
Name of subsidiary share loss attributable to minority distributed to minority equity balance at
proportion (%) interest shareholders interest shareholders the end of the year
Great Wall Estate Co., Inc 30.00 -26,931.88 -- -25,665,104.91
Fresh Peak Investment Ltd. 45.00 -3,631.56 -- -99,605,914.00
Barenie Co. Ltd. 20.00 -3,400.92 -- -2,034,032.04
(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
583,627.91 18,717,342.03 19,300,969.94 104,851,319.64 -- 104,851,319.64
Co., Inc
Fresh Peak
220,030,092.62 24,793,206.35 244,823,298.97 254,717,812.42 -- 254,717,812.42
Investment Ltd.
Barenie Co. Ltd. 1,016.78 30,373,713.87 30,374,730.65 32,781,363.48 -- 32,781,363.48
(Continued)
Opening balance
Name of subsidiary Non-current Current Non-current
Current assets Total Assets Total liabilities
assets liabilities liabilities
Great Wall Estate
689,285.57 19,166,598.03 19,855,883.60 107,367,974.19 -- 107,367,974.19
Co., Inc
Fresh Peak 220,030,112.41 24,793,206.35 244,823,318.76 254,709,762.07 -- 254,709,762.07
122
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Name of subsidiary Opening balance
Investment Ltd.
Barenie Co. Ltd. 1,043.34 30,373,713.87 30,374,757.21 32,775,171.39 -- 32,775,171.39
(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 comprehensive Net profit comprehensive
income operating income operating
income income
activities activities
Great Wall Estate
204,090.22 -89,772.94 1,961,740.89 -89,839.36 286,203.33 -110,409.13 -2,352,389.90 -110,476.29
Co., Inc
Fresh Peak
-- -8,070.14 -8,070.14 -- -- -762.09 -762.09 --
Investment Ltd.
Barenie Co. Ltd. -- -6,812.65 -6,812.65 -- -- -2,520.76 -2,520.76 --
9.2 Transactions of a subsidiary that the owner's equity share change but still domination
9.3 Equities in joint ventures or associated enterprises
（1）Insignificant joint ventures or associated enterprises
Item Closing balance/Incurred this year Opening balance/Incurred last 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 -- --
Associated enterprises*②：
Total investment book value 270,179.54 270,179.54
Totals of the following items calculated per
respective shareholding proportion
—Net profit -- -63,790.59
—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
7.17, including:
1) Guangdong province Huizhou Luofu Hill Mineral Water Co.,Ltd
123
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
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 7.17 for
details.
*② All associated enterprises of the Group are insignificant. For details of associated enterprises,
please refer to note 7.17, 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.
124
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
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 777,216.47 -- 777,216.47
Note 10 The risk associated with financial instruments
The company's major financial instruments, including equity investments, loans, accounts receivable,
accounts payable, etc., the detailed description of the financial instruments are shown in note six. The
risks which associated with these financial instruments and the risk management policies adopted by
the company to reduce these risks are described below. The management of the company is
responsible for the management and monitoring of these exposures to ensure that these risks are in a
limited amount of scope.
The company uses sensitivity analysis techniques to analyze the impact of reasonable and possible
changes in the risk variables on current profit or loss or shareholder equity. As risk variables rarely
occur in isolation, and affect the changes of correlation between these variables for a variable amount
of risk will have a significant effect ultimately, so the content is on the assumption that the changes in
each variable is in the condition of independence.
10.1Risk management objectives and policies
The aim that company engaged in the risk management is to achieve the right balance between risk
and return. It reduce the negative impact on the risk of the company's operating performance to the
lowest level and maximize shareholder interests and other interests of investors. The aim that risk
management based on the basic strategy of cpmpany’s risk management is to identify and analyze
various risks faced by the company. Establishment of appropriate risk limits and risk management, as
well as to monitor all kinds of risks that control it in a limited scope timely and reliably.
(1)Credit risk
The company's credit risk is mainly reflected in the uncollectible accounts receivable. In order to reduce
credit risk, the company set up a team wresponsible for determining the credit limit, credit approval,
and other monitoring procedures to ensure that the necessary measures to recover overdue debt. In
addition, the company reviews the recovery of each individual account receivable on each balance
sheet date to ensure that the uncollectible accounts are fully prepared. Therefore, the company's
management believes that the company's credit risk has been greatly reduced.
The company's liquidity is deposited in a bank with a higher credit rating, so the liquidity of the credit
risk is low.
(2)Liquidity risk
125
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
In the management of liquidity risk, the company maintains the concept of management that adequate
cash and cash equivalents, monitoring it to meet the company's business needs and reducing the
impact of cash flow fluctuations.
10.2The transfer of financial assets
Financial assets that have been transferred but not wholly terminated
Notes receivable, as of 30 June, 2017, has been discounted commercial acceptance of the maturity
16,405,895.50 yuan, the cash consideration of RMB 16,405,895.50. The bank have the right to require
the company to pay off the outstanding balance if the commercial acceptance is not acceptable at
maturity. Because the company still bear the main risk of the credit risk associated with the draft of
these commercial acceptance bills receivable, the company continues to fully recognize the carrying
amount of the notes receivable due to the transfer of payments received and will confirm it as pledge
loan.
As of 30 June, 2017, the company declared factoring business 100,079,290.62 yuan to the bank in
accounts receivable, got RMB 100,079,290.62 yuan of equal value. The bank have the right to
recourse to the company's account if it fails to collect the corresponding account from the account
receivable. Because the company still bear with these accounts receivable related credit risk, the
company should continue to fully recognize the carrying amount of the accounts receivable due to the
transfer of payments received and will confirm it as pledge loan.
Note 11 Disclosure of fair value
Note 12 Related party relationships and transactions
12.1 Parent of the Company
Proportion of
Proportion of the
the Company’s
Place of Registered Company’s voting
Name of the parent Type of the entity ownership
incorporation capital power held by the
interest held by
parent (%)
the parent (%)
Guangdong
Shenzhen Investment State-owned RMB 10.926
province 63.55 63.55
Shareholding Co. Ltd Enterprises billion
Shenzhen
12.2 Subsidiaries of the Company
Please refer to Note 9.1.
12.3 Associates and joint ventures of the entity
Please refer to Note 9.3 –Equities in joint venture or associated enterprises
126
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
12.4 Other related parties of the Company
Name of other related party Relationship between other related parties and the Company
Shenzhen Jian'an Group Co., Ltd. The same controlling shareholders
12.5 Related party transactions
(1)Purchasing and selling goods, providing and accepting labor services with related parties
(2)Contracting with related parties
List of outsourcing 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
party outsourcing contracting contracting
income the current year
Shenzhen Jian'an Shenzhen Zhen Tung
Construction 2012-6-1 Negotiations 365,500.77
Group Co., Ltd. Engineering Ltd
Shenzhen City
Shenzhen Jian'an Group
SPG Long Gang Construction 2015-9-16 Negotiations 69,155,316.14
Co., Ltd.
Development Ltd.
（3）Leasing with related parties
（4）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.As of Dec.31,2016, the loans balance of Shantou Hualin Estate Dev. Co at the Bank is
zero.
(5)Borrowing from related party
Carrying Reception Expiration
Item Statement
amount date date
Borrowing from:
Principal RMB 28,848,819.24 was repaid In 22
Shenzhen Investment December , 2016,Group owed Shenzhen
16,535,277.94 2006.11.9 2016.12.22
Shareholding Co. Ltd Investment Shareholding Co.Ltd 16,535,277.94
yuan loan interest at the end this period.
127
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
(6) Assets transfer and debt recombination with related parties
(7) Compensation for key management personal
Item Amount for the current period Amount for the prior period
Total 3,614,401.00 3,387,750.00
(8) Other
12.6 Amounts due from / to related parties
(1) Amounts due from related party
Closing balance Opening balance
Item Carrying Bad debt Carrying Bad debt
amount provision amount provision
Accounts receivable
Shenzhen Fresh Peak property consultant
1,203,374.10 -- 1,203,374.10 --
Co.,Ltd
Total 1,203,374.10 -- 1,203,374.10 --
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., Ltd 3,072,764.42 3,072,764.42 3,072,764.42 3,072,764.42
Canada GreatWall（Vancouver）Co. ,Ltd 89,035,748.07 89,035,748.07 89,035,748.07 89,035,748.07
Bekaton Property Limited 12,559,290.58 12,559,290.58 12,559,290.58 12,559,290.58
Paklid Limited 19,299,472.87 19,299,472.87 19,299,472.87 19,299,472.87
Shenzhen Shenfang Department Store Co. Ltd. 237,648.82 189,179.82 237,648.82 189,179.82
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 8,419,205.19 8,419,205.19
Trading Co.,Ltd
Total 152,978,190.15 152,295,146.69 152,978,190.15 152,295,146.69
(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
128
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Shenzhen ZhongGang Haiyan Enterprise Ltd. 135,853.52 135,853.52
Shenzhen Dongfang New world store Co., Ltd 902,974.64 902,974.64
Shenzhen Xin Dongfang Store Ltd. 1,394,704.21 1,394,704.21
Guangdong Province Fengkai Lain Feng 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
Total 14,398,496.70 14,398,496.70
Interest payable:
Shenzhen Investment Holding Co.,Ltd 16,535,277.94 16,535,277.94
Total 16,535,277.94 16,535,277.94
12.7 Related parties’ commitment
12.8 Other
Note 13 Share payment
Note 14 Commitments and Contingencies
14.1 Significant commitments
（1）Capital commitment
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 637,259,322.72 766,438,175.20
Total 637,259,322.72 766,438,175.20
（2）There is no any other commitment during this period.
14.2 Contingencies
(1)Contingencies arising from pending litigations or arbitrations and their financial effects
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.
129
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
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 30 June 2017, the book value of the investment of Xi’an Fresh Peak Company was Rmb
12,166,897.84. The provision for investment was Rmb 20,673,831.77. The book balance of assets was
Rmb 8,419,205.19 which has been taken full provision for impairment loss.
(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 12.4（2）.
②The Company provided loan guarantees for purchaser of real estate. As at 30 June 2017, the
amount and duration of the unsettled guarantee is as follows:
Items Duration Unsettled amount (ten thousand)
Shenfang Chuanqishan From real estate license granted and mortgaged 429.00
Shenfang Shanglin Garden From real estate license granted and mortgaged 372.00
Total 801.00
（3）Contingent liabilities Related to the equity joint venture or consortium investment
Refer to Note 9“Equities in other entities”.
Note 15 Events after Balance Sheet Date
Note 16 Other material facts
On 14 September, 2016, the Group plan the reorganization of material assets.The Group announced it
intended to buy 100% stock equity of Evergrande real estate group co., LTD by issue shares or cash
payment on 14 October, 2016.Guangzhou chiron real estate co., LTD will become the controlling
shareholder of the company after the acquisition
The reorganization of material assets still in process as scheduled as at 30 June 2017.
130
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Note 17 Notes to Items in the Financial Statements of the Company
17.1 Accounts receivable
(1) Accounts receivable by categories
Closing balance
Category Carrying amount Bad debt provision Book Value
Amount (%) Amount (%)
Accounts receivable of which provision for
-- -- -- -- --
bad debts is of individually significant
Accounts receivable of which provision for
60,629,034.98 100.00 6,968,694.02 11.49 53,660,340.96
bad debts is of individually insignificant
Total 60,629,034.98 100.00 6,968,694.02 11.49 53,660,340.96
(Continued)
Closing balance
Category Carrying amount Bad debt provision Book Value
Amount (%) Amount (%)
Accounts receivable of which provision for
-- -- -- -- --
bad debts is of individually significant
Accounts receivable of which provision for
14,295,945.00 100.00 6,968,694.02 48.75 7,327,250.98
bad debts is of individually insignificant
Total 14,295,945.00 100.00 6,968,694.02 48.75 7,327,250.98
(2) 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.
(3) There were no any significant accounts receivables written off in the current period.
(4) Top 5 entities with the largest balances of accounts receivable
Relationship with Proportion of the amount
Name of entity Amount Age Bad debt provision
the Group to the total AR (%)
Individual No.1 Un-related party 12,410,000.00 Within 1year 20.47 --
Individual No.2 Un-related party 9,550,000.00 Within 1year 15.75 --
Individual No.3 Un-related party 8,380,000.00 Within 1year 13.82 --
Individual No.4 Un-related party 7,540,000.00 Within 1year 12.44 --
Individual No.5 Un-related party 6,860,000.00 Within 1year 11.31 --
Total 44,740,000.00 73.79 --
All of them are Mortgage loans which banks loan are not yet available in late June.
(5)There were no any account receivables which had been derecognized.
131
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
(6)There were non transferred accounts receivable and continued involvement in the formation of
assets and liabilities during this period.
17.2 Other receivables
(1) Other receivables by categories
Closing balance
Category Carrying amount Bad debt provision Book Value
Amount (%) Amount (%)
Accounts receivable of which provision for
1,632,452,204.30 98.27 794,718,692.30 48.68 837,733,512.00
bad debts is of individually significant
Accounts receivable of which provision for
28,751,304.44 1.73 12,787,916.94 44.48 15,963,387.50
bad debts is of individually insignificant
Total 1,661,203,508.74 100.00 807,506,609.24 48.61 853,696,899.50
(Continued)
Closing balance
Category Carrying amount Bad debt provision Book Value
Amount (%) Amount (%)
Accounts receivable of which provision for
1,622,454,224.30 98.23 794,718,692.30 48.98 827,735,532.00
bad debts is of individually significant
Accounts receivable of which provision for
29,202,075.01 1.77 12,787,916.94 43.79 16,414,158.07
bad debts is of individually insignificant
Total 1,651,656,299.31 100.00 807,506,609.24 48.89 844,149,690.07
Bad debt provision of accounts receivable which is of individually significant
Proportion of
Content of accounts receivable Carrying amount Amount of bad debt Reasons for the provision
provision
Other receivables between
A separate provision is
subsidiaries that are included in 1,493,208,287.31 658,127,505.34 44.07
established according to
consolidated statement
the recoverability of each
Other receivables between
receivables with long
subsidiaries that are not included 122,318,455.59 120,994,319.55 98.92
aging and little
in consolidated statement
retrievability
Others 16,925,461.40 15,596,867.41 92.15
Total 1,632,452,204.30 794,718,692.30 —
(2) There were no other receivables had been fully collected or reversed back during the current period.
132
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
(3)There were no any other material receivables written off during the current period.
(4)Other receivables by nature
Content of accounts receivable Carrying amount Amount of bad debt
Other receivables between subsidiaries that are
1,493,208,287.31 1,498,630,840.42
included in consolidated statement
Other receivables between subsidiaries that are not
122,318,455.59 122,318,455.59
included in consolidated statement
Others 45,676,765.84 30,707,003.30
Total 1,661,203,508.74 1,651,656,299.31
(5)Top 5 entities with the largest balances of other receivables
Relationship Proportion of the Bad debt
Name of Entity with the Amount Age amount to the provision
Group total OR (%)（%）
6,011,155.71 Within 1 year 0.36 --
Fresh Peak Enterprise 7,993,662.28 1-2 years 0.48 --
Subsidiary
Co., Ltd 918,538.43 2-3 years 0.06 --
514,476,945.20 Over 3years 30.97 508,377,320.74
181,500,461.49 Within 1 year 10.93 --
Shantou Huafeng
43,722,391.26 1-2 years 2.63 --
Estate Development Subsidiary
23,384,385.37 2-3 years 1.41 --
Co., Ltd
260,000,000.00 Over 3years 15.65 --
Shenzhen ShenFang 135,544,085.27 Within 1 year 8.16 --
Group LongGang Subsidiary
70,000,000.00 1-2 years 4.21 --
Development Co., Ltd
American Great Wall
Subsidiary 101,379,954.81 Over 3 years 6.10 101,379,954.81
Co., Ltd
1,355,137.87 Within 1 year 0.08 --
Fresh Peak Holding
Subsidiary 2,054,534.17 1-2 years 0.12 --
Ltd.
86,051,073.24 Over 3 years 5.18 --
Total 1,434,392,325.10 86.35 609,757,275.55
(6) There were no any other receivables about government subsidies that have been involved.
(7) There were no any other receivables due to the transfer of financial assets that have been
derecognized.
(8) There were no any other receivables which had transferred to continued involvement in assets or
133
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
liabilities.
17.3 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
418,984,380.71 121,914,591.14 297,069,789.57 418,984,380.71 121,914,591.14 297,069,789.57
subsidiaries
Investment in
associates and 22,339,010.73 21,947,051.67 391,959.06 22,339,010.73 21,947,051.67 391,959.06
joint ventures
Total 441,323,391.44 143,861,642.81 297,461,748.63 441,323,391.44 143,861,642.81 297,461,748.63
134
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
(2)investment in subsidiaries
Curr. year Curr. year Curr. year Closing balance of
Name of investee Opening balance Closing balance
Increase decrease impairment provision impairment 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 -- --
135
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Curr. year Curr. year Curr. year Closing balance of
Name of investee Opening balance Closing balance
Increase decrease impairment provision impairment 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 -- --
Shantou Fresh Peak Building 58,547,652.25 -- -- 58,547,652.25 -- 58,547,652.25
Total 418,984,380.71 -- -- 418,984,380.71 -- 121,914,591.14
136
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
(3)Investment in associates and joint ventures
Changes in this period
Adjustments of Change
Opening Investment
Name of investee Add Reduce other s of
balance 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 1,468,913.70 -- -- -- -- --
Subtotal 2,914,339.26 -- -- -- -- --
Total 22,339,010.73 -- -- -- -- --
(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 Mineral
-- -- -- 9,969,206.09 9,969,206.09
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 Trading
-- -- -- 1,445,425.56 1,445,425.56
Co., Ltd
Shenzhen Ronghua Jidian Co., Ltd -- -- -- 1,468,913.70 1,076,954.64
Subtotal -- -- -- 2,914,339.26 2,522,380.2
Total -- -- -- 22,339,010.73 21,947,051.67
17.4 Operating income and costs
Operating income and operating costs
137
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Amount for the current period Amount for the prior period
Item
income costs income costs
Principal operating 229,557,159.39 111,270,152.44 312,137,584.07 180,246,091.18
Total 229,557,159.39 111,270,152.44 312,137,584.07 180,246,091.18
17.5 Investment income
(1) Details of investment income
Item Amount for the current period Amount for the prior period
Investment income from long-term investments under
169,393,952.18 -63,790.59
cost method
Investment income from Held-to-maturity investment
650,000.00 689,000.00
during the holding period
Total 170,043,952.18 625,209.41
Note18. Supplementary Materials
18.1 Breakdown non-recurring profit or loss
Amount for the current
Items Statement
period
Profit or loss on disposal of non-current assets -58,187.56 --
Other non-operating income or expenses other than the above 253,595.20 --
Tax effects 48,851.91 --
Total 146,555.73 --
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)
18.2 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
Basic EPS Diluted EPS
assets(%)
Net profit attributable to common stockholders 5.06 0.1356 0.1356
Net profit attributable to common stockholders
5.05 0.1355 0.1355
after deducting non-recurring gains and losses
18.3Differences between amounts prepared under foreign accounting standards and China
Accounting Standards (CAS)
（1）Differences in the net profit and net assets between those disclosed in the financial statements
in compliance with International / Hongkong Finance Reporting Standards and CAS
138
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
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 137,226,601.84 134,761,121.51 2,782,523,104.61 2,643,860,443.09
In accordance with IFRS 137,226,601.84 134,761,121.51 2,782,523,104.61 2,643,860,443.09
139
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Semi-Annual Report 2017
Section XI Documents Available for Reference
1. Financial statements carrying personal signatures and seals of the Legal Representative,
the accounting head for this Report and the head of the accounting department; and
2. Originals of all the documents and announcements disclosed by the Company on
Securities Times, China Securities Journal and Ta Kung Pao during the Reporting Period.
140
