SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE &
PROPERTIES (GROUP) CO., LTD.
ANNUAL REPORT 2020
2021-007
March 2021
Part I Important Notes, Table of Contents and DefinitionsThe Board of Directors (or the “Board”), the Supervisory Committee as well as the directors,supervisors and senior management of ShenZhen Special Economic Zone Real Estate &Properties (Group) Co., Ltd. (hereinafter referred to as the “Company”) hereby guaranteethe factuality, accuracy and completeness of the contents of this Report and its summary, andshall be jointly and severally liable for any misrepresentations, misleading statements ormaterial omissions therein.Liu Zhengyu, chairman of the Company’s Board, Zhao Zhongliang, the Company’s ChiefFinancial Officer, and Qiao Yanjun, head of the Company’s financial department (equivalentto financial manager) hereby guarantee that the Financial Statements carried in this Reportare factual, accurate and complete.All the Company’s directors have attended the Board meeting for the review of this Reportand its summary.Certain descriptions about the Company’s operating plans or work arrangements for thefuture mentioned in this Report and its summary, the implementation of which is subject tovarious factors, shall NOT be considered as promises to investors. Therefore, investors arereminded to exercise caution when making investment decisions.The Company is subject to the Guideline No. 3 of the Shenzhen Stock Exchange onInformation Disclosure by Industry—for Listed Companies Engaging in Real Estate.Risks facing the Company have been explained in detail in “IX Prospects” in “Part IVOperating Performance Discussion and Analysis” herein.The Board has approved a final dividend plan as follows: based on the total share capital of1,011,660,000 shares on 31 December 2020, a cash dividend of RMB0.87 (tax inclusive) per 10shares is to be distributed to the shareholders, with no bonus issue from either profit orcapital reserves.This Report and its summary have been prepared in both Chinese and English. Should therebe any discrepancies or misunderstandings between the two versions, the Chinese versionsshall prevail.
Table of Contents
Part I Important Notes, Table of Contents and Definitions ...... 2
Part II Corporate Information and Key Financial Information ...... 5
Part III Business Summary ...... 10
Part IV Operating Performance Discussion and Analysis ...... 12
Part V Significant Events ...... 35
Part VI Share Changes and Shareholder Information ...... 44
Part VII Preferred Shares ...... 50
Part VIII Convertible Corporate Bonds ...... 51
Part IX Directors, Supervisors, Senior Management and Staff ...... 52
Part X Corporate Governance ...... 62
Part XI Corporate Bonds ...... 69
Part XII Financial Statements ...... 70Part XIII Documents Available for Reference………………………………………………….172
Definitions
| Term | Definition |
| “Shenzhen SASAC” or the “Municipal SASAC” | The State-owned Assets Supervision and Administration Commission of the People’s Government of Shenzhen Municipal |
| SIHC | Shenzhen Investment Holdings Co., Ltd. |
| The “Company”, the “Group”, “SPG” or “we” | ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. and its consolidated subsidiaries, except where the context otherwise requires |
| Shenzhen Property Management | Shenzhen Property Management Co., Ltd. |
| Petrel Hotel | Shenzhen Petrel Hotel Co., Ltd. |
| Zhentong Engineering | Shenzhen Zhentong Engineering Co., Ltd. |
| Huazhan Construction Supervision | Shenzhen Huazhan Construction Supervision Co.,Ltd. |
Part II Corporate Information and Key Financial InformationI Corporate Information
| Stock name | SPG, SPG-B | Stock code | 000029, 200029 |
| Stock exchange for stock listing | Shenzhen Stock Exchange | ||
| Company name in Chinese | 深圳经济特区房地产(集团)股份有限公司 | ||
| Abbr. | 深房集团 | ||
| Company name in English (if any) | ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. | ||
| Abbr. (if any) | SPG | ||
| Legal representative | Liu Zhengyu | ||
| Registered address | 45/F-48/F, SPG Plaza, Renmin South Road, Shenzhen, Guangdong, P.R.China | ||
| Zip code | 518001 | ||
| Office address | 47/F, SPG Plaza, Renmin South Road, Shenzhen, Guangdong, P.R.China | ||
| Zip code | 518001 | ||
| Company website | http://www.sfjt.com.cn | ||
| Email address | spg@163.net | ||
II Contact Information
| Board Secretary | Securities Representative | |
| Name | Luo Yi | Hong Lu |
| Address | 47/F, SPG Plaza, Renmin South Road, Shenzhen, Guangdong, P.R.China | 47/F, SPG Plaza, Renmin South Road, Shenzhen, Guangdong, P.R.China |
| Tel. | （86 755）82289517 | （86 755）82297977 |
| Fax | （86 755）82294024 | （86 755）82294024 |
| Email address | spg@163.net | spg@163.net |
III Media for Information Disclosure and Place where this Report Is Lodged
| Newspapers designated by the Company for information disclosure | Domestic: Securities Times and China Securities Journal Overseas: Ta Kung Pao (HK) |
| Website designated by CSRC for publication of this Report | http://www.cninfo.com.cn |
| Place where this Report is lodged | 47/F, SPG Plaza, 3005 Renmin South Road, Luohu District, Shenzhen, Guangdong, P.R.China |
IV Change to Company Registered Information
| Unified social credit code | 91440300192179585N (unified social credit code) |
| Change to principal activity of the Company since going public (if any) | No change |
| Every change of controlling shareholder since incorporation (if any) | On 24 March 1999, the controlling shareholder was changed from Shenzhen Investment Management Co., Ltd. to Shenzhen Construction Investment Holdings Co., Ltd. And on 14 February 2006, it was changed to Shenzhen Investment Holdings Co., Ltd. |
V Other InformationThe independent audit firm hired by the Company:
| Name | Grant Thornton China |
| Office address | 5/F, Sci-Tech Plaza, 22 Jianguomenwai Avenue, Chaoyang District, Beijing |
| Accountants writing signatures | Zhao Juanjuan and Jiang Xiaoming |
The independent sponsor hired by the Company to exercise constant supervision over the Company in the ReportingPeriod:
□ Applicable √ Not applicable
The independent financial advisor hired by the Company to exercise constant supervision over the Company in theReporting Period:
□ Applicable √ Not applicable
VI Key Financial InformationIndicate by tick mark whether there is any retrospectively restated datum in the table below.
□ Yes √ No
| 2020 | 2019 | 2020-over-2019 change (%) | 2018 | |
| Operating revenue (RMB) | 1,615,009,713.88 | 2,548,740,319.49 | -36.63% | 2,175,187,242.60 |
| Net profit attributable to the listed company’s shareholders (RMB) | 290,229,772.23 | 552,452,307.59 | -47.47% | 503,498,831.60 |
| Net profit attributable to the listed company’s shareholders before exceptional gains and losses (RMB) | 253,595,334.11 | 524,204,812.66 | -51.62% | 490,490,702.80 |
| Net cash generated from/used in operating activities (RMB) | 285,164,013.17 | 603,607,724.75 | -52.76% | 1,062,567,405.59 |
| Basic earnings per share (RMB/share) | 0.2869 | 0.5461 | -47.46% | 0.4977 |
| Diluted earnings per share (RMB/share) | 0.2869 | 0.5461 | -47.46% | 0.4977 |
| Weighted average return on equity (%) | 7.81% | 15.90% | -8.09% | 16.35% |
| 31 December 2020 | 31 December 2019 | Change of 31 December 2020 over 31 December 2019 (%) | 31 December 2018 | |
| Total assets (RMB) | 4,936,916,746.74 | 4,909,669,536.09 | 0.55% | 4,665,891,514.25 |
| Equity attributable to the listed company’s shareholders (RMB) | 3,797,512,488.22 | 3,666,874,569.99 | 3.56% | 3,332,259,641.39 |
Indicate by tick mark whether the lower of the net profit attributable to the listed company’s shareholders before andafter exceptional gains and losses was negative for the last three accounting years, and the latest independent auditor’sreport indicated that there was uncertainty about the Company’s ability to continue as a going concern.
□ Yes √ No
Indicate by tick mark whether the lower of the net profit attributable to the listed company’s shareholders before andafter exceptional gains and losses was negative.
□ Yes √ No
VII Accounting Data Differences under China’s Accounting Standards for BusinessEnterprises (CAS) and International Financial Reporting Standards (IFRS) and ForeignAccounting Standards
1. Net Profit and Equity under CAS and IFRS
√ Applicable □ Not applicable
Unit: RMB
| Net profit attributable to the listed company’s shareholders | Equity attributable to the listed company’s shareholders | |||
| 2020 | 2019 | Ending amount | Beginning amount | |
| Under CAS | 290,229,772.23 | 552,452,307.59 | 3,797,512,488.22 | 3,666,874,569.99 |
| Adjusted as per IFRS | ||||
| Under IFRS | 290,229,772.23 | 552,452,307.59 | 3,797,512,488.22 | 3,666,874,569.99 |
2. Net Profit and Equity under CAS and Foreign Accounting Standards
□ Applicable √ Not applicable
No difference for the Reporting Period.
3. Reasons for Accounting Data Differences Above
□ Applicable √ Not applicable
VIII Key Financial Information by Quarter
Unit: RMB
| Q1 | Q2 | Q3 | Q4 | |
| Operating revenue | 256,842,391.67 | 339,416,103.73 | 621,402,307.38 | 397,348,911.10 |
| Net profit attributable to the listed company’s shareholders | 28,114,908.77 | 69,160,076.95 | 101,565,292.91 | 91,389,493.60 |
| Net profit attributable to the listed company’s shareholders before exceptional gains and losses | 28,075,623.63 | 57,108,647.36 | 101,225,798.44 | 67,185,264.68 |
| Net cash generated from/used in operating activities | -435,258,963.67 | 223,016,165.08 | 309,652,617.04 | 187,754,194.72 |
Indicate by tick mark whether any of the quarterly financial data in the table above or their summations differsmaterially from what have been disclosed in the Company’s quarterly or interim reports.
□ Yes √ No
IX Exceptional Gains and Losses
√ Applicable □ Not applicable
Unit: RMB
| Item | 2020 | 2019 | 2018 | Note |
| Gain or loss on disposal of non-current assets (inclusive of impairment allowance write-offs) | 11,429.23 | -69,739.73 | ||
| Government subsidies charged to current profit or loss (exclusive of government subsidies given in the Company’s ordinary course of business at fixed quotas or amounts as per the government’s uniform standards) | 3,370,769.21 | 1,168,127.90 | 10,243.00 | |
| Gain or loss on assets entrusted to other entities for investment or management | 15,217,058.60 | 31,425,651.98 | 16,347,157.53 | Income from mature structured deposits |
| Non-operating income and expense other than the above | 29,009,657.60 | 1,118,861.69 | 891,652.84 | |
| Other gains and losses that meet the definition of exceptional gain/loss | 1,237,002.86 | |||
| Interest income from undue structured deposits | 3,950,685.00 | |||
| Less: Income tax effects | 12,211,479.38 | 9,415,831.64 | 4,171,184.84 | |
| Total | 36,634,438.12 | 28,247,494.93 | 13,008,128.80 | -- |
Explanation of why the Company reclassifies as recurrent an exceptional gain/loss item defined or listed in theExplanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to thePublic—Exceptional Gain/Loss Items:
□ Applicable √ Not applicable
No such cases for the Reporting Period.
Part III Business Summary
I Principal Activity of the Company in the Reporting PeriodIn 2020, the central government continued to stabilize land and housing prices as well as market expectations.Upholding the principle that housing is for living in and not for speculation, the central government adhered to theconcept of taking a differential approach in regulating the housing market for different places. The differentiationamong cities and urban regions intensified. To be specific, the first-tier cities led the way, and the city clusters inthe Pearl River Delta and Yangtze River Delta performed brilliantly. At the same time, while maintaining thecontinuity, consistency and stability of real estate financial policies, the central government accelerated theestablishment of a long-term mechanism for real estate finance. In the second half of the year, the overall realestate financial supervision was gradually tightened.The Company primarily develops and sells residential properties in two cities, Shenzhen and Shantou. InShenzhen, the Chuanqi Donghu Mingyuan project saw the completion of construction in late 2019 and has startedthe hand-over and move-in process, which is cumulatively around 80% sold; and regarding the Cuilinyuan project,it is approximately 95% sold. In Shantou, Tianyuewan Phase II was topped out in late June 2020, with thedecoration for its public space almost fully completed; and Tianyuewan Phase I is around 70% sold cumulatively.
II Significant Changes in Major Assets
1. Significant Changes in Major Assets
| Major assets | Main reason for significant changes |
| Equity assets | The ending amount was down by RMB92,349.00 (or 19.66%) from the beginning amount, primarily driven by the share of profits of associates measured at the equity method. |
| Fixed assets | The ending amount was down by RMB2,482,056.68 (or 8.13%) from the beginning amount, primarily driven by the depreciation allowance. |
| Intangible assets | No significant change |
| Construction in progress | No significant change |
| Accounts payable | The ending amount was down by RMB67,297,864.18 (or 27.56%) from the beginning amount, primarily driven by the payments made for construction. |
| Advances from customers | The ending amount was down by RMB153,542,418.28 (or 96.28%) from the beginning amount, primarily driven by the reclassification to contract liabilities |
| and other current liabilities pursuant to the new accounting standard governing revenue. | |
| Short-term borrowings | The ending amount was up by RMB25,246,735.77 (or 48.88%) from the beginning amount, primarily driven by the increased borrowings of Shenzhen Zhentong Engineering Co., Ltd. through discounting and pledging accounts receivable. |
| Taxes and levies payable | The ending amount was down by RMB125,991,168.41 (or 21.51%) from the beginning amount, primarily driven by the payment of various taxes. |
2. Major Assets Overseas
□ Applicable √ Not applicable
III Core Competitiveness AnalysisAs a pioneer of real estate development enterprises in Shenzhen, the Company has created a number of "firstplaces" in the history of real estate development in China. For example, the first to use the paid state-owned land,the first to introduce the foreign investment for the cooperative land development, the first to raise developmentfunds by means of pre-sale of buildings, the first to carry out public bidding for construction projects inaccordance with international practices, the first to set up a property management company to the buildings andresidences developed in an all-rounded manner, the first to win the bid in the auction of land use rights held in theShenzhen Special Economic Zone, etc.Over the past 40 years, the company has developed more than 100 high-rise buildings, 500 multi-storey residentialbuildings, and 400 garden villas, with a cumulative building area of more than 4 million square meters. It has paidgreat efforts to the establishment of a modern enterprise HR management system and works hard in building aprofessional and high-quality development team. It also keeps improving the management mechanism andprocesses for project development. As a result, its planning, construction, cost control, sales ability and brandimage have been effectively improved. More importantly, its main business operation ability and corecompetitiveness have been greatly enhanced.In 2020, the company was awarded "Industry-Leading Enterprise and Top 20 Enterprise in terms ofComprehensive Strength in Shenzhen Real Estate Development Industry" by Shenzhen Real Estate Association(SREA).
Part IV Operating Performance Discussion and AnalysisI OverviewSince the abrupt occurrence at the beginning of 2020, COVID-19 has continued to spread throughout the wholeworld, dragging global economy into the most severe recession since the Great Depression. The real estate marketas a whole kept its promise that houses are for living in and not for speculation on. In face of the complex severemacro-economic situation and fierce market competition, the Company’s management team met the challengesand moved forward under pressure with the support from the controlling shareholders. Taking the pandemicprevention and business operation into consideration, the management team made overall plans, leading theworking staff overcame the impact of the pandemic and the adverse effects of the termination of reorganization,and eventually made great achievements. The main achievements in the past year are as follows:
(I) Effective Pandemic Prevention and ControlAfter the outbreak of COVID-19, the Company took immediate action to establish a leading group for pandemicprevention and control according to the work deployment of Shenzhen Municipal Party Committee, ShenzhenMunicipal Government and Shenzhen State-owned Assets Supervision and Administration Commission, fullyimplementing measures of the regular pandemic prevention and control and resumption of work and production.During the Reporting Period, no mass infection cases emerged among the working staff, and the 27 residentialareas and other commercial properties operated and managed by the property management company and theHaiyan Hotel. At the same time, the Company's headquarters and its subordinated enterprises maintained normalproduction and operation throughout the year and realized the well-balanced pandemic prevention and production.(II) Stable Core Business with Improvement
1. Projects were carried forward steadily. Tianyuewan Phase II Project in Shantou was completed in June 2020,including the decoration of the public areas. The road works of Fuxian Road and Xianzhong Road for ChuanqiShanglin Project in Shenzhen were completed and opened to traffic in December 2020. The landscaping ofChuanqi Donghu Mingyuan Project, and the civil air-raid shelter have been successfully completed.
2. Sales capacity was enhanced significantly. In Shenzhen, the sales area of Chuanqi Donghu Mingyuan andCuilinyuan project reached nearly 20,000 square meters, far exceeding the annual sales goal. In Shantou, theaccumulative sales of Tianyuewan Phase I Project reached about 70% of the total. Paying close attention to the
market dynamics, the Company adjusted its marketing strategies in a timely manner in addition to innovating themarketing approaches, and thus increased its revenue while reducing the cost remarkably. Also, the Company hastaken various measures to ensure the smooth development of online home-purchase contracts and filing. In thewhole year, the rate of property repossession in Shenzhen reached nearly 95%, and that in Shantou was 91%.(III) Effective Operation and Management
1. The corporate governance was more standardized. In order to clarify the legal status of the partyorganization in the corporate governance structure of the Company, the Company completed the revision of theArticles of Association in June 2020, and party building work was officially recorded in it. During the ReportingPeriod, the chairman of the Board and the chairman of the Supervisory Committee changed their role due to theexpiration of the term. Four non-independent directors, two independent directors, one supervisor, the generalmanager, a deputy general manager, the CFO and the Board Secretary were changed. In May 2020, the Companyimplemented the cash dividend again, and the cash dividend became normal.
2. Standard and effective financial management. In order to withdraw funds of real estate sales effectively, theCompany kept close communication with cooperative banks. Additionally, under the premise of ensuring theoperating capital requirements, the Company made full use of the idle funds. Attaching great importance to budgetimplementation, the Company realized the decrease of key monitoring costs by 25% year-on-year.
3. Real estate rental undertook remarkable responsibilities. Under the double impact of COVID-19 andeconomic downturn, the Company focused on customer needs and tried its best to save, increase, and tap potential,and the rental income exceeded the annual target. During the Reporting Period, in response to the government'scall for the fight against the pandemic, the Company bravely undertook its social responsibility, reducing orexempting tenants' rent by more than RMB18 million.
4. Sound achievements were made in cost control. During the Reporting Period, 43 budget plans (including theapproval of them) were created, and the cumulative reduction rate of budget amount reached 19.64%. In particular,the Company completed the budgeting, auditing and contracting of two municipal projects on Fuxian Road andXianzhong Road in Longgang Sub-district, and the reduction rate of the approved budget reached 23.30%.
5. Work safety became a hot topic. During the Reporting Period, the Company established a work safetysupervision leading group to fully ensure the safety production. It also optimized the safety productionmanagement system constantly, formulated the special work plans for safety production, and investigated andtreated the hidden safety hazards in a timely manner. In order to strengthen the safety awareness of employees, the
Company carried out over 500 safety production inspections, and organized more than 50 relevant trainings. Zerosafety accident happened throughout the year.(IV) Termination of Major Asset RestructuringDue to a major asset restructuring in planning, the Company's stocks have been suspended for trading since theopening of the stock market on 14 September 2016. During the suspension period, the Company kept closecommunication with all trading parties, worked hard in due diligence, auditing, evaluation and other issues, andfulfilled the required decision-making procedures and information disclosure timely. In view of the current marketenvironment and many other reasons, it was still not a good time to advance the major asset restructuring.Therefore, in order to effectively protect the interests of the Company and all shareholders, the Company decidedto terminate the major asset restructuring after careful consideration. On 9 November 2020, the stock tradingresumed.(V) Strict and Pragmatic Approach in Party BuildingThe Company persisted in the party's requirements for managing and governing the party strictly and carried outpolitical development comprehensively. While attaching great importance to party building, the Companypromoted corporate culture development in an orderly manner. Firstly, the Company carried out the themeeducation. The "First Topics" learning became the theme of the Theoretical Center Team routinely. Secondly, theCompany deepened the party’s brand building. Through implementing the "1+6" one-core multi-linkedgovernance mode, the Company formed a new pattern of community governance led by the party building,diversified participation, integrated and co-governance. Thirdly, the Company enhanced the employees’ sense ofsocial responsibility. The company organized the party members volunteer and mass volunteers to participate involuntary activities in Jiabei community. Fourthly, the Company strengthened the corporate culture development.The Company organized various activities to enrich the employees’ life, and thus enhanced the corporate cohesionand team spirit.
The Company is subject to the Guideline No. 3 of the Shenzhen Stock Exchange on Information Disclosure byIndustry—for Listed Companies Engaging in Real Estate.New additions to the land bank:
| Name of land lot or project | Location | Planned use of land | Site area（㎡） | Floor area with plot ratio （㎡） | How the land is obtained | The Company’s interest | Total land price (RMB’0,000) | Consideration of the Company’s interest (RMB’0,000) |
Cumulative land bank:
| Name of project/area | Site area（0,000 ㎡） | Floor area（0,000 ㎡） | Floor area available for development（0,000 ㎡） |
| Xinfeng Building in Shantou | 0.59 | 2.66 | 2.66 |
| Total | 0.59 | 2.66 | 2.66 |
Development status of major projects:
| City/region | Name of project | Location | Status | The Company’s interest | Time for commencement of construction | % developed | % constructed | Site area（㎡） | Planned floor area with plot ratio （㎡） | Floor area completed in the Current Period（㎡） | Cumulatively completed floor area （㎡） | Expected total investment (RMB’0,000) | Cumulative investment (RMB’0,000) |
| Shantou | Tianyuewan Phase II | Chaoyang District | Framework in construction | 100.00% | 1 October 2018 | 95% | 95.00% | 33,362 | 127,770 | 65,485 | 49,829 |
Sales status of major projects:
| City/region | Name of project | Location | Status | The Company’s interest | Floor area with plot ratio （㎡） | Floor area available for sale （㎡） | Cumulatively pre-sold/sold floor area （㎡） | Floor area pre-sold/sold in the Current Period（㎡） | Pre-sale/sales revenue generate in the Current Period (RMB’0,000) | Cumulatively settled floor area (㎡) | Floor area settled in the Current Period（㎡） | Pre-sale/sales revenue settled in the Current Period (RMB’0,000) |
| Shenzhen | Cuilinyuan | Longgang District | Ready for sale | 100.00% | 60,111 | 56,137 | 52,020 | 1,326 | 4,548 | 51,911 | 3,484 | 11,540 |
| Shenzhen | Chuanqi Donghu Mingyuan | Luohu District | Ready for sale | 100.00% | 55,727 | 32,857 | 26,169 | 18,647 | 123,429 | 18,866 | 14,116 | 86,001 |
| Shantou | Tianyuewan Phase I | Chaoyang District | Ready for sale | 100.00% | 153,470 | 160,372 | 99,496 | 30,298 | 15,776 | 76,993 | 34,040 | 17,900 |
| Shantou | Tianyuewan Phase II | Chaoyang District | On pre-sale | 100.00% | 127,770 | 137,059 | 1,235 | 1,235 | 746 |
Rental status of major projects:
| Name of project | Location | Use | The Company’s interest | Rentable area （㎡） | Cumulative rented area （㎡） | Average occupancy rate |
| Real Estate Mansion | Shenzhen | Commercial | 100.00% | 3,413.88 | 3,413.88 | 100.00% |
| North Block of Guoshang Mansion | Shenzhen | Commercial | 100.00% | 4,819.71 | 4,819.71 | 100.00% |
| Petrel Building | Shenzhen | Commercial | 100.00% | 22,475.47 | 22,475.47 | 100.00% |
| SPG Plaza | Shenzhen | Office building | 100.00% | 61005.82 | 37088.88 | 60.80% |
| SPG Plaza Podium | Shenzhen | Commercial | 100.00% | 19896.3 | 10327.14 | 51.90% |
| Wenjin Garden | Shenzhen | Commercial | 100.00% | 3,531.60 | 3,531.60 | 100.00% |
Primary land development:
□ Applicable √ Not applicable
Financing channels:
| Financing channel | Ending balance of financings | Financing cost range/average financing cost | Maturity structure | |||
| Within 1 year | 1-2 years | 2-3 years | Over 3 years | |||
Development strategy and operating plan for the coming year:
Please refer to “IX Prospects” in this part.
Provision of guarantees for homebuyers on bank mortgages:
√ Applicable □ Not applicable
As at 31 December 2020, the Group provided guarantees for the homebuyers of the following projects on their bankmortgages:
| Project | Guarantee period | Guarantee amount (RMB’0,000) | Note |
| Cuilinyuan | Until the property ownership certificate is registered as collateral and handed over to bank for keeping | 8,532.86 | |
| Chuanqi Donghu Mingyuan | Until the property ownership certificate is registered as collateral and handed over to bank for keeping | 6,056.20 | |
| Tianyuewan Phase I | Until the property ownership certificate is registered as collateral and handed over to bank for keeping | 22,546.73 | |
| Total | 37,135.79 |
Joint investments by directors, supervisors and senior management and the listed company (applicable for suchinvestments where the directors, supervisors and senior management are the major source of investment):
□ Applicable √ Not applicable
II Core Business Analysis
1. Overview
See “I Overview” above.
2. Revenue and Cost Analysis
(1) Breakdown of Operating Revenue
Unit: RMB
| 2020 | 2019 | Change (%) | |||
| Operating revenue | As % of total operating revenue (%) | Operating revenue | As % of total operating revenue (%) | ||
| Total | 1,615,009,713.88 | 100% | 2,548,740,319.49 | 100% | -36.63% |
| By operating division | |||||
| Property sales | 1,158,411,393.81 | 71.73% | 2,017,872,864.14 | 79.17% | -42.59% |
| Engineering and construction | 251,454,463.43 | 15.57% | 304,837,313.46 | 11.96% | -17.51% |
| Property management | 151,968,675.51 | 9.41% | 157,665,638.01 | 6.19% | -3.61% |
| Rental service | 63,254,584.48 | 3.92% | 86,484,133.79 | 3.39% | -26.86% |
| Other | 12,215,550.30 | 0.76% | 15,337,469.10 | 0.60% | -20.35% |
| Eliminated internal transactions and accounts | -22,294,953.65 | -1.38% | -33,457,099.01 | -1.31% | -33.36% |
| By product category | |||||
| Residential units | 1,157,620,917.61 | 71.68% | 719,499,453.23 | 28.23% | 60.89% |
| Shops and parking lots | 790,476.20 | 0.05% | 11,526,595.29 | 0.45% | -93.14% |
| Apartments | 0.00 | 0.00% | 1,286,846,815.62 | 50.49% | -100.00% |
| Other | 478,893,273.72 | 29.65% | 564,324,554.36 | 22.14% | -15.14% |
| Eliminated internal transactions and accounts | -22,294,953.65 | -1.38% | -33,457,099.01 | -1.31% | -33.36% |
| By operating segment | |||||
| Guangdong Province | 1,613,933,749.67 | 99.93% | 2,491,373,238.76 | 97.75% | -35.22% |
| Other regions in China | 22,531,905.61 | 1.40% | 90,235,417.77 | 3.54% | -75.03% |
| Overseas | 839,012.25 | 0.05% | 588,761.97 | 0.02% | 42.50% |
| Eliminated internal transactions and | -22,294,953.65 | -1.38% | -33,457,099.01 | -1.31% | -33.36% |
(2) Operating Division, Product Category or Operating Segment Contributing over 10% of OperatingRevenue or Operating Profit
√ Applicable □ Not applicable
Unit: RMB
accounts
| Operating revenue | Cost of sales | Gross profit margin | YoY change in operating revenue (%) | YoY change in cost of sales (%) | YoY change in gross profit margin (%) | |
| By operating division | ||||||
| Property sales | 1,158,411,393.81 | 387,659,747.71 | 66.54% | -42.59% | -22.05% | -8.82% |
| Engineering and construction | 251,454,463.43 | 244,511,214.58 | 2.76% | -17.51% | -18.04% | 0.62% |
| By product category | ||||||
| Residential units | 1,157,620,917.61 | 387,369,116.92 | 66.54% | 60.89% | 44.37% | 3.83% |
| Shops and parking lots | 790,476.20 | 290,630.79 | 63.23% | -93.14% | -93.21% | 0.38% |
| Apartments | 0.00 | 0.00 | 0.00% | -100.00% | -100.00% | -82.54% |
| By operating segment | ||||||
| Guangdong Province | 1,613,933,749.67 | 799,028,972.30 | 50.49% | -35.22% | -12.14% | -12.96% |
Core business data of the prior year restated according to the changed statistical caliber for the Reporting Period:
□ Applicable √ Not applicable
(3) Whether Revenue from Physical Sales Is Higher than Service Revenue
√ Yes □ No
| Operating division | Item | Unit | 2020 | 2019 | Change (%) |
| Property sales | Sales volume | RMB’0,000 | 38,767 | 53,222 | -27.16% |
| Output | RMB’0,000 | 15,616 | 38,575 | -59.52% | |
| Inventory | RMB’0,000 | 121,599 | 161,109 | -24.52% |
Any over 30% YoY movements in the data above and why:
√ Applicable □ Not applicable
Real estate projects under development decreased.
(4) Execution Progress of Major Signed Sales Contracts in the Reporting Period
□ Applicable √ Not applicable
(5) Breakdown of Cost of Sales
By operating division
Unit: RMB
| Operating division | Item | 2020 | 2019 | Change (%) | ||
| Cost of sales | As % of total cost of sales (%) | Cost of sales | As % of total cost of sales (%) | |||
| Property sales | 387,659,747.71 | 48.13% | 497,310,023.38 | 51.92% | -22.05% | |
| Engineering and construction | 244,511,214.58 | 30.35% | 298,315,846.77 | 31.15% | -18.04% | |
| Property management | 139,937,487.12 | 17.37% | 142,261,602.88 | 14.85% | -1.63% | |
| Rental service | 35,984,852.34 | 4.47% | 45,173,891.05 | 4.72% | -20.34% | |
| Other | 11,611,768.12 | 1.44% | 13,404,895.03 | 1.40% | -13.38% | |
| Eliminated internal transactions and accounts | -14,196,621.19 | -1.76% | -38,713,606.57 | -4.04% | -63.33% | |
| Total | 805,508,448.68 | 100.00% | 957,752,652.54 | 100.00% | -15.90% | |
Note:
The operating divisions as percentages of the total cost of sales are stable, with insignificant changes on a year-on-yearbasis.
(6) Changes in the Scope of Consolidated Financial Statements for the Reporting Period
□ Yes √ No
(7) Major Changes to the Business Scope or Product or Service Range in the Reporting Period
□ Applicable √ Not applicable
(8) Major Customers and Suppliers
Major customers:
| Total sales to top five customers (RMB) | 105,366,757.84 |
| Total sales to top five customers as % of total sales of the Reporting Period (%) | 6.52% |
| Total sales to related parties among top five customers as % of total sales of the Reporting Period (%) | 0.00% |
Information about top five customers:
| No. | Customer | Sales revenue contributed | As % of total sales revenue (%) |
| for the Reporting Period (RMB) | |||
| 1 | Legal person A | 41,660,432.53 | 2.58% |
| 2 | Legal person B | 30,587,155.87 | 1.89% |
| 3 | Legal person C | 17,880,165.06 | 1.11% |
| 4 | Legal person D | 7,963,269.65 | 0.49% |
| 5 | Legal person E | 7,275,734.73 | 0.45% |
| Total | -- | 105,366,757.84 | 6.52% |
Other information about major customers:
□ Applicable √ Not applicable
Major suppliers:
| Total purchases from top five suppliers (RMB) | 285,468,647.66 |
| Total purchases from top five suppliers as % of total purchases of the Reporting Period (%) | 66.78% |
| Total purchases from related parties among top five suppliers as % of total purchases of the Reporting Period (%) | 42.81% |
Information about top five suppliers:
| No. | Supplier | Purchase in the Reporting Period (RMB) | As % of total purchases (%) |
| 1 | Legal person A | 182,994,620.79 | 42.81% |
| 2 | Legal person B | 41,003,278.66 | 9.59% |
| 3 | Legal person C | 30,099,448.05 | 7.04% |
| 4 | Legal person D | 17,616,816.55 | 4.12% |
| 5 | Legal person E | 13,754,483.61 | 3.22% |
| Total | -- | 285,468,647.66 | 66.78% |
Other information about major suppliers:
□ Applicable √ Not applicable
3. Expense
Unit: RMB
| 2020 | 2019 | Change (%) | Reason for any significant change | |
| Selling expense | 55,989,397.22 | 79,480,254.02 | -29.56% | Sales were limited for a certain period of time due to the pandemic. |
| Administrative expense | 93,616,226.75 | 68,854,618.70 | 35.96% | As projects were completed, the relevant engineering, construction, and labor costs were expensed. |
| Finance costs | -21,505,685.05 | -20,906,149.20 | -2.87% |
4. R&D Investments
□ Applicable √ Not applicable
5. Cash Flows
Unit: RMB
| Item | 2020 | 2019 | Change (%) |
| Subtotal of cash generated from operating activities | 1,783,707,997.05 | 2,728,276,550.05 | -34.62% |
| Subtotal of cash used in operating activities | 1,498,543,983.88 | 2,124,668,825.30 | -29.47% |
| Net cash generated from/used in operating activities | 285,164,013.17 | 603,607,724.75 | -52.76% |
| Subtotal of cash generated from investing activities | 1,019,824,221.85 | 2,237,622,620.55 | -54.42% |
| Subtotal of cash used in investing activities | 749,215.31 | 2,321,918,490.62 | -99.97% |
| Net cash generated from/used in investing activities | 1,019,075,006.54 | -84,295,870.07 | -1,308.93% |
| Subtotal of cash generated from financing activities | 76,893,995.94 | 43,741,293.64 | 75.79% |
| Subtotal of cash used in financing activities | 218,571,160.17 | 204,370,642.51 | 6.95% |
| Net cash generated from/used in financing activities | -141,677,164.23 | -160,629,348.87 | 11.80% |
| Net increase in cash and cash equivalents | 1,161,914,166.47 | 358,667,324.42 | 223.95% |
Explanation of why any of the data above varies significantly:
√ Applicable □ Not applicable
Cash generated from and used in operating activities both decreased year-on-year, primarily because property sales anddevelopment both decreased.Cash generated from and used in investing activities both decreased year-on-year, primarily driven by a decrease in theacquisition of wealth management products.Net increase in cash and cash equivalents increased year-on-year, primarily driven by the disinvestment in structureddeposits upon maturity.Reason for any big difference between the net operating cash flow and the net profit for this Reporting Period
□ Applicable √ Not applicable
III Analysis of Non-Core Businesses
□ Applicable √ Not applicable
IV Analysis of Assets and Liabilities
1. Significant Changes in Asset Composition
Indicate whether the Company has adopted the new accounting standards governing revenue and leases since 2020 andrestated the beginning amounts of relevant financial statement line items in the year.Applicable.
Unit: RMB
| 31 December 2020 | 1 January 2020 | Change in percentage (%) | Reason for any significant change | |||
| Amount | As a % of total assets | Amount | As a % of total assets | |||
| Monetary assets | 2,687,465,070.01 | 54.44% | 2,511,140,445.35 | 51.15% | 3.29% | Settlement of sales |
| Accounts receivable | 59,590,944.06 | 1.21% | 62,059,055.68 | 1.26% | -0.05% | |
| Inventories | 1,220,464,112.56 | 24.72% | 1,462,229,048.18 | 29.78% | -5.06% | Sales and decrease in real estate projects |
| Investment property | 616,365,621.53 | 12.48% | 632,241,900.20 | 12.88% | -0.40% | |
| Long-term equity investments | 377,489.65 | 0.01% | 469,838.65 | 0.01% | 0.00% | |
| Fixed assets | 28,039,978.43 | 0.57% | 30,522,035.11 | 0.62% | -0.05% | |
| Short-term borrowings | 76,893,995.94 | 1.56% | 51,647,260.17 | 1.05% | 0.51% | |
2. Assets and Liabilities at Fair Value
√ Applicable □ Not applicable
Unit: RMB
| Item | Beginning amount | Gain/loss on fair-value changes in the Reporting Period | Cumulative fair-value changes charged to equity | Impairment allowance for the Reporting Period | Purchased in the Reporting Period | Sold in the Reporting Period | Other changes | Ending amount |
| Financial assets | ||||||||
| Investments in other equity instruments | 33,126,730.04 | 4,384,130.47 | 37,510,860.51 | |||||
| Subtotal of financial | 33,126,730.04 | 4,384,130.47 | 37,510,860.51 | |||||
| assets | ||||||||
| Total of the above | 33,126,730.04 | 4,384,130.47 | 37,510,860.51 | |||||
| Financial liabilities | 0.00 | 0.00 |
Other changeSignificant changes to the measurement attributes of the major assets in the Reporting Period:
□ Yes √ No
3. Restricted Asset Rights as at the Period-End
Assets to which the Company’s ownership or right of use was restricted:
| Item | Ending carrying value | Reasons for restriction |
| Accounts receivable | 49,686,095.76 | Put in pledge for short-term borrowings |
| Notes receivable | 30,068,561.31 | Undue endorsed or discounted trade acceptance notes |
| Total | 79,754,657.07 |
V Investments Made
1. Total Investment Amount
□ Applicable √ Not applicable
2. Major Equity Investments Made in the Reporting Period
□ Applicable √ Not applicable
3. Major Non-Equity Investments Ongoing in the Reporting Period
□ Applicable √ Not applicable
4. Financial Investments
(1) Securities Investments
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(2) Investments in Derivative Financial Instruments
□ Applicable √ Not applicable
No such cases in the Reporting Period.
5. Use of Funds Raised
□ Applicable √ Not applicable
No such cases in the Reporting Period.
VI Sale of Major Assets and Equity Interests
1. Sale of Major Assets
□ Applicable √ Not applicable
No such cases in the Reporting Period.
2. Sale of Major Equity Interests
□ Applicable √ Not applicable
VII Major Subsidiaries
√ Applicable □ Not applicable
Major fully/majority-owned subsidiaries and those minority-owned subsidiaries with an over 10% effect on theCompany’s net profit:
Unit: RMB
| Name | Relationship with the Company | Principal activity | Registered capital | Total assets | Net assets | Operating revenue | Operating profit | Net profit |
| Shenzhen SPG Longgang Development Co., Ltd. | Subsidiary | Real estate development | 30,000,000.00 | 391,925,441.93 | 114,508,136.12 | 116,934,253.32 | 44,837,691.98 | 28,784,548.48 |
| Shantou SEZ, Wellam FTY, Building Development, Co., Ltd. | Subsidiary | Real estate development | 91,226,120.44 | 193,640,070.89 | 122,390,746.58 | 4,715,303.36 | 1,519,810.51 | -2,215,913.28 |
| Shantou Huafeng Real Estate Development Co., Ltd. | Subsidiary | Real estate development | 80,000,000.00 | 977,898,211.50 | 20,641,603.93 | 179,004,829.03 | 410,646.55 | -672,511.21 |
| Great Wall Estate Co., | Subsidiary | Real estate development | 2,051,146.00 | 18,163,906.02 | -83,658,196.85 | 839,012.25 | -774,074.99 | -774,074.99 |
| Inc. (U.S.) | ||||||||
| Shenzhen Zhentong Engineering Co., Ltd. | Subsidiary | Installation and maintenance | 10,000,000.00 | 148,187,525.32 | 24,609,352.65 | 252,712,482.88 | 636,053.15 | 323,798.26 |
| Shenzhen Property Management Co., Ltd. | Subsidiary | Property management | 7,250,000.00 | 103,605,217.56 | 31,817,548.93 | 151,546,323.15 | 5,371,989.51 | 3,798,588.64 |
| Shenzhen Petrel Hotel Co., Ltd. | Subsidiary | Hotel service | 30,000,000.00 | 52,342,468.40 | 42,149,488.13 | 14,314,081.68 | -5,361,133.28 | -4,071,603.65 |
| Shenzhen Huazhan Construction Supervision Co., Ltd. | Subsidiary | Supervisor | 8,000,000.00 | 10,525,484.45 | 9,936,185.34 | 3,308,507.75 | 380,114.01 | 523,887.40 |
| Xin Feng Enterprise Co., Ltd. | Subsidiary | Investment and management | 502,335.00 | 417,274,010.65 | -132,534,436.59 | 6,632,667.60 | 6,632,667.60 |
Subsidiaries obtained or disposed in the Reporting Period:
□ Applicable √ Not applicable
Information about major majority- and minority-owned subsidiaries:
1. Except the Company, the subordinate subsidiaries engaged in real estate development mainly include:
Shenzhen SPG Longgang Development Co., Ltd., Shantou SEZ, Wellam FTY, Building Development, Co., Ltd.,Shantou Huafeng Real Estate Development Co., Ltd. The Cuilinyuan project developed by Shenzhen SPGLonggang Development Co., Ltd. brought forward RMB115 million in 2020 (the percentage of accumulativesales carried forward was 93%), accounting for 10% of the Company's real estate sector income, 7.15% of theCompany's operating revenue and 11% of the group's combined profits. Jinyedao and YuejingDongfangdeveloped by Shantou SEZ, Wellam FTY, Building Development, Co., Ltd. left a few amount of remainingbuildings for sale. And Shantou Huafeng Real Estate Development Co., Ltd. was responsible for the developmentof Tianyuewan project (divided into Phase I and Phase II). Tianyuewan Phase I was opened for sale in October2016 and completed in December 2017. The Phase II started construction in November 2018 and was completedat the end of 2019. As of 2020, the sales progress of the Phase I was relatively slow with an accumulated sales rateof about 62%.
2. Shenzhen Zhentong Engineering Co., Ltd. was engaged in the business of building installation and maintenancewith the 2020 operating revenues of RMB253 million and of 15.65% to the operating revenues of the Company.
3. Shenzhen Property Management Co., Ltd was engaged in the industry of property management, and thebusiness was steady. The 2020 operating revenues was of RMB152 million that was of 9.38% to the operatingrevenues of the Company.
4. The 2020 net profits of Xin Feng Enterprise Co., Ltd. was of RMB6.63 million which mainly due to thechanges of exchange rate and it conducts no business.
5. The 2020 net profits of Shenzhen Petrel Hotel Co., Ltd. was of RMB-4.07 million which mainly due to theepidemic.
VIII Structured Bodies Controlled by the Company
□ Applicable √ Not applicable
IX Prospects(I) Industrial Pattern and TrendUpholding the principles that houses are for living and not for speculation on, the Company fully implemented along-term management and regulation mechanism through taking a differential approach in different places,stabilizing the land prices, the housing prices, and the expectations to ensure sound development of the real estatemarket. Under the continuous control of multiple financial regulatory policies, development goals of real estateenterprises were shifted from growth of scale to growth of quality. The top enterprises with high qualities, as aresult, were easy to get more resources, and the industry concentration was further improved.
(2) Development Strategies of the Company
The Company will earnestly implement the instructions of the Fifth Plenary Session of the 19
thCentral Committeeof the Communist Party of China, the Central Economic Work Conference, Secretary General Xi Jinping’s speechat the 40
thAnniversary of the Establishment of the Shenzhen Special Economic Zone, and the important speechesduring his visits to Guangdong. Embracing the strategic opportunities of Shenzhen “Dual Zone” construction andthe reform of state-owned assets and enterprises, the Company will take actions according to the decisions of theMunicipal Party Committee and Municipal Government, the Municipal State-owned Assets Supervision andAdministration Commission and the Shenzhen Investment Holdings Co., Ltd., moving forward steadily andbravely, and plotting out the project reserves. While stabilizing operation and management, the Companyassiduously innovated profit models and explored new areas so as to further improve the quality of the Company.Taking into account the overall situation, the Company are in full confidence to win the battle in the first year ofthe "14
thFive-Year Plan", and make SPG a respected listed company.(III) Potential Risks
1. Macroeconomic risks. In 2021, the world economic situation remains complicated and severe. Since therecovery is precarious, the various derivative risks caused by the impact of the pandemic cannot be ignored.
2. Industrial regulation risks. The government revealed many policies in terms of real estate market, such as“houses are for living in, not for speculation on", encouraging house renting and purchasing, taking differentapproaching in different cities, etc. The Company will meet huge challenges in future.
3. Business operation risks. Since the reserves of existing development land resource are limited, the competitionin the open land market will become quite intense in the future, which accordingly will endanger the Company'ssustainable development.
4. The risk of brain drain. The restructuring has been suspended for many years, resulting in the loss of theprofessional technical talents and key managers. At the same time, the unfavorable talent structure andprofessional capabilities need further improvement.(IV) Operation PlanIn 2021, the Company made an overall operation plan. The Company will stabilize the operation on the basis ofsafety management, expand the projects while strengthening the implementation. At the same time, the Companywill make efforts in key tasks such as project developments and constructions, sales, asset management, andinternal control. Additionally, the Company will explore new growth areas vigorously, gather all the possibleefforts, and accomplish more achievements in the reform and development of the company.
1. Focus on the stable operations. The Company will push forward the construction of projects in progress,check the schedules, and guarantee the quality and safety of the projects. Besides, the Company will put moreefforts in project marketing campaign to ensure the smooth completion of the annual sales target. Furthermore,great attention will be paid to lease of property to achieve an effective increase in occupancy rate.
2. Forge ahead bravely, exploring areas of growth. The Company will increase new lands and projects throughacquisitions, cooperative development, open market "bidding, auction and listing" and other ways. Exploring newgrowth areas proactively, the Company will strive to reshape a new pattern of profit growth, and eventuallyimprove the quality.
3. Pay constant attention to the prevention and control of pandemic and safe production. The Company willundertake full responsibility in pandemic prevention and control, normalizing its publicity and education.Optimizing the safety production management system will also be put on agenda. Boosting the standardization ofsafety production and "dual" prevention mechanism, the Company plans to identify and eliminate the potentialrisks, and intensify the safety management in important areas to ensure the smooth progress of production andoperation.
X Communications with the Investment Community such as Researches, Inquiries andInterviews
1. During the Reporting Period
√ Applicable □ Not applicable
| Date of visit | Place of visit | Way of visit | Type of visitor | Visitor | Contents and materials provided | Index to main inquiry information |
| 2020-01-13 | The Company | By telephone | Individual | Individual investor | Inquired of the progress of assets restructuring and the sales of project development, and didn’t offer written materials | N/A |
| 2020-01-22 | The Company | By telephone | Individual | Individual investor | Inquired of the progress of assets restructuring and fundamentals of the Company, and didn’t offer written materials | N/A |
| 2020-03-02 | The Company | By telephone | Individual | Individual investor | Inquired of the progress of assets restructuring and annual operation and expected disclosure time of annual report, and didn’t offer written materials | N/A |
| 2020-03-05 | The Company | By telephone | Individual | Individual investor | Inquired of the progress of assets restructuring and share trading resumption time of the Company, and didn’t offer written materials | N/A |
| 2020-03-16 | The Company | By telephone | Individual | Individual investor | Inquired of the progress of assets restructuring and share trading resumption time of the Company, and didn’t offer written materials | N/A |
| 2020-03-19 | The Company | By telephone | Individual | Individual investor | Inquired of the progress of assets restructuring and fundamentals of the Company, and didn’t offer written materials | N/A |
| 2020-03-26 | The Company | By telephone | Individual | Individual investor | Inquired of the progress of assets restructuring and plan arrangement of the Company, and didn’t offer written materials | N/A |
| 2020-03-31 | The Company | By telephone | Individual | Individual investor | Inquired of the progress of assets restructuring and reasons for the long suspension of trading and share trading resumption time of the | N/A |
| Company, and didn’t offer written materials | ||||||
| 2020-04-10 | The Company | By telephone | Individual | Individual investor | Inquired of the progress of assets restructuring and the expected time for stock trading resumption, and didn’t offer written materials | N/A |
| 2020-04-29 | The Company | By telephone | Individual | Individual investor | Inquired of the progress of assets restructuring and the expected time for stock trading resumption, and didn’t offer written materials | N/A |
| 2020-05-08 | The Company | By telephone | Individual | Individual investor | Inquired of the progress of assets restructuring and the expected time for stock trading resumption, and didn’t offer written materials | N/A |
| 2020-05-13 | The Company | By telephone | Individual | Individual investor | Inquired of the progress of assets restructuring and the expected time for stock trading resumption, and didn’t offer written materials | N/A |
| 2020-05-28 | The Company | By telephone | Individual | Individual investor | Inquired of the progress of assets restructuring and the expected time for stock trading resumption, and didn’t offer written materials | N/A |
| 2020-06-03 | The Company | By telephone | Individual | Individual investor | Inquired of the progress of assets restructuring and the impact of the 40th anniversary of the establishment of the Shenzhen Special Economic Zone, and didn’t offer written materials | N/A |
| 2020-06-15 | The Company | By telephone | Individual | Individual investor | Inquired of the progress of assets restructuring and the expected time for stock trading resumption, and didn’t offer written materials | N/A |
| 2020-06-29 | The Company | By telephone | Individual | Individual investor | Inquired of the progress of assets restructuring and business situation and expected disclosure time of interim report, and didn’t offer written materials | N/A |
| 2020-07-01 | The Company | By telephone | Individual | Individual investor | Inquired of the progress of assets restructuring and the expected time for stock trading resumption, and didn’t offer written materials | N/A |
| 2020-07-02 | The Company | By telephone | Individual | Individual investor | Inquired of the progress of assets restructuring, and didn’t offer written materials | N/A |
| 2020-07-06 | The Company | By telephone | Individual | Individual investor | Inquired of the progress of assets restructuring and reasons for the long suspension of trading and share trading resumption time of the Company, and didn’t offer written materials | N/A |
| 2020-07-09 | The Company | By telephone | Individual | Individual investor | Inquired of the progress of assets restructuring, and expected disclosure time of third quarter report, and didn’t offer written materials | N/A |
| 2020-07-15 | The Company | By telephone | Individual | Individual investor | Inquired of the progress of assets restructuring and the expected time for stock trading resumption, and didn’t offer written materials | N/A |
| 2020-07-23 | The Company | By telephone | Individual | Individual investor | Inquired of the progress of assets restructuring, the project development and business condition of the Company, and annual operations, without written materials, and didn’t offer written materials | N/A |
| 2020-08-06 | The Company | By telephone | Individual | Individual investor | Inquired of the progress of assets restructuring and fundamentals of the Company, and didn’t offer written materials | N/A |
| 2020-08-12 | The Company | By telephone | Individual | Individual investor | Inquired of the progress of assets restructuring and the expected time for stock trading resumption, and didn’t offer written materials | N/A |
| 2020-08-18 | The Company | By telephone | Individual | Individual investor | Inquired of the progress of assets restructuring and plan arrangement of the Company, and didn’t offer written materials | N/A |
| 2020-08-26 | The Company | By telephone | Individual | Individual investor | Inquired of the progress of assets restructuring and the expected time for stock trading resumption, and didn’t offer written materials | N/A |
| 2020-09-07 | The Company | By telephone | Individual | Individual investor | Inquired of the progress of assets restructuring and fundamentals of the | N/A |
| Company, and didn’t offer written materials | ||||||
| 2020-09-11 | The Company | By telephone | Individual | Individual investor | Inquired of the progress of assets restructuring, and didn’t offer written materials | N/A |
| 2020-09-14 | The Company | By telephone | Individual | Individual investor | Inquired of the progress of assets restructuring and the expected time for stock trading resumption, and didn’t offer written materials | N/A |
| 2020-09-15 | The Company | By telephone | Individual | Individual investor | Inquired of the progress of assets restructuring of the Company, and expected disclosure time of third quarter report, and didn’t offer written materials | N/A |
| 2020-09-21 | The Company | By telephone | Individual | Individual investor | Inquired of the progress of assets restructuring and reasons for the long suspension of trading of the Company, and didn’t offer written materials | N/A |
| 2020-09-22 | The Company | In writing | Individual | Individual investor | Inquired of the progress of assets restructuring and the expected time for stock trading resumption, and didn’t offer written materials | N/A |
| 2020-09-24 | The Company | By telephone | Individual | Individual investor | Inquired of the progress of assets restructuring and plan arrangement of the Company, and its business conditions in the third quarter, and didn’t offer written materials | N/A |
| 2020-09-25 | The Company | By telephone | Individual | Individual investor | Inquired of the progress of assets restructuring and reasons for the long suspension of trading of the Company, and didn’t offer written materials | N/A |
| 2020-09-28 | The Company | By telephone | Individual | Individual investor | Inquired of the progress of assets restructuring and the expected time for stock trading resumption, and didn’t offer written materials | N/A |
| 2020-09-30 | The Company | By telephone | Individual | Individual investor | Inquired of the progress of assets restructuring and reasons for the long suspension of trading of the Company, and didn’t offer written materials | N/A |
| 2020-10-13 | The Company | By telephone | Individual | Individual investor | Inquired of the progress of assets restructuring and fundamentals of the Company, and didn’t offer written materials | N/A |
| 2020-10-14 | The Company | By telephone | Individual | Individual investor | Inquired of the progress of assets restructuring and the expected time for stock trading resumption, and didn’t offer written materials | N/A |
| 2020-10-16 | The Company | By telephone | Individual | Individual investor | Inquired of the progress of assets restructuring and project development and sales and operation of the Company, and didn’t offer written materials | N/A |
| 2020-10-19 | The Company | By telephone | Individual | Individual investor | Inquired of the progress of assets restructuring and fundamentals of the Company, and didn’t offer written materials | N/A |
| 2020-10-20 | The Company | By telephone | Individual | Individual investor | Inquired of the progress of assets restructuring and reasons for the long suspension of trading of the Company, and didn’t offer written materials | N/A |
| 2020-10-22 | The Company | By telephone | Individual | Individual investor | Inquired of the progress of assets restructuring and fundamentals of the Company, and didn’t offer written materials | N/A |
| 2020-10-26 | The Company | By telephone | Individual | Individual investor | Inquired of the progress of assets restructuring and reasons for the long suspension of trading of the Company, and didn’t offer written materials | N/A |
| 2020-10-28 | The Company | By telephone | Individual | Individual investor | Inquired of the progress of assets restructuring and the expected time for stock trading resumption, and didn’t offer written materials | N/A |
| 2020-10-29 | The Company | By telephone | Individual | Individual investor | Inquired of the progress of assets restructuring and fundamentals of the Company, and didn’t offer written materials | N/A |
| 2020-10-30 | The Company | By telephone | Individual | Individual investor | Inquired of the progress of assets restructuring and the expected time for stock trading resumption, and didn’t offer written materials | N/A |
| 2020-11-02 | The Company | By telephone | Individual | Individual investor | Inquired of the progress of assets restructuring and project development and sales and operation of the Company, and didn’t offer written materials | N/A |
| 2020-11-03 | The Company | By telephone | Individual | Individual investor | Inquired of the progress of assets restructuring and reasons for the long suspension of trading of the Company, and didn’t offer written materials | N/A |
| 2020-11-04 | The Company | By telephone | Individual | Individual investor | Inquired of the progress of assets restructuring and the expected time for stock trading resumption, and didn’t offer written materials | N/A |
| 2020-11-05 | The Company | By telephone | Individual | Individual investor | Inquired of the progress of assets restructuring and project development and sales and operation of the Company, and didn’t offer written materials | N/A |
| 2020-11-06 | The Company | By telephone | Individual | Individual investor | Inquired of the progress of assets restructuring and the expected time for stock trading resumption, and didn’t offer written materials | N/A |
| 2020-11-09 | The Company | By telephone | Individual | Individual investor | Inquired of the reasons for the terminations of asset restructuring, and didn’t offer written materials | N/A |
| 2020-11-10 | The Company | By telephone | Individual | Individual investor | Inquired of the future development plan of the Company, and didn’t offer written materials | N/A |
| 2020-11-11 | The Company | By telephone | Individual | Individual investor | Inquired of business situations of the Company, and did not offer written materials | N/A |
| 2020-11-12 | The Company | By telephone | Individual | Individual investor | Inquired of the reasons for the terminations of asset restructuring, and didn’t offer written materials | N/A |
| 2020-11-13 | The Company | By telephone | Individual | Individual investor | Inquired of the land reserves and projects progress of the Company, and didn’t offer written materials | N/A |
| 2020-11-16 | The Company | By telephone | Individual | Individual investor | Inquired of the reasons for the terminations of asset restructuring, and didn’t offer written | N/A |
| materials | |||||||
| 2020-11-17 | The Company | By telephone | Individual | Individual investor | Inquired of the future development plan of the Company, and didn’t offer written materials | N/A | |
| 2020-11-19 | The Company | By telephone | Individual | Individual investor | Inquired of business situations and strategic planning of the Company, and didn’t offer written materials | N/A | |
| 2020-11-24 | The Company | By telephone | Individual | Individual investor | Inquired of the land reserves and projects progress of the Company, and didn’t offer written materials | N/A | |
| 2020-11-26 | The Company | By telephone | Individual | Individual investor | Inquired of the future development plan of the Company, and didn’t offer written materials | N/A | |
| 2020-11-30 | The Company | By telephone | Individual | Individual investor | Inquired of the land reserves and projects progress of the Company, and didn’t offer written materials | N/A | |
| 2020-12-04 | The Company | By telephone | Individual | Individual investor | Inquired of business situations and strategic planning of the Company, and didn’t offer written materials | N/A | |
| 2020-12-09 | The Company | By telephone | Individual | Individual investor | Inquired of business situation, and didn’t offer written materials | N/A | |
| 2020-12-21 | The Company | By telephone | Individual | Individual investor | Inquired of project sales of the Company, and didn’t offer written materials | N/A | |
| 2020-12-28 | The Company | By telephone | Individual | Individual investor | Inquired of the future development plan of the Company, and didn’t offer written materials | N/A | |
| Times of communications | 66 | ||||||
| Number of institutions communicated with | 0 | ||||||
| Number of individuals communicated with | 66 | ||||||
| Number of other communication parties | 0 | ||||||
| Tip-offs or leakages of substantial supposedly-confidential information during communications | None | ||||||
Part V Significant Events
I Profit Distributions to Ordinary Shareholders (in the Form of Cash and/or Stock)How the profit distribution policy, especially the cash dividend policy, for ordinary shareholders was formulated,executed or revised in the Reporting Period:
□ Applicable √ Not applicable
The profit distributions to ordinary shareholders, either in the form of cash or stock, in the past three years (includingthe Reporting Period) are summarized as follows:
The profit distribution strictly observe regulations of the Articles of Association, and the specific cash dividendplan is worked out after the approval of the board meeting and general meeting. Independent directors played theirroles with due diligence.For 2018, based on the total 1,011,660,000 shares of the Company as at 31 December 2018, a cash dividend ofRMB2.00 (tax included) was distributed to the A-share and B-share holders for every 10 shares they hold withoutbonus share (tax included), and no share capital increase from capital reserve would be conducted.For 2019, based on the total 1,011,660,000 shares of the Company as at 31 December 2019, a cash dividend ofRMB1.65 (tax included) was distributed to the A-share and B-share holders for every 10 shares they hold withoutbonus share (tax included), and no share capital increase from capital reserve would be conducted.For 2020, based on the total 1,011,660,000 shares of the Company as at 31 December 2020, a cash dividend ofRMB0.87 (tax included) was distributed to the A-share and B-share holders for every 10 shares they hold withoutbonus share (tax included), and no share capital increase from capital reserve would be conducted.
Cash dividend for ordinary shareholders in the past three years (including the Reporting Period):
Unit: RMB
| Year | Cash dividends (tax inclusive) (A) | Net profit attributable to ordinary shareholders of the listed company in consolidated statements for the year (B) | A as % of B (%) | Cash dividends in other forms (such as share repurchase) (C) | C as % of B (%) | Total cash dividends (including those in other forms) (D) | D as % of B (%) |
| 2020 | 88,014,420.00 | 290,229,772.23 | 30.33% | 0.00 | 0.00% | 88,014,420.00 | 30.33% |
| 2019 | 166,923,900.00 | 552,452,307.59 | 30.22% | 0.00 | 0.00% | 166,923,900.00 | 30.22% |
| 2018 | 202,332,000.00 | 503,498,831.60 | 40.19% | 0.00 | 0.00% | 202,332,000.00 | 40.19% |
Indicate by tick mark whether the Company fails to put forward a cash dividend proposal for the ordinary shareholdersdespite the facts that the Company has made profits in the Reporting Period and the profits of the Company as theparent distributable to the ordinary shareholders are positive.
□ Applicable √ Not applicable
II Final Dividend Plan for the Reporting Period
√ Applicable □ Not applicable
| Bonus shares for every 10 shares (share) | 0 |
| Dividend for every 10 shares (RMB) (tax inclusive) | 0.87 |
| Total shares as the basis for the profit distribution proposal (share) | 1,011,660,000 |
| Cash dividends (RMB) (tax inclusive) | 88,014,420.00 |
| Cash dividends in other forms (such as share repurchase) (RMB) | 0.00 |
| Total cash dividends (including those in other forms) (RMB) | 88,014,420.00 |
| Distributable profit (RMB) | 1,360,786,232.53 |
| Total cash dividends (including those in other forms) as % of total profit distribution | 100% |
| Cash dividend policy | |
| It’s not easy to distinguish in the Company’s development stage. While, when there is a major capital spending, the percentage of cash dividends to the profit distribution shall be 20% at least when conducting the profit distribution. | |
| Details about the proposal for profit distribution and converting capital reserve into share capital | |
| The Profit Distribution Plan of 2020 was reviewed and approved by the 60th Meeting of the 7th Board of Directors held on 19 March 2021, and intended to be submitted to The 2020 Annual General Meeting for review. Based on the total 1,011,660,000 shares of the Company as at 31 December 2020, a cash dividend of RMB0.87 (tax included) will be distributed to the A-share and B-share holders for every 10 shares they hold without bonus share (tax included), and no share capital increase from capital reserve would be conducted. The profit distribution plan can be implemented upon review and approval of the Shareholders’ General Meeting of the Company. | |
III Fulfillment of Commitments
1. Commitments of the Company’s Actual Controller, Shareholders, Related Parties and Acquirers, as wellas the Company Itself and other Entities Fulfilled in the Reporting Period or Ongoing at the Period-end
√ Applicable □ Not applicable
| Commitment | Promisor | Type of commitment | Details of commitment | Date of commitment making | Term of commitment | Fulfillment |
| Commitments made in time of asset restructuring | The Company | Asset restructuring | The Company's major asset restructuring was terminated, and trading of the stocks was resumed on 9 November 2020. The Company promises that it | 9 November 2020 | Two months | Completed |
| will not initiate the major asset restructuring after the announcement of termination was disclosed within at least two months. | |||
| Fulfilled on time | Yes | ||
| Specific reasons for failing to fulfill commitments on time and plans for next step (if any) | N/A | ||
2. Where there had been an earnings forecast for an asset or project and the Reporting Period was stillwithin the forecast period, explain why the forecast has been reached for the Reporting Period.
□Applicable √ Not applicable
IV Occupation of the Company’s Capital by the Controlling Shareholder or Its RelatedParties for Non-Operating Purposes
□ Applicable √ Not applicable
No such cases in the Reporting Period.V Explanations Given by the Board of Directors, the Supervisory Board and the IndependentDirectors (if any) Regarding the Independent Auditor's “Modified Opinion” on the FinancialStatements of the Reporting Period
□ Applicable √ Not applicable
VI YoY Changes to Accounting Policies, Estimates and Methods
√ Applicable □ Not applicable
Please refer to “31. Changes in Main Accounting Policies and Estimates” of “III Main Accounting Policies andEstimates” in “Part XII Financial Statements” for details.VII Retrospective Restatements due to Correction of Material Accounting Errors in theReporting Period
□ Applicable √ Not applicable
No such cases in the Reporting Period.
VIII YoY Changes to the Scope of the Consolidated Financial Statements
□ Applicable √ Not applicable
No such cases in the Reporting Period.
IX Engagement and Disengagement of Independent Auditor
Current independent auditor
| Name of the domestic independent auditor | Grant Thornton China (LLP) |
| The Company’s payment to the domestic independent auditor (RMB’0,000) | 53 |
| How many consecutive years the domestic independent auditor has provided audit service for the Company | 2 |
| Names of the certified public accountants from the domestic independent auditor writing signatures on the auditor’s report | Zhao Juanjuan, Jiang Xiaoming |
| How many consecutive years the certified public accountants from the domestic independent auditor have provided audit service for the Company | 2 |
Indicate by tick mark whether the independent auditor was changed for the Reporting Period.
□ Yes √ No
Independent auditor, financial advisor or sponsor engaged for the audit of internal controls:
√ Applicable □ Not applicable
The Company hired Grant Thornton China (LLP) to provide internal control audit service for this Reporting Period atthe cost of RMB0.23 million.X Possibility of Listing Suspension or Termination after Disclosure of this Report
□ Applicable √ Not applicable
XI Insolvency and Reorganization
□ Applicable √ Not applicable
No such cases in the Reporting Period.XII Major Legal Matters
√Applicable □ Not applicable
| General information | Involved amount (RMB’0,000) | Provision | Progress | Decisions and effects | Execution of decisions | Disclosure date | Index to disclosed information |
| Xi’an Project Lawsuit | 2,100 | No | In execution | ? Xi’an Business Tourism Company Limited (hereinafter referred to as “Business Company”) had to pay for the compensation RMB36.62 million and the relevant interest (from 14 September 1998 to the | Shaanxi High People’s Court Sold all assets of Business Company by auction in accordance with | 19 August 2020 | Interim Report 2020 (full text) on www.cninfo.com.cn |
| payment day) to Xi’an Fresh Peak Company within one month after the judgment entering into force. If the Business Company failed to pay in time, it had to pay double debt interests to Xi’an Fresh Peak Company for the overdue period; ② Xi’an Joint Commission on Commerce had jointly and severally obligation of the interests of the compensation; .③ Business Company shall bear RMB227,500 of the acceptance fee and the security fee. | laws in 2004. The applicant has received RMB15.20 million. Now Business Company has no executable properties and Xi’an Joint Commission on Commerce has been refusing to execute the ruling. It is difficult to recover the rest. |
XIII Punishments and Rectifications
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XIV Credit Quality of the Company as well as Its Controlling Shareholder and ActualController
□ Applicable √ Not applicable
XV Equity Incentive Plans, Employee Stock Ownership Plans or Other Incentive Measuresfor Employees
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XVI Major Related-Party Transactions
1. Continuing Related-Party Transactions
√Applicable □ Not applicable
| Related party | Relationship with the Compa | Type of transaction | Specific transaction | Pricing principle | Transaction price | Total value (RMB’0,000) | As % of total value of all same-t | Approved transaction line | Over the approved line or not | Method of settlement | Obtainable market price for | Disclosure date | Index to disclosed inform |
| ny | ype transactions | (RMB’0,000) | same-type transactions | ation | ||||||||||
| Shenzhen Jianan (Group) Co., Ltd. | Controlled by the same company as the parent | Engineering construction | Wholly-owned subsidiary undertook engineering construction of related party | Negotiate through agreements | - | 725.82 | 2.89% | 725.82 | Not | Bank transfer | - | 14 March 2020 | 2019 Annual Report disclosed on www.cninfo.com.cn | |
| Shenzhen Jianan (Group) Co., Ltd. | Controlled by the same company as the parent | Engineering construction | Wholly-owned subsidiary paid total account for construction contracted to related party | Negotiate through agreements | - | 18,299.46 | 42.81% | 18,299.46 | Not | Bank transfer | - | 14 March 2020 | 2019 Annual Report disclosed on www.cninfo.com.cn | |
| Total | -- | -- | 19,025.28 | -- | 19,025.28 | -- | -- | -- | -- | -- | ||||
| Large-amount sales return in detail | N/A | |||||||||||||
| Give the actual situation in the Reporting Period (if any) where an estimate had been made for the total value of continuing related-party transactions by type to occur in the Reporting Period | N/A | |||||||||||||
| Reason for any significant difference between the transaction price and the market reference price (if applicable) | N/A | |||||||||||||
2. Related-Party Transactions Regarding Purchase or Sales of Assets or Equity Interests
□ Applicable √ Not applicable
No such cases in the Reporting Period.
3. Related Transactions Regarding Joint Investments in Third Parties
□ Applicable √ Not applicable
No such cases in the Reporting Period.
4. Credits and Liabilities with Related Parties
□ Applicable √ Not applicable
No such cases in the Reporting Period.
5. Other Major Related-Party Transactions
□ Applicable √ Not applicable
No such cases in the Reporting Period.XVII Major Contracts and Execution thereof
1. Entrustment, Contracting and Leases
(1) Entrustment
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(2) Contracting
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(3) Leases
□ Applicable √ Not applicable
No such cases in the Reporting Period.
2. Major Guarantees
□ Applicable √ Not applicable
No such cases in the Reporting Period.
3. Cash Entrusted to Other Entities for Management
(1) Cash Entrusted for Wealth Management
√ Applicable □ Not applicable
Overview of cash entrusted for wealth management in the Reporting Period
Unit: RMB’0,000
| Type | Capital resources | Amount incurred | Outstanding balance | Overdue unrevoked amount |
| Bank financial products | Self-owned funds | 100,000 | 0 | 0 |
| Total | 100,000 | 0 | 0 | |
High-risk entrusted wealth management with significant single amount or low security, poor liquidity and no capitalpreservation:
□ Applicable √ Not applicable
Whether there is the case where the principal cannot be recovered at maturity or other case which may causeimpairment for entrusted wealth management
□ Applicable √ Not applicable
(2) Entrusted Loans
□ Applicable √ Not applicable
No such cases in the Reporting Period.
4. Significant Continuing Contracts
□ Applicable √ Not applicable
5. Other Major Contracts
□ Applicable √ Not applicable
No such cases in the Reporting Period.XVIII Corporate Social Responsibility (CSR)
1. Measures Taken to Fulfill CSR Commitment
The Company has proactively fulfilled its social responsibilities. While pursuing economic benefits and protectingthe interests of shareholders, it complied with the overall development of the country and society, protected thelegal rights of creditors and employees positively and treated the suppliers, customers and consumers withintegrity. Participating in the public welfare undertakings such as environment protection and communityactivities positively, the Company took efforts in keeping a harmonious development of the Company itself andthe whole society. During the Reporting Period, the Company actively fought against the pandemic, which fullydemonstrated the responsibility of state-owned enterprises. Also, the Company donated RMB500,000 to the“Municipal State-owned Enterprise Aiding Hubei Special Fund Raising Action”, exempted and reduced rents fortenants for about RMB18.36 million. Besides, in accordance with the idea of “creating a civilized community” in
Jiabei Community, the Company organized road traffic civilization persuasion and "creating a civilizedcommunity" voluntary activities twice with the participation of a total of 215 party members and mass volunteers.During this process, the employees' sense of social responsibility was hugely enhanced.
2. Measures Taken for Targeted Poverty Alleviation
The Company conducted no targeted poverty alleviation activities during the Reporting Period and has no subsequentplans yet.
3. Issues Related to Environmental Protection
Indicate by tick mark whether the Company or any of its subsidiaries is identified as a major polluter by theenvironmental protection authorities.
□ Yes √ No
XIX Other Significant Events
√ Applicable □ Not applicable
Since the planning for major asset restructuring, the Company's stocks have been suspended for trading since theopening of the stock market on 14 September 2016. During the suspension period, the Company kept closecommunication with all trading parties, worked hard in due diligence, auditing, evaluation and other issues, andfulfilled the required decision-making procedures and information disclosure timely. In view of the current marketenvironment and many other reasons, it was still not a good time to advance the major asset restructuring.Therefore, in order to effectively protect the interests of the Company and all shareholders, the Company decidedto terminate the major asset restructuring after careful consideration. On 9 November 2020, the stock tradingresumed. For details, please refer to the Announcement on the Termination of Planning for Major AssetRestructuring and the Stock Trading Resumption (No. 2020-085) which was disclosed by the Company onwww.cninfo.com.cn on 9 November 2020.
XX Significant Events of Subsidiaries
□ Applicable √ Not applicable
Part VI Share Changes and Shareholder InformationI. Share Changes
1. Share Changes
Unit: share
| Before | Increase/decrease (+/-) | After | |||||||
| Shares | Percentage (%) | New issues | Shares as dividend converted from profit | Shares as dividend converted from capital reserves | Other | Subtotal | Shares | Percentage (%) | |
| 1. Restricted shares | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| 1.1 Shares held by the state | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| 1.2 Shares held by state-own Legal-person | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| 1.3 Shares held by other domestic investors | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| Among which: shares held by domestic legal person | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0.00% | |
| Shares held by domestic natural person | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| 1.4 Oversea shareholdings | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0.00% | |
| Among which: shares held by oversea legal person | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| Shares held by oversea natural person | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| 2. Unrestricted shares | 1,011,660,000 | 100.00% | 0 | 0 | 0 | 0 | 0 | 1,011,660,000 | 100.00% |
| 2.1 RMB ordinary shares | 891,660,000 | 88.14% | 0 | 0 | 0 | 0 | 0 | 891,660,000 | 88.14% |
| 2.2 Domestically | 120,000,000 | 11.86% | 0 | 0 | 0 | 0 | 0 | 120,000,000 | 11.86% |
| listed foreign shares | |||||||||
| 2.3 Oversea listed foreign shares | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| 2.4 Other | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| 3. Total shares | 1,011,660,000 | 100.00% | 0 | 0 | 0 | 0 | 0 | 1,011,660,000 | 100.00% |
Reasons for share changes:
□ Applicable √ Not applicable
Approval of share changes:
□ Applicable √ Not applicable
Transfer of share ownership:
□ Applicable √ Not applicable
Progress on any share repurchase:
□ Applicable √ Not applicable
Progress on reducing the repurchased shares by means of centralized bidding:
□ Applicable √ Not applicable
Effects of share changes on the basic and diluted earnings per share, equity per share attributable to the Company’sordinary shareholders and other financial indicators of the prior year and the prior accounting period, respectively:
□ Applicable √ Not applicable
Other information that the Company considers necessary or is required by the securities regulator to be disclosed:
□ Applicable √ Not applicable
2. Changes in Restricted Shares
□ Applicable √ Not applicable
II. Issuance and Listing of Securities
1. Securities (Exclusive of Preferred Shares) Issued in the Reporting Period
□ Applicable √ Not applicable
2. Changes to Total Shares, Shareholder Structure and Asset and Liability Structures
□ Applicable √ Not applicable
3. Existing Staff-Held Shares
□ Applicable √ Not applicable
III Shareholders and Actual Controller
1. Shareholders and Their Shareholdings at the Period-End
Unit: share
| Number of ordinary shareholders | 74,276 | Number of ordinary shareholders at the month-end prior to the disclosure of this Report | 74,556 | Number of preferred shareholders with resumed voting rights (if any) | 0 | Number of preferred shareholders with resumed voting rights at the month-end prior to the disclosure of this Report (if any) | 0 | ||||||||
| Shareholding of ordinary shareholders holding more than 5% shares or the top 10 of ordinary shareholders | |||||||||||||||
| Name of shareholder | Nature of shareholder | Holding percentage (%) | Number of shareholding at the end of the Reporting Period | Increase and decrease of shares during Reporting Period | Number of shares held subject to trading moratorium | Number of shares held subject to trading moratorium | Pledged or frozen shares | ||||||||
| Status of shares | Amount | ||||||||||||||
| Shenzhen Investment Holdings Co., Ltd | State-owned legal person | 63.55% | 642,884,262 | 0 | 642,884,262 | ||||||||||
| Sun Longzhan | Domestic natural person | 0.14% | 1,464,248 | 1,464,248 | 1,464,248 | ||||||||||
| Yang Shuilian | Domestic natural person | 0.14% | 1,412,900 | 139,200 | 1,412,900 | ||||||||||
| Tan Shiqing | Domestic natural person | 0.13% | 1,286,701 | 0 | 1,286,701 | ||||||||||
| Yang Jianxiong | Domestic natural person | 0.12% | 1,255,750 | 0 | 1,255,750 | ||||||||||
| Shenzhen Bao'an Songgang Huamei Industry Company | Domestic non-state-owned legal person | 0.12% | 1,205,096 | 1,205,096 | 1,205,096 | ||||||||||
| Duan Weiping | Domestic natural person | 0.12% | 1,190,000 | 1,190,000 | 1,190,000 | ||||||||||
| Central Huijin Asset Management Co., Ltd. | State-owned legal person | 0.12% | 1,165,500 | 0 | 1,165,500 | ||||||||||
| Hong Kong Securities Clearing Company Ltd. | Foreign legal person | 0.11% | 1,117,641 | 1,117,641 | 1,117,641 | ||||||||||
| Wu Haoyuan | Foreign natural person | 0.11% | 1,109,300 | 0 | 1,109,300 | ||||||||||
| Strategic investor or general legal person becoming a top-10 ordinary shareholder due to rights issue (if any) (see Note 3) | None | ||||||||||||||
| Related or acting-in-concert parties among the shareholders above | Among the top 10 shareholders of the Company, SPG is neither a related party to, nor one of the persons acting in concert with other shareholders as prescribed in the Administrative Measures for the Acquisition of Listed Companies. The Company does not know whether there exists associated relationship among the other shareholders, or whether they are persons acting in concert as prescribed in the Administrative Measures for the Acquisition of Listed Companies. | ||||
| Above shareholders involved in entrusting/being entrusted with voting rights and giving up voting rights | None | ||||
| Top 10 unrestricted shareholders | |||||
| Name of shareholder | Unrestricted shares held at the period-end | Shares by type | |||
| Type | Shares | ||||
| Shenzhen Investment Holdings Co., Ltd | 642,884,262 | RMB ordinary shares | 642,884,262 | ||
| Sun Longzhan | 1,464,248 | RMB ordinary shares | 1,464,248 | ||
| Yang Shuilian | 1,412,900 | RMB ordinary shares | 1,412,900 | ||
| Tan Shiqing | 1,286,701 | RMB ordinary shares | 1,286,701 | ||
| Yang Jianxiong | 1,255,750 | Domestically listed foreign shares | 1,255,750 | ||
| Shenzhen Bao'an Songgang Huamei Industry Company | 1,205,096 | RMB ordinary shares | 1,205,096 | ||
| Duan Weiping | 1,190,000 | RMB ordinary shares | 1,190,000 | ||
| Central Huijin Asset Management Co., Ltd. | 1,165,500 | RMB ordinary shares | 1,165,500 | ||
| Hong Kong Securities Clearing Company Ltd. | 1,117,641 | RMB ordinary shares | 1,117,641 | ||
| Wu Haoyuan | 1,109,300 | Domestically listed foreign shares | 1,109,300 | ||
| Related or acting-in-concert parties among top 10 unrestricted public shareholders, as well as between top 10 unrestricted public shareholders and top 10 shareholders | Among the top 10 unrestricted public shareholders of the Company, SPG is neither a related party to, nor one of the persons acting in concert with other shareholders as prescribed in the Administrative Measures for the Acquisition of Listed Companies. The Company does not know whether there exists associated relationship among the other shareholders, or whether they are persons acting in concert as prescribed in the Administrative Measures for the Acquisition of Listed Companies. | ||||
| Top 10 ordinary shareholders involved in securities margin trading (if any) (see Note 4) | Both the fourth and sixth shareholders held all their shares of the Company in their margin accounts. | ||||
Indicate by tick mark whether any of the top 10 ordinary shareholders or the top 10 unrestricted ordinary shareholdersof the Company conducted any promissory repo during the Reporting Period.
□ Yes √ No
No such cases in the Reporting Period.
2. Controlling Shareholder
Nature of the controlling shareholder: Controlled by a local state-owned legal person
Type of the controlling shareholder: legal person
| Name of controlling shareholder | Legal representative/person in charge | Date of establishment | Unified social credit code | Principal activity |
| Shenzhen Investment Holdings Co., Ltd. | Wang Yongjian | 13 October 2004 | 767566421 | Investment in equities on behalf of the government and management of those investments; development and operation of government-allocated land; and investment in and provision of services for strategic emerging industries |
| Controlling shareholder’s holdings in other listed companies at home or abroad in the Reporting Period | 339,450,000 shares in SZPRD A (000011), representing a stake of 56.96%;; 234,070,000 shares in STHC (000045) , representing a stake of 46.10%; 9,590,000 shares in Shenzhen Universe A (000023) , representing a stake of 6.91%; 962,720,000 shares in Ping An (601318) , representing a stake of 5.27%; 3,223,110,000 shares in Guosen Securities (002736) , representing a stake of 33.53%; 609,240,000 of A shares and 103,370,000 of H shares in Guotai Junan (601211) , representing a stake of 8%; 195,030,000 shares in Telling Holding (000829) , representing a stake of 18.89%; 208,850,000 shares in Shenzhen International (00152) , representing a stake of 43.91%; 604,820,000 shares in BEAUTYSTAR (002243), representing a stake of 49.96%; 2,213,450,000 shares in Bay Area Development (00737), representing a stake of 71.83%; 315,830,000 shares in Infinova (002528), representing a stake of 26.35%; 388,450,000 shares in EA (002183), representing a stake of 18.30%; 6,770,000 shares in Shenzhen Energy (000027), representing a stake of 0.14%; 9,520,000 shares in BOCOM (601328), representing a stake of 0.01%; 113,980,000 shares in Techand Ecology (300197), representing a stake of 4.84%; 77,270,000 shares in Vanke (02202), representing a stake of 0.67%. | |||
Change of the controlling shareholder in the Reporting Period:
□ Applicable √ Not applicable
No such cases in the Reporting Period.
3. Actual Controller and Its Acting-in-Concert Parties
Nature of the actual controller: Local institution for state-owned assets managementType of the actual controller: legal person
| Name of actual controller | Legal representative/person in charge | Date of establishment | Unified social credit code | Principal activity |
| Shenzhen State-owned Assets Supervision and Administration Commission | Yu Gang | 31 July 2004 | K3172806-7 | Perform the responsibilities of investor on behalf of the state, and supervise and manage the authorized state-owned assets legally. |
| Other listed companies at | In addition to the Company controlling shareholder - Shenzhen Investment Holding Co., | |||
| home or abroad controlled by the actual controller in the Reporting Period | Ltd. Other domestic and overseas listed companies whose equity held by the actual controllers did not rank among the top ten shareholders of the Company. |
Change of the actual controller during the Reporting Period:
□ Applicable √ Not applicable
No such cases in the Reporting Period.Ownership and control relations between the actual controller and the Company:
Indicate by tick mark whether the actual controller controls the Company via trust or other ways of asset management.
□ Applicable √ Not applicable
4. Other 10% or Greater Corporate Shareholders
□ Applicable √ Not applicable
5. Limitations on Shareholding Decrease by the Company’s Controlling Shareholder, Actual Controller,Reorganizer and Other Commitment Makers
□ Applicable √ Not applicable
Part VII Preferred Shares
□ Applicable √ Not applicable
No preferred shares in the Reporting Period.
Part VIII Convertible Bonds
□ Applicable √ Not applicable
No convertible bonds in the Reporting Period.
Part IX Directors, Supervisors, Senior Management and Staff
I Change in Shareholdings of Directors, Supervisors and Senior Management
| Name | Office title | Incumbent/Former | Gender | Age | Start of tenure | End of tenure | Beginning shareholding (share) | Increase in the Reporting Period (share) | Decrease in the Reporting Period (share) | Other increase/decrease (share) | Ending shareholding (share) |
| Liu Zhengyu | Chairman of the Board | Incumbent | Male | 51 | 15 January 2020 | 0 | 0 | 0 | 0 | 0 | |
| Tang Xiaoping | Director | Incumbent | Male | 51 | 31 December 2020 | 0 | 0 | 0 | 0 | 0 | |
| Tang Xiaoping | GM | Incumbent | Male | 51 | 14 December 2020 | 0 | 0 | 0 | 0 | 0 | |
| Deng Kangcheng | Director | Incumbent | Male | 55 | 17 April 2012 | 10,000 | 0 | 0 | 0 | 10,000 | |
| Zhao Zhongliang | Director | Incumbent | Male | 51 | 31 December 2020 | 0 | 0 | 0 | 0 | 0 | |
| Zhao Zhongliang | CFO | Incumbent | Male | 51 | 14 December 2020 | 0 | 0 | 0 | 0 | 0 | |
| Wen Li | Director | Incumbent | Female | 52 | 8 September 2006 | 0 | 0 | 0 | 0 | 0 | |
| Sun Minghui | Director | Incumbent | Male | 40 | 31 December 2020 | 0 | 0 | 0 | 0 | 0 | |
| Kang Xiaoyue | Independent director | Incumbent | Male | 57 | 15 May 2018 | 0 | 0 | 0 | 0 | 0 | |
| He Zuowen | Independent director | Incumbent | Male | 59 | 30 June 2020 | 0 | 0 | 0 | 0 | 0 | |
| Mi Xuming | Independent director | Incumbent | Male | 46 | 30 June 2020 | 0 | 0 | 0 | 0 | 0 | |
| Li Lian | Chairman of the Supervisory Committee | Incumbent | Female | 54 | 31 December 2020 | 0 | 0 | 0 | 0 | 0 | |
| Ren Wei | Supervisor | Incumbent | Male | 41 | 15 May 2018 | 2,000 | 0 | 0 | 0 | 2,000 | |
| Li Yufei | Supervisor | Incumbent | Female | 43 | 17 April 2012 | 0 | 0 | 0 | 0 | 0 | |
| Feng Hongwei | Supervisor | Incumbent | Male | 50 | 2 March 2017 | 0 | 0 | 0 | 0 | 0 |
| Lin Jun | Supervisor | Incumbent | Female | 52 | 27 April 2016 | 0 | 0 | 0 | 0 | 0 | |
| Wei Hanping | Vice GM | Incumbent | Female | 55 | 28 September 2012 | 0 | 0 | 0 | 0 | 0 | |
| Zhang Hongwei | Vice GM | Incumbent | Male | 55 | 15 July 2020 | 0 | 0 | 0 | 0 | 0 | |
| Luo Yi | Secretary of the Board | Incumbent | Male | 47 | 31 December 2020 | 0 | 0 | 0 | 0 | 0 | |
| Zhou Jianguo | Chairman of the Board | Former | Male | 66 | 11 February 2009 | 15 January 2020 | 0 | 0 | 0 | 0 | 0 |
| Zhuang Quan | Chairman of the Supervisory Committee | Former | Male | 66 | 17 April 2012 | 15 January 2020 | 80,000 | 0 | 0 | 0 | 80,000 |
| Chen Maozheng | General Manager and Director | Former | Male | 57 | 17 April 2012 | 30 June 2020 | 0 | 0 | 0 | 0 | 0 |
| Song Botong | Independent director | Former | Male | 53 | 15 October 2010 | 30 June 2020 | 0 | 0 | 0 | 0 | 0 |
| Zhang Shunwen | Independent director | Former | Male | 55 | 23 April 2014 | 30 June 2020 | 0 | 0 | 0 | 0 | 0 |
| Zhang Lei | Director | Former | Male | 53 | 17 April 2012 | 31 December 2020 | 0 | 0 | 0 | 0 | 0 |
| Zhang Lei | CFO | Former | Male | 53 | 17 April 2012 | 14 December 2020 | 0 | 0 | 0 | 0 | 0 |
| Jiang Lihua | Director | Former | Female | 57 | 17 April 2012 | 31 December 2020 | 0 | 0 | 0 | 0 | 0 |
| Dai Xianhua | Chairman of the Supervisory Committee | Former | Male | 59 | 15 January 2020 | 31 December 2020 | 0 | 0 | 0 | 0 | 0 |
| Tang Xiaoping | Secretary of the Board | Appointed and | Male | 51 | 26 April 2018 | 31 Dece | 0 | 0 | 0 | 0 | 0 |
| dismissed | mber 2020 | ||||||||||
| Tang Xiaoping | Vice GM | Appointed and dismissed | Male | 51 | 22 October 2013 | 14 December 2020 | 0 | 0 | 0 | 0 | 0 |
| Total | -- | -- | -- | -- | -- | -- | 92,000 | 0 | 0 | 0 | 92,000 |
II Change of Directors, Supervisors and Senior Management
√Applicable □ Not applicable
| Name | Office title | Type of change | Date of change | Reason for change |
| Liu Zhengyu | Chairman of the Board | Elected | 15 January 2020 | |
| Dai Xianhua | Chairman of the Supervisory Committee | Elected | 15 January 2020 | |
| Zhou Jianguo | Chairman of the Board | Left | 15 January 2020 | Retired |
| Zhuang Quan | Chairman of the Supervisory Committee | Left | 15 January 2020 | Retired |
| Chen Maozheng | Director | Left | 30 June 2020 | Job change |
| Chen Maozheng | General Manager | Left | 30 June 2020 | Job change |
| Song Botong | Independent director | Left for expiration of appointment | 30 June 2020 | Expiration of appointment |
| Zhang Shunwen | Independent director | Left for expiration of appointment | 30 June 2020 | Expiration of appointment |
| He Zuowen | Independent director | Elected | 30 June 2020 | |
| Mi Xuming | Independent director | Elected | 30 June 2020 | |
| Zhang Hongwei | Vice GM | Appointed | 15 July 2020 | |
| Tang Xiaoping | GM | Appointed | 14 December 2020 | |
| Tang Xiaoping | Vice GM | Appointed | 14 December 2020 | Post change |
| Zhang Lei | CFO | Left | 14 December 2020 | Job change |
| Zhao Zhongliang | CFO | Appointed | 14 December 2020 | |
| Zhang Lei | Director | Left | 31 December 2020 | Job change |
| Jiang Lihua | Director | Left | 31 December 2020 | Retired |
| Tang Xiaoping | Director | Elected | 31 December 2020 | |
| Sun Minghui | Director | Elected | 31 December 2020 | |
| Zhao Zhongliang | Director | Elected | 31 December 2020 | |
| Dai Xianhua | Chairman of the Supervisory Committee | Left | 31 December 2020 | Job change |
| Li Lian | Chairman of the Supervisory Committee | Elected | 31 December 2020 | |
| Tang Xiaoping | Secretary of the Board | Appointed | 31 December 2020 | Post change |
| Luo Yi | Secretary of the Board | Appointed | 31 December 2020 |
III Biographical InformationProfessional backgrounds, major work experience and current duties in the Company of the incumbent directors,supervisors and senior management:
1. Liu zhengyu: he once was the director of Inspection Department in State-owned Assets Supervision andAdministration Commission of the People’s Government of Shenzhen Municipal and Chief Accountant ofShenzhen Investment Holdings Co., Ltd. Now he acts as the vice GM and the member of CPC of ShenzhenInvestment Holdings Co., Ltd., the Chairman of the Board, secretary of CPC of the Company.
2. Tang Xiaoping: he ever act as CFO and finance minister of Shenzhen HRD Assets Management Company,minister of Financial Operations Management Department of Shenzhen Foreign Labor Service Co., Ltd. andexecutive director of Shenzhen Foreign Affairs Service Center, Manager of Financing Plan Department, deputyGM of the Company and secretary of the Board of the Company. He is currently the director, GM and deputysecretary of the CPC of the Company.
3. Deng Kangcheng: he was once deputy director, director of the Office of Shenzhen Investment Holdings Co.,Ltd., and supervisor of the Company. And now he acts as the director and Vice Secretary of CPC of the Company.
4. Zhao Zhongliang: former director and CFO of Shenzhen Rosso Pharmaceutical Co., Ltd., member of thepresident team and CFO of Sichuan Lisen Building Materials Group Co., Ltd., supervisor of Ningbo Haiyue NewMaterials Co., Ltd., director and CFO of Shenzhen Investment Control Property Management Co., Ltd., directorand CFO of Shenzhen Shentou Education Co., Ltd.; currently serves as Director and CFO of the Company.
5. Wen Li: she once worked as the vice chief of the Investment and Development Department, vice director ofManagement Center for Construction Project and Minister of Enterprise Department I of Shenzhen InvestmentHoldings Co., Ltd. Now, she serves as the director, GM and vive secretary of CPC in Shenzhen Bay TechnologyDevelopment Co., Ltd. and the director of the Company.
6. Sun Minghui: Former the senior director of the Finance Department and the Office of the Board of Directors ofShenzhen Investment Holdings Co., Ltd., and the deputy director of the Finance Department (Settlement Center);currently, he is the director of the Finance Department (Settlement Center) of Shenzhen Investment Holdings Co.,Ltd. and a director of the Company.
7. Kang Xiaoyue: he was once the staff member of Department of Justice of Jiangxi Province, a reporter, editorand head of News Department of Shenzhen Legal Newspaper. Chief Lawyer, senior partner of Guangdong NewCentury Law Firm (now renamed Guangdong Wancheng Law Firm). Now he serves as a senior partner of BeijingWeiheng (Shenzhen) Law Firm and the independent director of the Company.
8. He Zuowen: formerly associate professor of accounting and director of teaching and research section ofChangsha University of Science & Technology, partner and deputy director of Shenzhen Huapeng CertifiedPublic Accountants, partner of BDO Certified Public Accountants; currently partner of Dahua Certified PublicAccountants (Special General Partnership), Secretary of CPC General Branch of Shenzhen Branch, Chairman ofShenzhen Tianye Tax Agent Co., Ltd., and also served as the independent director of Shenzhen JPTOpto-Electronics Co., Ltd., Shenzhen Textile (Group) Co., Ltd., Shenzhen Bioeasy Biotechnology Co., Ltd.,Shenzhen Tongyi Industry Co., Ltd. and the Company. The main social positions are: judge of the GuangdongProvincial Senior Accountant Review Committee, member of the Shenzhen Municipal Social OrganizationDisciplinary Inspection Committee of the Communist Party of China, deputy secretary and secretary of theDisciplinary Committee of Shenzhen CPA Industry Committee, and director of Shenzhen Certified Tax AgentsAssociation.
9. Mi Xuming: Former lecturer at Shenzhen University, postdoctor of post-doctoral mobile station for appliedeconomics of School of Economics of Xiamen University, visiting scholar at the University of Exeter; currently
associate professor and master tutor of Shenzhen University, and at the same time as the independent directors ofChinaLin Securities Co., Ltd., Shenzhen Farben Information Technology Co., Ltd. and the Company.
10. Li Lian: Former Deputy Director and Deputy Secretary of the Party Branch of Shenzhen Foreign Economicand Trade Service Center, Secretary of the Disciplinary Committee and Chairman of the Supervisory Committeeof Shenzhen Shentou Education Co., Ltd.; currently Chairman of the Supervisory Committee and Secretary of theDisciplinary Committee of the Company.
11. Ren Wei: he once was the CFO of Xian Zhenye Real Estate Development Co., Ltd., minister of Budget &Financing Department and director of Fund Centre of Shenfubao Group Co., Ltd. Now he serves as the viceminister of Audit Department of Shenzhen Investment Holdings Co., Ltd. and the supervisor of the Company.
12. Li Yufei: she ever worked as the Assistant to the Manager of the Investment Department and Assistant to theManager & Vice Manager of Assets Management Centre as well as the Senior Management Staff of EnterpriseDepartment I and Enterprise Department II (Journal Center) in Shenzhen Investment Holdings Co., Ltd. Now, sheserves as the deputy director of Discipline Inspection Office in Shenzhen Investment Holdings Co., Ltd. and thesupervisor of the Company.
13. Feng Hongwei: he once was the Vice Chief of the Board Secretariat, and the Securities Representative. Nowhe acts as the supervisor and minister of Audit Department of the Company.
14. Lin Jun: She once was the Vice Chief and Chief of the Party-Mass Work Department. And she has been actingas a supervisor of the Company, the Vice Discipline Inspection Secretary and Director of Discipline Inspectionand Supervision Office (Office of the Board of Supervisors).
15. Wei Hanping: she ever worked as the manager of the Leasing Operation Department in Shenzhen CityConstruction Development (Group) Co. and the manager of Cost Control Department of the Company. And shenow serves as the Vice GM of the Company.
16. Zhang Hongwei: once served as GM of Shenzhen Urban Construction Investment Development Co., Ltd.,Hefei Ruifa Urban Construction Investment Development Co., Ltd., manager of the Company's DevelopmentDepartment, Sales Department, Project II Department, Project Management Department; currently deputy GM ofthe Company, manager of Dongle Project, GM of Longgang Development Company.
17. Luo Yi: He was once the Vice GM, Deputy Director of Board Secretariat and Securities Representative in theShantou branch of the Company. And he now serves as the Board Secretary and Director of the Board Secretariatin the Company.
Offices held concurrently in shareholding entities:
√Applicable □Not applicable
| Name | Shareholding entity | Office held in the shareholding entity | Start of tenure | End of tenure | Remuneration or allowance from the shareholding entity |
| Liu Zhengyu | Shenzhen Investment Holdings Co., Ltd | Vice GM, member of CPC | 9 January 2017 | Yes | |
| Sun Minghui | Shenzhen Investment Holdings Co., Ltd | Chief of Financial Department (Settlement Center) | 11 November 2020 | Yes | |
| Ren Wei | Shenzhen Investment Holdings Co., Ltd | Vice minister of Audit Department | 18 September 2017 | Yes | |
| Li Yufei | Shenzhen Investment Holdings Co., Ltd | Deputy Director of Discipline Inspection Office | 9 July 2015 | Yes |
Offices held concurrently in other entities:
√Applicable □Not applicable
| Name | Other entity | Office held in the entity | Start of tenure | End of tenure | Remuneration or allowance from the entity |
| Liu Zhengyu | Shenzhen Urban Transport Planning Center Co.., Ltd. | Director | 17 October 2017 | 17 December 2019 | No |
| Liu Zhengyu | Telling Telecommunication Holding Co., Ltd. | Director | 2 March 2017 | 23 April 2020 | No |
| Liu Zhengyu | China's State Owned Capital Venture Capital Fund | Director | 16 August 2016 | No | |
| Liu Zhengyu | Kashi Shenzhen City Co., Ltd. | Director | 8 October 2013 | No | |
| Liu Zhengyu | Shenzhen Investment Holdings Bay Area Development Co., Ltd. | Non-executive director, Chairman of the Board | 14 March 2018 | No | |
| Liu Zhengyu | Shenzhen Investment International Capital Holdings Infrastructure Co., Ltd. | Director | 18 December 2017 | No | |
| Liu Zhengyu | Shenzhen Investment International Capital Holdings Co., Ltd. | Director | 9 September 2016 | No | |
| Liu Zhengyu | Tsinghua Tri Shenzhen Co., Ltd. | Director | December 12, 2019 | No | |
| Liu Zhengyu | SIHC Hong Kong Investment Holdings Limited | Director | March 11, 2019 | No | |
| Liu Zhengyu | Research Institute of Tsinghua University in Shenzhen | Member of a council | April 10, 2018 | No | |
| Deng Kangcheng | Shenzhen Leaguer Co., Ltd. | Director | June 15, 2020 | No | |
| Wen Li | Shenzhen Bay Technology Development Co., Ltd. | Director, GM and Vice Secretary of CPC | December 1, 2016 | Yes | |
| Sun Minghui | Meizhou Shenmei Friendship Building Co., Ltd. | Director | January 13, 2014 | June 18, 2020 | No |
| Sun Minghui | China Nanshan Development (Group) Co., Ltd. | Supervisor | October 17, 2017 | No | |
| Sun Minghui | Shenzhen Highway Passenger Transportation Service Centre Co., Ltd. | Supervisor | June 16, 2017 | No |
| Sun Minghui | China Science And Technology Development Co., Ltd. | Supervisor | June 27, 2017 | No | |
| Sun Minghui | ULTRARICH INTERNATIONAL LIMITED | Director | November 11, 2020 | No | |
| Sun Minghui | China Southern Fund Management Co., Ltd. | Supervisor | November 11, 2020 | No | |
| Sun Minghui | Hubei SIHC Investment Development Co., Ltd. | Director | November 11, 2020 | No | |
| Sun Minghui | Shenzhen Textile (Holdings) Co., Ltd. | Director | February 10, 2021 | No | |
| Ren Wei | Shenzhen Construction & Installation (Group) Co., Ltd. | Supervisor | October 22, 2017 | July 8, 2020 | No |
| Ren Wei | Shenzhen Sungang China Resources Land Development Co., Ltd. | Supervisor | October 17, 2017 | No | |
| Li Yufei | Shenzhen Dapengwan Huaqiao Tomb | Director | November 19, 2015 | No | |
| Li Yufei | Shenzhen Sports Center Operation Management Co., Ltd. | Supervisor | December 22, 2015 | June 18, 2020 | No |
| Kang Xiaoyue | Beijing Weiheng (Shenzhen) Law Firm | Senior partner | December 2, 2019 | Yes | |
| He Zuowen | Dahua Certified Public Accountants (Special General Partnership) | Partner | December 1, 2002 | Yes | |
| He Zuowen | Shenzhen Tianye Tax Agency Co., Ltd. | Chairman of the Board | December 1, 2008 | Yes | |
| He Zuowen | Shenzhen JPT Opto-Electronics Co., Ltd. | Independent director | June 1, 2017 | Yes | |
| He Zuowen | Shenzhen Textile (Holdings) Co., Ltd. | Independent director | July 19, 2017 | Yes | |
| He Zuowen | Shenzhen Bioeasy Biotechnology Co., Ltd. | Independent director | October 1, 2017 | Yes | |
| He Zuowen | Shenzhen Tongyi Industry Co., Ltd. | Independent director | October 11, 2018 | Yes | |
| Mi Xuming | Shenzhen University | Associate professor and master tutor | December 1, 2009 | Yes | |
| Mi Xuming | ChinaLin Securities Co., Ltd. | Independent director | April 10, 2017 | Yes | |
| Mi Xuming | Shenzhen Farben Information Technology Co., Ltd. | Independent director | January 29, 2021 | Yes |
Punishments imposed in the recent three years by the securities regulator on the incumbent directors, supervisors andsenior management as well as those who left in the Reporting Period:
□ Applicable √ Not applicable
IV Remuneration of Directors, Supervisors and Senior Management
Decision-making procedure, determination basis and actual payments of remuneration for directors, supervisors andsenior management:
1. The remuneration of the Company's directors, supervisors and senior managers shall be determined and implemented inaccordance with the regulations of the Company's remuneration management system.
2. After the review and approval at the 2013 Annual General Meeting of Shareholders held on April 23, 2014, theallowance for independent directors has been adjusted to RMB7000 (tax included) per person per month since May 2014,and independent directors will not receive any remuneration other than it from the Company.
3. He Zuowen, an independent director, also receives the allowance of independent director in Shenzhen Textile (Group)Co., Ltd. Shenzhen textile (Group) Co., Ltd and the Company are under the control of the same dominant shareholder andare related parties of the Company.
Remuneration of directors, supervisors and senior management for the Reporting Period
Unit: RMB’0,000
| Name | Office title | Gender | Age | Incumbent/Former | Total before-tax remuneration from the Company | Any remuneration from related party |
| Liu Zhengyu | Chairman of the Board | Male | 51 | Incumbent | Yes | |
| Tang Xiaoping | Director and GM | Male | 51 | Incumbent | 115.02 | No |
| Deng Kangcheng | Director | Male | 55 | Incumbent | 117.32 | No |
| Zhao Zhongliang | Director and CFO | Male | 51 | Incumbent | Yes | |
| Wen Li | Director | Female | 52 | Incumbent | Yes | |
| Sun Minghui | Director | Male | 40 | Incumbent | Yes | |
| Kang Xiaoyue | Independent director | Male | 57 | Incumbent | 8.4 | No |
| He Zuowen | Independent director | Male | 59 | Incumbent | 4.2 | Yes |
| Mi Xuming | Independent director | Male | 46 | Incumbent | 4.2 | No |
| Li Lian | Chairman of the Supervisory Committee | Female | 54 | Incumbent | Yes | |
| Ren Wei | Supervisor | Male | 41 | Incumbent | Yes | |
| Li Yufei | Supervisor | Female | 43 | Incumbent | Yes | |
| Feng Hongwei | Supervisor | Male | 50 | Incumbent | 63.93 | No |
| Lin Jun | Supervisor | Female | 52 | Incumbent | 63.93 | No |
| Wei Hanping | Vice GM | Female | 55 | Incumbent | 117.32 | No |
| Zhang Hongwei | Vice GM | Male | 55 | Incumbent | 80.3 | No |
| Luo Yi | Secretary of the Board | Male | 47 | Incumbent | 60.44 | No |
| Zhou Jianguo | Chairman of the Board | Male | 66 | Former | 59.44 | No |
| Zhuang Quan | Chairman of the Supervisory Committee | Male | 66 | Former | 46.5 | No |
| Chen Maozheng | General Manager and Director | Male | 57 | Former | 89.4 | Yes |
| Song Botong | Independent director | Male | 53 | Former | No | |
| Zhang Shunwen | Independent director | Male | 55 | Former | 4.2 | No |
| Zhang Lei | Director and CFO | Male | 53 | Former | Yes | |
| Jiang Lihua | Director | Female | 57 | Former | Yes | |
| Dai Xianhua | Chairman of the Supervisory Committee | Male | 59 | Former | Yes | |
| Total | -- | -- | -- | -- | 834.6 | -- |
Equity incentives for directors, supervisors and senior management in the Reporting Period:
□ Applicable √ Not applicable
V Employees
1. Number, Functions and Educational Backgrounds of Employees
| Number of in-service employees of the Company as the parent | 100 |
| Number of in-service employees of major subsidiaries | 1,568 |
| Total number of in-service employees | 1,668 |
| Total number of paid employees in the Reporting Period | 1,665 |
| Number of retirees to whom the Company as the parent or its major subsidiaries need to pay retirement pensions | 0 |
| Functions | |
| Function | Employees |
| Production | 1,053 |
| Sales | 78 |
| Technical | 412 |
| Financial | 51 |
| Administrative | 74 |
| Total | 1,668 |
| Educational backgrounds | |
| Educational background | Employees |
| Doctors | 1 |
| Masters | 21 |
| Bachelors | 169 |
| College graduates | 245 |
| Technical secondary school graduates | 100 |
| High school graduates and below | 1,132 |
| Total | 1,668 |
2. Employee Remuneration Policy
The management personnel above vice general manager (including vice GM) of the Companyconducted annual salary system, other employees conducted contacting the performance with thebenefit salary system.
3. Employee Training Plans
The Company established annual training plan in line with Measures for the Management of Employee TrainingThe Company adopts internal training, hires experts give lectures to the Company or participate professionaltraining, train the on job employees with job knowledge, professional skills, rules and regulations, the businessprocess etc., which enrich and renew the professional knowledge, enhance the comprehensive quality andbusiness skills of the employees.
4. Labor Outsourcing
□ Applicable √ Not applicable
Part X Corporate GovernanceI Basic Situation of Corporate GovernanceIn accordance with the requirements of the Company Law, the Securities Law, the Code on the Governance ofListed Companies and other laws and regulations, the Company has been improving its governance structurecontinuously, adhering to standardized operation, and an operational mechanism featuring decision-making by theboard of directors, execution by the management team, and supervision by the board of supervisors has beenformed.During the reporting period, the Company's governance institutions at all levels have carried out theirresponsibilities and authorities clearly and definitely and have performed their own functions. At the same time,they have checked and balanced each other in decision-making, implementation and supervision effectively, andhave operated in a coordinated manner.
(1) Operation of the general meeting of shareholders
The preparation, holding of the annual and extraordinary general meetings of shareholders of the Company aswell as disclosure of the resolutions made at the meetings have been carried out in strict accordance with theCompany Law, the Rules of the General Meeting of Shareholders of Listed Companies of China SecuritiesRegulatory Commission (CSRC), the Articles of Association and the Rules of Procedure of the General Meetingof Shareholders of the Company. The notification time of the meeting, the procedure of authorization, theprocedure of convening, the convener, the qualification of the personnel attending the meeting and the votingprocedure of the meeting have all been in line with relevant provisions. An on-site interaction for shareholders hasbeen set at the shareholders' meeting to ensure that the shareholders, especially the small and medium-sizedshareholders, can exercise their legitimate rights.
(2) Operation of the board of directors
The preparation and holding of the board meeting of the Company and the disclosure of the resolution made at themeeting have been carried out in strict accordance with the Company Law, the Guidelines for StandardizedOperation of Listed Companies of Shenzhen Stock Exchange, the Articles of Association and the Rules ofProcedure of the Board Meeting of the Company. The number and manning of the board of directors have met therequirements of laws and regulations. The directors have worked diligently and responsibly, and the board ofdirectors has worked hard in making decisions and setting the direction for the Company, and has exercised itspower in accordance with the requirements for corporate governance.
(3) Operation of the supervisory committee
The number and manning of the board of supervisors have met the requirements of laws and regulations. Allmembers of the board of supervisors of the Company have performed their duties diligently and conscientiously.They have supervised and inspected the important matters of the Company in strict accordance with the CompanyLaw, the Guidelines for the Standardized Operation of Listed Companies of Shenzhen Stock Exchange, theArticles of Association and the Rules of Procedure of the Board of Supervisors of the Company, exercised thepower of supervision effectively, gave a full play to the supervisory function, have played a substantial role in theoperation and management of the Company, and have protected the legitimate rights and interests of the Companyand the shareholders.
(4) Operation at manager level
The manager level of the Company has performed its duties in strict accordance with the Company Law, theGuidelines for the Standardized Operation of Listed Companies of Shenzhen Stock Exchange, the Articles ofAssociation and the Detailed Working Rules for the General Manager of the Company. The manager level isresponsible for the production, operation and management of the Company all-roundly. They have performedtheir duties diligently and conscientiously, and have carried out the decisions of the board of directors effectively.The members at the manager level have had a clear division of labor among them, they have worked diligentlyand conscientiously, and there has not existed any situation of "control under insiders ".Indicate by tick market whether there is any material incompliance with the regulatory documents issued by the CSRCgoverning the governance of listed companies.
□ Yes √ No
No such cases in the Reporting Period.
II The Company’s Independence from Its Controlling Shareholder in Business, Personnel,Asset, Organization and Financial Affairs
(I) In respect of business, the Company possessed independent production, supply and sales system;(II) In respect of personnel, the Company was absolutely independent in management of labor, personnel andsalaries from the controlling shareholders. All the senior executives of the Company took no office titleconcurrently and drew no remunerations from the Shareholder Company.(III) In respect of assets, the Company possessed independent and integrated assets and the property of theCompany is transparent.(IV) In respect of organization, the Board of Directors and the Supervisory Board operated independently. Thereexisted no superior-inferior relationship between the controlling shareholder and its function department and theCompany.(V) In respect of finance, the Company has independent financial department, independently accounted and paidtaxes according to the law. The Company established a complete accounting system, financial accounting systemand financial administrative systems. The Company opened independent bank accounts.III Horizontal Competition
□ Applicable √ Not applicable
IV Annual and Special General Meetings Convened during the Reporting Period
1. General Meeting Convened during the Reporting Period
| Meeting | Type | Investor participation ratio | Date of the meeting | Disclosure date | Index to disclosed information |
| The 1st Extraordinary General Meeting of 2020 | Extraordinary General Meeting | 63.59% | 15 January 2020 | 16 January 2020 | Announcement on Resolutions of the 1st Extraordinary General |
| Meeting of 2020 disclosed on www.cninfo.com.cn. | |||||
| The 2019 Annual General Meeting | Annual General Meeting | 63.60% | 29 April 2020 | 30 April 2020 | Announcement on Resolutions of 2019 Annual General Meeting disclosed on www.cninfo.com.cn. |
| The 2nd Extraordinary General Meeting of 2020 | Extraordinary General Meeting | 63.59% | 30 June 2020 | 1 July 2020 | Announcement on Resolutions of the 2nd Extraordinary General Meeting of 2020 disclosed on www.cninfo.com.cn. |
| The 3rd Extraordinary General Meeting of 2020 | Extraordinary General Meeting | 63.56% | 31 December 2020 | 4 January 2021 | Announcement on Resolutions of the 3rd Extraordinary General Meeting of 2020 disclosed on www.cninfo.com.cn. |
2. Special General Meetings Convened at the Request of Preferred Shareholders with Resumed VotingRights
□ Applicable √Not applicable
V Performance of Duty by Independent Directors in the Reporting Period
1. Attendance of Independent Directors at Board Meetings and General Meetings
| Attendance of independent directors at board meetings and general meetings | |||||||
| Independent director | Total number of board meetings the independent director was eligible to attend | Board meetings attended on site | Board meetings attended by way of telecommunication | Board meetings attended through a proxy | Board meetings the independent director failed to attend | The independent director failed to attend two consecutive board meetings (yes/no) | General meetings attended |
| Song Botong | 4 | 4 | 0 | 0 | 0 | No | 3 |
| Zhang Shunwen | 4 | 4 | 0 | 0 | 0 | No | 1 |
| Kang Xiaoyue | 11 | 7 | 4 | 0 | 0 | No | 4 |
| He Zuowen | 7 | 3 | 4 | 0 | 0 | No | 1 |
| Mi Xuming | 7 | 3 | 4 | 0 | 0 | No | 1 |
Why any independent director failed to attend two consecutive board meetings:
Not applicable
2. Objections Raised by Independent Directors on Matters of the Company
Indicate by tick mark whether any independent directors raised any objections on any matter of the Company.
□ Yes √ No
No such cases in the Reporting Period.
3. Other Information about the Performance of Duty by Independent DirectorsIndicate by tick mark whether any suggestions from independent directors were adopted by the Company.
√ Yes □ No
Suggestions from independent directors adopted or not adopted by the Company:
In reviewing major matters concerning production and operation decision-making, nomination of directors, andappointment of senior managers, the independent directors of the Company have obtained the actual situationthrough on-site investigation, inquiry to relevant personnel and search for and access to information, madeprudent judgments by using their own professional knowledge, and expressed independent, objective andimpartial opinions, which are not affected by the Company's dominant shareholders, actual controllers or otherinstitutions and individuals who have any interest in the Company.VI Performance of Duty by Specialized Committees under the Board in the Reporting PeriodThe board of directors of the Company has a strategy committee, an audit committee, a nomination committee anda salary and assessment committee set under it. During the reporting period, the special committees have carriedout their work actively and efficiently, which has effectively promoted the standardized operation and scientificdecision-making of the board of directors.
1. Performance of the Strategic Committee of the Board of Directors
The strategy committee of the board of directors of the Company focuses on the development status and the trendof the industry, and studies the Company's long-term development strategy and major investment decisions.
2. Performance of the Audit Committee of the Board of Directors
The Audit Committee of the Board of Directors actively promoted the progress of the annual audit and therelevant work. It reviewed on the Company’s following issues: Arrangement on the Annual Audit Work, PeriodicFinancial Report, Profit Distribution Plan, Renewal of CPAs Firm, Auditing of Internal Control, Fund TransferBetween Listed Companies and Related Parties and Guarantee Events, etc. Besides, it also kept full and necessarycommunication with the annual auditor of the Company. During the Reporting Period, the Audit Committee of theBoard of Directors has convened four meetings, reviewed the Company’s financial statements and the auditingresult issued by the annual auditor of the Company, as well as issued their opinions after the review, and remarkedfor the Annual Financial Report, Provisions for Asset Impairment and Renewal of CPAs Firm.
3. Performance of the Remuneration and Appraisal Committee of the Board of DirectorsDuring the reporting period, the remuneration and assessment committee of the board of directors has heldmeetings to review the remuneration of directors, supervisors and senior managers disclosed in the 2019 AnnualReport carefully so as to ensure that the information disclosed is true, accurate and complete.
4. Performance of the Nomination Committee of the Board of Directors
During the reporting period, the nomination committee of the board of directors of the Company has held fourmeetings to review the candidates of independent directors, non-independent directors and senior managers.
VII Performance of Duty by the Supervisory CommitteeIndicate by tick mark whether the Supervisory Committee found any risk to the Company during its supervision in theReporting Period.
□ Yes √ No
The Supervisory Committee raised no objections in the Reporting Period.
VIII Appraisal of and Incentive for Senior Management
The Company's board of directors assesses, evaluates and employs management teams. The Company’s chairmanand general manager implement the annual salary system, and the annual salary is composed of basic salary andperformance compensation. The shareholder unit formulates assessment methods for assessment. The other seniormanagement personnel's compensation is determined based on individual job performance with reference to thetotal salary of the Company’s leader; the Company has not implemented equity incentive plan.IX Internal Control
1. Material Internal Control Weaknesses Identified for the Reporting Period
□ Yes √ No
2. Internal Control Self-Evaluation Report
| Disclosure date of the internal control self-evaluation report | 20 March 2021 | ||
| Index to the disclosed internal control self-evaluation report | 2020 Internal Control Self-Evaluation Report on www.cninfo.com.cn | ||
| Evaluated entities’ combined assets as % of consolidated total assets | 86.88% | ||
| Evaluated entities’ combined operating revenue as % of consolidated operating revenue | 100.00% | ||
| Identification standards for internal control weaknesses | |||
| Type | Weaknesses in internal control over financial reporting | Weaknesses in internal control not related to financial reporting | |
| Nature standard | The Company in line with the actual situation, when the follows events or indications happen, which means there probably existing serious or important defects in the financial report; (1) the directors, supervisors and senior executives were fraud. (2) Certified Public Accountant find that there is a significant error in the financial report, however, the internal control did not discover it when conducting internal control; (3) The Audit Committee under the | The criterion of quality of the recognition of defects of internal control in the non-financial statements mainly were order of severity of defect involving business nature, the direct or potential negative influence nature and the influence scope and other factors. If the follows events or indicators occur, there may be serious or important defects of internal control in the non-financial statements:(1) Lack democratic decision-making | |
| Board and Internal Audit Service's supervision to the internal control is invalid. (4) The accounting personnel were without necessary qualities to complete the preparation of financial statements. | process, if lack significant problem decision-making, important appointment and dismissal of cadres, significant project investment decision-making; usage of large capital (three important, one large); (2) Unscientific decision-making process, such as the major decision-making errors, has caused a serious property loss to the company; (3) Seriously violating state laws and regulations; (4) Loss of key management personnel or important talent; (5) Negative news media appear frequently and widely spread; (6) The results of the internal control evaluation especially large or significant defects have not been corrected. (7) Important business systems lack control rules, or systemic failure. | ||
| Quantitative standard | Serious defects: the defects, or defect group may lead to the financial results misstatement or potential losses >3% of net assets; important defects: 1% of net assets<the defects, or defect group may lead to the financial results misstatement or potential losses ≤ 3% of net assets; General defects: the defects, or defect group may lead to the financial results misstatement or potential losses ≤ 1% of net assets. Note: Net assets in a recent issue of the audited financial report shall prevail | The criterion of quantity of the recognition of defects of internal control in the non-financial statements mainly were amount of direct economy losses, in line with the criterion of quantity of the recognition of defects of internal control in financial report of the Company. | |
| Number of material weaknesses in internal control over financial reporting | 0 | ||
| Number of material weaknesses in internal control not related to financial reporting | 0 | ||
| Number of serious weaknesses in internal control over financial reporting | 0 | ||
| Number of serious weaknesses in internal control not related to financial reporting | 0 | ||
X Independent Auditor’s Report on Internal Control
√ Applicable □ Not applicable
| Opinion paragraph in the independent auditor’s report on internal control | |
| We believe that Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. maintained effective internal control of financial statements in all significant aspects on 31 December 2020 in accordance with Basic Standards for Internal Control and relevant regulations. | |
| Independent auditor’s report on internal control disclosed or not | Disclosed |
| Disclosure date | 20 March 2021 |
| Index to such report disclosed | Report on Internal Control disclosed on www.cninfo.com.cn. |
| Type of the auditor’s opinion | Unmodified unqualified opinion |
| Material weaknesses in internal control not related to financial reporting | No |
Indicate by tick mark whether any modified opinion is expressed in the independent auditor’s report on the Company’sinternal control.
□ Yes √ No
Indicate by tick mark whether the independent auditor’s report on the Company’s internal control is consistent with theinternal control self-evaluation report issued by the Company’s Board.
√ Yes □ No
Part XI Corporate BondsDoes the Company have any corporate bonds publicly offered on the stock exchange, which were outstanding beforethe date of this Report’s approval or were due but could not be redeemed in full?No
Part XII Financial Statements
| Type of the audit opinion | Unmodified unqualified opinion |
| Date of signing this report | 19 March 2021 |
| Name of the audit institution | Grant Thornton Accounting Firm (LLP) |
| Number of the audit report | GTCNSZ（2021）NO.441A000013 |
| Name of the certified public accountants | Zhao Juanjuan, Jiang Xiaoming |
Auditor’s Report
To the Shareholders of Shenzhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd:
OpinionWe have audited the financial statement of Shenzhen Special Economic Zone Real Estate &Properties (Group) Co., Ltd and its subsidiaries (the "Group"), which comprise theconsolidated and company statement of financial position as at 31 December 2020, theconsolidated and company statement of comprehensive income, the consolidated and companycash flows for the year then ended, consolidated and company statement of changes in equityand the notes to the financial statements.In our opinion, the accompanying consolidated and company financial statements present fairly,in all material respects, the Group’s consolidated and company financial position as at 31December 2020, and their consolidated financial performance and their consolidated cashflows for the year then ended in accordance with Accounting Standards for Business Enterprises.Basis for OpinionWe conducted our audit in accordance with the China Standards on Auditing. Ourresponsibilities under those standards are further described in the Auditor’s Responsibilities forthe Audit of the Financial Statement Section of our report. We are independent of the Group inaccordance with the Code of Ethics for Chinese Certified Public Accountant (Ethics Code)together with the ethical requirements that are relevant to our audit of the financial statements,and we fulfilled our other ethical responsibilities in accordance with these requirements and theEthics Code. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our opinion.Key audit mattersKey audit matters are those matters that, in our professional judgment, were of mostsignificance in our audit of the consolidated financial statements of the current period. Thesematters were addressed in the context of our audit of the consolidated financial statements as awhole, and in forming our opinion thereon, and we do not provide a separate opinion on thesematters.
1.Revenue recognition from sales of properties
The relevant detailed information is set out in Notes III. 23 and Note V.29.
(1) Descriptions of the matter
In 2020, the revenue from sales of properties was RMB 1.158 billion that accounted for 71.73%of total revenue of the Group.When all of the following conditions have been met, the Group recognizes the revenue of salesof properties: ①the signed sales contract filed with the land department;②properties havebeen completed and accepted; ③fully one-off payment, or the first installment payment hasbeen received and the bank mortgage approval procedures have been completed;④theprocedures of housing delivery have completed in accordance with the sales contract.Due to the importance of revenue from sales of properties, and any misstatements in revenuerecognition will have a significant impact on the profit of the Group. Therefore, the revenuerecognition from sales of properties is a key audit matter.
(2) How our audit addressed the Key Audit Matter
Our audit procedures for the recognition of revenue include:
① Understanding, assessing and testing the design and implementation of key internalcontrols about the progress of contract performance and revenue recognition.
② Examining the main clauses in sales contracts to evaluate the appropriateness of theGroup’s revenue recognition policy associated with the relevant accounting standards;
③ Performing tests, on a sample basis, to examine contracts of sales of properties, traceto collection of revenue and check letter of admission (elements of revenue recognition) inorder to assess the compliance with the Group’s revenue recognition policy.
④ Evaluating the revenue of sales of properties, on sample basis, before and after thebalance sheet date by checking to sales contracts, revenue collection and the letter ofadmission, for the appropriateness of the period of revenue recognition
⑤ Calculating average house price and comparing it with the price from last year toanalyze the reasonableness of revenue and gross profit.
⑥ Evaluating the appropriateness of accounting treatment, presentation and disclosureof the revenue recognition of sales of properties and other relevant information by the Group inthe financial statements.
2. Accuracy of land appreciation tax calculations
The relevant detailed information is set out in Notes IV. tax and Note V.30.
(1) Descriptions of the matter
Land appreciation tax is the main tax category for the Group.For the sales of properties, land appreciation tax (“LAT”) is charged at a progressive tax rate of30%-60%. At the end of reporting period, management evaluates the provision of LAT with theconsideration of factors including the provisions of the relevant taxation, estimable revenueminus deductible land costs, costs of real estate development, interest expense, developmentexpense, etc. It is possible that a significant difference exists between actual and estimatedtaxable amount.Due to the importance of the LAT accrual to the consolidated financial statements, andmanagement's judgment when making estimates includes consideration of relevant tax lawsand regulations and practical practices. Therefore, we identified the accrual of LAT of theGroup as a key audit matter.
(2) How our audit addressed the Key Audit Matter
Our audit procedures for the land appreciation tax include:
① Evaluating the design and effectiveness of key internal controls related to themeasurement of LAT;
② Involved our internal tax specialists in the PRC to assess the provision of LAT on 31December 2020 on basis of our experience, knowledge, understanding of the practicaloperation of relevant tax laws by local tax authorities, to evaluate the Group’s assumptions andjudgments;
③ Evaluating the management's expected estimates of the estimated income from thesale of real estate and the amount of deductible items, and assess the Group’s assumptionsand judgments;
④ Recalculating the amount of provision of LAT and comparing it to managementestimate.
Other InformationManagement is responsible for the other information. The other information comprises theinformation included in the Annual Report of 2020, but does not include the financialstatements and our auditor’s report thereon.Our opinion on the financial statements does not cover the other information and we do notexpress any form of assurance conclusion thereon.In connection with our audit of financial statements, our responsibility is to read the otherinformation and, in doing so, consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the audit or otherwise appears to bematerially misstated.If, based on the work we have performed, we conclude that there is material misstatement ofthis other information, we are required to report that fact. We have nothing to report in thisregard.Responsibilities of Management and Those Charge with Governance for the FinancialStatementManagement of the Group is responsible for the preparation and fair presentation of thefinancial statement in accordance with Accounting Standards for Business Enterprises, and forsuch internal control as management determines in necessary to enable the preparation offinancial statements that are free form material misstatement, whether due to fraud or error.In preparing the financial statements, management is responsible for assessing the Group’sability to continue as a going concern, disclosing, as applicable, matters related to goingconcern and using the going concern basis of accounting unless management either intends toliquidate the Group or to cease operations, or has no realistic alternative but to do so.Those charge with governance are responsible for overseeing the Group’s financial reportingprocess.Auditor’s Responsibilities for the Audit of the Financial StatementOur objectives are to obtain reasonable assurance about whether the financial statements as awhole are free from material misstatement, whether due to fraud or error, and to issue anauditor’s report that includes our opinion. Reasonable assurance is a high level of assurance,but is not a guarantee that an audit conducted in accordance with China Standards on Auditingwill always detect a material misstatement when it exists. Misstatements can arise form fraudor error and are considered material if, individually or in the aggregate, they could reasonablybe expected to influence the economic decisions of users taken on the basis of these financialstatements.As part of an audit in accordance with China Standards on Auditing, we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:
? Identify and assess the risks of material misstatement of the financial statements, whetherdue to fraud or error, design and perform audit procedures responsive to those risks, andobtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.The risk of not detecting a material misstatement resulting from fraud is higher than for oneresulting from error, as fraud may involve collusion, forgery, intentional omissions,misrepresentations, or the override of internal control.
? Obtain an understanding of internal control relevant to the audit in order to design auditprocedures that are appropriate in the circumstances.
? Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by management.
? Conclude on the appropriateness of management’s use of the going concern basis ofaccounting and, based on the audit evidence obtained, whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Group’s abilityto continue as a going concern. If we conclude that a material uncertainty exists, we arerequired to draw attention in our auditor’s report to the related disclosures in the financialstatements or, if such disclosures are inadequate, to modify our opinion. Our conclusionsare based on the audit evidence obtained up to the date of our auditor’s report. However,further events or conditions may cause the Group to cease to continue as a going concern.
? Evaluate the overall presentation, structure and content of the financial statements, and
whether the financial statements represent the underlying transactions and events in amanner that achieves fair presentation.
? Obtain sufficient appropriate audit evidence regarding the financial information of the
entities or business activities within the Group to express an opinion on the consolidatedfinancial statements. We are responsible for the direction, supervision and performance ofthe group audit. We remain solely responsible for our audit opinion.We communicate with those charged with governance regarding, among other matters, theplanned scope and timing of the audit and significant audit findings, including any significantdeficiencies in internal control that we identify during our audit.We also provide the governance body with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them all relationshipsand other matters that may reasonably be thought to bear on our independence, and whereapplicable, related safeguards.From the matters communicated with the governance body, we determine those matters thatwere of most significance in the audit of the financial statements of the current period and aretherefore the key audit matters. We describe these matters in our auditor’s report unless law orregulation precludes public disclosure about the matter or when, in extremely rarecircumstances, we determine that a matter should not be communicated in our report becausethe adverse consequences of doing so would reasonably be expected to outweigh the publicinterest benefits of such communication.
| Grant Thornton China·Beijing | Auditor's signature and stamp Auditor's signature and stamp | |
| China ·Beijing | 19March 2021 | |
| Consolidated and Company Balance Sheets | |||||
| As at 31 December 2020 | |||||
| Prepared by：Shenzhen Special Economic Zone Real Estate and Properties (Group) Co., Ltd | Expressed in RMB | ||||
| Item | Note | As at 31/12/2020 | As at 31/12/2019 | ||
| Consolidated | Company | Consolidated | Company | ||
| Current assets: | |||||
| Cash at bank and on hand | V、1 | 2,687,465,070.01 | 2,329,517,987.02 | 2,511,140,445.35 | 1,967,688,122.55 |
| Financial assets at fair value through profit or loss | |||||
| Bills receivable | V、2 | 35,438,045.34 | - | ||
| Accounts receivable | V、3 | 59,590,944.06 | 5,418,024.74 | 62,059,055.68 | 156,935.84 |
| Accounts receivable financing | |||||
| Prepayments | V、4 | 3,205,534.51 | 200,000.00 | 219,948.17 | 200,000.00 |
| Other receivables | V、5 | 32,745,043.84 | 1,160,414,195.39 | 28,275,228.26 | 835,275,498.69 |
| including：interests receivables | |||||
| dividends receivables | 1,052,192.76 | - | 1,052,192.76 | ||
| Inventories | V、6 | 1,220,464,112.56 | 207,606,220.98 | 1,462,229,048.18 | 419,453,091.86 |
| Contract assets | not applicable | not applicable | |||
| Assets held for sale | |||||
| Non-current assets due within one year | |||||
| Other current assets | V、7 | 102,907,134.79 | 945,499.13 | 102,781,855.48 | 407,560.64 |
| Total current assets | 4,141,815,885.11 | 3,704,101,927.26 | 4,166,705,581.12 | 3,223,181,209.58 | |
| Non-current assets: | |||||
| Investments in debt obligations | |||||
| Investments in other debt obligations | |||||
| Long-term receivables | |||||
| Long-term equity investments | V、8 | 377,489.65 | 150,584,167.95 | 469,838.65 | 150,676,516.92 |
| Investment in other equity instruments | V、9 | 37,510,860.51 | 13,508,202.32 | 33,126,730.04 | 13,229,501.03 |
| Other non-current financial assets | |||||
| Investment properties | V、10 | 616,365,621.53 | 499,145,554.67 | 632,241,900.20 | 522,038,731.16 |
| Fixed assets | V、11 | 28,039,978.43 | 17,743,083.73 | 30,522,035.11 | 19,586,720.47 |
| Construction in progress | |||||
| Productive biological assets | |||||
| Oil and gas assets | |||||
| Intangible assets | V、12 | ||||
| Development costs | |||||
| Goodwill | |||||
| Long-term deferred expenses | V、13 | 61,667.53 | 61,667.53 | 162,125.72 | 162,125.72 |
| Deferred tax assets | V、14 | 112,745,243.98 | 83,740,299.64 | 46,441,325.25 | 20,975,294.54 |
| Other non-current assets | |||||
| Total non-current assets | 795,100,861.63 | 764,782,975.84 | 742,963,954.97 | 726,668,889.84 | |
| Total assets | 4,936,916,746.74 | 4,468,884,903.10 | 4,909,669,536.09 | 3,949,850,099.42 | |
| Consolidated and Company Balance Sheets(continued) | |||||
| As at 31 December 2020 | |||||
| Prepared by：Shenzhen Special Economic Zone Real Estate and Properties (Group) Co., Ltd | Expressed in RMB | ||||
| Item | Note | As at 31/12/2020 | As at 31/12/2019 | ||
| Consolidated | Company | Consolidated | Company | ||
| Current liabilities: | |||||
| Short-term loans | V、15 | 76,893,995.94 | 51,647,260.17 | ||
| Financial liabilities at fair value through profit or loss | |||||
| Bills payable | |||||
| Accounts payable | V、16 | 176,926,614.28 | 77,187,914.50 | 244,224,478.46 | 103,915,931.14 |
| Advances from customers | V、17 | 5,940,092.15 | 159,482,510.43 | 59,409,454.38 | |
| Contract liabilities | V、18 | 196,786,977.19 | 172,241,938.46 | not applicable | not applicable |
| Employee benefits payable | V、19 | 60,467,834.09 | 27,255,860.05 | 53,909,576.49 | 25,544,403.23 |
| Taxes payable | V、20 | 459,709,646.95 | 450,281,265.17 | 585,700,815.36 | 143,434,273.95 |
| Other payables | V、21 | 277,105,129.74 | 194,609,459.87 | 277,319,174.53 | 190,666,487.82 |
| including：interests payables | 16,535,277.94 | 16,535,277.94 | 16,535,277.94 | 16,535,277.94 | |
| dividends payables | |||||
| Liabilities held for sale | |||||
| Non-current liabilities due within one year | |||||
| Other current liabilities | V、22 | 8,917,027.07 | 8,612,096.92 | ||
| Total current liabilities | 1,262,747,317.41 | 930,188,534.97 | 1,372,283,815.44 | 522,970,550.52 | |
| Non-current liabilities: | |||||
| Long-term loans | |||||
| Debentures payable | |||||
| Long-term payables | V、23 | 7,480,233.43 | 7,499,192.92 | ||
| Provisions | |||||
| Deferred income | |||||
| Deferred tax liabilities | V、14 | 9,601,940.74 | 4,812,392.47 | 4,903,293.58 | 1,295,046.51 |
| Other non-current liabilities | |||||
| Total non-current liabilities | 17,082,174.17 | 4,812,392.47 | 12,402,486.50 | 1,295,046.51 | |
| Total liabilities | 1,279,829,491.58 | 935,000,927.44 | 1,384,686,301.94 | 524,265,597.03 | |
| Share capital | V、24 | 1,011,660,000.00 | 1,011,660,000.00 | 1,011,660,000.00 | 1,011,660,000.00 |
| Capital reserve | V、25 | 978,244,910.11 | 964,711,931.13 | 978,244,910.11 | 964,711,931.13 |
| Less: treasury shares | |||||
| Other comprehensive income | V、26 | 28,163,050.13 | 1,131,151.74 | 20,831,004.13 | 922,125.77 |
| Specific reserve | |||||
| Surplus reserve | V、27 | 218,724,273.67 | 195,594,660.26 | 191,222,838.94 | 168,093,225.53 |
| Retained earnings | V、28 | 1,560,720,254.31 | 1,360,786,232.53 | 1,464,915,816.81 | 1,280,197,219.96 |
| Total equity attributable to shareholders of the Company | 3,797,512,488.22 | 3,533,883,975.66 | 3,666,874,569.99 | 3,425,584,502.39 | |
| Non-controlling interests | -140,425,233.06 | -141,891,335.84 | |||
| Total shareholders' equity | 3,657,087,255.16 | 3,533,883,975.66 | 3,524,983,234.15 | 3,425,584,502.39 | |
| Total liabilities and shareholders' equity | 4,936,916,746.74 | 4,468,884,903.10 | 4,909,669,536.09 | 3,949,850,099.42 | |
Legal representative: Person in charge of accounting: Person in charge of accounting organ:
| Consolidated and Company Income Statements | ||||||
| For the year ended 31 December 2020 | ||||||
| Prepared by：Shenzhen Special Economic Zone Real Estate and Properties (Group) Co., Ltd | Expressed in RMB | |||||
| Item | Note | Year ended 31/12/2020 | Year ended 31/12/2019 | |||
| Consolidated | Company | Consolidated | Company | |||
| I.Operating income | V、29 | 1,615,009,713.88 | 911,839,269.70 | 2,548,740,319.49 | 1,666,952,912.58 | |
| Less:operating costs | V、29 | 805,508,448.68 | 241,307,783.52 | 957,752,652.54 | 330,874,297.00 | |
| Taxes and surcharges | V、30 | 329,962,066.50 | 289,600,033.09 | 751,013,928.21 | 630,418,453.86 | |
| Selling and distribution expenses | V、31 | 55,989,397.22 | 42,814,758.60 | 79,480,254.02 | 56,146,749.47 | |
| General and administrative expenses | V、32 | 93,616,226.75 | 56,022,941.66 | 68,854,618.70 | 30,540,740.51 | |
| Research and development expenses | ||||||
| Financial expenses | V、33 | -21,505,685.05 | -39,280,862.44 | -20,906,149.20 | -45,894,180.92 | |
| Including: Interest expenses | 38,642.51 | - | ||||
| Interest income | 30,130,066.10 | 51,099,467.08 | 19,686,882.13 | 41,049,606.12 | ||
| Add: Other income | V、34 | 4,607,772.07 | 150,785.59 | 1,168,127.90 | 18,998.01 | |
| Investment income ("-" for losses) | V、35 | 15,724,469.63 | 15,724,469.63 | 32,429,481.23 | 551,129,612.87 | |
| Including: Income from investment in associates and joint ventures ("-" for losses) | -92,348.97 | -92,348.97 | 1,003,829.25 | 1,003,829.25 | ||
| Gains from changes in fair value ("-" for losses) | ||||||
| Credit impairment loss (“-” for loss) | V、36 | -358,999.15 | 464,438.79 | -3,111,257.44 | -2,029,282.38 | |
| Impairment losses ("-" for losses) | V、37 | -12,166,897.84 | -83,683,888.90 | |||
| Gains from assets disposal ("-" for losses) | V、38 | 11,429.23 | ||||
| II.Operating profit ("-" for losses) | 371,423,931.56 | 337,714,309.28 | 730,864,469.07 | 1,130,302,292.26 | ||
| Add: Non-operating income | V、39 | 30,693,761.57 | 30,679,050.88 | 1,345,428.49 | 1,042,266.31 | |
| Less: Non-operating expenses | V、40 | 1,684,103.97 | 106,542.24 | 226,566.80 | 64,297.33 | |
| III.Profit before income tax ("-" for losses) | 400,433,589.16 | 368,286,817.92 | 731,983,330.76 | 1,131,280,261.24 | ||
| Less: Income tax expenses | V、41 | 110,470,834.78 | 93,272,470.62 | 190,786,300.70 | 173,952,583.46 | |
| IV.Net profit for the year ("-" for net losses) | 289,962,754.38 | 275,014,347.30 | 541,197,030.06 | 957,327,677.78 | ||
| (1) Classification according to operation continuity | ||||||
| Including: Net profit from continuing operations ("-" for net loss) | 289,962,754.38 | 275,014,347.30 | 541,197,030.06 | 957,327,677.78 | ||
| Net profit from discontinued operations ("-" for net loss) | ||||||
| (2) Classification according to attibute | ||||||
| Including: Shareholders of the company("-" for net loss) | 290,229,772.23 | 275,014,347.30 | 552,452,307.59 | 957,327,677.78 | ||
| Non-controlling interests("-" for net loss) | -267,017.85 | -11,255,277.53 | ||||
| V.Other comprehensive income, net of tax | 9,065,166.63 | 209,025.97 | -176,622.09 | -50,766.47 | ||
| Other comprehensive income (net of tax) attributable to shareholders of the company | 7,332,046.00 | 209,025.97 | 173,182.46 | -50,766.47 | ||
| (1) Items that may not be reclassified to profit or loss | 3,288,097.86 | 209,025.97 | 1,653,431.27 | -50,766.47 | ||
| Changes in the fair value of investments in other equity instruments | 3,288,097.86 | 209,025.97 | 1,653,431.27 | -50,766.47 | ||
| (2) Items that may be reclassified to profit or loss | 4,043,948.14 | - | -1,480,248.81 | - | ||
| Translation differences arising from translation of foreign currency financial statements | 4,043,948.14 | -1,480,248.81 | ||||
| Other comprehensive income (net of tax) attributable to non-controlling interests | 1,733,120.63 | -349,804.55 | ||||
| VI.Total comprehensive income for the year | 299,027,921.01 | 275,223,373.27 | 541,020,407.97 | 957,276,911.31 | ||
| Attributable to:Shareholders of the company | 297,561,818.23 | 275,223,373.27 | 552,625,490.05 | |||
| Non-controlling interests | 1,466,102.78 | -11,605,082.08 | ||||
| VII.Earnings per share: | ||||||
| (1) Basic earnings per share | 0.2869 | 0.5461 | ||||
| (2)Diluted earnings per share | 0.2869 | 0.5461 | ||||
Legal representative: Person in charge of accounting: Person in charge of accounting organ:
| Consolidated and Company Cash Flow Statements | |||||
| For the year ended 31 December 2020 | |||||
| Prepared by：Shenzhen Special Economic Zone Real Estate and Properties (Group) Co., Ltd | Expressed in RMB | ||||
| Item | Note | Year ended 31/12/2020 | Year ended 31/12/2019 | ||
| Consolidated | Company | Consolidated | Company | ||
| I.Cash flows from operating activities | |||||
| Proceeds from sales of goods or rendering of services | 1,729,680,056.34 | 1,078,103,371.61 | 2,648,597,164.58 | 1,787,968,670.18 | |
| Refund of taxes | - | - | |||
| Proceeds from other operating activities | V、42 | 54,027,940.71 | 64,609,945.07 | 79,679,385.47 | 58,719,902.38 |
| Sub-total of cash inflows | 1,783,707,997.05 | 1,142,713,316.68 | 2,728,276,550.05 | 1,846,688,572.56 | |
| Payment for goods and services | 550,912,214.50 | 32,909,312.44 | 639,208,411.38 | 99,847,275.06 | |
| Payment to and for employees | 164,940,269.68 | 41,972,734.54 | 178,713,870.65 | 51,174,841.78 | |
| Payments of various taxes | 708,116,426.50 | 183,703,076.95 | 1,199,806,904.82 | 916,815,076.44 | |
| Payment for other operating activities | V、42 | 74,575,073.20 | 388,932,614.43 | 106,939,638.45 | 79,596,205.39 |
| Sub-total of cash outflows | 1,498,543,983.88 | 647,517,738.36 | 2,124,668,825.30 | 1,147,433,398.67 | |
| Net cash flows from operating activities | 285,164,013.17 | 495,195,578.32 | 603,607,724.75 | 699,255,173.89 | |
| II.Cash flows from investing activities | - | - | |||
| Proceeds from disposal of investments | - | - | |||
| Investment returns received | 19,767,503.60 | 19,767,503.60 | 37,502,720.55 | 143,151,908.78 | |
| Net proceeds from disposal of fixed assets, intangible assets and other long-term assets | 56,718.25 | - | 119,900.00 | ||
| Net proceeds from disposal of subsidiaries and other business units | - | - | |||
| Proceeds from other investing activities | V、42 | 1,000,000,000.00 | 1,000,000,000.00 | 2,200,000,000.00 | 2,200,000,000.00 |
| Sub-total of cash inflows | 1,019,824,221.85 | 1,019,767,503.60 | 2,237,622,620.55 | 2,343,151,908.78 | |
| Payment for acquisition of fixed assets, intangible assets and other long-term assets | 749,215.31 | - | 21,918,490.62 | 20,824,023.65 | |
| Payment for acquisition of investments | - | - | |||
| Net payment for acquisition of subsidiaries and other business units | - | - | |||
| Payment for other investing activities | V、42 | - | - | 2,300,000,000.00 | 2,300,000,000.00 |
| Sub-total of cash outflows | 749,215.31 | - | 2,321,918,490.62 | 2,320,824,023.65 | |
| Net cash flows from investing activities | 1,019,075,006.54 | 1,019,767,503.60 | -84,295,870.07 | 22,327,885.13 | |
| III.Cash flows from financing activities | - | - | |||
| Proceeds from investors | - | - | |||
| Including: Proceeds from non-controlling shareholders of subsidiaries | - | - | |||
| Proceeds from borrowings | 76,893,995.94 | - | 43,741,293.64 | ||
| Proceeds from other financing activities | - | - | |||
| Sub-total of cash inflows | 76,893,995.94 | - | 43,741,293.64 | - | |
| Repayments of borrowings | 51,647,260.17 | - | 2,000,000.00 | ||
| Payment for dividends, profit distributions or interest | 166,923,900.00 | 166,923,900.00 | 202,370,642.51 | 202,332,000.00 | |
| Including: Dividends and profits paid to non-controlling shareholders of subsidiaries | - | - | |||
| Payment for other financing activities | - | - | |||
| Sub-total of cash outflows | 218,571,160.17 | 166,923,900.00 | 204,370,642.51 | 202,332,000.00 | |
| Net cash flows from financing activities | -141,677,164.23 | -166,923,900.00 | -160,629,348.87 | -202,332,000.00 | |
| IV.Effect of foreign exchange rate changes on cash and cash equivalents | -647,689.01 | - | -15,181.39 | ||
| V.Net increase in cash and cash equivalents | 1,161,914,166.47 | 1,348,039,181.92 | 358,667,324.42 | 519,251,059.02 | |
| Add: Cash and cash equivalents as at the beginning of the year | 1,507,189,760.35 | 963,737,437.55 | 1,148,522,435.93 | 444,486,378.53 | |
| VI.Cash and cash equivalent as at the year ended | 2,669,103,926.82 | 2,311,776,619.47 | 1,507,189,760.35 | 963,737,437.55 | |
Legal representative: Person in charge of accounting: Person in charge of accounting organ:
| Consolidated Statement of Changes in Shareholders' Equity | |||||||||
| For the year ended 31 December 2020 | |||||||||
| Prepared by：Shenzhen Special Economic Zone Real Estate and Properties (Group) Co., Ltd Expressed in RMB | |||||||||
| Item | Year ended 31/12/2020 | ||||||||
| Attributable to shareholders' equity of the parent company | Non-controlling interests | Total | |||||||
| Share capital | Capital reserve | Less: treasury shares | Other comprehensive income | Specific reserve | Surplus reserve | Retained earnings | |||
| I.Balance at the year ended | 1,011,660,000.00 | 978,244,910.11 | - | 20,831,004.13 | 191,222,838.94 | 1,464,915,816.81 | -141,891,335.84 | 3,524,983,234.15 | |
| Add：Changes in accounting policies | |||||||||
| Correction of prior period errors | |||||||||
| Business combination involving enterprises under common control | |||||||||
| Others | |||||||||
| II.Balance at the beginning of the year | 1,011,660,000.00 | 978,244,910.11 | - | 20,831,004.13 | - | 191,222,838.94 | 1,464,915,816.81 | -141,891,335.84 | 3,524,983,234.15 |
| III.Changes in equity during the year( "- "for decrease) | - | - | - | 7,332,046.00 | - | 27,501,434.73 | 95,804,437.50 | 1,466,102.78 | 132,104,021.01 |
| (I)Total comprehensive income | 7,332,046.00 | 290,229,772.23 | 1,466,102.78 | 299,027,921.01 | |||||
| (II)Shareholders' contributions and decrease of capital | - | - | - | - | - | - | - | - | - |
| 1.Ordinary shares by shareholders | |||||||||
| 2. Contribution by other equity instruments holders | |||||||||
| 3. Equity settled share-based payments | |||||||||
| 4. Others | |||||||||
| (III) Appropriation of profits | - | - | - | - | - | 27,501,434.73 | -194,425,334.73 | - | -166,923,900.00 |
| 1. Appropriation for surplus reserves | 27,501,434.73 | -27,501,434.73 | - | ||||||
| 2. Distributions to shareholders | -166,923,900.00 | -166,923,900.00 | |||||||
| 3. Others | |||||||||
| (IV) Transfer within equity | - | - | - | - | - | - | - | - | - |
| 1.Share capital increased by capital reserves transfer | |||||||||
| 2.Share capital increased by surplus reserves transfer | |||||||||
| 3.Transfer of surplus reserve to offset losses | |||||||||
| 4. Retained earnings transfered by other comprehensive income | |||||||||
| 5.Others | |||||||||
| (V)Specific Reserve | - | - | - | - | - | - | - | - | - |
| 1. Appropriation during the year | |||||||||
| 2.Utilisation during the year | |||||||||
| (VI)Others | |||||||||
| IV.Balance at the year ended | 1,011,660,000.00 | 978,244,910.11 | - | 28,163,050.13 | - | 218,724,273.67 | 1,560,720,254.31 | -140,425,233.06 | 3,657,087,255.16 |
Legal representative: Person in charge of accounting: Person in charge of accounting organ:
Consolidated Statement of Changes in Shareholders' Equity
For the year ended 31 December 2020Prepared by：SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., LtdExpressed in RMB
| Item | Year ended 31/12/2019 | ||||||||
| Attributable to shareholders' equity of the parent company | Non-controlling interests | Total | |||||||
| Share capital | Capital reserve | Less: treasury shares | Other comprehensive income | Specific reserve | Surplus reserve | Retained earnings | |||
| I.Balance at the year ended | 1,011,660,000.00 | 978,244,910.11 | - | 10,564,385.97 | - | 95,906,222.59 | 1,235,884,122.72 | -131,524,530.88 | 3,200,735,110.51 |
| Add：Changes in accounting policies | - | - | - | 10,093,435.70 | - | -416,151.43 | -25,355,845.72 | -390,720.82 | -16,069,282.27 |
| Correction of prior period errors | |||||||||
| Business combination involving enterprises under common control | |||||||||
| Others | - | ||||||||
| II.Balance at the beginning of the year | 1,011,660,000.00 | 978,244,910.11 | - | 20,657,821.67 | - | 95,490,071.16 | 1,210,528,277.00 | -131,915,251.70 | 3,184,665,828.24 |
| III.Changes in equity during the year( "- "for decrease) | - | - | - | 173,182.46 | - | 95,732,767.78 | 254,387,539.81 | -9,976,084.14 | 340,317,405.91 |
| (I)Total comprehensive income | - | - | - | 173,182.46 | - | - | 552,452,307.59 | -11,605,082.08 | 541,020,407.97 |
| (II)Shareholders' contributions and decrease of capital | - | - | - | - | - | - | - | - | - |
| 1.Contribution by ordinary shareholders | - | ||||||||
| 2.Capital contributed by the holders of other equity instrument | - | ||||||||
| 3. Equity settled share-based payments | - | ||||||||
| 4. Others | - | ||||||||
| (III) Appropriation of profits | - | - | - | - | - | 95,732,767.78 | -298,064,767.78 | - | -202,332,000.00 |
| 1. Appropriation for surplus reserves | - | - | - | - | - | 95,732,767.78 | -95,732,767.78 | - | - |
| 2. Appropriation for general risk reserve | |||||||||
| 3. Distributions to shareholders | -202,332,000.00 | -202,332,000.00 | |||||||
| 4. Others | - | ||||||||
| (IV) Transfer within equity | - | - | - | - | - | - | - | - | - |
| 1.Share capital increased by capital reserves transfer | - | ||||||||
| 2.Share capital increased by surplus reserves transfer | - | ||||||||
| 3.Transfer of surplus reserve to offset losses | - | ||||||||
| 4.Others | - | ||||||||
| (V)Specific Reserve | - | - | - | - | - | - | - | - | - |
| 1. Appropriation during the year | - | ||||||||
| 2.Utilisation during the year ("- ") | - | ||||||||
| (VI)Others | 1,628,997.94 | 1,628,997.94 | |||||||
| IV.Balance at the year ended | 1,011,660,000.00 | 978,244,910.11 | - | 20,831,004.13 | - | 191,222,838.94 | 1,464,915,816.81 | -141,891,335.84 | 3,524,983,234.15 |
Legal representative: Person in charge of accounting: Person in charge of accounting organ:
| Company's Statement of Changes in Shareholders' Equity | ||||||||
| For the year ended 31 December 2020 | ||||||||
| Prepared by：Shenzhen Special Economic Zone Real Estate and Properties (Group) Co., Ltd | Expressed in RMB | |||||||
| Item | Year ended 31/12/2020 | |||||||
| Share capital | Capital reserve | Less: treasury shares | Other comprehensive income | Specific reserve | Surplus reserve | Retained earnings | Total | |
| I.Balance at the year ended | 1,011,660,000.00 | 964,711,931.13 | - | 922,125.77 | - | 168,093,225.53 | 1,280,197,219.96 | 3,425,584,502.39 |
| Add：Changes in accounting policies | - | |||||||
| Correction of prior period errors | - | |||||||
| Others | - | |||||||
| II.Balance at the beginning of the year | 1,011,660,000.00 | 964,711,931.13 | - | 922,125.77 | - | 168,093,225.53 | 1,280,197,219.96 | 3,425,584,502.39 |
| III.Changes in equity during the year( "- "for decrease) | - | - | - | 209,025.97 | - | 27,501,434.73 | 80,589,012.57 | 108,299,473.27 |
| (I)Total comprehensive income | 209,025.97 | 275,014,347.30 | 275,223,373.27 | |||||
| (II)Shareholders' contributions and decrease of capital | - | - | - | - | - | - | - | - |
| 1.Ordinary shares by shareholders | - | |||||||
| 2. Contribution by other equity instruments holders | - | |||||||
| 3. Equity settled share-based payments | - | |||||||
| 4. Others | - | |||||||
| (III) Appropriation of profits | - | - | - | - | - | 27,501,434.73 | -194,425,334.73 | -166,923,900.00 |
| 1. Appropriation for surplus reserves | 27,501,434.73 | -27,501,434.73 | - | |||||
| 2. Distributions to shareholders | -166,923,900.00 | -166,923,900.00 | ||||||
| 3. Others | - | |||||||
| (IV) Transfer within equity | - | - | - | - | - | - | - | - |
| 1.Share capital increased by capital reserves transfer | - | |||||||
| 2.Share capital increased by surplus reserves transfer | - | |||||||
| 3.Transfer of surplus reserve to offset losses | - | |||||||
| 4. Retained earnings transfered by other comprehensive income | - | |||||||
| 5.Others | - | |||||||
| (V)Specific Reserve | - | - | - | - | - | - | - | - |
| 1. Appropriation during the year | - | |||||||
| 2.Utilisation during the year | - | |||||||
| (VI)Others | - | |||||||
| IV.Balance at the year ended | 1,011,660,000.00 | 964,711,931.13 | - | 1,131,151.74 | - | 195,594,660.26 | 1,360,786,232.53 | 3,533,883,975.66 |
Legal representative: Person in charge of accounting: Person in charge of accounting organ:
| Company's Statement of Changes in Shareholders' Equity | ||||||||
| For the year ended 31 December 2020 | ||||||||
| Prepared by：Shenzhen Special Economic Zone Real Estate and Properties (Group) Co., Ltd Expressed in RMB | ||||||||
| Item | Year ended 31/12/2019 | |||||||
| Share capital | Capital reserve | Less: treasury shares | Other comprehensive income | Specific reserve | Surplus reserve | Retained earnings | Total | |
| I.Balance at the year ended | 1,011,660,000.00 | 964,711,931.13 | 72,776,609.18 | 615,038,028.05 | 2,664,186,568.36 | |||
| Add：Changes in accounting policies | 972,892.24 | -416,151.43 | -4,072,924.18 | -3,516,183.37 | ||||
| Correction of prior period errors | - | |||||||
| Others | 9,969,206.09 | 9,969,206.09 | ||||||
| II.Balance at the beginning of the year | 1,011,660,000.00 | 964,711,931.13 | - | 972,892.24 | - | 72,360,457.75 | 620,934,309.96 | 2,670,639,591.08 |
| III.Changes in equity during the year( "- "for decrease) | - | - | - | -50,766.47 | - | 95,732,767.78 | 659,262,910.00 | 754,944,911.31 |
| (I)Total comprehensive income | -50,766.47 | 957,327,677.78 | 957,276,911.31 | |||||
| (II)Shareholders' contributions and decrease of capital | - | - | - | - | - | - | - | - |
| 1.Ordinary shares by shareholders | - | |||||||
| 2. Contribution by other equity instruments holders | - | |||||||
| 3. Equity settled share-based payments | - | |||||||
| 4. Others | - | |||||||
| (III) Appropriation of profits | - | - | - | - | - | 95,732,767.78 | -298,064,767.78 | -202,332,000.00 |
| 1. Appropriation for surplus reserves | 95,732,767.78 | -95,732,767.78 | - | |||||
| 2. Distributions to shareholders | -202,332,000.00 | -202,332,000.00 | ||||||
| 3. Others | - | |||||||
| (IV) Transfer within equity | - | - | - | - | - | - | - | - |
| 1.Share capital increased by capital reserves transfer | - | |||||||
| 2.Share capital increased by surplus reserves transfer | - | |||||||
| 3.Transfer of surplus reserve to offset losses | - | |||||||
| 4. Retained earnings transfered by other comprehensive income | ||||||||
| 5.Others | - | |||||||
| (V)Specific Reserve | - | - | - | - | - | - | - | - |
| 1. Appropriation during the year | - | |||||||
| 2.Utilisation during the year | - | |||||||
| (VI)Others | - | |||||||
| IV.Balance at the year ended | 1,011,660,000.00 | 964,711,931.13 | - | 922,125.77 | - | 168,093,225.53 | 1,280,197,219.96 | 3,425,584,502.39 |
Legal representative: Person in charge of accounting: Person in charge of accounting organ:
Notes to the Financial Statements
I.Company general information
1. Company’s profile
Shenzhen Special Economic Zone Real Estate and Properties (Group) Co., Ltd. (the “Group” or “theCompany”) is a listed company in main board, and was established in July 1993, as approved by theShenzhen Municipal Government with document SFBF (1993) 724. The company was restructured onthe basis of the former Shenzhen Special Economic Zone Real Estate Corporation, and has beenapproved and registered by the Shenzhen Municipal Administration for Industry and Commerce ofGuangdong Province. The unified social credit code of the company is 91440300192179585N, and theregistered capital of the Company is RMB 1,011,660,000.00. The Company issued A shares on 15September 1993 and issued B shares on 10 January 1994. On 31 August 1994, the issued B shareswere listed in the New York Exchange market as class A recommendation. The total share capital is1,011,660,000 shares, including 891,660,000 of A shares, and 120,000,000 of B shares. TheCompany’s headquarter is at Floor 45-48, Shen Fang Plaza, Ren Min South Road, Luo Hu District,Shen Zhen, Guang Dong province.On 13 October 2004，according to the document No.(2004) 223 “Decision on establishing Shenzheninvestment Holding Co., Ltd.” issued by State-Owned Assets Supervision and AdministrationCommission of Shenzhen Municipal Government, former major shareholder – Shenzhen ConstructionInvestment Holding Company with two other assets management companies merged to form theShenzhen Investment Holding Co., Ltd. By the State-owned Assets Supervision and AdministrationCommission of the state council, and quasi-exempt obligations tender offer as approved by ChinaSecurity Regulatory Committee with document No. (2005)116, this issue of consolidated has beenauthorized and the change in registration had been completed on 15 February 2006. At the end of thereporting period, Shenzhen Investment Holding Limited holds 642,884,262 shares of the Company(63.55% of the total share capital). The shares are all tradable unrestricted shares.The Company has established the corporate governance structure of the general meeting ofshareholders, the board of directors and board of supervisors. with human resources department,financing plan department, marketing department, engineering management department and etc inplace.The Company and its subsidiaries (hereinafter referred to as "the Group") are principally engaged inreal estate development and sales, property leasing and management, retail merchandising and trade,hotel, equipment installation and maintenance, construction, interior decoration, etc.The consolidated and company financial statements and the notes to financial statements have beenapproved by the 7
th
Board of Directors in the 60
th
board meeting on 19 March 2021.
2. Scope of consolidated financial statements
For details please refer to “1. Interests in subsidiaries” in Note VII ”Interests in other entities”..In this reporting period, the change of consolidation scope is shown in Notes VI and VII for moredetails.
II.Basis of preparation
The financial statements are prepared in accordance with the Accounting Standards for BusinessEnterprises and corresponding application guidance, interpretations and other related provisionsissued by the Ministry of Finance (collectively, " Accounting Standards for Business Enterprises "). Inaddition, the Group also discloses relevant financial information in accordance with the rules ofinformation disclosure for publicly issued securities companies No. 15 - general provisions on financialreporting (revised in 2014) of the China securities regulatory commission.The financial statements of the Company have been prepared on going concern basis.The Company adopts the accrual basis of accounting. Except for certain financial instruments, thefinancial statements are prepared under the historical cost convention. In the event that impairment ofassets occurs, a provision for impairment is made accordingly in accordance with the relevantregulations.III.Significant accounting policies and accounting estimatesThe Group determines the revenue recognition policy according to its own production and operationcharacteristics.The specific accounting policy please refer to Note III.23 .
1. Statement of compliance with the Accounting Standards for Business EnterprisesThe financial statements have been prepared in compliance with the Accounting Standards forBusiness Enterprises to truly and completely present the Company and consolidated financial positionas at 31 December 2020 and the Company and consolidated operating results and cash flows for theyear ended 31 December 2020.
2. Accounting Period
The accounting period of the Company is from 1 January to 31 December.
3. Operating Period
The operating period of the Company is 12 months.
4. Functional currency
The Company and domestic subsidiaries use Renminbi (“RMB”) as their functional currency. Offshoresubsidiaries,American Great Wall Co., Ltd., determine USD as their functional currency according tothe primary economic environment where they operate. The financial statements of the Company havebeen prepared in RMB.
5. Accounting treatments for business combinations involving enterprises under common control and notunder common control
(1) Business combinations involving enterprises under common controlFor a business combination involving enterprises under common control, the assets acquired andliabilities assumed are measured based on their carrying amounts in the consolidated financialstatements of the ultimate controlling party at the combination date, except for adjustments due todifferent accounting policies. The difference between the carrying amount of the net assets acquiredand the consideration paid for the combination (or the total par value of shares issued) is adjustedagainst share premium in the capital reserve, with any excess adjusted against retained earnings.Business combinations involving enterprises under common control and achieved in stages.
In the separate financial statements, the initial investment cost is calculated based on the shareholdingportion of the assets and liabilities obtained and are measured at the carrying amounts as recorded bythe enterprise being combined at the combination date. The difference between the initial investmentcost and the sum of the carrying amount of the original investment cost and the carrying amount ofconsideration paid for the combination is adjusted to the capital reserve, if the capital reserve is notsufficient to absorb the difference, the excess difference shall be adjusted to retained earning.In the consolidated financial statements, the assets and liabilities obtained at the combination shall bemeasured at the carrying value as recorded by the enterprise at combination date, except foradjustments of different accounting policies. The difference between the sum of the carrying valuefrom original shareholding portion and the new investment cost incurred at combination date and thecarrying value of net assets obtained at combination date shall be adjusted to capital reserve, if thebalance of capital reserve is not sufficient to absorb the differences, any excess is adjusted to retainedearnings. The long-term investment held by the combination party, the recognized profit or losecomprehensive income and other change of shareholding’s equity at the closer date of the acquisitiondate and combination date under common control shall separately offset the opening balance ofretained earnings and profit or loss during comparative statements.
(2) Business combinations involving enterprises not under common controlFor business combinations involving enterprises not under common control, the consideration costsinclude acquisition-date fair value of assets transferred, liabilities incurred or assumed and equitysecurities issued by the acquirer in exchange for control of the acquiree. At the acquisition date, theacquired assets, liabilities and contingent liabilities of the acquiree are measured at their fair value.The acquiree’s identifiable asset, liabilities and contingent liabilities, are recognised at theiracquisition-date fair value.Where the combination cost exceeds the acquirer’s interest in the fair value of the acquiree’sidentifiable net assets, the difference is recognised as goodwill, and subsequently measured on thebasis of its cost less accumulated impairment provisions. Where the combination cost is less than theacquirer’s interest in the fair value of the acquiree’s identifiable net assets, the difference is recognisedin profit or loss for the current period after reassessment.Business combinations involving enterprises not under common control and achieved in stagesIn the separate financial statements, the initial investment cost of the investment is the sum of thecarrying amount of the equity investment held by the entity prior to the acquisition date and theadditional investment cost at the acquisition date. The disposal accounting policy of othercomprehensive income related with equity investment prior to the purchase date recognized underequity method shall be compliance with the method when the acquiree disposes the related assets orliabilities. Shareholder’s equity due to the changes of other shareholder’s equity other than thechanges of net profit, other comprehensive income and profit distribution shall be transferred to profitor lose for current period when disposed. If the equity investment held by the entity prior to theacquisition date is measured at fair value, the cumulative changes in fair value recognized in othercomprehensive income shall be transferred to profit or loss for current period when accounted forusing cost method.In the consolidation financial statements, the combination cost is the sum of consideration paid atacquisition date and fair value of the acquiree’s equity investment held prior to acquisition date; thecost of equity of the acquiree held prior to acquisition date shall be re-measured at the fair value atacquisition date, the difference between the fair value and book value shall be recognized asinvestment income or loss for the current period. Other comprehensive income and changes of
investment equity related with acquiree’s equity held prior to acquisition date shall be transferred toinvestment profit or loss for current period at acquisition date, besides there is other comprehensiveincome incurred by the changes of net assets or net liabilities due to the re-measurement of definedbenefit plan.
(3) Transaction costs for business combination
The overhead for the business combination, including the expenses for
audit, legal services, valuationadvisory, and other administrative expenses, are recorded inprofit or loss for the current period when incurred.The transaction costs of equity or debt securities issued as the considerations of business combinationare included in the initial recognition amount of the equity or debt securities.
6. Consolidated financial statements
(1) Scope of consolidated financial statements
The scope of consolidated financial statements is based on control. Control exists when the Companyhas power over the investee; exposure, or rights to variable returns from its involvement with theinvestee and has the ability to affect its returns through its power over the investee. A subsidiary is anentity that is controlled by the Company (including enterprise, a portion of an investee as a deemedseparate component, and structured entity controlled by the enterprise).
(2) Basis of preparation of consolidated financial statements
The consolidated financial statements are prepared by the Company based on the financial statementsof the Company and its subsidiaries and other relevant information. When preparing consolidatedfinancial statements, the accounting policies and accounting periods of the subsidiaries should beconsistent with those established by the Company, and all significant intra-group balances andtransactions are eliminated.Where a subsidiary or business was acquired during the reporting period, through a businesscombination involving enterprises under common control, the financial statements of the subsidiary orbusiness are included in the consolidated financial statements as if the combination had occurred atthe date that the ultimate controlling party first obtained control.Where a subsidiary or business was acquired during the reporting period, through a businesscombination involving enterprises not under common control, the identifiable assets and liabilities ofthe acquired subsidiaries or business are included in the scope of consolidation from the date thatcontrol commences.The portion of a subsidiary’s equity that is not attributable to the parent is treated as non-controllinginterests and presented separately in the consolidated balance sheet within shareholders’ equity. Theportion of net profit or loss of subsidiaries for the period attributable to non-controlling interests ispresented separately in the consolidated income statement below the “net profit” line item. When theamount of loss for the current period attributable to the non-controlling shareholders of a subsidiaryexceeds the non-controlling shareholders’ share of the opening owners’ equity of the subsidiary, theexcess is still allocated against the non-controlling interests.
(3) Changes in non-controlling interests
Where the Company acquires a non-controlling interest from a subsidiary’s non-controllingshareholders or disposes of a portion of an interest in a subsidiary without a change in control, thetransaction is treated as equity transaction, and the book value of shareholder’s equity attributed to the
Company and to the non-controlling interest is adjusted to reflect the change in the Company’s interestin the subsidiaries. The difference between the proportion interests of the subsidiary’s net assets beingacquired or disposed and the amount of the consideration paid or received is adjusted to the capitalreserve in the consolidated balance sheet, with any excess adjusted to retained earnings.
(4) Disposal of subsidiaries
When the Company loses control over a subsidiary because of disposing part of equity investment orother reasons, the remaining part of the equity investment is re-measured at fair value at the datewhen the control is lost. A gain or loss is recognised in the current period and is calculated by theaggregate of consideration received in disposal and the fair value of remaining part of the equityinvestment deducting the share of net assets in proportion to previous shareholding percentage in theformer subsidiary since acquisition date and the goodwill.Other comprehensive income related to the former subsidiary is transferred to profit or loss when thecontrol is lost, except for the comprehensive income arising from the movement of net liabilities orassets in the former subsidiary’s re-measurement of defined benefit plan.
7. Joint arrangement classification and accounting treatment for joint operationA joint arrangement is an arrangement of which two or more parties have joint control. The Companyclassifies joint arrangements into joint operations and joint ventures.
(1) Joint operations
A joint operation is a joint arrangement whereby the joint operators have rights to the assets, andobligations for the liabilities, relating to the arrangement.The Company recognizes the following items relating to its interest in a joint operation, and account forthem in accordance with relevant accounting standards:
A、its solely-held assets, and its share of any assets held jointly;B、its solely-assumed liabilities, and its share of any liabilities assumed jointly;C、its revenue from the sale of its share of the output arising from the joint operation;D、its share of the revenue from the sale of the output by the joint operation; andE、its solely-incurred expenses, and its share of any expenses incurred jointly.
(2)Joint ventures
A joint venture is a joint arrangement whereby the joint venturers have rights to the net assets of thearrangement.The Company adopts equity method under long-term equity investment in accounting for itsinvestment in joint venture.
8. Cash and cash equivalents
Cash comprises cash in hand and deposits that can be readily withdrawn on demand. Cashequivalents include short-term, highly liquid investments that are readily convertible to known amountsof cash and are subject to an insignificant risk of change in value.
9. Foreign currency transactions and translation of foreign currency financial statements
(1)Foreign currency transactions
Foreign currency transactions are translated to the functional currency of the Company at the spotexchange rates on the dates of the transactions.Monetary items denominated in foreign currencies are translated to Renminbi at the spot exchange rateat the balance sheet date. The resulting exchange differences between the spot exchange rate onbalance sheet date and the spot exchange rate on initial recognition or on the previous balance sheetdate are recognised in profit or loss. Non-monetary items that are measured at historical cost in foreigncurrencies are translated to Renminbi using the exchange rate at the transaction date. Non-monetaryitems that are measured at fair value in foreign currencies are translated using the exchange rate at thedate the fair value is determined. The resulting exchange differences are recognised in profit or loss.
(2)Translation of foreign currency financial statements
When translating the foreign currency financial statements of overseas subsidiaries, assets andliabilities of foreign operation are translated to Renminbi at the spot exchange rate at the balancesheet date. Equity items, excluding “retained earnings”, are translated to Renminbi at the spotexchange rates at the transaction dates.Income and expenses of foreign operation are translated to Renminbi at the spot exchange rates atthe transaction dates.Cash flow statement of foreign operation is translated to Renminbi at the spot exchange rates [therates determined under a systematic and rational method that approximate the spot exchange rates] atthe cash flow occurence dates. Effect of foreign exchange rate changes on cash and cash equivalentsis presented separately as “Effect of foreign exchange rate changes on cash and cash equivalents” inthe cash flow statement.The resulting translation differences are recognised in other comprehensive income in shareholders’equity of balance sheet.The translation differences accumulated in shareholders’ equity with respect to a foreign operation aretransferred to profit or loss in the period when the foreign operation is disposed.
10. Financial instruments
Financial instruments refer to the contracts of forming enterprise financial assets and other entities’financial liabilities or equity instruments.
(1) Recognition and Derecognition of financial instruments
A financial asset or financial liability is recognised when the Group becomes one party of financialinstrument contracts.If one of the following conditions is met, the financial assets are terminated:
①The right of the contract to receive the cash flows of financial assets terminates
②The financial asset has been transferred, and is in accordance with the following conditions forderecognition.If the obligations of financial liability have been discharged in total or in part, derecognize all or part ofit. If the Group (debtor) makes an agreement with the creditor to replace the current financial liability ofassuming new financial liability which contract provisions are different in substance, derecognize thecurrent financial liability and meanwhile recognize as the new financial liability.If the financial assets are traded routinely, they are recognised and derecognised at the transaction date.
(2) Classification and measurement of financial assets
Financial assets are classified into the following three categories depends on the Group’s businessmode of managing financial assets and cash flow characteristics of financial assets: financial assetsmeasured at amortized cost, financial assets at fair value through other comprehensive income andfinancial assets at fair value through profit or loss.Financial assets measured at amortised costThe Group shall classify financial assets that meet the following conditions and are not designated asfinancial assets at fair value through profit or loss as financial assets measured at amortized cost:
? The Group’s business model for managing the financial assets is to collect contractual cash flows;? The terms of the financial asset contract stipulate that cash flows generated on a specific date areonly payments of principal and interest based on the amount of outstanding principal.After initial confirmation, the real interest rate method is used to measure the amortized cost of suchfinancial assets. Profits or losses arising from financial assets measured at amortized costs and notpart of any hedging relationship are included in current profits and losses when the recognition isterminated, amortized or impaired according to the Actual Interest Rate Law.Financial assets at fair value through other comprehensive incomeThe Group shall classify financial assets that meet the following conditions and are not designated asfinancial assets measured at fair value and whose changes are recorded in current profits and lossesas financial assets measured at fair value through other comprehensive income:
? The Group’s business model for managing the financial assets is both to collect contractual cashflows and to sell the financial assets;? The terms of the financial asset contract stipulate that cash flows generated on a specific date areonly payments of principal and interest based on the amount of outstanding principal.After initial recognition, financial assets are subsequently measured at fair value. Interest, impairmentlosses or gains and exchange gains calculated by the effective interest rate method are recognised inprofit or loss, while other gains or losses are recognised in other comprehensive gains. Whenderecognized, the accumulated gains or losses previously recognised in other comprehensive gainsare transferred from other comprehensive gains and recorded in current profits and losses.Financial assets at fair value through profit or lossIn addition to the aboving financial assets which are measured at amortized cost or at fair valuethrough other comprehensive income, the Group classifies all other financial assets as financial assets
measured at fair value through profit or loss.When initial recognition, in order to eliminate orsignificantly reduce accounting mismatches, the Group irrevocably designates some financial assetsthat should have been measured at amortized cost or at fair value through other comprehensive gainsas financial assets at fair value through profit or loss.After initial recognition, the financial assets are subsequently measured at fair value, and the profits orlosses (including interest and dividend income) generated from which are recognised in profit or loss,unless the financial assets are part of the hedging relationship.However, for non-tradable equity instrument investment, when initially recognized, the Groupirrevocably designates them as financial assets at fair value through other comprehensive gains. Thedesignation is made on the basis of individual investment, and the relevant investment conforms to thedefinition of equity instruments from the issuer’s point of view.After initial confirmation, financial assets are subsequently measured at fair value. Dividend incomethat meets the requirements is recognised in profit and loss, and other gains or losses and changes infair value are recognised in other comprehensive gains. When derecognized, the accumulated gains orlosses previously recognised in other comprehensive gains are transferred from other comprehensivegains to retained earnings.The business model of managing financial assets refers to how the group manages financial assets togenerate cash flow. The business model decides whether the source of cash flow of financial assetsmanaged by the Group is to collect contract cash flow, sell financial assets or both of them. Based onobjective facts and the specific business objectives of financial assets management decided by keymanagers, the Group determines the business model of financial assets management.The Group evaluates the characteristics of the contract cash flow of financial assets to determinewhether the contract cash flow generated by the relevant financial assets on a specific date is onlyto pay principal and interest based on the amount of unpaid principal. Among them, principal refersto the fair value of financial assets at the time of initial confirmation; interest includes theconsideration of time value of money, credit risk related to the amount of unpaid principal in aspecific period, and other basic borrowing risks, costs and profits. In addition, the Group evaluatesthe terms and conditions of the contracts that may lead to changes in the time distribution or amountof cash flow in financial asset contracts to determine whether they meet the requirements of theaboving contract cash flow’s. characteristicsOnly when the Group changes its business model of managing financial assets, all the financial assetsaffected shall be reclassified on the first day of the first reporting period after the business modelchanges, otherwise, financial assets shall not be reclassified after initial confirmation.Financial assets are measured at fair value at initial recognition. For financial assets that are measuredat fair value and whose changes are included in the current profit and loss, related transaction costsare directly included in the current profit and loss; for other types of financial assets, related transactioncosts are included in the initially recognized amount. For accounts receivable arising from the sale ofproducts or the provision of labor services that do not include or take into account significant financingcomponents, the Group considers the amount of consideration expected to be entitled as the initialrecognition amount.
(3) Classification and Measurement of financial liabilities
On initial recognition, financial liabilities are classified as: financial liabilities at fair value through profitor loss (FVTPL), and financial liabilities measured at amortized cost. For financial liabilities not
classified as at fair value through profit or loss, the transaction costs are recognised in the initiallyrecognised amount.Financial liabilities at fair value through profits and lossesFinancial liabilities at FVTPL include transaction financial liabilities and financial liabilities designatedas at fair value through profit or loss in the initial recognition. Such financial liabilities are subsequentlymeasured at fair value, all gains and losses arising from changes in fair value and dividend andinterest expense relative to the financial liabilities are recognised in profit or loss for the current period.Financial liabilities measured at amortized costOther financial liabilities are subsequently measured at amortized cost using the effective interestmethod; gains and losses arising from derecognition or amortization is recognised in profit or loss forthe current period.Distinction between financial liabilities and equity instrumentsThe financial liability is the liability that meets one of following criterias:
①Contractual obligation to deliver cash or other financial instruments to another entity.②Under potential adverse condition, contractual obligation to exchange financial assets or financialliabilities with other parties.③A contract that will or may be settled in the entity’s own equity instruments and is anon-derivative for which the entity is or may be obliged to deliver a variable number of the entity’sown equity instruments.④A derivative that will or may be settled other than by the exchange of a fixed amount of cash oranother financial asset for a fixed number of the entity’s own equity instruments.An equity instrument is any contract that evidences a residual interest in the assets of an entity afterdeducting all of its liabilities.If the group cannot unconditionally avoid fulfilling a contractual obligation by delivering cash or otherfinancial assets, the contractual obligation meets the definition of financial liability.If a financial instrument must or are able to be settled by the group’s own equity instrument, the groupshould consider whether the group’s equity instrument as the settlement instrument is a substitute ofcash or other financial assets or the residual interest in the assets of an entity after deducting all of itsliabilities. If the former, the tool is the group’s financial liability; if the latter, the tool is the equityinstrument of the group.
(4) Fair value of financial instruments
The recognization of fair value of financial assets and financial liability is set out in note III.11.
(5) Impairment of financial assets
On the basis of expected credit losses, the Group performs impairment assessment on the followingitems and confirms the loss provision.? financial assets measured at amortized cost;
? debt investments at fair value through other comprehensive income;? contractual assets as defined in Enterprise Accounting Standards No. 14 - Revenue;? lease receivables;? Financial guarantee contract (except measured at fair value through profit or loss or formed bycontinuing involvement of transferred financial assets or the transfer does not qualify forderecognition).Measurement of expected credit lossesThe expected credit losses refers to the weighted average of the credit losses of financial instrumentsthat are weighted by the risk of default. Credit loss refers to the difference between all contractual cashflows receivable from the contract and all cash flows expected to be received by the Group at theoriginal effective interest rate, that is, the present value of all cash shortages.The company considers reasonable and reliable information about past events, current conditions,future forecasts, and weights the risk of default to calculate the probability-weighted amount of thepresent value of the difference between the cash flow receivable under the contract and the cash flowexpected to be received in recognition of the expected credit loss.The Group separately measures the expected credit losses of financial instruments at different stages.The credit risk on a financial instrument has not increased significantly since initial recognition, which isin the first stage. The Group shall measure the loss allowance for that financial instrument at anamount equal To 12-month expected credit losses. If the credit risk of financial instruments hasincreased significantly since the initial recognition, but no credit impairment has occurred, which is inthe second stage. The Group shall measure the loss allowance for a financial instrument at an amountequal to the lifetime expected credit losses. If the financial instrument has occurred credit impairmentsince initial recognition, which is in the third stage, and the Group shall measure the loss allowance fora financial instrument at an amount equal to the lifetime expected credit losses.For financial instruments with lower credit risk at the balance sheet date, the Group assumes that theircredit risk has not increased significantly since the initial recognition, and shall measure the lossallowance for that financial instrument at an amount equal to 12-month expected credit losses.The lifetime expected credit losses,refer to the expected credit losses caused by all possible defaultsduring the whole expected lifetime. The 12-month expected credit losses,refer to the expected creditlosses caused by all possible defaults during the 12-month after balance sheet date(if the expectedduration of financial instrument is less than 12 months, then for the expected duration),which is part ofthe lifetime expected credit losses.When measure the expected credit loss, the longest contract period (including the option of renewal)that the group needs to consider is the longest contract period the enterprise facing credit risk.For financial instruments in the first stages,second stages and with lower credit risk, the Groupcalculates interest income on the basis of their book balances without deduction of impairmentprovisions and actual interest rates. For financial instruments in the third stage, the Group calculatesinterest income according to their book balance minus the impairment provision and the actualinterest rate.
For bills receivable and accounts receivable, whether or not there are significant financing elements,the Group shall always measure the loss allowance for them at an amount equal to the lifetimeexpected credit losses.When information on expected credit losses cannot be assessed for a single financial asset, inaccordance with the characteristics of credit risk, the group divides and combines bills receivable,accounts receivable and leased receivables. On the basis of the combination, the group calculates theexpected credit losses. The basis of determining the combination is as follows:
A﹑Bills receivable? Bill receivable group 1: Bank acceptance bills? Bill receivable group 2: Commercial acceptance billsB﹑Accounts receivable? Accounts receivable group 1: Amount receivables of related parties? Accounts receivable group 2: Amount receivables of sales of properties? Accounts receivable group 3: Amount receivables of other customersC﹑Contract Asset? Contract Asset group 1: Product sales? Contract Asset group 2: the Construction of the projectFor the accounts receivable divided into group, the group refers to the historical credit losses,combines the current situation with the forecast of future economic situation, compiles a comparisontable between the age of accounts receivable and the lifetime expected credit losses rate to calculatethe expected credit losses.For the bills receivables and contract assets divided into group, the Group refers to historical creditlosses, with the current situation and the forecast of future economic situation, calculates the expectedcredit losses through the exposure on default and the lifetime expected credit losses rate.Other receivablesAccording to the characteristics of credit risk, the group divides other receivables into group. On thebasis of the combination, the group calculates the expected credit losses. The basis of determining thecombination is as follows:
? Other receivables group 1: Amount receivables from government.? Other receivables group 2: Amount receivables from petty cash.? Other receivables group 3: Amount receivables from the collecting and paying on another's behalf.? Other receivables group 4: Amount receivables from current accounts.? Other receivables group 5: Amount receivables from related parties.
For other receivables a divided into group, the Group calculates the expected credit losses through theexposure on default and the lifetime expected credit losses rate or the next 12 months.Debt investments and Other debt investmentsFor debt investments and other debt investments, the group calculates the expected credit lossesthrough the exposure on default and the future 12-month or lifetime expected credit losses rate,according to the nature of the investment, the types of counterparty and risk exposure.Assessment of Significant Increase in Credit RiskBy comparing the default risk of financial instruments on balance sheet day with that on initialrecognition day, the Group determines the relative change of default risk of financial instrumentsduring the expected life of financial instruments,to evaluate whether the credit risk of financialinstruments has increased significantly since the initial recognition.To determine whether credit risk has increased significantly since the initial recognition., the Groupconsiders reasonable and valid information, including forward-looking information, that can be obtainedwithout unnecessary additional costs or efforts. Information considered by the Group includes:
? The debtor can’t pay principal and interest on the expiration date of the contract;? Serious deterioration of external or internal credit ratings (if any) of financial instruments that haveoccurred or are expected to occur;? Serious deterioration of the debtor’s operating results that have occurred or are expected to occur;? Changes in the existing or anticipated technological, market, economic or legal environment willhave a significant negative impact on the debtor’s repayment capacity.According to the nature of financial instruments, the Group evaluates whether credit risk has increasedsignificantly on the basis of a single financial instrument or a combination of financial instruments.When assessing on the basis of the combination of financial instruments, the Group can classifyfinancial instruments based on common credit risk characteristics, such as overdue information andcredit risk rating.If the delay exceeds 30 days, the Group determines that the credit risk of financial instruments hasincreased significantly.The Group considers that financial assets default in the following circumstances? The debtor is unlikely to full pay its arrears to the group, and the assessment does not take intoaccount recourse actions taken by the group, such as liquidation of collateral (if held);? Financial assets have delay more than 90 days.Financial assets that have occured credit impairmentOn the balance sheet date, the Group assesses whether credit impairment has occurred in financialassets measured at amortized cost and debt investments measured at fair value through othercomprehensive income. When one or more events adversely affect the expected future cash flow of afinancial asset occur, the financial asset becomes a financial asset with credit impairment. Evidence ofcredit impairment of financial assets includes the following observable information:
? Significant financial difficulties occurs to the issuer or debtor;? The debtor breaches any of the contractual stipulations, for example, fails to pay or delays thepayment of interests or the principal, etc.;? For economic or contractual considerations related to the financial difficulties of the debtor, theGroup grants concessions to the debtor that will not be made under any other circumstances.? The debtor is probable to go bankrupt or undergo other financial restructuring.? Financial difficulties of issuer or debtor lead to the disappearance of financial assets active market.Presentation of expected credit losses reserveIn order to reflect the changes happened to the credit risk of financial instruments since the initialrecognition, the Group recalculates the expected credit losses on each balance sheet day. Theincrease or reversal of the loss provision resulting therefrom is recognised as an impairment loss orgain in the current profit or loss.For financial assets measured at amortized cost, loss provision offsetsthe carrying amount of the financial assets shown on the balance sheet; for debt investmentsmeasured at fair value through other comprehensive income, the Group recognizes its loss provisionthrough other comprehensive income and does not offset the financial assets’ carrying amount.Write offIf the Group no longer reasonably expects that the financial assets contract cash flow can berecovered fully or partially, the financial assets book balance will be reduced directly. Such reductionconstitute the derecognition of the financial assets. What usually occurs when the Group determinesthat the debtor has no assets or sources of income to generate sufficient cash flows to pay the amountto be reduced. However, in accordance with the Group’s procedures for recovering due payment, thefinancial assets reduced may still be affected by enforcement activities.If the reduced financial assets are recovered later, the returns as impairment losses shall be includedin the profits and losses of the recovery period.
(6) Transfer of financial assets
Transfer of financial assets refers to the transference or deliverance of financial assets to the otherparty (the transferee) other than the issuer of financial assets.The Group derecognizes a financial asset only if it transfers substantially all the risks and rewards ofownership of the financial asset to the transferee; the Group should not derecognize a financial asset ifit retains substantially all the risks and rewards of ownership of the financial asset.The Group neither transfers nor retains substantially all the risks and rewards of ownership, shows asthe following circumstances: if the Group has forgone control over the financial assets, derecognizethe financial assets and verify the assets and liabilities; if the Group retains its control of the financialasset, the financial asset is recognized to the extent of its continuing involvement in the transferredfinancial asset and recognize an associated liability is recognized.
(7) Offseting financial assets and financial liabilities
When the Group has the legal rights to offset the recognized financial assets and financial liabilitiesand is capable to carry it out, the Group plans to net settlement or realize the financial assets and pay
off the financial liabilities, the financial assets and financial liabilities shall be listed separately with theneutralized amount in balance sheet and are not allowed to be offset.
11. Fair value measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderlytransaction between market participants at the measurement date.The Company measures related assets or liabilities at fair value assuming the assets or liabilities areexchanged in an orderly transaction in the principal market; in the absence of a principal market, assumingthe assets or liabilities are exchanged in an orderly transaction in the most advantageous market. Principalmarket (or the most advantageous market) is the market that the Company can normally enter into atransaction on measurement date. The Company adopts the presumptions that would be used by marketparticipants in achieving the maximized economic value of the assets or liabilities.For financial assets or financial liabilities with active markets, the Company uses the quoted prices inactive markets as their fair value. Otherwise, the Company uses valuation technique to determine theirfair value.Fair value measurement of a non-financial asset takes into account market participants’ ability togenerate economic benefits using the asset in its best way or by selling it to another market participantthat would best use the asset.The Company uses valuation techniques that are appropriate in the circumstances and for whichsufficient data are available to measure fair value, maximizing the use of relevant observable inputs,and using unobservable inputs only if the observable inputs aren’t available or impractical.Fair value level for assets and liabilities measured or disclosed at fair value in the financial statementsare determined according to the significant lowest level input to the entire measurement: Level 1 inputsare quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company canaccess at the measurement date; Level 2 inputs are inputs other than quoted prices included withinLevel 1 that are observable for the assets or liabilities, either directly or indirectly; Level 3 inputs areunobservable inputs for the assets or liabilities.At the balance sheet date, the Company revalues assets and liabilities being measured at fairvalue continuously in the financial statements to determine whether to change the levels of fairvalue measurement.
12. Inventories
(1) Classification
The Group's inventory is classified by real estate development and non-real estate development.Inventory is mainly for real estate development,including development costs and developmentproductes.Development cost include the development costs of development products to be developedand development products under construction. Development products includes completeddevelopment products and intended to sell but temporarily leased development products. Non-realestate developments include raw materials, finished gooods and construction.
(2) Mesurement method of cost of inventories
Inventories are initially measured at cost. The cost of product development includes land transfer fee,infrastructure expenditure, construction and installation project expenditure, borrowing expenses
incurred before the completion of the development project and other related expenses in thedevelopment process. When a product is developed and shipped, the actual cost is determined byspecific identification method..Raw materials and finished goods are calculated using weighted average method.
(3)Basis for determining the net realisable value and method for provision for obsolete inventoriesNet realisable value is the estimated selling price in the ordinary course of business less the estimatedcosts of completion and the estimated costs necessary to make the sale and relevant taxes. The netrealisable value is measured based on the verified evidences and considerations for the purpose ofholding inventories and the effect of post balance sheet events.Any excess of the cost over the net realisable value of of inventories is recognised as a provision forobsolete inventories, and is recognised in profit or loss. The Company usually recognises provision fordecline in value of inventories by a single inventory item. If the factors caused the value of inventorypreviously written-down have disappeared, the provision for decline in value of inventories previouslymade is reversed.
(4)Inventory count system
The Company maintains a perpetual inventory system.
(5)Amortization methods of low-value consumables and packaging materialsLow-value consumables are charged to profit or loss when they are used.
13. Long-term equity investments
Long-term equity investments include equity investments in subsidiaries and equity investments in jointventures and associates. An associate is an enterprise over which the Company has significantinfluence.
(1)Determination of initial investment cost
The initial cost of a long-term equity investment acquired through a business combination involvingenterprises under common control is the Company’s share of the carrying amount of the subsidiary’sequity in the consolidated financial statements of the ultimate controlling party at the combination date.For a long-term equity investment obtained through a business combination not involving enterprisesunder common control, the initial cost is the combination cost.A long-term equity investment acquired other than through a business combination: A long-term equityinvestment acquired other than through a business combination is initially recognised at the amount ofcash paid if the Company acquires the investment by cash, or at the fair value of the equity securitiesissued if an investment is acquired by issuing equity securities.
(2) Subsequent measurement and recognition of profit or loss
Long-term equity investments in subsidiaries are accounted for using the cost method. An investmentin a joint venture or an associate is accounted for using the equity method for subsequentmeasurement.
For a long-term equity investment which is accounted for using the cost method, Except for cashdividends or profit distributions declared but not yet distributed that have been included in the price orconsideration paid in obtaining the investments, the Company recognises its share of the cashdividends or profit distributions declared by the investee as investment income for the current period.For a long-term equity investment which is accounted for using the equity method, where the initialcost of a long-term equity investment exceeds the Company’s interest in the fair value of the investee’sidentifiable net assets at the date of acquisition, the investment is initially recognised at cost. Wherethe initial investment cost is less than the Company’s interest in the fair value of the investee’sidentifiable net assets at the date of acquisition, the investment is initially recognised at the investor’sshare of the fair value of the investee’s identifiable net assets, and the difference is recognised in profitor loss.Under the equity method, the Company recognises its share of the investee’s profit or loss and othercomprehensive income as investment income or losses and other comprehensive income respectively,and adjusts the carrying amount of the investment accordingly. Once the investee declares any cashdividends or profit distributions, the carrying amount of the investment is reduced by the amountattributable to the Company. Changes in the Company’s share of the investee’s owners’ equity, otherthan those arising from the investee’s net profit or loss, other comprehensive income or profitdistribution (referred to as “other changes in owners’ equity”), is recognised directly in the Company’sequity, and the carrying amount of the investment is adjusted accordingly. In calculating its share ofthe investee’s net profits or losses, other comprehensive income and other changes in owners’ equity,the Group recognises investment income and other comprehensive income after making appropriateadjustments to align the accounting policies or accounting periods with those of the Group based onthe fair value of the investee’s identifiable net assets at the date of acquisition.When the Company becomes capable of exercising joint control or significant influence (but not control)over an investee due to additional investment or other reasons, the Company uses the fair value of thepreviously-held equity investment, together with additional investment cost, as the initial investmentcost under the equity method. The difference between the fair value and carrying amount of thepreviously-held equity investment, and the accumulated changes in fair value included in othercomprehensive income, shall be transferred to profit or loss for the current period uponcommencement of the equity method.When the Company can no longer exercise joint control of or significant influence over an investee dueto partial disposal of the equity investment or other reasons, the remaining equity investment shall beaccounting for using Accounting Standard for Business Enterprises No. 22 - Recognition andMeasurement of Financial Instruments, and the difference between the fair value and the carryingamount of the remaining equity investment shall be charged to profit or loss for the current period atthe date of the loss of joint control or significant influence. Any other comprehensive income previouslyrecognised under the equity method shall be accounted for on the same basis as would have beenrequired if the Company had directly disposed of the related assets or liabilities for the current periodupon discontinuation of the equity method. Other movement of owner’s equity related to original equityinvestment is transferred to profit or loss for the current period.When the Company can no longer exercise control over an investee due to partial disposal of theequity investment or other reasons, and the remaining equity after disposal can exercise joint control ofor significant influence over an investee, the remaining equity is adjusted as using equity method fromacquisition. When the remaining equity can no longer exercise joint control of or significant influenceover an investee, the remaining equity investment shall be accounted for using Accounting Standardfor Business Enterprises No. 22-Recognition and Measurement of Financial Instruments, and the
difference between the fair value and the carrying amount of the remaining equity investment shall becharged to profit or loss for the current period at the date of loss of control.When the Company can no longer exercise control over an investee due to new capital injection byother investors, and the Company can exercise joint control of or significant influence over an investee,the Company recognizes its share of the investee’s new added net assets using new shareholdingpercentage. The difference between its new share of the investee’s new added net assets and itsdecreased shareholding percentage of the original investment is recognized in profit or loss. And theCompany adjusts to the equity method using the new shareholding percentage as if it uses the equitymethod since it obtains the investment.Unrealized internal trading gains and losses between the group and associated enterprises and jointventures shall be calculated as part of the group according to the shareholding ratio and investmentgains and losses shall be recognized on an offset basis. However, unrealized internal trading lossesbetween the group and the investee shall not be offset if they are impairment losses of thetransferred assets.
(3) Criteria for determining the existence of joint control or significant influence over an investeeJoint control is the contractually agreed sharing of control of an arrangement, which exists only whendecisions about the relevant activities require the unanimous consent of the parties sharing control.When assessing whether the Company can exercise joint control over an investee, the Company firstconsiders whether no single participant party is in a position to control the investee’s related activitiesunilaterally, and then considers whether strategic decisions relating to the investee’s related activitiesrequire the unanimous consent of all participant parties that sharing of control. All the parties, or agroup of the parties, control the arrangement collectively when they must act together to direct therelevant activities. When more than one combination of the parties can control an arrangementcollectively, joint control does not exist. A party that holds only protective rights does not have jointcontrol of the arrangement.Significant influence is the power to participate in the financial and operating policy decisions of aninvestee but does not have control or joint control over those policies. When determining whether theCompany can exercise significant influence over an investee, the effect of potential voting rights (forexample, warrants, share options and convertible bonds) held by the Company or other parties thatare currently exercisable or convertible shall be considered.When the Company, directly or indirectly through subsidiaries, owns 20% of the investee (including20%) or more but less than 50% of the voting shares, it has significant influence over the investeeunless there is clear evidence to show that in this case the Company cannot participate in theproduction and business decisions of the investee, and cannot form a significant influence. When theCompany owns less than 20% of the voting shares, generally it does not have significant influenceover the investee, unless there is clear evidence to show that in this case the Company can participatein the production and business decisions of the investee so as to form a significant influence.
(4) Method of impairment testing and impairment provision
For investments in subsidiaries, associates and joint ventures, refer to Note III. 19 for the impairmentof assets..
14. Investment property
Investment properties are properties held either to earn rental income or for capital appreciation or forboth. The Group's investment real estate includes leased houses, buildings and leased land use rights.
In addition, for a vacant building held by the company for operating lease, if the board of directors (or asimilar institution) makes a written resolution expressly indicating that it is used for operating lease andthe intention of holding does not change in the short term, it is also considered as Investment property.Investment properties are initially measured at acquisition cost, and depreciated or amortized using thesame policy as that for fixed assets or intangible assets.For the impairment of the investment properties accounted for using the cost model, refer to NoteIII.19.Gains or losses arising from the sale, transfer, retirement or disposal of an item of investment propertyare determined as the difference among the net disposal proceeds, the carrying amount of the item,related taxes and surchages, and are recognised in profit or loss for current period.
15. Fixed assets
(1) Recognition of fixed assets
Fixed assets represent the tangible assets held by the Company for use in production of goods, use insupply of services, rental or for administrative purposes with useful lives over one accounting year.Fixed assets are only recognised when its related economic benefits are likely to flow to the Companyand its cost can be reliably measured.Fixed asset are initially measured at cost.
(2) Depreciation of fixed assets
The cost of a fixed asset is depreciated using the straight-line method since the state of intendeduse, unless the fixed asset is classified as held for sale. Not considering impairment provision, theestimated useful lives, residual value rates and depreciation rates of each class of fixed assets areas follows:
Category
| Category | Useful life （years） | Residual value rate % | Annual depreciation rate % |
| Plant and buildings | 30 | 5 | 3.17 |
| Motor vehicles | 6 | 5 | 15.83 |
| Electronic equipment and others | 5 | 5 | 19.00 |
For impaired fixed assets, cumulative amount of impairment provision is deducted in determinatingf thedepreciation rate.
(3) The impairment of the fixed assets is set out in Note III. 19.
(4) Recognition and measurement of fixed assets acquired under finance leasesFixed assets under finance leases are recognised if they meet one or more of the following criteria:
①The ownership of leased assets is transferred to the Company by the end of the lease term.
②The Company has the option to purchase the asset at a price that is expected to be sufficientlylower than the fair value at the date of the option becomes exercisable for it to be reasonably certain,at the inception of the lease, that the option will be exercised.
③Even if the ownership of assets is not transferred, the lease term covers the major part of the usefullife of the asset.
④At the inception of lease, the present value of minimum lease payments amount to substantially allof the fair value of leased asset.
⑤Leased assets are of a specialized nature that only the Company can use them without majormodifications.An asset acquired under a finance lease is measured at an amount equal to the lower of its fair valueand the present value of the minimum lease payments, each determined at the inception of the lease.Long-term payable is recorded at an amount equal to the sum of all future minimum lease payments.The difference between the carrying amount of the leased assets and the minimum lease payments isaccounted for as unrecognised finance charges. Initial direct costs attributable to a finance leaseincurred during the process of lease negotiation and the signing of the lease agreement, includingservice charges, attorney's fees, travelling expenses and stamp duty, that are incurred by theCompany are added to the carrying amount of the leased asset. Unrecognised finance charges arerecognised as finance charge for the period using the effective interest method over the lease term.Depreciation is accounted for in accordance with the accounting policies of fixed assets. If there isreasonable certainty that the Company will obtain ownership of a leased asset at the end of the leaseterm, the leased asset is depreciated over its estimated useful life. Otherwise, the leased asset isdepreciated over the shorter of the lease term and its estimated useful life.
(5) Useful lives, estimated residual values and depreciation methods are reviewed at least at eachyear-end.The Company adjusts the useful lives of fixed assets if their expected useful lives are different withthe original estimates and adjusts the estimated net residual values if they are different from theoriginal estimates.
（6）Overhaul costs
Overhaul costs occurred in regular inspection are recognized in the cost if there is undoubtedevidence to confirm that this part meets the recognition criteria of fixed assets, otherwise, theoverhaul costs are recognized in profit or loss for the current period. Depreciation is provided duringthe period of regular overhaul.
16. Construction in progress
Construction in progress is recognized based on the actual construction cost, including allexpenditures incurred for construction projects, capitalised borrowing costs and any other costsdirectly attributable to bringing the asset to working condition for its intended use.Construction in progress is transferred to fixed asset when it is ready for its intended use.The impairment of construction in progress is set out in Note III. 19.
17. Borrowing costs
（1）Capitalisation criteria
Borrowing costs that are directly attributable to the acquisition, construction or production of aqualifying asset shall be capitalised as part of the cost of that asset. Other borrowing costs areexpensed in profit or loss as incurred. The capitalisation of borrowing costs shall commence only whenthe following criteria are met:
①capital expenditures have been incurred, including expenditures that have resulted in payment ofcash, transfer of other assets or the assumption of interest-bearing liabilities;②borrowing costs have been incurred;③the activities that are necessary to prepare the asset for its intended use or sale have commenced.
（2）Capitalisation period
The capitalisation of borrowing costs ceases when the asset under acquisition or constructionbecomes ready for its intended use, the borrowing costs incurred thereafter are recognised in profit orloss for the current period.Capitalisation of borrowing costs is suspended during periods in which the acquisition or constructionof a fixed asset is interrupted abnormally and the interruption lasts for more than 3 months, until theacquisition or construction is resumed.
(3) Capitalisation rate of borrowing costs and calculation basis of capitalised amountFor interest expense actually incurred on specific borrowings, the eligible capitalised amount is the netamount of the borrowing costs after deducting any investment income earned before some or all of thefunds are used for expenditures on the qualifying asset. To the extent that the Company borrows fundsgenerally and uses them for the purpose of obtaining a qualifying asset, the Company shall determinethe amount of borrowing costs eligible for capitalisation by applying a capitalisation rate to theexpenditures on that asset, the capitalisation rate shall be the weighted average of the borrowing costsapplicable to the borrowings of the Company that are outstanding during the period, other thanborrowings specifically for the purpose of obtaining a qualifying asset.In the capitalisation period, exchange differences of specific borrowings in foreign currency shall becapitalised; exchange differences of general borrowings in foreign currency is recognised in profit orloss for the current period.
18. Intangible assets
Intangible assets include software, land use right, and patent rights, etc.Intangible assets are stated at actual cost upon acquisition and the useful economic lives aredetermined at the point of acquisition. When the useful life is finite, amortisation method shall reflectthe pattern in which the asset’s economic benefits are expected to be realised. If the pattern cannotbe determined reliably, the straight-line method shall be used. An intangible asset with an indefiniteuseful life shall not be amortised.The Company shall review the useful life and amortisation method of an intangible asset with a finiteuseful life at least at each year end. Changes of useful life and amortisation method shall beaccounted for as a change in accounting estimate.An intangible asset shall be derecognised in profit or loss when it is not expected to generate futureeconomic benefits.
The impairment of intangible assets is set out in Note III. 19.
19. Impairment of assets
The impairment of long-term equity investments in subsidiaries, associates and joint ventures,investment properties measured using a cost model, fixed assets, construction in progress,intangible assets, goodwill,(Excluding inventories, deferred tax assets and financial assets) isdetermined as follows:
At each balance sheet date, the Company determines whether there is any indication of impairment.If any indication exists, the recoverable amount of the asset is estimated. In addition, the Companyestimates the recoverable amounts of goodwill, intangible assets with indefinite useful lives andintangible assets not ready for use at each year-end, irrespective of whether there is any indicationof impairment.The recoverable amount of an asset is the higher of its fair value less costs to sell and its presentvalue of expected future cash flows. The recoverable amount is estimated for each individual asset. Ifit is not possible to estimate the recoverable amount of each individual asset, the Company determinesthe recoverable amount for the asset group to which the asset belongs. An asset group is the smallestidentifiable group of assets that generates cash inflows that are largely independent of the cash inflowsfrom other assets or asset groups.An impairment loss is recognised in profit or loss when the recoverable amount of an asset is less thanits carrying amount. A provision for impairment of the asset is recognised accordingly.For goodwill impairment test, the carrying amount of goodwill arising from a business combination isallocated reasonably to the relevant asset group since the acquisition date. If the carrying amount ofgoodwill is unable to be allocated to asset group, the carrying amount of goodwill will be allocated toasset portfolio. Asset group or portfolio of asset group is asset group or portfolio of asset group whichcan be benefit from synergies of a business combination and is not greater than the reportablesegment of the Company.In impairment testing, if impairment indication exists in asset group or portfolio of asset groupcontaining allocated goodwill, impairment test is first conducted for asset group or portfolio of assetgroup that does not contain goodwill, and corresponding recoverable amount is estimated and anyimpairment loss is recognized. Then impairment test is conducted for asset group or portfolio ofasset group containing goodwill by comparing its carrying amount and its recoverable amount. If therecoverable amount is less than the carrying amount, impairment loss of goodwill is recognized.Once an impairment loss is recognised, it is not reversed in a subsequent period.
20. Long-term deferred expenses
Long-term deferred expenses are recorded at the actual cost, and amortized using a straight-linemethod within the benefit period. For long-term deferred expense that cannot bring benefit in futureperiod, the Company recognized its amortised cost in profit or loss for the current period.
21. Employee benefits
(1) Scope of employee benefits
Employee benefits refer to all forms of consideration or compensation given by the Company inexchange for service rendered by employees or for the termination of employment relationship.
Employee benefits include short-term employee benefits, post-employment benefits, terminationbenefits and other long-term employee benefits. Benefits provided to the Company’s spouse,children, dependents, family members of deceased employees or other beneficiaries are also part ofthe employee benefits.According to liquidity, employee benefits are presented as “employee benefits payable” and “long-termemployee benefits payable” on the balance sheet.
(2) Short-term employee benefits
In the current period, the Company has accrued for the actual wages, bonuses, medical insurance foremployees based on standard rate, work injury insurance and maternity insurance and other socialinsurance and housing fund incurred and these are recognised as liabilities and corresponding costs inthe profit or loss. If these liabilities are not expected to be fully paid 12 months after the end of thereporting period in which employee renders the service to the Company, and if the financial impact issignificant, these liabilities shall be discounted using the net present value method.
（3）Post-employment benefits
Post-employment benefit plan includes defined contribution plans and defined benefit plans. Definedcontribution plans are post-employment benefit plans under which an enterprise pays fixedcontributions into a separate fund and will have no future obligations to pay the contributions. Definedbenefit plans are post-employment benefit plans other than defined contribution plans.Defined contribution plansDefined contribution plans include primary endowment insurance, unemployment insurance,corporation pension plan.Besides basic pension insurance, the Company establishes corporate pension plans in accordancewith the related policies of corporate pension regulations. Employees can join the pension planvoluntarily. The Company has no other significant commitment of employees’ social security.The Company shall recognise, in the accounting period in which an employee provides service, thecontribution payable to a defined contribution plan as a liability, with a corresponding charge to theprofit or loss for the current period or the cost of a relevant asset.Defined benefit planFor the defined benefit plan, independent actuary uses an actuarial technique, the projected unit creditmethod, to make a reliable estimate of the ultimate cost to the entity of the benefit that employeeshave earned in return for their service in the current and prior periods, on the balance sheet date. TheGroup set the defined benefit plan including the following components:
① Service costs, including current service costs, any past service costs and gain or loss on settlement.Among them, the current service cost is the increase in the present value of the defined benefit obligationresulting from employee service in the current period; the past service cost is the change in the presentvalue of the defined benefit obligation for employee service in prior periods, resulting from a planamendment (the introduction or withdrawal of, or changes to, a defined benefit plan) or a curtailment (asignificant reduction by the entity in the number of employees covered by a plan).
② Net interest on the net defined benefit liability (asset) can be viewed as comprising interestincome on plan assets, interest cost on the defined benefit obligation and interest on the effect of theasset ceiling
③ Re-measurements of the net defined benefit liability and assets.
The Group makes determining amounts to be recognized in profit or loss except other accountingstandards stipulates or allows employee benefits recorded as asset cost. Re-measurements of thechanges in the net defined benefit liability (asset) recognized in other comprehensive income shall notbe reclassified to profit or loss in a subsequent period. However, the entity may transfer those amountsrecognized in other comprehensive income within equity, when original defined benefit plan isterminated.
(4) Termination benefits
The Company provides for termination benefits to the employees and shall recognize an employeebenefits liability for termination benefits, with a corresponding charge to the profit or loss for the currentperiod, at the earlier of the following dates: When the Company cannot unilaterally withdraw the offerof the termination benefits from an employment termination plan or a redundancy proposal; theCompany recognizes the costs or expenses relating to a restructuring that involves the payment of thetermination benefits..If an employee's internal retirement plan is implemented, the economic compensation before theofficial retirement date is a dismissal benefit. From the date when the employee stops providingservices to the normal retirement date, the salary of the retired employee and the social insurancepremium to be paid are included in the current period at one time profit and loss. Financialcompensation after the official retirement date (such as a normal retirement pension) is treated asafter-service benefits.
(5) Other long-term employee benefits
Other long-term employee benefits provided by the Company to the employees satisfied the conditionsfor classifying as a defined contribution plan; those benefits shall be accounted for in accordance withthe above requirements relating to defined contribution plan. When the benefits satisfy a definedbenefit plan, it shall be accounted for in accordance with the above requirements relating to definedbenefit plan, but the movement of net liabilities or assets in re-measurement of defined defined benefitplan shall be recorded in profit or loss for the current period or cost of relevant assets.
22. Provisions
A provision is recognised for an obligation related to a contingency if all the following conditions aresatisfied:
(1) the Company has a present obligation;
(2) it is probable that an outflow of economic benefits will be required to settle the obligation;
(3) the amount of the obligation can be estimated reliably.
A provision is initially measured at the best estimate of the expenditure required to settle the relatedpresent obligation. Factors pertaining to a contingency such as the risks, uncertainties and time valueof money are taken into account as a whole in reaching the best estimate. Where the effect of the timevalue of money is material, provisions are determined by discounting the expected future cash flows.
The Company reviews the carrying amount of a provision at the balance sheet date and adjusts thecarrying amount to the current best estimate.If all or part of the expenditure necessary for settling the provision is expected to be compensated by athird party, the amount of compensation is separately recognized as an asset when it is basicallycertain to be received. The recognized compensation amount shall not exceed the carrying amount ofthe provision.
23. Revenue
(1) General principle
The Group has fulfilled its contractual performance obligation to recognize revenue when the customertakes control of the goods or services in question.If the contract contains two or more performance obligations, the Group shall, at the beginning of thecontract, allocate the transaction price to each individual performance obligation in proportion to therelative selling price of the goods or services promised by each individual performance obligation andmeasure the income at the transaction price allocated to each individual performance obligation.Where one of the following conditions is met, the Group is a performance obligation within a certainperiod of time;
①The customer obtains and consumes the economic benefits of the Group's performance at thesame time as the Group performs.
②Customers are able to control the goods under construction in the performance of the Group.
③The goods produced in the performance of the Group are of irreplaceable use and the Group hasthe right to receive payments for the performance portion accumulated to date throughout thecontract period.For performance obligations performed during a certain period of time, the Group recognizes revenueat the performance pace during that period. Where the performance schedule cannot be reasonablydetermined, if the costs already in the Group are expected to be compensated, the revenue isrecognized in accordance with the amount of costs already occurring until the performance progresscan be reasonably determined.For performance obligations performed at a certain point in time, the Group recognizes revenue at thepoint when the customer takes control of the relevant goods or services. In determining whether acustomer has taken control of goods or services, the Group considers the following signs:
①The Group has the right to collect the goods or services at present, i.e. the customer has the currentobligation to pay for the goods.
②The Group has transferred the legal ownership of the commodity to the customer, i.e. the customeralready owns the legal ownership of the commodity.
③The Group has transferred the goods in kind to the customer, i.e. the customer has physicallyowned the goods.
④The Group has transferred the main risks and rewards of ownership of the commodity to thecustomer, i.e. the main risks and rewards of the customer's ownership of the commodity.
⑤The customer has accepted the goods or services.
⑥Other signs that the customer has taken control of the goods.
The Group has transferred goods or services to customers and is entitled to a consideration right (andthat right depends on factors other than the passage of time) as contractual assets, which areimpairments based on expected credit losses (see notes III, 10 (5)). The Right of the Group to collect abid from a customer as a receivable is owned and unconditionally (depending only on the passage oftime). The Group's obligation to transfer goods or services to customers as contractual liabilities as aresult of customer-to-customer prices received or receivables.Where contract assets and contractual liabilities under the same contract are shown in net amounts,net of borrower balances, they are shown in "contract assets" or "other non-current assets" itemsaccording to their liquidity;
(2)Specific revenue recognition
Specific revenue recognition is as follows:
①Real estate development sales revenue recognition
1) the sales contract has been signed and filed with the land department; 2) the real estate has beencompleted and accepted; 3)fully one-off payment on the first installment payment has been received; 4)completed the procedures for entering the partnership in accordance with the requirements stipulatedin the sales contract.
② Provide the specific method of property service income recognition
According to the service date agreed in the property service contract and agreement and the area andunit price corresponding to the service, during the period of service stipulated in the property servicecontract and agreement, the realization of the income from the provision of property services shall beconfirmed according to the average number of years.
③Rental property income recognition of the specific method
According to the lease contract, the lease date agreed upon in the agreement (with a rent-free periodconsidered rent-free period) and the lease amount, the realization of the income from the provision ofrental services shall be confirmed by the average law of the number of years during the lease termstipulated in the contract.
④Construction income recognition methods
As the Client is able to control the assets under construction in the Group's performance process, theGroup treats them as performance obligations within a certain period of time, recognizing income inaccordance with the performance schedule, except the schedule cannot be reasonably determined.
The Group determines the progress of service delivery in accordance with input laws and costs thatoccur. Where the performance schedule cannot reasonably be determined, if the costs expected to bereimbursed by the Company are recognized in accordance with the amount already occurring, until theperformance progress can be reasonably determined. If the contract cost cannot be recovered, it isrecognized as the current cost immediately upon occurrence, and the contract income is notrecognized. If the total cost of the contract is likely to exceed the total contract revenue, the expectedloss of the contract is formed, taken into account in the projected liability and recognized as thecurrent cost.
⑤Other income recognition methods
Including hotel income, etc.. For hotel income, as the customer in the Group's performance at thesame time to obtain and consume the Economic Benefits of the Group's performance, the Group as aperformance obligation performed within a certain period of time, in the provision of services during theaccounting period in accordance with the performance of the progress of the recognition of income.For other income, in accordance with the relevant contract, agreement, when the customer obtainscontrol of the relevant goods, the relevant amount has been received or received the right to receivethe recognition of income
24. Contract costs
Contract costs include incremental costs and contract performance costs for the contract.Incremental costs to obtain a contract are costs (e.g. sales commissions, etc.) that would not haveoccurred if the Group had not obtained the contract. If the cost is expected to be recoverable, theGroup recognizes it as an asset as a contract cost. The Group's expenses for the purpose of obtainingthe contract, in addition to incremental costs expected to be recoverable, are included in the currentprofit and loss at the time of occurrence.If the costs ad to be costs addjobed in order to perform the contract are not covered by the accountingstandards of other enterprises, such as inventory, and the following conditions are met at the sametime, the Group recognizes them as an asset as contract performance costs:
①The cost is directly related to a current or anticipated contract, including direct labor, direct materials,manufacturing costs (or similar costs), costs expressly borne by the customer, and other costsadminoly occurring only as a result of the contract;
②This cost increases the Group's future resources for the performance of performance obligations;
③The cost is expected to be recovered.
Assets recognized by the contract to obtain cost recognition and assets recognized at the contractperformance cost ("assets related to the contract cost") are amortized on the same basis as therecognition of income from goods or services associated with the asset and are included in the currentprofit and loss. Amortization periods of not more than one year are included in the current profit andloss at the time of occurrence.Where the carrying value of the assets relating to the contract cost is higher than the differencebetween the following two items, the Group prepares for impairment of the excess and recognizes theimpairment loss of the assets:
①the remaining price that the Group is expected to be able to obtain as a result of the transfer ofgoods or services related to the asset;
②Estimated costs to be expected for the transfer of the relevant goods or services.The contract performance cost recognized as an asset, the amortization period at the time of initialconfirmation shall not exceed one year or a normal business cycle, shall be shown in the "inventory"item, and the amortization period at the time of initial confirmation shall exceed one year or a normalbusiness cycle, as shown in the "other non-current assets" project.The contract cost of obtaining the asset is recognized, the amortization period at the time of initialconfirmation does not exceed one year or a normal business cycle, as shown in the "Other CurrentAssets" project, and the amortization period at the time of initial recognition exceeds one year or anormal business cycle, as shown in the "Other Non-Current Assets" project.
25. Government grants
A government grant is recognised when there is reasonable assurance that the grant will be receivedand that the Group will comply with the conditions attaching to the grant.If a government grant is in the form of a transfer of a monetary asset, it is measured at the amountreceived or receivable. If a government grant is in the form of a transfer of a non-monetary asset, it ismeasured at fair value. If fair value cannot be reliably determined, it is measured at a nominal amountof RMB 1.The government grants relating to assets are grants that Group purchases, construction or othermethods to acquire long-term assets of government grants. Exception of the above grants, others arerelated to gains.For government grants with unspecified purpose, the amount of grants used to form a long-term assetis regarded as government grants related to an asset, the remaining amount of grants is regarded asgovernment grants related to income. If it is not possible to distinguish, the amount of grants is treatedas government grants related to income.A government grant related to an asset is offset against the carrying amount of the related asset,or.recognised as deferred income and amortised to profit or loss over the useful life of the relatedasset on a reasonable and systematic manner. A grant that compensates the Group for expenses orlosses already incurred is recognised in profit or loss or offset against related expenses directly. Agrant that compensates the Group for expenses or losses to be incurred in the future is recognised asdeferred income, and included in profit or loss or offset against related expenses in the periods inwhich the expenses or losses are recognised.A grant related to ordinary activities is recognised as other income or offset against related expensesbased on the economic substance. A grant not related to ordinary activities is recognised asnon-operating income.When a recognised government grant is reversed, carrying amout of the related asset is adjusted if thegrant was initially recognized as offset against the carrying amount of the related asset. If there isbalance of relevant deferred income, it is offset against the carrying amount of relevant deferredincome. Any excess of the reversal to the carrying amount of deferred income is recognised in profit orloss for the current period. For other circumstances, reversal is directly recognized in profit or loss forthe current period.
26. Deferred tax assets and deferred tax liabilities
Income tax comprises of current tax and deferred tax. Current tax and deferred tax are recognised inprofit or loss except to the extent that they relate to transactions or items recognised directly in equityand goodwill arising from a business combination.Deferred tax assets and deferred tax liabilities arise from deductible and taxable temporary differencesrespectively, being the differences between the carrying amounts of assets and liabilities for financialreporting purposes and their tax bases.All the taxable temporary differences are recognized as deferred tax liabilities except for those incurredin the following transactions:
(1) initial recognition of goodwill, or assets or liabilities in a transaction that is not a businesscombination and that affects neither accounting profit nor taxable profit (or deductible loss);
(2) taxable temporary differences associated with investments in subsidiaries, associates and jointventures, and the Company is able to control the timing of the reversal of the temporary difference andit is probable that the temporary difference will not reverse in the foreseeable future.The Company recognises a deferred tax asset for deductible temporary differences, deductible lossesand tax credits carried forward to subsequent periods, to the extent that it is probable that futuretaxable profits will be available against which deductible temporary differences, deductible losses andtax credits can be utilised, except for those incurred in the following transactions:
(1) a transaction that is not a business combination and that affects neither accounting profit nortaxable profit (or deductible loss);
(2) deductible temporary differences associated with investments in subsidiaries, associates and jointventures, the corresponding deferred tax asset is recognized when both of the following conditions aresatisfied: it is probable that the temporary difference will reverse in the foreseeable future; and it isprobable that taxable profits will be available in the future against which the temporary difference canbe utilized.At the balance sheet date, deferred tax is measured based on the tax consequences that would followfrom the expected manner of recovery or settlement of the carrying amount of the assets and liabilities,using tax rates enacted at the reporting date that are expected to be applied in the period when theasset is recovered or the liability is settled.The carrying amount of a deferred tax asset is reviewed at each balance sheet date, and is reduced tothe extent that it is no longer probable that the related tax benefits will be utilised. Such reduction isreversed to the extent that it becomes probable that sufficient taxable profits will be available.
27. Operating leases and finance leases
A finance lease is a lease that transfers substantially all the risks and rewards incidental to ownershipof a leased asset to the lessee. An operating lease is a lease other than a finance lease.
(1)As a lessor
At the commencement of the lease term, the Company recognized the aggregate of the minimumlease receipts determined at the inception of a lease and the initial direct costs as finance leasereceivable, and recognized unguaranteed residual value at the same time. The difference between theaggregate of the minimum lease receipts, the initial direct costs and the unguaranteed residual value,and the aggregate of their present value is recognized as unearned finance income. Unearned financeincome is allocated to each accounting period during the lease term using the effective interest method.Income derived from operating leases is recognized in profit or loss using the straight-line method overthe lease term. Initial direct costs are charged to profit or loss immediately.
(2)As a lessee
When the Company acquires an asset under a finance lease, the asset is measured at an amountequal to the lower of its fair value and the present value of the minimum lease payments, eachdetermined at the inception of the lease. At the commencement of the lease term, the minimum leasepayments are recorded as long-term payables. The difference between the carrying amount of theleased assets and the minimum lease payments is accounted for as unrecognized financial charges.Initial direct costs attributable to a finance lease that are incurred by the Company are added to thecarrying amount of the leased asset. Unrecognized finance charges arising from a finance lease arerecognized using an effective interest method over the lease term. Depreciation is accounted for inaccordance with the accounting policies of fixed assets.Rental payments under operating leases are recognized as part of the cost of another related assetor as expenses on a straight-line basis over the lease term. Initial direct costs are charged to profitor loss immediately.
(3) Rental concessions caused by the COVID-19
For rental concessions such as rent remission and deferred payment reached between the Companyand the lessor on the existing lease contracts directly caused by the COVID-19, and if the followingconditions are met, the Company adopts a simplified method for the rental of buildings category:
①The lease consideration after the concession is reduced or the same from that before theconcession, where the lease consideration is not discounted or discounted at the discount rate beforethe concession;
②The concession applies only to lease payments payable prior to June 30, 2021;
③Taking both qualitative and quantitative factors into account, it is determined that there are nomaterial changes to the other terms and conditions of the lease.The Group does not evaluate whether a lease change has occurred.When the Group is a lessee, the Group continues to include the original contract rent in the relatedasset costs or expenses in accordance with the method consistent with the pre-concession foroperating leases. In the event of rent relief, the Group shall write down costs or expenses during therelief period by using the rent relief as a rent, and if the rent is deferred, the Group shall recognize therent payable as payable during the original payment period and write down the amount of payablerecognized in advance at the time of actual payment. For financial leases, the Group continues torecognize unrecfined financing expenses as current financing expenses at a discount rate consistentwith the pre-concession rate, and continues to provide subsequent measures such as depreciation of
financing leased assets in accordance with the method consistent with the pre-concession. In theevent of rent relief, the Group shall take the rent reduction as the rent or have rent, in the event of thetermination of the original rent payment obligations, such as the agreement to reduce the cost ofassets or expenses, and adjust the long-term payables accordingly, in accordance with the discountrate before the discount rate discounted into the current profit and loss, should also adjust theunrefired financing costs;When the Group is a lessor, the Group continues to recognize the original contract rent as rentalincome in accordance with the method consistent with the previous reduction for operating leases. Inthe event of rent relief, the Group shall use the reduced rent as a rent on a nature basis to reducerental income during the relief period, and if the rent is deferred, the Group shall recognize the rent dueduring the original collection period as receivable and, when actually received, write down the amountsreceivable recognized in the previous period. For financial leases, the Group continues to recognizeunreal financial gains as lease income at the lease inclusion rate consistent with the pre-reduction rate.In the event of rent relief, the Group shall take the rent reduction as the ortnance rent, and when itabandons the original rent collection right, such as reaching a reduction agreement, the portion of theoriginal confirmed lease income shall be deducted from the investment income, and the long-termreceivables shall be adjusted accordingly, and if the discount rate before the reduction is included inthe current profit or loss, the unrealed financing income shall also be adjusted;
28. Maintenance funds
The Group collects the maintenance funds from owners as the certain proportion of the sales amountwhen selling commercial housing. It shall be included in the long-term accounts payable. Themaintenance funds will reduce when it is delivered to the land and housing administration.
29. Quality deposit
The quality deposit is based on the proportion of the construction and installation and the term ofpayment,which is ruled in the contracts. It is deducted from the construction payables and classified asaccounts payable. Maintenance costs due to quality during the warranty period are directly expensedunder this account and will be eliminated when the warranty period ends.
30. Significant accounting estimates and judgments
Estimates as well as underlying assumptions involved are reviewed on an ongoing basis, based onhistorical experience and other factors, including reasonableness of estimation about future events.The followings are significant accounting estimations and key assumptions that have a significant riskof causing a material adjustment to the carrying amount of assets and liabilities within the nextfinancial year.:
(1)Classification of financial assets
The Group’s major judgments in determining the classification of financial assets include the analysisof business models and the characteristics of contract cash flows.At the level of financial asset group, the Group determines the business model for managing financialassets, taking into account factors such as the way to evaluate and report financial assetsperformance to key managers, the risks affecting financial assets performance and their managementmethods, and the way in which relevant business managers are paid.In assessing whether the contract cash flow of financial assets is consistent with the basic lendingarrangements, the Group has the following judgments: whether the principal’s time distribution or
amount may change during the lifetime for early repayment and other reasons; whether the interestonly includes the time value of money, credit risk, other basic lending risks and the consideration ofcost and profit. For example, does the amount of advance payment only reflect the unpaid principaland interest based on the unpaid principal, and reasonable compensation paid for the early terminationof the contract.
(2)Measurement of Expected Credit Loss of Account Receivable
The Group calculates the expected credit losses of accounts receivable by default risk exposure andexpected credit losses rate of accounts receivable, and determines the expected credit losses ratebased on default probability and default loss rate. In determining the expected credit losses rate, theGroup uses internal historical credit loss and other data, and adjusts the historical data with currentsituation and forward-looking information. In considering forward-looking information, the indicatorsused by the Group include the risks of economic downturn, external market environment, technologicalenvironment and changes in customer conditions. The Group regularly monitors and reviewsassumptions related to the calculation of expected credit losses.
(3) Deferred tax assets
Deferred tax assets relating to certain temporary differences and tax losses are recognised asmanagement considers it is probable that future taxable profit will be available against which thetemporary differences or tax losses can be utilised. The management needs significant judgment toestimate the time and extent of the future taxable profits and tax planning strategy to recognisethe appropriate amount of deferred income tax assets.
(4)The provision of land appreciation tax
The Group is subject to land appreciation tax (“LAT”). The Group recognised LAT based onmanagement’s best estimates, however, LAT is recognised by tax authorities according to theinterpretation of the tax rules. The final tax outcome could be different from the amounts that wereinitially recorded, and these differences will impact tax provision in periods in which such taxes havebeen finalised with local tax authorities.
(5) Determination of fair value of unlisted equity investment
The fair value of an unlisted equity investment is the future cash flow discounted from the currentdiscount rate of a project with similar terms and risks. This valuation requires the group to estimatefuture cash flows and discount rates. Therefore, it causes high uncertainty. In same cases, there isinsufficient information to determine fair value, or the distribution of possible estimates is wide. On thecontrary, the cost represents the best estimate of fair value within that range. As a whole, the cost canrepresent the appropriate estimate of fair value within that range.
31. Changes in significant accounting policies, accounting estimates and correction of errors in priorperiods
(1) Provisions Changes in significant accounting policies
①New revenue accounting policy
In 2017, the Ministry of Finance promulgated Enterprise Accounting Standards No. 14 - Revenue(Amendment) (hereinafter referred to as the "New Revenue Standards"), which requires companieslisted in China to take effect from January 1, 2020. The Group has implemented the above-mentionednew revenue standards as required from 1 January 2020, and the Group has implemented the
above-mentioned standards as of 1 January 2020, with adjustments to the relevant elements of itsaccounting policies.The Group has fulfilled its contractual performance obligation to recognize revenue when the customertakes control of the goods or services in question. When certain conditions are met, the Group isperforming its performance obligations within a certain period of time, otherwise it is performing itsperformance obligations at a certain point in time. If the contract contains two or more performanceobligations, the Group shall, at the beginning of the contract, allocate the transaction price to eachindividual performance obligation in proportion to the relative selling price of the goods or servicespromised by each individual performance obligation and measure the income at the transaction priceallocated to each individual performance obligation.The Group adjusted relevant accounting policies in accordance with the specific provisions of the newrevenue standards on specific matters or transactions, for example: contractual cost, quality assurance,distinction between principal and agent, sales with sales return clauses, additional purchase options,intellectual property license, repurchase arrangement, advances from customers and handling of initialfee without refund, etc.The Group has the right to receive consideration by transferring goods to customers, and this rightdepends on factors other than the passage of time as contractual assets. The Group’s obligation totransfer goods to customers for consideration received or receivable from customers is listed ascontractual liabilities.Based on the cumulative impact of the initial implementation of the new revenue standards, the Groupadjusted its retained earnings at the beginning of 2020 and other related items in the financialstatements, without adjusting for comparative financial statement data. The Group adjusts the Group'sretained earnings at the beginning of 2020 and the amount of other related items in the financialstatements only for cumulative impact on contracts not completed as at 1 January 2020.
The content and reason of the accounting policychange
| The content and reason of the accounting policy change | Affected report items | Affected amount （1/1/2020） |
| As a result of the implementation of the new revenue guidelines, the Group reclassified the sale of goods and services-related sales and pre-receivables related to the provision of services to contractual liabilities.。 | Contractual liabilities | 147,479,218.39 |
| Advance form customers | -153,363,826.53 | |
| Other current liabilities | 5,884,608.14 |
The impact of the implementation of the new income standards on items related to the 2020 financialstatements compared to the original income standards is as follows:
| Affected balance sheet items | Affected amount （31/12/2020） |
| Contractual liabilities | 196,786,977.19 |
| Advance form customers | -205,704,004.26 |
| Other current liabilities | 8,917,027.07 |
Adjustment statementThe implementation of the new revenue guidelines, with the transfer of control as the point of revenuerecognition, will not result in a significant change in the way the company's revenue is recognized.
(2) The Ministry of Finance issued the "Notice on the issuance of accounting treatment of COVID-19 forRental Concessions" (Finance and Accounting [2020] No. 10) in June 2020, with the option of adopting asimplified method in accordance with the accounting treatment of COVID-19 for rental concessions.The Group has not chosen to adopt a simplified approach to this provision and therefore the provisionhas not had a material impact on the Group's financial position and results of operations.
（2）At the first implementation of the new financial instrument standards, the situation to adjust therelevant items of the financial statements at the beginning of the first implementation year is as follow:
Consolidated balance sheet
Category
| Category | As at 31/12/2019 | As at 1/1/2020 | Adjusted amount |
| Current Assests: | |||
| Cash at bank and on hand | 2,511,140,445.35 | 2,511,140,445.35 | - |
| Accounts receivable | 62,059,055.68 | 62,059,055.68 | - |
| Prepayments | 219,948.17 | 219,948.17 | - |
| Other receivables | 28,275,228.26 | 28,275,228.26 | - |
| including: interest receivable | - | - | - |
| Dividends receivable | 1,052,192.76 | 1,052,192.76 | - |
| Inventory | 1,462,229,048.18 | 1,462,229,048.18 | - |
| Other current assets | 102,781,855.48 | 102,781,855.48 | - |
| Total current assets | 4,166,705,581.12 | 4,166,705,581.12 | - |
| Non-current assets: | - | ||
| Long-term equity investments | 469,838.65 | 469,838.65 | - |
| Investment in other equity instruments | 33,126,730.04 | 33,126,730.04 | - |
| Investment properties | 632,241,900.20 | 632,241,900.20 | - |
| Fixed assets | 30,522,035.11 | 30,522,035.11 | - |
| Long-term deferred expenses | 162,125.72 | 162,125.72 | - |
| Deferred tax assets | 46,441,325.25 | 46,441,325.25 | - |
| Total non-current assets | 742,963,954.97 | 742,963,954.97 | - |
| Total assets | 4,909,669,536.09 | 4,909,669,536.09 | - |
| Current liabilities: | |||
| Short-term borrowing | 51,647,260.17 | 51,647,260.17 | - |
| Accounts payable | 244,224,478.46 | 244,224,478.46 | - |
| Advances from customers | 159,482,510.43 | 6,118,683.90 | -153,363,826.53 |
| Contractual liabilities | 147,479,218.39 | 147,479,218.39 | |
| Employee benefits payable | 53,909,576.49 | 53,909,576.49 | - |
| Taxes payable | 585,700,815.36 | 585,700,815.36 | |
| Other payables | 277,319,174.53 | 277,319,174.53 | |
| including: interest payable | 16,535,277.94 | 16,535,277.94 | |
| Dividends payable | - | - | - |
| Other current liabilities | 5,884,608.14 | 5,884,608.14 |
Category
| Category | As at 31/12/2019 | As at 1/1/2020 | Adjusted amount |
| Total current liabilities | 1,372,283,815.44 | 1,372,283,815.44 | - |
| Non-current liabilities: | - | ||
| Long-term payables | 7,499,192.92 | 7,499,192.92 | - |
| Deferred tax liabilities | 4,903,293.58 | 4,903,293.58 | - |
| Total non-current liabilities | 12,402,486.50 | 12,402,486.50 | - |
| Total liabilities | 1,384,686,301.94 | 1,384,686,301.94 | - |
| Equity | 1,011,660,000.00 | 1,011,660,000.00 | - |
| Capital accumulation | 978,244,910.11 | 978,244,910.11 | - |
| Other comprehensive benefits | 20,831,004.13 | 20,831,004.13 | - |
| Surplus accumulation | 191,222,838.94 | 191,222,838.94 | - |
| Profits are not distributed | 1,464,915,816.81 | 1,464,915,816.81 | - |
| Total shareholders' equity attributable to the parent company | 3,666,874,569.99 | 3,666,874,569.99 | - |
| Minority shareholders' equity | -141,891,335.84 | -141,891,335.84 | - |
| Total shareholders' equity | 3,524,983,234.15 | 3,524,983,234.15 | - |
| Total liabilities and shareholders' equity | 4,909,669,536.09 | 4,909,669,536.09 | - |
Balance sheet of parent company
| Category | As at 31/12/2019 | As at 1/1/2020 | Adjustments |
| Current Assets: | |||
| Cash at bank and in hand | 1,967,688,122.55 | 1,967,688,122.55 | - |
| Accounts receivable | 156,935.84 | 156,935.84 | - |
| Prepayments | 200,000.00 | 200,000.00 | - |
| Other receivables | 835,275,498.69 | 835,275,498.69 | - |
| including: interest receivable | - | - | - |
| Dividends receivable | - | - | - |
| Inventory | 419,453,091.86 | 419,453,091.86 | - |
| Other current assets | 407,560.64 | 407,560.64 | - |
| Total current assets | 3,223,181,209.58 | 3,223,181,209.58 | - |
| Non-current assets: | |||
| Long-term equity investments | 150,676,516.92 | 150,676,516.92 | - |
| Investment in other equity instruments | 13,229,501.03 | 13,229,501.03 | - |
| Investment real estate | 522,038,731.16 | 522,038,731.16 | - |
| Fixed assets | 19,586,720.47 | 19,586,720.47 | - |
| Long-term deferred expenses s | 162,125.72 | 162,125.72 | - |
| Deferred income tax assets | 20,975,294.54 | 20,975,294.54 | - |
| Total non-current assets | 726,668,889.84 | 726,668,889.84 | - |
| Total assets | 3,949,850,099.42 | 3,949,850,099.42 | - |
| Current liabilities: | - | ||
| Short-term borrowing | - | - | - |
Category
| Category | As at 31/12/2019 | As at 1/1/2020 | Adjustments |
| Accounts payable | 103,915,931.14 | 103,915,931.14 | - |
| Pre-receivables | 59,409,454.38 | - | -59,409,454.38 |
| Contractual liabilities | 56,580,432.74 | 56,580,432.74 | |
| Payable to employees | 25,544,403.23 | 25,544,403.23 | - |
| Taxes payable | 143,434,273.95 | 143,434,273.95 | |
| Other payables | 190,666,487.82 | 190,666,487.82 | - |
| including: interest payable | 16,535,277.94 | 16,535,277.94 | - |
| Dividends payable | - | - | - |
| Other current liabilities | 2,829,021.64 | 2,829,021.64 | |
| Total current liabilities | 522,970,550.52 | 522,970,550.52 | - |
| Non-current liabilities: | - | ||
| Long-term payables | - | - | - |
| Deferred income tax liabilities | 1,295,046.51 | 1,295,046.51 | - |
| Total non-current liabilities | 1,295,046.51 | 1,295,046.51 | - |
| Total liabilities | 524,265,597.03 | 524,265,597.03 | - |
| Share capital | 1,011,660,000.00 | 1,011,660,000.00 | - |
| Capital reserve | 964,711,931.13 | 964,711,931.13 | - |
| Other comprehensive income | 922,125.77 | 922,125.77 | - |
| Surplus reserve | 168,093,225.53 | 168,093,225.53 | - |
| Retained earnings | 1,280,197,219.96 | 1,280,197,219.96 | - |
| Total equity attributable to shareholders of the Company | 3,425,584,502.39 | 3,425,584,502.39 | - |
| Non-controlling interests | - | - | - |
| Total shareholders' equity | 3,425,584,502.39 | 3,425,584,502.39 | - |
| Total liabilities and shareholders' equity | 3,949,850,099.42 | 3,949,850,099.42 | - |
Adjustment statementAccording to the company's revenue recognition principle, the company will not form "contract assets"after the implementation of the "New Revenue accounting Policy", and the impact of the financialreporting data mainly involves the reclassification between the three accounts of "contract liabilities","Advances from customers" and "other current liabilities".
IV. Taxation
1. Main types of taxes and corresponding tax rates
| Tax type | Tax basis | Tax rate% |
| VAT | Taxable income | 9,6,5,3 |
| Land appreciation tax | It shall be levied on the basis of the value-added value of the real estate transferred and the prescribed tax rate and paid in advance according to the type of real estate product | Four progressive rates of excess rate : 30,40,50, 60 |
Property tax
| Property tax | The original value of house deducts 30% | 1.2 |
| City maintenance and construction tax | Turnover tax payable | 7 |
| Education surcharge | Turnover tax payable | 3 |
| Local education surcharge | Turnover tax payable | 2 |
| Corporate income tax | Taxable profits | 25,16.5 |
Description of VAT rates for different businesses:
The group is engaged in real estate development, property management, Construction in process andother business income, "notice on the pilot of replacing business tax with VAT" (Caishui [201636]) andother relevant provisions. Since May 1, 2016, the group's VAT taxable items and tax rates are shownin the following table:
| Type of revenue | Tax | Tax rate% |
| Sales of properties | Simply filing return | 5 |
| Construction, installation income | Simply filing return | 9,3 |
| Rental income of Property | Simply filing return | 5 |
| Income of Property Management | Filing return generally | 6 |
Description of enterprise income tax rates of different tax payers:
The corporate income tax rate is 25% for companies incorporated in China and 16.5% for companiesincorporated in Hong Kong.2, tax concessions and approvalThe Corporate income tax rate of HuaZhan Supervision and Shantou Songshan Company, thesubsidiaries of the Group, shall be subject to the preferential tax rate of 20% for small micro-profitenterprises.V. Notes to the consolidated financial statements
1. Cash at bank and in hand
| Item | As at 31/12/2020 | As at 31/12/2019 | ||||
| Foreign currency amount | Exchange rate | RMB equivalent | Foreign currency amount | Exchange rate | RMB equivalent | |
| Cash in hand： | -- | -- | 61,121.83 | -- | -- | 66,252.42 |
| RMB | -- | -- | 61,121.83 | -- | -- | 66,252.42 |
| Cash at bank： | -- | -- | 1,026,042,804.99 | -- | -- | 1,493,123,507.93 |
| RMB | -- | -- | 1,019,343,085.65 | -- | -- | 1,485,217,117.53 |
| USD | 20,831.05 | 6.5249 | 135,920.52 | 5,532.95 | 6.9762 | 38,598.97 |
| HKD | 7,798,819.95 | 0.84164 | 6,563,798.82 | 8,783,167.25 | 0.89578 | 7,867,791.43 |
Including：
Deposits in financecompany
| Including： Deposits in finance company | -- | -- | -- | -- | -- | -- |
| Other monetary funds: | -- | -- | 1,661,361,143.19 | -- | -- | 1,017,950,685.00 |
| RMB | -- | -- | 1,661,361,143.19 | -- | -- | 1,017,950,685.00 |
| Total | -- | -- | 2,687,465,070.01 | -- | -- | 2,511,140,445.35 |
| Including: Total overseas deposits | -- | -- | 6,699,719.34 | -- | -- | 7,936,545.69 |
Note: At the end of the period, RMB 1,661,361,143.19 in Other monetary funds was a seven-daynotice deposit, of which the principal amount was RMB1,643,000,000.00 and interest wasRMB18,361,143.19.
2. Bills receivable
| Bills type | 2020.12.31 | 2019.12.31 | ||||
| Book balance | Bad debt preparation | Book value | Book balance | Bad debt preparation | Book value | |
| Bank Acceptance Bill | - | - | - | - | - | - |
| Commercial Acceptance Bill | 37,303,205.62 | 1,865,160.28 | 35,438,045.34 | - | - | - |
| Total | 37,303,205.62 | 1,865,160.28 | 35,438,045.34 | - | - | - |
Notes:
(1) At the year ended, there is no a pledge of notes receivable.
(2) Outstanding endorsed or discounted bills that have not matured at the end of the year:
| Type | Amount derecognized at year end | Amount not-derecognized at year end |
| Bank Acceptance Bill | - | - |
| Commercial Acceptance Bill | - | 30,068,561.31 |
| Total | - | 30,068,561.31 |
(3) At the year ended, there is no bills transferred to accounts receivable due to non-performance of theissuers.
(4) According to the method classification of the provision of bad debt.
Type
| Type | 2020.12.31 | 2019.12.31 | ||||||||
| Book balance | Bad debt preparation | Book value | Book balance | Bad debt preparation | Book value | |||||
| Amount | Rate(%) | Amount | Expected credit loss rate (%) | Amount | Rate (%) | Amount | Expected credit loss rate (%) | Amount | value | |
| Provision made individually | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Collectively assessed for impairment based on credit risk characteristics | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| including： | ||||||||||
| Bank Acceptance Bill | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Commercial Acceptance Bill | 37,303,205.62 | 100.00 | 1,865,160.28 | 5.00 | 35,438,045.34 | -- | -- | -- | -- | -- |
| Total | 37,303,205.62 | 100.00 | 1,865,160.28 | 5.00 | 35,438,045.34 | -- | -- | -- | -- | -- |
Collectively assessed for impairment based on credit risk characteristics:
Commercial Acceptance Bill
Category
| Category | 2020.12.31 | 2019.12.31 | ||||
| Bill receivable | Bad debt preparation | Expected credit loss rate(%) | Bill receivable | Bad debt preparation | Expected credit loss rate(%) | |
| Within 1 year | 37,303,205.62 | 1,865,160.28 | 5.00 | --- | --- | --- |
| Total | 37,303,205.62 | 1,865,160.28 | 5.00 | --- | --- | --- |
(5) Additions, recoveries or reversals of provision for bad and doubtful debts during the year
| Category | Provision of bad debt |
| 2019.12.31 | --- |
| Additions | 1,865,160.28 |
| Recoveries | --- |
| Written-off | --- |
| Reversals | --- |
| Others | --- |
| 2020.12.31 | 1,865,160.28 |
3. Accounts receivable
(1) Accounts receivable by aging
| Aging | As at 31/12/2020 | As at 31/12/2019 |
| Within 1 year | 61,614,768.47 | 65,195,782.66 |
| 1 to 2 years | --- | 66,518.00 |
| 2 to 3 years | 66,518.00 | -- |
| More than 3 years | 24,688,143.06 | 24,956,115.96 |
| Subtotal | 86,369,429.53 | 90,218,416.62 |
| Less: provision for bad and doubtful debts | 26,778,485.47 | 28,159,360.94 |
| Total | 59,590,944.06 | 62,059,055.68 |
（2）Accounts receivable by category
| Item | As at 31/12/2020 | ||||
| Book balance | Provision for bad and doubtful debts | Carrying amount | |||
| Book value | Proportion (%) | Book value | Expected credit loss(%) | ||
| Provision assessed for impairment individually | 24,688,143.06 | 28.58 | 24,688,143.06 | 100.00 | - |
Item
| Item | As at 31/12/2020 | ||||
| Book balance | Provision for bad and doubtful debts | Carrying amount | |||
| Book value | Proportion (%) | Book value | Expected credit loss(%) | ||
| Collectively assessed for impairment based on credit risk characteristics | 61,681,286.47 | 71.42 | 2,090,342.41 | 3.39 | 59,590,944.06 |
| Including: | |||||
| Accounts receivable from sales of properties | 11,114,285.60 | 12.87 | 555,714.28 | 5.00 | 10,558,571.32 |
| Accounts receivable from other customers | 50,567,000.87 | 58.55 | 1,534,628.13 | 3.03 | 49,032,372.74 |
| Total | 86,369,429.53 | 100.00 | 26,778,485.47 | 31.00 | 59,590,944.06 |
Continued
| Item | As at 31/12/2019 | ||||
| Book balance | Provision for bad and doubtful debts | Carrying amount | |||
| Book value | Proportion(%) | Book value | Expected credit loss(%) | ||
| Provision assessed for impairment individually | 24,866,900.27 | 27.56 | 24,866,900.27 | 100.00 | -- |
| Collectively assessed for impairment based on credit risk characteristics | 65,351,516.35 | 72.44 | 3,292,460.67 | 5.04 | 62,059,055.68 |
| Including:： | |||||
| Accounts receivable from sales of properties | 10,761,284.37 | 11.93 | 538,064.22 | 5.00 | 10,223,220.15 |
| Accounts receivable from other customers | 54,590,231.98 | 60.51 | 2,754,396.45 | 5.05 | 51,835,835.53 |
| Total | 90,218,416.62 | 100.00 | 28,159,360.94 | 31.21 | 62,059,055.68 |
Provision assessed for impairment individually：
| Item | As at 31/12/2020 | |||
| Book balance | Provision for bad and doubtful debts | Expected credit loss (%) | Rationale of provision | |
| Agent business payment of import and export | 11,574,556.00 | 11,574,556.00 | 100.00 | Expected to be not recoverable |
| Long-term accounts receivable from sales of proproties | 10,132,205.24 | 10,132,205.24 | 100.00 | Expected to be not recoverable |
| Accounts receivable from revoked subsidaries | 2,328,158.40 | 2,328,158.40 | 100.00 | Expected to be not recoverable |
| Other customers | 653,223.42 | 653,223.42 | 100.00 | Expected to be not recoverable |
| Total | 24,688,143.06 | 24,688,143.06 | 100.00 | |
| Continued | ||||
Item
| Item | As at 31/12/2019 | |||
| Book balance | Provision for bad and doubtful debts | Expected credit loss (%) | Rationale of provision | |
| Agents’ payment of import and export | 11,574,556.00 | 11,574,556.00 | 100.00 | Expected to be not recoverable |
| Long-term accounts receivable from sales of properties | 10,626,436.84 | 10,626,436.84 | 100.00 | Expected to be not recoverable |
| Accounts receivable from revoked subsidaries | 2,328,158.40 | 2,328,158.40 | 100.00 | Expected to be not recoverable |
| Other customers | 337,749.03 | 337,749.03 | 100.00 | Expected to be not recoverable |
| Total | 24,866,900.27 | 24,866,900.27 | 100.00 | |
Collectively assessed for impairment based on credit risk characteristics：
Accounts receivable from sales of properties
| Aging | 2020.12.31 | 2019.12.31 | ||||
| Accounts receivable | Provision for bad debt | Expected credit loss(%) | Accounts receivable | Provision for bad debt | Expected credit loss(%) | |
| Within 1 year | 11,114,285.60 | 555,714.28 | 5.00 | 10,690,000.00 | 534,500.00 | 5.00 |
| 1-2 year | -- | -- | -- | 71,284.37 | 3,564.22 | 5.00 |
| Total | 11,114,285.60 | 555,714.28 | 5.00 | 10,761,284.37 | 538,064.22 | 5.00 |
Accounts receivable from other customers
| Aging | 2020.12.31 | 2019.12.31 | ||||
| Accounts receivable | Provision for bad debt | Expected credit loss(%) | Accounts receivable | Provision for bad debt | Expected credit loss(%) | |
| Within 1 year | 50,500,482.87 | 1,531,302.23 | 3.03 | 54,590,231.98 | 2,754,396.45 | 5.05 |
| 1-2 year | 66,518.00 | 3,325.90 | 5.00 | -- | -- | -- |
| Total | 50,567,000.87 | 1,534,628.13 | 3.03 | 54,590,231.98 | 2,754,396.45 | 5.05 |
（3）Additions, recoveries or reversals of provision for bad and doubtful debts during the year
| Item | Provision for bad and doubtful debts |
| As at 31/12/2019 | 28,159,360.94 |
| Adjustment amount for the first implementation of the new financial instrument accounting policy | -- |
| As at 1/1/2020 | 28,159,360.94 |
| Provision | -1,380,875.47 |
| Recovery or reversals | -- |
| Written-off | -- |
| 2020.12.31 | 26,778,485.47 |
（4）Top 5 entities with the largest balances of account receivables
Entity name
| Entity name | Book value | a percentage of the total balance at the end of the accounts receivable (%) | Provision for bad and doubtful debts |
| Closing balance | Closing balance | ||
| Wuhan 2049 Poly Real Estate Development Co., Ltd | 33,009,906.00 | 38.22 | 1,650,495.30 |
| Wuhan Yutian Xingye Land Co., Ltd | 5,877,079.73 | 6.80 | 293,853.99 |
| Hubei Chuheng Real Estate Co., Ltd | 3,874,836.00 | 4.49 | 193,741.80 |
| Wuhan Anke United Real Estate Co., Ltd | 1,940,032.59 | 2.25 | 97,001.63 |
| Daxing Auto Parts Co., Ltd | 1,912,353.37 | 2.21 | 95,617.67 |
| Total | 46,614,207.69 | 53.97 | 2,330,710.38 |
（5）At the end of the year 2020, the group has handled the factoring of accounts receivable（RMB49,686,095.76）, corresponding to the book value of accounts receivable RMB49,686,095.76 which hasnot been terminated for recognition. The detail is set out in note V. 45.
4. Prepayments
(1) The aging analysis of prepayments is as follows:
| Aging | As at 31/12/2020 | As at 31/12/2019 | ||
| Amount | Proportion(%) | Amount | Proportion(%) | |
| Within 1 year | 3,004,771.47 | 93.74 | 19,398.17 | 8.82 |
| 1 to 2 years | 213.04 | 0.01 | 200,000.00 | 90.93 |
| 2 to 3 years | 200,000.00 | 6.23 | -- | -- |
| More than 3 years | 550.00 | 0.02 | 550.00 | 0.25 |
| Total | 3,205,534.51 | 100.00 | 219,948.17 | 100.00 |
（2）Top 5 entities with the largest balances of prepayment
The total amount of prepayment is RMB 3,205,534.51, accounting for 100.00% of the total amount ofthe closing balance of prepayment.5．Other receivables
| Item | As at 31/12/2020 | As at 31/12/2019 |
| Interest receivables | - | |
| Dividend receivables | 1,052,192.76 | 1,052,192.76 |
| Other receivables | 31,692,851.08 | 27,223,035.50 |
| Total | 32,745,043.84 | 28,275,228.26 |
(1) Dividend receivables
| Item | As at 31/12/2020 | As at 31/12/2019 |
| Yunnan KunPeng Flight service Co., Ltd | 1,052,192.76 | 1,052,192.76 |
| Less：Provision for bad and doubtful debts | -- | -- |
| Total | 1,052,192.76 | 1,052,192.76 |
Including: significant dividends receivable aging over 1 year:
Item
| Item | As at 31/12/2020 | Aging | Reason for uncollected | Any impairment and the basis |
| Yunnan KunPeng Flight service Co., Ltd | 1,052,192.76 | 5 years | Delay to issue | None |
(2) Other receivables
①Other receivables by aging
| Aging | As at 31/12/2020 | As at 31/12/2019 |
| Within 1 year | 29,101,943.94 | 20,256,667.46 |
| 1 to 2 years | 724,840.46 | 5,670,455.80 |
| 2 to 3 years | 266,855.66 | -- |
| More than 3 years | 196,836,127.29 | 196,658,114.17 |
| Subtotal | 226,929,767.35 | 222,585,237.43 |
| Less：Provision for bad and doubtful debts | 195,236,916.27 | 195,362,201.93 |
| Total | 31,692,851.08 | 27,223,035.50 |
②Other receivables by category
| Item | As at 31/12/2020 | As at 31/12/2019 | ||||
| Book value | Provision for bad and doubtful debts | Carrying amount | Book value | Provision for bad and doubtful debts | Carrying amount | |
| Amount receivables from government | 553,009.68 | -- | 553,009.68 | 4,371,247.34 | -- | 4,371,247.34 |
| Amount receivables from petty cash | 364,674.25 | -- | 364,674.25 | 716,684.01 | -- | 716,684.01 |
| Amount receivables from the collecting and paying on another's behalf | 665,251.08 | -- | 665,251.08 | 594,012.08 | -- | 594,012.08 |
| Amount receivables from current account | 63,398,344.58 | 33,288,428.51 | 30,109,916.07 | 56,713,292.62 | 35,639,303.91 | 21,073,988.71 |
| Amount receivables from related parties | 161,948,487.76 | 161,948,487.76 | -- | 160,190,001.38 | 159,722,898.02 | 467,103.36 |
| Total | 226,929,767.35 | 195,236,916.27 | 31,692,851.08 | 222,585,237.43 | 195,362,201.93 | 27,223,035.50 |
③ Provision for bad and doubtful debts
As at 31/12/2020, there are the provisions for bad debts in the first stage :
| Category | Book balance | 12-month expected credit loss(%) | Provision for bad and doubtful debts | Carrying amount | Reasons |
| Collectively assessed for impairment based on credit risk characteristics | |||||
| Amount receivables from government | 553,009.68 | -- | -- | 553,009.68 | |
| Amount receivables from petty cash | 364,674.25 | -- | -- | 364,674.25 | |
| Amount receivables from the collecting and paying on another's behalf | 665,251.08 | -- | -- | 665,251.08 | |
| Amount receivables from current account | 31,694,648.48 | 5.00 | 1,584,732.41 | 30,109,916.07 |
Category
| Category | Book balance | 12-month expected credit loss(%) | Provision for bad and doubtful debts | Carrying amount | Reasons |
| Amount receivables from related parties | -- | -- | -- | -- | |
| Total | 33,277,583.49 | 4.76 | 1,584,732.41 | 31,692,851.08 |
As at 31/12/2020, there is no interest receivable, dividends receivable and other receivables in thesecond stage.As at 31/12/2020, there are the provisions for bad debts in the third stage :
| Category | Book balance | To lifetime expected credit loss | Provision for bad and doubtful debts | Carrying amount | Reasons |
| Provision assessed for impairment individually | |||||
| Other receiables from revoked subsidaries | 3,275,882.44 | 100.00 | 3,275,882.44 | -- | Expected to be not recoverable |
| Other receiables from existed subsidaries | 190,376,301.42 | 100.00 | 190,376,301.42 | -- | Expected to be not recoverable |
| Including：Other receivables from related parties | 161,948,487.76 | 100.00 | 161,948,487.76 | -- | Expected to be not recoverable |
| Total | 193,652,183.86 | 100.00 | 193,652,183.86 | -- |
As at 31/12/2019，Provision for bad and doubtful debts：
There were bad debt provisions in the first stage:
| Category | Book balance | 12-month expected credit loss(%) | Provision for bad and doubtful debts | Carrying amount | Reasons |
| Collectively assessed for impairment based on credit risk characteristics | |||||
| Amount receivables from government | 4,371,247.34 | -- | -- | 4,371,247.34 | |
| Amount receivables from petty cash | 716,684.01 | -- | -- | 716,684.01 | |
| Amount receivables from the collecting and paying on another's behalf | 594,012.08 | -- | -- | 594,012.08 | |
| Amount receivables from current account | 22,183,146.01 | 5.00 | 1,109,157.30 | 21,073,988.71 | |
| Amount receivables from related parties | 491,687.74 | 5.00 | 24,584.38 | 467,103.36 | |
| Total | 28,356,777.18 | 4.00 | 1,133,741.68 | 27,223,035.50 |
As at 31 December 2019, there was no interest receivable, dividends receivable and other receivablesin the second stage.As of December 31, 2019, there were bad debt provisions in the third stage:
| Category | Book balance | To lifetime expected credit loss | Provision for bad and doubtful debts | Carrying amount | Reasons |
| Provision assessed for impairment individually |
Category
| Category | Book balance | To lifetime expected credit loss | Provision for bad and doubtful debts | Carrying amount | Reasons |
| Other receiables from revoked subsidaries | 3,838,281.67 | 100.00 | 3,838,281.67 | -- | Expected to be not recoverable |
| Other receiables from existed subsidaries | 190,390,178.58 | 100.00 | 190,390,178.58 | -- | Expected to be not recoverable |
| Including： Other receivables from related parties | 159,698,313.64 | 100.00 | 159,698,313.64 | -- | Expected to be not recoverable |
| Total | 194,228,460.25 | 100.00 | 194,228,460.25 | -- |
④ Additions, recoveries or reversals of provision for bad and doubtful debts during the year
| Provision for bad and doubtful | The first stage | The second stage | The third stage | Total |
| To 12-month expected credit loss | To lifetime expected credit loss (no credit impairment) | To lifetime expected credit loss (has occurred credit impairmen) | ||
| Balance as at 31/12/2019 | 1,133,741.68 | -- | 194,228,460.25 | 195,362,201.93 |
| Balance as at 31 December 2019 in the current period Move on to the second stage | -- | -- | -- | -- |
| Move on to the third stage | -- | -- | -- | -- |
| Turn back to the second stage | -- | -- | -- | -- |
| Turn back to the first stage | -- | -- | -- | -- |
| Provision | 450,990.73 | -- | -576,276.39 | -125,285.66 |
| Recovery | -- | -- | -- | -- |
| Reversals | -- | -- | -- | -- |
| Other changes | -- | -- | -- | -- |
| Balance as at 31/12/2020 | 1,584,732.41 | -- | 193,652,183.86 | 195,236,916.27 |
⑤There were no other receivables written off in the current period.
⑥Top 5 entities with the largest balances of other receivables
| Name of Entity | Nature | Amount | Aging | Proportion of the amount to the total OR (%) | Bad debt provision |
| Canada Great Wall( Vancouver) Co.,Ltd | Related party transactions | 89,035,748.07 | More than 5 years | 39.23 | 89,035,748.07 |
| Paklid Limited | Related party transactions | 18,870,785.54 | More than 5 years | 8.32 | 18,870,785.54 |
| Bekaton property Limited | Related party transactions | 12,559,290.58 | More than 5 years | 5.53 | 12,559,290.58 |
| Guangdong province Huizhou Luofu Hill Mineral Water Co.,Ltd | Related party transactions | 10,465,168.81 | More than 5 years | 4.61 | 10,465,168.81 |
| Xi’an Fresh Peak Property Trading Co., Ltd | Related party transactions | 8,419,205.19 | More than 5 years | 3.71 | 8,419,205.19 |
| Total | -- | 139,350,198.19 | -- | 61.40 | 139,350,198.19 |
6. Inventories
（1）Categories of inventory
Item
| Item | As at 31/12/2020 | As at 31/12/2019 | ||||
| Book value | Provision for impairment of inventories | Carrying amount | Book value | Provision for impairment of inventories | Carrying amount | |
| Real estate development projects | ||||||
| Developing costs | 556,589,091.25 | -- | 556,589,091.25 | 400,425,673.85 | -- | 400,425,673.85 |
| Developed products | 659,403,711.71 | 268,941.60 | 659,134,770.11 | 1,060,130,671.64 | 268,941.60 | 1,059,861,730.04 |
| Subtotal | 1,215,992,802.96 | 268,941.60 | 1,215,723,861.36 | 1,460,556,345.49 | 268,941.60 | 1,460,287,403.89 |
| Non real estate development projects | ||||||
| Raw material | 873,107.59 | 240,000.00 | 633,107.59 | 882,857.81 | 240,000.00 | 642,857.81 |
| Finished products | 631,926.30 | 38,891.91 | 593,034.39 | 317,200.81 | 38,891.91 | 278,308.90 |
| Construction in progress | 3,514,109.22 | - | 3,514,109.22 | 1,020,477.58 | -- | 1,020,477.58 |
| Subtotal | 5,019,143.11 | 278,891.91 | 4,740,251.20 | 2,220,536.20 | 278,891.91 | 1,941,644.29 |
| Total | 1,221,011,946.07 | 547,833.51 | 1,220,464,112.56 | 1,462,776,881.69 | 547,833.51 | 1,462,229,048.18 |
（2）Provision for impairment of inventories
| Category | As at 1/1/2020 | Additions during the year Provision others | Written back during the year | As at 31/12/2020 | |
| Reversals or write-off | others | ||||
| Real estate development projects | |||||
| Developed products | 268,941.60 | -- | -- | -- | 268,941.60 |
| Non real estate development projects | |||||
| Raw material | 240,000.00 | -- | -- | -- | 240,000.00 |
| Finished products | 38,891.91 | -- | -- | -- | 38,891.91 |
| Total | 547,833.51 | -- | -- | -- | 547,833.51 |
Provision for impairment of inventories (continued)
| Item | The basis for determining the net realizable value/residual consideration and the costs to be incurred | The cause of inventory depreciation provision for the current period |
| Developing costs |
| -- | ||
| Developed products | The estimated selling price of the inventory less the estimated selling cost and related taxes | -- |
| Raw materials |
Item
| Item | The basis for determining the net realizable value/residual consideration and the costs to be incurred | The cause of inventory depreciation provision for the current period |
| Finished products | The estimated selling price of the inventory less the estimated selling cost and related taxes | -- |
| Construction in progress | The estimated selling price of the inventory minus the estimated costs upon completion, the estimated selling expenses, and the related taxes | -- |
（3）Note of the capitalized amount of borrowing costs in the ending inventory balance:
As at 31/12/2020, the Group's inventory balance contains the amount capitalized on the borrowing costswith RMB 3,497,172.46 (As at 31/12/2019, RMB 4,910,251.90).
（4）Developing costs
| Ttem | Starting time | Finished time | Estimated total investment | As at 31/12/2020 | As at 31/12/2019 | Provision for inventory devaluation |
| ShanTou Fresh Peak Building | -- | -- | -- | 25,291,908.11 | 25,291,908.11 | -- |
| TianYue Bay No.2 | 2015 | 2021 | 65,485.00 | 531,297,183.14 | 375,133,765.74 | -- |
| Total | 556,589,091.25 | 400,425,673.85 | -- |
（5）Developed products
| Item | Finished time | As at 1/1/2020 | Increase | Decrease | As at 31/12/2020 | Provision for inventory devaluation |
| Jinye Island Multi-tier villa | 1997 | 39,127,219.14 | -- | -- | 39,127,219.14 | -- |
| Jinye Island villa No.10 | 2010 | 3,527,928.93 | 1,923,416.41 | 63,968.63 | 5,387,376.71 | -- |
| Jinye Island villa No.11 | 2008 | 4,341,162.49 | -- | 2,007,881.07 | 2,333,281.42 | -- |
| YueJing dongfang Project | 2014 | 7,846,006.07 | -- | 118,459.23 | 7,727,546.84 | -- |
| Wenjin Garden | 92,212.77 | -- | 69,014.40 | 23,198.37 | -- | |
| HuaFeng Building | 1,631,743.64 | -- | -- | 1,631,743.64 | -- | |
| HuangPu XinCun | 729,430.00 | - | 589,430.00 | 140,000.00 | -- | |
| XingHu Garden | 156,848.69 | -- | -- | 156,848.69 | -- | |
| Shenfang Shanglin Garden | 2014 | 10,206,656.46 | -- | -- | 10,206,656.46 | 268,941.60 |
| Beijing Fresh Peak Buliding | 304,557.05 | -- | -- | 304,557.05 | -- | |
| TianYue Bay No.1 | 2017 | 475,748,123.14 | - | 140,727,414.13 | 335,020,709.01 | -- |
| Shengfang CuiLin Building | 2018 | 99,946,066.54 | - | 44,162,300.76 | 55,783,765.78 | -- |
| Chuanqi Donghu | 2019 | 416,472,716.72 | - | 213,123,315.79 | 203,349,400.93 | -- |
| Total | 1,060,130,671.64 | 1,923,416.41 | 402,650,376.34 | 659,403,711.71 | 268,941.60 |
7、Other non-current assets
Item
| Item | As at 31/12/2020 | As at 31/12/ 2019 |
| Income tax prepaid or overpaid | 68,880,760.27 | 84,000,516.75 |
| VAT prepaid | 25,577,294.63 | 10,211,601.86 |
| Deductible input VAT | 4,741,378.98 | 4,741,727.70 |
| LAT prepaid | 2,083,793.61 | 2,617,779.37 |
| Business tax prepaid | 312,287.17 | 353,427.19 |
| Others | 1,311,620.13 | 856,802.61 |
| Total | 102,907,134.79 | 102,781,855.48 |
8、Long-term equity investments
Investee
| Investee | Balance as at 31/12/2019 | Movements during the year | Balance as at 31/12/2020 | Balance of provision for impairment as at 31/12/2020 | |||||||
| Additional investment | Reduce investment | Investment gains and losses confirmed by the equity method | Adjustment of other comprehensive income | Changes in other equity | The issuance of profit | Impairment | Other | ||||
| ① Joint ventures | |||||||||||
| Guangdong province Huizhou Luofu Hill Mineral Water Co.,Ltd | 9,969,206.09 | -- | -- | -- | -- | -- | -- | -- | -- | 9,969,206.09 | 9,969,206.09 |
| Fengkai Xinhua Hotel | 9,455,465.38 | -- | -- | -- | -- | -- | -- | -- | -- | 9,455,465.38 | 9,455,465.38 |
| Subtotal | 19,424,671.47 | -- | -- | -- | -- | -- | -- | -- | -- | 19,424,671.47 | 19,424,671.47 |
| ②Associates | |||||||||||
| Shenzhen Ronghua JiDian Co.,ltd | 1,546,793.29 | -- | -- | -92,349.00 | -- | -- | -- | -- | -- | 1,454,444.29 | 1,076,954.64 |
| Shenzhen Runhua Automobile trading Co.,Ltd | 1,445,425.56 | -- | -- | -- | -- | -- | -- | -- | -- | 1,445,425.56 | 1,445,425.56 |
| Dongyi Real Estate Co., Ltd | 30,376,084.89 | -- | -- | -- | -- | -- | -- | -- | -- | 30,376,084.89 | 30,376,084.89 |
| Subtotal | 33,368,303.74 | -- | -- | -92,349.00 | -- | -- | -- | -- | -- | 33,275,954.74 | 32,898,465.09 |
| ③Other equity investments | |||||||||||
| Paklid Limited | 201,100.00 | -- | -- | -- | -- | -- | -- | -- | -- | 201,100.00 | 201,100.00 |
| Bekaton Property Limited | 906,630.00 | -- | -- | -- | -- | -- | -- | -- | -- | 906,630.00 | 906,630.00 |
| Shenzhen Shenfang Department Store Co. Ltd. | 10,000,000.00 | -- | -- | -- | -- | -- | -- | -- | -- | 10,000,000.00 | 10,000,000.00 |
| Shantou Fresh Peak Building | 58,547,652.25 | -- | -- | -- | -- | -- | -- | -- | -- | 58,547,652.25 | 58,547,652.25 |
Investee
| Investee | Balance as at 31/12/2019 | Movements during the year | Balance as at 31/12/2020 | Balance of provision for impairment as at 31/12/2020 | |||||||
| Additional investment | Reduce investment | Investment gains and losses confirmed by the equity method | Adjustment of other comprehensive income | Changes in other equity | The issuance of profit | Impairment | Other | ||||
| Guangdong Province Fengkai Lian Feng Cement Manufacturing Co., Ltd | 56,228,381.64 | -- | -- | -- | -- | -- | -- | -- | -- | 56,228,381.64 | 56,228,381.64 |
| Jiangmen Xinjiang Real Estate Co., Ltd | 9,037,070.89 | -- | -- | -- | -- | -- | -- | -- | -- | 9,037,070.89 | 9,037,070.89 |
| Xi’an Fresh Peak Property Trading Co., Ltd | 32,840,729.61 | -- | -- | -- | -- | -- | -- | -- | 32,840,729.61 | 32,840,729.61 | |
| Subtotal | 167,761,564.39 | -- | -- | -- | -- | -- | -- | -- | 167,761,564.39 | 167,761,564.39 | |
| Total | 220,554,539.60 | -- | -- | -92,349.00 | -- | -- | -- | -- | 220,462,190.60 | 220,084,700.95 | |
Note:
Other equity investments are the equity of the company's subsidiaries not included in the scope of the consolidation. These subsidiaries may or have completedthe cancellation procedures, but the company has not written off its long-term equity investment, or they ceased operations many years ago, and the companyhas no longer existed, the company has been unable to implement effective control over it. Refer to Note VII for details.
9、Other equity instrument investments
Item
| Item | As at 31/12/2020 | As at 31/12/2019 |
| Shantou Small &Medium Enterprises Financing Guarantee Co., Ltd | 13,508,202.32 | 13,229,501.03 |
| Yunnan KunPeng Flight service Co.,Ltd | 24,002,658.19 | 19,897,229.01 |
| Total | 37,510,860.51 | 33,126,730.04 |
Note: Since the above equity instruments are investments that the Group plans to hold for a long timefor strategic purposes, the group designates them as financial assets measured at fair value and theirchanges recorded in other comprehensive income.
| Item | Dividend income recognized for the current period | The cumulative gains | The cumulative loss | The amount of other comprohensive reserve transferred into retained earnings | Tranfering reasons |
| Shantou Small &Medium Enterprises Financing Guarantee Co., Ltd | 599,760.00 | 4,044,060.00 | -- | -- | -- |
| Yunnan KunPeng Flight service Co.,Ltd | -- | 1,653,305.67 | -- | -- | -- |
10. Investment properties
(1) Investment properties measured using the cost model
| Item | Buildings | Land use rights | Total |
| Ⅰ.Cost | |||
| 1.Balance as at 31/12/2019 | 1,043,243,872.75 | 107,528,851.63 | 1,150,772,724.38 |
| 2.Additions during the year | 11,488,020.87 | - | 11,488,020.87 |
| （1）Transfers from inventory | 11,488,020.87 | -- | 11,488,020.87 |
| （2）Others(exchange fluctuation) | -- | -- | -- |
| 3. Decrease during the year | -- | 6,956,189.72 | 6,956,189.72 |
| （1）Others(exchange fluctuation) | -- | 6,956,189.72 | 6,956,189.72 |
| 4.Balance as at 31/12/2020 | 1,054,731,893.62 | 100,572,661.91 | 1,155,304,555.53 |
| Ⅱ.Accumulated depreciation or amortization | |||
| 1.Balance as at 31/12/2019 | 416,148,333.67 | -- | 416,148,333.67 |
| 2.Charge for the year | 26,117,379.30 | -- | 26,117,379.30 |
| （1）Depreciated or amortised | 26,117,379.30 | -- | 26,117,379.30 |
| 3. Reductions during the year | -- | -- | -- |
| 4.Balance as at 31/12/2020 | 442,265,712.97 | -- | 442,265,712.97 |
| III.Provision for impairment | |||
| 1.Balance as at 31/12/2019 | 14,128,544.62 | 88,253,945.89 | 102,382,490.51 |
| 2.Charge for the year | - | - | |
| （1）Other additions(exchange fluctuation) | - | ||
| 3. Reductions on disposals | 5,709,269.48 | 5,709,269.48 |
Item
| Item | Buildings | Land use rights | Total |
| （1）Others(exchange fluctuation) | 5,709,269.48 | 5,709,269.48 | |
| 4.Balance as at 31/12/2020 | 14,128,544.62 | 82,544,676.41 | 96,673,221.03 |
| IV.Carrying amounts | |||
| 1.As at 31/12/2020 | 598,337,636.03 | 18,027,985.50 | 616,365,621.53 |
| 2.As at 31/12/2019 | 612,966,994.46 | 19,274,905.74 | 632,241,900.20 |
Note: The original value of land use right and the amount of the increase of the impairment provision arecaused by the exchange rate changes in the translation of foreign currency statements.
11. Fixed assets
| Item | As at 31/12/2020 | As at 31/12/2019 |
| Fixed assets | 28,039,978.43 | 30,522,035.11 |
| Fixed assets to be disposed of | -- | -- |
| Total | 28,039,978.43 | 30,522,035.11 |
(1) Fixed assets
①Fixed assets
| Item | Plant & buildings | Motor vehicles | Electronic equipment & others | Total |
| Ⅰ.Cost | ||||
| 1.Balance as at 31/12/2018 | 107,110,751.42 | 10,441,067.49 | 13,926,522.79 | 131,478,341.70 |
| 2.Additions during the year | 589,430.00 | 185,191.43 | 712,467.41 | 1,487,088.84 |
| （1）Purchases | 185,191.43 | 712,467.41 | 897,658.84 | |
| （2）Others | 589,430.00 | -- | -- | 589,430.00 |
| 3. Decrease during the year | -- | 184,700.00 | 993,178.34 | 1,177,878.34 |
| （1）Disposals or written-offs | -- | 184,700.00 | 993,178.34 | 1,177,878.34 |
| 4.Balance as at 31/12/2020 | 107,700,181.42 | 10,441,558.92 | 13,645,811.86 | 131,787,552.20 |
| II.Accumulated depreciation: | ||||
| 1.Balance as at 31/12/2019 | 80,644,047.51 | 8,945,201.13 | 11,367,057.95 | 100,956,306.59 |
| 2.Charge for the year | 2,875,611.18 | 280,032.75 | 681,148.82 | 3,836,792.75 |
| (1)Provision | 2,875,611.18 | 280,032.75 | 681,148.82 | 3,836,792.75 |
| 3.Reductions for the year | -- | 166,230.00 | 879,295.57 | 1,045,525.57 |
| (1)Disposal or written-offs | -- | 166,230.00 | 879,295.57 | 1,045,525.57 |
| 4.Balance as at 31/12/2020 | 83,519,658.69 | 9,059,003.88 | 11,168,911.20 | 103,747,573.77 |
| III.Provision for impairment | ||||
| IV.Carrying amount | ||||
| 1.As at 31/12/2020 | 24,180,522.73 | 1,382,555.04 | 2,476,900.66 | 28,039,978.43 |
| 2.As at 31/12/2019 | 26,466,703.91 | 1,495,866.36 | 2,559,464.84 | 30,522,035.11 |
12. Intangible assets
(1)Intangible assets
Item
| Item | Software | Total |
| I.Cost | ||
| 1.Balance as at 31/12/2019 | 2,241,800.00 | 2,241,800.00 |
| 2.Additions during the year | -- | -- |
| 3.Decrease during the year | -- | -- |
| 4.Balance as at 31/12/2020 | 2,241,800.00 | 2,241,800.00 |
| II.Accumulative amortisation | ||
| 1.Balance as at 31/12/2019 | 2,241,800.00 | 2,241,800.00 |
| 2.Charge for the year | -- | -- |
| 3.Reduction for the year | -- | -- |
| 4.Balance as at 31/12/2020 | 2,241,800.00 | 2,241,800.00 |
| III.Provision for impairment | ||
| IV.Carrying amount | ||
| 1.As at 31/12/2020 | -- | -- |
| 2.As at 31/12/2019 | -- | -- |
13. Long-term deferred expenses
| Item | As at 31/12/2019 | Additions during the year | Decreases during the year | As at 31/12/2020 | |
| Amortisation for the year | Others decreases | ||||
| Improvement | 162,125.72 | -- | 100,458.19 | -- | 61,667.53 |
| Others | -- | -- | - | -- | |
| Total | 162,125.72 | -- | 100,458.19 | -- | 61,667.53 |
14. Deferred tax assets and deferred tax liabilities
(1) Deferred tax assets and deferred tax liabilities not offsetting
| Item | As at 31/12/2020 | As at 31/12/2019 | ||
| (1) Deductible or taxable temporary differences | Deferred tax assets/ deferred tax liabilities | (2) Deductible or taxable temporary differences | Deferred tax assets/ deferred tax liabilities | |
| Deferred tax assets: | ||||
| Provisions for impairment of assets | 6,549,009.33 | 1,637,252.34 | 5,157,896.86 | 1,289,474.22 |
| Deductible tax losses | 48,676,321.03 | 12,169,080.25 | 46,877,417.46 | 11,719,354.37 |
| Provision for land appreciation tax | 334,846,723.41 | 83,711,680.85 | 83,816,495.81 | 20,954,123.95 |
| Unrealized profits of intra-group transactions | 40,305,039.22 | 10,076,259.81 | 29,309,607.92 | 7,327,401.98 |
| Arrcual of contractual cost | 20,603,882.91 | 5,150,970.73 | 20,603,882.91 | 5,150,970.73 |
| Sub-total | 450,980,975.90 | 112,745,243.98 | 185,765,300.96 | 46,441,325.25 |
| Deferred tax liabilities: | ||||
Item
| Item | As at 31/12/2020 | As at 31/12/2019 | ||
| (1) Deductible or taxable temporary differences | Deferred tax assets/ deferred tax liabilities | (2) Deductible or taxable temporary differences | Deferred tax assets/ deferred tax liabilities | |
| Interest on unexpired | 18,361,143.19 | 4,590,285.80 | 3,950,685.00 | 987,671.25 |
| Changes in fair value of other equity instruments | 20,046,619.77 | 5,011,654.94 | 15,662,489.30 | 3,915,622.33 |
| Sub-total | 38,407,762.96 | 9,601,940.74 | 19,613,174.30 | 4,903,293.58 |
(2)Details of unrecognized deferred tax assets
| Item | As at 31/12/2019 | As at 31/12/1918 |
| Deductible tax losses | 21,878,078.42 | 31,568,944.69 |
| Bad debt provision | 217,879,386.20 | 218,911,499.52 |
| Provision for impairment of long-term equity investments | 220,084,700.95 | 220,084,700.95 |
| Provision for impairment of investment properties | 96,673,221.03 | 102,382,490.51 |
| Total | 556,515,386.60 | 572,947,635.67 |
Note: Due to the uncertainty of whether sufficient taxable income can be obtained in the future, there isno confirmation of deductible temporary differences and deductible losses on deferred tax assets.
(3) Expiration of deductible tax losses for unrecognised deferred tax assets
| Year | As at 31/12/2020 | As at 31/12/2019 | Note |
| 2020 | —— | 9,692,495.52 | |
| 2021 | 11,349,323.06 | 11,349,323.06 | |
| 2022 | 5,753,184.38 | 5,753,184.38 | |
| 2023 | 4,085,485.24 | 4,085,485.24 | |
| 2024 | 688,456.49 | 688,456.49 | |
| 2025 | 1,629.25 | —— | |
| Total | 21,878,078.42 | 31,568,944.69 |
15. Short-term loans
(1) Short-term loans by category
| Category | As at 31/12/2020 | As at 31/12/2019 |
| Pledged loans | 76,893,995.94 | 51,647,260.17 |
| Total | 76,893,995.94 | 51,647,260.17 |
Note: The loan at the end of the period is the result of the Group's application for factoring borrowingswith accounts receivable and the non-termination confirmation of the discount of commercialacceptance bills receivable.
16. Accounts payable
Item
| Item | As at 31/12/2020 | As at 31/12/2019 |
| Payable for construction | 174,552,420.54 | 241,850,173.72 |
| Others | 2,374,193.74 | 2,374,304.74 |
| Total | 176,926,614.28 | 244,224,478.46 |
17. Advances from customers
| Item | As at 31/12/2019 | As at 31/12/2018 |
| Advances for properties | —— | 151,031,759.13 |
| Advances for construction | —— | 1,805,298.78 |
| Advances for Import and export agent payment | 4,218,370.69 | 4,218,370.69 |
| Others | 1,721,721.46 | 2,427,081.83 |
| Total | 5,940,092.15 | 159,482,510.43 |
18、Contractual liabilities
| Item | 2020.12.31 | 2020.01.01 | 2019.12.31 |
| Advances from properties sales | 196,619,100.77 | 145,206,409.25 | —— |
| Advances from room fees | 167,876.42 | 199,135.90 | —— |
| Advances from property management fees | -- | 268,374.46 | —— |
| Advances from construction | -- | 1,805,298.78 | —— |
| Other | -- | -- | —— |
| Less: Contractual liabilities that are included in other non-current liabilities | -- | -- | —— |
| Total | 196,786,977.19 | 147,479,218.39 | —— |
19. Employee benefits payable
| Item | As at 31/12/2019 | Accrued during the year | Decreased during the year | As at 31/12/2020 |
| Short-term employee benefits | 53,817,671.14 | 166,271,915.30 | 159,713,901.52 | 60,375,684.92 |
| Post-employment benefits - defined contribution plans | 91,905.35 | 5,226,611.98 | 5,226,368.16 | 92,149.17 |
| Total | 53,909,576.49 | 171,498,527.28 | 164,940,269.68 | 60,467,834.09 |
（1）Short-term employee benefits
| Item | As at 31/12/2019 | Accrued during the year | Decreased during the year | As at 31/12/2020 |
| Salaries, bonus, allowances | 52,543,725.42 | 150,532,574.50 | 143,894,320.04 | 59,181,979.88 |
| Staff welfare | 37,800.00 | 2,643,024.26 | 2,643,024.26 | 37,800.00 |
| Social insurances | 1,578.57 | 4,058,527.39 | 4,058,255.52 | 1,850.44 |
| Including：1、Medical insurance | 1,503.22 | 3,700,092.71 | 3,700,336.53 | 1,259.40 |
| 2、Work-related injury insurance | 591.04 | 5,477.87 | 5,477.87 | 591.04 |
| 3、Maternity insurance | -515.69 | 352,956.81 | 352,441.12 | 0.00 |
| Housing Fund | 583,666.83 | 6,050,015.37 | 6,050,015.37 | 583,666.83 |
| Labor union fees, staff and workers’ | 650,900.32 | 2,987,773.78 | 3,068,286.33 | 570,387.77 |
Item
| Item | As at 31/12/2019 | Accrued during the year | Decreased during the year | As at 31/12/2020 |
| education fee | ||||
| Total | 53,817,671.14 | 166,271,915.30 | 159,713,901.52 | 60,375,684.92 |
(2) Defined contribution plans
| Item | As at 31/12/2019 | Accrued during the year | Decreased during the year | As at 31/12/2020 |
| Post-employment benefits | 91,905.35 | 5,226,611.98 | 5,226,368.16 | 92,149.17 |
| Including: 1．Basic pension insurance | 75,075.11 | 807,634.67 | 807,390.85 | 75,318.93 |
| 2．Unemployment insurance | 914.12 | 48,192.64 | 48,192.64 | 914.12 |
| 3．Annuity | 15,916.12 | 4,370,784.67 | 4,370,784.67 | 15,916.12 |
| Total | 91,905.35 | 5,226,611.98 | 5,226,368.16 | 92,149.17 |
20. Taxes payable
| Item | As at 31/12/2020 | As at 31/12/2019 |
| Corporate income tax | 116,073,629.88 | 51,397,791.31 |
| Land appreciation tax | 339,492,860.89 | 521,540,610.07 |
| Value-added tax | 2,225,243.79 | 10,221,416.88 |
| Individual Income Tax | 1,067,279.80 | 1,049,224.90 |
| City maintenance and construction tax | 240,165.30 | 632,944.99 |
| Property tax | 272,984.08 | 262,015.56 |
| Education surcharge | 180,666.76 | 335,721.66 |
| Local education surcharge | 11,963.23 | 119,929.86 |
| Others | 144,853.22 | 141,160.13 |
| Total | 459,709,646.95 | 585,700,815.36 |
21、Other payables
| Item | As at 31/12/2020 | As at 31/12/2019 |
| Interest payables | 16,535,277.94 | 16,535,277.94 |
| Dividend payables | -- | -- |
| Other payables | 260,569,851.80 | 260,783,896.59 |
| Total | 277,105,129.74 | 277,319,174.53 |
(1)Interest payables
| Item | As at 31/12/2020 | As at 31/12/2019 |
| Non-financial institution borrowing interest (interest payable to parent company) | 16,535,277.94 | 16,535,277.94 |
Significant overdue interest as follows:
| Debtor | Overdue amount | Overdue reason |
Shenzhen Invetment Holdings Co., Ltd.
| Shenzhen Invetment Holdings Co., Ltd. | 16,535,277.94 | Defer payment |
Note: The principal of the loan was fully repaid on 22 December 2016.
(2) Other payables
| Item | As at 31/12/2020 | As at 31/12/2019 |
| Provision for land appreciation tax | 59,789,921.48 | 59,710,423.57 |
| Crrent account of related parties | 18,119,380.19 | 12,549,466.41 |
| Deposits | 100,280,051.56 | 105,828,118.27 |
| Others | 82,380,498.57 | 82,695,888.34 |
| Total | 260,569,851.80 | 260,783,896.59 |
Including significant other payables aging over 1 year
| Item | Amount | Reason for no repayment |
| Provision for land appreciation tax | 59,789,921.48 | Payment has not been settled |
22、Other current liabilities
| Item | 2020.12.31 | 2020.1.1 | Adjustments at the beginning | 2019.12.31 |
| Other | 8,917,027.07 | 5,884,608.14 | 5,884,608.14 | —— |
| Total | 8,917,027.07 | 5,884,608.14 | 5,884,608.14 | —— |
Note: According to the new revenue accounting policy, the VAT in the “Advances from customers”account is recorded in the "other current liabilities" in the current period.
23. Long-term payables
| Item | As at 31/12/2020 | As at 31/12/2019 |
| Long-term payables | 7,480,233.43 | 7,499,192.92 |
| Total | 7,480,233.43 | 7,499,192.92 |
(1) Long-term payables
| Item | As at 31/12/2020 | As at 31/12/2019 |
| Maintenance fund | 7,480,233.43 | 7,499,192.92 |
24. Share capital (Unit: ten thousand shares)
| Investor | As at 31/12/2019 | Issued shares | Bonus shares | Provident fund increase shares | Others | Subtotal | As at 31/12/2020 |
| Total number of shares | 101,166.00 | -- | -- | -- | -- | -- | 101,166.00 |
25. Capital reserve
Item
| Item | As at 31/12/2019 | Additions during the year | Reductions during the year | As at 31/12/2020 |
| Share premium | 557,433,036.93 | -- | -- | 557,433,036.93 |
| Other capital reserves | 420,811,873.18 | -- | -- | 420,811,873.18 |
| Total | 978,244,910.11 | -- | -- | 978,244,910.11 |
26. Other comprehensive income
Item
| Item | As at 2019.12.31 (1) | Movements during the year | As at 2019.12.31 （3）=（1）+（2） | ||||
| Before-tax amount | Less: The current transfer of other comprehensive income into profit and loss is included in the prior period | Less: income tax expense | Net-of-tax amount attributable to shareholders of the Company (2) | Net-of-tax amount attributable to non-controlling interests | |||
| I. Items that will not be reclassified to profit or loss | 11,746,866.97 | 4,384,130.47 | 1,096,032.62 | 3,288,097.86 | 15,034,964.83 | ||
| 1. Changes in fair value of other equity instruments | 11,746,866.97 | 4,384,130.47 | 1,096,032.62 | 3,288,097.86 | 15,034,964.83 | ||
| II.Items that may be reclassified to profit or loss | 9,084,137.16 | 4,043,948.14 | - | - | 4,043,948.14 | 1,733,120.63 | 13,128,085.30 |
| 1. Translation differences arising from translation of foreign currency financial statements | 9,084,137.16 | 4,043,948.14 | 4,043,948.14 | 1,733,120.63 | 13,128,085.30 | ||
| Total | 20,831,004.13 | 8,428,078.61 | - | 1,096,032.62 | 7,332,046.00 | 1,733,120.63 | 28,163,050.13 |
27. Surplus reserve
Item
| Item | As at 31/12/2019 | Additions during the year | Reductions during the year | As at 31/12/2020 |
| Statutory surplus reserve | 191,222,838.94 | 27,501,434.73 | -- | 218,724,273.67 |
| Discretionary surplus reserve | -- | -- | -- | -- |
| Total | 191,222,838.94 | 27,501,434.73 | -- | 218,724,273.67 |
28. Retained earnings
| Item | Year ended 31/12/2020 | Year ended 31/12/2019 | Appropriation or distribution percentage |
| Retained earnings as at the beginning of the year (before adjustment) | 1,464,915,816.81 | 1,235,884,122.72 | -- |
| Total adjustments for opening retained earnings（“+” for increase; “–” for decrease） | -25,355,845.72 | -- | |
| Retained earnings as at the beginning of the year (after adjustment) | 1,464,915,816.81 | 1,210,528,277.00 | -- |
| Add: Net profits for the year attributable to shareholders of the Company | 290,229,772.23 | 552,452,307.59 | -- |
| Less: Appropriation for statutory surplus reserve | 27,501,434.73 | 95,732,767.78 | 10.00 |
| Dividends payable to ordinary shares | 166,923,900.00 | 202,332,000.00 | -- |
| Retained earnings as at the year ended | 1,560,720,254.31 | 1,464,915,816.81 | -- |
29. Operating income and operating cost
(1) Operationg income and operating cost
| Item | 2020 | 2019 | ||
| Revenue | Cost | Revenue | Cost | |
| Principal activities | 1,602,794,163.58 | 793,896,680.56 | 2,533,402,850.39 | 944,347,757.51 |
| Other operating activities | 12,215,550.30 | 11,611,768.12 | 15,337,469.10 | 13,404,895.03 |
| Total | 1,615,009,713.88 | 805,508,448.68 | 2,548,740,319.49 | 957,752,652.54 |
(2) Operating activities (classified by industries)
| Industry | 2020 | 2019 | ||
| Operating income | Operating cost | Operating income | Operating cost | |
| Real estate | 1,158,411,393.81 | 387,659,747.71 | 2,017,872,864.14 | 497,310,023.38 |
| Construction | 251,454,463.43 | 244,511,214.58 | 304,837,313.46 | 298,315,846.77 |
| Property management | 151,968,675.51 | 139,937,487.12 | 157,665,638.01 | 142,261,602.88 |
| Lease | 63,254,584.48 | 35,984,852.34 | 86,484,133.79 | 45,173,891.05 |
| Sub-total | 1,625,089,117.23 | 808,093,301.75 | 2,566,859,949.40 | 983,061,364.08 |
| Less: internal offset | 22,294,953.65 | 14,196,621.19 | 33,457,099.01 | 38,713,606.57 |
| Total | 1,602,794,163.58 | 793,896,680.56 | 2,533,402,850.39 | 944,347,757.51 |
(3) Operating activities(classified by geographical areas)
Region
| Region | 2020 | 2019 | ||
| Operating income | Operating cost | Operating income | Operating cost | |
| Domestic： | 1,624,250,104.98 | 807,403,891.75 | 2,566,271,187.43 | 983,061,364.08 |
| Guangdong: | 1,613,933,749.67 | 799,028,972.30 | 2,491,373,238.76 | 909,413,682.44 |
| Others: | 10,316,355.31 | 8,374,919.45 | 74,897,948.67 | 73,647,681.64 |
| Overseas： | 839,012.25 | 689,410.00 | 588,761.97 | |
| USA | 839,012.25 | 689,410.00 | 588,761.97 | |
| Sub-total | 1,625,089,117.23 | 808,093,301.75 | 2,566,859,949.40 | 984,319,212.90 |
| Less: internal offset | 22,294,953.65 | 14,196,621.19 | 33,457,099.01 | 38,713,606.57 |
| Total | 1,602,794,163.58 | 793,896,680.56 | 2,533,402,850.39 | 944,347,757.51 |
（4）the breakdown of operating income breakdown
| Item | 2020 | total | ||||
| Real estate | Construction | Management | lease | other | ||
| Principal operating income | 1,158,411,393.81 | 245,494,191.09 | 140,961,331.35 | 57,927,247.33 | 1,602,794,163.58 | |
| among: confirm at a certain point in time | 1,158,411,393.81 | 1,158,411,393.81 | ||||
| Confirm at a certain time | 245,494,191.09 | 140,961,331.35 | 57,927,247.33 | 444,382,769.77 | ||
| Other operating income | 12,215,550.30 | 12,215,550.30 | ||||
| Total | 1,158,411,393.81 | 245,494,191.09 | 140,961,331.35 | 57,927,247.33 | 12,215,550.30 | 1,615,009,713.89 |
30. Taxes and surcharges
| Item | 2020 | 2019 |
| Land appreciation tax | 311,880,157.14 | 725,378,098.62 |
| Property tax | 7,554,272.86 | 9,522,347.24 |
| Urban maintenance and construction tax | 5,098,758.97 | 8,326,655.33 |
| Education surcharge | 2,261,494.65 | 3,646,297.05 |
| Local education surcharge | 1,372,146.74 | 2,266,337.54 |
| Embankment protection fees | 1,795,236.14 | 1,874,192.43 |
| Total | 329,962,066.50 | 751,013,928.21 |
Note: The criteria of taxes and surcharges accrued and paid refer to Note IV. Taxation.
31. Selling and distribution expenses
| Item | 2020 | 2019 |
| Sales agency fees and commissions | 44,260,043.83 | 64,830,444.01 |
| Advertising expenses | 2,646,392.11 | 5,292,324.97 |
| Employee benefits | 6,493,766.61 | 4,002,688.15 |
| Business expenses | 2,131,882.24 | 935,889.90 |
| Others | 457,312.43 | 4,418,906.99 |
| Total | 55,989,397.22 | 79,480,254.02 |
32. General and administrative expenses
Item
| Item | 2020 | 2019 |
| Employee benefits | 64,704,357.03 | 49,342,369.86 |
| Depreciation | 3,850,384.39 | 2,901,508.29 |
| Business Hospitality | 2,167,046.29 | 2,601,004.99 |
| Intermediary fee | 12,450,245.35 | 2,862,135.59 |
| Administrative expenses | 1,831,836.07 | 1,949,136.92 |
| Water and electricity charges | 431,830.71 | 412,641.47 |
| Repair charge | 717,959.58 | 660,950.10 |
| Other amortization | 436,258.47 | 486,466.27 |
| Travel expense | 297,270.72 | 329,477.95 |
| Others | 6,729,038.14 | 7,308,927.26 |
| Total | 93,616,226.75 | 68,854,618.70 |
33. Financial expenses
| Item | 2020 | 2019 |
| Interest expenses | -- | 38,642.51 |
| Less: Interest capitalized | -- | -- |
| Interest income | 30,130,066.10 | 19,686,882.13 |
| Exchange losses/(gains) | 7,808,608.84 | -1,744,304.53 |
| Less: Exchange losses and gains capitalized | -- | -- |
| Bank charges and others | 815,772.21 | 486,394.95 |
| Total | -21,505,685.05 | -20,906,149.20 |
34. Other income
| Item (Source of other income) | 2020 | 2019 | Related to assets/ income |
| Input VAT deduction | 174,534.77 | 1,163,713.00 | Income |
| Subsidies of steable post | 125,750.12 | 4,414.90 | Income |
| Epidemic prevention subsidies | 3,245,019.09 | -- | Income |
| VAT relief | 1,062,301.22 | -- | Income |
| Relief of VAT from simple method | 166.87 | -- | Income |
| Total | 4,607,772.07 | 1,168,127.90 |
Note:
(1) For details of government grants, please refer to Note XIII.1.
35. Investment income
| Item | 2020 | 2019 |
| Income from long-term equity investments accounted for using the equity method | -92,348.97 | 75,629.25 |
Item
| Item | 2020 | 2019 |
| Dividend from investments in other equity instruments | 599,760.00 | 928,200.00 |
| Income from structured deposit | 15,217,058.60 | 31,425,651.98 |
| Total | 15,724,469.63 | 32,429,481.23 |
36. Credit impairment losses（"-" for losses）
| Item | 2020 | 2019 |
| Provision for impairment of bill receivables | -1,865,160.28 | -- |
| Provision for impairment of account receivables | 1,380,875.47 | -2,184,042.21 |
| Provision for impairment of financial receivables | -- | -- |
| Provision for impairment of other receivables | 125,285.66 | -927,215.23 |
| Total | -358,999.15 | -3,111,257.44 |
37. Impairment losses ("-" for losses)
| Item | 2020 | 2019 |
| Provision for impairment of receivables | -- | -- |
| Provision for impairment of long-term equity investments | -- | -12,166,897.84 |
| Total | -- | -12,166,897.84 |
38. Gains from assets disposal ("-" for losses)
| Item | 2020 | 2019 |
| Gains from disposals of fixed assets (“-’’ for losses) | 11,429.23 | -- |
| Total | 11,429.23 | -- |
39. Non-operating income
| Item | 2020 | 2019 | Amount included in non-recurring gains or losses for the year ended 31/12/2020 |
| Gains on Compensation | 30,000,000.00 | 30,000,000.00 | |
| Gains on penalty | 670,000.10 | 1,152,266.31 | 670,000.10 |
| Other | 2,600.16 | 193,162.18 | 2,600.16 |
| Gains on waste | 21,161.31 | 21,161.31 | |
| Total | 30,693,761.57 | 1,345,428.49 | 30,693,761.57 |
Note: The compensation of 30 million RMB received in the current period is for the Company toterminate the planning of major asset restructuring, in accordance with the agreement to receivecompensation from the restructuring parties.
40. Non-operating expenses
| Item | 2020 | 2019 | Amount included in non-recurring gains or losses for the year ended 31/12/2020 |
| Donations | 89,121.31 | 30,000.00 | 89,121.31 |
| Loss in damage and scrap of non-current assets | 69,581.08 | 169,935.95 | 69,581.08 |
Item
| Item | 2020 | 2019 | Amount included in non-recurring gains or losses for the year ended 31/12/2020 |
| Fines | -- | 1,445.39 | -- |
| Others | 1,525,401.58 | 25,185.46 | 1,525,401.58 |
| Total | 1,684,103.97 | 226,566.80 | 1,684,103.97 |
41. Income tax expenses
(1) Details of income tax expenses
| Item | 2020 | 2019 |
| Current tax expense for the year based on tax law and regulations | 173,172,138.96 | 81,384,471.24 |
| Changes in deferred tax assets/liabilities | -62,701,304.18 | 109,401,829.46 |
| Total | 110,470,834.78 | 190,786,300.70 |
(2) Reconciliation between income tax expenses and accounting profit is as follows:
| Item | 2020 | 2019 |
| Profits before tax | 400,433,589.16 | 731,983,330.76 |
| Expected income tax expenses at applicable tax rate (profits before tax 25 %) | 100,108,397.29 | 182,995,832.69 |
| Effect of different tax rates applied by subsidiaries | -523,491.63 | 5,114,261.95 |
| Effect on income tax for previous periods | -- | -- |
| Effect of gains or losses from joint ventures and associates accounted for using the equity method | -126,852.76 | -30,453,128.98 |
| Effect of non-deductible costs, expenses and losses | 15,046,324.88 | 21,337,044.56 |
| Effect of using the deductible temporary differences or deductible losses for which no deferred tax asset was recognized in previous (expressed in “-”)） | -4,257,625.20 | -661,881.43 |
| Effect of deductible temporary differences or deductible losses for which no deferred tax asset | 692,907.43 | 12,454,171.91 |
| Relief on business income tax | -468,825.23 | -- |
| Income tax expenses | 110,470,834.78 | 190,786,300.70 |
42、Notes to the cash flow statements
（1）Proceeds from other operating activities
| Item | 2020 | 2019 |
| Interest income | 11,768,922.91 | 15,906,764.91 |
| The collecting and paying on another's behalf | -- | 8,051,762.09 |
| Current account and Others | 42,259,017.80 | 55,720,858.47 |
| Total | 54,027,940.71 | 79,679,385.47 |
（2）Payment for other operating activities
| Item | 2020 | 2019 |
| Charges | 815,772.21 | 682,722.12 |
Item
| Item | 2020 | 2019 |
| Cash paid expenses | 72,468,127.90 | 97,554,049.46 |
| Current account and Others | 1,291,173.09 | 8,702,866.87 |
| Total | 74,575,073.20 | 106,939,638.45 |
（3）Proceeds from other investing activities
| Item | 2020 | 2019 |
| Restricted cash recoverd in the current period – structured deposit | 1,000,000,000.00 | 2,200,000,000.00 |
（4）Payment for other investing activities
| Item | 2020 | 2019 |
| Restricted cash paid in the current period –structured deposit | -- | 2,300,000,000.00 |
43. Supplementary information on cash flow statement
(1) Supplement to cash flow statement:
| Supplement information | 2020 | 2019 |
| 1、Reconciliation of net profit/loss to cash flows from operating activities： | ||
| Net profit | 289,962,754.38 | 541,197,030.06 |
| Add: Provisions for impairment of assets | -- | 12,166,897.84 |
| Provisions for impairment of credit | 358,999.15 | 3,111,257.44 |
| Depreciation of fixed assets, depreciation of investment properties | 29,954,172.05 | 28,907,809.32 |
| Amortization of intangible assets | -- | -- |
| Amortization of long-term deferred expenses | 100,458.19 | 224,941.19 |
| Losses from disposal of fixed assets, intangible assets, and other long-term assets ("-" for gains) | -11,429.23 | -- |
| Loss from scrapping of fixed assets ("-" for gains) | 69,581.08 | 169,935.95 |
| Losses from changes in fair value ("-" for gains) | -- | -- |
| Financial expenses ("-" for income) | 647,689.01 | 38,642.51 |
| Losses arising from investment ("-" for gains) | -15,724,469.63 | -32,429,481.23 |
| Decrease in deferred tax assets ("-" for increase) | -66,303,918.73 | 108,102,463.55 |
| Increase in deferred tax liabilities ("-" for decrease) | 3,602,614.55 | 987,671.25 |
| Decrease in inventories ("-" for increase) | 231,291,659.65 | 190,315,523.14 |
| Decrease in operating receivables ("-" for increase) | -54,000,863.50 | -136,075,098.50 |
| Increase in operating payables ("-" for decrease） | -134,783,233.80 | -113,109,867.77 |
| Others | -- | -- |
| Net cash flows from operating activities | 285,164,013.17 | 603,607,724.75 |
| 2、Investing and financing activities not requiring the use of cash: | ||
| Conversion of debt into capital | -- | -- |
| Convertible bonds due within one year | -- | -- |
Supplement information
| Supplement information | 2020 | 2019 |
| Acquisition of fixed assets under finance leases | -- | -- |
| 3、Change in cash and cash equivalents： | -- | -- |
| Cash as at the year ended | 2,669,103,926.82 | 1,507,189,760.35 |
| Less: cash as at the beginning of the year | 1,507,189,760.35 | 1,148,522,435.93 |
| Add: cash equivalents as at the year ended | -- | -- |
| Less: cash equivalents as at the beginning of the year | -- | -- |
| Net increase in cash and cash equivalents | 1,161,914,166.47 | 358,667,324.42 |
(2) Details of cash and cash equivalents
| Item | 2020 | 2019 |
| 1.Cash | 2,669,103,926.82 | 1,507,189,760.35 |
| Including: Cash on hand | 61,121.83 | 66,252.42 |
| Bank deposits available on demand | 1,026,042,804.99 | 1,493,123,507.93 |
| Other monetary funds available on demand | 1,643,000,000.00 | 14,000,000.00 |
| Deposits made to the central bank for payment | -- | -- |
| Deposit of funds from the same industry | -- | -- |
| Dismantling interbank payments | -- | -- |
| 2. Cash equivalents | -- | -- |
| Including: bond investments due within three months | -- | -- |
| 3. Cash and cash equivalents as at 31/12/2019 | 2,669,103,926.82 | 1,507,189,760.35 |
| Including: The parent company or in-group subsidiary uses restricted cash and cash equivalents |
45. Assets with restrictive ownership title or right of use
| Item | As at 31/12/2020 | Reason for restriction |
| Accounts receivable | 49,686,095.76 | Short-term loan pledge |
| BIlls receivable | 30,068,561.31 | Endorsement or discount of an unexposed commercial acceptance bill of exchange |
| Total | 79,754,657.07 |
46. Foreign currency translation
（1）Items in Foreign currency
| Item | Original | Exchange rate | Amount (RMB) |
| Cash at bank and on hand | |||
| Including: USD | 20,831.05 | 6.5249 | 135,920.52 |
| HKD | 7,798,819.95 | 0.84164 | 6,563,798.82 |
| Accounts receivable | |||
| Including: HKD | 4,905,150.10 | 0.84164 | 4,128,370.53 |
| Other receivables | |||
| Including: HKD | 20,165,086.70 | 0.84164 | 16,971,743.57 |
Item
| Item | Original | Exchange rate | Amount (RMB) |
| Other payables | |||
| Including: USD | 722,044.70 | 6.5249 | 4,711,269.46 |
| HKD | 15,918,034.59 | 0.84164 | 13,397,254.63 |
47、Government subsidies
(1) The use of the total amount method to include the current period profit and loss of government subsidies
| Subsidy programs | Type | Amount of profit and loss included in the last period | Amount of profit and loss included in the current period | Items reported for profit and loss | Relate to assets/ relate to income |
| Steady-duty subsidies | Government funding | 4,414.90 | 125,750.12 | Other income | Income |
| Epidemic prevention subsidies | Government funding | -- | 3,245,019.09 | Other income | income |
VI. Change of consolidation scopeThere is no change in consolidation scope during the current period.VII.Interest in other entities
1. Interests in subsidiaries
(1) Composition of the Group
| Name | Principal place of business | Registration place | Business nature | Shareholding% | Acquisition method | |
| Direct | Indirect | |||||
| Shenzhen City SPG Long Gang Development Ltd. | Shenzhen | Shenzhen | Real estate development | 95.00 | 5.00 | Acquiring through establishment or investment |
| American Great Wall Co., Ltd | U.S. | U.S. | Real estate development | 70.00 | -- | Acquiring through establishment or investment |
| Shenzhen City Property Management Ltd. | Shenzhen | Shenzhen | Property management | 95.00 | 5.00 | Acquiring through establishment or investment |
| Shenzhen Petrel Hotel Co. Ltd. | Shenzhen | Shenzhen | Hotel Services | 68.10 | 31.90 | Acquiring through establishment or investment |
| Shenzhen Zhen Tung Engineering Ltd. | Shenzhen | Shenzhen | Installation and maintenance | 73.00 | 27.00 | Acquiring through establishment or investment |
| Shenzhen City We Gen Construction Management Ltd. | Shenzhen | Shenzhen | Supervision | 75.00 | 25.00 | Acquiring through establishment or investment |
| Shenzhen Lain Hua Industry and Trading Co., Ltd. | Shenzhen | Shenzhen | Mechanical & Electrical device installation | 95.00 | 5.00 | Acquiring through establishment or investment |
| Fresh Peak Zhiye Co., Ltd. | Hong Kong | Hong Kong | Investment and management | 100.00 | -- | Acquiring through establishment or investment |
| Xin Feng Enterprise Co., Ltd. | Hong Kong | Hong Kong | Investment and management | 100.00 | -- | Acquiring through establishment or |
Name
| Name | Principal place of business | Registration place | Business nature | Shareholding% | Acquisition method | |
| Direct | Indirect | |||||
| investment | ||||||
| Shenzhen City Shenfang Free Trade Trading Ltd. | Shenzhen | Shenzhen | Commecial trade | 95.00 | 5.00 | Acquiring through establishment or investment |
| Shenzhen City Shenfang Investment Ltd. | Shenzhen | Shenzhen | Investment | 90.00 | 10.00 | Acquiring through establishment or investment |
| Shenzhen Special Economic Zone Real Estate (Group) Guangzhou Property and Estate Co., Ltd. | Shenzhen | Shenzhen | Real estate | 95.00 | 5.00 | Acquiring through establishment or investment |
| Beijing fresh peak property development management limited company | Beijing | Beijin | Real estate | 75.00 | 25.00 | Acquiring through establishment or investment |
Note:
① In consolidation scope, there are five subsidiaries in “revoked but not cancelled” condition: BeijingSPG Property Management Limited, Guangzhou Huangpu Xizun real estate limited company,Shenzhen Special Economic Zone Real Estate (Group) Guangzhou Property and Estate Co., Ltd.,Fresh Peak Real Estate Dev. Construction (Wuhan) Co. Ltd. and Beijing Shenfang PropertyManagement Co., Ltd. They are presented on the basis of discontinued operations, these fivesubsidiaries have made full provision for impairment of debet for the companies outside theconsolidation scope.
② The cancelled, revoked and closed subsidiaries of the Company that are not included in the scopeof consolidation are as follows:
| Name | Principal place of business | Registration place | Business nature | Shareholding% | Acquisition method | |
| Direct | Indirect | |||||
| Shenzhen Shenfang Department Store Co. Ltd | Shenzhen | Shenzhen | Commecial trade | 95.00 | 5.00 | Acquiring through establishment or investment |
| Paklid Limited | Hong Kong | Hong Kong | Commecial trade | 60.00 | 40.00 | Acquiring through establishment or investment |
| Bekaton Property Limited | Australia | Australia | Real estate | 60.00 | -- | Acquiring through establishment or investment |
| Canada Great Wall ( Vancouver) | Canada | Canada | Real estate | -- | 60.00 | Acquiring through establishment or investment |
| Guangdong Fengkai County Lianfeng Cement Manufacturing Co.,Ltd. | Fengkai Guangdong | Fengkai Guangdong | Manufacturing | -- | 90.00 | Acquiring through establishment or investment |
| Jiangmen Xinjiang Real Estate Co., Ltd | Jiangmen Guangdong | Jiangmen Guangdong | Real estate | -- | 90.91 | Acquiring through establishment or investment |
| Xi’an Fresh Peak Property Trading Co., Ltd | Xi’an Shanxi | Xi’an Shanxi | Real estate | -- | 67.00 | Acquiring through establishment or investment |
Name
| Name | Principal place of business | Registration place | Business nature | Shareholding% | Acquisition method | |
| Direct | Indirect | |||||
| Shenxi Limited | Shenzhen | Shenzhen | Building Decoration | 70.00 | -- | Acquiring through establishment or investment |
| Shenzhen Zhentong New Electromechanical Industry Development Co., Ltd. | Shenzhen | Shenzhen | Mechanical and electrical engineering | 95.00 | 5.00 | Acquiring through establishment or investment |
| Shenzhen Real Estate Electromechanical Management Company | Shenzhen | Shenzhen | Electromechanical Management | 100.00 | -- | Acquiring through establishment or investment |
| Shenzhen Nanyang Hotel Co., Ltd. | Shenzhen | Shenzhen | Hotel Management | 95.00 | 5.00 | Acquiring through establishment or investment |
| Shenzhen Kangtailong Industrial Electric Cooker Co., Ltd. | Shenzhen | Shenzhen | Industrial manufacturing | -- | 100.00 | Acquiring through establishment or investment |
| Shenzhen Longgang Henggang Huagang Industrial Co., Ltd. | Shenzhen | Shenzhen | Industrial Investment | -- | 79.92 | Acquiring through establishment or investment |
Note: 1. Shenzhen Shenfang Department Store Co. Ltd held a shareholders meeting on 29 October2007, decided to terminate the business, and formed a group for liquidation. The liquidation groupissued a liquidation report on 7 December, 2007.
2. Paklid Limited, Bekaton Property Limited and Canada Great Wall ( Vancouver), they were companiesestablished by the group overseas in the early years. On 13 December 2000, the gourp held a board ofdirectors and decided to liquidate these three companies. Bekaton Property Limited and Canada GreatWall ( Vancouver) , the cancellation procedures were completed.
3. All assets from Guangdong Fengkai County Lianfeng Cement Manufacturing Co., Ltd. (includingtangible and intangible asset) was auctioned by the court on 22 January 2006, and it became a shellcompany.
4. Shenxi Limited was the Group’s cancelled subsidiary Shenzhen Tefa Real Estate ConsolidatedServices Co., Ltd’s subsidiary, By the Group “The notice on the menger of Shenzhen Zhen TungEngineering Ltd and Shenxi Limited”（Shenfang [1997] No.19）announcement, all businesses formShenxi Limited were undertaken by Shenzhen Zhen Tung Engineering Ltd and Shenxi Limited wasrevoked on 8 February 2002.These invested companies that have not been included in the consolidation scope were either beencancelled or ceased operation many years ago, and the company entities were no longer exist, theGroup could no longer effectively control them. According to “Accounting Standard for BusinessEnterprises No. 33-Consolidated Financial Statements”, the above companies are not included in theconsolidated scope of the group consolidated financial statement, the group already fully provision forimpairment the investment or the book value of the net investment in these companies.
(2) Material non-wholly owned subsidiaries
Name
| Name | Proportion of ownership interest held by non-controlling interests % | Profit or loss allocated to non-controlling interests during the year | Dividend declared to non-controlling shareholders during the year | Balance of non-controlling interests as at 31/12/2020 |
| Great Wall Estate Co., Inc | 30.00 | -232,222.50 | -- | -20,359,204.37 |
| Fresh Peak Investment Ltd | 45.00 | -24,142.54 | -- | -116,179,012.28 |
| Barenie Co. Ltd. | 20.00 | -10,652.81 | -- | -3,887,016.41 |
(3) Key financial information about material non-wholly owned subsidiaries
| Name | As at 31/12/2020 | |||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non- current liabilities | Total liabilities | |
| Great Wall Estate Co., Inc | 135,920.52 | 18,027,985.50 | 18,163,906.02 | 101,822,102.87 | -- | 101,822,102.87 |
| Fresh Peak Investment Ltd | 4,769.05 | 36,016.90 | 40,785.95 | 258,216,451.81 | -- | 258,216,451.81 |
| Barenie Co. Ltd. | 985.56 | -- | 985.56 | 32,895,438.31 | -- | 32,895,438.31 |
Continued（1）：
| Name | As at 31/12/2019 | |||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
| Great Wall Estate Co., Inc | 38,598.97 | 19,274,905.74 | 19,313,504.71 | 107,974,695.34 | -- | 107,974,695.34 |
| Fresh Peak Investment Ltd | 4,817.49 | 36,016.90 | 40,834.39 | 256,573,564.93 | -- | 256,573,564.93 |
| Barenie Co. Ltd. | 1,045.70 | -- | 1,045.70 | 32,842,234.42 | -- | 32,842,234.42 |
Continued（2）：
Name
| Name | 2020 | 2019 | ||||||
| Operating income | Net profit | Total comprehensive income | Cash flows from operating activities | Operating income | Net profit | Total comprehensive income | Cash flows from operating activities | |
| Great Wall Estate Co., Inc | 839,012.25 | -774,074.99 | -774,074.99 | -774,075.02 | 588,761.97 | -273,403.83 | -- | -273,403.83 |
| Fresh Peak Investment Ltd | -- | -53,650.12 | -53,650.12 | -- | -- | -24,533.43 | -- | -- |
| Barenie Co. Ltd. | -- | -53,264.03 | -53,264.03 | -- | -- | -26,367.40 | -- | -- |
2. Interests in joint ventures or associates
(1) Summarised financial information of immaterial joint ventures and associates:
Item
| Item | As at 31/12/2020 / Year ended 31/12/2020 | As at 31/12/2019 /Year ended 31/12/2019 |
| Joint ventures: | ||
| Aggregate carrying amount of investments | -- | -- |
| Aggregate amount of share of | -- | -- |
| Net profit | -- | -- |
| Other comprehensive income | -- | -- |
| Total comprehensive income | -- | -- |
| Associates: | ||
| Aggregate carrying amount of investments | 377,489.68 | 469,838.65 |
| Aggregate amount of share of | -- | -- |
| Net profit | -92,348.97 | 75,629.25 |
| Other comprehensive income | -- | -- |
| Total comprehensive income | -- | -- |
(2) Excess loss from joint ventures or associates
| Investee | Accumulated unrecognized loss in prior periods | Unrecognized loss (or share of net profit)for the year | Accumulated unrecognized loss as at 31/12/2020 |
| Shenzhen Fresh Peak property consultant Co., Ltd | 1,095,961.55 | 1,121,994.34 | 2,217,955.89 |
Note: Shenzhen Fresh Peak property consultant Co., Ltd was established on 15 March 1993,Registered capital of 3,000,000, the group subscribed RMB 600,000 (20% in total capital). As at 31December 2020, the group actually contributed RMB 600,000 and already confirmed long-term equityinvent lose RMB 600,000.VIII. Financial instruments and risk managementThe major financial instruments of the Group include cash at bank and on hand, bill receivable,accounts receivable, other receivable, other current assets, other equity instrument, account payables,other payables, short-term loans，and long-term payables. The details of these financial instruments aredisclosed in the respective notes. The financial risk of these financial instruments and financialmanagement policies used by the Group to minimize the risk are disclosed as below. The managementmanages and monitors the exposure of these risks to ensure the above risks are controlled in thelimited range.
1.Objectives and policies of financial risk management
The Group’s objective in risk management is to obtain an appropriate equilibrium between risk andreturn. It also focuses on the unpredictability of financial markets and seeks to minimize potentialadverse effects on the Group’s financial performance. Based on the objectives of financial riskmanagement, certain policies are made to recognize and analyze risk and internal control is designedaccording to proper acceptable in order to monitor the risk position of the Group. Both the policies and
internal control will be reviewed and revised regularly to adapt the changes of the market and businessactivities of the Group. The performance of internal control will be reviewed regularly or randomly inaccordance with the financial management policies.The Group’s financial instrument risks mainly include credit risk, liquidity risk and market risk. (Includingcurrency risk, interest rate risk and commodity price risk)The board of directors is responsible for planning and establishing the risk management structure of theGroup, formulating the Group’s risk management policies and related guidelines, supervising theimplementation of risk management measures. The Group has established risk management policies toidentify and analyze the risks faced by the Group. These risk management policies clearly definespecific risks, covering market risk, credit risk and liquidity risk. The Group regularly assesses changesin the market environment and the Group’s operating activities to determine whether update riskmanagement policies and systems.The Group diversifies the risk of financial instruments through appropriate diversified investments andbusiness combinations, and reduces the risk of concentration in a single industry, a specific region or aspecific counterparty by developing appropriate risk management policies.
（1）Credit risk
Credit risk refers to the risk that the counterparty to a financial instrument would fail to discharge itsobligation under the terms of the financial instrument and cause a financial loss to the Group.Credit is managed on the grouping basis. Credit risk is mainly arising from cash at bank, accountsreceivable, and other receivables.The Group expects that there is no significant credit risk associated with cash at bank since it isdeposited or will be accepted by the sate-owned banks and other medium or large size listed banks.The Group has policies to limit the credit risk exposure on bills receivables, accounts receivables andother receivables. The Group assesses the credit quality of and sets credit limits on its customers bytaking into account their financial position, the availability of guarantee from third parties, the availabilityof guarantee from third parties, their credit history and other factors such as current market conditions.The credit history of the customers is regularly monitored by the Group. In respect of customers with apoor credit history, the Group will use written payment reminders, or shorten or cancel credit periods, toensure the overall credit risk of the Group is limited to a controllable extent.The Group’s debtors of account receivables are in different industries and regions, the Group continueson the evaluation of the debtor’s financial status, and purchase credit guarantee insurance whenappropriate.The highest credit risk exposed to the Group is limited to the carrying amount of each financialinstrument illustrated in the balance sheet. The Group would not provide any guarantee that mightcause credit risk to the Group.Among the accounts receivable of the Group, the bills receivable and accounts receivable of the top fivecustomers accounted for 53.79% (2019:53.79%); among the other receivables of the Group, the otherreceivable of the top five customers accounted for 61.40% (2019:62.80%)
（2）Liquidity risk
Liquidity risk refers to the risks that the Group will not be able to meet its obligations associated with itsfinancial liabilities that are settled by delivering cash or other financial assets.Cash flow forecasting is performed by Group’s finance department. The Group’s finance managementmonitors cash and cash equivalents to meet operational needs and reduce the effect of floating cashflow. The department monitors the usage of bank loan so that the Group does not breach borrowinglimits or covenants while maintaining sufficient headroom on its undrawn committed borrowing facilitiesfrom major financial institute to meet the short-term and long-term liquidity requirements.The Group raises working capital from its operations, bank and other borrowings. As at 31 December2020, the amount of bank loans not yet used by the Group is RMB 0.00. (As at 31 December 2020:
RMB 0.00)The financial assets and liabilities, off-balance-sheet guarantee items of the Group at 31 December2020 are analyzed by their maturity date below at their undiscounted contractual cash flows (RMB in tenthousand)：
Item
| Item | As at 31/12/2020 | |||
| Within 1 year | 1 to 5 years | Over 5 years | Total amount | |
| Financial liabilities： | ||||
| Short-term loans | 7,689.40 | -- | -- | 7,689.40 |
| Accounts payable | 17,692.66 | -- | -- | 17,692.66 |
| Interest payables | 1,653.53 | -- | -- | 1,653.53 |
| Other payables | 26,056.99 | -- | -- | 26,056.99 |
| Long-term payables | -- | 748.02 | -- | 748.02 |
| Guarantees for client | 37,135.79 | -- | -- | 37,135.79 |
| Total liabilities | 90,228.36 | 748.02 | -- | 90,976.38 |
The financial assets and liabilities, off-balance-sheet guarantee items of the Group at 31 December2019 are analyzed by their maturity date below at their undiscounted contractual cash flows（RMB in tenthousand）：
| Item | As at 31/12/2019 | |||
| Within 1 year | 1 to 5 years | Over 5 years | Total amount | |
| Financial liabilities： | ||||
| Short-term loans | 5,164.73 | -- | -- | 5,164.73 |
| Accounts payables | 24,422.45 | -- | -- | 24,422.45 |
| Interest payables | 1,653.53 | -- | -- | 1,653.53 |
| Other payables | 20,051.11 | -- | -- | 20,051.11 |
| Long-term payables | -- | 749.92 | -- | 749.92 |
| Guarantees for client | 47,539.67 | -- | -- | 47,539.67 |
| Total liabilities | 98,831.49 | 749.92 | -- | 99,581.41 |
The amount of financial liabilities disclosed in the above table is undiscounted contractual cash flow andmay differ from the carrying amount in the balance sheet.
The maximum guarantee contract that already signed dose not represent the amount need to paid.
（3）Market risk
Market risk, includes interest rate risk and foreign currency risk, refers to the risk that the fair value orfuture cash flow of a financial instrument will fluctuate because of the changes in market price.Interest rate riskInterest rate risk refers to the risk that the fair value or future cash flow of a financial instrument willfluctuate because of the floating rate. Interest rate risk arises from recognized interest-bearing financialinstrument and unrecognized financial instrument (e.g. loan commitments).The Group’s interest rate risk arises from long-term bank loans and other interest-bearing liabilities.Financial liabilities issued at floating rate expose the Group to cash flows interest rate risk. Financialliabilities issued at fixed rate expose the Group to fair value interest rate risk. The Group determines therelative proportions of its fixed rate and floating rate contracts depending on the prevailing marketconditions. At the same time, the Group monitors and maintains the combined financial instruments offixed rate and floating rate.During the reporting period, the Group operates by its own working capital. As at 31 December, 2020,the Group has no financial liabilities with fixed or floating interest rate, such as bank loan. Therefore, theGroup believes that the interest rate risk is insignificant.Foreign currency riskForeign currency risk refers to the risk that the fair value or future cash flows of a financial instrumentwill fluctuate because of changes in foreign currency rates. Foreign currency risk arises from thefunctional currency denominated financial instrument measured at individual entity.The foreign currency risk is mainly comes from the group’s financial position and cash flow which isaffected by the fluctuations of the foreign exchange rates. As the subsidiary establish in Hong KongSAR and U.S. are using local currency as settlement currency, other foreign currency assets andliabilities held by the Group compare with the group’s total assets and liabilities are insignificant,therefore, the Company believe the foreign currency risk is insignificant.
2、Capital risk management
The objectives of the Group’s capital risk management are to safeguard the Group’s ability to continueas a going concern in order to provide returns for shareholders and benefits for other stakeholders andto maintain an optimal capital structure to reduce the cost of capital.In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid toshareholders, return capital to shareholders, issue new shares or disposes assets to reduce itsliabilities.The Group monitors capital on the basis of the gearing ratio. This ratio is calculated as net liabilitiesdivided by total capital. As at 31 December 2020, the group’s debt to asset ratio is 25.92%. (As at 31December 2019: 28.20%)
IX Fair ValueThe level in which fair value measurement is categorized is determined by the level of the fair valuehierarchy of the lowest level input that is significant to the entire fair value measurement. The levels aredefined as follows:
Level 1 inputs: unadjusted quoted prices in active markets that are observable at the measurement datefor identical assets or liabilities.Level 2 inputs: inputs other than Level 1 inputs that are either directly or indirectly observable forunderlying assets or liabilities.Level 3 inputs: inputs that are unobservable for underlying assets or liabilities.
（1）Fair value of assets and liabilities measured at fair value
As at 31/12/2020, assets and liabilities measured at fair value are shown as follows:
Item
| Item | Level 1 fair value measurement | Level 2 fair value measurement | Level 3 fair value measurement | Total |
| I.Recurring fair value measurement | ||||
| Other Equity instruments | -- | -- | 37,510,860.51 | 37,510,860.51 |
| Total assets measured at fair value on a recurring basis | -- | -- | 37,510,860.51 | 37,510,860.51 |
（2）Quantitative information about the unobservable inputs used in the fair value measurement that are
significant and are reasonably available.
| Items | Fair value As at 31/12/2020 | Valuation techniques | Unobservable inputs |
| Unlisted equity investments | 37,510,860.51 | Net asset method | Book net assets, liquidity discount |
（3）Fair values of assets and liabilities not measured at fair value
The financial assets and financial liabilities of the Group measured at amortized cost mainly include:
cash, accounts receivable, other receivables, short-term loans, accounts payable, other payables andlong-term payable.In addition to above financial assets and liabilities, other financial asset and liabilities that not measuredat fair value, the differ between book values and fair value are not significant.X. Related parties and related party transactions
1. Information about the parent of the Company
| Name | Registration place | Business nature | Registered capital (RMB in ten thousand) | Shareholding percentage % | Percentage of voting rights % |
| Shenzhen Invetment Holdings Co., Ltd. | Shenzhen, Guangdong province | Investment, real estate development, guarantee | 2,764,900.00 | 63.55 | 63.55 |
The ultimate controlling party of the company is: State-owned Assets Supervision and ManagementCommission of Shenzhen Municipal People’s Government
2. Information about the subsidiaries of the Company
For information about the subsidiaries of the Company, refer to Note VII.1.
3. Information about joint ventures and associates of the Company
For information about the joint ventures and associates of the Company, refer to Note VII.2.
4. Information on other related parties
Name
| Name | Related party relationship |
| Shenzhen Jian'an Group Co., Ltd. | Same controlling shareholders |
| Shenzhen Dongfang New world store Co., Ltd | Participating stock companies |
| Shenxi Limited | Not included in Consolidated Financial Statements’ Subsidiary that had been terminated its licenses by law but not cancellation |
| Shenzhen Zhentong New Electromechanical Industry Development Co., Ltd. | Not included in Consolidated Financial Statements’ Subsidiary (Long-term without operation) |
| Shenzhen Nanyang Hotel Co., Ltd. | Not included in Consolidated Financial Statements’ Subsidiary that had been terminated its licenses by law but not cancellation |
| Shenzhen Real Estate Electromechanical Management Company | Not included in Consolidated Financial Statements’ Subsidiary that had been terminated its licenses by law but not cancellation |
| Shenzhen Longgang Henggang Huagang Industrial Co., Ltd. | Not included in Consolidated Financial Statements’ Subsidiary that had been terminated its licenses by law but not cancellation |
| Director, Manager, Controller and Secretary of the Board of Directors | Key managers |
5. Transactions with related parties
(1) Purchases/sales
①Purchase of goods/receiving of services
| Related party | Nature of transaction | 2020 | 2019 |
| Shenzhen RongHua JiDian Co.,Ltd | Elevator maintenance | 1,293,962.28 | 1,339,921.80 |
②Sales of goods/rendering of services
| Related party | Nature of transaction | Year ended 31/12/2020 | Year ended 31/12/2019 |
| Shenzhen Jian'an Group Co., Ltd. | Decoration services | 7,258,154.64 | 2,836,052.81 |
| Shenzhen RongHua JiDian Co.,Ltd | Property Services | 68,772.00 | 68,772.00 |
(2) Contracting arrangement
① Outsourcing with related parties
Name of maincontractor
| Name of main contractor | Name of contractor | Type of assets under outsourcing | Reception date of contracting | Expiration date of contracting | Basis of pricing of contracting income | Contracting income recognized in the current year year |
| Shantou City Huafeng Real Estate Devepment Co., Ltd | Shenzhen Jian'an Group Co., Ltd. | Construction | 19 October 2018 | 1 May 2021 | Negotiations | 182,994,620.79 |
(3) Funding from related party
| Related party | Amount of funding | Reception date | Expiration date | Note |
| Funds received | ||||
| Shenzhen Investment Shareholding Co. Ltd | 16,535,277.94 | 09 November 2006 | 22 December 2016 | The principal of the loan was repaid on 22 December 2016, and the remaining amount was interest payable. |
In the end of reporting period, interest payable for Shenzhen Investment Shareholding Co. Ltd isRMB 16,535,277.94.
(4) Remuneration of key management personnel
The Company has 12 key management personnel in 2020, and 11 key management personnel in 2019.Information about remuneration is as follows:
| Item | 2020 (RMB in ten thousand) | 2019 (RMB in ten thousand) |
| Remuneration of key management personnel | 884.86 | 902.08 |
6. Receivables from and payables to related parties
(1) Receivables from related parties
| Item | Related party | As at 31/12/2020 | As at 31/12/2019 | ||
| Book value | Provision for bad and doubtful debts | Book value | Provision for bad and doubtful debts | ||
| Accounts recevible | Shenzhen Fresh Peak property consultant Co.,Ltd | 1,144,740.49 | 1,144,740.49 | 1,205,588.76 | 1,205,588.76 |
| Other recevibles | Guangdong Province Huizhou Luofu Hill Mineral Water Co., Ltd | 10,465,168.81 | 10,465,168.81 | 10,465,168.81 | 10,465,168.81 |
| Other recevibles | Shenzhen Runhua Automobile Trading Co., Ltd | 3,072,764.42 | 3,072,764.42 | 3,072,764.42 | 3,072,764.42 |
| Other recevibles | Canada GreatWall（Vancouver）Co. ,Ltd | 89,035,748.07 | 89,035,748.07 | 89,035,748.07 | 89,035,748.07 |
Item
| Item | Related party | As at 31/12/2020 | As at 31/12/2019 | ||
| Book value | Provision for bad and doubtful debts | Book value | Provision for bad and doubtful debts | ||
| Other recevibles | Bekaton Property Limited | 12,559,290.58 | 12,559,290.58 | 12,559,290.58 | 12,559,290.58 |
| Other recevibles | Paklid Limited | 18,870,785.54 | 18,870,785.54 | 19,319,864.85 | 19,319,864.85 |
| Other recevibles | Shenzhen Shenfang Department Store Co. Ltd. | 237,648.82 | 237,648.82 | 237,648.82 | 189,179.82 |
| Other recevibles | Shenzhen RongHua JiDian Co.,Ltd | 475,223.46 | 23,761.17 | 475,223.46 | 23,761.17 |
| Other recevibles | Xi’an Fresh Peak property management& Trading Co.,Ltd | 8,419,205.19 | 8,419,205.19 | 8,419,205.19 | 8,419,205.19 |
| Other recevibles | Shenxi Limited | 7,660,529.37 | 7,660,529.37 | 7,660,529.37 | 7,660,529.37 |
| Other recevibles | Shenzhen Nanyang Hotel Co., Ltd. | 3,168,721.00 | 3,168,721.00 | 3,168,721.00 | 3,168,721.00 |
| Other recevibles | Shenzhen Jian'an Group Co., Ltd. | 16,464.28 | 823.21 | ||
(2) Payables to related parties
| Item | Related party | As at 31/12/2020 | As at 31/12/2019 |
| Intrest payables | Shenzhen Investment Shareholding Co. Ltd | 16,535,277.94 | 16,535,277.94 |
| Accounts payable | Shenzhen Jian'an Group Co., Ltd. | 54,193,856.16 | 68,172,202.04 |
| Other payables | Shenzhen Dongfang New world store Co., Ltd | 902,974.64 | 902,974.64 |
| Other payables | Guangdong Province Fengkai Lain Feng Cement Manufacturing Co., Ltd. | 1,867,348.00 | 1,867,348.00 |
| Other payables | Shenzhen Real Estate Electromechanical Management Company | 14,981,420.99 | 14,981,420.99 |
| Other payables | Shenzhen Zhentong New Electromechanical Industry Development Co., Ltd. | 8,827,940.07 | 8,827,940.07 |
| Other payables | Shenzhen Shenfang Department Store Co. Ltd. | 639,360.38 | 639,360.38 |
| Other payables | Shenzhen Longgang Henggang Huagang Industrial Co., Ltd. | 165,481.09 | 165,481.09 |
XI. Commitments and contingencies
1. Significant commitments
(1) Capital commitments
| Capital commitments have been entered into but not have not been in the financial statements | As at 31/12/2020 | As at 31/12/2019 |
| Material sales or purchases contracts | 153,945,220.09 | 200,684,729.85 |
(2) Information on implementation of commitments in previous year
The detail is set out in Note X.5.(2) Associated Contracting.As at 31 December 2020, there is no other material commitment to be disclosed.
2. Contingencies
(1) Contingent liabilities arising from pending arbitration and pending litigation and related financial impact
Plaintiff
| Plaintiff | Defendant | Case | Appellate court | Amount of the object of action | Progress of cases |
| Xi’an Fresh Peak Holding limited company | Xi'an Commercial and Trade Commission Xi'an Commerce and Tourism Co., Ltd. | Investment compensation disputes | Shaanxi Higher People's Court | 36.62 million yuan and interest | Pending |
Note: Xi’an Fresh Peak Holding limited company (hereinafter referred to as “Fresh Peak Company”) wassino-foreign joint venture set up in Xi’an city. Among them, Fresh Peak Enterprise Co., Ltd made 67% ofthe shares in cash. Xi’an Trade Building, a company directly under the Xi'an Commercial and TradeCommission (hereinafter referred to as "Xi'an C&T Commission"), invested 16% of the shares in land userights. Hong Kong Dadiwang Industrial Investment Company holds 17% of the shares. The core businesswas property development. And the project was Xi’an Trade Building. The project was started on 28November 1995. But the project had been stopped in 1996 because of the two parties differences on theoperating policy of the project. In 1997, the Xi’an government withdrew the Xi'an Fresh Peak investmentproject compulsively and assigned the project to Xi’an Business Tourism Co., Ltd (hereinafter referred toas “Business Tourism Company”). But the two parties had insulted a lawsuit on compensation. TheShanXi Province High Peoples Court made a judgement “(2000) SJ-CZ No.25”. The judgement was asfollows: 1. Business Tourism Company had to pay for the compensation Rmb 36,620 thousand to Xi’anFresh Peak Company after the judgment entering into force. If the Business Tourism Company failed topay in time, it had to pay double debt interests to Xi’an Fresh Peak Company. 2. Xi’an Joint Commissionon Commerce had jointly and severally obligation of the interests of the compensation.Untill 31 December 2020, the amount of RMB 15,201,000.00 had been called back. The company hasobtained new property clues, submitted an application for resumption of execution, this case is stillpending.As at 31 December 2020, the book value of the long-term equity investment of Xi’an Fresh PeakCompany was RMB 32,840,729.61. The book balance of assets was RMB 8,419,205.19. Both havebeen taken full provision for impairment loss.
(2) Contingent liabilities arising from guarantee provided to other entities and related financial effects.
As at 31 December 2020, the group has provided mortgage loan guarantee for commercial housingpurchasers in accordance with real estate business rules，totaling 371,357,900 .00RMB。
| Item | Duration | Amount | Note |
| Shengfang CuiLin Building | Until the Premises Permit mortgage registration is finished and in bank custody | 8,532.86 | |
| ChuanQi DongHu Building(Fromer DongHuDiJing Building) | Until the Premises Permit mortgage registration is finished and in bank custody | 6,056.20 | |
| TianYue Bay No.1 | Until the Premises Permit mortgage registration is finished and in bank custody | 22,546.73 | |
| Total | 37,135.79 |
(3) Other contingencies
For contingent liabilities related to joint venture or associate investment, please refer to Note VII.2. (2)As at 31 December 2020, there is no other contingency to be disclosed.XII. Post balance sheet date events
1. Profit distribution after the balance sheet date
Based on the total share capital of 1,011,660,000 shares as of 31 December 2020, a cash dividend ofRMB 0.87 (including tax) will be distributed to all shareholders for every 10 shares as total as RMB88,014,420.00.As of March 19, 2021, the Group has no other balance sheet dates to disclose.XIII.Other significant items
1. Government grants
(1) Government grants recognized in proft and loss, and subsequently measured using the grossmethod.
Item
| Item | Type | Recognised in profit and loss for the year ended 31/12/2019 | Recognised in profit and loss for the year ended 31/12/2020 | Presentation item recognized in profit and loss | Related to asset/income |
| Stabilization allowance | Government funding | 4,414.90 | 125,750.12 | Other income | income |
| Epidemic prevention subsidies | Government funding | -- | 3,245,019.09 | Other income | income |
2. Others
From 14 September 2016, the Group planned the reorganization of material assets. The Groupannounced it intended to buy 100% stock equity of Evergrande real estate group co., LTD by issueshares or cash payment on 14 October 2016. Guangzhou Chiron real estate co., LTD will become thecontrolling shareholder of the company after the acquisition.On November 8, 2020, the Company held the 57th meeting of the 7th Board of Directors to considerand pass the Bill on ending the Planning of Major Asset Reorganization Matters and other bills,agreeing to terminate this Material Asset Reorganization Matter.XIV.Notes to the Company’s financial statements1．Accounts receivable
(1) Accounts receivable by aging
| Aging | As at 31/12/2020 | As at 31/12/2019 |
| Within 1 year | 5,281,165.00 | 4,766.37 |
| 1-2 years | - | 66,518.00 |
| 2-3 years | 66,518.00 | -- |
Aging
| Aging | As at 31/12/2020 | As at 31/12/2019 |
| More than 3 years | 10,221,420.93 | 10,715,652.53 |
| Sub-total | 15,569,103.93 | 10,786,936.90 |
| Less：Provision for bad and doubtful debts | 10,151,079.19 | 10,630,001.06 |
| Total | 5,418,024.74 | 156,935.84 |
（2）Accounts receivable by category
| Item | As at 31/12/2020 | ||||
| Book balance | Provision for bad and doubtful debts | Carrying amount | |||
| Book value | Percentage of provision % | Book value | Expected credit loss(%) | ||
| Provision assessed for impairment individually | 10,132,205.24 | 65.08 | 10,132,205.24 | 100.00 | - |
| Collectively assessed for impairment based on credit risk characteristics | 5,436,898.69 | 34.92 | 18,873.95 | 0.35 | 5,418,024.74 |
| Including: | |||||
| Accounts receivable from related parties in consolidated scope | 5,059,419.69 | 32.50 | - | 0.00 | 5,059,419.69 |
| Accounts receivable from sales of properties | - | 0.00 | - | - | |
| Receivables from other clients | 377,479.00 | 2.42 | 18,873.95 | 5.00 | 358,605.05 |
| Total | 15,569,103.93 | 100.00 | 10,151,079.19 | 65.20 | 5,418,024.74 |
Continued
| Item | As at 31/12/2019 | ||||
| Book balance | Provision for bad and doubtful debts | Carrying amount | |||
| Book value | Percentage of provision % | Book value | Expected credit loss(%) | ||
| Provision assessed for impairment individually | 10,626,436.84 | 98.51 | 10,626,436.84 | 100.00 | -- |
| Collectively assessed for impairment based on credit risk characteristics | 160,500.06 | 1.49 | 3,564.22 | 2.22 | 156,935.84 |
| Including: | |||||
| Accounts receivable from related parties in consolidated scope | 89,215.69 | 0.83 | -- | -- | 89,215.69 |
| Accounts receivable from sales of properties | 71,284.37 | 0.66 | 3,564.22 | 5.00 | 67,720.15 |
| Total | 10,786,936.90 | 100.00 | 10,630,001.06 | 98.55 | 156,935.84 |
Provision assessed for impairment individually：
Category
| Category | 2020.12.31 | 2019.12.31 | |||||
| Book value | provision | Expected credit | Book value | provision | Expected credit | Reason | |
| Loss rate（%） | Loss rate（%） | ||||||
| Long-term accounts receivable from sales of proproties | 10,132,205.24 | 10,132,205.24 | 100.00 | 10,523,723.00 | 10,523,723.00 | 100.00 | Not expected to be recovered |
Collectively assessed for impairment based on credit risk characteristics:
Accounts receivable from related parties in consolidated scope
| Age | 2020.12.31 | 2019.12.31 | ||||
| Account receivables | provision | Expected credit loss(%) | Account receivables | provision | Expected credit loss(%) | |
| Within 1 year | 5,059,419.69 | -- | -- | -- | -- | -- |
| 1 to 2 years | -- | -- | -- | -- | -- | -- |
| 2 to 3 years | -- | -- | -- | -- | -- | -- |
| More than 3 years | -- | -- | -- | 89,215.69 | -- | -- |
| Total | 5,059,419.69 | -- | -- | 89,215.69 | -- | -- |
Accounts receivable from sales of properties
| Age | 2020.12.31 | 2019.12.31 | ||||
| Account receivables | provision | Expected credit loss(%) | Account receivables | provision | Expected credit loss(%) | |
| Within 1 year | 310,961.00 | 15,548.05 | 5.00 | 4,766.37 | 238.32 | 5.00 |
| 1-2 year | -- | -- | -- | 66,518.00 | 3,325.90 | 5.00 |
| 2-3 year | 66,518.00 | 3,325.90 | 5.00 | -- | -- | -- |
| Total | 377,479.00 | 18,873.95 | 5.00 | 71,284.37 | 3,564.22 | 5.00 |
（3）Additions, recoveries or reversals of provision for bad and doubtful debts during the year:
| Item | Provision for bad and doubtful debts |
| As at 31/12/2019 | 10,630,001.06 |
| Provision | -478,921.87 |
| Recovery | -- |
| Written-off | -- |
| As at 31/12/2020 | 10,151,079.19 |
（4）Top 5 entities with the largest balances of other receivables
Name of Entity
| Name of Entity | Amount | Proportion of the amount to the total AR (%) | Bad debt provision |
| Shenzhen Haiyan Hotel Co., Ltd | 5,059,419.69 | 32.50 | -- |
| Daxing Auto Parts Co., Ltd | 1,912,353.37 | 12.28 | 1,912,353.37 |
| Wang Weidong | 1,200,000.00 | 7.71 | 1,200,000.00 |
| Shenzhen Xinfeng Real Estate Consultants Co., Ltd | 1,144,740.49 | 7.35 | 1,144,740.49 |
| Cai Guangyao | 876,864.11 | 5.63 | 876,864.11 |
| Total | 10,193,377.66 | 65.47 | 5,133,957.97 |
2.Other receivables
① Other receivable by aging
| Aging | As at 31/12/2020 | As at 31/12/2019 |
| Within 1 year | 342,045,464.68 | 91,158,862.87 |
| 1-2 years | 79,875,511.65 | 140,372,735.75 |
| 2-3 years | 140,372,735.75 | 73,930,238.58 |
| More than 3 years | 1,399,130,297.43 | 1,330,808,992.53 |
| Sub-total | 1,961,424,009.51 | 1,636,270,829.73 |
| Less：Provision for bad and doubtful debts | 801,009,814.12 | 800,995,331.04 |
| Total | 1,160,414,195.39 | 835,275,498.69 |
② Other receivables by category
| Item | As at 31/12/2020 | As at 31/12/2019 | ||||
| Book balance | Provision for bad and doubtful debts | Carrying amount | Book balance | Provision for bad and doubtful debts | Carrying amount | |
| Amount receivables from government | 165,460.00 | -- | 165,460.00 | 721,755.80 | -- | 721,755.80 |
| Amount receivable from petty cash | -- | -- | -- | 182,691.21 | -- | 182,691.21 |
| Amount receivables of the collecting and paying on another's behalf | 307.17 | -- | 307.17 | 3,248.36 | -- | 3,248.36 |
| Amount receivables of current accounts | 5,464,176.55 | 3,647,753.92 | 1,816,422.63 | 6,818,306.11 | 5,744,165.49 | 1,074,140.62 |
| Amount receivables of related parties | 137,211,313.52 | 137,211,313.52 | -- | 135,567,522.22 | 135,100,418.87 | 467,103.35 |
| Amount receivables in consolidated scope | 1,818,582,752.27 | 660,150,746.68 | 1,158,432,005.59 | 1,492,977,306.03 | 660,150,746.68 | 832,826,559.35 |
| Total | 1,961,424,009.51 | 801,009,814.12 | 1,160,414,195.39 | 1,636,270,829.73 | 800,995,331.04 | 835,275,498.69 |
③Provision for bad and doubtful debts：
As at 31/12/2020, there are the provisions for bad debts in the first stage :
Category
| Category | Book balance | To 12-month expected credit loss (%) | Provision for bad and doubtful debts | Carrying amount | Reasons |
| Collectively assessed for impairment based on credit risk characteristics | |||||
| Amount receivables from government | 165,460.00 | -- | -- | 165,460.00 | |
| Amount receivables from petty cash | -- | -- | -- | -- | |
| Amount receivables from the collecting and paying on another's behalf | 307.17 | -- | -- | 307.17 | |
| Amount receivables from current accounts | 1,912,023.82 | 5.00 | 95,601.19 | 1,816,422.63 | |
| Amount receivables from related parties | -- | -- | -- | -- | |
| Total | 2,077,790.99 | 4.60 | 95,601.19 | 1,982,189.80 |
As at 31/12/2020, there is the provision for bad debts in the second stage :
| Category | Book balance | To 12-month expected credit loss (%) | Provision for bad and doubtful debts | Carrying amount | Reasons |
| Provision assessed for impairment individually | |||||
| Other receivables from related parties in consolidation scope | 1,818,582,752.27 | 36.30 | 660,150,746.68 | 1,158,432,005.59 | Expected to be not recoverable |
As at 31/12/2020, there are the provisions for bad debts in the third stage :
| Category | Book balance | 12-month expected credit loss(%) | Provision for bad and doubtful debts | Carrying amount | Reasons |
| Provision assessed for impairment individually | |||||
| Amount receivables of current accounts | 3,552,152.73 | 100.00 | 3,552,152.73 | -- | Expected to be not recoverable |
| Amount receivables of related parties | 137,211,313.52 | 100.00 | 137,211,313.52 | -- | Expected to be not recoverable |
| Total | 140,763,466.25 | 100.00 | 140,763,466.25 | -- |
④Additions, recoveries or reversals of provision for bad and doubtful debts during the year
| Provision for bad and doubtful | The first stage | The second stage | The third stage | Total |
| 12-month expected credit loss | Lifetime expected credit loss (no credit impairment) | Lifetime expected credit loss (has occurred credit impairmen) | ||
| As at 31/12/2019 | 81,118.11 | 660,150,746.68 | 140,763,466.25 | 800,995,331.04 |
| Provision | 14,483.08 | -- | -- | 14,483.08 |
| Recovery | -- | -- | -- | -- |
| Written-off | -- | -- | -- | -- |
| As at 31/12/2020 | 95,601.19 | 660,150,746.68 | 140,763,466.25 | 801,009,814.12 |
⑤ There were no other receivables written off in the current period.
⑥Top 5 entities with the largest balances of other receivables
Name of Entity
| Name of Entity | Relationship with the group | Amount | Aging | Proportion of the amount to the total OR (%) | Bad debt provision |
| Shantou Huafeng Estate Development Co., Ltd | Subsidiary | 777,718,384.72 | Within 1 year、1-3 years、More than 3 years | 39.65 | -- |
| Fresh Peak Enterprise Co., Ltd | Subsidiary | 534,325,628.01 | Within 1 year、More than 5 years | 27.24 | 508,377,320.74 |
| Shenzhen ShenFang Group Longgang Development Co., Ltd | Subsidiary | 234,000,000.00 | Within 1 year | 11.93 | -- |
| . American Great Wall Co., Ltd | Subsidiary | 103,403,196.15 | More than 5 years | 5.27 | 103,403,196.15 |
| Canada Great Wall( Vancouver ) Co., Ltd | Subsidiary | 89,035,748.07 | More than 5 years | 4.54 | 89,035,748.07 |
| Total | 1,738,482,956.95 | 88.63 | 700,816,264.96 |
3、Long-term equity investments
| Item | As at 31/12/2020 | As at 31/12/2019 | ||||
| Book balance | Provision for impairment | Book value | Book balance | Provision for impairment | Book value | |
| Investment in subsidiaries | 303,045,949.42 | 152,839,271.15 | 150,206,678.27 | 303,045,949.42 | 152,839,271.15 | 150,206,678.27 |
| Investment in joint ventures | 9,455,465.38 | 9,455,465.38 | -- | 9,455,465.38 | 9,455,465.38 | -- |
| Investment in associates | 2,899,869.88 | 2,522,380.20 | 377,489.68 | 2,992,218.85 | 2,522,380.20 | 469,838.65 |
| Total | 315,401,284.68 | 164,817,116.73 | 150,584,167.95 | 315,493,633.65 | 164,817,116.73 | 150,676,516.92 |
（1）Investment in subsidiaries
| Name of investee | Opening balance | Curr. year Increase | Curr. year decrease | Closing balance | Curr. year impairment provision | Closing balance of impairment provision |
| Shenzhen City Property Management Ltd. | 12,821,791.52 | 12,821,791.52 | -- | |||
| Shenzhen Petrel Hotel Co. Ltd. | 20,605,047.50 | 20,605,047.50 | -- | |||
| Shenzhen City Shenfang Investment Ltd. | 9,000,000.00 | 9,000,000.00 | -- | |||
| Fresh Peak Enterprise Ltd. | 556,500.00 | 556,500.00 | -- | |||
| Fresh Peak Zhiye Co., Ltd. | 22,717,697.73 | 22,717,697.73 | -- | |||
| Shenzhen Special Economic Zone Real Estate (Group) Guangzhou Property and Estate Co., Ltd. | 19,000,000.00 | 19,000,000.00 | 19,000,000.00 | |||
| Shenzhen Zhen Tong Engineering Ltd | 11,332,321.45 | 11,332,321.45 | -- |
Name of investee
| Name of investee | Opening balance | Curr. year Increase | Curr. year decrease | Closing balance | Curr. year impairment provision | Closing balance of impairment provision |
| American Great Wall Co., Ltd | 1,435,802.00 | 1,435,802.00 | -- | |||
| Shenzhen City Shenfang Free Trade Trading Ltd. | 4,750,000.00 | 4,750,000.00 | -- | |||
| Shenzhen City Hua Zhan Construction Management Ltd. | 6,000,000.00 | 6,000,000.00 | -- | |||
| QiLu Co.,Ltd | 212,280.00 | 212,280.00 | -- | |||
| Beijing Shenfang Property Management Co., Ltd. | 500,000.00 | 500,000.00 | 500,000.00 | |||
| Shenzhen Lain Hua Industry and Trading Co., Ltd. | 13,458,217.05 | 13,458,217.05 | -- | |||
| Shenzhen City SPG Long Gang Development Ltd. | 30,850,000.00 | 30,850,000.00 | -- | |||
| Beijing Fresh Peak Property Development Management Limited Company | 64,183,888.90 | 64,183,888.90 | 64,183,888.90 | |||
| Shantou City Huafeng Real Estate Devepment Co., Ltd | 16,467,021.02 | 16,467,021.02 | -- | |||
| Paklid Limited | 201,100.00 | 201,100.00 | 201,100.00 | |||
| Bekaton Property Limited | 906,630.00 | 906,630.00 | 906,630.00 | |||
| Shenzhen Shenfang Department Store Co. Ltd. | 9,500,000.00 | 9,500,000.00 | 9,500,000.00 | |||
| Shantou Fresh Peak Building | 58,547,652.25 | 58,547,652.25 | 58,547,652.25 | |||
| Total | 303,045,949.42 | 303,045,949.42 | 152,839,271.15 |
Note：Shenzhen Special Economic Zone Real Estate (Group) Guangzhou Property and Estate Co., Ltd.,the registered capital of RMB 20 million yuan, the company subscribed for RMB 19 million(95% of totalshares), another subsidiary Shenzhen City Shenfang Investment Ltd. subscribed RMB 1.0 million(5% oftotal shares).
（2）Investment in associates and joint ventures
Name of investee
| Name of investee | Opening balance | Changes in this period | Closing balance | The ending balance of impairment | |||||||
| Additional investment | Reduce investment | Investment gains and losses confirmed by the equity method | Adjustment of other comprehensive income | Changes in other equity | Cash dividend or profit declared | Impairment | Others | ||||
| ① Joint ventures | |||||||||||
| Fengkai Xinghua Hotel | 9,455,465.38 | -- | -- | -- | -- | -- | -- | -- | -- | 9,455,465.38 | 9,455,465.38 |
| Subtotal | 9,455,465.38 | -- | -- | -- | -- | -- | -- | -- | -- | 9,455,465.38 | 9,455,465.38 |
| ②Associates | |||||||||||
| Shenzhen Ronghua Jidian Co., Ltd | 1,546,793.29 | -- | -- | -92,348.97 | -- | -- | -- | -- | -- | 1,454,444.32 | 1,076,954.64 |
| Shenzhen Runhua Automobile Trading Co., Ltd | 1,445,425.56 | -- | -- | -- | -- | -- | -- | -- | -- | 1,445,425.56 | 1,445,425.56 |
| Subtotal | 2,992,218.85 | -- | -- | -92,348.97 | -- | -- | -- | -- | -- | 2,899,869.88 | 2,522,380.20 |
| Total | 12,447,684.23 | -- | -- | -92,348.97 | -- | -- | -- | -- | -- | 12,355,335.26 | 11,977,845.58 |
4、Operating income and costs
Item
| Item | 2020 | 2019 | ||
| Revenue | Cost | Revenue | Cost | |
| Principal operating | 911,815,174.45 | 241,307,783.52 | 1,666,904,055.40 | 330,874,297.00 |
| Other operating | 24,095.25 | -- | 48,857.18 | -- |
（1）Principal operating activities (classified by industries)
| Name of industry | 2020 | 2019 | ||
| Operating income | Operating cost | Operating income | Operating cost | |
| Real estate | 860,010,047.62 | 211,257,440.88 | 1,599,279,513.73 | 304,208,253.29 |
| Lease | 51,805,126.83 | 30,050,342.64 | 67,624,541.67 | 26,666,043.71 |
| Total | 911,815,174.45 | 241,307,783.52 | 1,666,904,055.40 | 330,874,297.00 |
（2）Principal operating activities (classified by geographical areas)
| Name of geographical area | 2020 | 2019 | ||
| Operating income | Operating cost | Operating income | Operating cost | |
| Guangdong province | 911,815,174.45 | 241,307,783.52 | 1,666,904,055.40 | 330,874,297.00 |
5、Investment income
| Item | 2020 | 2019 |
| Investment income from long-term investments under cost method | -- | 518,700,131.64 |
| Investment income from long-term investments under equity method | -92,348.97 | 75,629.25 |
| Investment income from available-for-sale financial assets during the holding period | -- | -- |
| Investment income from other equity instrument | 599,760.00 | 928,200.00 |
| Investment income from structured deposit | 15,217,058.60 | 31,425,651.98 |
| Total | 15,724,469.63 | 551,129,612.87 |
XV. Supplementary information1．Details of non-recurring gains or losses
| Item | 2020 | Note |
| Profit or loss on disposal of non-current assets | 11,429.23 | |
| Government grants recognized in profit or loss (other than grants which are closely related to the Company’s business and are either in fixed amounts or determined under quantitative methods in accordance with the national standard) | 3,370,769.21 | |
| Profit or loss on entrusted investments or assets management | 15,217,058.60 | Income from expired structured deposit |
| Interest on unexpired structured deposit | -- | |
| Non-operating income/(expenses) except the above | 29,009,657.60 | |
| Other non-recurring gains or losses | 1,237,002.86 |
Item
| Item | 2020 | Note |
| Profit or loss on disposal of non-current assets | 11,429.23 | |
| Total non-recurring gains or losses | 48,845,917.50 | |
| Less: Effects of income tax on non-recurring gains or losses | 12,211,479.38 | |
| Net non-recurring gains or losses | 36,634,438.12 | |
| Less: Effects of non-recurring gains or losses attributable to the minority shareholders of the Company (after tax) | -- | |
| Non-recurring gains or losses attributable to the shareholders of the Company | 36,634,438.12 |
2、Return on net assets and earnings per share
| Profit of reporting period | Weighted average return on net assets% | Earnings per share | |
| Basic earnings | Diluted earnings | ||
| Net profit attributable to the Company’s ordinary equity shareholders | 7.81% | 0.2869 | 0.2869 |
| Net profit attributable to the Company’s ordinary equity shareholders after deduction of non-recurring profit or loss | 6.82% | 0.2507 | 0.2507 |
Part XIII Documents Available for Reference
1. The financial statements signed and sealed by the legal representative, the head of financial affairs andthe head of the financial department; and
2. The original copy of the Independent Auditor’s Report signed and sealed by the CPAs, as well as sealedby the CPA firm; and
3. The originals of all the Company’s documents and announcements which were disclosed on SecuritiesTime, China Securities Journal and Ta Kung Pao (HK) during the Reporting Period.