SHENZHEN PROPERTIES & RESOURCES
DEVELOPMENT (GROUP) LTD.
INTERIM REPORT 2009
Disclosing Date: 13 Aug. 2009
Section I Important Notice & Contents
The Board of Directors, the Supervisory Committee as well as directors, supervisors and
senior executives of the Company guarantee that there are no any omissions, fictitious or
serious misleading statements carried in the report and will take all responsibilities,
individual and/or joint for the authenticity, accuracy and integrality of the whole contents.
No directors, supervisors and senior managers have objections to the report of the true,
accurate and complete.
Zha Zhenxiang, independent director of the Company, was on a business tour and
entrusted Li Xiaofan, the other independent director of the Company, to vote for the
report.
Chairman of the Board of the Company Mr. Chen Yugang, Person in Charge of
Accounting Work Mr. Wang Hangjun and Manager of Financial Department Ms. Shen
Xueying hereby guarantee that the Financial Statements in this report are true and
complete.
The interim financial report of the Company has not been audited.Contents
Section I Important Notice & Contents………………………………………………..1
Section II Company Profile……………………………………………………………2
Section III Changes in Share Capital and Shares Held by Principal Shareholders……4
Section IV Particulars about Directors, Supervisors and Senior Executives……….....5
Section V Report of the Board of Directors…………………………………………...5
Section VI Significant Events…………………………………………………………..10
Section VII Financial Report……………………………………………………………24
Section VIII Documents for Reference………………………………………………..118
Section II Company Profile
(I) Company Profile
1. Name of the Company in Chinese: 深圳市物业发展集团股份有限公司
Abbreviation: 物业集团
In English: Shenzhen Properties & Resources Development (Group) Ltd. (PRD)
2. Legal Representative: Chen Yugang
3. Secretary of the Board of Directors and Securities Affairs Representative
Secretary of the Board of
Directors Securities Affairs Representative
Name Fan Weiping Liu Gang
Contact
address
42/F, International Trade Center,
Renmin South Road, Shenzhen
42/F, International Trade Center,
Renmin South Road, Shenzhen
Tel 0755-82211020 0755-82213742
Fax 0755-82210610 82212043 0755-82210610 82212043
E-mail 000011touzizhe@163.com 000011touzizhe@163.com
4. Registered/Office Address: 39/F and 42/F, International Trade Center, Renmin South
Road, Shenzhen
Post Code: 518014
5. Media Designated for Disclosing Information
A share: Securities Times; B Share: Ta Kung Pao
Internet Website Designated by CSRC for Publishing Annual Report:
http://www.cninfo.com.cn
The Place Where the Interim Report is Prepared and Placed: Office of the Board of
Directors, 42/F, International Trade Center, Renmin South Road, Shenzhen
6. Stock Listed in: Shenzhen Stock ExchangeShort Form of Stock: S＊ST Wuye A, ＊ST Wuye B
Stock Code: 000011 200011
(II) Main financial data and indices
1. Main accounting data and financial indices
Unit: RMB Yuan
Items At the end of the
report period
At the end of last
year
Increase/decrease
compared with the end of
last year (%)
Total assets 2,479,758,151.70 2,110,845,898.28 17.48
Owners’ equity (or shareholders’ equity) 676,948,930.11 570,615,365.41 18.63
Net assets per share 1.2494 1.0532 18.63
Items In the report period
(from Jan. to Jun.)
The same period
of last year
Increase/decrease
year-on-year (%)
Operating profit 134,711,728.40 -20,035,240.30 772.37
Total profit 136,457,608.54 -890,889.91 15417.00
Net profit 106,297,227.83 -3,120,802.16 3506.09
Net profit deducted non-recurring gain/loss 106,062,901.26 -25,627,575.92 513.86
Basic earnings per share 0.1962 -0.0058 3506.09
Diluted earnings per share 0.1962 -0.0058 3506.09
Net return on equity 15.70% -0.56% 16.26
Net cash flow from operating activities 457,299,337.02 -88,458,895.06 616.96
Net cash flow from operating activities per share 0.8440 -0.1633 616.96
2. Items of non-recurring gains and loss
Unit: RMB Yuan
Items Amount
Profit and loss from disposal of non-current assets, including the offset part of the impaired assets; -123,079.53
Enterprises ’ reorganization fees, such as staffing expenses and integration fees -4,550,481.00
Profit or loss from change in fair value by holding tradable financial assets and liabilities, and
investment income from disposal of tradable financial assets and liabilities as well as salable financial
assets, excluding the effective hedging businesses related with the normal operations of the company
2,403,538.94
Other non-operating income and expenses besides the above items 1,868,959.67
Other items that conform to the definition of extraordinary profit and loss 635,388.49
Total 234,326.57
Note 1: Gains and losses from disposal of non-current assets, including offset that has
been withdrew as impairment reserve of assets in current period was loss from disposal of
fixed assets.
Note 2: Enterprises ’ reorganization fees, such as staffing expenses and integration fees in
this period was projected welfare amount for dismissal of employees as formulated
formerly. The event implemented in accordance with relevant document on state-owned
enterprise of Shenzhen, which was in line with definition of non-recurring gains and
losses in Explanation Public Notice on Information Disclosure of Public Offering Shares
Companies No. 1-Non-recurring Gains and Losses [2008] : “Gains and losses from
transactions and events that influenced correct judgment on operating achievements and
profitability of the Company according to financial statements owing to its special nature
and chance”.
Note 3: Profit or loss from change in fair value by holding tradable financial assets and
liabilities, and investment income from disposal of tradable financial assets and liabilities
as well as salable financial assets, excluding the effective hedging businesses related with
the normal operations of the company was gains and losses from change of fair value of
transaction financial assets and investment income from disposal of transaction financial
assets.
Note 4: Other non-operating income and expenses in current period was mainly income
from penalty and sequestration.3. Difference between PRC GAAP and IFRS
Unit: RMB Yuan
Items
Net profit attributable to
owners of parent company
(Jan.-Jun. 2009)
Owners’ equity attributable to
parent company
(As of 30 Jun. 2009)
As per PRC GAAP 106,297,227.83 676,948,930.11
As per IFRS 106,297,227.83 676,948,930.11
Explanation for difference No difference
4. Net return on equity, earnings per share and diluted earnings per share was accounted in
accordance with requirement in Compilation Rules for Information Disclosures by
Companies That Offer Securities to the Public (No. 9)-Calculation and Disclosure of Net
Return on equity and earnings per share issued by CSRC
Unit: RMB
Net return on equity Earnings per share
Jan.-Jun. 2009 Fully
diluted
Weighted
average
Basic earnings
per share
Diluted earnings
per share
Net profit attributable to shareholders
holding ordinary shares of the Company 15.70% 17.04% 0.1962 0.1962
Net profit attributable to shareholders
holding ordinary shares of the Company
after deducting non-recurring profit and loss
15.67% 17.00% 0.1958 0.1958
Section III Changes in Share Capital and Shares Held by Principal
Shareholders
(I) By the end of the report period, the Company’s total shares and its structure of share
capital remained unchanged compared with the previous report period.
(II) As of 30 Jun. 2009, particulars about the Company’s top ten shareholders and the top
ten shareholder of circulation share:
Total shareholders at the end of report period By the end of the report period, the Company has 25,858 shareholders in total,
including 18,511 ones of A-share and 7,347 ones of B-share.
Particulars about shares held by the top ten shareholders
Name of shareholders
Increase/decre
ase in the
report period
Shares held at
the period-end
Proportio
n (%)
Type of
shares
Shares
pledged or
frozen
Nature of shares
Shenzhen Construction
Investment Holdings 0 324,233,612 59.84 Non-circula
tion Naught
State-owned shares
323,747,713
Corporate shares
485,899
Shenzhen Investment Holding
Corporation 0 56,628,000 10.45 Non-circula
tion Naught Corporate shares
ZENG YING 1,804,762 5,752,940 1.06 Circulation Naught A Share 500000
B Share5252940
Labor Union of Shenzhen
International Trade Property
Management Company
0 2,516,800 0.46 Non-circula
tion Naught Corporate shares
WANG ZHI HAI 69,400 2,091,200 0.39 Circulation Tradable A share
Shenzhen Special Zone
Duty-Free Commodity Co., Ltd 0 1,573,000 0.29 Non-circula
tion Naught Corporate shares
Shenzhen Jinniuhong Trade
Co., Ltd 758,600 1,127,900 0.21 Circulation Naught Tradable A share
Shanghai Zhaoda Investment 0 1,010,000 0.19 Non-circula Naught Corporate sharesConsultant Co., Ltd tion
SHEN LING 300 901,100 0.17 Circulation Naught Tradable A share
SHA XUAN 800,000 800,000 0.15 Circulation Naught Tradable A share
Particulars about shares held by the top ten shareholder holding tradable shares
Name of shareholders Amount of tradable shares held at the
period-end (share) Type (A share and B share)
ZENG YING 5,752,940 A share 500000
B share 5252940
WANG ZHI HAI 2,091,200 A share
Shenzhen Jinniuhong Trade Co., Ltd 1,127,900 A share
SHEN LING 901,100 A share
SHA XUAN 800,000 A share
LUO XU YAN 727,908 A share
YUE ZHI YU 703,401 A share
LI HONG MAO 568,800 A share
HUANG WEI 500,000 A share
GENG QUN YING 480,000 A share
Explanation on associated relationship
among the aforesaid shareholders or
acting-in-concert
The Company was unknown whether there exists associated relationship among the top
ten shareholders of tradable share
Explanation on holding term of placing
shares by strategic investor and ordinary
legal person
There was no situation as this.
Explanation: ① In the report period, the share merger reform has not completed, and
structure of capital stock remained unchanged.
② In the report period, the controlling shareholder or actual controller of the Company
had no material change.
Section IV Particulars about Directors, Supervisors and Senior Executives
(I) In the report period, 101 A-share and 4900 B-share held by Guo Lusi, supervisor of the
Company, was frozen and subject to trading moratorium. Besides, in the report period,
none of the directors, supervisors and senior managements is holding the stocks of the
Company.
(II) Particulars about changes of directors, supervisors and senior executives in the report
period:
1. In the report period, directors, supervisors and senior executives of the Company
remained unchanged.
2. Changes in senior executives:
Ms Guo Yumei resigned from post of secretary of the Board of Directors of the Company
in Dec. 2008. The Company held the 10th Meeting of the 6th Board of Directors on 14 Jan.
2009, at which engaged Mr. Fan Weiping as secretary of the Board of Directors.
The Company disclosed the above events, for details please refer to extraordinary public
notice published in Securities Times, Ta Kung Pao dated 15 Jan. 2009 as well as the
designated website for information disclosing http://cninfo.com.cn.
Section V Report of the Board of Directors
(I) Review of operation during the report period
Looking back of the first half year of 2009, revival was the theme of real estate market in
Shenzhen. After Spring Festival of 2009, real estate in Shenzhen recovered and exceed as
expected; from Apr. to Jun. 2009, rebound of price of real estate was worrying, price of
part real estate in core area of Shenzhen reached or exceeded highest price in 2007.
Executives of the Company considered that accompanying with the 27 years of
development of real estate in China, the Company experienced all adjustment cycle of real
estate market; after rational analysis, the Company expected that real estate industry cankeep long-term, rational, stable and healthy development. At present, the state was in
period of interim low interest ratio, and enough market flow would support high price of
real estate for a moment. The Company will quicken sales progress in project on sale,
speed up development of construction in progress and call back capital as soon as possible;
insist on “Building masterpiece and building up brand”, further stand out main business
and faithfully enhanced enterprise internal management with target of “rationalization of
organization structure, fining management model and optimization of business process”;
adopt strategy of “fine selection and controlling risk strictly” to choose new project with
high quality in central city and seek more development.
(II) Operation during the report period
1. General operation
During the report period, the Company realized operation income amounting to RMB
536,738,584.88, an increase of 293.34% year-on-year; operating profit amounting to RMB
134,711,728.40, an increase of 775.37% year-on-year; net profit amounting to RMB
106,297,227.83, an increase of 3506.09% year-on-year
As of 30 Jun. 2009, total assets was RMB 2,479,758,151.70, up 10.76% compared with
that of the end of last year; shareholder’ equity (excluding monitory shareholders’ equity)
was RMB 676,948,930.11, up 1.90% over the end of last year.
(1) Changes in operating income, operating profit, net profit, net increase of cash and cash
equivalents over the same period of last year and analysis on reasons of change:
Unit: RMB Yuan
Items Jan.- Jun. 2008 Jan.-Jun. 2007 Increase/decrease %
Operating income 536,738,584.88 136,455,256.05 293.34%
Operating profit 134,711,728.40 -20,035,240.30 772.37%
Net profit 106,297,227.83 -3,120,802.16 3506.09%
Net increase of cash and cash equivalents 342,601,749.42 48,261,450.30 609.89%
Explanation on reason s of change:
① Operating income increased 293.34% year-on-year, mainly because sales from Imperial
Garden carried forward income.
② Operating profit and net profit increased 772.37% and 3506.09% year-on-year
respectively, mainly because carrying sales of Imperial Garden forward income caused
increase of operating income in current period.
③ Net increase of cash and cash equivalents increased 609.89% year-on-year, mainly
because calling back fund for purchase of Imperial Garden and Xinhua Town.
(2) Analysis on increase/decrease of total assets, shareholders’ equity and other items
compared with that at the report-begin and reasons of change:
Unit: RMB Yuan
Items 30 Jun. 2009 31 Dec. 2008 Increase/decrease %
Total assets 2,479,758,151.70 2,110,845,898.28 17.48%
Account receivable 74,146,219.12 68,605,911.80 8.08%
Other account receivable 66,023,499.50 67,222,142.10 -1.78%
Inventories 1,163,183,546.01 1,153,726,292.83 0.82%
Long-term equity investment 82,358,819.78 81,273,230.90 1.34%
Fixed assets 97,721,466.91 104,013,870.31 -6.05%
Intangible assets 116,148,009.02 119,402,340.92 -2.73%
Shareholders’ equity (excluding monitory
shareholders’ equity) 676,948,930.11 570,615,365.41 18.63%
Reason for change:
① Total assets increased over the beginning of the report period mainly due to increase of
pre-sale proceeds.② Account receivable increased over the beginning of the report period, mainly because
income from passenger transportation and property management increased;
③ Other account receivable decreased over the beginning of the report period, mainly
because the subsidiary of the Company called back part arrearage in the report period;
④ Inventories increased over the beginning of the report period, mainly because payment
for project increased in the report period.
⑤ Long-term equity investment increased over the beginning of the report period, mainly
because profit from invested company under equity method increased in the report period.
⑥ Fixed assets decreased over the beginning of the report period mainly due to
withdrawal of depreciation.
⑦ Intangible assets decreased over the beginning of the report period mainly due to
amortization in the report period.
⑧ Shareholders’ equity increased over the beginning of the report period, mainly because
the Company realized profit in the report period.
(3) Particulars about measuring significant assets, liabilities, income and expenses with
method of fair value.
Accounting calculation of the Company based on accrual basis. Other assets calculated on
basis of historical cost when transaction financial assets and financial assets calculated
with fair value method. For assets calculated with methods of replacement cost, net
realizable value, present value and fair value, based on obtain and credit of the confirmed
accounting elements.
Transaction financial assets (listed tradable stocks) held by the Company was calculated
market price of stock exchange as fair value.
2. Scope and operating situation of the main operations:
The Company mainly engaged in real estate development, property management and lease,
with by-lines of taxi passenger transportation and caterings. In the report period, the
Company realized incomes from main operations amounting to RMB 528,146,400 and
gross profit from main operations amounting to RMB 284,540,800. Composing of
incomes from main operations and gross profit was as follows:
(1) Classified by industries
Income from real estate development was RMB 417,013,300 and gross profit was RMB
253,242,600;
Income from property management and lease was RMB 81,972,400 and gross profit was
RMB 13,274,500;
Income from taxi passenger transportation was RMB 23,634,500 and gross profit was
RMB 12,300,100;
Income from caterings was RMB 6885900 and gross profit was RMB 3,843,200.
(2) Classified by regions:
Income in Shenzhen was RMB 523,994,700;
Income in Hainan was RMB 4,151,700.
In view of distribution classified by industries and regions, main operations and profit
centralized in real estate in Shenzhen, which took great proportion in operating income of
the Company.
(3) As for major products taking up great proportion in incomes from main operations or
of total profits from main operations, details for sales revenues, costs and gross profits are
as follows:
Unit: RMB’000 Yuan
Operating income Operating cost Gross profit ration
Industry Amount
Increase/decr
ease over the
last year (%)
Amount
Increase/decr
ease over the
last year (%)
Gross profit
ratio (%)
Increase/decr
ease over the
last year (%)Real estate development 417,013 1685.08 163,771 1594.48 60.73 2.10
Property Management and lease 81,972 8.94 68,698 8.53 16.19 0.32
taxi passenger transport 23,634 1.70 11,334 3.37 52.04 -0.78
3. Particulars about suppliers and customers
When the Company engaged in the business of real estate development, the developed real
estate projects would be contracted to the bid winning companies be means of bid of
projects, of construction materials were purchased by the construction enterprises with
responsibility.
The objects of the sales of commercial housing of the Company were almost the personal
customers to purchase house, generally existing no customers to purchase in batch. The
sales amount of the first five customers took up 0.53% of the total sales amount of the
Company.
4. Explanation on great changes in composing of profit, main operations or its structure
and profit capacity of main operations in the report period.
There was no great change in composing of profit, main operations or its structure and
profit capacity of main operations in the report period. Sales income increased by a large
margin, mainly because the Company enlarged sales with good situation of real estate
marker in the first half year.
5. Other operating activities greatly influenced profit in the report period
There were no other operating activities that greatly influenced profit during the report
period.
6. Operation and analysis on achievements of main subsidiaries and share-holding
companies
Unit: RMB’000 Yuan
Total assets Net assets Operating profit Net profit
Company
name Main products
Regist
ered
capital
Am
ount
Increase/de
crease
compared
to last year
(%)
Am
oun
t
Increase/
decrease
compared
to last
year (%)
Amo
unt
Increase/de
crease
compared
to last
year (%)
A
mo
unt
Increase/dec
rease
compared
to last year
(%)
ShenzhenHu
angcheng
Real Estate
Co., Ltd
Development, construction,
operation, and management
of supporting commercial
service facilities at
Huanggang Port
30000
150
414
5
28.30
666
267
44.93
1452
91
4771.73
117
67
3
5216.22
ShenzhenGuo
mao
Automobile
Industry
Company
Transportation of
passengers, and lease of
automobiles
29850
265
646
21.93
442
01
9.81 5137 77.08
41
05
46.24
7. Problems and difficulties in operation and countermeasure of the managements.
(1) Risk the Company faced and countermeasure
① Risk from policy and market
In the first half year of 2009, with effort of active finance policy and moderate easy
monetary policy of government, active factors for domestic economy increased
continually and real estate market has experienced period of recession, revival and bound,
and transaction in the secondary and the triple market was very active, which was out of
ordinary expectation of market and industry. The Company considered that fast revival of
market was mainly due to release of the rigid demand, inflation expectation and increase
of investment demand. Therefore, the Company was cautious but optimistic to future real
estate market. Real estate industry increased so fast in short time that will bring
adjustment and there will be new and partial fluctuation, and should prevent risks from
policy and market. Otherwise, in view of different development cycle in different area, the
Company will base on cautious research, full investigation and risk control, have a
foothold on Shenzhen, actively exploit real estate market in core area of the first andsecondary line cities to the south of Changjiang River, deeply development current land
and projects in Shenzhen with principal of “Found of masterpiece and building up brand”,
and realize maximization of value.
② Project exploration and risk control: exploration of real estate exploration has
characteristics of generous investment, long cycle, imbalanced settlement and relating to
various rings. Meanwhile, in progress of project, we must have permit from government
and limitation of control ability, which will cause prolong of development cycle and rise
of cost. So it is uncertain whether the expected operating target be realized as scheduled.
The Company enhanced internal control system through implementation of administration
measures like general budget management, biding management and risk management,
perfected cost control like tender & biding, and avoid risk with most effect.
(2) Key point of work and countermeasure of risk in the second half year of 2009
In the second half year of 2009, there will be both challenge and chance in real estate
industry, the Company will comply with market rule, organize staff to seize chance from
market, innovate management system and operation mechanism, mastered development
progress and sales rhythm of important real estate, and realize quick and healthy
development. Facing problems and risks, the Company will focus on improvement of
internal management, build core competitive power, integrate internal and external
resource and adopt the following measures to ensure realization of target set at the
year-begin.
① Focus on development of main business and strictly controlling cost;
② Roundly pushing strategic development program;
③ Enhancing fundamentals management, full utilization of various management tools
and roundly improving management level and work standards of the Company;
④ Doing well in liquidation, effectively liquidizing assets and realizing effective
management.
⑤ Enhancing risk control of the Company, accelerating solve historical remained
problems and lawsuits;
⑥ Enhancing construction of enterprise culture and brand.
(III) Investment during the report period
1. There were no raised proceeds of the Company in the report period, neither was the
continuous usage of the early raised proceeds.
2. Significant investment projects from funds from non-financial activities, and their
progress and benefit.
Unit: RMB’000 Yuan
Name of Project Investment in 2009 Project progress Profit-making status
B section in C block of Huangyuyuan
(Shen’gang No.1) 60,466 In progress of decoration —
D block of Huangyuyuan
(Langqiaogongguan) 31,997 Completion of pile foundation —
E block of Huangyuyuan
(Golden-collar Holiday Hotel) 49 Biding design phase —
Fengherili Tiankuoyuan
(B team of Fengherili) 83,434 In progress of decoration —
Caitianyise 1,334 Prophase design programming
Total 177,280 — —
(IV) Progress of competition of plan in 2009
Sales income schemed in 2009, which disclosed in Annual Report 2008, was RMB 690
million and cost of expenses was RMB 550 million. As of 30 Jun. 2009, the Company
realized sales income RMB 536,738,584.88, mainly because the Company seized market
chance and Imperial Garden had a good sales achievement.(V) About revising on operation plan in 2009
During the report period, the Company never revised operation plan in 2009 disclosed in
Annual Report 2008.
(VI) Estimation on accumulative net profit from the beginning of the year to the end of
next report period to be loss probably or the warning of its significant change compared
with the corresponding period of the last year and explanation on reason
Imperial Garden has been completed and occupies at year-end of 2008. Sales of this
project is fine at present due to seizing chance from market, and total sales ratio was over
90% as the report date. Therefore, the Company forecasted that accumulative net profit till
the end of the next period was between RMB 100 million and RMB 120 million, with an
increase of 800% to 1050%.
Sales of project centralized in the first half year, income in fiscal period of this year was
not balanced, and income and profit from real estate confirmed by the second half year
will decreased by a large margin. As for the actual profit from Jan. to Sep. 2009, data from
the 3rd Quarterly Report 2009 shall be prevailed. Meanwhile, we announced that the
investors please notice public notice on progress of “Haiyi Case” (For details please refer
to note to financial report (XII) 1 (1)) to avoid investment risk.
Section VI Significant Events
(I) Particulars about corporate governance
During the report period, the Company continuously perfected governance structure,
promoted governance level and normalized operation. Actual governance of the Company
basically complied with requirements of Code of Corporate Governance of Listed
Companies.
According to Notice on Doing Well in Annual Report 2008 of Listed Companies from
Shenzhen Stock Exchange and CSRC Determination on Revising Some Rules of Cash
Dividend of Listed Companies and reviewed and approved by the Shareholders’ General
Meeting, the Company revised cash dividend policy in Articles of Association and
disclosed it in time. For retails please refer to extraordinary public notice published in
Securities Times and Ta Kung Pao dated 17 Jul. 2009 as well as designated internet
website http://cnifo.com.cn.
The Company will continually improve and perfect normative governance, promote
corporate governance, standardize operation, effectively prevent avoid and set up fine
foundation for long-term and healthy development of the Company.
(II) Profit distribution and implementation
1. In accordance with resolutions of the Shareholders’ General Meeting 2008, the
Company didn’t distribute profit or withdraw capital reserves as share capital in 2008.
2. As of 30 Jun. 2009, the consolidated net profit attributed to shareholders of the parent
company in the first half year of 2009 was RMB 106,297,227.83 and net profit realized by
parent company was RMB -12,643,904.96. Consolidated retained profit as of 30 Jun. 2009
was RMB 50,367,035.72 and the retained profit of parent company was RMB
-440,372,655.09, and the Company didn’t plan to distribute profit or withdraw capital
reserves as share capital in the first half year of 2009.
3. During the report period, no equity incentive plan was implemented or made.
(III). significant lawsuits and arbitrations and equity of other listed companied held
1. In the report period, no new significant lawsuit or arbitration events occurred during the
report period.
2. In the report period, the progress of the significant lawsuits and arbitrations disclosed inthe previous years:
(1) About case of “Haiyi Company” disclosed in the Annual Report 2007 and Semi-annual
Report 2008
On 7 Apr. 2009, the Company received 34 reply enforcement notices served by Shenzhen
Intermediate People's Court, which the eight companies such as Haiyi Industrial
(Shenzhen) Co., Ltd. filed an application of resumption with Shenzhen Intermediate
People's Court to execute judgment made by Guangdong Higher People's Court in 1999.
Hereto, the Company had disclosed the relevant information by the extraordinary public
notice on 9 Apr. 2009, which was published on Securities Times and Ta Kung Pao, as well
as http://www.cninfo.com.cn. Later, the Company proposed objection on implementation,
but Shenzhen Intermediate Peoples’ Court considered that Judgment (1998) YFMZZ No,
298 was judged to terminate implementation by the Supreme People’s Court, which was in
accordance with condition of termination, and the other 33 judgments didn’t in progress of
judgment and should be implemented.
On 2 Jun. 2009, the Company received Notice on Sealing up and Freezing Property
( (2009) SZFZZ No. 364-377,379-397 (-1)) (hereinafter refer to as Notice) served by
Shenzhen Intermediate People's Court, the eight companies such as Haiyi Industrial
(Shenzhen) Co., Ltd. filed an application of resumption with Shenzhen Intermediate
People's Court to execute judgment, and Shenzhen Intermediate People’s Court accepted
and heard the application, sealed up and froze part property, equity and bank account of
the Company. The Company disclosed the above information with extraordinary public
notice, which was published in Securities Times, and Ta Kung Pao dated 4 Jun. 2009 as
well as http://www.cninfo.com.cn.
On 25 Jun. 2009, the Company received Notice on Sealing up Property ((2009) SZFZZ
No. 364-377,379-397) (hereinafter refer to as Notice) served by Shenzhen Intermediate
People's Court, and Shenzhen Intermediate People’s Court sealed up part property of the
Company. The Company disclosed the above information with extraordinary public notice,
which was published in Securities Times, and Ta Kung Pao dated 29 Jun. 2009 as well as
http://www.cninfo.com.cn.
The Company considered that: the 33 judgments as base of application for execution were
the same with Judgment (1998) YFMZZ No. 298 that has problems of unclear fact,
non-applicable law to the case and violating legal procedure. The Company is applying to
rehear.
(2) Regarding case of “Jiyong Company” disclosed in the Annual Report between 2000
and 2008, other properties of Jiabing Mansion the Company fielded for sealing up in this
case was released from seizing automatically according to rules of the Supreme People’s
Court. The Company has applied for resumption execution. At present, the case is under
pending review from the Court.
(3) As for case of the Company appealing Guomao Jewel & Gold Co., Ltd located in
Shengfeng Road, Shenzhen, which was disclosed in the Annual Report between 2005 and
2007, Semi-annual Report 2007 and Extraordinary Public Notice dated 13 Sep. 2007,
Shenzhen Intermediate People’s Court has made the trial of first instance in Sep. 2007,
which Guomao Jewel & Gold Co., Ltd would bear debts of RMB 32,524,650.45, Lin
Ruohua, legal representative of Guomao Jewel & Gold Co., Ltd, would undertake joint
discharge responsibility within the scope of RMB 10,053,000. The judgment has come
into force.
Guomao Jewel & Gold Co., Ltd and Lin Ruohua failed to execute the judgment, and there
were no property of Guomao Jewel & Gold Co., Ltd available for execution. The
Company withdrew bad debt reserve for payable administrative expense and substitutive
expenses of water and electricity amounting RMB 6,532,519.60 after deducting receivabledeposit. The Company applied for enforcement.
(4) Contract dispute on “Duokuai Elevator” disclosed in Annual Report between 2004 and
2007 and Semi-annual Report 2008
A. On 11 Jul. 2002, Shenzhen Huangcheng Real Estate Co., Ltd (hereinafter referred to as
“Huangcheng Real Estate”), subsidiary of the Company, signed and concluded Contract
on Elevator Equipment and Agreement on Real Estate Mortgage and Purchase with
Duokuai Elevator (Far-East) Co., Ltd (hereinafter referred to as “Duokuai Elevator”),
which prescribed Duokuai Elevator provided elevators demanded for B block of
Huangyuyuan to Huangcheng Real Estate, and Tao Boming was willing to guarantee with
mortgage of real estate under his name to Huangcheng Real Estate. On 6 Sep. 2004,
Huangcheng Real Estate applied for arbitration to Shenzhen Arbitration Commission,
appealed for termination of Contract on Elevator Equipment signed with Duokuai
Elevator with the reason that Duokuai Elevator failed to provided elevators, double return
paid deposit amounting RMB 7,539,000, payment for elevators amounting RMB
15,904,000 and compensation for loss amounting RMB 277,268.51. On 24 Nov. 2005,
Shenzhen Arbitration Commission made a judgment that Duokuai Elevator would pay for
deposit RMB 7,539,000, payment for elevators RMB 15,904,000 and Tao Boming
undertook compensation responsibility within the scope of value of mortgage.
Duokuai Company and Taoboming refused to accept the arbitration and applied to
Shenzhen Intermediate People’s Court for revoking the arbitration on December 7, 2005.
In 2006, Shenzhen Intermediate People’s Court issued Civil Ruling Paper SZFMSCZ
(2006) No. 18 and 19 to adjudge that the application of revoking the Arbitration SZCZ
(2005) No. 1227 made by Shenzhen Arbitration Committee from Shenzhen Arbitration
Committee was overruled. On November 16, 2006, Real Estate Company reported the
condition of execution to Shenzhen Intermediate People’s Court and applied to it for an
auction of the properties mortgaged.
Progress in the first half year of 2009: ① Two real estate under the name of Duokuai
Elevator, that is podium building of Huangchen Plaza and Shimao Plaza with total areas
of 957.31 square meters had been auctioned at auction price of RMB 4,280,000. In Apr.
2009, Huangcheng Real Estate received RMB 3 million transferred from Shenzhen
Intermediate Peoples’ Court and Balance amounting to RMB 1.28 million was still in
account of Shenzhen Intermediate Peoples’ Court. ② According to Notice (2006) SZFZ
Zi No. 516, Shenzhen Intermediate Peoples’ Court auctioned five real estates with auction
price of RMB 5.14 million on 24 Apr. 2009, of which one third amounting to RMB
1,713,333.00 was the executed property to distrain for debt payable to Huangcheng Real
Estate.
B. On 3 Aug. 2006, Hainan Duokuai Elevator Service (Far-East) Co., Ltd Shenzhen
Branch (hereinafter referred to as “Duokuai Shenzhen Branch”) initiated litigation to The
People’s Court of Futian District of Shenzhen, appealed Shenzhen Huangcheng Property
Management Co., Ltd (hereinafter referred to as “Huangcheng Property Management
Company”), subsidiary of the Company, to pay the service expense. In the process of trial,
Duokuai Shenzhen Branch applied to sue Huangcheng Real Estate as the second
defendant and appealed Huangcheng Real Estate bearing joint discharge responsibility for
the aforesaid debt. On 26 Jan. 2007, the People’s Court of Futian District of Shenzhen sent
civil judgment paper with (2006) SFFMEC Zi No. 1977, which ordered Huangcheng Real
Estate and Huangcheng Property Management Company would pay service expense RMB
925,500.00 and RMB 1,105,130.00 to Duokuai Shenzhen Branch respectively and paid for
loss of interest. Huangcheng Real Estate and Huangcheng Property Management
Company sued appeal with reasons of ambiguity of facts and violation of legal procedures.
On 28 Jan. 2008, Shenzhen Intermediate People’s Court made a civil judgment with (2007)SZFMEZ Zi No. 827: Huangcheng Real Estate and Huangcheng Property Management
Company would pay service expense RMB 893,100.00 and RMB 1,102,730.00 to
Duokuai Shenzhen Branch respectively and paid for loss of interest. Huangcheng Real
Estate and Huangcheng Property Management Company confirmed the relevant
expenditure in financial statement.
Huangcheng Real Estate Co., Ltd should receive balance of RMB 8,726,693.00 at the
period-end from Duokuai Elevator. In view of unsettled payables from Duokuai Elevator,
its related parties and guarantee parties by Huangcheng Real Estate Co., Ltd, the Company
carried depreciation provision test and confirmed to withdraw RMB 3,978,423.60 as bad
debt reserves.
C. In Jul. 2002 and Jan. 2003, Huangcheng Real Estate signed and concluded Agreement
for Sale and Purchase of the Property in Shenzhen City on 4-2901, 6-2901 of A block
respectively, Tao Boming paid the initial payment and applied to loan of the balance from
Industrial & Commercial Bank of China Futian Branch. Lawsuit which was sued
Huangcheng Real Estate to handle House Ownership Certificate for eight real estates
including the aforesaid real estate by Tao Boming, was objected by the court. Tao Boming
initiated litigation to the court for unable to enjoy substantive rights, and appealed: (1)
terminate Agreement for Sale and Purchase of the Property in Shenzhen City signed and
concluded with Huangcheng Real Estate and Loan Contract for Individual Housing signed
with Industrial & Commercial Bank of China Futian Branch, and appealed Huangcheng
Real Estate returned all housing fund, insurance expense and expense for public
notarization.
On 20 Nov. 2007, Shenzhen Intermediate People’s Court made a judgment of final
instance with (2007) SZFMWC Zi No. 79, which was in progress of execution.
Huangcheng Real Estate Co., Ltd switched back the above confirmed income, cost and tax
and withdrew relevant loss in 2007 according to the judge.
(5) With regard to case of “Meisi Company Lawsuit” disclosed continuously by the
Company in Annual Report between 2004 and 2007, extraordinary public notice on 15 Apr.
2006, extraordinary public notice on 5 Aug. 2006, extraordinary public notice on 11 Apr.
2007, extraordinary public notice on 19 May 2007, extraordinary public notice on 26 Feb.
2008, extraordinary public notice on 3 Jun. 2008, extraordinary public notice on 31 Dec.
2008 and extraordinary public notice on 13 Feb. 2009,
A civil action against the Company and Luohu Economic Development Co., Ltd. (as joint
defendants) was taken by Meisi Company to Shenzhen Municipal Futian District People’s
Court, hereafter, the Company considered that the object of action is the larger, belonging
to the case with significant influence within the area, which Shenzhen Intermediate
People’s Court should have the jurisdiction over the case. the Company, in accordance
with the provisions of the Law of Civil Procedure of the PRC, raised its objection at the
time of submitting a written reply to claim for transferring the case to Shenzhen
Intermediate People’s Court for trial. As examined and checked, Shenzhen Municipal
Futian Distric People’s Court believed that the said objection is tenable and decided to
transfer the case to Shenzhen Intermediate People’s Court for trial, and provided for the
service of notice ((2009) SFFMSC Zi No. 939) to the Company in Mar. 2009. The
Company disclosed the above in Significant Litigation and Arbitration, (I), Section X
Significant in Annual Report 2008.
On 2 Jul. 2009, Shenzhen Intermediate People’s Court heard the case, now is waiting for
collegiate judge. The Company believed that the Company should be considered as
legitimate oblige of the above land and building, and the Company will protect legitimated
equity by law. It was forecasted that the above events would not cause significant
influence on financial status of the Company.(6) The case of “Guarantee for Gintian” disclosed in Annual Report 2007 and Annual
Report 2008. The Company withdrew RMB 56.6 million; meanwhile, the Company would
recourse against Gintian Company in line with laws.
(7) For the case of “Hubei Foreign Economic Trade” disclosed in the Annual Reports
during 2000 to 2006, Semi-annual Report 2007 and Semi-Annual Report 2008. The
Supreme Court of People's Republic of China sent a paper of retrial civil judgment with
(2004) MEJ Zi No. 146-3 in Oct. 2007, which ordered retrial of the case by the Supreme
Court of People's Republic of China. At present, the case hasn’t opened a court session.
After the Company repaid housing fund of Jiabin Building RMB 24.4029999 million,
Hubei Foreign Economic Trade Shenzhen Office sent 14/F and 15/F of Jiabin Building to
the Company in line with law. In order to resolve ownership of the property and after
investigation, the Company found that 14/F and 15/F of Jiabin Building was registered
under the name of Zhuhai West Yinzhu Industrial Development Co., Ltd with method of
file registration. In Jun. 2008, the Company sued Zhuhai West Yinzhu Industrial
Development Co., Ltd to the Court of Luohu District, appealed the court confirm the
Company was obligee of 14/F and 15/F of Jiabin Building and judge to transfer
registration under the name of the Company. The Court of Luohu District accepted the
case with (2008) SLFMSC Zi No. 1442. On 21 Jul. 2008, the Court opened a court session
and presided to intermediation. The Company and Zhuhai West Yinzhu Industrial
Development Co., Ltd came to Civil Mediation Agreement, in which both parties
unanimously agreed that the 14/F and 15/F of Jinlihua Commercial Plaza (the former
Jiabin Building) located in Bao’an Road South, Luohu District , Shenzhen City owned by
the Company; Zhuhai West Yinzhu Industrial Development Co., Ltd cooperated with the
Company to handle relevant transfer procedure of the aforesaid property within three days
when the Civil Mediation Agreement came to effect. The mediation agreement now is
effective complied with law. The Company will actively handle transfer procedure. Up to
the end of current financial period, the 14th and 15th floor of Jiabin building has been
registered under the Company’s name by China Committee of Real Estate Title. As there
is a significant uncertainty about the impact of the above property ownership on the
Company’s financial interests, the Company did not recognize the above asset in the
financial statement.
(8) In Jul. 1997, China Huashi Enterprise Co., Ltd signed Contract on Exterior Decoration
of Jinlihua Commercial Plaze with granite with Jiyong Company, then China Huashi
Enterprise Co., Ltd appealed to the People’s Court of Luohu District in Shenzhen due to
Jiyong Company fell into arrears and claimed Jiyong Company, Shenzhen Zongli
Investment Co., Ltd and the Company pay the engine fund and loss amounting to RMB
5.87 million. The case has been reheard in May 2009. The Company believed that the
Company was not main body of the contract, so the litigation would not cause loss to the
Company according to fact and evidence.
3. Equity of other listed companies the Company held
(1) Securities investment
N
o.
Securities
variety
Securiti
es code
Short form of
securities
Initial
investment
amount (RMB)
Number
of shares
held
Book value
at
period-end
Proportion in
total securities
investment
(%)
Profits or
losses in the
report period
(RMB)
1 Hongkong
Stock 688 China overseas 674,792.66 210,600 3,527,234.10 87.78 1,546,144.71
2 Shenzhen
A stock 000030 ST Sunrise 268,735.50 30,000 153,000.00 3.81 89,100.00
3 Hongkong
Stock 3311 China
Construction 34,202.20 48,000 118,896.72 2.96 61,789.54
4 Hongkong
Stock 014 Xi Shen 101,548.80 6,000 105,251.10 2.62 39,041.685 Hongkong
Stock 144 Merchant 59,236.80 4,000 77,748.30 1.94 24,934.48
6 Hongkong
Stock 455 Yunan
Industrial 12,781.75 50,000 22,919.00 0.57 4,849.35
7 Hongkong
Stock 480 HKR
International 14,544.75 4,400 12,605.45 0.31 6,051.99
8 Hongkong
Stock 896
HANISON
CONSTRUCT
ION HLDGS
432.11 860 470.02 0.01 212.35
Other securities investment held at the
period-end
Profits or losses of securities sold in the report
period ---- ---- ---- ---- 614,438.13
Total 1,166,274.57 ---- 4,018,124.69 100.00 2,386,562.23
(2) Equity of other listed companies the Company held
Securitie
s code
Short
form of
securities
Initial
investment
amount
Proportion
in equity of
the
Company
Book value at
period-end
Profits or
losses in
the report
period
Changes of
owners’
equity in the
report period
Accounting
subject Resource
000509 S*ST
HASU 2,962,500.00 0.33% 802,199.55 0.00 0.00
Long-term
equity
investment
+9 directional
purchase of
corporate shares
Total 2,962,500.00 - 802,199.55 0.00 0.00
(Ⅳ) Briefing and progress of the Company’s significant asset acquisition, sale and
mergers
In the report period, the Company did not conduct any significant asset acquisition, sale or
reorganization.
(Ⅴ) Related transactions
1. Related transactions incurred in report period
(1) The Proposal on Applying to Shenzhen Investment Holdings Co., Ltd. for an
Entrustment Loan of RMB 50 Million was examined and approved at the 11th Meeting of
the 6th Board of Directors held by the Company on 23 Jan. 2009. With the Shenzhen
Branch of the Agricultural Bank of China as the trustee, the Company applied to Shenzhen
Investment Holdings Co., Ltd. for an entrustment loan of RMB 50 million with a term of
12 months, which was used for the project development of the Company’s
subsidiary—Shenzhen Huangcheng Real Estate Co., Ltd.. In this transaction, the
Company was getting the new loan to repay the old.
The Company disclosed on 24 Jan. 2009 this loan transaction in its interim public notice
on the designated media—Securities Times, Ta Kung Pao and http://www.cninfo.com.cn.
(2) On 25 Mar. 2009, the Company repaid RMB 15 million to its controlling
shareholder—Shenzhen Investment Holdings Co., Ltd., which was borrowed directly from
the latter.
2. For details of creditor’s rights and liabilities between the Company and its related
parties, please refer to Note Ⅺ 3. (1) of Financial Report—Balance of Accounts
Receivable from and Payable to Related Parties.
(Ⅵ) Significant contracts and their implementation
1. Significant transactions, trusting, contracting and leasing of assets
(1) The Company’s subsidiary—Shenzhen Huangcheng Real Estate Co., Ltd.—signed theContract of Land Purchase by post with Sihui Land Reserve Center. According to the
contract, the Company transferred its use right of the No.000050 State-owned Land in
Nanjiang Industrial Park, Dasha Town, Sihui City to Sihui Land Reserve Center at a price
totaling RMB 5,274,080.00.
The Company disclosed on 8 Jul. 2009 this transaction in its interim public notice on the
designated media—Securities Times, Ta Kung Pao and http://www.cninfo.com.cn.
The Company had not received the said sum of money payable by Sihui Land Reserve
Center for land transfer by the reporting date.
2. Significant guarantees
(1) The Company provided a guarantee for the long-term borrowing by its
subsidiary—Shenzhen Huangcheng Real Estate Co., Ltd.—from Shenzhen Branch of
China Construction Bank, with the credit limit of the loan standing at RMB 250 million
and the closing balance at RMB 200 million.
(2) The Company, together with its property—Shop 4-01 at the 3rd floor, District A of
International Trade Center, provided a joint guarantee for the long-term borrowing by its
subsidiary—Shenzhen Huangcheng Real Estate Co., Ltd.—from East Shenzhen Branch of
the Agricultural Bank of China, with the credit limit of the loan standing at RMB 240
million and the closing balance at RMB 200 million.
(3) The Company pledged part of its properties in the International Trade Center to East
Shenzhen Branch of the Agricultural Bank of China to help its subsidiary—Shenzhen
Guomao Automobile Industry Company—get a short-term loan of RMB 50 million from
the bank. And the closing balance of the loan stood at RMB 33 million.
(4) Guarantees for property buyers: The Company and its subsidiaries provided mortgage
guarantees for the buyers of its commercial housing. Up to 30 Jun. 2009, the amount of
unsettled guarantees totaled RMB 692,560,000. Those guarantees were considered a kind
of guarantee that a developer usually provided for the small buyers of its commercial
housing, which was a common phenomenon in the real estate business.
3. Special explanation and independent opinion from independent directors on capital
occupation by related parties and provision of external guarantees by the Company
Li Xiaofan, Dong Zhiguang and Zha Zhenxiang, all independent directors of the Company,
issued their independent opinion concerning the capital occupation by the Company’s
related parties and the provision of external guarantees by the Company.
In accordance with the Guiding Opinion of CSRC on Establishing Independent Director
System in Listed Companies, the Circular of Shenzhen Stock Exchange on Disclosure of
2009 Semi-Annual Reports of Listed Companies (SZS[2009] No.54) and other laws and
regulations, as well as the Company’s Articles of Association and its Rules for
Independent Directors, we, as the independent directors of Shenzhen Properties &
Resources Development (Group) Ltd., conducted careful examinations on the significant
guarantees provided by the Company and the capital occupation by the Company’s
holding shareholder and other related parties in the first half of 2009. Upon the
examinations, we hereby expressed our independent opinions as follows:The Company seriously executed relevant provisions in the Circular ZJF [2003] No.56
and strictly controlled the risks concerning the provision of external guarantees by the
Company and the capital occupation by the Company’s related parties.
(1) As of 30 Jun. 2009, the Company had provided no guarantees to its holding
shareholder or other related parties.
(2) As at 30 Jun. 2009, the balance of guarantees provided by the Company for its
wholly-owned subsidiaries stood at RMB 433 million, which was mainly used for the
project development of the subsidiaries. And the decision-making procedure of the said
guarantees was considered legal and reasonable, with no harm done to the interests of the
Company and its shareholders.
4. Significant matters concerning the Company’s entrusting other parties with cash asset
management
In the report period, the Company did not entrust other parties with cash asset
management.
(Ⅶ) Commitments made by the Company or shareholders holding 5% (including 5%)
shares of the Company
The actual controller of the Company—Shenzhen Investment Holdings Co., Ltd.—stated
that it would continue to perfect the internal control system concerning undisclosed
information management it had established, urge insiders not to buy and sell the
Company’s shares by taking advantage of undisclosed information, make no suggestions
to other parties for buying and selling the Company’s shares and leak no undisclosed
information. In addition, it would offer a name list of the insiders in a timely, factual,
accurate and complete way, which would be submitted by the Company to CSRC
Shenzhen Bureau and Shenzhen Stock Exchange for the record.
In the report period, it was found that no actual controller of the Company or insiders
bought and sold stocks of the Company by taking advantage of undisclosed information of
the Company. And the Company submitted monthly the particulars about the parties to
which the undisclosed information had been submitted to CSRC Shenzhen Bureau for
reference.
(Ⅷ) The Financial Report for the first half of 2009 has not been audited.
(Ⅸ) In the report period, the Company and its management received no punishment from
securities regulatory authorities.
(Ⅹ) In the report period, no shareholder holding over 5% shares of the Company made
such commitments as voluntarily extending the trading moratorium term, and setting or
raising the lowest price for reducing shareholding.
(Ⅺ) Researches, interviews and visits received by the Company in report period
1. In the report period, the Company received no field visits from institutional investors.
Instead, it received phone calls for consultation from a great number of individual
investors and some institutional investors. The said phone calls are too many to enumerate
and the issues of common concern of the investors are detailed as follows:(1) learned about the progress of the Company’s share merger reform and asked the
Company when to re-start the share merger reform;
(2) expressed the hope for the Company’s main shareholder to increase the consideration
of the share merger reform, advised the Company conducting asset reorganization, and
hoped that the Company would start its share merger reform as soon as possible;
(3) expressed the hope for the Company to make clear the reorganized assets as committed
in the share merger reform;
(4) asked whether the Company’s main businesses would change upon the completion of
the share merger reform;
(5) asked about the concrete procedure and methods of on-line voting;
(6) asked about the sale of Imperial Garden and Xinhua Town;
(7) asked about the progress of the “Haiyi Company” lawsuit;
(8) asked whether the “Meisi Company” lawsuit had made a significant impact on the
Company’s business performance in 2008;
(9) learned about the Company’s land reserve and asked whether the Company was in
normal production and operation;
(10) asked why the Company had not yet canceled the special warning of delisting risk;
(11) asked about the Enquiry Letter of Annual Report issued by Shenzhen Stock Exchange,
and wanted to know whether the Company had given a timely reply to the Letter.
The Company answered the aforesaid phone calls for consultation in strict compliance
with requirements and principles of the Guide on Fair Information Disclosure for Listed
Companies, and protected the investors’ right to get the information on a fair basis. All the
investors were treated fairly and no undisclosed information was leaked to the investors.
2. Index for information disclosed
Date of disclosure
Public
Notice No.
Name of public notice
15 Jan. 2009 2009-01 Public Notice on Resolutions Made at the Meeting
of Board of Directors
24 Jan. 2009 2009-02 Public Notice on Resolutions Made at the Meeting
of Board of Directors
10 Feb. 2009 2009-03 Public Notice on Resolutions Made at the Meeting
of Board of Directors
13 Feb. 2009 2009-04 Public Notice on “Meisi Company” Lawsuit
23 Feb. 2009 2009-05 Public Notice on Progress of Share Merger
Reform of the Company
25 Feb. 2009 2009-06 Public Notice on Convening the 1st Provisional
Shareholders’ General Meeting in 20092 Mar. 2009 2009-07 Public Notice on Progress of Share Merger
Reform of the Company
9 Mar. 2009 2009-08 Public Notice on Progress of Share Merger
Reform of the Company
9 Mar. 2009 2009-09
Public Notice on Abnormal Fluctuation of A Share
Price
13 Mar. 2009 2009-10 Public Notice on Resolutions Made at the 1st
Provisional Shareholders’ General Meeting in
2009
16 Mar. 2009 2009-11 Public Notice on Progress of Share Merger
Reform of the Company
23 Mar. 2009 2009-12 Public Notice on Progress of Share Merger
Reform of the Company
30 Mar. 2009 2009-13 Public Notice on Progress of Share Merger
Reform of the Company
6 Apr. 2009 2009-14 Public Notice on Progress of Share Merger
Reform of the Company
9 Apr. 2009 2009-15 Public Notice on “Haiyi Company” Lawsuit
13 Apr. 2009 2009-16 Public Notice on Progress of Share Merger
Reform of the Company
20 Apr. 2009 2009-17 Public Notice on Progress of Share Merger
Reform of the Company
27 Apr. 2009 2009-18 Public Notice on Resolutions Made at the Meeting
of Board of Directors
27 Apr. 2009 2009-19 Public Notice on Convening 2008 Annual
Shareholders’ General Meeting
27 Apr. 2009 2009-20 Public Notice on Resolutions Made at the 9thMeeting of the 6th Board of Supervisors
27 Apr. 2009 2009-21 Suggestive Public Notice on Applying for
Cancellation of Delisting Risk Warning
27 Apr. 2009 2009-22 Public Notice on Progress of Share Merger
Reform of the Company
29 Apr. 2009 2009-23 Public Notice on Earnings Estimate for the Middle
of 2009
4 May 2009 2009-24 Public Notice on Progress of Share Merger
Reform of the Company
5 May 2009 2009-25 Public Notice on Abnormal Fluctuation of B Share
Price
11 May 2009 2009-26 Public Notice on Progress of Share Merger
Reform of the Company
18 May 2009 2009-27 Public Notice on Progress of Share Merger
Reform of the Company
18 May 2009 2009-28 Suggestive Public Notice on Applying for
Cancellation of Delisting Risk Warning
20 May 2009 2009-29 Public Notice on Resolutions Made at 2008
Annual Shareholders’ General Meeting
25 May 2009 2009-30 Public Notice on Progress of Share Merger
Reform of the Company
1 Jun. 2009 2009-31 Public Notice on Progress of Share Merger
Reform of the Company
1 Jun. 2009 2009-32 Suggestive Public Notice on Applying for
Cancellation of Delisting Risk Warning
4 Jun. 2009 2009-33 Public Notice on Progress of “Haiyi Company”Lawsuit
8 Jun. 2009 2009-34 Public Notice on Progress of Share Merger
Reform of the Company
15 Jun. 2009 2009-35 Public Notice on Progress of Share Merger
Reform of the Company
15 Jun. 2009 2009-36 Suggestive Public Notice on Applying for
Cancellation of Delisting Risk Warning
22 Jun. 2009 2009-37 Public Notice on Progress of Share Merger
Reform of the Company
29 Jun. 2009 2009-38 Public Notice on Progress of Share Merger
Reform of the Company
29 Jun. 2009 2009-39 Public Notice on Progress of “Haiyi Company”
Lawsuit
30 Jun. 2009 2009-40 Public Notice on Resolutions Made at the Meeting
of Board of Directors
30 Jun. 2009 2009-41 Public Notice on Convening the 2nd Provisional
Shareholders’ General Meeting in 2009
6 Jul. 2009 2009-42 Public Notice on Progress of Share Merger
Reform of the Company
8 Jul. 2009 2009-43 Public Notice on Signing Land Purchase Contract
13 Jul. 2009 2009-44 Public Notice on Progress of Share Merger
Reform of the Company
17 Jul. 2009 2009-45 Public Notice on Resolutions Made at the 2nd
Provisional Shareholders’ General Meeting in
2009
(Ⅻ) Other matters that had significant influence on the Company
1. In Nov. 2008, the Company’s controlling shareholder—Shenzhen Investment HoldingsCo., Ltd.—put forward the plan of share merger reform, which was nevertheless not
approved by the relevant shareholders’ general meeting on 12 Dec. 2008. By the reporting
date, the Company had not received the written proposal on re-starting the share merger
reform from Shenzhen Investment Holdings Co., Ltd.
2. The Company had withdrawn in advance in the previous years the land value
appreciation fee of Jinlihua Building amounting to RMB 56,303,627.40. According to the
Document SGT [2001] No.314, the land value appreciation fee unpaid or owed would be
exempted. However, the relevant land use right had not been transferred. Therefore, the
Company would actively handle the procedures relating to exempting the land value
appreciation fee of Jinlihua Building amounting to RMB 56,303,627.40. Upon the arrival
of the relevant approval document, the Company would cancel the land value appreciation
fee withdrawn in advance after verification.
Concerning the sum for real estate of Jinlihua Building amounting to RMB 100,014,300
that the Company should receive from Shenzhen Jiyong Properties Development Co., Ltd.,
a bad debt of RMB 44,014,300 had been withdrawn with the net amount standing at RMB
56 million.
3. On 9 May 2008, the Company and Tianhong Shopping Plaza Co., Ltd. (hereinafter
referred to as “Tianhong Company”) signed the ITC Plaza Renting Contract, which
mainly stated that: The Company rent to Tianhong Company the floors 1-5 in Area A of
the ITC Plaza and some surrounding self-owned properties, with a renting area of 21,220
m2 and a renting period of 15 years. The Company should hand in the said properties to
Tianhong Company before 30 Jun., from which the rent started; Tianhong Company
should be responsible for the decoration and re-construction upon the handing over of the
said properties; The opening date of the shopping plaza was agreed to be no later than 1
Dec. 2008; A rent-free period might be offered to Tianhong Company according to the
decorating conditions of the shopping plaza; And the Company was responsible for
providing car parking lots and related supporting facilities. At the same day, Shenzhen
ITC Tian’an Properties Co., Ltd. (hereinafter referred to as “Tian’an Company” in which
the Company held 50% shares also signed the Property Renting Contract of Tian’an
Shopping Plaza with Tianhong Company. According to the contract, Tian’an Company
rent part of its properties on the floors 1-4 of Tian’an Shopping Plaza to Tianhong
Company, with a renting area of 14,477.88 m2 and a renting period of 15 years. And other
terms in the contract such as the rent and service charges and the rent-free period were the
same as or similar to the ITC Plaza Renting Contract.
The Company and Tian’an Company had handed over the relevant properties to Tianhong
Company on 30 Jun. 2008. After decoration, the ITC Tianhong Shopping Plaza was
opened on 5 Dec. 2008. According to the relevant contracts and the 2008 Explanation on
Accounting Standards for Business Enterprises, and considering the cash value of the total
rent income from the whole renting period, the Company and Tian’an Company
respectively confirmed the rent of the rent-free periods in the report period.
4. On 10 Sept. 2008, the Company received from CSRC Shenzhen Inspection Bureau the
Investigation Notice (SJLTZ (2008) No. 001), which launched an investigation on the
Company for its being suspected of violating securities laws and regulations. Up to the
date of the report, the Company had not been informed of any result of the investigation.
5. According to the land policies and the Company’s development plan, in Apr. 2008, the
Company’s subsidiary—Shenzhen Huangcheng Real Estate Co., Ltd. (Huangcheng RealEstate)—reported to the planning department the design plan bid of Land No.0051 for the
record, and issued the bid invitation proposal at the same time. In May 2008, Huangcheng
Real Estate received the Reply SGZSH (2008) No.467, which stated that part of the Land
No.0051 would be occupied due to the municipal plan of connecting Futian Nan Road
with Fugang Road and hence the design plan of the Company was temporarily rejected. In
Apr. 2009, the relevant department of Shenzhen Municipal Planning Bureau approved the
Company’s design plan of Land No.0051, with the construction land area in the plan
adjusted from 12,633.90 ㎡ to 12,597.57 ㎡. After the adjustment, the construction land
area was reduced by 36.33 ㎡ . At present, the Company is waiting to sign the
Supplementary Contract with Shenzhen Municipal Bureau of Land Resources and
Housing Management.
6. Based on the Labor Law and the Labor Contract Law, as well as the Opinion on Further
Regulating Labor Relation of Municipal SOE and the Circular on Deepening the Reform
of Human Resource Allocation in Municipal SOE issued by State-owned Assets
Supervision and Administration Commission of Shenzhen on 18 Aug. 2006, and some
other relevant documents, the Company formulated the Compensation Methods for
Human Resource Allocation Reform of Shenzhen Properties & Resources Development
(Group) Ltd. (hereinafter referred to as “Compensation Methods”). And the Compensation
Methods had been approved by the Company’s employee representative conference on 10
Oct. 2008. In accordance with the Compensation Methods, the Company worked out an
employee dismissal plan, which was approved at the 14th Meeting of the 6th Board of
Directors of the Company. And all the employees had been informed of the said dismissal
plan. The Company was unable and not going to unilaterally cancel the plan. According to
the plan and relevant accounting standards, the Company made a provision in 2008 on
dismissal compensation of RMB 24,474,290. Up to the date of the report, after deducting
the dismissal compensation which had been paid to the employees, the balance of the
dismissal compensation stood at RMB 7,915,801.17.
7. On 14 Jan. 2009, the proposal on transferring all the equity of Hainan Xinda
Development Co., Ltd. held by the Company through public listing upon price assessment
was approved at the 10th Meeting of the 6th Board of Directors of the Company. Up to the
date of the report, the price assessment was still in progress.
8. On 25 May 2006, the People’s Government of Shenzhen Municipality released the
Circular on Plan of Handing over Community Facilities and Public Service Houses (SFB
[2006] No.79). According to the Circular, the community facilities and public service
houses that should be handed over to the government included: (1) the buildings built by a
developer for residents’ committees and primary and secondary schools (excluding those
with the land contracts clearly stating that the relevant property rights belonged to the
developer) since the implementation of the scheme of transferring land-use rights with
compensation on 3 Jan. 1998; and (2) public service buildings such as kindergartens that
should had been handed over to the government according to land contracts or other
agreements but had had not been handed over since the implementation of the scheme of
transferring land-use rights with compensation on 3 Jan. 1998. For those buildings of
residents’ committees and primary and secondary schools with the land contracts not
clearly stating whether the property rights belonged to the government or whether those
buildings should be handed over to the government at the cost prices, the government
would take them back at the cost prices. According to the Circular, the cost prices should
be determined based on the principle of solving historical problems in broad outlineinstead of going into too much detail, i.e. to determine the cost prices based on the prices
and cost indexes announced by the construction cost management stations at the year of
completion. And the auditing department should perform review on the pricing scheme.
As shown by the statistics, the Company and its subsidiaries had such community
facilities and public service houses with the total building area of 36,000 square meters,
which had been handed over to relevant governmental departments as required by the
aforesaid documents. The relevant mapping had been finished, but the area and cost price
had not yet been confirmed by the government. Therefore, the Company was unable to
know the final area for handover recognized by the government and the compensation
amount. In addition, the subsidiary Shenzhen Huangcheng Real Estate Co., Ltd. had not
gone through the handover procedure concerning its facilities and properties. As a result,
the aforesaid contingent assets were not recognized in the financial statements of the
Company.
Section VII Financial Report
Balance Sheet
Prepared by: Shenzhen Properties & Resources Development (Group) Ltd.
30 Jun. 2009 Unit: (RMB) Yuan
Amount at period-end Amount at period-begin
Items Consolidation Parent
company Consolidation Parent company
Current Assets:
Monetary funds 614,310,477.28 2,159,268.46 271,708,727.86 7,802,612.88
Transactional financial
assets 4,018,124.69 153,000.00 2,670,729.47 63,900.00
Notes receivable
Accounts receivable 74,146,219.12 60,453,989.99 68,605,911.80 60,405,970.89
Prepayments 2,106,665.22 500,000.00 2,305,629.53
Other receivables 66,023,499.50 174,224,801.41 67,222,142.10 441,309,610.51
Financial assets
purchased under
agreement to resell
Inventories 1,163,183,546.01 106,124,864.34 1,153,726,292.83 106,048,264.34
Non-current assets due
within 1 year
Other current assets
Total current assets 1,923,788,531.81 343,615,924.20 1,566,239,433.59 615,630,358.62
Non-current assets：
Loans granted and
accounts disbursed on
others’ behalf
Available-for-sale
financial assets
Investment held to
maturity 3,000.00 3,000.00
Long-term receivables
Long-term equity
investment 82,358,819.78 181,538,819.78 81,273,230.90 183,908,863.53
Investment properties 220,338,554.82 129,141,335.54 224,041,978.19 133,384,070.84
Fixed assets 97,721,466.91 44,771,096.07 104,013,870.31 46,337,392.67
Construction in progressEngineering materials
Disposal of fixed assets
Productive biological
assets
Oil-gas assets
Intangible assets 116,148,009.02 119,402,340.92
Development expenses
Goodwill
Long-term deferred
expenses 2,413,609.88 2,326,101.38 2,549,186.42 2,409,176.42
Deferred income tax
assets 36,986,159.48 13,322,857.95
Other non-current assets
Total non-current assets 555,969,619.89 357,777,352.77 544,606,464.69 366,039,503.46
Total assets 2,479,758,151.70 701,393,276.97 2,110,845,898.28 981,669,862.08
Current Liabilities:
Short-term borrowings 292,000,000.00 109,000,000.00 369,000,000.00 164,000,000.00
Transactional financial
liabilities
Notes payable
Accounts payable 115,958,638.00 35,907,798.63 137,040,777.65 36,748,755.23
Accounts received in
advance 382,617,130.29 366,877.28 67,150,023.78 122,312.00
Financial assets sold
under agreement to
repurchase
Service charge and
commission payables
Payroll payable 30,849,509.67 3,740,108.97 67,254,232.19 16,228,231.70
Taxes payable 167,006,027.08 1,224,023.89 82,322,778.74 1,198,324.42
Dividends payable
Interest payable 620,737.50 620,737.50
Other payables 198,308,459.53 315,441,558.11 187,732,899.73 384,394,686.18
Non-current liabilities
due within 1 year 210,000,000.00 100,000,000.00 90,000,000.00
Other current liabilities
Total current liabilities 1,396,739,764.57 465,680,366.88 1,011,121,449.59 693,313,047.03
Non-current Liabilities:
Long-term borrowings 228,546,461.79 348,229,343.34 40,000,000.00
Bonds payable
Long-term payables
Special payables
Estimated liabilities 61,254,234.44 61,254,234.44 61,254,234.44 61,254,234.44
Deferred income tax
liabilities
Other non-current
liabilities 115,407,009.73 9,886,144.84 118,763,754.44 9,886,144.84
Total Non-current
Liabilities 405,207,705.96 71,140,379.28 528,247,332.22 111,140,379.28
TOTAL LIABILITIES 1,801,947,470.53 536,820,746.16 1,539,368,781.81 804,453,426.31
Owners’ equity (or
shareholders’ equity):
Paid-in capital (or share
capital) 541,799,175.00 541,799,175.00 541,799,175.00 541,799,175.00
Capital reserves 25,332,931.52 226,883.79 25,332,931.52 226,883.79Less: Treasury stock
Surplus reserves 62,919,127.11 62,919,127.11 62,919,127.11 62,919,127.11
General risk provision
Retained earnings 50,367,035.72 -440,372,655.0
9 -55,930,192.11 -427,728,750.13
Foreign exchange
difference -3,469,339.24 -3,505,676.11
Total shareholders' equity
attributable to parent
company
676,948,930.11 164,572,530.81 570,615,365.41 177,216,435.77
Minority interests 861,751.06 861,751.06
Total owner’s equity 677,810,681.17 164,572,530.81 571,477,116.47 177,216,435.77
Total liabilities and
owner’s equity 2,479,758,151.70 701,393,276.97 2,110,845,898.28 981,669,862.08
Income Statement
Prepared by: Shenzhen Properties & Resources Development (Group) Ltd.
Jan.-Jun. 2009 Unit: (RMB) Yuan
Items ConsolidCatuirorne nt Ppaerreiondt company ConSsaomlidea ptieornio d Poaf rleanstt cyoemarp a ny
I. Total operation income 536,738,584.88 13,680,918.93 136,455,256.05 10,320,880.23
Including: Sales 536,738,584.88 13,680,918.93 136,455,256.05 10,320,880.23
II. Total operation cost 406,296,629.50 28,562,271.97 160,020,305.17 36,957,172.92
Including: Cost of sales 251,443,084.02 5,075,317.74 94,294,488.92 3,697,400.96
Taxes and surcharges 97,185,166.54 713,127.58 7,268,582.46 526,712.72
Selling expenses 9,657,906.01 8,616,818.47
Administrative
expenses 37,914,659.32 15,859,164.75 41,208,248.17 22,622,529.45
Financial expenses 9,395,168.40 2,624,905.30 10,455,399.14 15,468,197.07
Asset impairment
loss 700,645.20 4,289,756.60 -1,823,232.00 -5,357,667.28
Add: gain/(loss) from
change in fair value (“-”
means loss)
2,182,553.30 89,100.00 -1,660,988.85
Investment gains/ losses
(“-” means loss) 2,087,219.72 1,866,234.08 5,190,797.67 2,811,587.80
Including: income form
investment in affiliated
enterprises and joint ventures
1,866,234.08 1,866,234.08 329,659.93 329,659.93
Gains/ losses from
foreign exchange difference
(“-” means loss)
III. Operation profit (“-”
means loss) 134,711,728.40 -12,926,018.96 -20,035,240.30 -23,824,704.89
Plus: non-operation
income 2,003,580.52 386,193.53 20,079,467.63 115,079.00
Less: non- operation
expenses 257,700.38 104,079.53 935,117.24 707,073.60
Including: loss from
non-current asset disposal 134,079.53 54,079.53 54,084.94 3,533.20
IV. Total profit (“-” means
loss) 136,457,608.54 -12,643,904.96 -890,889.91 -24,416,699.49
Less: Tax expense 30,160,380.71 2,229,912.25
V. Net profit (“-” means
loss) 106,297,227.83 -12,643,904.96 -3,120,802.16 -24,416,699.49Attributable to parent
company 106,297,227.83 -12,643,904.96 -3,120,802.16 -24,416,699.49
Minority interests
VI. Earnings per share
(I) basic earnings per share 0.1962 -0.0233 -0.0058 -0.0451
(II) diluted earnings per
share 0.1962 -0.0233 -0.0058 -0.0451
Cash Flow Statement
Prepared by: Shenzhen Properties & Resources Development (Group) Ltd.
Jan.-Jun. 2009 Unit: (RMB) Yuan
Items ConsolidCatuirorne nt Ppaerreiondt c ompany ConsSolaimdaet ipoenr iod Poaf rleanstt cyoemarp any
Ⅰ.Cash flows from
operating activities:
Cash received from sale of
commodities and rendering
of service
887,319,881.83 8,348,212.61 235,277,177.55 9,914,164.74
Net increase of disposal of
tradable financial assets
Tax refunds received
Other cash received
relating to operating
activities
54,653,344.05 170,423,938.07 49,606,919.81 140,553,550.65
Subtotal of cash inflows
from operating activities 941,973,225.88 178,772,150.68 284,884,097.36 150,467,715.39
Cash paid for purchase of
commodities and reception
of service
227,219,945.13 277,690.32 200,473,898.41 1,127,901.50
Cash paid to and for
employees 103,676,738.28 6,626,025.09 80,479,563.85 10,559,018.11
Various taxes paid 81,506,570.58 3,198,250.51 32,612,708.03 6,143,561.42
Other cash paid relating to
operating activities 72,270,634.87 51,776,591.76 59,776,822.13 68,455,816.55
Subtotal of cash outflows
from operating activities 484,673,888.86 61,878,557.68 373,342,992.42 86,286,297.58
Net cash flows from
operating activities 457,299,337.02 116,893,593.00 -88,458,895.06 64,181,417.81
Ⅱ. Cash flows from
investment activities:
Cash received from
disposal of investments 1,054,529.64 8,197,324.21 8,035,835.16
Investment income
Net cash received from
disposal of fixed assets,
intangible assets and other
long-term assets
960,351.26 890,741.54 638,136.70 19,400.00
Net cash received from
disposal of subsidiaries or
other operating business
units
Other cash received
relating to investment
activities
16,972.86 16,964.73
Subtotal of cash inflows 2,031,853.76 890,741.54 8,852,425.64 8,055,235.16from investment activities
Cash paid to acquire fixed
assets, intangible assets and
other long-term assets
2,263,086.72 1,212,039.46 11,381,899.80 109,703.00
Cash paid for investment 57,169.68 224,474.02
Net increase of pledged
loans
Net cash paid by
subsidiaries and other
operating units
Other cash paid relating
to investment activities
Subtotal of cash outflows
from investment activities 2,320,256.40 1,212,039.46 11,606,373.82 109,703.00
Net cash flows from
investment activities -288,402.64 -321,297.92 -2,753,948.18 7,945,532.16
Ⅲ. Cash flows from
financing activities
Cash received from capital
contribution
Of which: cash received
from capital contribution to
subsidiaries by minority
shareholders
Cash received from
borrowings 319,000,000.00 119,000,000.00 405,050,000.00 150,000,000.00
Cash received from
issuance of bonds
Other cash received
relating to financing
activities
Subtotal of cash flows
from financing activities 319,000,000.00 119,000,000.00 405,050,000.00 150,000,000.00
Cash paid for repaying
liabilities 405,682,881.55 235,000,000.00 232,523,265.11 208,450,000.00
Cash paid for interest
expenses and distribution of
dividends or profit
25,594,733.03 6,215,639.50 30,073,248.92 14,503,042.13
Of which: stock
dividends and profits paid to
minority shareholders by
subsidiaries.
Other cash paid relating to
financing activities 2,131,000.00 2,877,000.00
Subtotal of cash outflows
from financing activities 433,408,614.58 241,215,639.50 265,473,514.03 222,953,042.13
Net cash flows from
financing activities -114,408,614.58 -122,215,639.50 139,576,485.97 -72,953,042.13
Ⅳ. Effect of foreign
exchange changes on cash
and cash equivalents
-570.38 -102,192.43 -10,076.85
Ⅴ. Net increase of cash and
cash equivalents 342,601,749.42 -5,643,344.42 48,261,450.30 -836,169.01
Plus: beginning balance of
cash and cash equivalents 271,708,727.86 7,802,612.88 242,161,687.34 10,363,712.41
Ⅵ. Closing balance of cash 614,310,477.28 2,159,268.46 290,423,137.64 9,527,543.40and cash equivalents
Notes to Cash Flow Statement
Prepared by: Shenzhen Properties & Resources Development (Group) Ltd.
30 Jun. 2009 Unit: (RMB) Yuan
Supplementary items CoAnmsooliudnatt ifoonr cuPrarreenntt pceormiopda ny ConsoAlmidoatuinotn f o r Plaasrte nyte acro mpany
1. Transferring net profit into
cash flows of operating
activities:
Net profit 106,297,227.83 -12,643,904.96 -3,120,802.16 -24,416,699.49
Add: Reserve for
impairment of assets
700,645.20 4,289,756.60 -1,823,232.00 -5,357,667.28
Depreciation of
fixed assets, oil and gas
assets and productive
biological assets
12,658,511.15 5,997,519.11 12,858,238.01 6,058,382.04
Amortization of
intangible assets 3,254,331.90 3,322,401.89
Amortization of long-term
deferred expenses 135,576.54 83,075.04 34,998.00
Loss on disposal of
fixed assets, intangible assets
and other long-term assets
(“-” for gains)
30,365.63 30,365.63 -569,110.94 -5,110.00
Loss on scrapping
fixed assets (“-” for gains) 92,713.90 12,713.90 54,084.94 3,533.20
Loss on changes in
fair value (“-” for gains) -2,182,553.30 -89,100.00 1,660,988.85
Financial expenses
(“-” for gains) 9,930,573.32 2,517,002.00 11,593,370.00 15,487,531.37
Loss on investments
(“-” for gains) -2,087,219.72 1,866,234.08 -5,190,797.67 -2,811,587.80
Decrease of deferred
income tax assets (“-” for
increase)
-23,663,301.53 -899,995.75
Increase of deferred
income tax liabilities (“-” for
decrease)
-1,211,007.25 -554,092.94
Decrease of
inventories (“-” for increase) 8,209,866.65 -76,600.00 -141,718,092.83 -1,476,877.70
Decrease in
operating receivables (“-” for
increase)
-4,062,700.41 212,483,311.23 -3,210,000.75 -27,529,523.56
Increase in operating
payables (“-” for decrease) 349,261,570.27 -97,632,680.15 41,381,759.96 103,445,895.18
Others -1,276,270.41 55,900.52 -1,621,697.37 1,337,634.79
Net cash flows
arising from operating
activities
457,299,337.02 116,893,593.00 -88,458,895.06 64,181,417.81
2. Significant investing and
financing activities that
involve no cash income or
expenses
Conversion of debtinto capital
Convertible corporate
bonds due within one year
Fixed assets leased by
financing
3. Net change in cash and
cash equivalents
Cash balance at
period-end 614,310,477.28 2,159,268.46 290,423,137.64 9,527,543.40
Less: beginning cash
balance 271,708,727.86 7,802,612.88 242,161,687.34 10,363,712.41
Add: closing balance
of cash equivalents
Less: beginning
balance of cash equivalents
Net increase of cash
and cash equivalents 342,601,749.42 -5,643,344.42 48,261,450.30 -836,169.01
Cash and cash equivalents
Items CoAnmsooliudnatt ifoonr cuPrarreenntt pceormiopda ny ConsoAlmidoatuinotn f o r Plaasrte nyte acro mpany
I. Cash 614,310,477.28 2,519,286.46 290,423,137.64 9,527,543.40
Of which: cash on hand 325,780.68 55,612.61 356,010.82 25,500.78
Bank deposits
immediately available for
payment
605,927,627.06 1,440,682.32 280,246,345.43 9,401,044.70
Other monetary
funds immediately available
for payment
7,034,664.51 586.50
9,820,781.39 100,997.92
II. Cash equivalents
Of which: bonds
investment due within three
months
III. Balance of cash and cash
equivalents at period-end 614,310,477.28 2,519,286.46
290,423,137.64 9,527,543.40
Of which: cash and cash
equivalents concerning
whose use the parent
company and subsidiaries in
the Group are restricted
1,022,405.03 1,022,405.03
Consolidated Statement of Changes in Owners’ Equity
Jun. 2009
Prepared by: Shenzhen Properties & Resources Development (Group) Ltd. Unit: (RMB) Yuan
Amount for current period (Jun. 2009)
Owners’ equity attributable to parent company
Items
Paid-up capital
(or share
capital)
Capital reserve
Less
:
trea
sury
Surplus reserve Retained profit Others
Minority
interests
Total owners’
equitystoc
k
I. balance at the end
of last year 541,799,175.00 25,332,931.52 62,919,127.11 -55,930,192.11 -3,505,676.1
1
861,751.0
6 571,477,116.47
Add: change of
accounting policy
Correction
of errors in previous
period
II. balance at the
beginning of this year 541,799,175.00 25,332,931.52 62,919,127.11 -55,930,192.11 -3,505,676.1
1
861,751.0
6 571,477,116.47
III. Increase/
decrease of amount
in this year (“-”
means decrease)
106,297,227.83 36,336.87 106,333,564.70
(I) Net profit 106,297,227.83 106,297,227.83
(II)Gain/loss
recorded in owners’
equity directly
36,336.87 36,336.87
1. Net changes in fair
value of financial
assets available for
sale
2. Effect of changes
in other owners’
equity of invested
units under equity
method
3. Effect of income
tax related to items
listed to owners’
equity
4. Others 36,336.87 36,336.87
Subtotal of (I)and (II) 106,297,227.83 36,336.87 106,333,564.70
(III) Capital input and
reduction by owners
1. Capital input by
owners
2. Amount of stock
payment recorded in
owners’ equity
3. Others
(IV) Profit distribution
1. Surplus public
reserve withdrawn
2. Distribution to
owners
(shareholders)
3. Others
(V) Internal structure
of owners’ equity
1. New increase of
capital (share capital)
from capital reserves
2. Converting surplus
reserves tocapital(share capital)
3. Surplus reserves
make up losses
4. Others
IV. Balance at the
end of this period 541,799,175.00 25,332,931.52 62,919,127.11 50,367,035.72 -3,469,339.2
4
861,751.0
6 677,810,681.17
Consolidated Statement of Changes in Owners’ Equity (Con.)
Jun. 2009
Prepared by: Shenzhen Properties & Resources Development (Group) Ltd. Unit: (RMB) Yuan
Amount for last year (2008)
Owners’ equity attributable to parent company
Items
Paid-up capital
(or share
capital)
Capital reserve
Les
s:
trea
sury
stoc
k
Surplus reserve Retained profit Others
Minority
interests
Total owners’
equity
I. balance at the end
of last year 541,799,175.00 30,279,476.08 62,919,127.11 -67,197,819.73 -1,903,756.0
8
857,211.7
6 566,753,414.14
Add: change of
accounting policy
Correction of errors
in previous period
II. balance at the
beginning of this year 541,799,175.00 30,279,476.08 62,919,127.11 -67,197,819.73 -1,903,756.0
8
857,211.7
6 566,753,414.14
III. Increase/
decrease of amount
in this year (“-”
means decrease)
-4,946,544.56 11,267,627.62 -1,601,920.0
3 4,539.30 4,723,702.33
(I) Net profit
9,829,397.29 4,539.30 9,833,936.59
(II) Gain/loss
recorded in owners’
equity directly
-4,946,544.56 1,438,230.33 -1,601,920.0
3 -5,110,234.26
1. Net amount of
changes in fair value
of financial assets
available for sale
-3,078,294.09 -3,078,294.09
2. Effect of changes
in other owners’
equity of invested
units under equity
method
-2,422,343.41 -2,422,343.41
3. Effect of income
tax related to items
listed to owners’
equity
554,092.94 554,092.94
4. Others
1,438,230.33 -1,601,920.0
3 -163,689.70
Subtotal of (I)and (II)
-4,946,544.56 11,267,627.62 -1,601,920.0
3 4,539.30 4,723,702.33(III) Capital input and
reduction of owners
1.Capital input of
owners
2. Amount of stock
payment recorded in
owners’ equity
3. Others
(IV) Profit distribution
1．Withdrawing
surplus public
reserve
2. Distribution to
owners
(shareholders)
3. Other
(V) Internal structure
of owners’ equity
1. New increase of
capital (share capital)
from capital reserves
2. Converting surplus
reserves to
capital(share capital)
3. Surplus reserves
make up losses
4. Others
IV. Balance at the
end of this period 541,799,175.00 25,332,931.52 62,919,127.11 -55,930,192.11 -3,505,676.1
1
861,751.0
6 571,477,116.47
Statement of Changes in Owners’ Equity
Jun. 2009
Prepared by: Shenzhen Properties & Resources Development (Group) Ltd. Unit: (RMB) Yuan
Amount for current period (Jun. 2009)
Owners’ equity attributable to parent company
Items
Paid-up capital
(or share
capital)
Capital
reserve
Less:
treasur
y stock
Surplus reserve Retained profit Oth
ers
Mino
rity
inter
ests
Total owners’
equity
I. balance at the end
of last year 541,799,175.00 226,883.79 62,919,127.11 -427,728,750.13 177,216,435.77
Add: change of
accounting policy
Correction
of errors in previous
period
II. balance at the
beginning of this year 541,799,175.00 226,883.79 62,919,127.11 -427,728,750.13 177,216,435.77
III. Increase/
decrease of amount
in this year (“-”
means decrease)
-12,643,904.96
-12,643,904.96(I) Net profit -12,643,904.96 -12,643,904.96
(II)Gain/loss
recorded in owners’
equity directly
1. Net changes in fair
value of financial
assets available for
sale
2. Effect of changes
in other owners’
equity of invested
units under equity
method
3. Effect of income
tax related to items
listed to owners’
equity
4. Others
Subtotal of (I)and (II) -12,643,904.96 -12,643,904.96
(III) Capital input and
reduction by owners
1. Capital input by
owners
2. Amount of stock
payment recorded in
owners’ equity
3. Others
(IV) Profit distribution
1. Surplus public
reserve withdrawn
2. Distribution to
owners
(shareholders)
3. Others
(V) Internal structure
of owners’ equity
1. New increase of
capital (share capital)
from capital reserves
2. Converting surplus
reserves to
capital(share capital)
3. Surplus reserves
make up losses
4. Others
IV. Balance at the
end of this period 541,799,175.00 226,883.79 62,919,127.11 -440,372,655.09 164,572,530.81
Statement of Changes in Owners’ Equity (Con.)
Jun. 2009
Prepared by: Shenzhen Properties & Resources Development (Group) Ltd. Unit: (RMB) YuanAmount for last year (2008)
Owners’ equity attributable to parent company
Items
Paid-up capital
(or share
capital)
Capital
reserve
Less:
treasur
y stock
Surplus reserve Retained profit Oth
ers
Mino
rity
inter
ests
Total owners’
equity
I. balance at the end
of last year
541,799,175
.00
2,751,084.
94 62,919,127.1
1
-401,572,877.4
0
205,896,509.6
5
Add: change of
accounting policy
Correction
of errors in previous
period
II. balance at the
beginning of this year
541,799,175
.00
2,751,084.
94 62,919,127.1
1
-401,572,877.4
0
205,896,509.6
5
III. Increase/
decrease of amount
in this year (“-”
means decrease)
-2,524,20
1.15 -26,155,872.73
-28,680,073.88
(I) Net profit -26,155,872.73 -26,155,872.73
(II) Gain/loss
recorded in owners’
equity directly
-2,524,20
1.15
-2,524,201.15
1. Net changes in fair
value of financial
assets available for
sale
-3,078,29
4.09
-3,078,294.09
2. Effect of changes
in other owners’
equity of invested
units under equity
method
3. Effect of income
tax related to items
listed to owners’
equity
554,092.9
4
554,092.94
4. Others
Subtotal of (I)and (II)
-2,524,20
1.15 -26,155,872.73 -28,680,073.88
(III) Capital input and
reduction by owners
1. Capital input by
owners
2. Amount of stock
payment recorded in
owners’ equity
3. Others
(IV) Profit distribution
1. Surplus public
reserve withdrawn
2. Distribution to
owners
(shareholders)3. Others
(V) Internal structure
of owners’ equity
1. New increase of
capital (share capital)
from capital reserves
2. Converting surplus
reserves to
capital(share capital)
3. Surplus reserves
make up losses
4. Others
IV. Balance at the
end of this period
541,799,175
.00
226,883.7
9 62,919,127.1
1
-427,728,750.1
3 177,216,435.7
7
Notes to the Financial Statement
(As at 30 June 2009)
Note I Corporate information
Shenzhen Properties & Resources Development (Group) Ltd. (herein after referred to as “the
Company”) was incorporated based on the reconstruction of Shenzhen Properties & Resources
Development Co., Ltd. after obtaining approval of ZFBF [1991] No. 831from People’s Government of
Shenzhen Municipality. The registration number of Business License for Enterprises as Legal Person is
No. 440301103570124.
1. Registered capital of the Company
The registered capital of the Company is RMB 541,799,175 after bonus issue of shares on the basis of
one share for every existing 10 shares based on existing paid-in capital of the Company in 1996.
2. Registered office, organization form and headquarter address of the Company
Registered office: Shenzhen Municipal, Guangdong Province, PRC
Organization form: joint-stock company with limited liability
Headquarter address: 39th and 42nd Floor, International Trade Center, Renmin South Road, Shenzhen.
3. Nature of the business and main business scope of the Company
The business scope of the Company and its subsidiaries includes development and sale of property,
construction and management of buildings, lease of properties, supervision of construction, domestic
trading and materials supply and marketing (excluding exclusive dealing and monopoly sold products
and commodities under special control to purchase)
4. About the controlling shareholder of the Company and the Group
By the end of the reporting period, the controlling shareholder of the Company is still Shenzhen
Construction Investment Holdings in register book. In 2004, People’s Government of Shenzhen
Municipality incorporated Shenzhen Construction Investment Holdings with the other two municipal
asset management companies, namely Shenzhen Investment Management Corporation and ShenzhenTrade and Business Holding Company, and established Shenzhen Investment Holdings Co., Ltd. Thus,
the Company’s actual controlling shareholder is Shenzhen Investment Holdings Co., Ltd., a sole
state-funded limited company, who was established in Oct. 13, 2004; its legal representative is Mr.
Chen Hongbo and the registered capital is RMB 4 billion. Its main business scope is providing
guarantee to municipal state-owned enterprises, management of state-owned equity, assets
reorganization, reformation, capital operation, and equity investment of enterprises and etc. As a
government department, Shenzhen State-owned Assets Supervision and Administration Commission
manage Shenzhen Investment Holdings Co., Ltd. on behalf of People’s Government of Shenzhen
Municipality. Thus, the final controller of the Company is Shenzhen State-owned Assets Supervision
and Administration Commission.
5. Authorization and date of issuing the financial statements
The financial statements were approved and authorised for issue by the second session of the 17th
conference of the Company’s board of directors on 12 August 2009.
Note II Basis of preparation of the financial statements
The company prepares the financial statements based on the underlying assumption of going concern
and recognition and measurement of transactions actually occurred according to Accounting Standards
for Business Enterprises – Basic standard and other related accounting standards.
Note III Declaration of following Accounting Standards for Business Enterprises
The financial statements prepared in accordance with Accounting Standards for Business Enterprises
reflect truly and completely the financial position, the results of operations, the changes in equity of
shareholders and cash flows of the Company.
Note IV Significant accounting policies and accounting estimates of the Company
1. Fiscal year
The Company adopts the Gregorian calendar for its accounting period, starting on January 1 and
ending on December 31 of the year.
2. Functional currency
The financial statements are presented in Renminbi Yuan, which is the Company’s functional currency.
3. The measurement basis of accounting elements
The measurement basis used in the preparation of the financial statements is the historical cost basis,
except for accounting elements measured using replacement cost, net realisable value, present value or
fair value, which are measured on the basis that those accounting elements can be reliably measured.
4. Cash equivalent
Cash equivalent is defined as the short-term (normally refer to mature within 3 months from the date of
acquisition); highly liquid investment that is readily convertible to known amounts of cash and are
subject to an insignificant risk of changes in value.5. Foreign currency translation
The Company accounts for foreign currency transactions using the exchange rate which is determined
in a systematic and reasonable way and is approximate to the spot exchange rate ruling at the
transaction date (opening exchange rate).
(1) Foreign exchange difference
On balance sheet date, the Company accounts for monetary and non-monetary items denominated in
foreign currencies as follows: a) monetary items denominated in foreign currencies are translated at the
foreign exchange rates ruling at the balance sheet date. Foreign exchange gains and losses arising from
the difference between the balance sheet date exchange rate and the exchange rate ruling at the time of
initial recognition or the exchange rate ruling at the last balance sheet date are recognized in income
statement; b) Non-monetary items that are measured in terms of historical cost in a foreign currency are
translated using the foreign exchange rates ruling at the transaction dates. Non-monetary items
denominated in foreign currencies that are stated at fair value are translated using the foreign exchange
rates ruling at the dates the fair value was determined, the difference between the amount of functional
currency after translation and the original amount of functional currency is treated as part of change in
fair value (including change in exchange rate) and recognized in income statement. During the
capitalization period, exchange differences arising from foreign currency borrowings are capitalized as
part of the cost of the capitalized assets.
(2) Translation of foreign currency financial statements
The Company translates the financial statements of its foreign operation in accordance with the
following provisions: a) the asset and liability items in the balance sheets shall be translated at a spot
exchange rate ruling at the balance sheet date. Among the owner's equity items, except the ones as
"retained earnings", others shall be translated at the spot exchange rate ruling at the time when they
occurred; b) The income and expense items in the income statements shall be translated at an exchange
rate which is determined in a systematic and reasonable way and is approximate to the spot exchange
rate ruling at the transaction date. The foreign exchange difference arisen from the translation of
foreign currency financial statements shall be presented separately under the owner's equity in the
balance sheet. The translation of comparative financial statements shall be subject to the aforesaid
provisions.
6. Recognition and measurement of financial instruments
(1) Recognition of financial instruments
When the Company becomes a party to a financial instrument contract, it shall recognize a financial
asset or financial liability.
(2) Classification and measurement of financial assets
1) The Company classifies the financial assets hold into the following four categories: a) the
financial assets at fair value through profit or loss; b) investment held to maturity; c) loans andreceivables and d) available-for-sale financial assets.
2) Upon initial recognition, financial assets are measured at fair value. For the financial assets at fair
value through profit or loss, the transaction expenses thereof shall be directly recognized in profit or
loss; for other categories of financial assets, the transaction expenses thereof shall be included in the
initially recognized amount.
3) Subsequent Measurement of Financial Assets
A. Financial assets at fair value through profit or loss, including trading financial assets and the
financial asset that upon initial recognition are designated by the Company as at fair value through
profit or loss, are measured at fair value after initial recognition. Gains or losses arising from changes
in the fair value of financial assets at fair value through profit or loss, including held for trading
financial assets are recognized in profit or loss during current period.
B. Held to maturity investment are measured at amortised cost using the effective interest method
after initial recognition, gains or losses arising from derecognition, impairment and amortisation are
recognized in profit or loss during current period.
C. Loans and receivables are measured at amortised cost using the effective interest method after
initial recognition, gains or losses arising from derecognition, impairment and amortisation are
recognized in profit or loss during current period.
D. Available-for-sale financial assets are measured at fair value after initial recognition. A gain or loss
on an available-for-sale financial asset shall be recognized directly in Capital surplus until the financial
asset is impaired or derecognized, at which time the cumulative gain or loss previously recognized in
equity shall be recognized in profit or loss. However, interest calculated using the effective interest
method is recognized in profit or loss. Dividends on an available-for-sale equity instrument are
recognized in profit or loss when the entity's right to receive payment is established.
4) Impairment of financial assets
A. The Company assesses the carrying amount of the financial assets except the financial asset at fair
value through profit or loss at each balance sheet date, if there is any objective evidence that a financial
asset or group of financial assets is impaired, the Company shall recognize impairment loss.
B. Objective evidence that a financial asset or group of assets is impaired includes the following
event:
a) significant financial difficulty of the issuer or obligor;
b) a breach of contract, such as a default or delinquency in interest or principal payments;
c) the lender, for economic or legal reasons relating to the borrower's financial difficulty, granting to
the borrower a concession that the lender would not otherwise consider;
d) it becoming probable that the borrower will enter bankruptcy or other financial reorganization;
e) the disappearance of an active market for that financial asset because of financial difficulties of
issuer;
f) observable data indicating that there is a measurable decrease in the estimated future cash flows
from a group of financial assets since the initial recognition of those assets, although the decreasecannot yet be identified with the individual financial assets in the group, including: (i) adverse changes
in the payment status of borrowers in the group or (ii) an increase in the unemployment rate in the
geographical area of the borrowers, a decrease in property prices for mortgages in the relevant area, or
adverse changes in industry conditions that affect the borrowers.
g) significant changes with an adverse effect that have taken place in the technological, market,
economic or legal environment in which the borrower operates, and indicates that the cost of the
investment in the equity instrument may not be recovered;
h) a significant or non-temporary decrease in fair value of equity instrument investment;
i) Other objective evidences showing the impairment of the financial assets.
C. Measurement of impairment loss of financial assets
a) investment held to maturity and loans and receivables
If there is objective evidence that an impairment loss on loans and receivables or investment held to
maturity carried at amortised cost has been incurred, the amount of the loss is measured as the
difference between the financial asset's carrying amount and the present value of estimated future cash
flows. The amount of the loss shall be recognized in profit or loss.
The Company assesses whether objective evidence of impairment exists individually for financial
assets that are individually significant. For financial assets that are not individually significant, they
shall be individually assessed or be included in a group of financial assets with similar credit risk
characteristics for impairment assessment. If the Company determines that no objective evidence of
impairment exists for an individually assessed financial asset, whether significant or not, it includes the
asset in a group of financial assets with similar credit risk characteristics and collectively assesses them
for impairment. Assets that are individually assessed for impairment and for which an impairment loss
is or continues to be recognized are not included in a collective assessment of impairment.
The Company assesses receivables for impairment and provides bad debt provisions at the balance
sheet date. The Company assesses whether objective evidence of impairment exists individually for
receivables that are individually significant, or for receivables that are not individually significant. If
there is objective evidence showing that the receivable is impaired, an impairment loss measured as the
difference between the financial asset's carrying amount and the present value of estimated future cash
flows shall be recognized and a bad debt provision shall be provided.
If, in a subsequent period, there is any objective evidence indicates that an impairment loss recognized
in prior periods for a financial assets carried at amortized cost may no longer exist or may have
decreased, and the decrease can be related objectively to an event occurring after the impairment was
recognized, the previously recognized impairment loss shall be reversed. The amount of the reversal
shall be recognized in profit or loss.
b) available-for-sale financial assets
When a non-temporary decline in the fair value of an available-for-sale financial asset occurs, the
cumulative loss arising from decrease in fair value of the financial asset that had been recognizeddirectly in Capital surplus shall be removed from equity and recognized in profit or loss even though
the financial asset has not been derecognized.
Where an available-for-sale equity instrument investment for which there is no quoted price in the
active market and whose fair value cannot be reliably measured, or a derivative financial asset which is
connected with the equity instrument and which must be settled by delivering the equity instrument,
suffers from any impairment, the difference between the carrying amount of the equity instrument
investment or the derivative financial asset and the present value of estimated future cash flow
discounted at the current market rate of return for a similar financial asset shall be recognized as
impairment loss, with the amount of the impairment loss recognized in profit or loss.
If, in a subsequent period, there is any objective evidence indicates that an impairment loss recognized
in prior periods for a debt instrument classified as available for sale may no longer exist or may have
decreased, and the decrease can be related objectively to an event occurring after the impairment was
recognized, the previously recognized impairment loss shall be reversed. The amount of the reversal
shall be recognized in profit or loss.
Impairment losses for an investment in an equity instrument classified as available for sale shall not be
reversed through profit or loss. However, impairment loss of an equity instrument investment for which
there is no quoted price in the active market and whose fair value cannot be reliably measured, or a
derivative financial asset which is connected with the said equity instrument and which shall be settled
by delivering the said equity instrument, cannot be reversed.
(3) Classification and measure of financial liabilities
1) The Company classifies financial liabilities hold as financial liabilities at fair value through profit
or loss and other financial liabilities.
2) Upon initial recognition, financial liabilities are measured at fair value. For the financial liabilities
at fair value through profit or loss, the transaction expenses thereof shall be directly recognized in
profit or loss; for other financial liabilities, the transaction expenses thereof shall be included in the
initially recognized amount.
3) Subsequent measurement of financial liabilities
A. Financial liabilities at fair value through profit or loss, including held for trading financial
liabilities and the financial liabilities that upon initial recognition are designated by the Company as at
fair value through profit or loss, are measured at fair value after initial recognition. Gains or losses
arising from changes in the fair value of financial liabilities are recognized in profit or loss.
B. Other financial liabilities are measured at amortised cost using the effective interest method after
initial recognition.
(4) Fair Value Measurement Considerations
1) Where an active market for a financial instrument exists, the published price quotation in the
active market is the fair value of said financial instrument.
2) Where an active market for a financial instrument does not exist, the Company establishes fair
value by using a valuation technique.7. Recognition and measurement of financial assets transfer
(1) The Company derecognizes financial assets when the Company transfers substantially all the risks
and rewards of ownership of the financial assets.
If the transfer of a financial asset in its entirety qualifies for derecognition, difference between the
follows is recognized in profit or loss during the current period:
1) The carrying amount of the financial asset transferred and
2) The sum of (a) the consideration received from the transfer and (b) any cumulative fair value gain
or loss that had been recognized directly in owner’s equity (in the event that the financial asset
involved in the transfer is available for sale financial asset).
If the transferred asset is part of a larger financial asset and the part transferred qualifies for
derecognition, the previous carrying amount of the larger financial asset shall be allocated between the
part that continues to be recognized and the part that is derecognized, based on the relative fair values
of those parts on the date of the transfer. Difference between the follows is recognized in profit or loss
during the current period:
(a) The carrying amount allocated to the part derecognized and
(b) The sum of (i) the consideration received for the part derecognized and (ii) any cumulative fair
value gain or loss allocated to the part derecognized that had been recognized directly in owner’s equity
(in the event that the financial asset involved in the transfer is available for sale financial asset).
A cumulative fair value gain or loss allocated to the part derecognized that had been recognized directly
in owner’s equity shall be recognized by allocating the cumulative fair value gain or loss between the
part derecognized and the part continues to be recognized based on the relative fair values of those
parts.
(2) If a transfer does not qualify for derecognition, the Company shall continue to recognize the
transferred asset in its entirety and shall recognize a financial liability for the consideration received.
To a financial asset transfer under continuing involvement, the Company recognizes a financial asset
and an associated financial liability to the extent of the financial asset transfer under continuing
involvement. The transferred financial asset and the associated financial liability are measured on a
basis that reflects the rights and obligations that the Company has retained.
8. Classification and measurement of inventories
(1) Inventories of the Company include raw materials, finished goods, low-value consumption goods,
land use right held for real estate development, properties under development, completed properties for
sale, properties for rent and owner-occupied properties.
(2) Recognition of inventories:
The Company recognizes inventories when the following conditions are satisfied:
1) It is probable that future economic benefits associated with the inventories will flow to theCompany entity; and
2) The cost of the inventories can be measured reliably.
(3) Measurement of inventories: property inventories are measured at actual cost incurred, comprising
the borrowing cost designated for real estate development before completion of developing properties.
Completed saleable property inventories are measured using average unit area cost method. Other kinds
of inventories are measured at actual cost incurred, and when the inventories are transferred out or
issued for use, cost of the inventories is determined using weighted average cost method.
(4) The Company adopts equal-split amortization method for low-value consumption goods.
(5) Inventories shall be measured at the lower of cost and net realisable value at the balance sheet date.
Where the net realizable value is lower than the cost, the difference shall be recognized as provision for
impairment of inventories and charged to profit or loss.
1) Estimation of net realizable value
Estimates of net realisable value are based on the most reliable evidence available at the time the
estimates are made, of the amount the inventories are expected to realize. These estimates take into
consideration the purpose for which the inventory is held and the influence of post balance sheet
events.
Materials and other supplies held for use in the production are measured at cost if the net realizable
value of the finished goods in which they will be incorporated is higher than their cost. However, when
a decline in the price of materials indicates that the cost of the finished products will exceed their net
realisable value, the materials are measured at net realisable value.
The net realisable value of inventories held to satisfy sales or service contracts is generally based on the
contract price.
If the quantity specified in sales contracts is less than the inventory quantities held by the Company, the
net realisable value of the excess shall be based on general selling prices.
2) Provision for impairment of inventories shall be determined on an item-by-item basis. For large
quantity and low value items of inventories, provision may be made based on classes of inventories.
(6) The Company adopts perpetual inventory system for its inventory taking.
9. Long-term equity investment
(1) Initial measurement
The Company initially measures long-term equity investments under two conditions:
1) For long-term equity investment arising from business combination, the initial cost is recognized
under the following principles.
A. If the business combination is under the common control and the acquirer obtains long-term
equity investment in the consideration of cash, non-monetary asset exchange or bearing acquiree’s
liabilities, the initial cost is the carrying amount of the proportion of the acquiree’s owner’s equity at
the acquisition date. The difference between cash paid, the carrying amount of the non-monetary asset
exchanged and the acquiree’s liabilities beard and the initial cost of the long-term equity investmentshould be adjusted to capital surplus. If the capital surplus is not sufficient for adjustment, retained
earning is adjusted respectively. The business combination costs that are directly attributable to the
combination, such as audit fees, valuation fees, legal service fees and so on are recognized in profit or
loss during the current period when they occurred.
If the acquirer issuing equity securities as consideration, the initial cost is the carrying amount of the
proportion of the acquiree’s owner’s equity at the acquisition date. Amount of share capital equal to the
par value of the shares issued. The difference between initial cost of the long-term equity investment
and the par value of shares issued is adjusted to capital surplus. If the capital surplus is not sufficient
for adjustment, retained earning is adjusted respectively. The costs of issuing equity securities occurred
in business combination such as charges of security issuing and commissions are deducted from the
premium of equity securities. If the premium is not sufficient for deducting, retained earning is adjusted
respectively.
B. If the business combination is not under the common control, the acquirer recognizes the initial
cost of combination under the following principles.
a) When business combination is achieved through a single exchange transaction, the cost of a
business combination is the aggregate of the fair values, at the date of exchange, of assets given,
liabilities incurred or assumed, and equity securities issued by the acquirer, in exchange for control of
the acquiree;
b) For the business combination involved more than one exchange transaction, the cost of the
combination is the aggregate cost of the individual transactions;
c) The costs directly attributed to business combination are included in the cost of combination;
d) Where a business combination contract or agreement provides for a future event which may adjust
the cost of combination, the Company shall include the amount of the adjustment in the cost of the
combination at the acquisition date if the future event leading to the adjustment is probable and the
amount of the adjustment can be measured reliably.
2) For long-term equity investment obtained in any method other than business combination, the
initial cost is recognized under the following principles.
A. If the long-term equity investment is acquired in cash consideration, the initial cost is the actual
payment which includes direct expenses paid to acquire the long-term equity investment, taxes and
other necessary expense.
B. If the long-term equity investment is acquired by issuing equity securities, the initial cost is the
fair value of the equity securities issued. However, cash dividends or profits that are declared but
unpaid shall not be included in the initial cost. Direct costs attributed to issue equity securities such as
handling charges and commissions paid to securities underwriting agencies are deducted from premium
of equity securities. If the premium is not sufficient for deduction, reserved fund and retained earnings
is adjusted respectively.
C. For the long-term equity investment invested by investors, the initial cost is the agreed valueprescribed in the investment contract or agreement unless the agreed value is not fair.
D. For the long-term equity investment acquired through non-monetary asset exchange, the initial
cost is recognized according to “Accounting Standards for Business Enterprises No. 7-Non-monetary
transactions”.
E. For the long-term equity investment acquired through debt restructuring, the initial cost is
recognized according to “Accounting Standards for Business Enterprises No. 12-Debt restructuring”.
3) If there are cash dividends or profits that are declared but unpaid included in the consideration
paid, the cash dividends or profits declared but unpaid shall be recognized as receivables separately
rather than as part of initial cost of long-term equity instruments no matter through which method the
long-term equity investment is acquired.
(2) Subsequent measurement
The Company adopts either cost method or equity method for the long-term equity investment hold
according to the extent of influence, existence of active market and availability of fair value. The equity
method is used when the Company has joint control or significant influence over the investee enterprise.
The cost method is used when the Company has the control or does not have joint control or significant
influence over the investee enterprise and there is no quote price in active market or there is no reliable
fair value.
1) For the long-term equity investment under cost method, declared cash dividends or profits are
recognized as investment income for the current period when it incurred. The amount of investment
income recognized by the Company is limited to the amount distributed out of the accumulated net
profits of the investee enterprise that arose after the investment was made. The amount of profits or
cash dividends declared by the investee enterprise in excess of the above distributed amount is treated
as return of initial cost of investment.
2) For long-term equity investment under equity method, the Company adjusts carrying amount of
the long-term equity investment and recognizes investment income according to the proportion of net
profit or loss realized by the investee enterprise after acquisition. The Company reduces carrying
amount of the long-term equity investment by the proportion of declared cash dividend or profit which
shall be distributed to the Company.
For long-term equity investment under equity method, the Company recognizes net losses incurred by
the investee enterprise to the extent that the carrying amount of the long-term equity investment and
other long-term equities that are in substance treated as net investment in the investee enterprise is
reduced to zero except there is further obligation of the excess losses. If the investee enterprise makes
net profits in subsequent periods, the Company shall continue to recognize investment income after
using its share of net profits of the investee enterprise to cover its unrecognized losses.
3) The Company adopts the same manner of financial instrument for the impairment of long-term
equity investment which is measured under cost method and there is no quote price in active market or
there is no reliable fair value. Impairment of long-term equity investments other than above refers to
accounting policy “Impairment of assets” of the Company.4) On disposal of a long-term equity investment, the difference between the carrying amount of the
investment and the sale proceeds actually received is recognized as an investment gain or loss for the
current period. Where the equity method is adopted, when a long-term equity investment is disposed,
the amount of change in owner’s equity of the investee enterprise other than net profit or loss which is
previously recorded in owner’s equity of the Company shall be transferred to profit or loss for the
current period according to corresponding proportion.
(3) The basis for determination of joint control or significant influence over investee enterprise
A joint control over investee enterprise is established when the investment of the Company satisfied the
following conditions:
1) Any joint venture party cannot control the operating activities of joint venture individually.
2) Decisions regarding the basic operating activities of joint venture shall be agreed by all joint
venture parties.
3) All joint venture parties may appoint one of them to manage the operating activities of joint
venture, and the management over the financial and operating policies exercised by the joint venture
party appointed shall be limited to the extent agreed by all joint venture parties.
A significant influence over investee enterprise is established when the investment of the Company
satisfied the following conditions:
1) The Company has representation on the board of directors or equivalent governing body of the
investee.
2) The Company participates in policy-making processes, including participation in decisions about
dividends or other distributions.
3) Material transactions occur between the Company and the investee enterprise.
4) The Company dispatches managerial personnel to the investee enterprise.
5) The Company provides essential technical information to the investee enterprise.
If the Company holds, directly or indirectly (e.g. through subsidiaries), 20 percent or more but less than
50 percent of the voting power of the investee enterprise, it is presumed that the Company has
significant influence over the investee enterprise.
10. Recognition and measurement of investment properties
(1) Investment properties of the Company are properties held to earn rentals or for capital
appreciation or both, mainly comprising:
1) Land use right which has already been rented;
2) Land use right which is held for transfer out after appreciation; and
3) Property which has already been rented.
(2) Investment property shall be recognized as an asset when the following conditions are satisfied:
1) It is probable that the future economic benefits that are associated with the investment property
will flow to the Company; and
2) The cost of the investment property can be measured reliably.(3) Initial measurement
An investment property is measured initially at its cost.
1) The cost of a purchased investment property comprises its purchase price, related tax expenses
and any directly attributable expenditure.
2) The cost of a self-constructed investment property comprises all necessary construction
expenditures incurred before the property is ready for its intended use.
3) The cost of a property acquired by other means shall be recognized according to relevant
accounting standards.
(4) Subsequent measurement
After initial recognition, the Company adopts the cost model to measure its investment properties.
The Company amortizes or depreciates its investment properties measured using cost model in the
same way as fixed assets and intangible assets.
The Company values the investment property measured using cost model at the lower of its cost and its
recoverable amount at the end of the period. Where the cost exceeds the recoverable amount, the
difference shall be recognized as impairment loss. Once a provision for impairment loss is made, it
cannot be reversed.
11. Recognition and measurement of fixed assets
Fixed assets are tangible assets that: 1) are held for use in the production or supply of goods or services,
for rental to others, or for administrative purposes; and 2) have useful life more than one year.
(1) A fixed asset shall be initially recognized at cost when the following condition are satisfied:
1) It is probable that future economic benefits associated with the assets will flow to the Company;
and
2) The cost of the assets can be measured reliably.
(2) Depreciation
Subsequent expenditure relating to a fixed asset shall be added to the carrying amount of the asset
when the expenditure qualifies for capitalization. Subsequent expenditure that does not qualify for
capitalization shall be recognized as an expense for the current period.
The depreciation method adopted by the Company is straight-line method.
The estimated useful lives, residual value and annual depreciation rate of fixed assets are shown as
follows:
The categories
Estimated Useful
Lives (years) Residual value (%)
Annual Depreciation
Rate (%)
Property and buildings 20-25 5-10 3.8-4.5
Machineries 10 5 9.5
Vehicles 5 5 19
Electronic and other
equipments
5 5 19Decoration 5 20
The Company reviews the useful life, estimated residual value and depreciation method of a fixed asset
at the end of each financial year. If expectations are significantly different from previous estimates, the
useful life shall be revised accordingly. If expectations are significantly different from previous
estimates, the estimated residual value also shall be revised accordingly. If there has been a significant
change in the expected realization pattern of economic benefits from those assets, the depreciation
method shall be changed accordingly. The changes in useful life, estimated residual value and
depreciation method shall be treated as change in accounting estimates.
(3) Fixed assets acquired under finance lease
The Company identifies a lease of asset as finance lease when substantially all the risks and rewards
incidental to legal ownership of the asset are transferred.
A fixed asset acquired under finance lease shall be valued at the lower of the fair value of the leased
asset and the present value of the minimum lease payments at the inception of lease.
The depreciation method of fixed assets acquired under finance lease is consistent with that for
depreciable assets owned by the Company. If the Company can reasonably confirm that it will obtain
the ownership of leased asset at the end of lease term, the leased asset shall be depreciated during the
useful life of the leased asset. If the Company cannot reasonably confirm that it will obtain the
ownership of leased asset at the end of lease term, the leased asset shall be depreciated during shorter
of the useful life of the leased asset and the lease term.
(4) Impairment of fixed asset refers to accounting policy “Impairment of assets” of the Company.
12. Recognition and measurement of intangible assets
Intangible assets are identifiable non-monetary asset that are owned or controlled by the Company and
are without physical substance.
(1) Recognition of intangible assets
The Company recognizes an intangible asset when that intangible asset fulfills both of the following
conditions:
1) It is probable that the economic benefits associated with that asset will flow to the Company; and
2) The cost of that asset can be measured reliably.
Expenditures incurred during the research phase of an internal project shall be recognized as expenses
in the period in which they are incurred. Expenditures incurred during the development phase of an
internal project shall be recognized as an intangible asset if, and only if, the Company can demonstrate
all of the following:
1) The technical feasibility of completing the intangible asset so that it will be available for use or
sale;
2) Its intention to complete the intangible asset and use or sell it;
3) The method that the intangible asset will generate probable future economic benefits. Among
other things, the Company can demonstrate 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 to use or sell the intangible asset; and
5) Its ability to measure reliably the expenditure attributable to the intangible asset during its
development
(2) Measurement of intangible assets
1) An intangible asset is measured initially at its cost.
2) Subsequent measurement of intangible assets
A. For an intangible asset with finite useful life, the Company estimates its useful life at the time of
acquisition and amortizes it during its useful life in a reasonable and systematic way. The amount of
amortization is allocated to relevant costs and expenses according to the nature of beneficial items. The
Company does not amortize intangible asset with infinite useful life.
B. Impairment of intangible assets refers to accounting policy “Impairment of assets” of the
Company.
13. Recognition and measurement of long-term deferred expenses
The Company recognizes all expenses which have occurred during the period but shall be amortized
beyond one year, such as improvement expenditures of operating leased fixed assets, as long-term
deferred expenses. The Company amortizes long-term deferred expenses using straight-line method
according to relevant beneficial periods.
14. Impairment of assets
In assessing whether there is any indication that an asset may be impaired, the Company shall consider,
as a minimum, the following indications:
(1) During the period, an asset's market value has declined significantly more than it would be
expected as a result of the passage of time or normal use;
(2) Significant changes with an adverse effect on the Company have taken place during the period, or
will take place in the near future, in the technological, market, economic or legal environment in which
the Company operates or in the market to which an asset is dedicated;
(3) Market interest rates or other market rates of return on investments have increased during the
period, and those increases are likely to affect the discount rate used in calculating an asset's value in
use and decrease the asset's recoverable amount materially;
(4) Evidence is available of obsolescence or physical damage of an asset;
(5) The asset becomes idle, or the Company plans to discontinue or to dispose of an asset before the
previously expected date;
(6) Evidence is available from internal reporting that indicates that the economic performance of an
asset is, or will be, worse than expected, for example, the net cash flow generated from assets or the
operating profit (or loss) realized by assets is lower (higher) than the excepted amount, etc.; and
(7) Other evidence indicates that assets may be impaired.
The Company assesses long-term equity investment, fixed assets, construction materials, constructionsin progress and intangible assets (except for those with uncertain useful life) that apply Accounting
Standards for Business Enterprises No. 8 - Impairment of assets at the balance sheet date. If there is
any indication that an asset may be impaired, the Company shall assess the asset for impairment and
estimate the recoverable amount of the impaired asset.
Recoverable amount is measured as the higher of an asset's fair value less costs to sell and the present
value of estimated future cash flows from continuing use of the asset. If carrying amount of an asset is
higher than its recoverable amount, the carrying amount of this asset shall be written down to its
recoverable amount with the difference recognized as impairment loss and charged to profit or loss
accordingly. Simultaneously a provision for impairment loss shall be made.
There is any indication that an asset may be impaired, the Company usually estimates its recoverable
amount on an individual item basis. However if it’s not possible to estimate recoverable amount of the
individual asset, the Company shall determine the recoverable amount of the cash-generating unit to
which the asset belongs.
An asset's cash-generating unit is the smallest group of assets that includes the asset and generates cash
inflows that are largely independent of the cash inflows from other assets or groups of assets.
Identification of cash-generating unit is based on whether the cash inflows generated by the
cash-generating unit are largely independent of the cash inflows from other assets or groups of assets.
The Company assesses goodwill acquired in a business combination and intangible assets with
uncertain useful life for impairment each year no matter whether indication that an asset may be
impaired exists or not. Impairment assessment of goodwill is carried together with the impairment
assessment of related cash-generating unit or group of cash-generating units.
Once impairment loss is recognized, it cannot be reversed in subsequent financial period.
15. Recognition and measurement of borrowing cost
(1) Capitalization and capitalization period of borrowing costs
The costs of borrowings designated for acquisition or construction of qualifying assets shall be
capitalized as part of the cost of the assets. Capitalization of borrowing costs shall start when a) the
capital expenditures have incurred, b) the borrowing costs have incurred and c) the acquisition and
construction activities that are necessary to bring the asset to its expected usable condition have
commenced. Other borrowing costs that do not qualify for capitalization shall be expensed off during
current period.
Capitalization of borrowing costs shall be suspended during periods in which the acquisition or
construction is interrupted abnormally, and the interruption period is three months or longer. These
borrowing costs shall be recognized directly in profit or loss during the current period till the
acquisition or construction recommences. However, capitalization of borrowing costs during the
suspended periods shall continue when the interruption is a necessary part of the process of bringing
the asset to working condition for its intended use.
Capitalization of borrowing costs ceases when the qualifying asset being acquired or constructed issubstantially ready for its intended use. Subsequent borrowing costs shall be expensed off during the
period in which they are incurred.
(2) Calculation method of capitalization for borrowing costs
To the extent that funds are borrowed specifically for the purpose of acquiring or constructing a
qualifying asset, the amount of borrowing costs eligible for capitalization on that asset is determined as
the actual borrowing costs incurred on that borrowing during the period less any investment income on
the temporary investment of the borrowing.
To the extent that funds are borrowed generally and used for the purpose of acquiring or constructing a
qualifying asset, the amount of borrowing costs eligible for capitalization shall be determined by
applying a capitalization rate to the weighted average of excess of accumulated expenditures on
qualifying asset over that on specific purpose borrowing. The capitalization rate is the weighted
average of the borrowing costs applicable to the borrowings of the Company that are outstanding
during the period, other than borrowings made specifically for the purpose of acquiring or constructing
a qualifying asset.
16. Share-based payment
Recognition and measurement of share-based payment are based on true, complete and valid
share-based payment agreement. Share-based payment transaction comprises equity-settled share-based
payment transactions and cash-settled share-based payment transactions.
(1) Equity-settled share-based payment transactions
Equity-settled share-based payment transactions in which the Company receives employee’s services
as consideration for equity instruments of the Company are measured as fair value of the equity
instrument granted to the employees. As to an equity-settled share-based payment in return for services
of employees, if the right may be exercised immediately after the grant, the fair value of the equity
instruments shall, on the date of the grant, be included in the relevant cost or expense and the capital
surplus shall be increased accordingly. As to a equity-settled share-based payment in return for
employee services, if the right cannot be exercised until the vesting period comes to an end or until the
prescribed performance conditions are met, then on each balance sheet date within the vesting period,
the services obtained during the current period shall, based on the best estimate of the number of vested
equity instruments, be included in the relevant costs or expenses and capital surplus at the fair value of
the equity instruments on the date of the grant.
(2) Cash-settled share-based payment transactions
Cash-settled share-based payment is measured in accordance with the fair value of liability undertaken
by the Company that is calculated based on the shares or other equity instruments. As to a cash-settled
share-based payment, if the right may be exercised immediately after the grant, the fair value of the
liability undertaken by the Company, on the date of the grant, is included in the relevant costs or
expenses, and the liabilities shall be increased accordingly. As to a cash-settled share-based payment, if
the right may not be exercised until the vesting period comes to an end or until the specifiedperformance conditions are met, on each balance sheet date within the vesting period, the services
obtained during the current period shall, based on the best estimate of the information about the
exercisable right, be included in the relevant costs or expenses and the corresponding liabilities at the
fair value of the liability undertaken by the enterprise.
17. Revenue recognition
(1) Revenue from the sale of goods is recognized when all of the following conditions have been
satisfied:
1) The Company has transferred to the buyer the significant risks and rewards of ownership of the
goods;
2) The Company retains neither continuing managerial involvement to the degree usually associated
with ownership nor effective control over the goods sold;
3) The economic benefits associated with the transaction will flow to the Company; and
4) The relevant amount of revenue and costs can be measured reliably.
(2) Revenue from the sale of properties is recognized upon a) final acceptance of the construction of
property is completed and the property is transferred to buyer, b) buyer receives and accepts the
settlement billing and c) the Company receives all considerations of sale of property (down payment
and mortgage received from bank for property purchasing by installments) and the conditions for
obtaining certificate of title to house property are satisfied.
(3) Revenue from leasing of property is recognized when a) the economic benefits associated with
leasing of property will flow to the Company and b) the amount of revenue can be measured reliably. If
lessor provides rent-free period, lessor shall allocate total rental by straight-line method or other
reasonable method during entire lease term without deducting rent-free period. Lessor shall recognize
rental income during rent-free period.
(4) Revenue from rendering of services (excluding long-term contract) is by reference to the
percentage of completion of the service at closing date when the outcome of transaction can be reliably
estimated. The outcome of transaction can be reliably estimated when a) the total revenue and cost can
be reliably measured, b) the percentage of completion can be determined reliably and c) the economic
benefit pertaining to the service will flow to the Company. If the outcome of transaction cannot be
reliably estimated, the Company shall recognize revenue to the extent of costs incurred that are
expected to be recoverable and charge an equivalent amount of cost to profit or loss.
(5) Revenue arising from the Company’s assets used by others is recognized when (a) it is probable
that the economic benefits associated with the transaction will flow to the Company and (b) the amount
of the revenue can be measured reliably. Interest revenue should be measured based on the length of
time for which the Company's cash is used by others and the applicable interest rate. Royalty revenue
should be measured in accordance with the period and method of charging as stipulated in the relevant
contract or agreement.
(6) Recognition of construction contract revenue1) When the outcome of a construction contract can be reliably estimated, construction contract
revenue is recognized by reference to the percentage of completion of the contract activity at closing
date. The outcome of a construction contract can be reliably estimated when a) total contract revenue
and contract costs incurred can be measured reliably, b) both the contract costs to complete the contract
and the percentage of completion can be measured reliably and c) it is probable that the economic
benefits associated with the contract will flow to the Company. The percentage of completion of a
contract is determined as the proportion that actual contract costs incurred to date bears to the estimated
total contract costs.
2) When the outcome of a construction contract cannot be estimated reliably, contract revenue should
be recognized to the extent of contract costs that can be recovered and contract costs should be
recognized as expense in the period in which they are incurred.
3) If total estimated contract costs will exceed total contract revenue, the estimated loss should be
recognized immediately as an expense during the current period.
18. Income tax
The Company adopts the balance sheet liability method for income tax expenses.
(1) Deferred tax asset
1) Where there are deductible temporary differences between the carrying amount of assets or
liabilities in the balance sheet and their tax bases, a deferred tax asset shall be recognized for all those
deductible temporary differences to the extent that it is probable that taxable profit will be available
against which the deductible temporary difference can be utilized. Deferred tax assets arising from
deductible temporary differences should be measured at the tax rates that are expected to apply to the
period when the asset is realized or the liability is settled.
2) At the balance sheet date, where there is strong evidence showing that sufficient taxable profit will
be available against which the deductible temporary difference can be utilized, the deferred tax asset
unrecognized in prior period shall be recognized.
3) The Company assesses the carrying amount of deferred tax asset at the balance sheet date. If it’s
probable that sufficient taxable profit will not be available against which the deductible temporary
difference can be utilized, the Company shall write down the carrying amount of deferred tax asset, or
reverse the amount written down later when it’s probable that sufficient taxable profit will be available.
(2) Deferred tax liability
A deferred tax liability shall be recognized for all taxable temporary differences, which are differences
between the carrying amount of an asset or liability in the balance sheet and its tax base, and measured
at the tax rates that are expected to apply to the period when the asset is realized or the liability is
settled.
19. Basis of consolidation
(1) Scope of consolidationThe scope of consolidated financial statements of the Company is identified based on the concept of
control.
When the parent owns, directly or indirectly through subsidiaries, more than half of the voting power
of investee company, the investee company is regarding as subsidiary and included in consolidated
financial statements. If the parent owns half or less of the voting power of an entity when there is any
following condition satisfied, the investee company is regarding as subsidiary and included in
consolidated financial statements.
1) Own over more than half of the voting rights by virtue of an agreement with other investors;
2) Power to govern the financial and operating policies of the entity under a statute or an agreement;
3) Power to appoint or remove the majority of the members of the board of directors or equivalent
governing body;
4) Power to cast the majority of voting right at meetings of the board of directors or equivalent
governing body of investee company.
If there is evidence suggesting that no control over investee company exists, the investee company
shall not be included in consolidated financial statements.
(2) Principle of consolidation
The consolidated financial statements are based on the financial statements of individual subsidiaries
which are included in the consolidation scope and prepared after adjustment of long-term equity
investment in subsidiaries under equity method and elimination effects of intragroup transaction.
(3) Minority interests
Minority interest in the consolidated balance sheet is that portion of the net asset of a subsidiary
attributable to equity interests that are not owned, directly or indirectly through subsidiaries, by the
parent.
Minority interest is shown separately below net profit in the consolidated income statement, which is
that portion of the profit or loss of a subsidiary attributable to equity interests that are not owned,
directly or indirectly through subsidiaries, by the parent.
(4) Excess losses
Losses applicable to the minority in a consolidated subsidiary may exceed the minority interest in the
subsidiary's equity. The excess, and any further losses applicable to the minority, are allocated against
the majority interest except to the extent that the minority has a binding obligation and is able to make
an additional investment to cover the losses. If the subsidiary subsequently reports profits, such profits
are allocated to the majority interest until the minority's share of losses previously absorbed by the
majority has been recovered.
(5) Consolidation procedures for acquisition or disposal of subsidiaries during current period
For any subsidiary acquired by the Company during the reporting period through business combination
under common control, when the consolidated balance sheet for the current period are being prepared,
the amount at the beginning of the period in the consolidated balance sheet is made corresponding
modification. For addition business combination not under common control during the reporting period,the Company makes no adjustment for the amount at the beginning of the period in the consolidated
balance sheet. When disposing subsidiary during the reporting period, the Company makes no
adjustment for the amount at the beginning of the period in the consolidated balance sheet.
For any subsidiary acquired by the Company through business combination under common control,
when the consolidated income statement for the current period are being prepared, revenue, expense
and profit for the period from the beginning of the consolidated period to the year end of the reporting
period are included in the consolidated income statement. For any subsidiary acquired by the Company
through business combination not under common control during the reporting period, revenue, expense
and profit for the period from acquisition date to the year end of the reporting period is included in the
consolidated income statement. When disposing subsidiary during the reporting period, revenue,
expense and profit for the period from the beginning to the disposal date are included in the
consolidated income statement.
For any subsidiary acquired by the Company through business combination under common control,
when the consolidated cash flow statement for the current period are being prepared, cash flow for the
period from the beginning to the end of the reporting period is included in the consolidated cash flow
statement. For any subsidiary acquired by the Company through business combination not under
common control during the reporting period, cashflow for the period from acquisition date to the end of
the reporting period is included in the consolidated cashflow statement. When disposing subsidiary
during the reporting period, cash flow for the period from the beginning to the disposal date is included
in the consolidated cashflow statement.
Note V Changes in accounting policies and estimates, and correction of errors
1. Changes in accounting policies
There is no change in accounting policies during the financial year.
2. Changes in accounting estimates
There is no change in accounting estimate during the financial year.
3. Correction of errors
There is no event which requires errors correction during the financial year.
Note VI Taxation
1. Value Added Tax rate is 13% or 17%, paid by deducting value added input tax.
2. The business tax rate is 3% or 5% of operating revenue.
3. Urban maintenance and construction tax is 1% or 7% of turnover tax payable.
4. Education surtax is 3% of turnover tax payable.
5. Levee fee is 0.01% of operating revenue.
6. Land value appreciation tax is levied in four progressive levels with the tax rate ranging from 30% to
60%.
7. Income tax expense(3) According to Notification of the State Council on Carrying out the Transitional Preferential
Policies concerning Corporate income tax (Guo Fa [2007] No.39), from January 1, 2008, enterprises
which enjoy the preferential policies of low tax rates in the past shall gradually transit to apply the
statutory tax rate within 5 years after the Corporate Income Tax Law of the People's Republic of China
is put into force. Among them, the enterprises which enjoy the corporate income tax rate of 15% shall
be subject to the corporate income tax rate of 18% in 2008, 20% in 2009, 22% in 2010, 24% in 2011
and 25% in 2012. The applicable income tax rate of the Company and the subsidiaries located in
Shenzhen special economic zone is 20%.
(4) Corporate Income Tax Law of the People's Republic of China is put into force from January 1,
2008. According to this tax law, the applicable income tax rate of the subsidiaries located outside
Shenzhen special economic zone is 25%.
Note VII Business combination and consolidated financial statements
1. Subsidiaries
Details of subsidiaries directly or indirectly controlled by the Company as at 30 June 2009 is shown as
below:
Subsidiaries
Business
nature
Registered
capital
(0’000)
Business scope
(1)subsidiaries acquired through
business combination
A. Business combination under
common control
None
B. Business combination without
common control
None
(2)subsidiaries acquired through
methods other than business
combination
Hainan Xinda Development Co., Ltd Real estate
development
2,000 Real estate development, decoration
engineering,; planting; import & export
practice
Shenzhen ITC Food Co., Ltd. Restaurant
operation and
wine
merchandise
200 Retail sales of Chinese meal,
western-style food and wineSubsidiaries
Business
nature
Registered
capital
(0’000)
Business scope
Shenzhen Property and Real Estate
Development Co., Ltd.
Real estate
development
3,095 Land development, real estate
management; construction supervision;
property management
Shenzhen ITC Property
Management Co., Ltd.
Property
management
2,000 Property rent and management
Shenzhen ITC Vehicles Industry
Co., Ltd.
Transportation
and vehicles
rental service
2,985 Motor transport and motor rent
Shenzhen Huangcheng Real Estate
Co., Ltd.
Real estate
development
3,000 Development, construction, operation
and management of commercial service
facilities relevant to Huanggang port
Sichuan Tianhe Industry Co., Ltd Trading 800 Wholesale in domestic market
Shenzhen ITC Property
Management Engineering
Equipment Co., Ltd.
Service 120 Domestic commerce; material supply;
maintenance and repair of electric
equipment
Shenzhen Tianque Elevator
Technology Co., Ltd.
Service 500 Maintenance of elevator and air condition
Chongqing Shenzhen ITC Property
Management Co., Ltd.
Property
management
500 Property management and agency
Chongqing Ao’bo Elevator Co., Ltd. Service 200 Installing, reconstructing and repairing
the elevator; sales of elevator and
accessories
Shenzhen ITC Motor Rent Co., Ltd. Service 1,600 Motor transport and motor rent
Shenzhen ITC Petroleum Co., Ltd. Trading 850 Sales of gasoline, diesel oil, lube and coal
oil
Shenzhen ITC Vehicle Industry
Company Vehicle repair shop
Service 150 Motor maintenance; sales of auto parts
and Motorcycle Accessories
Shenzhen Tesu Vehicle Driver
Training Center Co., Ltd.
Service 200 Driver training
Shenzhen Huangcheng Real Estate
Management Co., Ltd.
Property
management
500 Property management; court virescence
and cleansing services
Zhanjiang Shenzhen Real Estate
Development Co., Ltd.
Real estate
development
253 Real estate development and sales of
commodity premises
Shenzhen Property Construction
Supervision Co., Ltd.
Construction
Supervision
300 Supervision of general industrial and
civil construction engineeringSubsidiaries
Business
nature
Registered
capital
(0’000)
Business scope
Shenzhen International Trade Plaza Trading 1,200 Investing in commercial, material and
supplying company
Shenzhen Real Estate Exchange Service 138 Providing property information,
property agency and evaluation
Shum Yip Properties Development
Co., Ltd.
Real estate
development
HKD2,000 Property agency and investment
Wayhang Development Co., Ltd. Real estate
development
HKD0.0002 Property development
Chief Link Properties Co., Ltd. Real estate
development
HKD0.01 Property agency and investment
Syndis Investment Co., Ltd. Real estate
development
HKD0.0004 Property investment
East Land Properties Limited Real estate
development
HKD0.01 Property investment
Shareholding
Subsidiaries
Contribution
(0’000) Direct Indirect
Consolidated
(Y/N)
Hainan Xinda Development Co., Ltd 2,000 100% Y
Shenzhen ITC Food Co., Ltd. 200 80% 20% Y
Shenzhen Property and Real Estate Development Co., Ltd. 3,095 95% 5% Y
Shenzhen ITC Property Management Co., Ltd. 2,000 95% 5% Y
Shenzhen ITC Vehicles Industry Co., Ltd. 2,985 90% 10% Y
Shenzhen Huangcheng Real Estate Co., Ltd. 3,000 95% 5% Y
Sichuan Tianhe Industry Co., Ltd 800 100% Y
Shenzhen ITC Property Management Engineering Equipment
Co., Ltd
120 100% Y
Shenzhen Tianque Elevator Technology Co., Ltd 500 100% Y
Chongqing Shenzhen ITC Property Management Co., Ltd 500 100% Y
Chongqing Ao’bo Elevator Co., Ltd 200 100% Y
Shenzhen ITC Motor Rent Co., Ltd. 1,600 100% Y
Shenzhen ITC Petroleum Co., Ltd. 850 100% N（Note 1）
Shenzhen ITC Vehicle Industry Company Vehicle repair shop 150 100% Y
Shenzhen Huangcheng Real Estate Management Co., Ltd 500 100% Y
Shenzhen Property Construction Supervision Co., Ltd 300 93% 7% Y
Shenzhen Tesu Vehicle Driver Training Center Co., Ltd. 200 100% YShareholding
Subsidiaries
Contribution
(0’000) Direct Indirect
Consolidated
(Y/N)
Zhanjiang Shenzhen Real Estate Development Co., Ltd 253 100% Y
Shenzhen International Trade Plaza 1,200 95% 5% Y
Shenzhen Real Estate Exchange 138 100% Y
Shum Yip Properties Development Co., Ltd. HKD2,000 100% Y
Wayhang Development Limited HKD0.0002 100% Y
Chief Link Properties Limited HKD0.01 70% Y
Syndis Investment Co., Ltd HKD0.0004 70%（Note 2） Y
East Land Properties Limited HKD0.01 100% N（Note 3）
Note 1. In 2008, Shenzhen ITC Vehicles Industry Co., Ltd. and Shenzhen Guanghong investment Co.,
Ltd. signed a gas station operating lease contract, prescribing that Shenzhen Guanghong investment
Co., Ltd. leases and manage the assets such as land of gas station, gas station shed, operating buildings,
accommodations, equipments in gas station and so on, equity and management right of Shenzhen ITC
Petroleum Co., Ltd (which is wholly-owned subsidiary of Shenzhen ITC Vehicles Industry Co., Ltd.).
Since the start of the operating lease, the Company has no control over Shenzhen ITC Petroleum Co.,
Ltd. According to Accounting Standards for Business Enterprises, the balance sheet of this subsidiary
is excluded from consolidation scope from the end of 2008.
Note 2. Syndis Investment Co., Ltd is a wholly-owned subsidiary of Chief Link Properties Limited.
Note 3. On November 22, 2008, a resolution regarding liquidation of East Land Properties Limited
(hereinafter referred to as “East Land Company”) is approved by the ninth session of the sixth
conference of the Company’s board of directors. In November 2008, the Company set up a liquidation
group for East Land Company, the benchmark date of liquidation is November 30, 2008. After the
benchmark date, the liquidation group is in charge of management of East Land Company, East Land
Company may not carry out any operating activities other than liquidation activities. In this case, the
Company no longer controls East Land Company, and its financial statements are no longer based on
the underlying assumption of going concern, therefore East Land Company is excluded from
consolidation scope.
Note 4. There is no difference between the aforesaid proportions of voting rights and shareholding hold
by the Company.
2. Changing of Consolidation Scope
During the reporting period, the consolidation scope remained unchanged.
3. Information of Minority Interest (MI) of subsidiariesName of subsidiary MI
Amount of minority
interest in income
statement deducted
from minority interest
Balance after deduction of losses
of subsidiaries during the period
exceeding the proportion of
minority shareholders from equity
of parent company
Chief Link Properties
Limited
861,751.06
4. Balance that is in essence treated as net investment in insolvent subsidiaries
Name of company Net investment as at June 2009
Shenzhen Property and Real Estate Development Co., Ltd. 211,242,892.15
Shum Yip Properties Development Co., Ltd. 29,031,693.13
Hainan Xinda Development Co., Ltd 5,950,714.65
Shenzhen ITC Food Co., Ltd. 811,080.61
Shenzhen Real Estate Exchange 438,879.62
Note VIII Joint ventures, associates and other invested companies
Up to 30 June 2009, the main joint ventures, associates and other invested companies the Company
directly or indirectly invested are listed as follows:
Name of company Business
nature
Registered
capital
(0’000)
Business scope
Shenzhen ITC Tian’an
Properties Co., Ltd
Hotel
services
USD888 Constructing and managing Tian’an
International Building
Shenzhen ITC Tian’an
Properties Management Co.,
Ltd
Property
managem
ent
300 Property management
Shenzhen Jifa Warehouse Co.,
Ltd
Services 5,415 Warehousing; developing sea-front
industry; road transport; sales of auto
parts
Shenzhen ITC Industrial
Development Co., Ltd
Services HKD3,280 Biquan Restaurant; snooker, bowling,
karaoke; laundry
Anhui Nanpeng Papermaking
Co., Ltd
Industry USD800 Production and sales of copperplate paper,
culture paper, and wrapping paperName of company Business
nature
Registered
capital
(0’000)
Business scope
Shenzhen Wufang Pottery &
Porcelain Industrial Co., Ltd
Industry USD12,500 Production and export of top grade
construction tile, sale of building
materials and architectural ceramic
products
Shenzhen Huajing Glass Bottle
Co., Ltd
Industry 4,800 Producing kinds of glass bottles used in
the wrapping the medicine, beer, food and
drinks or other special glass bottles;
providing economic information and
technical consulting services
Guangzhou Lishifeng Motor
Co., Ltd
Services 2,000 Taxi transportation; domestic commerce
and materials supply (besides the goods
that the government controlled)
Shareholdings
Name of company
Contribution
(0’000) Direct Indirect
Shenzhen ITC Tian’an Properties Co., Ltd 2,318.61 50%
Shenzhen ITC Tian’an Property Management Co., Ltd 150 50%
Shenzhen Jifa Warehouse Co., Ltd 3,064.51 50%
Shenzhen ITC Industrial Development Co., Ltd 2,015.48 38.33%
Anhui Nanpeng Papermaking Co., Ltd 1,382.40 30%
Shenzhen Wufang Pottery & Porcelain Industrial Co., Ltd 1,898.36 26%
Shenzhen Huajing Glass Bottle Co., Ltd 760 15.83%
Guangzhou Lishifeng Motor Co., Ltd 600 30%
Note: there is no difference between the aforesaid proportions of voting rights and shareholding hold
by the Company.Note IX Notes to the main subjects in consolidated financial statements
(Unless otherwise stated, the closing balance and the opening balance refer to the balance at 30 June
2009 and December 31, 2008 respectively. All amounts are presented in RMB.)
1. Cash and cash equivalents
Item Closing balance Opening balance
Cash on hand 325,780.68 340,965.83
Bank deposit 606,950,032.09 265,398,484.68
Other cash and cash
equivalents 7,034,664.51 5,969,277.35
Total 614,310,477.28 271,708,727.86
Note 1: Other cash and cash equivalents refer to the closing balance of securities margin and other
margin.
Note 2: Closing cash and cash equivalents has increased by 126.09% compared with the opening
balance, which was caused by increase of payment for flats on sale and project-financing loan.
Note 3: Among closing bank deposit, RMB 1,022,405.03 is frozen by the Court in the reporting period
due to pending action on “Haiyi” Case, please refer to Note X (2) 1 (1) for details.
Closing balance
Item
Currency Original currency Exchange rate RMB
Cash on hand RMB 283,842.61 1.0000 283,842.61
USD 863.58 6.8346 5,902.20
HKD 39,889.12 0.8819 36,035.87
Subtotal —— —— 325,780.68
Bank deposit RMB 605,800,338.09 1.0000 605,800,338.09
USD 315.12 6.8346 2,153.72
HKD 1,301,767.03 0.8819 1,147,540.28
Subtotal —— —— 606,950,032.09
Other cash and
cash equivalents
RMB
6,975,656.38 1.0000 6,975,656.38
HKD 66,940.59 0.8819 59,008.13
Sub-Total —— —— 7,034,664.51
Total 614,310,477.28
Opening balance
Item
Currency Original currency Exchange rate RMBCash on hand RMB 256,104.11 1.0000 256,104.11
USD 863.58 6.8346 5,902.20
HKD 89,533.42 0.8819 78,959.52
Subtotal —— —— 340,965.83
Bank deposit RMB 264,160,081.58 1.0000 264,160,081.58
USD 368.81 6.8346 2,520.65
HKD 1,401,387.06 0.8819 1,235,882.45
Sub-Total —— —— 265,398,484.68
Other cash and
cash equivalents
RMB
5,869,611.04 1.0000 5,869,611.04
HKD 113,013.16 0.8819 99,666.31
Sub-Total —— —— 5,969,277.35
Total 271,708,727.86
2. Trading financial assets
Item Closing fair value Opening fair value
Held-for-trading equity instrument 4,018,124.69 2,670,729.47
Total 4,018,124.69 2,670,729.47
Note1：The market price at the end of the financial year was determined at the closing price at 30 June
2009 declared by Stock Exchange. There is no significant restriction on realization of trading financial
assets.
Note 2: In such investment, 30,000 circulating shares of ST Sunrise (closing fair value: RMB
153,000.00) is frozen by the Court in the reporting period due to pending action on “Haiyi” Case,
please refer to Note XII 1 (1) for details.
3. Accounts receivables
(1) Aging analysis of accounts receivables is as follows
Closing balance
Aging Amount Proportion Bad debt
provision
Within 1 year(including 1 year) 17,978,948.22 14.35% 1,005,169.13
1-2 years(including 2 years) 626,314.90 0.50% 52,254.63
2-3 years(including 3 years) 484,916.40 0.39% 14,559.84
Over 3 years 106,220,612.95 84.77% 50,092,589.75
Total 125,310,792.47 100.00% 51,164,573.35Opening balance
Aging Amount Proportion Bad debt
provision
Within 1 year(including 1 year) 11,635,926.07 9.72% 177,944.87
1-2 years(including 2 years) 1,893,946.13 1.58% 893,438.73
2-3 years(including 3 years) 20,000.00 0.02% 600.00
Over 3 years 106,220,612.95 88.68% 50,092,589.75
Total 119,770,485.15 100.00% 51,164,573.35
(2) Accounts receivables by Categories are as follows：
Closing balance
Categories
Amount Proportion
Bad debt
provision
Individually significant receivables 106,947,075.88 85.35% 50,947,075.88
Individually insignificant receivables with
high credit risk in group assessment
Other insignificant amount 18,363,716.59 14.65% 217,497.47
Total 125,310,792.47 100.00% 51,164,573.35
Opening balance
Categories
Amount Proportion
Bad debt
provision
Individually significant receivables 106,947,075.88 89.29% 50,947,075.88
Individually insignificant receivables with
high credit risk in group assessment 0 0 0
Other insignificant amount 12,823,409.27 10.71% 217,497.47
Total 119,770,485.15 100.00% 51,164,573.35
Individually significant receivable is regarded as risky receivable, of which the collectability is
uncertain and of which the recoverable amount can only be determined after effective assessment.
Individually insignificant receivable with high credit risk in group assessment is regarded as receivable,
of which the collectability may be certain for single item, but the collectability of group of the
receivables with same credit risk characteristic is uncertain and the recoverable amount of the group of
receivables can only be determined after effective assessment.
(3) Details of individually significant accounts receivable
Name of company Closing balance Bad debt
provision
Aging Reason for provision
Shenzhen Jiyong Properties &
Resources Development Company
98,611,328.05 42,611,328.05 Over 3 years Involved in lawsuit, refer to
Note XII.1.(2)Shenzhen Tewei Industry Co., Ltd.
2,836,561.00 2,836,561.00
Over 3 years Uncollectible for a long
period
Shenzhen Lunan Industry
Development Co., Ltd. 2,818,284.84 2,818,284.84
Over 3 years Poor operational status
Total 104,266,173.89 48,266,173.89
(4) There was no accounts receivable due from shareholders with more than 5% (including 5%) of the
voting shares of the Company.
(5) There was no accounts receivable due from related parties.
(6) The details of significant accounts receivable are as follows
Name of company Amount Proportion to total accounts
receivables
Occurrence
period
Shenzhen Jiyong Properties & Resources
Development Company 98,611,328.05 78.69%
Over 3
years
Rainbow Plaza Co., Ltd 4,442,874.99 3.55%
Within 1
year
Shenzhen Tewei Industry Co., Ltd.
2,836,562.00 2.26%
Over 3
years
Shenzhen Lunan Industry Development
Co., Ltd. 2,818,284.84 2.25%
Over 3
years
Total 108,709,049.88 86.75%
(7) The total amount of top 5 accounts receivables is RMB 109,559,735.88, accounting for 87.43% of
the closing balance.
4. Other receivables
(1) Aging analysis of other receivables is as follows:
Closing balance
Aging Amount Proportion Bad debt
provision
Within 1 year(including 1 year) 4,721,021.85 2.73% 13,295.33
1-2 years(including 2 years) 8,888,549.85 5.14% 2,807,019.58
2-3 years(including 3 years) 967,766.28 0.56% 33,274.97
Over 3 years 158,198,396.41 91.56% 103,898,645.01
Total 172,775,734.39 100.00% 106,752,234.89
Opening balance
Aging Amount Proportion Bad debt
provision
Within 1 year(including 1 year) 7,474,705.15 4.29% 13,295.331-2 years(including 2 years) 3,544,418.51 2.04% 2,807,019.58
2-3 years(including 3 years) 892,835.73 0.51% 33,274.97
Over 3 years 162,142,417.60 93.16% 103,978,645.01
Total 174,054,376.99 100.00% 106,832,234.89
(2) Other receivables by Categories are as follows
Closing balance
Categories Amount Proportion Bad debt
provision
Individually significant receivables 114,776,922.31 66.43% 106,361,980.23
Individually insignificant receivables with
high credit risk in group assessment
Other insignificant amount 57,998,812.08 33.57% 390,254.66
Total 172,775,734.39 100.00% 106,752,234.89
Opening balance
Categories Amount Proportion Bad debt
provision
Individually significant receivables 117,856,922.31 67.71% 106,441,980.23
Individually insignificant receivables with
high credit risk in group assessment
0 0 0
Other insignificant amount 56,197,454.68 32.29% 390,254.66
Total 174,054,376.99 100.00% 106,832,234.89
Individually significant receivable is regarded as risky receivable, of which the collectability is
uncertain and of which the recoverable amount can only be determined after effective assessment.
Individually insignificant receivable with high credit risk in group assessment is regarded as receivable,
of which the collectability may be certain for single item, but the collectability of group of the
receivables with same credit risk characteristic is uncertain and the recoverable amount of the group of
receivables can only be determined after effective assessment.
(3) Details of individually significant other receivables:
Name of company Closing balance Bad debt provision Aging Reason for provision
Gintian Industry (Group) Co.,
Ltd.
56,600,000.00 56,600,000.00 Within 1 to 2
years and over
3 years
Payment for discharging of
guaranty responsibility that
was difficult to be
recollecte
Shenzhen Shengfenglu ITC
Jewel & Gold Co., Ltd
10,199,186.28 6,532,519.60 Over 3 years There is no asset to execute
the verdict, thus lead to
uncollectibility
Duokuai Elevator (Far East) Co., 8,726,693.00 3,978,423.60 Over 3 years Receivables cannot beLtd. offset by executable
property, referring to
Note XII.1.(4) for
details
Anhui Nanpeng Papermaking
Co., Ltd
8,702,432.00 8,702,432.00 Over 3 years Uncollectible for a long
period
Over 3 years
Shanghai Yutong Property
Development Co., Ltd
5,676,000.00 5,676,000.00 Over 3 years Uncollectibility for the
reason of verdict
Wuliangye Restaurant 5,523,057.70 5,523,057.70 Over 3 years Has been liquidated
HongKong Yueheng
Development Co., Ltd
3,271,931.42 3,271,931.42 Over 3 years Has been liquidated
Elevated Train Project 2,542,332.43 2,542,332.43 Over 3 years Suspended project
Dameisha Tourism Center 2,576,445.69 2,576,445.69 Over 3 years Suspended project
Shenzhen ITC Food Enterprise
Co.,Ltd.
2,431,652.48 2,431,652.48 Over 3 years Insolvency
Shenzhen Wufang Pottery &
Porcelain Industrial Co., Ltd
1,747,264.25 1,747,264.25 Over 3 years Poor operation status
Total 107,996,995.25 99,582,059.17
(4) There was no other receivable due from shareholders with more than 5% (including 5%) of the
voting shares of the Company.
(5) Details of top 5 other receivables are as follows:
Name of company Amount Proportion
to total
other
receivables
Nature or content Occurrence
period
Gintian Industry (Group) Co.,
Ltd.
56,600,000.00 32.76% Warranty
liability
Within 1 to 2
years and over 3
years
Shenzhen ITC Tian’an
Properties
Co., Ltd
24,705,931.45 14.30% Dividend
receivable
Over 3 years
Shenzhen Municipal Planning
and Land Resource Bureau
Longgang Breach
12,024,387.70 6.96% Land section
receivable
Over 3 years
Shenzhen Shengfenglu ITC Jewel
& Gold Co., Ltd
10,199,186.28 5.90% Rent receivable Over 3 years
Duokuai Elevator (Far East) 8,726,693.00 5.05% Law suit Over 3 yearsCo., Ltd. receivable
Total 112,256,198.43 64.97%
(6) Amount due from related parties in other receivables is RMB 37,587,280.188, accounting for
21.76% of the closing balance.
5. Prepayment
(1) The aging analysis of prepayment is as follows:
Aging Closing balance Opening balance
Amount Proportion Amount Proportion
Within 1 year(including 1
year) 2,036,561.42 96.67% 2,111,993.73 91.60%
1-2 years(including 2
years) 36,985.00 1.76% 161,517.00 7.01%
2-3 years(including 3
years) 1,000.00 0.05% 0 0
Over 3 years 32,118.80 1.52% 32,118.80 1.39%
Total 2,106,665.22 100.00% 2,305,629.53 100.00%
(2) Notes to prepayment
1） Prepayments with aging over 1 year are mainly construction payments to be settled.
2） There was no amount due from shareholders with more than 5% (including 5%) of the voting
shares of the Company in prepayment.
6. Inventories
(1) The details of inventory are as follows:
Categories Opening balance Increase Decrease Closing balance
Including：
Capitalized
borrowing cost
The
proportion of
reversal of
provision for
impairment
of
inventories to
closing
balance
Raw materials 1,451,382.22 1,514,930.77 1,598,024.71 1,368,288.28 0.042%
Finished products 217,315.43 402,494.65 385,077.66 234,732.42
low-value
consumption
goods 327,065.90
404,466.50 565,154.14 166,378.26
land use right held
for property 230,187,067.43
1,687,887.71 22,822.96 231,852,132.18 0.006%Categories Opening balance Increase Decrease Closing balance
Including：
Capitalized
borrowing cost
The
proportion of
reversal of
provision for
impairment
of
inventories to
closing
balance
development
Properties under
development 528,550,086.36
173,117,960.85 120,000.00 701,548,047.21 68,801,263.32
Completed
properties for sale 529,239,657.47
164,993,606.79 364,246,050.68 2,584,930.63
Total 1,289,972,574.81 177,127,740.48 167,684,686.26 1,299,415,629.03 71,386,193.95 0.048%
Note: For Inventories that ownership rights is restricted, please refer to Note IX 14.
(2) Provision for impairment of inventories:
Categories Opening balance Increase Decrease
Reversal Written off
Closing balance
Raw materials 429,881.46 576.00 429,305.46
land use right held
for property
development
106,697,503.71 13,622.96 106,683,880.75
completed
properties for sale
29,118,896.81 29,118,896.81
Total 136,246,281.98 14,198.96 136,232,083.02
Note 1: The reversal of provision for impairment of inventories on raw materials during the current
period arose from procurement of materials
Note 2: The reversal of provision for impairment of inventories on land use right held for property
development during the current period arose from the translation of foreign currency financial
statement of the Company’s foreign subsidiary, Shum Yip Properties Development Limited.
(3) The details are as follows：
A. land use right held for property development
Closing balance Opening balance
Item
Amount provision for
impairment of
inventories
Amount provision for
impairment of
inventoriesHuanggang Port Land 46,823,373.98 46,823,373.98
Pinghu Land 40,642,168.99 38,242,168.99 40,642,168.99 38,242,168.99
Hainan Qiongshan Land 6,648,404.13 6,648,404.13 6,648,404.13 6,648,404.13
Shenhui Garden 34,927,062.89 26,002,128.89 34,726,762.89 26,002,128.89
Donggua Ridge Land 46,745,443.45 45,257,855.74 0
Fuchang Second Term
Land 5,769,577.11 5,769,577.11 5,769,577.11 5,769,577.11
Hong Kong Tingjiu Land 50,296,101.63 30,021,601.63 50,318,924.59 30,035,224.59
Total 231,852,132.18 106,683,880.75 230,187,067.43 106,697,503.71
Notes to Pinghu Land: In August, 1992, the Company signed the contract with HongKong Lianfahang
International Development Co., Ltd and Pinghu village to develop Pinghu village’s land. The Company
paid RMB 47,100,000 to obtain the real estate certificate for 173,750 square meters, which including
undeveloped land 65,714.10 square meters. Aferwards, Pinghu village took over the undeveloped land
on grounds of not receiving the full fund. On December 30, 2003, the Company signed contract with
Pinghu village, which agreed that the Company kept the use rignt of 10,000 square meters in
undeveloped land 65,714.10 square meters, and the rest 55,714.10 square meters was returned to Pighu
village. In 2008, owing that the 10,000 square meters was occupied by villagers, the Company signed
another supplemental contract with Pinghu village to obtain an un-using land 9,980 square meters
instead. The Company had evaluated these two lands. Shenzhen Pengxin Assets Land and Real Estate
Appraisal Co., Ltd issued PXZXZ (2008) No.192 report, the evaluation price before exchange is about
RMB 3,910,000, and the evaluation price after exchange is about RMB 5,080,000. Because the 9,980
square meters land is collective land, which can be transferred the ownership after being changed into
merchandise land. The related procedures must have permission of the relevant department of the
government. At the beginning of 2009, the Company received reply from Shenzhen Municipal Bureau
of Land Resources and Housing Management Longgang Branch, in accordance with the policies
related to transfer of land use right, the said land failed to confirm ownership to the Company, the
Company was suggested to find other way to settle. Hereafter, coordinations is made for many times
between the Company and the relevant department of government, at the beginning of July 2009, the
Company received the letter form Pinghu Subdistrct Office of Longgang District in Shenzhen, in which
the Company is given a requirement to settled nicely matters related to such land transfer with Pinggu
according to the commitment in the Agreement signed between the Company and Pinghu. The
government shall recall the part land and rest space occupied for road-working, totaling 6417.22 aq.m.,
and give relevant compensation to the Company. Currently, the carrying amount of this land is RMB
40,642,168.99, the opening and closing balance of provision is RMB 38,242,168.99, and the net value
is RMB 2,400,000.00.
B. Properties under developmentProject name Starting
time
Expected
completion
time
Expected total
investment
Closing balance Opening balance
Shenwuye – Shengang
No.1 (original HuangYu
Garden District C-B)
2006.7 2010.5 388,000,000.00 195,459,891.95 136,463,567.97
Shenwuye -Langqiao
Residence (original
HuangYu Garden District
D)
2005.12 2011.3 420,000,000.00 153,466,093.94 121,862,512.84
Shenwuye – FHRL
(original FHRL Group B)
2005.9 2009.12 422,280,000.00 352,622,061.32 270,104,005.55
Sundry project 120,000.00
Total 701,548,047.21 528,550,086.36
C. Completed properties for sale
Item Completion
time
Opening
balance
Increase Decrease Closing balance provision for
impairment of
inventories
ITC Plaza 1995.12 79,901,727.31 79,901,727.31
Huangyu Garden District
A 2001.06 2,973,623.25
356,066.14 2,617,557.11
Huangyu Garden District
B 2003.12 15,968,124.72 551,108.33 15,417,016.39
Imperial Garden (original
HuangYu Garden District
C-A)
2008.11 220,671,151.80
159,342,503.85 61,328,647.95
Huangcheng Plaza 1997.05 172,981,417.98 1,614,600.76 171,366,817.22 29,118,896.81
Xinda Building 2001.10 3,145,042.17 3,145,042.17
Fenrun Garden 1998.02 339,542.36 339,542.36
Haikou Landao Shore 18,297,459.85 3,129,327.71 15,168,132.14
Rihao Garden 4,654,651.00 4,654,651.00
Meisi Workshop 3,885,469.40 3,885,469.40
Fuchang Comprehensive
Building 6,421,447.63 6,421,447.63
Total 529,239,657.47 164,993,606.79 364,246,050.68 29,118,896.81
7. Investment held to maturity：Item Closing balance Opening balance
Investments on bond 3,000.00 3,000.00
Total 3,000.00 3,000.00
8. Long-term equity investment
Categories Closing balance Opening balance
Long-term equity investment accounted
using equity method 67,056,526.59 65,190,292.51
Long-term equity investment accounted
using cost method 79,783,292.58 79,785,387.54
Sub-Total 146,839,819.17 144,975,680.05
Less：Provision for impairment of
long-term equity investment 64,480,999.39 63,702,449.15
Total 82,358,819.78 81,273,230.90
(1) The details of significant joint ventures and associates refer to Note VIII.
(2) Long-term equity investment accounted using equity method
Investment Amount of
initial
investment
Opening
balance
Increase Decrease Closing
balance
Cash
dividends
received
during the
current
period
Shenzhen ITC
Tian’an Properties
Co., Ltd 23,186,124.00 37,134,170.50 1,721,148.00 38,855,318.50
Shenzhen Jifa
Warehouse
Company Limited 30,645,056.04 26,297,645.27 96,554.65 26,394,199.92
Shenzhen Tian’an
International
Building Property
Management Co.,
Ltd 1,500,000.00 1,758,476.74 48,531.43 1,807,008.17
Total 55,331,180.04 65,190,292.51 1,866,234.08 67,056,526.59
(3) Long-term equity investment accounted using cost methodInvestment Opening balance Increase Decrease Closing balance
Shenzhen ITC Industrial Development Co., Ltd 3,682,972.55 3,682,972.55
Anhui Nanpeng Papermaking Co., Ltd 13,824,000.00 13,824,000.00
Shenzhen Wufang Pottery & Porcelain Industrial Co., Ltd 18,983,614.14 18,983,614.14
Shenzhen Huajing Glass Bottle Company Limited 7,600,000.00 7,600,000.00
Shenshan Co., Ltd. 17,695.09 17,695.09
China T.H. Co., Ltd. 2,962,500.00 2,962,500.00
North Machinery (Group) Co.,Ltd. 3,465,000.00 3,465,000.00
Guangdong Huayue Real Estate Co.,Ltd. 8,780,645.20 8,780,645.20
Guangzhou Lishifeng Automobile Co.,Ltd. 6,000,000.00 6,000,000.00
Sanya East Travel Co., Ltd. Legal persons shares 1,350,000.00 1,350,000.00
Macao Huashen Enterprise Co., Ltd. 85,621.36 38.83 85,582.53
Saipan Project 1,935,184.04 877.73 1,934,306.30
Chongqing Guangfa Property Development Co., Ltd. 2,598,061.52 1,178.38 2,596,883.13
East Land Properties Limited 93.64 93.64
Shenzhen ITC Petroleum Company Limited 8,500,000.00 8,500,000.00
Total 79,785,387.54 2,094.95 79,783,292.58
Note: 825,000 directional corporate shares of China T.H. Co., Ltd. held by the Company are frozen by
the Court in the reporting period due to pending action on “Haiyi” Case, please refer to Note XII 1 (1)
for details.
(4) Provision for impairment of long-term equity investment
Investment Opening
balance
Increase Decrease Closing
balance
Shenzhen ITC Industrial
Development Co., Ltd
3,682,972.55
3,682,972.55
Anhui Nanpeng Papermaking Co.,
Ltd
13,824,000.00
13,824,000.00
Shenzhen Wufang Pottery &
Porcelain
Industrial Co., Ltd
18,983,614.14
18,983,614.14
Shenzhen Huajing Glass Bottle
Company Limited
7,600,000.00
7,600,000.00
Shenshan Co., Ltd. 17,695.09 17,695.09
China T.H. Co., Ltd. 2,160,300.45 2,160,300.45
North Machinery (Group) Co., Ltd. 3,465,000.00 3,465,000.00
Guangdong Huayue Real Estate
Co., Ltd.
8,000,000.00 780,645.20
8,780,645.20Investment Opening
balance
Increase Decrease Closing
balance
Sanya East Travel Co., Ltd. Legal
persons shares
1,350,000.00
1,350,000.00
Macao Huashen Enterprise Co.,
Ltd.
85,621.36
38.83
85,582.53
Saipan Project 1,935,184.04 877.73 1,934,306.30
Chongqing Guangfa Property
Development Co., Ltd.
2,598,061.52
1,178.38
2,596,883.13
Total 63,702,449.15 780,645.20 2,094.95 64,480,999.39
Note 1: The withdrawn provision for impairment of long-term equity investment on Guangdong
Huayue Real Estate Co., Ltd. is because net asset as at 30 June 2009 is negative due to the said
company’s deficit during the reporting period.
Note 2: The decrease of long-term equity investment and provision for impairment over Macao
Huashen Enterprise Co., Ltd, Saipan Project, and Chongqing Guangfa Real estate development Co.,
Ltd are due to the translation of the foreign currency financial statement.
9. Investment property
(1) The details of investment properties are as follows:
Item Opening balance Increase Decrease Closing balance
Cost 337,388,599.87 1,868,796.00 5,522.23 339,251,873.64
Including：Property and building 334,388,599.87 1,868,796.00 5,522.23 336,251,873.64
Land use right 3,000,000.00 3,000,000.00
Accumulated depreciation and
amortisation 113,346,621.68 5,569,969.21 3,272.07 118,913,318.82
Including：Property and building 113,242,575.44 5,543,957.65 3,272.07 118,783,261.02
Land use right 104,046.24 26,011.56 0.00 130,057.80
Impairment loss
Including：Property and building
Land use right
Carrying amount 224,041,978.19 —— —— 220,338,554.82
Including：Property and building 221,146,024.43 —— —— 217,468,612.62
Land use right 2,895,953.76 —— —— 2,869,942.20
（2）The increased cost of property and building during the current period was due to the investment
property transferred from fixed assets under leasing and transformation and renovation of the part of
investment properties.
（3）The decrease of property and building during the current period was due to the translation of theforeign currency financial statement of the Company’s subsidiaries, Shum Yip Properties Development
Limited.
（4）For investment property that ownership rights is restricted, please refer to Note IX 14.
11. Fixed assets
(1) The details of fixed assets is as follows
Categories Opening balance Increase Decrease Closing balance
Cost 193,412,746.09 875,644.00 1,468,830.60 192,819,559.49
Including: Property and
buildings 137,145,608.25 217,939.00 2,555.60 137,360,991.65
Machineries 81,941.80 81,941.80
Vehicles 45,568,495.17 145,000.00 1,180,000.00 44,533,495.17
Electronic and other
equipment 10,616,700.87 512,705.00 286,275.00 10,843,130.87
Depreciation 89,323,158.61 7,088,541.94 1,389,325.14 95,022,375.42
Including: Property and
buildings 59,651,863.61 2,702,167.85 1,390.30 62,352,641.16
Machineries 48,857.70 12,359.62 61,217.32
Vehicles 21,669,729.19 3,957,993.93 1,121,000.00 24,506,723.12
Electronic and other
equipment 7,952,708.12 416,020.54 266,934.84 8,101,793.82
Impairment loss 75,717.16 75,717.16
Including: Property and
buildings
Machineries
Vehicles
Electronic and other
equipment 75,717.16 75,717.16
Carrying amount 104,013,870.31 —— —— 97,721,466.91
Including: Property and
buildings 77,493,744.64 —— —— 75,008,350.49
Machineries 33,084.10 —— —— 20,724.48
Vehicles 23,898,765.98 —— —— 20,026,772.05
Electronic and other
equipment 2,588,275.59 —— —— 2,665,619.89
(2) The details of temporarily idle fixed assets are as follows:Categories Cost Accumulated
depreciation
Impairment
loss
Carrying
amount
Expected date for
put into usage
Property and
building
19,403,967.40 5,224,989.65 14,178,977.75
Total 19,403,967.40 5,224,989.65 14,178,977.75
Note：The temporarily idle property and buildings are properties that are neither leased out nor used for
self-occupation. No provision for impairment was made because its market price was in excess of its
cost.
(3) For fixed assets that ownership rights is restricted, please refer to Note IX 14.
11. Intangible assets
Categories Opening
balance
Increase Decrease Closing balance
Cost 146,798,497.31 146,798,497.31
-Operating license plate 144,851,143.70 144,851,143.70
-Repurchased operating right of taxi’s
operating license plate 1,947,353.61 1,947,353.61
Accumulated amortization 27,396,156.39 3,254,331.90 30,650,488.29
-Operating license plate 27,016,274.07 3,197,651.10 30,213,925.17
-Repurchased operating right of taxi’s
operating license plate 379,882.32 56,680.80 436,563.12
Impairment loss
-Operating license plate
-Repurchased operating right of taxi’s
operating license plate
Carrying amount 119,402,340.92 —— —— 116,148,009.02
-Operating license plate 117,834,869.63 —— —— 114,637,218.53
-Repurchased operating right of taxi’s
operating license plate 1,567,471.29 —— —— 1,510,790.49
Note: For intangible assets that ownership rights is restricted, please refer to Note IX 14.
12. Deferred tax assets and liabilities
(1) Assets and liabilities giving rise to temporary difference
Items Temporary difference
Closing balance Opening balance
I. Deductible temporary difference giving rise to
deferred tax assets
1.Carrying amount of other receivables less than its 3,978,423.60 3,978,423.60Items Temporary difference
Closing balance Opening balance
tax base
2.Carrying amount of inventories less than its tax base 29,118,896.81 29,118,896.81
3.Carrying amount of accounts payable greater than
its tax base 119,918,647.15
4.Carrying amount of payroll payable greater than its
tax base 4,093,393.05
9,200,000.00
5.Unused tax losses 25,292,215.27 21,924,517.60
Total 178,423,152.28 64,221,838.01
II. Taxable temporary difference giving rise to
deferred tax liabilities
1.Carrying amount of trading financial assets greater
than its tax base
2.Carrying amount of available-for-sale financial
assets greater than its tax base
Total
(2) Recognized deferred tax assets and liabilities
Item Closing balance Opening balance
I. Deferred tax assets
1.Carrying amount of other receivables less than its
tax base 795,684.72 795,684.72
2.Carrying amount of inventories less than its tax base 5,823,779.36 5,823,779.36
3.Carrying amount of accounts payable greater than
its tax base 23,983,729.43
4.Carrying amount of payroll payable greater than its
tax base 818,678.61 1,880,000.00
5.Unused tax losses 5,564,287.36 4,823,393.87
Total 36,986,159.48 13,322,857.95
Deferred tax liabilities
1.Carrying amount of trading financial assets greater
than its tax base
2.Carrying amount of available-for-sale financial
assets greater than its tax base
Total
13. Impairment lossCategories Opening Decrease
balance
Increase
Reversal Written off
Closing
balance
Provision for bad
debt
157,996,808.24 80,000.00 157,916,808.24
Including：Accounts
receivables
51,164,573.35 51,164,573.35
Other
receivables
106,832,234.89 80,000.00 106,752,234.89
Provision for
impairment of
inventories
136,246,281.98 14,198.96 136,232,083.02
Impairment loss of
long-term equity
investment
63,702,449.15 780,645.20 2,094.96 64,480,999.39
Impairment loss of
fixed assets
75,717.16 75,717.16
Total 358,021,256.53 780,645.20 96,293.92 358,705,607.81
Note 1: The written off of provision for bad debt of other receivables arose from the original arrears
called back by the subsidiaries, at the same time , writing off the provision for bad debts.
Note 2: The reversal of provision for impairment of inventories for the current period was due to the
translation of the foreign currency financial statement of the Company’s subsidiaries, Shum Yip
Properties Development Limited.
Note 3: The reversal of impairment loss of long-term equity investment during the current period was
due to is due to the translation of the foreign currency financial statement of the Company’s
subsidiaries, Shum Yip Properties Development Limited.
Note 4: The withdrawn provision for impairment of long-term equity investment on Guangdong
Huayue Real Estate Co., Ltd. is because net asset as at 30 June 2009 is negative due to the said
company’s deficit during the reporting period.
14. Assets with restriction on ownership
(1) The reason for restriction on ownership
A. The subsidiary of the Company, Shenzhen ITC Vehicles Services Company, mortgaged parts of ITC
Plaza (second phase) for a short-term bank loan amounting to RMB 50,000,000.00, and the closing
balance of said short-term bank loan at the end of the financial year was RMB 33,000,000.00; and
mortaged 97 property certificates of operating vehicle plate for a short-term bandk loan RMB
24,950,000.00, and the closing balance is RMB 18,546,461.79.
B. The Company mortgaged District A and B of ITC, IT Commercial Building, 3-7th floors of Heping
Single Building, 7th floor of Heping Hotel, Heping Food Market, 2nd floor in Heping Xinju 54thBuilding, and 1st floor in Heping Xinju Small Market for a long-term bank loan amounting to RMB
250,000,000.00, and the closing balance is RMB 0.00.
C. The Company jointly mortgaged parts of ITC Plaza (second phase), 2nd Floor of ITC Building
District A, and 73 suits of properties in ITC Commercial Building for a short-term bank loan
amounting to RMB 69,000,000.00, and the closing balance is RMB 59,000,000.00.
D. The Company mortgaged the 3rd floor of Block A and 4-01 property in Shenzhen International
Trade Center for the long-term loan amounting to RMB 240 million obtained by its subsidiary
Shenzhen Huangcheng Real Estate Co., Ltd. and the closing balance is RMB 200 million.
E. The subsidiary of the Company, Shenzhen Huangcheng Real Estate Company Limited, mortgaged
5-6th building of Loyal Garden District A and parts of Loyal Garden District B for a long-term bank
loan amounting to RMB 250,000,000.00 from Construction Bank, and the closing balance was RMB
200,000,000.00; and mortgaged parts of Huangcheng Plaza for a long-term bank loan amounting to
RMB 30,000,000.00, and the closing balance is RMB 20,000,000.00.
F. The assets sealed and frozen by the Court in the reporting period due to “Haiyi” Case as follws: 133
properties located in Shenzhen International Trade Center, Shenzhen ITC Commercial Building, 2nd
phase of International Trade Plaza, famous garden of RIHAO, Shenzhen ITC Business and Residence
Building and Chuanbu Street at Heping Road, totaling 66,581.11 sq.m., bank deposit of RMB
1,022,405.03, 30,000 circulating shares of ST Sunrise in tradable financial assets, 825,000 directional
corporate shares of China T.H. Co., Ltd. in long-term equity investment, as well as 95% equities of
Shenzhen Huangcheng Real Estate Co., Ltd. held by the Company. Among the above-mentioned sealed
properties, the area of properties mortgaged to the bank is 49,096.14 sq.m., the closing book value is
RMB 83,993,035.10. Please refer to Note XII 1 (1) and the public notices disclosed on 4 Jun. 2009 and
29 Jun. 2009.
(2) Details of the assets with restriction on ownership are as follows:
Categories Opening
balance
Increase Decrease Closing
balance
Assets used as mortgage in guarantee
Fixed asset - property and building 28,319,771.58 16,783,286.81 11,536,484.77
Investment real estate－property and building 87,104,912.14 6,965,426.26 520,594.68 93,549,743.72
Inventories - land use right 74,622,692.96 74,622,692.96
-developments 185,829,097.42 60,382,514.79 125,446,582.63
Intangible asset - operating license plate 62,553,119.84 22,271,109.79 40,282,010.05
Subtotal 363,806,900.98 81,588,119.22 99,957,506.07 345,437,514.13
Sealed assets due to lawsuitCash and cash equivalent 1,022,405.03 1,022,405.03
Trandable financial assets 153,000.00 153,000.00
Long-term equity investment 29,302,199.50 29,302,199.50
Fixed assets-house and building 19,070,064.49 19,070,064.49
Investment property- house and building 49,374,240.29 49,374,240.29
Inventory- house and building 83,171,211.98 83,171,211.98
Subtotal 182,093,121.29 182,093,121.29
Total 363,806,900.98 263,681,240.51 99,957,506.07 527,530,635.42
15. Short-term borrowing
Categories Closing balance Opening balance
Credit loan 200,000,000.00 215,000,000.00
Mortgaged loan 92,000,000.00 154,000,000.00
Total 292,000,000.00 369,000,000.00
16. Trade payable
Item Closing balance Opening balance
Amount 115,958,638.00 137,040,777.65
Note：There was no amount due to shareholders with more than 5% (including 5%) of the voting shares
of the Company in trade payables.
17. Advance from customers
Item Closing balance Opening balance
Amount 382,617,130.29 67,150,023.78
Note: The closing balnce of advance from customers for the current period increased by 469.79% than
that of last period, which was due to increase of payment for flats on sale of Xinhua Town in the
reporting period.
Note B：The details of advance from customers on main projects of properties for sale are as follows:
Items
Aging Closing balance Opening balance Estimated date of
completion
Imperial Garden Within 1 year 10,253,644.90 11,800,710.00 completed
Huangcheng Plaza Within 1 year 3,830,769.15 3,866,804.24 completed
District A of
Huangyu Garden 1-3 years 846,495.63 2,407,528.93 completed
District B of
Huangyu Garden 1-3 years 218,413.26 218,413.26 completed
Fengrun Garden 2-3 years 128,254.00 128,254.00 completedItems
Aging Closing balance Opening balance Estimated date of
completion
Xinhua City Within 1 year 361,006,367.00 45,078,355.00 December 2009
Total 376,283,943.94 63,500,065.43
Advances from customers with the aging over 1 year is due to the terms of revenue recognizantion
having not been satisfied.
Note C：There was no amount due to shareholders with more than 5% (including 5%) of the voting
shares of the Company in advance from customers.
18. Payroll payable
Categories Opening
balance
Increase Decrease Closing
balance
Salary, bonus, allowance,
subsidy
38,781,860.13
56,049,005.64 78,316,598.84 16,514,266.93
Employee welfare 1,500.00 1,437,023.00 1,438,523.00
Social insurance 0 6,491,870.08 5,507,740.08 984,130.00
Including：
1. Medical insurance
0
1,201,793.80 1,182,485.28 19,308.52
2. Basic retirement insurance 0 3,178,752.88 3,123,585.66 55,167.22
3. Annuity fee 0 1,768,839.49 868,839.49 900,000.00
4. Unemployment insurance 0 97,113.20 91,596.48 5,516.72
5. Injury insurance 0 133,025.82 130,819.13 2,206.69
6. Pregnancy insurance 0 112,344.89 110,414.04 1,930.85
7. Labor cooperation medical
care
0
31,842.00 31,842.00
8. Other social insurance 0 73,705.98 73,705.98
Public housing fund 73,754.34 22,299.20 22,299.20 73,754.34
Labour union fee and employee
education fee
2,467,938.22
1,087,420.14 1,179,097.24 2,376,261.12
Redemption for termination of
labor contract
25,929,179.50
4,550,481.00 19,578,563.22 10,901,097.28
Total 67,254,232.19 69,638,099.06 106,042,821.58 30,849,509.67
Note: The closing balance of payroll payable of 2008 decreased by 54.13% than that of 2007, mainly
due to the estimated termination benefits generated from the employee termination sheme. Details refer
to Note XIV.6.
19. Taxes payableCategories Closing balance Opening balance
1. VAT 22,386.79 41,461.01
2. Business tax -3,125,109.66 2,652,094.93
3. Income tax expense 38,698,209.70 15,604,575.75
4. Stamp tax -16,432.23 191,350.64
5. Education surtax -98,475.15 75,151.48
6. Land value appreciation tax 128,766,020.29 62,342,634.21
7. Urban maintenance and construction tax 18,577.78 39,833.23
8. Property tax 702,913.59 741,777.42
9. Land use tax 174,102.24 0.10
10. individual income tax 1,875,859.19 627,227.15
11.Embankment maintenance fee -12,025.46 5,127.41
12．Others 1,545.41
Total 167,006,027.08 82,322,778.74
Note 1: The closing balance of taxes payable in the current period increased by 102.87% than that of
last period, mainly due to increased income tax and land value appreciation tax generated from the
recognized revenue of Loyal Garden project.
Note 2: The closing balance of the part of taxes showed a negative, which was due to tax paid in
advance by the Company for Xinhua Town Project according to tax law.
20. Other payable
Item Closing balance Opening balance
Other payables 198,308,459.53 187,732,899.73
Note A：The details of significant other payables are as follows
Item Amount Nature
Accrued Land value appreciation tax
56,303,627.40
Accrued Land value
appreciation tax
Rent deposit 28,597,453.63 Deposit
Yirun Property Co., Ltd. 23,496,270.58 Current account
Guangzhou Lishifeng Motor Company Limited 15,000,000.00 Current account
Shenzhen Guanghong Investment Co., Ltd. 14,070,000.00 Current account
Shenzhen Fulin Industrial Co., Ltd. 9,528,506.00 Current account
Total 146,995,857.61
Note B：There was no amount due to shareholders with more than 5% (including 5%) of the voting
shares of the Company in other payables.
21. Non-current liabilities due within 1 year
(1) DetailsItem Closing balance Opening balance
Long-term borrowings 210,000,000.00 100,000,000.00
Total 210,000,000.00 100,000,000.00
(2) Long-term borrowings due within 1 year
Item Closing balance Opening balance
Guarantee borrowings 200,000,000.00
Mortgage borrowings 10,000,000.00 100,000,000.00
Total 210,000,000.00 100,000,000.00
22. Long-term borrowings
Borrowing terms Closing balance Opening balance
Mortgage borrowings 210,000,000.00 55,000,000.00
Pledge borrowings 18,546,461.79 43,229,343.34
Guarantee borrowings 250,000,000.00
Total 228,546,461.79 348,229,343.34
23. Provision for contingent liabilities
Item Opening
balance
Increase Decrease Closing
balance
Pending action of Haiyi case 61,254,234.44 61,254,234.44
Total 61,254,234.44 61,254,234.44
Note: Details of Haiyi case refer to Note XII.1 (1).
24.Other non-current liabilities
Item Closing balance Opening balance
1.Utility specific fund 18,628,645.62 21,571,868.62
2.Housing principle fund 9,366,126.34 7,837,285.22
3.House warming deposit 7,811,892.04 7,812,947.26
4.Electric Equipment Maintenance fund 4,019,415.44 4,019,415.44
5.Deputed Maintenance fund 25,847,869.48 25,978,097.69
6.Taxi Deposit 28,925,000.00 28,617,800.00
7.Lease income of taxi license to be written
off 17,386,060.81 18,039,340.21
8.Others 3,422,000.00 4,887,000.00
Total 115,407,009.73 118,763,754.44
Note: “Others” is borrowing of Shenzhen ITC Automobile Industry Co., Ltd due to the drivers.25. Paid-in capital
Before Increase/Decrease (+/-) After
Item Quantity
(0’000)
Proportion
(%)
Issuing
new shares
Bonus
shares
Reserves
transferred
to shares
Others Subtotal
Quantity
(0’000)
Proportion
(%)
A. Unlisted shares
1. Sponsors' shares 38,894.86 71.79 38,894.86 71.79
Including: State owned
shares 32,374.77
59.76
32,374.77
59.76
Shares held by
domestic legal persons 6,520.09
12.03
6,520.09
12.03
Shares held by
overseas legal persons
Others
2. Raised shares held by
legal persons
3. Shares held by
employees
4. Preference shares and
others
Including: Transferred
allotted shares
Subtotal 38,894.86 71.79 38,894.86 71.79
B. Listed shares
1. RMB-denominated
ordinary shares 9,139.13
16.87
9,139.13
16.87
2. Domestically listed
foreign shares 6,145.93
11.34
6,145.93
11.34
3. Overseas listed foreign
shares
4.Others
Subtotal 15,285.06 28.21 15,285.06 28.21
Total 54,179.92 100.00 54,179.92 100.00
26. Capital surplus
Item Opening
balance
Increase Decrease Closing
balance
Share premiumOthers 25,332,931.52 25,332,931.52
Including: ① Other changes besides net
gains or losses in shareholders' equity of the
investee under equity method
25,332,931.52 25,332,931.52
②Changes in fair value of financial
assets available for sale
③ Tax effects related to items
accounted in shareholders' equity
Total 25,332,931.52 25,332,931.52
27. Reserved fund
Item Opening
balance
Increase Decrease Closing balance
Legal reserve 62,919,127.11 62,919,127.11
Total 62,919,127.11 62,919,127.11
28. Retained earnings
Item Amounts
Retained earnings at the beginning of the year -55,930,192.11
Plus: Net profit attributable to parent company
transferred in 106,297,227.83
Retained earnings at the end of the period 50,367,035.72
29. Revenue and Cost of Sales
(1) Revenue
Item Jan. – Jun. 2009 Jan. – Jun. 2008
1．Sales 528,146,386.17 127,617,641.69
2．Other operating income 8,592,198.71 8,837,614.36
Total 536,738,584.88 136,455,256.05
(2) Cost of sales
Item Jan. – Jun. 2009 Jan. – Jun. 2008
1．Cost of sales 248,886,848.15 91,397,658.83
2．Other operating cost 2,556,235.87 2,896,830.09
Total 251,443,084.02 94,294,488.92
Note: Revenue for the current period increased by 293.34%% than that of last period, mainly due to the
revenue of Royal Garden project recognized in this period. Cost of sales for the current period
increased 166.66% than that of last period, which increase is less than that of revenue, mainly due tothe increased proportion of properties sales with higher margin profit.
(3) Listed by the categories of production or business
Categories Revenue Cost of sales Margin profit
Hotel and restaurant
operations 6,885,893.08 3,042,657.95 3,843,235.13
Sale of properties 417,013,314.49 163,770,717.39 253,242,597.10
Transportation services 23,634,531.98 11,334,397.41 12,300,134.57
Property rental and
management services
income 81,972,375.93 68,697,983.96 13,274,391.97
Others 5,684,950.89 3,804,497.16 1,880,453.73
Elimination -7,044,680.20 -1,763,405.72 -5,281,274.48
Total 528,146,386.17 248,886,848.15 279,259,538.02
Categories Other operating
income
Other operating cost Other operating margin
profit
Parking lots 8,226,095.81 1,937,048.09 6,289,047.72
Others 366,102.90 619,187.78 -253,084.88
Total 8,592,198.71 2,556,235.87 6,035,962.84
(4) Details of revenue
Business segment Jan. – Jun. 2009 Jan. – Jun. 2008
Hotel and restaurant operations 6,885,893.08 6,802,354.76
Sale of properties 417,013,314.49 23,360,742.00
Transportation services 23,634,531.98 23,240,859.06
Sale of goods 2,559,188.26
Property rental and management services income 81,972,375.93 75,242,367.78
Others 5,684,950.89 4,799,728.89
Subtotal 535,191,066.37 136,005,240.75
Elimination -7,044,680.20 -8,387,599.06
Total 528,146,386.17 127,617,641.69
(5) Details of cost of sales
Business segment Jan. – Jun. 2009 Jan. – Jun. 2008
Hotel and restaurant operations 3,042,657.95 2,995,189.92
Sale of properties 163,770,717.39 9,665,054.76
Transportation services 11,334,397.41 10,964,800.89
Sale of goods 2,371,862.87
Property rental and management services income 68,697,983.96 63,297,899.71
Others 3,804,497.16 2,692,617.08Subtotal 250,650,253.87 91,987,425.23
Elimination -1,763,405.72 -589,766.40
Total 248,886,848.15 91,397,658.83
30. Business taxes and surcharges
Item
Jan. – Jun.
2009
Jan. – Jun. 2008 Base of payment
Business tax 27,045,753.62 6,732,718.37 3% or 5% of taxable income
Urban maintenance
and construction tax
354,087.79 156,205.84
1% or 7% of VAT and Business tax
Additional education
Fees
818,936.02 212,283.18
3% of VAT and Business tax
Land appreciation
tax
68,920,000.00 119,190.40
30%－60% four level progressive rates
Embankment
maintenance fee
46,389.11 48,184.67 0.01% of operating revenue
Total 97,185,166.54 7,268,582.46
Note: Business taxes and surcharges for the current period increased by 1237.06% than that of last
peirod, mainly due to the increase of revenue and the related turnover tax payable.
31. Administrative expenses
Amount for the current period is RMB 37,914,659.32, down by 7.99% over the last period, which was
because the Company strengthened its management to contorl expenditure in the reporting period.
32. Financial costs
Item Jan. – Jun. 2009 Jan. – Jun. 2008
Interest expense 9,780,573.32 10,051,715.78
Less: Interest income 1,022,654.56 1,137,970.86
Exchange loss, net 1,292,207.56
Others 637,249.64 249,446.66
Total 9,395,168.40 10,455,399.14
Note; Amount for the current period has decreased by 10.14% compared with amount in the last period,
which was due to net loss on exchange in the last period.
33. Impairment loss
Item Jan. – Jun. 2009 Jan. – Jun. 2008
Bad debt -80,000.00 -1,823,232.00
Depreciation of long-term equity investment 780,645.20
Total 700,645.20 -1,823,232.0034. Gain/loss on change in fair value
Source Jan. – Jun. 2009 Jan. – Jun. 2008
Trading financial assets 2,182,553.30 -1,660,988.85
Total 2,182,553.30 -1,660,988.85
35. Gain/loss on investment
Source Jan. – Jun. 2009 Jan. – Jun. 2008
1.Gain on investment under equity method 1,866,234.08 329,659.93
2. Gain on investment from disposal of trading financial
assets
220,985.64 25,338.03
3. Gain on investment from disposal of available-for-sale
financial assets
4,835,799.71
Total 2,087,219.72 5,190,797.67
Note1: There is not significant restriction on the remittance of gain on investment.
Note 2: Amount occurred for the current period has a drop of 59.79% compared with amount occurred
in last period, which was caused by disposal of available-for-sale financial assets in the last period.
36. Non-operating income
Item Jan. – Jun. 2009 Jan. – Jun. 2008
1. Income from disposal of non-current
assets
11,000.00 569,110.94
Including: Disposal of fixed assets 11,000.00 569,110.94
2. Others 1,992,580.52 19,510,356.69
Including: Debts unable to pay 58,292.63 81,956.00
Penalty of House rental deposit 1,736,193.20 123,553.00
Fine for paying late 33,171.16 77,474.50
Other 164,923.53 19,227,373.19
Total 2,003,580.52 20,079,467.63
Note: Item “other” in the amount occurred in the last period arose from non-operating income due to
disposal of property projects in other cities.
37. Non-operating expense
Item Jan. – Jun. 2009 Jan. – Jun. 2008
1. Loss on disposal of non-current assets 134,079.53 54,084.94
Including: Disposal of fixed assets 134,079.53 54,084.94
2.Public welfare donation outlay 90,000.00 296,500.00
3.Tax late fee and forfeit 297.25 558,495.95
4.Others 33,323.60 26,036.35
Total 257,700.38 935,117.2438. Income tax expense
Item Jan. – Jun. 2009 Jan. – Jun. 2008
Income tax for the current period 54,965,003.63 3,250,889.92
Plus: Deferred tax expense 440,000.00
Less: Deferred tax income 25,244,622.92 1,020,977.67
Income tax expense 30,160,380.71 2,229,912.25
39. Earnings per share
Item EPS for this period EPS in the last period
Basic Earnings Per Share 0.1962 -0.0058
Diluted Earnings Per Share 0.1962 -0.0058
Calculation of earnings per share is as following:
Basic Earnings Per Share＝106,297,227.83÷541,799,175＝0.1962
Diluted Earnings Per Share＝106,297,227.83÷541,799,175＝0.1962
Note: The method of basic earnings per share and diluted earnings per share calculation
A．Basic Earnings Per Share =P÷S
S=S0+S1+Si×Mi÷MO-Sj×Mj÷MO-Sk
P represents the amounts attributable to ordinary equity holders of the Company in respect of:
(a) Profit or loss attributable to the Company; and
(b) Profit or loss after deducting extraordinary gain or loss attributable to the Company.
S represents the weighted average number of ordinary shares outstanding during the period. S0
represents the number of ordinary shares at the beginning of the period. S1 represents the number of
additional ordinary shares issued on capital surplus transfer or share dividends appropriation; Si
represents the number of ordinary shares issued in exchange for cash or issued as a result of the
conversion of a debt instrument to ordinary shares during the period. Sj represents reduced number of
ordinary shares such as shares buy back. Sk represents the number of a reverse share split. Mo
represents the months during the period. Mi represents the months from the following month after
issuing incremental shares to the end of the period. Mj represents the months from the following month
after reducing shares to the end of the period.
B．Diluted Earnings Per Share =[P+（Expensed interest of dilutive potential ordinary shares -
Conversion expense）×（1-corporate income tax rate）]/（SO+S1+Si×Mi÷MO-Sj×Mj÷MO-Sk+ The
weighted average number of incremental ordinary shares on warrants, options, convertible debt and so
on）
P represents the amounts attributable to ordinary equity holders of the Company in respect of:
(a) Profit or loss attributable to the Company; and
(b) Profit or loss after deducting extraordinary gain or loss attributable to the Company. The Company
considered in sequence from dilutive potential ordinary shares to get the lowest earnings per share.40. Relevant information about cash flow statement
(1) Other cash received from operating activities
Items Jan. – Jun. 2009 Jan. – Jun. 2008
Other cash received from operating activities 54,653,344.05 49,606,919.81
Of which: Electricity and water charge agency services 18,880,429.70 19,065,187.71
General deposits 9,046,655.18 6,164,544.34
Various sundry charges from Taxi Driver 5,647,283.83 4,090,380.90
Shenzhen Guanghong Investment Co., Ltd. 6,000,000.00 4,400,000.00
Yirun Real Estate Co., Ltd. 3,200,000.00
Housing maintenance fund 678,776.75 787,996.20
Charges agency service for handling property certificate 27,931.59 501,014.05
Duokuai ElevatorCo., Ltd. 3,000,000.00
Guangzhou Lishifeng Motors Co., Ltd. 5,000,000.00
Project deposit returned by Department of Construction of
Fujian
1,061,902.09
(2) Other cash paid relating to operating activities
Items Jan. – Jun. 2009 Jan. – Jun. 2008
Other cash paid relating to operating activities 72,270,634.87 59,776,822.13
Including: Water and electricity charges
22,927,069.43 20,630,847.57
HongKong Hehe Ltd. 5,395,722.66
Various deposits 8,657,080.12 5,077,901.69
Various sundry charges for Taxi Driver 8,158,021.47 5,258,396.79
Maintenance fee 975,460.00 1,339,863.28
Attorney fee and fees for lawsuits 773,000.00 1,036,799.39
Fee for sale agent 2,993,698.30 1,225,173.52
Special fund 7,213,708.47
Yirun Real Estate Co., Ltd. 5,855,832.20
(3) Other cash received relating to investing activitiesItems Jan. – Jun. 2009 Jan. – Jun. 2008
Other cash received relating to investing activities 16,972.86 16,964.73
Of which: dividend income 16,972.86 16,964.73
(4) Other cash paid relating to financing activities
Items Jan. – Jun. 2009 Jan. – Jun. 2008
Other cash paid relating to financing activities 2,131,000.00 2,877,000.00
Including: Significant borrowing charges 2,131,000.00 2,877,000.00
(5) Supplementary information of cash flow statement
Supplementary information Jan. – Jun. 2009 Jan. – Jun. 2008
1. Adjustment from net profit to cash flows from operating
activities
Net profit 106,297,227.83 -3,120,802.16
Plus: Provision for impairment of assets 700,645.20 -1,823,232.00
Depreciation of fixed assets, Oil-gas assets and Productive
biological assets 12,658,511.15 12,858,238.01
Amortization of intangible assets 3,254,331.90 3,322,401.89
Amortization of long-term deferred expense 135,576.54 34,998.00
Loss on disposal of fixed assets, intangible assets and other
non-current assets(“-” for gain) 30,365.63 -569,110.94
Loss on fixed assets retirement (“-” for gain) 92,713.90 54,084.94
Loss on change in fair value(“-” for gain) -2,182,553.30 1,660,988.85
Financial costs(“-” for gain) 9,930,573.32 11,593,370.00
Loss on investment(“-” for gain) -2,087,219.72 -5,190,797.67
Decrease of deferred tax assets(“-” for increase) -23,663,301.53 -899,995.75
Increase of deferred tax assets(“-” for decrease) -1,211,007.25
Decrease of inventory(“-” for increase) 8,209,866.65 -141,718,092.83
Decrease in operating receivables(“-” for increase) -4,062,700.41 -3,210,000.75
Increase in operating payables(“-” for decrease) 349,261,570.27 41,381,759.96
Others -1,276,270.41 -1,621,697.37
Net cash flow from operating activities 457,299,337.02 -88,458,895.06
2.Significant investment and financing activities irrelevant to
cash flow
Debt transferred to capital
Changeable corporation bond due within 1 year
Fixed assets acquired under finance leasesSupplementary information Jan. – Jun. 2009 Jan. – Jun. 2008
3.Changing in cash and cash equivalents
Cash at the end of the period 614,310,477.28 290,423,137.64
Less: Cash at the beginning of the period 271,708,727.86 242,161,687.34
Plus: Cash equivalents at the end of the period
Less: Cash equivalents at the beginning of the period
Increase in cash and cash equivalents 342,601,749.42 48,261,450.30
(6) Cash and cash equivalents
Items Jan. – Jun.
2009
Jan. – Jun.
2008
Cash 614,310,477.28 290,423,137.64
Including: Cash on hand 325,780.68 356,010.82
Bank deposit on demand 605,927,627.06 280,246,345.43
Other monetary assets on demand 7,034,664.51 9,820,781.39
Cash and cash equivalents at the end of the period 614,310,477.28 290,423,137.64
Including: Restricted Cash and cash equivalents held by parent
company or subsidiaries 1,022,405.03Note X Note to the financial statement of parent company
1. Accounts receivables
(1) Aging analysis of accounts receivables is as follows：
Closing book balance
Aging
Amount Proportion Bad debt provision
Within 1 year (including 1
year) 4,442,874.99 4.19%
Over 3 years 101,513,384.40 95.81% 45,502,269.40
Total 105,956,259.39 100.00% 45,502,269.40
Opening book balance
Aging
Amount Proportion Bad debt provision
Within 1 year (including 1
year)
4,394,855.89
4.15%
Over 3 years 101,513,384.40 95.85% 45,502,269.40
Total 105,908,240.29 100.00% 45,502,269.40
（2）Accounts receivables by Categories are as follows：
Closing book balance
Categories
Amount Proportion Bad debt provision
Individually significant
receivables 101,502,269.40 95.80% 45,502,269.40
Other insignificant amount 4,453,989.99 4.20%
Total 105,956,259.39 100.00% 45,502,269.40
Opening book balance
Categories
Amount Proportion Bad debt provision
Individually significant
receivables 101,502,269.40 95.84% 45,502,269.40
Other insignificant amount 4,405,970.89 4.16%
Total 105,908,240.29 100.00% 45,502,269.40
（3）Notes to individually significant accounts receivables：
Name of company Closing
balance
Bad debt
provision
Aging Reason for provision
Shenzhen Jiyong Property
Development Co., Ltd
98,611,328.05 42,611,328.05 Over 3 years Involved in lawsuit, refer to
Note XII.1.(2)
Shenzhen Tewei Industry Co., Ltd. 2,836,561.00 2,836,561.00 Over 3 years Uncollectible for a long periodTotal 101,447,889.05 45,447,889.05
（4）The details of significant accounts receivables are as follows：
Name of company Amount Proportion to total
accounts
receivables
Occurrence
period
Shenzhen Jiyong Property
Development Co., Ltd 98,611,328.05 93.07%
Over 3 years
Tianhong Shopping Plaza Co., Ltd. 4,442,874.99 4.19% Within 1 year
Shenzhen Tewei Industry Co., Ltd. 2,836,562.00 2.68% Over 3 years
Total 105,890,765.04 99.94%
（5）The closing balance of top 5 accounts receivables is RMB 105,951,144.39, accounting for
99.99% of the total.
2. Other receivables
（1）Aging analysis of other receivables is as follows:
Closing book balance
Aging
Amount Proportion Bad debt provision
Within 1 year(including 1 year) 64,522,742.07 17.45%
1-2 years(including 2 years) 12,672,308.17 3.43% 2,600,000.00
2-3 years(including 3 years) 1,698,489.91 0.46%
Over 3 years 290,969,022.70 78.67% 193,037,761.44
Total 369,862,562.85 100.00% 195,637,761.44
Opening book balance
Aging
Amount Proportion Bad debt provision
Within 1 year(including 1 year) 147,581,486.29 23.17%
1-2 years(including 2 years) 172,378,779.07 27.07% 2,600,000.00
2-3 years(including 3 years) 774,097.31 0.12% 601,762.21
Over 3 years 316,159,530.51 49.64% 192,382,520.46
Total 636,893,893.18 100.00% 195,584,282.67
（2）Other receivables by Categories are as follows：
Closing book balance
Categories
Amount Proportion Bad debt provision
Individually significant receivables 256,841,150.72 69.44% 195,637,761.44
Other insignificant amount 113,021,412.13 30.56%
Total 369,862,562.85 100.00% 195,637,761.44Opening book balance
Categories
Amount Proportion Bad debt provision
Individually significant
receivables 256,842,814.95 40.33%
195,584,282.67
Other insignificant amount 380,051,078.23 59.67%
Total 636,893,893.18 100.00% 195,584,282.67
（3）Notes to individually significant other receivables：
Name of company Closing
balance
Bad debt
provision
Aging Reason for provision
Shum Yip Properties
Development Co., Ltd. 108,432,646.29 68,634,188.97
Over 3 years Uncollectible for a long
period
Gintian Industry (Group) Co.,
Ltd.
56,600,000.00 56,600,000.00
1 – 2 years and over
3 years
Payment for discharging of
guaranty responsibility that
was difficult to be
recollected
Hainan Xinda Development
Co., Ltd 53,987,291.54 36,249,026.26
Within 1 year to
over 3 years
Uncollectible for a long
period
Shenzhen Shengfenglu ITC
Jewel & Gold Co., Ltd
10,199,186.28 6,532,519.60
2－3 years There is no asset to execute
the verdict, thus lead to
uncollectibility
Anhui Nanpeng Papermaking
Co., Ltd 8,702,432.00 8,702,432.00
Over 3 years Uncollectible for a long
period
Shanghai Yutong Real Estate
Co., Ltd. 5,676,000.00 5,676,000.00
Over 3 years Uncollectible for a long
period
HongKong Yueheng
Development Co., Ltd 3,271,931.42 3,271,931.42
Over 3 years Has been liquidated
Elevated Train Project 2,542,332.43 2,542,332.43 Over 3 years Suspended
Dameisha Tourism Center 2,576,445.69 2,576,445.69 Over 3 years Suspended
Shenzhen ITC Food
Enterprise Co.,Ltd. 2,431,652.48 2,431,652.48
Over 3 years Insolvency
Total 254,419,918.13 193,216,528.85
（4）The details of significant other receivables are as follows：
Name of company Amount Proportion
to total
other
receivables
Occurrence period
Shum Yip Properties Development Co., 108,432,646.29 29.32% Over 3 yearsLtd.
Shenzhen Property and Real Estate
Development Co., Ltd. 59,105,097.50 15.98%
Within 1 year to over 3
years
Gintian Industry (Group) Co., Ltd.
56,600,000.00 15.30%
1 – 2 years and over 3
years
Hainan Xinda Development Co., Ltd
53,987,291.54 14.60%
Within 1 year to over 3
years
Shenzhen ITC Tian’an Property Co., Ltd 24,705,931.45 6.68% Over 3 years
Shenzhen Municipal Planning and Land
Resource Bureau Longgang Breach 12,024,387.70 3.25%
Over 3 years
Shenzhen Shengfenglu ITC Jewel &
Gold Co., Ltd 10,199,186.28 2.76%
Over 3 years
Anhui Nanpeng Papermaking Co., Ltd 8,702,432.00 2.35% Over 3 years
Total 325,054,540.76 87.89%
（5）The closing balance of top 5 other receivables is RMB 302,830,966.78, accounting for
81.88% of the total.
3. Long-term equity investment
Categories Closing book balance Opening book balance
Long-term equity investment
accounted using equity method 67,056,526.59 65,190,292.51
Long-term equity investment
accounted using cost method 224,960,520.62 224,960,520.62
Sub-Total 292,017,047.21 290,150,813.13
Less：Provision for impairment of
long-term equity investment 110,478,227.43 106,241,949.60
Total 181,538,819.78 183,908,863.53
（1）Long-term equity investment accounted using equity method
Investment
Amount of
initial
investment
Opening
balance
Increase Decrease
Closing
balance
Cash
dividends
received
during the
current
period
Shenzhen ITC
Tian’an Property
Co., Ltd
23,186,124.0
0
37,134,170.5
0
1,721,148.00 38,855,318.5
0
Shenzhen Jifa 30,645,056.0 26,297,645.2 96,554.65 26,394,199.9Warehouse Co.,
Ltd
4 7 2
Shenzhen ITC
Tian’an
Properties
Management
Co., Ltd
1,500,000.00 1,758,476.74 48,531.43 1,807,008.17
Total 55,331,180.0
4
65,190,292.5
1
1,866,234.08
67,056,526.5
9
（2）Long-term equity investment accounted using cost method
Investment Initial investment Opening balance Increase Decrease Closing balance
Shenzhen ITC Vehicles
Industry Co., Ltd.
29,850,000.00 29,850,000.00 29,850,000.00
Hainan Xinda
Development Co., Ltd
20,000,000.00 20,000,000.00 20,000,000.00
Shenzhen Property and
Real Estate
Development Co., Ltd.
30,950,000.00 30,950,000.00 30,950,000.00
Shenzhen Huangcheng
Real Estate Co., Ltd
(Note)
28,500,000.00 28,500,000.00 28,500,000.00
Shenzhen ITC Property
Management Co., Ltd.
20,000,000.00 20,000,000.00 20,000,000.00
Shenzhen ITC Food
Co.,Ltd.
1,600,000.00 1,600,000.00 1,600,000.00
Shenzhen Property
Construction
Supervision Co., Ltd
2,000,000.00 3,000,000.00 3,000,000.00
Shenzhen International
Trade Plaza
12,000,000.00 12,000,000.00 12,000,000.00
Shenzhen Real Estate
Exchange
1,380,000.00 1,380,000.00 1,380,000.00
Shensan Co.,Ltd. 17,695.09 17,695.09 17,695.09
Hong Kong Shum Yip
Properties
Development Co., Ltd.
15,834,000.00 15,834,000.00 15,834,000.00
Zhanjiang Shenzhen 2,530,000.00 2,530,000.00 2,530,000.00Investment Initial investment Opening balance Increase Decrease Closing balance
Real Estate
Development Co., Ltd
China T.H. Co.,Ltd. 2,962,500.00 2,962,500.00 2,962,500.00
North Machinery
(Group) Co.,Ltd.
3,465,000.00 3,465,000.00 3,465,000.00
Guangdong Huayue
Real Estate Co.,Ltd.
8,780,645.20 8,780,645.20 8,780,645.20
Shenzhen Huajing
Glass Bottle Co., Ltd
7,600,000.00 7,600,000.00 7,600,000.00
Anhui Nanpeng
Papermaking Co., Ltd
13,824,000.00 13,824,000.00 13,824,000.00
Shenzhen Wufang
Pottery & Porcelain
Industrial Co., Ltd
18,983,614.14 18,983,614.14 18,983,614.14
Shenzhen ITC
Industrial Development
Co., Ltd
20,154,840.79 3,682,972.55 3,682,972.55
East Land Properties
Limited
93.64 93.64 93.64
Total 240,432,388.86 224,960,520.62 224,960,520.62
Note: 95% equities of Shenzhen Huangcheng Real Estate Co., Ltd held by the Company has been
frozen due to the case of “Haiyi”, a pending action, by the Court. Please refer to Note XII 1 (1) for
details.
（3）Provision for impairment of long-term equity investment
Item
Opening book
balance
Increase Decrease Closing book
balance
Anhui Nanpeng Papermaking Co.,
Ltd
13,824,000.00 13,824,000.00
Shenzhen Wufang Pottery &
Porcelain Industrial Co., Ltd
18,983,614.14 18,983,614.14
Shenzhen Huajing Glass Bottle Co.,
Ltd
7,600,000.00 7,600,000.00
Shenzhen ITC Industrial
Development Co., Ltd
3,682,972.55 3,682,972.55
Guangdong Huayue Real Estate
Co.,Ltd.
8,000,000.00 780,645.20 8,780,645.20Item
Opening book
balance
Increase Decrease Closing book
balance
North Machinery (Group) Co.,Ltd. 3,465,000.00 3,465,000.00
China T.H. Co.,Ltd. 2,160,300.45 2,160,300.45
Shensan Co.,Ltd. 17,695.09 17,695.09
Shenzhen ITC Food Co.,Ltd. 1,600,000.00 1,600,000.00
Hainan Xinda Development Co., Ltd 20,000,000.00 20,000,000.00
Zhanjiang Shenzhen Real Estate
Development Co., Ltd
2,530,000.00 2,530,000.00
Hong Kong Shum Yip Properties
Development Co., Ltd.
15,834,000.00 15,834,000.00
Shenzhen International Trade Plaza 8,544,367.37 3,455,632.63 12,000,000.00
Total 106,241,949.60 4,236,277.83 110,478,227.43
Note: Provision for impairment of long-term equity investment that is withdrawn in the reporting
period is because the above companies’s net assets as at the end of reporting period is negative.
4. Revenue and cost of sales
Items Amount occurred for the
current period
Amount occurred in the last
period
Income from main operation 13,680,918.93 10,320,880.23
Total 13,680,918.93 10,320,880.23
Items Amount occurred for
the current period
Amount occurred in
the last period
Cost of main operation 5,075,317.74 3,697,400.96
Total 5,075,317.74 3,697,400.96
Listed by the categories of production or business:
Categories Revenue Cost of sales Gross profit
Property rental and
management services
income
13,680,918.93 5,075,317.74 8,605,601.19
Total 13,680,918.93 5,075,317.74 8,605,601.19
5. Gain/loss on investment
Source Amount occurred for
the current period
Amount occurred in
the last period1. Gain on investment calculated at equity
method
1,866,234.08 329,659.93
2. Gain on investment from disposal of tradable
financial assets
20,528.04
3. Gain on investment from disposal of
available-for-sale financial assets
2,461,399.83
Total 1,866,234.08 2,811,587.80
Note XI Related party relationship and transactions
1. Identification of related party of the Company
According to Accounting Standards for Business Enterprises and the related regulations of China
Securities Regulatory Commission, the related party is defined as “when a party controls, jointly
controls or exercises significant influence over another party, or when two or more parties are
under the common control, joint control or significant influence of the same party, the related
party relationships are constituted.”
2. Related party relationship
(1) Related party with control relationship
A. Information of parent company
Name
Registered
address
Business scope Relationship Nature
Legal
person
Shenzhen
Investment
Holdings
Co., Ltd.
Shenzhen,
China
Providing guarantee for city
state-owned enterprises; Managing
the state-owned shareholdings
except for which is monitored
directly by State-owned Assets
Supervision and Administration
Commission of Shenzhen Municiple
Government; Managing the
reconstruction, system renovation
and capital operation over the
affiliates; investing; other business
authorized by State-owned Assets
Supervision and Administration
Commission of Shenzhen Municiple
Government.
Parent
company
Limited
liability
company
(state-owned)
Chen
Hongbo
The registered controlling shareholders of the Company for the moment is Shenzhen Construction
Investment Holdings, the details refer to Note I. 4.
B. Subsidiaries with control relationshipInformation about subsidiaries of the Company refers to Note VII.1.
(2) The registered capital and changes of related party with control relationship
A. The registered capital and changes of shareholder with control relationship
(Unit: RMB0’000)
Name Opening balance Increase Decrease Closing balance
Shenzhen Investment Holdings
Co., Ltd.
400,000.00 400,000.00
B. The registered capital of subsidiaries with control relationship refers to Note VII.1.
（3）The shareholdings held by the related party with control relationship and the changes in
shareholdings (All amounts are presented in RMB, unless otherwise stated.)
Name Opening balance Increase/Decrease Closing balance
Amount % Amount % Amount %
Shenzhen Investment
Holdings Co., Ltd.
323,747,713.00 59.75 323,747,713.00 59.75
Hainan Xinda
Development Co., Ltd
20,000,000.00 100 20,000,000.00 100
Shenzhen ITC Food Co.,
Ltd.
2,000,000.00 100 2,000,000.00 100
Shenzhen Property and
Real Estate Development
Co., Ltd.
30,950,000.00 100 30,950,000.00 100
Shenzhen ITC Property
Management Co., Ltd.
20,000,000.00 100 20,000,000.00 100
Shenzhen ITC Vehicles
Industry Co., Ltd.
29,850,000.00 100 29,850,000.00 100
Shenzhen Huangcheng
Real Estate Co., Ltd
30,000,000.00 100 30,000,000.00 100
Sichuan Tianhe Industry
Co., Ltd
8,000,000.00 100 8,000,000.00 100
Shenzhen ITC Property
Management Engineering
Equipment Co., Ltd
1,200,000.00 100 1,200,000.00 100
Shenzhen Tianque
Elevator Technology Co.,
Ltd
5,000,000.00 100 5,000,000.00 100Name Opening balance Increase/Decrease Closing balance
Amount % Amount % Amount %
Chongqing Shenzhen ITC
Property Management
Co., Ltd.
5,000,000.00 100 5,000,000.00 100
Chongqing Ao’bo
Elevator Co., Ltd
2,000,000.00 100 2,000,000.00 100
Shenzhen ITC Petroleum
Co., Ltd
8,500,000.00 100 8,500,000.00 100
Shenzhen ITC Vehicle
Industry Company
Vehicle repair shop 1,500,000.00 100 1,500,000.00 100
Shenzhen Tesu Vehicle
Driver Training Center
Co., Ltd.
2,000,000.00 100 2,000,000.00 100
Shenzhen Huangcheng
Real Estate Management
Co., Ltd.
5,000,000.00 100 5,000,000.00 100
Zhanjiang Shenzhen Real
Estate Development Co.,
Ltd
2,530,000.00 100 2,530,000.00 100
Shenzhen Property
Construction Supervision
Co., Ltd
3,000,000.00 100 3,000,000.00 100
Shenzhen International
Trade Plaza
12,000,000.00 100 12,000,000.00 100
Shenzhen Real Estate
Exchange
1,380,000.00 100 1,380,000.00 100
Shum Yip Properties
Development Co., Ltd.
HKD20,000,000.00 100 HKD20,000,000.00 100
Wayhang Development
Limited
HKD2.00 100 HKD2.00 100
Chief Link Properties
Limited
HKD100.00 70 HKD100.00 70
Syndis Investment Co.,
Ltd (note)
HKD4.00 70 HKD4.00 70
East Land Properties
Limited
HKD100.00 100 HKD100.00 100Note: Chief Link Properties Limited holds 100% shareholding of Syndis Investment Co., Ltd.
（4）Other related parties
Name Relationship
Shenzhen Jifa Warehouse Co., Ltd Joint venture
Shenzhen ITC Tian’an Property Co., Ltd Joint venture
Anhui Nanpeng Papermaking Co., Ltd 30% shareholdings held by the Company
Shenzhen Wufang Pottery & Porcelain Industrial Co., Ltd 26% shareholdings held by the Company
Shenzhen ITC Industrial Development Co., Ltd 38.33% shareholdings held by the Company
Guangzhou Lishifeng Motor Co., Ltd 30% shareholdings held by the Company
3. Related Party Transactions
(1) Amount due to/from related parties
Balance %
Name
30 Jun. 2009 31 Dec. 2008 30 Jun. 2009 31 Dec. 2008
Other receivables:
Shenzhen ITC Tian’an Property
Co., Ltd 24,705,931.45 24,705,931.45 14.30 14.19
Anhui Nanpeng Papermaking
Co., Ltd 8,702,432.00 8,702,432.00 5.04 5.00
Shenzhen ITC Industrial
Development Co., Ltd 2,431,652.48 2,431,652.48 1.41 1.40
Shenzhen Wufang Pottery &
Porcelain Industrial Co., Ltd 1,747,264.25 1,747,264.25 1.01 1.00
Short-term borrowings:
Shenzhen Investment Holdings
Co., Ltd. (note) 200,000,000.00 215,000,000.00 68.49 58.27
Other payables:
Shenzhen ITC Petroleum Co.,
Ltd 3,400,442.77 2,603,248.77 1.71 1.22
Shenzhen Jifa Warehouse Co.,
Ltd 6,163,040.00 6,163,040.00 3.11 3.27
Guangzhou Lishifeng Motor
Co., Ltd 15,000,000.00 10,000,000.00 7.56 5.33
Note: The closing balance of the short-term loan of Shenzhen Investment Holdings Co., Ltd. to the
company is amount to RMB 200 million, including the amount of RMB 50 million guaranteed by
The Agricultural Bank of China Shenzhen Branch at 24 Jan. 2009, the loan is due at 23 Jan. 2010;
the amount of RMB150 Million borrowed from the subsidiary of the company - Shenzhen
Huangcheng Real Estate Co., Ltd, guaranteed by China Everbright Bank Shenzhen JingtianBranch at October 15, 2008, the loan is due at October 14, 2009.
Note XII Contingencies
1. Pending litigations
（1）In December 1997, eight house owners including Haiyi Industrial (Shenzhen) Co., Ltd. sued
the Company and its subsidiary, Shenzhen International Trade Plaza Property Development Co.,
Ltd., to Shenzhen Intermediate People’s Court (hereinafter referred to as Shenzhen Intermediate
Court) for cancellation of the Property Purchase and Sale Contract, refund of house purchase
payment and a penalty amounted to RMB 0.3 billion because of delay in property delivery. The
Company counterclaimed that the delay was due to the prosecutor’s unsettled property
consideration and Shenzhen Intermediate Court adjudicated that the Company won the lawsuit.
The prosecutor did not accept the judgment and appeal to Guangdong Higher People’s Court
(hereinafter referred to as Guangdong Higher Court). Guangdong Higher Court made the final
adjudication with 34 copies verdict in April 1999. Guangdong Higher Court adjudicated that the
Contract of Purchase and Sale of Real Estate of Shenzhen City between both parties was effective.
Furthermore, the prosecutor has paid off all property considerations. The Company therefore
should bear penalty, compensation and legal fare added up to HKD79.16 million to the prosecutor.
The eight companies applied to Shenzhen Intermediate Court for the execution in June 1999.
Because of unclear recognition of the truth and improperly application of the law, Guangdong
Higher Court decided to retry the case in August 1999 under the Company’s application.
According to the decision of the retrial, Shenzhen Intermediate Court ended the execution of the
case after the Company provided possession’s drawing. At the end of 2003, Guangdong Higher
Court overruled the application of the Company after investigation. The Company estimated
related losses amounted RMB41,772,906.07 according to the carrying amount of the property
drawn. The company believes that there are problems such as unclear recognition of the truth,
improper application of the law, and violation of the legal procedures and so on. Hence the
Company applied to the Highest People’s Court for the case to be retried. In February 2008, the
Highest People’s Court decided that the judgment of YGFM (1998) No. 298 (No. 1 case of
commercial company) should be retried. The case was reopened by Guangdong Higher Court on
June 18, 2008 and is still under investigation. In 2008, an additional prospective damage is RMB
19,481,328.37 due to change in market price of properties drawn by the Company.
On 6 Apr. 2009, the Company received 34 copies of Enforcement Restore Notice issued by the
Shenzhen Intermediate Court on Match 23, 2009, claimed that the eight house owners including
Haiyi Industrial (Shenzhen) Co., Ltd. applied to the court for restoration the enforcement of the 34
copies of verdict issued at 1999. Shenzhen Intermediate People’s Court accepted and heard this
application.
On 2 Jun. 2009, the Company received Notice on Sealing up and Freezing Property ( (2009)
SZFZZ No. 364-377,379-397 (-1)) served by Shenzhen Intermediate People's Court, sealed up andfroze part property, equity and bank account of the Company. On 25 Jun. 2009, the Company also
received Notice on Sealing up Property ((2009) SZFZZ No. 364-377,379-397) served by
Shenzhen Intermediate People's Court, Shenzhen Intermediate People's Court additionally sealed
up part property of the Company. Please refer to the public notices disclosed on 4 Jun. and 29 Jun.
2009 for details. Among the 34 cases, one case [(1998) YGFMZ Zi No. 298] has entered into
judicial proceeding, namely, suspend execution was ruled by the Supreme People's Court judged
and the Supreme People's Court remanded the case for a new trial. Hereby, the Company raised
opposition to execution with the said 34 cases to Shenzhen Intermediate People's Court. Shenzhen
Intermediate People's Court suspended execution of the case [(1998) YGFMZ Zi No. 298], the
other 33 cases shall be continued to execute.
The Company considered that: the 33 judgments as base of application for execution were the
same with Judgment (1998) YFMZZ No. 298 that has problems of unclear fact, non-applicable
law to the case and violating legal procedure. The Company is applying to rehear. Meanwhile, the
Company also tried to find other legal means to safeguard legal rights of the Company and
shareholdes.
（2）In 1993, the Company signed Right of Development Transfer Contract of Jiabin Building
(name of Jiabin Building has been changed to Jinlihua Building) with Shenzhen Haibin Property
Development Co., Ltd. (name of which has been changed to Shenzhen Jiyong Property
Development Co., Ltd., hereinafter referred to as Jiyong Company). In January 1999, Jiyong
Company sued the company to Guangdong Higher People’s Court for termination of the transfer
contract and refund of the transfer consideration and construction payment paid on the ground that
the area of premises was in discrepancy with the contract. With respect to this, the Company
counterclaimed the opposing party to pay back the rest transfer consideration and applied for
sealing up their property with an area of 28,000 square meters.
On July 29, 2001, Guangdong Higher People’s Court issued Civil Court Judgment YGFM (1999)
No. 3 (hereinafter referred to as Judgment No. 3) to judge that ① the Company should transfer the
title of land use right specified in the transfer contract to Jiyong Company within 30 days from the
date the judgment taking into effect and ②Jiyong Company should pay off the transfer
consideration amounting to RMB143,860,000 within 60 days from the date the Company
transferred the title of land use right. On November 27, 2001, the Company applied to Guangdong
Higher People’s Court for forcible execution, however Guangdong Higher People’s Court
adjudicated to release the sealing property of Jiyong Company approximately 10,000 square
meters since Industrial & Commercial Bank of China Zhejiang Branch disagree to seal the
properties.
In January 2006, Guangdong Higher People’s Court issued Civil Court Judgment YGFZ (2002)No. 1 and adjudicated because that ① the Company has not yet transferred the title of land use
right specified in the transfer contract to Jiyong Company and ② Jiyong Company cannot provide
other properties available for execution and the Company also cannot provide the property
available for execution, the second judgment of the No. 3 verdict - “Jiyong Company should pay
off the transfer consideration amounted RMB143,860,000 within 60 days from the date the
Company transferred the title of land use right” is terminated for execution. When the conditions
causing termination for execution of the second judgment are eliminated, the second judgment
should still be executed.
In March 2006, according to the ordain of Guangdong Higher People’s Court, the properties in
Jiabin Building that have been sealed up in this case have been leased automatically. Till the end
of the period, the Company has applied to the Court for restoration of the judgment execution and
is still waiting for Court’s investigation.
（3）On July 1996, China Huaxi enterprise Limited has signed Jinglihua Commercial Square
granite outside decoration construction Contract with Jiyong Ltd. The China Huaxi enterprise Ltd
later sued to the Luohu court for the default construction payment by Jiyong Ltd for the
construction payment and related losses of Jiyong Ltd, Shenzhen Zongli Investment Limited and
the company amounted RMB5.87million. The case has been reopened in May 2009. In the
company’s opinion, according to the truth and legal proceeding, this case would not bring losses
to the Company as the company is not the main party of the contract.
（4）The case of Duokuai Elevator
A. On July 11, 2002, Shenzhen Huangcheng Real Estate Co., Ltd., a subsidiary of the Company,
(hereinafter referred to as Real Estate Company) and Duokuai Elevator (Far East) Co., Ltd.
(Hereinafter referred to as Duokuai Company) signed Elevator Equipment Contract and House
Mortgage and Purchasing Contract to purchase the elevators for Huang Yu Yuan District B from
Duokuai Company, Taoboming agreed to provide guaranty with the mortgage of his own
properties to Real Estate Company to ensure that Duokuai Company would supply the elevators
on time. On December 6, 2004, Real Estate Company applied to Shenzhen Arbitration Committee
for arbitration to cancel the contract on the ground that Duokuai Company did not supply the
elevators, and demanded from the Elevator Company to return the double amount of the deposit
paid to the amount of RMB7,539,000.00, the consideration of RMB15,904,000.00 and a
compensation of RMB277,268.51. On November 24, 2005, Shenzhen Arbitration Committee
made an arbitration that Duokuai Company should make a double repayment of the deposit paid
by Real Estate Company to the amount of RMB7,539,000.00 together with a repayment of the
consideration of RMB15,904,000.00 and Taoboming should take joint discharge liability within
the bound of the value of the properties mortgaged.
Duokuai Company and Taoboming refused to accept the arbitration and applied to Shenzhen
Intermediate People’s Court for revoking the arbitration on December 7, 2005. In 2006, ShenzhenIntermediate People’s Court issued Civil Ruling Paper SZFMSCZ (2006) No. 18 and 19 to
adjudge that the application of revoking the Arbitration SZCZ (2005) No. 1227 made by Shenzhen
Arbitration Committee from Shenzhen Arbitration Committee was overruled. On November 16,
2006, Real Estate Company reported the condition of execution to Shenzhen Intermediate
People’s Court and applied to it for an auction of the properties mortgaged.
Progress in the first half year of 2009: ① Two real estate under the name of Duokuai Elevator, that
is podium building of Huangchen Plaza and Shimao Plaza with total areas of 957.31 square meters
had been auctioned at auction price of RMB 4,280,000. In Apr. 2009, Huangcheng Real Estate
received RMB 3 million transferred from Shenzhen Intermediate Peoples’ Court and Balance
amounting to RMB 1.28 million was still in account of Shenzhen Intermediate Peoples’ Court. ②
According to Notice (2006) SZFZ Zi No. 516, Shenzhen Intermediate Peoples’ Court auctioned
five real estates with auction price of RMB 5.14 million on 24 Apr. 2009, of which one third
amounting to RMB 1,713,333.00 was the executed property to distrain for debt payable to
Huangcheng Real Estate.
B. On August 3, 2006, Hainan Duokuai Elevator Maintenance (Far East) Co., Ltd. Shenzhen
Branch (hereinafter referred to as Duokuai Shenzhen Company) sued Shenzhen Huangcheng Real
Estate Management Co., Ltd, a subsidiary of the Company, (hereinafter referred to as Huangcheng
Management Company) to Shenzhen Futian People’s Court for settlement of maintenance fee by
Huangcheng Management Company. In the process of investigation, Duokuai Shenzhen Company
applied for adding Real Estate Company as joint defendant and asked Real Estate Company to
take joint discharge liability for aforesaid instance. On January 26, 2007, Shenzhen Futian
People’s Court issued the Civil Ruling Paper SFFMECZ (2006) No. 1977 and adjudicated that
Real Estate Company and Huangcheng Management Company should pay the maintenance fee
amounted RMB925,500.00 and RMB1,105,130.00 respectively together with a compensation on
related interest loss to Duokuai Shenzhen Company. Real Estate Company and Huangcheng
Management Company appealed on the ground of unclear recognition of truth and violation of
legal procedures. On January 28, 2008, Shenzhen Intermediate People’s Court issued Civil Ruling
Paper SZFMEZZ (2007) No. 827 and adjudicated that Real Estate Company and Huangcheng
Management Company should pay the maintenance fee amounted RMB893,100.00 and
RMB1,102,730.00 respectively together with a compensation on related interest loss to Duokuai
Shenzhen Company. Real Estate Company and Huangcheng Management Company have
recognized relevant expenses in the financial statements.
Huangcheng Real Estate Co., Ltd should receive balance of RMB 8,726,693.00 at the period-end
from Duokuai Elevator. In view of unsettled payables from Duokuai Elevator, its related parties
and guarantee parties by Huangcheng Real Estate Co., Ltd, the Company carried depreciation
provision test and confirmed to withdraw RMB 3,978,423.60 as bad debt reserves.
(5) In June 2004, Shenzhen Meisi Industrial Co., Ltd. (hereinafter referred to as Meisi Company)
prosecuted Shenzhen Luohu Economic Development Co., Ltd and the Company to ShenzhenIntermediate People’s Court for illegal use of land owned by Meisi Company and request for
ceasing the infringing act and receiving a compensation amounted RMB 8 million. In March 2005,
Shenzhen Intermediate People’s Court issued Civil Ruling Paper SZFMCZ (2004) No. 108 and
adjudicated that the Company should return the land with an area of 4,782 square meters to Meisi
Company within 3 months and other claims of Meisi Company were overruled. The Company
refused to accept the verdict and appealed to Guangdong Higher Court. On November 25, 2005,
Guangdong Higher Court adjudicated that the Civil Ruling Paper SZFMCZ (2004) No. 108 issued
by Shenzhen Intermediate People’s Court should be cancelled and the prosecution of Meisi
Company were overruled.
During the process of trial of second instance, Meisi Company applied to Registration Center for
Property of Real Estate of Shenzhen Municipality for revoking Property Ownership Certificates
SFDZ No. 3000320987 and No. 300119899 owned by the Company. On July 7, 2005, Registration
Center for Property of Real Estate of Shenzhen Municipality issued the reply of SFDH (2005) No.
84 to Meisi Company and judged that aforesaid certificates are legal and effective and should not
be revoked. Meisi Company disagreed with this judgment and applied the administrative
reconsideration to the People's Government of Shenzhen Municipality. On October 8, 2005, the
People's Government of Shenzhen Municipality issued Decision on Administrative
Reconsideration SFFJ (2005) No. 294 and judged that aforesaid 2 certificates were registered
illegally and should be revoked, reply of SFDH (2005) No. 84 was canceled accordingly.
The Company refused to accept Decision on Administrative Reconsideration SFFJ (2005) No. 294
and prosecuted an administrative litigation to Shenzhen Intermediate People’s Court on October
20, 2005. Shenzhen Intermediate People’s Court issued Administrative Judgment SZFXCZ (2005)
No. 23 and adjudicated that Decision on Administrative Reconsideration SFFJ (2005) No. 294 is
sustained. The Company disagreed with this administrative judgment and appealed to Guangdong
Higher Court on August 2, 2006. Guangdong Higher Court issued Administrative Judgment
YGFXZZ (2006) No. 154 in which the appeal was rejected and Administrative Judgment
SZFXCZ (2005) No. 23 was sustained. According to this Judgment, Shenzhen Municipal Bureau
of Land Resources and Housing Management would reconsider the request of Meisi Company to
revoke the Property Ownership Certificates SFDZ No. 3000320987 and No. 3000119899 of the
Company.
On May 15, 2007, Registration Center for Property of Real Estate of Shenzhen Municipality
issued Decision on Revoking the Property Ownership Certificates SFDZ No. 3000320987 and No.
3000119899 (SFZ (2007) No. 27). Registration Center for Property of Real Estate of Shenzhen
Municipality decided to revoke property ownership certificates SFDZ No. 3000320987 and No.
3000119899 owned by the Company that indicating the ownership of occupied property of MeilinWorkshop, Comprehensive Building and the land use right of 11,500 square meters and restore the
registration of the ownership of occupied property of Meilin Workshop, Comprehensive Building
and the land use right of certificates of SFDZ No. 0103142 and No. 0103139. The Company had
the ownership of occupied property of Meilin Workshop, Comprehensive Building and the land
use right of 11,500 square meters according to original property ownership certificates.
On July 9,2007, the Company applied the administrative reconsideration to the Administrative
Reconsideration Office of the People's Government of Shenzhen Municipality, which considered
that those action that Registration Center for Property and Real Estate of Shenzhen Municipality
revoked property ownership certificate SFDZ No. 3000320987 and No. 3000119899 owned by
the Company and restore the registration of Meilin Workshop, Comprehensive Building and land
use right violated the provisions of the Decision on Strengthening Land Market Management and
further Enlivening and Standardizing Real Estate Market (SF (2001) No. 94) promulgated by
People’s Government of Shenzhen Municipality, and requested People’s Government of Shenzhen
Municipality to rescind the Decision. On September 6, 2007, the People's Government of
Shenzhen Municipality issued Decision on Administrative Reconsideration SFFJ (2007) No. 255
to sustain the administrative decision of Shenzhen Municipal Bureau of Land Resources and
Housing Management.
In November 2007, Shenzhen Municipal Bureau of Land Resources and Housing Management
rejected the application of Meisi Company for revoking Property Ownership Certificates SFDZ
No. 0103142 and No. 0103139. Meisi Company prosecuted an administrative litigation to
Shenzhen Futian People’s Court to ask for revoking the administrative decision of Shenzhen
Municipal Bureau of Land Resources and Housing Management. The Company was involved as
third party. Court session started on January 8, 2008 with litigation number of (2008) SFFXCZ No.
10. On January 2008, Meisi Company prosecuted an administrative litigation to Shenzhen Futian
People’s Court for revoking the above administrative decision of Shenzhen Municipal Bureau of
Land Resources and Housing Management, revoking Property Ownership Certificates SFDZ No.
0103142 and No. 0103139, and restoring the land use right to Meisi Company with the litigation
number of SFFX(2008) No. 70. On May 2008, the Shenzhen Futian Court made adjudication to
No. 70 case in which the property ownership certificates SFDZ No. 0103142 and No. 0103139
owned by the Company were revoked and Shenzhen Municipal Bureau of Land Resources and
Housing Management were required to re-investigate the application of Meisi Company. The
company, the Shenzhen Municipal Bureau of Land Resources and Housing Management as well
as Meisi Company refused to accept the verdict and made an appeal. On July 2008, the company
has received the Administrative Ruling Paper from Futian People’s Court in which the trial of
SFFX (2008) No. 10 was terminated.On December 2008, Shenzhen Intermediate Court issued the Administrative Ruling Paper
SZFXZZ (2008) No. 223, in which the final adjudication of appeal case SFFXCZ (2008) No. 70
was made and the original verdict was sustained. Moreover, the final adjudication stated that the
controversy over the land use right in this case between Meisi Company and the Company should
be settled through civil procedures; the Bureau of Land Resources and Housing Management of
Shenzhen Municipality should not proceed the registration procedure until the controversy is final
settled.
On February 11, 2009, the Company received the Civil Complaint from ShenZhen Futian People’s
Court; Meisi Company has made a civil prosecution against the Company and Shenzhen Luohu
Commercial Development Co., Ltd. for the confirmation of Meisi Company’s land use right and
the buildings in original Property Ownership Certificates SFDZ No., 0103142 and No., 0103139.
Furthermore, Meisi Company requests that return of related land use right and a compensation of
RMB7.5 Million. The Company has submitted an objection to jurisdiction. On March 4, 2009,
ShenZhen Futian People’s Court sent the Notice to the Company to inform that this case has been
transferred to Shenzhen Intermediate People’s Court for adjudication.
The Company believes that the land use right and ownership of above building should be legally
confirmed to the Company. The Company will secure its own legal rights through all legal means,
and the above issues would not have significant impact on the Company’s financial position.
2. Guarantee
(1) The Company provides guarantee to China Construction Bank Shenzhen branch for the
long-term loan of its subsidiary Shenzhen Huangcheng Real Estate Co., Ltd. which the credit
facility is RMB 250 million and the closing balance is RMB 200 million.
(2) The Company provides guarantee to Agricultural Bank of China Eastern branch for the
long-term loan of its subsidiary Shenzhen Huangcheng Real Estate Co., Ltd. with and the 3rd floor
of Block A and 4-01 property in Shenzhen International Trade Center owned by the Company,
which the credit facility is RMB 240 million and the closing balance is RMB 200 million.
(3) The Company obtained short-term loan of RMB 50 million which the closing balance is RMB
33 million from Agricultural Bank of China Eastern branch with pledge of certain properties in
International Trading Plaza for its subsidiary Shenzhen ITC Vehicles Industry Co., Ltd.
(4) Guarantee for the house owners: The Company and its subsidiaries provide mortgage
guarantee for commodity premise purchasers. The total unsettled guarantee is RMB 692.56
million as at June 30, 2009. It is common that the real estate developer provides mortgageguarantee for small owners.
3. Contingent assets
(1) Bureau of Foreign Trade and Economic Cooperation of Hubei province Shenzhen branch
(hereinafter referred as “Hubei FTEC Shenzhen branch”) sued the Company to Shenzhen
Intermediate People’s Court on July 2000 for termination of the agreement between the Hubei
FTEC Shenzhen branch and the Company about office property of 4,000 square meters purchasing
in Jiabing Building (now known as Jinlihua Building) and asked for refund of purchase payment
of RMB10.8 million and an indemnify of RMB18.6756 million on the ground of delayed delivery.
Guangdong Higher Court issued YGFMYZZ No. 90 judgment and adjudicated that the Company
should refund the Hubei FTEC Shenzhen branch purchase payment of RMB 10.8 million and
related interests.
The Hubei FTEC Shenzhen branch applied for execution to Guangdong Higher People’s Court.
Guangdong Railage Intermediate Court (hereinafter as the “Railage Court”) was appointed by the
Higher Court to execute the case at the end of January 2005. The Railage Court delivered the
seal-up order to the liquidation team of Luohu Hotel, sealing up the debt right amounted RMB 23
million allocated to the Company.
The Company rejected the adjudication and applied for retrial to the Supreme Court of the P.R.C.
In August 2005, the Supreme Court issued the Civil Judgment (2004) MEJZ No.146-1 and
adjudicated that the Higher Court should give the case second instance and the execution should
be suspended during the second instance. On 12 May 2006 the Higher Court made the judgment
that the original judgment should be sustained and the execution be resumed. The Hubei FTEC
Shenzhen branch applied to the Railage Court for the payment and bank interest in the second trial
period, while the Company applied for the suspension of execution. On 30 June 2006, the (2004)
GTZFZZ No. 225-4 Civil Judgment was issued by the Railage Court in which (i) The Company’s
execution suspension application was denied because it lacked for facts and legal evidence; (ii) It
was legal for the Hubei FTEC Shenzhen branch to apply and the Railage Court decided to transfer
RMB23 million from the sealed account which had been transferred to the Railage court after
deduction of execution fees to t the Hubei FTEC Shenzhen branch; (iii) The Hubei FTEC
Shenzhen branch’s application of interest during the second trial was denied; (iv) The Company’s
repayment obligation ruled by the Judgment No.90 had been legally executed; (v) the execution of
Judgment No.90 was terminated. The Company recognized losses based on the above judgments,
and increased the receivables due from Jiyong Company and made provision for bad debts
accordingly. The Company considered that there is error of fact recognition and application of the
law in the adjudication of the second trial and appealed to the Supreme People's Court. The
Supreme People's Court issued the Civil Ruling Paper MEJZ (2004) No. 146-3 and adjudicatedthat this litigation would be retried by the Supreme People's Court.
Ownership of the 14th and 15th floors of Jiabing Building retuned by the Hubei FTEC Shenzhen
branch belongs to the Company after indemnity of house payment and interest. The Company
investigated and found that the owner of the 14th and 15th floors of Jiabing Building was registered
as Zhuhai Western Yingzhu Industrial Development Co., Ltd. addressing the ownership of the
properties, therefore, on June, 2008 the Company sued Zhuhai Western Yingzhu Industrial
Development Co., Ltd. to the People’s Court of Luohuo District in Shenzhen (hereinafter referred
as “Luohu Court”) for confirmation of the above properties’ ownership and adjudicating the
Company’s ownership of the 14th and 15th floors of Jiabing Building in the registration. The Luohu
Court processed the case with the litigation number of (2008) SLFMSCZ No. 1442. On July 21,
2008, the court held a public trail and hosted the mediation; the Company reached a Civil
Mediation Agreement with Zhuhai Western Yingzhu Industrial Development Co., Ltd. in which
stated ① both agree that the 14th and 15th floor of Jiabin building belongs to the complaint
company; ② the defendant should assist the complaint party (the Company) with the procedures
of transferring the property to the complaint company within 3 days since the agreement becomes
effective. The agreement is legally valid. Up to the end of current financial period, the 14th and
15th floor of Jiabin building has been registered under the Company’s name by China Committee
of Real Estate Title. As there is a significant uncertainty about the impact of the above property
ownership on the Company’s financial interests, the Company did not recognize the above asset in
the financial statement.
(2) On May 25, 2006, the People's Government of Shenzhen Municipality announced the Notice
on Transferrable Plan of Shenzhen Community Facilities and Public Services Houses (SFB [2006]
No.79), which stipulated the scope of the transfer covers (i) the buildings built for resident
committees and junior and senior schools (excluding that the land contract clearly indicates the
property right belongs to land development entity), since the scheme of payment-transfer of land
use right has been executed on January 3, 1998, and (ii) public services building such as
kindergarten that should been but not transferred to the government according to the land contract
or other agreements, since the scheme of payment-transfer of land use right has been executed
on January 3, 1998. If the buildings built for resident committees and junior and senior schools
were not definite in the contracts whether the property rights belonged to the government or
whether these buildings were transferred government at cost price, the government would take the
buildings back at cost price. The cost price should be based on information price and costing index
publicized in the construction costing management station at the completion year. The auditing
department should perform review on the pricing scheme.
Base on the statistics, the Company and its subsidiaries have transferred to relate governmentdepartment the community facilities and public services houses of the building area of 36,000
square meters, which complied with the above scheme, although the buildings in these community
facilities has been mapped, its area and cost price has not been confirmed by the government, and
Shenzhen Huangcheng Real Estate co., Ltd. fails to handle truning over procedure to relevant
community facilities of hence, the final confirmation on the area and amount of compensation
could not be confirmed. Therefore, the Company did not recognize the above contingent assets in
the financial statements.
Note XIII Events after balance sheet date
1. On February 9, 2009, a resolution regarding disposal of use right of a land located in Sihui City
is approved by the twelfth session of the sixth conference of the Company’s board of directors.
The details of the resolution are described as follows. Shenzhen Huangcheng Real Estate Co., Ltd
(hereinafter referred to as “Huangcheng Real Estate”), a wholly-owned subsidiary of the Company,
owns use right of an industrial land located in Sihui City Guangdong Province (with an expiration
date of August 11, 2044, hereinafter referred to as “Sihui Land”) with an usable area of 31,394.49
square meter (equivalent to 47.09 Mu). To protect right of the company from government
expropriation, Huangcheng Real Estate plans to negotiate with the People’s Government of Sihui
City to repurchase use right of Sihui Land. Huangcheng Real Estate signed the Land Purchase
Contract with Sihui Land Storage Centre by EMS. On 6 Jul. 2009, the Company received the
original copy of the said contract signed and sealed between two parties at the purchase price of
RMB 112,000.00 per Mu, as well as total purchase price of RMB 5,274,080.00. In view of the
said transaction, the profit after tax of RMB 1.3 million shall be increased for the Company.
Please refer to the temporary public notice disclosed on 8 July 2009. Up to reporting date,
Huangcheng Real Esate failed to receive such payment.
2. Material borrowing and repayment of borrowing after balance sheet date
Shenzhen Huangcheng Real Estate Co., Ltd., the subsidiary of the Company, has returned the
long-term borrowing of RMB 20 million to the Industrial and Commercial Bank of China,
Shenzhen Futian Sub-branch on 14 July 2009, up till now, all long-term borrowing the Company
borrowed from such bank has been repaid.
Note XIV Other significant events
1. On November 11, 20, 2008, Investment Holding raised the Non-tradable Share Reform
Proposal but has not passed the board of director meeting related to the Non-tradable Share
Reform on December 12. Up to the report date, the company has not received any other written
proposal on the restart of the Non-tradable Share Reform.
2. The company has accrued expense of the Jinlihua Plaza land VAT amounted to RMB
56,303,627.40 in the previous financial year, according to the SGT (2001) No. 314, unpaid oroverdue land VAT could be exempted. However, as the land use right has not been transferred, the
company will proceed with the Jinlihua Plaza land VAT amounted to RMB 56,303,627.40
exemption related procedures, and will write off the accrued expense of Jinlihua Plaza land VAT
amounted to RMB 56,303,627.40 when the Company receives the reply.
The company has receivable house payment from Shenzhen Jiyong Property Development Co.,
Ltd Jinlinhua Plaza amounted to RMB100.0143 million, the provision for bad debts is amounted
to RMB 44.0143 million and the net amount is RMB56 million.
3. On May 9, 2008, the Company and Tianhong Shopping Plaza Co. Ltd (thereafter referred to as
Tianhong Company) signed The ITC Plaza Renting Contract, which states that: The Company
rents to Tianhong Company floor 1-5 in Area A of the ITC Plaza and the surrounding self-owned
property, with a renting area of 21,220 square meter, renting period of 15 years, the company
needs to hand in the property to Tianhong Company before 30th June from when the rent starts;
Tianhong Company is responsible for the decoration and transform after the hand in of the
property; and the promised opening time for the shopping plaza should be no later than December
1, 2008; rent free period is provided according to the condition of decoration of Tianhong
Shopping Plaza etc.; the company is responsible for the providing of car parking and related
supporting facilities. Shenzhen ITC Tian’an Properties Co., Ltd (thereafter referred to as Tianan
Company) in which The Company has 50% shareholdings also signed Tianan Shopping Plaza
Property Renting Contract with Tianhong Company to rent part of Tianan Shopping Plaza floor
1-4 to Tianhong Company with the renting area of 14,477.88 square meter, renting period of 15
years, rent and service standards, rent free period and other promises are similar to The ITC Plaza
Renting Contract.
The Company and Tianan Company has hand in the property to Tianhong Company on June 30,
2008, after the decoration, ITC Shopping Plaza opened on December 5, 2008, based on the
contract, according to the related provision of The Accounting Standard Explanation (2008),
considering the cash value of the rent of the whole renting period, The Company and Tianan
Company confirmed individually the rent of the rent free period during the financial year.
4. The Company received from CSRC Shenzhen Inspection Bureau the Investigation notice
(SJLTZ (2008) No. 001) on September 10, 2008, to investigate the Company’s suspicion on the
violation of Security Law and Regulation. Up to the date of the report, The Company has not been
informed with any result of the investigation.
5. According to the Land Policy and The Company’s development plan, in April 2008, the
subsidiary company Shenzhen Huangcheng Real Estate Co., Ltd reported to The Planning
Department the design proposal bid record for land Huangcheng No. 0051, and at the same time
issued the bid invitation proposal. Huangcheng Company received the reply SGZSH (2008) No.467 in May which stated that part of the No. 0051 land will be occupied by the Municipal Plan of
the Futian Nan Road linking to Fugang Road project, hence the plan of The Company would
temporarily not be considered. In Apr. 2009, In Apr. 2009, the relevant department of Shenzhen
Municipal Planning Bureau gave a written reply, the Company’s desgin plan of Land No.0051,
with the construction land area in the plan adjusted from 12,633.90 ㎡ to 12,597.57 ㎡. After the
adjustment, the construction land area was reduced by 36.33 ㎡. At present, the Company is
waiting to sign the Supplementary Contract with Shenzhen Minicipal Bureau of Land Resources
and Housing Management.
6. According to the Labor Legislation, the Labor Contract Law, The Opinion on Further
Standardization of Labor Relation of the Municipal SOE, The Notice to Reform the Human
Resource Allocation Improvement in Municipal SOE which is issued on August 18, 2006, and
some other related document, the Company formulated Compensation Measures of Human
Resource Allocation Improvement Reform of Shenzhen Properties & Resources Development
(Group) Ltd. (Thereafter referred to as Compensation Method), The Compensation Method has
approved by the Company’s employee representative conference on October 10, 2008. The
Company formulated employee dismiss plan based on the Compensation Method which was
approved by the fourteenth session of the sixth conference of the Company’s board of directors.
The employees have all been notified and the Company is not able and does not plan to
unilaterally remove the plan. According to the plan, the Company made a provision on dismisses
compensation of RMB24, 474,290.00 according to relevant accounting standard in 2008. Till
reporting date, the balance of dismisses compensation is RMB 7,915,801.17 after deducting
prepaid dismisses compensation.
7. On January 14, 2009, a resolution regarding transferring the entire stakeholders’ equity of
Hainan Xinda Development Co., Ltd hold by the Company based on appraisal value through
public listing was approved by the tenth session of the sixth conference of the Company’s board of
directors. Till the reporting day, the asset appraisal is still in progress.
Note XV Supplementary information
1. According to “Regulation on the Preparation of Information Disclosures of Companies Issuing
Public Shares No. 9. Calculation and disclosure of ROE and EPS (2007 revised)” issued by the
CSRC, ROE and EPS are calculated as follows:
ROE EPS
Jan. – Jun. 2009 Fully
diluted
Weighted
average
Basic
EPS
Diluted
EPS
Net profit attributable to ordinary shareholders 15.70% 17.04% 0.1962 0.1962
Net profit attributable to ordinary shareholders after 15.67% 17.00% 0.1958 0.1958ROE EPS
Jan. – Jun. 2009 Fully
diluted
Weighted
average
Basic
EPS
Diluted
EPS
deducting extraordinary gain or loss
ROE EPS
Jan. – Jun. 2008 Fully
diluted
Weighted
average
Basic
EPS
Diluted
EPS
Net profit attributable to ordinary shareholders -0.56% -0.56% -0.0058 -0.0058
Net profit attributable to ordinary shareholders after
deducting extraordinary gain or loss
-4.62% -4.57% -0.0473 -0.0473
Calculation process:
Item Jun. 2009 Jun. 2008
Net profit attributable to ordinary shareholders 106,297,227.83 -3,120,802.16
Extraordinary gain or loss (Gain: negative) -234,326.57 -22,506,773.76
Net profit attributable to ordinary shareholders after
deducting extraordinary gain or loss
106,062,901.26 -25,627,575.92
Opening balance of net asset attributable to ordinary
shareholders 570,615,365.41 565,896,202.38
Increase of capital surplus (negative: decrease) -4,946,544.56
Increase/(decrease) in foreign exchange difference arisen
from the translation of foreign currency financial
statements 36,336.87 -2,694,841.60
Closing balance of net assets attributable to ordinary
shareholders 676,948,930.11 555,134,014.06
Opening balance of paid-in capital 541,799,175.00 541,799,175.00
Closing balance of paid-in capital 541,799,175.00 541,799,175.00
Weighted average paid-in capital 541,799,175.00 541,799,175.00
2. Extraordinary gains and losses (negative: loss)
According to “Regulation on the Preparation of Information Disclosures of Companies Issuing
Public Shares No. 1: Extraordinary gains and losses (2008)” issued by the CSRC Notice (2008)
No. 43, Extraordinary gains and losses of the company of this reporting period are calculated as
follows:
(Positive: gains, Negative: losses)Items Amount
occurred for
the current
period
Amount
occurred in
the last period
Gains and Losses on disposal of non-current assets, including
provision for asset impairment write-off -123,079.53 515,026.00
Corporate restructuring cost, such as employee resettlement
expense, integration costs etc. -4,550,481.00
A gain or loss arising from a change in the fair value of a financial
asset or financial liability and available-for-sale financial assets
that is not part of a hedging relationship related to ordinary
operation of the Company 2,403,538.94 3,200,148.89
Non-operational income and expense apart from the above items
1,868,959.67 18,629,324.39
Others items in accordance with extraordinary gains and losses 138,357.05
Sub-total -401,061.92 22,482,856.33
Exclude extraordinary gains and losses income tax influence 635,388.49 23,917.43
Total 234,326.57 22,506,773.76
Note 1: “Gains and Losses on disposal of non-current assets, including provision for asset
impairment reversal” is loss on disposal of fixed assets.
Note 2. “Corporate restructuring cost, such as employee resettlement expense, integration costs
etc.” of this accounting period is the predicted employee redundancy compensation of the
employee redundancy plan, the item is based on the Document of State-owned Enterprise Reform
of Shenzhen, and in accordance with the definition of Extraordinary gains and losses: “trading and
items that could influence the judgments on the business performance and profitability of the
company by the users of financial statement, due to its special nature and occasionality” from The
Regulation on the Preparation of Information Disclosures of Companies Issuing Public Shares No.
1 – Extraordinary gains and losses (2008).
Note 3: Among amount occurred in the reporting period, “A gain or loss arising from a change in
the fair value of a financial asset or financial liability and available-for-sale financial assets that is
not part of a hedging relationship related to ordinary operation of the Company” is gains and
losses from change in fair value of tradable financial assets and investment income from disposal
of trandable financial assets.
Note 4: Among amount occurred in the reporting period, “Net amount of non-operational income
and expense” is from fines and confiscations.
Legal representative: Senior accountant Chief financial officer:Section VIII Documents Available for Reference
I. Text of the 2009 Semi-Annual Report with the signature of Chairman of the Board
of Directors;
II. Financial statement with the signatures and stamps of legal representative, the
person in charge of accounting and manager of financial department;
III. Texts of all the public notices disclosed in the report period on the newspapers
designated by CSRC, i.e. Securities Times and Ta Kung Pao;
The aforesaid documents are prepared and placed in Office of the Board of Directors,
42/F, International Trade Center, Renmin South Road, Shenzhen.
Board of Directors
Shenzhen Properties & Resources Development (Group) Ltd
13 Aug. 2009
