(000029 SSFA 200029 SSFB)
Shenzhen Special Economic Zone Real Estate
& Properties (Group) Co., Ltd.
Semi-Annual Report 2012
31 August 2012
Contents
I. Important Notice………………………………………………………………….
II. Company Profile………………………………………………………………………
III. Financial and Business Highlights.….……........…………………………………….
IV. Change of Capital Share and Shares Held by Principal Shareholders………….....
V. Particulars about the Directors, Supervisors and Senior Executives………………….
VI. Report of the Board of Directors…………………………………….………………
VII. Significant Events………………………………….………………………………..
VIII. Financial Report……………………………………………………………………
IX. 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.
All the directors have attended the Board meeting to review this semi-annual report.
Zhou Jianguo, Principal of the Company, Chen Maozheng, Person-in-charge of the accounting
work and Tang Xiaoping, Person-in-charge of the accounting organization hereby confirm the
financial report enclosed in this semi-annual report is authentic and integrated.
The Semi-Annual Report 2012 has not been audited.
1
Section II Company Profile
(I) Basic information
A-share code 000029 B-share code 200029
A-share abbreviation SSFA B-share abbreviation SSFB
Stock exchange listed
Shenzhen Stock Exchange
with
Legal Chinese name of SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES
the Company (Group) CO., LTD
Abbr. of the legal Chinese
深房集团
name of the Company
Legal English name of the
ShenZhen Special Economic Zone Real Estate & Properties (Group).Co.，Ltd．
Company
Abbr. of the legal English
SPG
name of the Company
Legal representative of
Zhou Jianguo
the Company
Registered address 45-48/F of SPG Plaza, Renmin South Road, Shenzhen
Postal code for the
518001
registered address
Office address 45-48/F of SPG Plaza, Renmin South Road, Shenzhen
Postal code for the office
518001
address
Internet website of the
http://www.sfjt.com.cn
Company
Email spg@163.net
(II) For contact
Secretary to the Board of Directors Securities Affairs Representative
Name Chen Ji Luo Yi
47/F of SPG Plaza, Renmin South 47/F of SPG Plaza, Renmin South
Contact address
Road, Shenzhen Road, Shenzhen
Tel. (0755)82293000-4718 (0755)82293000-4715
Fax (0755)82294024 (0755)82294024
Email spg@163.net spg@163.net
(III) About information disclosure and where the interim report is placed
Newspapers designated by the
Domestic: Securities Times; Overseas: Ta Kung Pao
Company for information disclosure
Internet website designated by CSRC
http://www.cninfo.com.cn
for disclosing the semi-annual report
2
Where the semi-annual report is
47/F of SPG Plaza, Renmin South Road, Shenzhen
placed
3
III. Financial and Business Highlights
(I) Major accounting data and indexes
Major accounting data
Major accounting data Jan.-Jun. 2012 Jan.-Jun. 2011 Increase/decrease (%)
Gross operating revenues (RMB
447,364,203.07 553,919,803.97 -19.24%
Yuan)
Operating profit (RMB Yuan) 53,275,854.82 81,876,583.09 -34.93%
Total profit (RMB Yuan) 53,290,258.39 82,830,990.51 -35.66%
Net profit attributable to
shareholders of the Company (RMB 40,084,098.09 64,300,859.86 -37.66%
Yuan)
Net profit attributable to
shareholders of the Company after
40,066,125.89 63,360,695.70 -36.77%
deducting non-recurring gains and
losses (RMB Yuan)
Net cash flow from operating
-116,313,872.03 84,323,901.31 -237.94%
activities (RMB Yuan)
30 Jun. 2012 31 Dec. 2011 Increase/decrease (%)
Total assets (RMB Yuan) 3,272,631,866.84 3,236,127,046.06 1.13%
Owners’ equity attributable to
shareholders of the Company (RMB 1,568,635,529.01 1,528,596,536.13 2.62%
Yuan)
Share capital (share) 1,011,660,000.00 1,011,660,000.00 0%
Major financial indexes
Major financial indexes Jan.-Jun. 2012 Jan.-Jun. 2011 Increase/decrease (%)
Basic EPS (RMB Yuan/share) 0.0396 0.0636 -37.74%
Diluted EPS (RMB Yuan/share) 0.0396 0.0636 -37.74%
Basic EPS after deducting
non-recurring gains and losses 0.0396 0.0626 -36.74%
(RMB Yuan/share)
Fully diluted ROE (%) 2.56% 4.21% -1.65%
Weighted average ROE (%) 2.59% 4.40% -1.81%
Fully diluted ROE after deducting
2.55% 4.15% -1.60%
non-recurring gains and losses (%)
Weighted average ROE after
deducting non-recurring gains and 2.59% 4.34% -1.75%
losses (%)
Net cash flow per share from
operating activities (RMB -0.115 0.0834 -237.89%
Yuan/share)
4
30 Jun. 2012 31 Dec. 2011 Increase/decrease (%)
Net assets per share attributable to
shareholders of the Company (RMB 1.551 1.511 2.65%
Yuan/share)
Liability/asset ratio (%) 55.99% 56.73% -0.74%
(II) Accounting data differences under the domestic and overseas accounting standards
1. Net profit and net asset differences between financial reports disclosed according to the
international and Chinese accounting standards respectively: □Applicable √Inapplicable
2. Net profit and net asset differences between financial reports disclosed according to the overseas
and Chinese accounting standards respectively: □Applicable √Inapplicable
(III) Items of non-recurring gains and losses: □Applicable √Inapplicable
Jan.-Jun. 2012 (RMB
Items Notes
Yuan)
Gains and losses on disposal of non-current assets 14,692.90
Tax rebate, reduction or exemption due to un-authorized approval or
the lack of formal approval documents
Government grants recognized in the current year, except for those
acquired in the ordinary course of business or granted at certain
quotas or amounts according to the country’s unified standards
Capital occupation fees received from non-financial enterprises that
are included in current gains and losses
Gains generated when the investment costs of the Company’s
acquiring subsidiaries, associates and joint ventures are less than the
fair value of identifiable net assets in the investees attributable to the
Company in the acquisition of the investments
Exchange gains and losses of non-monetary assets
Gains and losses through entrusting others to invest or manage
assets
Various asset impairment provisions due to acts of God such as
natural disasters
Gains and losses on debt restructuring
Enterprise reorganization expenses, such as expenses on employee
settlement and integration
Gains and losses on the parts exceeding the fair value when prices
of transactions become unfair
Net current gains and losses from the period-begin to the
5
combination date of subsidiaries due to business combinations under
the same control
Gains and losses on contingent matters which are irrelevant to the
normal operation of the Company
Gains and losses on fair value changes of transactional financial
assets and liabilities, and investment gains on disposal of
transactional financial assets and liabilities and available-for-sale
financial assets, except for the effective hedging business related to
the Company’s normal operation
Reversal of impairment provisions for accounts receivable which
are separately tested for impairment signs
Gains and losses on entrustment loans from external parties
Gains and losses on fair value changes of investing properties for
which the fair value method is adopted for subsequent measurement
Current gain and loss effect due to a just-for-once adjustment to
current gains and losses according to requirements of taxation and
accounting laws and regulations
Custodian fee income from entrusted operations with the Company
Other non-operating incomes and expenses besides the items above -289.33
Other gain and loss items that meet the definition of non-recurring
gains and losses
Minority interests effects
Income tax effects 3,568.63
Total 17,972.20 --
6
IV. Changes in Share Capital and Particulars about Shareholders
I. Changes in share capital
In the reporting period, share capital of the Company remained unchanged.
II. Particulars about shares held by shareholders
1. Total shareholders in reporting period
There are 86,854 shareholders in total in reporting period.
2. Statement of the top ten shareholders and the top ten shareholders holding shares not
subject to trading moratorium
Unit: Share
Particulars about shares held by the top ten shareholders
Pledged or frozen
Shareholdin Total shares Number of
Name of shareholder (full shares
Nature of shareholder g percentage held at the non-tradable
name) Status of Number
(%) period-end shares held
shares of shares
SHENZHEN INVESTMENT
State-owned corporation 63.5475% 642,884,262 0
HOLDINGS CO., LTD
JING JIANJUN Domestic natural person 0.1582% 1,600,000 0
GUOTAI JUNAN
SECURITIES(HONGKONG) Foreign corporation 0.1524% 1,541,850 0
LIMITED
WANG ZHONGMING Domestic natural person 0.1083% 1,095,808 0
WU HAOYUAN Foreign natural person 0.108% 1,092,100 0
XUE HAOYUAN Domestic natural person 0.0885% 894,956 0
PENG QIONGHUI Domestic natural person 0.0869% 879,499 0
AGRICULTURAL BANK
OF CHINA—CHINA
SOUTHERN CHINA State-owned corporation 0.0774% 782,619 0
SECURITIES 500 INDEX
FUND (LOF)
XU TAIYING Domestic natural person 0.0771% 780,000 0
ZHANG RUI Domestic natural person 0.0722% 730,700 0
Notes about particulars of shareholders
Particulars about shares held by the top ten shareholders holding tradable shares
Number of tradable shares Type and number of shares
Name of shareholder
held Type Number
SHENZHEN INVESTMENT HOLDINGS
642,884,262 A-share 642,884,262
CO., LTD
JING JIANJUN 1,600,000 A-share 1,600,000
GUOTAI JUNAN 1,541,850 B-share 1,541,850
7
SECURITIES(HONGKONG) LIMITED
WANG ZHONGMING 1,095,808 B-share 1,095,808
WU HAOYUAN 1,092,100 B-share 1,092,100
XUE HAOYUAN 894,956 A-share 894,956
PENG QIONGHUI 879,499 A-share 879,499
AGRICULTURAL BANK OF
CHINA—CHINA SOUTHERN CHINA 782,619 A-share 782,619
SECURITIES 500 INDEX FUND (LOF)
XU TAIYING 780,000 A-share 780,000
ZHANG RUI 730,700 A-share 730,700
Explanation on associated relationship or (and) action-in-concert among the above
shareholders: Unknown.
3. Controlling shareholder and actual controller
(1) Change of the controlling shareholder and actual controller: □Applicable √Inapplicable
(2) Particulars about the controlling shareholder and actual controller
Is there a new actual controller? □Yes √No □Inapplicable
Name of actual controller Shenzhen SASAC
Type of actual controller Local SASAC
Notes:
Shenzhen Investment Holdings Co., Ltd. is a sole state-funded company limited, who are founded on Oct.
13, 2004 with a registered capital of RMB5.6 billion as well as legal representative Fan Mingchun. Its
business scope included: providing guarantees for municipal state-owned enterprises, management of
state-owned equity, and assets restructure reformation, capital operation and equity investment of
enterprises etc. The ultimate controller of the Company was Shenzhen State-owned Assets Supervision and
Administration Bureau, which was located at Investment Building, Shennan Av., Futian District, Shenzhen,
as well as the post code 518029.
(3) Property right relationship and control relationship between the Company and actual
controller
Shenzhen State-owned Assets Supervision
and Administration Bureau
Shenzhen Investment Holdings Co., Ltd.
The Company
8
V. Directors, Supervisors and Senior Management
I. Shareholding changes of directors, supervisors and senior management
In the reporting period, shares held by directors, supervisors and senior management of the Company
remained unchanged.
II. Particulars about engagement and dismiss of directors, supervisors and senior
managers
In the reporting period, the Six Board of Directors, the Six Supervisory Committee of the Company came to
expire. With review of the First Special Shareholders’ General Meeting 2012 convened on 17 Apr. 2012, the
Company has finished re-election of the new Board of Directors and the new Supervisory Committee. Other
senior management was also newly engaged on the First Session of the Seventh Board of Directors of the
Company convened on 17 May 2012. Relevant announcements have been disclosed on China Securities
Journal, Ta Kung Pao and http://www.cninfo.com.cn dated 18 Apr. 2012 and 18 May 2012. Relevant
information is as following statement:
(I) Shareholding changes of directors, supervisors and senior management
Number Withdraw
Number of Numbe Number
Number of remuneration
shares r of Of which: of stock Reaso
of shares shares from
Initial date End date of increased shares number of options n for
Name Office title Sex Age held at decrease shareholding
of office office in held at restricted held at chang
period-b d in units or other
reporting period- shares held period-en e
egin reportin related parties
period end d
g period or not?
Zhou 17 Apr. 16 Apr.
Chairman Male 57 0 0 0 0 0 0- No
Jianguo 2012 2015
Chen
GM; 17 Apr. 16 Apr.
Maozhe Male 48 0 0 0 0 0 0- No
Director 2012 2015
ng
Zhuang 17 Apr. 16 Apr.
Supervisor Male 57 0 0 0 0 0 0- No
Quan 2012 2015
Deng
17 Apr. 16 Apr.
Kangche Director Male 46 0 0 0 0 0 0- No
2012 2015
ng
17 Apr. 16 Apr.
Wen Li Director Female 42 0 0 0 0 0 0- Yes
2012 2015
Jiang Director Female 48 17 Apr. 16 Apr. 0 0 0 0 0 0- Yes
9
Lihua 2012 2015
Zhang CFO; 17 Apr. 16 Apr.
Male 44 0 0 0 0 0 0- No
Lei Director 2012 2015
Zhou Independent 17 Apr. 16 Apr.
Male 42 0 0 0 0 0 0- No
Hanjun Director 2012 2015
Liu
Independent 17 Apr. 16 Apr.
Quanmi Male 48 0 0 0 0 0 0- No
Director 2012 2015
n
Song Independent 17 Apr. 16 Apr.
Male 44 0 0 0 0 0 0- No
Botong Director 2012 2015
Wang 17 Apr. 16 Apr.
Supervisor Female 50 0 0 0 0 0 0- Yes
Xiuyan 2012 2015
Femal 17 Apr. 16 Apr.
Li Yufei Supervisor 34 0 0 0 0 0 0- Yes
e 2012 2015
Xiong
17 Apr. 16 Apr.
Xingnon Supervisor Male 54 0 0 0 0 0 0- No
2012 2015
g
Shi
17 Apr. 16 Apr.
Chunron Supervisor Male 56 0 0 0 0 0 0- No
2012 2015
g
Yang 17 May 16 May
Vice GM Male 39 0 0 0 0 0 0- No
Jiayong 2012 2015
Teng 17 May 16 May
Vice GM Male 55 0 0 0 0 0 0- No
Xianyou 2012 2015
Nie 17 May 16 May
Vice GM Male 41 0 0 0 0 0 0- No
Liming 2012 2015
Company 17 May 16 May
Chen Ji Male 40 0 0 0 0 0 0- No
Secretary 2012 2015
Xu 11 Feb. 17 Apr.
Supervisor Male 60 0 0 0 0 0 0- No
Zhenhan 2009 2012
Feng 11 Feb. 17 Apr.
Supervisor Male 41 0 0 0 0 0 0- No
Hongwei 2009 2012
Total -- -- -- -- -- -- --
Equity incentives granted to directors, supervisors and senior management during the reporting period:
□Applicable √Inapplicable
(II) Post-holding particulars
Post-holding in shareholders units
Name of the
person
Beginning Receives
holding any Name of the Ending date of
Position in the shareholder unit date of payment from the
post in any shareholder unit office term
office term shareholder unit?
shareholder
unit
Wen Li Shenzhen Vice director of Management - - Yes
10
Investment Center for Construction Project
Holdings Co., Ltd. of Shenzhen Investment
Holdings Co., Ltd.
Assistant Accountant of the
Shenzhen
Finance Department of
Jiang Lihua Investment - - Yes
Shenzhen Investment Holdings
Holdings Co., Ltd.
Co., Ltd.
Shenzhen Audit Manager of the Audit
Wang
Investment Department of Shenzhen - - Yes
Xiuyan
Holdings Co., Ltd. Investment Holdings Co., Ltd.
Senior Supervisor of
Shenzhen
Enterprise No.1 Dept. of
Li Yufei Investment - - Yes
Shenzhen Investment Holdings
Holdings Co., Ltd.
Co., Ltd.
Notes to post-holding in other
Naught
shareholding units
Information of post-holding in other units
Whether
Name of Post taken in Ending date of withdrawal
Name of other unit Starting date of post
employee other units post remuneration in
other units?
Asia Pacific Certified
Zhou Partner
Public Accountants 1 Mar. 2012 - Yes
Hanjun accountant
(Group) Co., Ltd.
Liu Guangdong Shenyatai
Partner lawyer 1 Apr. 2007 - Yes
Quanmin Law Firm
Architecture and Civil
Song
Engineering of Shenzhen Secretary of CPC 1 Dec. 2010 - Yes
Botong
University
Notes to post-holding in other
Naught
units
(III) Remuneration for directors, supervisors and senior management
Decision making
procedure for the
remuneration of Executing according to regulations of Provisional Method on Management of Human
directors, supervisors Resources of the Company
and senior
management
Basis for determining The Company decided remuneration based on Provisional Regulations on Annual Salary
the remuneration of System on Runner of Shenzhen State-owned Enterprises.
directors, supervisors Director Jiang Lihua, Wen Li and the supervisor of the Company Wang Xiuyan take
and senior posts in shareholding units and didn’t draw their payment from the Company.
11
management With review and approval on the Shareholders’ General Meeting 2010 convened on 29
Jun. 2011, allowance for each independent director was adjusted to RMB5,000 (tax
included) per month, since Jun. 2011. Besides, they received no other rewards from the
Company.
Actual payment of the
remuneration of
Make payment in accordance with relevant management system of remuneration of the
directors, supervisors
Company in time.
and senior
management
(IV) Change of directors, supervisors and senior management
Name Position Way of change Date of change Reason for change
Chairman of the
Xu
Supervisory Left office 17 Apr. 2012 Retirement, transition of leadership
Zhenhan
Committee
Chairman of the
Zhuang Newly
Supervisory 17 Apr. 2012 Elected through re-election
Quan appointed
Committee
Feng
Supervisor Left office 17 Apr. 2012 Transition of post
Hongwei
Newly
Li Yufei Supervisor 17 Apr. 2012 Elected through re-election
appointed
(V) Employees
Number of on-job employees 1763
Number of retired employees for whom the Company
400
shall bear expenses
Function structure
Type of function Number of personnel
Production 1119
Sale 57
Technical 485
Financial 55
Administration 64
Level of education
Level of education Number of personnel
Doctor 3
Master 24
University 132
Junior college 206
High school and below 1398
12
VI. Report of the Board of Directors
（I）Discussion and analysis by the management
In the first half of 2012, adhering to the theme of scientific development and the main track of strategic
transformation, the management of the Company worked hard to boost the main business, enlarge the land
reserve, enhance cost control, improve the management capability and proactively cope with problems left
from the past. Meanwhile, they also tried to enhance the building of an honest and clean management team,
build a professional high-quality management team, create a new corporate culture and thoroughly increase
the core competitiveness. Following the general guideline of “making great efforts to build a strong
company, striving for progress, seeking progress while maintaining stability and trying to make the
Company one of the top”, they worked hard together with all tiers of management and staff. As a result,
expected results were achieved in terms of various projects, the management capability and the management
team were improved, and the main business of project development proceeded smoothly, which created
favorable conditions for the sustained, stable and healthy development of the Company.
1. Analysis to operating results
Unit: RMB Yuan
Item Jan.-Jun. 2012 Jan.-Jun. 2011 Increase/decrease (%)
Operating revenue 447,364,203.07 553,919,803.97 -19.24
Operating cost 310,482,609.12 381,699,513.43 -18.66
Business taxes and surtaxes 44,716,083.71 49,318,473.28 -9.33
Selling expense 6,256,376.23 4,223,578.62 48.13
Administrative expense 29,263,423.18 31,177,179.75 -6.14
Financial expense 3,419,856.01 5,710,554.08 -40.11
Period expense 38,939,655.42 41,111,312.45 -5.28
Asset impairment loss -- -- --
Gains on fair value changes -- 25,479.05 --
Investment gains 50,000.00 60,599.23 -17.49%
Operating profit 53,275,854.82 81,876,583.09 -34.93%
Non-business income 62,961.84 1,138,021.01 -94.47%
Non-business expense 48,558.27 183,613.59 -73.55%
Total profit 53,290,258.39 82,830,990.51 -35.66%
Income tax expense 13,182,343.19 18,548,556.91 -28.93%
Net profit 40,107,915.20 64,282,433.60 -37.61%
Net profit attributable to 40,084,098.09 64,300,859.86 -37.66%
owners of the Company
(1) For the reporting period, the Company achieved a total profit of RMB 53.29 million, down 35.66% over
the same period of last year; and a net profit attributable to shareholders of the Company of RMB 40.08
million, down 37.66% on a year-on-year basis. This was mainly because the government’s macro-control
affected the Company’s real estate sales to some degree and the operating revenues and profit decreased
accordingly.
13
(2) The Company achieved operating revenue of RMB 447.36 million, down 19.24% over the same period
of last year; and an overall gross profit rate of 30.60%, down 49 basic points on a year-on-year basis.
(3) The period expense for the reporting period was RMB 38.94 million, down 5.28% over the same period
of last year, of which:
a. The selling expense was RMB 6.26 million, up 48.13% on a year-on-year basis, which was mainly due to
the increased advertising cost.
b. The administrative expense was RMB 29.26 million, down 6.14% over the same period of last year,
which was mainly because other cash expenses decreased.
c. The financial expense was RMB 3.42 million, down 40.11% over the same period of last year, which was
mainly because more interest on the borrowings for real estate projects was capitalized.
(4) The operating profit was RMB 53.28 million, down 34.93% from a year earlier, which was mainly
because the operating revenue decreased 106.56 million and the gross profit decreased 35.34 million on a
year-on-year basis.
(5) Non-business income and expense both decreased over the same period of last year, which was mainly
due to the decrease in the net earnings on non-current asset disposal and the liquidated damage income on
house payments receivable.
2. Main business lines and their operating results
（1）Main business lines classified by industries and products
Unit: RMB Yuan
Increase/decrease Increase/decrease
Increase/decrease
of operating of gross profit
of operating cost
Gross profit revenue rate compared
Industries/products Operating revenue Operating cost compared with
rate (%) compared with with the same
the same period
the same period period last year
last year (%)
last year (%) (%)
Industries
Real estate 171,290,731.00 76,250,647.97 55.48% -37.65% -45.78% 6.67%
Construction 182,734,297.82 171,454,717.81 6.17% -2.7% -2.76% 0.06%
Property lease 30,141,506.10 11,819,302.94 60.79% 6.5% -11.7% 8.08%
Property management 51,453,638.87 41,628,088.89 19.1% 0.2% 0.29% -0.07%
Hotel and other
11,744,029.28 9,329,851.51 20.56% 0.16% -5.38% 4.65%
services
Products
Residential buildings 17,129.00 7,625.00 55.48% -30.63% -40.43% 7.31%
(2) Notes to main business lines classified by industries and products
① The area of the real estate sold (the Company’s main business) decreased during the reporting period and
the relevant settlement income and cost decreased accordingly. And the gross profit rate increased 6.67% on
a year-on-year basis.
② Property lease income increased 6.5% from a year earlier and the operating cost decreased 11.7% at the
mean time. As such, the gross profit rate increased 8.08% over the same period of last year.
14
(3) Main business lines classified by regions
Jan.-Jun. 2012 Jan.-Jun. 2011
Region
Operating revenue Operating cost Operating revenue Operating cost
Guangdong Province 447,055,009.59 310,482,609.12 553,586,209.99 381,699,513.43
Overseas 309,193.48 333,593.98
Total 447,364,203.07 310,482,609.12 553,919,803.97 381,699,513.43
3. Problems and difficulties in operation
In the first half year of 2012, the national macro control on real estate continued, and the Company still
faced difficult external situation and operation pressure, which is mainly reflected as follows: Firstly, three
main business projects of the Company start to build, causing a certain capital pressure on the Company;
under the market circumstance of restriction in purchase, price and loan, the sale of real estate in stock will
face a severe challenge; the land available for development was insufficient, thus the bottleneck of resources
will always restrict the sustainable development of enterprise. Secondly, the ability in the development of
main business still needs to improve. Thirdly, the accumulated losses left over by history is big, now a loss
of approximate RMB 0.436 billion is to be cover, thus the financing function in the capital market as a listed
company is lack, which will affect the long-term development of the enterprise.
Therefore, in the next half year of 2012, the Company will continue to pay attention to the macro economic
situation and industrial development trend, accelerate the development of the construction in progress;
create conditions for increasing the land reserves; improve the efficiency of capital operation, so as to
ensure the capital supply for the development of main business project and gaining the land resources;
improve the management and control capacity as well as the capacity in the development of main business
to create an excellent main business project, so as to further enhance the market position and brand image
for the Company; strengthen the cost control on the project development to improve the profitability of the
Company.
4. Outlook for future development of the Company
In the next half year of 2012, the Company will work on the four central tasks as follows:
Firstly, it is to concentrate all energy to make the core business stronger and better, make every effort to
advance the construction of three main business projects, and create excellent projects; actively explore the
new mode for the transformation development of main business; strengthen the cost control by careful
calculation and strict budget, so as to improve the profitability of products; strengthen the market research,
intensify marketing efforts, try the best to realize the sales of East of SPG Chuanqi Mountain as scheduled,
so as to ensure the recovery of funds.
Secondly, it is to pursue the high-quality increase and sustainable overall development for the Company.
The macro economic situation in the next half year of 2012 is still severe, three main business projects of
the Company start to build, the Company will make more efforts to ensure the stability of team, the safety of
capital and the realization of development progress and sales target.
15
Thirdly, it’s to make every effort to realize the Company’s vision and goal. It shall strive to create the
first-class operating results in accordance with the first-class work standards, so as to realize the goal made
in the Strategic Plan for the Five-year Development as soon as possible.
Lastly, it’s to strive to create a cultural atmosphere of happy work and health life, make every effort to
create a “professional, dedicated, united and honest” corporate culture, thus create a good enterprise
development environment.
(II) Investment of the Company
Progress of significant projects invested with non-raised funds (Unit: RMB Ten Thousand)
Investmen
Disclosure date of initial Project
Name of project t in Progress of project
announcement earnings
project
For section A of east area, 6# is constructed to 4/F, 7#
SPG Chuanqi
to 3/F, 12# to ground floor and 11# to the B1/F; for No earnings
Mountain (East 24 Apr. 2010 6,435
section B, the cushion cap is excavated and brick tire so far
Area)
mould is built.
SPG Chuanqi Pile foundation engineering is conducted for the west
No earnings
Mountain (West 24 Apr. 2010 2,232 area; brick tire mould is completed and the cushion is
so far
Area) under construction for the 5# and low-rise building.
SPG Shanglin No earnings
27 Aug. 2009 2,474 Excavation of 80% foundation ditch
Garden so far
SPG Yuejing No earnings
24 Apr. 2009 566 Land leveling
Dongfang so far
Total 11,707 -- --
(III) Revision of the Board of Directors’ business plan for the second half of the year
□Applicable √Inapplicable
(IV) Business performance estimate for Jan.-Sept. 2012
Warnings of estimated possible losses or major changes of the accumulative net profit achieved during the
period from the beginning of the year to the end of the next report period compared with the same period of
last year, as well as the reasons
□Applicable √Inapplicable
(V) Explanation of the Board of Directors on “Non-standard Auditing Report” issued by
the CPA firm for the report period
□Applicable √Inapplicable
16
(VI) Explanation of the Board of Directors on changes and solutions of the issues
involved in the “Non-standard Auditing Report” issued by the CPA firm for last year
□Applicable √Inapplicable
(VII) State the discussion results of the Board of Directors on the reasons and influence
of the Company’s accounting policy and estimate alterations or significant accounting
error correction
□Applicable √Inapplicable
(VIII) Formulation and execution of the Company’s cash dividend policy
In the reporting period, according to the CSRC Notice on Further Implementing Matters Related to Cash
Dividend Distribution of Listed Companies and the CSRC Shenzhen Bureau Notice on Seriously
Implementing Relevant Requirements of the Notice on Further Implementing Matters Related to Cash
Dividend Distribution of Listed Companies (Shen-Zheng-Ju-Gong-Si Zi [2012] No. 43), the Company
formulated the Return for Shareholder Plan for the Coming Three Years (2012-2014), the Verification
Report on Return for Shareholder Plan for the Coming Three Years (2012-2014) and the Articles of
Association, which was reviewed and approved on 13 Aug. 2012; in according to the Articles of Association,
the Proposal on Amendment of the Articles of Association will be submitted to the Second Special
Shareholders’ General Meeting for 2012 held on 30 Aug. 2012. And relevant situation is as follows:
I. Formulation of dividend distribution policy
(I) In accordance with relevant requirements of CSRC, the Company formulated the Work Plan on Further
Implementing Matters Related to Cash Dividend Distribution of Listed Companies on 25 Jun. 2012, and
established a special team, with the Chairman of the Board of Directors as the team leader to preside over
the work on cash dividend distribution plan and the amendment of the Articles of Association.
(II) The Board of Directors published the Announcement on Collecting the Opinion of Investors on
Relevant Issues Regarding Formulation of Return for Shareholders Plan on 9 Aug. 2012, to publicly collect
the opinion of minority shareholders on the revision of dividend distribution policy of the Company. After
deep research and integrating the actual situation of the Company, the directors, supervisors and relevant
personnel of the Company completed the Return for Shareholder Plan for the Coming Three Years
(2012-2014), and finished the recording in CSRC Shenzhen Bureau and the verification procedures of the
Board of Directors, besides, the Proposal on Amendment of the Articles of Association was reviewed and
approved by the Board of Directors, then submitted to the Special Shareholders General Meeting held on 30
17
Aug. 2012 for review and approval. (For details, please refer to the public notice published on
http://www.cninfo.com.cn/ dated 14 Aug. 2012) .
II. Execution of dividend distribution policy: there are large amount of losses to make up now, so the
Company didn’t execute cash dividends distribution over the past three years and the year. However, with
the improvement of the operation situation, the Company will realize the cash return for investors as soon as
possible in strict accordance with the Articles of Association and other regulations.
III. Explanation on general situation
(I) The conditions and procedures for revising the Return for Shareholder Plan and the Articles of
Association of the Company at this time are compliant and transparent, which content is line with relevant
laws, rules and the requirements of CSRC as well as the needs for operation and future development of the
Company, thus protect the legal rights of minority shareholders.
(II) The revised criteria and proportion for dividend distribution is specific and clear, relevant
decision-making procedures and mechanism are complete.
(III) The independent directors diligently fulfill their duties, and issue their independent opinion on the cash
dividend distribution policy of the Company.
(IX) Pre-plan for profit distribution or turning capital reserve into share capital
□Applicable √Inapplicable
(X) The accumulative retained profit as at the end of 2011 is a positive number but the
Company has not put forward a cash dividend pre-plan.
□Applicable √Inapplicable
(XI) Other matters that need to be disclosed
In accordance with requirements of Basic Standards for Corporate Internal Control, Guidelines for
Corporate Internal Control jointly published by Finance Bureau, CSRC and other three ministries and
Guidelines on Internal Control of Listed Companies issued by Shenzhen Stock Exchange, and integrated
with the Company’s internal control system and appraisal method, as well as based on the routine and
special supervision on internal control, the Company made effective self-appraisal on its internal control.
1. General situation of appraisal work of internal control
The Company’s internal control leading team is responsible for the construction and appraisal work of
internal control, the internal control construction office organize to implement the appraisal work of internal
control under the guidance of the internal control leading team, while the internal control appraisal team is
responsible for implementing the appraisal work of internal control. The internal control leading team is the
decision-making organ of the appraisal work of internal control, while the internal control construction
18
office is the management organ of the appraisal work of internal control. Besides, the reporting lines for the
appraisal work of internal control are as follows: internal control appraisal team → internal control
construction office→ internal control leading team → audit committee under the board→ board of directors.
The Company has engaged the Deloitte Touche Tohmatsu Certified Public Accountants Ltd. (Shenzhen
Branch) to provide the consulting service for internal control and assist to carry out the appraisal work of
internal control.
2. Appraisal scope of internal control
The Company’s appraisal scope of internal control covers the enterprises relevant to the core business of
property development, which account for over 90% of the total assets in its consolidated financial
statements. And it pays special attention to the risks as follows: the financial report disclosure risks, capital
management risks, significant engineering projects management risks, significant investment projects risks,
significant assets disposal risks, procurement management risks, sales management risks, external guarantee
risks, fixed assets management risks and contract management risks, etc.
The Company’s entities included into the appraisal scope: 1. the headquarters of the Group; 2. Shantou
Hualin Real Estate Development Co., Ltd.; 3. Shenzhen ShenFang Group LongGang Development Co., Ltd.
The Company’s business and events included into the appraisal scope: the company-level control, human
resources management, property sales management, fixed assets management, property costs management,
engineering projects management, general control of information system, procurement management,
financing management, financial report, investment property, long-term equity investment, guarantee
management, capital management, budget management, contract management, information disclosure and
related-party transactions.
The internal control on the above business and events covers the main aspects of operation management of
the Company, which has no significant omissions.
3. Appraisal procedures and methods of internal control
Basic procedures for appraisal work of internal control: the internal control appraisal team formulates the
appraisal plan and the self-appraisal test template, then each units and relevant departments choose
appropriate amounts of samples to conduct the internal control test appraisal in accordance with the test
template, so as to form the working paper on self-appraisal of internal control; basing on the self-appraisal
results of each units, the internal control appraisal team chooses the samples independently, supervises and
checks the self-appraisal results. Finally, in accordance with the working paper on self-appraisal and defects
summary from each units, the internal control appraisal team executes the general-level defects analysis and
appraisal, and drafts the self-appraisal report of internal control.
During the appraisal procedure, as for the validity of the design and operation of internal control, the
Company decides the appropriate amounts of samples in accordance with occurring frequency of each
business, and widely collects the evidences on approving whether the design and operation of internal
control of the Company is valid or not by comprehensively using individual interviews, special meeting for
discussion, walk-through test, sampling analysis and other methods.
4. Internal control defects and their recognition
In accordance with the recognition requirements for significant defects, important defects and common
19
defects in the Basic Standards for Corporate Internal Control and Guidelines for Corporate Internal Control,
as well as integrating the company size, industry characteristics, risk appetite, risk tolerance level and other
factors, the Company decides the recognition criteria on internal control defects for the Company.
The defects relevant to financial report are classified into significant defects, important defects and common
defects in accordance with the order of severity.
Significant defects, is one or the combination of more control defects, which may lead to a serious deviation
from the control objectives for the Company.
Important defects, is one or the combination of more control defects, whose severity is lower than the
significant defects but it still may lead to a serious deviation from the control objectives for the Company.
The severity of important defects is lower than the important defects, which won’t seriously endanger the
overall validity of internal control, but still shall attract the full attention of the Board of Directors and the
managers’ level.
Common defects, is the other control defects except for the significant defects and important defects.
In accordance with the recognition criteria, and integrating the routine and special supervision situation, we
believe that the Company has no significant defects during the reporting period.
5. Establishment and perfect of internal control
In accordance with the spirit of the documents from CSRC, the Company formulates the Work Plan on
Implementation of Internal Control Rules of Shenzhen Special Economic Zone Real Estate & Properties
(Group) Co., Ltd., forms a work team to conduct internal control construction work according to the
proposed plan and time. And the work team re-combs current internal control system, combing a total of 39
one-level procedures, 172 two-level procedures and 52 important risk points. Comparing the risk points and
current control activities, the work team and relevant departments revise and perfect many management
systems and procedures, so as to ensure all systems and business procedures cover all the risk points.
On the basis of completing the comb and revision of current systems, the Company prepares the Internal
Control Brochure, accumulates the experience on internal control construction, implements various
requirements of internal control, and improves the operation management level and risk preventing ability.
(1) Internal environment
① Corporate governance
In accordance with the Company Law, the Articles of Association as well as other regulations on normative
operation for listed companies, the Shareholders’ Meeting, the Board of Directors and the Supervisory
Committee as well as the management team set up completed systems and conducted standardized operation
in decision-making, implementation and supervision. There are Strategy Committee, Nomination
Committee, Remuneration & Appraisal Committee and the Audit Committee under the Board of Directors,
and all committees formulated and executed special rules and supported decision-making of the Board of
Directors; of which the Audit Committee was responsible for execution and supervision on internal control.
The Management Level of the Company realized democratic discussion, independent responsibility,
normative operation and harmonious cooperation.
The Company defines its goals and tasks in the Five Years Development Strategy Plan (2011-2015), which
are as follows: significantly improve the assets quality, economic benefits, management and control ability
of the Company, make every effort to build the Company as a middle-size listed property developer with
20
core competitive power, perfect system, efficient management, standardized operation and sustainable
development.
② Organizational structure
The Board of the Company accounts for establishment and implementation of internal. The separation of
decision-making, execution, and supervision forms checks and balances among them. The Audit Committee
under the Board accounts for auditing internal control and supervising the implementation and
self-assessment of internal control. Main business management modes are headquarters, functional
departments, business department, project department and subsidiaries. Business development of
headquarter of the Company is supported by planning and marketing department, cost control department
and project management department, charged by project department and subsidiaries, and project
departments in other places operate with combination of independent corporation.
③ Internal audit
The Company drew up and implemented Provisional Rules of Internal Audit, and set up special internal
audit institution – the audit and supervision department, to conduct internal audit on the perfection and
validity of internal control system, financial revenue and expenditure management, assets management,
legal and compliant operation and other aspects. Besides, it tightly combined development and reform facts
of the Company, comprehensively implemented duty of internal audit with a line of “leading by risks,
weaving by control and targeting added-value”, and displayed the supervision and service role of internal
audit as well as promoted the standardization of work on all parts.
④ Human resource
The Company focused on building professional organizations and teams, promoted performance culture,
with an aim to conducting “elite and excellent team”, targeting at the establishment of standardizing human
resource management, made concerted effort, practical work with innovation, earnestly carried out each
work of annul establishment of human resource step by step in plan, thereof realized new development of
human resource management and powerfully support operation strategy of the Company.
⑤ Corporate culture
The Company proposed consciousness of “Professional, Dedication, Unity and Probity”, made the
establishment of enterprise culture involve in routine operation management and activity carriers;
vigorously developed system culture of obeying codes and rules, developed probity culture of honest
devotion, and carried forward performance culture and excellent culture of keeping improving. The
Company promoted a notion of healthy life and happy work that formed a fine circumstance of harmonious,
smooth and integrity.
21
(2) Risk assessment
The Company paid much attention to prevention and control of financial risk, formulated and implemented
Provisional Method on Management of Financial Risk Warning, of which listed financial risk warning index
on aspects of risk of paying debt, operation risk, risk of profitability, risk of external investment and
comprehensive risk etc.. The Company conducted overall quality and quantity assessment on corporate
financial risk, promptly made research and drew up risk management program, offered guidance and
adjustment to operation behavior. The Company actively coped with regulation of real estate market,
adopted solutions to eliminate policy risk and market risk, which included policy risk and industrial risk
arising from regulation of real estate market; the Company focused on analysis of marketing risk, mainly
about the real estate market trend turning cold and price inflection point occurs that would result in a sales
risk of steep decrease of market trading volume. The Company concentrated on enforcement of the
construction of developing professional ability, strictly controlled operation risk. In accordance with
Establishment Scheme and Work Plan of Overall Risk Management System, the Company put effort on
building a project management system of “fine business, intensive administration and control, integrated
platform”. The Company focused on prevention of risk on legal affairs, ensured project development. The
Company strengthened management of strategic programming, defined development goal and business
scheme of the Company, effectively prevented strategy risk as a result.
(3) Control activities
① Control on authorization
The Company executed authorization of operating and managing business according to grade, defined
decision-making procedures, handling procedures and authority of examination and approval, confirmed
responsibilities and rights of sponsors, checker and authorizer for each business, and standardized and
streamlined it by upgrade of information system, which was not only good for improvement of efficiency,
but also public and transparence, so was easy to supervise and account responsibility.
② Tender and bidding control
The Company formulated and executed the Administrative Measures on Tender and Bidding Projects, the
Administrative Measures on Engagement of Intermediary Agencies, and relevant rules about approval
power and business processes. The tender and bidding leader team was responsible for organizing tender
and bidding activities while the tender and bidding supervision team was responsible for supervising the
whole process. Pursuant to the principles of “transparency, fairness, justness and choosing the best”, the
22
Company tightened the tender and bidding procedures, proactively organized various tender activities and
carefully reviewed tender documents, all of which were in compliance with applicable laws and regulations
and transparent.。
③ Significant investment
The Company followed the Provisional Method of Investment Management, further clearly defining events
of investment projects, such as basic requirements, feasibility research and demonstration, decision-making
authority and procedures, regulation and post-assessment, rewards and accountability investigation.
④ Lease business
In order to enhance the integration of property resources and increase the gain on this segment, the
Company set up the Asset Operation Center in May 2011 to carry out intensive management over the lease
business, which boosted steady increase in the lease rate and the rent recovery rate. The Company followed
the Provisional Management Method of Lease and Operation and business procedures, defined events and
process such as preparation, checkup and approval of leasing price, signing of contracts, contract
management, as well as management of lease and operation, cleared up control links, namely lease, contract
management, rental collection, and customer service of office buildings, shops, and residences in the charge
of the Company, and ensured operation of leasing business.
⑤ Management on development of real estate project
The Company followed the Management Method of Project Company (Project Department (Trial),
perfected relevant business process, introduced establishment of information system of integrated
management in real estate, and further improved proprietor management of real estates of the Company.
Control system and business progress of the Company clearly defined purchase of land resources and
project exploitation, so as to ensure successful development of projects and improve work quality and
efficiency.
⑥ Cost control
The Company valued cost control, carried out the spirit of “careful calculation, strict budgeting, and
intensified cost control”, strictly implemented operating processes including Preparation Process of Target
Cost, Process of Project Budget and Settlement, Process on Management of Project Cost and Resolution Chart
on Target Cost, as well as measures including Administrative Measure on Target Cost, Administrative
Measures on project site visa, Administrative Measures on Project Contract, Administrative Measures on
Project Budget and Settlement, Administrative Measures on Project Tender and Bidding, Guidelines for
Preparation of Budget or Audit Work and Guidelines for Settlement Work. Cost control was demonstrated in
23
the whole process of project development. By enhancing cost control key points such as estimation and
budgets, the Company was able to control development costs under the target costs.
⑦ Management of safety production
The Company set up Safety Management Committee, of which the primary person in charge is the Chairman
of the Board. It was in the overall charge of operating teams and led by the General Deputy Manager who
headed safety production. Project Management Department was responsible for safety production of all
projects and other businesses, formulated systems and process concerning Measures for Safety Management,
Process on Audit of Project, Assessment Table on Safety Image and Assessment Table on Control of Quality
of Project, and assured safe production.
⑧ Financial management
The Company strictly executed accounting standards uniformed by the state, continued to enhance
standardization of accounting basis, valued regulation on finance management, and controlled finance risks.
The Company followed the Provisional Method of Finance Management and the Management Method of
Related People in Charge of Finance, which clearly defined events and processes including system of
finance management, management of finance and accounting, management of finance budget, asset
management, management of liabilities and guarantees, incomes, cost expenses, profit management, finance
and accounting report, handover of accounting work, and management of accounting files. The Company
attached importance to control of finance risks, revised and perfected Management Method of Overall
Budget, and strictly executed overall budget management. All investment and expenditures were controlled
within budget. The Company paid attention to business development and balance between bank loans and
ability of payment, so as to keep reasonable proportion of assets liabilities and make financial risks under
control. Aiming to deal with the operating pressure and financial uncertainty arising from the macro-control
over real estate, the Company attached great importance to preventing and controlling financial risks. It
followed the Provisional Management Methods for Financial Risks Pre-warning. According to the said
Methods, financial risk pre-warning indicators were given in terms of debt repayment risk, operating risk,
profitability risk, external investment risk and comprehensive risk; the nature and involved amounts of
financial risks were thoroughly tested and estimated by preparing risk monitoring sheets; and risk
management plans were worked out in time to provide guidance for adjusting operating activities.
⑨ Related transactions
During the reporting period, the Company fulfilled decision-making procedures on related transactions
strictly in accordance with Rules for Listing Shares in Shenzhen Stock Exchange, Articles of Association as
24
well as other regulations concerning related transaction. Related-party transactions of the Company were all
conducted under the fair market pricing principle, which fully safeguarded interests of all investors.
⑩ External guarantee
The Company paid attention to risk control and decision-making procedures of external guarantee, and
implemented procedures of decision-making according to Circular on Regulating External Guarantee of
Listed Companies, Rules for Listing Shares in Shenzhen Stock Exchange and Articles of Association.
Capital occupation by principal shareholder
The Company focused on protection of interests of its own and all shareholders, and there was no capital
occupation by principal shareholder.
Information disclosure
The Company implemented information disclosure strictly in line with Rules for Listing Shares in Shenzhen
Stock Exchange and Articles of Association, and formulated System on Internal Report of Significant
Information and Administrative System for Information Disclosure Affairs. There are no false records,
misleading statements, or significant omissions in the materials of this report, and the information disclosed
are authentic, accurate and complete.
(4) Information communication
The Company paid attention to communication of internal and external information, formulated and
implemented Administrative Measures of Informatization, System on Report of Significant Information,
Rules for Archives Management, and Rules for Confidentiality Management. The Company kept all staffs
of the Company knowing trends of the Company and ensured successful execution of the order with the
help of the Management Council, the GM’s Meeting, and the System on Specific Meeting. The Company
valued the establishment of informatization, continually and sustainably enhanced informatization of
enterprise management, and improved efficiency of regulation and control of the enterprise.
(5) Internal supervision
The Company formed multi-levels supervision mechanisms for the execution of internal control, with the
Supervisory Committee, the Audit and Risks Management Committee and the Internal Audit Organ
performing their own duties and displaying their respective supervision function. Besides, the Company
formulated the Rules for Procedures of Supervisory Committee, Rules for the Implementation of Audit and
Risks Management Committee and the Temporary Rules for the Internal Audit Work as well as other rules
and regulations, made clear the responsibilities and power of each supervisory organ on internal supervision,
and stipulated the working procedures, methods and requirements of internal supervision.
6. Rectification situation of internal control defects
25
As for the defects, the Company convened many special sessions to arrange the implementation of rectificat
ion, and clearly required each unit to consolidate the results of defect rectification. And the overall rectificati
on work for internal control defects shall be basically completed before the end of Nov. 2012.
7. Conclusion of the validity of internal control
In accordance with requirements of Basic Standards for Corporate Internal Control, Guidelines for
Corporate Internal Control and other laws and rules, the Company has made the self-appraisal on the
validity of the design and operation of internal control as of 30 Jun. 2012.
During the reporting period, the Company has established the internal control on the business and events
included into the appraisal scope, which was effectively executed and reached the goal of the internal
control of the Company, with no significant defects.
No significant changes in internal control occurred that substantially affected the appraisal conclusion from
the base day to the issuing day of self-appraisal report for internal control.
The internal control shall fit into the operating size, business scope, competitive situation and risks level,
etc., and be adjusted with the change of situation in time.
In the next half year of 2012, we will continue to perfect the construction of internal control system and
strengthen the supervision and examination on the internal control, ensure the risks control cultures deeply
rooted in the mind of employees gradually through training, propaganda and other ways, and actively
supervise the staffs to learn various business procedures and management systems of the Company, so as to
ensure each procedure and system of the Company be effectively implemented, as well as further promote
the healthy and sustainable development for the Company.
26
VII. Significant Events
(I) Corporate governance
I. Actuality of governance corporate structure of the Company
In the reporting period, the Company strictly accorded with requirements of Company Law, Securities Law,
Code of Corporate Governance of Listed Companies and other laws and statutes, continuously perfected its
corporate governance, and standardized its operation. The actual situation of corporate governance was in
line with the requirements of the relevant normative documents. The operating mechanism, of which the
Board of Directors made decisions scientifically, the management team took powerful execution, and the
Supervisory Committee implemented effective supervision.
(I) Preparations and holding of shareholders’ general meeting and disclosure of resolution of the meetings
were normatively in line with Articles of Association and Rules for Procedure of the Shareholders’ General
Meeting; all shareholders were on an equal position and could fully exercise their legal rights.
(II) Directors and the Board of Directors: power of decision-making was exercised normatively;
preparations, holding and disclosure of resolution of the Board sessions were normatively in line with the
Articles of Association and Rules of Procedure for the Board of Directors; Special committees concerning
strategy, audit, nomination, remuneration and appraisal under the Board can operate positively and
effectively; all directors performed their obligations in an honest and diligence manner. During the reporting
period, the office term of the Sixth Board of Directors of the Company was expired, and in accordance with
the Articles of Association, the Seventh Board of Directors was reviewed and approved at the First Special
Shareholders’ General Meeting for 2012 held on 17 Apr. 2012, thus successfully completing the re-election
work.
(III) Supervisors and the Supervisory Committee: structure of the Supervisory Committee was reasonable.
The Supervisory Committee conducted the supervision and inspection for the significant events of the
Company strictly in accordance with the Rules for Procedure of the Supervisory Committee, and exercised
its supervision right effectively and brought its supervision function into fully play. During the reporting
period, the office term of the Sixth Supervisory Committee of the Company was expired, and in accordance
with the Articles of Association, the Seventh Supervisory Committee was reviewed and approved at the
First Special Shareholders’ General Meeting for 2012 held on 17 Apr. 2012, thus successfully completing
the re-election work.
(IV) Manager level: the manager level of the Company was fully responsible for the production and
management of the Company, other Senior Executives performed their obligation in an honest and diligence
manner. The manager level of the Company implemented the resolution of the Board with efficient
supervision and control. In light of the re-election of the Board of Directors of the Company, the Company’s
Management Level has been re-engaged with review and approval of the board sessions held on 17 Apr.
2012 and 17 May 2012.
(V) Information disclosures and transparency: the Board of Directors authentically, correctly, completely,
timely, and fairly developed information disclosure strictly according to relevant laws and statutes as well as
the Articles of Association of the Company. There was neither correction on serious accounting mistake, or
supplement of serious omissions or correction of performance forecast. The Company’s controlling
27
shareholder—Shenzhen Investment Holdings Co., Ltd.—is an enterprise directly under Shenzhen Municipal
People’s Government State-owned Assets Supervision and Administration Commission. According to
relevant requirements of the Commission, the Company must submit monthly briefings of main financial
indicators and statements to the controlling shareholder before the 10th of every month. In compliance with
the Regulations on the Information Insider Registration and Administration of Listed Companies and
relevant requirements of Shenzhen CSRC, the Company has submitted to Shenzhen CSRC on a monthly
basis the Sheet of Undisclosed Information Provided by the Company for Its Principal Shareholder and
Actual Controller.
II. Duty performance of independent directors
(I) Presence of independent director at the Board Sessions:
Times of Times of absent
Times of sessions Times of attendance Times of
Name attendance in from on-the-spot
should attended in person entrusted voting
communication meeting
Zhou Hanjun 3 3 3 0 0
Liu Quanmin 3 3 3 0 0
Song Botong 3 3 3 0 0
In the reporting period, there was no particular of independent directors’ objections to resolutions of the
Board of Directors.
(II) Presence of independent director at the shareholders’ general meeting:
The Company convened two sessions of shareholders’ general meeting during the reporting period, three
independent directors presented the meeting.
(III) Duty performance of independent directors
In the reporting period, independent directors of the Company was in line with requirements in laws and
statutes as well as Articles of Association, earnestly performed duties, analyzed professionally and
expressed independent opinion cautiously when the Company made significant decision-making, and played
an important role in normative operation.
（II）Execution of the plans for profit distribution, turning capital reserve into share
capital or new share issuance which had been made in the previous period and were
carried out in the report period
□Applicable √Inapplicable
(III) Significant litigations and arbitrations
28
Amount
The Party to involved in
The Type of Basic Disclosure date
complai undertake the Progress of
defendant litigation situation of Trial result and influence of the Execution situation on the judgment of of relevant Announceme
nt joint and litigation the litigation
(responde and the litigation litigation (arbitration) the litigation (arbitration) interim public nt No.
(applica several (arbitration) (arbitration)
nt) party arbitration (arbitration) notice
nt) party liability (RMB Ten
thousand)
Shenzhe ① Baoxing Company should pay the
n Baoxing transfer payment of RMB 98.95
Special Real million and relevant interest, which
Econom Estate should be paid within ten days after
ic Zone Develop Second the judge coming into effects,
Under RMB 81 million was returned back, the
Real ment No Litigation instance as 1,800 otherwise it would be treated in
execution others were hard to recover.
Estate & (Shenzhe final trial accordance with the Article 232 of
Properti n) Code of Civil Law. ② Baoxing
es Company Company should undertake the
(Group) limited counterclaim fee of RMB 0.62 million
Co., Ltd and appraisal fee of RMB 40,000.
Xi’an Joint ① Business Tourism Company had to
Xi’an Commission pay for the compensation RMB 36.62
The applicant gained the transaction
Fresh on million and interest after the judgment
Xi’an payment of RMB 15.20 million;
Pead Commerce entering into force (interest was
Business Valid after Under Business Tourism Company had no
Holding and Trade Litigation 2,100 calculated from 14 Sept. 1998 to the
Tourism first trial execution property for execution, and the Xi’an
limited (now execution day). If the Business
Co., Ltd Joint Bureau on Commerce and Trade
compan renamed as Tourism Company failed to pay in
always refused to execute the
y Xi’an Joint time, it had to pay double debt
judgment, so it’s hard to recover.
Bureau on interests to Xi’an Fresh Peak
29
Commerce Company. ②Xi’an Joint Commission
and Trade) on Commerce had jointly and
severally obligation of the interests of
the compensation. ③ Business
Tourism Company should undertake
the acceptance fees and security fees
totaling RMB 227,500.
①Luofu
Shenzhe
Hill
n ① Luofu Hill Tourism Company had
Tourism
Special paid back RMB 9.6 million; ②Luofu
Company
Econom Hill Administration Committee had to Due to the national land authority
②Luofu
ic Zone Second undertake one third of the debts which
Hill Under couldn’t make the key points for the
Real No Litigation instance as 980 Luofu Hill Tourism Company was
Administr execution
Estate & final trial unable to repay; ③ Luofu Hill plan of sealing lands, the auction
ation
Properti Tourism Company should undertake
Committe couldn’t be executed.
es the acceptance fee and security fee of
e on
(Group) RMB 167,700.
Scenic
Co., Ltd
Spot
Shenzhe
n ① Tongxin Company should RMB
Shenyang
Special 14.42 million and interest, and the
Tongxin
Econom interest was calculated from 1 Feb.
Real CIETAC Executed repayment: Tongxin
ic Zone Under 2006 to the actual repayment day (up
Estate No Arbitration South China 760 Company repaid RMB 7 million in Jan.
Real execution to 1 Jul. 2007, the interest was RMB
Develop Commission 2010; it’s hard to recover the others.
Estate & 1,166,900); ② Tongxin Company
ment Co.,
Properti should undertake the arbitration fee of
Ltd.
es RMB 16.63.
(Group)
30
Co., Ltd
The significant litigations and arbitrations occurred after preparing the last annual report involves RMB0.
The significant litigations and arbitrations included in the last annual report but not yet finished involve RMB 56.4 million.
The estimated liabilities accrued for the litigations and arbitrations amounts RMB 0.
For details of significant litigations and arbitrations occurred during the reporting period and those occurred in previous periods but carried forward to the reporting
period, please refer to “(I) Significant litigations” under “Note X. Contingent Events” of the Financial Report.
31
(IV) Bankruptcy reorganization events
√ Applicable □ Inapplicable
(V) Holding equity of other listed companies and joint financial enterprises
1. Securities investment
□Applicable √Inapplicable
2. Holding equity of other listed companies
□Applicable √Inapplicable
3. Holding equity of non-listed financial enterprises
□Applicable √Inapplicable
4. Trading stocks of other listed companies
□Applicable √Inapplicable
(VI) Assets transaction events
1. Purchase of assets
□Applicable √Inapplicable
2. Sale of assets
□Applicable √Inapplicable
3. Replacement of assets
□Applicable √Inapplicable
4. Business combination
□Applicable √Inapplicable
5. Progress of these events after the publication of the assets reorganization report or public notices
on the purchases or sales of assets, as well as the influences of these events on the operation results
and financial status of the Company in this report period
□Applicable √Inapplicable
(VII) Explanation on shareholding increase scheme during the report period proposed or
implemented by the principal shareholders and act-in-concert persons
□Applicable √Inapplicable
(VIII) Implementation situation and influence of equity incentive plan of the Company
□Applicable √Inapplicable
(IX) Significant related-party transactions
1. Related-party transactions relevant to routine operation
32
Reason for
significant
Type of the Pricing Proportion in Settlement
Transaction Transaction Influence on Market price difference
related-part Content of the principle of the same kind of method of the
Related party Relationship price (RMB amount (RMB the profits of (RMB Ten between the
y related-party transaction related-party transactions related-party
Ten thousand) Ten thousand) the Company thousand) transaction
transaction transaction (%) transaction
price and the
market price
General contracting
Shenzhen Same Acceptance Paid according
project on construction No bad
Jianan Group controlling labor Open tendering 7,752.00 13.96% to the progress 无
of East of SPG Chuanqi influence
Co., Ltd. shareholder services of contract
Mountain
Shenzhen
Green building
Institute of Same Acceptance Paid according
consultancy services Competitive No bad
Building controlling labor 59.50 0.11% to the progress 无
for SPG Chuanqi negotiation influence
Research Co., shareholder service of contract
Mountain Project
Ltd.
Shenzhen
Environmental
Same Acceptance Paid according
Engineering Environmental Impact Direct No bad
controlling labor 1.53 0 to the progress 无
Science Tech Report Contract contracting influence
shareholder services of contract
Center Co.,
Ltd.
Total -- -- 7,813.03 14.07% -- -- -- --
Details of large amount of sales returns No
Necessity and continuity of related-party transaction as well as reason
of choosing the related party (but not other transaction parties) to It’s good for the Company to realize the goals of main business projects development.
conduct the said transaction
33
Impacts of related-party transaction on independency of the Company No
Dependant degree of the Company on related party and relevant
No
solutions for the dependence (if any)
As for the prediction on the total amount of routine related-party
transactions to be occurred in the report period by relevant types, the Not out of the prediction
actual performance in the report period
Explanation on related-party transaction No
Of which: the total amount of related-party transactions of the Company selling products or providing labor services to the controlling shareholder and subsidiaries
during the report period stood at RMB0.
34
2. Related-party transactions regarding purchase and sales of assets
□Applicable √Inapplicable
3. Significant related-party transitions with joint investments
□Applicable √Inapplicable
4. Significant credits and liabilities with related parties
√Applicable □Inapplicable
Was there any non-operating credit or liability with any related party?
√ Yes □ No
Lending funds to related parties (RMB Ten thousand) Borrowing funds from related parties (RMB Ten thousand)
Interest Interest
Related party Relationship Opening Incurred Repaid Closing Interest Opening Incurred Repaid Closing Interest
expenditu expendit
balance amount amount balance income balance amount amount balance income
res ures
Non-operational
Shenzhen Investment Holding Co., Ltd. 6,384.88 6,384.88
Subtotal
Operational
Subtotal
Total 6,384.88 6,384.88
Incurred amount of funds provided to the controlling shareholder
and its subsidiaries by the Company during the reporting period 0
(RMB Ten Thousand)
Of which: non-operational incurred amount (RMB Ten Thousand) 0
Balance of funds lent to the controlling shareholder and its 0
35
subsidiaries by the Company (RMB Ten Thousand)
Of which: non-operational balance (RMB Ten Thousand) 0
Reason of forming the credits and liabilities with related parties Current loans
Debt clearing situation of the credits and liabilities with related
Not yet cleared
parties
Commitments made relevant to the credits and liabilities with
No
related parties
Influence of the credits and liabilities with related parties on the
No bad influence
business results and financial status of the Company
Capital occupation during the report period and debt-clearing progress
□Applicable √Inapplicable
36
(X) Significant contracts and execution
1. The trust, contract and lease whose profits reaching more than 10% (including 10%) of
the total profits of the Company in the reporting period
(1) Particulars about trust: □Applicable √Inapplicable
(2) Particulars about contracting: □Applicable √Inapplicable
(3) Particulars about leasing: □Applicable √Inapplicable
2. Guarantees provided by the Company
Unit: RMB Ten Thousand
Guarantees provided by the Company for external parties (excluding those for subsidiaries)
Guarant
Disclosur
Actual ee for a
e date of Amount Actual
occurrence Type of Period of Execute related
Guarantee party relevant for guarantee
date (date of guarantee guarantee d or not party or
announce guarantee amount
agreement) not (Yes
ment
or no)
Total actual occurred
Total external guarantee line
amount of external
approved during the 0 0
guarantee during the
reporting period (A1)
reporting period (A2)
Total external guarantee line Total actual external
that has been approved at the guarantee balance at the
0 0
end of the reporting period end of the reporting
(A3) period (A4)
Guarantee provided by the Company for its subsidiaries
Guarant
Disclosur
Actual ee for a
e date of Amount Actual
occurrence Type of Period of Execute related
Guaranteed party relevant for guarantee
date (date of guarantee guarantee d or not party or
announce guarantee amount
agreement) not (Yes
ment
or no)
Shantou Hualin
Real Estate 15 Aug. Credit Three
30,000.00 30 Aug. 2009 9,000.00 No No
Development Co., 2009 guarantee years
Ltd.
Shenzhen 31 Mar. Credit Not
6,000 Pending 0 - No
Zhentong 2012 guarantee applicab
37
Engineering Co., le
Ltd.
Shenzhen SPG
Longgang 31 Mar. Credit Three
8,840 31 Mar. 2012 8,840 No No
Development Co., 2012 guarantee years
Ltd.
Total guarantee line Total actual occurred
approved for the subsidiaries amount of guarantee for
14,840 8,840
during the reporting period the subsidiaries during the
(B1) reporting period (B2)
Total guarantee line that has Total actual guarantee
been approved for the balance for the
34,840 17,840
subsidiaries at the end of subsidiaries at the end of
reporting period (B3) the reporting period (B4)
Total guarantee amount provided by the Company (total of the above-mentioned two kinds of guarantees)
Total actual occurred
Total guarantee line
amount of guarantee
approved during the 14,840 8,840
during the reporting
reporting period (A1+B1)
period (A2+B2)
Total guarantee line that has Total actual guarantee
been approved at the end of 34,840 balance at the end of the 17,840
the reporting period (A3+B3) reporting period (A4+B4)
Proportion of total guarantee amount (A4+B4) to the
11.37%
net assets of the Company
Of which:
Amount of guarantee for shareholders, actual
0
controller and related parties (C)
Amount of debt guarantee provided for the guaranteed
party whose asset-liability ratio is not less than 70% 8,840
directly or indirectly (D)
Part of the amount of the total guarantee over 50% of
0
net assets (E)
Total amount of the above three guarantees (C+D+E) 8,840
Explanation on possible bearing joint responsibility of At the end of reporting period, balance of guarantees for
liquidation due to immature guarantee property buyers has not settled totaling RMB8.5 million.
Explanation on provision of guarantees for external
N/A
parties in violation of the prescribed procedure
The Company belongs to the real estate industry. As for property developer shall provide pledge
loan guarantee for property purchaser in accordance of relevant regulations of People’s Band of
China, currently the Company provides periodic joint guarantee for property purchaser. The
guarantee term is from disbursement date to the date when the Certificate of Real Estate of the
property purchaser is handled by the mortgage banker. If the home buyer mentioned above didn’t
perform the debtor’s duties within the guarantee period, then the Company has the right to take
back the properties sold. Therefore, the said guarantee will not cause actual loss to the Company.
38
As to the end of the reporting period, the Company has provided an amount of RMB8.5 million to
the above mentioned guarantee.
3. Entrusted financial management: □Applicable √Inapplicable
4. Performance of significant contracts relevant to routine operation: □Applicable
√Inapplicable
5. Other significant contracts: □Applicable √Inapplicable
(XI) Explanation on issuing corporate bonds: □Applicable √Inapplicable
(XII) Performance of commitments
1. Commitments made by the Company or shareholders holding over 5% of the Company’s
shares in the reporting period or such commitments carried down into the reporting period:
□Applicable √Inapplicable
2. The Company’s assets or projects exist profitable prediction and the report period is in
such prediction period, it states the profits from the assets or projects reaching original
prediction and relevant reasons: □Applicable √Inapplicable
(XIII) Items of other comprehensive income
Unit: RMB Yuan
Same period of last
Item Reporting period
year
1. Profits/(losses) from available-for-sale financial assets
Less: Effects on income tax generating from
available-for-sale financial assets
Net amount transferred into profit and loss in the current
period that recognized into other comprehensive income in
prior period
Subtotal 0.00 0.00
2. Interests in the investee entities’ other comprehensive
income as per equity method
Less: Effects on income tax generating from the interests in
the investee entities’ other comprehensive income as per
equity method
39
Net amount transferred into profit and loss in the current
period that recognized into other comprehensive income in
prior period
Subtotal 0.00 0.00
3. Profits/(losses) from cash flow hedging instrument
Less: Effects on income tax generating from cash flow
hedging instrument
Net amount transferred into profit and loss in the current
period that recognized into other comprehensive income in
prior period
The adjustment value that is the converted initial recognition
amount of arbitrage project
Subtotal 0.00 0.00
4. Converted amount of foreign currency financial statements -76,219.59 1,943,257.60
Less: Net value of disposal of oversea operations that
recognized into current profit and loss
Subtotal -76,219.59 1,943,257.60
5. Other
Less: Effects on income tax generating from the others that
included into other comprehensive income
Net amount transferred into profit and loss in the current
period that recognized into other comprehensive income in
prior period
Subtotal 0.00 0.00
Total -76,219.59 1,943,257.60
(XIV) Particulars about researches, visits and interviews received in this
reporting period
Place of Way of Main discussion and materials
Time of reception Visitor type Visitor
reception reception provided by the Company
The Company’s business
By Individual
10 Jan. 2012 Office Individual structure, didn’t offer written
telephone investor
materials
Inquiry about disclosure time
of annual report of the
Company and effect of
By Individual
13 Mar. 2012 Office Individual macro-control policies on
telephone investor
main business of the
Company, didn’t offer written
materials
Inquiry about development
By Individual
10 Apr. 2012 Office Individual and operation project of the
telephone investor
Company, didn’t offer written
40
materials
Inquiry about process of
By Individual
24 May 2012 Office Individual Guangming project, didn’t
telephone investor
offer written materials
Inquiry about semi-annual
By Individual operation particulars of the
20 Jun. 2012 Office Individual
telephone investor Company, didn’t offer written
materials
Inquiry about effect of
macro-control policies on
operation of the Company,
By Individual particulars of semi-annual
18 Jul. 2012 Office Individual
telephone investor operation, appointed
disclosure time of
semi-annual report, didn’t
offer written materials
(XV) Particulars about engagement and disengagement of CPAs firm
Has this semi-annual report been audited? □Yes √No □Inapplicable
(XVI) Particulars about punishment and rectification order received by the
Company, its directors, supervisors, senior executives, shareholders, actual
controller and acquirer: □Applicable √Inapplicable
(XVII) Explanation on other significant events
Compensation issue for the take-back of Dong Hu Di Jing Building
Dong Hu Di Jing Building (with Parcel No.H312-0061) is located in Luohu District. The area is
7,970.08 s.q.m., construction land area is 5,889.7 s.q.m. and area of structure 59,486 s.q.m. Its
volume fraction is 10.1. In November 2006, the Company got the land use rights of Dong Hu Di
Jing Building Project. Until the first half of 2008, the Company had completed the land turnover
housing resettlement, environment assessment, the transformation of the underground pipe
network, geological exploration, programs design and planning, construction review and
development design. In September and December 2008, the Company has received a letter from
the immediate branch of Shenzhen Urban Planning and the Shenzhen Municipal Planning Bureau
(Shen Gui [2008]1069, Shen Gui [2008] 2517).The Company was told that the municipal road
works may partially occupied the red line of the parcel of land of Dong Hu Di Jing Building
41
Project and the development of the project was required to suspend. In 2009, the Company
submitted report to the municipal government twice, requiring to resume the project as soon as
possible, but not received a clear answer. On 13 August 2010, the first branch of the Urban
Planning and Land Commission issued a notice about idle land inspection to the Company. The
Company immediately submitted relevant report about the idle land of Dong Hu Di Jing Building
on August 26, reiterating that why development land is idle lies in the Government's changes of
planning on the land. The Company had suffered huge losses and required the government to
solve the problem as soon as possible. On 20 January 2011, Shenzhen Urban Planning and Land
Resources Committee (hereinafter referred to as the Commission) issued “decision on disposal of
idle land” Shen Gui Land Yiqu idle [2011] No. 009. According to the decision, the government
will take back land use rights by payment. The Company subsequently submitted to the
administrative reconsideration. On 2 April, 2011, the Commission issued Shen Gui Land
referendum[2011]No. 02 “decision on administrative reconsideration” , insisting on the land use
rights to be took back in pay. In order to receive compensation for the land use rights as soon as
possible, the Company made response to the reconsideration on 17 May 2011, giving the solution
of replacement land. The Commission replied in Shen Gui Land Yiju [2011] No.523 and had these
decisions (Shen Gui Land Yiju [2011] No. 009 and Shen Gui Land referendum [2011] No. 02)
unchanged. In view of this, the Company accepted these decisions in principle. In Feb. 2012, the
Commission and the Company entrusted or hired intermediary agencies to evaluate the land parcel
to be requisitioned with compensation. In the second half of March, the Company sent a letter to
the Commission again, asking it to solve problems involving the compensated requisition of Dong
Hu Di Jing Building. In early May, the First Administrative Bureau directly under the Commission
notified the Company that the planning for the Danping Express Phase II Project and the Eastern
Boundary Passage Project had been determined and suggested the Company researching on the
feasibility of continuing the Dong Hu Ding Jing Building Project through revising the design
under the current conditions. And the Company has entrusted Shenzhen General Institute of
Architectural Design and Research Co., Ltd. to study the feasibility.
42
(XVIII) Index for information disclosure
Newspapers for
disclosing Internet website for disclosing information
Event Publishing date
information and and the searching approach
relevant page
China
Announcement on www.cninfo.com.cn
Securities
Providing External 31 Mar. 2012 (http://www.cninfo.com.cn/finalpage/2012-03
Journal, Ta
Guarantee -31/60774028.PDF?www.cninfo.com.cn)
Kung Pao
Specific Notes on
Particulars about Capital www.cninfo.com.cn
Not disclosed
Occupation of Controlling 31 Mar. 2012 (http://www.cninfo.com.cn/finalpage/2012-03
on newspapers
Shareholders and Other -31/60774024.PDF?www.cninfo.com.cn)
Related Parties in 2011
www.cninfo.com.cn
Self-appraisal Report on Not disclosed
31 Mar. 2012 (http://www.cninfo.com.cn/finalpage/2012-03
Internal Control of 2011 on newspapers
-31/60774025.PDF?www.cninfo.com.cn)
Announcement on China
www.cninfo.com.cn
Resolutions Made on the Securities
31 Mar. 2012 (http://www.cninfo.com.cn/finalpage/2012-03
Supervisory Committee Journal, Ta
-31/60774023.PDF?www.cninfo.com.cn)
Meeting Kung Pao
Announcement on China
www.cninfo.com.cn
Resolutions of the 16th Securities
31 Mar. 2012 (http://www.cninfo.com.cn/finalpage/2012-03
Session of the Six Board of Journal, Ta
-31/60774021.PDF?www.cninfo.com.cn)
Directors Kung Pao
www.cninfo.com.cn
Independent Opinions of Not disclosed
31 Mar. 2012 (http://www.cninfo.com.cn/finalpage/2012-03
Independent Directors on newspapers
-31/60774035.PDF?www.cninfo.com.cn)
Declaration of the www.cninfo.com.cn
Not disclosed
Nominated Independent 31 Mar. 2012 (http://www.cninfo.com.cn/finalpage/2012-03
on newspapers
Director (by Liu Quanmin) -31/60774029.PDF?www.cninfo.com.cn)
Declaration of the www.cninfo.com.cn
Not disclosed
Nominated Independent 31 Mar. 2012 (http://www.cninfo.com.cn/finalpage/2012-03
on newspapers
Director (by Zhou Hanjun) -31/60774030.PDF?www.cninfo.com.cn)
Declaration of the www.cninfo.com.cn
Not disclosed
Nominated Independent 31 Mar. 2012 (http://www.cninfo.com.cn/finalpage/2012-03
on newspapers
Director (by Song Botong) -31/60774031.PDF?www.cninfo.com.cn)
www.cninfo.com.cn
Statement of Nominator of Not disclosed
31 Mar. 2012 (http://www.cninfo.com.cn/finalpage/2012-03
Independent Director (I) on newspapers
-31/60774034.PDF?www.cninfo.com.cn)
www.cninfo.com.cn
Statement of Nominator of Not disclosed
31 Mar. 2012 (http://www.cninfo.com.cn/finalpage/2012-03
Independent Director (II) on newspapers
-31/60774033.PDF?www.cninfo.com.cn)
43
www.cninfo.com.cn
Statement of Nominator of Not disclosed
31 Mar. 2012 (http://www.cninfo.com.cn/finalpage/2012-03
Independent Director (III) on newspapers
-31/60774032.PDF?www.cninfo.com.cn)
Work Report of www.cninfo.com.cn
Not disclosed
Independent Director of 31 Mar. 2012 (http://www.cninfo.com.cn/finalpage/2012-03
on newspapers
2011 -31/60774036.PDF?www.cninfo.com.cn)
China
www.cninfo.com.cn
Abstract of the 2011 Securities
31 Mar. 2012 (http://www.cninfo.com.cn/finalpage/2012-03
Annual Report Journal, Ta
-31/60774016.PDF?www.cninfo.com.cn)
Kung Pao
www.cninfo.com.cn
Annual Auditor’s Report Not disclosed
31 Mar. 2012 (http://www.cninfo.com.cn/finalpage/2012-03
of 2011 on newspapers
-31/60774020.PDF?www.cninfo.com.cn)
China
Correction Notice of the www.cninfo.com.cn
Securities
First Special Shareholders’ 7 Apr. 2012 (http://www.cninfo.com.cn/finalpage/2012-04
Journal, Ta
General Meeting 2012 -07/60793967.PDF?www.cninfo.com.cn)
Kung Pao
China
Correction Notice of the www.cninfo.com.cn
Securities
First Special Shareholders’ 10 Apr. 2012 (http://www.cninfo.com.cn/finalpage/2012-04
Journal, Ta
General Meeting 2012 -10/60803756.PDF?www.cninfo.com.cn)
Kung Pao
Announcement of the First
www.cninfo.com.cn
Special Shareholders’ Not disclosed
10 Apr. 2012 (http://www.cninfo.com.cn/finalpage/2012-04
General Meeting on newspapers
-10/60803757.PDF?www.cninfo.com.cn)
(Updated)
Informative China
www.cninfo.com.cn
Announcement of the First Securities
13 Apr. 2012 (http://www.cninfo.com.cn/finalpage/2012-04
Special Shareholders’ Journal, Ta
-13/60822884.PDF?www.cninfo.com.cn)
General Meeting 2012 Kung Pao
Legal Opinion Letter on
www.cninfo.com.cn
the First Special Not disclosed
18 Apr. 2012 (http://www.cninfo.com.cn/finalpage/2012-04
Shareholders’ General on newspapers
-18/60848672.PDF?www.cninfo.com.cn)
Meeting
Announcement on China
www.cninfo.com.cn
Resolutions Made at the Securities
18 Apr. 2012 (http://www.cninfo.com.cn/finalpage/2012-04
First Special Shareholders’ Journal, Ta
-18/60848673.PDF?www.cninfo.com.cn)
General Meeting 2012 Kung Pao
www.cninfo.com.cn
Financial Budget Plan of Not disclosed
19 Apr. 2012 (http://www.cninfo.com.cn/finalpage/2012-04
2012 on newspapers
-19/60854801.PDF?www.cninfo.com.cn)
China
Announcement on www.cninfo.com.cn
Securities
Shareholders’ General 19 Apr. 2012 (http://www.cninfo.com.cn/finalpage/2012-04
Journal, Ta
Meeting 2011 -19/60854800.PDF?www.cninfo.com.cn)
Kung Pao
44
China
Announcement on www.cninfo.com.cn
Securities
Resolutions Made at the 19 Apr. 2012 (http://www.cninfo.com.cn/finalpage/2012-04
Journal, Ta
Supervisory Committee -19/60854806.PDF?www.cninfo.com.cn)
Kung Pao
Announcement on China
www.cninfo.com.cn
Resolutions Made at the Securities
19 Apr. 2012 (http://www.cninfo.com.cn/finalpage/2012-04
First Session of the Journal, Ta
-19/60854804.PDF?www.cninfo.com.cn)
Seventh Board of Directors Kung Pao
China
Abstract of the Report for Securities
19 Apr. 2012 www.cninfo.com.cn (dated 19 Apr. 2012)
the First Quarter of 2012 Journal, Ta
Kung Pao
www.cninfo.com.cn
Full text of the Report for Not disclosed
19 Apr. 2012 (http://www.cninfo.com.cn/finalpage/2012-04
the First Quarter of 2012 on newspapers
-19/60854807.PDF?www.cninfo.com.cn)
China
www.cninfo.com.cn
Correction Notice of Securities
28 Apr. 2012 (http://www.cninfo.com.cn/finalpage/2012-04
Periodic Report Journal, Ta
-28/60930227.PDF?www.cninfo.com.cn)
Kung Pao
www.cninfo.com.cn
Annual Report 2011 Not disclosed
28 Apr. 2012 (http://www.cninfo.com.cn/finalpage/2012-04
(Updated) on newspapers
-28/60930225.PDF?www.cninfo.com.cn)
Legal Opinion Letter on www.cninfo.com.cn
Not disclosed
Shareholders’ General 18 May 2012 (http://www.cninfo.com.cn/finalpage/2012-05
on newspapers
Meeting 2011 -18/61012904.PDF?www.cninfo.com.cn)
Independent Opinions on
Engaging Senior www.cninfo.com.cn
Not disclosed
Management of the 18 May 2012 (http://www.cninfo.com.cn/finalpage/2012-05
on newspapers
Company by Independent -18/61012905.PDF?www.cninfo.com.cn)
Directors
Announcement on China
www.cninfo.com.cn
Resolutions Made at the Securities
18 May 2012 (http://www.cninfo.com.cn/finalpage/2012-05
Second Session of the Journal, Ta
-18/61012907.PDF?www.cninfo.com.cn)
Seventh Board of Directors Kung Pao
Announcement on China
www.cninfo.com.cn
Resolutions Made at the Securities
18 May 2012 (http://www.cninfo.com.cn/finalpage/2012-05
Shareholders’ General Journal, Ta
-18/61012906.PDF?www.cninfo.com.cn)
Meeting 2011 Kung Pao
Announcement on China
www.cninfo.com.cn
Resolutions Made at the Securities
29 Jun. 2012 (http://www.cninfo.com.cn/finalpage/2012-06
Forth Session of the Journal, Ta
-29/61195507.PDF?www.cninfo.com.cn)
Seventh Board of Directors Kung Pao
Independent Opinions of Not disclosed www.cninfo.com.cn
29 Jun. 2012
Independent Directors on newspapers (http://www.cninfo.com.cn/finalpage/2012-06
45
-29/61195506.PDF?www.cninfo.com.cn)
VIII. Financial Report
(Attached)
IX. Documents for Reference
Documents for Reference
1. Financial statements signed and sealed by legal representative, principal of accounting work, and manager of
finance department.
2. Original documents of Auditors’ Report sealed by accounting firm, signed and sealed by certified public
accountant.
3. In the reporting period, all originals of the Company’s documents and public notices have been publicly
disclosed on China Securities Journal, Ta Kung Pao.
Chairman of the Board of Directors: Zhou Jianguo
Date for submission approved by the Board of Directors: 30 Aug. 2012
Board of Directors
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd.
31 Aug. 2012
46
SHENZHEN SPECIAL ECONOMIC ZONE REAL
ESTATE & PROPERTIES (GROUP) CO., LTD.
FINANCIAL REPORT
for the six months ended 30 June 2012(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 13-99
* Confidential *
CONSOLIDATED BALANCE SHEET
As at 30 June 2012 (unaudited)
Prepared by: SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE& PROPERTIES
(GROUP) CO., LTD Units: Rmb Yuan
ASSETS Note Ⅴ June 30, 2012 Dec 31, 2011
Current assets
Cash at bank and on hand 1 220,541,381.53 333,469,243.72
Financial assets held for trading
Accounts receivable 2 20,597,874.96 19,139,800.22
Advances to suppliers 3 102,105,153.91 44,871,783.45
Interest receivable 4 341,000.00
Other receivables 5 56,405,842.29 46,087,935.04
Inventories 6 2,224,524,035.77 2,132,760,206.58
Total current assets 2,624,174,288.46 2,576,669,969.01
Non-current assets
Long-term equity investments 7 63,346,188.26 63,346,188.26
Investment Property 8 497,978,917.34 508,001,693.51
Fixed assets 9 60,208,856.15 60,918,611.65
Construction in progress
Intangible assets 10 6,031,096.73 6,196,086.71
Long-term deferred and prepaid 11 489,287.07 591,264.09
expenses
Deferred tax assets 12 20,403,232.83 20,403,232.83
Total non-current assets 648,457,578.38 659,457,077.05
TOTAL ASSETS 3,272,631,866.84 3,236,127,046.06
（The Notes form part of these financial statemtents）
1
CONSOLIDATED BALANCE SHEET（Continued）
As at 30 June 2012 (unaudited)
Prepared by: SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE& PROPERTIES
(GROUP) CO., LTD Units: Rmb Yuan
LIABILITIES AND
Note Ⅴ June 30, 2012 Dec 31, 2011
SHAREHOLDERS' EQUITY
Current liabilities
Short-term borrowings 15 30,000,000.00 20,000,000.00
Accounts payable 16 93,925,003.50 109,202,474.18
Advance from customers 17 239,954,498.11 258,976,095.57
Employee benefits payable 18 31,668,821.15 36,389,941.35
Taxes payable 19 -11,017,342.78 2,969,643.65
Interest payable 20 16,535,277.94 16,535,277.94
Other payables 21 392,204,108.04 384,721,231.13
Non-current liabilities within 22
one year 624,273,710.68 697,095,738.47
Total current liability 1,417,544,076.64 1,525,890,402.29
Non-current liabilities
Long-term borrowings 23 403,679,444.13 299,621,374.64
Long-term payable 24 11,070,029.55 10,308,648.22
Total non-current liabilities 414,749,473.68 309,930,022.86
Total liabilities 1,832,293,550.32 1,835,820,425.15
Shareholders' equity
Share capital 25 1,011,660,000.00 1,011,660,000.00
Capital reserve 26 978,244,858.10 978,244,858.10
Less: Shares in stock
Surplus reserve 27 4,974,391.15 4,974,391.15
Retained Earnings 28 -435,884,850.80 -475,968,948.89
Foreign currency translation
defferences 9,641,130.56 9,686,235.77
Total equity attributable to
equity holders of the
Company 1,568,635,529.01 1,528,596,536.13
Minority interests 29 -128,297,212.49 -128,289,915.22
Total shareholders' equity 1,440,338,316.52 1,400,306,620.91
TOTAL LIABILITIES AND
3,272,631,866.84 3,236,127,046.06
SHAREHOLDERS' EQUITY
（The Notes form part of these financial statemtents）
2
CONSOLIDATED INCOME STATEMENT
For the six months ended 30 June 2012(unaudited)
Prepared by: SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE& PROPERTIES
(GROUP) CO., LTD Units: Rmb Yuan
Items Note Ⅴ 1-6/2012 1-6/2011
1. Operating Income 30 447,364,203.07 553,919,803.97
Less: Cost of sales 30 310,482,609.12 381,699,513.43
Business Taxes and Surcharges 31 44,716,083.71 49,318,473.28
Selling and distribution expenses 32 6,256,376.23 4,223,578.62
General and administrative expenses 33 29,263,423.18 31,177,179.75
Finance expenses 34 3,419,856.01 5,710,554.08
Add: Gain from changes of fair value 25,479.05
Investment income 35 50,000.00 60,599.23
Including: Investment income from
-- --
affiliates
2. Operating profit 53,275,854.82 81,876,583.09
Add: Non-operating income 36 62,961.84 1,138,021.01
Less:Non-operating expenses 37 48,558.27 183,613.59
Including: Loss from disposal of
non-current assets 37 9,175.80 38,036.39
3. Profit before income tax 53,290,258.39 82,830,990.51
Less: Income tax expenses 38 13,182,343.19 18,548,556.91
4. Net profit 40,107,915.20 64,282,433.60
Including：net profit of the merged party
which has been realized prior to the -- --
combination
Attributable to equity holders of the Company 40,084,098.09 64,300,859.86
Minority profit or loss 23,817.11 -18,426.26
5. Earnings per share
(1) Earnings per share 39 0.0396 0.0636
(2) Diluted earnings per share 39 0.0396 0.0636
6. Other comprehensive income 40 -76,219.59 1,943,257.60
7. Total comprehensive income 40,031,695.61 66,225,691.20
Attributable to equity holders of the Company 40,038,992.88 65,661,140.18
Minority comprehensive income -7,297.27 564,551.02
Business combinations under common control was recognized in the current reporting period. The net profit of the
merged party which has been realized prior to the combination is RMB 0.
（The Notes form part of these financial statemtents）
3
CONSOLIDATED CASH FLOW STATEMENT
For the six months ended 30 June 2012(unaudited)
Prepared by: SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE& PROPERTIES
(GROUP) CO., LTD Units: Rmb Yuan
Items Note Ⅴ 1-6/2012 1-6/2011
1. Cash flows from operating activities
Cash received from sales of goods or rendering of 395,345,406.76 507,445,488.20
services
Refund of taxes and levies
Cash received relating to other operating activities 41.(1) 35,178,907.21 50,475,255.65
Sub-total of cash inflows 430,524,313.97 557,920,743.85
Cash paid for goods and services 356,669,537.04 298,716,478.48
Cash paid to and on behalf of employees 50,803,286.66 49,601,871.87
Payments of taxes and levies 70,391,794.88 68,372,545.14
Cash paid relating to other operating activities 41.(2) 68,973,567.42 56,905,947.05
Sub-total of cash outflows 546,838,186.00 473,596,842.54
Net cash flows from operating activities -116,313,872.03 84,323,901.31
2. Cash flows from investing activities
Cash received from investment retrieving
Cash received as investment gains 50,000.00 175,000.00
Net cash received from disposal of fixed assets,
8,000.00 47,410.00
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 58,000.00 222,410.00
Cash paid to acquire fixed assets, intangible assets and
2,452,280.00 2,532,175.95
other long-term assets
Cash paid to acquire investments --
Net cash received from subsidiaries and other -- --
operational
Cash paid relating to other investing activities -- --
Sub-total of cash outflows 2,452,280.00 2,532,175.95
Net cash flows from investing activities -2,394,280.00 -2,309,765.95
3. Cash flows from financing activities
Cash received as investment -- --
Cash received from borrowings 41.(3) 146,000,000.00 10,000,000.00
Cash received from issuance of bonds -- --
Cash received relating to other financing activities -- --
Sub-total of cash inflows 146,000,000.00 10,000,000.00
Cash repayments of borrowings 41.(4) 105,236,955.55 27,961,200.01
Cash payments for interest expenses and distribution of 35,318,863.43 31,944,767.51
dividends or profits
Including： Cash payments for dividends or profit to -- --
minority shareholders of subsidiaries
Cash payments relating to other financing activities 41.(5) 2,000,000.00
Sub-total of cash outflows 140,555,818.98 61,905,967.52
Net cash flows from financing activities 5,444,181.02 -51,905,967.52
4. Effect of foreign exchange rate changes on cash 336,108.82 -1,004,543.49
and cash equivalents
5. Net increase in cash and cash equivalents -112,927,862.19 29,103,624.35
Add: Cash and cash equivalents at the beginning of year 324,967,185.86 379,720,636.21
6. Cash and cash equivalent at the end of year 212,039,323.67 408,824,260.56
（The Notes form part of these financial statemtents）
4
CONSOLIDATED STATEMENT OF CHANGES IN OWNER'S EQUITY
6/30/2012（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 -475,968,948.89 9,686,235.77 -128,289,915.22 1,400,306,620.91
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 -475,968,948.89 9,686,235.77 -128,289,915.22 1,400,306,620.91
3. Change in equity for the year -- -- -- -- -- 40,084,098.09 -45,105.21 -7,297,.27 40,031,695.61
(1) Net profit -- -- -- -- -- 40,084,098.0 -- 23,817.11 40,107,915.20
(2) Others -- -- -- -- -- -- -45,105.21 -31,114.38 -76,219.59
Sub-total (1)& (2) -- -- -- -- -- 40,084,098.09 -45,105.21 -7,297,.27 40,031,695.61
(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 -435,884,850.80 9,641,130.56 -128,297,212.49 1,440,338,316.52
5
（The Notes form part of these financial statemtents）
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 Total
Items Capital Less:shares Share Capital Retained currency interests Less:shares in
Share capital in stock earnings exchange
reserve capital reserve Capital reserve stock
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 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
6
period
（The Notes form part of these financial statemtents）
7
BALANCE SHEET
As at 30 June 2012(unaudited)
Prepared by: SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE& PROPERTIES (GROUP)
CO., LTD Units: Rmb Yuan
ASSETS NoteXIII June 30, 2012 Dec 31, 2011
Current assets
Cash at bank and on hand 103,266,554.8 153,281,158.51
Financial assets held for trading
Accounts receivable 1 4,510,114.34 4,484,384.86
Advances to suppliers 48,938,018.00 1,664,400.00
Interest receivable 341,000.00
Other receivables 2 334,698,405.37 305,330,386.21
Inventories 3 1,606,285,526.33 1,522,326,774.87
Total current assets 2,097,698,618.91 1,987,428,104.45
Non-current assets
Long-term equity investments 4 286,516,902.86 286,516,902.86
Investment Property 435,690,174.39 444,953,535.87
Fixed assets 35,112,954.53 36,367,166.98
Intangible assets 376,666.73 426,066.71
Long-term deferred and prepaid expenses 217,721.25 245,986.35
Deferred tax assets 6,814.20 6,814.20
Total non-current assets 757,921,233.96 768,516,472.97
TOTAL ASSETS 2,855,619,852.87 2,755,944,577.42
(The Notes form part of these financial statemtents)
8
BALANCE SHEET（Continued）
As at 30 June 2012(unaudited)
Prepared by: SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE& PROPERTIES (GROUP)
CO., LTD Units: Rmb Yuan
LIABILITIES AND OWNERS'
NoteXIII June 30, 2012 Dec 31, 2011
EQUITY
Current liabilities
Account payable 18,805,367.78 18,844,767.78
Advance from customers 11,389,156.60 12,627,059.60
Employee benefits payable 9,586,786.27 10,393,956.41
Taxes payable 1,703,455.39 1,636,872.67
Interest payable 16,535,277.94 16,535,277.94
Other payables 643,346,052.91 625,106,207.82
Non-current liability due in one year 534,273,710.68 557,095,738.47
Other current liability -- --
Total of current liability 1,235,639,807.57 1,242,239,880.69
Non-current liabilities
Long-term borrowings 403,679,444.13 299,621,374.64
Total non-current liabilities 403,679,444.13 299,621,374.64
Total liabilities 1,639,319,251.70 1,541,861,255.33
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 -773,604,256.93 -775,821,536.01
Total owners' equity 1,216,300,601.17 1,214,083,322.09
TOTAL LIABILITIES AND
2,855,619,852.87 2,755,944,577.42
OWNER'S EQUITY
(The Notes form part of these financial statemtents)
9
INCOME STATEMENT
6/30/2012(unaudited)
Prepared by: SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE& PROPERTIES (GROUP)
CO., LTD Units: Rmb Yuan
Items NoteXIII 1-6/2012 1-6/2011
1. Operating Income 5 35,178,901.24 56,173,437.09
Less: Cost of sales 5 13,073,029.87 25,469,746.52
Business Taxes and Surcharges 5,507,801.24 9,300,689.98
Selling and distribution expenses 2,183,414.92 200,008.48
General and administrative expenses 13,592,628.97 13,459,164.93
Finance expenses -1,365,021.84 4,149,886.99
Add: Gain from changes of fair value 25,479.05
Investment income 6 -39,400.77
Including: Investment income from
6 -- --
affiliates
2. Operating profit 2,187,048.08 3,580,018.47
Add: Non-operating income 30,231.00 995,716.90
Less:Non-operating expenses 28,910.00
Including: Loss from disposal of
-- --
non-current assets
3. Profit before income tax 2,217,279.08 4,546,825.37
Less: Income tax expenses --
4. Net profit 2,217,279.08 4,546,825.37
5. Other comprehensive income -- --
6. Total comprehensive income 2,217,279.08 4,546,825.37
(The Notes form part of these financial statemtents)
10
CASH FLOW STATEMENT
6/30/2012(unaudited)
Prepared by: SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE& PROPERTIES (GROUP)
CO., LTD Units: Rmb Yuan
Items Note XIII 1-6/2012 1-6/2011
1. Cash flows from operating activities
Cash received from sales of goods or rendering of services 33,177,385.26 53,321,655.66
Refund of taxes and levies -- --
Cash received relating to other operating activities 93,495,493.31 71,690,164.42
Sub-total of cash inflows 126,672,878.57 125,011,820.08
Cash paid for goods and services 114,370,846.62 18,072,694.57
Cash paid to and on behalf of employees 13,975,981.49 14,325,346.44
Payments of taxes and levies 8,234,754.56 8,714,849.13
Cash paid relating to other operating activities 92,853,530.98 27,343,816.00
Sub-total of cash outflows 229,435,113.65 68,456,706.14
Net cash flows from operating activities -102,762,235.08 56,555,113.94
2. Cash flows from investing activities
Cash received from investment retrieving --
Cash received as investment gains 75,000.00
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
Cash paid to acquire fixed assets, intangible assets and other
long-term assets 138,892.00 692,094.77
Cash paid to acquire investments --
Net cash received from subsidiaries and other operational -- --
Cash paid relating to other investing activities -- --
Sub-total of cash outflows 138,892.00 692,094.77
Net cash flows from investing activities -138,892.00 -617,094.77
3. Cash flows from financing activities
Cash received as investment -- --
Cash received from borrowings 126,000,000.00
Cash received from issuance of bonds -- --
Cash received relating to other financing activities -- --
Sub-total of cash inflows 126,000,000.00
Cash repayments of borrowings 45,236,955.55 13,161,200.01
Cash payments for interest expenses and distribution of
27,876,216.82 25,204,496.17
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 73,113,172.37 40,366,207.38
Net cash flows from financing activities 52,886,827.63 -40,366,207.38
4. Effect of foreign exchange rate changes on cash and -304.19 -414.21
5. Net equivalents
cashincrease in cash and cash equivalents -50,014,603.64 15,571,397.58
Add: Cash and cash equivalents at the beginning of year 144,779,100.65 191,108,590.15
6. Cash and cash equivalent at the end of year 94,764,497.01 206,679,987.73
(The Notes form part of these financial statemtents)
11
STATEMENT OF CHANGES IN OWNER'S EQUITY
6/30/2012 (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 -- -- -- -775,821,536.01 1,214,083,322.09
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 -- -- -- -775,821,536.01 1,214,083,322.09
3. Change in equity for the year -- -- -- -- -- 2,217,279.08 2,217,279.08
(1) Net profit -- -- -- -- -- 2,217,279.08 2,217,279.08
(2) Others -- -- -- -- -- -- --
Sub-total (1)& (2) -- -- -- -- -- 2,217,279.08 2,217,279.08
(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 -- -- -- -773,604,256.93 1,216,300,601.17
(The Notes form part of these financial statemtents)
12
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 -- -- -791,322,947.43 1,198,581,910.67
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 -- -- -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)
13
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
I. The company's basic information
B. 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.
C. The company's nature/business scope/main products or ser vices
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.
D. Approved financial report
The financial statements were authorized for issuance by the board of directors on 30th Augustl, 2012.
II. Summary of significant accounting policies, accounting estimates, prior period errors and prepare the
consolidated financial statements
14
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
Basis of preparation
The financial statements have been translated into English from the Company’s financial statementss issued in
Chinese.
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.
Accounting period
The fiscal year of the Group is from 1 January to 31 December.
Functional and presentation cur rency
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.
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.
Foreign cur rency transactions
Foreign currency transactions are, on an initial recognition, translated to RMB at the spot exchange rate on the dates
of the transactions.
Monetary items denominated in foreign currencies are translated into RMB at the spot exchange rate at the balance
15
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
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.
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 business
16
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
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.
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
Company makes necessary adjustments to the financial statements of the subsidiary based on the Company’s own
17
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
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.
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.
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
18
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(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.
19
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(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.
E. 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.
F. Inventories
(1) Categories of inventories
20
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
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.
21
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
G. Long ter m 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, it shall be measured at fair value: the exchange transaction has commercial substance; and, the fair value of
22
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
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
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.
23
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
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.
H. 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 difference
between the cost and book value includes in current profit and loss.
24
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
(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.
I. 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.
25
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(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.
J. 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.
26
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
K. 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.
L. Long-ter m prepaid expenses
Long-term prepaid expenses are amortized among the benefit periods average.
M. Bor rowing 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 or
production of assets eligible for capitalization, it shall be capitalized and recorded into the costs of relevant assets.
27
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
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 is being incurred;
②borrowing costs 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
28
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(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.
N. 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.
O. 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.
P. 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;
29
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(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.
30
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(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.
Q. Gover nment 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.
R. 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 back
temporary difference can be determited and the temporary difference won’t be transferred back in the future.
31
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
S. 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
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.
32
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
(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 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
33
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
caulated according to the revised leasing investment.
Contingent rent will be caulated in gain or loss when it happens.
T. 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.
U. 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.
(2) Changes in main accounting eatimation
There were no changes in main accounting eatimation that affected the Company during the period.
34
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
V. Previous accounting er rors 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%
Local Education surcharge** Business tax and value added tax payable 2%
Land appreciation Tax Sales revenue of properties ***
Income tax Income tax payable ****
* According to the noticification (guo fa [2010] No. 35) issued by the state council, which set the rules about
construction tax and education surcharge of domestic and foreign enterprises and individuals, it was adopted that
People's Republic of China construction tax tentative regulations issued in 1985 and education surcharge tentative
regulations issued in 1986 in domestic and foreign enterprises and individuals since December 1th, 2010. That is to
say, the same tax rateof construction tax and education surcharge was applied in domestic and foreign enterprises and
individuals.
**According to the provision (CaiZong (2010) No. 98 from the Treasury) about uniform of local educational expenses
to add, the local education surcharge is charged at 2% of the actual payment of VAT, business tax and
consumption tax. On July 4, 2011, Shenzhen City People’s government issued Interim Provision for Administration of
Shenzhen City Local education surcharge (Shen FuBan [2011] No.60). According to the provison, these companies
and individuals, including foreign-invested enterprises, foreign enterprises and foreign individuals, should pay local
education surcharge at 2% of the actual payment of VAT, business tax and consumption tax.
***On July 23, 2010, Shenzhen Local Tax Bureau issued a notice about the adjustment of pre-charge rate of the city
land value increment tax (Shen Local Tax Report [2010] 6). According to the announcement, from August 1, 2010,
the pre-charge rate of land value-added tax has beginned to be adjusted. Tthe pre-charge rate of standard residential is
35
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
1% of sales, while villas are 4% and other real estate is 3%. Ultra-progressive tax rate was used when clearing the
land valued added tax. 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.
* *** Enterprise income tax rate is as follows：
Items Income tax rate
Domestic Enterprises
- enterprises in Shenzhen 24%
- 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 infor mations of subsidiaries are as follows:
The informations of subsidiaries in mid-2012 are as follows:
36
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
(1) Subsidiaries acquired through new establishment or investment are as follows:
Net June 30, 2012
Registered Investment Net balance of Whether or not
capital (in in subsidiary other investment included in
Name of Registered Equity Voting
Types ten Nature of business and principal activities in substance items to the consolidated
the Subsidiary place holding rights
thousand (in ten subsidiaries（in ten financial
(%) (%)
Yuan) thousand thousand Yuan） statement
Yuan）
Shenzhen Petrel Hotel
Wholly-owned subsidiary shenzhen 3,000 Hotel 3,000 -- 100 100 YES
Co. Ltd.
Shenzhen City Property
Wholly-owned subsidiary shenzhen 725 Property management 725 -- 100 100 YES
Management Ltd.
Shenzhen Zhen Tung
Wholly-owned subsidiary shenzhen 1,000 Fitting-out contracting and maintenance 1,000 -- 100 100 YES
Engineering Ltd
Shenzhen City We Gen
Construction Wholly-owned subsidiary shenzhen 800 Construction project management 800 -- 100 100 YES
Management Ltd.
Shenzhen City Car
Wholly-owned subsidiary shenzhen 1,029 Car rental 1,029 -- 100 100 YES
Rental Ltd.
Shenzhen Shenfang Car
Wholly-owned subsidiary shenzhen 4,250 Develop and operate car park 4,250 -- 100 100 YES
Park Ltd.
Shenzhen City
Shenfang Investment Wholly-owned subsidiary shenzhen 1,000 Investment and management 1,000 -- 100 100 YES
Ltd.
37
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
Net June 30, 2012
Registered Investment Net balance of Whether or not
capital (in in subsidiary other investment included in
Name of Registered Equity Voting
Types ten Nature of business and principal activities in substance items to the consolidated
the Subsidiary place holding rights
thousand (in ten subsidiaries（in ten financial
(%) (%)
Yuan) thousand thousand Yuan） statement
Yuan）
Shenzhen City
Shenfang Free Trade Wholly-owned subsidiary shenzhen 500 Trading of Import and export 500 -- 100 100 YES
Trading Ltd.
Shenzhen City SPG
Long Gang Wholly-owned subsidiary shenzhen 3,000 Property development 3,000 -- 100 100 YES
Development Ltd.
Shenzhen Special
Economic Zone Real
Estate (Group) Wholly-owned subsidiary GuangZhou 2,000 Property development 2,000 -- 100 100 YES
Guangzhou Property
and Estate Co., Ltd.
Beijing fresh peak
property development
Wholly-owned subsidiary BeiJing US$1,000 operating of Real estate 7,671 -- 100 100 YES
management limited
company
Beijing SPG Property
Wholly-owned subsidiary BeiJing 50 Property management 50 -- 100 100 YES
Management Limited
Shenzhen ShenWu Wholly-owned subsidiary shenzhen 350 Elevator sales and service 350 -- 100 100 YES
38
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
Net June 30, 2012
Registered Investment Net balance of Whether or not
capital (in in subsidiary other investment included in
Name of Registered Equity Voting
Types ten Nature of business and principal activities in substance items to the consolidated
the Subsidiary place holding rights
thousand (in ten subsidiaries（in ten financial
(%) (%)
Yuan) thousand thousand Yuan） statement
Yuan）
elebator Co.,Ltd
Shenzhen Lain Hua
Trading of equipment and provision of renovation
Industry and Trading Wholly-owned subsidiary shenzhen 1,000 1,000 -- 100 100 YES
material
Co. Ltd.
Fresh Peak Holding
Wholly-owned subsidiary HongKong HKD100 Investment and management HKD100 3,134 100 100 YES
Ltd.
Wellam Ltd. Wholly-owned subsidiary HongKong HKD1 Investment holding HKD1 -- 100 100 YES
Shantou SEZ Wellam
Wholly-owned subsidiary ShanTou US$600 Property development US$600 -- 100 100 YES
Fty Bldg., Dev. Co.
Great Wall Estate Co.,
Subsidiary of holding company USA USD50 Property development USD35 10,138 70 70 YES
Inc
Fresh Peak Holdings
Wholly-owned subsidiary HongKong HKD100 Investment and management HKD100 57,472 100 100 YES
Ltd.
Skill Elite Ltd. Wholly-owned subsidiary HongKong HKD1 corporate financing HKD1 -- 100 100 YES
Fresh Peak Investment
Subsidiary of holding company HongKong HKD100 Properties investment HKD55 -- 55 55 YES
Ltd.
Openice Ltd. Wholly-owned subsidiary HongKong HKD100 Investment and management HKD120 -- 100 100 YES
39
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
Net June 30, 2012
Registered Investment Net balance of Whether or not
capital (in in subsidiary other investment included in
Name of Registered Equity Voting
Types ten Nature of business and principal activities in substance items to the consolidated
the Subsidiary place holding rights
thousand (in ten subsidiaries（in ten financial
(%) (%)
Yuan) thousand thousand Yuan） statement
Yuan）
Barenie Co. Ltd. Subsidiary of holding company HongKong HKD1 Properties investment HKD0.8 -- 80 80 YES
Keyear Development
Wholly-owned subsidiary HongKong HKD100 Investment holding HKD100 -- 100 100 YES
Ltd.
Guangzhou Huangpu
Xizun real estate limited Wholly-owned subsidiary GuangZhou HKD3980 Property development HKD3980 -- 100 100 YES
company
Fresh Peak Real Estate
Dev. Construction Wholly-owned subsidiary WuHan US$400 Property development US$400 -- 55 55 YES
(Wuhan) Co. Ltd.*①
Shenzhen Shenfang
Department Store Co. Wholly-owned subsidiary shenzhen 1,000 Commercial goods supplier 1,000 -- 100 100 No
Ltd.*②
Shenzhen CyberPort
Wholly-owned subsidiary shenzhen 2,000 Information Technology Advisory 1,400 -- 70 70 No
Co., Ltd *③
Shenzhen City SPG Bao
An Development Wholly-owned subsidiary shenzhen 2,000 Property development 2,000 -- 100 100 No
Ltd.*④
Shenzhen Real Estate Wholly-owned subsidiary shenzhen 1,371 Construction material, consume goods 596 -- 100 100 No
40
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
Net June 30, 2012
Registered Investment Net balance of Whether or not
capital (in in subsidiary other investment included in
Name of Registered Equity Voting
Types ten Nature of business and principal activities in substance items to the consolidated
the Subsidiary place holding rights
thousand (in ten subsidiaries（in ten financial
(%) (%)
Yuan) thousand thousand Yuan） statement
Yuan）
Consolidated Service
Co., Ltd *⑤
Shenzhen Shen Fang
Industrial Development Wholly-owned subsidiary shenzhen 300 Invest in industrial projects 450 -- 100 100 No
Co., Ltd.*⑥
Shenzhen Tefa Real
Estate Consolidated Wholly-owned subsidiary shenzhen 221 Construction and decoration 818 -- 100 100 No
Service Co., Ltd.*⑦
Bekaton Property
Subsidiary of holding company Australia US$20 Property Development 91 1,256 60 60 No
Limited *⑧
Canada Great Wall
Subsidiary of holding company Canada JOD 0.1 Property Development 0.45 8,904 75 75 No
( vancouver) *⑧
Property construction and trading of construction
Paklid Limited *⑧ Wholly-owned subsidiary HongKong HKD50 20 1,107 100 100 No
materials
Shenzhen City
Shenfang Construction
Wholly-owned subsidiary shenzhen 268 Construction materials 268 -- 100 100 No
and Decoration
Materials Ltd *⑨
41
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
Net June 30, 2012
Registered Investment Net balance of Whether or not
capital (in in subsidiary other investment included in
Name of Registered Equity Voting
Types ten Nature of business and principal activities in substance items to the consolidated
the Subsidiary place holding rights
thousand (in ten subsidiaries（in ten financial
(%) (%)
Yuan) thousand thousand Yuan） statement
Yuan）
Shenzhen ZhongGang
Haiyan Enterprise Subsidiary of holding company shenzhen 1,900 Tourism Restaurant 1,294 -- 68 68 No
Ltd.*⑩
Shenzhen Xing
Dongfang Store Ltd.* Wholly-owned subsidiary shenzhen 2,000 Domestic commercial goods supply 1,850 -- 100 100 No
11
Guangdong Province
FengKai in
Fengkai Lain Feng Manufacturing and trading
Subsidiary of holding company GuangDong US$800 12,126 -- 90 90 No
Cement Manufacturing in cement products
Province
Co., Ltd *12
42
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(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.
43
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(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 *②, *③,*④,* 12, 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.
44
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(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
Net June 30, 2012 Whether
Registered Net balance of
Nature of investment in or not
capital other investment Equity
Registered Registered business and subsidiary in include in
Types (in ten items to the holding Voting
place place principal substance the
thousand subsidiaries（in ten Percentag power
activities (in ten thousand financial
Yuan) thousand Yuan） e (%)
Yuan） statement
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.
V. Notes to the consolidated and the Company’s financial statements
1. Cash at bank and on hand
June 30, 2012 Dec 31, 2011
Original currency Exchange rate RMB Original currency Exchange rate RMB
Cash on hand
RMB 225,613.45 225,613.45 254,443.84 254,443.84
HKD 17,865.52 0.815 14,560.40 715.39 0.8122 581.06
USD 433.30 6.325 2,740.58 3,333.32 6.3167 21,055.58
242,914.43 276,080.48
Deposit with banks
RMB 204,842,046.26 204,842,046.26 284,705,859.96 284,705,859.96
45
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
June 30, 2012 Dec 31, 2011
Original currency Exchange rate RMB Original currency Exchange rate RMB
HKD 7,249,271.16 0.815 5,909,558.63 48,257,549.07 0.8122 39,196,229.08
USD 101,126.50 6.325 639,679.63 89,448.48 6.3167 565,019.22
211,391,284.52 324,467,108.26
Other monetary funds
RMB 1,090,000.00 8,772,701.66 8,592,057.86 8,592,057.86
HKD 165,007.26 0.815 134,480.92 164,974.35 0.8122 133,997.12
8,907,182.58 8,726,054.98
220,541,381.53 333,469,243.72
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. Accounts receivable
（1）The symbol of credit risk identified by customers categories
June 30, 2012 Dec 31, 2011
Book balance Proportion % Provision of bad debts Book balance proportion % Provision of bad debts
Category 1 -- -- -- -- -- --
Category 2 39,072,113.74 100.00 18,474,238.78 37,614,079.33 100.00 18,474,279.11
Total 39,072,113.74 100.00 18,474,238.78 37,614,079.33 100.00 18,474,279.11
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.
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 11,168,848.64 6,301,854.02 56.42
receivales with long aging and little
Engineering construction
retrievability.
funds and others 13,771,069.52 597,828.76 4.34
46
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
Total 39,072,113.74 18,474,238.78 47.28
(3) The aging of accounts receivable by categories:
June 30, 2012 Dec 31, 2011
Aging Provision of bad Provision of bad
Amount Proportion % Amount Proportion %
debts debts
Within 1 year (including 1
year, the same below) 3,991,218.72 10.22 -- 5,048,707.10 13.42 --
1 - 2 years 4,712,970.13 12.06 -- 2,387,215.72 6.35 --
2 - 3 years 2,094,055.49 5.36 -- 1,968,143.50 5.23 --
3- 5 years 62,399.74 0.16 -- 38,068.41 0.10 --
Above 5 years 28,211,469.66 72.20 18,474,238.78 28,171,944.60 74.90 18,474,279.11
Total 39,072,113.74 100.00 18,474,238.78 37,614,079.33 100.00 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
Engineering
Corporate unit No.1 Un-related party
3,093,642.52 7.92 1 - 2 years construction funds
Corporate unit No.2 Un-related party 1,852,322.50 4.74 Above 5 years
Engineering
Corporate unit No.3 Un-related party
1,600,188.37 4.10 Within 1 year construction funds
Engineering
Individual No.1 Un-related party construction
1,394,894.02 3.57 Within 1 year funds
Individual No.2 Un-related party 1,200,000.00 3.07 Above 5 years
Total 9,141,047.41 23.40
*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.
（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. (3) 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.
47
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
（9）There were no any accounting receivable which had been securitization.
3. Advance to suppliers
（1）The aging of advance to suppilers by categories:
June 30, 2012 Dec 31, 2011
Aging
Amount Proportion % Amount Proportion %
Within 1 year 88,535,593.71 86.7102 36,689,923.35 81.766
1 to 2 years 6,363,240.00 6.2320 971,011.25 2.164
2 to 3 years 206.35 0.0002 550.00 0.001
Above 3 years 7,206,113.85 7.0576 7,210,298.85 16.069
Total 102,105,153.91 100.00 44,871,783.45 100.00
The balance of advance to suppliers increased by Rmb 57,230thousand and has an increase of 127.55%. The increase
is due to engineering materials.
（2）The informations of accounts receivables of the company's top five debtors are as follows:
Name Relationship Amount Proportion % Aging Notes
Corporate unit No.1 Un-related party 46,000,000.00 45.05 Within 1 year advance payment in the construction.
Corporate unit No.2 Un-related party 31,419,886.06 30.77 Within 1 year advance payment in the material
Corporate unit No.3 Un-related party 6,179,545.75 6.05 Within 1 year advance payment in the material
Corporate unit No.4 Un-related party 2,435,446.41 2.39 Within 1 year advance payment in the material
Corporate unit No.5 Un-related party 2,089,135.41 2.05 Within 1 year The un-settled prepayment of fitment
Total 88,124,013.63 86.31
（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.
4. Interest receivable
Item Dec 31, 2011 Additions Redutions June 30, 2012
Bank of Shanhai Shenzhen Branch (Longgang
341,000.00 -- 341,000.00 --
Sub-branch)*
Total 341,000.00 -- 341,000.00 --
* The interest Reduce reason for the fixed deposit of 90 million in Bank of Shanhai Shenzhen Branch (Longgang
Sub-branch), the deposit period is from 17 Nov, 2011 to 17 Feb, 2012 and the interest rate is 3.10%.
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Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(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, 2012 Dec 31, 2011
Book Proportion Provision of Book Proportion Provision of
balance % bad debts balance % bad debts
Category 1 162,500,901.55 69.22 148,948,710.29 162,500,901.55 72.40 148,948,710.29
Category 2 72,269,684.01 30.78 29,416,032.98 61,958,418.82 27.60 29,422,675.04
Total 234,770,585.56 100.00 178,364,743.27 224,459,320.37 100.00 178,371,385.33
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 1,324,136.04 1,116,316.04 84.31 receivales with long aging and little
Others 70,945,547.97 28,299,716.94 39.89 retrievability
Total 72,269,684.01 29,416,032.98 40.70
（3）The aging of accounts receivable by categories:
June 30, 2012 Dec 31, 2011
Aging Proportion Provision of Proportion Provision of
Amount Amount
% bad debts % bad debts
49
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
Within 1 year
(including 1 year, 10,517,404.45 4.48 -- 5,742,193.32 2.56 --
the same below)
1 - 2 years 4,082,199.30 1.74 -- 4,164,398.60 1.86 --
2 - 3 years 7,720,561.43 3.29 -- 3,276,724.27 1.46 --
3 - 5 years 2,566,254.81 1.09 -- 1,855,785.35 0.83 --
Above 5 years 209,884,165.57 89.40 178,364,743.27 209,420,218.83 93.29 178,371,385.33
Total 234,770,585.56 100.00 178,364,743.27 224,459,320.37 100.00 178,371,385.33
（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 37.92 Above 5 years
Paklid Limited * Subsidiary 18,946,689.75 8.07 Above 5 years
Bekaton property Limited * Subsidiary 12,559,290.58 5.35 Above 5 years
Guangdong province Huizhou Luofu Hill Mineral Water Co.,Ltd Joint venture 10,465,168.81 4.46 Above 5 years
Luofu Hill Travelling Corporation Un- related party 9,600,000.00 4.09 Above 5 years
Total 140,606,897.21 59.89
* 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. (3) 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, 2012 Dec 31, 2011
Amount Provision Amount Provision
Real estate developed products 260,997,525.39 -- 330,937,275.39 --
Real estate developing products 1,920,784,914.96 47,584,499.31 1,316,044,794.01 47,584,499.31
Real estate which are going to be developed -- -- 488,129,480.59 --
Raw materials 821,754.22 -- 456,564.13 --
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Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
Finished products 675,042.16 278,891.91 592,570.73 278,891.91
Low-value consumable products 29,084.92 -- 29,985.02 --
Construction in progress 89,079,105.34 -- 44,432,927.93 --
Total 2,272,387,426.99 47,863,391.22 2,180,623,597.80 47,863,391.22
（2）Provision
Redutions
Dec 31, 2011 Additions June 30, 2012
Transferred back Written-off
Finished products 278,891.91 -- -- -- 278,891.91
Shengfang Shanglin Garden 47,584,499.31 -- -- -- 47,584,499.31
47,863,391.22 -- -- 47,863,391.22
（3）Real estate developed products
Finished time Dec 31, 2011 Additions Redutions June 30, 2012
Jinye Island villa No.1 1996 602,180.72 602,180.72
Jinye Island Multi-tier villa 1997 36,383,546.37 -- -- 36,383,546.37
Jinye Island villa No.6 2007 7,005,473.61 -- 2,798,508.60 4,206,965.01
Jinye Island villa No.7 2007 3,672,297.51 -- -- 3,672,297.51
Jinye Island villa No.9 2009 24,411,425.96 -- 7,261,525.77 17,149,900.19
Jinye Island villa No.10 2010 182,800,363.07 -- 58,967,971.35 123,832,391.72
Jinye Island villa No.11 2008 29,294,280.73 -- -- 29,294,280.73
HuangPuXinChun No.1 1994 121,283.88 -- -- 121,283.88
HuangPuXinChun No.2 2007 3,601,484.75 -- 911,744.28 2,689,740.47
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 2,151,920.73 -- -- 2,151,920.73
Wenjin warehouse 1-5 floor 13,507,895.61 -- -- 13,507,895.61
Real Estate building 11,025,444.77 -- -- 11,025,444.77
Wenjing Garden 3,818,939.87 -- -- 3,818,939.87
Total 330,937,275.39 -- 69,939,750.00 260,997,525.39
（4）Real estate developing products
Starting time Finished time Dec 31, 2011 June 30, 2012
DongHuDiJing Building* 130,118,235.51 130,966,363.51
ShenFang east yue scene 2008 69,090,057.78 63,427,856.39
Shengfang Shanglin Garden 2007 270,963,105.93 246,218,888.14
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Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
ShanTou Fresh Peak Building 22,461,516.39 22,074,672.22
Shengfang east area of mountain ChuanQi 2001 917,705,866.36 853,357,013.75
Shengfang west area of mountain ChuanQi 2002 510,446,132.99 --
Total 1,920,784,914.96 1,316,044,794.01
The capitalisation amount of loans was Rmb 28,247,669.94 during the accounting year, compared to Rmb
24,944,603.36 last year .
* Refer to NoteX. 3. for details of DongHu DiJing Building.
（5）Real estate which are going to be developed
Dec 31, 2011 Additions Reductions June 30, 2012
Shengfang west area of ChuanQi mountain 488,129,480.59 -- 488,129,480.59 --
Total 488,129,480.59 -- 488,129,480.59 --
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 853,357,013.75was transferred
to Real estate developing products.
52
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
7. Long-ter m 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 this
method cost (%) (%) in cash provision
year
1.Associate investment
Equity
Shenzhen Ronghua JiDian Co.,ltd
method 1,250,000.00 1,524,067.93 -- 1,524,067.93 25 25 -- 1,076,954.64
Shenzhen Fresh Peak property Equity
consultant Co.,Ltd method 600,000.00 -- -- -- 20 20 -- -- --
Shenzhen runhua automobile trading Equity
Co.,Ltd method 1,445,425.56 1,445,425.56 -- 1,445,425.56 50 50 -- -- 1,445,425.56
Shenzhen Dongfang New world store Equity
Co.,Ltd method 15,000,000.00 -- -- -- 50 50 -- -- --
2.Joint venture investment
Guangdong province Huizhou Equity
Luofu Hill mineral water Co.,Ltd method 9,969,206.09 9,969,206.09 -- 9,969,206.09 Cooperation Cooperation -- -- 9,969,206.09
Equity
Fengkai Xinhua Hotel
method 9,455,465.38 9,455,465.38 -- 9,455,465.38 Cooperation Cooperation -- -- 9,455,465.38
Equity
Jiangmen Xinjian Real Estate Co. Ltd.
method 9,037,070.89 9,037,070.89 -- 9,037,070.89 Cooperation Cooperation -- -- 912,537.16
Equity
Xian Fresh Peak Building Co. Ltd.
method 32,840,729.61 32,840,729.61 -- 32,840,729.61 Cooperation Cooperation -- -- 20,673,831.77
53
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(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 this
method cost (%) (%) in cash provision
year
Equity
DongYi Property Co.,Ltd
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 Cost
Development Co., Ltd method 4,500,000.00 4,500,000.00 -- 4,500,000.00 100 100 -- -- 4,500,000.00
Shenzhen ZhongGang Haiyan Cost
Enterprise Ltd. method 12,940,900.00 12,940,900.00 -- 12,940,900.00 68 68 -- -- 12,940,900.00
Shenzhen Real Estate Consolidated Cost
Service Co., Ltd. method 5,958,305.26 5,958,305.26 -- 5,958,305.26 100 100 -- -- 5,958,305.26
Cost
Paklid Limited
method 201,100.00 201,100.00 -- 201,100.00 100 100 -- -- 201,100.00
Cost
Bekaton Property Limited
method 906,630.00 906,630.00 -- 906,630.00 60 60 -- -- 906,630.00
Canada Great Wall (Vancouver) Cost
Co.,Ltd method 4,526.25 -- -- -- 75 75 -- -- --
Shenzhen Tefa Real Estate Cost
Consolidated Service Co., Ltd. method 8,180,003.63 8,180,003.63 -- 8,180,003.63 100 100 -- -- 8,180,003.63
Cost
Shenzhen Xin Dongfang Store Ltd.
method 18,500,000.00 18,500,000.00 -- 18,500,000.00 100 100 -- -- 18,500,000.00
Shenzhen City Shenfang
Cost
Construction and Decoration
method
Materials Ltd. 2,680,000.00 2,680,000.00 -- 2,680,000.00 100 100 -- -- 2,680,000.00
54
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(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 this
method cost (%) (%) in cash provision
year
Shenzhen Shenfang Department Cost
Store Co. Ltd. method 10,000,000.00 10,000,000.00 -- 10,000,000.00 100 100 -- -- 10,000,000.00
Cost
Shenzhen CyberPort Co., Ltd
method 14,000,000.00 7,613,507.96 -- 7,613,507.96 70 70 -- -- --
YunNan KunPeng Flight service Cost
Co.,Ltd method 5,464,240.74 5,464,240.74 -- 5,464,240.74 25 25 -- -- --
ShenZhen ShenFang BaoAn Cost
developmentCo.,Ltd method 20,000,000.00 20,379,525.68 -- 20,379,525.68 100 100 -- -- --
Cost
Shantou Fresh Peak Building
method 68,731,560.43 58,547,652.25 -- 58,547,652.25 100 100 -- -- 58,547,652.25
Guangdong Province Fengkai Lain
Cost
Feng Cement Manufacturing Co.,
method
Ltd. 121,265,000.00 56,228,381.64 -- 56,228,381.64 90 90 -- -- 56,228,381.64
Total 403,306,248.73 306,748,297.51 -- 306,748,297.51 -- -- 243,402,109.25
55
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(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
Shenzhen ZhongGang Haiyan Enterprise Ltd. 12,940,900.00 -- -- -- 12,940,900.00
Shenzhen Real Estate Consolidated Service Co., Ltd. 5,958,305.26 -- -- -- 5,958,305.26
Paklid Limited 201,100.00 -- -- -- 201,100.00
Bekaton Property Limited 906,630.00 -- -- -- 906,630.00
Shenzhen Tefa Real Estate Consolidated Service Co., 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
Ltd. 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
Co., Ltd. 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, 2011 Additions Reductions June 30, 2012
Original cost
Buildings 748,891,106.42 -- -- 748,891,106.42
Land-use right 97,363,535.61 126,392.10 -- 97,489,927.71
total 846,254,642.03 126,392.10 -- 846,381,034.13
Accumulated depreciation
Buildings 244,213,607.19 10,045,432.38 -- 254,259,039.57
Land-use right --
total 244,213,607.19 10,045,432.38 -- 254,259,039.57
Provision for impairment losses
56
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
Dec 31, 2011 Additions Reductions June 30, 2012
Buildings 14,128,544.62 14,128,544.62
Land- use right 79,910,796.71 103,735.89 80,014,532.60
total 94,039,341.33 103,735.89 -- 94,143,077.22
Book value
Buildings 490,548,954.61 -- -- 480,503,522.23
Land-use right 17,452,738.90 -- -- 17,475,395.11
Total 508,001,693.51 497,978,917.34
The amount of current year deprication is Rmb 10,045,432.38, compared with Rmb 10,495,091.70 last year.
The increase of Original cost and Accumulated depreciation of building is mainly due to the change of rate used in
translation of foreign currencies
Among the investment property, Rmb 364,506,269.14 of net book value of buliding was used as mortgage for the
company’s short-term/long-term loans. Refer to Note V.14 for details.
9. Fixed assets and Accumulated depreciation
Dec 31, 2011 Additions Reductions June 30, 2012
Cost
Buildings 117,201,722.56 117,201,722.56
Transport equipment 18,619,290.60 1,479,366.00 1,229,341.00 18,869,315.60
Electronic equipment and others 14,139,926.65 1,202,290.64 115,084.95 15,227,132.34
Total 149,960,939.81 2,681,656.64 1,344,425.95 151,298,170.50
Accumulated depreciation
Buildings 66,289,919.14 1,854,644.79 68,144,563.93
Transport equipment 12,494,563.02 947,805.34 1,226,873.95 12,215,494.41
Electronic equipment and others 10,257,846.00 581,320.05 109,910.04 10,729,256.01
Total 89,042,328.16 3,383,770.18 1,336,783.99 91,089,314.35
Provision for impairment loss
Electronic equipment and others
Net book value
Buildings 50,911,803.42 49,057,158.63
Transport equipment 6,124,727.58 6,653,821.19
Electronic equipment and others 3,882,080.65 4,497,876.33
Total 60,918,611.65 60,208,856.15
The amount of current year depreciation is Rmb 3,383,770.18, compared with Rmb 2,980,722.42 last year. No
57
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
construction in progress was transferred to fixed assets in this accounting year.
As at June 30 2012, book value Rmb 27,532,001.37 of the Buildings was used as the long-term loans’ mortgage
(including the long-term loans due within one year). Refer to Note V.14 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. Intangible assets
Dec 31, 2011 Additions Amortization June 30, 2012
Original cost
Software 812,000.00 -- -- 812,000.00
Taxi license 6,368,000.00 -- -- 6,368,000.00
Total 7,180,000.00 -- -- 7,180,000.00
Accumulative amortization
Software 258,733.29 81,199.98 -- 339,933.27
Taxi license 725,180.00 83,790.00 -- 808,970.00
Total 983,913.29 164,989.98 -- 1,148,903.27
Net value
Software 553,266.71 -- -- 472,066.73
Taxi license 5,642,820.00 -- -- 5,559,030.00
Total 6,196,086.71 6,031,096.73
Provision for impairment loss
Book value
Software 553,266.71 472,066.73
Taxi license 5,642,820.00 5,559,030.00
Total 6,196,086.71 6,031,096.73
58
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
11. Long-ter m defer red and prepaid expenses
Amortization Accumulative
Original cost Dec 31, 2011 Additions June 30, 2012
Current year amortization
Decoration costs 2,437,115.53 591,264.09 -- 101,977.02 1,947,828.46 489,287.07
12. Defer red tax assets
The deferred tax asset which were already recognized
June 30, 2012 Dec 31, 2011
Assests impairment provision 11,896,124.83 11,896,124.83
Dismiss welfare 816,350.26 816,350.26
Unused operating losses against tax 7,690,757.74 7,690,757.74
Total 20,403,232.83 20,403,232.83
the amount of temporary difference is as follow:
Amount of temporary difference
Assests impairment provision 47,584,499.32
Dismiss welfare 3,265,401.05
Unused operating losses against tax 30,763,030.96
Total 81,612,931.33
13. Impair ment provision of assets
Reductions
Dec 31, 2011 Additions June 30, 2012
Transferred back Written-off
Provision for bad debts 196,845,664.44 -- 6,682.39 196,838,982.05
Inventories impairment provision 47,863,391.22 -- -- -- 47,863,391.22
Long-term equity investment
impairment provision 243,402,109.25 -- -- -- 243,402,109.25
Investment property impairment provision 94,039,341.33 103,735.89 -- -- 94,143,077.22
Fixed assets impairment provision -- -- -- -- --
Total 582,150,506.24 103,735.89 6,682.39 -- 582,247,559.74
The variation of impairment provision of assets is due to the change of rate used in translation of foreign currencies.
59
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
14. Restrictions on the ownership of assets
Book value on June
Items Mortagage period
30, 2012
Deposits with bank Other monetary funds 8,502,057.86
Inventories(work in process) DongHuDiJing Building land-use right Apr 15,2012 to Dec 7,2012 112,858,904.00
Inventories(work in process) Shengfang east area of mountain
ChuanQi land-use right Apr 20,2012 To Oct 17,2014 736,800,000.00
Inventories(work in process) Shengfang west area of mountain
ChuanQi land-use right June 14,2012 To June 14,2015 463,200,000.00
Investment Property Shen Fang Square June 30,2010 to June 1,2020 227,313,869.64
Investment Property Petrel Building June 3,2010 to June 1,2020 69,845,932.29
Investment Property GuoShang North 2 floor May 29,2007 to May 29,2017 67,346,467.21
Inventories (Real estate
developed products) Real estate Building 5-6 floor Nov 26,2010 to Nov 26,2013 7,492,175.18
Fixed assests ShenFang Square 46-48 floor Aug 23,2010 to Nov 26,2013 27,532,001.37
Total 1,720,891,407.55
* 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.
15. Short-ter m bor rowings
Nature June 30, 2012 Dec 31, 2011
Mortgage borrowings -- --
Credit borrowing 30,000,000.00 20,000,000.00
Total 30,000,000.00 20,000,000.00
（1） The short-term borrowings were credit loans by Shenzhen Zhen Tung Engineering Ltd from Shenzhen branch
of China CITIC Bank. The closing balance is as follows:
Lender Loan period Currency Interest rate Condition Dec 31, 2011
60
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
10% above the withdraws day benchmark lending
Shenzhen branch of Sep 22,2011 to credit
RMB rate of the people's bank of China for the same 10,000,000.00
China CITIC Bank Sep 22, 2012 loans
period and the same class loans
May 30.2012 10% above the withdraws day benchmark lending
Shenzhen branch of credit
to May RMB rate of the people's bank of China for the same 20,000,000.00
China CITIC Bank loans
30.2013 period and the same class loans
Total 30,000,000.00
（2）The company didn’t fail repaid any due short-term borrowings.
16. Accounts payable
June 30, 2012 Dec 31, 2011
Accounts payable 93,925,003.50 109,202,474.18
（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.
17. Advance from customers
The aging analysis of the company’s accounts receivable is as follow:
June 30, 2012 Dec 31, 2011
Aging
Amount Proportion% Amount Proportion %
Within 1 year 199,990,867.96 83.35 219,012,465.42 84.57
Above 1 year 39,963,630.15 16.65 39,963,630.15 15.43
Total 239,954,498.11 100.00 258,976,095.57 100.00
（1）The balance of accounts payable decreased by7.35%. The decrease is due to recognition of income from advance
from customers when the conditions for the recognition of the income were met.
（2）The balance whose aging were more than 1 year were mostly the import and export agency business payment
which haven’t settle with the clients and advance payment from housing buyers.
（3）No amount due to shareholders who hold 5% or more of the voting rights of the comanpy is included in the
above balance .
（4）No amount due to related parities is included in the above balance.
61
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
At June 30, 2012，the main items of Advances from customers are as follow:
June 30, 2012
Items Dec 31, 2011
Amounts Situation Aging
Guangzhou Huangpu yuan 897,500.00 Completed Within 1 year 1,588,840.00
Jinye Island villa No. 6 2,000,000.00 Completed Within 1 year 7,200,000.00
Jinye Island villa No. 7 3,254,703.00 Completed between 1 and 2 year 3,254,703.00
Jinye Island villa No. 9 7,620,000.00 Completed Within 1 year 5,694,800.00
Jinye Island villa No. 10 65,192,885.00 Completed Within 1 year 145,355,609.78
Jinye Island villa No. 11 11,303,324.00 Completed Within 1 year 4,030,624.00
Total 90,268,412.00 167,124,576.78
18. Employee benefits payable
Dec 31, 2011 Additions Reductions June 30, 2012
Wages , bonuses, allowances and subsidies 28,486,516.43 35,288,224.75 40,424,181.85 23,350,559.33
Staff welfare -- 2,564,148.81 2,539,875.00 24,273.81
Social securities 3,160,806.63 7,275,438.01 7,508,775.51 2,927,469.13
including：Pension insurance 1,404,236.45 2,881,334.74 2,820,997.67 1,464,573.52
Medical insurance 1,103,073.77 1,448,441.12 1,422,297.01 1,129,217.88
Unemployement insurance -- 120,359.70 112,618.53 7,741.17
Employement injury insurance -- 122,186.94 114,891.18 7,295.76
Maternity insurance -- 127,488.35 123,817.24 3,671.11
Housing Fund 653,496.41 2,575,627.16 2,914,153.88 314,969.69
Labor union and employee education funds 813,221.85 773,828.02 691,136.28 895,913.59
Compensation to employees for termination of employment
relationship 3,897,639.39 105,930.45 105,930.45 3,897,639.39
Others 31,757.05 2,137,797.26 1,596,588.41 572,965.90
Total 36,389,941.35 48,145,367.30 52,866,487.50 31,668,821.15
（1）No amount’s nature of the employee benefits payable were arrears of wage.
（2）The amount of Labor union and employee education funds were Rmb 691,136.28. The nature was monetary
benefits. The amount of Compensation to employees for termination of employment relationship was Rmb
105,930.45.
19. Taxes payable
June 30, 2012 Dec 31, 2011
Value added tax (“VAT”) -5,302,237.62 -5,068,827.11
62
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
Business tax -8,020,009.17 -8,333,346.56
Construction tax -663,679.31 -624,580.98
Education surcharge -288,271.15 -274,944.28
Embankment Protection Fee -97,356.49 -151,734.75
Property tax 1,711,577.46 1,723,069.64
Land value added tax 3,772,829.04 2,347,034.79
Corporate Income tax -2,478,914.58 13,453,711.50
Personal income tax 348,719.04 -100,738.60
Others -- --
Total -11,017,342.78 2,969,643.65
The balance of taxes payable decreased by Rmb 13,990 thousands, The decrease is due to enterprise income tax
payment of last year.
20. Interests payable
June 30, 2012 Dec 31, 2011
Shenzhen Investment Shareholding Co.，Ltd 16,535,277.94 16,535,277.94
Total 16,535,277.94 16,535,277.94
The balance of interests payable due to Shenzhen Investment Shareholding Co.，Ltd. were accured from the loans
borrowed from 2007 to 2010.
21. Other payables
June 30, 2012 Dec 31, 2011
Other payables 392,204,108.04 384,721,231.13
（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, 2012 Dec 31, 2011 Nature of other payables
Shenzhen Investment Holdings Co., Ltd. 63,848,819.24 63,848,819.24 Loans
（2）Up to June 30,2012, accrued land value increment tax with an amount of RMB 113,293,144.06 was included.
（3）The amount whose aging were more than 1 year are mostly loans borrowed form related parities, land value
increment tax and leasing deposit.
（4）Please refer to Note VI.3. (3) for details of the amount owed to related parties.
63
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
22. Non-cur rent liabilities within one year
June 30, 2012 Dec 31, 2011
Long-term loans within one year
Mortgage loans 124,273,710.68 57,095,738.47
Guaranteed loans 500,000,000.00 640,000,000.00
Total 624,273,710.68 697,095,738.47
(1) The company didn’t fail to repay the due long-term loans in the accounting year.
（2）The lenders of long-term loans are as follows
lender Maturity Date Currency June 30, 2011
Bank of Shanghai (Shenzhen Branch) Dec 7,2012 RMB 500,000,000.00
Nanyang Commercial Bank (Shenzhen Branch) June 20,2013 RMB 6,553,710.68
Shenzhen Rural Commercial Bank June 20,2013 RMB 12,000,000.00
Industrial and Commercial Bank of China (Shenzhen
June 20,2013
Branch) RMB 5,720,000.00
Bank Of East Asia(Shenzhen Branch) June 20,2013 RMB 10,000,000.00
Bank of Communications (Shantou Branch) Aug 3.2012 RMB 90,000,000.00
624,273,710.68
The borrowing rate is above a certain percentage of the benchmark interest rate in accordance with the People's Bank
of China over the same period.
23. Long-ter m Bor rowings
Loans conditions June 30, 2012 Dec 31, 2011
Mortgage loans 527,953,154.81 356,717,113.11
Guarantee loans 500,000,000.00 640,000,000.00
Total 1,027,953,154.81 996,717,113.11
Including.：non-current liability within one year 624,273,710.68 697,095,738.47
long term loans 403,679,444.13 299,621,374.64
The informations for the ending balance of long-term loans owed to each lender are as follows:
Lender Currency June 30, 2012 Conditions Maturity Date
Shenzhen Rural Commercial Bank RMB 100,000,000.00 Mortgage Nov 26,2013
Shenzhen Rural Commercial Bank RMB 89,000,000.00 Mortgage Aug 23.2013
64
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
Industrial and Commercial Bank of China (Shenzhen Branch) RMB 20,000,000.00 Mortgage Oct 17.2014
Shenzhen Rural Commercial Bank RMB 76,000,000.00 Mortgage June 14.2015
Bank Of East Asia(Shenzhen Branch) RMB 30,000,000.00 Mortgage June 29.2015
Nanyang Commercial Bank (Shenzhen Branch) RMB 34,393,154.81 Mortgage May 29,2017
Bank of Shanghai (Shenzhen Branch) RMB 500,000,000.00 Guaranteed Dec 7.2012
Industrial and Commercial Bank of China (Shenzhen Branch) RMB 88,560,000.00 Mortgage June 1.2020
Bank of Communications (Shantou Branch) RMB 90,000,000.00 Mortgage Aug 3.2012
Total 1,027,953,154.81
* 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
DongHuDiJing Building land-use right. Refer to Note V.14 for details.
24. Long-ter m payable
June 30, 2012 Dec 31, 2011
Maintenance fund 11,070,029.55 10,308,648.22
25. Share capital
Dec 31, 2011 Additions Reductions June 30, 2012
Total shares 1,011,660,000 -- -- 1,011,660,000
26. Capital reser ve
Dec 31, 2011 Additions Reductions June 30, 2012
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
27. Sur plus reser ve
Dec 31, 2011 Additions Reductions June 30, 2012
Reserve fund 4,974,391.15 -- -- 4,974,391.15
28. Retained Ear nings
June 30, 2012 Dec 31, 2011
Retained Earnings at the end of last year -475,968,948.89 -577,169,009.54
Add: adjustment amount -- --
Retained Earnings at the beginning of year -475,968,948.89 -577,169,009.54
Add: net profit for parent Company’s shareholders 40,084,098.09 101,200,060.65
65
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
June 30, 2012 Dec 31, 2011
less：Profit distribution -- --
Including.：withdrawal legal surplus -- --
Withdrawal special surplus -- --
Distribution to ordinary shareholders -- --
Make up for losses with surplus reserve -- --
Retained Earnings at the ending of year -435,884,850.80 -475,968,948.89
29. Minority Interest
Proportion of minority
Name of investees June 30, 2012 Dec 31, 2011
shareholdings %
Fresh Peak Investment Ltd. 45 -104,543,516.57 -104,543,516.57
Barenie Co. Ltd. 20 -2,033,931.94 -2,033,931.94
Great Wall Estate Co., Inc 30 -21,719,763.98 -21,712,466.71
Total -128,297,212.49 -128,289,915.22
30. Tur nover and cost of sales
(1) Turnover and cost of sales
1-6/2012 1-6/2011
Core operating income 447,364,203.07 553,919,803.97
Other operating income -- --
Gross Income 447,364,203.07 553,919,803.97
Cost of sales 310,482,609.12 381,699,513.43
66
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
(2) Core operating Income（classfied by industry）
Operating Income Operating Cost Operating Margin
Industry
1-6/2012 1-6/2011 1-6/2012 1-6/2011 1-6/2012 1-6/2011
Real estate 171,290,731.00 274,744,823.00 76,250,647.97 140,624,745.69 95,040,083.03 134,120,077.31
Construction 182,734,297.82 187,799,797.42 171,454,717.81 176,321,179.81 11,279,580.01 11,478,617.61
Leasing 30,141,506.10 28,301,072.75 11,819,302.94 13,384,825.80 18,322,203.16 14,916,246.95
Property
management 51,453,638.87 51,349,228.03 41,628,088.89 41,508,369.19 9,825,549.98 9,840,858.84
Hotel and others 11,744,029.28 11,724,882.77 9,329,851.51 9,860,392.94 2,414,177.77 1,864,489.83
Total 447,364,203.07 553,919,803.97 310,482,609.12 381,699,513.43 136,881,593.95 172,220,290.54
（3）Core business（classified by district）
Operating Income Operating Cost Operating Margin
District
1-6/2012 1-6/2011 1-6/2012 1-6/2011 1-6/2012 1-6/2011
Domestic:
GuangDong Province 447,055,009.59 553,586,209.99 310,482,609.12 381,699,513.43 136,572,400.47 171,886,696.56
Overseas： 309,193.48 333,593.98 -- -- 309,193.48 333,593.98
Total 447,364,203.07 553,919,803.97 310,482,609.12 381,699,513.43 136,881,593.95 172,220,290.54
（4）The informations of the top 5 clients are as follows:
1-6/2012
Client
Amount Proportion%
Corporation unit No.1 12,156,000.00 2.72
Corporation unit No.2 9,501,999.12 2.12
Corporation unit No.3 7,404,177.00 1.66
Individual 7,200,000.00 1.61
Corporation unit No.4 6,730,000.00 1.50
Total 42,992,176.12 9.61
67
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
31. Business Taxes and Surcharges
1-6/2012 1-6/2011
Business tax 19,268,563.25 23,480,726.07
City maintenance and construction tax 1,312,295.65 992,846.83
Educational surcharge 892,129.66 461,167.12
Property tax 3,147,535.56 3,157,056.99
Land value added tax 19,413,284.32 20,163,634.52
Embankment Protection Fee 682,275.27 1,063,041.75
Total 44,716,083..71 49,318,473.28
32. Selling and distribution expenses
1-6/2012 1-6/2011
Employee benefits 949,054.46 616,512.13
Advertising expenses 3,883,759.00 2,181,140.00
Entertainment expenses 124,874.00 214,008.90
Others 1,298,688.77 1,211,917.59
Total 6,256,376.23 4,223,578.62
33. General and administrative expenses
1-6/2012 1-6/2011
Employee benefits 12,979,250.05 15,234,153.28
Depreciation and amortizaon 2,727,032.93 2,773,247.92
Entertainment expenses 2,329,855.17 2,311,246.85
Others 11,227,285.03 10,858,531.70
Total 29,263,423.18 31,177,179.75
34. Finance expenses
1-6/2012 1-6/2011
Interest expenses 32,899,322.07 32,183,842.67
Less：capitalization interest 28,247,669.94 24,944,603.36
Less: interest income 1,152,479.46 1,112,553.32
Exchange losses -- --
Less: exchange gains 209,478.42 541,375.61
Others 130,161.76 125,243.70
Total 3,419,856.01 5,710,554.08
The financial expenses decreased by Rmb 229,070 thousand, a decrease of 40.11%. The decrease is due to the accrued
68
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
interest expenses caused by capitalization of interest.
35. Investment income
The details of investment income are as follows:
1-6/2012 1-6/2011
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 equity -- --
The investment income yielded from the disposal of the
financial assest held for trading -- -39,400.77
Others 50,000.00 100,000.00
Total 50,000.00 60,599.23
36. Non-operating income
1-6/2012 1-6/2011
1.Total gain on disposal of non current assets 23,868.70 237,717.96
including：Gain on disposal of fixed assets -- 178,267.96
2.Penalty income 30,331.00 800,000.00
3.Compensation income 520.00 95,312.00
4.Others 8,242.14 4,991.05
Total 62,961.84 1,138,021.01
37. Non-operating expenses
1-6/2011 1-6/2010
1.Total losses on disposal of non current assets 9,175.80 38,036.39
including：Loss on disposal of fixed assets -- --
2.Penalty expense 8,215.00 367.20
3.Donation expenses 10,000.00 64,000.00
4.Compensation expense* -- 18,810.00
5.Others 21,167.47 62,400.00
Total 48,558.27 183,613.59
69
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
38. Income tax expenses
1-6/2012 1-6/2011
Current year income tax expenses 13,182,343.19 18,548,556.91
Deferred income tax expenses -- --
Total 13,182,343.19 18,548,556.91
39. Calculation of basic ear nings per share and diluted ear nings per share
1-6/2012 1-6/2011
Net profit for parent company’s shareholders 40,084,098.09 64,300,859.86
Weighted average number of ordinary shares issued 1,011,660,000.00 1,011,660,000.00
Basic earnings per share 0.0396 0.0636
Diluted earnings per share 0.0396 0.0636
40. 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
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 -76,219.59 1,943,257.60
less：the net amount of dealing with the overseas operationg gain or loss -- --
Total -76,219.59 1,943,257.60
70
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
ITEM 1-6/2011 1-6/2010
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 -76,219.59 1,943,257.60
41. Cash flow statements
（1）Cash received from operating activities
1-6/2012 1-6/2011
Interest income 7,540,099.77 1,0528,891.34
Mortgage and deposits 11,261,354.48 2,768,329.00
Correspondent payment 9,630,981.84 30,782,659.92
Maintenance fund 2,309,593.38 2,050,062.13
Others 4,436,877.74 4,345,313.26
Total 35,178,907.21 50,475,255.65
（2）Cash paid for other operating activities
1-6/2012 1-6/2011
Cash paid to general and administrative expenses 12,129,988.00 9,826,214.64
Cash paid to operating expenses 5,112,100.14 3,330,533.61
Mortgage and guarantee 7,785,702.62 10,105,008.00
Porperty license fee and survey fee 3,283,165.96 132,830.49
Other correspondent payment 14,034,304.39 9,805,612.37
Others 26,628,306.31 23,705,747.94
Total 68,973,567.42 56,905,947.05
（3）Cash received from borrowings
1-6/2012 1-6/2011
Cash received from short-term borrowings 20,000,000.00 10,000,000.00
Cash received from long-term borrowings 126,000,000.00 --
Total 146,000,000.00 10,000,000.00
71
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
（4）Cash repaid the borrowings
1-6/2012 1-6/2011
Cash repaid the short-term borrowings 10,000,000.00 27,961,200.01
Cash repaid the long-term borrowings 95,236,955.55 --
Total 105,236,955.55 27,961,200.01
（5）Cash payments relating to other financing activities
1-6/2012 1-6/2011
Guarantee fees for bank loan -- 2,000,000.00
(6) Supplementary cash flow statement of the company
Supplementary information 1-6/2012 1-6/2011
1. Reconciliation from the net profit to the cash flows from operating activities
Net profit 40,107,915.20 64,282,433.60
Add：Provisions for assets impairment -- --
Depreciation of fixed assets and investment property 13,308,286.90 13,475,814.12
Amortization of intangible assets 164,989.98 137,389.98
Long-term deferred and prepaid expenses amortization 101,977.02 124,216.10
Losses on disposal of fixed assets, intangible assets and other long-term
assets（gains used“-”） -23,868.70 --
Scrapping of fixed assets losses（gains used“-”） -- --
Exchange of fair value losses（gains used“-”） -- -25,479.05
Finance expenses （gains used“-”） 11,022,629.56 7,489,726.71
Investment losses（gains used“-”） -50,000.00 -60,599.23
Decrease in deferred tax assets（gains used“-”） -- --
Increase in deferred tax liabilities（gains used“-”） -- --
Decrease in inventories（gains used“-”） -91,763,829.19 66,281,173.21
Decrease in operating receivables （gains used“-”） -43,657,674.94 -4,015,032.60
Increase in operating payables（gains used“-”） -45,524,297.86 -63,365,741.53
Others -- --
Net cash flows from operating activities -116,313,872.03 84,323,901.31
2. Investment and financing activities not involving cash -- --
3. Net increase/ (decrease) in cash and cash equivalents -- --
Cash at end of the year 212,039,323.67 408,824,260.56
Less: cash at beginning of the year 324,967,185.86 379,720,636.21
Add：cash equivalents at end of the year -- --
Less: cash equivalents at beginning of the year -- --
Net increase in cash and cash equivalents -112,927,862.19 29,103,624.35
72
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
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
of Equity
Place of Legal Voting
Controlling Enterprise business Registered Registered Holding
Relationship registration represen rights
shareholder type and code capital proporat
tative %
principal ion%
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
* Investment, operation and management of state-owned equity controlled by restructurings, operation of capital,
disposals of assets and other measure; Real estate development and operation on lawful land; Policy investment and
strategic investment required by SAC; Guarantees for Municipal State-owned enterprises; Other businesses
authorized by city SAC.
(2) The informations of the Company’s subsidiaries refer to Note IV.1 for details.
73
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(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
province Water and
Huizhou Cooperative other YangHu Cooperati
Boluo 602 Cooperation
Luofu Hill Enterprises products aiYu on
mineral water supply
Co.,Ltd *③
74
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(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) %
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
*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
75
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
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
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.
(4)The informations of other related parties
Names of related parties Relationships with the Company Registered code
Shenzhen Jian'an Group Co., Ltd. The same controlling shareholders 19219737X
Shenzhen Institute of Building Research Co., Ltd. The same controlling shareholders 665899831
Shenzhen Environmental Engineering Science Tech Center Co., Ltd. The same controlling shareholders 668538441
3. Related parties transactions
(1) Purchases of g oods from related parties
Name of related parties Transaction content Transacetion 1-6/2012 1-6/2011
76
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
pricing Propotion
Amount Propotion(%) Amount
（%）
General contract about
Shenzhen Jian'an Group Co., Ltd. Shenfang Yufu East Public bidding 77,520,000.00 13.96
District
Design, consulting,
Shenzhen Institute of Building Negotiated
environmental detection and 595,000.00 0.11 620,000.00 32.29
Research Co., Ltd. price
so on
Shenzhen Environmental
The report on environment Direct
Engineering Science Tech 15,250.00 0.00 144,750.00 7.54
impact contracting
Center Co., Ltd.
（ 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
77
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
（ 3） Receivables and Payables of related parties
June 30, 2012 Dec 31, 2011
Name of related parties
Amount Propotion% Amount Propotion%
Other receivables Luofu Hill Mineral Water Co.,Ltd 10,465,168.81 4.46 10,465,168.81 4.66
Shenzhen Runhua automobile trading Co.,Ltd 3,072,764.42 1.31 3,072,764.42 1.37
Canada GreatWall（vancouver）Co.,Ltd 89,035,748.07 37.92 89,035,748.07 39.67
Bekaton Property Limited 12,559,290.58 5.35 12,559,290.58 5.60
Paklid Limited 18,946,689.75 8.07 18,946,689.75 8.44
Shenzhen Shenfang Department Store Co. Ltd. 237,648.82 0.10 237,648.82 0.11
Shenzhen Real Estate Consolidated Service Co., Ltd. 1,086,487.22 0.46 1,086,487.22 0.48
Shenzhen City Shenfang Construction and Decoration
Materials Ltd. 8,327,180.71 3.55 8,327,180.71 3.71
Shenzhen RongHua JiDian Co.,Ltd 475,223.46 0.20 475,223.46 0.21
Xi’an Fresh Peak property management& Trading Co.,Ltd 8,419,205.19 3.59 8,419,205.19 3.75
Accounts
Shenzhen Fresh Peak property consultant Co.,Ltd
receivable 1,115,774.53 2.86 1,112,496.40 2.96
Other payables Shenzhen Tefa Real Estate Consolidated Service Co., Ltd. 598,012.16 0.15 598,012.16 0.16
Shenzhen Shen Fang Industrial Development Co., Ltd 1,534,854.91 0.39 1,534,854.91 0.40
Shenzhen ZhongGang Haiyan Enterprise Ltd. 135,853.52 0.03 135,853.52 0.04
Shenzhen Dongfang New world store Co.,Ltd 902,974.64 0.23 902,974.64 0.23
Shenzhen Xin Dongfang Store Ltd. 1,394,704.21 0.36 1,394,704.21 0.36
Guangdong Province Fengkai Lain Feng Cement
Manufacturing
Co., Ltd. 1,868,148.00 0.48 1,869,348.00 0.49
Shenzhen Cyber Port Co., Ltd 7,949,749.26 2.03 7,949,749.26 2.07
Shenzhen shenfang group BaoAn developing Co.,Ltd 20,093,445.07 5.12 20,093,445.07 5.22
Shenzhen Investment Holding Co.,Ltd 63,848,819.24 16.28 63,848,819.24 16.60
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-2012.
VIII. Share-based payment
There are no any share-based payment contracts in mid-2012.
IX. Debt restructurings
No informations of Debt restructurings are needed to disclosure in mid-2012.
78
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(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 22 Feb 2008, 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
BaoXing Company failed to carry out the agreement. On 23 July 2008, 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 (the property developer is Great China International
Group（China）Co., Ltd, hereinafter referred to as Great China Company) of Shenzhen international exchange plaza
instead. In December 2008, the Company received Rmb 2,500 thousand. Great China Company did not handle with
the house property certificate for the Company according to the agreement. On November 15, 2011,
another "Agreement" was signed by the Company, BaoXing Company, HongMing Company and Great China
Company. They agreed that BaoXing Company would pay RMB 12,500 thousand Yuan in cash to the Company, and
the Company receive the money in full, the agreement signed on 22 Feb, 2008 was seemed to have been fulfilled. In
2011, the company received RMB 12,500 thousand Yuan from Shenzhen Haotian Equity Investment Fund
Management Co., Ltd- the third-party equity interest commissioned by BaoXing Company.
79
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
（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 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 pay for the compensation Rmb
36,620 thousand to Xi’an Fresh Peak Company after the judgment entering into force. If the Business Tourism
Company failed to pay in time, it had to pay double debt interests to Xi’an Fresh Peak Company. 2. Xi’an Joint
Commission on Commerce had jointly and severally obligation of the interests of the compensation.
Untill 31 December 2011, the amount of RMB 15,201,000.00 had been called back. Because of Fresh Peak
Company’s application, ShanXi Province High Peoples Court resumed the execution on September 5, 2011. Now the
case is proceeding and there was no any new substantive progress in the reporting period.
As at 30 June 2012, 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 debt 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
80
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
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 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 on 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 17 Mar 2010,
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 relevant provisions of the Huizhou local authorities, auction of land should be approved
by local department of land and be implemented in real estate trading center set up under Land Branch. Huizhou
Intermediate Court has issued an official letter to inform Boluo Land Bureau of its decision, and notify the relevant
assistance. Boluo Land Bureau replied the Huizhou Intermediate Court that the land for aution would be surveyed and
mapped (different from land evaluation), new planning point would be made by them
as the conditions of auction. Boluo Land Bureau have surveyed and mapped Luofu Hill Tourism site that was sealed.
The cadastral map and land red line chart were submitted to Huizhou Municipal Intermediate People's Court in June
2011. Detailed regulation is deemed as the basis for the development of planning points, while the
preparation of detailed regulation relies on Luofushan Administration Committee. Because the planning points were
not made, the land failed to be auctioned.
As at 30 June 2012, the book value of the Company’s creditor rights on Tourism Company was Rmb 9,600,000.00.
81
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
The provision for bad debt was Rmb 4,800,000.00.
（4）Shenyang Tongxin Case
Shenyang Tongxin Real Estate Development Co., Ltd. (hereinafter referred to as “TongXin Company”) was
joint-venture set up in ShenYang city. The shareholder of company – 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.
2. Security for debts
Up to 30 June 2012, the balance of guarantees is as follows:：
Amount
Currency
(in ten thousand Yuan)
Internal guarantees in the group RMB 17,840
Guarantees for outstanding mortgage RMB 850
3. Other Contingencies
Dong Hu Di Jing Building (with Parcel No.H312-0061) is located in Luohu District. The area is 7,970.08 s.q.m.,
construction land area is 5,889.7 s.q.m. and area of structure 59,486 s.q.m. Its volume fraction is 10.1. In November
2006, the Company got the land use rights of Dong Hu Di Jing Building Project. Until the first half of 2008, the
Company had completed the land turnover housing
resettlement, environmental assessment, the transformation of the underground pipe network, geological
exploration, programs design and planning, construction review and development design.In September and December
2008, the Company has received a letter from the immediate branch of Shenzhen Urban Planning and the Shenzhen
Municipal Planning Bureau (Shen Gui [2008]1069, Shen Gui [2008] 2517).The Company was told that the
municipal road works may partially occupied the red line of the parcel of land of Dong Hu Di Jing Building Project
and the development of the project was required to suspend .In 2009, the Company submitted report to the municipal
82
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
government twice, equiring to resume the project as soon as possible, but not received a clear answer. On 13 August
2010, the first branch of the Urban Planning and Land Commission issued a notice about idle land inspection to the
Company. The Company immediately submitted relevant report about the idle land of Dong Hu Di Jing Building on
August 26, reiterating that why development land is idle lies in the Government's changes of planning on the land.
The Company had suffered huge losses and required the government to solve the problem as soon as possible. On 20
January 2011, Shenzhen Urban Planning and Land Resources Committee (hereinafter referred to as the Comission)
issued "decision on disposal of idle land"Shen GuiLand Yiqu idle [2011] No. 009. According to the decision, the
government will take back land use rights by payment. The Company subsequently submitted to the administrative
reconsideration. On 2 April, 2011,the Commission issued Shen Gui Land referendum[2011]No. 02" decision on
administrative reconsideration” , insisting on the land use rights to be took back in pay. In
order to receive compensation for the land use rights as soon as possible, the Company made response to the
reconsideration on 17 May 2011, giving the solution of replacement land. The Commision replied in Shen GuiLand
Yiju [2011] No.523 and had these decisions (Shen GuiLand Yiju [2011] 02 and Shen GuiLand referendum [2011]
No. 02) unchanged. In view of this, the Company accepted these decisions.
In February 2012, the Commision and the Company respectively authorized relevant institutions to evaluate the
land. In early May 2012, the Committee recommend the Company to study the feasibility of continuing to construct
the Donghu Dijing Mingyuan Project. The Company had Shenzhen General Institute of Architectural Design and
Research CO., LTD conduct the feasibility study.
XI. Commitments
Until 30 June, 2012, the Company had the commitments of the contracts which had been signed but not carried out.
Mostly of them were construction contracts. And the total amount of capital item expense and investment were RMB
1,589,300 thousands. The money had to be paid for until the other partner of contract carried out the responsibilities
and liabilities.
XII. Other significant events
(1) Significant contracts
Shenzhen Jiangong Group Shareholding Co., Ltd, won the bid for General Contracting Projects (Shenfang west area of
Mountain ChuanQi Project) in Shenzhen Construction Project Transaction Service Center. The Company and
Shenzhen Jiangong Group Co., Ltd had the contract signed on 16 January 2012. The contract amount is RMB
364,200 thousands.
83
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
Nanjing Construction Group Co., Ltd, won the bid for General Contracting Projects (ShenFang ShangLin Garden
Project) in Shenzhen Construction Project Transaction Service Center. The Company and Nanjing Construction
Group Co., Ltd had the contract signed on 5 January 2012. The contract amount is RMB 589,300 thousands.
(2) Significant contracts with related parties
Shenzhen Jian'an Group Co., Ltd, the Company's related party, won the bid for General Contracting
Projects (Shenfang east area of Mountain ChuanQi Project) in Shenzhen Construction Project Transaction Service
Center. The Company and Shenzhen Jian'an Group Co., Ltd had the contract signed on 20 January 2012. The contract
amount is RMB 553,330 thousands.
XIII .Notes to items of the parent company financial statements
1. Accounts receivable
（1）The symbol of credit risk identified by customers categories
June 30, 2012 Dec 31, 2011
Provision of Provision of
Book balance Book balance
bad debts bad debts
Proportion Proportion Proportion
Amount Proportion % Amount Amount Amount
% % %
Category
1 -- -- -- -- -- -- -- --
Category
2 10,811,968.36 100.00 6,301,854.02 100.00 10,786,238.88 100.00 6,301,854.02 100.00
Total 10,811,968.36 100.00 6,301,854.02 100.00 10,786,238.88 100.00 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
84
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
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
10,811,968.36 6,301,854.02 58.29 recoverability of each receivales with long aging
collected
and little retrievability.
（3）The aging of accounts receivable by categories
June 30, 2012 Dec 31, 2011
Aging
Book balance Proportion % Provision Book balance Proportion % Provision
Within 1 years -- -- -- -- -- --
1 to 2 years -- -- -- -- -- --
2 to 3 years -- -- -- -- -- --
Above 3 years 10,811,968.36 100.00 6,301,854.02 10,786,238.88 100.00 6,301,854.02
Total 10,811,968.36 100.00 6,301,854.02 10,786,238.88 100.00 6,301,854.02
(4) No amount due from shareholders who hold 5% or more of the voting rights of the company is included in the
above balance of accounts receivable.
(5) Refer to Note VI.3. (3) for details of the accounts receivables which is due to related parities.
(6) There were no any acconts receivables which had been terminated recognized.
(7) 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, 2012 Dec 31, 2011
Book balance Provision of bad debts Book balance Provision of bad debts
proportio proportio proportio proportio
Amount Amount Amount Amount
n% n% n% n%
Categor 1,151,208,160.2 849,851,353.2 1,151,208,160.2 849,851,353.2
y1 8 96.10 8 98.45 8 98.52 8 98.45
Categor
y2 46,683,425.11 3.90 13,341,826.74 1.55 17,315,405.95 1.48 13,341,826.74 1.55
Total 1,197,891,585.3 863,193,180.0 1,168,523,566.2 863,193,180.0
9 100.00 2 100.00 3 100.00 2 100.00
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
85
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
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.
Provision of bad
Book balance Proportion % Notes
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 1,324,136.04 1,116,316.04 84.31
long aging and little retrievability
Others 45,359,289.07 12,225,510.70 26.95
Total 46,683,425.11 13,341,826.74 28.58
86
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
（3）The aging of other receivables:
June 30, 2012 Dec 31, 2011
Aging
Amount Proportion % Provision Amount proportion % Provision
Within 1 year 42,999,147.98 3.59 -- 40,546,035.56 3.47 --
1 to 2 years 21,465,683.72 1.79 -- 5,016,859.43 0.43 --
2 to 3 years 3,136,198.25 0.26 -- 8,713,096.41 0.75 --
Above 3 years 1,130,290,555.44 94.36 863,193,180.02 1,114,247,574.83 95.35 863,193,180.02
Total
1,197,891,585.39 100.00 863,193,180.02 1,168,523,566.23 100.00 863,193,180.02
（4）The informations of accounts receivables of the company's top five debtors are as follows:：
Name Relationship Amount Proportion % Aging
1,035,548.35 0.09 Within 1 year
2,016,110.69 0.17 1 to 2 year
Fresh Peak Enterprise Co., Ltd. Subsidiary
33,806.00 0.00 2 to 3 year
562,384,457.59 46.95 Above 3 years
41,963,599.63 3.50 Within 1 year
Shenzhen ShenFang Group LongGang 19,449,573.03 1.62 1 to 2 year
Subsidiary
Development Co.,Ltd 3,102,392.25 0.26 2 to 3 year
201,920,536.31 16.86 Above 3 years
American Great Wall Co.,Ltd Subsidiary 101,379,954.81 8.46 Above 3 years
Canada Great Wall(vancouver) Co.,Ltd Subsidiary 89,035,748.07 7.43 Above 3 years
Shenzhen City Shenfang Free Trade Trading Ltd. Subsidiary 32,392,459.91 2.70 Above 3 years
Total 1,054,714,186.64 88.05
（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. (3) for details of the other receivables which due from related parities.
（7）There were no any other receivables which had been terminated recognized in the accounting year.
（8）There were no any other receivables which had been securitization in the accounting year.
87
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
3. Inventories
June 30, 2012 Dec 31, 2011
Amount Provision for declines Amount Provision for declines
Real estate developed products 47,701,012.52 -- 49,472,548.12 --
Real estate developing products 1,558,584,513.81 -- 984,724,746.16 --
Real estate which are going to be developed -- -- 488,129,480.59 --
Total 1,606,285,526.33 -- 1,522,326,774.87 --
4. Long-ter m equity investments
（1）The informations of long-term equtiy investments:
88
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(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
Construction Management Ltd. 6,000,000.00 6,000,000.00 -- 6,000,000.00 75 75 -- -- --
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 -- -- --
89
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(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
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
Development Ltd. 30,850,000.00 30,850,000.00 -- 30,850,000.00 95 95 -- -- --
Beijing Fresh Peak Property
Development Management Cost method
Limited Company 64,183,888.90 64,183,888.90 -- 64,183,888.90 75 75 -- -- --
Shenzhen Shenfang Car Park
Cost method
Ltd. 29,750,000.00 29,750,000.00 -- 29,750,000.00 70 70 -- -- --
Joint venture investment：
Guangdong province Huizhou Equity
Luofu Hill mineral water Co.,Ltd method 9,969,206.09 9,969,206.09 -- 9,969,206.09 Cooperation Cooperation 9,969,206.09 -- --
Equity
Fengkai Xinhua Hotel
method 9,455,465.38 9,455,465.38 -- 9,455,465.38 Cooperation Cooperation 9,455,465.38 -- --
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 1,524,067.93 -- 1,524,067.93 25 25 1,076,954.64 -- --
Shenzhen Fresh Peak Property Equity 600,000.00 -- -- -- 20 20 -- -- --
90
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(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
Consultant Co.,Ltd method
Shenzhen Dongfang New World Equity
Store Co.,Ltd method 15,000,000.00 -- -- -- 50 50 -- -- --
Other investments：
Shenzhen Shen Fang Industrial
Cost method
Development Co., Ltd 4,500,000.00 4,500,000.00 -- 4,500,000.00 100 100 4,500,000.00 -- --
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 -- --
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 9,500,000.00 9,500,000.00 -- 9,500,000.00 95 95 9,500,000.00 -- --
91
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(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
Store Co. Ltd.
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 460,913,016.79 430,378,545.67 -- 430,378,545.67 143,861,642.81 -- --
92
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(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
5. Tur nover and cost of sales
（1）Turnover and cost of sales
1-6/2012 1-6/2011
Core Operating Income 35,178,901.24 56,173,437.09
Other Operating Income -- --
Gross Income 35,178,901.24 56,173,437.09
Cost of sales 13,073,029.87 25,469,746.52
（2）Core operating Income（classfied by industry）
Operating Income Operating Cost Operating margin
Industry
1-6/2012 1-6/2011 1-6/2012 1-6/2011 1-6/2012 1-6/2011
Real estate 2,908,357.00 29,861,552.00 1,771,535.60 14,340,350.35 1,136,821.40 15,521,201.65
Leasing 31,112,312.62 25,219,254.63 10,986,640.28 10,904,963.83 20,125,672.34 14,314,290.80
Others 1,158,231.62 1,092,630.46 314,853.99 224,432.34 843,377.63 868,198.12
Total 35,178,901.24 56,173,437.09 13,073,029.87 25,469,746.52 22,105,871.37 30,703,690.57
93
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
（3）Core business（classfied by district）
Operating Income Operating Cost Operating Margin
District
1-6/2012 1-6/2011 1-6/2012 1-6/2011 1-6/2012 1-6/2011
Shenzhen 35,178,901.24 56,173,437.09 13,073,029.87 25,469,746.52 22,105,871.37 30,703,690.57
（4）The informations of the top 5 clients are as follows:
1-6/2012
Amount Proportion%
Corporation unit No.1 3,008,328.00 8.55
Corporation unit No.2 2,539,932.00 7.22
Corporation unit No.3 867,924.72 2.47
Corporation unit No.4 809,574.00 2.30
Corporation unit No.5 348,432.00 0.99
Total 7,574,190.72 21.53
6. Investment income
The details of investment income are as follows:
1-6/2012 1-6/2011
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 equity -- --
The investment income yielded from the disposal of the financial assest held for trading -- -39,400.77
Total -- -39,400.77
7. Supplementary cash f low statement of the parent company
Supplementary information 1-6/2012 1-6/2011
1. Reconciliation from the net profit to the cash flows from operating
activities
Net profit 2,217,279.08 4,546,825.37
Add：Provisions for assets impairment -- --
Depreciation of fixed assets and investment property 10,620,565.93 10,862,361.38
Amortization of intangible assets 49,399.98 27,733.31
Long-term deferred and prepaid expenses amortization 28,265.10 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“-”） -- --
94
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
Supplementary information 1-6/2012 1-6/2011
Exchange of fair value losses（gains used“-”） -- 25,479.05
Finance expenses （gains used“-”） 6,109,875.73 6,060,907.89
Investment losses（gains used“-”） -- -39,400.77
Decrease in deferred tax assets（gains used“-”） -- --
Increase in deferred tax liabilities（gains used“-”） -- --
Decrease in inventories（gains used“-”） -83,958,751.46 23,560,955.59
Decrease in operating receivables（gains used“-”） -76,326,366.64 11,352,683.07
Increase in operating payables（gains used“-”） 38,497,497.20 149,033.05
Others -- --
Net cash flows from operating activities -102,762,235.08 56,555,113.94
2. Investment and financing activities not involving cash
3.Net increase/ (decrease) in cash and cash equivalents
Cash at end of the year 94,764,497.01 206,679,987.73
Less: cash at beginning of the year 144,779,100.65 191,108,590.15
Add：cash equivalents at end of the year -- --
Less: cash equivalents at beginning of the year -- --
Net increase in cash and cash equivalents -50,014,603.64 15,571,397.58
XIV 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 1-6/2012 1-6/2011
Non-current assets disposed of profit and loss, including the written-off part of provision
for asset impairment 14,692.90 199,681.57
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
95
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
Items 1-6/2012 1-6/2011
net assets of the revenue generated
Non-monetary assets to exchange gains and losses -- --
Commissioned the investment or management of assets, profit and loss -- --
Due to force majeure factors, such as natural disasters and the provision of the
-- --
quasi-impairment of assets
Debt restructuring, profit and loss -- --
Corporate restructuring costs, such as placement of workers spending, such as integration
-- --
charges
Significant loss of fair trading price of the transaction over the fair value of part of the
-- --
profit and loss
The same under the control of mergers resulting from the merger a subsidiary of the
-- --
opening day of the current period to the net profit or loss
Normal business with the company or have a matter arising from unrelated to the profit
and loss -- --
In addition to normal business with the company effective hedging related business,
holders of tradable financial assets, transactions and financial liabilities arising from
changes in fair value gains and losses, as well as the disposal of trading of financial
assets, trading financial liabilities and available-for-sale financial assets investment
returns achieved -- -13,921.72
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 -289.33 754,725.85
Other non-recurring gains and losses in line with the definition of profit and loss items -- --
Total 14,403.57 940,485.70
Less: Income tax impact of several -3,568.63 321.54
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 17,972.20 940,164.16
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.
96
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
2. Rate of Retur n on Common Stockholders’ Equity (ROE) and Ear nings per share
Earnings per
Profit during the Weighed net assets
Items 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
1-6/2012
The net profit Attributable to equity holders of
the Company 40,084,098.09 2.59 0.0396 0.0396
The net profit after deducting the non-regular
gian or loss attributable to equity holders of the
Company 40,066,125.89 2.59 0.0396 0.0396
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;
97
Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd
Notes to the financial statement for the six months ended 30 June 2012(unaudited)
(All amounts are stated in RMB Yuan unless otherwise stated)
Mk - the accumulated number of the months from the next month the net assests happened to the ending month of the
reporting period;
If the company happens combination under common control, when the company calculate the weighted average
return on net assets, the net assets of the combined party are calculated form the beginning of the reporting period;
when calculating the weighted average return on net assets after deducting non-recurring gains and losses, the net
assets of the combined party are calculated form the next month of combination month.
When calculating the weighted average net assets during the return, the combined party's net profit, net assets are
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 40,084,098.09 40,084,098.09
The net assests attributable to holding company
of the Company 1,568,635,529.01 1,568,635,529.01
Notes No differences
公司法定代表人： 主管会计工作负责人： 会计机构负责人：
日 期： 日 期： 日 期：
98
