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深深房B:2018年半年度报告(英文版)2018-08-29  

						ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.   Interim Report 2018




     SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE &
              PROPERTIES (GROUP) CO., LTD.

                                       INTERIM REPORT 2018

                                                      2018-066




                                                   August 2018


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ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.        Interim Report 2018




             Part I Important Notes, Table of Contents and Definitions

The Board of Directors (or the “Board”), the Supervisory Committee as well as the directors,
supervisors and senior management of ShenZhen Special Economic Zone Real Estate &
Properties (Group) Co., Ltd. (hereinafter referred to as the “Company”) hereby guarantee the
factuality, accuracy and completeness of the contents of this Report and its summary, and
shall be jointly and severally liable for any misrepresentations, misleading statements or
material omissions therein.
Zhou Jianguo, chairman of the Company’s Board, Chen Maozheng, the Company’s General
Manager, Tang Xiaoping, the Company’s head for financial affairs, and Qiao Yanjun, head of
the Company’s financial department (equivalent to financial manager) hereby guarantee that
the Financial Statements carried in this Report are factual, accurate and complete.
All the Company’s directors have attended the Board meeting for the review of this Report
and its summary.
The Company discusses the “risks facing the Company and countermeasures” under the same
heading in item X under “Part IV Operating Performance Discussion and Analysis” of this
Report.
The Company has no interim dividend plan, either in the form of cash or stock.
This Report and its summary have been prepared in both Chinese and English. Should there
be any discrepancies or misunderstandings between the two versions, the Chinese versions
shall prevail.




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ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                                                Interim Report 2018




                                                   Table of Contents




Interim Report 2018........................................................................................................................... 1

Part I Important Notes, Table of Contents and Definitions ........................................................... 2

Part II Corporate Information and Key Financial Information ................................................... 5

Part III Business Summary ............................................................................................................... 8

Part IV Operating Performance Discussion and Analysis ........................................................... 10

Part V Significant Events ................................................................................................................ 22

Part VI Share Changes and Shareholder Information ................................................................. 29

Part VII Preferred Shares ............................................................................................................... 34

Part VIII Directors, Supervisors and Senior Management.......................................................... 35

Part IX Corporate Bonds ................................................................................................................ 36

Part X Financial Report .................................................................................................................. 37

Part XI Documents Available for Reference ................................................................................ 131




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ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                                       Interim Report 2018




                                                       Definitions


                         Term                                                          Definition

                                                    ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
“SPG”, the “Company”, the “Group” or “we”
                                                    and its consolidated subsidiaries, except where the context otherwise requires

Holding Company                                     Shenzhen Investment Holdings Co., Ltd.

The “Reporting Period” or “Current Period”      The period from 1 January 2018 to 30 June 2018

                                                    Expressed in the Chinese currency of Renminbi, expressed in ten thousand
RMB, RMB’0,000
                                                    Renminbi




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ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                                      Interim Report 2018




          Part II Corporate Information and Key Financial Information

I Corporate Information

Stock name                         SPG, SPG-B                            Stock code                   000029, 200029

Changed stock name (if any)        ---

Stock     exchange   for   stock
                                   Shenzhen Stock Exchange
listing

Company name in Chinese            深圳经济特区房地产(集团)股份有限公司

Abbr. (if any)                     深房集团

Company name in English (if
                                   ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
any)

Abbr. (if any)                     SPG

Legal representative               Zhou Jianguo


II Contact Information

                                                           Board Secretary                       Securities Representative

Name                                          Tang Xiaoping                             Luo Yi

                                              47/F, SPG Plaza, Renmin South Road, 47/F, SPG Plaza, Renmin South Road,
Address
                                              Shenzhen, Guangdong, P.R.China      Shenzhen, Guangdong, P.R.China
Tel.                                          (86 755)82293000-4638                   (86 755)82293000-4715

Fax                                           (86 755)82294024                        (86 755)82294024

Email address                                 tangxiaoping0086@126.com                  spg@163.net


III Other Information

1. Contact Information of the Company


Indicate by tick mark whether any change occurred to the registered address, office address and their zip codes, website address and

email address of the Company in the Reporting Period.

□ Applicable √ Not applicable

No change occurred to the said information in the Reporting Period, which can be found in the 2017 Annual Report.


2. Media for Information Disclosure and Place where this Report is Kept


Indicate by tick mark whether any change occurred to the information disclosure media and the place for keeping the Company’s

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ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                                            Interim Report 2018



periodic reports in the Reporting Period.

□ Applicable √ Not applicable

The newspapers designated by the Company for information disclosure, the website designated by the CSRC for disclosing the

Company’s periodic reports and the place for keeping such reports did not change in the Reporting Period. The said information can

be found in the 2017 Annual Report.


IV Key Financial Information

Indicate by tick mark whether there is any retrospectively restated datum in the table below.

□ Yes √ No

                                                                             H1 2018                  H1 2017              Change (%)

Operating revenue (RMB)                                                    1,317,541,631.35            731,306,982.03            80.16%

Net profit attributable to the listed company’s shareholders
                                                                             329,066,084.53            137,226,601.84           139.80%
(RMB)

Net profit attributable to the listed company’s shareholders before
                                                                             329,143,873.10            137,080,046.11           140.11%
exceptional items (RMB)

Net cash generated from/used in operating activities (RMB)                   594,728,129.67            -97,700,697.19           708.72%

Basic earnings per share (RMB/share)                                                   0.3253                   0.1356          139.90%

Diluted earnings per share (RMB/share)                                                 0.3253                   0.1356          139.90%

Weighted average return on equity (%)                                                 11.00%                    5.06%              5.94%

                                                                          30 June 2018            31 December 2017         Change (%)

Total assets (RMB)                                                         4,516,278,981.14          3,989,263,981.96            13.21%

Equity attributable to the listed company’s shareholders (RMB)            3,156,821,917.54          2,828,242,120.98             11.62%


V Accounting Data Differences under Chinese Accounting Standards (CAS) and
International Financial Reporting Standards (IFRS) and Foreign Accounting Standards

1. Net Profit and Equiy Differences under CAS and IFRS

√ Applicable □ Not applicable
                                                                                                                               Unit: RMB

                                   Net profit attributable to the listed company’s       Equity attributable to the listed company’s
                                                     shareholders                                        shareholders
                                        H1 2018                    H1 2017                 Ending amount           Beginning amount

Under CAS                               329,066,084.53                 137,226,601.84           3,156,821,917.54         2,828,242,120.98

Adjustments as per IFRS

Under IFRS                              329,066,084.53                 137,226,601.84           3,156,821,917.54         2,828,242,120.98



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ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                               Interim Report 2018


2. Net Profit and Equity Differences under CAS and Foreign Accounting Standards

□ Applicable √ Not applicable

No such differences for the Reporting Period.


3. Reasons for Accounting Data Differences Above

□ Applicable √ Not applicable


XI Exceptional Gains and Losses

√ Applicable □ Not applicable

                                                                                                                Unit: RMB

                                  Item                                     Reporting Period             Note

Gain or loss on disposal of non-current assets (inclusive of
                                                                                        -19,011.53
impairment allowance write-offs)

Non-operating income and expense other than above                                       -84,706.57

Less: Income tax effects                                                                -25,929.53

Total                                                                                   -77,788.57       --

Explanation of why the Company classifies a gain/loss item as exceptional according to the definition in the Explanatory
Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Exceptional Gain/Loss
Items, or reclassifies any exceptional item listed in the said explanatory announcement as recurrent:
□ Applicable √ Not applicable
No such cases for the Reporting Period.




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ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                                      Interim Report 2018




                                        Part III Business Summary

I Core Business Scope of the Company in Reporting Period

Is the Company subject to any disclosure requirements for special industries?

No.
Focused on residential property development, the Company has been seeing increasing brand
effects with great effort spent on project quality and progress, as well as on premium projects.
The Company primarily develops and sells residential properties in two cities, Shenzhen and
Shantou. The Cuilinyuan project and the Chuanqi Jingyuan project (formerly known as the “Tianju
Jingtian Apartment Block” project), both located in Shenzhen, as well as the Shantou-based
Tianyuewan Phase I project have finished filing of completion and acceptance. Also, the
development progress of the Chuanqi Donghu Mingyuan project is in line with the schedule, with
the main frame of its Tower A completed to the 27th floor and Tower B roofed. As for sales, the
Chuanqishan project has been almost sold out; the Chuanqi Shanglin project has been sold out;
approximately 70% of the Cuilinyuan project has been sold; and the Tianyuewan Phase I project has
sold about 20% of its residential units.


II Material Changes in Major Assets

1. Material Changes in Major Assets


                Major assets                                             Reason for material changes


Equity assets                             No material change

Fixed assets                              No material change

                                          Ending amount (as at 30 June 2018) down by RMB55,200.00 (or 100%) from beginning
Intangible assets                         amount (as at 31 December 2017), primarily driven by end of Kingdee software’s
                                          amortization

Construction in progress                  No material change

                                          Ending amount down by RMB5,921,287.00 (or 100%) from beginning amount, primarily
Notes receivable                          driven by payment collection by a curtain wall engineering branch of subsidiary
                                          Shenzhen Zhentong Engineering Co., Ltd. (“Zhentong Engineering”)

                                          Ending amount up by RMB199,022,291.19 (or 145.17%) from beginning amount,
Accounts receivable                       primarily driven by house mortgage payments which bank has issued commitment letter
                                          for but has not yet paid

                                          Ending amount down by RMB5,088,009.96 (or 84.23%) from beginning amount,
Prepayments
                                          primarily driven by decrease in prepayments by subsidiary Zhentong Engineering for


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ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                                           Interim Report 2018


                                             engineering materials

                                             Ending amount up by RMB592,844,561.90 (or 5214.32%) from beginning amount,
Other current assets
                                             primarily driven by a 600 million half-year structured bank deposit

                                             Ending amount down by RMB52,833,113.08 (or 50.70%) from beginning amount,
Short-term borrowings                        primarily driven by repayment of credit borrowing by Zhentong Engineering and
                                             decrease in its curtain wall engineering branch’s secured borrowing

                                             Ending amount up by RMB117,690,793.37 (or 136.61%) from beginning amount,
Taxes payable                                primarily driven by provisions for turnover tax and corporate income tax as a result of
                                             sales growth in H1 2018

                                             Ending amount up by RMB259,023,243.84 (or 69.08%) from beginning amount,
Other payables                               primarily driven by accrued value added tax on land made on property sales carried
                                             forward to Reporting Period

                                             Ending amount down by RMB46,226,800.00 (or 72.23%) from beginning amount,
Current portion of non-current liabilities
                                             primarily driven by repayment of mature bank loans

                                             Ending amount down by RMB64,216,500.00 (or 78.31%) from beginning amount,
Long-term borrowings
                                             primarily driven by paying back bank loans ahead of schedule


2. Major Assets Overseas

□ Applicable √ Not applicable


III Core Competitiveness Analysis

Is the Company subject to any disclosure requirements for special industries?

No.
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 Shenzhen-located
Chuanqishan project, Chuanqi Shanglin project, Cuilinyuan project, Chuanqi Jingyuan project and
Chuanqi Donghu Mingyuan project, as well as from the Shantou-located projects, 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. As of the Reporting Period (inclusive), the Company has been honored jointly by
the Guangdong Provincial Enterprise Confederation and the Guangdong Provincial Association of
Entrepreneurs as a “Most Honest Enterprise in Guangdong Province” for seven years in a row.




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ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                                  Interim Report 2018




              Part IV Operating Performance Discussion and Analysis

I Overview

(I) Operating Results of Reporting Period

2018 marks the first year for the nationwide practice of the Spirit of the 19th National Congress of
the Communist Party of China, an important year for the Company’s 13th five-year plan for
development, as well as a key year for the Company’s major assets restructuring programme. The
focus of China’s economic growth is shifting from high speed to high quality. In the first half of the
year, great international economic uncertainty, stricter financial regulation and continued domestic
government controls weighed on the real estate sector. Under such circumstances, in addition to
carrying forward its major assets restructuring programme, the Company adhered to the thinking of
“Carefully Draw up Development Strategies, Particularly Focus on Core 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 operating revenue
of RMB1,318 million, up 80.16% compared to the same period of last year; profit before taxation of
RMB440 million, representing a year-on-year growth of 138.76%; and net profit attributable to the
listed company’s shareholders of RMB329 million, increasing 139.80% from a year earlier. As at 30
June 2018, net assets attributable to the listed company’s shareholders were equal to RMB3,157
million, an 11.62% rise compared to the end of last year.
1. Focused on residential property development, the Company has been building a professional and
high-quality development team, as well as improving the management mechanism and processes for
project development. As a result, the operational capability in the core business of real estate keeps
increasing, along with the core competitiveness. During the Reporting Period, the key projects of
the Company were mostly located in Shenzhen and Shantou. The Company paid close attention to
product quality and progress, and adjusted marketing strategies in a timely manner. As a result,
project development and sales progress basically met expectations, and the core business was in
good order and health.
2. The Company’s main real estate projects under construction and available for sale during the
Reporting Period included the Shenzhen-based Cuilinyuan, Chuanqi Jingyuan, and Chuanqi
Donghu Mingyuan projects, as well as the Shantou-located Tianyuewan project, etc., with details as
follows:
                                           The
                                                                Floor area                 Expected total Accumulated
                Locati                    Compa Site area                    Completed
    Project              Usage   Status                         with plot                   investment   investment
                  on                       ny’s   (㎡)                  floor area(㎡)
                                                               ratio (㎡)                (RMB’0,000) (RMB’0,000)
                                          stake

Cuilinyuan      Shenzh Residen Available 100%      16,424.29        60,450        60,450          57,000          47,777



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ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                                              Interim Report 2018


                    en     tial     for sale

Chuanqi             Shenzh Rental Under            49%     4,243.34          42,412          42,412          24,865              17,904
Jingyuan            en              construct
                                    ion

Tianyuewan          Shanto Residen Available 100%         31,167.50 153,578.51            153,578.51         79,801              81,047
Phase I             u      tial     for sale

Chuanqi             Shenzh Residen Under          100%      5,889.7        34,072.60                0        51,000              22,621
Donghu              en     tial     construct
Mingyuan                            ion

3. Land bank for future development by the end of the Reporting Period:
             Project                Location               Land area(㎡)                       Floor area with plot ratio (㎡)

Tianyuewan Phase II               Shantou                                              33,362                                127,661

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) Operation Review for H1 2018
1. The Company’s fundamentals remain positive with a reasonable debt structure and a healthy
financial condition. During the Reporting Period, macro-economy was facing downward pressure,
and real estate control continued. The Company's real estate development and sales mainly
concentrate in Shenzhen and Shantou. The sales revenue and profits in the region of Shenzhen,
where overall sales are good, accounted for more than 90%. Thus, the future destocking pressure
mainly lies in the Shantou region.
Financing of the Company:
(1) Borrowings secured by accounts receivable
                         Item                                                  Ending balance (RMB’0,000)

                  Secured borrowings                                                                                             5,137.45

As at 30 June 2018, Zhentong Engineering                                                  had       RMB51.3745            million           of
accounts-receivable-secured short-term borrowings.
(2) Bank borrowings
                                                                                                Including:
                                                                            Total amount                     Including: amount due
        Lender           Start date            End date   Interest rate                         long-term
                                                                             of borrowing                        within one year
                                                                                                borrowing

        Chinese          7 May 2015         6 May 2020      110% of            3,555.67          1,778.35             1,777.32
Merchantile Bank,                                          benchmark
 Shenzhen branch                                           interest rate

          Total                                                                3,555.67          1,778.35             1,777.32




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ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                                            Interim Report 2018


2. The major property developments proceed smoothly. The Company has further improved the
development and management system, attached importance to construction safety and tightened
cost control. During the Reporting Period, the overall progress of the Company’s property
developments was in line with the schedule.
(1) The Chuanqi Shanglin project was sold out, and the Cuilinyuan project has finished filing of
completion and acceptance, as well as move-in formalities.
(2) The Chuanqi Jingyuan project (formerly known as the “Tianju Jingtian Apartment Block”
project) has finished filing of completion, is currently being fully furbished and is expected to be
ready for sale by the end of this year.
(3) The Chuanqi Donghu Mingyuan project has the main frame of its Tower A completed to the 27th
floor and Tower B roofed. The project is expected to be ready for sale by the end of this year.
(4) The Shantou-based Tianyuewan Phase I project has finished filing of completion, with
homebuyers moving in and the road to the north of the project expected to be completed by the
local government at the end of this year.
(5) Operating divisions, product categories or operating segments that accounted for more than 10%
of the Company’s operating revenue or operation profit:
                                                                                                                        Unit: RMB’0,000

                                                                    YoY change in
                 Operating                        Gross profit                             YoY change in cost   YoY change in gross
                                  Cost of sales                   operating revenue
                  revenue                         margin (%)                                  of sales (%)      profit margin (%)
                                                                          (%)

By operating division

Real estate             104,628          30,282        71.06%                164.76%                  52.95%                 21.16%

Engineering              15,064          14,409         4.35%                    -34.52%              -35.54%                 1.51%
construction

By product category

Residential             104,628          30,282        71.06%                179.84%                  57.58%                 22.46%
units

Shops                                                                       -100.00%                -100.00%                -72.69%

By operating segment

Guangdong               127,343          49,636        61.02%                    80.64%                 5.90%                27.51%
province



3. Real estate sales basically met expectations. The Company kept an eye on policy and market
dynamics, and adjusted marketing strategies based on regulatory policies and market changes.
Project sales basically met the expectations. The Chuanqishan project has been almost sold out; the
Chuanqi Shanglin project has been sold out; approximately 70% of the Cuilinyuan project has been
sold; and the Tianyuewan Phase I project has sold about 20% of its residential units.
(1) Sales of major real estate projects carried forward to the Reporting Period:
                                                                                                                        Unit: RMB’0,000

                        Location           Operating             Cost of sales        Gross profit margin       Gross profit margin


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ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                                                  Interim Report 2018


                                                 revenue                                                                     (%)

   Cuilinyuan             Shenzhen                   102,558                  28,856                        73,702                   71.86

Tianyuewan Phase          Shenzhen                     1,224                      978                          246                   20.10
         I

Yuejing Dongfang           Shantou                         465                    288                          177                   38.06

    Jinyedao               Shantou                         381                    212                          169                   44.36

                Total                                104,628                  30,334                        74,294                   71.01



(2) Real Estate sales during the Reporting Period:
                                                                                                                            Unit: square meters

                                                                                     Floor area
                                                           The                                          Area actually
                                                                                    available for                         Settled area in
   No.           Project             Open time        Company’s       Location                         sold in Current
                                                                                        sale at                           Current Period
                                                           stake                                            Period
                                                                                  year-beginning
    1        Cuilinyuan              June 2017             100%        Shenzhen               37,148            21,113              30,475

    2        Tianyuewan             October 2016           100%        Shantou               137,508              9,779              2,232
             Phase I

    3        Yuejing            December 2013              100%        Shantou                    980                51                621
             Dongfang

    4        Jinyedao                July 1996             100%        Shantou                 2,794                 26                427

                                       Total                                                 178,430            30,969              33,755



4. Real estate rental of the Company is stable with steadily rising rental prices as well as good
occupancy rates and rent collection rates. The major properties for rental are as follows:
                                                                                                                            Unit: square meters

                                                                       Occupan                      Land
 Location Name of building Rentable area Rented area                                Usage                         The Company’s stake
                                                                       cy rate                    ownership

Shenzhen Real              Estate         3,413.88          3,413.88         100% Commerci The Company                               100%
             Mansion                                                                    al

Shenzhen North         Block    of        4,819.71           4819.71         100% Commerci The Company                               100%
             Guoshang                                                                   al
             Mansion

Shenzhen      Petrel Building            22,475.47         22,475.47         100% Commerci The Company                               100%
                                                                                        al

Shenzhen SPG Plaza                       61,005.94          52348.14     89.3%      Office     The Company                           100%

             SPG            Plaza        19,913.30          19913.30         100% Commerci The Company                               100%
             Podium                                                                     al




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ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                                         Interim Report 2018


Shenzhen Wenjin Garden                3,531.60      3,531.60        100% Commerci The Company                               100%
                                                                            al

               Total               115,159.90     106,502.10

5. The assets restructuring programme has been carried forward.
The Company’s major assets restructuring plan is subject to further communications and
improvements with the regulators. Due diligence material update, additional audit and assessment,
etc. are underway.
6. The talent team has been enhanced.
With great importance attached to building a professional team, the Company has promoted certain
young talent as middle management and brought in a group of professionals and university
graduates. These moves have ensured a stable talent team during the assets restructuring.


II Analysis of Core Businesses

See “I Overview” above.
Year-on-year changes in key financial data:
                                                                                                                           Unit: RMB

                                 H1 2018            H1 2017             Change (%)                 Main reason for change

Operating revenue              1,317,541,631.35     731,306,982.03            80.16% Increase in property sales carryforwards

Cost of sales                   540,417,491.41      494,949,797.89               9.19% Increase in property sales carryforwards

                                                                                        Increases in property sales commissions
Selling expense                   37,167,133.77       6,832,803.76          443.95%
                                                                                        and advertising expense

                                                                                        Staff re-deploy on completion of
Administrative expense            31,736,200.85      24,719,238.69            28.39%
                                                                                        Cuilinyuan project

                                                                                        Decrease in interest expense on borrowings
Finance costs                     -8,611,669.10      -2,635,571.58          -226.75% and increase in interest income from term
                                                                                        deposits

Income tax expense               111,169,717.28      47,173,139.72          135.66% A rise in profits

Net     cash      generated
                                                                                        Increase in cash proceeds from sale of
from/used in operating          594,728,129.67      -97,700,697.19          708.72%
                                                                                        commodities and rendering of services
activities

Net     cash      generated
                                                                                        600 million half-year structured bank
from/used in investing          -599,344,168.71         424,910.51      -141,151.86%
                                                                                        deposit
activities

Net     cash      generated
from/used in financing          -133,528,938.06      -4,191,437.88        -3,085.75% Increase in cash repayment of borrowings
activities

Net increase in cash and                                                                Joint effects of cash proceeds from sale of
                                -138,128,390.84    -101,713,852.56           -35.80%
cash equivalents                                                                        commodities and rendering of services,


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ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                                                 Interim Report 2018


                                                                                              and structured bank deposit

                                                                                              Provisions for value added tax and surtax,
                                                                                              as well as accrued value added tax on land
Taxes and surtaxes                    277,340,490.76         23,913,311.23        1,059.77%
                                                                                              made on property sales carried forward to
                                                                                              Reporting Period

Major changes in 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

                                                                                    Year-on-year                             Year-on-year
                                                                                                        Year-on-year
                           Operating                                              increase/decrease                        increase/decrease
                                             Cost of sales    Gross profit rate                       increase/decrease
                            revenue                                                 of operating                            of gross profit
                                                                                                       of cost of sales
                                                                                      revenue                                    rate

By business segment

Real estate             1,046,284,161.25    302,815,653.15             71.06%             164.76%               52.95%               21.16%

Construction
                         150,642,530.35     144,088,214.48                4.35%            -34.52%             -35.54%                  1.51%
service

Rental service            34,955,530.61       16,019,002.54            54.17%              -12.24%              16.35%              -11.26%

Property
management                75,192,293.43       68,281,932.01               9.19%              8.47%               5.60%                  2.47%
service

Other                     13,770,810.85       10,240,743.17            25.63%                2.32%               3.07%               -0.54%

Subtotal                1,320,845,326.49    541,445,545.35             59.01%              76.61%                6.19%               27.19%

Less:          offset
internal                   -3,303,695.14      -1,028,053.94            68.88%              -80.05%             -93.12%               59.12%
transactions

Total                   1,317,541,631.35    540,417,491.41             58.98%              80.16%                9.19%               26.66%

By product

Housing units           1,046,284,161.25    302,815,653.15             71.06%             179.84%               57.58%               22.46%

Shops                                                                                    -100.00%             -100.00%              -72.69%

Other products           274,561,165.24     238,629,892.20             13.09%              -22.15%             -23.49%                  1.52%

Subtotal                1,320,845,326.49    541,445,545.35             59.01%              76.61%                6.19%               27.19%

Less:          offset
internal                   -3,303,695.14      -1,028,053.94            68.88%              -80.05%             -93.12%               59.12%
transactions

Total                   1,317,541,631.35    540,417,491.41             58.98%              80.16%                9.19%               26.66%

By geographic segment


                                                                     15
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                                                     Interim Report 2018


Guangdong
                        1,273,425,789.87     496,360,343.04              61.02%                 80.64%                    5.90%         27.51%
Province

Other regions in
                           47,131,738.79      45,085,202.31                  4.34%              10.61%                    9.43%           1.04%
China

Overseas                      287,797.83                                100.00%                 -5.36%                                    0.00%

Subtotal                1,320,845,326.49     541,445,545.35              59.01%                 76.61%                    6.19%         27.19%

Less:          offset
internal                   -3,303,695.14       -1,028,053.94             68.88%                -80.05%              -93.12%             59.12%
transactions

Total                   1,317,541,631.35     540,417,491.41              58.98%                 80.16%                    9.19%         26.66%


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 the same period of last
                                                                                              Increase/decrea
                                           Proportion to                     Proportion to                        Notes to significant changes
                            Amount                            Amount                          se in proportion
                                            total assets                      total assets

                                                           1,164,343,471.
Monetary funds          1,068,660,665.62         23.66%                              30.68%           -7.02%
                                                                        84

Accounts
                         336,114,447.24           7.44% 183,877,575.95               4.84%             2.60%
receivable

                                                           1,765,951,891.                                        Caused by carry-over of real
Inventories             1,677,853,797.04         37.15%                              46.53%           -9.38%
                                                                        14                                       estate

                                                                                                                 Caused by the transfer of
Investment
                         635,361,225.57          14.07% 405,102,784.35               10.67%            3.40% inventories to investment
property
                                                                                                                 property

Long-term equity
                          29,888,661.65           0.66% 37,447,267.61                0.99%            -0.33%
investments

Fixed assets              35,921,711.70           0.80% 42,507,617.00                1.12%            -0.32%

Short-term                                                                                                       Caused by repayment of
                          51,374,540.56           1.14% 143,560,032.01               3.78%            -2.64%
borrowings                                                                                                       borrowings

Long-term                                                                                                        Caused by repayment of
                          17,783,500.00           0.39% 114,000,000.00               3.00%            -2.61%
borrowings                                                                                                       borrowings



                                                                       16
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                                  Interim Report 2018


                                                                                              Caused by the purchase of
Other current
                      604,214,106.70     13.38% 14,568,268.07          0.38%          13.00% bank structured deposits of
assets
                                                                                              RMB600,000,000


2. Assets and Liabilities Measured at Fair Value

□ Applicable √ Not applicable


3. Assets with Restricted Rights as of the End of the Reporting Period


                Item                     Ending carrying value                       Reason for restriction

 Accounts receivable                                51,374,540.56   As pledges for short-term borrowings

 Investment property (SPG Plaza)                    22,972,285.00   As mortgages for long-term borrowings

 Total                                              74,346,825.56                               --


V Investment Analysis

1. Total Investments Made

□ Applicable √ Not applicable


2. Significant Equity Investments Made in the Reporting Period

□ Applicable √ Not applicable


3. Significant Non-equity Investments Ongoing in the 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




                                                             17
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                                                      Interim Report 2018


VI Sale of Major Assets and Equity Interests

1. Sale of Major Assets

□ Applicable √ Not applicable
No such cases in this Reporting Period.


2. Sale of Major Equity Interests

□ Applicable √ Not applicable


VII Analysis on Majority-owned 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

                 Relationship           Main
  Company                                            Registered                                     Operating       Operating
                   with the         business                      Total assets    Net assets                                          Net profit
    name                                              capital                                        revenue          profit
                  Company               scope

Shenzhen
SPG
                                  Development 30,000,000.0 1,289,181,11 442,215,293. 1,025,584,99 435,633,32
Longgang       Subsidiary                                                                                                           326,764,331.46
                                  of real estate 0                         4.06            92              5.24           4.28
Development
Co., Ltd.

Shantou
SEZ, Wellam
FTY,                              Development 91,226,120.4 251,802,753. 147,307,510.                                -805,739.6
               Subsidiary                                                                          8,461,588.82                        -619,301.86
Building                          of real estate 4                          52             14                                   1
Development
, Co., Ltd.

Shantou
Huafeng Real
                                  Development 30,000,000.0 900,260,407.                            12,237,577.1 -21,879,04
Estate         Subsidiary                                                          59,779.45                                        -16,409,085.97
                                  of real estate 0                          77                                  9         5.02
Development
Co., Ltd.

Great Wall
                                                                  18,637,645.4 -83,452,473.
Estate Co.,    Subsidiary         Lease          2,051,146.00                                       287,797.83 -68,120.84               -68,120.84
                                                                             1             92
Inc. (U.S.)

Shenzhen
                                  Installation
Zhentong                                         10,000,000.0 321,621,992. 24,882,772.6 151,004,540. 1,532,801.
               Subsidiary         and                                                                                                 1,249,956.42
Engineering                                      0                          58                 1               11              76
                                  construction
Co., Ltd.


                                                                      18
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                                       Interim Report 2018


Shenzhen
Property                          Property                       106,039,411. 25,201,866.9 75,911,564.4 3,226,848.
               Subsidiary                         7,250,000.00                                                        2,391,888.45
Management                        management                              33            1            3          50
Co., Ltd.

Shenzhen
                                                  30,000,000.0 47,676,213.1 41,550,137.6 12,700,962.7
Petrel Hotel Subsidiary           Hotel Service                                                          904,354.11    658,792.03
                                                  0                        1            2            3
Co., Ltd.

Shenzhen
Huazhan
                                  Construction
Construction Subsidiary                           8,000,000.00 9,248,413.58 8,750,164.47 1,910,711.35 156,774.43       137,177.63
                                  supervision
Supervision
Co., Ltd.

Subsidiaries obtained or disposed in this Reporting Period
□ Applicable √ Not applicable
Information on main majority-owned and joint stock companies
1. Except the Company, the subordinate subsidiaries engaged in real estate development mainly include:
(1) Shenzhen SPG Longgang Development Co., Ltd., Shantou SEZ, Wellam FTY, Building Development, Co., Ltd. and Shantou
Huafeng Real Estate Development Co., Ltd. The Cuilinyuan (south district of Shanglin Garden Project) developed by Longgang
Company began to presell in June 2017. Until now, it has been accumulatively sold 70%. It was completed in May 2018. During the
Reporting Period, it has been carried forward RMB1025.58 million, accounting for 78.84% of the Company’s operating revenue. The
net profit generated from it was RMB326.76 million, accounting for 99.30% of the Company’s net profit.
(2) There is only little remaining buildings for Jinye Island and Yuejing Dongfang Project developed by Shantou Wellam Company.
The carried forward sales of the Yuejing Dongfang Project was of RMB4.65 million in the Reporting Period with overall carried
forward rate of sales 96%, and the carried forward sales of Jinye Island was of RMB3.81 million in the Reporting Period with overall
carried forward rate of sales 98%.
(3) Shantou Huafeng Company took the responsibility of developing the Tianyuewan Project (namely the Shantou Jingzaiwan
Project), of which the Phase I was opened to sale in October 2016, and it was completed in December 2017 with accumulated sales
of 21%. The carried forward sales of it in the Reporting Period was of RMB12.24 million. The net profit generated from it was of
RMB-16.41 million which was mainly from interest expense.
2. Shenzhen Zhentong Engineering Co., Ltd. was engaged in the business of building installation and maintenance with operating
revenue in the Reporting Period of RMB151 million accounting for 11.46% of total operating revenue of the Company.
3. The operating revenue of Shenzhen Property Management Co., Ltd. in the Reporting Period was of RMB75.91 million accounting
for 5.76% of total operating revenue of the Company.


VIII Structured Entities Controlled by the Company

□ Applicable √ Not applicable


IX Performance Forecast for January-September 2018

Warning of possible loss or considerable year-on-year change in the accumulative net profit made during the period-beginning to the
end of the next Reporting Period, as well as the reasons:



                                                                    19
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                                          Interim Report 2018


√ Applicable □ Not applicable
Forecast: Considerable increase at the same direction
Type of the forecast data: Interval number

                                                                   January-Septe
                                     January-September 2018                                              +/- (%)
                                                                    mber 2017

Forecast    accumulative     net
                                         36,000 --        40,000           14,961 Increase                  140.63% --      167.36%
profit (RMB'0,000)

Basic   earnings     per   share
                                         0.3559 --        0.3954           0.1479 Increase                  140.60% --      167.34%
(RMB/share)

Notes to the forecast              The sales of carry forward of the real estate of the Company increased year-on-year.


X Risks Facing the Company and Countermeasures

1. Risks Facing the Company:
(1) Risks from macroeconomic environment. Since this year, Chinese government has been
adhering to the general principle of seeking progress while maintaining stability, implementing new
development concepts, practicing the requirement of high-quality development and focusing on the
supply-side structural reform. Against this background, the economy in the first half of the year
maintained an overall stable trend with good momentum. However, given that the Sino-US trading
dispute is still going on, and that the global economic situation remains complicated and severe, the
downward pressure on the economy is difficult to relieve in a short term.
(2) Risks from policy on real estate industry. Against the convening of the 19th National Congress
of the Communist Party of China, the Chinese government shows a clear attitude that “Houses are
for living in, not for speculating on”. The continuous implementation of real estate macro-control
policy curbs people’s investment demands at a large degree, and potential customers are
increasingly taking a wait-and-see attitude, which generates a certain impact on the development
and sales of main business of the Company.
(3) Risks from development and operation of main business. At present the Company holds limited
land reserve for not increasing its land reserve for a long time, which is influenced by the major
assets restructuring. Moreover, there is a lag in the sales progress of Shantou Tianyuewan Phase I.
(4) Potential risks from assets restructuring. The major assets restructuring of the Company is a
significant and unprecedented event with complex trading structure for involved in the Shenzhen
State-owned Enterprise Reform and with large-scale assets since the underlying assets it plans to
purchase are industrial leading assets. Thus, the trading of its shares has been suspended for almost
two years since its start of trading on 14 September 2016. At present, matters such as the renewal of
diligence materials in restructuring and supplementary audit as well as evaluation are carried out
simultaneously. For the uncertainty of related events, investors are reminded of the investment
risks.
2. Countermeasures
Firstly, the Company will unremittingly pay attention to international and domestic macroeconomic
situation and the industrial trend, and then formulate flexible coping strategies.
Secondly, the Company will further strengthen its ability to develop main business, raise its
management level and make efforts to reinforce the marketing so as to stabilize the fundamental of

                                                                    20
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.        Interim Report 2018


the Company.
Thirdly, the Company will increase its land reserve timely and in an appropriate way to maintain
the sustainable development of the Company in the future.
Fourthly, the Company will enhance the communication with regulators together with parties
involved in the restructuring and make full efforts to promote the process of major assets
restructuring.




                                                             21
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                                        Interim Report 2018




                                           Part V Significant Events

I Annual and Extraordinary General Meeting Convened during the Reporting Period

1. General Meeting Convened during the Reporting Period


                                                 Investor
       Meeting                Type                              Convened date   Disclosure date     Index to disclosed information
                                          participation ratio

                                                                                                  Resolutions of 2017 Annual
  The 2017 Annual        Annual General
                                                      63.58% 26 April 2018      27 April 2018     General Meeting disclosed on
  General Meeting           Meeting
                                                                                                  www.cninfo.com.cn

                                                                                                  Resolutions of the 1st
The 1st Extraordinary
                        Extraordinary                                                             Extraordinary General Meeting of
General Meeting of                                    63.59% 15 May 2018        16 May 2018
                        General Meeting                                                           2018 disclosed on
2018
                                                                                                  www.cninfo.com.cn

2. Extraordinary General Meeting Convened at Request of Preference Shareholders with Resumed Voting

Rights

□ Applicable √ Not applicable


II Interim Dividend Plan for the Reporting Period

□ Applicable √ Not applicable

The Company has no interim dividend plan.


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 interim financial report been audited?

□Yes √ No

This interim Report is unaudited.




                                                                  22
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                                                      Interim Report 2018


V Explanations Given by Board of Directors and Supervisory Committee Regarding
“Modified Auditor’s Report” Issued by CPAs Firm for the Reporting Period

□ Applicable √ Not applicable


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

                  Amount
                             Estimated                                                                                                Index to
Lawsuit/arbitr involved                                                                        Execution of        Disclosure
                              liabilities     Progress          Decision and influence                                                disclosed
     ation       (RMB’0,0                                                                        decision              date
                                  or not                                                                                            information
                       00)

                                                           ①     Business          Tourism The        applicant
                                                                Company had to pay for has              received
                                                                the          compensation RMB15.20
                                                                RMB36.62 million and million.              Now
                                                                the relevant interest (from Business
                                                                                                                                   Annual
                                                                14 September 1998 to the Tourism
                                                                                                                                   Report 2017
Xi’an Project                                                  payment day) to Xi’an Company               has 30 March
                        2,100 No            In execution                                                                           (full text) on
Lawsuit                                                         Fresh     Peak     Company no         executable 2017
                                                                                                                                   www.cninfo.c
                                                                within one month after properties            and
                                                                                                                                   om.cn
                                                                the     judgment    entering Xi’an        Joint
                                                                into force. If the Business Commission on
                                                                Tourism Company failed Commerce has
                                                                to pay in time, it had to been refusing to
                                                                pay double debt interests execute            the


                                                                        23
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                                     Interim Report 2018


                                                      to   Xi’an     Fresh          Peak ruling.   It   is
                                                      Company for the overdue difficult                  to
                                                      period; ②      Xi’an Joint recover the rest.
                                                      Commission                       on
                                                      Commerce        had        jointly
                                                      and severally obligation
                                                      of the interests of the
                                                      compensation;              .     ③
                                                      Business              Tourism
                                                      Company         shall          bear
                                                      RMB227,500            of        the
                                                      acceptance fee and the
                                                      security fee.


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
No such cases in the Reporting Period.


2. Related Transactions Regarding Purchase or Sales of Assets or Equity Interests


□ Applicable √ Not applicable

No such cases in the Reporting Period.



                                                             24
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                                 Interim Report 2018


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.


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


                                                             25
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                                                         Interim Report 2018



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

                                         Carryin Assesse
                                                                                                                         Executi
            Name                         g value d value Name                                                                                   Index
 Name                                                                  Base              Transac                         on as of
            of the                        of the   of the        of                                Related                                          to
      of                                                              date of Pricing     tion                Related the end
            other                Signing involve involve evaluati                                  transact                         Disclos disclose
contrac                Target                                         evaluati principl price                 relation of the
           party of               date   d assets d assets       ve                                ions or                          ure date         d
    ting                                                               on (if     es     (RMB’                 ship     Reporti
                the                      (RMB’ (RMB’ agency                                        not                                       informa
 party                                                                 any)              0,000)                             ng
           contract                      0,000) 0,000) (if any)                                                                                     tion
                                                                                                                         Period
                                         (if any) (if any)

                                                                                                                                               Announ
                                                                                                                                               cement
                                                                                                                                               on
ShenZh
                                                                                                                                               Progres
en
                                                                                                                                               s of
Special
           Shenzh                                                                                                                              Using
Econo
           en                                                                                                                                  Self-ow
mic                   Structur
           Branch                                                                                                        Implem                ned
Zone                  al                                                                                      No
           of                                                                   Market                                   enting                Funds
Real                  deposit 28 May                                                                          related               30 May
           China                          60,000             -                  compar   60,000 No                       in a                  to
Estate                s ( term 2018                                                                           relation              2018
           Citic                                                                ison                                     normal                Invest
&                     of 186                                                                                  ship
           Bank                                                                                                          way                   into
Propert               days)
           Co.,                                                                                                                                Structur
ies
           Ltd                                                                                                                                 al
(Group
                                                                                                                                               Deposit
) Co.,
                                                                                                                                               s on
Ltd.
                                                                                                                                               www.c
                                                                                                                                               ninfo.c
                                                                                                                                               om.cn


XV. Social Responsibilities

1. Significant Environment Protection

Indicate by tick mark whether the Company or any of its subsidiaries is a heavily polluting business identified by the environmental

                                                                         26
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                    Interim Report 2018


protection authorities of China
No


2. Targeted Measures Taken to Help People Lift Themselves Out of Poverty

(1) Plan for Targeted Measures

(2) Outline of Targeted Measures in the Reporting Period

(3) Effects of Targeted Measures


                                                                        Measurement
                                  Indicator                                           Number/Progress
                                                                            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)                                     ——           ——


(4) Subsequent Targeted Measure Plans

XVI. Other Significant Events

√Applicable□ Not applicable
Since Shenzhen Investment Holdings Co., Ltd, the controlling shareholder of the Company, is
planning a significant event that involves 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 on 14 September 2016. On 30 September 2016, the Company disclosed the
Announcement on Share Trading Suspension Due to Major Assets Restructuring (No. 2016-025),
and continued the suspension due to major assets restructuring since the market opening on 30
September 2016.
The Company is organizing relevant intermediaries to conduct supplementary due diligence on the
parties to the restructuring 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

                                                             27
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.              Interim Report 2018


major assets restructuring 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 restructuring are high, and the Company still needs to communicate with
regulatory authorities for further discussion, demonstration and improvement. On the specific
circumstances of restructuring of the Company, please keep an eye on the Company's follow-up
announcements.
To ensure the smooth progress of this major asset restructuring, prevent abnormal fluctuations in the
prices of its stocks and protect the rights and interests of its minority shareholders, the Company has
applied to the Shenzhen Stock Exchange for continued share trading suspension for no more than 1
month as of 14 August 2018. It is respected that the major assets restructuring plan or report will be
disclosed according to the requirements of the Standards for the Contents and Formats of
Information Disclosure by Companies Offering Securities to the Public No. 26—Major Assets
Restructuring of Listed Companies prior to 14 September 2018.
During the continued suspension, the Company will keep promoting the work of this major asset
restructuring 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.

XVII. Significant Events of Subsidiaries

□ Applicable √ Not applicable




                                                             28
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                                                       Interim Report 2018




                    Part VI Share Changes and Shareholder Information

I. Share Changes

1. Share Changes

                                                                                                                                           Unit: share

                                   Before the change                        Increase/decrease (+/-)                             After the change

                                                                                    Capitalize
                                                           Newly       Bonus                                                               Proportio
                                  Amount Proportion                                 d Capital      Others       Subtotal       Amount
                                                         issue share   shares                                                                 n
                                                                                    reserves

I. Restricted shares                      0     0.00%              0            0              0            0              0          0       0.00%

1.Shares held by the state                0     0.00%              0            0              0            0              0          0       0.00%

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
                                          0     0.00%                           0              0            0              0          0       0.00%
by domestic legal person

Shares held by domestic
                                          0     0.00%              0            0              0            0              0          0       0.00%
natural person

4.Oversea shareholdings                   0     0.00%              0            0              0            0              0                  0.00%

Among which: shares held
                                          0     0.00%              0            0              0            0              0          0       0.00%
by oversea legal person

Shares held by oversea
                                          0     0.00%              0            0              0            0              0          0       0.00%
natural person

II. Shares not subject to 1,011,660,                                                                                           1,011,660
                                               100.00%             0            0              0            0              0               100.00%
trading moratorium                      000                                                                                         ,000

                                  891,660,0                                                                                    891,660,0
1. RMB ordinary shares                         88.14%              0            0              0            0              0                 88.14%
                                         00                                                                                          00

2.   Domestically          listed 120,000,0                                                                                    120,000,0
                                                11.86%             0            0              0            0              0                 11.86%
foreign shares                           00                                                                                          00

3. Oversea listed foreign
                                          0     0.00%              0            0              0            0              0          0       0.00%
shares

4. Other                                  0     0.00%              0            0              0            0              0          0       0.00%

                                  1,011,660,                                                                                   1,011,660
III. Total shares                              100.00%             0            0              0            0              0               100.00%
                                        000                                                                                         ,000


                                                                       29
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                                                 Interim Report 2018



Reasons for the share changes

□ Applicable √ Not applicable

Approval of share changes

□ Applicable √ Not applicable

Transfer of share ownership

□ Applicable √ Not applicable

Effects of share changes on the basic EPS, diluted EPS, net assets per share attributable to ordinary shareholders of the Company and

other financial indexes over the prior year and the prior period

□ Applicable √ Not applicable

Other contents that the Company considers necessary or is required by the securities regulatory authorities to disclose

□ 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 preference
Total number of ordinary                                              shareholders with resumed
                                                             76,443                                                                        0
shareholders at the period-end                                        voting rights at the period-end
                                                                      (if any) (see Note 8)

              Shareholding of ordinary shareholders holding more than 5% shares or the top 10 of ordinary shareholders

                                                     Number        Increase     Number                         Pledged or frozen shares
                                                        of             and      of shares Number of
                                        Holding     shareholdi decrease of        held        shares held
    Name of            Nature of
                                       percentage ng at the           shares    subject to subject to         Status of
  shareholder         shareholder                                                                                              Amount
                                           (%)      end of the     during        trading        trading        shares
                                                    Reporting Reporting moratoriu moratorium
                                                      Period       Period           m

Shenzhen          State-owned legal                 642,884,2                                 642,884,26
                                           63.55%
Investment        person                                     62                                           2


                                                                      30
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                                            Interim Report 2018


Holdings       Co.,
Ltd

Shandong Gold
Financial
Holding Capital
Management
                      Domestic
Co.,      Ltd. -                                            10,300,00
                      non-state-owned                1.02%                                  10,300,000
Shandong Gold                                                        0
                      legal person
Financial
Holding
Sustaining Fund
1

                      Domestic       natural
Lu Zhigao                                            0.32% 3,246,949                         3,246,949
                      person

                      Domestic natural
Tan Shiqing                                          0.13% 1,286,701                         1,286,701
                      person

                      Domestic natural
Yang Shuilian                                        0.13% 1,273,700                         1,273,700
                      person

                      Domestic natural
Yang Jianxiong                                       0.12% 1,255,750                         1,255,750
                      person

Central      Huijin
Asset                 State-owned legal
                                                     0.12% 1,165,500                         1,165,500
Management            person
Co., Ltd.

                      Domestic natural
Peng Wei                                             0.11% 1,129,082                         1,129,082
                      person

                      Foreign natural
Wu Haoyuan                                           0.11% 1,109,300                         1,109,300
                      person

Guotai      Junan
Securities            Foreign legal
                                                     0.10% 1,015,683                         1,015,683
(Hong Kong)           person
Limited

Strategic investors or the general
legal person due to the placement of
new shares become the top 10                   N/A
ordinary shareholders (if any) (note
3)

                                               The Company has found no related parties or acting-in-concert parties as defined in the
Explanation on related relationship
                                               Administrative Measures for Shareholding Changes in Listed Companies among the
or/and persons
                                               shareholders above.

                       Particulars about shares held by top 10 ordinary shareholders not subject to trading moratorium


                                                                         31
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                                                Interim Report 2018



                                                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 Co.,                                                                      RMB      ordinary
                                                                                       642,884,262                             642,884,262
Ltd                                                                                                    shares

Shandong Gold Financial Holding
Capital Management Co., Ltd. -                                                                        RMB      ordinary
                                                                                        10,300,000                                10,300,000
Shandong Gold Financial Holding                                                                        shares
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

                                                                                                       RMB      ordinary
Yang Shuilian                                                                              1,273,700                               1,273,700
                                                                                                       shares

                                                                                                       Domestically
Yang Jianxiong                                                                             1,255,750 listed foreign                1,255,750
                                                                                                       share

Central Huijin Asset Management                                                                        RMB      ordinary
                                                                                           1,165,500                               1,165,500
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
                                                                                                       share

                                                                                                       Domestically
Guotai      Junan Securities (Hong
                                                                                           1,015,683 listed foreign                1,015,683
Kong) Limited
                                                                                                       share

Explanation on related relationship
among the top ten shareholders of
tradable share not subject to trading
moratorium, as well as among the The Company has found no related parties or acting-in-concert parties as defined in the
top ten shareholders of tradable Administrative Measures for Shareholding Changes in Listed Companies among the
share      not   subject   to    trading shareholders above.
moratorium         and     top       ten
shareholders, or explanation on
acting-in-concert

Particular       about     shareholder
                                           The fourth shareholder holds all his shares in the Company in his accounts of collateral
participate in the securities lending
                                           securities for margin trading. And the third shareholder holds some of his shares in the
and borrowing business (if any)
                                           Company in such accounts.
(note 4)



                                                                       32
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                                    Interim Report 2018



Indicate by tick mark whether any of the top ten ordinary shareholders or the top ten non-restricted ordinary shareholders of the

Company conducted any promissory repo during the Reporting Period.

□ Yea √ No

No such cases in the Reporting Period.


IV. Change of the Controlling Shareholder or the Actual Controller

Change of the controlling shareholder in the Reporting Period

□ Applicable √ Not applicable

There was no any change of the controlling shareholder of the Company in the Reporting Period.

Change of the actual controller in the Reporting Period

□ Applicable √ Not applicable

There was no any change of the actual controller of the Company in the Reporting Period.




                                                                33
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.   Interim Report 2018




                                         Part VII Preferred Shares

□ Applicable √ Not applicable
No preferred shares in the Reporting Period.




                                                             34
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                              Interim Report 2018




             Part 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 2017.


II Changes in Directors, Supervisors and Senior Management

√ Applicable □ Not applicable

      Name                        Position                     Type               Date                 Reason

Chen Ji            Board Secretary                      Left              26 April 2018   Job change

Tang Xiaoping      Board Secretary                      Employed          26 April 2018

Liu Quanmin        Independent director                 Left              15 May 2018     Personal reasons

Kang Xiaoyue       Independent director                 Employed          15 May 2018

Wang Xiuyan        Supervisor                           Left              15 May 2018     Retired

Ren Wei            Supervisor                           Employed          15 May 2018




                                                                35
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                                       Interim Report 2018




                                          Part 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




                                                                 36
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                        Interim Report 2018




                                         Part X Financial Report

I Auditor’s Report
Whether the semi-annual report has been audited?
□ Yes √ No
The semi-annual report of the Company has not been audited.
II Financial Statements
The unit of the financial statements attached: RMB
1.Consolidated Balance Sheet
Prepared by:SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd
                                                        June 30 2018
                                                                                                Currency: RMB Yuan
                    Item                             Closing balance                   Opening balance

Current Assets:

Monetary funds                                                     1,068,660,665.62                1,207,079,090.29
Account receivables                                                 336,114,447.24                   137,092,156.05
Prepayments                                                              952,357.55                       6,040,367.51
Dividends receivable                                                    1,052,192.76                      1,052,192.76
Other receivables                                                      62,528,710.16                     75,903,158.62
Inventories                                                        1,677,853,797.04                1,764,086,643.94
Other current assets                                                604,214,106.70                       11,369,544.80
Total current assets                                               3,751,376,277.07                3,208,544,440.97
Non-current assets
Available- for- sale financial assets                                  17,464,240.74                     17,464,240.74
Long-term equity investments                                           29,888,661.65                     29,888,661.65
Investment properties                                               635,361,225.57                   647,297,124.04
Fixed assets                                                           35,921,711.70                     37,937,868.71
Intangible assets                                                                                           55,200.00
Long-term deferred assets                                                500,320.01                        586,350.66
Deferred tax assets                                                    45,766,544.40                     47,490,095.19
Total non-current assets                                            764,902,704.07                   780,719,540.99
TOTAL ASSETS                                                       4,516,278,981.14                3,989,263,981.96
Current liabilities:
Short-term loans                                                       51,374,540.56                 104,207,653.64
Accounts payable                                                    247,315,649.23                   190,629,756.30


                                                              37
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                               Interim Report 2018


Deferral                                                           256,368,225.43                           332,152,016.54
Employee benefits payable                                           37,041,729.10                               30,516,219.96
Taxes payable                                                      203,844,320.26                               86,153,526.89
Interest payables                                                   16,535,277.94                               16,535,277.94
Other payables                                                     633,968,332.94                           374,945,089.10
Non-current liabilities due within one
                                                                    17,773,200.00                               64,000,000.00
year
Total current liabilities                                         1,464,221,275.46                        1,199,139,540.37

Non-current liabilities::

Long-term loans                                                     17,783,500.00                               82,000,000.00
Long-term payables                                                   5,900,692.96                                8,101,880.05
Total non-current liabilities                                       23,684,192.96                               90,101,880.05
Total liabilities                                                 1,487,905,468.42                        1,289,241,420.42

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                                           9,559,409.19                               10,045,697.16
Surplus reserve                                                     85,666,668.00                               85,666,668.00
Undistributed profit                                              1,071,690,930.24                          742,624,845.71
Total owners' equity attributable to
                                                                  3,156,821,917.54                        2,828,242,120.98
parent company
Minority interests                                                -128,448,404.82                          -128,219,559.44
Total owners’ equity                                             3,028,373,512.72                        2,700,022,561.54
Total liabilities and owners’ equity                             4,516,278,981.14                        3,989,263,981.96


Legal representative : Zhou Jianguo                                      Person in charge of accounting : Tang Xiaoping
Person in charge of accounting organ:Qiao Yanjun


2、Balance Sheet


                                                     As of 30 June 2018
Prepared by:SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Currency: RMB Yuan
                     Item                                Note                                 Closing balance
Current assets
Monetary funds                                                     477,965,205.73                           726,801,673.89
Accounts receivable                                                  4,314,184.42                                4,482,074.17
Prepayments                                                            200,000.00
Dividends receivable                                                                                        169,393,952.18


                                                             38
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.            Interim Report 2018


Other receivables                                                  753,668,682.27       899,872,523.90
Inventories                                                        430,405,017.51       365,067,776.29
Other current assets                                               600,234,829.12           165,020.02
Total current assets                                              2,266,787,919.05    2,165,783,020.45
Non-current Assets:
Available-for-sale financial assets                                 12,000,000.00        12,000,000.00
Long-term equity investments                                       248,870,407.21       248,870,407.21
Investment properties                                              521,797,432.63       532,414,374.79
Fixed assets                                                        23,118,873.12        24,371,839.21
Intangible assets                                                                            55,200.00
Long-term deferred assets                                              437,960.62           529,905.52
Deferred tax assets                                                     30,620.43
Total non-current assets                                           806,255,294.01       818,241,726.73
Total Assets                                                      3,073,043,213.06    2,984,024,747.18
Current liabilities:
Short-term loans                                                                 -                    -
Account payable                                                      5,298,907.50         6,803,512.99
Deferral                                                                93,435.00            93,435.00
Employee benefits payable                                           14,955,449.53         8,761,156.65
Taxes payable                                                       52,167,159.04        52,311,869.66
Interest payable                                                    16,535,277.94        16,535,277.94
Other payables                                                     353,291,934.84       178,195,493.46
Non-current liability due within one yea                            17,773,200.00        64,000,000.00
Other current liability                                                          -                    -
Total current liabilities                                          460,115,363.85       326,700,745.70

Non-current liabilities:

Long-term loans                                                     17,783,500.00        82,000,000.00
Total non-current liabilities                                       17,783,500.00        82,000,000.00
Total liabilities                                                  477,898,863.85       408,700,745.70

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                                                     62,537,054.59        62,537,054.59
Undistributed profit                                               542,702,384.51       522,882,036.78
Total owners' equity attributable to
                                                                  2,595,144,349.21    2,575,324,001.48
parent company
Total liabilities and owners' equity                              3,073,043,213.06    2,984,024,747.18




                                                             39
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                              Interim Report 2018


3、Consolidated Income Statemen


For the Year 2018
Prepared by: SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE& PROPERTIES (GROUP) CO., LTD
Currency: RMB Yuan


                     Item                       Amount for the current period          Amount for the prior period

Ⅰ. Total operating income                                          1,317,541,631.35                       731,306,982.03

Including: Operating income                                         1,317,541,631.35                       731,306,982.03

Ⅱ. Total operating Costs                                            878,049,647.69                        547,779,579.99

Including: Operating costs                                           540,417,491.41                        494,949,797.89
            Tax and surcharge                                        277,340,490.76                          23,913,311.23
            Selling expenses                                          37,167,133.77                           6,832,803.76
            Administrative expense                                    31,736,200.85                          24,719,238.69
            Financial expense                                          -8,611,669.10                         -2,635,571.58
      Impairment losses of assets
    Add: Gains from changes in fair
value ("-" means loss)
Investment income ("-" means loss)                                        827,100.00                            650,000.00
Including: Investment income from
associates and joint venture
Gains from disposal of asset ("-" means
loss)

Ⅲ. Operating profit ("-" means loss)                                440,319,083.66                        184,177,402.04

Add: Non-operating income                                                  95,835.23                            317,021.43
Less: Non-operating expenses                                              199,553.33                            121,613.79

Ⅳ   .Total profit ("-" means loss)                                  440,215,365.56                        184,372,809.68

Less: Income tax expenses                                            111,169,717.28                          47,173,139.72

Ⅴ   Net profit ("-" means loss)                                     329,045,648.28                        137,199,669.96

  5.1.Net income from continuing
                                                                     329,045,648.28                        137,199,669.96
operations (“-” for net loss)
  5.2. Net income from discontinued
operations (“-” for net loss)
Net attributable to owners of parent
                                                                     329,066,084.53                        137,226,601.84
company
Minority interests                                                        -20,436.25                             -26,931.88

Ⅵ . After-tax net of other comprehensive
                                                                         -694,697.10                          2,051,513.82
incomes
After-tax net of other comprehensive
incomes owned by owner of the parent                                     -486,287.97                          1,436,059.68
company

                                                               40
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                                     Interim Report 2018


6.1 Other comprehensive incomes that
cannot be classified into profit and loss in
the future
6.2 Other comprehensive incomes that
would be classified into profit and loss in                                   -486,287.97                           1,436,059.68
the future
6.2.1.Share of other comprehensive
income of investees that will be
reclassified to profit or loss under equity
method
6.2.2. Gains/Losses on changes in fair
value of available-for-sale financial
assets
6.2.3. Gains/Losses arising from
reclassification of
held-to-maturity investments to
available-for-sale financial assets
6.2.4. Effective gains/losses on cash flow
hedges
6.2.5.Translation difference in the foreign
                                                                              -486,287.97                           1,436,059.68
currency financial statement
6.2.6. Other
Net of tax from other comprehensive
                                                                              -208,409.13                             615,454.14
incomes owned by minority stockholders

Ⅶ. Total comprehensive income                                            328,350,951.18                          139,251,183.78

Total comprehensive income attributable
                                                                          328,579,796.56                          138,662,661.52
to owners of parent company
   Total comprehensive income
                                                                              -228,845.38                             588,522.26
attributable to minority interests

Ⅷ   .Earnings per share

8.1 Basic Earnings per share                                                        0.3253                                 0.1356
8.2 Diluted Earnings per share                                                      0.3253                                 0.1356


Legal representative:Zhou Jianguo        Person in charge of accounting: Tang Xiaoping

Person in charge of accounting organ:Qiao Yanjun


4.Income Statement


For the Year 2018
                     Prepared by:SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
                                                                                                            Currency: RMB Yuan


                    Item                            Amount for the current period            Amount for the prior period
I. Total operating income                                                  29,987,467.51                          229,557,159.39

                                                                    41
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                                 Interim Report 2018


Less: Operating cost                                                  12,583,669.74                           111,270,162.44
       Tax and surcharge                                                3,654,804.11                            5,845,366.82
       Selling expenses                                                  908,158.92                               964,585.37
       Administrative expense                                         10,894,513.21                            11,294,643.69
       Financial expense                                              -23,494,559.62                          -12,619,614.38
       Impairment losses of assets
Add: Gain from changes in fair value ("-"
means loss)
        Investment income ("-" means loss)                               827,100.00                           170,043,952.18

II. Operating profit ("-" means loss))                               26,267,981.15                           282,845,967.63

Add: Non-operating income                                                  34,352.59                                        2.69
Less: Non-operating expenses                                             143,299.25                                    12,574.69
III. Total profit ("-" means loss)                                    26,159,034.49                           282,833,395.63
Less: Income tax expenses                                              6,338,686.76                            28,203,216.91
IV.Net profit ("-" means loss)                                        19,820,347.73                           254,630,178.72
  4.1.Net income from continuing
                                                                      19,820,347.73                           254,630,178.72
operations (“-” for net loss)
  4.2. Net income from discontinued
operations (“-” for net loss)
V. Total comprehensive income                                         19,820,347.73                           254,630,178.72
VI. Earnings per share
6.1 Basic Earnings per share                                                    0.0196                                   0.2517
6.2 Diluted Earnings per share                                                  0.0196                                   0.2517


5.Consolidated Cash Flow Statement


For the Year 2018
Prepared by : SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Currency: RMB Yuan


                   Items                      Amount for the   current period            Amount for the prior period

Ⅰ. Cash Flow from Operating Activities:

Cash received from sales of goods or
                                                                    1,082,569,145.05                          620,215,163.04
rendering of services
Cash received relating to other
                                                                      86,785,897.61                            25,245,970.46
operating activities
Sub-total of Cash Inflows                                           1,169,355,042.66                          645,461,133.50
Cash paid for goods and services                                     359,603,259.50                           510,142,331.49
Cash paid to and on behalf of
                                                                      67,569,589.85                            77,473,040.09
employees
Cash paid on taxes and levies                                         89,393,534.10                            85,002,656.01

                                                               42
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                               Interim Report 2018


Cash paid relating to other operating
                                                                      58,060,529.54                          70,543,803.10
activities
Sub-total of Cash Outflows                                           574,626,912.99                         743,161,830.69
Net Cash Flows from Operating
                                                                     594,728,129.67                         -97,700,697.19
Activities

Ⅱ. Cash Flows from Investing
Activities:
Cash received from return of
investments
Cash received investing income                                           827,100.00                             650,000.00
Sub-total of Cash Inflows                                                827,100.00                             664,976.00
Cash paid to acquire fixed assets,
                                                                         171,268.71                             240,065.49
intangible assets and other long assets
Cash paid on other investing activities                              600,000,000.00
Sub-total of Cash Outflows                                           600,171,268.71                             240,065.49
Net Cash Flows from Investing
                                                                    -599,344,168.71                             424,910.51
Activities

Ⅲ. Cash flow from Financing Activities

Cash received from borrowing                                                                                 20,900,000.00
Sub-total of Cash Inflows                                                                                    20,900,000.00
Cash repayments on borrowed amounts                                  131,343,300.00                          20,216,016.22
Cash payments for distribution of
                                                                       2,185,638.06                           4,875,421.66
dividends or profits
Sub-total of cash Outflows                                           133,528,938.06                          25,091,437.88
Net cash flows from financing activities                            -133,528,938.06                          -4,191,437.88

Ⅳ. Effect of foreign exchange rate on
                                                                           16,586.26                            -246,628.00
cash

Ⅴ. Net increase in cash and cash
                                                                    -138,128,390.84                        -101,713,852.56
equivalents
Add: cash equivalents at the beginning
                                                                    1,206,789,056.46                      1,265,767,290.57
of the period

Ⅵ. Cash equivalents at the end of the
                                                                    1,068,660,665.62                      1,164,053,438.01
period


6.Cash Flow Statement


For the Year 2018
Prepared by : SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
Currency: RMB Yuan
                                                                                                                     单位:元
                    Item                       Amount for the current period           Amount for the prior period

Ⅰ. Cash Flow from Operating Activities:

                                                               43
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.           Interim Report 2018


Cash received from sales of goods or
                                                                   34,592,057.81        98,370,357.73
rendering of services
Cash received relating to other
                                                                  387,291,082.03        11,306,698.94
operating activities
Sub-total of cash inflows                                         421,883,139.84       109,677,056.67
Cash paid for goods and services                                   53,951,198.75        35,773,557.77
Cash paid to and on behalf of
                                                                   15,556,181.04        20,853,392.88
employees
       Cash paid on taxes and levies                               13,609,736.21        36,541,949.79
Cash paid relating to other operating
                                                                   45,617,416.07         7,663,760.55
activities
Sub-total of Cash Outflows                                        128,734,532.07       100,832,660.99
Net Cash Flows from Operating
                                                                  293,148,607.77         8,844,395.68
Activities

Ⅱ. Cash Flows from Investing
Activities:
     Cash received from return of
                                                                  170,221,052.18           650,000.00
investments
Sub-total of Cash Inflows                                         170,221,052.18           650,000.00
Cash paid to acquire fixed assets,
                                                                       20,888.00            48,675.00
intangible assets and other long assets
Cash paid on other investing activities                           600,000,000.00
Sub-total of cash outflows                                        600,020,888.00            48,675.00
Net Cash Flows from Investing
                                                                  -429,799,835.82          601,325.00
Activities

Ⅲ. Cash flow from Financing Activities

Sub-total of cash inflows
Cash repayments on borrowed amounts                               110,443,300.00        15,216,016.22
Cash payments for distribution of
                                                                     1,728,453.04        4,413,190.66
dividends or profits
Cash payments on other financing
activities
Sub-total of cash Outflows                                        112,171,753.04        19,629,206.88
Net cash flows from financing activities                          -112,171,753.04      -19,629,206.88

Ⅳ. Effect of foreign exchange rate on
                                                                       -13,487.07           -15,112.84
cash

Ⅴ.Net increase in cash and cash
                                                                  -248,836,468.16      -10,198,599.04
equivalents
  Add: cash equivalents at the beginning of
                                                                  726,801,673.89       818,261,250.52
the period

Ⅵ. Cash equivalents at the end of the
                                                                  477,965,205.73       808,062,651.48
period


                                                             44
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                                   Interim Report 2018


7.CONSOLIDATED STATEMENT OF CHANGE IN OWNER'S EQUITY


                       Prepared by:SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd.
                                                                                                           Currency: RMB Yuan
January-June 2018
                                                                The amount in current year
                                                Attribute to the equity of parent company
                                 Other equity
         Items                                                      Other                                   Minority Total
                                  instruments              Less:                           Generic Undistri
                       Share                      Capital          compre Special Surplus                   interest owners'
                               Prefer Perpet              Treasur                            risk   buted
                       capital               Othe reserve y shares hensive reserve reserve                      s     equity
                                e nce ual                          income
                                                                                           reserve profit
                                              r
                               shares bonds

I.    Balance at        1,011,                                                                                 -128,21 2,700,0
                                                    978,244            10,045,              85,666,   742,624
the end of last        660,00                                                                                  9,559.4 22,561.
                                                     ,910.11            697.16               668.00    ,845.71
period                    0.00                                                                                       4     54
Add: Changes of
accounting
policies
Prior year
adjustments
Corporate
combination under
common control
Others
II. Balance at the      1,011,                                                                                 -128,21 2,700,0
                                                    978,244            10,045,              85,666,   742,624
Beginning of the       660,00                                                                                  9,559.4 22,561.
                                                     ,910.11            697.16               668.00    ,845.71
Year                      0.00                                                                                       4     54
III.Increase/Decre
ase movements in                                                       -486,28                        329,066 -228,84 328,350
this Year ("-"                                                            7.97                         ,084.53   5.38 ,951.18
means loss)
(I) Total
                                                                       -486,28                        329,066 -228,84 328,350
comprehensive
                                                                          7.97                         ,084.53   5.38 ,951.18
income
(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
                                                                  45
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                                      Interim Report 2018


4.Others
(IV)Internal
carry-forward of
shareholders’
equity
(V) Special
Reserve
(VI) Others
                    1,011,                                                                               1,071,6 -128,44 3,028,3
IV. Balance at the                                    978,244             9,559,4              85,666,
                   660,00                                                                                90,930. 8,404.8 73,512.
end of the period                                      ,910.11              09.19               668.00
                      0.00                                                                                   24        2     72

January-June 2017
                                                                                                              Currency: RMB Yuan
                                                          The amount brought from the previous year
                                                   Attribute to the equity of parent company
                                    Other equity                   Other
         Items                                             Less: compre                                    Minority Total
                                   instruments                                            Generic Undistri
                       Share                      Capital Treasur hensive Special Surplus                  interest owners'
                                      Perpet                                               risk    buted
                       capital Prefer        Othe reserve    y                                                 s     equity
                               e nce ual                          income reserve reserve reserve profit
                                               r          shares
                                 shares bonds

                        1,011,                                                                                    -127,89 2,515,9
I.Balance at the                                      978,244             10,652,              59,394,   583,908
                       660,00                                                                                     3,573.2 66,869.
end of last period                                     ,910.11             531.69               668.24    ,333.05
                          0.00                                                                                          1     88
Add: Changes of
accounting
policies
Prior year
adjustments
Corporate
combination under
common control
Others
II. Balance at the      1,011,                                                                                    -127,89 2,515,9
                                                      978,244             10,652,              59,394,   583,908
Beginning of the       660,00                                                                                     3,573.2 66,869.
                                                       ,910.11             531.69               668.24    ,333.05
Year                      0.00                                                                                          1     88
III.Increase/Decre
ase movements in                                                          1,436,0                        137,226 588,522 139,251
this Year ("-"                                                              59.68                         ,601.84    .26 ,183.78
means loss)

(I) Total
                                                                          1,436,0                        137,226 588,522 139,251
comprehensive
                                                                            59.68                         ,601.84    .26 ,183.78
income
(II) Capital paid in
                                                                                                                             0.00
and reduced by the


                                                                     46
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.   Interim Report 2018


shareholders
3.2.1 Capital
increased and
                                                                                          0.00
reduced by
owners
3.2.2 Capital
increased by
holders                                                                                   0.00
of other equity
instruments
3.2.3 Amounts of
                                                                                          0.00
share-based
3.2.4 Other
(III) Profit
                                                                                          0.00
distribution
3.3.1.Draw
statutory surplus
reserve
3.3.2.Draw generic
risk reserve

3.3.3.Distribution
to shareholders
3.3.4.Others
(IV)Internal
carry-forward of
                                                                                          0.00
shareholders’
equity
3.4.1 New increase
of capital (or
share capital) from
capital reserve
3.4.2 New increase
of capital (or
share capital) from
surplus reserve
3.4.3 Surplus
reserve for making
up loss
3.4.4 Other
(V) Special
                                                                                          0.00
Reserve
3.5.1Withdrawn
for the period
3.5.2 Used in the
period


                                                             47
  ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                                                   Interim Report 2018


   (VI) Others
                           1,011,                                                                                               -127,30 2,655,2
                                                             978,244               12,088,             59,394,         721,134
   IV. Balance at the 660,00                                                                                                    5,050.9 18,053.
                                                              ,910.11               591.37              668.24          ,934.89
   end of the period    0.00                                                                                                          5     66


  8.Statement of Changes in Owners’ Equity


  January-June 2018
                                                                                                                              Currency: RMB Yuan

                                                                           The amount in current year

                                             Other equity                                      Other
                                               instruments                          Less:     comprehe              Generic Undistri      Total
         Items              Share                                       Capital                           Surplus
                                      Prefere Perpet                               Treasury    nsive                  risk      buted    owners'
                           capital                           Othe       reserve                           reserve
                                       nce         ual                             shares      income               reserve     profit   equity
                                                              r
                                      shares     bonds

ⅠBalance at the           1,011,66                                 978,244,9                                       62,537,05 522,882 2,575,324

End of Last Period         0,000.00                                        10.11                                         4.59 ,036.78     ,001.48

Add: Changes of

accounting policies

Prior year

adjustments

Others

II. Balance at the
                           1,011,66                                 978,244,9                                       62,537,05 522,882 2,575,324
Beginning       of   the
                           0,000.00                                        10.11                                         4.59 ,036.78     ,001.48
Year

III.
Increase/Decrease
                                                                                                                               19,820, 19,820,34
movements in this
                                                                                                                                347.73       7.73
Year     ("-"    means
loss)
(I) Total
                                                                                                                               19,820, 19,820,34
comprehensive
                                                                                                                                347.73       7.73
income

(II) Capital paid in

and reduced by the

shareholders


                                                                              48
 ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.   Interim Report 2018


3.2.1 Capital

increased and

reduced by

owners

3.2.2 Capital

increased by holders

of other equity

instruments

3.2.3 Amounts of

share-based

3.2.4 Other

(III) Profit

distribution

1.Draw statutory

surplus reserve

2.Distribution to

shareholders

3.Others

(IV)Internal

carry-forward of

shareholders’ equity

3.4.1 New increase

of capital (or

share capital) from

capital reserve

3.4.2 New increase

of capital (or

share capital) from

surplus reserve

3.4.3 Surplus reserve

for making

up loss

3.4.4 Other

(V) Special Reserve



                                                              49
 ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                                           Interim Report 2018


3.5.1Withdrawn for

the period

3.5.2 Used in the

period

(VI) Others

IV. Balance at the       1,011,66                                  978,244,9                                62,537,05 542,702 2,595,144

end of the period        0,000.00                                      10.11                                     4.59 ,384.51   ,349.21

 January-June 2017
                                                                                                                    Currency: RMB Yuan
                                                                The amount brought from the previous year
                                           Other equity                                  Other
                                             instruments                         Less: comprehe             Generic Undistri Total
           Items         Share                                      Capital                     Surplus
                                 Prefere Perpet                                Treasury nsive                 risk   buted owners'
                         capital                           Othe     reserve                     reserve
                                     nce         ual                            shares income               reserve profit   equity
                                                            r
                                    shares     bonds

  ⅠBalance at the   1,011,66                                      978,244,9                                36,265,05 286,434 2,312,604
  End of Last Period 0,000.00                                          10.11                                     4.83 ,038.90 ,003.84

  Add: Changes of
  accounting
  policies
   Prior      year
  adjustments
  Others
  II. Balance at the
                         1,011,66                                  978,244,9                                36,265,05 286,434 2,312,604
  Beginning of the
                         0,000.00                                      10.11                                     4.83 ,038.90 ,003.84
  Year
  III.
  Increase/Decrease
                                                                                                                      254,630 254,630,1
  movements in this
                                                                                                                       ,178.72    78.72
  Year ("-" means
  loss)
  (I) Total
                                                                                                                      254,630 254,630,1
  comprehensive
                                                                                                                       ,178.72    78.72
  income
  (II) Capital paid in
  and reduced by the
  shareholders
  3.2.1 Capital
  increased and
  reduced by
  owners
  3.2.2 Capital
  increased by
                                                                          50
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                      Interim Report 2018


holders
of other equity
instruments
3.2.3 Amounts of
share-based
3.2.4 Other
(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
3.4.1 New increase
of capital (or
share capital) from
capital reserve
3.4.2 New increase
of capital (or
share capital) from
surplus reserve
3.4.3 Surplus
reserve for making
up loss
3.4.4 Other
(V) Special
Reserve
3.5.1Withdrawn
for the period
3.5.2 Used in the
period
(VI) Others
IV. Balance at the 1,011,66                           978,244,9                      36,265,05 541,064 2,567,234
end of the period 0,000.00                                10.11                           4.83 ,217.62 ,182.56

Legal representative:                 Person in charge of accounting:       Person in charge of accounting organ




                                                              51
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                          Interim Report 2018




III   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, 2018, which approved by Group’s Board of Directors.
25 units were consolidated into the Group in first half of 2018 for the detail in Note 8 "Equities in other entities".
The company did not change the range of consolidation in this period compared with last year.
IV    The Basis of Preparation of Financial Statements
4.1 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 42 specified Accounting
Standards for Business Enterprise issued and revised by the Ministry of Finance of People’s Republic of China
on 15 February, 2006 and thereafter, the guidance for the application of the Accounting Standards for Business
Enterprise, the explanation for the Accounting Standards for Business Enterprise and other relevant
regulations( thereinafter referred as “Accounting Standards for Business Enterprises”) and Compilation Rules
for Information Disclosure by Companies Offering Securities to the Public No.15—General Provisions on
Financial Reports (2014 Revision) issued by the China Securities Regulatory Commission (CSRC).
According to the relevant accounting regulations of Chinese Accounting Standards for Business Enterprises,
the Group has adopted the accrual basis of accounting. The Group adopts the historical cost as the principle of

                                                             52
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                         Interim Report 2018




measurement in the financial statements except some financial instruments and Investment properties.
Non-current assets held for sale are based on lower price between the fair value less estimated expenses and
the original book value when they meet the conditions for holding the sale. Provision will be made if any assets
impair in accordance with relevant requirements.
4.2 Going concern
No significant suspected event or circumstances about the going concern for the past 12 months from the end
of the reporting period.


V Important accounting policies and estimations
The Company and each subsidiary formulated certain specific accounting policies and
accounting estimates according to the actual production and operation characteristics and the
regulations of the relevant ASBE on the transactions and events of the revenues recognition.
For the details, please refer to each description of Notes 5. 28 “Revenues”. For the notes of
the significant accounting judgment and estimations made by the management layer, please
refer to Notes 5.34 “Significant accounting judgment and estimations”.
5.1 Basis of Preparation
   The financial statements of the Group are recognized and measured in accordance with the regulations of
the Chinese Accounting Standards for Business Enterprises and they give a true and fair view of the financial
position, business result and cash flow of the Group as of 30 June 2018. 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 December 31.
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


                                                             53
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                        Interim Report 2018




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 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

                                                             54
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                        Interim Report 2018




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
4.5(2)), a judgment about whether it is package deal or not should be made. If it is package deal, please refer
to the note 4.12 - Long-term equity investment for accounting treatment; if it is not package deal, distinguish
them as individual financial statement and consolidated financial statement for accounting treatment.
For the individual financial statements, the book value of the long-term equity investment held before the
acquisition date plus the newly added equity investment on the acquisition date, and then sum should be
recorded as the original investment cost; the long-term equity investment involved with other comprehensive
income held before the acquisition date, the way to deal with the investment will be the same with the way the
acquiree directly dispose the related assets and liabilities (i.e., under the equity method, beside the portion
caused by the acquiree’s recalculated defined benefit plan’s net assets and net liabilities, the rest are
transferred into investment 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

                                                             55
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                       Interim Report 2018




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 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
                                                             56
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                          Interim Report 2018




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 4.12-Long-term equity investment and 4.9-Financial instruments).
The Group’s losing control of subsidiaries through multistep transactions of disposing of the long-term equity
investment, need to indentify whether every transaction, involving with disposing of the investment in
subsidiary until losing the control, is belonging to package deal. Several transactions should be accounted for
as a package deal if conditions and the economic impact of disposal of investments in subsidiaries are in
compliance with one or more of the following circumstances: ① These transactions are considered
simultaneously or      ② these transactions as a whole in order to reach a complete business results; another
case of the occurrence of the impact of entering into a transaction depends ③ had at least one other
transaction; ④ see a transaction alone is not economical, but, it is economical when other transactions are
taken into account. If it is not package deal, every transaction of the non-package deals is treated according to
the applicable accounting standards of “partly disposing of the long-term equity investment without losing
control ”( refer to 4.12(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

                                                             57
ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                         Interim Report 2018




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 4.12 (2) ②-long-term equity investment measured using the equity method.
As one party of the mutual office, the Group recognizes the separately owned assets and separately assumed
obligations, and the proportionate commonly held assets and commonly assumed obligations per the
company’s percentage of share interest; recognize the revenue from the selling of the Group’s shared output
of the mutual office; recognize the common revenue generated from the selling of the common output of the
mutual office according to the Group’s share percentage; recognize the expense separately incurred by the
Group and the proportionate expense incurred by the mutual office according to the Group’s share percentage.
When the Group sells invest or sell assets to the mutual office as one of the mutual office party (the assets do
not constitute a business, the same to below), or buys assets from the mutual office, before the assets are sold
to the third party, the Group only recognizes the portion of profit and loss attributable to the other participating
parties. According to requirements of Chinese Accounting Standards for Business Enterprises No.8- Asset
impairment, when the assets are impaired, for the assets invested or sold to the mutual office by the Group,
the Group fully recognizes the impairment loss; for assets that the Group bought from the mutual office, the
impairment loss is recognized according to the share percentage by the Group.
5.8 Cash and cash equivalent
Cash and cash equivalents of the Group include cash on hand, ready usable deposits and investments having
short holding term (normally will be due within three months from the day of purchase), with strong liquidity and
easy to be exchanged into certain amount of cash that can be measured reliably and have low risks of change.
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

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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 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


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ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                         Interim Report 2018




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 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

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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
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


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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 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


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ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                              Interim Report 2018




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 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.

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If, after an impairment loss has been recognized, there is objective evidence that the value of the financial
asset is recovered, and it is objectively related to an event occurring after the impairment loss was recognized,
the initial impairment loss can be reversed and the reserved impairment loss on available-for-trade equity
instrument is recorded in the profit or loss, the reserved impairment loss on available-for-trade debt instrument
is recorded in the current profit or loss.
The equity instrument where there is no quoted price in an active market, and whose fair value cannot be
reliably measured, or impairment loss on a derivative asset that is linked to and must be settled by delivery of
such an unquoted equity instrument shall not be reversed.
(4) Recognition and measurement of financial assets transfer
The Group derecognizes a financial asset when one of the following conditions is met:
1) The rights to receive cash flows from the asset have expired;
2) The enterprise has transferred its rights to receive cash flows from the asset to a third party under a
“pass-through” arrangement; or
3) The enterprise has transferred its rights to receive cash flows from the asset and either (a) has transferred
substantially all the risks and rewards of the asset, or (b) has neither transferred nor retained substantially all
the risks and rewards of the asset, but has transferred control of the asset.
If the enterprise has neither retained all the risks and rewards from the financial asset nor control over the
asset, the asset is recognized according to the extent it exists as financial asset, and correspondent liability is
recognized. The extent of existence refers the level of risk by the financial asset changes the enterprise is
facing.
For a transfer of a financial asset in its entirety that satisfies the derecognition criteria, (a). the carrying amount
of the financial asset transferred; and (b) the sum of the consideration received from the transfer and any
cumulative gain or loss that had been recognized in other comprehensive income, is recognized in profit or
loss.
If a part of the transferred financial asset qualifies for derecognition, the carrying amount of the transferred
financial asset is allocated between the part that continues to be recognized and the part that is derecognized,
based on the relative fair value of those parts. The difference between (a) the carrying amount allocated to the
part derecognized; and (b) the sum of the consideration received for 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
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ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                            Interim Report 2018




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 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


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ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                          Interim Report 2018




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
The account receivable by the Group includes account receivables, and other receivables.
The Group carries out an inspection on the balance sheet date. Where there is any objective evidence proving
that the receivables have been impaired, an impairment provision shall be made:
1)     A serious financial difficulty occurs to the issuer or debtor;
2)     The debtor breaches any of the contractual stipulations, for example, fails to pay or delays the payment
of interests or the principal, etc.;
3)     The debtor will probably become bankrupt or carry out other financial reorganizations;
4)     Other objective evidences showing the impairment of the receivables.
(1)Provisions of bad debts in account receivables that is individually significant.
     The Group treats account receivables over RMB 5,000,000.00 (including 5,000,000.00) as individually
significant item.
For an account receivable that is individually significant, the asset is individually assessed for impairment. If
there is objective evidence indicating that the asset is impaired. The impairment loss is recognized in the profit
and loss at the excess of carrying value over its predicted future cash flow (excluding the non-incurred future
credit loss ) discounted with original actual interest rate.
(2) Provisions of bad debts for accounts receivables that is individually insignificant.
For the accounts receivables that is individually insignificant, if there are signs indicating the impairment, such
as long-aging, having a dispute with the obligator or obligator suffering serious financial difficulties, it should be
individually tested for impairment.
5.12 Inventories
(1) Classification of inventory
①Real   estate development products
Real estate development inventory is initially measured at cost. Inventories mainly include inventory materials,
development products under development (development costs), completed development products, and
development products that are temporarily leased for sale. The cost of developing products includes
land-transferring fees, expenditures on infrastructure support facility, expenditures on construction and
installation project, borrowing costs and other related costs in the process of development before the


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ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                          Interim Report 2018




completion of the project. When delivering inventories, the actual cost is determined using the individual
identification method.
②Build   contracted inventory
The construction contract is measured at actual cost, including direct costs and indirect costs incurred from the
commencement of the contract to the completion of the contract, and the implementation of the contract.
Where travel expenses, tender fees, etc. incurred for the purpose of entering into a contract, which can be
separately distinguished and reliably measured and the contract is likely to be concluded, are included in the
contract cost when the contract is obtained; if the above conditions are not satisfied, it is included in the current
profit or loss.
The accumulative costs incurred for the construction in progress contracts and the cumulative gross profits
(losses) that have been recognized and the settled amounts are shown in the balance sheet as net offsets.
The part of the accumulative cost of the construction-in-progress contract and the accumulatively recognized
gross profit (loss) that exceeds the settlement price is listed as inventory; the settlement price of the
construction-in-contract exceeds the accumulative cost incurred and accumulatively recognized gross profit
( The sum of losses is shown as advance receipts.
(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.

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ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                                                       Interim Report 2018




(5) Amortization method for low cost and short-lived consumable items and packaging materials.
    Low cost and short-lived consumable items are amortized using immediate write-off method; packaging materials are amortized using

    immediate write-off method.

    (6) Cost of land constitutes land development costs for pure land development project.

    Together with the overall development of the property, its cost is included in housing costs generally based on the actual area.

    (7)Public Facilities Fee: The cost is the actual construction cost incurred. If several estate projects benefit from the same facility, they stay in

    the same category. The cost of fee should be measured according to the allocation of sales area. If they got benefit but in different categories,

    the cost was measured according to the allocation of the area covered.

    (8)Utility reserve funds:Utility reserve funds were received by the Group and recorded in Long-term payables. The funds were used to

    maintain and renew communal facilities.

    (9)Quality Guarantees:Quality Guarantees was put into the account of real estate developing according to the contract amount and also

    recorded in the accounts payable at the same time. The actual payment incurs after the expiry of guarantee.

5.13 Long-term equity investments
The long-term equity investment mentioned in this section is about the equity investment                                     of which the Group
has control, common control or significant influences over the investee. For the investments that the Group
has no control, common control or significant influences over the investee, they will be recorded as
available-for-sale or financial instrument assets measured at fair value with its changes into profit and loss.
Please refer to note 4.9-Financial instruments for detail.
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.


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ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                          Interim Report 2018




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 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

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ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                         Interim Report 2018




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
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

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difference in the net asset between the amount of disposed long-term investment and the amount of the
consideration paid or received is adjusted to the owner’s equity. If the disposal of long-term investment in a
subsidiary involves loss of control over the subsidiary, the related accounting policies in Note 4.5 applies.
(3) Accounting policies retailed on “the method of preparing consolidated financial statements”
On disposal of a long-term equity investment, the difference between the proceeds actually received and
receivable and the carrying amount is recognized in profit or loss for the period.
For long-term equity investment accounted for using the equity method, when the rest of the long-term equity
investment is still accounted for using the equity method after disposal, the other comprehensive income
originally recorded into the equity should be dealt with by the same way as the investee’s directly dealing with
its assets or liabilities. The other investee equity changes caused beside the net profit, other comprehensive
income and profit distribution should be proportionately transferred into current year profit and loss.
For long-term equity investment accounted for using the cost method, when the rest of the long-term equity
investment is still accounted for using the cost method after disposal, other comprehensive income recognized
using the equity method or the method of recognizing and measuring the financial instruments before
obtaining the control over the investee should be dealt with as the same way with investee’s direct disposing of
its assets and liabilities and be proportionately taken into profit and loss; The other investee equity changes
caused beside the net profit, other comprehensive income and profit distribution should be proportionately
transferred into current year profit and loss.
 When the Group loses control over the investee but still can exercise the common control or significant
influences over the investee after partial disposal of the long-term equity investment, the equity method should
be used to prepare individual financial statements. The rest equity investment is treated as accounted using
the equity method upon the acquisition and is adjusted; If no control and significant influences cannot be
exercised, the rest equity investments should be recognized and measured by the accounting standards to
financial instruments. The difference 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

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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.
5.14 Investment properties
Investment property is property held to earn rental or for capital appreciation or both. It includes a land use
right that is leased out, a land use right held for transfer upon capital appreciation, and a building that is leased
out. Besides, the Group has buildings empty for operating lease. If there is a written decision from the Board
(or similar organization) with clear indication for operating lease and intension that no change shall be made in
the near future, the buildings shall be presented as investment properties.
An investment property is measured initially at cost. Subsequent expenditures incurred for such investment
property are included in the cost of the investment property if it is probable that economic benefits associated
with an investment property will flow to the Group and the subsequent expenditures can be measured reliably.
Other subsequent expenditures are recognized in profit or loss in the period in which they are incurred.
The Group uses the cost method for subsequent measurement of investment property, and adopts a
depreciation or amortization policy for the investment property which consistent with that for building or land
use rights.
Where self-occupied property or inventory converts into investment property, or investment property converts
into self-occupied property, the carrying amount before the change shall be accounted as the value after
conversion.
When an investment property changes into self-occupied property, it should be converted into fixed asset or
intangible asset on the date of conversion. When the purpose of a self-occupied property changes into rental
earning or capital increase, fixed asset or intangible asset should be converted into an investment property
from the date of conversion. Where the cost model is used in the measurement of investment property during
the conversion, the carrying amount before the conversion is accounted as the value after conversion. Where
the investment property is measured by the fair value after conversion, the fair value at the conversion date is
adopted as value after conversion.
Where an investment property is disposed or no longer in use permanently and no economic benefits shall be

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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.
5.15 Fixed assets
(1) The conditions of recognition
Fixed assets refers to the tangible assets that are held for the sake of producing commodities, rendering labor
service, renting or business management and their useful life is in excess of one fiscal year. Fixed assets are
only confirmed when their related economic benefits are likely to flow into the company and its cost can be
reliably measured. Fixed assets are stated at cost and consider the impact of expected costs of abandoning
the initial measurement.
(2) The method for depreciation
From the following month of state of intended use, depreciation method of the straight-line method is used for
different categories of fixed assets to take depreciation. The recognition of the classification, useful life and
estimated residual rate are as follows:
              Category                   Expected useful life        Estimated residual value(%)   Depreciation(%)

Building & construction                          30                               5                        3.17

Machines & equipments                             7                               5                        13.57

Vehicles                                          6                               5                        15.83

Electronic appliances                             5                               5                        19.00

Expected net residual value of fixed assets is the balance of the Group currently obtained from the disposal of
the asset less the estimated costs of disposal amount, assuming the asset is out of useful life and state the
expected service life in the end.
(3) Measurement and recognition of fixed assets impairment
For the details of impairment test method and withdrawal method of impairment provision for fixed assets,
please refer to Note.4.18 Long-term assets impairment


(4) Recognition and measurement of financial lease
Finance leases which transfer substantially all the risks and rewards of ownership .Its ownership may be
transferred or not eventually .The depreciation policy for assets held under finance leases should be consistent
with that for owned assets. If it is reasonable to determine the ownership of the leased asset at the end of the
lease term, depreciation is provided within the useful life of the leased asset. Otherwise, the asset should be
depreciated over the shorter of the lease term or the life of the asset
(5) Others


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ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                        Interim Report 2018




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.
A fixed asset is derecognized when it is disposed or no economic benefits will be gained through the use or
disposal of the assets.. 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.
5.16 Construction in progress
Construction in process is measured at actual cost. Actual cost comprises construction costs,borrowing costs
that are eligible for capitalization before the fixed assets being ready for their intended us and other relevant
costs. Construction in process is transferred to fixed assets when the assets are ready for their intended use.
For details of the testing method of impairment and withdraw method of impairment provision on construction
in progress, please refer to Note 5. 22 “Long-term assets         impairment”
5.17 Borrowing costs
(1) The standards for capitalizing the borrowing cost
Borrowing costs include interest, amortization of discounts or premiums related to borrowings, ancillary costs
incurred in connection with the arrangement of borrowings, and exchange differences arising from foreign
currency borrowings.
The borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying
asset are capitalized. The amounts of other borrowing costs incurred are recognized as an expense in the
period in which they are incurred.
(2) The period of capitalizing the borrowing costs
The period of borrowing costs capitalization is calculated from the point when borrowing costs beginning
capitalizing to the time stopping capitalizing. The period suspending capitalizing the borrowing costs are
excluded.
(3) The period suspending capitalizing the borrowing costs
Capitalization of borrowing costs is suspended during periods in which the acquisition, construction or
production of a qualifying asset is interrupted by activities other than those necessary to prepare the asset for
its intended use or sale, when the interruption is for a continuous period of more than 3 months. Borrowing
costs incurred during these periods recognized as an expense for the current period until the acquisition,
construction or production is resumed.
(4) The method for calculating the amount of borrowing cost capitalized

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ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                         Interim Report 2018




Where funds are borrowed for a specific-purpose, the amount of interest to be capitalized is the actual interest
expense incurred on that borrowing for the period less any bank interest earned from depositing the borrowed
funds before being used on the asset or any investment income on the temporary investment of those funds.
Where funds are borrowed for a general-purpose, the amount of interest to be capitalized on such borrowings
is determined by applying a weighted average interest rate to the weighted average of the excess amounts of
accumulated expenditure on the asset over and above the amounts of specific-purpose borrowings.
During the capitalization period, exchange differences related to a specific-purpose borrowing denominating in
foreign currency are all capitalized. Exchange differences in connection with general-purpose borrowings are
recognized in profit or loss in the period in which they are incurred.
5.18 Intangible assets
(1) Recognition and calculation of intangible asset
The term “intangible asset” refers to the identifiable non-monetary assets without physical shape, possessed
or controlled by enterprises.
The intangible assets are initially measured by its cost. Expenses related to intangible assets, if the economic
benefits related to intangible assets are likely to flow into the enterprise and the cost of intangible assets can
be measured reliably, shall be recorded as cost of intangible assets. The expenses other than this shall be
booked in the profit or loss when they occur.
Land use rights that are purchased by the Group are accounted for as intangible assets. Buildings, such as
plants that are developed and constructed by the Group, and relevant land use rights and buildings, are
accounted for as intangible assets and fixed assets, respectively. Payments for the land and buildings
purchased are allocated between the land use rights and the buildings; if they cannot be reasonably allocated,
all of the land use rights and buildings are accounted for as fixed assets.
When an intangible asset with a definite useful life is available for use, its original cost less net residual value
and any accumulate impairment losses is amortized over its estimated useful life using the straight-line method.
An intangible asset with an indefinite useful life is not amortized.
For an intangible asset with a definite useful life, the Group reviews the useful life and amortization method at
the end of the period, and makes adjustment when necessary.. An additional review is also carried out for
useful life of the intangible assets with indefinite useful life. If there is evidence showing the foreseeable limit
period of economic benefits generated to the enterprise by the intangible assets, then estimate its useful life
and amortize according to the policy of intangible assets with definite useful life.
 (2) The accounting of expenditures of internally researched and developed project
Expenditure on the research phase of an internal research is recognized in profit & loss in the period in which it
is incurred.
Expenditure during the development phase that meets all of the following conditions at the same time is
recognized as intangible asset. Expenditure during development phase that does not meet the following
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conditions is recognized in profit or loss for the period.
1)     it is technical feasible to complete the intangible asset so that it will be available for use or sale;
2)     the Group has the intention to complete the intangible asset and use or sell it;
3)     the Group can demonstrate the ways in which the intangible asset will generate economic benefits
including the evidence of the existence of a market for the output of the intangible asset or the intangible asset
itself or, if it is to be used internally, the usefulness of the intangible asset;
4)     the availability of adequate technical, financial and other resources to complete the development and the
ability to use or sell the intangible asset; and
5)     the expenditure attributable to the intangible asset during its development phase can be reliably
measured.
If the expenditures cannot be distinguished between the research phase and development phase, the Group
recognizes all of them in profit or loss for the period.
(3) Methods of impairment assessment and determining the provision for impairment losses of intangible
assets
The testing method for intangible assets impairment and the calculation of the provision for impairment is
detailed listed on the note 4.18-Long-term assets impairment.
5.19 Long-term deferred assets
Long-term deferred assets represent expenses incurred that should be borne and amortized over the current
and subsequent period (together of more than one year). Long-term deferred assets are amortized by using
straight line method.
5.20 Long-term assets impairment
On each balance sheet date, the Group will make judgments to determine whether there are signs for
impairment to the fixed assets ,construction in progress, definite intangible assets, investment properties&
equity investment in subsidiaries& joint ventures& jointly run business measured using the cost method etc.
non-current and non-financial assets. If there are signs for impairment, the impairment should be tested by
estimating the recoverable amount. Goodwill, indefinite intangible assets and intangible assets having not
reached the usable condition, should be yearly tested for impairment no matter whether there are signs for
impairment.
The result of impairment test demonstrates that the recoverable amount is less than its carrying amount, the
difference will be recorded as provision for impairment and debited as impairment loss. The recoverable
amount equals to the greater of 1) fair value less disposal expenses and 2) present value of the predicted
future cash flows.
The fair value of the assets is determined by the sale contract price of fair trade; When there are no sale
contracts but exist active market ,the fair value will be determined with the quotation from the buyer; When
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ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                     Interim Report 2018




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.
5.21 Employee Benefits
The benefits of employees in the Group include short-term benefits, welfare after demission, demission welfare
and       other long-term welfare.
The short-term benefits include the employees’ salary, bonus, allowance and compensation, employee welfare,
medical insurance, maternity insurance, employment injury insurance, housing fund, labor union expense and
employee education expense and non-currency welfare etc. The Group recognizes the actually incurred
short-term employee benefits as liability during the period when the employees’ services are rendered, the
expenses are recorded into the current period profit and loss or related asset costs according to the benefit
object. For the non-currency welfare, it is recognized according to its fair value.
Welfare after demission mainly includes the defined contribution plan and the defined benefit plan. The defined
contribution plan and the defined benefit plan mainly include the basic endowment insurance premium,
unemployment insurance expense             and pension etc. For the defined contribution plan, the sinking fund
deposited to the     an independent entity for the service provided by employee in the accounting period on the
balance sheet is recognized as the debt and included in the current profit and loss or related asset costs
according to the benefit object.
When the Group cannot unilaterally withdraw the dismissal welfare provided for the plan on the cancellation of

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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 employees not providing the services
to the legal retirement day, when the conditions for recognizing the contingency liability are met.
Other long-term welfare provided by the Group is referred to as the welfare beside the short-term benefits,
welfare after demission, demission welfare. It would be recognized as the requirements of defined contribution
plan, when conditions are met. Or else, it would be recorded as defined benefit plan.
5.22 Revenue
The real estate construction agreement is in accordance with the definition of the construction contract, for
buyers who can specify the main structural elements of real estate design before the start of the construction
project, or be able to determine the major changes in structure during the construction process, will be
confirmed by the Company of construction services according to the Enterprise Accounting Standards No. 15 -
Construction Contract. As purchaser, whose limited ability to influence real estate design (such as only minor
changes to the basic design), the company in accordance with the "principles and methods of income
accounting standards for Enterprises No. fourteenth - income" about commodity sales confirmation, the
relevant revenue recognition combined with the specific conditions of the company real estate sales.
The company will confirmed the relevant income and expenses according to the Enterprise Accounting
Standards No. 15 - Construction Contract when real estate construction agreement is in accordance with the
definition of the construction contract, for buyers who can specify the main structural elements of real estate
design before the start of the construction project, or be able to determine the major changes in structure
during the construction process. However, when purchaser’s ability to influence real estate design is limited
(such as only minor changes to the basic design), the relevant revenue            will be confirmed by the company
combined with the specific conditions in accordance with the principle of the Enterprise Accounting Standards
No. 14 – income
 (1) Developed products
The Group established real estate sales revenue is recognized, must satisfied the following four conditions at
the same time:
1). Real estate is completed and accepted;
2). contract of Installment selling is singed and the contractual obligations is performed;

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3). the company no longer retains the continuation management rights nor controls normally associated with
the ownership;
4). the amount of income can be reliably measured;
5) the related economic benefits are likely to flow into the company and the cost of the house can be reliably
measured
(2) Revenue from Installment selling
The revenue is recognized by the fair vale about contract or agreement when the selling conditions satisfied
the following conditions at the same time:
1). Real estate is completed and accepted;
2). contract of Installment selling is singed and the contractual obligations is performed;
3).the related economic benefits are likely to flow into the company and the cost of the development product
can be reliably measured.
The difference between the price and the fair value of the contract or agreement is amortized by the actual
interest rate during the period of the contract or agreement and be taken into the profit and loss of the current
period.
(3) Revenue from self-use house selling
The sales revenue is confirmed when the following conditions are met:
1) the main risks and rewards of self-use house ownership are transferred to the purchaser;,
2) the company no longer retains the continuation management rights nor controls normally associated with
the ownership;
3) the amount of income can be reliably measured;
4) the related economic benefits are likely to flow into the company and the cost of the house can be reliably
measured
(4)Revenue from rental property
The income of rental property is confirmed when the relevant rents or receipt have obtained according to the
lease contract.
(5) Revenue from construction contracts
Where the outcome of a construction contract can be estimated reliably, contract revenue and costs are
recognized using the percentage of completion method at the balance sheet date. The stage of completion of
a contract is determined using the proportion that actual contract costs incurred to date bears to the estimated
total contract costs.
The outcome of a construct contract can be measured reliably when the following conditions are met:
1) The total revenue of the contract can be measured reliably;
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ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                        Interim Report 2018




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,4)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; 4)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.
(6) Royalty revenue
Revenue is confirmed according to the relevant contract or agreement on the accrual basis.
(7) Interest income
Revenue is confirmed according to the time and actual interest rate in the use of the company's money.
(8) Other business income recognition
The Group will confirm other business revenue while clauses of the relevant contracts and agreements reveal
that economic interests related to transactions may flow into enterprises ,the amount of income          and other
related or incurred costs can be reliably measured.
5.23 Government Grants
Government grants are transfer of monetary assets and non-monetary assets from the government to the
Group at no consideration, excluding the capital invested by the government as equity owner. Government
grant can be classified as grant related to the assets and grants related to the income.
If a government grant is in the form of a transfer of a monetary asset, it is measured at the amount received or
receivable. If a government grant is in the form of a non-monetary asset, it is measured at fair value. If the fair
value cannot be reliably determined, it is measured at a nominal amount. A government grant measured at a
nominal amount is recognized immediately in profit or loss for the period.
A government grant related to an asset is recognized as deferred income, and evenly amortized to profit or
loss over the useful life of the related asset. For a government grant related to income, if the grant is a
compensation for related expenses or losses to be incurred in subsequent period, the grant is recognized as
deferred income, and recognized in profit or loss over the periods in which the related costs are recognized. If


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ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                         Interim Report 2018




the grant is a compensation for related expenses or losses already incurred, the grant is recognized
immediately in profit or loss for the period.
Government grants, including both asset-related and income-related components at the same time,are used to
separate into different parts of the accounting process. They are classified as income-related government
subsidies while it is difficult to distinguish.
Government grants, related to the Company's daily activities, are taken into other income or write down related
costs in accordance with the substance of the economic business. Government subsidies that are not related
to daily activities are included in non-operating income and expenses.
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.
5.24 Deferred income tax assets and deferred income tax liabilities
At the balance sheet date, deferred tax assets and liabilities are measured at the tax rates that are expected to
apply to the period when the asset is realized or the liability is settled, according to the requirements of tax
laws. The measurement of deferred tax assets and deferred tax liabilities reflects the tax consequences that
would follow from the manner in which the Group expects at the balance sheet date, to recover the assets or
settle the liabilities.
For temporary differences between the carrying amount of certain assets or liabilities and their tax base, or
between the nil carrying amount of those items that are not recognized as assets or liabilities and their tax
base that can be determined according to tax laws, deferred tax assets and liabilities are recognized using the
balance sheet liability method.
For temporary differences associated with the initial recognition of goodwill and the initial recognition of an
asset or liability arising from a transaction (not a business combination) that affects neither the accounting
profit nor taxable profits (or deductible losses) at the time of transaction, no deferred tax asset or liability is
recognized.
For taxable temporary differences associated with investments in subsidiaries and associates, and interests in
joint ventures, no deferred income tax liability related is recognized except where the Group is able to control
the timing of reversal of the temporary difference and it is probable that the temporary difference will not
reverse in the foreseeable future.
All deferred income tax liabilities arising from taxable temporary differences except the ones mentioned above
are recognized.
For temporary deductible differences associated with the initial recognition of an asset or liability arising from a
transaction (not a business combination) that affects neither the accounting profit nor taxable profits (or
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ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                           Interim Report 2018




deductible losses) at the time of transaction, no deferred tax asset is recognized.
For taxable temporary deductible differences associated with investments in subsidiaries and associates, and
interests in joint ventures, no deferred income tax asset related is recognized if it is impossible to reversal the
temporary difference in the foreseeable future, or it is not probable to obtain taxable income which can be used
for the deduction of the temporary difference in the future.
Except mentioned above, the Group recognizes other deferred income tax assets that can deduct temporary
differences to the extent that it is probable that taxable profits will be available against which the deductible
temporary differences can be utilized.
For the deductible losses and tax credit that can be carried forward, deferred tax assets for deductible
temporary differences are recognized to the extent that it is probable that taxable profits will be available
against which the deductible temporary differences can be utilized.
At the balance sheet date, deferred tax assets and liabilities are measured at the tax rates according to tax
laws that are expected to apply in the period in which the asset is realized or the liability is settled.
At the balance sheet date, the Group reviews the carrying amount of deferred tax assets. If it is no longer
probable that sufficient taxable profit will be available in future periods to allow the benefits of the deferred tax
assets to be used, the Group reduces the carrying amount of deferred tax assets. The amount of such
reduction is reversed when it becomes probable that sufficient taxable profit will be available.
5.25 Leases
(1) Operating Lease
①The Group as Lessee under Operating Lease
Lease payments under an operating lease are recognized by a lessee on a straight-line basis over the lease
term, and either included in the cost of the related asset or charged to profit or loss for the current period. The
contingent rents shall be recorded in the profit or loss of the period in which they actually arise.
②The Group as Leaser under Operating Lease
Lease income from operating leases shall be recognized by the leaser in profit or loss on a straight-line basis
over the lease term. Initial direct cost of significance in amount shall be capitalized when incurred. If another
basis is more systematic and rational, that basis may be used. Contingent rents are credited to profit or loss in
the period in which they actually arise.
(2)Financing Lease
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

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ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                      Interim Report 2018




between the recorded amount of the leased asset and the recorded amount of the payable is accounted for as
unrecognized finance charge, Initial direct costs incurred by the lessee during the process of negotiating and
securing the lease agreement shall be added to the amount recognized for the leased asset.
The net amount of minimum lease payment deducted by the unrecognized finance shall be separated into
long-term liabilities and long-term liability within one year for presentation.
Unrecognized finance charge shall be computed by the effective interest method during the lease term.
Contingent rent shall be booked into profit or loss when actually incurred.
②The Group as Leaser under Operating Lease
For an asset that is leased out under a finance lease, the aggregate of the minimum lease receipts at the
inception of the lease and the initial direct costs is recorded as a finance lease receivable, and unguaranteed
residual value is recorded at the same time; the difference between the aggregate of the minimum lease
receipt, initial direct costs, and unguaranteed residual value, and the aggregate of their present values, is
recognized as unearned finance income, which is amortized using the effective interest rate method over each
period during the lease term.
Finance lease receivable less unearned finance income shall be separated into long-term liabilities and
long-term liability within one year for presentation.
Unearned finance income shall be computed by the effective interest method during the lease term.
Contingent rent shall be credited into profit or loss in which actually incurred.
5.26 Changes in major accounting policies and accounting estimates
(1) Changes of accounting policies
There were no changes of accounting policies during this period.
 (2)Changes of accounting estimates
There were no changes of main accounting estimations during this period.
4.27 Material accounting judgments and accounting estimations
Because of the inherent uncertainties of the operating activities, the Group need to make judgments,
estimations and assumptions to the financial statement items whose carrying amount cannot be accurately
measured. Those judgments, estimations and assumptions are made based on the management’s historical
experience and taking other relevant factors into account. Those judgments, 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,
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ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                         Interim Report 2018




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) Income recognition - construction contract
 The Company confirm the contract income by the percentage method of completion on the balance sheet
 date when the result of the construction can be reliably estimated. The percentage of completion is confirmed
 according to the methods mentioned in Note 4. 25 Income, and is accumulated in the accounting year for
 each construction contract.
 Significant judgments need to be made in determining the percentage of completion, the cost of the contract,
 the total revenue and cost of the contract, and the recoverability of the contract. Project management’s
 judgments mainly relies on past experience and work. The change in the estimated total revenue and cost of
 the contract, as well as the estimated alteration of the execution result of the contract, may affect or constitute
 a major impact on the business income and cost, profit and loss during the current or subsequent period.
(2)     classification of lease
The lease are classified into operating lease and finance lease, according to the “Accounting Standards for
Business Enterprise No.21-Lease” .When making the classification, the management need to make analysis
and judgment about whether all risk and reward related with the ownership of assets leased out have been
substantially transferred to the lessee or not ,or whether all risk and reward related with the ownership of the
assets leased have substantially assumed by the Group.
(3)     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.
(4)     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


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ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                          Interim Report 2018




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.
(5)     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.
 (6) Provision for Available- for- sale financial assets
 The determination to confirm the impairment loss in the profit statement of whether the impairment of
 Available- for- sale financial assets is largely depends on the judgement and assumption of the management.
 In the process of judgment and assumptions, the cost and duration of the investment fair value, the financial
 condition and short-term business prospect of investment targets, including the industry situation,
 technological change, credit rating, default rate and the risk of hand will be taken into account.
(7)     Provision for non-current assets
The Group will make judgment on the non-current assets beside the financial assets about whether there are
signs for impairment on the balance sheet date. For the intangible assets whose life is uncertain, when there
are signs for impairment, it should be tested for impairment, beside the yearly impairment test. Other
non-current assets beside the financial statement, when there are signs indicating that the carrying value are
unrecoverable, it should be tested for impairment.
When the carrying value of the asset or asset group is greater than the recoverable amount (i.e., the net value
of fair value less the cost of disposal and present value of the predicted future cash flow whichever is higher), it
indicates impairment.
The net value of fair value less the cost of disposal, is referred to the agreed sale price of similar assets under
fair trade or the observable market price, less the incremental cost directly related with the disposal of the
assets.
The Group need to make significant judgment to the output of assets (or assets group), sale price, relevant
operating cost and the discounted rate when estimating             the present value of future cash flows. The Group
will make use of any relevant         material available when estimating the recoverable amount , including the
prediction of the output, sale price and relevant operating cost according to reasonable and supportable
assumptions.
The Group will test the goodwill for impairment at least once a year, which requires to estimate the present
value of the future cash flows of the assets and assets group allocated with the goodwill        . When estimating

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ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                        Interim Report 2018




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.
(8)          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.
(9)          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.
(10) 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.


VI    Principal Taxes Applied
Taxes and their rates
                 Category                                    Taxable basis                       Tax rate

Value added tax (“VAT”)             Goods sales income, taxi operating income                        5%,3%,6%

Construction tax                      Turnover tax                                                                   7%

Income tax                            Income tax payable                                                     25% & 16.5%
Education surcharge(Local Education
                                      Turnover tax                                                                   5%
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 company and its subsidiaries provided commodity housing, property leasing and management, hotel
service, construction and installation service as main products and services. As the inform, No.36—pilot about
business tax replacing with VAT popularized (2016 Revision) ,is issued by Finance and Taxation Ministry , The

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ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                                                         Interim Report 2018




categories and rates of VAT about the company and its subsidiaries are as follow .
                                                                                                                          Tax rate before Business Tax
            Category of income                     The way of tax calculation                      Tax rate
                                                                                                                               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%




VII     Notes to the Consolidated Financial Statements
Unless otherwise noted, the following annotation project (including the main projects annotation of the financial
statement of the Company), the period-begin refers to January 1,2018 the period-end refers to June 30, 2018
and this period refers to January – June 2018 with the last period of January – June 2017.
7.1 Monetary funds
                                    Item                                         Closing balance                          Opening balance
      Cash on hand                                                                                 72,392.09                                56,472.32
      Cash in bank                                                                       1,068,588,273.53                         1,206,732,584.14
      Other monetary funds                                                                                                              290,033.83
                                    Total                                                1,068,660,665.62                         1,207,079,090.29
      Including amount deposited in the foreign countries                                     8,105,519.64                             8,257,485.53

Note: Other monetary funds that the Group’s ownership are the deposits about letter of guarantee setting up
by bank.
7.2 Note receivables

(1)Note receivables by types
                      Item                                            Closing balance                                     Opening balance

Trade acceptance                                                                                     --                                      5,921,287.00

                      Total                                                                          --                                      5,921,287.00


(2) There are no Note receivables pledged at the period-end
(3) There are no Note receivables endorsed or discounted at the period-end and not matured yet on the
balance sheet date
(4)There are no situations of reclassifying the note receivables to the accounts receivables due to the issuer
dishonoring at the end of the year.
7.3 Accounts receivables
(1)          Accounts receivable by categories
                                                                                                   Closing balance
                        Category
                                                                      Carrying amount                     Bad debt provision            book value


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                                                                 Amount                     (%)                Amount                 (%)

Accounts receivable of which provision for bad debts is
                                                                              --                  --                        --               --
of individually significant
Accounts receivable of which provision for bad debts is
                                                            355,303,762.40                 100.00%           19,189,315.16            5.40%           336,114,447.24
of individually insignificant

                          Total                             355,303,762.40                 100.00%           19,189,315.16            5.40%           336,114,447.24

 (Continued)
                                                                                              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 individually             156,335,813.56          100.00%                   19,243,657.51                      12.31%                137,092,156.05
insignificant

                 Total                       156,335,813.56          100.00%                   19,243,657.51                      12.31%                137,092,156.05

① Bad debt provision of accounts receivable which is of individually insignificant
□ Yes √ No
 (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 accounting year.
(3) There were no any significant account receivables which had been written off in this accounting year.
(4) Top 5 entities with the largest balances of accounts receivable
                                                                                                                                   Proportion of the amount to
            Name of entity               Relationship with the Group                     Amount                  Age
                                                                                                                                        the total AR (%)
    Corporate unit No.1                       Un-related party                           76,176,227.77 Within 1 year                                        22.66
    Corporate unit No.2                       Un-related party                           36,585,691.51 Within 1 year                                        10.88
    Corporate unit No.3                       Un-related party                            8,931,088.39 Within 1 year                                        10.88
    Corporate unit No.4                       Un-related party                            7,909,014.55 Within 1 year                                           2.35
    Corporate unit No.5                       Un-related party                            6,862,127.83 Within 1 year                                           2.04
                 Total                                                                  136,464,150.05                                                      48.83

Other instructions:
Details of pledge of accounts receivable are as follows: Note 7.44 and X(2)
7.4 Prepayments

(1) Aging analysis
                                                  Closing balance                                                                Opening balance
         Aging
                                         Amount                               (%)                                 Amount                                 (%)




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ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                                                           Interim Report 2018




Within 1 year                                       951,595.61                       99.92%                     3,412,663.50                        56.50%

1-2 years                                                                                                       2,626,942.07                        43.49%

Over 3 years                                             761.94                       0.08%                           761.94                         0.01%

            Total                                  952,357.55                         ——                     6,040,367.51                          ——

(2) Top 5 entities with the largest balances of prepayments
              Name of entity                Relationship with the Group             Amount               Age             The reason for Unsettled
                                                                                                                     Legal fees for outstanding
      Project No.1                               Un-related party                      200,000.00 Within 1 year
                                                                                                                     cases
      Project No.2                               Un-related party                       85,566.00 Within 1 year Unsettled material funds
      Project No 3                               Un-related party                       84,511.50 Within 1 year Unsettled material funds
      Project No.4                               Un-related party                       74,000.00 Within 1 year Unsettled gas charges
      Project No 5                               Un-related party                       40,085.40 Within 1 year Unsettled material funds

                     Total                                                             484,162.90                                   ——




7.5 Dividends receivables
(1) Details of dividends receivable
                Item(Or name of investee)                                 Closing balance                                Opening balance

Yunnan KunPeng Flight service Co., Ltd                                                  1,052,192.76                                        1,052,192.76

                             Total                                                      1,052,192.76                                        1,052,192.76

(2) Dividends receivable aging over 1year
                                                                                                           Reasons for           Whether the amount is
                Item(Or name of investee)                   Closing balance             Aging              uncollected          impaired and the base of
                                                                                                            amounts                    judgment
Yunnan KunPeng Flight service Co., Ltd                            1,052,192.76          Above 5 years           Delay to pay                  No
                             Total                                1,052,192.76

7.6 Other receivables
(1)           Other receivables by categories

                                                                                              Closing balance

Category                                                          Carrying amount                       Bad debt provision
                                                                                                                                           Book value
                                                              Amount                   (%)              Amount                (%)

Other receivables of which provision for bad
                                                                  144,777,268.75        61.22%          144,443,572.49        99.77%          333,696.26
debts is of individually significant
Other receivables of which provision for bad
                                                                    91,695,698.81       38.78%           29,500,684.91        32.17%        62,195,013.90
debts is of individually insignificant

                        Total                                     236,472,967.56       100.00%          173,944,257.40        73.56%        62,528,710.16

(Continued)

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                                                                                          Closing balance

 Category                                                 Carrying amount                        Bad debt provision
                                                                                                                                      Book value
                                                         Amount                 (%)         Amount                    (%)

 Other receivables of which provision for bad
                                                         144,777,268.75        58.00%       144,443,572.49             99.77%               333,696.26
 debts is of individually significant
 Other receivables of which provision for bad
                                                         105,057,180.46        42.00%        29,487,718.10             28.07%            75,569,462.36
 debts is of individually insignificant

                        Total                            249,834,449.21        100.00%      173,931,290.59             69.62%            75,903,158.62




 ① Bad debt provision of other receivables which is of individually significant
 □ Yes √ No
 ② Bad debt provision of other receivables which is of individually insignificant
 □ Yes √ No
 (2) There were no any other receivables which had been accrued fully or large proportion provision but had
 been fully collected or reversed back in this accounting year.
 (3) There were no any significant account other receivables which had been written off in this accounting
 year.
 (4)Other receivables by nature
                                    Nature                                               Closing balance                         Opening balance
 Other receivables between subsidiaries that are not included in the
                                                                                                      129,277,424.93                   121,140,372.17
 consolidated statement
 Others                                                                                               107,195,542.63                   128,694,077.04
                                    Total                                                             236,472,967.56                   249,834,449.21

 (5)Top 5 entities with the largest balances of other receivables
                                                                                                            Proportion of the        Provision for bad
            Name of entity                   Nature               Amount                   Age             amount to the total       debt at year end
                                                                                                                OR (%)
Canada Great Wall( Vancouver)
                                       current account             89,035,748.07 Above 5 years                         37.65%            89,035,748.07
Co.,Ltd
 Paklid Limited                        current account             19,300,627.03 Above 5 years                          8.16%            19,300,627.03
 Bekaton property Limited *            current account             12,559,290.58 Above 5 years                          5.31%            12,559,290.58
 Guangdong province Huizhou
                                       current account             10,465,168.81 Above 5 years                          4.43%            10,465,168.81
 Luofu Hill Mineral Water Co.,Ltd
 Shenxi Limited                        current account              5,464,392.59 Above 5 years                          2.31%             5,131,698.60
                Total                                             136,825,227.08                                       57.86%          136,492,533.09

 (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.


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 ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                                                            Interim Report 2018




 (8) There were no any other receivables which had transferred to continued involvement in assets or liabilities.
 7.7 Inventory

 (1) Categories of inventory
                                                                                          Closing balance
                           Item
                                                       Carrying amount              Provision for inventories             Net carrying amount

 Non real estate development projects

Raw materials                                                   882,110.01                          240,000.00                             642,110.01

Finished products                                               329,837.97                           38,891.91                         290,946.06

Low-value consumable products                                                                                                                    0.00

Construction in progress                                   73,599,891.72                                                          73,599,891.72

 Real estate development projects                         168,923,076.99                                        --                                 --

Real estate developing products                           430,944,949.91                                                         430,944,949.91

Real estate developed products                          1,003,721,763.95                            268,941.60                 1,003,452,822.35

Real estate which are going to be developed               168,923,076.99                                                         168,923,076.99

                           Total                        1,678,401,630.55                            547,833.51                 1,677,853,797.04

   (Continued)
                                                                                          Opening balance
                           Item
                                                       Carrying amount              Provision for inventories             Net carrying amount

 Non real estate development projects
Raw materials                                                   883,896.65                         240,000.00                          643,896.65
Finished products                                               350,102.98                           38,891.91                             311,211.07
Low-value consumable products                                                                                                                    0.00
Construction in progress                                   39,005,838.31                                                          39,005,838.31

 Real estate development projects
Real estate developing products                           804,372,181.70                                                         804,372,181.70
Real estate developed products                            751,099,380.82                           268,941.60                    750,830,439.22
Real estate which are going to be developed               168,923,076.99                                                         168,923,076.99

                           Total                        1,764,634,477.45                           547,833.51                  1,764,086,643.94

 (2)Movement of Provision of inventories

                                                                         Increase                         Decrease
                    Item                      Opening balance                                                                                Closing balance
                                                                   Provision         other        Reversals               Write-off

 Raw materials                                      240,000.00                 --         --                         --               --           240,000.00

 Inventories                                         38,891.91                 --         --                         --               --            38,891.91

 Real estate developed products                    268,941.60                  --         --                         --               --          268,941.60



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                       Total                            547,833.51              --         --              --              --         547,833.51

(3) apitalized borrowing cost at the period-end is RMB 42,245,570.18:
                                                                                                                                       Annual
           Item                  Opening balance              Increase               Decrease            Closing balanc             capitalization
                                                                                                                                         rate
YueJing            dongfang
                                         208,232.32                        --               66,634.34             141,597.98                 1.49%
Project

Shenfang Chuanqishan                     720,530.19                        --                       --            720,530.19                 5.66%

Shenfang            Shanlin
                                         443,793.86                        --                       --            443,793.86                 7.10%
Garden
Shengfang            CuiLin
                                        9,165,242.92             3,694,420.78         4,582,621.46               8,277,042.24                3.47%
Building

TianYue Bay No.1                       28,024,892.29                       --         1,582,433.22              26,442,459.07                7.78%

ChuanQi            DongHu
                                        4,811,327.74                       --                       --           4,811,327.74                3.62%
Building

ChuanQi JingYuan                        1,408,819.10                       --                       --           1,408,819.10                1.66%

           Total                       44,782,838.42             3,694,420.78         6,231,689.02              42,245,570.18                5.73%




(4)Completed and unsettled assets resulting from the construction contract at the end of the period
                                                 Item                                                            Amount

    Accumulated cost incurred                                                                                                   196,294,762.33

    Accumulated gross profit                                                                                                      6,916,325.63

    Deduct: Expected loss                                                                                                                    --

               Amount already settled                                                                                           129,611,196.24

    Completed outstanding assets formed by the construction contract                                                             73,599,891.72


7.8 Other current assets

                               Item                                      Closing balance                           Opening balance

Value added tax                                                                        3,186,838.82                                  10,783,474.63

Business tax                                                                               166,667.14                                   401,663.63

City construction surcharge                                                                297,494.42                                    78,771.08

Education surcharge                                                                        144,926.38

Local education surcharge                                                                  117,981.55                                   105,635.46

Embankment Protection Fee                                                                       725.66

Increment tax on land value                                                                299,472.73

Bank structured deposits                                                             600,000,000.00

                               Total                                                 604,214,106.70                                  11,369,544.80


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ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                                                        Interim Report 2018




Instructions:
The company signed an agreement with the shenzhen branch of China citic bank co., ltd. to invest 60,000
yuan of its own capital in the 6-month guaranteed floating bank structured deposits on May 28, 2018.
7.9 Available-for-sale financial assets
(1) Details of available-for-sale financial assets
                                                 Closing balance                                          Opening balance
                Item
                                  Book balance        Impairment         Book value        Book balance        Impairment          Book value
    Available-for-sale    debt
                                                 --                --                 --                  --                --                  --
    instrument
    Available-for-sale   equity
                                    17,464,240.74                  --    17,464,240.74      17,464,240.74                   --     17,464,240.74
    instrument

    Including:measured by fair
                                                 --                --                 --                  --                --                  --
    value
    Measured by cost                17,464,240.74                  --    17,464,240.74      17,464,240.74                   --     17,464,240.74
    Others                                       --                --                 --                  --                --                  --
               Total                17,464,240.74                  --    17,464,240.74      17,464,240.74                   --     17,464,240.74




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(2)Available-for-sale financial assets measured by cost at year end
                                                                          Book balance                                                   Provision for impairment
                                                                                                                                                                                        Proportion rate         Curr. year
                     Investee                                                                                                                                            Closing
                                                  Opening bal.       Increase.     Decrease           Closing bal.     Opening bal.       increase     decrease                         in investee(%)        cash div.
                                                                                                                                                                           bal.
Shantou Small &Medium Enterprises
                                                  12,000,000.00              --            --         12,000,000.00                 --            --            --                 --              7.14%        827,100.00
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                 --            --            --                 --         --                827,100.00

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.
7.10 Long-term equity investments
(1) Long-term equity investments by types
                                                                                                                                         Change amount of this period
                        Invested company                      Opening balance       Additional             Negative          Profit and loss on investments confirmed         Other comprehensive                Other equity
                                                                                   investment             investment                     with equity method                    income adjustment                   change
I.Joint ventures

Guangdong province Huizhou Luofu Hill Mineral Water Co.,Ltd         9,969,206.09                 --                    --                                               --                                 --                     --

Fengkai Xinhua Hotel                                                9,455,465.38                 --                    --                                               --                                 --                     --

Jiangmen Xinjiang Real Estate Co., Ltd                              9,037,070.89                 --                    --                                               --                                 --                     --

Xi’an Fresh Peak Property Trading Co., Ltd                        32,840,729.61                 --                    --                                               --                                 --                     --

Dongyi Real Estate Co., Ltd                                        30,376,084.89                 --                    --                                               --                                 --                     --

                               Subtotal                            91,678,556.86                 --                    --                                               --                                 --                     --

II.Affiliated enterprises

Shenzhen Ronghua JiDian Co.,ltd                                     1,523,815.70                 --                    --                                                -                                 --                     --


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                                                                                                                                     Change amount of this period
                        Invested company                      Opening balance      Additional            Negative          Profit and loss on investments confirmed         Other comprehensive        Other equity
                                                                                  investment            investment                     with equity method                    income adjustment           change
Shenzhen Runhua Automobile trading Co.,Ltd                         1,445,425.56                  --                  --                                               --                          --                   --

                            Subtotal                               2,969,241.26                  --                  --                                                                           --                   --

                              Total                              94,647,798.12                   --                   -                                                -                          --                   --

(Continuted)
                                                                                                  Change amount of this period                                                              Provision for impairment
                            Invested company                                                                                                                          Ending balance
                                                                         Invested company             Change amount of this period          Ending balance                                 balance at the period-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
Dongyi Real Estate Co., Ltd                                                                 --                                        --                   --              30,376,084.89                 21,225,715.87
Subtotal                                                                                    --                                        --                   --              91,678,556.86                 62,236,756.27
II.Affiliated enterprises
Shenzhen Ronghua JiDian Co.,ltd                                                             --                                        --                   --               1,523,815.70                  1,076,954.64
Shenzhen Runhua Automobile trading Co.,Ltd                                                  --                                        --                   --               1,445,425.56                  1,445,425.56
                                 Subtotal                                                   --                                        --                   --               2,969,241.26                  2,522,380.20
                                      Total                                                 --                                        --                   --              94,647,798.12                 64,759,136.47

other equity investment, are as follow :note 9, 1 "equity in the subsidiary".




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7.11         Investment properties
Investment properties measured at cost.
                                  Item                         House& building        Land-use right                Total
I.     Original carrying value
1.Opening balance                                                  1,010,636,392.81      100,823,904.75           1,111,460,297.56
2.Increase in the year                                                           --           844,669.17                844,669.17
(1)Outsourcing                                                                 --                    --                         --

(2)Carried over from inventory                                                 --                    --                         --

(3)Others                                                                      --           844,669.17                          --

3.Decrease in the year                                                           --                    --                         --
4.Closing balance                                                  1,010,636,392.81      101,668,573.92           1,112,304,966.73
II.    Accumulative depreciation& amortization
1.Opening balance                                                    367,283,745.78                    --          367,283,745.78
2.Increase in the year                                                12,087,308.24                    --            12,087,308.24

(1)Withdrawing or amortization                                      12,087,308.24                    --            12,087,308.24

(2)Carried over from assets                                                    --                    --                         --

3.Decrease in the year                                                           --                    --                         --
4. Closing balance                                                   379,371,054.02                    --          379,371,054.02
III.   Provision for impairment
1.Opening balance                                                     14,128,544.62        82,750,883.12             96,879,427.74
2.Increase in the year                                                           --           693,259.40                693,259.40
3.Decrease in the year                                                           --                    --                         --
4.Closing balance                                                     14,128,544.62        83,444,142.52             97,572,687.14
IV.    Book value
1.Closing book value                                                 617,136,794.17        18,224,431.40           635,361,225.57
2.Opening book value                                                 629,224,102.41        18,073,021.63           647,297,124.04

Note:(a) Current year depreciation and amortization is RMB 12,087,308.24;The decrease 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;
(b)Among the investment properties, there were house &building with carrying value RMB 22,972,285.00 that
were used as mortgage of long-term loans(including the long-term loans that will mature within one year),
referring to note 7.78 for details.




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7.12 Fixed assets
                                                                               Transportation        Electronic equipment
                            Item                     Houses& Buildings                                                               Total
                                                                                 equipment                and others
I.     Original carrying value
1.Opening balance                                        107,110,751.42           12,270,722.14             14,833,483.00           134,214,956.56
2. Increase in the year                                                  --          349,560.34                315,917.18              665,477.52

(1)Purchasing                                                          --          349,560.34                315,917.18              665,477.52

(2)Transferred from the construction in progress                       --                     --                      --                      --

3. Decrease in the year                                                                         --             308,022.78              308,022.78

(1)Disposal or discard as useless                                      --                     --             308,022.78              308,022.78

(2)Decrease of cooperation combination                                 --                     --                      --                      --

(3)Transferred to investment property                                  --                     --                      --                      --

4. Closing balance                                       107,110,751.42           12,620,282.48             14,841,377.40           134,572,411.30
II.    Accumulated depreciation
1.Opening balance                                         73,640,632.96           10,638,507.53             11,997,947.36            96,277,087.85
2. Increase in the year                                    1,511,028.82              498,845.79                363,737.14             2,373,611.75

Including:withdrawing                                     1,511,028.82              498,845.79                363,737.14             2,373,611.75

3. Decrease in the year                                                  --                     --                      --                      --

(1)Disposal or discard as useless                                      --                     --                      --                      --

(2)Decrease of corporate combination                                   --                     --                      --                      --

(3)Transferred to investment property                                  --                     --                      --                      --

4. Closing balance                                        75,151,661.78           11,137,353.32             12,361,684.50            98,650,699.60
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                                      31,959,089.64            1,482,929.16              2,479,692.90            35,921,711.70
2. Beginning book value                                   33,470,118.46            1,632,214.61              2,835,535.64            37,937,868.71

Note: (1)The depreciation for the current year is RMB 2,373,611.75. There were no constructions in progress
transferred to fixed assets during the period.
(2)There was no any fixed assets whose ownership are restricted.
(3)There was no any fixed assets lying idle temporary.
7.13 Intangible assets
                                   Item                                       Software                                      Total

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                                Item                                              Software                                       Total
I.       Carrying value
1. Opening balance                                                                           2,241,800.00                                2,241,800.00
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                                2,241,800.00
II.      Accumulated amortization
1.Opening balance                                                                             2,186,600.00                                  2,186,600.00
2. Increase in the year                                                                          55,200.00                                    55,200.00

Including:withdrawing                                                                           55,200.00                                    55,200.00

3. Decrease in the year                                                                                      --                                            --

(1)Disposal                                                                                                --                                            --

(2)Decrease of corporate combination                                                                       --                                            --

4. Closing balance                                                                            2,241,800.00                                  2,241,800.00
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                                                                                         --                                            --
2. Beginning book value                                                                          55,200.00                                    55,200.00

7.14 Long-term deferred assets

                Item                Opening balance           Increase           Amortization           Other reductions            Closing balance

Renovation costs                            529,905.52                                    78,333.61                                          451,571.91

Others                                       56,445.14                                     7,697.04                                           48,748.10

               Total                        586,350.66                                    86,030.65                                          500,320.01

7.15 Deferred tax assets
(1) Recognized deferred tax assets
                                                         Closing balance                                      Opening balance
                   Item
                                       Deferred tax assets        Deductible or taxable       Deferred tax          Deductible or taxable

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                                                                temporary differences         assets          temporary differences

Provision for impairment losses of
                                                   268,941.60                 67,235.40          268,941.60               67,235.40
assets
Eliminated unrealized profit when
                                                 9,761,284.98               2,440,321.25      30,132,928.99            7,533,232.24
consolidating financial statement

Deductible loss                                 15,099,870.28               3,774,967.57      26,809,694.47            6,702,423.62

Provision for land appreciation tax
                                                14,118,236.27               3,529,559.07      40,166,204.21           10,041,551.05
liquidation reserves
Expected profit for advances from
                                              143,817,844.47               35,954,461.11      92,582,611.51           23,145,652.88
customers

                  Total                       183,066,177.60               45,766,544.40     189,960,380.78           47,490,095.19

(2) Details of unrecognized deferred tax assets
                                 Item                                    Closing balance                       Opening balance

      Deductible operating losses                                                        4,194,750.37                        4,194,750.37

      Bad debt provision                                                                46,673,541.64                       46,673,541.64

      Provision for impairment of long-term investments                                 47,660,725.09                       47,660,725.09

      Provision for impairment of investment properties                                 24,219,856.94                       24,219,856.94

                                 Total                                               122,748,874.04                        122,748,874.04

(3) Unrecognized deductible losses of deferred tax assets will be expire at the end of following years
                                 Year                                    Closing balance                       Opening balance

      2018                                                                               1,656,431.26                        1,656,431.26

      2019                                                                                 107,123.28                          107,123.28

      2020                                                                               9,692,495.52                        9,692,495.52

      2021                                                                              11,349,323.06                       11,349,323.06

      2022                                                                               5,753,184.38                        5,753,184.38

                                 Total                                                  28,558,557.50                       28,558,557.50


7.16 Short-term loans

                                 Item                                    Closing balance                       Opening balance

      Pledged Loan                                                                      51,374,540.56                       83,307,653.64

      Credit Loan                                                                                                           20,900,000.00

                                 Total                                                  51,374,540.56                      104,207,653.64

Note:(1) (1) Refer to note 6.2/Notes receivable for the details of pledged loan and note 7.44.
(2)There was no short term loan overdue which had not repaid

7.17 Accounts payable

(1) Details of accounts payable
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                                        Item                                     Closing balance                        Opening balance
      Within 1 year                                                                          145,360,477.82                         150,123,930.63
      Over 1 year                                                                            101,955,171.41                          40,505,825.67
                                       Total                                                 247,315,649.23                         190,629,756.30

Note: Significant accounts payable aged more than one year is for the unsettled project at the end of the period.

7.18 Advances from customers

(1) Details of advances from customers
                                Item                                       Closing balance                             Opening balance

      Within one year                                                                   216,164,441.03                              325,258,418.19

      Over one year                                                                      40,203,784.40                                6,893,598.35

                                Total                                                   256,368,225.43                              332,152,016.54

(2) Completed and unsettled assets resulting from the construction contract at the end of the period
                                                      Item                                                              Amount

      Accumulated cost incurred                                                                                                     196,294,762.33

      Accumulated gross profit                                                                                                        6,916,325.63

      Deduct: Expected loss                                                                                                                        --

              Amount already settled                                                                                                129,611,196.24

      Completed outstanding assets formed by the construction contract                                                               73,599,891.72

○1 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.
○2 Details of advances from customers
                      Item                                   Closing balance            Opening balance                Estimated time of completion

Jinye Island villa No.10                                            4,226,985.74                 2,899,190.49                   Completed

Jinye Island villa No.11                                               90,000.00                 1,558,741.91                   Completed

Yuejing dongfang                                                    2,727,839.06                 3,629,283.83                   Completed

Tianyue Bay No.1                                                   16,153,171.47                 8,264,468.87                   Completed

Shengfang CuiLin Building                                         231,035,731.00              256,113,269.00                    Completed

                      Total                                       254,233,727.27              272,464,954.10                      ——

7.19 Employee benefits payable
(1) Details of employee benefits payable
                              Item                             Opening balance               Increase           Decrease         Closing balance
      I.    Short-term remuneration                                     30,373,697.09        75,534,726.58      68,959,267.32        36,949,156.35
      II.   Post-employment              benefit-defined
                                                                           142,522.87         7,407,472.65       7,457,422.77             92,572.75
      benefit plans


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                           Item                         Opening balance            Increase          Decrease           Closing balance
                           Total                                30,516,219.96      82,942,199.23     76,416,690.09          37,041,729.10

(2) Details of short-term remuneration
                                   Item                     Opening balance         Increase           Decrease          Closing balance

     I.        Salary, bonus, allowance and subsidies           29,500,700.86       68,150,449.04       61,450,761.97       36,200,387.93

     II. Employee welfare                                           39,600.00          566,582.00          566,582.00           39,600.00
     III. Social insurance premium                                   2,045.09         2,395,896.02       2,395,896.02            2,045.09
            Including: Medical insurance premium                     1,503.22         2,076,701.87       2,076,701.87            1,503.22
                       Industries insurance premium                       591.04       150,790.17          150,560.01              821.20
                       Maternity insurance premium                        -49.17       168,403.98          168,634.14             -279.33
     III.      Housing fund                                        124,366.23         3,228,044.38       3,228,044.38          124,366.23
     IV. Union expenses and employee education
                                                                   706,984.91         1,193,755.14       1,317,982.95          582,757.10
     expenditure
                                   Total                        30,373,697.09       75,534,726.58       68,959,267.32       36,949,156.35




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(3) The details of defined contribution plans
                                Item                 Opening balance           Increase         Decrease       Closing balance
      I.       Basic endowment insurance premium              75,075.11        4,938,829.20     4,938,829.20            75,075.11
      II. Unemployment insurance premium                         447.60          150,790.17       150,790.17              447.60
      III. Company annuity payment                            67,000.16        2,317,853.28     2,367,803.40            17,050.04
                                Total                        142,522.87        7,407,472.65     7,457,422.77            92,572.75

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. 20 Taxes payable

                                    Item                           Closing balance                    Opening balance

      VAT                                                                       13,047,453.97                      3,582,136.09

      Corporate income tax                                                     127,808,171.76                     28,512,631.43

      Individual income tax                                                        803,092.71                      1,041,204.75

      Urban maintenance & construction tax;                                      2,234,203.98

      Property tax                                                               3,717,315.47                      1,975,303.69

      Land appreciation tax                                                     53,482,786.37                     49,979,273.19

      Education surcharge                                                        1,650,112.98                           12,493.53

      Others                                                                     1,101,183.02                      1,050,484.21

                                    Total                                      203,844,320.26                     86,153,526.89


7.21 Interest payable
                                    Item                           Closing balance                    Opening balance

      Others                                                                    16,535,277.94                     16,535,277.94

                                    Total                                       16,535,277.94                     16,535,277.94

Note: The balance of “Other” interests payable due to Shenzhen Investment Holdings Co.,Ltd., being accrued
for the loans interst. Please refer refer to XI.6 (2)

7.22 Other payables

(1)Details of other payables
                      Item                              Closing balance                               Opening balance

Land appreciation tax accrued                                             334,810,562.72                                176,386,234.44

Payable to related parties                                                 14,398,496.70                                 11,999,854.37

Deposits                                                                   83,126,753.11                                 79,464,386.67


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Others                                                                  201,632,520.41                                 107,094,613.62

                     Total                                              633,968,332.94                                 374,945,089.10

(2)Description of significant other payables aged more than one year
                 Name of entity                             Amount                                   Reason for overdue

Tax accrued- land appreciation tax                                      334,810,562.72                  Unexpired

                     Total                                              334,810,562.72                    ——


NOTICE: 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, 2018, the closing balance is RMB 334,810,562.72.

7.23 Non-current liabilities due within one year

(1)Details of non-current liabilities due within one year
                              Item                                 Closing balance                       Opening balance

Long-term loans due within one year                                              17,773,200.00                          64,000,000.00

                              Total                                              17,773,200.00                          64,000,000.00


7.24 Long-term loans
                                      Item                            Closing balance                 Opening balance

     Loan with mortgage                                                         35,556,700.00                    146,000,000.00

     Less: long-term loans due within one year                                  17,773,200.00                      64,000,000.00

                                      Total                                     17,783,500.00                      82,000,000.00

Notice:
○1 The total amount of long-term loans on June 30, 2018 is 35,556,700.00 yuan, of which 17,773,200.00 yuan is
divided into non-current liabilities due within one year; The remaining 17,783,500.00 yuan is divided into
long-term loans.
○2 The 2018 annual interest rate shall be set at 10% higher than the benchmark interest rate of the people's
bank of China in the same period.
○3 The classes and the amount of mortgage assets, Please refer refer to note 7.44.
7.25 Long-term payables

Details of long-term payables
                             Item                             Closing balance                    Opening balance
 Maintenance fund                                                           5,900,692.96                    8,101,880.05

                             Total                                          5,900,692.96                    8,101,880.05




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  7.26 Share capital
                                                                        Changes for the period(+ 、-)
                 Item          Opening balance      Newly issued Bonus             Capitalization of                                            Closing balance
                                                                                                             Other        Subtotal
                                                      shares     issued            surplus reserve

           Total shares          1,011,660,000.00                 --         --                         --           --              --        1,011,660,000.00

  7.27 Capital surplus
             Item                  Opening balance                     Increase                            Decrease                       Closing balance

  Capital premium                           557,433,036.93                                   --                             --                 557,433,036.93

  Other capital reserve                     420,811,873.18                                   --                             --                 420,811,873.18

            Total                           978,244,910.11                                   --                             --                 978,244,910.11


  7.28     Other comprehensive income

                                                                             Amount incurred this year
                                                                   Less: previous
                             Opening                                                                          Attributable        Attributable               Closing
         Item                                 Accrual before         years‘ OCI                   Less:
                             balance                                                                           to parent          to minority                balance
                                               income tax          transferred to                 income
                                                                                                               company           shareholders
                                                 this year         P&L in current.                  tax
                                                                                                                after tax          after tax
                                                                       period
  I. Other
  comprehensive
  income that could
                                       --                    --                         --              --                  --                      --                     --
  not be classified
  into profit and
  loss in the future
  II. Other
  comprehensive
  income that
  would be                  10,045,697.16         -694,697.10                                                   -486,287.97               -208,409.13        9,559,409.19
  classified into
  profit and loss in
  the future
  including:the
  difference of
  foreign currency
                            10,045,697.16         -694,697.10                                                   -486,287.97               -208,409.13        9,559,409.19
  financial
  statement
  translation
         Total              10,045,697.16         -694,697.10                                                   -486,287.97               -208,409.13        9,559,409.19


  7.29 Surplus reserve

                    Item                            Opening balance                          Increase                     Decrease                       Closing balance
Statutory surplus reserve                                    85,666,668.00                                                                                    85,666,668.00

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                    Item                            Opening balance                   Increase                   Decrease                   Closing balance
                    Total                                   85,666,668.00                                                                         85,666,668.00

Note: According to the Company Law and the company's policy, the company draws 10% of net profit for
statutory surplus reserve. It will not be withdrawn if the accumulation amount of statutory surplus reserve
exceeds 50% of the registered capital of the company.
Discretionary surplus reserve could be withdrawn after the statutory surplus reserve. It can be made up the
previous annual loss or increase the capital stock after approval

7.30 Undistributed profit

                                                                                                         Amount for the current         Amount for the prior
                                                 Item
                                                                                                                period                       period
Before adjustment: Undistributed profits at the end of prior year                                                742,624,845.71                583,908,333.05
Adjustment: adjust the beginning undistributed profits     (Increase +, decrease -)                                               --                           --
After adjustment: Undistributed profits at beginning of year                                                     742,624,845.71                583,908,333.05
Plus: net profit attributable to the shareholders of the parent company in the period                            326,066,084.53                137,226,601.84
Less: Appropriation to the statutory surplus reserve                                                                              --                           --
Appropriation to discretionary surplus reserve                                                                                    --                           --
Common stock dividends declared                                                                                                   --                           --
Conversion of ordinary shares’ dividends into share capital                                                                      --                           --
Undistributed profit at the end of the period                                                                   1,071,690,930.24               721,134,934.89


7.31 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                             1,313,971,314.90            538,511,001.68                     727,183,146.15                  493,647,637.36

Other operating                                     3,570,316.45                1,906,489.73                      4,123,835.88                    1,302,160.53

            Total                               1,317,541,631.35            540,417,491.41                     731,306,982.03                  494,949,797.89




7.32 Taxes and surcharges

                               Item                                Amount for the current period                   Amount for the prior period
      City construction and maintenance tax                                                4,283,758.49                                    2,255,618.74
      Education surcharges                                                                 1,894,171.09                                      996,755.33
      Property tax                                                                         3,525,479.32                                    3,327,020.32
      Land appreciation tax                                                                       6,815.23
      vehicle and vessel tax                                                                     10,200.00                                      6,000.00
      Stamp duty                                                                            457,845.20                                         24,463.50

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                            Item                     Amount for the current period        Amount for the prior period
     Business tax                                                          1,629,897.12                           859,907.11
     Land value increment tax                                           264,344,713.02                         15,825,612.34
     Local education surcharges                                            1,186,490.00                           606,413.00
     Embankment Protection Fee                                                 1,121.29                            11,520.89
                            Total                                       277,340,490.76                         23,913,311.23

Note: Details of business taxes and surcharges please refer to 11.6.

7.33 Selling expenses

                            Item                     Amount for the current period        Amount for the prior period
     Employee benefits                                                     1,968,446.05                         1,707,531.15
     Advertising expenses                                                  2,795,656.99                         3,847,364.06
     Entertainment expenses                                                  445,386.30                           448,735.60
     Sales agency fees and commissions                                    30,118,783.25                            56,665.76
     Others                                                                1,838,861.18                           772,507.19
                            Total                                         37,167,133.77                         6,832,803.76

The Selling expenses incurred in this period was 37,167,133.77 yuan, which increased by 443.95% compared
with the same period last year .was due to the depreciation of Cuilinyuan sales agent fees by the sales of a
certain proportion of the account

7.34 Administrative expenses
                            Item                     Amount for the current period        Amount for the prior period

     Employee benefits                                                    20,306,987.57                        13,427,835.61

     Taxes                                                                   355,928.24                           642,583.97

     Depreciation                                                          1,548,056.87                         1,544,544.45

     Entertainment expenses                                                  880,424.02                         1,099,378.23

     Intermediary fee                                                        943,460.89                           850,413.87

     Travel expense                                                          200,814.85                           205,266.91

     Administrative expenses                                                 565,594.94                           436,364.81

     Repair charge                                                           438,716.03                           443,258.96

     Water and electricity charges                                           421,746.13                           180,904.51

     Other amortization                                                      357,994.59                           391,561.10

     Others                                                                5,716,476.72                         5,497,126.27

                            Total                                         31,736,200.85                        24,719,238.69




7.35 Financial expenses
                            Item                     Amount for the current period        Amount for the prior period

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                               Item                              Amount for the current period                      Amount for the prior period

       Interest expenses                                                                    6,711,775.56                                    19,728,425.13

       Less: Interest income                                                               11,769,366.46                                     7,399,712.00

       Less: capitalized interest expenses                                                  3,694,420.78                                    15,451,618.09

       Exchange differences                                                                   -34,475.31                                       333,780.08

       Less: Capitalized exchange differences

       Others                                                                                174,817.89                                        153,553.30

                               Total                                                       -8,611,669.10                                    -2,635,571.58

The amount of financial expenses incurred in the current period was -8,611,669.10 yuan, a decrease of 226.75%
compared with the same period last year was due to the interest expense on current loan decreases, while the
interest income of time deposit increases

7.36            Investment income
                                                                                                           Amount for the           Amount for the prior
                                                  Item
                                                                                                           current period                period

       Investment income from long-term investments under cost method                                                        --                              --

       Investment income from long-term investments under equity method*1                                                    --                              --

       Investment income on disposal of long-term investments                                                                --                              --

       Investment income from holding trading financial assets                                                               --                              --

       Investment income for the sale of financial assets during the holding period                                827,100.00                  650,000.00

                                                  Total                                                            827,100.00                  650,000.00

Investment income for the sale of financial assets during the holding period:
                                                          Amount for the current
                           Item                                                       Amount for the prior period                 Reasons for changes
                                                                 period

Shantou Small &Medium Enterprises Financing                                                                                       Distribution of profit
                                                                     650,000.00                       689,000.00
Guarantee Co., Ltd

                           Total                                     650,000.00                       689,000.00




7.38 Non-operating income

                                                                   Amount for the            Amount for the        Amount included in non-recurring profit or
                               Item
                                                                   current period             prior period                    loss for the period

Total gains on disposal of non-current assets                                         --                      --                                                  --

Gains on penalty                                                                      --                      --                                                  --

Government grants unrelated to the Company's daily
                                                                                      --                      --                                                  --
activities

Indemnity                                                                   91,835.23               74,635.68                                              91,835.23


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                                                                  Amount for the       Amount for the       Amount included in non-recurring profit or
                             Item
                                                                  current period        prior period                   loss for the period

Others                                                                      4,000.00         242,385.75                                         4,000.00

                             Total                                         95,835.23         317,021.43                       ——




7.39 Non-operating expenses

                                                                 Amount for the     Amount for the prior    Amount included in non-recurring profit or
                             Item
                                                                  current period          period                       loss for the period

Donations to third parties                                              50,000.00               20,851.54                                     50,000.00


Penalty expense                                                         30,210.47               10,000.00                                     30,210.47


Compensation expense                                                                            10,000.00                                           0.00


Others                                                                 119,342.86               80,762.25                                     119,342.86


                             Total                                     199,553.33            121,613.79                       ——


7.40     Income tax expenses
(1) Details of income tax expenses
                             Item                                    Amount for the current period                 Amount for the prior period

Current tax expense calculated according to tax laws and
                                                                                         116,979,398.73                                 48,017,985.19
relevant requirements

Deferred income tax expenses                                                               -5,809,681.45                                     -844,845.47

                             Total                                                       111,169,717.28                                 47,173,139.72

(2)The process of calculating the income tax based on accounting profit
                                                         Item                                                      Incurred in the current
                                                                                                                           period
Consolidated profit this period                                                                                            440,215,365.56
Income tax calculated at legal or applicable tax rate                                                                      110,053,841.39
Impact of various tax rates applicable to subsidiaries                                                                                   --
Adjustment of impact on the income tax in the previous period                                                                     1,460.64
Impact of non-taxable income                                                                                                             --
Impact of non-deductible cost, expense and loss                                                                              1,114,415.25
Impact of deductible losses deferred income tax assets unconfirmed in the previous use period                                            --
Impact of the deductible temporary differences or deductible loss of unconfirmed deferred tax assets of this
                                                                                                                                         --
year.
Changes of the deferred tax assets/liability caused by the adjustment of tax rate                                                        --
Income taxes                                                                                                               111,169,717.28

7.41 Other comprehensive income

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Note: Please refer to note 7.28.


7.42 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                                                                       13,061,210.22                          10,938,611.05

Cash pledge and security deposits                                                      4,323,391.76                           4,169,257.32

Maintenance fund                                                                       6,343,450.31

The collecting and paying on another's behalf                                          1,651,300.01                           1,963,519.00

Others                                                                                61,406,545.31                           8,174,583.09

                               Total                                                  86,785,897.61                          25,245,970.46

(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                                      12,874,997.70                          11,613,292.21

Cash paid to operating expenses                                                        3,628,291.42                           3,233,124.58

Cash pledge and security deposits                                                      4,763,108.22                           4,557,072.05

The collecting and paying on another's behalf                                            161,981.18                            724,088.98

Others                                                                                36,632,151.02                          50,416,225.28

                               Total                                                  58,060,529.54                          70,543,803.10




(4)Cash paid on other investing activities
                       Item                                   Amount for the current period                     Amount for the prior period

Six months of structured deposits                                                     600,000,000.00

                       Total                                                          600,000,000.00




 7.43 Supplementary information to the cash flow statement

(1) Supplementary information to the cash flow statement
                                                                                                    Amount for the current Amount for the prior
                                                   Item
                                                                                                           period               period
     I.     Reconciliation of net profit to cash flows from operating   activities:
     Net profit                                                                                           329,045,648.28         137,199,669.96

     Add:Provision for asset impairment                                                                                --                    --


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                                                                                                    Amount for the current Amount for the prior
                                                   Item
                                                                                                           period               period
    Depreciation of fixed assets, bio-assets, and natural gas                                               13,246,302.18        12,436,112.05
    Amortization of intangible assets                                                                            55,200.00          254,370.00
    Amortization of long-term deferred expense                                                                 369,642.72         1,147,347.42
    Losses on disposal of fixed assets, intangible assets and other long-term assets(deduct:
                                                                                                                                     24,018.05
    gains)
    Losses on scrapping of fixed assets (deduct: gains)                                                          14,291.75              264.47
    Loss of fair value variation (deduct: gains)                                                                        --                     --
    Financial expenses (deduct: gains)                                                                       3,060,270.68         4,276,807.04
    Losses from investments (deduct: gains)                                                                    -827,100.00         -650,000.00

    Decrease in deferred tax assets (deduct: increase))                                                     1,723,550.79          -844,845.47

    Increase in deferred tax liabilities (deduct: decrease)                                                             --                     --
    Decrease in inventories (deduct: increase)                                                             175,982,196.68       -13,302,973.16
    Decrease in operating receivables (deduct: increase)                                                  -174,638,545.77       -93,695,521.42
    Increase in operating payables (deduct: decrease)                                                      246,450,854.80      -144,604,199.24
    Others                                                                                                     245,817.56             58,253.11
    Net cash flows from operating activities                                                               594,728,129.67       -97,700,697.19
    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                                                                        1,068,660,665.62     1,164,053,438.01
    Less: cash at the beginning of the period                                                            1,206,789,056.46     1,265,767,290.57
    Add: cash equivalents at the end of the period                                                                      --                     --
    Less: cash equivalents at the beginning of the period                                                               --                     --
    Net increase in cash and cash equivalents                                                             -138,128,390.84      -101,713,852.56

 (2)Information of cash and cash equivalents
                                                                                              Amount for the current    Amount for the prior
                                               Item
                                                                                                     period                  period

     I.       Cash                                                                                  1,068,660,665.62          1,206,789,056.46

            Including: Cash on hand                                                                        72,392.09                 56,472.32

                      Bank deposits                                                                                --                          --

                      Other monetary funds                                                                         --                          --

     II.      Cash equivalents                                                                                     --                          --

            Including: Investments in debt securities due within three months                                      --                          --

     III.     Closing balance of cash and cash equivalents                                          1,068,660,665.62          1,206,789,056.46

            Including: Cash and cash equivalents using restricted of the parent company or                         --                          --


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                                                                                             Amount for the current     Amount for the prior
                                              Item
                                                                                                    period                   period
       subsidiary


7.44 Ownership or use-right restricted assets
                      Categories of assets                                     Closing balance                    The reasons for restriction
Accounts receivable                                                                       51,374,540.56 Short-term loan mortgaged

Investment property( Shenfang square)                                                   22,972,285.00 Long-term loan mortgaged

                             Total                                                        74,346,825.56                     ——


7.45 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                                                       62,689.67 6.5957                                         413,484.39

              HKD                                                 9,152,390.70 0.8404                                       7,692,035.25
              HKD                                                 4,905,150.10 0.8404                                       4,122,484.36
Other accounts receivable

Including:USD                                                                  --                   --                                 --

             HKD                                                 25,522,945.11 0.8404                                      21,450,504.02
Other accounts payable

Including:USD                                                                  --                   --                                 --

              HKD                                                20,097,370.62 0.8404                                      16,890,634.19

(2)Oversea operating entities
The Group’s significant oversea operating entities are American Great Wall Co., Ltd and Fresh Peak Investment
Co., Ltd. American Great Wall Co., Ltd chooses the USD as the its functional currency, for its main operating
activities are in the USA; Fresh Peak Investment Co., Ltd. chooses the RMB as its functional currency, for it is a
investment company and its main operating activities are in the mainland of China.


VIII      The changes of the scope of consolidation
The company did not change the range of consolidation in this period compared with last year


IX      Equities in other entities.

9.1 Equities in the subsidiaries

(1) The formation of the Group

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                                                                                 Shareholding proportion
                                 Main operating       Reg.                                 (%)
     Name of the subsidiary                                    Business nature                                           Method of acquiring
                                      area           place
                                                                                    Direct        Indirect

                                                                                                                 Acquiring through establishment or
Shenzhen Petrel Hotel Co. Ltd.     Shenzhen       Shenzhen     Services              68.10           31.90
                                                                                                                 investment

Shenzhen City Property                                                                                           Acquiring through establishment or
                                   Shenzhen       Shenzhen     Services              95.00                5.00
Management Ltd.                                                                                                  investment

Shenzhen Zhen Tung                                                                                               Acquiring through establishment or
                                   Shenzhen       Shenzhen     Services              73.00           27.00
Engineering Ltd.                                                                                                 investment

Shenzhen City We Gen                                                                                             Acquiring through establishment or
                                   Shenzhen       Shenzhen     Services              75.00           25.00
Construction Management Ltd.                                                                                     investment

Shenzhen City Shenfang                                                                                           Acquiring through establishment or
                                   Shenzhen         Shenzhen     Investment          90.00        10.00
Investment Ltd.                                                                                                  investment

Shenzhen City Shenfang Free                                     Commecial                                        Acquiring through establishment or
                                   Shenzhen         Shenzhen                         95.00         5.00
Trade Trading Ltd.                                                trade                                          investment

Shenzhen City SPG Long Gang                                                                                      Acquiring through establishment or
                                   Shenzhen         Shenzhen    Real estate          95.00         5.00
Development Ltd.                                                                                                 investment

Shenzhen Special Economic
Zone Real Estate (Group)                                                                                         Acquiring through establishment or
                                  Guangzhou        Guangzhou    Real estate          95.00         5.00
Guangzhou Property and Estate                                                                                    investment
Co., Ltd.
Beijing fresh peak property
                                                                                                                 Acquiring through establishment or
development management              Beijing          Beijing    Real estate          75.00        25.00
                                                                                                                 investment
limited company
Beijing SPG Property                                                                                             Acquiring through establishment or
                                    Beijing          Beijing      Services           10.00        90.00
Management Limited                                                                                               investment

Shenzhen ShenWu Elebator                                                                                         Acquiring through establishment or
                                   Shenzhen         Shenzhen      Services                   --   100.00
                                                                                                                 investment
Co.,Ltd
Shenzhen Lain Hua Industry and                                                                                   Acquiring through establishment or
                                   Shenzhen         Shenzhen      Services           95.00         5.00
                                                                                                                 investment
Trading Co. Ltd.
                                                                Investment
                                                                                                                 Acquiring through establishment or
Fresh Peak Holding Ltd.           HongKong         HongKong         and             100.00           --
                                                                                                                 investment
                                                               management
                                                                Investment                                       Acquiring through establishment or
Wellam Ltd.                       HongKong         HongKong                                  --   100.00
                                                                  holding                                        investment

Shantou SEZ Wellam Fty Bldg.,                                                                                    Acquiring through establishment or
                                   ShanTou          ShanTou     Real estate                  --   100.00
Dev. Co.                                                                                                         investment

                                                                                                                 Acquiring through establishment or
Shantou Huafeng Estate Dev.Co.     ShanTou          ShanTou     Real estate         100.00           --
                                                                                                                 investment
                                                                                                                 Acquiring through establishment or
Great Wall Estate Co., Inc           USA              USA       Real estate        70.00             --
                                                                                                                 investment

                                                                Investment                                       Acquiring through establishment or
Fresh Peak Holdings Ltd.          HongKong         HongKong                       100.00             --
                                                                    and                                          investment


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ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                                               Interim Report 2018


                                                                                  Shareholding proportion
                                 Main operating      Reg.                                   (%)
     Name of the subsidiary                                     Business nature                                      Method of acquiring
                                      area          place
                                                                                     Direct        Indirect
                                                                management
                                                                                                              Acquiring through establishment or
Fresh Peak Investment Ltd.        HongKong        HongKong Investment                 --           55.00
                                                                                                              investment

                                                               Investment and                                 Acquiring through establishment or
Openice Ltd.                      HongKong        HongKong                          20.00          80.00
                                                               management                                     investment

                                                                                                              Acquiring through establishment or
Barenie Co. Ltd.                  HongKong        HongKong       Investment           --           80.00
                                                                                                              investment
                                                                                                              Acquiring through establishment or
Keyear Development Ltd.           HongKong        HongKong Investment                 --           100.00
                                                                                                              investment

Guangzhou Huangpu Xizun real                                                                                  Acquiring through establishment or
                                 GuangZhou        GuangZhou      Real estate          --           100.00
estate limited company                                                                                        investment

Fresh Peak Real Estate Dev.                                                                                   Acquiring through establishment or
                                    WuHan          WuHan         Real estate          --           55.00
Construction (Wuhan) Co. Ltd.*                                                                                investment

Shantou Special Economic Zone
                                                                                                              Subsidiary acquired through emerge
Real Estate (Group) Songshan       Shantou         Shantou       Real estate          --           100.00
                                                                                                              under non-common control
Property and Estate Co., Ltd.
Shenzhen Shenfang Department                                     Commecial                                    Acquiring through establishment or
                                  Shenzhen        Shenzhen                          95.00     5.00
Store Co. Ltd.* ①                                                 trade                                      investment

                                                                                                              Acquiring through establishment or
Bekaton Property Limited *②       Australia       Australia     Real estate        60.00     --
                                                                                                              investment

Canada Great Wall ( Vancouver)                                                                                Acquiring through establishment or
                                   Canada          Canada        Real estate          --      60.00
*②                                                                                                           investment

                                                                 Commecial                                    Acquiring through establishment or
Paklid Limited *②                HongKong        HongKong                          60.00           40.00
                                                                   trade                                      investment

Guangdong Province Fengkai
Lain Feng Cement Manufacturing Guangdong          Guangdong
                                                                 Manufacture          --      90.00
                                                                                                              Acquiring through establishment or
                                Fengkai            Fengkai                                                    investment
Co., Ltd *③

*① Shenzhen Shenfang Department Store Co. Ltd
The shareholders meeting held on October 29 th,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 December 7 th,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 Bekaton Property Limited ,Canada Great Wall ( Vancouver)and Paklid Limited
These 3 subsidiaries were set up overseas in early times. The board of directors passed a resolution to
terminate the corporations’ business on Dec.13th, 2000.
*③ Guangdong Province Fengkai Lian Feng Cement Manufacturing Co., Ltd
                                                                 113
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The total assets (including tangible and intangible assets) of the corporation were auctioned for debt repayment
at 22 January 2006. The Company's investment in the company's book value is zero.
Except for *①, *②, *③, the above subsidiaries which are not included the company’s consolidated financial
statement had ceased operations for many years. And the entities of the corporations didn’t exist. And the
Company has no control over its subsidiaries’ businesses. According to the principle of “Enterprise Accounting
Standards No.33- the Consolidation Financial Statement”, the corporation will not be included in the Company’s
consolidated financial statement. The book value of the investment account of the Company is zero. The
following are the details.

                                                      Accounting
                      Investee                                         Investment cost Opening balance              Changes          Closing balance
                                                       Method

    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 Shenfang Department Store
                                       Cost Method                       10,000,000.00        10,000,000.00                     --        10,000,000.00
    Co. Ltd
    Shantou Huafeng Building                       Cost Method           68,731,560.43        58,547,652.25                     --        58,547,652.25

    Guangdong Province Fengkai Lain Feng
                                         Cost Method                    121,265,000.00        56,228,381.64                     --        56,228,381.64
    Cement Manufacturing Co., Ltd
                        Total                            ——          201,104,290.43        125,883,763.89                      -    125,883,763.89

(Continued)
                                                                                          Increased current year
                                                                      Provision for                              Current year cash
                                Investee                                                       provision for                                Remarks
                                                                      impairment                                     dividends
                                                                                                impairment

    Paklid Limited                                                          201,100.00                         --                    --

    Bekaton Property Limited                                                906,630.00                         --                    --

    Shenzhen Shenfang Department Store Co. Ltd                          10,000,000.00                          --                    --

    Sahntou Huafeng Building                                            58,547,652.25                          --                    --
    Guangdong Province Fengkai Lain Feng Cement
                                                                        56,228,381.64                          --                    --
    Manufacturing Co., Ltd
                                 Total                                 125,883,763.89                          --                    --

 (2)Significant non-wholly owned subsidiary
                                     Minority interest Current year profit and loss         Current year dividends       Minority interest
       Name of subsidiary            share proportion attributable to minority interest     distributed to minority    equity balance at the
                                           (%)                 shareholders                 interest shareholders        end of the year
Great Wall Estate Co., Inc                       30.00                      -14,445.74                                         -21,824,034.20

Fresh Peak Investment Ltd.                       45.00                        -4,358.19                                       -104,587,105.22

Barenie Co. Ltd.                                 20.00                        -1,632.33                                         -2,037,265.40

 (3) The main financial information of significant non-wholly owned subsidiary

                                                                          114
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                                                                                             Closing balance
       Name fo subsidiary                                       Non-current                                                     Non-current
                                         Current assets                              Total Assets      Current liabilities                        Total liabilities
                                                                  assets                                                         liabilities
Great Wall Estate Co., Inc                     413,214.01        18,224,431.40        18,637,645.41         102,090,119.33                         102,090,119.33

Fresh Peak Investment Ltd.                220,030,064.69         24,793,206.35       244,823,271.04        254,740,948.35                          254,740,948.35
Barenie Co. Ltd.                                     979.31      30,373,713.87        30,374,693.18          32,802,836.67                            32,802,836.67

 (Continued)
                                                                                           Opening balance
     Name of subsidiary                                       Non-current                                                       Non-current
                                   Current assets                                Total Assets         Current liabilities                        Total liabilities
                                                                assets                                                           liabilities
Great Wall Estate Co., Inc                 479,270.32         18,073,021.63        18,552,291.95           101,241,947.93                          101,241,947.93

Fresh Peak Investment Ltd.          220,030,061.97            24,793,206.35       244,823,268.32           254,731,260.77                          254,731,260.77

Barenie Co. Ltd.                                975.66        30,373,713.87        30,374,689.53            32,794,671.39                             32,794,671.39

 (Continued)
                                           Incurred in current year                                                 Incurred in previous year

    Name of                                                                   Cash flow                                                                 Cash flow
                                                            Total of                                                                 Total of
   subsidiary        Operating                                                  from           Operating                                                  from
                                        Net profit       comprehensive                                            Net profit      comprehensive
                      income                                                  operating         income                                                  operating
                                                            income                                                                   income
                                                                              activities                                                                activities
Great Wall
                     287,797.83          -68,120.84             -48,152.47     -68,159.28       204,090.22         -89,772.94         1,961,740.89       -89,839.36
Estate Co., Inc
Fresh Peak
                                          -9,684.86              -9,684.86                                          -8,070.14             -8,070.14
Investment Ltd.
Barenie Co. Ltd.                          -8,161.63              -8,161.63                                          -6,812.65             -6,812.65


9.2 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                                                                 446,861.06                                     446,861.06
      Totals of the following items calculated per respective
      shareholding proportion


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                           Item                       Closing balance/Incurred this year        Opening balance/Incurred last year
     —Net profit                                                                          --                                        --
     —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 7.10,
including:
1) Guangdong province Huizhou Luofu Hill Mineral Water Co.,Ltd
The operting period of the company was form June 5, 1991 to June 4, 2001. And the company had ceased
operations because of operating loss for many years. And the Company had been terminated its licenses by law
at July 6, 2001 because it failed to pass the annual inspection. Besides, the corporation stopped preparing the
financial statement. As of the end of the year, the book value of the investment account of the Company is zero.
According to the joint venture agreement, the Company didn’t have the obligation to bear the additional loss.
2)Fengkai Xinghua Hotel
The FengKai XingHua Hotel was announced bankruptcy by the Guangdong Province Zhaoqing City
second-middle intermediate Peoples’ court with the document (2002) ZHFJPZ No.2. And the corporation had
finished the bankruptcy procedure. As of the end of the year, the book value of the investment account of the
Company is zero. According to the joint venture agreement, the Company didn’t have the obligation to bear the
additional loss.
3)Jiangmen Xinjian Real Estate Co. Ltd., Xi’an Fresh Peak Building Co. Ltd, DongYi Property Co., Ltd
The above corporations were the joint ventures set up with the local partners for the properties developing
projects. Consider the projects had been stopped, and the joint ventures had closed operating activities for
many years with no preparation of financial statements. Already the corresponding provision for the investment
of these joint ventures was accrued. Refer to Note 7.10 for details.
*② All associated enterprises of the Group are insignificant. For details of associated enterprises, please refer
to note 7.10, including:
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)The excess losses of the joint ventures or associated enterprises incurred.




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                                                                     Accumulated        Unrecognized losses          Accumulated
        Name of the joint ventures or associated enterprises   unrecognized losses as this year (or shared net unrecognized losses as
                                                                of the end of last year    profit this year)    of the end of this year
     Shenzhen Fresh Peak property consultant Co., Ltd                      777,216.47                89,140.82              866,357.29




X 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.


10.1 Risk 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
In the management of liquidity risk, the company maintains the concept of management that adequate cash and

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ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                                                   Interim Report 2018



cash equivalents, monitoring it to meet the company's business needs and reducing the impact of cash flow
fluctuations.

10.2 The transfer of financial assets

Financial assets that have been transferred but not wholly terminated
As of 30 June, 2018, the company declared factoring business 51,374,540.56 yuan to the bank in accounts
receivable, got RMB 51,374,540.56 yuan of equal value. If it is fail to receive the corresponding accounts from
the client, the bank has the right to repay the corresponding accounts to the company.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.
XI     Related party relationships and transactions
11.1 Parent of the Company
                                                                                                         Proportion of the
                                                                                                                           Proportion of the
                                                                                                           Company’s
                                       Place of                                                                            Company’s voting
          Name of the parent                           Business Nature          Registered capital      ownership interest
                                    incorporation                                                                          power held by the
                                                                                                        held by the parent
                                                                                                                              parent (%)
                                                                                                               (%)
                                     Guangdong
      Shenzhen Investment                           Investment, Real estate
                                      province                                   RMB21.58billion                   63.55               63.55
      Shareholding Co. Ltd                          development, Guarantee
                                      Shenzhen


11.2 Subsidiaries of the Company

Please refer to Note IX.1- Equities in the subsidiaries

11.3 Associates and joint ventures of the entity

Please refer to Note IX.3 –Equities in joint venture or associated enterprises

11.4 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


11.5 Related party transactions

(1)Contracting with related parties
List of contracting item
                                                                         Reception      Expiration date Basis of pricing     Contracting
   Name of main                                      Type of assets
                             Name of contractor                            date of            of         of contracting income recognized
contract issuing party                              under contracting
                                                                         contracting     contracting         income      in the current year

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Shenzhen Jian'an       Shenzhen Zhen Tung
                                                         Construction         2012-6-1                         Negotiations          1,480,604.70
Group Co., Ltd.        Engineering Ltd

List of outsourcing item
                                                           Type of assets      Reception        Expiration     Basis of pricing     Contracting
Name of main contract issuing
                                  Name of contractor           under             date of          date of       of contracting income recognized
           party
                                                            outsourcing        contracting      contracting         income      in the current year
Shenzhen City SPG Long Gang Shenzhen Jian'an
                                                           Construction        2015-9-16                         Negotiations        18,344,588.63
Development Ltd.            Group Co., Ltd.

(2)Borrowing from related party
             Item                      Carrying amount        Reception date           Expiration date                          Statement

Borrowing from:

                                                                                                              The principal was repaid on December 22th,
Shenzhen Investment
                                           16,535,277.94                  2006.11.9           2016.12.22        2016. The remaining amount is interest
Shareholding Co. Ltd
                                                                                                                               payable.

(3) Rewards for the Key Management Personnel

                      Item                                        Reporting period                            Same period of last year

Rewards for the key management
                                                                                   2,321,457.00                                    3,614,401.00
personnel

11.6 Amounts due from / to related parties
(1) Amounts due from related party
                                                                              Closing balance                            Opening balance
                                Item                                    Carrying
                                                                                       Bad debt provision Carrying amount Bad debt provision
                                                                        amount

     Accounts receivable

     Shenzhen Fresh Peak property consultant Co.,Ltd                    1,143,424.85                     --         1,140,015.16                      --

     Total                                                              1,143,424.85                     --         1,140,015.16                      --

     Other receivables

     Guangdong Province Huizhou Luofu Hill Mineral Water
                                                                    10,465,168.81            10,465,168.81         10,465,168.81          10,465,168.81
     Co., Ltd

     Shenzhen Runhua Automobile Trading Co., Ltd                        3,072,764.42          3,072,764.42          3,072,764.42           3,072,764.42

     Canada GreatWall(Vancouver)Co. ,Ltd                          89,035,748.07            89,035,748.07         89,035,748.07          89,035,748.07

     Bekaton Property Limited                                       12,559,290.58            12,559,290.58         12,559,290.58          12,559,290.58

     Paklid Limited                                                 18,858,628.14            18,858,628.14         18,835,911.09          18,835,911.09

     Shenzhen Shenfang Department Store Co. Ltd.                          237,648.82            189,179.82            237,648.82            189,179.82

     Shenzhen Real Estate Consolidated Service Co., Ltd.                  475,223.46                                  475,223.46

     Shenzhen City Shenfang Construction and Decoration
                                                                        8,419,205.19          8,419,205.19          8,419,205.19           8,419,205.19
     Materials Ltd.

     Shenzhen RongHua JiDian Co.,Ltd                               143,123,677.49          142,599,985.03        143,100,960.44          142,577,267.98

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ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                                                     Interim Report 2018


                                                                         Closing balance                          Opening balance
                                  Item                             Carrying
                                                                                  Bad debt provision Carrying amount Bad debt provision
                                                                   amount
        Xi’an Fresh Peak property management& Trading
                                                                  10,465,168.81       10,465,168.81          10,465,168.81        10,465,168.81
        Co.,Ltd

                                  Total                            3,072,764.42        3,072,764.42           3,072,764.42         3,072,764.42

(2) Amounts due to related party
                                              Item                                         Closing balance          Opening balance

Accounts receivable

Shenzhen Jian'an Group Co., Ltd.                                                                40,071,435.16                 5,755,028.65

Total                                                                                           40,071,435.16                 5,755,028.65

Other payables

Shenzhen Xin Dongfang Store Ltd.                                                                   902,974.64                  902,974.64

Guangdong Province Fengkai Lain Feng Cement Manufacturing Co., Ltd.                              1,867,348.00                 1,867,348.00

Total                                                                                            2,770,322.64                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




XII Commitments and Contingencies
12.1 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                                            201,539,688.62                          245,497,748.08

                                      Total                                            201,539,688.62                          245,497,748.08

(2)There is no any other commitment during this period.

12.2 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

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ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.                            Interim Report 2018


which was the enterprise under the Xi’an Joint Commission on Commerce and Trade contributed 16% of the
Fresh Peak Company’s share- capital with the land-use right. The core business was property development. And
the project was Xi’an Trade Building. The project was started on 1995-11-28. But the project had been stopped
in 1996 because of the two parties differences on the operating policy of the project.
In 1997, the Xi’an government withdrew the Xi'an Fresh Peak investment project compulsively and assigned the
project to Xi’an Business Tourism Co., Ltd (hereinafter referred to as “Business Tourism Company”). But the two
parties had insulted a lawsuit on compensation. The ShanXi Province High Peoples Court made a judgement
“(2000) SJ-CZ No.25”. The judgement was as follows: 1. Business Tourism Company had to pay for the
compensation Rmb 36,620 thousand to Xi’an Fresh Peak Company after the judgment entering into force. If the
Business Tourism Company failed to pay in time, it had to pay double debt interests to Xi’an Fresh Peak
Company. 2. Xi’an Joint Commission on Commerce had jointly and severally obligation of the interests of the
compensation.
Untill December 31 th, 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 th, 2011.
Now the case is proceeding and there was no any new substantive progress in the reporting period.
As at 30 June 2018, 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
The Company provided loan guarantees for purchaser of real estate. Up to Jun 30th,2018, the amount and
duration of the unsettled guarantee is as follows:
             Items                                          Duration                        Unsettled amount (million)

Shenfang Chuanqishan             From real estate license granted and mortgaged                                    45,033.00

Shenfang Shanglin Garden         From real estate license granted and mortgaged                                     5,762.00

             Total                                           ——                                                  50,795.00

(3)Contingent liabilities Related to the equity joint venture or consortium investment
Refer to Note IX “Equities in other entities”.


XIII 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 restructuring of material assets is still in process as scheduled by the financial report day.
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XIV Notes to Items in the Financial Statements of the Company
14.1 Accounts receivable

(1)         Accounts receivable by categories
                                                                                                                Closing balance

                        Category                                      Carrying amount                               Bad debt provision                     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
                                                                     11,282,878.44          100.00%                6,968,694.02           61.76%              4,314,184.42
of individually insignificant

                           Total                                     11,282,878.44          100.00%                6,968,694.02           61.76%              4,314,184.42

(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 bad debts is
                                                                     11,450,768.19              100.00%               6,968,694.02        60.86%              4,482,074.17
of individually insignificant

                           Total                                     11,450,768.19              100.00%               6,968,694.02        60.86%              4,482,074.17

① Bad debt provision of accounts receivable which is of individually significant
           Content of accounts                                    Amount of bad           Proportion of
                                           Carrying amount                                                                  Reasons for the provision
               receivable                                            debt                   provision

      House pay to be collected                 11,074,183.83       6,968,694.02                    62.93 A separate provision is established according to
                                                                                                           the recoverability of each receivable with long
      Rental to be collected                        208,694.61                  --                      --          aging and little retrievability.

                   Total                        11,282,878.44       6,968,694.02                    62.93


(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 the                                                   Proportion of the amount to the
       Name of entity                                        Amount                       Age                                                          Bad debt provision
                                          Group                                                                     total AR (%)

Corporation No.1                        Un-related party         1,909,626.76        Within 1year                                         16.92                             --

Corporation No.2                        Un-related party         1,143,424.85        Within 1year                                         10.13                             --



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                                Relationship with the                                           Proportion of the amount to the
        Name of entity                                        Amount               Age                                                 Bad debt provision
                                       Group                                                             total AR (%)

Individual No.1                        Un-related party       1,200,000.00       Within 1year                               10.64             1,200,000.00

Individual No.2                        Un-related party         876,864.11       Within 1year                                7.77               876,864.11

Individual No.3                        Un-related party         617,559.26       Within 1year                                5.47               617,559.26

            Total                                             5,747,474.98                                                  50.94             2,694,423.37


(5)There were no any account receivables which had been derecognized.

14.2 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 bad debts is of
                                                                    1,526,878,271.80       98.40%         786,391,511.59 51.50%             740,486,760.21
individually significant
Accounts receivable of which provision for bad debts is of
                                                                         24,883,351.78      1.60%          11,701,429.72 47.03%              13,181,922.06
individually insignificant

                            Total                                   1,551,761,623.58        1.00%        798,092,941.31 51.43%              753,668,682.27

(Continued)
                                                                                                     Closing balance

Category                                                                 Carrying amount                  Bad debt provision               Book Value

                                                                       Amount               (%)            Amount            (%)

Accounts receivable of which provision for bad debts is of
                                                                    1,677,928,020.15       89.27%         786,391,511.59 46.87%             891,536,508.56
individually significant
Accounts receivable of which provision for bad debts is of
                                                                         20,037,445.06     10.73%          11,701,429.72 58.40%               8,336,015.34
individually insignificant

                            Total                                   1,697,965,465.21       100.00%       798,092,941.31 47.00%              899,872,523.90

①Bad 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 subsidiaries
that are included in consolidated                   1,358,567,228.42               658,127,505.34              48.44%      A separate provision is
statement                                                                                                                established according to the
                                                                                                                      recoverability of each receivables
Other receivables between subsidiaries                                                                                     with long aging and little
that are not included in consolidated                   168,311,043.38             128,264,006.25              76.21%             retrievability
statement

                    Total                           1,526,878,271.80               786,391,511.59                      --


(2) There were no any other receivables which had been accrued fully or large proportion provision but had

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been fully collected or reversed back in this period..
(3) There were no any other receivables written off in the current period.
The detail for other receivables which had been written off
(4) Other receivables by nature
                       Nature                                         Closing balance                               Opening balance

Other receivables between subsidiaries that are
                                                                                  1,358,567,228.42                                  1,553,914,573.46
included in the consolidated statement
Other receivables between subsidiaries that are
                                                                                       168,311,043.38                                128,834,349.06
not included in the consolidated statement

Others                                                                                  24,883,351.78                                 15,216,542.69

                          Total                                                   1,551,761,623.58                                  1,697,965,465.21




(5) Top 5 entities with the largest balances of other receivables
                                                                                                          Proportion of the         Bad debt provision
                                       Relationship
         Name of Entity                                          Amount                   Age            amount to the total
                                      with the Group
                                                                                                          OR (%)(%)

                                                                   9,689,866.22            1-2 years

Fresh Peak Enterprise Co., Ltd         Subsidiary                  7,993,662.28            2-3 years                    34.92            508,377,320.74

                                                                524,161,781.15           Over 3years

                                                                 73,328,902.56          Within 1 year

Shantou Huafeng Estate                                          170,323,464.83             1-2 years
                                       Subsidiary                                                                       39.57                            --
Development Co., Ltd                                             43,722,391.26             2-3 years

                                                                326,470,754.23         Over 3years

American Great Wall Co., Ltd           Subsidiary               101,379,954.81          Over 3 years                   6.53%             101,379,954.81

Canada Great
                                       Subsidiary                89,035,748.07     Over 3 years                        5.74%              89,035,748.07
Wall( Vancouver ) Co., Ltd

               Total                                           1,346,106,525.41                                       86.75%             698,793,023.62




14.3 Long-term equity investments

(1) Long-term equity investments by types
                                              Closing balance                                                     Opening balance
    Item                                       Provision for                                                        Provision for
                       Book balance                                       Book value            Book balance                              Book value
                                               impairment                                                           impairment
Investment
in                      317,578,928.40           69,155,382.25            248,423,546.15        317,578,928.40      69,155,382.25        248,423,546.15
subsidiaries

Investment                22,393,912.73          21,947,051.67                446,861.06         22,393,912.73      21,947,051.67            446,861.06

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                                     Closing balance                                           Opening balance
    Item                              Provision for                                             Provision for
                 Book balance                               Book value        Book balance                          Book value
                                      impairment                                                impairment
in associates
and joint
ventures
    Total          339,972,841.13       91,102,433.92        248,870,407.21   339,972,841.13     91,102,433.92    248,870,407.21




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(2)investment in subsidiaries
                                                                                            Curr. year                                                Curr. year impairment    Closing balance of
                               Name of investee                      Opening balance                      Curr. year decrease    Closing balance
                                                                                            Increase                                                         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) Guangzhou
                                                                            20,000,000.00            --                     --       20,000,000.00                       --
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                      --

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 Limited Company          64,183,888.90            --                     --       64,183,888.90                       --

Shantou City Huafeng Real Estate Devepment Co., Ltd                         30,000,000.00            --                     --       30,000,000.00                       --

Paklid Limited                                                                201,100.00             --                     --          201,100.00                       --             201,100.00

Bekaton Property Limited                                                      906,630.00             --                     --          906,630.00                       --             906,630.00

Shenzhen Shenfang Department Store Co. Ltd.                                  9,500,000.00            --                     --         9,500,000.00                      --            9,500,000.00

Shantou Fresh Peak Building                                                 58,547,652.25            --                     --       58,547,652.25                       --          58,547,652.25

                                    Total                                317,578,928.40              --                     --      317,578,928.40                       --          69,155,382.25

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(3)Investment in associates and joint ventures
                                                                                                         Changes in this period



                                                                                                                                  Adjustments of
             Name of investee            Opening balance                                         Investment income                                      Changes of
                                                                   Add                  Reduce                                        other
                                                                                                    under equity                                          other
                                                                investment            investment                                  comprehensive
                                                                                                      method                                              equity
                                                                                                                                     income



I.    Joint ventures
Guangdong Huizhou Luofu Hill Mineral
                                               9,969,206.09                      --                 --                     --                     --            --
Water Co., Ltd
Fengkai Xinghua Hotel                          9,455,465.38                      --                 --                     --                     --            --
                   Subtotal                   19,424,671.47
II.   Associates
Shenzhen Runhua Automobile Trading
                                               1,445,425.56                      --                 --                     --                     --            --
Co., Ltd
Shenzhen Ronghua Jidian Co., Ltd               1,523,815.70                      --                 --                     --                     --            --
                   Subtotal                    2,969,241.26                      --                 --                     --                     --            --
                      Total                   22,393,912.73                      --                 --                     --                     --            --

(Continued)
                                                               Changes in this period
                                                                                                                                             Closing balance of
               Name of investee                Cash dividend or profit         Provision for                           Closing balance
                                                                                                         Others                             impairment provision
                                                     declared                  impairment
I.    Joint ventures
Guangdong Huizhou Luofu Hill Mineral Water
                                                                   --                          --             --            9,969,206.09               9,969,206.09
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 Co., Ltd                        --                          --             --            1,445,425.56               1,445,425.56
Shenzhen Ronghua Jidian Co., Ltd                                   --                          --             --            1,523,815.70               1,076,954.64
                      Subtotal                                     --                          --             --            2,969,241.26                2,522,380.2
                        Total                                      --                          --             --           22,393,912.73           21,947,051.67

14.4 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                       29,987,467.51                   12,583,669.74                            229,557,159.39                 111,270,152.44


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                                             Amount for the current period                                   Amount for the prior period
             Item
                                           Income                       Costs                        Income                            Costs

             Total                            29,987,467.51              12,583,669.74                   229,557,159.39                    111,270,152.44

14.5 Investment income
(1) Details of investment income
                                  Item                                       Amount for the current period           Amount for the prior period

    Investment income from long-term investments under cost
                                                                                                               --                   169,393,952.18
    method
    Investment income from long-term investments under equity
                                                                                                               --                                   --
    method

    Investment income on disposal of long-term investments                                                     --                                   --

    Investment income from available-for-sale financial assets during
                                                                                                   827,100.00                              650,000.00
    the holding period
                                  Total                                                       166,511,022.49                           746,988.93




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XV. Supplementary Materials
15.1 Breakdown non-recurring profit or loss

                                                                             Items                                                                               Amount for the current period        Statement

Profit or loss on disposal of non-current assets                                                                                                                                      -19,011.53                  --

Tax refunds or reductions with ultra vires approval or without official approval documents                                                                                                       --               --

Government grants recognized in profit or loss (other than grants which are closely related to the Company’s business and are either in fixed
                                                                                                                                                                                                 --               --
amounts or determined under quantitative methods in accordance with the national standard)

Income earned from lending funds to non-financial institutions and recognized in profit or loss                                                                                                  --               --

The excess of attributable fair value of identifiable net assets over the consideration paid for the acquisition of subsidiaries, associates and joint
                                                                                                                                                                                                 --               --
ventures

Profit or loss on exchange of non-monetary assets                                                                                                                                                --               --

Profit or loss on entrusted investments or assets management                                                                                                                                     --               --

Impairment losses on assets due to force majeure events, e.g, natural disasters                                                                                                                  --               --

Profit or loss on debt restructuring                                                                                                                                                             --               --

Entity restructuring expenses, e.g., expenditure for layoff of employees, integration expenses, etc.                                                                                             --               --

Profit or loss attributable to the evidently unfair portion of transaction price, being transacted price in excess of fair transaction price, of a transaction                                   --               --

Net profit or loss of subsidiaries from the beginning of the period up to the business combination date recognized as a result of business combination
                                                                                                                                                                                                 --               --
of enterprises under common control

Profit or loss arising from contingencies other than those related to normal operating business                                                                                                  --               --

Profit or loss on changes in the fair value of held-for-trade financial assets, and held-for-trade financial liabilities and financial assets
                                                                                                                                                                                                 --               --
available-for-sale, other than those used in the effective hedging activities relating to normal operating business

Reversal of provision for account receivables that are tested for impairment losses individually                                                                                                 --               --

Profit or loss on entrusted loans                                                                                                                                                                --               --

Profit or loss on changes in the fair value of investment properties that are subsequently measured using the fair value model                                                                   --               --


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                                                                             Items                                                                          Amount for the current period        Statement

Effects on profit or loss of one-off adjustment to profit or loss for the period according to the period requirements of tax laws and accounting laws and
                                                                                                                                                                                            --               --
regulations

Custodian fees earned from entrusted operation                                                                                                                                              --               --

Other non-operating income or expenses other than the above                                                                                                                      -84,706.57                  --

Other profit or loss that meets the definition of non-recurring profit or loss                                                                                                              --               --

Subtotal                                                                                                                                                                        -103,718.10                  --

Tax effects                                                                                                                                                                      -25,929.53                  --

Effects attributable to minority interests (after tax)                                                                                                                                      --               --

                                                                             Total                                                                                               -77,788.57                  --




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Note:”+” means income or gain and “-” means loss or expense
The Group defines items as non-recurring profit or loss items according to “Information Disclosure and
Presentation Rules for Companies Making Public Offering of Securities No.1---Non-recurring Profit or
Loss”(CSRC No.[2008]43)

15.2 Return rate of net assets and earning per share

                                                                     Weighted return rate       Earning per share (yuan / stock)(元/股)
                   Profit the in the reporting year
                                                                      of net assets(%)             Basic EPS                 Diluted EPS

      Net profit attributable to common stockholders                                11.00%                     0.3253                   0.3253

     Less: Net profit attributable to common stockholders
                                                                                    11.00%                     0.3254                   0.3254
     after deducting non-recurring losses

15.3 Differences between amounts prepared under foreign accounting standards and China Accounting
Standards (CAS)

Differences in the net profit and net assets between those disclosed in the financial statements in compliance
with International / Hongkong Finance Reporting Standards and CAS
                                            Net profit attributable to shareholders of listed      Net assets attributable to shareholders of
                                                               companies t                                     listed companies
                                        Amount for the current                                      Amount for the       Amount for the prior
                                                                     Amount for the prior period
                                               period                                               current period            period

     In accordance with CASs                       329,066,084.53                137,226,601.84      3,156,821,917.54        2,828,242,120.98

     In accordance with IFRS                       329,066,084.53                137,226,601.84      3,156,821,917.54        2,828,242,120.98




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                        Part XI Documents Available for Reference

1. The financial statements with the personal signatures and stamps of the Company’s legal
representative, head for financial affairs and head of the financial department; and
2. The 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.




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