(000029 SHENSHENFANG-A 200029 SHENSHENFANG-B)
Shenzhen Special Economic Zone Real Estate
& Properties (Group) Co., Ltd.
Semi-Annual Report 2011
26 August 2011
Contents
I. Important Notice………………………………………………………………….
II. Company Profile……………………………………………………………………
III. Change of Capital Share and Shares Held by Principal Shareholders………….....
IV. Particulars about the Directors, Supervisors and Senior Executives………………
V. Discussion and Analysis of Executives……………………………………………..
VI. Significant Events………………………………………………………………
VII. Financial Report………………………………………………………….…….
VIII. Documents Available for Reference…………………………………………
Attached: Financial Report
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.
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 2011 has not been audited.
English Translation for Reference Only. Should there be any discrepancy between the
two versions, the Chinese version shall prevail.
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: Luo Yi
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 At the period-end of Increase/decrease compared with the
reporting period last year period-end of last year (%)
Total assets 3,334,189,868.33 3,379,090,178.02 -1.33%
Owners’ equity attributable to
1,493,533,010.21 1,427,871,870.03 4.60%
shareholders of the Company
Share capital 1,011,660,000.00 1,011,660,000.00 0.00%
Net assets per share attributable to
shareholders of the Company 1.4763 1.4114 4.60%
(Yuan/share)
Reporting period Same period of last
Increase/decrease year-on-year (%)
(Jan.-Jun.) year
Total operating income 553,919,803.97 518,826,692.07 6.76%
Operating profit 81,876,583.09 78,107,399.80 4.83%
Total profit 82,830,990.51 78,129,831.79 6.02%
Net profit attributable to shareholders
64,300,859.86 64,109,890.28 0.30%
of the Company
Net profit attributable to shareholders
of the Company after deducting 63,360,695.70 54,360,826.15 16.56%
non-recurring gains and losses
Basic earnings per share (Yuan/share) 0.0636 0.0634 0.32%
Diluted earnings per share
0.0636 0.0634 0.32%
(Yuan/share)
ROE (%) 4.40% 4.66% -0.26%
ROE excluding non-current gains and
4.34% 3.97% 0.37%
losses (%)
Net cash flows from operating
84,323,901.31 -66,691,366.55 226.44%
activities
Net cash flows per share from
0.0834 -0.0659 226.44%
operating activities (Yuan/share)
2. Items of non-recurring gains and losses
Items Amount Note (if applicable)
A year-on-year decrease of
RMB 8.81 million, mainly
due to disposal of
Gains and losses from disposal of non-current assets 199,681.57
long-term equity
investment in the same
period of last year.
Gains and losses from changes in fair value of transaction
financial assets and liabilities, and investment income from -13,921.72
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
Other non-operating incomes and expenses besides the
754,725.85
items above
Impact on income tax -321.54
Total 940,164.16 -
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 reporting period.
II. Shares held by shareholders
1. Up to 30 Jun. 2011, 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 89,460
Particulars about shares held by the top ten shareholders
Shares subject to
Nature of Shareholding Total number of Shares pledged
Name of shareholder trading
shareholder ratio shares held or frozen
moratorium held
State-owned
Shenzhen Investment Holdings Co., Ltd 63.55% 642,884,262 0 0
corporation
Domestic natural
Qian Guangyue 0.12% 1,205,700 0 0
person
Domestic natural
Wang Zhongming 0.11% 1,095,808 0 0
person
Domestic natural
Wu Haoyuan 0.11% 1,092,100 0 0
person
GUOTAI JUNAN Foreign
0.10% 1,044,750 0 0
SECURITIES(HONGKONG) LIMITED corporation
Domestic natural
Jing Jianjun 0.10% 1,033,347 0 0
person
Domestic natural
Ren Huan 0.10% 992,848 0 0
person
Beijing Zhongjin Xin’guo Assets State-owned
0.09% 948,974 0 0
Management Center (limited partnership) corporation
Domestic natural
Xue Haoyuan 0.09% 888,656 0 0
person
Domestic natural
Zhao Jianlan 0.08% 800,600 0 0
person
Particulars about shares held by the top ten shareholders holding tradable shares
Name of shareholder Number of shares not subject to
Type of share
trading moratorium held
Shenzhen Investment Holdings Co., Ltd 642,884,262 Renminbi ordinary shares
Qian Guangyue 1,205,700 Renminbi ordinary shares
Wang Zhongming 1,095,808 Domestically listed foreign shares
Wu Haoyuan 1,092,100 Domestically listed foreign shares
GUOTAI JUNAN SECURITIES(HONGKONG) LIMITED 1,044,750 Domestically listed foreign shares
Jing Jianjun 1,033,347 Renminbi ordinary shares
Ren Huan 992,848 Renminbi ordinary shares
Beijing Zhongjin Xin’guo Assets Management Center (limited
948,974 Renminbi ordinary shares
partnership)
Xue Haoyuan 888,656 Renminbi ordinary shares
Zhao Jianlan 800,600 Renminbi ordinary shares
Explanation on associated relationship or
action-in-concert among the above Unknown
shareholders
3. Particulars about the controlling shareholder of the Company
During the reporting 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 reporting period, shares held by directors, supervisors and senior
executives remained unchanged.
II. Engagement and dismissal of directors, supervisors and senior executives
Directors, supervisors and senior executives of the Company remained unchanged
during the reporting period.
Section V Discussion and Analysis of Executives
I. Operation review for the first half of 2011
In the first half of 2011, the government continued to carry out economic
macro-control, bringing uncertainty to the prospects of the domestic prosperity market.
In face of the harsh external environment for operation, the Company made careful
judgments on the big picture and coped with various situations in a flexible manner.
As a result, the Company’s business performance improved steadily, its financial
position was sound, development projects moved on in an orderly way, the
development ability of the main business was further improved, and its governance
and management capability kept increasing.
(I) Analysis to operating results
Currency unit: (RMB) Yuan
Year-on-year increase/decrease
Items Jan.-Jun. 2011 Jan.-Jun. 2010
(%)
Operating revenues 553,919,803.97 518,826,692.07 6.76
Operating costs 381,699,513.43 338,485,970.34 12.77
Business taxes and surtaxes 49,318,473.28 55,612,034.02 -11.32
Selling expense 4,223,578.62 5,193,067.44 -18.67
Administrative expense 31,177,179.75 32,261,773.04 -3.36
Financial expense 5,710,554.08 31,581,722.57 -81.92
Period expense 41,111,312.45 69,036,563.05 -40.45
Asset impairment loss -
Earnings from fair value
25,479.05 -24,785.75 202.80
changes
Investment earnings 60,599.23 22,440,060.89 -99.73
Operating profit 81,876,583.09 78,107,399.80 4.83
Non-operating income 1,138,021.01 123,299.72 822.97
Non-operating expense 183,613.59 100,867.73 82.03
Total profit 82,830,990.51 78,129,831.79 6.02
Income tax 18,548,556.91 13,988,830.51 32.60
Net profit 64,282,433.60 64,141,001.28 0.22
Net profit attributable to
64,300,859.86 64,109,890.28 0.30
owners of the Company
1. For the reporting period, the Company achieved total profit of RMB 82.83 million,
up 6.02% from a year earlier; and net profit attributable to shareholders of the
Company of RMB 64.30 million, up 0.30% from a year earlier. The profit growth was
mainly due to decrease of the period expense.
2. For the reporting period, the Company achieved operating revenues of RMB
553.92 million, up 6.76% from a year earlier; and a comprehensive gross profit rate of
31.09%, down 367 basic points as compared with the same period of last year.
Business results for the main business lines classified according to industries are
detailed as follows:
Unit: RMB Ten thousand
Main businesses classified according to industries
Year-on-year Year-on-year Year-on-year
Gross profit increase/decreas increase/decreas increase/decrease
Industries or products Operating income Operating cost
rate (%) e of operating e of operating of gross profit
income (%) cost (%) rate (%)
Real estate 27,474.00 14,062.00 48.82% -13.77% -15.34% 0.95%
Construction 18,780.00 17,632.00 6.11% 59.05% 58.34% 0.42%
Property lease 2,830.00 1,338.00 52.72% 9.46% -11.71% 11.34%
Property management 5,135.00 4,151.00 19.16% 15.59% 13.26% 1.66%
Hotel and other services 1,172.00 986.00 15.87% -1.20% 7.02% -6.46%
Total 553,919,803.97 381,699,513.43 31.09 6.76 12.77 -3.67
Main operating income increase/decrease of all business lines:
(1) Real estate, the Company’s main business line, generated earnings of RMB 274.74
million, down 13.77% from a year earlier, with a gross profit rate of 48.82%, up 95
basic points as compared with the same period of last year. This was mainly because
the Headquarters of the Group sold Hujing Building and the subordinate company
Shantou Hualin Real Estate Development Co., Ltd. sold residential buildings in Block
No. 10 of Jinye Island.
(2) Construction generated earnings of RMB 187.80 million, up 59.05% from a year
earlier, which was mainly because the subordinate company Shenzhen Zhentong
Engineering Co., Ltd. undertook more construction projects from external institutions.
(3) Property lease generated earnings of RMB 28.30 million, up 9.46% from a year
earlier, which was mainly due to increase of both the rents and the leased area.
(4) Property management generated earnings of RMB 51.35 million, up 15.59% from
a year earlier, which was mainly due to strengthened collection of arrears.
3. Period expense for the reporting period stood at RMB 41.11 million, down 40.45%
from a year earlier, of which:
(1) Selling expense stood at RMB 4.22 million, down 18.67% from a year earlier,
which was mainly due to decrease of the sales service expense.
(2) Administrative expense stood at RMB 31.18 million, down 3.36% from a year
earlier, which was mainly due to decrease of cash paid for non-salary items.
(3) Financial expense stood at RMB 5.71 million, down 81.92% from a year earlier,
which was mainly due to interest capitalization of the borrowings for the Guangming
New District.
4. Investment earnings for the reporting period stood at RMB 60,000 down
significantly by 99.73% from a year earlier, which was mainly because:
(1) In the same period of last year, the Company earned RMB 9.64 million by
transferring 50% ownership of Nantian Shopping Mall in Shatoujiao, Shenzhen; and
(2) In the same period of last year, the Company received bonuses of RMB 12.58
million from joint ventures and associates.
5. Operating profit for the reporting period stood at RMB 81.88 million, up 4.83%
from a year earlier, which was mainly because financial expense decrease
compensated for investment income decrease.
6. Non-operating income for the reporting period stood at RMB 1.14 million, up
dramatically by 822.97% from a year earlier, which was mainly due to earnings from
non-current asset disposal and from default fines on property selling receivables.
7. Net cash flows from operating activities also soared 226.44% from a year earlier,
which was mainly due to decrease of cash paid for goods and services. Net cash flows
from investing activities decreased when compared with the same period of last year,
which was mainly due to decrease of both investment withdrawal and return on
investment. And net cash flows from financing activities also decreased on a
year-on-year basis, which was mainly because the year-on-year decrease of cash
received from borrowings was larger than that of cash expense for financing activities.
II. Analysis to the Company’s financial position
During the reporting period, the Company actively coped with market changes. As a
result, the Company’s business performance improved steadily, and its financial
position became sounder. Relevant indexes were as follows:
Unit: RMB Yuan
Increase/decrease
Item 30 Jun. 2011 31 Dec. 2010
(%)
Total assets 3,334,189,868.33 3,379,090,178.02 -1.33
Transactional financial assets 10,635.30 97,726.25 -89.12
Accounts paid in advance 32,647,030.35 26,890,551.77 21.41
Construction in process 1,559,860.00 520,000.00 199.97
Long-term deferred expense 541,065.14 202,456.50 167.25
Total liabilities 1,968,177,705.57 2,079,303,706.46 -5.34
Short-term borrowings 10,000,000.00 14,800,000.00 -32.43
Taxes and fares payable -28,486,266.51 -13,333,458.44 -113.64
Non-current liabilities due within 1 60,077,571.34 29,423,411.10
104.18
year
Retained profit -512,868,149.68 -577,169,009.54 11.14
Foreign exchange difference 11,521,910.64 10,161,630.32 13.39
Total equity attributable to owners of
1,493,533,010.21 1,427,871,870.03 4.60
the Company
(I) Up until 30 Jun. 2011, total assets of the Company stood at RMB 3,334,190,000,
down 1.33% as compared with the year-begin. No asset items showed significant
movement. Details are as follows:
1. Transactional financial assets decreased mainly due to the sale of transactional
financial assets.
2. Accounts paid in advance increased 21.41% over the opening amount, which was
mainly due to increase of prepayments for construction.
3. Construction in process increased considerably by 199.97% over the opening
amount, which was mainly due to elevator repair.
4. Long-term deferred expense also increased significantly by 167.25% over the
opening amount, which was mainly due to increase of the repair expense.
(II) Total liabilities stood at RMB 1,968,180,000, down 5.34% over the opening
amount, of which:
1. Short-term borrowings decreased 32.43% over the opening amount, which was
mainly due to repayment of some short-term loans to banks.
2. Taxes and fares payable decreased dramatically by 113.64% over the opening
amount, which was mainly because the Company paid the enterprise income tax for
the previous year, and prepaid the business tax and surtaxes for sums received in
advance for selling properties in the Jinye Island Project in Shantou, as well as the
land VAT at the anticipated tax rate.
3. Non-current liabilities due within 1 year increased significantly by 104.18% over
the opening amount, which was mainly due to increase of long-term borrowings from
banks due within 1 year.
(III) Retained profit increased 11.14% over the opening amount, which was mainly
because the Company achieved net profits attributable to it for the reporting period.
(IV) Foreign exchange difference increased 13.39% over the opening amount, which
was mainly due to exchange rate fluctuations.
(V) Equity attributable to shareholders of the Company (net assets) increased 4.60%
over the opening amount, which was mainly because net profit attributable to the
Company was realized and foreign exchange difference increased in the reporting
period.
III．Particulars about investment projects
Progress of significant projects invested by non-raised funds
Investment amount
within the
Earnings of
Name of project reporting period Progress of project
project
(RMB Ten
thousand)
Shui Yun Tian Ya
Garden and Ming
1,550 In the progress of primary project design
Garden
(Longgang project)
An income of
Shantou Jinye RMB 244,860,000
Island International 983 In a certain state of development was carried down
Garden for the reporting
period.
The foundation trench and earth & stone work at the east area of the
Guangming New
3,764 project is under construction, of which all the support piles and
District Project
water-seal series have been finished, and the construction of anchor
cable box by different levels is still under the construction, which is
expected to be finished in the middle of August.
Total 6,297
IV. Problems and difficulties met in operation
1. Policy risk: Macro economy and real estate market was under deflation policy with
high interest rate, making it hard for the real estate enterprise to finance, and the sale
of product is also suffered by so much constraint;
2. Capital pressure: Now the Company still has capital pressure. The smooth advance
of the development plan for Guangming New District project and Longgang project is
significantly important for the Company to realize its income, profits and cash flow in
the future three years.
3. Land reserves: The lacking of land reserves is still the main bottleneck to restrict
the development and expansion of the Company’s main business, thus purchasing the
land resources at appropriate time and place will be the necessary assurance for the
Company to realize its continuous operation and development of main business.
V. Business plan for the second half year of 2011
In the second half year of 2011, the Company will continue to follow the general
guideline for operation made at the beginning of the year, focus on key points and
concentrate on development of main businesses; the Company will deal with
difficulties and thoroughly improve regulation and control, as well as professional
capability; the Company will cultivate highlights and put efforts to enhance brand
image of the enterprise; the company will practically strength party building and
culture establishment of the enterprise, and strive to raise the establishment of “two
civilizations” to a new grade, and make every effort to create first-class performance.
Therefore, the Company will work on the following central tasks in the second half
year of 2011:
1. To go all out to focus on operation work: The Company will ensure the smooth
advance of the three key projects in Guangming, Longgang and Jinhu Road by paying
special attention to the progress of development and safety as well as controlling the
project quality and cost strictly.
2. To pay special attention to the research on development strategy in advance：The
Company will wholly understand the direction of policy, and correctly judge the
macro situation, thus timely hold the market rhythm; and the Company will flexibly
make the future marketing strategy of project in construction, and adopt multiple
ways to expand the financing channels so as to easy the capital pressure; besides, the
Company will strengthen the collection, field investigation and research of land
resources reserving information so as to lay foundation for adding its land resources.
3. To strengthen enterprise integration and thus enhance its operation efficiency. On
one hand, the Company will further reinforce the extent of assets operation so as to
enhance assets operation efficiency; on the other hand, it will accelerate the
integration process of bankrupt or close-down enterprises.
4. To reinforce the team work building, and enhance enterprise’s core competitiveness
so as to improve the overall strength of its professional technical team.
5. To continually realize overall promotion in regulation and control: Firstly, the
Company will take the opportunity of establishment of internal control system of the
enterprise and further improve its regulation and control capability; secondly, the
Company will further perfect its information integration system, so as to improve its
management capability and efficiency by information tools; lastly, the Company will
strength direction, regulate, control and supervise on its subsidiaries to ensure their
legal and standardized operation.
6. To earnestly reinforce the management team building: The Company will aim to
forming a united & harmonious, incorruptible & self-discipline, professional &
dedicated and hard-working & pioneering management team.
7. To continually reinforce party building, spiritual civilization building and culture
establishment of the enterprise: The Company will pay attention to staffs’ appeals and
difficulties, do well the ideological work, and maintain the enterprise’s stability, so as
to ensure the enterprise’s development and reformation.
Section VI Significant Events
I. Corporate governance
In the reporting 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 and internal control pilot work of listed companies from CSRC,
continually perfected corporate governance structure, establish modern enterprise
system and standardize operation of the Company.
Firstly, the corporate governance has been improved. The Company’s operating
mechanism of “the Board of Directors makes decision, the Management Team
executes and the Supervisory Committee supervises” has been further implemented,
and the operating is tending to more united, harmonious and stable.
Secondly, various measurements to improve regulation and control capability have
been continually advanced. The Board of Directors made the Work Plan of Enterprise
Internal Control Construction at the first half year of 2011, and will introduce
professional institution to overall build up the Company’s internal control system at
the next half year; the Company will continually reinforce the information integration
construction of real estate with every module being on line totally before the end of
this year; the Company continued to perfect its Financial Management System,
Administration on Target Cost of Developed Projects and other systems at the first
half year ; besides, the Company ensured its legal operation and corporate governance
by laws with many effective ways, such as supervising audit and procedure as well as
checking execution power, etc..
Lastly, the Company’s cost control work has been totally implemented. On one hand,
the Company has executed well the overall budget management work, every index
was controlled within the budget scope, and the Company’s finance is stable and
controllable in risk; on the other hand, the cost control measurement for the whole
project construction has been well implemented, the work of compute, rough
estimation and budget for Guangming and Longgang Projects, etc. is advanced
smoothly, and the next key task is to do well the final settlement of account, so as to
actually realize the target of cutting down cost and increasing profits.
II. Particulars about profit distribution
The Company would not conduct profit distribution or capitalization of public reserve
for the first half of 2011. 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 reporting period.
III. Significant lawsuits and arbitrations
For the significant lawsuits and arbitrations incurred in the reporting period or carried
down from the previous years to the reporting period, please refer to “(I) Significant
lawsuits” of “Note X Contingency of the Financial Report”.
IV. Acquisition, sales of assets and assets reorganization
There was no acquisition, sales of assets and assets reorganization during the
reporting period.
V. Related transactions
For the Company’s related transactions, as well as the creditor’s rights and liabilities
with its related parties in the reporting 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)
Date of
Date and No. Implementat
occurrence Actual Guarantee for
Name of the of relevant Guarantee Type of Term of ion
(Date of amount of related parties
guaranteed announceme line guarantee guarantee accomplishe
signing guarantee or not
nt d or not
agreement)
Total external guarantees lines Total external guarantees
examined and approved in the 0.00 occurred in the reporting period 0.00
reporting period (A1) (A2)
Total external guarantee lines Balance of actual external
examined and approved at the 0.00 guarantees at the period end 0.00
period end (A3) (A4)
Guarantees provided for subsidiary companies
Date of
Date and No. Implementat
occurrence Actual Guarantee for
Name of the of relevant Guarantee Type of Term of ion
(Date of amount of related parties
guaranteed announceme line guarantee guarantee accomplishe
signing guarantee or not
nt d or not
agreement)
Shantou Hualin Credit
Real Estate guarantee
15 Aug. 2009 30,000.00 30 Aug. 2009 20,000.00 Three years No No
Development with joint
Co., Ltd. responsibility
Total guarantees lines for
Total guarantees for subsidiaries
subsidiaries examined and
0.00 occurred in the reporting period 0.00
approved in the reporting period
(B2)
(B1)
Total guarantee lines for
Balance of actual guarantees at
subsidiaries examined and 20,000.00 20,000.00
the period end (B4)
approved at the period end (B3)
Total guarantees of the Company (Total of the two above)
Total guarantees lines examined
Total guarantees occurred in the
and approved in the reporting 0.00 0.00
reporting period (A2+B2)
period (A1+B1)
Total guarantees lines examined Total balance of actual
and approved at the period end 20,000.00 guarantees at the period end 20,000.00
(A3+B3) (A4+B4)
Proportion of total actual guarantee amount (A4+B4) in net assets of
13.39%
the Company
Among which:
Amount of guarantees provided for shareholders, actual controller and
0.00
other related parties (C)
Amount of debt guarantees provided directly or indirectly for parties
0.00
with asset-liability ratio exceeding 70% (D)
Proportion of total guarantee amount exceeding 50% of the Company’s
0.00
net assets (E)
Total amount of the above three guarantees (C+D+E) 0.00
At the end of the reporting period, the balance of guarantees
Explanation on possibility of taking several and joint liability
for property buyers’ mortgage loans that has not been settled
involving immature guarantees
totaled RMB 8.72 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 reporting period, the Company provided
such guarantees totaling RMB 8.72 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 reporting 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 reporting period.
2. In the reporting 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 reporting period.
IX. 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
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 Sep. 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.
X. Securities Investments
Proportion in
Initial total
Shares held Gains or losses
Short form of investment Book value at securities
No. Securities variety Stock code at period-end in the reporting
stock amount period-end investment at
(share) period
(Yuan) period-end
(%)
Sea Star
1 Stock 002137 5,150.00 1,170 10,635.30 100.00% 5,485.30
Technology
Other securities investments held at period-end 0.00 - 0.00 0.00% 0.00
Gains/ losses from securities investment sold in the
- - - - -78,182.92
reporting period
Total 5,150.00 - 10,635.30 100% -72,697.62
Explanation on securities investment: Stock investments held by the Company were all new stocks subscribed for by lot drawing,
which were sold for profits on the same day of subscription.
XI. Reception of surveys, interviews and visits in the reporting period
Reception Reception
Reception time Visitor Main discussion and materials provided
place way
The
By Individual Inquired about operating of the Company in 2010 and the real estate
21 Jan. 2011 Company’s
telephone investor market situation, with no materials provided by the Company
office
The
By Individual Inquired about operating of the Company in 2010 and the disclosure date
21 Feb. 2011 Company’s
telephone investor of annual report for Y2010, with no materials provided by the Company
office
The
By Individual Inquired about operating of the Company in 2010 and the disclosure date
15 Mar. 2011 Company’s
telephone investor of annual report for Y2010, with no materials provided by the Company
office
The
By Individual Inquired about operating of the Company in 2010 and the disclosure date
28 Mar. 2011 Company’s
telephone investor of annual report for Y2010, with no materials provided by the Company
office
The
By Individual Inquired about operating of the Company at the first quarter of 2011, with
15 Apr. 2011 Company’s
telephone investor no materials provided by the Company
office
The
By Individual Inquired about influence of the control policy on the Company’s main
20 Apr. 2011 Company’s
telephone investor business, with no materials provided by the Company
office
The
By Individual Inquired about land reserves of the Company, with no materials provided
18 May 2011 Company’s
telephone investor by the Company
office
The
By Individual Inquired about operating of the Company at the first half year of 2011,
23 Jun. 2011 Company’s
telephone investor with no materials provided by the Company
office
The Inquired about operating of the Company at the first half year of 2011 and
By Individual
30 Jun. 2011 Company’s the subscribed disclosure date of semi-annual report for Y2011, with no
telephone investor
office materials provided by the Company
Section VII Financial Report
(Attached)
Section VIII Documents Available for Reference
I. Text of the Semi-Annual Report 2011 with 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 reporting 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.
26 Aug. 2011
SHENZHEN SPECIAL ECONOMIC ZONE REAL
ESTATE & PROPERTIES (GROUP) CO., LTD.
FINANCIAL REPORT
for the six months ended 30 June 2011(unaudited)
CONTENTS PAGE(S)
CONSOLIDATED BALANCE SHEET 1-2
CONSOLIDATED INCOME STATEMENT 3
CONSOLIDATED CASH FLOW STATEMENT 4
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 5-6
BALANCE SHEET 7-8
INCOME STATEMENT 9
CASH FLOW STATEMENT 10
STATEMENT OF CHANGES IN EQUITY 11-12
NOTES TO THE FINANCIAL STATEMENTS 13-93
* Confidential *
CONSOLIDATED BALANCE SHEET
As at 30 June 2011 (unaudited)
Prepared by: SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE& PROPERTIES
(GROUP) CO., LTD Units: Rmb Yuan
ASSETS Note Ⅴ June 30, 2011 Dec 31, 2010
Current assets
Cash at bank and on hand 1 408,824,260.56 379,720,636.21
Financial assets held for trading 2 10,635.30 97,726.25
Accounts receivable 3 17,926,259.99 17,152,478.36
Advances to suppliers 4 32,647,030.35 26,890,551.77
Other receivables 5 45,019,711.90 47,534,939.51
Inventories 6 2,158,657,533.28 2,224,938,706.49
Total current assets 2,663,085,431.38 2,696,335,038.59
Non-current assets
Long-term equity investments 7 63,351,810.37 63,426,810.37
Investment Property 8 519,083,264.83 530,109,494.13
Fixed assets 9 62,735,960.20 64,526,512.04
Construction in progress 10 1,559,860.00 520,000.00
Intangible assets 11 6,075,876.69 6,213,266.67
Long-term deferred and prepaid 12 541,065.14 202,456.50
expenses
Deferred tax assets 13 17,756,599.72 17,756,599.72
Total non-current assets 671,104,436.95 682,755,139.43
TOTAL ASSETS 3,334,189,868.33 3,379,090,178.02
（The Notes form part of these financial statemtents）
CONSOLIDATED BALANCE SHEET（Continued）
1
As at 30 June 2011 (unaudited)
Prepared by: SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE& PROPERTIES
(GROUP) CO., LTD Units: Rmb Yuan
LIABILITIES AND Note Ⅴ June 30, 2011 Dec 31, 2010
SHAREHOLDERS' EQUITY
Current liabilities
Short-term borrowings 16 10,000,000.00 14,800,000.00
Accounts payable 17 198,874,246.99 228,580,780.82
Advance from customers 18 362,015,285.84 395,332,270.89
Employee benefits payable 19 34,225,158.55 39,338,801.36
Taxes payable 20 -28,486,266.51 -13,333,458.44
Interest payable 21 16,535,277.94 16,535,277.94
Other payables 22 291,100,971.96 302,144,393.62
Non-current liabilities within 23
one year 60,077,571.34 29,423,411.10
Total current liability 944,342,246.11 1,012,821,477.29
Non-current liabilities
Long-term borrowings 24 1,013,349,454.00 1,056,703,120.34
Long-term payable 25 10,486,005.46 9,779,108.83
Total non-current liabilities 1,023,835,459.46 1,066,482,229.17
Total liabilities 1,968,177,705.57 2,079,303,706.46
Shareholders' equity
Share capital 26 1,011,660,000.00 1,011,660,000.00
Capital reserve 27 978,244,858.10 978,244,858.10
Less: Shares in stock -- --
Surplus reserve 28 4,974,391.15 4,974,391.15
Retained Earnings 29 -512,868,149.68 -577,169,009.54
Foreign currency translation
defferences 11,521,910.64 10,161,630.32
Total equity attributable to
equity holders of the
Company 1,493,533,010.21 1,427,871,870.03
Minority interests 30 -127,520,847.45 -128,085,398.47
Total shareholders' equity 1,366,012,162.76 1,299,786,471.56
TOTAL LIABILITIES AND
3,334,189,868.33 3,379,090,178.02
SHAREHOLDERS' EQUITY
（The Notes form part of these financial statemtents）
2
CONSOLIDATED INCOME STATEMENT
For the six months ended 30 June 2011(unaudited)
Prepared by: SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE& PROPERTIES
(GROUP) CO., LTD Units: Rmb Yuan
Items Note Ⅴ 1-6/2011 1-6/2010
1. Operating Income 31 553,919,803.97 518,826,692.07
Less: Cost of sales 31 381,699,513.43 338,485,970.34
Business Taxes and Surcharges 32 49,318,473.28 55,612,034.02
Selling and distribution expenses 33 4,223,578.62 5,193,067.44
General and administrative expenses 34 31,177,179.75 32,261,773.04
Finance expenses 35 5,710,554.08 31,581,722.57
Add: Gain from changes of fair value 36 25,479.05 -24,785.75
Investment income 37 60,599.23 22,440,060.89
Including: Investment income from
affiliates 37 -- 12,586,609.32
2. Operating profit 81,876,583.09 78,107,399.80
Add: Non-operating income 38 1,138,021.01 123,299.72
Less:Non-operating expenses 39 183,613.59 100,867.73
Including: Loss from disposal of
39
non-current assets -- 14,409.50
3. Profit before income tax 82,830,990.51 78,129,831.79
Less: Income tax expenses 40 18,548,556.91 13,988,830.51
4. Net profit 64,282,433.60 64,141,001.28
Attributable to equity holders of the Company 64,300,859.86 64,109,890.28
Minority profit or loss -18,426.26 31,111.00
5. Earnings per share -- --
(1) Earnings per share 41 0.0636 0.0634
(2) Diluted earnings per share 41 0.0636 0.0634
6. Other comprehensive income 42 1,943,257.60 22,640.46
7. Total comprehensive income 66,225,691.20 64,163,641.74
Attributable to equity holders of the Company 65,661,140.18 64,132,530.74
Minority comprehensive income 564,551.02 31,111.00
（The Notes form part of these financial statemtents）
3
CONSOLIDATED CASH FLOW STATEMENT
For the six months ended 30 June 2011(unaudited)
Prepared by: SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE& PROPERTIES
(GROUP) CO., LTD Units: Rmb Yuan
Items Note Ⅴ 1-6/2011 1-6/2010
1. Cash flows from operating activities
Cash received from sales of goods or rendering of 507,445,488.20 561,833,156.45
services
Refund of taxes and levies -- --
Cash received relating to other operating activities 43.1 50,475,255.65 83,447,111.83
Sub-total of cash inflows 557,920,743.85 645,280,268.28
Cash paid for goods and services 43.3 298,716,478.48 545,456,789.91
Cash paid to and on behalf of employees 49,601,871.87 36,125,405.77
Payments of taxes and levies 68,372,545.14 56,224,700.88
Cash paid relating to other operating activities 43.2 56,905,947.05 74,164,738.27
Sub-total of cash outflows 473,596,842.54 711,971,634.83
Net cash flows from operating activities 84,323,901.31 -66,691,366.55
2. Cash flows from investing activities
Cash received from investment retrieving -- 2,553,452.35
Cash received as investment gains 175,000.00 10,053,451.57
Net cash received from disposal of fixed assets,
47,410.00 3,000.00
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 222,410.00 12,609,903.92
Cash paid to acquire fixed assets, intangible assets and
2,532,175.95 169,815.60
other long-term assets
Cash paid to acquire investments -- 87,040.00
Net cash received from subsidiaries and other -- --
operational
Cash paid relating to other investing activities -- --
Sub-total of cash outflows 2,532,175.95 256,855.60
Net cash flows from investing activities -2,309,765.95 12,353,048.32
3. Cash flows from financing activities
Cash received as investment -- --
Cash received from borrowings 43.4 10,000,000.00 364,800,000.00
Cash received from issuance of bonds -- --
Cash received relating to other financing activities -- --
Sub-total of cash inflows 10,000,000.00 364,800,000.00
Cash repayments of borrowings 43.4 27,961,200.01 348,117,983.77
Cash payments for interest expenses and distribution of 31,944,767.51 23,187,230.16
dividends or profits
Including： Cash payments for dividends or profit to -- --
minority shareholders of subsidiaries
Cash payments relating to other financing activities 43.5 2,000,000.00 --
Sub-total of cash outflows 61,905,967.52 371,305,213.93
Net cash flows from financing activities -51,905,967.52 -6,505,213.93
4. Effect of foreign exchange rate changes on cash -1,004,543.49 -254,669.43
and cash equivalents
5. Net increase in cash and cash equivalents 29,103,624.35 -61,098,201.59
Add: Cash and cash equivalents at the beginning of year 379,720,636.21 386,102,533.51
6. Cash and cash equivalent at the end of year 408,824,260.56 325,004,331.92
（The Notes form part of these financial statemtents）
4
CONSOLIDATED STATEMENT OF CHANGES IN OWNER'S EQUITY
6/30/2011（unaudited）
Prepared by: SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE& PROPERTIES (GROUP) CO., LTD Units: Rmb Yuan
Attributable to equity holders of the Company
Foreign Minority
Items Capital Less:shares Special Surplus Retained currency Total
Share capital interests
reserve in stock reserve reserves earnings exchange
differernces
1. Balance at the end of last year: 1,011,660,000.00 978,244,858.10 -- -- 4,974,391.15 -577,169,009.54 10,161,630.32 -128,085,398.47 1,299,786,471.56
Add: Changes of accouting 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 -577,169,009.54 10,161,630.32 -128,085,398.47 1,299,786,471.56
3. Change in equity for the year -- -- -- -- -- 64,300,859.86 1,360,280.32 564,551.02 66,225,691.20
(1) Net profit -- -- -- -- -- 64,300,859.86 -- -18,426.26 64,282,433.60
(2) Others -- -- -- -- -- -- 1,360,280.32 582,977.28 1,943,257.60
Sub-total (1)& (2) -- -- -- -- -- 64,300,859.86 1,360,280.32 564,551.02 66,225,691.20
(3)Shareholders’ contributions and decrease of
capital -- -- -- -- -- -- -- -- --
a. Contributions by shareholders -- -- -- -- -- -- -- -- --
b. Equtiy settled share-based payment -- -- -- -- -- -- -- -- --
c. Others -- -- -- -- -- -- -- -- --
(4) Distribution of profits -- -- -- -- -- -- -- -- --
a. Withdraws of surplus reserves -- -- -- -- -- -- -- -- --
b. Distributions to shareholders -- -- -- -- -- -- -- -- --
c. Others -- -- -- -- -- -- -- -- --
(5) Transfers within equity -- -- -- -- -- -- -- -- --
a. Share capital increased by capital reserve
transfer -- -- -- -- -- -- -- -- --
b. Share capital increased by surplus reserve
transfer -- -- -- -- -- -- -- -- --
c. Remedying loss with profit surplus -- -- -- -- -- -- -- -- --
d. Others -- -- -- -- -- -- -- -- --
(6) Special reserves -- -- -- -- -- -- -- -- --
a. Extracted this year -- -- -- -- -- -- -- -- --
b. Used this year -- -- -- -- -- -- -- -- --
(7) Others -- -- -- -- -- -- -- -- --
4. Balance at the end of the year report period 1,011,660,000.00 978,244,858.10 -- -- 4,974,391.15 -512,868,149.68 11,521,910.64 -127,520,847.45 1,366,012,162.76
5
CONSOLIDATED STATEMENT OF CHANGES IN OWNER'S EQUITY
6/30/2011（unaudited）
Prepared by: SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE& PROPERTIES (GROUP) CO., LTD Units: Rmb Yuan
Attributable to equity holders of the Company Minority Total
Items Capital Less:shares Share Capital Less:shares in interests Less:shares in
Share capital Share capital
reserve in stock capital reserve stock Capital reserve stock
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 accouting policy -- -- -- -- -- 119,428,606.57 -4,539,043.21 -114,889,563.36 --
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 -661,929,172.29 10,591,100.81 -127,912,535.45 1,215,628,642.32
3. Change in equity for the year -- -- -- -- -- 84,760,162.75 -429,470.49 -172,863.02 84,157,829.24
(1) Net profit -- -- -- -- -- 84,760,162.75 -- 11,195.76 84,771,358.51
(2) Others -- -- -- -- -- -- -429,470.49 -184,058.78 -613,529.27
Sub-total (1)& (2) -- -- -- -- -- 84,760,162.75 -429,470.49 -172,863.02 84,157,829.24
(3)Shareholders’ contributions and decrease
of capital -- -- -- -- -- -- -- -- --
a. Contributions by shareholders -- -- -- -- -- -- -- -- --
b. Equtiy settled share-based payment -- -- -- -- -- -- -- -- --
c. Others -- -- -- -- -- -- -- -- --
(4) Distribution of profits -- -- -- -- -- -- -- -- --
a. Withdraws of surplus reserves -- -- -- -- -- -- -- -- --
b. Distributions to shareholders -- -- -- -- -- -- -- -- --
c. Others -- -- -- -- -- -- -- -- --
(5) Transfers within equity -- -- -- -- -- -- -- -- --
a. Share capital increased by capital reserve
transfer -- -- -- -- -- -- -- -- --
b. Share capital increased by surplus reserve
transfer -- -- -- -- -- -- -- -- --
c. Remedying loss with profit surplus -- -- -- -- -- -- -- -- --
d. Others -- -- -- -- -- -- -- -- --
(6) Special reserves -- -- -- -- -- -- -- -- --
a. Extracted this year -- -- -- -- -- -- -- -- --
b. Used this year -- -- -- -- -- -- -- -- --
(7) Others -- -- -- -- -- -- -- -- --
4. Balance at the end of the year report
period 1,011,660,000.00 978,244,858.10 -- -- 4,974,391.15 -577,169,009.54 10,161,630.32 -128,085,398.47 1,299,786,471.56
（The Notes form part of these financial statemtents）
6
BALANCE SHEET
As at 30 June 2011 (unaudited)
Prepared by: SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE& PROPERTIES (GROUP)
CO., LTD Units: Rmb Yuan
ASSETS NoteⅫ June 30, 2011 Dec 31, 2010
Current assets
Cash at bank and on hand 206,679,987.73 191,108,590.15
Financial assets held for trading 10,635.30 97,726.25
Accounts receivable 1 5,582,066.02 5,694,673.47
Advances to suppliers 668,400.00 1,199,429.00
Other receivables 2 291,391,622.76 277,483,418.47
Inventories 3 1,436,773,584.03 1,413,212,628.44
Total current assets 1,941,106,295.84 1,888,796,465.78
Non-current assets
Long-term equity investments 4 286,522,524.97 286,597,524.97
Investment Property 454,508,058.23 464,169,328.80
Fixed assets 37,624,353.97 38,189,370.22
Intangible assets 190,266.69 212,066.67
Long-term deferred and prepaid expenses 247,543.74 --
Deferred tax assets 923,314.27 923,314.27
Total non-current assets 780,016,061.87 790,091,604.93
TOTAL ASSETS 2,721,122,357.71 2,678,888,070.71
(The Notes form part of these financial statemtents)
7
BALANCE SHEET（Continued）
As at 30 June 2011 (unaudited)
Prepared by: SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE& PROPERTIES (GROUP)
CO., LTD Units: Rmb Yuan
LIABILITIES AND OWNERS'
NoteⅫ June 30, 2011 Dec 31, 2010
EQUITY
Current liabilities
Account payable 20,387,450.12 20,387,450.12
Advance from customers 10,490,019.60 15,424,301.60
Employee benefits payable 13,322,047.91 14,865,546.49
Taxes payable 1,644,918.39 1,444,204.58
Interest payable 16,535,277.94 16,535,277.94
Other payables 582,186,882.37 525,522,847.87
Non-current liability due in one year 60,077,571.34 29,423,411.10
Other current liability -- --
Total of current liability 704,644,167.67 623,603,039.70
Non-current liabilities
Long-term borrowings 813,349,454.00 856,703,120.34
Total non-current liabilities 813,349,454.00 856,703,120.34
Total liabilities 1,517,993,621.67 1,480,306,160.04
Owners' equity
Share capital 1,011,660,000.00 1,011,660,000.00
Capital reserve 978,244,858.10 978,244,858.10
Retained Earnings -786,776,122.06 -791,322,947.43
Total owners' equity 1,203,128,736.04 1,198,581,910.67
TOTAL LIABILITIES AND
2,721,122,357.71 2,678,888,070.71
OWNER'S EQUITY
(The Notes form part of these financial statemtents)
8
INCOME STATEMENT
6/30/2011(unaudited)
Prepared by: SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE& PROPERTIES (GROUP)
CO., LTD Units: Rmb Yuan
Items NoteⅫ 1-6/2011 1-6/2010
1. Operating Income 5 56,173,437.09 156,040,672.45
Less: Cost of sales 5 25,469,746.52 72,488,362.99
Business Taxes and Surcharges 9,300,689.98 35,790,518.88
Selling and distribution expenses 200,008.48 652,510.61
General and administrative expenses 13,459,164.93 17,104,824.06
Finance expenses 4,149,886.99 32,616,647.73
Add: Gain from changes of fair value 25,479.05 -24,785.75
Investment income 6 -39,400.77 9,753,451.57
Including: Investment income from
6 -- --
affiliates
2. Operating profit 3,580,018.47 7,116,474.00
Add: Non-operating income 995,716.90 90,862.40
Less:Non-operating expenses 28,910.00 --
Including: Loss from disposal of
-- --
non-current assets
3. Profit before income tax 4,546,825.37 7,207,336.40
Less: Income tax expenses --
4. Net profit 4,546,825.37 7,207,336.40
5. Other comprehensive income -- --
6. Total comprehensive income 4,546,825.37 7,207,336.40
(The Notes form part of these financial statemtents)
9
CASH FLOW STATEMENT
6/30/2011(unaudited)
Prepared by: SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE& PROPERTIES (GROUP)
CO., LTD Units: Rmb Yuan
Items Note XII 1-6/2011 1-6/2010
1. Cash flows from operating activities
Cash received from sales of goods or rendering of services 53,321,655.66 163,884,610.97
Refund of taxes and levies -- --
Cash received relating to other operating activities 71,690,164.42 206,890,634.05
Sub-total of cash inflows 125,011,820.08 370,775,245.02
Cash paid for goods and services 18,072,694.57 303,575,969.32
Cash paid to and on behalf of employees 14,325,346.44 10,198,572.20
Payments of taxes and levies 8,714,849.13 32,427,936.47
Cash paid relating to other operating activities 27,343,816.00 39,584,594.50
Sub-total of cash outflows 68,456,706.14 385,787,072.49
Net cash flows from operating activities 56,555,113.94 -15,011,827.47
2. Cash flows from investing activities
Cash received from investment retrieving -- 2,553,452.35
Cash received as investment gains 75,000.00 9,953,451.57
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 75,000.00 12,506,903.92
Cash paid to acquire fixed assets, intangible assets and other
long-term assets 692,094.77 77,635.60
Cash paid to acquire investments -- 87,040.00
Net cash received from subsidiaries and other operational -- --
Cash paid relating to other investing activities -- --
Sub-total of cash outflows 692,094.77 164,675.60
Net cash flows from investing activities -617,094.77 12,342,228.32
3. Cash flows from financing activities
Cash received as investment -- --
Cash received from borrowings -- 350,000,000.00
Cash received from issuance of bonds -- --
Cash received relating to other financing activities -- --
Sub-total of cash inflows -- 350,000,000.00
Cash repayments of borrowings 13,161,200.01 338,717,983.77
Cash payments for interest expenses and distribution of
25,204,496.17 14,974,515.16
dividends or profits
Including： Cash payments for dividends or profit to
minority shareholders of subsidiaries -- --
Cash payments relating to other financing activities 2,000,511.20 --
Sub-total of cash outflows 40,366,207.38 353,692,498.93
Net cash flows from financing activities -40,366,207.38 -3,692,498.93
4. Effect of foreign exchange rate changes on cash and -414.21 -143,719.00
5. Net equivalents
cashincrease in cash and cash equivalents 15,571,397.58 -6,505,817.08
Add: Cash and cash equivalents at the beginning of year 191,108,590.15 73,508,120.37
6. Cash and cash equivalent at the end of year 206,679,987.73 67,002,303.29
(The Notes form part of these financial statemtents)
10
STATEMENT OF CHANGES IN OWNER'S EQUITY
6/30/2011 (unaudited)
Prepared by: SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE& PROPERTIES (GROUP) CO., LTD Units: Rmb Yuan
Items Share capital Capital reserve Less:shares in stock Special reserve Surplus Retained Total
1. Balance at the end of last year： 1,011,660,000.00 978,244,858.10 -- -- -- -791,322,947.43 1,198,581,910.67
Add: Changes of accouting policy -- -- -- -- -- -- --
Error correction of the last period -- -- -- -- -- -- --
2. Balance at the beginning of this year 1,011,660,000.00 978,244,858.10 -- -- -- -791,322,947.43 1,198,581,910.67
3. Change in equity for the year -- -- -- -- -- 4,546,825.37 4,546,825.37
(1) Net profit -- -- -- -- -- 4,546,825.37 4,546,825.37
(2) Others -- -- -- -- -- -- --
Sub-total (1)& (2) -- -- -- -- -- 4,546,825.37 4,546,825.37
(3)Shareholders’ contributions and decrease of capital -- -- -- -- -- -- --
a. Contributions by shareholders -- -- -- -- -- -- --
b. Equtiy settled share-based payment -- -- -- -- -- -- --
c. Others -- -- -- -- -- -- --
(4) Distribution of profits -- -- -- -- -- -- --
a. Withdraws of surplus reserves -- -- -- -- -- -- --
b. Distributions to shareholders -- -- -- -- -- -- --
c. Others -- -- -- -- -- -- --
(5) Transfers within equity -- -- -- -- -- -- --
a. Share capital increased by capital reserve transfer -- -- -- -- -- -- --
b. Share capital increased by surplus reserve transfer -- -- -- -- -- -- --
c. Remedying loss with profit surplus -- -- -- -- -- -- --
d. Others -- -- -- -- -- -- --
(6) Special reserves -- -- -- -- -- -- --
a. Extracted this year -- -- -- -- -- -- --
b. Used this year -- -- -- -- -- -- --
(7) Others -- -- -- -- -- -- --
4. Balance at the end of the year report period 1,011,660,000.00 978,244,858.10 -- -- -- -786,776,122.06 1,203,128,736.04
(The Notes form part of these financial statemtents)
11
STATEMENT OF CHANGES IN OWNER'S EQUITY
6/30/2011 (unaudited)
Prepared by: SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE& PROPERTIES (GROUP) CO., LTD Units: Rmb Yuan
Items Share capital Capital reserve Less:shares in stock Special reserve Surplus reserves Retained earnings Total
3. 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 accouting policy -- -- -- -- -- -- --
Error correction of the last period -- -- -- -- -- -- --
4. Balance at the beginning of the 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 -- -- -- -- -- -1,836,875.99 -1,836,875.99
(1) Net profit -- -- -- -- -- -1,836,875.99 -1,836,875.99
(2) Others -- -- -- -- -- -- --
Sub-total (1)& (2) -- -- -- -- -- -1,836,875.99 -1,836,875.99
(3)Shareholders’ contributions and decrease of capital -- -- -- -- -- -- --
a. Contributions by shareholders -- -- -- -- -- -- --
b. Equtiy settled share-based payment -- -- -- -- -- -- --
c. Others -- -- -- -- -- -- --
(4) Distribution of profits -- -- -- -- -- -- --
a. Withdraws of surplus reserves -- -- -- -- -- -- --
b. Distributions to shareholders -- -- -- -- -- -- --
c. Others -- -- -- -- -- -- --
(5) Transfers within equity -- -- -- -- -- -- --
a. Share capital increased by capital reserve transfer -- -- -- -- -- -- --
b. Share capital increased by surplus reserve transfer -- -- -- -- -- -- --
c. Remedying loss with profit surplus -- -- -- -- -- -- --
d. Others -- -- -- -- -- -- --
(6) Special reserves -- -- -- -- -- -- --
a. Extracted this year -- -- -- -- -- -- --
b. Used this year -- -- -- -- -- -- --
(7) Others -- -- -- -- -- -- --
4. Balance at the end of the year report period 1,011,660,000.00 -- -- 978,244,858.10 -- -791,322,947.43 1,198,581,910.67
(The Notes form part of these financial statemtents)
12
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
I. The company's basic information
1. Company status
Shenzhen Special Economic Zone Real Estate and Properties (Group) Co., Ltd. (the “Company”) was established in
July 1993, as approved by the Shenzhen Municipal Government with document SFBF (1993) 724. The Company issued
A shares on 15th September, 1993 and issued B shares on 10 January 1994. On 31 August 1994, B shares issued were
listed in New York Exchange market as class A recommendation. The total share capital are 1,011,660,000 shares, of
which, A shares are 891,660,000 shares, and the B shares are 120, 000,000 shares. The company business 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 assests
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 Feberary 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 Busines: 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 issuance by the board of directors on 26th Augustl, 2011.
II. Summary of significant accounting policies, accounting estimates, prior period errors and prepare the
consolidated financial statements
13
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
1. Basis of preparation
The financial statements have been translated into English from the Company’s financial statementss 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 caluation of earning per share” revised by the China Securities Reulatory
Commission (CSRC) in 2010.
3. Accounting period
The fiscal year of the Group is from 1 January to 31 December.
4. Functional and presentation currency
The consoliated financial statements are presented in Renminbi 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.
6. Foreign currency transactions
Foreign currency transactions are, on an initial recognition, translated to RMB at the spot exchange rate on the dates
of the transactions.
14
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
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 recognised 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 assests. Non-monetary items denominated in foreign currences 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 involing entities under common control
A business combination involving enterprises under common control is a business combination in which all of
the combining enterprises are ulimately controlled by the same party or parties both before and after the business
combination, and that control is not transitory. The assests and liabilities obtained are measured at the carrying amounts
as recorder by the enterprise being absorded at the combination date. The differences between the carrying amount of the
net assest obtained and the carrying amount of consideration paid for the combination (or the total face value of shares
issued) is adjusted for share premiun in the capital reserve. If the balance of share primiun 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 absord.
（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 assests 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 the fair value and the
carrying amount of the assests given is recognised in profit or loss. The acquisition date is the date on which the Group
effectively obtains control of the acquiree.
Any excess of the cost of a business combination over the Group’s interest in the fair value of the acquiree’s
identifiable net assest is recognised as goodwill.
Any excess of the Group’s interest in the fair value of the acquiree’s identificable net assest over the cost of a
15
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
business combination is recognized in profit or loss.
The Group, at the acquisition date, allocates the cost of the business combinationby recognising the acquiree’s
identificable assest, liabilities and contigent liabilities at their fari value at that date.
8. Consolidated financial statements
The consolidated financial statements comprise the company and the subisdiaries. 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 contorl, the financial statements of the subsidiary are included in the cosolidated 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 prepartions of the consolidated
financial statements are restated. In the preparation of the consolidated financial statements, the subsidiary’s assests,
liabilities and results of operations are included in the consolidated balance sheet and the consolidated income statements,
from the date that common control was estabished.
Where the company acquires a subsidiary during the reporting period through a business combination involving
entities not under common control, the identifiable assests, liabilities and results of operations of the subsidiaries are
consolidated into consolidated into consolidated financial statements from the date that control commenses, 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.
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 thar 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
16
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
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 unrealised profit of loss arising
from intra-group transactions, are eliminated in preparing the onsolidated financial statememts. Unrealised 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) Recognization of financial assets and financial liability
Recognization of financial assets is the process that items that meet the definition and the condition for recognition
of financial assets are recognized in the balance sheet. Recognization of financial liability is the process that items that
meet the definition of financial liability are recognized in the balance sheet.
(3) Measurement of financial assets and financial liability
The initial recorganization of a financial asset or financial liability shall be measured at its fair value. Transaction
costs shall be charged to the profit or loss for the current period for financial assets and financial liability held for trading.
For other financial assets or fianacial liability, relevant transaction expenses to get them are deemed as the initial
confirmation amount.
Except loans, receivables, held-to-maturity investments and other financial liabilities, financial asset or financial
liability was measured at its fair value and other financial liability was measured at amotized cost by effective interest.
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 balance sheet date, for the sale of financial assets should be based on fair value. The changes in fair value, not
17
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
including impairment and exchange gains or losses, will be included in capital reserve. The capital reserve will be
transferred into profit or loss when the financial asset was derecognized.
Exchange differences of foreign financial assets available for sale and interest from financial assets available for
sale measured by the effective interest method were recognized as profit or loss for the current period. For the financial
assets held for sale, cash dividends will be included inprofit or loss in the current period when it was declared by the
investee.
For financial assets and financial liabilities measured by amortized cost, gains or loss was recognized as profit or
loss in event of impairment, amortization or termination of recognition.
(4) Termination of financial assets and financial liability
Termination of financial assets means that the financial assets are removed from business accounts and balance
sheet. The financial assets will be derecognized when it meets these conditions: the contractual right to receive cash
flows of financial assets is terminated; financial assets have been transferred; other conditions for derecognition of
financial assets in accordance with "Accounting Standards for Enterprises No. 23 - Transference of financial assets".
(5) Determination of the fair value of the financial assets and financial liability
①If 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.
②If there is no active financial instruments market, the valuation techniques is used to determine its fair value.
③As 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.
④In 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.
(6) 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.
18
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
①Held-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.
②Sellable 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.
11. Account receivable and other receivables
Account receivable fund of the company includes accounts receivable and other receivables. The provision adopts
the Allowance method. If there are evidences proving that the ccount fund have devualtion the company will recognize
the difference between the book value and the estimated cash flow in the future.
(1) Refers to accounts receivable with significant individual amount and separate impairment test
The ending blance of Rmb 5000 thousand or above of account receivables is significant accounts receivable. The
ending blance of Rmb 5000 thousand or above of other receivables is significant other receivable. When testing the
significant account receivables or other receivables indivually, if there are evidences proving that the ccount fund have
devualtion, the company will recognize the difference as profitbetween the book value and the estimated cash flow in the
future.
(2) Refers to accounts receivable which is unsignificant indivually but according to the characteristics of the
portfolio after portfolio of risky accounts receivable and separate impairment test
The company made the credit policy according to the markets characteristics and clients’ risks for the accounts
receivable which is unsignificant. A separate provision is established according to the recoverability of each receivales
with long aging and little retrievability.
12. Inventories
19
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
(1) Categories of inventories
Inventory was classified 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 include raw materials, finished
products and stocks, low-value consumable products and construction.
(2) Measurement of inventories
①Completed product development 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 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. If several estate projects benefit from the
same facility, they stay in the same category. The cost of fee should be measured according to the allocation of sales area.
If they got benefit but in different categories, the cost was measured according to the allocation of the area covered.
③Utility 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 was provided. But it all measures in the non-development products.
④ Quality Guarantees was put into the account of real estate development according to the contract amount and
also recorded in the accounts payable at the same time. The actual payment incurs after the expiry of guarantee.
⑤ 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.
20
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
13. Long term equity investment
(1) Categories
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 be measured reliably in the active market.
(2) Recognition of initial investment costs
①Long term equity investments acquired through a business combination
For long-term equity investment acquired through a business combination involving enterprises under common
control, the initial investment cost shall be the absorbing party’ share of the carrying amount of owner’s equity of the
party being absorbed at the date of combination. The difference between the initial investment cost and the carrying
amount of the consideration paid shall be adjusted against capital reserve. If the balance of capital reserve is not
sufficient for such adjustment, the remaining difference shall be adjusted against retained earnings. The direct expenses
were recognized as profits or losses.
For long-term equity investmenst acquired through a business combination involving enterprises not under common
control, the initial investment cost shall be determined according to the fair value of consideration paid.
②Long term equity investmenst acquired through other ways
For long-term equity investmenst acquired through cash, the initial investment cost shall be determined according
to the purchase price paid. The investment cost includes the direct cost, tax surcharges and other necessary expenses
relating to the acquisition. However, the dividends that are included in purchase price and declared but unpaid are
accounted as receivable items separately.
For long-term equity investments acquired by issuing equity securities, the initial investment cost shall be the fair
value of the equity securities issued.
For long-term equity investments contributed by an investor, the initial investment cost shall be the amount
stipulated in the investment contract or agreement, except when the amount stipulated in the contract or agreement is not
at fair value.
The initial investment cost of long-term equity investments acquired in exchange of non-monetary assets shall be
determined in accordance with “CAS 7-Exchange of Non-monetary Assets”. When the following conditions are satisfied,
21
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
it shall be measured at fair value: the exchange transaction has commercial substance; and, the fair value of either the
asset received or the asset given up can be reliably measured. Otherwise, it shall be measured at the carrying amount of
the assets given up.
For a long-term equity investment acquired in a debt restructuring transaction, the initial investment cost shall be
determined at its fair value.
(3) Subsequent measurement
The cost method shall be used to account for the long term equity investment where the company invested in
subsidiary and other equity investment. In the preparation of the consolidated financial statement, appropriate
adjustments shall be made based on the equity method. The equity method shall be used to account for the investment in
associates and joint ventures.
(4) Measurement of gains or lossess
For long-term equity investment accounted for using the cost method, the investee companies shall recognize
investment income in accordance with its share after the declaration of dividends or profits from investee entity other
than cash dividends or profits included in the purchase price and declared but not paid.
For long-term equity investment accounted for using the equity method, appropriate adjustments shall be made to
the investee entity’s net profits or losses based on the fair values of the investee entity’ separate identifiable assets before
determing investment income or loss. Tthe carrying value of long-term equity investement shall be decreased when the
investee entity declares profit distribution and cash dividends. The investor enterprise shall adjust the carrying amount of
the long-term equity investment based on its share of the changes in owners’ equity of the investee entity other than
those arising from net profits or losses, with a corresponding increase or decrease in owners’ equity.
When disposing of long-term equity investment, the difference between book value and the actual purchase price is
recognized as profit or loss. For long-term equity investment accounted for using equity method, the portion of change in
its appropriate interest in the investee entity that does not arise from the investee entity’s net profit or loss, is recognized
directly in the owners’ equity. Upon disposal of that investment, the corresponding amount that was previously
recognized directly in owners’ equity shall be transferred to profit or loss.
(5) Basis of recognizing common control or significant influence
①Basis of recognizing common control
22
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
According to the contract, if the invested enterprise’s main finance and operation policy need to be agreed by other
invested parties, the investment is common investment.
②The determination of significant influence investee entity
According to the contract, if the invested enterprise’s only have participating decision rights in invested enterprise’s
main finance and operation policy but have no own control or common control with other investing parties, the
investment is investment with significant influence. Generally, if the company owns 20% but less than 50% of voting
shares of the investee entity directly or indirectly through subsidiaries, it has a significant impact over the investee entity.
(6) Impairment examination and providing of impairment provision
If the investment in subsidiary, affiliates, and joint ventures are impaired has the indication of 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. When impairment appears for other equity investment, 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 reversed back in the following
accounting period.
14. Investment Property
(1) Recognition of investment property
Investment property shall be recognized as an assets when, and only when both of the following conditions are
satisfied: ①The held for earn rentals and/or capital appreciation, or both; ②Investment property shall be capable of
being measured and sold separately; ③The economic benefits pertinent to this investment real estate are likely to flow
into the enterprise; ④The 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
23
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
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) Transference and disposal
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
①it is probable that economic benefits associated with the assets will flow to the enterprise;
②the 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.
(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.
24
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
(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 it does not meet 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.
(7) 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
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, estimation should be made for the impairment of the long-term suspension project that
will not be re-started in three years. The impairment estimated is book value minus the recoverable amount. Once
provision for impairment, it could not be reversed in later accounting period.
25
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
17. Intangible assets
Intangible assets include 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 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.
②Intangible assets with uncertain service life may not be amortized.
（3） Impairment of intangible assets
On balance sheet day, make impairment test for 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 are amortized 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 borrowings.
Where the borrowing costs incurred to an enterprise can be directly attributable to the acquisition and construction
26
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
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) Capitalization
The borrowing costs shall not be capitalized unless they simultaneously meet the following 3 requirements:
①expenditure for the asset are being incurred;
②borrowing cost are being incurred;
③the necessary construction or production activities to make the assets ready for use or sales have been launched.
(2) Determination of the amount of capitalization
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) Suspension of capitalization
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.
（4） Cessation of capitalization
When the qualified asset under acquisition and construction or production is ready for the intended use or sale, the
27
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
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;
28
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
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.
29
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
（3）Used 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
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. Deffered tax assests and deffered tax liabilities
The income tax of the company adopts the financial statement liability method. The deffered tax assests and
deffered tax liabilities are recognized of the difference of book value and tax book balance. At the balance date, the
deffered tax assests and deffered tax liabilities were calculated based on the estimated taxable income tax rate.
Deffered tax assests are recognized not more than the amount that income tax payble of the company.
Deffered tax assests and deffered tax liabilities were recognized from the temporary difference of the subsidiaries
and joint ventures. But Deffered tax assests and deffered tax liabilities were not recognized if the time of transferred
30
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
back temporary difference can be determited and the temporary difference won’t be transferred back in the future.
25. Operating leasing and financial leasing
(1) Operating leasing
Operating leasing are other leasing except for financial leasing.
①leaseholder
The rent will be caulated in gain or loss averagely. And the orignial expense will be counted in gain or loss in
current year. Contingent rent will be caulated in gain or loss when it happens.
If the lessor provids free-rental period, the total rent will be caulated in gain or loss averagely in the whole rental
period（ including the free-rental period）. The free-rental period have to recognize the rental expense.
If the lessor bears some expense, the total rental expense which deductes the expense will be caulated 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 is some definite evidence showing that the price of sale-leaseback transactions is determined with fair
value. The difference between the prich and the book value of the assests will be caluated in gian 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 wil be caulated in gain or loss. But if this loss will be compensated with the rent which is less than the market
price in the future, the loss should be deffered. And the loss will be caulated 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.
②lessor
The financial statements will included the operating assests.
The rent will be caulated in gain or loss averagely. The orignial expense will be caulated in gain or loss in current
year. The poperty will be depricated according to the similar assest deprications policy. Contingent rent will be caulated
in gain or loss when it happens.
If the lessor provids free-rental period, the total rent will be caulated in gain or loss averagely in the whole rental
31
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
period（ including the free-rental period）. If the lessors bear some expense, the rent deducting the orginal expense will
be caulated in gain or loss in the whole rental period.
(2) Financial leasing
Financial leasing is the leaseing that actually transfer the property rights to leaseholder. And the property rights will
be transferred or not in the end.
① Leaseholder
Ate the starting date of leasing, the less amount of the assest fair value and par value of rent will be the book value
of the rental assest 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 expensed which happened during the egotiation period due to the
leasing project can be caulated as assests.
When calculating the par value of rent, the company adopts the leasing implied rate as discount rate if it can get the
leasing implied rate. Otherwise, the company adopts 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 caulated in the whole rental period averagelly.
The leasing assest will apply the same deprication policy. If the leaseholder assures that it can have the property
right when the leasing period ends, the assests will be drpricated in the whole use life time. And oterswise, the the assests
will be drpricated in period of which the shorter of the leasing period and use life time.
Contingent rent will be caulated in gain or loss when it happens.
② Lessor
At the starting date of leasing, the par value of rent and the orginal expense will be counted as long-term receivables.
And record the remained unsecured amount at the same time. The difference between the par value of rent, orginal
expenses and the remained unsecured amount will be recognized as the unfulfilment financial income. The unfulfilment
financial income will be distributed with the acual rate averagelly.
When each year ended, the company will test the the unfulfilment financial income. If the unfulfilment financial
income increases, it won’t be recognized. And the unfulfilment financial income increase decrease, the company will
caulate the leasing implied rate. And the reduaction due to leasing investment will be caulated in gain or loss. The the
income of each year will be caulated according to the revised leasing investment. The net amount of leasing investment
32
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
is the difference between the par value of rent and unfulfilment 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 habe to recaulated the leasing implied rate. he the income of each year will be
caulated according to the revised leasing investment.
Contingent rent will be caulated in gain or loss when it happens.
26. Assests held for sale
The assests 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 assests held for sale, the company will adjust the estimated net value of this assest. And make the estimated net
value can reflect the amount equalling the amount that the fair value minus the disposal expenses. And the amount can
not excess the orginal cost of the assests. If the book value is higher than the estimated net value, the difference will be
caulated in current gain or loss.
The Assests held for sale don’t depreciated. And it is counted with the less amoun of the book value and the amount
that the fair value minus the disposal expenses.
If the Assests held for sale don’t satisfy the conditions, the company stopped reclassing it as the assests held for sale.
And it will be caulated with the lower amount of the following:
① the amount which caulated under the orginal method befort the assest was reclassed to the assests held for sale.
② the retracting amount when the Company decides not to sell.
The other uncurrent assests which satisfy the conditions will use the method mentioned above. The other uncurrent
assests don’t include defferred tax assests, the financial assests documentd in “Enterprise Principle No.22 –
Recognization and Caulation of Financial Instruments”, the properties caulated by the fair value, biological assests, the
rights of the insurance agreement.
27. Changes in main accounting policies and accounting estimation
(1) Changes in main accounting policies
There were no changes in main accounting policies that affected the Company during the period.
33
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
(2) Changes in main accounting eatimation
There were no changes in main accounting eatimation that affected the Company during the period.
28. Previous accounting errors correction
There was no previous accounting errors correction that affected the Company.
III. 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 7%
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 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 is by 60% the proportion of the levy.
* 2. Enterprise income tax rate is as follows：
Items Income tax rate
Domestic Enterprises
- enterprises in Shenzhen 24%
34
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
- enterprises outside Shenzhen 25%
Enterprises in HK 17.50%
According to the China’s Corporate Tncome 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,
incomen 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.
IV. Enterprises combination and the consolidated financial statements
1. The informations of subsidiaries are as follows:
The informations of subsidiaries in mid-2011 are as follows:
35
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
(1) Subsidiaries acquired through new establishment or investment are as follows:
Net
Net balance of June 30, 2011 Whether or
Registered Investment
other investment not included
capital (in in subsidiary in
Name of Registered items to the Equity Voting in
Types ten Nature of business and principal activities substance
the Subsidiary place subsidiaries（in holding rights consolidated
thousand (in ten
ten thousand (%) (%) financial
Yuan) thousand
Yuan） statement
Yuan）
Wholly-owned
Shenzhen Petrel Hotel Co. Ltd. shenzhen 3,000 Hotel 3,000 -- 100 100 YES
subsidiary
Shenzhen City Property Wholly-owned
shenzhen 725 Property management 725 -- 100 100 YES
Management Ltd. subsidiary
Shenzhen Zhen Tung Engineering Wholly-owned
shenzhen 1,000 Fitting-out contracting and maintenance 1,000 -- 100 100 YES
Ltd subsidiary
Shenzhen City We Gen Wholly-owned
shenzhen 800 Construction project management 800 -- 100 100 YES
Construction Management Ltd. subsidiary
Wholly-owned
Shenzhen City Car Rental Ltd. shenzhen 1,029 Car rental 1,029 -- 100 100 YES
subsidiary
Wholly-owned
Shenzhen Shenfang Car Park Ltd. shenzhen 4,250 Develop and operate car park 4,250 -- 100 100 YES
subsidiary
Shenzhen City Shenfang Investment Wholly-owned
shenzhen 1,000 Investment and management 1,000 -- 100 100 YES
Ltd. subsidiary
Shenzhen City Shenfang Free Trade Wholly-owned
shenzhen 500 Trading of Import and export 500 -- 100 100 YES
Trading Ltd. subsidiary
Shenzhen City SPG Long Gang Wholly-owned
shenzhen 3,000 Property development 3,000 -- 100 100 YES
Development Ltd. subsidiary
Shenzhen Special Economic Zone
Wholly-owned GuangZh
Real Estate (Group) Guangzhou 2,000 Property development 2,000 -- 100 100 YES
subsidiary ou
Property and Estate Co., Ltd.
Beijing fresh peak property
Wholly-owned
development management limited BeiJing US$1,000 operating of Real estate 7,671 -- 100 100 YES
subsidiary
company
Beijing SPG Property Wholly-owned
BeiJing 50 Property management 50 -- 100 100 YES
Management Limited subsidiary
Wholly-owned
Shenzhen ShenWu elebator Co.,Ltd shenzhen 350 Elevator sales and service 350 -- 100 100 YES
subsidiary
36
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
Net
Net balance of June 30, 2011 Whether or
Registered Investment
other investment not included
capital (in in subsidiary in
Name of Registered items to the Equity Voting in
Types ten Nature of business and principal activities substance
the Subsidiary place subsidiaries（in holding rights consolidated
thousand (in ten
ten thousand (%) (%) financial
Yuan) thousand
Yuan） statement
Yuan）
Shenzhen Lain Hua Industry and Wholly-owned Trading of equipment and provision of renovation
shenzhen 1,000 1,000 -- 100 100 YES
Trading Co. Ltd. subsidiary material
Wholly-owned HongKo
Fresh Peak Holding Ltd. HKD100 Investment and management HKD100 3,134 100 100 YES
subsidiary ng
Wholly-owned HongKo
Wellam Ltd. HKD1 Investment holding HKD1 -- 100 100 YES
subsidiary ng
Shantou SEZ Wellam Fty Bldg., Wholly-owned
ShanTou US$600 Property development US$600 -- 100 100 YES
Dev. Co. subsidiary
Subsidiary of
Great Wall Estate Co., Inc USA USD50 Property development USD35 10,138 70 70 YES
holding company
Wholly-owned HongKo
Fresh Peak Holdings Ltd. HKD100 Investment and management HKD100 57,472 100 100 YES
subsidiary ng
Wholly-owned HongKo
Skill Elite Ltd. HKD1 corporate financing HKD1 -- 100 100 YES
subsidiary ng
Subsidiary of HongKo
Fresh Peak Investment Ltd. HKD100 Properties investment HKD55 -- 55 55 YES
holding company ng
Wholly-owned HongKo
Openice Ltd. HKD100 Investment and management HKD120 -- 100 100 YES
subsidiary ng
Subsidiary of HongKo
Barenie Co. Ltd. HKD1 Properties investment HKD0.8 -- 80 80 YES
holding company ng
Wholly-owned HongKo
Keyear Development Ltd. HKD100 Investment holding HKD100 -- 100 100 YES
subsidiary ng
Guangzhou Huangpu Xizun real Wholly-owned GuangZh
HKD3980 Property development HKD3980 -- 100 100 YES
estate limited company subsidiary ou
Fresh Peak Real Estate Dev. Wholly-owned
WuHan US$400 Property development US$400 -- 55 55 YES
Construction (Wuhan) Co. Ltd.*① subsidiary
Shenzhen Shenfang Department Wholly-owned
shenzhen 1,000 Commercial goods supplier 1,000 -- 100 100 No
Store Co. Ltd.*② subsidiary
Wholly-owned
Shenzhen CyberPort Co., Ltd *③ shenzhen 2,000 Information Technology Advisory 1,400 -- 70 70 No
subsidiary
Shenzhen City SPG Bao An Wholly-owned shenzhen 2,000 Property development 2,000 -- 100 100 No
37
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
Net
Net balance of June 30, 2011 Whether or
Registered Investment
other investment not included
capital (in in subsidiary in
Name of Registered items to the Equity Voting in
Types ten Nature of business and principal activities substance
the Subsidiary place subsidiaries（in holding rights consolidated
thousand (in ten
ten thousand (%) (%) financial
Yuan) thousand
Yuan） statement
Yuan）
Development Ltd.*④ subsidiary
Shenzhen Real Estate Consolidated Wholly-owned
shenzhen 1,371 Construction material, consume goods 596 -- 100 100 No
Service Co., Ltd *⑤ subsidiary
Shenzhen Shen Fang Industrial Wholly-owned
shenzhen 300 Invest in industrial projects 450 -- 100 100 No
Development Co., Ltd.*⑥ subsidiary
Shenzhen Tefa Real Estate Wholly-owned
shenzhen 221 Construction and decoration 818 -- 100 100 No
Consolidated Service Co., Ltd.*⑦ subsidiary
Subsidiary of holding
Bekaton Property Limited *⑧ Australia US$20 Property Development 91 1,256 60 60 No
company
Canada Great Wall ( vancouver) Subsidiary of
Canada JOD 0.1 Property Development 0.45 8,904 75 75 No
*⑧ holding company
Wholly-owned HongKo Property construction and trading of construction
Paklid Limited *⑧ HKD50 20 1,107 100 100 No
subsidiary ng materials
Shenzhen City Shenfang
Wholly-owned
Construction and Decoration shenzhen 268 Construction materials 268 -- 100 100 No
subsidiary
Materials Ltd *⑨
Shenzhen ZhongGang Haiyan Subsidiary of
shenzhen 1,900 Tourism Restaurant 1,294 -- 68 68 No
Enterprise Ltd.*⑩ holding company
Shenzhen Xing Dongfang Store Wholly-owned
shenzhen 2,000 Domestic commercial goods supply 1,850 -- 100 100 No
Ltd.* 11 subsidiary
FengKai
Guangdong Province Fengkai Lain in
Subsidiary of holding Manufacturing and trading
Feng Cement Manufacturing Co., GuangD US$800 12,126 -- 90 90 No
company in cement products
Ltd *12 ong
Province
38
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
*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 included in the company’s consolidated financial statement. The book value of the
investment account of the company is zero.
*③ Shenzhen CyberPort Co., Ltd
The shareholders meeting held on 12 May 2008 passed the resolution to terminate business, liquidation and formed
a group to carry out the liquidation prodecures. The liquidation group issued a notice of liquidation on 5 December 2008.
According to the principle of “Enterprise Accounting Standards No.33- the Consolidation Financial Statement”, the
corporation will not be included in the company’s consolidated financial statement. The book value of the investment
account of the company is zero.
*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 prodecures. According to the principle of “Enterprise Accounting Standards No.33- the
Consolidation Financial Statement”, the Store will not be included in the company’s consolidated financial statement.
*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 Febuary 2002 because of
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 Febuary 2002 because
failing to take part in annual inspection.
39
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
*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 licenses by law in 2004 because failing to take
part in annual inspection.
*⑧ Bekaton Property Limited and Paklid Limited
These 3 subsidiaries were set up overseas in early times. The board of directors passed a resoluction 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.
*⑩Shenzhen 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 is zero.
Except for *①, *②, *⑩, the above subsidiaries which are not includedin the company’s cnsolidated financial
statement had ceased operations for many years. And the entities of the corporations didn’t exist. And the company has
no control over its subsidiaries’ businesses. According to the principle of “Enterprise Accounting Standards No.33- the
Consolidation Financial Statement”, the corporation will not be included in the company’s consolidated financial
statement. The book value of the investment account of the company is zero.
40
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
(2) Subsidiaries acquired through combination under common control
The company has no any subsidiaries acquired through combination under common control.
(3) Subsidiaries acquired through combination under non-common control
June 30, 2011 Whether
Net
Registered Net balance of or not
Nature of investment in
capital other investment Equity include in
Registered Registered business and subsidiary in
Types (in ten items to the holding Voting the
place place principal substance
thousand subsidiaries（in ten Percentag power financial
activities (in ten thousand
Yuan) thousand Yuan） e (%) statement
Yuan）
Shan Tou
Wholly-own
Special Economic Property
ed ShanTou HKD3000 2,108 -- 100 100 Yes
Zone Real Estate development
subsidiary
Ltd.
(4) The company has no any entities special purpose
The company has no any controlling entities through the way of trustee or leasing.
2 Minority interests of subsidiaries
Up to June 30, 2011
Name The amount of losses attributed to the minority
Minority interests shareholders of a subsidiary exceeds the minority
shareholders’ portion of the equity of the subsidiary
Fresh peak investment limited -104,535,306.38 --
Barenie Co. Ltd. -2,029,582.32 --
Great Wall Estate Co., Inc -20,955,958.75 -18,426.26
Total -127,520,847.45 -18,426.26
3 Changes in the scope of combination in mid-2010
There are no Changes in the scope of combination in mid-2010.
V. Notes to the consolidated and the Company’s financial statements
1. Cash at bank and on hand
June 30, 2011 Dec 31, 2010
41
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
Original currency Exchange RMB Original currency Exchange RMB
rate rate
Cash on hand
RMB 358,180.21 358,180.21 393,927.17 393,927.17
HKD 19,888.76 0.8312 16,531.54 10,255.39 0.8514 8,731.85
USD 2,000.00 6.4750 12,950.00 2,000.00 6.6252 13,250.40
387,661.75 415,909.42
Deposit with banks
RMB 354,679,526.08 354,679,526.08 324,800,743.62 324,800,743.62
HKD 49,351,312.68 0.8312 41,020,811.10 49,511,067.69 0.8514 42,155,703.47
USD 74,218.00 6.4750 480,561.55 85,077.73 6.6252 563,656.97
396,180,898.73 367,520,104.06
Other monetary funds
RMB 12,118,573.40 12,118,573.40 11,644,185.53 11,644,185.53
HKD 164,974.35 0.8312 137,126.68 164,940.81 0.8514 140,437.20
12,255,700.08 11,784,622.73
408,824,260.56 379,720,636.21
Other monetary funds are the deposit of mortgage loan the bank asked for the company when the properties buyers
applied for the mortgage loan from the bank to buy the company’s properities.
2. Financial assets held for trading
June 30, 2011 Dec 31, 2010
Stock investment 10,635.30 97,726.25
Including: Cost 5,150.00 117,720.00
Change in the fair value 5,485.30 -19,993.75
3. Accounts receivable
（1）The symbol of credit risk identified by customers categories
June 30, 2011 Dec 31, 2010
Book balance Proportion % Provision of bad debts Book balance proportion % Provision of bad debts
Category 1 -- -- -- -- -- --
Category 2 36,400,539.10 100.00 18,474,279.11 35,626,757.47 100.00 18,474,279.11
Total 36,400,539.10 100.00 18,474,279.11 35,626,757.47 100.00 18,474,279.11
Category 1: refers to accounts receivable with significant individual amount and separate impairment test.
42
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
Category 2: refers to accounts receivable which is unsignificant indivually but according to the characteristics of the
portfolio after portfolio of risky accounts receivable and separate impairment test.
The ending balance is mainly constituted by accounts receivables of import and export agency business, house pay
to be collected and engineering construction.
(2) Refers to accounts receivable which is unsignificant indivually but according to the characteristics of the
portfolio after portfolio of risky accounts receivable and separate impairment test.
Book balance Provision of bad debts Proportion % Notes
Receivables of import and
A separate provision is established
export agency business 14,132,195.58 11,574,556.00 81.90
according to the recoverability of each
House pay to be collected 12,627,965.74 6,301,854.02 49.90
receivales with long aging and little
Engineering construction
retrievability.
funds and others 9,640,377.78 597,869.09 6.20
Total 36,400,539.10 18,474,279.11 50.75
(3) The aging of accounts receivable by categories:
June 30, 2011 Dec 31, 2010
Aging Provision of bad Provision of bad
Amount Proportion % Amount Proportion %
debts debts
Within 1 year 3,587,149.04 9.85 -- 3,734,648.20 10.48 --
1 and 2 year 1,066,682.91 2.93 -- 2,361,120.75 6.63 --
2 and 3 year 2,329,470.64 6.40 -- 10,632.02 0.03 --
3and 5 year 63,964.02 0.18 -- 356,744.49 1.00 --
Above 5 year 29,353,272.49 80.64 18,474,279.11 29,163,612.01 81.86 18,474,279.11
Total 36,400,539.10 100.00 18,474,279.11 35,626,757.47 100.00 18,474,279.11
(4) The informations of accounts receivables of the company's top five debtors are as follows:
Name Relationship Amount Proportion % Aging Notes
Individual-Liu Zihua(and so on) Un-related party 2,309,255.46 6.34 Above *
Daxing Auto Parts Co., Ltd. Un-related party 1,888,540.97 5.19 Above *
Individual-Wang Weidong Un-related party 1,200,000.00 3.30 Above *
Account
Shenzhen Fresh Peak Property receivable
Associate investment from
Consultant Co.,Ltd
1,133,250.59 3.11 Above 5 year consignment
Individual-Cai guangyao Un-related party 876,864.11 2.41 Above 5 year *
Total 7,407,911.13 20.35
*The sales price of properties hadn’t called back. The company would call back the money when the owners of the
properties finish the property right certificates.
43
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
（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 NoteVI.3. (5) or details of the accounts receivables which are due to related parities.
（7）There were no any accont reciviables which had been accured full or large proporation provisiontransferred
back in this accounting year.
（8）There were no any acconts receivables which had been terminated recognized.
（9）There were no any accounting receivable which had been securitization.
4. Advance to suppliers
（1）The aging of advance to suppilers by categories:
June 30, 2011 Dec 31, 2010
Aging
Amount Proportion % Amount Proportion %
Within 1 year 22,948,601.37 70.29 19,444,569.63 72.310
1 to 2 years 2,252,977.00 6.90 530.16 0.002
2 to 3 years -- -- -- --
Above 3 years 7,445,451.98 22.81 7,445,451.98 27.688
Total 32,647,030.35 100.00 26,890,551.77 100.00
The balance of advance to suppliers increased by Rmb 5,760 thousand and has an increase of 21.42%. The increase
is due to engineering materials.
（2）The informations of accounts receivables of the company's top five debtors are as follows:
Proportion
Name Relationship Amount Aging Notes
%
Un-related Within 1
Shenzhen Foshan Vanke The un-settled prepayment of project
(Project Material) party 15,000,070.01 45.95 year
Un-related Within 1
Times Qingcheng Square The un-settled prepayment of project
(Project Material) party 4,023,016.28 12.32 year
KaiPing FuLiHua Fashion Un-related Above 3 The un-settled prepayment of import and
Co.,Ltd party 1,570,000.00 4.81 years export business
Hainan Vanke Hi-zhiyuan Un-related Within 1
The un-settled prepayment of project
(Project Material) party 1,418,197.00 4.34 year
ShangQiu City QiuGe Mao Rong Un-related Above 3 The un-settled prepayment of import and
Co.,Ltd party 1,263,486.10 3.87 years export business
Total 23,274,769.39 71.29
（3）No amount due from shareholders who hold 5% or more of the voting rights of the company are included in
the above balance of advance suppilers.
（4）No amount due from related parties is inclued in the above balance of advance suppilers.
44
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
5. Other receivables
（1）The symbol of credit risk identified by customers categories
June 30, 2011 Dec 31, 2010
Book Proportion Provision of Book Proportion Provision of
balance % bad debts balance % bad debts
Category 1 154,398,267.51 69.04 149,265,573.52 154,398,267.51 68.28 149,265,573.52
Category 2 69,227,456.15 30.96 29,340,438.24 71,742,683.76 31.72 29,340,438.24
Total 223,625,723.66 100.00 178,606,011.76 226,140,951.27 100.00 178,606,011.76
Category 1: refers to other receivable with significant individual amount and separate impairment test.
Category 2: refers to other receivable which is unsignificant indivually but according to the characteristics of the
portfolio after portfolio of risky accounts receivable and separate impairment test.
The ending balance is mainly constituted by other receivables between subsidiares that are not concluded in
consolidated statement. A provision for impairment of the receivable is established at the difference between the carrying
amount of the receivable and the recoverable amount for accounts receivable with long aging and little retrievability.
(2) Refers to other receivable which is unsignificant indivually but according to the characteristics of the portfolio
after portfolio of risky accounts receivable and separate impairment test.
Provision of Proportion
Book balance Notes
bad debts %
Other receivables between subsidiares A separate provision is established
that are not concluded in consolidated according to the recoverability of each
statement 9,598,942.50 9,375,225.50 97.67 receivales with long aging and little
Others 59,628,513.65 19,965,212.74 33.48 retrievability
Total 69,227,456.15 29,340,438.24 42.38
（3）The aging of accounts receivable by categories:
June 30, 2011 Dec 31, 2010
Aging Proportion Provision of Proportion Provision of
Amount Amount
% bad debts % bad debts
Within 1 year 4,207,278.54 1.88 -- 7,128,913.14 3.15 --
1 and 2 year 2,164,084.49 0.97 -- 6,188,309.32 2.74 --
45
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
2 and 3 year 5,658,110.72 2.53 -- 1,690,204.51 0.75 --
3and 5 year 1,737,901.51 0.78 -- 2,550,351.80 1.13 --
Above 5 year 209,858,348.40 93.84 178,606,011.76 208,583,172.50 92.23 178,606,011.76
Total 223,625,723.66 100.00 178,606,011.76 226,140,951.27 100.00 178,606,011.76
（4）The informations of accounts receivables of the company's top five debtors are as follows:
Name Relationship Amount Proportion % Aging
Canada Great Wall( Vancouver) Co.,Ltd * Subsidiary 89,035,748.07 39.81 Above 5 years
Paklid Limited * Subsidiary 18,946,689.75 8.47 Above 5 years
Bekaton property Limited * Subsidiary 12,559,290.58 5.62 Above 5 years
Guangdong province Huizhou Luofu Hill mineral
Joint venture Above 5 years
water Co.,Ltd 10,465,168.81 4.68
Luofu Hill Travelling Corporation Un- related party 9,600,000.00 4.29 Above 5 years
Total 140,606,897.21 62.88
* The above subsidiaries were not included in the company’s consolidated financial statement. Refer to Note IV.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 NoteVI. 3. (5) for details of the other receivables which are due from related parities.
（7）There were no any accont reciviables which had been accured full or large proporation provisionl transferred
back in this accounting year.
（8）There were no any other receivables written-off in this accounting year.
（9）There were no any other receivables which had been terminated recognized in the accounting year.
（10）There were no any other receivables which had been Securitization in the accounting year.
6. Inventories
（1）Inventories classified by category
June 30, 2011 Dec 31, 2010
Amount Provision Amount Provision
Real estate developed products 439,979,327.13 -- 583,563,384.20 771,196.00
Real estate developing products 1,231,793,005.70 47,584,499.31 430,337,926.63 47,584,499.31
Real estate which are going to be developed 470,448,048.99 -- 1,215,632,063.00 --
46
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
Raw materials 829,153.09 -- 858,631.86 --
Finished products 621,570.18 278,891.91 584,324.05 278,891.91
Low-value consumable products 14,705.53 -- 44,640.76 --
Construction in progress 62,835,113.88 -- 42,552,323.21 --
Total 2,206,520,924.50 47,863,391.22 2,273,573,293.71 48,634,587.22
（2）Provision
Redutions
Dec 31, 2010 Additions June 30, 2011
Transferred back Written-off
Finished products 278,891.91 -- -- -- 278,891.91
ShuiYunTianYa, MingYuan 47,584,499.31 -- -- -- 47,584,499.31
HuaMin Building 771,196.00 -- -- 771,196.00 --
Total 48,634,587.22 -- -- 771,196.00 47,863,391.22
The amount written-off is due to selling of HuaMin Building.
（3）Real estate developed products
Finished time Dec 31, 2010 Additions Redutions June 30, 2011
Jinye Island villa No.1 1996 1,847,882.72 7,101.00 -- 1,854,983.72
Jinye Island Multi-tier villa 1997 36,637,324.65 -- 126,889.14 36,510,435.51
Jinye Island villa No.6 2007 34,471,819.41 -- 10,315,571.69 24,156,247.72
Jinye Island villa No.7 2007 7,255,236.88 -- 3,685,349.77 3,569,887.11
Jinye Island villa No.9 2009 41,011,242.53 3,195,260.32 13,603,698.50 30,602,804.35
Jinye Island villa No.10 2010 364,293,126.50 6,563,118.92 100,369,684.16 270,486,561.26
Jinye Island villa No.11 2008 35,416,795.47 66,455.63 10,710,050.61 24,773,200.49
HuangPuXinChun No.1 1994 121,283.88 -- -- 121,283.88
HuangPuXinChun No.2 2007 5,283,181.34 -- 424,197.04 4,858,984.30
HuaMin Building 1,725,534.83 -- 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 Buliding 671,820.67 -- -- 671,820.67
JiaoHu Roan Cyber Shop 2,045,172.56 106,748.17 -- 2,151,920.73
Wenjin warehouse 1-5 floor 13,453,649.46 54,246.15 -- 13,507,895.61
Hujing building 2-4 floor 12,616,011.52 -- 12,616,011.52 --
Real Estate building 11,025,444.77 -- -- 11,025,444.77
Wenjing Garden 3,818,939.87 -- -- 3,818,939.87
47
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
Finished time Dec 31, 2010 Additions Redutions June 30, 2011
Total 583,563,384.20 9,992,930.19 153,576,987.26 439,979,327.13
（4）Real estate developing products
Starting time Finished time Dec 31, 2010 June 30, 2011
DongHuDiJing Building 131,828,661.29 131,926,363.51
Jinye Island villa No.10 2008 2010 -- --
ShanTou JinHu Road Project 2008 53,912,169.04 56,708,689.88
ShuiYuTianYa, MingYuan 2007 223,098,533.75 238,600,780.14
ShanTou Fresh Peak Building 21,498,562.55 21,730,548.76
Shenfang Yufu -- 782,826,623.41
Total 430,337,926.63 1,231,793,005.70
The capitalisation amount of loans was Rmb 24,944,603.36 this accounting year. And last year was Rmb
8,190,000.00.
（5）Real estate which are going to be developed
Dec 31, 2010 Additions Reductions June 30, 2011
GuangMing New District project 1,215,632,063.00 1,637,947.18 746,821,961.19 470,448,048.99
Total 1,215,632,063.00 1,637,947.18 746,821,961.19 470,448,048.99
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 had be paid for in 2010. 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. The project of New District
No.A510-0131 has been being developed since February 2011 and an amount of RMB 746,821,961.19 was transferred
to Real estate developing products.
48
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
7. Long-term equity investments
（1）The informations of Long-term equity investments are as follows:
The
Measured Investment Proportion Voting right Dividend Accumulated
Name of investees Dec 31, 2010 Movement June 30, 2011 provisionaccrued
method cost (%) (%) in cash provision
this year
1.Associate investment
Shenzhen Ronghua JiDian
Equity method 1,250,000.00 1,604,690.04 -75,000.00 1,529,690.04 25 25 75,000.00 -- 1,076,954.64
Co.,ltd
Shenzhen Fresh Peak
property consultant Equity method 600,000.00 -- -- -- 20 20 -- -- --
Co.,Ltd
Shenzhen runhua
Equity method 1,445,425.56 1,445,425.56 -- 1,445,425.56 50 50 -- -- 1,445,425.56
automobile trading Co.,Ltd
Shenzhen Dongfang New
Equity method 15,000,000.00 -- -- -- 50 50 -- -- --
world store Co.,Ltd
2.Joint venture
investment
Guangdong province
Huizhou Luofu Hill Equity method 9,969,206.09 9,969,206.09 -- 9,969,206.09 Cooperation Cooperation -- -- 9,969,206.09
mineral water Co.,Ltd
Fengkai Xinhua Hotel Equity method 9,455,465.38 9,455,465.38 -- 9,455,465.38 Cooperation Cooperation -- -- 9,455,465.38
Jiangmen Xinjian Real
Equity method 9,037,070.89 9,037,070.89 -- 9,037,070.89 Cooperation Cooperation -- -- 912,537.16
Estate Co. Ltd.
Xian Fresh Peak Building Equity method 32,840,729.61 32,840,729.61 -- 32,840,729.61 Cooperation Cooperation -- -- 20,673,831.77
49
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
The
Measured Investment Proportion Voting right Dividend Accumulated
Name of investees Dec 31, 2010 Movement June 30, 2011 provisionaccrued
method cost (%) (%) in cash provision
this year
Co. Ltd.
DongYi Property Co.,Ltd Equity method 30,376,084.89 30,376,084.89 -- 30,376,084.89 Cooperation Cooperation -- -- 21,225,715.87
3.other equity
investment:
Shenzhen Shen Fang
Industrial Development Cost method 4,500,000.00 4,500,000.00 -- 4,500,000.00 100 100 -- -- 4,500,000.00
Co., Ltd
Shenzhen ZhongGang
Cost method 12,940,900.00 12,940,900.00 -- 12,940,900.00 68 68 -- -- 12,940,900.00
Haiyan Enterprise Ltd.
Shenzhen Real Estate
Consolidated Service Cost method 5,958,305.26 5,958,305.26 -- 5,958,305.26 100 100 -- -- 5,958,305.26
Co., Ltd.
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
Cost method 4,526.25 -- -- -- 75 75 -- -- --
(Vancouver) Co.,Ltd
Shenzhen Tefa Real
Estate Consolidated Cost method 8,180,003.63 8,180,003.63 -- 8,180,003.63 100 100 -- -- 8,180,003.63
Service Co., Ltd.
Shenzhen Xin Dongfang
Cost method 18,500,000.00 18,500,000.00 -- 18,500,000.00 100 100 -- -- 18,500,000.00
Store Ltd.
Shenzhen City Shenfang Cost method 2,680,000.00 2,680,000.00 -- 2,680,000.00 100 100 -- -- 2,680,000.00
50
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
The
Measured Investment Proportion Voting right Dividend Accumulated
Name of investees Dec 31, 2010 Movement June 30, 2011 provisionaccrued
method cost (%) (%) in cash provision
this year
Construction and
Decoration Materials Ltd.
Shenzhen Shenfang
Department Store Co. Cost method 10,000,000.00 10,000,000.00 -- 10,000,000.00 100 100 -- -- 10,000,000.00
Ltd.
Shenzhen CyberPort Co.,
Cost method 14,000,000.00 7,613,507.96 -- 7,613,507.96 70 70 -- -- --
Ltd
YunNan KunPeng Flight
Cost method 5,464,240.74 5,464,240.74 -- 5,464,240.74 25 25 -- -- --
service Co.,Ltd
ShenZhen ShenFang
BaoAn Cost method 20,000,000.00 20,379,525.68 -- 20,379,525.68 100 100 -- -- --
developmentCo.,Ltd
Shantou Fresh Peak
Cost method 68,731,560.43 58,547,652.25 -- 58,547,652.25 100 100 -- -- 58,547,652.25
Building
Guangdong Province
Fengkai Lain Feng
Cost method 121,265,000.00 56,228,381.64 -- 56,228,381.64 90 90 -- -- 56,228,381.64
Cement Manufacturing
Co., Ltd.
Total 403,306,248.73 306,828,919.62 -75,000.00 306,753,919.62 75,000.00 -- 243,402,109.25
51
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
（2）Impairment provision for Long-term equity investment are as follows:
Reductions
Name of investees Opening balance Additions Closing balance
Transferred back Written-off
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
henzhen 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., Ltd. 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 Materials 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 Manufacturing 56,228,381.64 -- -- -- 56,228,381.64
Shenzhen Runhua automobile trading Co.,Ltd 1,445,425.56 -- -- -- 1,445,425.56
Guangdong province Huizhou Luofu Hill mineral water Co.,Ltd 9,969,206.09 -- -- -- 9,969,206.09
Fengkai Xinhua hotel 9,455,465.38 -- -- -- 9,455,465.38
Jiangmen Xinjian Real Estate Co. Ltd. 912,537.16 -- -- -- 912,537.16
Xian Fresh Peak Property Management & Trading Co. Ltd. 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）
Dec 31, 2010 Additions Reductions June 30, 2011
Original cost
Buildings 749,156,283.42 -- 265,177.00 748,891,106.42
Land-use right 102,118,653.11 -- 2,367,539.87 99,751,113.24
total 851,274,936.53 -- 2,632,716.87 848,642,219.66
Accumulated depreciation
Buildings 223,223,354.26 10,495,091.70 158,428.83 233,560,017.13
Land-use right -- -- -- --
total 223,223,354.26 10,495,091.70 158,428.83 233,560,017.13
52
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
Provision for impairment losses
Buildings 14,128,544.62 -- -- 14,128,544.62
Land- use right 83,813,543.52 -- 1,943,150.44 81,870,393.08
total 97,942,088.14 -- 1,943,150.44 95,998,937.70
Book value
Buildings 511,804,384.54 501,202,544.67
Land-use right 18,305,109.59 17,880,720.16
Total 530,109,494.13 519,083,264.83
The amount of current year deprication is Rmb 10,495,091.70, compared with Rmb 11,070,734.92 last year.
There was no any provision for impairment losses accured in this accounting year.
The reduaction of Original cost and Accumulated depreciation of building is mainly due to sales. The amount of
building’s reductions of orginal cost is Rmb 265,177.00. And the amount of Accumulated depreciation is Rmb
158,428.83.
The reductions of land use right’s orginal cost and provision for impairment losses due to the change of rate used in
translation of foreign currencies.
Among the investment property, Rmb 436,495,488.21 of net book value of buliding was used as mortgage for the
company’s short-term/long-term loans. Refer to Note V.15 for details.
9. Fixed assets and Accumulated depreciation
Dec 31, 2010 Additions Reductions June 30, 2011
Cost
Buildings 117,201,722.56 -- -- 117,201,722.56
Transport equipment 19,453,567.83 703,027.77 2,550,000.00 17,606,595.60
Electronic equipment and others 13,873,179.44 606,599.20 179,439.85 14,300,338.79
Total 150,528,469.83 1,309,626.97 2,729,439.85 149,108,656.95
Accumulated depreciation
Buildings 63,052,074.46 1,698,171.54 -- 64,750,246.00
Transport equipment 12,947,351.97 939,736.05 2,435,000.00 11,452,088.02
Electronic equipment and others 9,870,803.40 342,814.83 43,255.50 10,170,362.73
Total 85,870,229.83 2,980,722.42 2,478,255.50 86,372,696.75
Provision for impairment loss
Electronic equipment and others 131,727.96 -- 131,727.96 --
53
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
Net book value
Buildings 54,149,648.10 52,451,476.56
Transport equipment 6,506,215.86 6,154,507.58
Electronic equipment and others 3,870,648.08 4,129,976.06
Total 64,526,512.04 62,735,960.20
As at June 30, 2011, net book value Rmb 29,105,780.13 of the Buildings was used as the short-term/long-term
loans’ mortgage (includin the long-term loans). Refer to Note V.15 for details.
There are no any temporary idle fixed assests.
There are no any fixed assests 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 assests held for sale.
10. Construction in progress
June 30, 2011 Dec 31, 2010
Book balance Provision for Net book Book Provision for Net book
impairment loss value balance impairment loss value
Elevator renovation 1,559,860.00 -- 1,559,860.00 520,000.00 -- 520,000.00
The increase of Construction in progress is due to sightseeing elevator renovation of Shenzhen Petrel Hotel Co. Ltd.
11. Intangible assets
Dec 31, 2010 Additions Amortization June 30, 2011
Original cost
Software 536,000.00 -- -- 536,000.00
Taxi license 6,368,000.00 -- -- 6,368,000.00
Total 6,904,000.00 -- -- 6,904,000.00
Accumulative amortization
Software 134,133.33 53,599.98 -- 187,733.31
Taxi license 556,600.00 83,790.00 -- 640,390.00
Total 690,733.33 137,389.98 -- 828,123.31
Net value
54
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
Dec 31, 2010 Additions Amortization June 30, 2011
Software 401,866.67 -- -- 348,266.69
Taxi license 5,811,400.00 -- -- 5,727,610.00
Total 6,213,266.67 -- -- 6,075,876.69
Provision for impairment loss -- -- --
--
Book value
Software 401,866.67 348,266.69
Taxi license 5,811,400.00 5,727,610.00
Total 6,213,266.67 6,075,876.69
12. Long-term deferred and prepaid expenses
Amortization Accumulative
Original cost Dec 31, 2010 Additions June 30, 2011
Current year amortization
Decoration costs 2,271,464.98 202,456.50 462,824.74 124,216.10 1,730,399.84 541,065.14
13. Deferred tax assets
The deferred tax asset which were already recognized
June 30, 2011 Dec 31, 2010
Assests impairment provision 11,896,124.83 11,896,124.83
Employee benefits payable 834,104.90 834,104.90
Unused operating losses against tax 5,026,369.99 5,026,369.99
Total 17,756,599.72 17,756,599.72
55
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
14. Impairment provision of assets
Reductions
Dec 31, 2010 Additions June 30, 2011
Transferred back Written-off
Provision for bad debts 197,080,290.87 -- -- -- 197,080,290.87
Inventories impairment provision 48,634,587.22 -- -- 771,196.00 47,863,391.22
Long-term equity investment
243,402,109.25
impairment provision -- -- -- 243,402,109.25
Investment property impairment
97,942,088.14
provision -- 1,943,150,44 -- 95,998,937.70
Fixed assets impairment provision 131,727.96 -- -- 131,727.96 --
Total 587,190,803.44 -- 1,943,150,44 902,923.96 584,344,729.04
The variation of impairment provision of assets is due to the change of rate used in translation of foreign currencies.
Transferrence back of inventoris is caused by selling of inventories.
15. Restrictions on the ownership of assets
Book value on June 30,
Items Mortagage period
2011
Deposits with bank Other monetary funds * 8,723,604.37
Inventories(work in process) ShuiYunTianYa, MingYuan land-use right 2009.12.08-2012.12.07 121,416,542.78
Investment Property ShenFang Square 2009.03.30-2020.06.01 282,544,497.82
Investment Property Petrel Building 2010.06.03-2020.06.01 81,211,530.13
Investment Property GuoShang North 2 floor 2007.05.29-2017.05.29 72,739,460.26
Investment Property Real estate Building 5-6 floor 2010.11.26-2013.11.26 7,492,175.18
Fixed assests ShenFang Square 46-48 floor 2010.08.23-2013.11.26 29,105,780.13
Total 603,233,590.67
* Other monetary funds of the Company is the security deposit that the company provided when properties
purchaser apply mortgage. Types consist in 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 perido 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.
56
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
16. Short-term borrowings
Nature June 30, 2011 Dec 31, 2010
Mortgage borrowings -- --
Credit borrowing 10,000,000.00 14,800,000.00
Total 10,000,000.00 14,800,000.00
The short-term borrowings were comprehensive credit loans by Shenzhen Zhen Tung Engineering Ltd from
Shenzhen branch of China CITIC Bank. The loan interest rate is 6.94%.
The company didn’t fail repaid any due short-term borrowings.
17. Accounts payable
June 30, 2011 Dec 31, 2010
Accounts payable 198,874,246.99 228,580,780.82
（1）The balance of accounts payable whose aging is more than 1 year is mostly the un-billing construction fee.
（2）No amount due to shareholders who hold 5% or more of the voting rights of the comanpy is included in the
above balance of AP.
（3）No amount due to related parities is included in the above balance of AP.
18. Advance from customers
The aging analysis of the company’s accounts receivable is as follow:
June 30, 2011 Dec 31, 2010
Aging
Amount Proportion% Amount Proportion %
Within 1 year 341,338,245.65 94.29 374,655,230.80 94.77
Above 1 year 20,677,040.09 5.71 20,677,040.09 5.23
Total 362,015,285.84 100.00 395,332,270.89 100.00
（1）The balance whose aging were more than 1 year were mostly the import and export agency business payment
which havn’t settle with the clients.
（2）No amount due to shareholders who hold 5% or more of the voting rights of the comanpy is included in the
above balance .
57
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
（3）No amount due to related parities is included in the above balance.
At June 30, 2011，the main items of Advances from customers are as follow:
Items Dec 31, 2010 June 30, 2011 Situation Aging
Jinye Island villa No. 6 11,917,000.00 26,401,448.00 Completed Within 1 year
Jinye Island villa No. 7 9,884,697.00 2,556,128.00 Completed Within 1 year
Jinye Island villa No. 9 18,447,800.00 9,724,100.00 Completed Within 1 year
Jinye Island villa No. 10 268,200,985.00 193,817,912.78 Completed Within 1 year
Jinye Island villa No. 11 10,502,424.00 23,254,591.00 Completed Within 1 year
Total 318,952,906.00 255,754,179.78
19. Employee benefits payable
Dec 31, 2010 Additions Reductions June 30, 2011
Wages , bonuses, allowances and subsidies 25,232,951.02 34,860,762.55 39,054,254.76 21,039,458.81
Staff welfare -- 3,159,008.22 2,505,337.58 653,670.64
Social securities 9,322,472.58 5,101,250.12 6,227,936.78 8,195,785.92
including：Pension insurance 1,486,464.08 2,808,256.55 2,767,643.05 1,527,077.58
Medical insurance 1,103,073.77 1,016,137.46 1,024,642.88 1,094,568.35
Unemployement insurance -- 101,456.58 97,837.75 3,618.83
Employement injury insurance -- 49,674.44 46,069.02 3,605.42
Maternity insurance -- 104,564.32 104,564.32 --
Housing Fund 6,732,934.73 1,021,160.77 2,187,179.76 5,566,915.74
Labor union and employee education funds 648,702.37 1,027,012.36 892,703.20 783,011.53
Compensation to employees for termination of
4,107,675.39
employment relationship 305,156.00 859,599.74 3,553,231.65
Others 27,000.00 1,571,577.69 1,598,577.69 --
Total 39,338,801.36 46,024,766.94 51,138,409.75 34,225,158.55
（1）No amount’s nature of the employee benefits payable were arrears of wage.
（2）The nature of Labor union and employee education funds was monetary benefits.
20. Taxes payable
June 30, 2011 Dec 31, 2010
Value added tax (“VAT”) -4,850,020.20 -4,293,362.47
58
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
Business tax -16,488,960.94 -15,541,233.94
Construction tax -825,360.27 -217,617.34
Education surcharge -370,560.34 -134,881.85
Embankment Protection Fee -242,042.03 -227,106.05
Property tax 1,728,894.02 1,772,048.29
Land value added tax -9,244,225.76 -2,124,986.64
Corporate Income tax 1,638,366.84 6,490,711.85
Personal income tax 413,822.10 484,123.71
Others -246,179.93 458,846.00
Total -28,486,266.51 -13,333,458.44
The balance of taxes payable decreased by Rmb 15,150 thousands, 113.64%. The decrease due to that the business
tax surcharges of JinYe Island project is prepaid in 5% and Land value added tax according to the advance aggregated
sales price.
21. Interests payable
June 30, 2011 Dec 31, 2010
Shenzhen Investment Shareholding Co.，Ltd 16,535,277.94 16,535,277.94
Total 16,535,277.94 16,535,277.94
Please refer to Note VI.3. (2) for details of loans borrowed from the company’s controlling shareholder - Shenzhen
Investment Shareholding Co.，Ltd.
And the balance of interests payable due to Shenzhen Investment Shareholding Co.，Ltd. were accured from the
loans borrowed from 2007 to 2010.
22. Other payables
June 30, 2011 Dec 31, 2010
Other payables 291,100,971.96 302,144,393.62
（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:
June 30, 2011 Dec 31, 2010 Nature of other payables
Shenzhen Investment Holdings Co., Ltd. 63,848,819.24 65,848,819.24 Loans and guarantee fees
59
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
（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 Note VI.3. (2) for details of the amount owed to related parties.
23. Non-current liabilities within one year
June 30, 2011 Dec 31, 2010
Long-term loans within one year
Mortgage loans 60,077,571.34 29,423,411.10
Total 60,077,571.34 29,423,411.10
(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:
60
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
lender Maturity Date Currency Rate（%） June 30, 2011
Shenzhen Rural Commercial Bank 2011.12.20 RMB 5.40 12,000,000.00
ShangHai PuDong Development Bank
2011.12.20 RMB 5.40
ShenZhen Branch 36,500,000.00
Nanyang Commercial Bank shenzhen
2011.12.20 RMB 5.40
Branch 5,857,571.34
Industrial and Commercial Bank of China
2011.12.20 RMB 4.86
Shenzhen Branch 5,720,000.00
Total 60,077,571.34
24. Long-term Borrowings
Loans conditions June 30, 2011 Dec 31, 2010
Mortgage loans 573,427,025.34 386,126,531.44
Guarantee loans 500,000,000.00 700,000,000.00
Total 1,073,427,025.34 1,086,126,531.44
Including.：non-current liability within one year 60,077,571.34 29,423,411.10
long term loans 1,013,349,454.00 1,056,703,120.34
The informations for the ending balance of long-term loans owed to each lender are as follows:
Lender Currency June 30, 2011 Conditions Maturity Date
Shenzhen Rural Commercial Bank Shangbu Branch RMB 106,000,000.00 Mortgage 2013.11.26
Shenzhen Rural Commercial Bank Shangbu Branch RMB 95,000,000.00 Mortgage 2013.08.23
Nanyang Commercial Bank shenzhen branch RMB 40,147,025.34 Mortgage 2017.05.29
ShangHai Bank Shenzhen Branch* RMB 500,000,000.00 Guaranteed 2012.12.07
ShangHai PuDong Development Bank
RMB Mortgage 2012.03.29
ShenZhen Branch 38,000,000.00
Industrial and Commercial Bank of
RMB Mortgage 2020.06.01
China Shenzhen Branch 94,280,000.00
Bank of Communciation ShanTou Branch RMB 200,000,000.00 Guaranteed 2012.08.03
Total 1,073,427,025.34
* The loans borrowed from ShangHai Bank 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 Note V.15 for details.
61
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
25. Long-term payable
June 30, 2011 Dec 31, 2010
Maintenance fund 10,486,005.46 9,779,108.83
26. Share capital
Dec 31, 2010 Additions Reductions June 30, 2011
Total shares 1,011,660,000 -- -- 1,011,660,000
27. Capital reserve
Dec 31, 2010 Additions Reductions June 30, 2011
Share 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
28. Surplus reserve
Dec 31, 2010 Additions Reductions June 30, 2011
Reserve fund 4,974,391.15 -- -- 4,974,391.15
29. Retained Earnings
Dec 31, 2010 Additions Reductions June 30, 2011
Retained Earnings -577,169,009.54 64,300,859.86 -- -512,868,149.68
30. Minority Interest
Proportion of minority
Name of investees June 30, 2011 Dec 31, 2010
shareholdings %
Fresh Peak Investment Ltd. 45 -104,535,306.38 -104,535,306.38
Barenie Co. Ltd. 20 -2,029,582.32 -2,029,582.32
Great Wall Estate Co., Inc 30 -20,955,958.75 -21,520,509.77
Total -127,520,847.45 -128,085,398.47
31. Turnover and cost of sales
62
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
(1) Turnover and cost of sales
1-6/2011 1-6/2010
Core operating income 551,316,796.94 514,325,139.40
Other operating income 2,603,007.03 4,501,552.67
Gross Income 553,919,803.97 518,826,692.07
Cost of sales 381,699,513.43 338,485,970.34
(2) Core operating Income（classfied by industry）
Operating Income Operating Cost Operating Margin
Industry
1-6/2011 1-6/2010 1-6/2011 1-6/2010 1-6/2011 1-6/2010
Real estate 274,744,823.00 318,604,350.04 140,624,745.69 166,107,938.16 134,120,077.31 152,496,411.88
Construction 187,799,797.42 118,073,356.03 176,321,179.81 111,355,323.27 11,478,617.61 6,718,032.76
Leasing 28,301,072.75 25,856,083.66 13,384,825.80 15,160,405.66 14,916,246.95 10,695,678.00
Property
management 51,349,228.03 44,425,439.15 41,508,369.19 36,648,912.66 9,840,858.84 7,776,526.49
Hotel and others 11,724,882.77 11,867,463.19 9,860,392.94 9,213,390.59 1,864,489.83 2,654,072.60
Total 553,919,803.97 518,826,692.07 381,699,513.43 338,485,970.34 172,220,290.54 180,340,721.73
（3）Core business（classified by district）
Operating Income Operating Cost Operating Margin
District
1-6/2011 1-6/2010 1-6/2011 1-6/2010 1-6/2011 1-6/2010
Domestic:
GuangDong
Province 553,586,209.99 518,493,114.95 381,699,513.43 338,485,970.34 171,886,696.56 180,007,144.61
Overseas： 333,593.98 333,577.12 -- -- 333,593.98 333,577.12
Total 553,919,803.97 518,826,692.07 381,699,513.43 338,485,970.34 172,220,290.54 180,340,721.73
（4）The informations of the top 5 clients are as follows:
1-6/2011
Client
Amount Proportion%
Shenzhen FutianDistrict Building Works Bureau 58,620,000.00 10.58
Shenzhen Kaitaishengye Investment Co., Ltd. 27,800,000.00 5.02
Shenzhen Jiangong Group Co., Ltd
11,420,000.00 2.06
Individual-Zhang Lihua
7,905,500.00 1.43
Individual-Renhong
7,905,500.00 1.43
Total 113,651,000.00 20.52
63
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
32. Business Taxes and Surcharges
1-6/2011 1-6/2010
Business tax 23,480,726.07 23,365,570.12
City maintenance and construction tax 992,846.83 240,630.34
Educational surcharge 461,167.12 414,098.21
Property tax 3,157,056.99 3,479,836.34
Land value added tax 20,163,634.52 27,780,088.67
Embankment Protection Fee 1,063,041.75 331,810.34
Total 49,318,473.28 55,612,034.02
33. Selling and distribution expenses
1-6/2011 1-6/2010
Employee benefits 616,512.13 936,466.55
Advertising expenses 2,181,140.00 3,126,351.79
Entertainment expenses 214,008.90 221,407.10
Others 1,211,917.59 908,842.00
Total 4,223,578.62 5,193,067.44
34. General and administrative expenses
1-6/2011 1-6/2010
Employee benefits 15,234,153.28 13,817,872.40
Depreciation and amortizaon 2,773,247.92 2,718,085.01
Entertainment expenses 2,311,246.85 1,975,532.41
Others 10,858,531.70 13,750,283.22
Total 31,177,179.75 32,261,773.04
35. Finance expenses
1-6/2011 1-6/2010
Interest expenses 32,183,842.67 39,125,739.31
Less：capitalization interest 24,944,603.36 8,190,000.00
Less: interest income 1,112,553.32 617,242.05
Exchange losses -- 1,771,437.40
Less: exchange gains 541,375.61 1,473,280.54
Others 125,243.70 965,068.45
Total 5,710,554.08 31,581,722.57
The financial expenses increased by 46.76%. The increase is due to the accrued interest expenses caused by
capitalization of interest.
36. Gain from changes of fair value
Source 1-6/2011 1-6/2010
64
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
Trading financial assets 25,479.05 -24,785.75
Including：gain from changes of fair value of derivative
financial instruments -- --
Trading financial liability -- --
Investment property measured at fair value -- --
Total 25,479.05 -24,785.75
37. Investment income
（1）The details of investment income are as follows:
1-6/2011 1-6/2010
The investment income yielded from the long-term equity
appilied with the cost method -- 12,586,609.32
The investment income yielded from the long-term equity
appilied with the equityt 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 assest held for trading -39,400.77 116,843.92
Others 100,000.00 100,000.00
Total 60,599.23 22,440,060.89
RMB 9,636,607.65 was yielded from the transference of 50% equity of Shenzhen Shatoujiao Nantian Store
（2）The investment income yielded from the long-term equity appilied with the cost method
Investee 1-6/2011 1-6/2010 Reason of the movement
No dividend this year because of
KunShanDiaoFeng electrity Co.,Ltd
-- 12,586,609.32 liquidation last year
Total -- 12,586,609.32
38. Non-operating income
1-6/2011 1-6/2010
1.Total gain on disposal of non current assets 237,717.96 --
including：Gain on disposal of fixed assets 178,267.96 --
2.Penalty income 800,000.00 78,762.40
3.Compensation income 95,312.00 --
4.Others 4,991.05 44,537.32
65
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
Total 1,138,021.01 123,299.72
39. Non-operating expenses
1-6/2011 1-6/2010
1.Total losses on disposal of non current assets 38,036.39 14,409.50
including：Loss on disposal of fixed assets -- 14,409.50
2.Penalty expense 367.20 7,858.23
3.Donation expenses 64,000.00 68,000.00
4.Compensation expense* 18,810.00 --
5.Others 62,400.00 10,600.00
Total 183,613.59 100,867.73
40. Income tax expenses
1-6/2011 1-6/2010
Current year income tax expenses 18,548,556.91 13,988,830.51
Deferred income tax expenses -- --
Total 18,548,556.91 13,988,830.51
41. Calculation of basic earnings per share and diluted earnings per share
1-6/2011 1-6/2010
Net profit for parent company’s shareholders 64,300,859.86 64,109,890.28
Weighted average number of ordinary shares issued 1,011,660,000.00 1,011,660,000.00
Basic earnings per share 0.0636 0.0634
Diluted earnings per share 0.0636 0.0634
42. Other comprehensive income
ITEM 1-6/2011 1-6/2010
1. The gain/loss yeild from the disposal of financial assests avaible for sale -- --
Less：the effect of income tax of disposal of financial assests avaible 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 comprehensie income applied with the
-- --
equity method
less：the effect of income tax of The amount of which the investee other
-- --
comprehensie income applied with the equity method
66
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
ITEM 1-6/2011 1-6/2010
the amount of which had been transferred in gain and loss which had been
-- --
counted in other comprehensive income prior period
Total -- --
3. The gain or loss yiele from the cash flow hedging instrument -- --
less：the effect of the gain or loss yiele 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
the adjustment of the first recognized amout which had been transferred in
-- --
hedging instrument
Total -- --
4. The differencs of translation of foreign financial statement 1,943,257.60 22,640.46
less：the net amount of dealing with the overseas operationg gain or loss -- --
Total 1,943,257.60 22,640.46
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 -- --
Sumtotal 1,943,257.60 22,640.46
43. Cash flow statements
（1）Cash received from operating activities
1-6/2011 1-6/2010
Interest income 1,0528,891.34 962,273.50
Mortgage and deposits 2,768,329.00 40,476,735.71
Correspondent payment 30,782,659.92 47,258.44
Maintenance fund 2,050,062.13 2,070,673.06
Others 4,345,313.26 39,890,171.12
Total 50,475,255.65 83,447,111.83
（2）Cash paid for other operating activities
1-6/2011 1-6/2010
67
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
Cash paid to general and administrative expenses 9,826,214.64 11,347,864.88
Cash paid to operating expenses 330,533.61 3,888,613.50
Mortgage and guarantee 13,105,008.00 25,180,736.06
Porperty license fee and survey fee 132,830.49 2,769,095.00
Other correspondent payment 9,805,612.37 4,397,359.64
Others 23,705,747.94 26,581,069.19
Total 56,905,947.05 74,164,738.27
（3）Cash paid for goods and serveices
1-6/2011 1-6/2010
Cash paid for goods and serveices 298,716,478.48 545,456,789.91
The cash decreased Rmb 246,740 thousand, 45.24%. The decrease was due to construction cost paid.
（4）Cash received from borrowings
1-6/2011 1-6/2010
Cash received from borrowings 10,000,000.00 364,800,000.00
Cash repaid the borrowings
1-6/2011 1-6/2010
Cash repaid the borrowings 27,961,200.01 348,117,983.77
（5）Cash payments relating to other financing activities
1-6/2011 1-6/2010
Guarantee fees for bank loan 2,000,000.00 --
(6) Supplementary cash flow statement of the company
Supplementary information 1-6/2011 1-6/2010
1. Reconciliation from the net profit to the cash flows from operating activities
Net profit 64,282,433.60 64,141,001.28
Add：Provisions for assets impairment -- --
Depreciation of fixed assets and investment property 13,475,814.12 13,818,749.79
Amortization of intangible assets 137,389.98 115,590.00
Long-term deferred and prepaid expenses amortization 124,216.10 81,222.60
Losses on disposal of fixed assets, intangible assets and other long-term
13,734.50
assets（gains used“-”） --
68
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
Supplementary information 1-6/2011 1-6/2010
Scrapping of fixed assets losses（gains used“-”） -- --
Exchange of fair value losses（gains used“-”） -25,479.05 24,785.75
Finance expenses （gains used“-”） 7,489,726.71 38,191,264.49
Investment losses（gains used“-”） -60,599.23 -22,440,060.89
Decrease in deferred tax assets（gains used“-”） -1,524,469.31 -1,524,469.31
Increase in deferred tax liabilities（gains used“-”） -- --
Decrease in inventories（gains used“-”） 66,281,173.21 39,967,798.36
Decrease in operating receivables （gains used“-”） -4,015,032.60 3,719,253.25
Increase in operating payables（gains used“-”） -63,365,741.53 -204,324,705.68
Others -- --
Net cash flows from operating activities 84,323,901.31 -66,691,366.55
2. Investment and financing activities not involving cash -- --
3. Net increase/ (decrease) in cash and cash equivalents
Cash at end of the year 408,824,260.56 325,004,331.92
Less: cash at beginning of the year 379,720,636.21 386,102,533.51
Add：cash equivalents at end of the year -- --
Less: cash equivalents at beginning of the year -- --
Net increase in cash and cash equivalents 29,103,624.35 -61,098,201.59
VI. Related parties’ transactiom
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 influences, constitutes a related party.
2. Related party relationships
(1) The information of the company’s controlling shareholder is as follows:
Nature Equity
Place of Legal Voting
Controlling Enterprise of Registered Registered Holding
Relationship registration represen rights
shareholder type business code capital proporat
tative %
and ion%
69
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
principal
activities
Shenzhen
Guangdon Fan
Investment controlling State-owned RMB 5.60
g province Mingch * 76756642-1 63.55 63.55
Shareholdin shareholder Enterprises billion
Shenzhen un
g Limited
* Guarantees for Municipal State-owned enterprises; stated-owned shares management excluded from the
enterprises of direct control by SAC; on assets restructurings of controlled enterprises as well as its capital operation;
investment; Other businesses authorized by city SAC.
(2) The informations of the company’s subsidiaries. Refer to Note IV.1 for details.
70
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
(3) The informations of the joint venture and Associate
Registered Equity
Legal Place of
Name of Enterprise Nature of Registered capital Holding Voting
represen registrati
investees type business code (in ten thousand proporation rights%
tative on
yuan) %
1. Associate
investment:
Elevator,
air-conditio
Shenzhen Llimited Zheng
n, Shen
ronghua liability Zhong 19219691-6 500 25 25
water-electr zhen
JiDian Co.,ltd company Qing
icty fixing
and sales
Shenzhen
Fresh Peak Llimited Prope
Zhong Shen
property liability rty sales 19221684-1 300 20 20
XinFa zhen
consultant company and rental
Co.,Ltd
Domestic
Shenzhen
car
runhua Limited
sales( not LiXue Shenzhe
automobile liability 19220483-2 500 50 50
includen Min n
trading company
little car),
Co.,Ltd *①
moto
Shenzhen
Dongfang Limited Domestic
PengNai Shenzhe
New world liability trade/mater 19222948-2 3,000 50 50
Dian n
store Co.,Ltd company ial supply
*②
2. Joint
venture
investment:
Guangdong Water and
Cooperative YangHu Cooperati
province other Boluo 602 Cooperation
Enterprises aiYu on
Huizhou products
71
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
Registered Equity
Legal Place of
Name of Enterprise Nature of Registered capital Holding Voting
represen registrati
investees type business code (in ten thousand proporation rights%
tative on
yuan) %
Luofu Hill supply
mineral water
Co.,Ltd *③
Fengkai
Cooperative Tourism, Feng Cooperati
Xinhua Hotel Cooperation
Enterprises Restaurant kai on
*④
Jiangmen
Property
Xinjian Real Cooperative LuoJinX Jiangme Cooperati
developing USD660 Cooperation
Estate Co. Enterprises Xing n on
and sales
Ltd.*⑤
Developing
and
Xian Fresh
Cooperative operating LiangW Xi’ Cooperati
Peak Building 62390802-3 HKD3,000 Cooperation
Enterprises Xi’an trade eiGuo an on
Co. Ltd.*⑤
building
DongYi Private Property
Hong Cooperati
Property owned developme HKD100 Cooperation
kong on
Co.,Ltd *⑤ enterprises nt and sales
72
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
*① Shenzhen runhua automobile trading Co., Ltd
The operting 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 Dec 31,
2010, the book value of the investment account of the company is zero. According to the assosicate agreement, the
company didn’t have the ability to bear the additional loss.
*② Shenzhen Dongfang New world store Co., Ltd
The operting 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 Dec 31,
2010, the book value of the investment account of the company is zero. According to the assosicate agreement, the
company didn’t have the ability to bear the additional loss.
*③Guangdong province Huizhou Luofu Hill mineral water Co., Ltd
The operting 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 Dec 31,
2010, 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.
*④Fengkai Xinghua Hotel
The FengKai XingHua Hotel was announced bankruptcy by the Guangdong Province Zhaoqing City second-middle
intermdediate Peoples’ court with the document (2002) ZHFJPZ No.2. And the corporation had finished the bankruptcy
procedure. At Dec 31, 2010, 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 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 properties developing projects.
Because the projects had been stopped, the joint ventures had stopped operating actvities for many years. And these
corporations also stopped operation for many years and didn’t prepare financial statements. The company had accrued
corresponding privision of the investment of joint ventures. Refer to NotesV.7. (2) for details.
The above joint ventures and assosicates which number were *①, *②, *③, *④, *⑤ had stopped operating
73
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
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. Accoring to the principle
“Enterprise Accounting Standard – No.2 Long-Term Equity Investment”, the company had accured 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 conpany is still zero.
3. Related parties transactions
(1)Borrowings from related parties
June 30, 2011 Dec 31, 2010
Other payables - Shenzhen Investment Holding Co.,Ltd 63,848,819.24 63,848,819.24
Total 63,848,819.24 63,848,819.24
（2）The Assurance of the relate parities
Secured
Assurance Provider Secured party Relationship Secured period
amount
Shenzhen Special Economic
Shenzhen Iinvestment Holding Controlling
Zone Real Estate and 200,000,000 2009.12.08to 2012.12.07
Co.,Ltd subsidiary
Properties (Group) Co., Ltd
Shenzhen Special Economic
Shenzhen Iinvestment Holding Controlling
Zone Real Estate and 100,000,000 2010.03.23to 2012.12.07
Co.,Ltd subsidiary
Properties (Group) Co., Ltd
Shenzhen Special Economic
Shenzhen Investment Holding Controlling
Zone Real Estate and 100,000,000 2010.05.24 to2012.12.07
Co.,Ltd subsidiary
Properties (Group) Co., Ltd
Shenzhen Special Economic
Shenzhen Investment Holding Controlling
Zone Real Estate and 100,000,000 2010.06.30 to2012.12.07
Co.,Ltd subsidiary
Properties (Group) Co., Ltd
The Company paid RMB 2,000 thousand to its controlling shareholder, Shenzhen Investment Holdings Limited for
the bank loan guarantee fee in the period.
74
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
（3）Receivables and Payables of related parties
June 30, 2011 Dec 31, 2010
Name of related parties
Amount Propotion% Amount Propotion%
Other receivables Luofu Hill Mineral Water Co.,Ltd 10,465,168.81 4.68 10,465,168.81 4.63
Shenzhen Runhua automobile trading Co.,Ltd 3,072,764.42 1.37 3,072,764.42 1.36
Canada GreatWall（vancouver）Co.,Ltd 89,035,748.07 39.81 89,035,748.07 39.37
Bekaton Property Limited 12,559,290.58 5.62 12,559,290.58 5.55
Paklid Limited 18,946,689.75 8.47 18,946,689.75 8.38
Shenzhen Shenfang Department Store Co. Ltd. 237,648.82 0.11 189,179.82 0.08
Shenzhen Real Estate Consolidated Service Co., Ltd. 1,096,489.22 0.49 927,136.22 0.41
Shenzhen City Shenfang Construction and Decoration
Materials Ltd. 8,327,180.71 3.72 8,327,180.71 3.68
Shenzhen RongHua JiDian Co.,Ltd 475,223.46 0.21 475,223.46 0.21
Xi’an Fresh Peak property management& Trading Co.,Ltd 8,419,205.19 3.76 8,419,205.19 3.72
Accounts receivableShenzhen Fresh Peak property consultant Co.,Ltd 1,133,250.59 3.11 1,155,484.87 3.24
Other payables Shenzhen Tefa Real Estate Consolidated Service Co., Ltd. 598,012.16 0.21 598,012.16 0.20
Shenzhen Shen Fang Industrial Development Co., Ltd 1,534,854.91 0.53 1,534,854.91 0.51
Shenzhen ZhongGang Haiyan Enterprise Ltd. 135,853.52 0.05 135,853.52 0.04
Shenzhen Dongfang New world store Co.,Ltd 902,974.64 0.31 902,974.64 0.30
Shenzhen Xin Dongfang Store Ltd. 1,394,704.21 0.48 1,394,704.21 0.46
Guangdong Province Fengkai Lain Feng Cement Manufacturing
Co., Ltd. 1,869,348.00 0.64 1,870,577.00 0.62
Shenzhen Cyber Port Co., Ltd 7,949,749.26 2.73 7,949,749.26 2.63
Shenzhen shenfang group BaoAn developing Co.,Ltd 20,852,042.10 7.16 19,767,689.82 6.54
Shenzhen Investment Holding Co.,Ltd 63,848,819.24 21.93 65,848,819.24 21.79
Interest payable Shenzhen Investment Holding Co.,Ltd 16,535,277.94 100.00 16,535,277.94 100.00
VII. Exchange of non-monetary assets
No informations of exchange of non-monetary assets are needed to disclose in mid-2010.
VIII. Share-based payment
There are no any share-based payment contracts in mid-2010.
IX. Debt restructurings
No informations of Debt restructurings are needed to disclosure in mid-2010.
75
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
X. Contingencies
1. Significant litigation
（1） Guoxing Building Lawsuit
On 21 March 1997, the company signed 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 68% of GuoXing Building project to BaoXing with the price- Rmb
145,000 thousand. And also, the construction cost – Rmb 15,000 thousands that the company owed to GuoXing Building
were undertaken by BaoXing. But after paying Rmb 45 million to the company, Bao Xing hadn’t paid the remaining
equity transferring fund- Rmb 100,000 thousand and the construction cost – 15,000 thousand. 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 judgement remained unchanged.
On 2008-2-22, 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 pay for the company Rmb 2,500 thousand and
transferred the land-use right of N0. 1514 room (size: 343.95 square meters) of Shenzhen international exchange plaza
instead. In 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, 2011, the amount of RMB 66,201,645.33 had been called back on the case 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 – Hongkong Fresh Peak Co., Ltd was the
wholly owned subsidiary of the company. And the Hongkong Fresh Peak Co., Ltd contributed 84% of the Fresh Peak
Company’s share- capital in cash. And Xi’an trade building which was the enterprise under the Xi’an Joint Commission
76
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
on Commerce and Trade contributed 16% of the Fresh Peak Company’s share- capital with the land-use right. The core
business was property development. And the project was Xi’an Trade Building. The project was started on 1995-11-28.
But the project had been stopped in 1996 because of the two parties differences on the operating policy of the project.
In 1997, the Xi’an government withdrew the Xi'an Fresh Peak investment project compulsively and assignned the
project to Xi’an Business Tourism Co., Ltd (hereinafter referred to as “Business Tourism Company”). But the two parties
had insulted a lawsuit on compensation. The ShanXi Province High Peoples Court made a judgement “(2000) SJ-CZ
No.25”. The judgement was as follows: 1. Business Tourism Company had to 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.
Untill 31 December 2010, the amount of RMB 15,201,000.00 had been called back. Now the case is proceeding and
there was no any new substantive progress in the reporting period.
As at 6/30/2011, 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”) on
Luofu Hill Tourism project in early years. The company instituted legal proceedings against Tourism Company because
the Tourism Company failed to carry out the agreement. The judgement which issued by GuangDong Province High
Peoples Court on 2007-12-21 was as follows:
①Tourism Company had to pay for Rmb 9,600 thousand to the company in 10 days after the judgment entering into
force.
②Tourism Company should paid the interests for the occupation of Rmb 9,600 thousands with The People's Bank
of China similar loans rate in 10 days after the judgment entering into force. Of which, the interests for the occupation of
Rmb 4,400 thousand were caluated from 1986-5-1 to the day the Tourism company paid off the debt. The interests for
the occupation of Rmb 4100 thousand were caluated from 1988-2-1 to the day the Tourism Company paid off the debt.
The interests for the occupation of Rmb 1,100 thousand were caluated from 1989-6-15 to the day the Tourism Company
paid off the debt. The interest of Rmb 8,580 thousand that the Tourism Company had paid for to the company can be
deducted from the interest payable.
③Luofushan Administration Committee had to undertake one third of the debts which Luofushan Tourism was
77
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
unable to repay;
④Interest 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;
⑤Tourism company undertaked all the litigation fees (RMB 167,714.00). The expense of first instance and the
second instance had to pay to the company during the duration of payment.
There was no any new substantive progress after the judgement announced. The company applied the GuangDong
Province High people’s Court to supervise implementation in December 17, 2009. The GuangDong Province High
people’s Court issued a document “(2009) YGYZDZ No. 67 to Huizhou intermediate people’s court and asked the
Huizhou intermediate people’s court to close this case in 3 months after receiving the document. Until 2010-3-17,
Huizhou intermediate people’s court had finished the evaluation of the land use right of the executor.On 13th October
2010, the land-use right was acutioned by the national resource department at the price of RMB 51,200 thousand.
According to the requirements of Huizhou Municipal Intermediate People's Court, Surveying and Mapping unit
from Boluo Land Bureau have surveyed and mapped Luofu Hill Tourism site that was sealed. The drawings were
submitted to Huizhou Municipal Intermediate People's Court in the end of June 2011.
（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 – Hongkong Fresh Peak Co., Ltd was the wholly
owned subsidiary of the company. And the equity Hongkong Fresh Peak Co., Ltd held was 93.1%. The core businss of
TongXin Company was to develop Shenyang Fresh Peak Businedd Plaza. TongXin Company refinanced Rmb 13,140
thousand from China Agriculture Bank ShenYang branch. And the company provided assurance for the loan.Because
TongXin Company failed to repay 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
repay the loans and interests.
On 25 January, 2008, Internationl economic trade Arbitration commission HuaNam branch made a judgement.
According to the judgement, TongXin Company had to repaid Rmb 14,422,440.22 and interests to the company. Now
the case is proceeding. Untill 27 January, 2010, 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 2011, the balance of guarantees is as follows:：
78
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
Amount
Currency
(in ten thousand Yuan)
Internal guarantees in the group RMB 20,000
Guarantees for outstanding mortgage RMB 872
XI. Commitments
Until 6/30/2011, the Company had the commitments of the contracts which had been signed but not carried out.
Mostly were construction contracts. And the total amount of capital item expense and investment were RMB 84.52
millions. The money had to be paid for until the other partner of contract carried out the responsibilities and liabilities.
XII. Notes to items of the parent company financial statements
1. Accounts receivable
（1）The symbol of credit risk identified by customers categories
June 30, 2011 Dec 31, 2010
Provision of Provision of
Book balance Book balance
bad debts bad debts
Amount Proportion % Amount Proportion % Amount Proportion % Amount Proportion %
Category
-- -- -- -- -- -- -- --
1
Category
100.00
2 11,883,920.04 100.00 6,301,854.02 100.00 11,996,527.49 100.00 6,301,854.02
Total 11,883,920.04 100.00 6,301,854.02 100.00 11,996,527.49 100.00 6,301,854.02 100.00
Category 1: refers to accounts receivable with significant individual amount and separate impairment test.
Category 2: refers to accounts receivable which is unsignificant indivually but according to the characteristics of the
portfolio after portfolio of risky accounts receivable and separate impairment test.
（2）Refers to accounts receivable which is unsignificant indivually but according to the characteristics of the
portfolio after portfolio of risky accounts receivable and separate impairment test.
Book balance Provision of bad debts Proportion % Notes
A separate provision is established according to the
House pay to be
recoverability of each receivales with long aging and
collected
11,883,920.04 6,301,854.02 53.03 little retrievability.
（3）The aging of accounts receivable by categories
79
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
June 30, 2011 Dec 31, 2010
Aging
Book balance Proportion % Provision Book balance Proportion % Provision
Within 1 year -- -- -- -- -- --
1 to 2 year -- -- -- -- -- --
2 to 3 year -- -- -- -- -- --
Above 3 years 11,883,920.04 100.00 6,301,854.02 11,996,527.49 100.00 6,457,254.02
Total 11,883,920.04 100.00 6,301,854.02 11,996,527.49 100.00 6,457,254.02
(4) No accounts receivable was written-off in the report period.
(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 Note VI.3. (5) for details of the accounts receivables which is due to related parities.
(7) There were no any acconts receivables which had been terminated recognized.
(8) There were no any accounting receivable which had been Securitization.
2. Other receivables
（1）The symbol of credit risk identified by customers categories
June 30, 2011 Dec 31, 2010
Book balance Provision of bad debts Book balance Provision of bad debts
Amount proportion % Amount proportion % Amount proportion % Amount proportion
Category
1 1,124,799,057.84 97.42 849,851,353.28 98.45 1,124,799,057.84 98.61 849,851,353.28 98.45
Category
2 29,785,744.94 2.58 13,341,826.74 1.55 15,877,540.65 1.39 13,341,826.74 1.55
Total 1,154,584,802.78 100.00 863,193,180.02 100.00 1,140,676,598.49 100.00 863,193,180.02 100.00
Category 1: refers to accounts receivable with significant individual amount and separate impairment test.
Category 2: refers to accounts receivable which is unsignificant indivually but according to the characteristics of the
portfolio after portfolio of risky accounts receivable and separate impairment test.
(2) Refers to other receivable which is unsignificant indivually but according to the characteristics of the portfolio
after portfolio of risky accounts receivable and separate impairment test.
Book balance Provision of bad Proportion % Notes
80
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
debts
Other receivables between subsidiares
A separate provision is established according
that are not concluded in consolidated
to the recoverability of each receivales with
statement 9,598,940.50 9,375,225.50 97.67
long aging and little retrievability
Others 20,186,804.44 3,966,601.24 19.65
Total 29,785,744.94 13,341,826.74 44.79
（3）The aging of other receivables:
June 30, 2011 Dec 31, 2010
Aging
Amount Proportion % Provision Amount proportion % Provision
Within 1 year 10,458,295.12 0.91 7,786,529.93 0.68 --
1 to 2 year 6,972,587.40 0.60 8,853,096.41 0.78 --
2 to 3 year 74,049,321.23 6.41 115,288,327.28 10.11 --
Above 3 years 1,063,104,599.03 92.08 863,193,180.02 1,008,748,644.87 88.43 863,193,180.02
Total 1,154,584,802.78 100.00 863,193,180.02 1,140,676,598.49 100.00 863,193,180.02
（4）The informations of accounts receivables of the company's top five debtors are as follows:：
Name Relationship Amount Proportion % Aging
2,016,110.69 0.17 Within 1 year
38,031.18 0.00 1 to 2 year
Fresh Peak Enterprise Co., Ltd. Subsidiary
2,301,063.25 0.20 2 to 3 year
567,123,328.59 49.12 Above 3 years
20,338,001.45 1.76 Within 1 year
Shenzhen ShenFang Group LongGang 1,999,411.25 0.17 1 to 2 year
Subsidiary
Development Co.,Ltd 88,799,337.69 7.69 2 to 3 year
110,801,652.65 9.60 Above 3 years
American Great Wall Co.,Ltd Subsidiary 101,379,954.81 8.78 Above 5 years
358,028.54 0.03 Within 1 year
Fresh Peak Holdings Ltd. Subsidiary 61,674.32 0.01 2 to 3 year
30,187,104.95 2.61 Above 3 years
Canada Great Wall(vancouver) Co.,Ltd Subsidiary 89,035,748.07 7.71 Above 3 years
Total 1,014,439,447.44 87.86
（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 other receivables.
（6）Refer to VI.3. (5) for details of the other receivables which due from related parities.
81
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
（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
June 30, 2011 Dec 31, 2010
Amount Provision for declines Amount Provision for declines
Real estate developed products 51,572,548.12 -- 66,523,100.15 771,196.00
Real estate developing products 914,752,987.73 -- 131,828,661.29 --
Real estate which are going to be developed 470,448,048.18 -- 1,215,632,063.00 --
Total 1,436,773,584.03 -- 1,413,983,824.44 771,196.00
4. Long-term equity investments
（1）The informations of long-term equtiy investments:
82
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
Provision
Measured Investment Proportion Voting right
Name of investees Dec 31, 2010 Movement June 30, 2011 Provision accrued in Dividend
method cost (%) (%)
2010
Subsidiaries’ investment：
Shenzhen City Property
Cost method
Management Ltd. 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
Cost method
Investment Ltd. 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 -- -- --
Shenzhen Special Economic
Zone Real Estate (Group)
Cost method
Guangzhou Property and Estate
Co., Ltd. 20,000,000.00 20,000,000.00 -- 20,000,000.00 100 100 -- -- --
Shenzhen Zhen Tung
Cost method
Engineering Ltd 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
Cost method
Trade Trading Ltd. 4,750,000.00 4,750,000.00 -- 4,750,000.00 95 95 -- -- --
Shenzhen City Hua Zhan Cost method 6,000,000.00 6,000,000.00 -- 6,000,000.00 75 75 -- -- --
83
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
Provision
Measured Investment Proportion Voting right
Name of investees Dec 31, 2010 Movement June 30, 2011 Provision accrued in Dividend
method cost (%) (%)
2010
Construction Management Ltd.
Shenzhen City Car Rental Ltd. Cost method 11,809,500.00 6,495,225.00 -- 6,495,225.00 55 55 -- -- --
QiLu Co.,Ltd Cost method 212,280.00 212,280.00 -- 212,280.00 20 20 -- -- --
Beijing Shenfang Property
Cost method
Management Ltd. 500,000.00 500,000.00 -- 500,000.00 10 10 -- -- --
Shenzhen Lain Hua Industry and
Cost method
Trading Co. Ltd. 13,458,217.05 13,458,217.05 -- 13,458,217.05 95 95 -- -- --
Shenzhen City SPG Long Gang
Cost method 30,850,000.00 30,850,000.00 -- 30,850,000.00 95 95 -- -- --
Development Ltd.
Beijing Fresh Peak Property
Development Management Cost method 64,183,888.90 64,183,888.90 -- 64,183,888.90 75 75 -- -- --
Limited Company
Shenzhen Shenfang Car Park
Cost method 29,750,000.00 29,750,000.00 -- 29,750,000.00 70 70 -- -- --
Ltd.
Joint venture investment：
Guangdong province Huizhou
Equity
Luofu Hill mineral water 9,969,206.09 9,969,206.09 -- 9,969,206.09 Cooperation Cooperation 9,969,206.09 -- --
method
Co.,Ltd
Equity
Fengkai Xinhua Hotel 9,455,465.38 9,455,465.38 -- 9,455,465.38 Cooperation Cooperation 9,455,465.38 -- --
method
84
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
Provision
Measured Investment Proportion Voting right
Name of investees Dec 31, 2010 Movement June 30, 2011 Provision accrued in Dividend
method cost (%) (%)
2010
Associate investment ： -- --
Shenzhen Runhua Automobile Equity
trading Co.,Ltd method 1,445,425.56 1,445,425.56 -- 1,445,425.56 50 50 1,445,425.56 -- --
Shenzhen Ronghua JiDian Equity
Co.,ltd method 1,250,000.00 1,604,690.04 -75,000.00 1,529,690.04 25 25 1,076,954.64 -- 75,000.00
Shenzhen Fresh Peak Property Equity
Consultant Co.,Ltd method 600,000.00 -- -- -- 20 20 -- -- --
Shenzhen Dongfang New World Equity
Store Co.,Ltd method 15,000,000.00 -- -- -- 50 50 -- -- --
Other investments： -- --
Shenzhen Shen Fang Industrial
Cost method 4,500,000.00 4,500,000.00 -- 4,500,000.00 100 100 4,500,000.00 -- --
Development Co., Ltd
Shenzhen ZhongGang Haiyan
Cost method
Enterprise Ltd. 12,940,900.00 12,940,900.00 -- 12,940,900.00 68 68 12,940,900.00 -- --
Shenzhen Real Estate
Cost method
Consolidated Service Co., Ltd. 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 -- --
Canad GreatWall (vancouver)
Cost method
Co.,Ltd 4,526.25 -- -- -- 60 60 -- -- --
Bekaton Property Limited Cost method 906,630.00 906,630.00 -- 906,630.00 60 60 906,630.00 -- -
85
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
Provision
Measured Investment Proportion Voting right
Name of investees Dec 31, 2010 Movement June 30, 2011 Provision accrued in Dividend
method cost (%) (%)
2010
Shenzhen Tefa Real Estate
Cost method
Consolidated Service Co., Ltd. 8,180,003.63 8,180,003.63 -- 8,180,003.63 100 100 8,180,003.63 -- --
Shenzhen Xin Dongfang Store
Cost method
Ltd. 18,500,000.00 18,500,000.00 -- 18,500,000.00 100 100 18,500,000.00 -- --
Shenzhen City Shenfang
Construction and Decoration Cost method
Materials Ltd. 2,680,000.00 2,680,000.00 -- 2,680,000.00 100 100 2,680,000.00 -- --
Shenzhen Shenfang Department
Cost method
Store Co. Ltd. 9,500,000.00 9,500,000.00 -- 9,500,000.00 95 95 9,500,000.00 -- --
Shenzhen CyberPort Co., Ltd Cost method 14,000,000.00 12,401,018.42 -- 12,401,018.42 70 70 -- -- --
ShenZhen ShenFang BaoAn
Cost method
developmentCo.,Ltd 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 460,913,016.79 430,459,167.78 -75,000.00 430,384,167.78 143,861,642.81 -- 75,000.00
86
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
（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 cessation
Materials Ltd. 2,680,000.00 -- -- 2,680,000.00
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 cessation
Co.,Ltd 9,969,206.09 -- -- 9,969,206.09
Fengkai Xinhua Hotel 9,455,465.38 -- -- 9,455,465.38 cessation
Shantou Fresh Peak Building 58,547,652.25 -- -- 58,547,652.25 cessation
Total 143,861,642.81 -- -- 143,861,642.81
87
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
5. Turnover and cost of sales
（1）Turnover and cost of sales
1-6/2011 1-6/2010
Core Operating Income 56,171,137.09 153,726,868.02
Other Operating Income 2,300.00 2,313,804.43
Gross Income 56,173,437.09 156,040,672.45
Cost of sales 25,469,746.52 72,488,362.99
（2）Core operating Income（classfied by industry）
Operating Income Operating Cost Operating margin
Industry
1-6/2011 1-6/2010 1-6/2011 1-6/2010 1-6/2011 1-6/2010
Real estate 29,861,552.00 135,462,246.00 14,340,350.35 60,709,940.53 15,521,201.65 74,752,305.47
Leasing 25,219,254.63 20,092,299.40 10,904,963.83 11,575,387.52 14,314,290.80 8,516,911.88
Others 1,092,630.46 486,127.05 224,432.34 203,034.94 868,198.12 283,092.11
Total 56,173,437.09 156,040,672.45 25,469,746.52 72,488,362.99 30,703,690.57 83,552,309.46
（3）Core business（classfied by district）
Operating Income Operating Cost Operating Margin
District
1-6/2011 1-6/2010 1-6/2011 1-6/2010 1-6/2011 1-6/2010
Shenzhen 56,173,437.09 156,040,672.45 25,469,746.52 72,488,362.99 30,703,690.57 83,552,309.46
（4）The informations of the top 5 clients are as follows:
1-6/2011
Amount Proportion%
Shenzhen Kaitaishengye Investment Co., Ltd. 27,800,000.00 49.49
Shenzhen Jinjiahua Marketing Operating
Management Co., Ltd 2,539,932.00 4.52
Indivual – Gu Hongmei 886,704.00 1.58
Golden Age Club Food Company 759,466.00 1.35
Indivual – Sun Mingwei 607,180.00 1.08
Total 32,593,282.00 58.02
88
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
6. Investment income
The details of investment income are as follows:
1-6/2011 1-6/2010
The investment income yielded from the long-term equity appilied with --
the cost method --
The investment income yielded from the long-term equity appilied with --
the equityt method --
The investment income yielded from the disposal of the long-term 9,636,607.65*
equity --
The investment income yielded from the disposal of the financial assest 116,843.92
held for trading -39,400.77
Total -39,400.77 9,753,451.57
RMB 9,636,607.65 was yielded from the transference of 50% equity of Shenzhen Shatoujiao Nantian Store.
7. Supplementary cash flow statement of the parent company
Supplementary information 1-6/2011 1-6/2010
1. Reconciliation from the net profit to the cash flows from operating
activities
Net profit 4,546,825.37 7,207,,336.40
Add：Provisions for assets impairment -- -788,014.33
Depreciation of fixed assets and investment property 10,862,361.38 11,280,025.46
Amortization of intangible assets 27,733.31 --
Long-term deferred and prepaid expenses amortization 8,536.00 --
Losses on disposal of fixed assets, intangible assets and other long-term
assets（gains used“-”） -- --
Scrapping of fixed assets losses（gains used“-”） -- --
Exchange of fair value losses（gains used“-”） 25,479.05 24,785.75
Finance expenses （gains used“-”） 6,060,907.89 30,537,172.59
Investment losses（gains used“-”） -39,400.77 -9,753,451.57
Decrease in deferred tax assets（gains used“-”） -- --
Increase in deferred tax liabilities（gains used“-”） -- --
Decrease in inventories（gains used“-”） 23,560,955.59 2,680,437.25
Decrease in operating receivables（gains used“-”） 11,352,683.07 -170,704,850.15
89
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
Supplementary information 1-6/2011 1-6/2010
Increase in operating payables（gains used“-”） 149,033.05 130,218,077.92
Others -- --
Net cash flows from operating activities 56,555,113.94 -6,505,817.08
2. Investment and financing activities not involving cash -- --
3.Net increase/ (decrease) in cash and cash equivalents -- --
Cash at end of the year 206,679,987.73 67,002,303.29
Less: cash at beginning of the year 191,108,590.15 73,508,120.37
Add：cash equivalents at end of the year -- --
Less: cash equivalents at beginning of the year -- --
Net increase in cash and cash equivalents 15,571,397.58 -6,505,817.08
XIII. Non - regular gains and losses
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:
Items 1-6/2011 1-6/2010
Non-current assets disposed of profit and loss, including the written-off part of provision
for asset impairment 199,681.57 9,622,198.15
Authority approval or non-formally approved document or incidental tax revenue return,
-- --
relief
Gains and losses included in the current period of government 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
90
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
Items 1-6/2011 1-6/2010
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 -13,921.72 92,058.17
A separate impairment test for impairment of receivables transferred back to preparation -- --
Commissioned external loans made by the profit and loss -- --
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 754,725.85 36,841.49
Other non-recurring gains and losses in line with the definition of profit and loss items -- --
Total 940,485.70 9,751,097.81
Less: Income tax impact of several 321.54 2,033.68
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 940,164.16 9,749,064.13
The Non - regular gains and losses increased by Rmb 8,810 thousand. The increase is due to the disposal of
long-term equity investment, refer to Notes V.37.
2. Rate of Return on Common Stockholders’ Equity (ROE) and Earnings per share
Items Profit during the Weighed net assets
Earnings per
91
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
share ( yuan/share)
reporting period yield (%)
basic diluted
1-6/2011
The net profit attributable to equity holders of the
Company 64,300,859.86 4.40 0.0636 0.0636
The net profit after deducting the non-regular gian
or loss attributable to equity holders of the
Company 63,360,695.70 4.34 0.0626 0.0626
1-6/2010
The net profit Attributable to equity holders of the
Company 64,109,890.28 4.66 0.0634 0.0634
The net profit after deducting the non-regular gian
or loss attributable to equity holders of the
Company 54,360,826.15 3.97 0.0537 0.0537
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 gian 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 assests attributable to holding company;
Ei – the balance of net assests attributed to the shares issued in the reporting period or debt to equity shares;
Ej – the balance of net assents attrictued to the shares which were repurchased or decreased by distributing the
cash dividend;
Mi – the accumulated number of the months from the next month the new additional net assests to the end month
of the reporting period;
Mj - the accumulated number of the months from the next month the net assests reducted to the end month of the
reporting period;
Ek –the movement of the net assests attributed to the shares which are due to other transaction;
Mk - the accumulated number of the months from the next month the net assests happened to the ending month
of the reporting period;
92
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2011(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
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
caluated from the comparing beginning of the period; when Calculating the 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 diffenences of the domestic financial statements compared with the overseas financial statement
CAS (Rmb) IFRS (Rmb)
The net profit attributable to holding
company of the Company 64,300,859.86 64,300,859.86
The net assests attributable to holding
company of the Company 1,493,533,010.21 1,493,533,010.21
Notes No differences
English version of financial statements for the year 1 January 2011 to 30 June 2011 if there is any conflict of
meaning between the Chinese version and English version, the Chinese version will prevail.
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