(000029 SHENSHENFANG-A 200029 SHENSHENFANG-B)
Shenzhen Special Economic Zone Real Estate
& Properties (Group) Co., Ltd.
Semi-Annual Report 2010
23 August 2010
Contents
I. Important Notice………………………………………………………………….2
II. Company Profile……………………………………………………………………3
III. Change of Capital Share and Shares Held by Principal Shareholders………….....5
IV. Particulars about the Directors, Supervisors and Senior Executives………………7
V. Discussion and Analysis of Executives……………………………………………..8
VI. Significant Events………………………………………………………………15
VII. Financial Report………………………………………………………….…….21
VIII. Documents Available for Reference…………………………………………21
Attached: Financial Report…………………………………………………………...22
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Section I. Important Notice
The Board of Directors, the Supervisory Committee, directors, supervisors and senior
executives of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co.,
Ltd (hereinafter referred to as the Company) guarantee that there are no any omissions,
fictitious or seriously 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.
None of the directors have declared uncertainty or disagreement about the truthfulness,
accuracy, and completeness of this semi-annual report.
Director Xia Guiying was unable to attend the board meeting for the reason of her duty
and she entrusted Chairman of the Board Zhou Jianguo to attend the meeting and vote
on behalf of her. Director Wen Li was unable to attend the board meeting for the
reason of his duty and he entrusted Director Jiang Lihua to attend the meeting and vote
on behalf of him.
Zhou Jianguo, Principal of the Company, Chen Maozheng, Person-in-charge of the
accounting work and Chen Jincai, Person-in-charge of the accounting organization
hereby confirm the financial report enclosed in this semi-annual report is true and
complete.
The Semi-Annual Report 2010 has not been audited.
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Section II Company Profile
I. Company profile
1. Legal Name of the Company
In Chinese: 深圳经济特区房地产（集团）股份有限公司
In English: SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE &
PROPERTIES (Group) CO., LTD
Abbreviation in Chinese: 深房集团
Abbreviation in English: SPG
2. Stock Exchange Listed in: Shenzhen Stock Exchange
Short Form of A Share: SHENSHENFANG A Stock Code: 000029
Short Form of B share: SHENSHENFANG B Stock Code: 200029
3. Registered Address: 47/F, SPG Plaza, No. 3005, Renmin South Road, Shenzhen
Office Address: 46/F-48/F, SPG Plaza, No. 3005, Renmin South Road, Shenzhen
Postal Code: 518001
E-mail: spg@163.net
4. Legal Representative: Zhou Jianguo
5. Secretary of the Board: Chen Ji
Securities Affairs Representative: Feng Hongwei
Tel.: (0755) 82293000-4718, 4715
Fax: (0755) 82294024
E-mail: spg@163.net
6. Newspapers Designated by CSRC and Chosen by the Company for Disclosing
Information: China Securities Journal and Ta Kung Pao
Internet Website Designated by CSRC: http://www.cninfo.com.cn
The Place Where the Interim Report is Prepared and Placed: Room 4703, 47/F of
SPG Plaza, No. 3005, Renmin South Road, Shenzhen
7. Other Information of the Company
Business Scope of the Company: real estate development and sales of commercial
housing, property lease and management, decoration and installation of buildings,
retails and trade of commodity, hotel and catering services.
Initial Registration Date: 8 Jan. 1980
Registration Place: Shenzhen Administration for Industry and Commerce
Registration Number of Business License: 440301103225878
Registration number of Taxation: 440300192179585
Name and Address of the CPA firm engaged by the Company:
Name: China Audit International Certified Public Accountants LTD.
Address: 8/F, Times Technology Building, No.7028 Shennan Avenue, Futian District,
Shenzhen
II. Main Financial Data and Indices
1. Main accounting data and financial indices
Currency unit: (RMB) Yuan
At the end of the report
period
At the period-end of last
year
Increase/decrease
compared with the
period-end of last year
(%)
Total assets 3,251,986,997.32 3,361,110,324.04 -3.25%
Owners’ equity attributable to shareholders of the listed
company 1,292,815,256.15 1,228,651,614.41 5.22%
Share capital 1,011,660,000.00 1,011,660,000.00 0.00%
Net assets per share attributable to shareholders of the
listed company (Yuan/share) 1.2779 1.2145 5.22%
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Report period (Jan.-Jun.) Same period of last year Increase/decrease
year-on-year (%)
Total operating income 518,826,692.07 290,811,601.49 78.41%
Operating profit 78,107,399.80 12,022,240.15 549.69%
Total profit 78,129,831.79 11,967,314.20 552.86%
Net profit attributable to shareholders of the listed
company 64,141,001.28 7,725,323.97 730.27%
Net profit attributable to shareholders of the listed
company after deducting non-recurring gains and losses 54,391,937.15 7,628,241.73 613.03%
Basic earnings per share (Yuan/share) 0.0634 0.0076 734.21%
Diluted earnings per share (Yuan/share) 0.0634 0.0076 734.21%
ROE (%) 4.33% 0.63% 3.70%
Net cash flows from operating activities -66,691,366.55 -21,003,143.36 -217.53%
Net cash flows per share from operating activities
(Yuan/share) -0.0659 -0.0208 -216.83%
2. Items of non-recurring gains and losses
Currency unit: (RMB) Yuan
Item Amount
Gains and losses from disposal of non-current assets 9,622,198.15
Gains and losses from changes in fair value of transaction financial
assets and liabilities, and investment income from disposal of
transaction financial assets and liabilities and financial assets available
for sale, excluding the valid hedging business relating to normal
operation of the Company
92,058.17
Other non-operating incomes and expenses besides the items above 36,841.49
Impact on income tax -2,033.68
Total 9,749,064.13
Section III Changes in Share Capital and Particulars about Shares Held by
Principal Shareholders
I. Particulars about changes in share capital
The Company’s share capital remained unchanged in the report period.
II. Shares held by shareholders
1. Up to 30 Jun. 2010, only Shenzhen Investment Holdings Co., Ltd held over 5%
shares of the Company. Shenzhen Investment Holdings Co., Ltd held 642,884,262
shares not subject to trading moratorium, which remained unchanged in the report
period. And none of those shares were frozen, pledged or in custody.
2. Particulars about shares held by the top ten shareholders and the top ten shareholders
holding shares not subject to trading moratorium
Unit: share
Total number of shareholders 99,433
Particulars about shares held by the top ten shareholders
Name of shareholder Nature of shareholder
Shareholding
ratio
Total number of
shares held
Shares subject to
trading moratorium
held
Shares pledged or
frozen
Shenzhen Investment Holdings Co., Ltd State-owned 63.55% 642,884,262 0 0
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corporation
CPI Financial Co., Ltd.
State-owned
corporation
0.33% 3,336,701 0 0
Guan Jinfeng
Domestic natural
person
0.11% 1,092,220 0 0
Li Hongjie
Domestic natural
person
0.11% 1,075,800 0 0
ICBC-GF China Securities 500 Index
Securities Investment Fund (LOF)
State-owned
corporation
0.08% 844,880 0 0
Xue Haoyuan
Domestic natural
person
0.07% 746,356 0 0
Zhang Rui
Domestic natural
person
0.07% 730,700 0 0
CHU KOON YUK
Foreign natural
person
0.07% 720,000 0 0
Zhou Zhongping
Domestic natural
person
0.07% 675,401 0 0
GUOTAI JUNAN
SECURITIES(HONGKONG)
LIMITED
Foreign corporation 0.07% 674,650 0 0
Particulars about shares held by the top ten shareholders holding tradable shares
Name of shareholder Number of shares not subject to trading
moratorium held Type of share
Shenzhen Investment Holdings Co., Ltd 642,884,262 Renminbi ordinary shares
CPI Financial Co., Ltd. 3,336,701 Renminbi ordinary shares
Guan Jinfeng 1,092,220 Renminbi ordinary shares
Li Hongjie 1,075,800 Renminbi ordinary shares
ICBC-GF China Securities 500 Index Securities Investment
Fund (LOF)
844,880 Renminbi ordinary shares
Xue Haoyuan 746,356 Renminbi ordinary shares
Zhang Rui 730,700 Renminbi ordinary shares
CHU KOON YUK 720,000
Domestically listed foreign
shares
Zhou Zhongping 675,401 Renminbi ordinary shares
GUOTAI JUNAN SECURITIES(HONGKONG) LIMITED 674,650 Domestically listed foreign
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shares
Explanation on associated relationship or
action-in-concert among the above
shareholders
Unknown
3. Particulars about the controlling shareholder of the Company
During the report period, the controlling shareholder of the Company remained
unchanged.
Section IV Particulars about Directors, Supervisors and Senior Executives
I. Changes in shares held by directors, supervisors and senior executives
During the report period, shares held by directors, supervisors and senior executives
remained unchanged.
II. New engagement and dismissal of directors, supervisors and senior executives
On 28 Jun. 2010, resignation letters of independent directors Ms. Hou Liying and Mr.
Zong Dechun were reviewed and approved at the 2009 Annual Shareholders’ General
Meeting of the Company. Considering that resignation of Ms. Hou Liying and Mr.
Zong Dechun would make the Company’s ratio of independent directors lower than the
prescribed lowest standard, their resignation letters would take effect after new
independent directors had filled their places. Before arrival of new independent
directors, Ms. Hou Liying and Mr. Zong Dechun would continue to perform their
duties according to laws, regulations and the Company’s Articles of Association. (For
more details, see the public notice disclosed on http://www.cnonfo.com.cn dated 28
Jun. 2010.)
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Section V Discussion and Analysis of Executives
I. Operation review for the first half of 2010
1. In the first six months of 2010, with a series of real estate macro-control policies
constantly introduced by the government, the Company, based on actual situations of
itself and the market, made a comprehensive assessment of the overall situation and
coped with it in a flexible manner. As a result, operation and management in various
aspects were in smooth progress, the economic performance of the Company greatly
improved, and the total operating income and total profit both showed a significant
year-on-year growth. In addition, the asset quality improved with a relatively sound
financial position. The main business development capability was reinforced with a
stronger stamina for further development. The control system was optimized step by
step with a better and better management capability. And a good corporate culture was
gradually taking shape.
2. Analysis to operating results
Currency unit: (RMB) Yuan
Items Jan.-Jun. 2010 Jan.-Jun. 2009 Increase/decrease
amount
Increase/decrease
%
Operating income 518,826,692.07 290,811,601.49 228,015,090.58 78.41
Operating cost 338,485,970.34 218,500,804.81 119,985,165.53 54.91
Sales tax and sur-taxes 55,612,034.02 24,785,610.35 30,826,423.67 124.37
Sales expenses 5,193,067.44 3,888,471.54 1,304,595.90 33.55
Administrative expenses 32,261,773.04 29,658,569.11 2,603,203.93 8.78
Financial expenses 31,581,722.57 9,782,087.07 21,799,635.50 222.85
Period expense 69,036,563.05 43,329,127.72 25,707,435.33 59.33
Income from change of fair
value -24,785.75 133,836.40 -158,622.15 -118.52
Income from investment 22,440,060.89 7,692,345.14 14,747,715.75 191.72
Operating profit 78,107,399.80 12,022,240.15 66,085,159.65 549.69
Non-operating income 123,299.72 30,925.09 92,374.63 298.70
Non-operating expenditure 100,867.73 85,851.04 15,016.69 17.49
Total profit 78,129,831.79 11,967,314.20 66,162,517.59 552.86
Income tax expenses 13,988,830.51 4,267,635.56 9,721,194.95 227.79
Net profit 64,141,001.28 7,699,678.64 56,441,322.64 733.03
Net profit attributable to owners
of parent company 64,141,001.28 7,725,323.97 56,415,677.31 730.27
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During the report period, under the leadership of the Board of Directors and the
operation team, all employees of the Company united as one, actively coped with
market changes and forged ahead. As a result, the performance and management of the
Company were both improved.
(1) For the report period, the Company achieved a total profit reaching RMB
78,129,800, up by RMB 66,162,500 from RMB 11,967,300 at the same period of last
year, representing a growth of 552.86%; and a net profit attributable to shareholders of
the listed company amounting to RMB 64,141,000, up by RMB 56,441,300 from RMB
7,699,700 at the corresponding period of last year, representing an increase of 730.27%.
The profit growth mainly came from increase in the operating income, the gross profit
rate and investment incomes.
(2) Operating profit stood at RMB 78,107,400, up by RMB 66,085,200 year on year,
representing a growth of 549.69%. Main reasons for the significant growth of the
operating profit are:
① In the report period, the Company achieved an operating income reaching RMB
518,826,700, a year-on-year growth of 78.41%; and a comprehensive gross profit rate
of 34.76%, up by 9.89 percentage points from 24.87% at the corresponding period of
last year.
② Sales tax and sur-taxes stood at RMB 55,612,000, a year-on-year growth of
124.37%, which was mainly because the sales tax and land VAT increased due to the
operating income growth.
③ Period expense stood at RMB 69,036,600, representing a year-on-year growth of
59.33%, which was mainly because: firstly, measures to reinforce product sales in the
report period caused a year-on-year growth of 33.55% and 8.78% respectively in
advertising and agent expense; secondly, borrowings increased and interest expenses
thus grew by 222.85% as compared with the same period of last year.
④ Income from fair value changes decreased as compared with the same period of last
year, which was mainly due to fair value decrease of transactional financial assets held
by the Company.
⑤ Investment income stood at RMB 22,440,100, representing a year-on-year growth
of 191.72%, which was mainly because: firstly, bonus received from Kunshan
Tiaofeng Electrical Power Co., Ltd in the report period increased over the same period
of last year; secondly, 50% equities of the Nantian Shopping Mall in Shatoujiao were
transferred, which generated an investment income of RMB 9,636,600.
3. Analysis to cash flows
Currency unit: (RMB) Yuan
Item Report period Same period of last
year
Year-on-year
increase/decrease (%)
. Cash flows from operating Ⅰ activities:
Sub-total of cash inflows from operating
activities 645,280,268.28 289,451,578.20 122.93%
Sub-total of cash outflows from operating
activities 711,971,634.83 310,454,721.56 129.33%
Net cash flows from operating activities -66,691,366.55 -21,003,143.36 -217.53%
Ⅱ. Cash flows from investing activities:
Sub-total of cash inflows from investing
activities 12,609,903.92 7,729,505.14 63.14%
Sub-total of cash outflows from investing
activities 256,855.60 305,224.43 -15.85%
Net cash flows from investing activities 12,353,048.32 7,424,280.71 66.39%
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. Cash flows from financing Ⅲ activities:
Sub-total of cash inflows from financing
activities 364,800,000.00 50,000,000.00 629.60%
Sub-total of cash outflows from financing
activities 371,305,213.93 76,662,804.11 384.34%
Net cash flows from financing activities -6,505,213.93 -26,662,804.11 75.60%
Ⅳ. Effect of exchange rate changes on cash
and cash equivalents -254,669.43 77,327.26 -429.34%
Ⅴ. Net increase in cash and cash equivalents -61,098,201.59 -40,164,339.50 -52.12%
Add: Opening balance of cash and cash
equivalents 386,102,533.51 328,413,393.57 17.57%
. Closing balance of cash and cash Ⅵ
equivalents 325,004,331.92 288,249,054.07 12.75%
(1) Cash inflows and outflows from operating activities both registered a significant
year-on-year growth and net cash flows from operating activities were down by
217.53% as compared with the same period of last year, which was mainly because the
Company paid some of the remaining land price amount of the Guangming Project in
the report period.
(2) Cash inflows from investing activities increased significantly as compared with the
corresponding period of last year, which was mainly because the income from
transferring 50% equities of the Nantian Shopping Mall in Shatoujiao was recognized
in the report period.
(3) Cash inflows and outflows from financing activities both showed a particularly
significant growth as compared with the same period of last year, which was mainly
because the Company optimized the borrowing structure in the report period.
As shown by data, the operating scale of the Company expanded significantly as
compared with the same period of last year. As a real estate developer, the Company
basically achieved a balance between cash inflows and outflows when main projects
developed by the Company were still in the input period.
4. Operation status of main businesses classified according to industries
Currency unit: (RMB) Yuan
Industry Operating income Operating cost
Gross
profit
rate (%)
Increase/decrease
of operating
income
year-on-year (%)
Increase/decrease
of operating cost
year-on-year (%)
Increase/decrease
of gross profit
ratio
year-on-year (%)
Real estate 318,604,350.04 166,107,938.16 47.86 209.47 160.59 9.77
Construction 118,073,356.03 111,355,323.27 5.69 18.49 18.43 0.04
Property lease and
management 70,281,522.81 51,809,309.32 26.28 -6.72 1.51 -5.98
Hotel and other
services 11,867,463.19 9,213,390.59 22.36 -7.74 -4.98 -2.26
Total 518,826,692.07 338,485,961.34 34.76 78.41 54.91 9.89
Income increase and decrease in various main businesses classified according to
industries:
(1) Sales income of the leading business of real estate stood at RMB 318,604,400,
representing a year-on-year growth of 209.47%. And the gross profit rate stood at
47.86%, up by 9.77 percentage points as compared with the same period of last year.
This was mainly because: ① Sales income from the Shantou Jinye Island Project
increased by RMB 106,356,600 from the same period of last year and the gross profit
rate also showed a year-on-year growth of 9 percentage points; and ② Real estate
sales income achieved by the headquarters of the Company showed a year-on-year
growth of RMB 109,295,500 with the gross profit rate up by 17 percentage points year
on year.
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(2) Construction income stood at RMB 118,073,400, up by 18.49% year on year,
which was mainly because incomes from both self-operated and cooperation
construction projects increased.
(3) Income from property lease and management stood at RMB 70,281,500, down by
6.72% year on year, which was mainly due to decrease of the leasing area.
(4) Income from hotel, catering and other services stood at RMB 11,687,500, down by
7.74% year on year. And the gross profit rate was also down by 2.26 percentage points
due to increase of the operating cost rate. These were mainly because the hotel
occupancy rate showed a year-on-year decrease. And incomes from other services also
decreased year on year.
II. Analysis and explanation on financial status of the Company
During the report period, the Company actively coped with market changes. As a result,
various businesses of the Company grew steadily, its asset quality improved and its
financial position was sound. Relevant indexes were as follows:
Item 30 Jun. 2010 31 Dec. 2009 Increase/decrease
(%)
Total assets 3,251,986,997.32 3,361,110,324.04 -3.25
Total liabilities 1,972,194,713.26 2,145,481,681.72 -8.08
Accounts payable 452,217,979.28 730,944,352.56 -38.13
Accounts received in advance 218,043,366.47 157,116,052.15 38.78
Taxes and fares payable -1,087,338.67 -8,782,763.56 87.62
Interest payable 39,573,775.51 24,687,711.65 60.30
Short-term borrowings 14,800,000.00 100,000,000.00 -85.20
Non-current liabilities due within 1
year
129,353,308.07 229,607,155.48 -43.66
Long-term borrowings 784,122,394.98 581,986,531.34 34.73
Total owners’ equity attributable to the
parent company
1,292,815,256.15 1,228,651,614.41 5.22
1. Up until 30 Jun. 2010, total assets of the Company stood at RMB 3,251,987,000,
down by 3.25% as compared with the year-begin.
2. Total liabilities stood at RMB 1,972,194,700, down by 8.08% as compared with the
year-begin, of which: ① The closing balance of accounts payable decreased by RMB
278,726,300 from the period-begin, representing a decrease margin of 38.13%, which
was mainly because the Company paid the remaining amount for acquiring the land
use right of the Guangming New District Project in the report period. ② The closing
amount of accounts received in advance increased by RMB 60,927,300 from the
period-begin, a growth of 38.78%, which was mainly due to increase in house
payments received in advance which could not meet income recognition conditions yet.
③ The closing balance of taxes and fares payable increased by RMB 7,695,400 from
the period-begin, a growth of 87.62%, which was mainly because pre-paid sales tax
was carried forward for carried forward house payments received in advance and the
business income tax payable increased. ④ The closing balance of interest payable
increased by RMB 14,886,100 from the period-begin, a growth of 60.30%, which was
mainly because the Company paid interest for the unsettled land price amount of the
Guangming New District Project and for the borrowings from Shenzhen Investment
Holdings Co., Ltd.. ⑤ The total closing balance of short-term and long-term
borrowings increased by 1.83% from the period-begin, which was mainly because the
Company optimized the borrowing structure.
3. The closing balance of equities attributable to shareholders of the listed company
(net assets) increased by RMB 64,163,600 from the period-begin, a growth of 5.22%,
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which was mainly due to increase in the net profit achieved in the report period and the
foreign-currency statement translation difference.
Ⅲ. Investments in the report period
1. In the report period, the Company did not raise any funds. There existed no such
funds carried down from the previous periods, either.
2. Progress of significant projects invested by non-raised funds
Name of project
Investment amount within the report
period (RMB Ten thousand)
Progress of project
Longgang Project 91.66
In the process of land transferring and relevant
preparations
Shantou Jinye Island
International Garden Phase Ⅹ
8,993.37The Phase Ⅹ is in construction.
Guangming Project 659.94Preparations are in smooth progress.
Total 9744.97 -
Ⅳ. Problems and difficulties met in operation
1. The macro-economic situation and the real estate market condition are still severe.
Affected by macro-control measures on the real estate sector, it is more and more
difficult for real estate developers to get financing. And product sales is also restricted
in various aspects. Where the real estate market will go is still unclear.
2. There still exists capital pressure. Although the Company has managed to cope with
many peak periods of capital payment, the capital pressure is still there. The
development progress of the Longgang Project and the Dongle Project was interrupted,
which caused stagnancy of capital input previously. What’s worse, the Company needs
to pay off the remaining land price amount for the Guangming New District Project
and borrowings due within one year.
3. The professional capability and control ability still need to be improved. The
Guangming Project, Longgang Project and Shantou Jinhu Road Project have been
launched in an all-round way, which will serve as a key turning point for the Company
to shift from the survival strategy to the development strategy. It also presents a
challenge to the Company’s main business development ability.
4. Some problems in the past need to be solved. Problems in the past involving land,
economic disputes, enterprise close-down, off-the-job employees shunting, etc. will
affect the normal operation and stability of the Company to some degree.
V. Business plan for the second half year of 2010
In the second half year of 2010, the Company will continue to fully carry out the
Concept of Scientific Development, stick to the Company’s development strategy and
planning, promote reform through development and encourage development through
reform; to elaborately work on the main business, further strengthen cost control,
perfect management capability, and build a high-quality and professional management
team so as to create core competitiveness; to improve the party conduct, the
management team, enterprise culture and cohesion so as to lay a solid foundation for
realizing the five-year development strategy and planning.
In the second half year of 2010, we will work on the following central tasks:
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1. To elaborately work on the main business. Firstly, the Company will work on project
development in both Shenzhen and Shantou with equal efforts and launch high-quality
projects. As for project in Shantou, the Company will realize the accomplishment of
Construction of the District No.10 of Jinye Island Project, Jinhu Road Project and will
begin; Preparation for the Longgang Project and the Guangming Project will be
finished and the Company will try to begin construction within the year 2010.
2. To further strengthen cost control. Firstly, to thoroughly strengthen budget
management, strictly control expenses and enhance constant checks, supervision and
service on budget execution. Secondly, to thoroughly carry out target cost control on
project development, as well as control before events, examination during events and
analysis after events. Finally, to strengthen management over construction contracts,
improve management over contract signing, checking and approving, and handle
affairs in strict compliance with contracts.
3. To perfect management capability. Firstly, to improve corporate governance and
management rules, as well as to promote standardized operation. In accordance with
requirement of standard governance and management on state-owned assets for listed
companies, to further perfect mechanism of decision-making, execution and
supervision. Secondly, to improve various rules and revise Responsibility for Positions
according to the fine management principle, and prepare information system for
development and construction of the Company, then to carry out in several phases.
Thirdly, to build a professional management team. Fourthly, to optimize the
organizational structure, explore operation mechanisms for project development and
perfect the management mode for projects. Fifthly, to optimize performance appraisal
and improve the remuneration system. Sixthly, to strengthen financial management,
improve management and use of funds, increase efficiency of capital use, and enhance
ability to distribute capital with overall consideration. Finally, to enhance risk
management and internal control by formulating and implementing a thorough risk
control system, and continually strengthen auditing on economic responsibility,
performance and financial income & expenditure and other specific auditing.
4. To work on and formulate a development strategy and planning for the Company. To
hold tendency of domestic real estate market, use advanced experience of famous
enterprise for reference, formulate and execute five-year development strategy in
accordance with orientation of economic strategic distribution and combining with
actuality.
5. To try every possible way to solve historical problems. To make use of policy and
create chance, make effort to get support from all parties to solve historical land
problems; to adopt several measures to settle historical economic disputes, enhance
execution of lawsuit won and collection of debts; properly handle appeal to the higher
authorities by staff off-the job due to reform, to ensure stability of enterprise.
6. To thoroughly strengthen party building and create a new-type enterprise culture.
IV. Warning and explanation on forecast that accumulative net profit from the
year-beginning to the next report period will be deficit or great changes compared with
the same period of last year.
It is forecasted that net profit from Jan. to Sep. 2010 will from RMB 66,000,000 to
68,000,000, with an increase from 485.65% to 503.40% year-on-year.
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Section VI Significant Events
I. Corporate governance
In the report period, the Company actively in strict compliance with the Company Law,
Securities Law, Code of Corporate Governance for Listed Companies, Stock-Listing
Rules of Shenzhen Stock Exchange and other relevant laws and regulations, further
carry out sprit of relevant document concerning corporate governance of listed
companies from CSRC, continually perfected corporate governance structure, establish
modern enterprise system and standardize operation of the Company.
In the report period, responsibilities of shareholders’ general meeting ,the Board of
Directors, the Supervisory Committee, impendent director and all specific
commissions under the Board of Directors as well as managers are clear, and
procedures are standard. Management realized democratic discussion, independent
responsibility, normative operation and harmonious work together. All decisions were
more democratic, scientific, normative and public, and promoted unity and accordance.
The operating mechanism of “the Board of Directors make decision, operating team
executes and the Supervisory Committee supervise” was further carried out, the
operating is tending to more unit, harmonious and stable.
In the report period, the Company adjusted Strategy Commission due to job change of
its member Mr. Guo Hongzhuang, which was reviewed and approved at the Boarding
Meeting date 20 Apr. 2010. Members of new Strategy Commission: Zhou Jianguo
(Director), Chen Maozheng, Wern Li, Zong Dechun, Hou Liying. In order to improve
quality and transparence of information disclosure, further identify responsibility for
information disclosure, enhance responsibility for mistakes in information disclosure,
Responsibility for Serious Errors in Disclosure of Annual Report was approved at the
Board Meeting.
In the report period, according to requirement of State-Owned Assets Supervision
Administration of Shenzhen Municipality, Financial Department of the Company
should summarize relevant data and report Express on General Monthly Major
Financial Index of Companies in Shenzhen to State-Owned Assets Supervision
Administration of Shenzhen Municipality though system online per month with check
and signature of manager of Financial Department, General Manager and Chairman of
the Board. The Company and controlling shareholder strictly executed system on
report and file of insider, established insider information data, and reported list of
person who know non-public information to Shenzhen Bureau each month.
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In the report period, the Company was in line with requirement of Notice on Generally
and Deeply Carrying out a Special Campaign on Standardization of Basic Work of
Finance and Accounting, actively developed self-examination, self-correction and
rectification on financial basic work, prepared Self-Examination Report on Basic Work
of Finance and Accounting, formulated relevant rectification plan, identify term and
duty man of recertification. At present, the above work has been in progress of
execution.
II. Particulars about profit distribution
The Company would not conduct profit distribution or capitalization of public reserve
for the first half of 2009. And there existed no profit distribution, capitalization of
public reserve or issue of new shares which were planned in the previous periods to be
implemented in the report period.
III. Significant lawsuits and arbitrations
For the significant lawsuits and arbitrations incurred in the report period or carried
down from the previous years to the report period, please refer to “(I) Significant
lawsuits” of Note X Contingency of the Financial Report.
V. Acquisition, sales of assets and assets reorganization
Review and approved the Provisional Board Meeting dated 22 Sep. 2009, 50% equity
of the Nantian Shopping Mall in Shatoujiao held by the Company was listed in
Shenzhen United Assets and Equity Exchange, and the equity transferred to Shenzhen
Sha Tou Jiao Commercial Foreign Trade Co., Ltd on 2 Feb. 2010 with consolidation of
RMB 12,145,000, and the sold assets contributed net profit of RMB 9,636,000 to the
Company.
(For details please refer to public notice on http://www.cninfo.com.cn)
V. Related transactions
For the Company’s related transactions, as well as the creditor’s rights and liabilities
with its related parties in the report period, please refer to Note VI “Related Party
Relationships and Transactions” of the Financial Report.
VI. Particulars about guarantees provided by the Company
Unit: RMB’0000
Guarantees provided for external parties (excluding guarantees provided for subsidiaries)
Name of the
guaranteed
Date and No.
of Relevant
public notice
Guarantee
line
Date of
occurrence
(Date of
signing
agreement)
Actual
amount of
guarantee
Type of
guarantee
Term of
guarantee
Implementat
ion
accomplishe
d or not
Guarantee for
related parties
or not
Total external guarantees lines
examined and approved in the
reporting period (A1)
0.00
Total external guarantees
occurred in the reporting period
(A2)
0.00
Total external guarantee lines
examined and approved at the
period end (A3)
0.00 Balance of actual guarantees at
the period end (A4) 0.00
Guarantees provided for subsidiary companies
Name of the
guaranteed
Date and No.
of Relevant
public notice
Guarantee
line
Date of
occurrence
(Date of
signing
agreement)
Actual
amount of
guarantee
Type of
guarantee
Term of
guarantee
Implementat
ion
accomplishe
d or not
Guarantee for
related parties
or not
Shantou Hualin
Real Estate
15 Aug. 2009
(Public 30,000.00 31 Aug. 2009 30,000.00 Credit
guarantee Three years No No
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Development
Co., Ltd.
Notice No.
2009-20)
with joint
responsibility
Shenzhen Petrel
Hotel Co., Ltd. - 1,800.00 10 Jul. . 2007 1,440.00
Credit
guarantee
with joint
responsibility
Three years No No
Total guarantees lines for
subsidiaries examined and
approved in the reporting period
(B1)
0.00
Total guarantees for subsidiaries
occurred in the reporting period
(B2)
0.00
Total guarantee lines for
subsidiaries examined and
approved at the period end (B3)
31,440.00 Balance of actual guarantees at
the period end (B4) 31,440.00
Total guarantees of the Company (Total of the two above)
Total guarantees lines examined
and approved in the reporting
period (A1+B1)
0.00 Total guarantees occurred in the
reporting period (A2+B2) 0.00
Total guarantees lines examined
and approved at the report period
(A3+B3)
31,440.00
Total balance of actual
guarantees at the period end
(A4+B4)
31,440.00
Proportion of total actual guarantee amount (A4+B4) in net assets of
the Company 24.32%
Among which:
Amount of guarantees provided for shareholders, actual controller and
other related parties (C) 0.00
Amount of debt guarantees provided directly or indirectly for parties
with asset-liability ratio exceeding 70% (D) 0.00
Proportion of total guarantee amount exceeding 50% of the Company’s
net assets (E) 0.00
Total amount of the above three guarantees (C+D+E) 0.00
Explanation on possibility of taking several and joint liability
involving immature guarantees
At the end of report period, balance of guarantees for property
buyers has not settled totaling RMB 10.26 million.
Due to that the Company is engaged in the real estate industry, and according to the
relevant regulation of the People’s Bank of China that a developer must provide
mortgage guarantees for property buyers, the Company currently provides phasic
joint-liability guarantees for its property buyers. And the term of guarantee lasts from
the date when the bank grants the loan to the date when the mortgage bank gets the real
estate ownership certificate for the buyers. If the buyers do not perform the debtor’s
responsibility within the aforesaid guarantee term, the Company is entitled to take back
the properties sold. Thus, such a kind of guarantee will not bring any actual losses to
the Company. As at the end of the report period, the Company provided such
guarantees totaling RMB 10.26 million.
VII. Particulars about capital occupation
The Company’s main shareholder and its subsidiaries were not involved in any
irregular occupation of the Company’s capital.
VIII. Significant contracts and their implementation
1. In the report period, the Company did not hold in trust, contract or lease the assets of
other companies, or vise versa. And there existed no such matters carried down from
the previous periods to the report period.
2. In the report period, the Company did not entrust other with cash assets management.
And there existed no such matters carried down from the previous periods to the report
period.
XI. Commitments made by the Company or shareholders holding over 5% (including
5%) shares of the Company
1. Shenzhen Investment Holding Co., Ltd. made the following commitments
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concerning the relevant matters of the share merger reform of SPG: “ ① The Company
shall abide by the relevant laws, regulations and rules, and fulfill the legal
commitments; ② The Company hereby declares that: The promisor shall faithfully
fulfill its commitments and shoulder corresponding responsibilities; Unless the
transferee agrees to and is able to fulfill the commitments, the promisor shall not
transfer the held shares. ③ The Company hereby declares that: Should the promisor
fail to fulfill its commitments prescribed in the relevant documents, it shall compensate
the other shareholders for their losses caused thereupon.” The commitments have been
fulfilled;
2. Shenzhen Investment Holding Co., Ltd. made the following commitments
concerning the conditional sales of its held shares: The shares shall not be listed or
transferred within 12 months from the date when the reform plan is implemented;
When the aforesaid provision reaches its mature term, the originally non-tradable
shares may be listed for trading at securities exchanges, with the proportion of the sold
amount in the Company’s total shares not exceeding 5% within 12 months, as well as
not exceeding 10% within 24 months.” And the said commitments have been fulfilled;
3. In the share merger reform, Shenzhen Investment Holding Co., Ltd. promised to
implement a share incentive plan, where the company was to sell its held shares (not
exceeding 10% of SPG’s total shares) to the SPG’s management on three years’
amortization. On 30 Sept. 2006, the State-Owned Assets Supervision and
Administration Commission of the State Council issued the Trial Measures for
Implementing Equity Incentive Plans by State Holding Listed Companies (Domestic)
(GZFFP【2006】No. 175). The Item 9 of the Trail Measures stipulates that the source of
the subject shares for implementing the equity incentive plan of a listed company shall
not be paid by a single state shareholder and that the state equity shall not be
gratuitously quantized either. Therefore, the equity incentive plan was unable to be
implemented. Nor the concerned commitment of Shenzhen Investment Holding Co.,
Ltd. was able to be fulfilled.
4. The Shenzhen Sate-owned Assets Supervision and Administration Commission
issued the Letter on Relevant Matters Concerning Information Disclosure of SPG to
Shenzhen Investment Holdings Co., Ltd. in Oct. 2009, making a commitment that it
would not conduct transfer of SPG share rights through agreements, asset
reorganization or other matters (not including shareholding reduction in the secondary
market) that have significant influence on SPG in this year or the next year. The said
commitment is currently in the process of execution.
X. Securities Investments
Unit: (RMB) Yuan
No. Securities variety Stock code Short form of
stock
Initial
investment
amount
(Yuan)
Shares held
at period-end
(share)
Book value
at
period-end
Proportion in
total
securities
investment at
period-end
(%)
Gains or losses
in report period
1 Stock 601857 China National
Petroleum 48,024.00 3,000 30,750.00 29.72% -17,272.74
2 Stock 780000 Subscription of
Tangshan Port 16,400.00 2,000 16,400.00 15.85% 0.00
3 Stock 601866 China Shipping
Container Lines 13,160.00 2,000 6,740.00 6.51% -6,420.00
4 Stock 002440 Zhejiang Runtu
Co., Ltd 31,200.00 1,000 31,200.00 30.16% 0.00
5 Stock 601898 China Coal 16,614.00 1,000 8,390.00 8.11% -8,223.61
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Energy
6 Stock 002137 Sea Star
Technology 13,274.63 975 9,984.00 9.65% -3,291.00
Other securities investments held at period-end 0.00 - 0.00 0.00% 0.00
Gains/ losses from securities investment sold in report
period - - - - 111,166.82
Total 138,672.63 - 103,464.00 100% 75,959.47
Explanation on securities investment: stocks held by the Company were lottery of new share, which has been sold in current day when
benefit.
XI. Reception of surveys, interviews and visits in the report period
Reception time Reception place Reception
way Visitor Main discussion and materials provided
15 Jul. 2010 The Company’s
office Field research Donghai Securities and Guodu
Securities
General interview, with no written materials
provided by the Company
22 Jun. 2010 The Company’s
office Field research
Nanfang Daily, Business Report
in 21st Century, Ta Kung Pao
and Shenzhen Jing Bao
Acknowledge of renewal and rebuild of the city,
with no materials provided by the Company
17 Jun. 2010 The Company’s
office By telephone Standard Chartered Bank Inquiring date of record of the Company, with no
materials provided by the Company
9 Jun. 2010 The Company’s
office By telephone Individual investor
Inquired about reasons for the Company’s shares
reaching upper trading limit, with no materials
provided by the Company
18 May 2010 The Company’s
office By telephone Individual investor
Inquired with time of holding shareholders’
general meeting of the Company, with no materials
provided by the Company
10 May 2010 The Company’s
office By telephone Individual investor Inquired about land reserves of the Company, with
no materials provided by the Company
23 Apr. 2010 The Company’s
office By telephone Individual investor
Inquired about Annual Report 2009 of the
Company, with no materials provided by the
Company
5 Mar. 2010 The Company’s
office By telephone Individual investor
Inquired about plan on development projects of the
Company, with no materials provided by the
Company
12 Feb. 2010 The Company’s
office By telephone Individual investor Inquired about sales of the Company’s sales, with
no materials provided by the Company
26 Jan. 2010 The Company’s
office By telephone Individual investor
Inquired about influence of the policy on the
Company, with no materials provided by the
Company
8 Jan. 2010 The Company’s
office By telephone Individual investor Inquired about operating of the Company in 2009,
with no materials provided by the Company
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Section VII Financial Report
Section VIII Documents Available for Reference
I. Text of the Semi-Annual Report 2010with the signature of Chairman of the Board
of Directors;
II. Text of the Financial Report with the signatures and stamps of the person in charge
of the Company, the person in charge of accounting and the person in charge of the
accounting agency;
III. Texts of all the public notices disclosed in the report period on the newspapers
designated by CSRC—Securities Times, Ta Kung Pao;
IV. Text of the Articles of Association of the Company.
Board of Directors
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
23 Aug. 2010
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SHENZHEN SPECIAL ECONOMIC ZONE REAL
ESTATE
& PROPERTIES (GROUP) CO., LTD.
Semi-annual Financial Report (Un-audited)
for the year ended 30 June 2010
CONTENTS PAGE(S)
Ⅰ、FINANCIAL STATEMENTS
1、CONSOLIDATED BALANCE SHEET 1-2
2、CONSOLIDATED INCOME STATEMENT 3
3、CONSOLIDATED CASH FLOW STATEMENT 4
4、CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 5-6
5、BALANCE SHEET 7-8
6、INCOME STATEMENT 9
7、CASH FLOW STATEMENT 10
8、STATEMENT OF CHANGES IN EQUITY 11-12
Ⅱ、NOTES TO THE FINANCIAL STATEMENTS 13-107
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CONSOLIDATED BALANCE SHEET
As at 30 June 2010 (Un-audited)
Prepared by: SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE&
PROPERTIES (GROUP) CO., LTD. Units: RMB Yuan
ASSETS Note Ⅴ 2010-6-30 2009-12-31
Current assets：
Cash at bank and on hand 1 325,004,331.92 386,102,533.51
Financial assets held for trading 2 103,464.00 86,269.75
Accounts receivable 3 16,088,595.19 14,732,395.84
Advances to suppliers 4 21,437,926.25 18,020,338.85
Other receivables 5 41,187,154.37 49,298,258.09
Inventories 6 2,111,009,086.53 2,088,298,946.63
Total current assets 2,514,830,558.26 2,556,538,742.67
Non-current assets
Long-term equity investments 7 108,659,053.80 111,305,288.02
Investment Property 8 542,130,900.79 604,153,453.42
Fixed assets 9 63,733,884.96 66,283,427.82
Intangible assets 10 6,116,790.00 6,232,380.00
Long-term deferred and prepaid expenses 11 283,679.10 364,901.70
Deferred tax assets 12 16,232,130.41 16,232,130.41
Total non-current assets 737,156,439.06 804,571,581.37
TOTAL ASSETS 3,251,986,997.32 3,361,110,324.04
The Notes on page 13 to 117 form part of these financial statements
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CONSOLIDATED BALANCE SHEET（Continued）
As at 30 June 2010 (Un-audited)
Prepared by: SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE&
PROPERTIES (GROUP) CO., LTD. Units: RMB Yuan
LIABILITIES AND
SHAREHOLDERS' EQUITY
Note Ⅴ 2010-6-30 2009-12-31
Current liabilities:
Short-term borrowings 15 14,800,000.00 100,000,000.00
Accounts payable 16 452,217,979.28 730,944,352.56
Advance from customers 17 218,043,366.47 157,116,052.15
Employee benefits payable 18 23,002,786.59 24,499,493.75
Taxes payable 19 -1,087,338.67 -8,782,763.56
Interest payable 20 39,573,775.51 24,687,711.65
Other payables 21 302,806,117.01 297,237,215.73
Non-current liabilities within one
year
22 129,353,308.07 229,607,155.48
Total of current liability 1,178,709,994.26 1,555,309,217.76
Non-current liabilities:
Long-term borrowings 23 784,122,394.98 581,986,531.34
Long-term payable 9,362,324.02 8,185,932.62
Accrued liabilities -- --
Total non-current liabilities 793,484,719.00 590,172,463.96
Total liabilities 1,972,194,713.26 2,145,481,681.72
Shareholders' equity
Share capital 24 1,011,660,000.00 1,011,660,000.00
Capital reserve 25 978,244,858.10 978,244,858.10
Less: Shares in stock -- --
Surplus reserve 26 4,974,391.15 4,974,391.15
Retained Earnings 27 -717,216,777.58 -781,357,778.86
Foreign currency translation
differences
15,152,784.48 15,130,144.02
Total equity attributable to
equity holders of the Company
1,292,815,256.15 1,228,651,614.41
Minority interests 28 -13,022,972.09 -13,022,972.09
Total shareholders' equity 1,279,792,284.06 1,215,628,642.32
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY
3,251,986,997.32 3,361,110,324.04
The Notes on page 13 to 117 form part of these financial statements
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CONSOLIDATED INCOME STATEMENT
As at 30 June 2010 (Un-audited)
Prepared by: SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE&
PROPERTIES (GROUP) CO., LTD. Units: RMB Yuan
Items Note Ⅴ Jan. 2010-
Jun. 2010 Jan. 2009-
Jun. 2009
1、Operating Income 29 518,826,692.07 290,811,601.49
Less：Cost of sales 29 338,485,970.34 218,500,804.81
Business Taxes and Surcharges 30 55,612,034.02 24,785,610.35
Selling and distribution expenses 5,193,067.44 3,888,471.54
General and administrative expenses 32,261,773.04 29,658,569.11
Finance expenses 31 31,581,722.57 9,782,087.07
Add：Gain from changes of fair value -24,785.75 133,836.40
Investment income 32 22,440,060.89 7,692,345.14
Including： Investment income from affiliates 32 12,586,609.32 7,683,812.56
2、Operating profit 78,107,399.80 12,022,240.15
Add：Non-operating income 33 123,299.72 30,925.09
Less：Non-operating expenses 34 100,867.73 85,851.04
Including： Loss from disposal of non-current assets 34 14,409.50 48,532.00
3、Profit before income tax 78,129,831.79 11,967,314.20
Less：Income tax expenses 13,988,830.51 4,267,635.56
4、Net profit 64,141,001.28 7,699,678.64
Attributable to equity holders of the Company 64,141,001.28 7,725,323.97
Minority profit or loss -- -25,645.33
5、Earnings per share
（1）Basic earnings per share 0.0634 0.0076
（2）Diluted earnings per share 0.0634 0.0076
6、Other comprehensive income 35 22,640.46 87,377.62
7、Total comprehensive income 64,163,641.74 7,787,056.26
Attributable to equity holders of the Company 64,163,641.74 7,812,701.59
Minority comprehensive income -- -25,645.33
The Notes on page 13 to 117 form part of these financial statements
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CONSOLIDATED CASH FLOW STATEMENT 2010 First half Year
Prepared by: SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE& (Un-audited)
PROPERTIES (GROUP) CO., LTD. Units: RMB Yuan
Items Note Ⅴ Jan. 2010-Jun. 2010 Jan. 2009-Jun. 2009
1、Cash flows from operating activities
Cash received from sales of goods or rendering of services 36(2) 561,833,156.45 260,615,674.46
Refund of taxes and levies --
Cash received relating to other operating activities 36(1) 83,447,111.83 28,835,903.74
Sub-total of cash inflows 645,280,268.28 289,451,578.20
Cash paid for goods and services 36(4) 545,456,789.91 184,311,701.42
Cash paid to and on behalf of employees 36,125,405.77 41,215,377.96
Payments of taxes and levies 56,224,700.88 36,743,154.64
Cash paid relating to other operating activities 36(2) 74,164,738.27 48,184,487.54
Sub-total of cash outflows 711,971,634.83 310,454,721.56
Net cash flows from operating activities -66,691,366.55 -21,003,143.36
2、Cash flows from investing activities
Cash received from investment retrieving -- --
Cash received as investment gains 2,553,452.35 37,160.00
Net cash received from disposal of fixed assets, intangible
assets and other long-term assets 10,053,451.57 7,692,345.14
Net cash received from disposal of subsidiaries or
other operational units
3,000.00 --
Cash received relating to other investing activities -- --
Sub-total of cash inflows 12,609,903.92 7,729,505.14
Cash paid to acquire fixed assets, intangible assets and
other long-term assets 169,815.60 305,224.43
Cash paid to acquire investments 87,040.00
Net cash received from subsidiaries and other operational
units
Cash paid relating to other investing activities
Sub-total of cash outflows 256,855.60 305,224.43
Net cash flows from investing activities 12,353,048.32 7,424,280.71
3、Cash flows from financing activities
Cash received as investment -- --
Including： Cash received as investment from minor
shareholders -- --
Cash received from borrowings 36(5) 364,800,000.00 50,000,000.00
Cash received relating to other financing activities -- --
Sub-total of cash inflows 364,800,000.00 50,000,000.00
Cash repayments of borrowings 36(5) 348,117,983.77 66,235,566.97
Cash payments for interest expenses and distribution of
dividends or profits 23,187,230.16 10,427,237.14
Including： Cash payments for dividends or profit to
minority shareholders of subsidiaries -- --
Cash payments relating to other financing activities -- --
Sub-total of cash outflows 371,305,213.93 76,662,804.11
Net cash flows from financing activities -6,505,213.93 -26,662,804.11
4、Effect of foreign exchange rate changes on cash and
cash equivalents -254,669.43 77,327.26
5、Net increase in cash and cash equivalents -61,098,201.59 -40,164,339.50
Add: Cash and cash equivalents at beginning of year 386,102,533.51 328,413,393.57
6、Cash and cash equivalent at end of year 325,004,331.92 288,249,054.07
The Notes on page 13 to 117 form part of these financial statements
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CONSOLIDATED STATEMENT OF CHANGES IN OWNER'S EQUITY
As at 30 June 2010 (Un-audited)
Prepared by: SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE& PROPERTIES (GROUP) CO., LTD. Units: RMB Yuan
Attributable to equity holders of the Company
Share capital Capital
reserve
Less：
shares
in
stock
Special
reserve
Surplus
reserves
Retained
Earnings
Foreign
currency
exchange
differences
Minority
interests Total
1、Balance at the end of last year：： 1,011,660,000.00 978,244,858.10 -- -- 4,974,391.15 -781,357,778.86 15,130,144.02 -13,022,972.09 1,215,628,642.32
Add：Changes of accounting policy -- -- -- -- -- -- -- -- --
Error correction of the last period -- -- -- -- -- -- -- -- --
2、Balance at the beginning of the year 1,011,660,000.00 978,244,858.10 -- -- 4,974,391.15 -781,357,778.86 15,130,144.02 -13,022,972.09 1,215,628,642.32
3、Change in equity for the year -- -- -- -- -- 64,141,001.28 22,640.46 -- 64,163,641.74
(1) Net profit -- -- -- -- -- 64,141,001.28 -- 64,141,001.28
(2) Other comprehensive income -- -- -- -- -- -- 22,640.46 -- 22,640.46
sub-total（1）&（2） -- -- -- -- -- 64,141,001.28 22,640.46 -- 64,163,641.74
(3) Shareholders' contributions and decrease of
capital
-- -- -- -- -- -- -- -- --
1、Contributions by shareholders -- -- -- -- -- -- -- -- --
2、Equity settled share-based payment -- -- -- -- -- -- -- -- --
(4) Appropriation of profits -- -- -- -- -- -- -- -- --
1、Withdrawal of surplus reserves -- -- -- -- -- -- -- -- --
2、Distributions to shareholders -- -- -- -- -- -- -- -- --
3、Others -- -- -- -- -- -- -- -- --
（5）Transfers within equity -- -- -- -- -- -- -- -- --
1、share capital increased by capital reserve
transfer
-- -- -- -- -- -- -- -- --
2、share capital increased by surplus reserve
transfer
-- -- -- -- -- -- -- -- --
3、Remedying loss with profit surplus -- -- -- -- -- -- -- -- --
4、others -- -- -- -- -- -- -- -- --
4、Balance at the end of the year
report period 1,011,660,000.00 978,244,858.10 -- -- 4,974,391.15 -717,216,777.58 15,152,784.48 -13,022,972.09 1,279,792,284.06
The Notes on page 13 to 117 form part of these financial statements
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CONSOLIDATED STATEMENT OF CHANGES IN OWNER'S EQUITY(Continued)
As at 30 June 2009 (Un-audited)
Prepared by: SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE& PROPERTIES (GROUP) CO., LTD. Units: RMB Yuan
Attributable to equity holders of the Company
Share capital Capital
reserve
Less：
shares
in
stock
Special
reserve
Surplus
reserves
Retained
Earnings
Foreign
currency
exchange
differences
Minority
interests Total
1、Balance at the end of last year：： 1,011,660,000.00 978,244,858.10 -- -- 118,910,686.94 -915,511,458.27 14,984,787.99 -11,161,500.40 1,197,127,374.36
Add：Changes of accounting policy -- -- -- -- -- -- -- -- --
Error correction of the last period -- -- -- -- -- -- -- -- --
2、Balance at the beginning of the year 1,011,660,000.00 978,244,858.10 -- -- 118,910,686.94 -915,511,458.27 14,984,787.99 -11,161,500.40 1,197,127,374.36
3、Change in equity for the year -- -- -- -- -118,910,686.94 126,636,010.91 87,377.62 -25,645.33 7,787,056.26
(1) Net profit -- -- -- -- -- 7,725,323.97 -- -25,645.33 7,699,678.64
(2) Other comprehensive income -- -- -- -- -- -- 87,377.62 -- 87,377.62
sub-total（1）&（2） -- -- -- -- -- 7,725,323.97 87,377.62 -25,645.33 7,787,056.26
(3) Shareholders' contributions and
decrease of capital
-- -- -- -- -- -- -- -- --
1、Contributions by shareholders -- -- -- -- -- -- -- -- --
2、Equity settled share-based payment -- -- -- -- -- -- -- -- --
(4) Appropriation of profits -- -- -- -- -- -- -- -- --
1、Withdrawal of surplus reserves -- -- -- -- -- -- -- -- --
2、Distributions to shareholders -- -- -- -- -- -- -- -- --
3、Others -- -- -- -- -- -- -- -- --
（5）Transfers within equity -- -- -- -- -118,910,686.94 118,910,686.94 -- -- --
1、share capital increased by capital reserve
transfer
-- -- -- -- -- -- -- -- --
2、share capital increased by surplus reserve
transfer
-- -- -- -- -- -- -- -- --
3、Remedying loss with profit surplus -- -- -- -- -118,910,686.94 118,910,686.94 -- -- --
4、others -- -- -- -- -- -- -- -- --
4、Balance at the end of the year
report period 1,011,660,000.00 978,244,858.10 -- -- -- -788,875,447.36 15,072,165.61 -11,187,145.73 1,204,914,430.62
The Notes on page 13to 117 form part of these financial statements
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BALANCE SHEET
As at 30 June 2010 (Un-audited)
Prepared by: SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE&
PROPERTIES (GROUP) CO., LTD. Units: RMB
Yuan
ASSETS NoteⅫ 20109-6-30 2009-12-31
Current assets:
Cash at bank and on hand 67,002,303.29 73,508,120.37
Financial assets held for trading 103,464.00 86,269.75
Accounts receivable 1 5,799,020.77 6,109,646.72
Advances to suppliers -- --
Other receivables 2 299,457,451.19 469,851,675.39
Inventories 3 1,412,234,321.43 1,414,914,758.68
Total current assets 1,784,596,560.68 1,964,470,470.91
Non-current assets:
Long-term equity investments 4 299,358,529.15 302,004,763.37
Investment Property 473,720,336.82 534,718,105.50
Fixed assets 38,287,991.32 39,439,456.90
Deferred tax assets 95,455.46 95,455.46
Total non-current assets 811,462,312.75 876,257,781.23
TOTAL ASSETS 2,596,058,873.43 2,840,728,252.14
The Notes on page 13 to 117 form part of these financial statements
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BALANCE SHEET（Continued）
As at 30 June 2010 (Un-audited)
Prepared by: SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE&
PROPERTIES (GROUP) CO., LTD. Units: RMB Yuan
LIABILITIES AND OWNERS'
EQUITY NoteⅫ 2010-6-30 2009-12-31
Current liabilities:
Short-term borrowings 100,000,000.00
Account payable 320,728,548.23 621,374,407.44
Advance from customers 15,424,301.60 10,696,023.60
Employee benefits payable 10,741,208.31 9,066,342.19
Taxes payable 2,230,108.83 2,915,204.83
Interest payable 39,573,775.51 24,687,711.65
Other payables 400,059,104.84 383,176,088.95
Non-current liability due in one year 115,553,308.07 206,407,155.48
Other current liability -- --
Total of current liability 904,310,355.39 1,358,322,934.14
Non-current liabilities:
Long-term borrowings 484,122,394.98 281,986,531.34
Accrued liabilities -- --
Total non-current liabilities 484,122,394.98 281,986,531.34
Total liabilities 1,388,432,750.37 1,640,309,465.48
Owners' equity:
share capital 1,011,660,000.00 1,011,660,000.00
Capital reserve 978,244,858.10 978,244,858.10
Less: Shares in stock -- --
Surplus reserve -- -
Retained Earnings -782,278,735.04 -789,486,071.44
Total owners' equity 1,207,626,123.06 1,200,418,786.66
TOTAL LIABILITIES AND
OWNER'S EQUITY 2,596,058,873.43 2,840,728,252.14
The Notes on page 13 to 117 form part of these financial statements
INCOME STATEMENT
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As at 30 June 2010 (Un-audited)
Prepared by: SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE&
PROPERTIES (GROUP) CO., LTD. Units: RMB
Yuan
Items NoteⅫ Jan.2010-Jun.2010 Jan.2009-Jun.2009
1、Operating Income 5 156,040,672.45 55,954,978.92
Less: Cost of sales 5 72,488,362.99 31,580,000.36
Business Taxes and Surcharges 35,790,518.88 9,230,591.73
Selling and distribution expenses 652,510.61 917,897.08
General and administrative expenses 17,104,824.06 13,004,332.67
Finance expenses 32,616,647.73 7,530,786.10
Asset impairment losses -- --
Add: Gain from changes of fair value -24,785.75 133,836.40
Investment income 6 9,753,451.57 8,532.58
Incl. Investment income from affiliates 6 -- --
2、Operating profit 7,116,474.00 -6,166,260.04
Add: Non-operating income 90,862.40 --
Less: Non-operating expenses -- 1,318.84
Incl. Loss from disposal of non-current
assets -- --
3、Profit before income tax 7,207,336.40 -6,167,578.88
Less：Income tax expenses -- 21,061.72
4、Net profit 7,207,336.40 -6,188,640.60
5、Earnings per share
（1）Basic earnings per share 0.0071 -0.0061
（2）Diluted earnings per share 0.0071 -0.0061
6、Other comprehensive income -- --
7、Total comprehensive income 7,207,336.40 -6,188,640.60
The Notes on page 13 to 117 form part of these financial statements
CONSOLIDATED CASH FLOW STATEMENT
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2010 First Half Year (Un-audited)
Prepared by: SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE&
PROPERTIES (GROUP) CO., LTD. Units: RMB Yuan
Item NoteⅫ Jan.2010-Jun.2010 Jan.2009-Jun.2009
1、Cash flows from operating activities
Cash received from sales of goods or rendering of services 163,884,610.97 58,955,441.83
Refund of taxes and levies -- --
Cash received relating to other operating activities 206,890,634.05 15,310,229.24
Sub-total of cash inflows 370,775,245.02 74,265,671.07
Cash paid for goods and services 303,575,969.32 10,726,615.49
Cash paid to and on behalf of employees 10,198,572.20 11,817,987.61
Payments of taxes and levies 32,427,936.47 11,416,741.93
Cash paid relating to other operating activities 39,584,594.50 41,760,424.53
Sub-total of cash outflows 385,787,072.49 75,721,769.56
Net cash flows from operating activities -15,011,827.47 -1,456,098.49
2、Cash flows from investing activities
Cash received from investment retrieving 2,553,452.35 37,160.00
Cash received as investment gains 9,953,451.57 8,532.58
Net cash received from disposal of fixed assets, intangible assets
and other long-term assets -- --
Net cash received from disposal of subsidiaries or
other operational units
-- --
Cash received relating to other investing activities -- --
Sub-total of cash inflows 12,506,903.92 45,692.58
Cash paid to acquire fixed assets, intangible assets and other
long-term assets 77,635.60 85,853.54
Cash paid to acquire investments 87,040.00
Net cash received from subsidiaries and other operational units
Cash paid relating to other investing activities
Sub-total of cash outflows 164,675.60 85,853.54
Net cash flows from investing activities 12,342,228.32 -40,160.96
3、Cash flows from financing activities
Cash received as investment -- --
Cash received from borrowings 350,000,000.00 50,000,000.00
Cash received relating to other financing activities -- --
Sub-total of cash inflows 350,000,000.00 50,000,000.00
Cash repayments of borrowings 338,717,983.77 64,713,776.24
Cash payments for interest expenses and distribution of dividends
or profits 14,974,515.16 8,508,182.04
Cash payments relating to other financing activities -- --
Sub-total of cash outflows 353,692,498.93 73,221,958.28
Net cash flows from financing activities -3,692,498.93 -23,221,958.28
4、Effect of foreign exchange rate changes on cash and cash
equivalents -143,719.00 -187.05
5、Net increase in cash and cash equivalents -6,505,817.08 -24,718,404.78
Add: Cash and cash equivalents at beginning of year 73,508,120.37 188,891,010.32
6、Cash and cash equivalent at end of year 67,002,303.29 164,172,605.54
The Notes on page 13 to 117 form part of these financial statements
CHANGES IN OWNER'S EQUITY
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As at 30 June 2010 ( Un-audited)
Prepared by: SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE&
PROPERTIES (GROUP) CO., LTD. Units: RMB Yuan
Item Share capital
Capital
reserve
Surplus
reserves
Retained
Earnings
Total
一、Balance at the end of last
year：
1,011,660,000.00 978,244,858.10 -- -789,486,071.44 1,200,418,786.66
Add: Changes of accounting policy -- -- -- -- --
Error correction of the last period -- -- -- -- --
2、Balance at the beginning of this
year
1,011,660,000.00 978,244,858.10 -- -789,486,071.44 1,200,418,786.66
3、Change in equity for the year -- -- -- 7,207,336.40 7,207,336.40
(1)Net profit -- -- -- 7,207,336.40 7,207,336.40
(2)Other comprehensive income -- -- -- -- --
sub-total（1）&（2） -- -- -- 7,207,336.40 7,207,336.40
(3) Shareholders' contributions and
decrease of capital
-- -- -- -- --
1、Contributions by shareholders -- -- -- -- --
2、Equity settled share-based payment -- -- -- -- --
(4) Appropriation of profits -- -- -- -- --
1、Withdrawal of surplus reserves -- -- -- -- --
2、Distributions to shareholders -- -- -- -- --
（5）Transfers within equity -- -- -- -- --
1、share capital increased by capital
reserve transfer
-- -- -- -- --
2、share capital increased by surplus
reserve transfer
-- -- -- -- --
3、Remedying loss with profit surplus -- -- -- -- --
4、others
4、Balance at the end of this
report period
1,011,660,000.00 978,244,858.10 -- -782,278,735.04 1,207,626,123.06
The Notes on page 13to 117 form part of these financial statements
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CHANGES IN OWNER'S EQUITY
As at 30 June 2009( Un-audited)
Prepared by: SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE&
PROPERTIES (GROUP) CO., LTD. Units: RMB Yuan
Item Share capital
Capital
reserve
Surplus
reserves
Retained
Earnings
Total
一、Balance at the end of last year： 1,011,660,000.00 978,244,858.10 113,936,295.79 -859,485,749.27 1,244,355,404.62
Add: Changes of accounting policy -- -- -- -- --
Error correction of the last period -- -- -- -- --
2、Balance at the beginning of this year 1,011,660,000.00 978,244,858.10 113,936,295.79 -859,485,749.27 1,244,355,404.62
3、Change in equity for the year -- -- -113,936,295.79 107,747,655.19 -6,188,640.60
(1)Net profit -- -- -- -6,188,640.60 -6,188,640.60
(2)Other comprehensive income -- -- -- -- --
sub-total（1）&（2） -- -- -- -6,188,640.60 -6,188,640.60
(3) Shareholders' contributions and
decrease of capital
-- -- -- -- --
1、Contributions by shareholders -- -- -- -- --
2、Equity settled share-based payment
-- -- -- -- --
(4) Appropriation of profits -- -- -- -- --
1、Withdrawal of surplus reserves -- -- -- -- --
2、Distributions to shareholders -- -- -- -- --
（5）Transfers within equity
-- -- -113,936,295.79 113,936,295.79 --
1、share capital increased by capital
reserve transfer
-- -- -- -- --
2、share capital increased by surplus
reserve transfer
-- -- -- -- --
3、Remedying loss with profit surplus -- -- -113,936,295.79 113,936,295.79 --
4、others
4、Balance at the end of this
report period
1,011,660,000.00 978,244,858.10 -- -751,738,094.08 1,238,166,764.02
The Notes on page 13 to 117 form part of these financial statements
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For the year ended at 30 June 2010 (Un-audited)
13
NOTE 1、The company's basic information
(1) COMPANY STATUS
Shenzhen Special Economic Zone Real Estate and Properties (Group) Co., Ltd. (hereafter
referred to as “Company”) was in corporate in July 1993, as approved by the Shenzhen Municipal
Government with document SFBF (1993) 724. The Company issued A shares on 15th September
1993 and issued B shares on 10 January 1994. On 31 August 1994, B shares issued were listed in
New York Exchange market as class A recommendation. The total share capital are 1,011,660,000
shares, of which, A shares are 891,660,000 shares, and the B shares are 120, 000,000 shares. The
company business licenses registration number is 440301103225878, and the registered capital is
RMB 1,011,660,000.00.
On 13 October 2004，according to the document No.(2004) 223 “Decision on establishing
Shenzhen investment Holding Co., Ltd.” issued by State-Owned Assets Supervision and
Administration Commission of Shenzhen Municipal Government, Former major shareholder –
Shenzhen Construction Investment Holding Company with two other assets management
companies merged to form the Shenzhen Investment Holding Co., Ltd. By the State-owned Assets
Supervision and Administration Commission of the state council， and quasi-exempt obligations
tender offer as approved by China Security Regulatory Committee with document No.(2005)116,
this issue of consolidated has been authorized and the registration changing had been done on 15
February 2006. As at the end of the reporting period, Shenzhen Investment Holding Limited holds
642,884,262 shares of the company (63.55% of the total share capital). The shares are all selling
unrestricted shares.
(2) The company's nature/business scope/main products or services
Nature of Business: This Company belongs to the real estate industry.
Business scope：Mainly engaged in real estate development and sales, property leasing and
management, retail merchandising and trade, hotel, equipment installation and maintenance,
construction, interior decoration and so on.
The main products or services provided：commodity housing, property leasing and
management , hotel service, construction and installation service, renovation service.
(3) Approved financial report
The financial statements were authorized for issue by the board of directors at 23 August
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For the year ended at 30 June 2010 (Un-audited)
14
2010.
NOTE 2、Summary of significant accounting policies, accounting estimates and
prepare the consolidated financial statements
(1) Basis of preparation
The financial statements have been translated into English from the Company’s financial
statements issued in Chinese.
(2) Statement of compliance
The financial statements have been prepared in accordance with the requirements of the
China Accounting Standards for Business Enterprises ( CAS (2006)) issued by the Ministry of
Finance(MOF). These financial statements present truly and completely the consolidated financial
position and financial position, the consolidated results of operations and results of operations and
the consolidated cash flows and cash flows of the Group.
The financial statements also comply with the disclosure requirements of “ Regulation on
the Preparation of Information Disclosures of Companies Issuing Public Shares, No. 15: General
Requirements for Financial Reports and No. 9: Rate of Return(ROE) and the calculation of
earning per share” revised by the China Securities Regulatory Commission(CSRC) in 2010.
(3) Accounting period
The accounting year of the Group is from 1 January to 31 December.
(4) Functional and presentation currency
The consolidated financial statements are presented in RMB Yuan, and subsidiaries registered
in foreign countries shall consider the local currency as functional and presentation currency.
(5) Accounting basis and Accounting measurement
The accounting basis of the Group is the accrual system.
Accounting measurements consist of: historical cost, replacement cost, net realizable value,
present value, fair value. An enterprise shall generally adopt historical cost as the measurement
basis for accounting elements. If the accounting elements are measured at replacement cost, net
realizable value, present value or fair value, the enterprise shall ensure such amounts can be
obtained and reliably measured.
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For the year ended at 30 June 2010 (Un-audited)
15
(6) Foreign currency transactions
Foreign currency transactions are , on a initial recognition, translated to RMB at the spot
exchange rate on the dates of the transactions.
Monetary items denominated in foreign currencies are translated into RMB at the spot
exchange rate at the balance sheet date. The resulting exchange differences are recognized in profit
or loss, except those arising from the principals and interests on foreign currency borrowings
specifically for the purpose of acquisition, construction or productions of qualifying assets.
Non-monetary items denominated in foreign currencies that are measured at historical cost are
translated to RMB using the foreign exchange rate at the transaction date.
(7) Business combination under common control and not under common control
A business combinations refers to a transaction or event that brings together of separate
enterprises into one reporting entity. Business combinations are classified into the business
combinations involving enterprise common control under and the business combinations not
involving enterprise under common control.
1. Business combination involving entities under common control
A business combination involving enterprises under common control is a business
combination in which all of the combining enterprises are ultimately controlled by the same party
or parties both before and after the business combination, and that control is not transitory. The
assets an liabilities obtained are measured at the carrying amounts as recorder by the enterprise
being absorbed at the combination date. The differences between the carrying amount of the net
assets obtained and the carrying amount of consideration paid for the combination (or the total
face value of shares issued) is adjusted for share premium in the capital reserve. If the balance of
share premium is insufficient, any excess is adjusted to retained earnings. The combination date is
the date on which the Group effectively obtains control of the enterprise being absorb.
2、Business combinations involving entities not under common control
A business combination involving entities not under common control is a business
combination in which all of the combining entities are not ultimately controlled by the same party
or parties both before and after the business combination. The cost of a business combination paid
for the Group is the aggregate of fair value at the acquisition date of assets given, liabilities
incurred or assumed, and equity securities issued by the Group, in exchange for control of the
acquiree plus any cost directly attributable to the business combination. The difference between
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For the year ended at 30 June 2010 (Un-audited)
16
the fair value and the carrying amount of the assets given is recognized in profit or loss. The
acquisition date is the date on which the Group effectively obtains control of the acquirer.
Any excess of the cost of a business combination over the Group’s interest in the fair value of
the acquirer’s identifiable net assets is recognized as goodwill.
Any excess of the Group’s interest in the fair value of the acquirer’s identifiable net assets
over the cost of a business combination is recognized in profit or loss.
The Group, at the acquisition date, allocates the cost of the business combination by
recognizing the acquirer’s identifiable assets, liabilities and contingent liabilities at their fare value
at that date.
(8) Consolidated financial statements
The consolidated financial statements comprise the company and the subsidiaries. Control is
that the company can decide the financial and operating policy, and earn the profit from the
business of the subsidiaries.
When the company combines a subsidiary during the reporting period through a business
combination involving entities under common control, the financial statements of the subsidiary
are included in the consolidated financial statements as if the combination had occurred at the
beginning of the earliest comparative period presented or, if later, at the date that common control
was established. Therefore the opening balances and the preparations of the consolidated financial
statements are restated. In the preparation of the consolidated financial statements, the subsidiary’s
assets, liabilities and results of operations are included in the consolidated balance sheet and the
consolidated income statements, from the date that common control was established.
Where the company acquires a subsidiary during the reporting period through a business
combination involving entities not under common control, the identifiable assets, liabilities and
results of operations of the subsidiaries are consolidated into consolidated into consolidated
financial statements from the date that control commences, base on the fair value of those
identifiable assets and liabilities at the acquisition date.
Minority interest is presented separately in the consolidated balance sheet within equity. Net
profit or loss attributable to minority shareholders is presented separately in the consolidated
income statement below the net profit line item.
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For the year ended at 30 June 2010 (Un-audited)
17
Where the amount of losses attributable to the minority shareholders of a subsidiary exceeds
the minority shareholders’ portion of the equity of the subsidiary, the excess, and any further
losses arrtibutable to the minority shareholders, are allocated against the equity attributable to the
Company except to the extent that the minority shareholders have a binding obligation under the
articles of association or an agreement and are able to make additional investment to cover the
losses. If the subsidiary subsequently reports profits, such profits are allocated to the equity
attributable to the Company until the minority shareholders’ share of losses previously absorbed
by the Company has been recovered.
When the accounting period or accounting policies of a subsidiary are different from those of
the Company, the Company makes necessary adjustments to the financial statements of the
subsidiary based on the Company’s own accounting period or accounting policies. Intra-group
balances and transactions, and any unrealized profit of loss arising from intra-group transactions,
are eliminated in preparing the consolidated financial statements. Unrealized losses resulting from
intra-group transactions are eliminated in the same way as unrealized gains but only to the extent
that there is no evidence of impairment.
(9) Cash and cash equivalents
Cash equivalents are short-term, highly liquid investments that are readily convertible to
known amounts of cash and that are subject to an insignificant risk of changes in value.
(10) Recognition and Measurement of financial assets and financial liability
1、Categories
Financial assets and financial liability are classified into the following categories: financial
assets and financial liability held for trading, held-to-maturity investments, receivables, financial
assets available for sale, and other financial liabilities.
2、Determination of the Fair Value of the financial assets and financial liability
（1）If there is an active market for a financial asset or financial liability, the quoted prices in
the active market shall be used to establish the fair value of the financial assets and financial
liability.
（2）There is no active financial instruments market, the valuation techniques used to
determine its fair value.
（3）As for the financial assets initially obtained or produced at source and the financial
liabilities assumed, the fair value thereof shall be determined on the basis of the transaction price
of the market.
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For the year ended at 30 June 2010 (Un-audited)
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（4）In applying discounted cash flow analysis to determine the fair value of a financial
instrument, it shall use the market returns ratio of other financial instruments with essentially the
same contractual stipulations and features as the rate of capitalization. Short-term receivable and
payable with no state interest rate may be measured at the actual transaction amount when the
difference between that amount and its present value is immaterial.
3、Transaction of financial assets and financial liabilities
The initial reorganization of a financial asset or financial liability held for trading shall
measure it at fair value. Transaction costs shall be charged to the profit or loss for the current
period. The payment has been including in the declared but not yet paid cash dividends or interest
paid to the period but not yet receiving interest, recognized as receivables. Holding companies in
the trading of financial assets acquired during the interest or dividends in cash, recognized as
investment income.
The balance sheet date, adopt fair value for trading financial assets and financial liabilities,
changes of fair value will be included in current profit and loss.
The disposal of financial assets or financial liabilities, its fair value and accounted for the
initial amount of the difference recognized as investment income and changes in the fair value
adjustment of profit and loss.
4、Held-to-maturity investments
The term "held-to-maturity investment" refers to a non-derivative financial asset with a fixed
date of maturity, a fixed or determinable amount of price and which the enterprise holds for a
definite purpose or the enterprise is able to hold until its maturity. The following non-derivative
financial assets shall not be classified as investments held to their maturity:
(1) The designated non-derivative financial assets which, at their initial recognition, are
measured at their fair values and of which the variation is included in the current profits and
losses;
(2) The non-derivative financial assets which are designated as sellable at their initial
recognition; and
(3) Loans and account receivables.
An enterprise shall, on the balance sheet date, make an appraisal on its purpose of holding
and ability to hold. Where there is any change, it shall be dealt with according to the present
Standards.
5、Receivables
Should be receiving amount according to the take initial confirmation amount with debtors
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For the year ended at 30 June 2010 (Un-audited)
19
between the contract or the agreement.
The date of the balance sheet, the receivable amount must account to the amortized cost
measurement. Disposal or recovery of receivables, the difference between actual price and fair
value will be counted as gain or loss for the current period.
6、Sellable financial assets
Sellable financial asset should be made in accordance with the fair value of financial assets
and related transaction costs and is recognized as the initial amount. To pay the price included in
the payment period has not yet received the bonds but has not yet declared or paid cash dividends,
recognized as a separate receivables.
For the sale of financial assets held by the period of interest and cash dividends, will be
included in investment income. The balance sheet date, for the sale of financial assets should be
based on fair value, and the changes in fair value will be included in capital reserve.
7、Other financial liabilities
Other financial liabilities at fair values and relevant transaction expenses to get them are
deemed as the initial confirmation amount. The subsequent calculation adopts the amortized cost
method.
8、Impairment of Financial Assets
The end of trading on financial assets other than financial assets, there is objective evidence
that the impairment occurred, according to their expected future cash flows are lower than the
book value of the difference between the impairment provisions.
（1）Receivables
Provide of the bad debts using the allowance method. At the end of period, if have the
objective evidence to indicate that the receivable amount reduce, then the net book value and the
estimate in the future between the cash flow current value differential computation confirmation
the impairment loss.
The end of the period, receivables that are individually significant are subject to individual
impairment assessment, separate impairment test. If there is objective evidence that the incidence
of impairment, a provision for impairment of the receivable is established at the difference
between the carrying amount of the receivable and the present value of estimated future cash
flows.
The company based on the same or similar case which had the similar credit risk and actual
loss, to define the specific provision for bad debt.
The criterion of the bad debts: 1.the debtor goes bankrupt or the death, pay off the legally
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after its bankrupt property or the inheritance, still that is unable to recover the funds; 2. the debtor
default overdue, and that is unable to recover the funds.
To the notes of the receivable and prepay credit，this company carries on the impairment test
alone, which has the objective evidence to indicate that it has had the impairment, will be lower
than its book value according to the future cash flow the current value the difference, it is the
impairment loss, the provision for bad debt.
（2）Held-to-maturity investments
Has the objective evidence to indicate that has had the impairment to the due investment, that
should be calculate this investment the cash flow current value in the future, this current value is
lower than the book vale which the difference is the revaluation deficit.
（3）Sellable financial asset
Where a sellable financial asset is impaired, even if the recognition of the financial asset has
not been terminated, the accumulative losses arising from the decrease of the fair value of the
owner’s equity which was directly included shall be transferred out and recorded into the profits
and losses of the current period. The accumulative losses that are transferred out shall be the
balance obtained from the initially obtained costs of the sold financial asset after deducting the
principals as taken back, the current fair value and the impairment-related losses as was recorded
into the profits and losses of the current period.
As for the sellable debt instruments whose impairment-related losses have been recognized, if,
within the accounting period thereafter, the fair value has risen and are objectively related to the
subsequent events that occur after the originally impairment-related losses were recognized, the
originally recognized impairment-related losses shall be reversed and be recorded into the profits
and losses of the current period.
The impairment-related losses incurred to a sellable equity instrument. Investment shall not
be reversed through profits and losses. However, the impairment-related losses incurred to an
equity instrument investment for which there is no quoted price in the active market and whose
fair value cannot be reliably measured, or incurred to a derivative financial asset which is
connected with the said equity instrument and which shall be settled by delivering the said equity
instrument, may not be reversed.
After an impairment of a financial asset, the interest incomes shall be recognized at the
interest rate which is used as the capitalization rate in the capitalization of the future cash flow
when the impairment-related losses are determined.
(11) Account Receivable and other receivables
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Account receivable fund of the company comply accounts receivable and other
receivables. The provision apply the Allowance method. If there are evidences proving that the
account fund have devaluation. The company will recognize the difference between the book
value and the estimated cash flow in the future.
1． The recognizing of account receivable( other receivable) which is significant and the
method of allowance
The ending balance of RMB 5000 thousand or above of account receivables is Significant
accounts receivable. The ending balance of RMB 5000 thousand or above of other receivables is
Significant other receivable. If tested the significant account receivables or other receivables
individually, if there are evidences proving that the account fund have devaluation. The company
will recognize the difference as profit between the book value and the estimated cash flow in the
future.
2．The recognizing of account receivable( other receivable) which is insignificant
individually but according to the characteristics of the portfolio after portfolio of risky accounts
receivable and the method of allowance
The company made the credit policy according to the markets characteristics and clients’
risks. And form the credit risky Composition according to credit period and aging. The company
accrued the allowance according to the actual loss rate comparing with the similar risk
characteristics portfolio.
3．Other insignificant accounts receivable and other receivables
The less risky accounts receivable and other receivables, if the aging is longer, the debtors
have serious financial difficulties and the company has dissensions with the debtors, the company
accrued the allowance individually.
（12）Inventories
1、Categories of Inventories
Inventory classification according to real estate development and non-development of
products. The real estate development products are the real estate development products under
construction development products which have been completed, the lands to be developed, etc.
The non-real estate development products including raw materials, finished products and stocks,
low-value consumable products and construction.
2、Measurement of Inventories:
(1) Have been completed is the development of products that have been completed, pending
the sale of the property; under construction is the development of products that have not yet
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completed the sale of the property for development purposes; to develop land is acquired by
means of, has decided to be developed for sale or lease land property. To the overall development
of land in the project development, all built into the development of products; in the project
development phases, it will be part of a phased development of land into the development of
products in the building, undeveloped land is still retained in the proposed land development.
(2) Public Facilities Fee: The cost is the actual construction cost incurred. Measured in the
non-development product account. If several estate projects benefit from the same facility, and
they stay in the same category. The cost of fee should be measured according to the allocation of
sales area. If they got benefit but in different categories, the cost measured according to the
allocation of the area under the prorated. Until the project complete, the cost measures in the
assessment into the real estate development products.
(3) Utility Reserve Fund: In special administrative region, the fund is the ratio of 2% of the
whole constructive investment that included the land price of delivery of completed estate.
Outside the region, the ratio of 2% of the whole constructive investment of the estate. But it all
measures in the non-development products.
(4) Quality Guarantees: According to the contract amount puts into the account of real estate
development. Also record in the accounts payable at the same time. The actual payment incurs
after the expiry of guarantee.
(5) Implement the perpetual inventory system; all kinds of inventories are recorded in the
actual cost, a weighted-average valuation for sell. The real estate development records in the
measurement of identification. As for the low value properties, implement one amortization
method when used.
(6) Inventories are written down to the lower of the cost and the revised net realizable value.
On the basis of comprehensive inventory, those destroyed, in whole or part outdated or the sales
price is lower than its cost. Should decline the value. And the value is the difference from the cost
and net realizable value. Long-term equity investments.
（13）Long term equity investment
1、 Long term equity investment can be classified: Investment in subsidiary; investment in
associate; investment in joint venture; other long term investment in an entity which the investor
does not have jointly control and significant influence, and also the fair value of this long term
investment can not measure reliably in the active market.
2、 Investment in subsidiary
For the investment in subsidiary, initially cost of investment should be accounted for at its
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carrying value of the investing entity. The direct cost relating to the acquisition, are recognized as
expenses to income statement. The difference between the initially cost of investment and the fair
value paid for the investment should be adjusted to capital reserve. If the capital reserve is not
enough to deduct the difference, the surplus should be adjusted to retained earnings.
For the investment in subsidiary, which is not under the same control, initially cost of
investment should be accounted for at its fair value paid for the investment and all the direct cost
relating to the investment. The difference between initially cost of investment and carrying value
of the investing entity at the date of acquisition are recognised as profit/loss for the year. If the
initially cost of investment is more than identifiable assets and liabilities for the investment entity
at the date of acquisition, the surplus should be treated as long term investment in the
investor/parent’s book. This surplus can be treated as goodwill, recorded in the consolidated
accounts. If the initial cost of investment is less than the identifiable assets and liabilities of the
investing entity at the date of acquisition, the difference should be recognized as expense for the
year.
Goodwill should not be amortized, but acquirer shall test it for impairment annually instead.
Impairment test for goodwill is part of impairment testing the cash generating units to which it
related. Once the impairment loss is recognized, it cannot be reverse back.
In the investor/parent’s financial statement, costing method is used to account for the long
term equity investment. Consolidated financial statement should be included subsidiary.
If subsidiary has the indication for impairment as at the balance sheet date, recoverable
amount should be measured. If the recoverable amount is less than its fair value, impairment loss
should be provided. Provision for impairment cannot be reverse back in the following accounting
period.
For disposal of the long term investment, the difference between sales proceeds and carrying
value, recognized as profit/loss for the investment.
3、 Investment in associate and joint venture
For the investment in associate, initial cost of investment should be account for the fair value
paid for the investment and related cost for the investment.
Investment in associate is acquired by non-monetary asset, if this transaction has business
value, and the fair value of exchangeable assets can be measured reliably, therefore, initial cost of
investment should be account at fair value of the exchangeable assets and related tax expenses.
Difference of fair value and carrying value of the exchangeable assets, should be recognized as
profit and loss for the year. If the two requirements are not met, then carrying value of the
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exchangeable assets and related tax expenses should be account at initial cost of investment.
If the associate is acquired by debt restructuring, initial cost of investment should be the
market value of the shares acquired. The difference of the initial cost of investment and carry
value of the debt should be recognized as profit/loss for the year.
Equity method should be used for subsequent measurement of investment in associate. Once
measuring gain/loss for investing in associate, it should be based on the fair value of identifiable
net assets as at acquisition date. If associated company’s accounting policy and accounting period
is difference with investing company, then it should follow investing company’s accounting policy
and accounting period, and measure the investment profit or loss.
If associated company is making a loss, carrying value of this investment and net investment
equity can be reduce to zero, except for other responsibilities to be bear by the investing company.
If associate company has the indication for impairment as at the balance sheet date,
recoverable amount should be measured. If the recoverable amount is less than its fair value,
impairment loss should be provided. Provision for impairment cannot be reverse back in the
following accounting period.
For disposal of the long term investment, the difference between sales proceeds and carrying
value, recognized as profit/loss for the investment. Any movements which recorded in owner’s
equity, during the disposal, it should be reverse out, and recognized as profit/loss for the year
proportionately.
The treatment of accounting principal for investment in joint venture is the same as
investment in associate.
4、 Other long term investment (no control and significant influence for the investing entity;
no active market price; fair value can not be measured reliably)
Investment in an entity which has no control power and significant influence, no active
market value and fair value can not be measured reliably, called other long term investment. The
recognition criteria of the initial cost of investment are same as the investment in associate.
Costing method is used for subsequent measurement for other long term investment.
When impairment appears, the difference between net present value of the market yield for
similarity financial instrument and carrying value of the investment should be recognized
impairment loss, recorded in income statement. Impairment can not be reverse back in the
following accounting period.
For disposal of the long term investment, the difference between sales proceeds and carrying
value, recognized as profit/loss for the investment.
（14）Investment Property
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1、Recognition of Investment property
Investment property shall be recognized as an assets when, and only when both of the
following conditions are satisfied: （1）The held for earn rentals and/or capital appreciation, or
both; （2）Investment property shall be capable of being measured and sold separately; （3）The
economic benefits pertinent to this investment real estate are likely to flow into the enterprise;
（4）The initial measurement of the investment real estate shall be made at its cost.
2、Initial measurement
Investment property should be measured in cost model.
The cost of investment property from the transfer of non-monetary assets were taken into
accounts of the transfer assets and the related expenditure, if it is the real exchange with
commercial and the value of assets could be measured reliably. If not, the difference between the
fair value and cost of the transfer assets should be taken into accounts of current profit and loss.
The costs of investment property from debt restriction use the fair value as the initial
investment cost. The difference between the cost and book value includes in current profit and
loss.
3、Subsequent Measurement
An enterprise shall use the cost model for subsequent measurement of investment property at
the balance sheet date.
4、Transfer and Disposals
Transfer to, or form, investment property shall be made when, and only when, there is a
change in use.
An investment property shall be derecognized on disposal; the enterprise shall deduct the
book value of the investment property as well as the relevant taxes from the disposal income, and
include the amount in the current profits and losses.
（15）Recognition standard of fixed assets, Classification and Depreciation
1、Standard of fixed assets
Fixed assets are tangible assets that are held for use in the production or supply of services,
for rental to others, or for administrative purposes; they have useful lives over one fiscal year.
2、Recognition standard of fixed assets
（1）It is probable that economic benefits associated with the assets will flow to the
enterprise;
（2）The cost of the fixed assets can be measured reliably.
3、Classification of fixed assets:
The Company’s fixed assets are classified as buildings and constructions, machinery
equipment, transportation equipment, other equipment and fixed assets fitment.
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4、Initial measurement of fixed assets
Fixed assets are recorded at the actual cost on acquisition. The cost of fixed assets purchased
includes purchase price, import tariffs, transport and insurance and other related costs as well as
the fixed assets reached before the intended use of the necessary expenditure. Where payment for
the purchase price of a fixed asset is deferred beyond normal credit terms, such that the
arrangement is in substance of a financing nature, the cost of the fixed asset shall be determined
based on the present value of the purchase price. The difference between the purchase price and its
present value shall be recognized in profit or loss over the period of credit, except where it is
capitalized in accordance with borrowing cost principle.
5、Depreciation method
Depreciation of fixed assets is provided for on a straight-line basis, the depreciation rate is
recognized in accordance with fix assets, estimated useful life (5% of original value) and
estimated residual rate of fixed assets. Annual depreciation rate of fixed assets by categories are as
follows：
Category Estimated useful life (year)
Annual depreciation
rate(％)
Buildings and constructions 30 3.17
Machinery equipment 7 13.57
Transportation equipment 6 15.83
Other equipment 5 19.00
6、Subsequent expenditure of fixed assets
Subsequent expenditure is only recognized as an asset when it meets two conditions at the
same time: Firstly, it is probable that future economic benefits associated with the expenditures
will flow into the enterprise. Secondly, the cost can be measured reliably. If not meets that, the
expenditures should be included in the current profit and loss.
Subsequent expenditure of operating lease should be capitalized, as long-term prepaid
expenses, which amortize in a reasonable period.
Impairment of fixed assets
fixed assets should be estimated the recoverable amount if there is an indication. The
recoverable amount is according to the high one of net value of fair value minus the disposal with
the present value of the future cash flows. The estimation should be based on individual assets, if
it is difficult to estimate the recoverable amount, change into estimating the group of assets it
belongs to. Once provision for impairment, it could not be reversed in later accounting period.
(16) Construction-in-progress
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Construction-in-progress includes the pre-construction preparation, the under construction,
installation, technical construction, overhaul project and so on. It measures in actual cost incurred.
And are taken into accounts of fixed assets to record before used.
On the balance sheet day, estimate the impairment of that long-term suspension and will not
re-started in three years. The impairment estimation is book value minus the recoverable amount.
Once provision for impairment, it could not be reversed in later accounting period.
(17) Intangible assets
Intangible assets including intangible assets with a finite useful life and intangible assets with
an indefinite useful life.
1、Calculation method of intangible assets
An intangible asset shall be measured initially
The cost of self-developed intangible assets shall include the total expenditures incurred
during the period from the time when it meets the provisions of standards to the time when the
expected purposes of use are realized.
2、Amortization of intangible assets
（1）With regard to intangible assets with limited service life.
Useful life in the period, with the use of intangible assets related to the economic interests of
the consistent realization of the expected amortization method, not a reliable way of determining
expected to achieve, intangible assets shall be amortized by the straight-line method.
Taxi license shall be amortized for 38 years.
（2）Intangible assets with uncertain service life may not be amortized.
3、Impairment of Intangible Assets
On balance sheet day, make impairment testing to the uncertain life of intangible assets.
If there is an indication of impairment on balance sheet day for intangible assets with the
finite useful life. Estimate the recoverable amount. If the amount is lower than the book value, the
carrying value of intangible assets will be written down to its recoverable amount. And the cut
amount recognized as impairment losses, included in the current profit and loss period. Once
provision for impairment, it could not be reversed in later accounting period.
(18) Long-term prepaid expenses
Long-term prepaid expenses amortize among the benefit periods average.
(19) Borrowing costs
The borrowing costs shall include interest on borrowings, amortization of discounts or
premiums on borrowings, ancillary expenses, and exchange balance on foreign currency
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borrowings.
Where the borrowing costs incurred to an enterprise can be directly attributable to the
acquisition and construction or production of assets eligible for capitalization, it shall be
capitalized and recorded into the costs of relevant assets. Other borrowing costs shall be
recognized as expenses on the basis of the actual amount incurred, and shall be recorded into the
current profits and losses.
1、Capitalized
The borrowing costs shall not be capitalized unless they simultaneously meet the following 3
requirements:
（1）expenditure for the asset are being incurred；
（2）borrowing cost are being incurred；
（3）The necessary construction or production activities to make the assets ready for use or
sales have been launched.
2、Determination of the amount of capitalized
As for specifically borrowed loans for the acquisition and construction or production of assets
eligible for capitalization, the to-be-capitalized amount of interests shall be determined in light of
the actual cost incurred of the specially borrowed loan at the present period minus the income of
interests earned on the unused borrowing loans as a deposit in the bank or as a temporary
investment.
Where a general borrowing is used for the acquisition and construction or production of
assets eligible for capitalization, the enterprise shall calculate and determine the to-be-capitalized
amount of interests on the general borrowing by multiplying the weighted average asset
disbursement of the part of the accumulative asset disbursements minus the general borrowing by
the capitalization rate of the general borrowing used. The capitalization rate shall be calculated
and determined in light of the weighted average interest rate of the general borrowing.
3、Capitalized of Suspension
Where the acquisition and construction or production of a qualified asset is interrupted
abnormally and the interruption period lasts for more than three months, the capitalization of the
borrowing costs shall be suspended. The borrowing costs incurred during such period shall be
recognized as expenses, and shall be recorded into the profits and losses of the current period, till
the acquisition and construction or production of the asset restarts. If the interruption is a
necessary step for making the qualified asset under acquisition and construction or production
ready for the intended use or sale, the capitalization of the borrowing costs shall continue.
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4、Capitalized of ceased
When the qualified asset under acquisition and construction or production is ready for the
intended use or sale, the capitalization of the borrowing costs shall be ceased. After the borrowing
costs incurred in the current period expenses.
(20) Employee Benefits
The term “employee benefits “refers to all kinds of payments and other relevant expenditures
given by enterprises in exchange of the services offered by the employees. Employee benefits
include: (1) Wages, bonuses, allowances and subsidies for the employees; (2) Welfare expenses for
the employees; (3) Medical insurance, endowment insurance, unemployment insurance, work
injury insurance, maternity insurance and other social insurances; (4) Housing accumulation
fund ;(5) Labor union expenditure and employee education expenses; (6) Non-monetary benefits;
(7) Compensations for the cancellation of the labor relationship with the employees; and (8) Other
relevant expenditures of services offered by the employees.
During the accounting period of an employee' providing services to an enterprise, the
enterprise shall recognize the compensation payable as liabilities. Except for the compensations
for the cancellation of the labor relationship with the employee, the enterprise shall, in accordance
with beneficiaries of the services offered by the employee; cost of product, cost of services, cost of
fixed assets, intangible assets or profit or loss for the current period, shall be recognized.
(21) Contingent liability
The obligation pertinent to a contingency shall be recognized as a provision when the
following conditions are satisfied simultaneously:
（1）the obligation is a current obligation of the enterprise;
（2）it is probable that an outflow of economic benefit will be required to settle the
obligation;
（3）the amount of the obligation can be measured reliably
A provision shall be recognized when an onerous contract and obligation to restructure
incurred by an enterprise satisfies the requirements of the above conditions.
The amount of a provision recognized of expenditure required to settle a provision is
expected to be reimbursed of the best estimates of measurement.
(22) Revenue
（1）revenue from sales goods shall be recognized only when all of the following conditions
are satisfied:
A、the enterprise has transferred to the buyer the significant risks and rewards of ownership
of the goods;
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B、 the enterprise retains neither continuing managerial involvement to the degree usually
associated with ownership nor effective control over the goods sold;
C、the amount of revenue can be measured reliably;
D、it is probable that the economic benefits associated with the transaction will flow to the
enterprise;
E、the associated costs incurred or to be incurred can be measured reliably:
According to the principles above, the Company established real estate sales revenue is
recognized, must satisfied the following four conditions at the same time:
A、Real estate is completed, and is completed checking and accepting;
B、Signed a contract of sale and make recording in land department
Installment, if it is deferred for receiving money with financing, the cost should be measured
in present value according to the contract price. Mortgage, has been received, and have completed
the first phase of the mortgage loan approval procedures;
D、Agreed in the contract of sale and transfer the property to buyers
（2）Rendering of service，In case on the preparation date of balance sheet the results about
service transaction can be reliably evaluated, the labor income will be confirmed by the
completion percentage method.
Company has estimated the costs of determining the proportion of the total cost of providing
labor services, determinate of the progress of the completion of transactions. In case the service
transaction results on the preparation date of balance sheet cannot be reliably evaluated. In case
the service costs that have occurred can be compensated, the service income will be confirmed
based on such service costs and the same amounts will be settled as the service costs. In case the
service costs that have occurred cannot be compensated, such service costs will be accrued to the
current profit and loss and will not be confirmed as the service costs.
（3）Use by others of enterprise assets，in case the economic benefits related to the
transaction will probably flow into the enterprise and the income amounts can be reliably
calculated. The interest income amount will be calculated and determined based on the use time of
currency capital from the Company by others and actual interest rate. The income amount of use
expenses will be calculated and determined subject to the charging time and method agreed in the
relevant contracts and agreements.
(23) Government Grants
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A government grant is transfer of monetary assets or non-monetary assets from the
government to an enterprise at no consideration, excluding the contribution from the government
as the owner of the enterprise to enterprise. The company’s government grants are classified into
government grants relate to assets and government grants relate to income.
If a government grant is a monetary asset, it shall be measured in the light of the received or
receivable amount. If a government grants is a non-monetary asset, it shall be measured at its fair
value. If its fair value cannot be obtained in a reliable way, it shall be measured at its nominal
amount.
The government grant pertinent to assets shall be recognized as deferred income, equally
distributed within the useful lives of the relevant assets, and included in the current profits and
losses. But the government grants measured at their nominal amounts shall be directly included in
the current profits and losses.
The government grant related to income, the grant used for compensating the related future
expenses or losses of the enterprise shall be recognized as deferred income and shall included in
the current profits and losses during the period when the relevant expenses are recognized; the
grant used for compensating the related expenses or losses incurred to the enterprise shall be
directly included in the current profits and losses.
(24) Deferred tax assets and deferred tax liabilities
The income tax of the company apply with the financial statement liability method. The
Deferred tax assets and deferred tax liabilities are recognized of the difference of book value and
tax book balance. At the balance date, the deferred tax assets and deferred tax liabilities were
calculated based on the estimated taxable income tax rate.
Deferred tax assets are recognized not more than the amount that income tax payable of the
company.
Deferred tax assets and deferred tax liabilities were recognized from the temporary difference
of the subsidiaries and joint ventures. But Deferred tax assets and deferred tax liabilities were not
recognized if the time of transferred back temporary difference can be determined and the
temporary difference won’t be transferred back in the future.
(25) 1. operating leasing
Operating leasing are other leasing except for financial leasing.
（1）leaseholder
The rent will be calculated in gain or loss averagely. And the original expense will be counted
in gain or loss in current year. Contingent rent will be calculated in gain or loss when it happens.
If the lessor provides free-rental period, the total rent will be calculated in gain or loss
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averagely in the whole rental period（ including the free-rental period）. The free-rental period
have to recognized the rental expense.
if the lessor bears some expense, The total rental expense which deducts the expense will be
calculated in gain or loss averagely in the whole rental period.
If the sale-leaseback transactions are defined as operating leasing, it will be dealt with
according to the next situations:
a．If there are some definite evidence show that the price of sale-leaseback transactions is
determined with fair value. The difference between the price and the book value of the assets will
be calculated in gain or loss.
b．The price of sale-leaseback transactions is not determined with fair value. If the price is
less than fair value, the difference will be calculated in gain or loss. But if this loss will be
compensated with the rent which are less than the market price in the future, the loss should be
deferred. And the loss will be ca calculated in the whole rental period with the same methoud. If
the price is more than fair value, the difference will be recognized in deffered income. And
amortized in the whole rental period.
（2）lessor
The financial statements will included the operating assets.
The rent will be calculated in gain or loss averagely. The original expense will be calculated
in gain or loss in current year. The property will be deprecated according to the similar assets
deprecations policy. Contingent rent will be calculated in gain or loss when it happens.
If the lessor provides free-rental period, the total rent will be calculated in gain or loss
averagely in the whole rental period（ including the free-rental period）. If the lessor bear some
expense, the rent deducting the original expense will be calculated in gain or loss in the whole
rental period.
2．Financial leasing
Financial leasing is the leasing that actually transfer the property rights to leaseholder. And
the property rights will be transferred or not in the end.
（1）leaseholder
At the starting date of leasing, the less amount of the assets fair value and par value of rent
will be the book value of the rental assets in the financial statements. If the par value of rent as the
book value of long-term payables, the difference is recognized as financial expense. The expense
which happened during the negotiation period due to the leasing project can be calculated as
assets.
When calculated the par value of rent, the company use the leasing implied rate as discount
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For the year ended at 30 June 2010 (Un-audited)
33
rate if it can get the leasing implied rate. Otherwise, the company use the rate which the agreement
forth as the discount rate. If the company can not get the leasing implied rate or the agreement rate,
it will use the similar loans’ rate as discount rate. The financial expense which had not been
recognized will be calculated in the whole rental period averagely.
The leasing assets will apply the same deprecation policy. If the leaseholder assure that it can
have the property right when the leasing period ends, the assets will be deprecated in the whole
use life time. And otherwise, the assets will be deprecated in period of which the shorter of the
leasing period and use life time.
Contingent rent will be calculated in gain or loss when it happens.
（2）lessor
At the starting date of leasing, the par value of rent and the original expense will be counted
as long-term receivables. And record the remain unsecured amount at the same time. The
difference between the par value of rent, original expenses and the remain unsecured amount will
be recognized as the un-fulfillment financial income. The un-fulfillment financial income will be
distributed with the actual rate averagely.
When each year ended, the company will test the un-fulfillment financial income. If the
un-fulfillment financial income increase, it won’t be recognized. And the un-fulfillment financial
income increase decrease, the company will calculated the leasing implied rate. And the reduction
due to leasing investment will be calculated in gain or loss. The income of each year will be
calculated according to the revised leasing investment. The net amount of leasing investment is the
difference between the par value of rent and un-fulfillment financial income.
The amount of remain unsecured amount which had recognized as loss recover, it can be
transferred back not less than the amount. And the company have to re-calculate the leasing
implied rate. he the income of each year will be calculated according to the revised leasing
investment.
Contingent rent will be calculated in gain or loss when it happens.
(26) Assets held for sale
The assets held for sale must satisfy these conditions: 1, the company had made an disposal
agreement; 2, the company had signed the irrevocable transferring agreement with the transferee;
3, the transferring will be done in 1 year.
To Assets held for sale, the company will adjust the estimated net value of this assets. And
make the estimated net value can reflect the amount equaling the amount that the fair value minus
the disposal expenses. And the amount can not excess the original cost of the assets. If the book
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value is higher than the estimated net value, the difference will be calculated in current gain or
loss.
The Assets held for sale don’t deprecated. And it is counted with the less amount of the book
value and the amount that the fair value minus the disposal expenses.
If the Assets held for sale don’t satisfy the conditions, the company stopped re-classing it as
the Assets held for sale. And it will be calculated with the less amount of the following:
(1) the amount which calculated under the original method before the assets was re-classed to
the assets held for sale.
（2）the retracting amount when the company decide not to sale.
The other incurrent assets which satisfy the conditions will use the method mentioned above.
The other incurrent assets don’t include deferred tax assets, the financial assets documented in
“ enterprise principle No.22 – re-cognization and calculation of financial instruments “, the
properties calculated by the fair value, biological assets, the rights of the insurance agreement.
NOTE 3、Taxation
The main tax type and tax rate：
Type Taxable basis Tax rate
Business tax
proceeds from sales of properties, leasing income, property
management income
5%
Business tax Construction, installation income 3%
Value added tax (“VAT”) Goods sales income 17%
Construction tax Business tax and value added tax payable 1%
Education surcharge Business tax and value added tax payable 3%
Land appreciation Tax Sales revenue of properties *1
Income tax Income tax payable *2
* 1 According to Provisions of Shenzhen Municipal People’s Government and the local
Inland Revenue Department. From 1 November 2005, the company or individuals should pay land
value-added tax if they gain income from the real estate development or transfer in Shenzhen.
“Pay in advance, settlement after, refund for any overpayment or a supplemental payment for any
deficiency. In other words, prepaid the tax on the basis of the income from real estate transfer
before the project completed (the pre-charge rate of villas, resorts, hotel–style apartment on sales
of 1%, while 0.5% of other real estate sales). Till it all completed, handle settlement after clear the
account. Clearing the land valued added tax rate of used ultra-progressive tax rate. Valued-added
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ratio of 50% or less by 30 percent the proportion of value-added tax( general standard of domestic
value-added ratio of less than 20% of the land exempt tax from value-added tax). Value-added
ratio of more than 50 % did not exceed 100% of parts by 40% the proportion of the levy.
Value-added tax of more than 100% does not exceed 200% of the parts by 50% the proportion of
the levy. Value-added ratio of more than 200% of the parts by 60% the proportion of the levy.
* 2、Enterprise income tax rate is as follows：
Items Income tax rate
Domestic Enterprises
- enterprises in Shenzhen 20%
- enterprises outside Shenzhen 25%
Enterprises in HK 17.50%
* According to the China’s Corporate Income Tax (“CIT”) law that was passed by the
Standing Committee of the Tenth National People’s Congress(“NPC”) on 16 March 2007 and the
Notice of the State Council on the Transitional Preferential Policy regarding implementation of the
CIT Law (Guo Fa [2007] No.39) issued on 26 December 2007, income tax rate was effect from 1
January 2008. for certain enterprises that are entitled to preferential income tax rate of 15% before
the implementation of the CIT law, the income tax rate applicable will be 18%, 20%, 22%, 24%,
25% in 2008, 2009, 2010, 2011, 2012 and thereafter respectively.
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NOTE 4、Enterprises combination and the consolidated financial statements
1、 The information’s of subsidiaries are as follows:
The information’s of subsidiaries in 2009 are as follows :
1. Subsidiaries acquired through new establishment or investment are as follows:
2010-6-30
Name of
the Subsidiary Types
Registered
place
Registered
capital (in
ten
thousand
Yuan)
Nature of business and
principal activities
Net
Investment
in subsidiary in
substance
(in ten thousand
Yuan）
Net balance of other
investment items to the
subsidiaries（in ten
thousand Yuan）
Equity
holding
(%)
Voting
rights
(%)
Whether or not
included in
consolidated
financial
statement
Shenzhen Petrel Hotel
Co. Ltd.
Wholly-owned subsidiary Shenzhen 3,000 hotel 3,000 -- 100 100 YES
Shenzhen City Property
Management Ltd.
Wholly-owned subsidiary Shenzhen 725 Property management 725 -- 100 100 YES
Shenzhen Zhen Tung
Engineering Ltd
Wholly-owned subsidiary Shenzhen 1,000
Fitting-out contracting and
maintenance
1,000 -- 100 100 YES
Shenzhen City We Gen
Construction
Management Ltd.
Wholly-owned subsidiary Shenzhen 800
Construction project
management
800 -- 100 100 YES
Shenzhen City Car Rental
Ltd.
Wholly-owned subsidiary Shenzhen 1,029 Car rental 1,029 -- 100 100 YES
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42
2010-6-30
Name of
the Subsidiary Types
Registered
place
Registered
capital (in
ten
thousand
Yuan)
Nature of business and
principal activities
Net
Investment
in subsidiary in
substance
(in ten thousand
Yuan）
Net balance of other
investment items to the
subsidiaries（in ten
thousand Yuan）
Equity
holding
(%)
Voting
rights
(%)
Whether or not
included in
consolidated
financial
statement
Shenzhen Shenfang Car
Park Ltd.
Wholly-owned subsidiary Shenzhen 4,250
Develop and operate car
park
4,250 -- 100 100 YES
Shenzhen City Shenfang
Investment Ltd.
Wholly-owned subsidiary Shenzhen 1,000
Investment and
management
1,000 -- 100 100 YES
Shenzhen City Shenfang
Free Trade Trading Ltd.
Wholly-owned subsidiary Shenzhen 500
Trading of Import and
export
500 -- 100 100 YES
Shenzhen City SPG Long
Gang Development Ltd.
Wholly-owned subsidiary Shenzhen 3,000 Property development 3,000 -- 100 100 YES
Shenzhen Special
Economic Zone Real
Estate (Group)
Guangzhou Property and
Estate Co., Ltd.
Wholly-owned subsidiary Guangzhou 2,000 Property development 2,000 -- 100 100 YES
Beijing fresh peak
property development
Wholly-owned subsidiary Beijing US$1,000 operating of Real estate 7,671 -- 100 100 YES
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2010-6-30
Name of
the Subsidiary Types
Registered
place
Registered
capital (in
ten
thousand
Yuan)
Nature of business and
principal activities
Net
Investment
in subsidiary in
substance
(in ten thousand
Yuan）
Net balance of other
investment items to the
subsidiaries（in ten
thousand Yuan）
Equity
holding
(%)
Voting
rights
(%)
Whether or not
included in
consolidated
financial
statement
management limited
company
Beijing SPG Property
Management Limited
Wholly-owned subsidiary Beijing 50 Property management 50 -- 100 100 YES
Shenzhen ShenWu
elebator Co.,Ltd
Wholly-owned subsidiary Shenzhen 350 Elevator sales and service 350 -- 100 100 YES
Shenzhen Lain Hua
Industry and Trading Co.
Ltd.
Wholly-owned subsidiary Shenzhen 1,000
Trading of equipment and
provision of renovation
material
1,000 -- 100 100 YES
Fresh Peak Enterprise
Ltd.
Wholly-owned subsidiary Hong Kong HKD100
Investment and
management
HKD100 3,209 100 100 YES
Wellam Ltd. Wholly-owned subsidiary Hong Kong HKD1 Investment holding HKD1 -- 100 100 YES
Shantou SEZ Wellam Fty
Bldg., Dev. Co.
Wholly-owned subsidiary Shantou US$600 Property development US$600 -- 100 100 YES
Great Wall Estate Co., Inc Subsidiary of holding USA USD50 Property development USD35 10,138 70 70 YES
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44
2010-6-30
Name of
the Subsidiary Types
Registered
place
Registered
capital (in
ten
thousand
Yuan)
Nature of business and
principal activities
Net
Investment
in subsidiary in
substance
(in ten thousand
Yuan）
Net balance of other
investment items to the
subsidiaries（in ten
thousand Yuan）
Equity
holding
(%)
Voting
rights
(%)
Whether or not
included in
consolidated
financial
statement
company
Fresh Peak Holdings Ltd. Wholly-owned subsidiary Hong Kong HKD100
Investment and
management
HKD100 57,623 100 100 YES
Skill Elite Ltd. Wholly-owned subsidiary Hong Kong HKD1 corporate financing HKD1 -- 100 100 YES
Fresh Peak Investment
Ltd.
Subsidiary of holding
company
Hong Kong HKD100 Properties investment HKD55 -- 55 55 YES
Openice Ltd. Wholly-owned subsidiary Hong Kong HKD100
Investment and
management
HKD120 -- 100 100 YES
Barenie Co. Ltd.
Subsidiary of holding
company
Hong Kong HKD1 Properties investment HKD0.8 -- 80 80 YES
Keyear Development Ltd. Wholly-owned subsidiary Hong Kong HKD100 Investment holding HKD100 -- 100 100 YES
Guangzhou Huangpu
Xizun real estate limited
company
Wholly-owned subsidiary Guangzhou HKD3980 Property development HKD3980 -- 100 100 YES
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45
2010-6-30
Name of
the Subsidiary Types
Registered
place
Registered
capital (in
ten
thousand
Yuan)
Nature of business and
principal activities
Net
Investment
in subsidiary in
substance
(in ten thousand
Yuan）
Net balance of other
investment items to the
subsidiaries（in ten
thousand Yuan）
Equity
holding
(%)
Voting
rights
(%)
Whether or not
included in
consolidated
financial
statement
Fresh Peak Real Estate
Dev. Construction
(Wuhan) Co. Ltd.*1
Wholly-owned subsidiary WuHan US$400 Property development US$400 -- 55 55 YES
Shenzhen Shenfang
Department Store Co.
Ltd.*2
Wholly-owned subsidiary Shenzhen 1,000
Commercial goods
supplier
1,000 -- 100 100 No
Shenzhen CyberPort Co.,
Ltd *3
Wholly-owned subsidiary Shenzhen 2,000
Information Technology
Advisory
1,400 -- 70 70 No
Shenzhen City SPG Bao
An Development Ltd.*4
Wholly-owned subsidiary Shenzhen 2,000 Property development 2,000 -- 100 100 No
Shenzhen Real Estate
Consolidated Service Co.,
Ltd *5
Wholly-owned subsidiary Shenzhen 1,371
Construction material,
consume goods
596 -- 100 100 No
Shenzhen Shen Fang
Industrial Development
Wholly-owned subsidiary Shenzhen 300
Invest in industrial
projects
450 -- 100 100 No
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46
2010-6-30
Name of
the Subsidiary Types
Registered
place
Registered
capital (in
ten
thousand
Yuan)
Nature of business and
principal activities
Net
Investment
in subsidiary in
substance
(in ten thousand
Yuan）
Net balance of other
investment items to the
subsidiaries（in ten
thousand Yuan）
Equity
holding
(%)
Voting
rights
(%)
Whether or not
included in
consolidated
financial
statement
Co., Ltd.*6
Shenzhen Tefa Real
Estate Consolidated
Service Co., Ltd.*7
Wholly-owned subsidiary Shenzhen 221
Construction and
decoration
818 -- 100 100 No
Bekaton Property Limited
*8
Subsidiary of holding
company
Australia US$20 Property Development 91 1,256 60 60 No
Canada Great Wall
( Vancouver) Corporation
*8
Subsidiary of holding
company
Canada JOD 0.1 Property Development 0.45 8,904 75 75 No
Paklid Limited *8 Wholly-owned subsidiary Hong Kong HKD50
Property construction and
trading of construction
materials
20 1,107 100 100 No
Shenzhen City Shenfang
Construction and
Decoration Materials Ltd
Wholly-owned subsidiary Shenzhen 268 construction materials 268 -- 100 100 No
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47
2010-6-30
Name of
the Subsidiary Types
Registered
place
Registered
capital (in
ten
thousand
Yuan)
Nature of business and
principal activities
Net
Investment
in subsidiary in
substance
(in ten thousand
Yuan）
Net balance of other
investment items to the
subsidiaries（in ten
thousand Yuan）
Equity
holding
(%)
Voting
rights
(%)
Whether or not
included in
consolidated
financial
statement
*9
Shenzhen ZhongGang
Haiyan Enterprise
Ltd.*10
Subsidiary of holding
company
Shenzhen 1,900 Tourism Restaurant 1,294 -- 68 68 No
Shenzhen Xing Dongfang
Store Ltd.*11
Wholly-owned subsidiary Shenzhen 2,000
Domestic commercial
goods supply
1,850 -- 100 100 No
Guangdong Province
Fengkai Lain Feng
Cement Manufacturing
Co., Ltd *12
Subsidiary of holding
company
Fengkai in
Guangdong
Province
US$800
Manufacturing and trading
in cement products
12,126 -- 90 90 No
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51
*1 Fresh Peak Real Estate Dev. Construction (Wuhan) Co. Ltd.
The company holds 100% equity of the corporation through the Subsidiary – fresh peak
investment limited which the company held 55% equity.
*2 Shenzhen Shenfang Department Store Co. Ltd.：
The shareholders meeting held on 29 October 2007 passed the resolution to terminate
business, liquidation and formed a group to carry out the liquidation prodecures. The liquidation
group issued a notice of liquidation on 7 December 2007. According to the principle of
“Enterprise Accounting Standards No.33- the Consolidation Financial Statement”, the Store will
not be include in the company’s consolidated financial statement. The book value of the
investment account of the company is zero.
*3 Shenzhen Cyber Port Co., Ltd
The shareholders meeting held on 12 May 2008 passed the resolution to terminate business,
liquidation and formed a group to carry out the liquidation procedures. The liquidation group
issued a notice of liquidation on 5 December 2008. According to the principle of “Enterprise
Accounting Standards No.33- the Consolidation Financial Statement”, the corporation will not be
include in the company’s consolidated financial statement. The book value of the investment
account of the company is zero.
*4 Shenzhen City SPG Bao An Development Ltd.
The shareholders meeting held on 2009-9-18 passed the resolution to terminate business,
liquidation and formed a group to carry out the liquidation procedures. According to the principle
of “Enterprise Accounting Standards No.33- the Consolidation Financial Statement”, the Store will
not be include in the company’s consolidated financial statement.
*5 Shenzhen Real Estate Consolidated Service Co., Ltd.
The operating period of this corporation is from 26 January 1983 to 28 August 1999. and this
company has ceased operations for many years. And the corporation had been terminated its
licenses by law on 8 February 2002 because failing to take part in annual inspection.
*6 Shenzhen Shen Fang Industrial Development Co., Ltd.
The operating period of this corporation is from 3 October 1993 to 3 October 1998. And this
company has ceased operations for many years. And the corporation had been terminated its
licenses by law on 8 February 2002 because failing to take part in annual inspection.
*7 Shenzhen Tefa Real Estate Consolidated Service Co., Ltd
The operating period of this corporation is from 7 March 1983 to 14 April 1995. And this
company has ceased operations for many years. And the corporation had been terminated its
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52
licenses by law in 2004 because failing to take part in annual inspection.
*8 Bekaton Property Limited、Canada Great Wall ( Vancouver) Corporation and Paklid Limited
These 3 subsidiaries were set up overseas in early times. The board of directors passed a
resolution to terminate the corporations’ business.
*9 Shenzhen City Shenfang Construction and Decoration Materials Ltd
The operating period of this corporation is from 1 January 1984 to 6 July 2004. And this
company has ceased operations for many years. And the corporation had been terminated its
licenses by law on February 8, 2002 because failing to take part in annual inspection.
*10 Shenzhen ZhongGang Haiyan Enterprise Ltd
The operating period of this corporation is from 16 October 1984 to 16 October 2004. And
this company has ceased operations for many years. And the corporation had been terminated its
licenses by law in 1999 because failing to take part in annual inspection.
*11 Shenzhen Xin Dongfang Store Ltd.
The operating period of this corporation is from 7 June 1983 to 7 June 1998. And this
company has ceased operations for many years. And the corporation had been terminated its
licenses by law at 10 January 2001 because failing to take part in annual inspection.
*12 Guangdong Province Fengkai Lian Feng Cement Manufacturing Co., Ltd.
The total assets (including tangible and intangible assets) of the corporation were auctioned
for debt repayment at 22 January 2006. The company's investment in the company's book value of
zero.
Except for *2、*3、*4、*12, the above subsidiaries which are not included in the company’s
consolidated financial statement had ceased operations for many years. And the entities of the
corporations didn’t exist. And the company have no control over its subsidiaries’ businesses.
According to the principle of “Enterprise Accounting Standards No.33- the Consolidation
Financial Statement”, the corporation will not be include in the company’s consolidated financial
statement. The book value of the investment account of the company is zero.
2. Subsidiaries acquired through combination under common control
The company have no any subsidiaries acquired through combination under common control.
3. Subsidiaries acquired through combination under non-common control.
2009-12-31
Registered
place
Types
Registered
place
Registered
capital
(in ten
Nature of
business and
principal
Net
investment
in subsidiary
Net balance of
other investment
items to the
Equity
holding
Voting
power
Whether
or not
include in
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For the year ended at 30 June 2010 (Un-audited)
53
thousand
Yuan)
activities in substance
(in ten
thousand
Yuan）
subsidiaries（in ten
thousand Yuan）
Percenta
ge (%)
the
financial
statement
Shan Tou
Special
Economic Zone
Real Estate Ltd.
Wholly-owne
d subsidiary
ShanTou HKD3000
Property
development
2108 -- 100 100 Yes
4．The company have no any Entities special purpose.
The company have no any controlling entities through the way of trustee or leasing.
2、There is no any changes in the scope of combination in first half year of 2010.
NOTE 5 、Notes to the consolidated and the Company’s financial statements
1、 Cash at bank and on hand
2010-6-30 2009-12-31
Original
currency
Exchange
rate
RMB
Original
currency
Exchange
rate
RMB
Cash on hand
RMB
446,528.83 448,793.86 345,780.13 345,780.13
HKD 20,883.47 0.8725 18,220.83 30,480.11 0.8805 26,839.22
USD 2,000.00 6.8282 13,656.40
467,014.69 386,275.75
Deposit with banks
RMB 299,005,785.26 299,005,785.26 322,210,490.21 322,210,490.21
HKD 11,743,153.66 0.8725 10,245,901.57 53,146,295.26 0.8805 46,795,312.96
USD 92,516.97 6.7901 628,199.48 106,432.32 6.8282 726,741.17
CAD 197,933.41 6.4802 1,282,648.09
AUD 48,827.40 6.1294 299,282.67
309,879,886.31 371,314,475.10
Other monetary funds
RMB 14,593,243.79 14,593,243.79 14,191,779.92 14,191,779.92
HKD 73,566.91 0.8725 64,187.13 238,507.72 0.8805 210,002.74
14,657,430.92 14,401,782.66
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For the year ended at 30 June 2010 (Un-audited)
54
2010-6-30 2009-12-31
Original
currency
Exchange
rate
RMB
Original
currency
Exchange
rate
RMB
325,004,331.92 386,102,533.51
Other monetary funds are the deposit of mortgage loan the bank asked for the company when
the properties buyers applied the mortgage loan from the bank to buy the company’s properties.
The cash decreased by RMB 6,110 ten thousand, 15.82% comparing to the opening balance.
The decrease due to paying for the goods and services.
2、 Financial assets held for trading
2010-6-30 2009-12-31
stock investment 103,464.00 86,269.75
Including：Cost 132,920.00 90,940.00
Change in the fair value -29,456.00 -4,670.25
3、 Accounts receivable
（1）The symbol of credit risk identified by customers categories
2010-6-30 2009-12-31
Book balance proportion % Provision of bad debts Book balance proportion % Provision of bad debts
category 1 -- -- -- -- -- --
category 2 14,475,072.39 41.88 12,172,384.7614,475,072.39 43.39 12,172,384.76
category 3 20,087,801.91 58.12 6,301,894.3518,887,002.56 56.61 6,457,294.35
Total 34,562,874.30 100.00 18,474,279.1133,362,074.95 100.00 18,629,679.11
category 1: refers to accounts receivable with significant individual amount, such individual
amount is more than 5 million Yuan
category 2: individual is not a significant amount of credit risk, but according to the
characteristics of the portfolio after portfolio of risky accounts receivable, aging of such fund in
three years, and still less likely to recover the money.
category 3： Other is not significant accounts receivable
（2）Analysis of provision for bad and doubtful debts are as follow:
Book balance Provision of
bad debts
Proportion% Notes
individual is not a 14,475,072.39 12,172,384.76 84.09% The amount are mostly the accounts
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For the year ended at 30 June 2010 (Un-audited)
55
significant amount of credit
risk, but according to the
characteristics of the
portfolio after portfolio of
risky accounts receivable
receivable of import and export agency
business. The aging is long and the
irretrievability is little. We accrued the
provision according the irretrievability of
each item individually.
Other insignificant accounts
receivable
20,087,801.91 6,301,894.35 31.37%
The amount is mostly properties price. We
accrued the provision according to the
irretrievability of each item individually.
Total 34,562,874.30 18,474,279.11
(3) The aging of accounts receivable by categories:
2010-6-30 2009-12-31
Aging
amount proportion %
Provision of bad
debts
amount proportion %
Provision of bad
debts
Within 1 year 3,392,471.62 9.82 3,129,531.81 9.38 --
1 and 2 year 985,722.09 2.85 66,946.50 0.20 --
2 and 3 year 251,629.33 0.73 330,779.11 0.99 --
3and 5 year 718,804.65 2.08 886,529.88 2.66 --
Above 5 year 29,214,246.61 84.52 18,474,279.11 28,948,287.65 86.77 18,629,679.11
Total 34,562,874.30 100 18,474,279.11 33,362,074.95 100.00 18,629,679.11
The provision of individual is not a significant amount of credit risk, but according to the
characteristics of the portfolio after portfolio of risky accounts receivable
2010-6-30 2009-12-31
Aging
amount proportion %
Provision of bad
debts
amount proportion %
Provision of bad
debts
Above 5 year 14,475,072.39 100.00 12,172,384.7614,475,072.39 100.00 12,172,384.76
Total 14,475,072.39 100.00 12,172,384.7614,475,072.39 100.00 12,172,384.76
（4）On 30 June 2010，the information’s of accounts receivables of the company's biggest
five debtors are as follows:
Name relationship amount proportion % aging Notes
ZhongHai Properties Stock Un-related party
3,076,255.49 8.90 Within 1 Construction billing
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56
Limited Corporation year
DaXing Auto Parts Co., Ltd Un-related party
1,982,404.52 5.74
Above 5
year
Individual – Wang WeiDong Un-related party
1,200,000.00 3.47
Above 5
year
Shenzhen LongFu Real Estate
developing Corporation
Un-related party
1,184,669.51 3.43
Above 5
year
Fresh Peak Exchange
Corporation
Un-related party
1,178,541.43 3.41
Above 5
year
The sales price of
properties which hadn’t
called back. The company
would call back the
money when the owner of
the properties finfish the
property right certificates.
Total 8,621,870.95 24.95
（5）No amount due from shareholders who hold 5% or more of the voting rights of the
company is included in the above balance of accounts receivable.
（6）Refer to Note6、(3).5 for details of the accounts receivables which due from related
parities.
（7）There were no any account receivables which had been accrued full or large proportion
provision transferred back in this accounting year.
（8）There were no any accounts receivable Wright off in this accounting year.
（9）There were no any accounts receivables which had been terminated recognized.
（10）There were no any accounting receivable which had been Securitization.
4、 Advance to suppliers
（1）The aging of advance to suppliers by categories:
2010-6-30 2009-12-31
aging
Amount proportion % Amount proportion %
Within 1 year 11,872,036.89 55.38 10,568,061.87 58.65
1 to 2 years 2,113,612.38 9.86 -- --
2 to 3 years 2,000.00 0.01
Above 3 years 7,452,276.98 34.76 7,450,276.98 41.34
Total 21,437,926.25 100.00 18,020,338.85 100.00
（2）The information’s of accounts receivables of the company's biggest five debtors are as
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follows:
Name relationship amount proportion % aging Notes
Shenzhen Mao Ning Co., Ltd Un-related
party
483,000.00 2.26
Above 3
years
The un-settled prepayment of
import and export business
Shenzhen LianHua Insulated
Materials trade Co., Ltd
Un-related
party
815,168.55 3.80
Above 3
years
The un-settled prepayment of
import and export business
KaiPing FuLiHua Fashion Co.,
Ltd
Un-related
party
1,570,000.00 7.32
Above 3
years
The un-settled prepayment of
import and export business
ShangQiu City JiaHeQiangYi
Co., Ltd
Un-related
party
500,000.00 2.33
Above 3
years
The un-settled prepayment of
import and export business
ShangQiu City QiuGe Mao
Rong Co., Ltd
Un-related
party
1,263,486.10 5.89
Above 3
years
The un-settled prepayment of
import and export business
Total 4,631,654.65 21.60
（3）No amount due from shareholders who hold 5% or more of the voting rights of the
company is included in the above balance of advance suppliers.
（4）No amount due from related parties is included in the above balance of advance
suppliers.
5、 Other receivables
（1）The symbol of credit risk identified by customers categories
2010-6-30 2009-12-31
Book balance proportion %
Provision of bad
debts
Book balance proportion %
Provision of bad
debts
Category 1 154,633,577.80 70.35 149,340,344.13154,633,577.80 67.78 149,500,412.72
Category 2 41,104,126.23 18.70 27,865,955.59 41,104,126.23 18.02 27,865,955.59
Category 3 24,063,765.02 10.95 1,408,014.96 32,401,405.02 14.20 1,474,482.65
Total 219,801,469.05 100.00 178,614,314.68228,139,109.05 100.00 178,840,850.96
category 1: Refers to other receivables with significant individual amount, such individual
amount is more than 5 million Yuan
category 2: Individual is not a significant amount of credit risk, but according to the
characteristics of the portfolio after portfolio of risky other receivables, aging of such fund in three
years, and still less likely to recover the money.
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category 3：Other is not significant other receivables.
（2）The aging of accounts receivable by categories:
2009-12-31 2008-12-31
Aging
amount proportion %
Provision of bad
debts
amount proportion %
Provision of bad
debts
Within 1 year 1,678,918.05 0.76 -- 9,336,668.77 4.09 --
1 and 2 year 2,719,555.10 1.24 -- 3,399,443.88 1.49 --
2 and 3 year 1,463,582.25 0.67 -- 1,626,202.50 0.71 --
3and 5 year 1,446,877.20 0.66 -- 1,426,952.45 0.63 --
Above 5 year 212,492,536.45 96.67 178,614,314.68 212,349,841.45 93.08 178,840,850.96
Total 219,801,469.05 100.00 178,614,314.68 228,139,109.05 100.00 178,840,850.96
The provision of individual is not a significant amount of credit risk, but according to the
characteristics of the portfolio after portfolio of risky other receivable:
2009-12-31 2008-12-31
Aging
amount proportion %
Provision of bad
debts
amount proportion %
Provision of bad
debts
Above 5 years 41,104,126.23 100.00 27,865,955.59 41,104,126.23 100.00 27,865,955.59
（3）the provision of the other receivable which were significant or were insignificant
individually but tested individually.
2010-6-30
categories
Book balance
Provision for bad
debts
proportion % Notes
individual significant other
receivables
154,633,577.80 149,500,412.72 96.68%
The amount were not included in
subsidiaries which belong to the consolidate
financial statement Correspondent Payment.
The irretrievability is little. We accrued the
provision according the irretrievability of
each item individually.
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individual is not a significant
amount of credit risk, but according
to the characteristics of the
portfolio after portfolio of risky
accounts receivable
41,104,126.23 27,865,955.59 67.79%
The correspondent payment about unrelated
parities. The aging is long and the
irretrievability is little. We accrued the
provision according the irretrievability of
each item individually.
Other insignificant receivables 24,063,765.02 1,247,946.37 5.19%
Insignificant other receivable, we accrued
the provision according the irretrievability of
each item individually.
Total 219,801,469.05 178,614,314.68
（4）The information’s of other receivables of the company's biggest five debtors are as
follows:：
Name relationship Amount proportion % aging
Canada Great Wall( Vancouver) Co., Ltd
*
subsidiary 89,035,748.07 40.51 Above 5 years
Paklid Limited * 1 subsidiary 19,181,797.04 8.73 Above 5 years
Bekaton property Limited * 2 subsidiary 12,559,290.58 5.71 Above 5 years
Guangdong province Huizhou Luofu Hill
mineral water Co., Ltd
Joint venture 10,465,168.81 4.76 Above 5 years
Luofu Hill Traveling Corporation Un- related party 9,600,000.00 4.37 Above 5 years
Total 140,842,004.50 64.08
* The above subsidiaries were not included in the company’s consolidated financial
statement. Refer to Note 4 、(1).1 for details.
（5）No amount due from shareholders who hold 5% or more of the voting rights of the
company is included in the above other receivables.
（6）Refer to Note6、(3).3 for details of the other receivables which due from related parities.
（7）There were no any other receivables Wright off in this accounting year.
（8）There were no any other receivables which had been terminated recognized in the
accounting year.
（9）There were no any other receivables which had been Securitization in the accounting
year.
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6、 Inventories
（1）Inventories classed by category
2010-6-30 2009-12-31
Amount provision Amount provision
Real estate development products 297,045,429.14 771,196.00 374,902,380.30 1,350,000.00
Real estate developing products 634,229,198.04 47,584,499.31 542,654,985.50 47,584,499.31
Real estate which are going to be
developed
1,206,770,138.46 --
1,200,170,737.09 --
Raw materials
860,786.93
--
861,932.89 --
finished products
660,001.75 278,891.91 608,858.82 278,891.91
low-value consumable
products
-- --
11,478.74 --
Construction
20,078,119.43 -- 18,301,964.51 --
Total 2,159,643,673.75 48,634,587.22 2,137,512,337.85 49,213,391.22
The ending balance of inventories increased by RMB 2,271.01 ten thousand, 1.09%. The increase
due to the additions of Real estate developing products.
（2）Provision
reductions
2009-12-31 additions
Transfer back Wright-off
2010-6-30
finished products 278,891.91 -- -- -- 278,891.91
ShuiYunTianYa, MingYuan 47,584,499.31 -- -- -- 47,584,499.31
HuaMin Building 1,350,000.00 -- -- 578,804.00 771,196.00
Total 49,213,391.22 -- -- 578,804.00 48,634,587.22
（3）Real estate development products
Finished
time
2009-12-31 additions redutions 2010-6-30
Jinye Island villa No.1 1996 3,141,098.72 -- 1,293,216.00 1,847,882.72
Jinye Island Multi-tier villa 1997 36,077,347.92 20,000.00 126,889.14 35,970,458.78
Jinye Island villa No.4 2010-3-31 3,436,974.85 -- 3,436,974.85
Jinye Island villa No.6 2007 34,471,819.41 87,790.01 -- 34,559,609.42
Jinye Island villa No.7 2007 18,424,926.88 -- 11,056,049.30 7,368,877.58
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61
Finished
time
2009-12-31 additions redutions 2010-6-30
Jinye Island villa No.8 2007 6,716,371.49 131,151.11 -- 6,847,522.60
Jinye Island villa No.9 2009 56,446,237.99 34,000,638.07 22,495,513.46 67,951,362.60
Jinye Island villa No.11 2008 138,898,000.80 -- 71,872,356.04 67,025,644.76
HuangPuXinChun No.1 1994 121,283.88 -- 121,283.88
HuangPuXinChun No.2 2007 6,732,405.35 -- 937,626.13 5,794779.22
HuaMin Building 3,020,596.68 -- 1,295,061.85 1,725,534.83
HuaFeng Building 2000 1,631,743.64 -- -- 1,631,743.64
XingHu Garden Multi-tier 2003 248,384.29 -- -- 248,384.29
XingHu Garden No.8 2005 9,988,789.21 -- -- 9,988,789.21
BeiJing Fresh Peak Building 671,820.67 -- -- 671,820.67
Friendship Multi-tier Parking Lot* 56,266,380.81 -- 56,266,380.81 --
JiaoHu Roan Cyber Shop 2,045,172.56 -- -- 2,045,172.56
WenJin Building** -- 12,751,281.46 -- 12,751,281.46
WenJin Garden ** - 3,818,939.87 -- 3,818,939.87
HuJing Building** -- 12,616,011.52 -- 12,616,011.52
Real Estate Building** -- 11,025,444.77 -- 11,025,444.77
DongLe Building** -- 9,597,909.91 -- 9,597,909.91
Total 374,902,380.30 87,486,141.57 165,343,092.73 297,045,429.14
* On 2010-1-29, Friendship Multi-tier Parking Lot were sold by auction successfully with the
price - RMB 129,360,000.00 in Shenzhen Land Real Estate Trading Center.
** The above were re-classed to inventories because of the changes of use.
（4）Real estate developing products
Starting time Finished time 2009-12-31 2010-6-30
DongHuDiJing Building 129,832,800.58 130,536,736.91
Jinye Island villa No.10 2008 2010 118,848,416.49 208,782,105.70
ShanTou JinHu Road Project 2008 53,858,008.00 53,878,008.00
ShuiYuTianYa, MingYuan 2007 219,031,704.38 219,948,291.38
ShanTou Fresh Peak Building 21,084,056.05 21,084,056.05
Total 542,654,985.50 634,229,198.04
Among the real estate developing products, the net balance of land-use right of Jinye Island
villa No.10 is RMB 61,548,064.64. And also, it had been as mortgage when the company
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62
borrowed money from the bank. The mortgage ending date is 3rd August 2012.
The capitalization amount of loans was RMB 8,190,000 in the first half year of 2010. And
last year was RMB 2,927,040.62.
（5）Real estate which are going to be developed
Starting
time
2009-12-31 additions reductions 2010-6-30
GuangMing New
District project
2011.3 1,200,170,737.09 6,599,401.37 -- 1,206,770,138.46
The company bought the land-use right of Shenzhen GuangMing New District whose number
were A510-0131、A511-0025 through the listing transferring mode. The total land remise fund is
1.2 billion. And the company had paid 50% of the fund on 9 September 2009. And the remaining
fund have to be paid for in 1 year. The total area of the land is 90,737.09 square meter. FAR is 2.
The total construction area is 181,470.00 square meter. And the project is planned to be developed
at the beginning of 2011 year.
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64
7、 Long-term equity investments
（1）the information’s of Long-term equity investments are as follow:
Name of investees
Measured
method Original cost 2009-12-31 movement 2010-6-30
Proporti
on (%)
Voting
right (%)
Dividend in
cash
The
provision
accrued
this year
Accumulated
provision
1、Associate investment
Shenzhen Shatoujiao Nantian
Store *1
equity
method 2,850,618.06 2,446,234.22 -2,446,234.22 -- 50 50 -- -- --
Zhaoqing Guifeng cement
Co.,Ltd *2
equity
method 15,112,000.00 12,724,417.03 12,724,417.03 50 50 -- -- --
Shenzhen Ronghua JiDian
Co.,ltd
equity
method 1,250,000.00 1,841,277.19 -200,000.00 1,641,277.19 25 25 200,000.00 -- 1,076,954.64
Shenzhen Fresh Peak property
consultant Co.,Ltd
equity
method 600,000.00 -- -- -- 20 20 -- -- --
Shenzhen runhua automobile
trading Co.,Ltd
equity
method 1,445,425.56 1,445,425.56 -- 1,445,425.56 50 50 -- -- 1,445,425.56
Shenzhen Dongfang New
world store Co.,Ltd
equity
method 15,000,000.00 -- -- -- 50 50 -- -- --
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65
Name of investees
Measured
method Original cost 2009-12-31 movement 2010-6-30
Proporti
on (%)
Voting
right (%)
Dividend in
cash
The
provision
accrued
this year
Accumulated
provision
2、joint venture investment
Guangdong province
Huizhou Luofu Hill mineral
water Co.,Ltd
equity
method
9,969,206.09 9,969,206.09 -- 9,969,206.09
coopera
te
cooperat
e -- -- 9,969,206.09
Fengkai Xinhua Hotel
equity
method 9,455,465.38 9,455,465.38 -- 9,455,465.38
coopera
te
cooperat
e -- -- 9,455,465.38
Jiangmen Xinjian Real Estate
Co. Ltd.
equity
method 9,037,070.89 9,037,070.89 -- 9,037,070.89
coopera
te
cooperat
e -- -- 912,537.16
Xian Fresh Peak Building Co.
Ltd.
equity
method 32,840,729.61 32,840,729.61 -- 32,840,729.61
coopera
te
cooperat
e -- -- 20,673,831.77
DongYi Property Co.,Ltd
equity
method 30,376,084.89 30,376,084.89 -- 30,376,084.89
coopera
te
cooperat
e -- -- 21,225,715.87
3、other equity investment:
Shenzhen Shen Fang
Industrial Development Co.,
Ltd
Cost
method
4,500,000.00 4,500,000.00 -- 4,500,000.00 100 100 -- -- 4,500,000.00
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Name of investees
Measured
method Original cost 2009-12-31 movement 2010-6-30
Proporti
on (%)
Voting
right (%)
Dividend in
cash
The
provision
accrued
this year
Accumulated
provision
Shenzhen ZhongGang Haiyan
Enterprise Ltd.
Cost
method 12,940,900.00 12,940,900.00 -- 12,940,900.00 68 68 -- -- 12,940,900.00
Shenzhen Real Estate
Consolidated Service Co.,
Ltd.
Cost
method
5,958,305.26 5,958,305.26 -- 5,958,305.26 100 100 -- -- 5,958,305.26
Paklid Limited Cost
method 201,100.00 201,100.00 -- 201,100.00 100 100 -- -- 201,100.00
Bekaton Property Limited Cost
method 906,630.00 906,630.00 -- 906,630.00 60 60 -- -- 906,630.00
Canada Great Wall
(Vancouver) Co.,Ltd
Cost
method 4,526.25 -- -- -- 75 75 -- -- --
Shenzhen Tefa Real Estate
Consolidated Service Co.,
Ltd.
Cost
method
8,180,003.63 8,180,003.63 -- 8,180,003.63 100 100 -- -- 8,180,003.63
Shenzhen Xin Dongfang
Store Ltd.
Cost
method 18,500,000.00 18,500,000.00 -- 18,500,000.00 100 100 -- -- 18,500,000.00
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Name of investees
Measured
method Original cost 2009-12-31 movement 2010-6-30
Proporti
on (%)
Voting
right (%)
Dividend in
cash
The
provision
accrued
this year
Accumulated
provision
Shenzhen City Shenfang
Construction and Decoration
Materials Ltd.
Cost
method
2,680,000.00 2,680,000.00 -- 2,680,000.00 100 100 -- -- 2,680,000.00
Shenzhen Shenfang
Department Store Co. Ltd.
Cost
method 10,000,000.00 10,000,000.00 -- 10,000,000.00 100 100 -- -- 10,000,000.00
Shenzhen CyberPort Co., Ltd Cost
method 14,000,000.00 7,613,507.96 -- 7,613,507.96 70 70 -- -- --
KunShan Electrity Co.,Ltd *3
Cost
method 32,471,239.25 32,471,239.25 -- 32,471,239.25 50 50 12,586,609.32 -- --
YunNan KunPeng Flight
service Co.,Ltd
Cost
method 5,464,240.74 5,464,240.74 -- 5,464,240.74 25 25 -- -- --
ShenZhen ShenFang BaoAn
developmentCo.,Ltd
Cost
method 20,000,000.00 20,379,525.68 -- 20,379,525.68 100 100 -- -- --
Shantou Fresh Peak Building
Cost
method 68,731,560.43 58,547,652.25 -- 58,547,652.25 100 100 -- -- 58,547,652.25
Guangdong Province Fengkai Cost 121,265,000.00 56,228,381.64 -- 56,228,381.64 90 90 -- -- 56,228,381.64
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68
Name of investees
Measured
method Original cost 2009-12-31 movement 2010-6-30
Proporti
on (%)
Voting
right (%)
Dividend in
cash
The
provision
accrued
this year
Accumulated
provision
Lain Feng Cement
Manufacturing Co., Ltd.
method
Total 453,740,106.04 354,707,397.27 -2,646,234.22 352,061,163.05 12,786,609.32 -- 243,402,109.25
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68
*1 Shenzhen Shatoujiao Nantian Store
The company transferred 50% equity of Shenzhen Shatoujiao Nantian Store to Shenzhen
ShaTou Jiao Business trade Co., Ltd with a listing agreement price –RMB 12,145 thousand in
Shenzhen United Exchange on 2nd February 2010.
*2 Zhaoqing Guifeng cement Co.,Ltd
The company held a party joint conference on 2010-4-19. The meeting passed a resolution to
dispose the 50% equity of Zhaoqing Guifeng cement Co., Ltd the company held. With the same
conditions, the former shareholder – GuangLong Group had preferential right. The company and
GuangLong group had reached a preliminary agreement on equity transferring.
*3 KunShan Electrity Co.,Ltd
KunShan Electrity Co., Ltd held the directors’ meeting at 2010-1-30. because the board
deemed the original liquidation date- 2009-6-30 had been delayed. The meeting decided the date –
2010-2-6 as the new dissolution date. And the corporation was go into liquidation according to the
procedure.
（2）Impairment Provision for Long-term equity investment are as follows:
reductions
Name of investees Opening balance addition Transfer
back
Wright-off
Closing balance
Shenzhen ronghua JiDian Co.,ltd 1,076,954.64 -- -- -- 1,076,954.64
Shenzhen Shen Fang Industrial Development Co., Ltd 4,500,000.00 -- -- -- 4,500,000.00
Shenzhen ZhongGang Haiyan Enterprise Ltd. 12,940,900.00 -- -- -- 12,940,900.00
Shenzhen Real Estate Consolidated Service Co., Ltd. 5,958,305.26 -- -- -- 5,958,305.26
Paklid Limited 201,100.00 -- -- -- 201,100.00
Bekaton Property Limited 906,630.00 -- -- -- 906,630.00
Shenzhen Tefa Real Estate Consolidated Service Co., 8,180,003.63 -- -- -- 8,180,003.63
Shenzhen Xin Dongfang Store Ltd. 18,500,000.00 -- -- -- 18,500,000.00
Shenzhen City Shenfang Construction and Decoration 2,680,000.00 -- -- -- 2,680,000.00
Shenzhen Shenfang Department Store Co. Ltd. 10,000,000.00 -- -- -- 10,000,000.00
Guangdong Province Fengkai Lain Feng Cement 56,228,381.64 -- -- -- 56,228,381.64
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reductions
Name of investees Opening balance addition Transfer
back
Wright-off
Closing balance
Shenzhen Runhua automobile trading Co.,Ltd 1,445,425.56 -- -- -- 1,445,425.56
Guangdong province Huizhou Luofu Hill mineral 9,969,206.09 -- -- -- 9,969,206.09
Fengkai Xinhua hotel 9,455,465.38 -- -- -- 9,455,465.38
Jiangmen Xinjian Real Estate Co. Ltd. 912,537.16 -- -- -- 912,537.16
Xian Fresh Peak Property Management & Trading Co. 20,673,831.77 -- -- -- 20,673,831.77
Tung Yick Property Co., Ltd. 21,225,715.87 -- -- -- 21,225,715.87
Shantou Fresh Peak Building 58,547,652.25 -- -- -- 58,547,652.25
TOTAL 243,402,109.25 -- -- -- 243,402,109.25
8、 Investment Property（measured according to the cost model）
2009-12-31 additions reductions 2010-6-30
Original cost
Buildings 834,855,168.59 -- 84,804,203.11 750,050,965.48
Land use right 105,247,628.32 -- 27,744.61 105,219,883.71
total 940,102,796.91 -- 84,831,947.72 855,270,849.19
Accumulated
depreciation
Buildings 235,385,349.06 11,070,734.92 33,803,548.38 212,652,535.60
Land use right --
total 235,385,349.06 11,070,734.92 33,803,548.38 212,652,535.60
provision for
Impairment losses
Buildings 14,182,354.95 53,810.33 14,128,544.62
Land use right 86,381,639.48 22,771.30 86,358,868.18
total 100,563,994.43 76,581.63 100,487,412.80
Book value
Buildings 585,287,464.58 523,269,885.26
Land use right 18,865,988.84 18,861,015.53
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For the year ended at 30 June 2010 (Un-audited)
70
2009-12-31 additions reductions 2010-6-30
Total 604,153,453.42 542,130,900.79
The amount of current year deprecation is RMB 11,070,734.92.
There were no any provision for impairment losses accrued in this accounting year.
The reduction of Original cost and Accumulated depreciation of building due to
reclassification because of the change of purpose. The amount of building’s reductions of original
cost is RMB 84,804,203.11, of which, the amount due to be sold is RMB 1,487,593.88. and the
amount due to reclassification to inventories is RMB 83,316,609.23 ( the balance of Accumulated
depreciation is RMB 33,507,021.70 ).
The reductions of land use right’s original cost and provision for impairment losses due to the
change of rate used in translation of foreign currencies.
Among the investment property, RMB 272,959,888.24 of net balance of building were used
as mortgage for the company’s short-term/long-term loans. Refer to Note 5、14 for details.
9、 Fixed assets and Accumulated depreciation
2009-12-31 additions reductions 2010-6-30
Cost
Buildings 117,069,692.56 -- -- 117,069,692.56
Transport equipment 19,784,159.53 -- 334,693.10 19,449,466.43
Electronic equipment and others 16,096,615.97 206,599.60 13,500.00 16,289,715.57
Total 152,950,468.06 206,599.60 348,193.10 152,808,874.56
Accumulated depreciation
Buildings 59,463,001.85
1,616,547.93 --
61,079,549.78
Transport equipment 13,950,692.68
743,144.42
317,958.60
14,375,878.50
Electronic equipment and others 13,121,617.75
379,040.61
12,825.00
13,487,833.36
Total 86,535,312.28
2,738,732.96
330,783.60
88,943,261.64
Provision for
impairment loss
Electronic equipment and others 131,727.96 -- -- 131,727.96
Net book value
Buildings 57,606,690.71 -- --
55,858,414.82
Transport equipment 5,833,466.85 -- --
5,073,587.93
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For the year ended at 30 June 2010 (Un-audited)
71
2009-12-31 additions reductions 2010-6-30
Electronic equipment and others 2,843,270.26 -- --
2,801,882.21
Total 66,283,427.82
63,733,884.96
Until 2010-6-30 , net book value RMB 114,844,202.50 of the Buildings were used as the
short-term/long-term loans’ mortgage (including the long-term loans). Refer to Note5、14 for
details.
There are no any temporary idle fixed assets.
There are no any fixed assets acquired by financial leasing in the accounting year.
There are no any fixed assets leased out through operating leasing way.
There are no any fixed assets held for sale.
10、 Intangible assets
2009-12-31 additions amortization 2010-6-30
Original cost
Software 318,000.00 -- - 318,000.00
Taxi license 6,368,000.00 - -- 6,368,000.00
Total 6,686,000.00 -- -- 6,686,000.00
Accumulative
amortization
Software 63,600.00 31,800.00 -- 95,400.00
Taxi license 390,020.00 83,790.00 -- 473,810.00
Total 453,620.00 115,590.00 -- 569,210.00
Book value
Software 254,400.00 -- -- 222,600.00
Taxi license 5,977,980.00 -- -- 5,894,190.00
Total 6,232,380.00 -- -- 6,116,790.00
Provision for
impairment loss
-- --
Net amount
Software 254,400.00 -- -- 222,600.00
Taxi license 5,977,980.00 -- -- 5,894,190.00
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For the year ended at 30 June 2010 (Un-audited)
72
2009-12-31 additions amortization 2010-6-30
Total 6,232,380.00 -- -- 6,116,790.00
11、 Long-term deferred and prepaid expenses
Original cost 2009-12-31 additions
Current year
amortization
Accumulative
amortization
2010-6-30
Decoration costs 1,808,640.24 364,901.70 -- 81,222.60 1,524,961.14 283,679.10
12、 Deferred tax assets
The deferred tax asset which were already recognized:
2010-6-30 2009-12-31
Assests impairment provision 11,896,124.83 11,896,124.83
Employee benefits payable 807,847.20 807,847.20
Unused operating losses against tax 3,528,158.38 3,528,158.38
Total 16,232,130.41 16,232,130.41
13、 Impairment provision of assets
reductions
2009-12-31
additions
Transfer back Wright-off
2010-6-30
Provision for bad debts 197,470,530.07 -- -- 381,936.28 197,088,593.79
Inventories impairment
provision
49,213,391.22
-- -- 578,804.00
48,634,587.22
Long-term equity investment
impairment provision
243,402,109.25
-- -- --
243,402,109.25
Investment property
impairment provision
100,563,994.43
-- -- 76,581.63
100,487,412.80
Fixed assets impairment
provision
131,727.96
-- -- --
131,727.96
Total 590,781,752.93 -- -- 1,037,321.91 589,744,431.02
14、 Restrictions on the ownership of assets
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For the year ended at 30 June 2010 (Un-audited)
73
Items Mortagage period Book value on 2010-6-30
Deposits with bank Other monetary funds * 11,444,484.00
Inventories(work in process) JinYe Island No.10 land-use right 2009.08.31-2012.08.03 61,548,064.64
Inventories(work in process)
ShuiYunTianYa, MingYuan land-use
right
2009.12.08-2012.12.07 121,416,542.78
Investment Property ShenFang Square 2007.06.21-2012.03.29 194,457,397.25
Investment Property GuoShang North 2 floor 2007.05.29-2017.05.29 76,469,688.94
Investment Property Real estate Building 2007.06.21-2010.12.04 2,032,802.05
Fixed assests ShenFang Square 46-48 floor 2007.06.21-2010.12.04 30,679,525.77
Fixed assests Hai Yan Building 84,164,676.73
Total 582,213,182.16
* Other monetary assets of the Company is the security deposit that the company provided
when properties purchaser apply mortgage. Types consist with full security and Periodical
security. Periodically to ensure security of the guarantee period from the effective date of the
contract until the buyers who purchased homes in the "real estate license," registration process is
completed and the mortgage bank completed and delivered the date of the Executive Management;
the period of full security guarantees from the effective date until the date of expiry of the loan
contract.
The Restrictions on the ownership of assets mentioned above, except for Other monetary
funds, were used as mortgage when the company borrowed money form the bank and related
parities.
15、 Short-term borrowings
Nature 2010-6-30 2009-12-31
Mortgage borrowings 14,800,000.00 100,000,000.00
The company didn’t fail repaid any due short-term borrowings.
16、 Accounts payable
2010-6-30 2009-12-31
Accounts payable 452,217,979.28 730,944,352.56
（1）The balance of accounts payable decreased by RMB 27,872.63 ten thousand, 38.13%.
The decrease due to pay for the remaining land remise fund to Urban Planning and Resources
Commission of Shenzhen Municipality of the GuangMing New district project.
（2）The balance of accounts payable whose aging is more than 1 year is mostly the
un-billing construction fee.
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74
（3）No amount due to shareholders who hold 5% or more of the voting rights of the
company is included in the above balance of AP.
（4）No amount due to related parities is included in the above balance of AP.
17、 Advances from customers
The aging analysis of the company’s accounts receivable is as follow:
2010-6-30 2009-12-31
aging
Amount proportion% Amount proportion %
Within 1 year 212,533,541.74 97.47 151,606,227.42 96.49
Above 1 year 5,509,824.73 2.53 5,509,824.73 3.51
Total 218,043,366.47 100.00 157,116,052.15 100.00
（1）The balance of Advances from customers increased by RMB 6,092.73 ten thousand,
38.78%. The increase due to the advance properties sales price which haven’t reached the
condition of revenue recognition.
（2）The balance whose aging were more than 1 year were mostly the import and export
agency business payment which haven’t settle with the clients.
（3）No amount due to shareholders who hold 5% or more of the voting rights of the
company is included in the above balance .
（4）No amount due to related parities is included in the above balance.
On 2010-6-30，the main items of Advances from customers are as follow:
Item 2009-12-31 2010-6-30 Situation Aging
HuJing Building -- 8,000,000.00 completed Within 1 year
Guangzhou Huangpu yuan 1,751,000.00 -- completed
ShanTou Jinye Island villa No. 4 -- 3,699,650.00 completed Within 1 year
ShanTou Jinye Island villa No. 7 6,173,201.00 4,379,994.00 completed Within 1 year
ShanTou Jinye Island villa No. 8 -- 10,651,200.00 completed Within 1 year
ShanTou Jinye Island villa No. 9 35,338,525.00 5,642,600.00 completed Within 1 year
ShanTou Jinye Island villa No. 10 -- 122,247,519.20 December 2010 Within 1 year
ShanTou Jinye Island villa No. 11 80,487,094.60 10,211,327.82 completed Within 1 year
Total 123,749,820.60 164,832,291.02
18、 Employee benefits payable
2009-12-31 additions reductions 2010-6-30
Wages , bonuses, allowances and subsidies 17,139,442.94
29,486,436.33
31,163,898.39
15,461,980.88
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For the year ended at 30 June 2010 (Un-audited)
75
Staff welfare --
741,201.59
741,201.59
-
Social securities 2,395,896.99
4,674,952.41
4,526,009.18
2,544,840.22
Labor union and employee education funds 632,882.76
622,414.69
580,045.07
675,252.38
Compensation to employees for
termination of employment relationship 4,304,271.06
46,457.67
4,257,813.39
others 27,000.00
247,361.18
211,461.46
62,899.72
Total 24,499,493.75 35,772,366.20 37,269,073.36 23,002,786.59
（1）No amount’s nature of the employee benefits payable were arrears of wage.
（2）The amount of Labor union and employee education funds were RMB 675,252.38. The
nature were Monetary benefits.
19、 Taxes payable
2010-6-30 2009-12-31
Value added tax (“VAT”) 551,979.66 -3,356,801.84
Business tax -4,421,209.30 -8,775,058.40
Construction tax -236,907.93 -246,366.15
Education surcharge -89,767.25 -70,442.79
Embankment Protection Fee 11,572.95 -125,435.28
Property tax 1,829,282.27 2,069,192.63
Land value added tax -2,851,114.84 2,119,324.64
Corporate Income tax 3,966,701.56 -913,790.48
Personal income tax 188,715.11 498,046.04
others -36,590.90 18,568.07
Total -1,087,338.67 -8,782,763.56
The balance of taxes payable increased by RMB 769.54 ten thousand. The increase due to
carry-over the prepaid business tax and corporate income tax comparing to the fund of properties
sales.
20、 Interests payable
Name 2010-6-30 2009-12-31
Shenzhen Investment Shareholding Co.，Ltd 16,447,275.51 14,421,711.65
Urban Planning and Resources Commission of
Shenzhen Municipality
23,126,500.00 10,266,000.00
Total 39,573,775.51 24,687,711.65
The balance of interests payable due to Urban Planning and Resources Commission of
Shenzhen Municipality were accrued form the unpaid land remise fund of the company
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For the year ended at 30 June 2010 (Un-audited)
76
GuangMing New district project. And the land remise fund will be paid in 1 year. The rate is
5.31%. Refer to Note 11 for details.
21、 Other payables
Closing balance Opening balance
Other payables 302,806,117.01 297,237,215.73
（1）The information of other payables due to shareholders who hold 5% or more of the
voting rights of the company are is as follows:
Name Closing balance Opening balance Nature of other payables
Shenzhen Investment Holdings Co., Ltd. 63,848,819.24 63,848,819.24 Loan
（2）The amount whose aging were more than 1 year are mostly loans borrowed form related
parities, correspondent fund and leasing deposit.
（3）Please refer to Note6、(3). 3 for details of the amount due to related parties.
22、 Non-current liabilities within one year
Closing balance Opening balance
Long-term loans within one year -- --
Mortgage loans 129,353,308.07 229,607,155.48
Total 129,353,308.07 229,607,155.48
(1) the company didn’t fail to repay the due long-term loans in the accounting year.
（2）the lenders of long-term loans are as follows:
lender Maturity Date currency Rate（%） Closing balance
Shenzhen Rural Commercial Bank 2010.10.26 RMB 5.40 70,000,000.00
Shenzhen Rural Commercial Bank 2010.12.4 RMB 5.40 40,000,000.00
Nanyang Commercial Bank
Shenzhen branch 2010.12 RMB 5.58 5,553,308.07
China Construction Bank Shenzhen
Branch
2010.07.10
RMB 6.21
13,800,000.00
Total 129,353,308.07
23、 Long-term Borrowings s
Loans conditions Closing balance Opening balance
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For the year ended at 30 June 2010 (Un-audited)
77
Mortgage loans 913,475,703.05 811,593,686.82
Total 913,475,703.05 811,593,686.82
Including.：non-current liability within one year 129,353,308.07 229,607,155.48
long term loans 784,122,394.98 581,986,531.34
The ending balance of long-term loans by each lender are as follows:
Lender currency Closing balance Conditions Maturity Date
Nanyang Commercial Bank Shenzhen branch RMB 40,122,394.98 Mortgage 2017.05.29
FuFa Branch Shenzhen BuJi Branch RMB 44,000,000.00 Mortgage 2012.3.29
ShangHai Band Shenzhen Branch* RMB 400,000,000.00 Guaranteed 2012.12.07
JiaoTong Band ShanTou Branch RMB 300,000,000.00 Mortgage 2012.08.03
Total 784,122,394.98
* The loans borrowed from Shanghai’s Band Shenzhen Branch were guaranteed by the
company’s controlling shareholder – Shenzhen Investment Holdings Co., Ltd. And the company
provided counter-guarantee mortgage with ShuiYunTianYa, MingYuan land-use right. Refer to
Note5、14 for details.
24、 Share capital
Opening balance additions reductions Closing balance
1、Shares with restriction on disposals
1)、State-owned shares -- -- -- --
2)、PRC legal person shares -- -- -- --
3)、PRC legal nature person shares -- -- -- --
4)、Others -- -- -- --
Total -- -- -- --
2、Shares without restriction on disposals
1)、Domestically listed PRC public shares 891,660,000 -- -- 891,660,000
2)、Domestically listed foreign shares 120,000,000 -- -- 120,000,000
3)、Overseas listed foreign shares -- -- -- --
4)、Others -- -- -- --
Total 1,011,660,000 -- -- 1,011,660,000
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For the year ended at 30 June 2010 (Un-audited)
78
Opening balance additions reductions Closing balance
Sum total 1,011,660,000 1,011,660,000
25、 Capital reserve
Opening balance additions reductions Closing balance
Capital premium 557,433,036.93 -- -- 557,433,036.93
Other capital surplus 420,811,821.17 -- -- 420,811,821.17
Total 978,244,858.10 -- -- 978,244,858.10
26、 Surplus reserve
Opening balance additions reductions Closing balance
Reserve fund 4,974,391.15 -- -- 4,974,391.15
27、 Retained Earnings
Closing balance Opening balance
Net profit for parent company’s shareholders 64,141,001.28 20,217,383.62
add：Retained Earnings at the beginning of year -781,357,778.86 -915,511,458.27
less：Profit distribution -- 113,936,295.79
Including.：withdrawal legal surplus -- --
Withdrawal special surplus -- --
Distribution to ordinary shareholders -- --
Remedying loss with surplus reserve -- 113,936,295.79
Retained Earnings at the ending of year -717,216,777.58 -781,357,778.86
28、 Minority Interest and profit or loss
Name of investees
Proportion of minority
shareholdings %
Closing balance Opening balance
Fresh Peak Investment Ltd. 45 -10,995,584.63 -10,995,584.63
Wellam Ltd. 20 -2,027,387.46 -2,027,387.46
Total -13,022,972.09 -13,022,972.09
29、 Turnover and cost of sales
（1）Turnover and cost of sales
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For the year ended at 30 June 2010 (Un-audited)
79
Jan 2010 - Jun 2010 Jan 2009 - Jun 2009
Core operating Income 514,325,139.40 288,743,395.14
Other operating Income 4,501,552.67 2,068,206.35
Gross Income 518,826,692.07 290,811,601.49
Cost of sales 338,485,961.34 218,500,804.81
（2）Core operating Income（classed by industry）
operating Income operating Cost Operating margin
Industry Jan 2010 - Jun
2010
Jan 2009 - Jun
2009
Jan 2010 - Jun
2010
Jan 2009 - Jun
2009
Jan 2010 - Jun
2010
Jan 2009 - Jun
2009
Real estate
318,604,350.04 102,952,316.99
166,107,938.16 63,742,098.75 152,496,411.88 39,210,218.24
Construction 118,073,356.03 99,649,713.76
111,355,323.27 94,023,612.07 6,718,032.76 5,626,101.69
Leasing &
Property
management 70,281,522.81 75,347,008.91 51,809,309.32 51,038,851.06 18,472,213.49 24,308,157.85
Hotel and
others 11,867,463.19 12,862,561.83 9,213,390.59 9,696,242.93 2,654,072.60 3,166,318.90
Total
518,826,692.07 290,811,601.49
338,485,961.34 218,500,804.81 180,340,730.73 72,310,796.68
（3）core business（class by district）
operating Income operating Cost Operating margin
District Jan 2010 - Jun
2010
Jan 2009 - Jun
2009
Jan 2010 - Jun
2010
Jan 2009 - Jun
2009
Jan 2010 - Jun
2010
Jan 2009 -
Jun 2009
Domestic:
GuangDong
Province 518,493,114.95 290,395,405.61 338,485,961.34 218,500,804.81 180,007,153.61 71,894,600.80
Overseas：
333,577.12 416,195.88 333,577.12 416,195.88
Total
518,826,692.07 290,811,601.49 338,485,961.34 218,500,804.81 180,340,730.73 72,310,796.68
（4）The information of the biggest 5 clients are as follows:
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For the year ended at 30 June 2010 (Un-audited)
80
Jan 2010 - Jun 2010
Client
Amount proportion%
Shenzhen ShengShi JiaChuang Investment Corporation 129,360,000.00 24.93
ZhongShan City GuZhenZhenJiang NanHai An Garden Electric Fitting 10,662,588.15 2.06
DaZu JiGuang Equipment Manufacture secondary power distribution & Air supply
Project 9,314,700.00 1.80
Individual – Liao ChuYin 7,691,200.00 1.48
Individual – Wang Lei 7,429,998.00 1.43
Total 164,458,486.15 31.70
30、 Business Taxes and Surcharges
Jan 2010 - Jun 2010 Jan 2009 - Jun 2009
Business tax 23,365,570.12 13,490,618.90
City maintenance and construction tax 240,630.34 163,657.96
Educational surcharge 414,098.21 256,933.62
Property tax 3,479,836.34 3,799,059.74
Land value added tax 27,780,088.67 6,869,813.66
Others 331,810.34 205,526.47
Total 55,612,034.02 24,785,610.35
31、 Finance expenses
Jan 2010 - Jun 2010 Jan 2009 - Jun 2009
Interest expenses 39,125,739.31 13,293,246.53
Less：capitalization interest 8,190,000.00 2,927,040.62
Less: interest income 617,242.05 726,616.64
Exchange losses 1,771,437.40 --
Less: exchange gains 1,473,280.54 43,824.49
Others 965,068.45 186,322.29
Total 31,581,722.57 9,782,087.07
The finance expenses increased by RMB 2,180 ten thousand, 222.85%. The increase due to
the accrued interest expenses of the remaining land remise fund of the GuangMing New District.
32、 Investment income
（1）The details of investment income are as follows:
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For the year ended at 30 June 2010 (Un-audited)
81
Jan 2010 - Jun 2010 Jan 2009 - Jun 2009
The investment income yielded from the long-term equity
applied with the cost method 12,586,609.32 7,583,812.56
The investment income yielded from the long-term equity
applied with the equity method -- --
The investment income yielded from the disposal of the
long-term equity 9,636,607.65 --
The investment income yielded from the disposal of the
financial assets held for trading 116,843.92 8,532.58
others 100,000.00 100,000.00
Total 22,440,060.89 7,692,345.14
*The company transferred the 50% equity of Shenzhen ShaTouJiao NanTian Store to
Shenzhen ShaTouJiao Business trade company with the price of 1,214.50 ten thousand. And the
company gained the investment profit RMB 963.66 ten thousand.
（2）The investment income yielded from the long-term equity applied with the cost method
investee
Jan 2010 - Jun
2010
Jan 2009 - Jun
2009
Reason of the movement
KunShanDiaoFeng electricity Co., Ltd 12,586,609.32 7,208,812.56
The addition of the
dividend
YunNan KunPeng Flight Service Co.,
Ltd -- 375,000.00
The reduction of the
dividend
Total 12,586,609.32 7,583,812.56
33、 Non-operating income
Jan 2010 - Jun 2010 Jan 2009 - Jun 2009
1、Total gain on disposal of non current assets -- 300.00
including：Gain on disposal of fixed assets -- 300.00
2、penalty income 78,762.40 818.50
3、compensation income -- --
4、others 44,537.32 29,806.59
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For the year ended at 30 June 2010 (Un-audited)
82
Total 123,299.72 30,925.09
34、 Non-operating expenses
Jan 2010 - Jun 2010 Jan 2009 - Jun 2009
1、Total losses on disposal of non current assets 14,409.50 48,532.00
including：Loss on disposal of fixed assets 14,409.50 48,532.00
2、penalty expense 7,858.23 --
3、Donation expenses 68,000.00 24,000.00
4、compensation expense* -- --
5、others 10,600.00 13,319.04
Total 100,867.73 85,851.04
35、 Other comprehensive income
ITEM
Jan 2010 - Jun
2010
Jan 2009 - Jun
2009
1、the gain/loss yield from the disposal of financial assets available for sale -- --
Less：the effect of income tax of disposal of financial assets available for sale
-- --
The amount of which had been transferred in gain and loss which had been
counted in other comprehensive income prior period
-- --
Total -- --
2、The amount of which the investee other comprehensive income applied
with the equity method
-- --
less：the effect of income tax of The amount of which the investee other
comprehensive income applied with the equity method
-- --
The amount of which had been transferred in gain and loss which had been
counted in other comprehensive income prior period
-- --
Total -- --
三、the gain or loss yield from the cash flow hedging instrument -- --
less：the effect of the gain or loss yield from the cash flow hedging
instrument
-- --
The amount of which had been transferred in gain and loss which had been
counted in other comprehensive income prior period
-- --
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For the year ended at 30 June 2010 (Un-audited)
83
ITEM
Jan 2010 - Jun
2010
Jan 2009 - Jun
2009
The adjustment of the first recognized amount which had been transferred
in hedging instrument
-- --
Total -- --
4、the differences of translation of foreign financial statement 22,640.46 87,377.62
less：the net amount of dealing with the overseas operation gain or loss -- --
Total 22,640.46 87,377.62
5、others -- --
less：the income tax effect of other item which had been counted in other
comprehensive income
-- --
The amount of which had been transferred in gain and loss which had been
counted in other comprehensive income prior period
-- --
Total -- --
Sum total 22,640.46 87,377.62
36、 Cash flow statements
（1）Cash received from operating activities
Jan 2010 - Jun 2010 Jan 2009 - Jun 2009
interest income 962,273.50 726,616.64
Mortgage、deposits 40,476,735.71 3,635,486.58
Correspondent Payment 47,258.44 --
Maintenance fund 2,070,673.06 1,944,783.36
Others 39,890,171.12 22,529,017.16
Total 83,447,111.83 28,835,903.74
（2）Cash paid for other operating activities
Jan 2010 - Jun 2010 Jan 2009 - Jun 2009
Cash paid to General and
administrative expenses 11,347,864.88
10,707,023.68
Cash paid to operating expenses 3,888,613.50 2,551,818.93
Mortgage and Guarantee 25,180,736.06 1,116,920.00
Property license fee、Survey Fee 2,769,095.00 2,155,117.40
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For the year ended at 30 June 2010 (Un-audited)
84
Other Correspondent Payment 4,397,359.64 3,074,539.26
Others 26,581,069.19 28,579,068.27
Total 74,164,738.27 48,184,487.54
（3）Cash received by selling the products and providing the services
Jan 2010 - Jun 2010 Jan 2009 - Jun 2009
Cash received by selling the products and
providing the services
561,833,156.45 260,615,674.46
The cash increased RMB 30,121.75 ten thousand, 115.58%. The increase due to additions of
the sales fund of properties.
（4）Cash paid for the goods and services:
Jan 2010 - Jun 2010 Jan 2009 - Jun 2009
Cash paid for the goods and services 545,456,789.91 184,311,701.42
The cash increased RMB 36,114.51 ten thousand, 195.94%. The increase due to paying for
the remaining land-use right fee of the GuangMing New District.
（5）Cash received from borrowings & repaid the borrowings
Jan 2010 - Jun 2010 Jan 2009 - Jun 2009
Cash received from borrowings 364,800,000.00 50,000,000.00
Cash repaid the borrowings 348,117,983.77 66,235,566.97
The borrowings increase by RMB 31,480 ten thousand, 629.60%.
The cash paid for the borrowings increased by RMB 28,188.24 ten thousand, 425.58%. The
increase due to debt rescheduling.
（6）Cash flow statement(continued)
Supplementary information Jan 2010 - Jun 2010 Jan 2009 - Jun 2009
1、Reconciliation from the net profit to the cash flows from operating
activities
Net profit 64,141,001.28 7,699,678.64
Add：Provisions for assets impairment
Depreciation of fixed assets and investment property 13,818,749.79 17,529,766.15
Amortization of intangible assets 115,590.00 112,410.00
Long-term deferred and prepaid expenses amortization 81,222.60 81,222.60
Losses on disposal of fixed assets, intangible assets and other long-term 13,734.50 48,232.00
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Supplementary information Jan 2010 - Jun 2010 Jan 2009 - Jun 2009
assets（gains used“-”）
Scrapping of fixed assets losses（gains used“-”）
Exchange of fair value losses（gains used“-”） 24,785.75 -133,836.40
Finance expenses （gains used“-”） 38,191,264.49 13,062,903.65
Investment losses（gains used“-”） -22,440,060.89 -7,692,345.14
Decrease in deferred tax assets（gains used“-”）
Increase in deferred tax liabilities（gains used“-”）
Decrease in inventories（gains used“-”） 39,967,798.36 35,032,398.72
Decrease in operating receivables（gains used“-”） 3,719,253.25 3,637,307.90
Increase in operating payables（gains used“-”） -191,752,191.63 -90,114,568.35
Others -12,572,514.05 -266,313.13
Net cash flows from operating activities -66,691,366.55 -21,003,143.36
2、Investment and financing activities not involving cash
3、Net increase/ (decrease) in cash and cash equivalents
Cash at the end of the year 325,004,331.92 288,249,054.07
Less: cash at beginning of the year 386,102,533.51 328,413,393.57
Net increase in cash and cash equivalents -61,098,201.59 -40,164,339.50
Note 6、Related parties’ transaction
（1）The standards of related parties recognition
Party control, joint control or the other to exert a significant impact on the other party, as well
as two or more than two parties are of the same party control, joint control or significant influence,
constitutes a related party.
（2）Related party relationships
1、 the information of the company’s controlling shareholder is as follows:
Controlling
shareholder relationship Enterprise
type
Place of
registration
legal
representative
Nature
of
business
and
principal
activities
Registered
code
Registered
capital
Equity
Holding
proporation%
Voting
rights%
Shenzhen
Investment
Shareholding
Limited
controlling
shareholder
State-owned
Enterprises
Guangdong
province
Shenzhen
Chen hongbo * 76756642-1 RMB 4
billion 63.55 63.55
* Guarantees for Municipal State-owned enterprises; stated-owned shares management
excluded from the enterprises of direct control by SAC; on assets restructurings of controlled
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For the year ended at 30 June 2010 (Un-audited)
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enterprises as well as its capital operation. Other businesses authorized by city SAC.
2、 The information of the company’s subsidiaries. Refer to Note 4.(1) for details.
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3、 The information of the joint venture and Associate
Name of investees Enterprise type Nature of business legal representative Registered code
Place of
registration
Registered
capital
(in ten thousand Yuan)
Equity
Holding
proportion%
Voting rights%
1、Associate investment:
Zhaoqing Guifeng cement
Co.,Ltd *1
limited liability
company
CEMENTand
CONCRETE production
LiangGuangZhen 78385809-6 zhaoqing 3,023 50 50
Shenzhen ronghua JiDian
Co.,ltd
limited liability
company
Elevator, air-condition,
water-electricty fixing
and sales
ZhengZhongQing 19219691-6 Shenzhen 500 25 25
Shenzhen Fresh Peak
property consultant Co.,Ltd
limited liability
company
Property sales and
rental
ZhongXinFa 19221684-1 Shenzhen 300 20 20
Shenzhen runhua automobile
trading Co.,Ltd *2
limited liability
company
Domestic car sales( not
includen little car)、moto
LiXueMin 19220483-2 Shenzhen 500 50 50
Shenzhen Dongfang New
world store Co.,Ltd *3
limited liability
company
Domestic trade/material
supply
PengNaiDian 19222948-2 Shenzhen 3,000 50 50
2、joint venture investment:
Guangdong province
Huizhou Luofu Hill mineral
Cooperative
Enterprises
Water and other products
supply
YangHuaiYu boluo 602 cooperation cooperation
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Name of investees Enterprise type Nature of business legal representative Registered code
Place of
registration
Registered
capital
(in ten thousand Yuan)
Equity
Holding
proportion%
Voting rights%
water Co.,Ltd *4
Fengkai Xinhua Hotel *5
Cooperative
Enterprises
tourism、Restaurant fengkai cooperation cooperation
Jiangmen Xinjian Real Estate
Co. Ltd.*6
Cooperative
Enterprises
Property developing and
sales
LuoJinXXing jiangmen USD660 cooperation cooperation
Xian Fresh Peak Building
Co. Ltd.*6
Cooperative
Enterprises
Developing and operating
Xi’an trade building
LiangWeiGuo 62390802-3
Xi’a
n
HKD3,000
cooperation cooperation
DongYi Property Co.,Ltd *6
Private owned
enterprises
Property development
and sales
Hong Kong HKD100
cooperation cooperation
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*1 Zhaoqing Guifeng cement Co., Ltd
The company held the Fifth meeting of the Sixth Directors on 2010-4-19. The meeting
passed a resolution to dispose the 50% equity of Zhaoqing Guifeng cement Co., Ltd the
company held. With the same condition, the former shareholder – GuangLong Group had the
right of priority in acquiring.
*2 Shenzhen runhua automobile trading Co., Ltd
The operating period of this corporation was form 1992-2-24 to 1997-2-24. and the
corporation had ceased operations because of operating loss for many years. And the
corporation had been terminated its licenses by law because it failed to pass the annual
inspection. And the corporation stopped making the financial statement. At 2009-12-31, the
book value of the investment account of the company is zero. According to the associate
agreement, the company didn’t have the ability to bear the additional loss.
*3 Shenzhen Dongfang New world store Co., Ltd
The operating period of this corporation was form 1993-6-7 to 1998-6-7. and the
corporation had ceased operations because of operating loss for many years. And the
corporation had been terminated its licenses by law at 2001-1-10 because it failed to pass the
annual inspection. And the corporation stopped making the financial statement. At
2009-12-31, the book value of the investment account of the company is zero. According to the
associate agreement, the company didn’t have the ability to bear the additional loss.
*4 Guangdong province Huizhou Luofu Hill mineral water Co., Ltd
The operating period of this corporation was form 1991-6-5 to 2001-6-4. and the
corporation had ceased operations because of operating loss for many years. And the
corporation had been terminated its licenses by law at 2001-7-6 because it failed to pass the
annual inspection. And the corporation stopped making the financial statement. At
2009-12-31, the book value of the investment account of the company is zero. According to the
joint venture agreement, the company didn’t have the ability to bear the additional loss.
*5 Fengkai Xinhua Hotel
The FengKai XingHua Hotel was announced bankruptcy by the Guangdong Province
Zhaoqing City second-middle intermediate Peoples’ court with the document (2002)ZHFJPZ
No.2. and the corporation had finished the bankruptcy procedure. At 2009-12-31, the book
value of the investment account of the company is zero. According to the joint venture
agreement, the company didn’t have the ability to bear the additional loss.
*6 Jiangmen Xinjian Real Estate Co. Ltd.、Xian Fresh Peak Building Co. Ltd、DongYi
Property Co., Ltd
The above corporations were the joint ventures set up with the local partners for the
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For the year ended at 30 June 2010 (Un-audited)
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properties developing projects. Because the projects had been stopped, the joint ventures had
stopped operating activities for many years. And these corporations also stopped operation for
many years and didn’t prepare financial statements. The company had accrued corresponding
provision of the investment of joint ventures. Refer to Notes 5.7.2 for details.
The above joint ventures and associates which number were *2、*3、*4、*5、*6 had stopped
operating businesses and preparing financial statements. The constitution and the agreement of
the above corporations didn’t require the shareholders bearing the extra loss abilities except for
contributing capital. According to the principle “ Enterprise Accounting Standard – No.2
Long-Term Investment Equity ”, the company had accrued full provision of the investment
according to the corporations’ financial situations. And the company hadn’t transferred back
any provision. So in the accounting period, the book value of the investment account of the
company is still zero.
（3）Related parties transactions
The related parties transactions included the emoluments、borrowings from related parties
and interest expenses. The information is as follows:
1、 Borrowings from related parties
Closing Balance Opening Balance
Short-term loans - Shenzhen investment
holding Co., Ltd
-- 100,000,000.00
Other payables - Shenzhen investment
holding Co., Ltd
63,848,819.24 63,848,819.24
Total 63,848,819.24 163,848,819.24
2、 The Assurance of the relate parities
Assurance Provider secured party relationship
Secured
amount
Secured period
Shenzhen investment holding
Co., Ltd
Shenzhen Special
Economic Zone Real
Estate and Properties
(Group) Co., Ltd
Controlling
subsidiary
200,000,000 2009.12.08 to 2012.12.07
Shenzhen investment holding
Co., Ltd
Shenzhen Special
Economic Zone Real
Estate and Properties
(Group) Co., Ltd
Controlling
subsidiary
100,000,000 2010.3.23 to 2012.12.07
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Shenzhen investment holding
Co., Ltd
Shenzhen Special
Economic Zone Real
Estate and Properties
(Group) Co., Ltd
Controlling
subsidiary
100,000,000 2010.5.22 to 2012.12.07
Shenzhen Special Economic
Zone Real Estate and Properties
(Group) Co., Ltd
ShanTou HuaLin Real
Estate Developing
Corporation
Controlling
subsidiary
300,000,000 2009.08.31 to 2012.08.03
Shenzhen Special Economic
Zone Real Estate and Properties
(Group) Co., Ltd
Shenzhen Petrel Hotel Co.
Ltd.
Controlling
subsidiary
15,000,000 2007.06.14 to 2010.06.13
3、 Receivables and Payables of related parties
Closing Balance Opening Balance
Name of related parties
amount proportion% amount proportion%
Other receivables Luofu Hill mineral water Co., Ltd 10,465,168.81 4.76 10,465,168.81 4.59
Shenzhen Runhua automobile
trading Co., Ltd
3,072,764.42 1.40 3,072,764.42 1.35
Canada GreatWall（Vancouver）
Co., Ltd
89,035,748.07 40.51 89,035,748.07 39.03
Bekaton Property Limited 12,559,290.58 5.71 12,559,290.58 5.51
Paklid Limited 19,181,797.04 8.73 19,181,797.04 8.41
Shenzhen Shenfang Department
Store Co. Ltd.
189,179.82 0.09 189,179.82 0.08
Shenzhen Real Estate
Consolidated Service Co., Ltd.
927,136.22 0.42 927,136.22 0.41
Shenzhen City Shenfang
Construction and Decoration
Materials Ltd.
8,327,180.71 3.79 8,327,180.71 3.65
Shenzhen RongHua JiDian Co.,
Ltd
475,223.46 0.22 1,187,723.46 0.52
Xi’an Fresh Peak property
management& Trading Co., Ltd
8,419,205.19 3.83 8,419,205.19 3.69
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Closing Balance Opening Balance
Name of related parties
amount proportion% amount proportion%
Accounts receivable
Shenzhen Fresh Peak property
consultant Co., Ltd
1,178,541.43 3.41 1,187,345.24 3.56
Other payables
Shenzhen Tefa Real Estate
Consolidated Service Co., Ltd.
598,012.16 0.20 598,012.16 0.20
Shenzhen Shen Fang Industrial
Development Co., Ltd
1,534,854.91 0.51 1,534,854.91 0.52
Shenzhen ZhongGang Haiyan
Enterprise Ltd.
135,853.52 0.04 135,853.52 0.05
Shenzhen Dongfang New world
store Co., Ltd
902,974.64 0.30 902,974.64 0.30
Shenzhen Xin Dongfang Store
Ltd.
1,394,704.21 0.46 1,394,704.21 0.47
Guangdong Province Fengkai
Lain Feng Cement Manufacturing
Co., Ltd.
1,870,577.00 0.62 1,870,577.00 0.63
Shenzhen Shatoujiao Nantian
Store
-- -- 1,200,000.00 0.40
Shenzhen Cyber Port Co., Ltd 7,940,762.26 2.62 7,910,026.54 2.66
Shenzhen shenfang group
Bao’An developing Co., Ltd
20,754,116.41 6.85 18,981,347.13 6.39
Shenzhen investment holding
Co., Ltd
63,848,819.24 21.09 63,848,819.24 21.48
Short-term loans
Shenzhen investment holding
Co., Ltd
-- -- 100,000,000.00 100.00
Interest payable
Shenzhen investment holding
Co., Ltd
16,447,275.51 41.56 14,421,711.65 58.42
Note 7、Exchange of non-monetary assets
No information of exchange of non-monetary assets are needed to disclosure in the first
half year of 2010 .
Note 8、Share-based payment
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There are no any share-based payment contract in the first half year of 2010.
Note 9、Debt restructurings
No information of Debt restructurings are needed to disclosure in the first half year of
2010.
Note 10、Contingencies
（1）Significant litigation
1．Guoxing Building Lawsuit
On 21 March 1997, the company singed an agreement “transferring equity of GuoXing
Building agreement” with Baoxing real Estate Development (Shenzhen) Company limited
(hereinafter referred to as “BaoXing” ). According to the agreement specifications, the company
transferred 50% of GuoXing Building project to BaoXing with the price- RMB 145,000
thousand . And also, the construction cost – RMB 15,000 thousand that the company owed to
GuoXing Building were undertaken by BaoXing. But after paying RMB 45 million to the
company, the remaining equity transferring fund- RMB 100,000 thousand and the construction
cost – 15,000 thousand hadn’t paid for the company. The company instituted legal proceedings
against BaoXing. After the trial of the Guangdong High People’s Court on 28 September 2002,
Baoxing had to pay for RMB 98,948,060.00 and interest to the company according to the paper
of civil judgment –“（2001）YueGaoFaJing – ChuZhi No.7. Upon a second sue of the case in
2003, the judgment remained unchanged.
On 2008-2-2, the company signed an agreement with BaoXing company. According to the
agreement specifications, BaoXing company paid for RMB 15,000 thousand to the company.
and at the same time, the company gave up the distribution right and Auction Disposal right of
the LongGang District BaoXing Building. But the BaoXing Company failed to carry out the
agreement. On 2008-7-23, Baoxing Company 、the third party – Shenzhen HongMing MuYe
Co., Ltd (hereinafter referred to as HongMing Company )and the company signed the
composition agreement. According to the agreement specifications, the debts and other
responsibilities of BaoXing Company would be undertaken by HongMing company. And
HongMing Company had to paid for the company RMB 15,000 thousand and transferred the
land-use right of N0. 1514 room ( size: 343.95 square meters) of Shenzhen international
exchange plaza. At December 2008, the company received RMB 2,500 thousand. And the
property hadn’t finished the transferring ownership procedures. Now the case is proceeding and
there was no any new substantive progress in the reporting period.
Until 30 June, 2010, the amount of RMB 66,201,645.33 had been called back on the case
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For the year ended at 30 June 2010 (Un-audited)
9 5
with the execution.
2．Xi’an project Lawsuit
Xi’an Fresh Pead Holding limited company (hereinafter referred to as “Fresh Peak
Company” ) was sino-foreign joint venture set up in Xi’an city. The shareholder of the Fresh
Peak Company – Hong Kong Fresh Peak Co., Ltd was the wholly owned subsidiary of the
company. And the Hong Kong Fresh Peak Co., Ltd contributed 84% of the Fresh Peak
company’s share- capital in cash. And Xi’an trade building which was the enterprise under the
Xi’an Joint Commission on Commerce and Trade contributed 16% of the Fresh Peak company’s
share- capital with the land-use right. The core business was property development. And the
project was Xi’an Trade Building. The project was started on 1995-11-28. But the project had
been stopped in 1996 because of the 2 parties differences on the operating policy of the project.
In 2007, the Xi’an government withdrew the Xi'an Fresh Peak investment project
compulsively and assigned the project to Xi’an Business Tourism Co., Ltd ( hereinafter referred
to as “Business Tourism company” ). But the two parties had insulted an lawsuit on
compensation. The ShanXi Province High Peoples Court made a judgement “(2000) SJ-CZ
No.25”. The judgment were as follows: 1、Business Tourism company had to paid for the
compensation RMB 36,620 thousand to Xi’an Fresh Peak company after the judgment entering
into force. If the Business Tourism company failed to pay in time, it had to pay double debt
interests to Xi’an Fresh Peak company. 2、Xi’an Joint Commission on Commerce had the joint
and several obligation of the interests of the compensation.
Until 30 June, 2010, the amount of RMB 15,201,000.00.had been called back. There was
no any new substantive progress in the reporting period.
At 2010-6-30, the book value of the investment of Xi’an Fresh Peak Company was RMB
12,166,897.84 . The provision for investment was RMB 20,673,831.77. and the amount of
credit was RMB 8,419,205.19.
3．Luofu Hill project Lawsuit
The company cooperated with Luofu Hill Tourism company ( hereinafter referred to as
“Tourism company” )cooperated on Luofu Hill Tourism project in early years. The company
instituted legal proceedings against Tourism company because the Tourism company failed to
carry out the agreement. The judgment which issued by GuangDong Province High Peoples
Court on 2007-12-21 are as follows:
1、Tourism company had to paid for RMB 9,600 thousand to the company in 10 days after
the judgment entering into force.
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2、Tourism company should paid for the interests of RMB 9,600 thousand with The
People's Bank of China similar loans rate in 10 days after the judgment entering into force. Of
which, The interests of RMB 4,400 thousand were calculated from 1986-5-1 to the day the
Tourism company paid off the debt. The interests of RMB 4100 thousand were calculated from
1988-2-1 to the day the Tourism company paid off the debt. The interests of RMB 1,100
thousand were calculated from 1989-6-15 to the day the Tourism company paid off the debt.
The interest of RMB 8,580 thousand that the Tourism company had paid for to the company can
be deduct ed from the interest payable.
3、Luofushan Administration Committee had to undertake one third of the debts which
Luofushan Tourism was unable to pay ;
4、The interest of debts would be double if the Tourism company and Luofushan
Administration Committee failed to fulfill their obligations within the designated period of this
judgment;
5、Tourism company undertake all the litigation fees (RMB 167,714 ). The expense of
first instance and the second instance had to pay to the company during the duration of
payment.
There was no any new substantive progress after the judgment announced. The company
applied the Guangdong Province High people’s Court to supervise implementation at May 2009.
The Guangdong Province High people’s Court issued a document “(2009) YGYZDZ No. 67 to
Huizhou intermediate people’s court and asked the Huizhou intermediate people’s court to close
this case in 3 months after receiving the document. Until 2010-3-17, Huizhou intermediate
people’s court had finished the Evaluation of the land use right of the executor.
On 2010-6-30, the book value of the investment of Tourism company was RMB
9,600,000.00 . the provision for investment was RMB 4,800,000.00.
4．Shenyang Tongxin Case
Shenyang Tongxin Real Estate Development Co., Ltd. ( hereinafter referred to as
“TongXin Company” ) was joint-venture set up in ShenYang city. The shareholder of
company – Hong Kong Fresh Peak Co., Ltd was the wholly owned subsidiary of the company.
And the shares Hong Kong Fresh Peak Co., Ltd held was 93.1%. The core business of TongXin
Company was to develop ShenYang Fresh Peak Business Plaza. TongXin Company refinanced
RMB13,140 thousand from China Agriculture bank ShenYang branch. And the company
provided assurance for the loan. Because TongXin Company failed to repaid the loan in time.
The China Agriculture bank ShenYang branch instituted legal proceedings in shenyang
Intermediate People's Court. So TongXin Company borrowed money from the company to
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For the year ended at 30 June 2010 (Un-audited)
9 7
repay the loans and interests.
On 2008-1-25, International economic trade Arbitration commission HuaNam branch
made a judgment. According to the judgment, TongXin Company had to repaid RMB
14,422,440.22 and interests to the company. Now the case is proceeding. Until 2010-1-27, the
company had called back RMB 7,000 thousand.
Related Matters of the case: 93.1% shares of Shenyang Tongxin Company's shares held
by fresh Peak Company was auctioned sale by Shenzhen Intermediate People's Court on 22
January 2006. and fresh Peak Company didn’t hold any shares of Tongxin Company'.
（2）、Security for debts
Up to 30 June 2010, balance of guarantees is as follows:：
Currency Amount
(in ten thousand Yuan)
Internal guarantees in the group RMB 31,440
Guarantees for outstanding mortgage RMB 1,026
Note 11、Commitments
At 2010-6-30, the information of the commitments are as follows:
Amount （in ten thousand）
The land-use right contracts which had been signed or were going to carry out 30,000
Until 2010-6-30, the company had the land-use right contract which had been signed but
not already paid for the full land remise fund. The total land remise fund is RMB 1.2 billion.
The company had paid for RMB0.9billion . The remaining land remise fund is RMB 0.3 billion.
The rate is 5.31%. The remaining land remise fund had to be paid before 2010-8-28.
Note12、Notes to the parent company financial statements
1、 Accounts receivable
（1）The symbol of credit risk identified by customers categories
Closing Balance Opening Balance
Book balance Provision of bad debts Book balance Provision of bad debts
Amount
proportion
%
Amount
proportion
%
Amount
proportion
%
Amount
proportion
%
category 1 -- -- -- -- -- -- -- --
category 2 -- -- -- -- -- -- -- --
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category 3 12,100,874.79 100.00 6,301,854.02 100.00 12,566,900.74 100.00 6,457,254.02 100.00
Total 12,100,874.79 100.00 6,301,854.02 100.00 12,566,900.74 100.00 6,457,254.02 100.00
category 1: refers to accounts receivable with significant individual amount, such
individual amount is more than 5 million Yuan
category 2: individual is not a significant amount of credit risk, but according to the
characteristics of the portfolio after portfolio of risky accounts receivable, aging of such fund in
three years, and still less likely to recover the money.
category 3： Other is not significant accounts receivable
（2）The information of provision for bad debts of which the amount were significant or
insignificant but tested individually are as follows:
Closing Balance
Book balance
Provision for
bad debts
proportion % reason
Other insignificant
accounts receivable
12,100,874.79 6,301,854.02 52.08%
The sales price which were gonna reclaimed.
The company accrued the provision according to
the irretrievability.
（3）The aging of accounts receivable by categories
Closing Balance Opening Balance
Aging
Book balance proportion % Provision Book balance proportion % Provision
Within 1 year -- -- -- -- -- --
1 to 2 year -- -- -- 65,745.71 0.52 --
2 to 3 year 38,875.00 0.32 183,200.39 1.46 --
Above 3 years 12,061,999.79 99.68 6,301,854.02 12,317,954.64 98.02 6,457,254.02
Total 12,100,874.79 100 6,301,854.02 12,566,900.74 100.00 6,457,254.02
（4）No amount due from shareholders who hold 5% or more of the voting rights of the
company is included in the above balance of accounts receivable.
（5）Refer to Note6、(3).3 for details of the accounts receivables which due from related
parities.
2、 Other receivables
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For the year ended at 30 June 2010 (Un-audited)
9 9
（1）The symbol of credit risk identified by customers categories
Closing Balance Opening Balance
Book balance Provision of bad debts Book balance Provision of bad debts
Amount
proport
ion %
Amount
proport
ion %
Amount
propor
tion %
Amount
propor
tion %
Category 1 1,060,244,818.15 91.19 849,851,353.28 98.45 1,222,338,453.35 91.70 849,851,353.28 98.45
Category 2 12,530,185.94 1.08 12,530,185.94 1.45 12,530,185.94 0.94 12,530,185.94 1.45
Category 3 89,875,627.12 7.73 811,640.80 0.10 98,176,216.12 7.36 811,640.80 0.10
Total
1,162,650,631.21 100.00
863,193,180.02 100.00 1,333,044,855.41 100.00 863,193,180.02 100.00
category 1: refers to other receivables with significant individual amount, such individual
amount is more than 5 million Yuan.
category 2: individual is not a significant amount of credit risk, but according to the
characteristics of the portfolio after portfolio of risky other receivables, aging of such fund in
three years, and still less likely to recover the money.
category 3： Other is not significant other receivables.
（2）The aging of other receivables:
Closing Balance Opening Balance
Aging
Amount proportion % Provision Amount proportion Provision
Within 1 year 21,207,640.16 1.82 -- 23,564,044.62 1.77 --
1 to 2 year 106,115,899.01 9.13 -- 115,288,327.28 8.65 --
2 to 3 year 127,027,751.05 10.93 -- 132,332,131.47 9.92 --
Above 3 years 908,299,340.99 78.12 863,193,180.02 1,061,860,352.04 79.66 863,193,180.02
Total 1,162,650,631.21 100.00 863,193,180.02 1,333,044,855.41 100.00 863,193,180.02
The provision of individual is not a significant amount of credit risk, but according to the
characteristics of the portfolio after portfolio of risky other receivable:
Closing Balance Opening Balance
Aging
amount proportion %
Provision of bad
debts
amount proportion %
Provision of bad
debts
Above 3 years 12,530,185.94 100.00 12,530,185.94 12,530,185.94 100.00 12,530,185.94
（3）the information of provision for bad debts of which the amount were significant or
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For the year ended at 30 June 2010 (Un-audited)
1 0 0
insignificant but tested individually are as follows:
Closing Balance
Book balance Provision (%) proportion % Reason
individually significant other
receivables
1,060,244,818.15 849,851,353.28 80.16%
The correspond money of related parties.
The aging is long and the irretrievability
is little. The company accrued the
provision according to the irretrievability
of each item.
individual is not a significant
amount of credit risk, but
according to the characteristics
of the portfolio after portfolio of
risky accounts receivable
12,530,185.94 12,530,185.94 100.00%
The correspond money of unrelated
parties. The aging is long and the
irretrievability is little. The company
accrued the full provision.
Other insignificant receivables 89,875,627.12 811,640.80 0.90%
Other insignificant receivable. The
company accrued the provision according
to the irretrievability of each item.
Total 1,162,650,631.21 863,193,180.02
（4）The information of accounts receivables of the company's biggest five debtors are as
follows:：
Name relationship Amount proportion % aging
417,789.75 0.036 Within 1 year
977,977.04 0.084 1 to 2 year
209,738,677.28 18.040 2 to 3 year
Fresh Peak Enterprise Co., Ltd. subsidiary
365,100,233.62 31.402 Above 3 years
3,257,244.54 0.280 Within 1 year
100,703,588.09 8.662 1 to 2 year
Shenzhen ShenFang Group LongGang
Development Co., Ltd
subsidiary
98,527,997.38 8.474 2 to 3 year
American great wall Co., Ltd subsidiary 101,379,954.81 8.720 Above 5 years
Canada Great Wall(Vancouver) Co., Ltd subsidiary 89,035,748.07 7.658 Above 3 years
13,606,762.15 1.170 1 to 2 year
Fresh Peak property Co., Ltd. subsidiary 761,332.16 0.065 2 to 3 year
17,719,721.16 1.524 Above 3 years
Total 1,001,227,026.05 86.116
（5）No amount due from shareholders who hold 5% or more of the voting rights of the
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For the year ended at 30 June 2010 (Un-audited)
1 0 1
company is included in the above balance of other receivables.
（6）Refer to Note6、(3).3 for details of the other receivables which due from related
parities.
（7）There were no any other receivables which had been terminated recognized in the
accounting year.
（8）There were no any other receivables which had been Securitization in the accounting
year.
3、 Inventories
Closing Balance Opening Balance
Amount
Provision for
declines
Amount
Provision for
declines
Real estate development products 75,698,642.06 771,196.00 86,040,542.19 1,350,000.00
Real estate developing products 130,536,736.91 -- 130,053,479.40 --
Real estate which are going to be
developed 1,206,770,138.46
--
1,200,170,737.09
--
Total 1,413,005,517.43 771,196.00 1,416,264,758.68 1,350,000.00
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For the year ended 30 June 2010 (Un-audited)
10 4
4、 Long-term equity investments
（1） the information of long-term equity investments:
Name of investees
Measured
method
Original cost
Opening
Balance
movement
Closing
Balance
Proportion
(%)
Voting
right (%)
provision
Provision
accrued
in the
first half
year of
2010
Dividend
Subsidiaries’ investment：
Shenzhen City Property
Management Ltd.
Cost
method
12,821,791.52 12,821,791.52 -- 12,821,791.52 95 95 -- -- --
Shenzhen Petrel Hotel Co.
Ltd.
Cost
method
20,605,047.50 20,605,047.50 -- 20,605,047.50 68.10 68.10 -- -- --
Shenzhen City Shenfang
Investment Ltd.
Cost
method
9,000,000.00 9,000,000.00 -- 9,000,000.00 90 90 -- -- --
Fresh Peak Enterprise Ltd.
Cost
method
556,500.00 556,500.00 -- 556,500.00 100 100 -- -- --
Fresh Peak Holdings Ltd.
Cost
method
20,824,545.77 22,717,697.73 -- 22,717,697.73 100 100 -- -- --
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For the year ended 30 June 2010 (Un-audited)
10 5
Name of investees
Measured
method
Original cost
Opening
Balance
movement
Closing
Balance
Proportion
(%)
Voting
right (%)
provision
Provision
accrued
in the
first half
year of
2010
Dividend
Shenzhen Special Economic
Zone Real Estate (Group)
Guangzhou Property and
Estate Co., Ltd.
Cost
method
20,000,000.00 20,000,000.00 -- 20,000,000.00 100 100 -- -- --
Shenzhen Zhen Tung
Engineering Ltd
Cost
method
11,332,321.45 11,332,321.45 -- 11,332,321.45 73 73 -- -- --
American Great wall Co.,
Ltd
Cost
method
1,435,802.00 1,435,802.00 -- 1,435,802.00 70 70 -- -- --
Shenzhen City Shenfang
Free Trade Trading Ltd.
Cost
method
4,750,000.00 4,750,000.00 -- 4,750,000.00 95 95 -- -- --
Shenzhen City Hua Zhan
Construction Management
Ltd.
Cost
method 6,000,000.00 6,000,000.00 -- 6,000,000.00 75 75 -- -- --
Shenzhen City Car Rental Cost 11,809,500.00 6,495,225.00 -- 6,495,225.00 55 55 -- -- --
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For the year ended 30 June 2010 (Un-audited)
10 6
Name of investees
Measured
method
Original cost
Opening
Balance
movement
Closing
Balance
Proportion
(%)
Voting
right (%)
provision
Provision
accrued
in the
first half
year of
2010
Dividend
Ltd. method
QiLu Co., Ltd
Cost
method
212,280.00 212,280.00 -- 212,280.00 20 20 -- -- --
Beijing fresh peak property
development management
limited company
Cost
method 500,000.00 500,000.00 -- 500,000.00 10 10 -- -- --
Shenzhen Lain Hua Industry
and Trading Co. Ltd.
Cost
method
13,458,217.05 13,458,217.05 -- 13,458,217.05 95 95 -- -- --
Shenzhen City SPG Long
Gang Development Ltd.
Cost
method
30,850,000.00 30,850,000.00 -- 30,850,000.00 95 95 -- -- --
Beijing fresh peak property
development management
limited company
Cost
method 64,183,888.90 64,183,888.90 -- 64,183,888.90 75 75 -- -- --
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For the year ended 30 June 2010 (Un-audited)
10 7
Name of investees
Measured
method
Original cost
Opening
Balance
movement
Closing
Balance
Proportion
(%)
Voting
right (%)
provision
Provision
accrued
in the
first half
year of
2010
Dividend
Shenzhen Shenfang Car Park
Ltd.
Cost
method
29,750,000.00 29,750,000.00 -- 29,750,000.00 70 70 -- -- --
Joint venture investment：
Guangdong province
Huizhou Luofu Hill mineral
water Co., Ltd
Equity
method 9,969,206.09 9,969,206.09 -- 9,969,206.09 cooperate cooperate 9,969,206.09 -- --
Fengkai Xinhua Hotel
Equity
method
9,455,465.38 9,455,465.38 -- 9,455,465.38 cooperate cooperate 9,455,465.38 -- --
Associate investment ： -- --
Shenzhen Shatoujiao
Nantian Store *1
Equity
method
2,850,618.06 2,599,085.66 -152,851.44 2,446,234.22 50 50 -- -- --
Zhaoqing Guifeng cement
Co., Ltd *2
Equity
method
15,112,000.00 14,500,911.03 -1,776,494.00 12,724,417.03 50 50 -- -- --
Shenzhen runhua automobile Equity 1,445,425.56 1,445,425.56 -- 1,445,425.56 50 50 1,445,425.56 -- --
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For the year ended 30 June 2010 (Un-audited)
10 8
Name of investees
Measured
method
Original cost
Opening
Balance
movement
Closing
Balance
Proportion
(%)
Voting
right (%)
provision
Provision
accrued
in the
first half
year of
2010
Dividend
trading Co., Ltd method
Shenzhen ronghua JiDian
Co., ltd
Equity
method
1,250,000.00 1,816,528.73 24,748.46 1,841,277.19 25 25 1,076,954.64 -- --
Shenzhen Fresh Peak
property consultant Co., Ltd
Equity
method
600,000.00 -- -- -- 20 20 -- -- --
Other investments： -- --
Shenzhen Shen Fang
Industrial Development Co.,
Ltd
Cost
method 4,500,000.00 4,500,000.00 -- 4,500,000.00 100 100 4,500,000.00 -- --
Shenzhen ZhongGang
Haiyan Enterprise Ltd.
Cost
method
12,940,900.00 12,940,900.00 -- 12,940,900.00 68 68 12,940,900.00 -- --
Shenzhen Real Estate
Consolidated Service Co.,
Ltd.
Cost
method 5,958,305.26 5,958,305.26 -- 5,958,305.26 100 100 5,958,305.26 -- --
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For the year ended 30 June 2010 (Un-audited)
10 9
Name of investees
Measured
method
Original cost
Opening
Balance
movement
Closing
Balance
Proportion
(%)
Voting
right (%)
provision
Provision
accrued
in the
first half
year of
2010
Dividend
Paklid Limited
Cost
method
201,100.00 201,100.00 -- 201,100.00 100 100 201,100.00 -- --
Canada GreatWall
(vancouver) Co., Ltd
Cost
method
4,526.25
-- -- -- 60 60 -- -- --
Bekaton Property Limited
Cost
method
906,630.00 906,630.00 -- 906,630.00 60 60 906,630.00 -- -
Shenzhen Tefa Real Estate
Consolidated Service Co.,
Ltd.
Cost
method 8,180,003.63 8,180,003.63 -- 8,180,003.63 100 100 8,180,003.63 -- --
Shenzhen Xin Dongfang
Store Ltd.
Cost
method
18,500,000.00 18,500,000.00 -- 18,500,000.00 100 100 18,500,000.00 -- --
Shenzhen City Shenfang
Construction and Decoration
Materials Ltd.
Cost
method 2,680,000.00 2,680,000.00 -- 2,680,000.00 100 100 2,680,000.00 -- --
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For the year ended 30 June 2010 (Un-audited)
11 0
Name of investees
Measured
method
Original cost
Opening
Balance
movement
Closing
Balance
Proportion
(%)
Voting
right (%)
provision
Provision
accrued
in the
first half
year of
2010
Dividend
Shenzhen Shenfang
Department Store Co. Ltd.
Cost
method
9,500,000.00 9,500,000.00 -- 9,500,000.00 95 95 9,500,000.00 -- --
Shenzhen Cyber Port Co.,
Ltd
Cost
method
14,000,000.00 12,401,018.42 -- 12,401,018.42 70 70 -- -- --
ShenZhen ShenFang BaoAn
development Co., Ltd
Cost
method
19,000,000.00 19,000,000.00 -- 19,000,000.00 95 95 -- -- --
Shantou Fresh Peak Building
Cost
method
68,731,560.43 58,547,652.25 -- 58,547,652.25 100 100 58,547,652.25 -- --
Total 497,875,634.85 445,866,406.18 -2,646,234.22 443,220,171.96 143,861,642.81 -- --
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The company transferred 50% equity of Shenzhen Shatoujiao Nantian Store to Shenzhen
ShaTou Jiao Business trade Co., Ltd with a listing agreement price –RMB 12,145.00 thousand in
Shenzhen United property Exchange on 2nd February 2010 .
*2Zhaoqing Guifeng cement Co., Ltd
The company held a party joint conference at 2010-4-19. the meeting passed a resolution to
dispose the 50% equity of Zhaoqing Guifeng cement Co., Ltd which the company held. under the
same condition, the former shareholder – GuangLong Group had the right of priority in acquiring.
（2）Provision for impairment of long-term equity investments:
Provision for impairment
Name of investees Opening
balance
additions reductions
Closing
balance
Notes
Shenzhen ronghua JiDian Co.,ltd 1,076,954.64 -- -- 1,076,954.64
operating
loss
Shenzhen Shen Fang Industrial
Development Co., Ltd
4,500,000.00 -- -- 4,500,000.00
cessation
Shenzhen ZhongGang Haiyan Enterprise
Ltd.
12,940,900.00 -- -- 12,940,900.00
cessation
Shenzhen Real Estate Consolidated
Service Co., Ltd.
5,958,305.26 -- -- 5,958,305.26
cessation
Paklid Limited 201,100.00 -- -- 201,100.00 cessation
Bekaton Property Limited 906,630.00 -- -- 906,630.00 cessation
Shenzhen Tefa Real Estate Consolidated
Service Co., Ltd
8,180,003.63 -- -- 8,180,003.63
cessation
Shenzhen Xin Dongfang Store Ltd. 18,500,000.00 -- -- 18,500,000.00 cessation
Shenzhen City Shenfang Construction
and Decoration Materials Ltd.
2,680,000.00 -- -- 2,680,000.00
cessation
Shenzhen Shenfang Department Store
Co. Ltd.
9,500,000.00 -- -- 9,500,000.00
liquidition
Shenzhen Runhua automobile trading
Co.,Ltd
1,445,425.56 -- -- 1,445,425.56
cessation
Guangdong province Huizhou Luofu Hill
mineral water Co., Ltd
9,969,206.09 -- -- 9,969,206.09
cessation
Fengkai Xinhua Hotel 9,455,465.38 -- -- 9,455,465.38 cessation
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Provision for impairment
Name of investees Opening
balance
additions reductions
Closing
balance
Notes
Shantou Fresh Peak Building 58,547,652.25 -- -- 58,547,652.25 cessation
Total 143,861,642.81 -- -- 143,861,642.81
5、 Turnover and cost of sales
（1）Turnover and cost of sales
Jan 2010 - Jun 2010 Jan 2009 - Jun 2009
Core Operating Income 153,726,868.02 55,952,078.92
Other Operating Income 2,313,804.43 2,900.00
Gross Income 156,040,672.45 55,954,978.92
Cost of sales 72,488,362.99 31,580,000.36
（2）Core operating Income（classed by industry）
Operating Income operating Cost Operating margin
Industry Jan 2010 - Jun
2010
Jan 2009 - Jun
2009
Jan 2010 -
Jun 2010
Jan 2009 - Jun
2009
Jan 2010 -
Jun 2010
Jan 2009 -
Jun 2009
Real 135,462,246.00 26,166,782.38 60,709,940.53 16,131,692.49 74,752,305.47 10,035,089.89
Leasing 20,092,299.40 29,273,859.02 11,575,387.52 15,087,280.66 8,516,911.88 14,186,578.36
Other 486,127.05 514,337.52 203,034.94 361,027.21 283,092.11 153,310.31
Total 156,040,672.45 55,954,978.92 72,488,362.99 31,580,000.36 83,552,309.46 24,374,978.56
（3）the information of the biggest 5 clients are as follows:
Jan 2010 – Jun 2010
Amount proportion%
Shenzhen ShengShi JiaChuang Investment
Corporation 129,360,000.00 82.90
Shenzhen JinSe Times Corporation 1,580,500.00 1.01
Individual – SunMingWei 728,643.00 0.47
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ShenZhen YongWang Friendship Business
Corporation 579,766.40 0.37
YongChangCheng Consulting Services
(Shenzhen) Corporation 529,374.00 0.34
Total 132,778,283.40 85.09
6、 Investment income
（1）the details of investment income are as follows:
Jan 2010 - Jun 2010 Jan 2009 - Jun 2009
The investment income yielded from the long-term equity applied with the
cost method
-- --
The investment income yielded from the long-term equity applied with the
equity method
The investment income yielded from the disposal of the long-term equity 9,636,607.65
The investment income yielded from the disposal of the financial assets held
for trading
116,843.92 8,532.58
others
Total 9,753,451.57 8,532.58
The investment income yielded from the disposal of the long-term equity is the profit that the company
transferred the 50% equity of the NanTian Store.
Note 13、 Non - regular gains and losses and financial
1、Non - regular gains and losses
According to "public offering of securities companies to disclose information interpretative
bulletin No. 1 - non-recurring gains and losses (2008)", the Company non-recurring gains and
losses are as follows:：
Item Jan 2010 - Jun 2010 Jan 2009 - Jun 2009
Non-current assets disposed of profit and loss, including the write-off
part of provision for asset impairment 9,622,198.15 -48,232.00
Authority approval or non-formally approved document or incidental
tax revenue return, relief -- --
Gains and losses included in the current period of government -- --
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Item Jan 2010 - Jun 2010 Jan 2009 - Jun 2009
subsidies, but the company is closely related to normal business, in
line with national policies and regulations, in accordance with
standard fixed or quantitative government subsidies except
Gains and losses included in current period on non-financial
enterprises occupy fees charged by funds -- --
Enterprises to obtain subsidiaries, joint ventures and joint venture
investment is less than the cost of investment should be enjoyed by
the investment unit fair value of identifiable net assets of the revenue
generated -- --
Non-monetary assets to exchange gains and losses -- --
Commissioned the investment or management of assets, profit and
loss -- --
Due to force majeure factors, such as natural disasters and the
provision of the quasi-impairment of assets -- --
Debt restructuring, profit and loss -- --
Corporate restructuring costs, such as placement of workers
spending, such as integration charges -- --
Significant loss of fair trading price of the transaction over the fair
value of part of the profit and loss -- --
The same under the control of mergers resulting from the merger a
subsidiary of the opening day of the current period to the net profit or
loss -- --
Normal business with the company or have a matter arising from
unrelated to the profit and loss -- --
In addition to normal business with the company effective hedging
related business, holders of tradable financial assets, transactions and
financial liabilities arising from changes in fair value gains and
losses, as well as the disposal of trading of financial assets, trading
financial liabilities and available-for-sale financial assets investment
returns achieved 92,058.17 142,368.98
A separate impairment test for impairment of receivables transferred
back to preparation -- --
Commissioned external loans made by the profit and loss -- --
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Item Jan 2010 - Jun 2010 Jan 2009 - Jun 2009
The use of fair value measurement model of follow-up to the fair
value of real estate investment gains and losses arising from changes -- --
According to tax, accounting and other laws and regulations the
requirements of the current profit and loss for a one-time adjustment
of the current profit and loss impact -- --
Entrusted with the operation of the trustee to obtain fee income -- --
In addition to the above other than the operating income and
expenditure 36,841.49 -6,693.95
Other non-recurring gains and losses in line with the definition of
profit and loss items -- --
Total 9,751,097.81 87,443.03
Less: Income tax impact of several 2,033.68 -9,639.21
Profit and loss impact of the number of minority shareholders
Deducting income tax, minority shareholders after the
non-recurring profit and loss profit and loss together 9,749,064.13 97,082.24
The Non - regular gains and losses increased by RMB 965.2 ten thousand. The increase due
to transferred the 50% of the equity the Shenzhen ShaTouJiao Store .
2、weighted Rate of return and Earnings per share
Earnings per
Items share ( Yuan/share)
Profit during the
reporting period
Net assets yield (%)
basic diluted
Jan 2010 – Jun 2010
the net profit Attributable to equity
holders of the Company
64,141,001.28 5.09 0.0634 0.0634
the net profit after deducting the
non-regular gain or loss attributable
to equity holders of the Company
54,391,937.15 4.33 0.0538 0.0538
Jan 2009 – Jun 2009
the net profit Attributable to equity
holders of the Company
7,725,323.97 0.637 0.0076 0.0076
the net profit after deducting the
non-regular gian or loss attributable
to equity holders of the Company
7,628,241.73 0.627 0.0075 0.0075
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The calculation formula of weighted Rate of return is as follows:
weighted Rate of return =P0/(E0＋NP÷2＋Ei×Mi÷M0– Ej×Mj÷M0±Ek×Mk÷M0)
Notes: P0- the net profit attributable to holding company of the Company、the net profit after
deducting the non-regular gain or loss attributable to holding company of the Company;
NP - the net profit attributable to shareholders of the Company;
E0 – the opening balance of net assets attributable to holding company;
Ei – the balance of net assets attributed to the shares which issued in the reporting period or
debt to equity shares;
Ej – the balance of net assents attributed to the shares which were repurchased or decreased
by distributing the cash dividend;
Mi – the accumulated amount of the months from the next month the new additional net
assests to the end month of the reporting period;
Mj - the accumulated amount of the months from the next month the net assets reduced to the
end month of the reporting period;
Ek – the movement of the net assets attributed to the shares which due to other transaction;
Mk - the accumulated amount of the months from the next month the net assests happened to
the ending month of the reporting period;
If the company happens combination under common control, when the company calculate
the weighted average return on net assets, the net assets of the combined party are calculated form
the beginning of the reporting period ; when calculating the weighted average return on net assets
after deducting non-recurring gains and losses, the net assets of the combined party are calculated
form the next month of combination month.
When calculating the weighted average net assets during the return, the combined party's net
profit, net assets are calculated from the comparing beginning of the period; when Calculating the
weighted average return on net assets after deducting non-recurring gains and losses, the merged
party's net assets are not counted in (weight is zero)
3、the differences of the domestic Financial statements comparing with the overseas financial
statement
CAS (RMB) IFRS (RMB)
the net profit attributable to
holding company of the Company 64,141,001.28 64,141,001.28
the net assets attributable to
holding company of the Company 1,292,815,256.15 1,292,815,256.15
notes No differences
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English version of financial statements for the year 1 January 2010 to 30 June 2010 if there is
any conflict of meaning between the Chinese and English versions, the Chinese version will
prevail.
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