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深深房B:2019年年度报告(英文版)

编辑 : 王远   发布时间: 2020-03-13 20:11:12   消息来源: sina 阅读数: 0 收藏数:
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE &PROPERTIES (GROUP) CO., LTD.ANNUAL ...

SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE &

PROPERTIES (GROUP) CO., LTD.

ANNUAL REPORT 2019

2020-019

March 2020

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 guarantee thefactuality, 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, Chen Maozheng, the Company’s GeneralManager, Tang Xiaoping, the Company’s head for financial affairs, and Qiao Yanjun, head ofthe Company’s financial department (equivalent to financial manager) hereby guarantee thatthe Financial Statements carried in this Report are factual, accurate and complete.All the Company’s directors have attended the Board meeting for the review of this Reportand its summary.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.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.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 as at 31 December 2019, a cash dividend of RMB1.65 (tax inclusive) per10 shares 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 ...... 32

Part VI Share Changes and Shareholder Information ...... 43

Part VII Preferred Shares ...... 50

Part VIII Convertible Corporate Bonds ...... 52

Part IX Directors, Supervisors, Senior Management and Staff ...... 53

Part X Corporate Governance ...... 61

Part XI Corporate Bonds ...... 68

Part XII Financial Statements ...... 70

Part XIII Documents Available for Reference ...... 71

Definitions

TermDefinition
“SPG”, the “Company”, the “Group” or “we”ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. and its consolidated subsidiaries, except where the context otherwise requires
Holding CompanyShenzhen Investment Holdings Co., Ltd.

Part II Corporate Information and Key Financial Information

I Corporate Information

Stock nameSPG, SPG-BStock code000029, 200029
Stock exchange for stock listingShenzhen 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 representativeLiu Zhengyu
Registered address45/F-48/F, SPG Plaza, Renmin South Road, Shenzhen, Guangdong, P.R.China
Zip code518001
Office address47/F, SPG Plaza, Renmin South Road, Shenzhen, Guangdong, P.R.China
Zip code518001
Company websitehttp://www.sfjt.com.cn
Email addressspg@163.net

II Contact Information

Board SecretarySecurities Representative
NameTang XiaopingLuo Yi
Address47/F, SPG Plaza, Renmin South Road, Shenzhen, Guangdong, P.R.China47/F, SPG Plaza, Renmin South Road, Shenzhen, Guangdong, P.R.China
Tel.(86 755)82293000-4638(86 755)82293000-4715
Fax(86 755)82294024(86 755)82294024
Email addresstangxiaoping0086@126.comspg@163.net

III Media for Information Disclosure and Place where this Report Is Lodged

Newspapers designated by the Company for information disclosureDomestic: Securities Times and China Securities Journal Overseas: Ta Kung Pao (HK)
Website designated by CSRC for publication of this Reporthttp://www.cninfo.com.cn
Place where this Report is lodged47/F, SPG Plaza, 3005 Renmin South Road, Luohu District, Shenzhen, Guangdong, P.R.China

IV Change to Company Registered Information

Unified social credit code91440300192179585N (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:

NameGrant Thornton China
Office address5/F, Sci-Tech Plaza, 22 Jianguomenwai Avenue, Chaoyang District, Beijing
Accountants writing signaturesHuang Shengsen and Zhao Juanjuan

The independent sponsor hired by the Company to exercise constant supervision over the Company in the Reporting Period:

□ Applicable √ Not applicable

The independent financial advisor hired by the Company to exercise constant supervision over the Company in the Reporting Period:

□ Applicable √ Not applicable

VI Key Financial InformationIndicate by tick mark whether there is any retrospectively restated datum in the table below.

□ Yes √ No

201920182019-over-2018 change (%)2017
Operating revenue (RMB)2,548,740,319.492,175,187,242.6017.17%1,345,912,605.09
Net profit attributable to the listed company’s shareholders (RMB)552,452,307.59503,498,831.609.72%184,988,512.42
Net profit attributable to the listed company’s shareholders before exceptional gains and losses (RMB)524,204,812.66490,490,702.806.87%181,588,638.91
Net cash generated from/used in operating activities (RMB)603,607,724.751,062,567,405.59-43.19%-17,801,139.64
Basic earnings per share (RMB/share)0.54610.49779.72%0.1829
Diluted earnings per share (RMB/share)0.54610.49779.72%0.1829
Weighted average return on equity (%)15.90%16.35%-0.45%6.76%
31 December 201931 December 2018Change of 31 December 2019 over 31 December 2018 (%)31 December 2017
Total assets (RMB)4,909,669,536.094,665,891,514.255.22%3,989,263,981.96
Equity attributable to the listed company’s shareholders (RMB)3,666,874,569.993,332,259,641.3910.04%2,828,242,120.98

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 shareholdersEquity attributable to the listed company’s shareholders
20192018Ending amountBeginning amount
Under CAS552,452,307.59503,498,831.603,666,874,569.993,316,581,079.94
Adjusted as per IFRS
Under IFRS552,452,307.59503,498,831.603,670,790,192.323,319,891,256.50

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

Q1Q2Q3Q4
Operating revenue424,535,370.83826,802,431.74652,161,755.98645,240,760.94
Net profit attributable to the listed company’s shareholders84,028,728.24249,127,115.17106,361,655.99112,934,808.19
Net profit attributable to the listed company’s shareholders before exceptional gains and losses84,055,572.77238,810,381.76105,876,740.2096,334,902.68
Net cash generated from/used in operating activities217,157,204.59468,518,040.51356,240,434.19-434,357,269.54

Indicate by tick mark whether any of the quarterly financial data in the table above or their summations differs materially from whathave been disclosed in the Company’s quarterly or interim reports.

□ Yes √ No

IX Exceptional Gains and Losses

√ Applicable □ Not applicable

Unit: RMB

Item201920182017Note
Gain or loss on disposal of non-current assets (inclusive of impairment allowance write-offs)-69,739.734,261,370.46
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)1,168,127.9010,243.0059,611.09
Gain or loss on assets entrusted to other entities for investment or management31,425,651.9816,347,157.53Income from mature structured deposits
Non-operating income and expense other than the above1,118,861.69891,652.84212,183.13
Interest income from undue structured deposits3,950,685.00
Less: Income tax effects9,415,831.644,171,184.841,133,291.17
Total28,247,494.9313,008,128.803,399,873.51--

Explanation of why the Company reclassifies as recurrent an exceptional gain/loss item defined or listed in the ExplanatoryAnnouncement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Exceptional Gain/LossItems:

□ Applicable √ Not applicable

No such cases for the Reporting Period.

Part III Business Summary

I Principal Activity of the Company in the Reporting PeriodWith regard to China’s real estate market in 2019, under the macro-control policy of maintainingstability, growth in house sales continued to slow down nationwide, but with relatively strongdemand in the Yangtze River Delta and the Guangdong-Hong Kong-Macau areas due to thepositive factor of urban development planning.The Company primarily develops and sells residential properties in two cities, Shenzhen andShantou. In Shenzhen, the Chuanqi Jingyuan project completed the interior fine decoration inJanuary 2019 and was 100% sold out and handed over during the Reporting Period; the ChuanqiDonghu Mingyuan project completed the filing for completed construction in December 2019 andhas started the hand-over and move-in process, which is cumulatively around 25% sold; and theCuilinyuan project is approximately 90% sold. In Shantou, the Tianyuewan Phase I project hasbasically finished municipal road supporting and landscape improvement, which is around 50%sold cumulatively; and the Tianyuewan Phase II project completed the basement in October 2019.II Significant Changes in Major Assets

1. Significant Changes in Major Assets

Major assetsMain reason for significant changes
Equity assetsThe ending amount was down by RMB12,091,268.59 (or 96.26%) from the beginning amount in 2019, primarily driven by the allowance for impairment of long-term equity investments.
Fixed assets
Intangible assetsNo significant change
Construction in progressNo significant change
Accounts receivableThe ending amount was up by RMB28,632,064.03 (or 85.66%) from the beginning amount in 2019, primarily driven by the receivable of Shenzhen Zhentong Engineering Co., Ltd. for engineering service provided.
Other receivablesThe ending amount was down by RMB16,742,799.35 (or 37.19%) from the beginning amount in 2019, primarily driven by the allowances for doubtful accounts.
Short-term borrowingsThe ending amount was up by RMB34,387,156.71 (or 199.23%) from the beginning amount in 2019, primarily driven by the increased borrowings of Shenzhen Zhentong Engineering Co., Ltd. through discounting and pledging accounts receivable.
Taxes payable
Other payablesThe ending amount was down by RMB444,500,723.95 (or 61.58%) from the beginning amount in 2019, primarily driven by the final settlement and payment of land VAT.

2. Major Assets Overseas

□ Applicable √ Not applicable

III Core Competitiveness AnalysisAs one of the earliest real estate listed companies in Shenzhen, the Company has a history over 40years in real estate development in Shenzhen and rich experience in the main business of real estatedevelopment. In recent years, thanks to the experience learned from the Shenzhen-locatedChuanqishan project, Chuanqi Shanglin project, Chuanqi Jingyuan project and Chuanqi DonghuMingyuan project, as well as from the Shantou-located projects, the Company accelerates theestablishment of a modern enterprise HR management system and works hard in building aprofessional and high-quality development team. It also keeps improving the managementmechanism and processes for project development. As a result, the professionalism andmanagement capability of the Company have improved significantly; planning, construction, costcontrol, marketing capability and brand image have been effectively enhanced; and the operationalcapability in the main business of real estate keeps increasing, along with the core competitiveness.As of the Reporting Period (inclusive), the Company has been honored jointly by the GuangdongProvincial Enterprise Confederation and the Guangdong Provincial Association of Entrepreneurs asa “Most Honest Enterprise in Guangdong Province” for eight years in a row. It has also wonaccolades from the Shenzhen Real Estate Association, namely, the “Real Estate Developer inShenzhen with the Highest Brand Value” for the past two years.

Part IV Operating Performance Discussion and AnalysisI OverviewFor 2019, the Company recorded operating revenue of RMB2,549 million, up 17.17% year-on-year;a profit before tax of RMB732 million, up 7.21% year-on-year; and a net profit attributable to thelisted company’s shareholders of RMB552 million, up 9.72% year-on-year. As at 31 December2019, equity attributable to the listed company’s shareholders amounted to RMB3,667 million, up

10.04% year-on-year; and the debt/asset ratio was 28.20%, down by 3.20 percentage pointsyear-on-year.

Review of Operation and Management for 2019

In 2019, on the backdrop of a complicated international environment and continuous recession ofworld economy, China’s economy continued to suffer from downward pressure, but achievedgenerally stable growth while making further progress. All local governments firmly implementedthe decisions of the CPC Central Committee and the State Council, persisted in the positioning of“Houses are for living in, not for speculating on” without using real estate as a measure tostimulate economic development on a short-term basis, fully performed the main responsibilities ofcities and maintained an overall stable trend for the real estate market. During the Reporting Period,the Company orderly drove the progress of a number of matters, including main businessdevelopment, management and operations, material assets restructuring, party building andproduction safety, and set another new record in major operating indicators. The main achievementsover the year include:

(I) Stable Growth with Further Progress in Main Business Development

1. The progress of project development was smooth. The Company placed importance onimproving its capacity of controlling project development, implemented a full-cost, whole-processand penetrated management concept, carried out tender invitation and bidding legally and incompliance, timely identified and solved problems encountered during project development andtook strict measures for the settlement of project payment. As a result, it basically achieved the goalfor project development progress in main business. It completed the interior refined decorationworks for the Chuanqi Jingyuan project in Shenzhen in January 2019 and achieved 100% deliveryduring the Reporting Period; it completed the regulatory filing and started the process of partnershipand delivery for the Chuanqi Donghu Mingyuan project in December 2019. It basically completedthe municipal road works and landscape renovation and upgrading works of Shantou TianyuewanPhase I, and completed the basement works of Phase II in October 2019.

2. The property sales exceeded the forecast. The Company continued to keep watch on marketchanges and policy trends. Considering the regional market status of on-sale projects and the

advantages and disadvantages of the projects, the Company established different promotion andsales plans, selected such new media channels as WeChat and Toutiao for marketing and dulykicked off citywide referral sales. As a result, the Company made big breakthroughs in the sale ofon-sale projects compared with the forecast, but with marked regional differences. The ChuanqiJingyuan project became a hot sale across the city and was sold out in just 10 months; the projectsof Chuanqi Donghu Mingyuan and Cuilinyuan were sold at a regular speed; the Tianyuewan PhaseI project required stronger promotion.(II) Higher Quality and Efficiency in Management and Operation

1. Regulated and highly efficient financial management

The Company intensified financial control by printing and distributing a number of policies,including SPG Management Measures for Financial Approval, SPG Management Measures forExpert Consultation Fee, SPG Management Measures for Online Banking Payment andManagement Measures for Traveling Expense Management (Revision), making furtherimprovements to the financial management policy system; strengthened communication withcooperating banks and effectively sped up the return of sales fund; fully increased the returns oftemporarily idle fund through bank structured deposits and agreement deposits; strictly controlledperiod costs, with a YOY decrease of 0.76% in six cost items of focus.

2. Stable growth in rental income

Affected by the economic downturn and facing the leasing trend of increasingly frequent surrenderof tenancy and reduction of leasing sizes, the Company tried every means to retain customers,stabilize prices and urge payment collection, worked hard to raise the leasing returns of propertystock and thus exceeded the annual rental target.

3. New progress in outstanding matters

By strengthening efforts to solve outstanding matters, the Company won nine legal cases witheffective court decisions in the year, and had five winning cases that had entered the enforcementstage.

4. Continuous enhancement in the competitiveness of affiliates

All the Company’s affiliates worked hard to develop the market, took tough measures foroperation, strengthened management, improved services and maintained profitability with growth.(III) Progress in Assets Restructuring in ComplianceIn 2019, trading in the Company’s shares was suspended due to the material assets restructuring.The Company worked with related parties to continuously promote various fundamental work forthe restructuring, including the updating of due diligence documents, additional audit, additionalevaluation and the updating of restructuring related documents and data; while strictly observingregulation, disciplines and information disclosure principles, the Company proactively and properlyhandled the investor relations by attentively answering investors’ questions by deadlines andpatiently providing explanations and assurance for investors calling and visiting the Company,gaining understanding and support from the majority of them. To ensure orderly progress of itsrestructuring, the Company signed Supplementary Agreement V to the Cooperation Agreement onRestructuring and Listing and Supplementary Agreement VI to the Cooperation Agreement on

Restructuring and Listing respectively on March 13, 2019 and December 13, 2019 with relatedparties. The corresponding announcements have been disclosed through the media outletsdesignated by the Company. During the Reporting Period, the Company fulfilled the obligation ofinformation disclosure strictly in accordance with regulatory rules, including disclosing therestructuring progress at least every five trading days, duly going through the procedures forpostponing the resumption of share trading and disclosing the restructuring related information.(IV) Marked Achievements in Party-Related WorkThe party committee of the Company further implemented the theme education of “Stay true toyour mission”, made full use of the theoretical study of its central group, the primary subject studyof itself and the branches’ study and education of “Study the party constitution and regulationsand become a qualified party member”, persisted in promoting theoretical study while drivingpractical rectifications and centered around study & learning, investigation & research, examinationof problems and rectifications throughout the whole theme education process; continued theeducation in politics, ideology and incorruptible practice and kept improving the risk prevention andcontrol system for incorruptible practice; continuously promoted the party building project of“support from state-owned enterprises and party building to communities”, gaining recognitionfrom the organization divisions of the provincial and the municipal party committees; continued tocarry out the “rendering warmness” activities, including consoling needy employees and partymembers and hospitalized employees, and proactively participating in public benefit activities, suchas donations on Guangdong Day of Poverty Alleviation and the clothes donation themed“Donation of Used Clothes to Deliver Warmness”; exerted the organization role of differentgroups, including actively organizing diverse corporate cultural activities through interest groupactivities, such as soccer, tennis, badminton, yoga and table tennis, leading to increasingly strongercorporate cohesion.(V) Effective Efforts in Production SafetyThe Company formulated SPG Emergency Plan for Production Safety Accidents and printed anddistributed SPG Compilation of Safety Management Policies, further refining the safetymanagement policy system with obvious improvements in standardization and operability. Theaffiliates refined and updated their safety management policies according to the requirements andconducted a number of targeted emergency drills based on their respective industrial characteristics.The Company has not had production safety accidents in its system for years with stable andcontrollable production safety.

The Company is subject to the Guideline No. 3 of the Shenzhen Stock Exchange on Information Disclosure by Industry—for ListedCompanies Engaging in Real Estate.New additions to the land bank:

Name of land lot or projectLocationPlanned usage of landSite area(㎡)Floor area with plot ratio (㎡)How the land is obtainedThe Company’s interestTotal land price (RMB’0,000)Consideration of the Company’s interest (RMB’0,000)

Cumulative land bank:

Name of project/areaSite area(㎡)Floor area(㎡)Floor area available for development(㎡)
Xinfeng Building in Shantou0.592.662.66
Total0.592.662.66

Development status of major projects:

City/regionName of projectLocationStatusThe Company’s interestTime for commencement of construction% developed% constructedSite area(㎡)Planned floor area with plot ratio (㎡)Floor area completed in the Current Period(㎡)Cumulative completed floor area (㎡)Expected total investment (RMB’0,000)Cumulative investment (RMB’0,000)
ShenzhenChuanqi Donghu MingyuanLuohu DistrictConstruction completed on 18 December 2019100.00%1 February 2016100%100.00%5,889.7045,256.2645,256.2645,256.2651,00040,828
ShantouTianyuewan Phase IIChaoyang DistrictFramework in construction100.00%1 October 201860%31,167.50153,470.4079,80169,884

Sales status of major projects:

City/regionName of projectLocationStatusThe Company’s interestFloor area with plot ratio (㎡)Floor area available for sale (㎡)Cumulative 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)Cumulative settled floor area (㎡)Floor area settled in the Current Period(㎡)Pre-sale/sales revenue settled in the Current Period (RMB’0,000)
ShenzhenCuilinyuanLonggang DistrictReady for sale100.00%60,111.4256,13750,6958,05928,68548,4277,30225,675
ShenzhenChuanqi JingyuanFutian DistrictSold out49.00%43,075.4521,09321,09318,012131,7152109318,719135,119
ShantouTianyuewan Phase IChaoyang DistrictFor sale100.00%153,470.40160,37269,19827,63015,65852,95328,57616,629

Rental status of major projects:

Name of projectLocationUsageThe Company’s interestRentable area (㎡)Cumulative rented area (㎡)Average occupancy rate
Real Estate MansionShenzhenCommercial100.00%3,413.883,413.88100.00%
North Block of Guoshang MansionShenzhenCommercial100.00%4,819.714,819.71100.00%
Petrel BuildingShenzhenCommercial100.00%22,475.4722,475.47100.00%
SPG PlazaShenzhenOffice building100.00%59,462.5248,110.5780.91%
SPG Plaza PodiumShenzhenCommercial100.00%21,456.7221,456.72100.00%
Wenjin GardenShenzhenCommercial100.00%3,531.603,531.60100.00%

Primary land development:

□ Applicable √ Not applicable

Financing channels:

Financing channelEnding balance of financingsFinancing cost range/average financing costMaturity structure
Within 1 year1-2 years2-3 yearsOver 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 2019, as a usual practice for real estate developers, the Group providedguarantees of a total amount of RMB475.3967 million for its homebuyers on their bank mortgages.

ProjectGuarantee periodGuarantee amount (RMB’0,000)Note
CuilinyuanUntil the property ownership certificate is registered as collateral and handed over to bank for keeping15,819.86
Chuanqi Donghu MingyuanUntil the property ownership certificate is registered as collateral and handed over to bank for keeping17,535.05
Tianyuewan Phase IUntil the property ownership certificate is registered as collateral and handed over to bank for keeping14,184.76
Total47,539.67

Joint investments by directors, supervisors and senior management and the listed company (applicable for such investments wherethe 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

20192018Change (%)
Operating revenueAs % of total operating revenue (%)Operating revenueAs % of total operating revenue (%)
Total2,548,740,319.49100%2,175,187,242.60100%17.17%
By operating division
Property sales2,017,872,864.1479.17%1,595,473,065.4073.35%5.82%
Engineering and construction304,837,313.4611.96%370,298,109.3617.02%-5.06%
Property management157,665,638.016.19%146,123,975.957.36%-1.17%
Rental service86,484,133.793.39%92,015,827.233.59%-0.20%
Other15,337,469.100.60%25,329,926.731.16%-0.56%
Eliminated internal transactions and accounts-33,457,099.01-1.31%-54,053,662.07-2.49%1.17%
By product category
Residential units719,499,453.2328.23%1,435,068,125.3765.97%-37.74%
Shops and parking lots11,526,595.290.45%1,614,094.300.07%0.38%
Apartments1,286,846,815.6250.49%158,790,845.737.30%43.19%
Other564,324,554.3622.14%633,767,839.2729.14%-6.99%
Eliminated internal transactions and accounts-33,457,099.01-1.31%-54,053,662.07-2.49%1.17%
By operating segment
Guangdong Province2,491,373,238.7697.75%2,142,575,113.6998.50%-0.75%
Other regions in China90,235,417.773.54%86,071,887.303.96%-0.42%
Overseas588,761.970.02%593,903.680.03%0.00%
Eliminated internal transactions and accounts-33,457,099.01-1.31%-54,053,662.07-2.49%1.17%

(2) Operating Division, Product Category or Operating Segment Contributing over 10% of OperatingRevenue or Operating Profit

√ Applicable □ Not applicable

Unit: RMB

Operating revenueCost of salesGross profit marginYoY change in operating revenue (%)YoY change in cost of sales (%)YoY change in gross profit margin (%)
By operating division
Property sales2,017,872,864.14497,310,023.3875.35%26.47%11.63%3.28%
Engineering and construction304,837,313.46298,315,846.772.14%-17.68%-16.75%-1.09%
By product category
Residential units719,499,453.23268,317,902.5562.71%-49.86%-36.48%-7.86%
Shops and parking lots11,526,595.294,281,944.6662.85%614.12%441.60%11.83%
Apartments1,286,846,815.62224,710,176.1782.54%710.40%909.10%-3.44%
By operating segment
Guangdong Province2,491,373,238.76910,671,531.2663.45%16.28%-0.51%31.77%

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 divisionItemUnit20192018Change (%)
Real estateSales volumeRMB’0,00053,22237,80840.77%
OutputRMB’0,00038,57573,927-47.82%
InventoryRMB’0,000161,109176,408-8.67%

Any over 30% YoY movements in the data above and why:

√ Applicable □ Not applicable

The sales volume went up 40.77% year-on-year, primarily driven by the launch of a tertiary referral agent system for the purpose ofpromoting sales. And the output went down year-on-year, primarily because most constructions in progress had been completed andthe major ongoing construction project was Tianyuewan Phase II in Shantou.

(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 divisionItem20192018Change (%)
Cost of salesAs % of total cost of sales (%)Cost of salesAs % of total cost of sales (%)
Real estate497,310,023.3851.92%445,500,004.8547.48%16.85%
Engineering construction298,315,846.7731.15%358,335,541.2038.19%-14.97%
Property management142,261,602.8814.85%128,536,788.4015.08%12.47%
Rental services45,173,891.054.72%46,069,096.383.52%-10.49%
Other13,404,895.031.40%19,705,354.722.10%-0.58%
Eliminated internal transactions and accounts-38,713,606.57-4.04%-59,760,772.46-6.37%-3.27%

(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)91,065,399.14
Total sales to top five customers as % of total sales of the Reporting Period (%)3.57%
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.CustomerSales revenue contributed for the Reporting Period (RMB)As % of total sales revenue (%)
1Legal person A30,430,950.541.19%
2Legal person B19,809,523.810.78%
3Legal person C15,607,569.910.61%
4Legal person D15,035,134.760.59%
5Legal person E10,182,220.120.40%
Total--91,065,399.143.57%

Other information about major customers:

□ Applicable √ Not applicable

Major suppliers:

Total purchases from top five suppliers (RMB)225,289,440.84
Total purchases from top five suppliers as % of total purchases of the Reporting Period (%)48.32%
Total purchases from related parties among top five suppliers as % of total purchases of the Reporting Period (%)36.01%

Information about top five suppliers:

No.SupplierPurchase in the Reporting Period (RMB)As % of total purchases (%)
1Legal person A167,885,971.2336.01%
2Legal person B19,623,072.704.21%
3Legal person C15,035,134.763.23%
4Legal person D12,563,042.032.69%
5Legal person E10,182,220.122.18%
Total--225,289,440.8448.32%

Other information about major suppliers:

□ Applicable √ Not applicable

3. Expense

Unit: RMB

20192018Change (%)Reason for any significant change
Selling expense79,480,254.0252,562,980.2251.21%Increase of referral fee and commission
Administrative expense68,854,618.7074,029,840.44-6.99%
Finance costs-20,906,149.20-17,235,722.1621.30%The decrease of interest expense
Taxes and surcharges751,013,928.21445,365,141.9268.63%Provisions for VAT of land
Return on investment (“-” for loss)32,429,481.2317,121,605.8789.41%Wealth management income from bank structural deposits

4. R&D Expense

□ Applicable √ Not applicable

5. Cash Flows

Unit: RMB

Item20192018Change (%)
Subtotal of cash generated from operating activities2,728,276,550.052,274,046,624.4619.97%
Subtotal of cash used in operating activities2,124,668,825.301,211,479,218.8775.38%
Net cash generated from/used in operating activities603,607,724.751,062,567,405.59-43.19%
Subtotal of cash generated from investing activities2,237,622,620.55614,891,757.53263.91%
Subtotal of cash used in investing activities2,321,918,490.621,500,629,839.4354.73%
Net cash generated from/used in investing activities-84,295,870.07-885,738,081.9090.48%
Subtotal of cash generated from financing activities43,741,293.6417,550,137.29149.24%
Subtotal of cash used in financing activities204,370,642.51253,025,175.24-19.23%
Net cash generated from/used in financing activities-160,629,348.87-235,475,037.9531.78%
Net increase in cash and cash equivalents358,667,324.42-58,266,620.53722.34%

Explanation of why any of the data above varies significantly:

√ Applicable □ Not applicable

The subtotal of cash generated from operating activities in 2019 showed a year-on-year increase of 19.97%,mainly caused by the increase of the houses selling amount received from selling products and providing the laborservices of 2019.The subtotal of cash used in operating activities in 2019 showed a year-on-year increase of 75.38%, mainly due tothe increase of tax payments.The subtotal of cash generated by investing activities in 2019 showed a year-on-year increase of 263.91%, mainlybecause of recovering the bank structural deposits of RMB2.2 billion in2019.The subtotal of cash used in investing activities in 2019 showed a year-on-year increase of 54.73%, mainly becausethe Company invested to buy bank structural deposits of RMB2.3 billion in 2019.The subtotal of cash generated by financing activities in 2019 showed a year-on-year increase of 149.24%, mainlybecause of the increase of wealth management income from bank structural deposits in 2019.The subtotal of cash used in financing activities in 2019 showed a year-on-year decrease of 19.23%, mainly becausefunds increased in the factoring operations in the current year.The net increase in cash and cash equivalents in 2019 showed a year-on-year increase of 722.34%, mainlybecause funds increased in the factoring operations in the current year.

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

Unit: RMB

31 December 201931 December 2018Change in percentage (%)Reason for any significant change
AmountAs % of total assetsAmountAs % of total assets
Monetary assets2,511,140,445.3551.15%2,050,804,935.9344.07%7.08%Withdrawal of money from selling
Accounts receivable62,059,055.681.26%26,678,630.820.57%0.69%Increase of receivable project funds
Inventories1,462,229,048.1829.78%1,685,152,051.2636.22%-6.44%
Investment property632,241,900.2012.88%623,930,838.1513.41%-0.53%
Long-term equity investments469,838.650.01%12,561,107.240.27%-0.26%Provision for impairment
Fixed assets30,522,035.110.62%33,926,198.520.73%-0.11%
Short-term borrowings51,647,260.171.05%17,260,103.460.37%0.68%Increase of pledge and discount by accounts receivable
Taxes payable585,700,815.3611.93%300,547,372.986.46%5.47%Provisions for VAT of land
Other payables277,319,174.535.65%721,819,898.4815.51%-9.86%Settlement of VAT of land

2. Assets and Liabilities at Fair Value

√ Applicable □ Not applicable

Unit: RMB

ItemBeginning amountGain/loss on fair-value changes in the Reporting PeriodCumulative fair-value changes charged to equityImpairment allowance for the Reporting PeriodPurchased in the Reporting PeriodSold in the Reporting PeriodOther changesEnding amount
Financial assets
4. Investments in other equity instruments30,922,155.022,204,575.0233,126,730.04
Subtotal of financial assets30,922,155.022,204,575.0233,126,730.04
Total of the above30,922,155.022,204,575.0233,126,730.04
Financial liabilities0.000.00

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

ItemEnding carrying valueReasons
Monetary assets1,003,950,685.00Undue structural deposits
Accounts receivable51,647,260.17Pledge for short-term borrowings
Total1,055,597,945.17

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.

(1) Overall Use of Funds Raised

□ Applicable □ Not applicable

(2) Commitment Projects of Funds Raised

□ Applicable □ Not applicable

(3) Change in Projects of Funds Raised

□ Applicable □ Not applicable

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 the Company’s net profit:

Unit: RMB

NameRelationship with the CompanyPrincipal activityRegistered capitalTotal assetsNet assetsOperating revenueOperating profitNet profit
Shenzhen SPG Longgang Development Co., Ltd.SubsidiaryReal estate development30,000,000.00641,467,005.2685,723,587.64245,325,748.5652,271,506.7439,261,438.25
Shantou SEZ, Wellam FTY, Building Development, Co., Ltd.SubsidiaryReal estate development91,226,120.44199,040,626.36124,606,659.8616,142,556.251,235,069.591,008,352.88
Shantou Huafeng Real Estate Development Co., Ltd.SubsidiaryReal estate development80,000,000.00922,144,188.8121,314,115.14158,381,370.34-2,818,105.32-10,348,779.46
Great Wall Estate Co., Inc. (U.S.)SubsidiaryReal estate development2,051,146.0019,313,504.71-88,661,190.63588,761.97-273,403.83-273,403.83
Shenzhen Zhentong Engineering Co., Ltd.SubsidiaryInstallation and maintenance10,000,000.00111,975,243.9524,285,554.39306,512,094.79-1,526,881.63-1,087,022.38
Shenzhen Property Management Co., Ltd.SubsidiaryProperty management7,250,000.00106,677,568.2928,018,960.29164,538,783.125,564,347.744,204,947.22
Shenzhen Petrel Hotel Co., Ltd.SubsidiaryHotel service30,000,000.0051,250,282.5746,221,091.7826,011,914.594,900,951.974,431,852.58
Shenzhen Huazhan Construction Supervision Co., Ltd.SubsidiarySupervisor8,000,000.0010,234,197.069,412,297.943,889,537.61789,329.31591,564.98
Xin Feng Enterprise Co., Ltd.SubsidiaryInvestment and management502,335.00405,581,919.38-138,637,929.010.00-16,668,673.66-16,668,673.66

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 mainlyinclude: Shenzhen SPG Longgang Development Co., Ltd., Shantou SEZ, Wellam FTY, BuildingDevelopment, Co., Ltd., Shantou Huafeng Real Estate Development Co., Ltd. The Cuilinyuanproject developed by Shenzhen SPG Longgang Development Co., Ltd. brought forward RMB245million in 2019 (the percentage of accumulative sales carried forward was 85%), accounting for 12%of the Company's real estate sector income, 9.6% of the Company's operating revenue and 7% ofthe group's combined profits. Jinyedao and YuejingDongfang developed by Shantou SEZ, WellamFTY, Building Development, Co., Ltd. left a few amount of remaining buildings for sale. AndShantou Huafeng Real Estate Development Co., Ltd. was responsible for the development ofTianyuewan project (divided into Phase I and Phase II). Tianyuewan Phase I was opened for sale inOctober 2016 and completed in December 2017. The Phase II started construction in November2018 and was expected to be completed before the end of 2019. As of 2019, the sales progress ofthe Phase I was relatively slow with a accumulated sales rate of about 50%. The main reasons forthe loss in 2019 were: the sales progress was not up to expectations, and another was due to thepayment of interest on internal borrowings.

2. Shenzhen Zhentong Engineering Co., Ltd. was engaged in the business of building installation andmaintenance with the 2019 operating revenues of RMB306 million and of 8% to the operatingrevenues of the Company.

3. Shenzhen Property Management Co., Ltd was engaged in the industry of property management,and the business was steady. The 2019 operating revenues was of RMB164 million that was of 6% tothe operating revenues of the Company.

4. The 2019 net profits of Xin Feng Enterprise Co., Ltd. was of RMB-16.67 million which mainly dueto the changes of exchange rate and the provision made for impairment of long-term equityinvestment of RMB12.17 million.VIII Structured Bodies Controlled by the Company

□ Applicable √ Not applicable

IX Prospects

(I) Industrial Pattern and TrendWith a look into 2020, the sudden COVID-19 Epidemic has increased the downward pressure of domesticeconomy for a short period. But from a long-term view, due to the strong resilience of China’s economy, theshort-term economic fluctuation caused by the epidemic will gradually weaken to the general trend of economicdevelopment. The basic trend of growth amid stability and on a long-term basis of China’s economy will remainunchanged. The real estate industry is affected by the epidemic substantially in a short term, with real estatecompanies under performance pressure. However, with the implementation of a variety of stimulation policiescountering the epidemic impact, improvement is expected in the “abnormal trend” of the real estate sector at thebeginning of the year; from an overall perspective, the country’s positioning of “Houses are for living in, not forspeculating on” and the target of “stabilizing land prices, housing prices and expectations” are expected to remainunchanged. In 2019, Shenzhen’s medium- and long-term plans continuously yielded good results. Coupled withpartial adjustment to the real estate market policy, it sparked continuous market concern and stimulated thegrowth of deals. It is expected that Shenzhen’s real estate market in 2020 will continue the momentum of stable

development.(II) Development Strategy of the CompanyThe Company will proactively adapt to the “new norm” of macroeconomic development, seek new opportunitiesin the real estate industry, make full use of the favorable foundation for rapid development during the 13

th

Five-Year Plan period, and persist in the concept of seeking growth amid stability and continuous development.By continuing to center around the goal of building a competitive professional real estate company, it willaccelerate the development and construction of existing land and projects, prudently look for new investmentopportunities, recover the financing capacity on capital market, vigorously promote reforms, innovation andmechanism switch, and make full efforts to generate reasonable and stable investment returns for the shareholderswithout insisting on high-speed growth in business scale and profit targets.(III) Potential RisksDespite another new record in its performance during the Reporting Period, the Company still have someproblems that require prompt solution:

First, affected by the assets restructuring, the Company has not developed any new land for reserve in recent years,bringing great challenges to its sustained operations; the restructuring work remains unsettled for prolonged time,resulting in the loss of the Company’s core professional and technical personnel with a stronger wait-and-seeattitude among the staff;Second, the transformation of the economic development pattern and the reform in the housing policy haveenhanced the competitive edges of industrial leading companies, leading to a faster process of “the fittest survive”,increasingly higher concentration of the real estate industry and ever-growing market shares of advantagedenterprises. The Company has yet to improve its core competitiveness in a number of segments involved in its realestate development control, including design, construction, cost control, marketing and after-sale services;Third, the sudden COVID-19 Epidemic has brought substantial impact to the Company’s main business andaffiliates. Consequently, its original marketing plans for the first quarter and the first half year are exposed toserious impact and its affiliates are unable to carry out their business normally, putting pressure on the annualoperating income and performance targets.The Company will attach great importance to the above-mentioned problems and proactively take effectivemeasures to solve them.(IV) Operating PlanThe Company will follow these guidelines for its work of 2020: Persist in the concept of innovation with stabilityand sustained development; work hard to manage the efforts towards party building, the construction of an honestparty and an incorruptible government and the building of corporate culture; reinforce strategic management;focus on its main business real estate; make full efforts to properly carry out safe production and businessmanagement; proactively plan for new land development; continuously improve the control level; effectively dealwith the COVID-19 Epidemic; orderly promote material assets restructuring; push the progress of all tasks to ahigher level; and strive to develop itself into a listed real estate company with industrial competitiveness.Centering around the annual target, the Company will focus on the following four aspects in 2020:

First, it will focus on main business and strive to strengthen industrial competitiveness. The Company willreinforce strategic management, keep close watch on land market information, proactively explore new models ofproject development and increase land and project reserves through multiple channels; it will spare no efforts topromote the construction of ongoing projects and properly control project progress, quality and safety; it will payclose attention to market changes and policy trends, vigorously drive project sales and ensure the achievement ofthe annual sales target; it will continue to optimize control policies and processes, manage talent team buildingand comprehensively improve its main business development capacity.

Second, it will orderly promote the material assets restructuring. The Company will keep close watch on thetrends of capital market and regulatory policies, work hard to strengthen communication with regulatoryauthorities and collaboration with all trade parties, promote the material assets restructuring process in compliance,fulfill the obligation of information disclosure strictly in accordance with regulatory rules, patiently andattentively manage investor relations and maintain its good image on capital market; during the restructuring, itwill stabilize the staff team and guarantee normal operations and the implementation of the original targets.Third, it will make full efforts in the epidemic prevention and control and production safety. The Company willintensify guarantee measures, make active steps to deal with the epidemic, work hard at the safety of projectconstruction, rental property and office areas, properly reduce the epidemic impact on production and operations,avoid production safety accidents and create favorable conditions for the achievement of this year’s operatingtarget.Fourth, it will endeavor to manage its efforts towards party building and the construction of an honest party and anincorruptible government. The Company will further study and implement Xi Jinping Thought on Socialism withChinese Characteristics for a New Era, put into effect the guiding principles of the 19

th

National Congress thesecond, third and fourth plenary sessions of its 19

thCentral Committee of the Communist Party of China,implement fully the decisions of the superior party committee, give play to the leading role of the partycommittees of state-owned enterprises in controlling directions, managing the overall situation and guaranteeingthe implementation, integrate party leadership into corporate governance and lead high-quality corporatedevelopment.X Communications with the Investment Community such as Researches, Inquiries andInterviews

1. During the Reporting Period

√ Applicable □ Not applicable

DateWay of communicationType of communication partyIndex to main information communicated
21 January 2019By telephoneIndividualInquired of the progress of assets restructuring and the sales of project development, and didn’t offer written materials
25 February 2019By telephoneIndividualInquired of the progress of assets restructuring and annual operation and expected disclosure time of annual report, and didn’t offer written materials
26 March 2019By telephoneIndividualInquired of the progress of assets restructuring and fundamentals of the Company, and didn’t offer written materials
11 April 2019By telephoneIndividualInquired of the progress of assets restructuring and share trading resumption time of the Company, and didn’t offer written materials
17 May 2019By telephoneIndividualInquired of the progress of assets restructuring and share trading resumption time of the Company, and didn’t offer written materials
12 June 2019By telephoneIndividualInquired of the progress of assets restructuring and fundamentals of the Company, and didn’t offer written materials
26 June 2019By telephoneIndividualInquired of the progress of assets restructuring and fundamentals of the Company, and didn’t offer written materials
4 July 2019By telephoneIndividualInquired of the interim operation, progress of assets restructuring and expected share trading resumption time of the Company, and didn’t offer written materials
24 July 2019By telephoneIndividualInquired of the progress of assets restructuring and share trading resumption time of the Company, and didn’t offer written materials
5 August 2019By telephoneIndividualInquired of the progress of assets restructuring and share trading resumption time of the Company, and expected disclosure time of interim report, and didn’t offer written materials
12 September 2019By telephoneIndividualInquired of the progress of assets restructuring and share trading resumption time of the Company, and didn’t offer written materials
18 September 2019By telephoneIndividualInquired of the progress of assets restructuring and share trading resumption time of the Company, and didn’t offer written materials
30 September 2019By telephoneIndividualInquired of the progress of assets restructuring and operation of the Company, and expected disclosure time of third quarter report, and didn’t offer written materials
10 October 2019By telephoneIndividualInquired of the progress of assets restructuring and, reasons for delaying share trading resumption, and expected share trading resumption time and didn’t offer written materials
25 October 2019By telephoneIndividualInquired of the progress of assets restructuring and, reasons for delaying share trading resumption, and expected share trading resumption time and didn’t offer written materials
7 November 2019By telephoneIndividualInquired of the progress of assets restructuring and, reasons for delaying share trading resumption, and expected share trading resumption time and didn’t offer written materials
18 November 2019By telephoneIndividualInquired of the progress of assets restructuring and share trading resumption time of the Company, and change of CPAs by the Company, and didn’t offer written materials
2 December 2019By telephoneIndividualInquired of the progress of assets restructuring and share trading resumption time of the Company, and didn’t offer written materials
10 December 2019By telephoneIndividualInquired of the progress of assets restructuring and share trading resumption time of the Company, and didn’t offer written materials
19 December 2019By telephoneIndividualInquired of the progress of assets restructuring, annual operation, and the sales of project development, and didn’t offer written materials
26 December 2019By telephoneIndividualInquired of the progress of assets restructuring, annual operation, and the sales of project development, and didn’t offer written materials
Times of communications21
Number of institutions communicated with0
Number of individuals communicated with21
Number of other communication parties0
Tip-offs or leakages of substantial supposedly-confidential information during communicationsNone

Part V Significant EventsI 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 inthe Reporting Period:

□ Applicable √ Not applicable

The profit distributions to ordinary shareholders, either in the form of cash or stock, in the past three years (including the ReportingPeriod) are summarized as follows:

The profit distribution strictly observe regulations of the Articles of Association, and the specificcash dividend plan is worked out after the approval of the board meeting and general meeting.Independent directors played their roles with due diligence.For the year 2017, no profit distribution or share capital increase from capital reserve would beconducted.For 2018, based on the total 1,011,660,000 shares of the Company as at 31 December 2018, a cashdividend of RMB2.00 (tax included) will be distributed to the A-share and B-share holders for every10 shares they hold without bonus share (tax included), and no share capital increase from capitalreserve would be conducted.For 2019, based on the total 1,011,660,000 shares of the Company as at 31 December 2019, a cashdividend of RMB1.65 (tax included) will be distributed to the A-share and B-share holders for every10 shares they hold without bonus share (tax included), and no share capital increase from capitalreserve would be conducted.Cash dividend for ordinary shareholders in the past three years (including the Reporting Period):

Unit: RMB

YearCash 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 (%)
2019166,923,900.00552,452,307.5930.22%0.000.00%166,923,900.0030.22%
2018202,332,000.00503,498,831.6040.19%0.000.00%202,332,000.0040.19%
20170.00184,988,512.420.00%0.000.00%0.000.00%

Indicate by tick mark whether the Company fails to put forward a cash dividend proposal for the ordinary shareholders despite thefacts that the Company has made profits in the Reporting Period and the profits of the Company as the parent distributable to theordinary 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)1.65
Additional shares to be converted from capital reserve for every 10 shares (share)0
Total shares as the basis for the profit distribution proposal (share)1011660000
Cash dividends (RMB) (tax inclusive)166,923,900.00
Cash dividends in other forms (such as share repurchase) (RMB)0.00
Total cash dividends (including those in other forms) (RMB)166,923,900.00
Distributable profit (RMB)1,280,197,219.96
Total cash dividends (including those in other forms) as % of total profit distribution100%
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 2019 was reviewed and approved by the 50th Meeting of the 7th Board of Directors held on 13 March 2020, and intended to be submitted to The 2019 Annual General Meeting for review. Based on the total 1,011,660,000 shares of the Company as at 31 December 2019, a cash dividend of RMB1.65 (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

No such cases in the Reporting Period.

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 “30. Changes in Main Accounting Policies and Estimates” of “III Main AccountingPolicies and Estimates” 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 AuditorCurrent independent auditor

Name of the domestic independent auditorGrant 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 Company0
Names of the certified public accountants from the domestic independent auditor writing signatures on the auditor’s reportHuang Shengsen, Zhao Juanjuan
How many consecutive years the certified public accountants from the domestic independent auditor have provided audit service for the Company0

Indicate by tick mark whether the independent auditor was changed for the Reporting Period.

√ Yes □ No

Indicate by tick mark whether the independent auditor was changed during the auditing period

□ Yes √ No

Whether the change of the independent auditor has performed the approval procedure

√ Yes □ No

Notes to the change of the independent auditorConsidering that Ruihua Certified Public Accountants LLP has provided audit service for the Company for consecutive years, to

ensure the independence and objectivity of audit, the Company made a public bidding for CPAs based on the Company’s demand forfuture development. Then, after review of the 47

th Meeting of the 7

th Board of Directors and the 1

stExtraordinary General Meeting of2019, the Company determined to hire Grant Thornton China (LLP) (hereinafter referred to as “Grant Thornton”) as the auditor forthe Company’s 2019 Financial Report and internal control.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 at the cost ofRMB0.23 million.X Possibility of Listing Suspension or Termination after Disclosure of this Report

□ Applicable √ Not applicable

XI Insolvency and Reorganization

□ Applicable √ Not applicableNo such cases in the Reporting Period.XII Major Legal Matters

√Applicable □ Not applicable

General informationInvolved amount (RMB’0,000)ProvisionProgressDecisions and effectsExecution of decisionsDisclosure dateIndex to disclosed information
Xi’an Project Lawsuit2,100NoIn execution? Business Tourism Company had to pay for the compensation RMB36.62 million and the relevant interest (from 14 September 1998 to the payment day) to Xi’an Fresh Peak Company within one month after the judgment entering into force. If the Business Tourism Company failed to pay in time, it had to pay double debt interests to Xi’an Fresh Peak Company for the overdue period; ② Xi’an Joint Commission on Commerce had jointly and severally obligation of the interests of the compensation; .③ Business Tourism Company shall bear RMB227,500 of the acceptance fee and the security fee.The applicant has received RMB15.20 million. Now Business Tourism 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.21 August 2019Interim Report 2019 (full text) on www.cninfo.com.cn

XIII Punishments and Rectifications

□ Applicable √ Not applicableNo 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 applicableNo such cases in the Reporting Period.XVI Major Related-Party Transactions

1. Continuing Related-Party Transactions

√Applicable □ Not applicable

Related partyRelationship with the CompanyType of transactionSpecific transactionPricing principleTransaction priceTotal value (RMB’0,000)As % of total value of all same-type transactionsApproved transaction line (RMB’0,000)Over the approved line or notMethod of settlementObtainable market price for same-type transactionsDisclosure dateIndex to disclosed information
Shenzhen Jianan (Group) Co., Ltd.Controlled by the same company as the parentEngineering constructionWholly-owned subsidiary undertook engineering construction of related partyNegotiate through agreements-283.610.93%283.61NotBank transfer-29 March 20192018 Annual Report disclosed on www.cninfo.com.cn
Shenzhen JiananControlled byEngineeringWholly-ownedNegotiate-16,788.636.01%16,788.6NotBank transfer-29 March2018 Annual
(Group) Co., Ltd.the same company as the parentconstructionsubsidiary paid total account for construction contracted to related partythrough agreements2019Report disclosed on www.cninfo.com.cn
Total----17,072.21--17,072.21----------
Large-amount sales return in detailN/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 PeriodN/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

TypeCapital resourcesAmount incurredOutstanding balanceOverdue unrevoked amount
Bank financial productsSelf-owned funds100,00000
Bank financial productsSelf-owned funds30,00000
Bank financial productsSelf-owned funds100,000100,0000
Total230,000100,0000

High-risk entrusted wealth management with significant single amount or low security, poor liquidity and no capital preservation:

□ Applicable √ Not applicable

Whether there is the case where the principal cannot be recovered at maturity or other case which may cause impairment forentrusted wealth management

□ Applicable √ Not applicable

(2) Entrusted Loans

□ Applicable √ Not applicable

No such cases in the Reporting Period.

4. 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 paid attention on the execution of the social responsibilities and positively protectedthe legal interests of the stakeholders such as the creditors, employees, customers, suppliers andcommunity as well as executed the social responsibilities. During the Reporting Period, theCompany organized the volunteer team and the Party member volunteer service team and positivelydeveloped the volunteer service and the Party member volunteer service activities; furthermore, theCompany also executed the social responsibilities as a state-owned enterprise, made donations toShenzhen Charity Community Public Welfare Fund, provided special funds for community tocarrying out joint construction, joint governance and joint enjoyment, helped families with familyplanning difficulty, paid consolation money to Party members and employees in hardship andhospitalized employees due to diseases; carried out condolence activities for employees on theirbirthday and for retired cadres on festivals; positively developed the interest teams activities such asthe badminton, table tennis, mountain climbing and basketball as well as football. As of theReporting Period, the Company actively performed its social responsibilities and obligations,issuing consolation money of RMB37,192.90 to vulnerable groups and donations of RMB30,000.00to poor families in the administrative region, collecting donations of 52,435.00 for povertyalleviation as well as donating 1500 items of clothing.

2. Measures Taken for Targeted Poverty Alleviation

(1) Plans

(2) Summary of the Related Work Done in the Reporting Period

(3) Results

IndicatorMeasurement unitQuantity/Progress
1. General results————
2. Itemized results————
2.1 Out of poverty by industrial development————
2.2 Out of poverty by transferring employment————
2.3 Out of poverty by relocation————
2.4 Out of poverty by education————
2.5 Out of poverty by improving health————
2.6 Out of poverty by protecting ecological environment————
2.7 Subsidy for the poorest————
2.8 Social poverty alleviation————
2.9 Other items————
3. Accolades received (for what and at what level)————

(4) Subsequent Plans

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 the environmental protectionauthorities.Not applicable

XIX Other Significant Events

√ Applicable □ Not applicable

Since the controlling shareholder of the Company is planning a significant event that involves theCompany, upon the application to the Shenzhen Stock Exchange, trading in the stocks of theCompany (A-stock under the name of “SPG” and the code of “000029”; B-stock under the name of“SPG-B” and the code of “200029”) was suspended starting from the opening of 14 September2016. The Company disclosed the Announcement on Share Trading Suspension due to Planning ofSignificant Event (No. 2016-022), the Announcement on Continued Share Trading Suspension dueto Planning of Significant Event (No. 2016-023) and the Announcement on Continued ShareTrading Suspension due to Planning of Significant Event (No. 2016-024) on 14 September 2016, 22September 2016 and 29 September 2016, respectively. Upon ascertainment, the event constituted amaterial asset restructuring. The Company disclosed the Announcement on Share TradingSuspension due to Planning of Major Assets Restructuring (No. 2016-025) on 30 September 2016and the Announcement on Signing Cooperation Agreement on Restructuring and Listing (No.2016-027) on 10 October 2016.The Company convened the 33rd Meeting of the 7th Board of the Directors on 11 November 2016,which the Proposal on Continued Share Trading Suspension due to Planning of Major AssetsRestructuring was reviewed and approved. For details, see the Announcement on Continued Share

Trading Suspension after Expiration of Period of Share Trading Suspension due to Planning ofMajor Assets Restructuring (No. 2016-039) disclosed on 14 November 2016.The Company convened the 1st Extraordinary General Meeting of 2016 on 12 December 2016, onwhich the Proposal on Continued Share Trading Suspension due to Planning of Major AssetsRestructuring was reviewed and approved. For details, see the Announcement on Application forContinued Share Trading Suspension after Expiration of Period of Share Trading Suspension due toPlanning of Major Assets Restructuring (No. 2016-047) disclosed on 13 December 2016.The Company held an online illustration meeting to investors on 10 March 2017, communicatingthis major assets restructuring with them and answering questions that they were generallyconcerned about with the information allowed to be disclosed. For details, see the Announcementon Online Illustration Meeting to Investors (No. 2017-012) disclosed on 11 March 2017.On 14 December 2019, the Company disclosed the Announcement on Signing the SupplementaryAgreement VI of the Cooperation Agreement governing Restructuring and Listing (No. 2019-090),which extends the exclusivity period and validity period stipulated in the restructuring cooperationagreement to 31 December 2020.To ensure the smooth progress of this major assets restructuring, prevent abnormal fluctuations inthe prices of its stocks and protect the rights and interests of its non-controlling interests, theCompany has applied to the Shenzhen Stock Exchange for continued share trading suspension forno more than 1 month as of 14 February 2020 and expects to disclose the major assets restructuringplan or report according to the requirements of the Standards for the Contents and Formats ofInformation Disclosure by Companies Offering Securities to the Public No. 26—Major AssetsRestructuring of Listed Companies prior to 14 March 2020. For details, see the Announcement onDelay of Share Trading Resumption of Planning of Major Assets Restructuring (No. 2019-011)disclosed on 14 February 2020.During the share trading suspension period, the Company shall disclose the progress of this majorassets restructuring at least every five trading days in strict accordance with the requirements ofapplicable laws and regulations. At present, this major assets restructuring is proceeding smoothly.This major assets restructuring is subject to great uncertainty. Therefore, investors are kindlyreminded to pay attention to possible investment risk.XX Significant Events of Subsidiaries

□ Applicable √ Not applicable

Part VI Share Changes and Shareholder Information

I. Share Changes

1. Share Changes

Unit: share

BeforeIncrease/decrease (+/-)After
SharesPercentage (%)New issuesShares as dividend converted from profitShares as dividend converted from capital reservesOtherSubtotalSharesPercentage (%)
1. Restricted shares00.00%0000000.00%
1.1 Shares held by the state00.00%0000000.00%
1.2 Shares held by state-own Legal-person00.00%0000000.00%
1.3 Shares held by other domestic investors00.00%0000000.00%
Among which: shares held by domestic legal person00.00%000000.00%
Shares held by domestic natural person00.00%0000000.00%
1.4 Oversea shareholdings00.00%000000.00%
Among which: shares held by oversea legal person00.00%0000000.00%
Shares held by oversea natural person00.00%0000000.00%
2. Unrestricted shares1,011,660,000100.00%000001,011,660,000100.00%
2.1 RMB ordinary shares891,660,00088.14%00000891,660,00088.14%
2.2 Domestically listed foreign shares120,000,00011.86%00000120,000,00011.86%
2.3 Oversea listed foreign shares00.00%0000000.00%
2.4 Other00.00%0000000.00%
3. Total shares1,011,660,000100.00%000001,011,660,000100.00%

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’s ordinaryshareholders 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 shareholders76,443Number of ordinary shareholders at the month-end prior to the disclosure of this Report76,443Number of preferred shareholders with resumed voting rights (if any) (see Note 8)0Number of preferred shareholders with resumed voting rights at the month-end prior to the disclosure of this Report (if any) (see Note 8)0
Shareholding of ordinary shareholders holding more than 5% shares or the top 10 of ordinary shareholders
Name of shareholderNature of shareholderHolding percentage (%)Number of shareholding at the end of the Reporting PeriodIncrease and decrease of shares during Reporting PeriodNumber of shares held subject to trading moratoriumNumber of shares held subject to trading moratoriumPledged or frozen shares
Status of sharesAmount
Shenzhen Investment Holdings Co., LtdState-owned legal person63.55%642,884,262642,884,262
Shandong Gold Financial Holding Capital Management Co., Ltd.-Shandong Gold Financial Holding Sustaining Fund 1Domestic non-state-owned legal person1.02%10,300,00010,300,000
Lu ZhigaoDomestic natural person0.32%3,246,9493,246,949
Tan ShiqingDomestic natural person0.13%1,286,7011,286,701
Yang ShuilianDomestic natural person0.13%1,273,7001,273,700
Yang JianxiongDomestic natural person0.12%1,255,7501,255,750
Central Huijin Asset Management Co., Ltd.State-owned legal person0.12%1,165,5001,165,500
Peng WeiDomestic natural person0.11%1,129,0821,129,082
Wu HaoyuanForeign natural person0.11%1,109,3001,109,300
Guotai Junan Securities (Hong Kong) LimitedForeign legal person0.10%1,015,6831,015,683
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 aboveThe Company has found no related parties or acting-in-concert parties as defined in the Administrative Measures for Shareholding Changes in Listed Companies among the shareholders above.
Top 10 unrestricted shareholders
Name of shareholderUnrestricted shares held at the period-endShares by type
TypeShares
Shenzhen Investment Holdings Co., Ltd642,884,262RMB ordinary shares642,884,262
Shandong Gold Financial Holding Capital Management Co., Ltd.-Shandong Gold Financial Holding Sustaining Fund 110,300,000RMB ordinary shares10,300,000
Lu Zhigao3,246,949RMB ordinary shares3,246,949
Tan Shiqing1,286,701RMB ordinary shares1,286,701
Yang Shuilian1,273,700RMB ordinary shares1,273,700
Yang Jianxiong1,255,750Domestically listed foreign shares1,255,750
Central Huijin Asset Management Co., Ltd.1,165,500RMB ordinary shares1,165,500
Peng Wei1,129,082RMB ordinary shares1,129,082
Wu Haoyuan1,109,300Domestically listed foreign shares1,109,300
Guotai Junan Securities (Hong Kong) Limited1,015,683Domestically listed foreign shares1,015,683
Related or acting-in-concert parties among top 10 unrestricted public shareholders, as well as between top 10 unrestricted public shareholders and top 10 shareholdersThe Company has found no related parties or acting-in-concert parties as defined in the Administrative Measures for Shareholding Changes in Listed Companies among the shareholders above.
Top 10 ordinary shareholders involved in securities margin trading (if any) (see Note 4)The fourth shareholder held all his shares in the Company in his margin account. And the third shareholder held part of his shares in the Company in his margin account.

Indicate by tick mark whether any of the top 10 ordinary shareholders or the top 10 unrestricted ordinary shareholders of theCompany conducted any promissory repo during the Reporting Period.

□ Yea √ No

No such cases in the Reporting Period.

2. Controlling Shareholder

Nature of the controlling shareholder: Controlled by a local state-owned legal personType of the controlling shareholder: legal person

Name of controlling shareholderLegal representative/person in chargeDate of establishmentUnified social credit codePrincipal activity
Shenzhen Investment Holdings Co., Ltd.Wang Yongjian13 October 2004767566421Investment 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 Period380,380,000 shares in SZPRD A (000011), representing a stake of 63.82%;; 234,070,000 shares in STHC (000045) , representing a stake of 45.96%; 12,270,000 shares in Shenzhen Universe A (000023) , representing a stake of 8.85%; 962,720,000 shares in Ping An (601318) , representing a stake of 5.27%; 2,749,530,000 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 18.80%; 952,010,000 shares in Shenzhen International (00152) , representing a stake of 44.04%; 604,820,000 shares in BEAUTYSTAR (002243), representing a stake of 51.93%; 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%; 5,640,000 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 (002243), representing a stake of 4.86%; 77,270,000 shares in Vanke (02202), representing a stake of 0.68%.

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 controllerLegal representative/person in chargeDate of establishmentUnified social credit codePrincipal activity
Shenzhen State-owned Assets Supervision and Administration CommissionYu Gang31 July 2004K3172806-7Perform the responsibilities of investor on behalf of the state, and supervise and manage the authorized state-owned assets legally.
Other listed companies at home or abroad controlled by the actual controller in the Reporting PeriodIn addition to the Company controlling shareholder - Shenzhen Investment Holding Co., 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

Shenzhen State-owned Assets Supervisionand Administration Commission

Shenzhen Investment Holdings Co., Ltd.

Shenzhen Investment Holdings Co., Ltd.

The Company

Part VII Preferred Shares

□ Applicable √ Not applicable

No preferred shares in the Reporting Period.I Issuance and Listing of Preferred Shares in the Resent 3 Years up the Period-end

□ Applicable √ Not applicable

II Amount and Shareholding of Preferred Shareholders

Unit: share

Shareholding of preferred shareholders holding more than 5% shares or the top 10 of preferred shareholders
Name of shareholderNature of shareholderHolding percentage (%)Number of shareholding at the end of the Reporting PeriodIncrease and decrease of shares during Reporting PeriodNumber of shares held subject to trading moratoriumNumber of shares held subject to trading moratoriumPledged or frozen shares
Status of sharesAmount

III Profit Distribution of Preferred Shares

□ Applicable √ Not applicable

IV Repurchase and Conversion of Preferred Shares

□ Applicable √ Not applicable

V Resumed Voting Rights of Preferred Shares in the Reporting Period

1. Restoration and Exercise of Preferred Shares

□ Applicable □ Not applicable

2. Shareholders and Actual Controllers Involved in the Resumed Voting Rights of Preferred Shares

□ Applicable □ Not applicable

VI Accounting Policies and Reasons for Preferred Shares

□ Applicable □ Not applicable

Part VIII Convertible Bonds

□ Applicable √ Not applicable

No convertible bonds in the Reporting Period.I Previous Adjustments of Conversion PriceII Cumulative Conversion

□ Applicable □ Not applicable

III Top 10 Shareholders of Convertible Bonds

Unit: share

No.Name of shareholderNature of shareholderNumber of convertible bonds held at the period-endAmount of convertible bonds held at the period-endProportion (%)

IV Significant Changes in Profitability, Assets Condition and Credit Standing of Guarantees

□ Applicable □ Not applicable

V Period–end Liabilities, Changes of Credit Standing and Cash Arrangement of FutureRepayment of the Company

Part IX Directors, Supervisors, Senior Management and StaffI Change in Shareholdings of Directors, Supervisors and Senior Management

NameOffice titleIncumbent/FormerGenderAgeStart of tenureEnd of tenureBeginning shareholding (share)Increase in the Reporting Period (share)Decrease in the Reporting Period (share)Other increase/decrease (share)Ending shareholding (share)
Liu ZhengyuChairman of the BoardIncumbentMale5015 January 202016 April 201500000
Chen MaozhengGeneral Manager and DirectorIncumbentMale5617 April 201216 April 201500000
Dai XianhuaSupervisorIncumbentMale5815 January 202016 April 201500000
Deng KangchengDirectorIncumbentMale5417 April 201216 April 201510,00000010,000
Zhang LeiCFO and DirectorIncumbentMale5217 April 201216 April 201500000
Wen LiDirectorIncumbentFemale5117 April 201216 April 201500000
Jiang LihuaDirectorIncumbentFemale5617 April 201216 April 201500000
Song BotongIndependent directorIncumbentMale5215 October 201014 October 201600000
Zhang ShunwenIndependent directorIncumbentMale5423 April 201422 April 202000000
Kang XiaoyueIndependent directorIncumbentMale5615 May 201814 May 202100000
Ren WeiSupervisorIncumbentMale4015 May 201816 April 20152,0000002,000
Li YufeiSupervisorIncumbentFemale4217 April 201216 April 201500000
Feng HongweiSupervisorIncumbentMale492 March 201716 April 201500000
Lin JunSupervisorIncumbentFemale5127 April 201616 April 201500000
Wei HanpingVice GMIncumbentFemale5428 September 201216 April 201500000
Tang XiaopingVice GM, Secretary of the BoardIncumbentMale5022 October 201316 April 201500000
Zhou JianpingChairman of the BoardLeftMale6517 April 201215 January 202000000
Zhuang QuanSupervisorLeftMale6517 April 201215 January 202080,00000080,000
Teng XianyouVice GMLeftMale6317 May 201224 December 201900000
Total------------92,00000092,000

II Change of Directors, Supervisors and Senior Management

√Applicable □ Not applicable

NameOffice titleType of changeDate of changeReason for change
Zhou JianguoDirector, Chairman of the Board and Director of the Strategic Committee of the BoardLeft15 January 2020Retired
Zhuang QuanSupervisor, Chairman of the Supervisory BoardLeft15 January 2020Retired
Teng XianyouVice GMLeft24 December 2019Retired

III Biographical Information

Professional backgrounds, major work experience and current duties in the Company of the incumbent directors, supervisors andsenior management:

1. Liu zhengyu: he once was the director of Inspection Department in State-owned Assets Supervision and AdministrationCommission of the People’s Government of Shenzhen Municipal and Chief Accountant of Shenzhen Investment Holdings Co., Ltd.Now he acts as the vice GM of Shenzhen Investment Holdings Co., Ltd. and the member of CPC. He has been the secretary of CPC

and Chairman of the Board of the Company since January 2020.

2. Chen Maozheng: he once was the vice secretary of CPC and managing director of Shenzhen City Construction Development(Group) Co. Ltd. And he has been the vice secretary of CPC and director as well as managing director of the Company since October2009.

3. Dai Xianhua: he once was vice director of the Asset Management Department in State-owned Assets Supervision andAdministration Commission of the People’s Government of Shenzhen Municipal, office investigator and investigator of Appraisaland Distribution Department. Now he acts as the Chairman of the Supervisory Board of ShenZhen Properties & ResourcesDevelopment (Group) Ltd.He has been the Chairman of the Supervisory Board of the Company since January 2020.

4. Deng Kangcheng: he was once deputy director, director of the Office of Shenzhen Investment Holdings Co., Ltd., and supervisorof the Company. And he has been director, Vice Secretary of CPC and Secretary in Discipline Inspection Committee of the Companysince February 2009.

5. Zhang Lei: he was once the CFO and Secretary to the Board of SDIC ZHONGLU FRUIT Co., Ltd. And he has been the directorand CFO of the Company since October 2010.

6. Wen Li: she once worked as the vice chief of the Investment and Development Department, vice director of Management Centerfor Construction Project and Minister of Enterprise Department I of Shenzhen Investment Holdings Co., Ltd. Now, she serves as thedirector, GM and vive secretary of CPC in Shenzhen Bay Technology Development Co., Ltd. And she has been the director of theCompany since September 2006.

7. Jiang Lihua: she once was the vice chief of the Finance Department and the Chief of Appraisal and Distribution Department inShenzhen Investment Holdings Co., Ltd. Now, she serves as the Chief of Financial Department (Settlement Center). And she hasbeen acting as director of the Company since February 2009.

8. Song Botong: he ever took posts of vice chief of Civil Engineering Department in College of Architecture and Civil Engineeringand Chairman of Labor Union, and secretary of CPC of Shenzhen University. Now he acts as standing deputy director of ResearchCenter for Real Estate and director of Infrastructure Department in Shenzhen University. He has been the independent director of theCompany since October 2010.

9. Zhang Shunwen: he acted as director of the Shenzhen Juyuan Certified Public Accounting, now he acts as partner of BDO ChinaShu Lun Pan Certified Public Accountants LLP. He acts as theindependent directors of the Company since April 2014.

10. Kang Xiaoyue: he was once the staff member of Department of Justice of Jiangxi Province, a reporter, editor and head of NewsDepartment of Shenzhen Legal Newspaper. Now he serves as a general partner of BeijingWeiheng (Shenzhen) Law Firm. He acts asthe independent director of the Company since May 2018.

11. Ren Wei: he once was the CFO of Xian Zhenye Real Estate Development Co., Ltd., minister of Budget & Financing Departmentand director of Fund Centre of Shenfubao Group Co., Ltd. Now he serves as the vice minister of Audit Department of ShenzhenInvestment Holdings Co., Ltd. Since May 2018 he serves as the supervisor of the Company.

12. Li Yufei: she ever worked as the Assistant to the Manager of the Investment Department and Assistant to the Manager & ViceManager of Assets Management Centre as well as the Senior Management Staff of Enterprise Department I and EnterpriseDepartment II (Journal Center) in Shenzhen Investment Holdings Co., Ltd. Now, she serves as the senior executive of IndustrialManagement Department. And she has been the supervisor of the Company since April 2012.

13. Feng Hongwei: he once was the Vice Chief of the Board Secretariat, and the Securities Representative. Now he acts as the AuditSupervisory Manager of the Company. He has been acting as a supervisor of the Company since March 2017.

14. Lin Jun: She once was the Vice Chief of the Party-Mass Work Department and the Vice Discipline Inspection Secretary & Chiefof the Party-Mass Work Department of the Company. And she has been acting as a supervisor of the Company since April 2016.

15. Wei Hanping: she ever worked as the manager of the Leasing Operation Department in Shenzhen City Construction Development(Group) Co. and the manager of Cost Control Department of the Company. And she has been the Vice GM of the Company sinceSeptember 2012.

16. Tang Xiaoping: he ever act as CFO of Shenzhen HRD Assets Management Company, minister of Financial OperationsManagement Department of Shenzhen Foreign Labor Service Co., Ltd., legal representative, the executive director of the ShenzhenForeign Affairs Service Center, and financing plan department manager of the Company. Since 22 October 2013 he acts as deputyGM of the Company. Since 26 April 2018 he acts as secretary of the Board of the Company.Offices held concurrently in shareholding entities:

√Applicable □Not applicable

NameShareholding entityOffice held in the shareholding entityStart of tenureEnd of tenureRemuneration or allowance from the shareholding entity
Liu ZhengyuShenzhen Investment Holdings Co., LtdVice GM, member of CPC9 January 2017Yes
Jiang LihuaShenzhen Investment Holdings Co., LtdChief of Financial Department (Settlement Center)6 March 2017Yes
Ren WeiShenzhen Investment Holdings Co., LtdVice minister of Audit Department18 September 2017Yes
Li YufeiShenzhen Investment Holdings Co., LtdSenior executive of Industrial Management Department9 July 2015Yes

Offices held concurrently in other entities:

√Applicable □Not applicable

NameOther entityOffice held in the entityStart of tenureEnd of tenureRemuneration or allowance from the entity
Liu ZhengyuShenzhen Urban Transport Planning Center Co.., Ltd.Director17 October 2017No
Liu ZhengyuTelling Telecommunication Holding Co., Ltd.Director2 March 2017No
Liu ZhengyuChina's State Owned Capital Venture Capital FundDirector16 August 2016No
Liu ZhengyuKashi Shenzhen City Co., Ltd.Director8 October 2013No
Liu ZhengyuShenzhen Investment Holdings Bay Area Development Co., Ltd.Non-executive director, Chairman of the Board14 March 2018No
Liu ZhengyuShenzhen Investment International Capital Holdings Infrastructure Co., Ltd.Director18 December 2017No
Liu ZhengyuShenzhen Investment International Capital Holdings Co., Ltd.Director9 September 2016No
Dai XianhuaShenZhen Properties & Resources Development (Group) Ltd.Supervisor, Chairman of Supervisory Board27 May 2011Yes
Song BotongInfrastructure Department of Shenzhen UniversityDirector1 March 2013Yes
Zhang ShunwenBDO China Shu Lun Pan Certified Public Accountants LLP.Partner1 March 2008Yes
Kang XiaoyueBeijingWeiheng (Shenzhen) Law FirmGeneral partner2 December 2019Yes
Wen LiShenzhen Bay Technology Development Co., Ltd.Director, GM and Vice Secretary of CPC1 December 2016Yes
Zhang LeiShenzhen Agricultural Products Co., Ltd.CFO11 January 2017Yes
Zhang LeiShenzhen Zhenye (Group) Co., Ltd.Supervisor16 March 2017No

Punishments imposed in the recent three years by the securities regulator on the incumbent directors, supervisors and seniormanagement as well as those who left in the Reporting Period:

□ Applicable √ Not applicable

IV Remuneration of Directors, Supervisors and Senior ManagementDecision-making procedure, determination basis and actual payments of remuneration for directors, supervisors and seniormanagement:

It was executed according to the procedures stipulated in the Interim Measures for the Administration of Human Resources of the Company.
Their remuneration was decided in accordance with the Interim Provisions of the Annual Salary System for Managers of the State-owned Enterprises in Shenzhen and spirit of relevant documents as well as the Interim Measures for the Administration of Human Resources of the Company. The Directors Jiang Lihua and Wen Li, and the Supervisor Ren Wei, Li Yufei are dispatched by controlling shareholders of the Company without drawing remuneration from the Company. With review and approval of the 2013 Annual General Meeting convened on 23 April 2014, allowance for each independent director was adjusted to RMB7,000 (tax included) per month since May 2014. Besides, they received no other rewards from the Company. The independent director Song Botong hasn’t received rewards from the Company since January 2019.

Remuneration of directors, supervisors and senior management for the Reporting Period

Unit: RMB’0,000

The Company paid their remuneration monthly according to relevant systems for remuneration management ofthe Company.

Name

NameOffice titleGenderAgeIncumbent/FormerTotal before-tax remuneration from the CompanyAny remuneration from related party
Zhou JianguoChairman of the BoardMale65Left121.98No
Chen MaozhengGeneral Manager and DirectorMale56Incumbent134.28No
Zhuang QuanSupervisorMale65Left86.15No
Deng KangchengDirectorMale54Incumbent114.36No
Zhang LeiCFO and DirectorMale52Incumbent0No
Wen LiDirectorFemale51Incumbent0No
Jiang LihuaDirectorFemale56Incumbent0No
Song BotongIndependent directorMale52Incumbent0No
Zhang ShunwenIndependent directorMale54Incumbent8.4No
Kang XiaoyueIndependent directorMale56Incumbent8.4No
Ren WeiSupervisorMale40Incumbent0No
Li YufeiSupervisorFemale42Incumbent0No
Feng HongweiSupervisorMale49Incumbent54.65No
Lin JunSupervisorFemale51Incumbent54.65No
Teng XianyouVice GMMale64Left92.59No
Wei HanpingVice GMFemale53Incumbent112.26No
Tang XiaopingVice GM, Secretary of the BoardMale50Incumbent114.36No
Total--------902.08--

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 parent102
Number of in-service employees of major subsidiaries1,823
Total number of in-service employees1,925
Total number of paid employees in the Reporting Period1,925
Number of retirees to whom the Company as the parent or its major subsidiaries need to pay retirement pensions597
Functions
FunctionEmployees
Production1,294
Sales82
Technical419
Financial53
Administrative77
Total1,925
Educational backgrounds
Educational backgroundEmployees
Doctors1
Masters29
Bachelors193
College graduates297
Technical secondary school graduates148
High school graduates and below1,257
Total1,925

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 ofEmployee Training The Company adopts internal training, hires experts give lectures to theCompany or participate professional training, train the on job employees with job knowledge,professional skills, rules and regulations, the business process etc., which enrich and renew theprofessional knowledge, enhance the comprehensive quality and business skills of the employees.

4. Labor Outsourcing

□ Applicable √ Not applicable

Part X Corporate Governance

I Basic Situation of Corporate GovernanceIn this Reporting Period, the Company strictly accorded with requirements of Company Law,Securities Law, Code of Corporate Governance of Listed Companies and other laws and statutes,continuously perfected its corporate governance, and standardized its operation. The actual situationof corporate governance was in line with the requirements of the relevant normative documents.The operating mechanism, of which the Board of Directors made decisions, the management teamtook execution, and the Supervisory Board implemented supervision.(I) Preparations and holding of shareholders’ general meeting and disclosure of resolution of themeetings were normatively in line with Articles of Association and Rules for Procedure of theShareholders’ General Meeting; all shareholders were on an equal position and could fully exercisetheir legal rights.(II) Directors and the Board of Directors: The Board is responsible for decision-making andchoosing directions. It exercised its power as per the corporate governance requirements.Preparations, holding and disclosure of resolution of the Board sessions were normatively in linewith the Articles of Association and Rules of Procedure for the Board of Directors; all directorsperformed their obligations in an honest and diligent manner; independent directors had a rationalprofession structure; and special committees concerning strategy, audit, nomination, remunerationand appraisal under the Board can operate positively and effectively.(III) Supervisors and the Supervisory Board: structure of the Supervisory Board was reasonable.The Supervisory Board conducted the supervision and inspection for the significant events of theCompany strictly in accordance with the Rules for Procedure of the Supervisory Board, andexercised its supervision right effectively and brought its supervision function into fully play.(IV) Manager level: the manager level of the Company was fully responsible for the production andmanagement of the Company, performed their obligations in an honest and diligence manner.Implemented the resolution of the Board with efficient supervision and restriction and acquiredgood achievement.Indicate by tick market whether there is any material incompliance with the regulatory documents issued by the CSRC governing thegovernance 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 and salaries from the controlling shareholders. All the senior executives of the Company

took no office title concurrently and drew no remunerations from the Shareholder Company.(III) In respect of assets, the Company possessed independent and integrated assets and the propertyof the Company is transparent.(IV) In respect of organization, the Board of Directors and the Supervisory Board operatedindependently. There existed no superior-inferior relationship between the controlling shareholderand its function department and the Company.(V) In respect of finance, the Company has independent financial department, independentlyaccounted and paid taxes according to the law. The Company established a complete accountingsystem, financial accounting system and financial administrative systems. The Company openedindependent 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

MeetingTypeInvestor participation ratioDate of the meetingDisclosure dateIndex to disclosed information
The 2018 Annual General MeetingAnnual General Meeting63.61%18 April 201919 April 2019Announcement on Resolutions of 2018 Annual General Meeting disclosed on www.cninfo.com.cn.
The 1st Extraordinary General Meeting of 2019Extraordinary General Meeting63.60%15 November 201916 November 2019Announcement on Resolutions of the 1st Extraordinary General Meeting of 2019disclosed 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 directorTotal number of board meetings the independent director was eligible to attendBoard meetings attended on siteBoard meetings attended by way of telecommunicationBoard meetings attended through a proxyBoard meetings the independent director failed to attendThe independent director failed to attend two consecutive board meetings (yes/no)General meetings attended
Song Botong55000No2
Zhang Shunwen55000No2
Kang Xiaoyue54010No2

Why any independent director failed to attend two consecutive board meetings:

Not applicable

2. Objections Raised by Independent Directors on Matters of the CompanyIndicate 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:

NoneVI Performance of Duty by Specialized Committees under the Board in the Reporting PeriodAll committees actively, effectively work, providing powerful guarantee to the scientificdecision-making, the relevant details are as follows:

1. Performance of the Audit Committee of the Board of Directors

During the Reporting Period, the Audit Committee actively promoted the progress of the annualaudit and the relevant work. It reviewed on the Company’s following issues: Arrangement on theAnnual Audit Work, Periodic Financial Report, Profit Distribution Plan, Change of CPAs Firm,Written Submission of the Administration on CPAs Firm, Construction of Internal Control, FundTransfer Between Listed Companies and Related Parties and Guarantee Events, etc.. Besides, it alsokept full and necessary communication with the annual auditor of the Company. During the

Reporting Period, the Audit Committee has convened four meetings, reviewed the Company’sfinancial statements and the preliminary auditing result issued by the annual auditor of the Company,as well as issued their opinions after the review, and remarked for the change of CPAs Firm.

2. Performance of the Remuneration and Appraisal Committee

The Remuneration and Appraisal Committee issued its opinion on annual remuneration of directors,supervisors and senior management disclosed in 2018 Annual Report on 28 March 2019.

3. Performance of the Nomination Committee

The Nomination Committee issued its opinion on the Company’s changes in directors on 24December 2019.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 the ReportingPeriod.

□ Yes √ No

The Supervisory Committee raised no objections in the Reporting Period.

VIII Appraisal of and Incentive for Senior ManagementThe Company's board of directors assesses, evaluates and employs management teams. TheCompany’s chairman and general manager implement the annual salary system, and the annualsalary is composed of basic salary and performance compensation. The shareholder unit formulatesassessment methods for assessment. The other senior management personnel's compensation isdetermined based on individual job performance with reference to the total salary of the Company’sleader; 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 report14 March 2020
Index to the disclosed internal control self-evaluation reportInternal Control Self-Evaluation Report on www.cninfo.com.cn
Evaluated entities’ combined assets as % of consolidated total assets86.25%
Evaluated entities’ combined operating revenue as % of consolidated operating revenue100.00%
Identification standards for internal control weaknesses
TypeWeaknesses in internal control over financial reportingWeaknesses in internal control not related to financial reporting
Nature standardThe 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 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.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 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 standardSerious 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 prevailThe 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 reporting0
Number of material weaknesses in internal control not related to financial reporting0
Number of serious weaknesses in internal control over financial reporting0
Number of serious weaknesses in internal control not related to financial reporting0

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 2019 in accordance with Basic Standards for Internal Control and relevant regulations.
Independent auditor’s report on internal control disclosed or notDisclosed
Disclosure date14 March 2020
Index to such report disclosedReport on Internal Control disclosed on www.cninfo.com.cn.
Type of the auditor’s opinionUnmodified unqualified opinion
Material weaknesses in internal control not related to financial reportingNo

Indicate by tick mark whether any modified opinion is expressed in the independent auditor’s report on the Company’s internalcontrol.

□ Yes √ No

Indicate by tick mark whether the independent auditor’s report on the Company’s internal control is consistent with the internalcontrol 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 before the date of thisReport’s approval or were due but could not be redeemed in full?No

I Basic Information of the Corporate Bonds

NameAbbr.CodeRelease dateDue dateBonds balance (RMB’0,000)Interest rateWay of redemption

II List of the Bond Trustee and the Rating Organization

Bond trustee:
Rating organization executed the tracking rating of the corporate bonds of the Reporting Period:

III List of the Usage of the Raised Funds of the Corporate BondsIV Rating Situation of the Corporate Bonds InformationV Credit-adding Mechanism, Repayment Plan and Other Repayment Guarantee Measures ofthe Corporate BondsVI Convene Situation of the Bonds Holders Meeting during the Reporting PeriodVII List of the Duty Execution of the Bonds Trustee during the Reporting PeriodVIII The Major Accounting Data and the Financial Indicators of the Recent 2 Years of theCompany up the Period-end

Unit: RMB’0,000

Item20192018Change rate of the same period

Main reason of the above accounting data and the financial indicators with the YoY change exceeded 30%

□ Applicable □ Not applicable

IX List of the Interest Payment of Other Bonds and Debt Financing Instruments during theReporting PeriodX List of the Acquired Bank Credit Lines, Usage and the Repayment of the Bank LoansXI. List of the Execution of the Agreements or the Commitments Related to the CompanyBonds Raising Specification during the Reporting PeriodXII Significant Events Occurring during the Reporting PeriodXIII Whether there Was Guarantor of the Corporate Bonds

□ Yes □ No

Part XII Financial Statements

Type of the audit opinionUnmodified unqualified opinion
Date of signing this report31 December 2019
Name of the audit institutionGrant Thornton Accounting Firm (LLP)
Number of the audit reportZTSZ (2020) No. 441ZA1280
Name of the certified public accountantsHuang Shengsen, Zhao Juanjuan

Text of the Audit ReportAudit Report

GTCSZ(2020)No. 441ZA1280

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 the consolidated and company statement of financial position as at 31 December 2019,the consolidated and company statement of comprehensive income, the consolidated and company cash flows for the year then ended,consolidated and company statement of changes in equity and the notes to the financial statements.In our opinion, the accompanying consolidated and company financial statements present fairly, in all material respects, the Group’sconsolidated and company financial position as at 31 December 2019, and their consolidated financial performance and their consolidatedcash flows 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. Our responsibilities under those standards are furtherdescribed in the Auditor’s Responsibilities for the 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 arerelevant to our audit of the financial statements, and we fulfilled our other ethical responsibilities in accordance with these requirements andthe Ethics Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.Key audit mattersKey audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financialstatements of the current period. These matters 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 these matters.

1.Revenue recognition from sales of properties

Relatively detailed information is set out in Notes III. 23 and Note V.27.Descriptions of the matterIn 2019, the revenue from sales of properties was RMB 2.018 billion that accounted for 79.65% of total revenue of the Group.When all of the following conditions have been met, the Group recognizes the revenue of sales of properties: (1) the signed sales contractfiled with the land department; (2) properties have been completed and accepted; (3) fully one-off payment, or the first installment paymenthas been received and the bank mortgage approval procedures have been completed;(4) the procedures of housing delivery have completedin accordance with the sales contract.Due to the importance of revenue from sales of properties, and any discrepancies in revenue recognition will have a significant impact on the

profit of the Group. Therefore, the revenue recognition from sales of properties is a key audit matter.How our audit addressed the Key Audit MatterOur audit procedures for the recognition of revenue include:

① Understanding, assessing and testing the design and implementation of key internal controlsabout the progress of contract performance and revenue recognition.

② Examining the main clauses in sales contracts to evaluate the appropriateness of the Group’srevenue recognition policy associated with the relevant accounting standards;

③ Performing tests, on a sample basis, to examine contracts of sales of properties, trace tocollection of revenue and check letter of admission (elements of revenue recognition) in order to assessthe compliance with the Group’s revenue recognition policy.

④ Evaluating the revenue of sales of properties, on sample basis, before and after the balancesheet date by checking to sales contracts, revenue collection and the letter of admission, for theappropriateness of the period of revenue recognition

⑤ Calculating average house price and comparing it with the price from last year to analyze thereasonableness of revenue and gross profit.

⑥ Evaluating the appropriateness of accounting treatment, presentation and disclosure of therevenue recognition of sales of properties and other relevant information by the Group in the financialstatements.

2. Accuracy of land appreciation tax calculations

Relatively detailed information is set out in Notes IV and Note V.28.Descriptions of the matterLand 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 of 30%-60%. At the end of reporting period,management evaluates the provision of LAT with the consideration of factors including the provisions of the relevant taxation, estimablerevenue minus deductible land costs, costs of real estate development, interest expense, development expense, etc. It is possible that asignificant difference exists between actual and estimated taxable amount.Due to the importance of the LAT accrual to the consolidated financial statements, and management's judgment when making estimatesincludes consideration of relevant tax laws and regulations and practical practices. Therefore, we identified the accrual of LAT of the Groupas a key audit matter.How our audit addressed the Key Audit MatterOur audit procedures for the land appreciation tax include:

① Evaluating the design and effectiveness of key internal controls related to the measurement of LAT;

② Involved our internal tax specialists in the PRC to assess the provision of LAT on 31 December 2019 on basis of our experience,knowledge, understanding of the practical operation 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 the sale of real estate and the amount ofdeductible items, and assess the Group’s assumptions and judgments;

④ Recalculating the amount of provision of LAT and comparing it to management estimate.

Other InformationManagement is responsible for the other information. The other information comprises the information included in the Annual Report of 2019,but does not include the financial statements and our auditor’s report thereon.Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusionthereon.In connection with our audit of financial statements, our responsibility is to read the other information and, in doing so, consider whether theother 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 of this other information, we are required to reportthat fact. We have nothing to report in this regard.Responsibilities of Management and Those Charge with Governance for the Financial StatementManagement of the Group is responsible for the preparation and fair presentation of the financial statement in accordance with AccountingStandards for Business Enterprises, and for such 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’s ability to continue as a going concern, disclosing,as applicable, matters related to going concern 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 reporting process.Auditor’s Responsibilities for the Audit of the Financial StatementOur objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,whether due to fraud or error, and to issue an auditor’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 Auditing will always detect a material misstatementwhen it exists. Misstatements can arise form fraud or error and are considered material if, individually or in the aggregate, they couldreasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.As part of an audit in accordance with China Standards on Auditing, we exercise professional judgment and maintain professional skepticismthroughout the audit. We also:

? Identify and assess the risks of material misstatement of the financial statements, whether due tofraud or error, design and perform audit procedures responsive to those risks, and obtain auditevidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detectinga material misstatement resulting from fraud is higher than for one resulting from error, as fraud mayinvolve 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 audit proceduresthat are appropriate in the circumstances.

? Evaluate the appropriateness of accounting policies used and the reasonableness of accountingestimates and related disclosures made by management.

? Conclude on the appropriateness of management’s use of the going concern basis of accounting and,

based on the audit evidence obtained, whether a material uncertainty exists related to events orconditions that may cast significant doubt on the Group’s ability to continue as a going concern. If weconclude that a material uncertainty exists, we are required to draw attention in our auditor’s report tothe related disclosures in the financial statements or, if such disclosures are inadequate, to modify our

opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’sreport. However, further events or conditions may cause the Group to cease to continue as a goingconcern.

? Evaluate the overall presentation, structure and content of the financial statements, and whether the

financial statements represent the underlying transactions and events in a manner that achieves fairpresentation.

? Obtain sufficient appropriate audit evidence regarding the financial information of the entities orbusiness activities within the Group to express an opinion on the consolidated financial statements.We are responsible for the direction, supervision and performance of the group audit. We remainsolely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit andsignificant audit findings, including any significant deficiencies in internal control that we identify during our audit.We also provide the governance body with a statement that we have complied with relevant ethical requirements regarding independenceand to communicate with them all relationships and 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 that were of most significance in the audit of thefinancial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unlesslaw or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter shouldnot be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the publicinterest benefits of such communication.

Grant ThorntonAuditor's signature and stamp Auditor's signature and stamp
China ·Beijing13 March 2020 Date of the auditor's report

Consolidated and Company Balance Sheet

As at 31 December 2019Prepared by:SHENZHEN SPECIAL ECONOMIC ZONE REALESTATE & PROPERTIES (GROUP) Co., Ltd

Expressed in RMB

Item

ItemNoteAs at 31/12/2019As at 31/12/2018
ConsolidatedCompanyConsolidatedCompany
Current assets: Cash at bank and on hand Financial assets held for trading Financial assets at fair value through profit or loss Bills receivable Accounts receivable Accounts receivable financing Prepayments Other receivables Including:Interest receivables Dividend receivables Inventories Assets held for sale Non-current assets due within one year Other current assets Total current assets Non-current assets: Debt investments Available-for-sale financial assets Other debt investments Held-to-maturity investments Long-term receivables Long-term equity investments Other equity instrument investments Other non-current financial assets Investment properties Fixed assets Construction in progress Productive biological assets Oil and gas assets Intangible assets Development costs Goodwill Long-term deferred expenses Deferred tax assets Other non-current assets Total non-current assets Total assetsV.12,511,140,445.351,967,688,122.552,048,522,435.931,344,486,378.53
V.262,059,055.68156,935.8433,426,991.655,164,795.67
V.3219,948.17200,000.004,177,767.88200,000.00
V.428,275,228.26835,275,498.6945,018,027.61770,374,849.84
--2,453,067.782,380,301.11
1,052,192.76-1,052,192.76-
V.51,462,229,048.18419,453,091.861,685,152,051.26543,912,100.37
V.6102,781,855.48407,560.646,780,999.56215,745.41
4,166,705,581.123,223,181,209.583,823,078,273.892,664,353,869.82
V.7--17,464,240.7412,000,000.00
V.8469,838.65150,676,516.9212,561,107.24235,284,776.57
V.933,126,730.0413,229,501.03--
V.10632,241,900.20522,038,731.16623,930,838.15511,040,299.65
V.1130,522,035.1119,586,720.4733,926,198.5221,942,842.11
V.12----
V.13162,125.72162,125.72387,066.91346,015.72
V.1446,441,325.2520,975,294.54154,543,788.8016,699,980.23
742,963,954.97726,668,889.84842,813,240.36797,313,914.28
4,909,669,536.093,949,850,099.424,665,891,514.253,461,667,784.10

Consolidated and Company Balance Sheet(Continued)

As at 31 December 2019Prepared by:SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE &PROPERTIES (GROUP) Co., Ltd

Expressed in RMB

Item

ItemNoteAs at 31/12/2019As at 31/12/2018
ConsolidatedCompanyConsolidatedCompany
Current liabilities: Short-term loans Financial liabilities at fair value through profit or loss Bills payable Accounts payable Advances from customers Employee benefits payable Taxes payable Other payables Including: Interest payables Dividend payables Liabilities held for sale Non-current liabilities due within one year Other current liabilities Total current liabilities Non-current liabilities: Long-term loans Debentures payable Long-term payables Long-term employee benefits payable Provisions Deferred income Deferred tax liabilities Other non-current liabilities Total non-current liabilities Total liabilities Share capital Capital reserve Less: treasury shares Other comprehensive income Specific reserve Surplus reserve Retained earnings Total equity attributable to shareholders of the Company Non-controlling interests Total shareholders' equity Total liabilities and shareholders' equityV.1551,647,260.17-17,260,103.46-
V.16244,224,478.46103,915,931.14216,758,906.7116,743,360.96
V.17159,482,510.4359,409,454.38156,426,152.8622,035,608.45
V.1853,909,576.4925,544,403.2345,836,830.0519,687,728.50
V.19585,700,815.36143,434,273.95300,547,372.98144,621,616.85
V.20277,319,174.53190,666,487.82721,819,898.48594,392,900.98
16,535,277.9416,535,277.9416,535,277.9416,535,277.94
1,372,283,815.44522,970,550.521,458,649,264.54797,481,215.74
V.217,499,192.92-6,507,139.20-
V.144,903,293.581,295,046.51--
12,402,486.501,295,046.516,507,139.20-
1,384,686,301.94524,265,597.031,465,156,403.74797,481,215.74
V.221,011,660,000.001,011,660,000.001,011,660,000.001,011,660,000.00
V.23978,244,910.11964,711,931.13978,244,910.11964,711,931.13
V.2420,831,004.13922,125.7710,564,385.97-
V.25191,222,838.94168,093,225.5395,906,222.5972,776,609.18
V.261,464,915,816.811,280,197,219.961,235,884,122.72615,038,028.05
3,666,874,569.993,425,584,502.393,332,259,641.392,664,186,568.36
-141,891,335.84--131,524,530.88-
3,524,983,234.153,425,584,502.393,200,735,110.512,664,186,568.36
4,909,669,536.093,949,850,099.424,665,891,514.253,461,667,784.10

Legal representative: Person in charge of accounting: Person in charge of accounting organ:

Consolidated and Company Income Statement

For the year ended 31 December 2019Prepared by:

SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., Ltd Expressed in RMB

ItemNoteYear ended 31/12/2019Year ended 31/12/2018
ConsolidatedCompanyConsolidatedCompany
I. Operating income Less:operating costs Taxes and surcharges Selling and distribution expenses General and administrative expenses Research and development expenses Financial expenses Including: Interest expenses Interest income Add: Other income Investment income ("-" for losses) Including: Income from investment in associates and Gains from derecognition of financial assets measured at amortised cost ("-" for losses) Gain from net exposure of hedge ("-" for losses) Gains from changes in fair value ("-" for losses) Credit impairment losses(“-” for losses) Impairment losses ("-" for losses) Gains from assets disposal ("-" for losses) II. Operating profit ("-" for losses) Add: Non-operating income Less: Non-operating expenses III. Profit before income tax ("-" for losses) Less: Income tax expenses IV. Net profit for the year ("-" for net losses) (1) Classification according to operation continuity Including: Net profit from continuing operations ("-" for net loss) Net profit from discontinued operations ("-" for net loss) (2) Classification according to attibute Including: Shareholders of the company("-" for net loss) Non-controlling interests("-" for net loss) V. Other comprehensive income, net of tax Other comprehensive income (net of tax) attributable to shareholders of the company A. Items that will not be reclassified to profit or loss a.Changes in fair value of other equity instruments B. Items that may be reclassified to profit or loss Translation differences arising from translation of foreign currency financial statements Other comprehensive income (net of tax) attributable to non- controlling interests VI. Total comprehensive income for the year Attributable to shareholders of the company Non-controlling interests VII. Earnings per share: (1) Basic earnings per share (2)Diluted earnings per shareV.272,548,740,319.491,666,952,912.582,175,187,242.60229,682,550.17
V.27957,752,652.54330,874,297.00938,386,013.0948,332,118.70
V.28751,013,928.21630,418,453.86445,365,141.9276,302,964.10
V.2979,480,254.0256,146,749.4752,562,980.224,052,427.57
V.3068,854,618.7030,540,740.5174,029,840.4429,529,995.90
V.31-20,906,149.20-45,894,180.92-17,235,722.16-47,884,284.78
38,642.51-2,817,521.602,399,365.74
19,686,882.1341,049,606.1219,825,334.0841,576,903.81
V.321,168,127.9018,998.01--
V.3332,429,481.23551,129,612.8717,121,605.8717,121,605.87
1,003,829.251,003,829.25-52,651.66-52,651.66
----
V.34-3,111,257.44-2,029,282.38
V.35-12,166,897.84-83,683,888.90-17,304,699.75-
V.36---530.20-
730,864,469.071,130,302,292.26681,895,365.01136,470,934.55
V.371,345,428.491,042,266.311,411,786.32633,377.64
V.38226,566.8064,297.33579,100.01374,436.18
731,983,330.761,131,280,261.24682,728,051.32136,729,876.01
V.39190,786,300.70173,952,583.46182,756,486.3634,334,330.15
541,197,030.06957,327,677.78499,971,564.96102,395,545.86
541,197,030.06957,327,677.78499,971,564.96102,395,545.86
552,452,307.59-503,498,831.60-
-11,255,277.53-3,527,266.64
-176,622.09-50,766.47740,984.01-
173,182.46-50,766.47518,688.81-
1,653,431.27-50,766.47--
1,653,431.27-50,766.47
-1,480,248.81-518,688.81-
-1,480,248.81-518,688.81-
-349,804.55-222,295.20-
541,020,407.97957,276,911.31500,712,548.97102,395,545.86
552,625,490.05504,017,520.41
-11,605,082.08-3,304,971.44
0.54610.4977
--

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 2019Prepared by:SHENZHEN SPECIAL ECONOMIC ZONE REALESTATE & PROPERTIES (GROUP) Co., Ltd

Expressed in RMB

ItemNoteYear ended 31/12/2019Year ended 31/12/2018
ConsolidatedCompanyConsolidatedCompany
I.Cash flows from operating activities Proceeds from sales of goods or rendering of services Refund of taxes Proceeds from other operating activities Sub-total of cash inflows Payment for goods and services Payment to and for employees Payments of various taxes Payment for other operating activities Sub-total of cash outflows Net cash flows from operating activities II.Cash flows from investing activities Proceeds from disposal of investments Investment returns received Net proceeds from disposal of fixed assets, intangible assets and other long-term assets Net proceeds from disposal of subsidiaries and other business units Proceeds from other investing activities Sub-total of cash inflows Payment for acquisition of fixed assets, intangible assets and other long-term assets Payment for acquisition of investments Net payment for acquisition of subsidiaries and other business units Payment for other investing activities Sub-total of cash outflows Net cash flows from investing activities III.Cash flows from financing activities Proceeds from investors subsidiaries Proceeds from borrowings Proceeds from other financing activities Sub-total of cash inflows Repayments of borrowings Payment for dividends, profit distributions or interest Including: Dividends and profits paid to non-controlling shareholders of subsidiaries Payment for other financing activities Sub-total of cash outflows Net cash flows from financing activities IV. Effect of foreign exchange rate changes on cash and cash equivalents V.Net increase in cash and cash equivalents Add: Cash and cash equivalents as at 01/01/2019 VI. Cash and cash equivalent as at 31/12/20192,648,597,164.581,787,968,670.182,216,524,455.50260,723,994.01
----
V.4079,679,385.4758,719,902.3857,522,168.96411,645,620.31
2,728,276,550.051,846,688,572.562,274,046,624.46672,369,614.32
639,208,411.3899,847,275.06686,915,180.64172,885,291.04
178,713,870.6551,174,841.78155,037,192.5638,307,017.74
1,199,806,904.82916,815,076.44286,175,244.0639,081,749.05
V.40106,939,638.4579,596,205.3983,351,601.6114,362,419.34
2,124,668,825.301,147,433,398.671,211,479,218.87264,636,477.17
603,607,724.75699,255,173.891,062,567,405.59407,733,137.15
----
37,502,720.55143,151,908.7814,891,757.53184,285,709.71
119,900.00---
----
V.402,200,000,000.002,200,000,000.00600,000,000.00892,206,391.13
2,237,622,620.552,343,151,908.78614,891,757.531,076,492,100.84
21,918,490.6220,824,023.65629,839.43127,680.54
----
----
V.402,300,000,000.002,300,000,000.001,500,000,000.001,618,000,000.00
2,321,918,490.622,320,824,023.651,500,629,839.431,618,127,680.54
-84,295,870.0722,327,885.13-885,738,081.90-541,635,579.70
----
----
43,741,293.64-17,260,103.46-
V.40--290,033.83-
43,741,293.64-17,550,137.29-
2,000,000.00-250,207,653.64146,000,000.00
202,370,642.51202,332,000.002,817,521.602,399,365.74
----
----
204,370,642.51202,332,000.00253,025,175.24148,399,365.74
-160,629,348.87-202,332,000.00-235,475,037.95-148,399,365.74
-15,181.39-379,093.73-13,487.07
358,667,324.42519,251,059.02-58,266,620.53-282,315,295.36
1,148,522,435.93444,486,378.531,206,789,056.46726,801,673.89
1,507,189,760.35963,737,437.551,148,522,435.93444,486,378.53

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 2019Prepared by:SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., LtdExpressed in RMB

ItemYear ended 31/12/2019
Attributable to shareholders' equity of the parent companyNon-controlling interestsTotal
Share capitalCapital reserveLess: treasury sharesOther comprehensive incomeSpecific reserveSurplus reserveRetained earnings
I.Balance at 31/12/2018 Add:Changes in accounting policies Correction of prior period errors1,011,660,000.00978,244,910.11-10,564,385.97-95,906,222.591,235,884,122.72-131,524,530.883,200,735,110.51
---10,093,435.70--416,151.43-25,355,845.72-390,720.82-16,069,282.27
-
Business combination involving enterprises under common control-
Others-
II.Balance at 01/01/20191,011,660,000.00978,244,910.11-20,657,821.67-95,490,071.161,210,528,277.00-131,915,251.703,184,665,828.24
III.Changes in equity during the year( "- "for decrease)---173,182.46-95,732,767.78254,387,539.81-9,976,084.14340,317,405.91
(I)Total comprehensive income---173,182.46--552,452,307.59-11,605,082.08541,020,407.97
(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)Others1,628,997.941,628,997.94
IV.Balance at 31/12/20191,011,660,000.00978,244,910.11-20,831,004.13-191,222,838.941,464,915,816.81-141,891,335.843,524,983,234.15

Prepared by:SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE &

Consolidated Statement of Changes in Shareholders' Equity

For the year ended 31 December 2019

Expressed in RMB

ItemYear ended 31/12/2018
Attributable to shareholders' equity of the parent companyNon-controlling interestsTotal
Share capitalCapital reserveLess: treasury sharesOther comprehensive incomeSpecific reserveSurplus reserveRetained earnings
I.Balance at 31/12/20181,011,660,000.00978,244,910.11-10,045,697.16-85,666,668.00742,624,845.71-128,219,559.442,700,022,561.54
Add:Changes in accounting policies-
Correction of prior period errors-
Business combination involving enterprises under common co-
Others-
II.Balance at 01/01/20191,011,660,000.00978,244,910.11-10,045,697.16-85,666,668.00742,624,845.71-128,219,559.442,700,022,561.54
III.Changes in equity during the year( "- "for decrease)---518,688.81-10,239,554.59493,259,277.01-3,304,971.44500,712,548.97
(I)Total comprehensive income---518,688.81--503,498,831.60-3,304,971.44500,712,548.97
(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-----10,239,554.59-10,239,554.59--
1. Appropriation for surplus reserves-----10,239,554.59-10,239,554.59--
2. Appropriation for general risk reserve
3. Distributions to shareholders-
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-
IV.Balance at 31/12/20191,011,660,000.00978,244,910.11-10,564,385.97-95,906,222.591,235,884,122.72-131,524,530.883,200,735,110.51

Company Statement of Changes in Shareholders' Equity

For the year ended 31 December 2019Prepared by:SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) Co., LtdExpressed in RMB

Year ended 31/12/2019
Share capitalCapital reserveLess: treasury sharesOther comprehensive incomeSpecific reserveSurplus reserveRetained earningsTotal
I. Balance at 31/12/2018 Add:Changes in accounting policies Correction of prior period errors Others II. Balance at 01/01/2019 III. Changes in equity during the year( "- "for decrease) (I) Total comprehensive income (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 1. Appropriation for surplus reserves 2. Appropriation for general risk reserve 2. Distributions to shareholders 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.Others (V)Specific Reserve 1. Appropriation during the year 2.Utilisation during the year ("- ") (VI)Others IV.Balance at 31/12/20191,011,660,000.00964,711,931.13---72,776,609.18615,038,028.052,664,186,568.36
972,892.24-416,151.43-4,072,924.18-3,516,183.37
-
9,969,206.099,969,206.09
1,011,660,000.00964,711,931.13-972,892.24-72,360,457.75620,934,309.962,660,670,384.99
----50,766.47-95,732,767.78659,262,910.00754,944,911.31
-50,766.47957,327,677.78957,276,911.31
--------
-
-
-
-
-----95,732,767.78-298,064,767.78-202,332,000.00
95,732,767.78-95,732,767.78-
-202,332,000.00-202,332,000.00
-
--------
-
-
-
-
--------
-
-
-
1,011,660,000.00964,711,931.13-922,125.77-168,093,225.531,280,197,219.963,425,584,502.39

Legal representative: Person in charge of accounting: Person in charge of accounting organ:

Prepared by:SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTA

Company Statement of Changes in Shareholders' Equity

For the year ended 31 December 2019

Expressed in RMB

Year ended 31/12/2018
Share capitalCapital reserveLess: treasury sharesOther comprehens ive incomeSpecific reserveSurplus reserveRetained earningsTotal
I. Balance at 31/12/2018 Add:Changes in accounting policies Correction of prior period errors Others II. Balance at 01/01/2019 III. Changes in equity during the year( "- "for decrease) (I) Total comprehensive income (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 1. Appropriation for surplus reserves 2. Appropriation for general risk reserve 2. Distributions to shareholders 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.Others (V)Specific Reserve 1. Appropriation during the year 2.Utilisation during the year ("- ") (VI)Others IV.Balance at 31/12/20191,011,660,000.00978,244,910.11---62,537,054.59522,882,036.782,575,324,001.48
-
-
-
1,011,660,000.00978,244,910.11---62,537,054.59522,882,036.782,575,324,001.48
--13,532,978.98---10,239,554.5992,155,991.2788,862,566.88
102,395,545.86102,395,545.86
--------
-
-
-
-
-----10,239,554.59-10,239,554.59-
10,239,554.59-10,239,554.59-
-
-
--------
-
-
-
-
--------
-
-
-13,532,978.98-13,532,978.98
1,011,660,000.00964,711,931.13---72,776,609.18615,038,028.052,664,186,568.36

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 “the Company”) was established in July 1993, asapproved by the Shenzhen Municipal Government with document SFBF (1993) 724. The Company issued A shares on 15 September 1993 andissued B shares on 10 January 1994. On 31 August 1994, the issued B shares were listed in the New York Exchange market as class Arecommendation. The total share capital is 1,011,660,000 shares, of which, A shares are 891,660,000 shares, and the B shares are 120, 000,000shares. The company business license registration number is 440301103225878, and the registered capital is RMB 1,011,660,000.00. 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 Shenzhen investment Holding Co., Ltd.” issued byState-Owned Assets Supervision and Administration Commission of Shenzhen Municipal Government, former major shareholder – ShenzhenConstruction Investment Holding Company with two other assets management companies merged to form the Shenzhen Investment Holding Co., Ltd.By the State-owned Assets Supervision and Administration Commission of the state council, and quasi-exempt obligations tender offer as approvedby China Security Regulatory Committee with document No. (2005)116, this issue of consolidated has been authorized and the change in registrationhad been completed on 15 February 2006. At the end of the reporting period, Shenzhen Investment Holding Limited holds 642,884,262 shares of theCompany (63.55% of the total share capital). The shares are all tradable unrestricted shares.The Company has established the corporate governance structure including the general meeting of shareholders, the board of directors and board ofsupervisors. Currently, the Company’s structure includes human resources department, financing plan department, marketing department,engineering management department and etc.The main products or services provided by the Company and its subsidiaries (hereinafter referred to as "the Group") includes: mainly engaged in realestate development and sales, property leasing and management, retail merchandising and trade, hotel, equipment installation and maintenance,construction, interior decoration, etc.The parent of the Company is Shenzhen Investment Holdings Co., Ltd. The Financial statement published on 28 March 2019, which approved by theGroup’s Board of Directors. 25 entities were consolidated into the Group in 2018 for the detail in Note 8 "Equities in other entities". The scope ofconsolidation of the Group does not change as compared with that of the previous year.The consolidated and company financial statements and the notes to financial statements have been approved by the 7

th

Board of Directors in the

th

board meeting on 13 March 2020.

2. Scope of consolidated financial statements

The detail is set out in Note VII "Joint arrangement classification and accounting treatment for joint operation”.In this reporting period, the change of consolidation scope is in Notes VI and VII for more details.II.Basis of preparationThe financial statements are prepared in accordance with the Accounting Standards for Business Enterprises and corresponding applicationguidance, interpretations and other related provisions issued by the Ministry of Finance (collectively, " Accounting Standards for Business Enterprises"). In addition, the Group also discloses relevant financial information in accordance with the rules of information disclosure for publicly issuedsecurities companies No. 15 - general provisions on financial reporting (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, the financialstatements are prepared under the historical cost convention. In the event that impairment of assets occurs, aprovision for impairment is made accordingly in accordance with the relevant regulations.III.Significant accounting policies and accounting estimatesThe Group determines the revenue recognition policy according to its own production and operation characteristics. The detail is set out in Note III,23 for the specific accounting policies.

1. Statement of compliance with the Accounting Standards for Business Enterprises

The financial statements have been prepared in compliance with the Accounting Standards for Business Enterprises to truly and completely presentthe Company and consolidated financial position as at 31 December 2019 and the Company and consolidated operating results and cash flows for

the year ended 31 December 2019.

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. Offshore subsidiaries determine [American Great WallCo., Ltd.] as their functional currency according to the primary economic environment where they operate. The financial statements of the Companyhave been prepared in RMB.

5. Accounting treatments for business combinations involving enterprises under common control and not under common control

(1) Business combinations involving enterprises under common control

For a business combination involving enterprises under common control, the assets acquired and liabilities assumed are measured based on theircarrying amounts in the consolidated financial statements 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 acquired and the consideration paid for the combination(or the total par value of shares issued) is adjusted against 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 shareholding portion of the assets and liabilities obtainedand are measured at the carrying amounts as recorded by the enterprise being combined at the combination date. The difference between the initialinvestment cost and the sum of the carrying amount of the original investment cost and the carrying amount of consideration paid for the combinationis adjusted to the capital reserve, if the capital reserve is not sufficient to absorb the difference, the excess difference shall be adjusted to retainedearning.In the consolidated financial statements, the assets and liabilities obtained at the combination shall be measured at the carrying value as recorded bythe enterprise at combination date, except for adjustments of different accounting policies. The difference between the sum of the carrying value fromoriginal shareholding portion and the new investment cost incurred at combination date and the carrying value of net assets obtained at combinationdate shall be adjusted to capital reserve, if the balance 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 lose comprehensive income and other change ofshareholding’s equity at the closer date of the acquisition date and combination date under common control shall separately offset the openingbalance of retained earnings and profit or loss during comparative statements.

(2) Business combinations involving enterprises not under common control

For business combinations involving enterprises not under common control, the consideration costs include acquisition-date fair value of assetstransferred, liabilities incurred or assumed and equity securities issued by the acquirer in exchange for control of the acquiree. At the acquisition date,the acquired assets, liabilities and contingent liabilities of the acquiree are measured at their fair value. The acquiree’s identifiable asset, liabilitiesand contingent liabilities, are recognised at their acquisition-date fair value.Where the combination cost exceeds the acquirer’s interest in the fair value of the acquiree’s identifiable net assets, the difference is recognised asgoodwill, and subsequently measured on the basis 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 recognised in profit or loss for the current period afterreassessment.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 the carrying amount of the equity investment held bythe entity prior to the acquisition date and the additional investment cost at the acquisition date. The disposal accounting policy of othercomprehensive income related with equity investment prior to the purchase date recognized under equity method shall be compliance with themethod when the acquiree disposes the related assets or liabilities. Shareholder’s equity due to the changes of other shareholder’s equity other thanthe changes of net profit, other comprehensive income and profit distribution shall be transferred to profit or lose for current period when disposed. Ifthe equity investment held by the entity prior to the acquisition date is measured at fair value, the cumulative changes in fair value recognized inother comprehensive income shall be transferred to profit or loss for current period when accounted for using cost method.In the consolidation financial statements, the combination cost is the sum of consideration paid at acquisition date and fair value of the acquiree’sequity investment held prior to acquisition date; the cost of equity of the acquiree held prior to acquisition date shall be re-measured at the fair valueat acquisition date, the difference between the fair value and book value shall be recognized as investment 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 comprehensive income incurred by the changes of net assets ornet liabilities due to the re-measurement of defined benefit plan.

(3) Transaction costs for business combination

The overhead for the business combination, including the expenses for audit, legal services, valuation advisory, and other administrative expenses,are recorded in profit or loss for the current period when incurred. The transaction costs of equity or debt securities issued as the considerations ofbusiness combination are 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 Company has power over the investee; exposure, orrights to variable returns from its involvement with the investee and has the ability to affect its returns through its power over the investee. Asubsidiary is an entity that is controlled by the Company (including enterprise, a portion of an investee as a deemed separate component, andstructured 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 statements of the Company and its subsidiaries andother relevant information. When preparing consolidated financial statements, the accounting policies and accounting periods of the subsidiariesshould be consistent with those established by the Company, and all significant intra-group balances and transactions are eliminated.Where a subsidiary or business was acquired during the reporting period, through a business combination involving enterprises under commoncontrol, the financial statements of the subsidiary or business are included in the consolidated financial statements as if the combination hadoccurred at the date that the ultimate controlling party first obtained control.Where a subsidiary or business was acquired during the reporting period, through a business combination involving enterprises not under commoncontrol, the identifiable assets and liabilities of the 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-controlling interests and presented separately in theconsolidated balance sheet within shareholders’ equity. The portion of net profit or loss of subsidiaries for the period attributable to non-controllinginterests is presented separately in the consolidated income statement below the “net profit” line item. When the amount of loss for the current periodattributable to the non-controlling shareholders of a subsidiary exceeds the non-controlling shareholders’ share of the opening owners’ equity of thesubsidiary, the excess 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-controlling shareholders or disposes of a portion of an interest in asubsidiary without a change in control, the transaction is treated as equity transaction, and the book value of shareholder’s equity attributed to theCompany and to the non-controlling interest is adjusted to reflect the change in the Company’s interest in the subsidiaries. The difference betweenthe proportion interests of the subsidiary’s net assets being acquired or disposed and the amount of the consideration paid or received is adjusted tothe capital reserve 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 or other reasons, the remaining part of the equityinvestment is re-measured at fair value at the date when 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 equity investment deducting the share of net assets inproportion to previous shareholding percentage in the former subsidiary since acquisition date and the goodwill.Other comprehensive income related to the former subsidiary is transferred to profit or loss when the control is lost, except for the comprehensiveincome arising from the movement of net liabilities or assets in the former subsidiary’s re-measurement of defined benefit plan.

7. Joint arrangement classification and accounting treatment for joint operation

A joint arrangement is an arrangement of which two or more parties have joint control. The Company classifies joint arrangements into jointoperations and joint ventures.

(1) Joint operations

A joint operation is a joint arrangement whereby the joint operators have rights to the assets, and obligations for the liabilities, relating to thearrangement.

The Company recognizes the following items relating to its interest in a joint operation, and account for them in accordance with relevant accountingstandards:

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 the arrangement.The Company adopts equity method under long-term equity investment in accounting for its investment in joint venture.

8. Cash and cash equivalents

Cash comprises cash in hand and deposits that can be readily withdrawn on demand. Cash equivalents include short-term, highly liquid investmentsthat are readily convertible to known amounts of 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 spot exchange rates on the dates of the transactions.Monetary items denominated in foreign currencies are translated to Renminbi at the spot exchange rate at the balance sheet date. The resultingexchange differences between the spot exchange rate on balance sheet date and the spot exchange rate on initial recognition or on the previousbalance sheet date are recognised in profit or loss. Non-monetary items that are measured at historical cost in foreign currencies are translated toRenminbi using the exchange rate at the transaction date. Non-monetary items that are measured at fair value in foreign currencies are translatedusing the exchange rate at the date 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 and liabilities of foreign operation are translated toRenminbi at the spot exchange rate at the balance sheet 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 at the transaction dates.Cash flow statement of foreign operation is translated to Renminbi at the spot exchange rates [the rates determined under a systematic and rationalmethod that approximate the spot exchange rates] at the cash flow occurence dates. Effect of foreign exchange rate changes on cash and cashequivalents is presented separately as “Effect of foreign exchange rate changes on cash and cash equivalents” in the 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 are transferred to profit or loss in the period whenthe 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 financial instrument 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 terminates②

The financial asset has been transferred, and is in accordance with the following conditions for derecognition.If the obligations of financial liability have been discharged in total or in part, derecognize all or part of it. If the Group (debtor) makes an agreementwith the creditor to replace the current financial liability of assuming new financial liability which contract provisions are different in substance,derecognize the current 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 business mode of managing financial assets and cash flowcharacteristics of financial assets: financial assets measured at amortized cost, financial assets at fair value through other comprehensive incomeand financial 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 as financial assets at fair value through profit orloss 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 are only payments of principal and interestbased on the amount of outstanding principal.After initial confirmation, the real interest rate method is used to measure the amortized cost of such financial assets. Profits or losses arising fromfinancial assets measured at amortized costs and not part of any hedging relationship are included in current profits and losses when the recognitionis terminated, 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 as financial assets measured at fair value andwhose changes are recorded in current profits and losses as 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 cash flows and to sell the financial assets;? The terms of the financial asset contract stipulate that cash flows generated on a specific date are only payments of principal and interestbased on the amount of outstanding principal.After initial recognition, financial assets are subsequently measured at fair value. Interest, impairment losses or gains and exchange gains calculatedby the effective interest rate method are recognised in profit or loss, while other gains or losses are recognised in other comprehensive gains. Whenderecognized, the accumulated gains or losses previously recognised in other comprehensive gains are transferred from other comprehensive gainsand 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 value a through other comprehensive income, the Groupclassifies 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 assets that should have been measured at amortizedcost or at fair value through other comprehensive gains as financial assets at fair value through profit or loss.After initial recognition, the financial assets are subsequently measured at fair value, and the profits or losses (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 Group irrevocably designates them as financial assets at fairvalue through other comprehensive gains. The designation is made on the basis of individual investment, and the relevant investment conforms tothe definition of equity instruments from the issuer’s point of view.After initial confirmation, financial assets are subsequently measured at fair value. Dividend income that meets the requirements is recognised inprofit and loss, and other gains or losses and changes in fair value are recognised in other comprehensive gains. When derecognized, theaccumulated gains or losses previously recognised in other comprehensive gains are transferred from other comprehensive gains to retainedearnings.The business model of managing financial assets refers to how the group manages financial assets to generate cash flow. The business modeldecides whether the source of cash flow of financial assets managed by the Group is to collect contract cash flow, sell financial assets or both of

them. Based on objective facts and the specific business objectives of financial assets management decided by key managers, the Groupdetermines the business model of financial assets management.The Group evaluates the characteristics of the contract cash flow of financial assets to determine whether the contract cash flow generated by therelevant financial assets on a specific date is only to 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 the consideration of time value of money, credit risk related tothe amount of unpaid principal in a specific period, and other basic borrowing risks, costs and profits. In addition, the Group evaluates the terms andconditions of the contracts that may lead to changes in the time distribution or amount of cash flow in financial asset contracts to determine whetherthey meet the requirements of the aboving contract cash flow’s. characteristicsOnly when the Group changes its business model of managing financial assets, all the financial assets affected shall be reclassified on the first dayof the first reporting period after the business model changes, 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 measured at fair value and whose changes are includedin the current profit and loss, related transaction costs are directly included in the current profit and loss; for other types of financial assets, relatedtransaction costs are included in the initially recognized amount. For accounts receivable arising from the sale of products or the provision of laborservices that do not include or take into account significant financing components, the Group considers the amount of consideration expected to beentitled as the initial recognition amount.

(3) Classification and Measurement of financial liabilities

On initial recognition, financial liabilities are classified as: financial liabilities at fair value through profit or loss (FVTPL), and financial liabilitiesmeasured at amortized cost. For financial liabilities not classified as at fair value through profit or loss, the transaction costs are recognised in theinitially recognised amount.Financial liabilities at fair value through profits and lossesFinancial liabilities at FVTPL include transaction financial liabilities and financial liabilities designated as at fair value through profit or loss in the initialrecognition. Such financial liabilities are subsequently measured 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 interest method; gains and losses arising fromderecognition or amortization is recognised in profit or loss for the current period.Distinction between financial liabilities and equity instrumentsThe financial liability is the liability that meets one of following cateria:

①Contractual obligation to deliver cash or other financial instruments to another entity.②Under potential adverse condition, contractual obligation to exchange financial assets or financial liabilities with other parties.③A contract that will or may be settled in the entity’s own equity instruments and is a non-derivative for which the entity is or may be obliged todeliver a variable number of the entity’s own equity instruments.④

A derivative that will or may be settled other than by the exchange of a fixed amount of cash or another financial asset for a fixed number ofthe entity’s own equity instruments.An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.If the group cannot unconditionally avoid fulfilling a contractual obligation by delivering cash or other financial assets, the contractual obligation meetsthe definition of financial liability.If a financial instrument must or are able to be settled by the group’s own equity instrument, the group should consider whether the group’s equityinstrument as the settlement instrument is a substitute of cash or other financial assets or the residual interest in the assets of an entity afterdeducting all of its liabilities. If the former, the tool is the group’s financial liability; if the latter, the tool is the equity instrument 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 following items and confirms the loss provision.

? financial assets measured at amortized cost;? debt investments at fair value through other comprehensive income;? lease receivables;? Financial guarantee contract(except measured at fair value through profit or loss or formed by continuing involvement of transferred financialassets or the transfer does not qualify for derecognition).Measurement of expected credit lossesThe expected credit losses refers to the weighted average of the credit losses of financial instruments that are weighted by the risk of default. Creditloss refers to the difference between all contractual cash flows receivable from the contract and all cash flows expected to be received by the Groupat the original 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 tocalculate the probability-weighted amount of the present value of the difference between the cash flow receivable under the contract and the cashflow expected 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 hasnot increased significantly since initial recognition, which is in the first stage. The Group shall measure the loss allowance for that financial instrumentat an amount equal To 12-month expected credit losses. If the credit risk of financial instruments has increased significantly since the initialrecognition, but no credit impairment has occurred, which is in the second stage. The Group shall measure the loss allowance for a financialinstrument at an amount equal to the lifetime expected credit losses. If the financial instrument has occurred credit impairment since initial recognition,which is in the third stage, and the Group shall measure the loss allowance for a financial instrument at an amount equal to the lifetime expectedcredit losses.For financial instruments with lower credit risk at the balance sheet date, the Group assumes that their credit risk has not increased significantly sincethe initial recognition, and shall measure the loss allowance 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 defaults during the whole expected lifetime. The12-month expected credit losses,refer to the expected credit losses caused by all possible defaults during the 12-month after balance sheet date(ifthe expected duration of financial instrument is less than 12 months, then for the expected duration),which is part of the lifetime expected creditlossesWhen measure the expected credit loss, the longest contract period (including the option of renewal) that the group needs to consider is the longestcontract period the enterprise facing credit risk.For financial instruments in the first stages,second stages and with lower credit risk, the Group calculates interest income on the basis of their bookbalances without deduction of impairment provisions 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 actual interest rate.For bills receivable and accounts receivable, whether or not there are significant financing elements, the Group shall always measure the lossallowance for them at an amount equal to the lifetime expected credit losses.When information on expected credit losses cannot be assessed for a single financial asset, in accordance with the characteristics of credit risk, thegroup 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:Trade acceptance billsB﹑Accounts receivable? Accounts receivable group 1: Amount receivables of related parties? Accounts receivable group 2: Amount receivables of sales of proporties? Accounts receivable group 3: Amount receivables of other customersFor the accounts receivable divided into group, the group refers to the historical credit losses, combines the current situation with the forecast offuture economic situation, compiles a comparison table between the age of accounts receivable and the lifetime expected credit losses rate tocalculate the expected credit losses.

For the bills receivables and contract assets divided into group, the Group refers to historical credit losses, with the current situation and the forecastof future economic situation, calculates the expected credit 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 the basis of the combination, the group calculatesthe expected credit losses. The basis of determining the combination is as follows:

? Other receivables group 1: Amount receivables from government? Other receivables group 2: Amount receivables from employee’s inprest fund? Other receivables group 3: Amount receivables from the collecting and paying on another's behalf? Other receivables group 4: Amount receivables from other customers? Other receivables group 5: Amount receivables from related partiesFor other receivables a divided into group, the Group calculates the expected credit losses through the exposure on default and the lifetime expectedcredit 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 losses through the exposure on default and the future12-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 initial recognition day, the Group determines the relativechange of default risk of financial instruments during 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 Group considers reasonable and valid information,including forward-looking information, that can be obtained without unnecessary additional costs or efforts. Information considered by the Groupincludes:

? 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 have occurred 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 will have a significant negative impact on thedebtor’s repayment capacity.According to the nature of financial instruments, the Group evaluates whether credit risk has increased significantly on the basis of a single financialinstrument 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 and credit risk rating.If the delay exceeds 30 days, the Group determines that the credit risk of financial instruments has increased 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 into account 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 financial assets measured at amortized cost and debtinvestments measured at fair value through other comprehensive income. When one or more events adversely affect the expected future cash flowof a financial asset occur, the financial asset becomes a financial asset with credit impairment. Evidence of credit impairment of financial assetsincludes 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 the payment of interests or the principal, etc.;? For economic or contractual considerations related to the financial difficulties of the debtor, the Group grants concessions to the debtor that willnot 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 initial recognition, the Group recalculates the expectedcredit losses on each balance sheet day. The increase 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 offsets the carrying amount of the financial assetsshown on the balance sheet; for debt investments measured at fair value through other comprehensive income, the Group recognizes its lossprovision through 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 be recovered fully or partially, the financial assets bookbalance will be reduced directly. Such reduction constitute 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 amount to be reduced. However, in accordance withthe Group’s procedures for recovering due payment, the financial assets reduced may still be affected by enforcement activities.If the reduced financial assets are recovered later, the returns as impairment losses shall be included in 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 other party (the transferee) other than the issuer offinancial assets.The Group derecognizes a financial asset only if it transfers substantially all the risks and rewards of ownership of the financial asset to thetransferee; the Group should not derecognize a financial asset if it 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 as the following circumstances: if the Group hasforgone control over the financial assets, derecognize the financial assets and verify the assets and liabilities; if the Group retains its control of thefinancial asset, the financial asset is recognized to the extent of its continuing involvement in the transferred financial asset and recognize anassociated 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 liabilities and is capable to carry it out, the Group plans tonet settlement or realize the financial assets and pay off the financial liabilities, the financial assets and financial liabilities shall be listed separatelywith the neutralized 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 orderly transaction between market participants at themeasurement date.The Company measures related assets or liabilities at fair value assuming the assets or liabilities are exchanged in an orderly transaction in theprincipal market; in the absence of a principal market, assuming the assets or liabilities are exchanged in an orderly transaction in the mostadvantageous market. Principal market (or the most advantageous market) is the market that the Company can normally enter into a transaction onmeasurement date. The Company adopts the presumptions that would be used by market participants in achieving the maximized economic value ofthe assets or liabilities.For financial assets or financial liabilities with active markets, the Company uses the quoted prices in active markets as their fair value. Otherwise,the Company uses valuation technique to determine their fair value.Fair value measurement of a non-financial asset takes into account market participants’ ability to generate economic benefits using the asset in itsbest way or by selling it to another market participant that would best use the asset.The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient 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 statements are determined according to the significant

lowest level input to the entire measurement: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that theCompany can access at the measurement date; Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for theassets or liabilities, either directly or indirectly; Level 3 inputs are unobservable inputs for the assets or liabilities.At the balance sheet date, the Company revalues assets and liabilities being measured at fair value continuously in the financial statements todetermine whether to change the levels of fair value measurement.

12. Inventories

(1) Classification

The Group's inventory is classified by real estate development and non-real estate development. Inventory is mainly real estate development projects,development costs including development productes to be developed and development products to be developed and development products underconstruction, development products, including the development costs of development products to be developed and development products underconstruction, development products including completed development products and intended to sell but temporarily leased development products.Non-real estate developments include raw materials, inventory and construction.

(2) Mesurement method of cost of inventories

The Group's inventory is valued at actual cost when acquired. The actual cost of product development includes land transfer fee, infrastructureexpenditure, construction and installation project expenditure, borrowing expenses incurred before the completion of the development project andother related expenses in the development process. When a product is developed and shipped, the actual cost is determined by individual pricing.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 inventories

Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costsnecessary to make the sale and relevant taxes. The net realisable value is measured based on the verified evidences and considerations for thepurpose of holding 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 for obsolete inventories, and is recognised in profitor loss. The Company usually recognises provision for decline in value of inventories by a single inventory item. If the factors caused the value ofinventory previously written-down have disappeared, the provision for decline in value of inventories previously made is reversed.

(4)Inventory count system

The Company maintains a perpetual inventory system.

(5)Amortization methods of low-value consumables and packaging materials

Low-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 joint ventures and associates. An associate is anenterprise over which the Company has significant influence.

(1)Determination of initial investment cost

The initial cost of a long-term equity investment acquired through a business combination involving enterprises under common control is theCompany’s share of the carrying amount of the subsidiary’s equity in the consolidated financial statements of the ultimate controlling party at thecombination date. For a long-term equity investment obtained through a business combination not involving enterprises under common control, theinitial cost is the combination cost.A long-term equity investment acquired other than through a business combination: A long-term equity investment acquired other than through abusiness combination is initially recognised at the amount of cash paid if the Company acquires the investment by cash, or at the fair value of theequity securities issued 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 investment in a joint venture or an associate is accountedfor using the equity method for subsequent measurement.For a long-term equity investment which is accounted for using the cost method, Except for cash dividends or profit distributions declared but not yetdistributed that have been included in the price or consideration paid in obtaining the investments, the Company recognises its share of the cash

dividends 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 initial cost of a long-term equity investment exceeds theCompany’s interest in the fair value of the investee’s identifiable net assets at the date of acquisition, the investment is initially recognised at cost.Where the initial investment cost is less than the Company’s interest in the fair value of the investee’s identifiable net assets at the date of acquisition,the investment is initially recognised at the investor’s share of the fair value of the investee’s identifiable net assets, and the difference is recognisedin profit or loss.Under the equity method, the Company recognises its share of the investee’s profit or loss and other comprehensive income as investment incomeor losses and other comprehensive income respectively, and adjusts the carrying amount of the investment accordingly. Once the investee declaresany cash dividends or profit distributions, the carrying amount of the investment is reduced by the amount attributable to the Company. Changes inthe Company’s share of the investee’s owners’ equity, other than those arising from the investee’s net profit or loss, other comprehensive income orprofit distribution (referred to as “other changes in owners’ equity”), is recognised directly in the Company’s equity, and the carrying amount of theinvestment is adjusted accordingly. In calculating its share of the investee’s net profits or losses, other comprehensive income and other changes inowners’ equity, the Group recognises investment income and other comprehensive income after making appropriate adjustments to align theaccounting policies or accounting periods with those of the Group based on the fair value of the investee’s identifiable net assets at the date ofacquisition.When the Company becomes capable of exercising joint control or significant influence (but not control) over an investee due to additionalinvestment or other reasons, the Company uses the fair value of the previously-held equity investment, together with additional investment cost, asthe initial investment cost under the equity method. The difference between the fair value and carrying amount of the previously-held equityinvestment, and the accumulated changes in fair value included in other comprehensive income, shall be transferred to profit or loss for the currentperiod upon commencement of the equity method.When the Company can no longer exercise joint control of or significant influence over an investee due to partial disposal of the equity investment orother reasons, the remaining equity investment shall be accounting for using Accounting Standard for Business Enterprises No. 22 - Recognition andMeasurement 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 the loss of joint control or significant influence. Any other comprehensive incomepreviously recognised under the equity method shall be accounted for on the same basis as would have been required if the Company had directlydisposed of the related assets or liabilities for the current period upon discontinuation of the equity method. Other movement of owner’s equityrelated to original equity investment 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 the equity investment or other reasons, and theremaining equity after disposal can exercise joint control of or significant influence over an investee, the remaining equity is adjusted as using equitymethod from acquisition. When the remaining equity can no longer exercise joint control of or significant influence over an investee, the remainingequity investment shall be accounted for using Accounting Standard for Business Enterprises No. 22-Recognition and Measurement of FinancialInstruments, and the difference between the fair value and the carrying amount of the remaining equity investment shall be charged to profit or lossfor 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 by other investors, and the Company can exercisejoint control of or significant influence over an investee, the Company recognizes its share of the investee’s new added net assets using newshareholding percentage. The difference between its new share of the investee’s new added net assets and its decreased shareholding percentageof the original investment is recognized in profit or loss. And the Company adjusts to the equity method using the new shareholding percentage as ifit uses the equity method since it obtains the investment.Unrealized internal trading gains and losses between the group and associated enterprises and joint ventures shall be calculated as part of the groupaccording to the shareholding ratio and investment gains and losses shall be recognized on an offset basis. However, unrealized internal tradinglosses between the group and the investee shall not be offset if they are impairment losses of the transferred assets.

(3) Criteria for determining the existence of joint control or significant influence over an investee

Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities requirethe unanimous consent of the parties sharing control. When assessing whether the Company can exercise joint control over an investee, theCompany first considers whether no single participant party is in a position to control the investee’s related activities unilaterally, and then considerswhether strategic decisions relating to the investee’s related activities require the unanimous consent of all participant parties that sharing of control.All the parties, or a group of the parties, control the arrangement collectively when they must act together to direct the relevant activities. When morethan one combination of the parties can control an arrangement collectively, joint control does not exist. A party that holds only protective rights doesnot have joint control of the arrangement.Significant influence is the power to participate in the financial and operating policy decisions of an investee but does not have control or joint controlover those policies. When determining whether the Company can exercise significant influence over an investee, the effect of potential voting rights(for example, warrants, share options and convertible bonds) held by the Company or other parties that are currently exercisable or convertible shallbe considered.When the Company, directly or indirectly through subsidiaries, owns 20% of the investee (including 20%) or more but less than 50% of the votingshares, it has significant influence over the investee unless 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 the Company owns less than 20% of the voting

shares, generally it does not have significant influence over the investee, unless there is clear evidence to show that in this case the Company canparticipate in 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 Company’s method of asset impairment.

14. Investment property

Investment properties are properties held either to earn rental income or for capital appreciation or for both. The Group's investment real estateincludes leased houses, buildings and leased land use rights. In addition, for a vacant building held by the company for operating lease, if the boardof directors (or a similar institution) makes a written resolution expressly indicating that it is used for operating lease and the intention of holding doesnot 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 the same policy as that for fixed assets orintangible assets.For the impairment of the investment properties accounted for using the cost model, refer to Note III.19.Gains or losses arising from the sale, transfer, retirement or disposal of an item of investment property are determined as the difference among thenet 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 in supply of services, rental or for administrativepurposes with useful lives over one accounting year.Fixed assets are only recognised when its related economic benefits are likely to flow to the Company and 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 intended use, unless the fixed asset is classified as held forsale. Not considering impairment provision, the estimated useful lives, residual value rates and depreciation rates of each class of fixed assets are asfollows:

CategoryUseful life (years)Residual value rate %Annual depreciation rate %
Plant and buildings3053.17
Motor vehicles6515.83
Electronic equipment and others5519.00

For impaired fixed assets, cumulative amount of impairment provision is deducted in determinatingf the depreciation 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 leases

Fixed 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 sufficiently lower than the fair value at the date of the optionbecomes 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 useful life of the asset.

④At the inception of lease, the present value of minimum lease payments amount to substantially all of the fair value of leased asset.

⑤Leased assets are of a specialized nature that only the Company can use them without major modifications.An asset acquired under a finance lease is measured at an amount equal to the lower of its fair value and the present value of the minimum leasepayments, each determined at the inception of the lease. Long-term payable is recorded at an amount equal to the sum of all future minimum leasepayments. The difference between the carrying amount of the leased assets and the minimum lease payments is accounted for as unrecognisedfinance charges. Initial direct costs attributable to a finance lease incurred during the process of lease negotiation and the signing of the leaseagreement, including service charges, attorney's fees, travelling expenses and stamp duty, that are incurred by the Company are added to thecarrying amount of the leased asset. Unrecognised finance charges are recognised as finance charge for the period using the effective interestmethod over the lease term.Depreciation is accounted for in accordance with the accounting policies of fixed assets. If there is reasonable certainty that the Company will obtainownership of a leased asset at the end of the lease term, 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 each year-end.The Company adjusts the useful lives of fixed assets if their expected useful lives are different with the original estimates and adjusts the estimatednet residual values if they are different from the original estimates.

(6)Overhaul costs

Overhaul costs occurred in regular inspection are recognized in the cost if there is undoubted evidence to confirm that this part meets the recognitioncriteria of fixed assets, otherwise, the overhaul costs are recognized in profit or loss for the current period. Depreciation is provided during the periodof regular overhaul.

16. Construction in progress

Construction in progress is recognized based on the actual construction cost, including all expenditures incurred for construction projects, capitalisedborrowing costs and any other costs directly 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 a qualifying asset shall be capitalised as part of the costof that asset. Other borrowing costs are expensed in profit or loss as incurred. The capitalisation of borrowing costs shall commence only when thefollowing criteria are met:

capital expenditures have been incurred, including expenditures that have resulted in payment of cash, transfer of other assets or theassumption of interest-bearing liabilities;②

borrowing costs have been incurred;③

the 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 construction becomes ready for its intended use, the borrowingcosts incurred thereafter are recognised in profit or loss for the current period.Capitalisation of borrowing costs is suspended during periods in which the acquisition or construction of a fixed asset is interrupted abnormally andthe interruption lasts for more than 3 months, until the acquisition or construction is resumed.

(3) Capitalisation rate of borrowing costs and calculation basis of capitalised amount

For interest expense actually incurred on specific borrowings, the eligible capitalised amount is the net amount of the borrowing costs after deductingany investment income earned before some or all of the funds are used for expenditures on the qualifying asset. To the extent that the Companyborrows funds generally and uses them for the purpose of obtaining a qualifying asset, the Company shall determine the amount of borrowing costseligible for capitalisation by applying a capitalisation rate to the expenditures on that asset, the capitalisation rate shall be the weighted average ofthe borrowing costs applicable to the borrowings of the Company that are outstanding during the period, other than borrowings specifically for thepurpose of obtaining a qualifying asset.

In the capitalisation period, exchange differences of specific borrowings in foreign currency shall be capitalised; exchange differences of generalborrowings in foreign currency is recognised in profit or loss for the current period.

18. Intangible assets

Intangible assets include software, land use right, patent rights and etc.Intangible assets are stated at actual cost upon acquisition and the useful economic lives are determined at the point of acquisition. When theuseful life is finite, amortisation method shall reflect the pattern in which the asset’s economic benefits are expected to be realised. If the patterncannot be determined reliably, the straight-line method shall be used. An intangible asset with an indefinite useful life shall not be amortised.The Company shall review the useful life and amortisation method of an intangible asset with a finite useful life at least at each year end. Changesof useful life and amortisation method shall be accounted for as a change in accounting estimate.An intangible asset shall be derecognised in profit or loss when it is not expected to generate future economic 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, productive biological assets measured using a cost model, intangible assets, goodwill, proven oil and gasmining rights and wells and related facilities, etc. (Excluding inventories, investment property measured using a fair value model, deferred tax assetsand financial assets) is determined as follows:

At each balance sheet date, the Company determines whether there is any indication of impairment. If any indication exists, the recoverable amountof the asset is estimated. In addition, the Company estimates 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 indication of impairment.The recoverable amount of an asset is the higher of its fair value less costs to sell and its present value of expected future cash flows. Therecoverable amount is estimated for each individual asset. If it is not possible to estimate the recoverable amount of each individual asset, theCompany determines the recoverable amount for the asset group to which the asset belongs. An asset group is the smallest identifiable group ofassets that generates cash inflows that are largely independent of the cash inflows from other assets or asset groups.An impairment loss is recognised in profit or loss when the recoverable amount of an asset is less than its carrying amount. A provision forimpairment of the asset is recognised accordingly.For goodwill impairment test, the carrying amount of goodwill arising from a business combination is allocated reasonably to the relevant asset groupsince the acquisition date. If the carrying amount of goodwill is unable to be allocated to asset group, the carrying amount of goodwill will be allocatedto asset portfolio. Asset group or portfolio of asset group is asset group or portfolio of asset group which can be benefit from synergies of a businesscombination and is not greater than the reportable segment of the Company.In impairment testing, if impairment indication exists in asset group or portfolio of asset group containing allocated goodwill, impairment test is firstconducted for asset group or portfolio of asset group 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 of asset group containing goodwill by comparing itscarrying amount and its recoverable amount. If the recoverable 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-line method within the benefit period. For long-termdeferred expense that cannot bring benefit in future period, 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 in exchange for service rendered by employees or forthe termination of employment relationship. Employee benefits include short-term employee benefits, post-employment benefits, termination benefitsand other long-term employee benefits. Benefits provided to the Company’s spouse, children, dependents, family members of deceasedemployees or other beneficiaries are also part of the employee benefits.According to liquidity, employee benefits are presented as “employee benefits payable” and “long-term employee benefits payable” on the balancesheet.

(2) Short-term employee benefits

In the current period, the Company has accrued for the actual wages, bonuses, medical insurance for employees based on standard rate, work injuryinsurance and maternity insurance and other social insurance and housing fund incurred and these are recognised as liabilities and correspondingcosts in the profit or loss. If these liabilities are not expected to be fully paid 12 months after the end of the reporting period in which employeerenders the service to the Company, and if the financial impact is significant, 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. Defined contribution plans are post-employment benefitplans under which an enterprise pays fixed contributions 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 and etc.Besides basic pension insurance, the Company establishes corporate pension plans in accordance with the related policies of corporate pensionregulations. Employees can join the pension plan voluntarily. 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, the contribution payable to a defined contributionplan as a liability, with a corresponding charge to the profit 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 credit method, to make a reliable estimate of theultimate cost to the entity of the benefit that employees have earned in return for their service in the current and prior periods, on the balance sheetdate. The Group 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 isthe increase in the present value of the defined benefit obligation resulting from employee service in the current period; the past service cost is thechange in the present value of the defined benefit obligation for employee service in prior periods, resulting from a plan amendment (the introductionor withdrawal of, or changes to, a defined benefit plan) or a curtailment (a significant reduction by the entity in the number of employees covered by aplan).

② Net interest on the net defined benefit liability (asset) can be viewed as comprising interest income on plan assets, interest cost on the definedbenefit obligation and interest on the effect of the asset 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 accounting standards stipulates or allows employee benefitsrecorded as asset cost. Re-measurements of the changes in the net defined benefit liability (asset) recognized in other comprehensive income shallnot be reclassified to profit or loss in a subsequent period. However, the entity may transfer those amounts recognized in other comprehensiveincome within equity, when original defined benefit plan is terminated.

(4) Termination benefits

The Company provides for termination benefits to the employees and shall recognize an employee benefits liability for termination benefits, with acorresponding charge to the profit or loss for the current period, at the earlier of the following dates: When the Company cannot unilaterally withdrawthe offer of the termination benefits from an employment termination plan or a redundancy proposal; the Company recognizes the costs or expensesrelating to the payment of the termination benefits.If an employee's internal retirement plan is implemented, the economic compensation before the official retirement date is a dismissal benefit. Fromthe date when the employee stops providing services 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. Financial compensation after the official retirement date (such as anormal retirement pension) is treated as after-service benefits.

(5) Other long-term employee benefits

Other long-term employee benefits provided by the Company to the employees satisfied the conditions for classifying as a defined contribution plan;those benefits shall be accounted for in accordance with the above requirements relating to defined contribution plan. When the benefits satisfy adefined benefit plan, it shall be accounted for in accordance with the above requirements relating to defined benefit plan, but the movement of net

liabilities or assets in re-measurement of defined defined benefit plan shall be recorded in profit or loss for the current period or cost of relevantassets.

22. Provisions

A provision is recognised for an obligation related to a contingency if all the following conditions are satisfied:

(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 related present obligation. Factors pertaining to acontingency such as the risks, uncertainties and time value of money are taken into account as a whole in reaching the best estimate. Where theeffect of the time value of money is material, provisions are determined by discounting the expected future cash flows. The Company reviews thecarrying amount of a provision at the balance sheet date and adjusts the carrying amount to the current best estimate.If all or part of the expenditure necessary for settling the provision is expected to be compensated by a third party, the amount of compensation isseparately recognized as an asset when it is basically certain to be received. The recognized compensation amount shall not exceed the carryingamount of the provision.

23. Revenue

(1) General principle

①Sale of goods

Revenue is recognised when all the following conditions are satisfied: significant risks and rewards of ownership of goods have been transferred tothe buyer; the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control overthe goods sold; it is probable that the economic benefits will flow to the Company; and the revenue and costs can be measured reliably.

②Rendering of services

Where the outcome of a transaction involving the rendering of services can be estimated reliably, revenue is recognised by reference to the stage ofcompletion.The stage of completion is based on the proportion of costs incurred to date to the estimated total costs.Rendering of services can be estimated reliably when all the following conditions are satisfied: A. The revenue can be measured reliably; B. It isprobable that the economic benefits will flow to the Company; C. The stage of completion can be measured reliably; D. The costs incurred and to beincurred in the transaction can be measured reliably.Where the outcome cannot be estimated reliably, revenues are recognised to the extent of the costs incurred that are expected to be recoverable,and an equivalent amount is charged to profit or loss as service cost; otherwise, the costs incurred are recognised in profit or loss and no servicerevenue is recognised.

③Transfer of right to use assets

Revenue is recognized when it is probable that the economic benefits will flow to the Company, and the revenue can be measured reliably.

④Revenue from construction contracts

Where the outcome of a construction contract can be estimated reliably, contract revenue and contract expenses associated with the constructioncontract are recognised using the percentage of completion method. When the outcome of a construction contract cannot be estimated reliably, if thecontract costs can be recovered, revenue is recognised to the extent of contract costs incurred that can be recovered, and the contract costs arerecognised as contract expenses when incurred; otherwise, the contract costs are recognised as contract expenses immediately when incurred, andno contract revenue is recognised.If the estimated total costs exceed contract revenue, the Company recognises estimated loss in profit or loss for the current period.The stage of completion of a contract is determined based on the proportion of contract costs incurred for work performed to date to the estimatedtotal contract costs.

The outcome of a construction contract can be estimated reliably when all the following conditions are satisfied: A. The contract revenue can bemeasured reliably; B. It is probable that the economic benefits will flow to the Company; C. The actual contract costs incurred can be distinguishedclearly and measured reliably; D. The completion progress of the contract and the costs need to be incurred to complete the contract can bemeasured reliably.

(2)Specific revenue recognition

Specific revenue recognition is as follows:

①Real estate development sales revenue recognition specific methods

1) the sales contract has been signed and filed with the land department; 2) the real estate has been completed and accepted; 3)fully one-offpayment on the first installment payment has been received; 4) completed the procedures for entering the partnership in accordance with therequirements stipulated in 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 and unit price corresponding to the service, therealization of the property service income shall be confirmed when the relevant service fee has been received or evidence of payment has beenobtained.

③Rental property income recognition of the specific method

The realization of the income from the leased property shall be confirmed when the relevant rent has been received or evidence of collection hasbeen obtained according to the lease contract and agreement on the date of lease (consider the rent-free period if there is a rent-free period) and therent amount.

④Other income recognition methods

Including project construction income, hotel operating income, etc., according to the relevant contract, agreement, in the relevant payment has beenreceived or is likely to receive the realization of revenue recognition.

24. Government grants

A government grant is recognised when there is reasonable assurance that the grant will be received and that the Group will comply with theconditions attaching to the grant.If a government grant is in the form of a transfer of a monetary asset, it is measured at the amount received or receivable. If a government grant is inthe form of a transfer of a non-monetary asset, it is measured at fair value. If fair value cannot be reliably determined, it is measured at a nominalamount of RMB 1.The government grants relating to assets are grants that Group purchases, construction or other methods to acquire long-term assets of governmentgrants. Exception of the above grants, others are related to gains.For government grants with unspecified purpose, the amount of grants used to form a long-term asset is regarded as government grants related toan asset, the remaining amount of grants is regarded as government grants related to income. If it is not possible to distinguish, the amount of grantsis treated as 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 toprofit or loss over the useful life of the related asset 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. A grant that compensates the Group for expenses orlosses to be incurred in the future is recognised as deferred 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 expenses based on the economic substance. A grant notrelated to ordinary activities is recognised as non-operating income.When a recognised government grant is reversed, carrying amout of the related asset is adjusted if the grant was initially recognized as offset againstthe carrying amount of the related asset. If there is balance 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 or loss for the current period. For othercircumstances, reversal is directly recognized in profit or loss for the current period.

25. Deferred tax assets and deferred tax liabilities

Income tax comprises of current tax and deferred tax. Current tax and deferred tax are recognised in profit or loss except to the extent that theyrelate to transactions or items recognised directly in equity and goodwill arising from a business combination.Deferred tax assets and deferred tax liabilities arise from deductible and taxable temporary differences respectively, being the differences betweenthe carrying amounts of assets and liabilities for financial reporting purposes and their tax bases.All the taxable temporary differences are recognized as deferred tax liabilities except for those incurred in the following transactions:

(1) initial recognition of goodwill, or assets or liabilities in a transaction that is not a business combination and that affects neither accounting profitnor taxable profit (or deductible loss);

(2) taxable temporary differences associated with investments in subsidiaries, associates and joint ventures, and the Company is able to controlthe timing of the reversal of the temporary difference and it 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 losses and tax credits carried forward to subsequentperiods, to the extent that it is probable that future taxable profits will be available against which deductible temporary differences, deductible lossesand tax 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 nor taxable profit (or deductible loss);

(2) deductible temporary differences associated with investments in subsidiaries, associates and joint ventures, the corresponding deferred taxasset is recognized when both of the following conditions are satisfied: it is probable that the temporary difference will reverse in the foreseeablefuture; and it is probable that taxable profits will be available in the future against which the temporary difference can be utilized.At the balance sheet date, deferred tax is measured based on the tax consequences that would follow from the expected manner of recovery orsettlement of the carrying amount of the assets and liabilities, using tax rates enacted at the reporting date that are expected to be applied in theperiod when the asset 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 to the extent that it is no longer probable that therelated tax benefits will be utilised. Such reduction is reversed to the extent that it becomes probable that sufficient taxable profits will be available.

26. Operating leases and finance leases

A finance lease is a lease that transfers substantially all the risks and rewards incidental to ownership of a leased asset to the lessee. An operatinglease 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 minimum lease receipts determined at the inception of alease and the initial direct costs as finance lease receivable, and recognized unguaranteed residual value at the same time. The difference betweenthe aggregate of the minimum lease receipts, the initial direct costs and the unguaranteed residual value, and the aggregate of their present value isrecognized as unearned finance income. Unearned finance income is allocated to each accounting period during the lease term using the effectiveinterest method.Income derived from operating leases is recognized in profit or loss using the straight-line method over the lease term. Initial direct costs are chargedto profit or loss immediately.

(2)As a lessee

When the Company acquires an asset under a finance lease, the asset is measured at an amount equal to the lower of its fair value and the presentvalue of the minimum lease payments, each determined 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 the leased assets and the minimum lease payments isaccounted for as 95ecognized95d finance charges. Initial direct costs attributable to a finance lease that are incurred by the Company are added tothe carrying amount of the leased asset. Unrecognised finance charges arising from a finance lease are 95ecognized using an effective interestmethod over the lease term. Depreciation is accounted for in accordance with the accounting policies of fixed assets.Rental payments under operating leases are recognized as part of the cost of another related asset or as expenses on a straight-line basis over thelease term. Initial direct costs are charged to profit or loss immediately.

27. Maintenance funds

The Group collects the maintenance funds from owners as the certain proportion of the sales amount when selling commercial housing. It shall beincluded in the long-term accounts payable. The maintenance funds will reduce when it is delivered to the land and housing administration.

28. Quality guarantee deposit

The quality deposit is based on the Group’s proportion of the construction and installation contracts, the term of payment. It is deducted from theconstruction payables and classified as accounts payable. Maintenance costs due to quality during the warranty period are directly expensed underthis account and will be eliminated when the warranty period ends.

29. Significant accounting estimates and judgments

The Group continues to make significant estimates and judgements with the consideration of historical experience and other factors such asreasonable forecasts about the future. The estimates and judgements will have a huge impact on the carrying amount of assets and liabilities in thenext financial period. The main estimates and judgements are as following:

(1)Classification of financial assets

The Group’s major judgments in determining the classification of financial assets include the analysis of business models and the characteristics ofcontract cash flows.At the level of financial asset group, the Group determines the business model for managing financial assets, taking into account factors such as theway to evaluate and report financial assets performance 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 lending arrangements, the Group has the followingjudgments: whether the principal’s time distribution or amount may change during the lifetime for early repayment and other reasons; whether theinterest only includes the time value of money, credit risk, other basic lending risks and the consideration of cost and profit. For example, does theamount of advance payment only reflect the unpaid principal and interest based on the unpaid principal, and reasonable compensation paid for theearly termination of 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 and expected credit losses rate of accountsreceivable, and determines the expected credit losses rate based on default probability and default loss rate. In determining the expected creditlosses rate, the Group uses internal historical credit loss and other data, and adjusts the historical data with current situation and forward-lookinginformation. In considering forward-looking information, the indicators used by the Group include the risks of economic downturn, external marketenvironment, technological environment and changes in customer conditions. The Group regularly monitors and reviews assumptions related to thecalculation of expected credit losses.

(3) Deferred income tax assets

Deferred tax assets relating to certain temporary differences and tax losses are recognised as management considers it is probable that futuretaxable profit will be available against which the temporary 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 recognise the appropriate amount of deferred income taxassets.

(4)The provision of land appreciation tax

The Group is subject to land appreciation tax (“LAT”). The Group recognised LAT based on management’s best estimates, however, LAT isrecognised by tax authorities according to the interpretation 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 have been 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 current discount rate of a project with similar terms andrisks. This valuation requires the group to estimate future cash flows and discount rates. Therefore, it causes high uncertainty. In same cases, thereis insufficient information to determine fair value, or the distribution of possible estimates is wide. On the contrary, the cost represents the bestestimate of fair value within that range. As a whole, the cost can represent the appropriate estimate of fair value within that range.

30. Changes in significant accounting policies, accounting estimates and correction of errors in prior periods

(1) Provisions Changes in significant accounting policies

①New guidelines for financial instrument guidelines

In 2017,the Ministry of Finance has issued “Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of FinancialInstruments (Revised)”,“Accounting Standards for Business Enterprises No. 23 - Finance Asset Transfer (Revised)”, “Accounting Standards forBusiness Enterprises No.24 - Hedge Accounting(Revised)”, “Accounting Standards for Business Enterprises No.37 - Financial InstrumentsPresentation (Revised)”(hereinafter referred to as the “New Financial Instruments Standards”). The Group has changed accounting policies, thechanged accounting policies are stated as note III. 10.

According to the new financial instruments standards,financial assets are classified into the following three categories depends on the Group’sbusiness mode of managing financial assets and cash flow characteristics of financial assets: financial assets measured at amortized cost, financialassets at fair value through other comprehensive income and financial assets at fair value through profit or loss. If the main contract contained in themixed contract belongs to financial assets, it should not be separated from the mixed contract and embedded in derivatives, but should be applied asa whole to the relevant provisions of the classification of financial assets.The adoption of the new financial instrument standards for the Group has no significant impact on the accounting policy of the Group’s financialliabilities.On 1 January, 2019, the Group did not designate any financial assets or liabilities as financial assets or liabilities measured at fair value throughprofits and losses, nor did it revoke its previous designation.The new financial instrument standard replaces the method of recognising impairment provision according to actual impairment loss stipulated in theoriginal financial instrument standard with the method of “expected credit losses method”. The“expected credit losses method” model requirescontinuous assessment of the credit risk of financial assets. Therefore, under the new financial instrument standard, the group’s credit loss isrecognised earlier than the original financial instrument standard.On the basis of expected credit losses, the Group performs impairment assessment on the following items and confirms the loss provision.? Financial assets measured at amortized cost;? Debt investments at fair value through other comprehensive income;? Lease receivables;? Financial guarantee contract(except measured at fair value through profit or loss or formed by continuing involvement of transferred financialassets or the transfer does not qualify for derecognition).In accordance with the provisions of the new financial instrument standard, except in certain specific cases, the Group retrospectively adjusts theclassification and measurement of financial instruments (including impairment), and calculates the difference between the original book value offinancial instruments and the new book value on the date of implementation of the n new financial instrument standard (i.e. January 1, 2019) into theretained earnings or other comprehensive earnings at the beginning of 2019. At the same time, the Group did not adjust the comparative financialstatements data.

On 1 January, 2019, the results of classification and measurement of financial assets in accordance with the original financial instrument standards and the new financial instrument standards are as follows:

The original financial instrument standards

The original financial instrument standardsThe new financial instrument standards
ItemsCategoriesBook valueItemsCategoriesBook value
Available-for-sale financial assetsTo measure (an equity instrument) at cost.17,464,240.74Other non-current financial assetsMeasured at fair value and recorded in current profit and loss--
Other equity instruments investmentMeasured at fair value and recorded in other comprehensive income30,922,155.02
ReceivablesAmortised cost33,426,991.65ReceivablesAmortized cost26,678,630.82
Receivables financingMeasured at fair value and recorded in other comprehensive income--
Other receivablesAmortised cost45,018,027.61Other current assetAmortised cost--
Other receivablesAmortised cost23,009,475.81

On 1 January 2019, the adjustment table of the financial instrument classification and book value,at the implemention of the new financial instrumentstandards were as follows:

Category

CategoryBook amount before adjustment (31 December 2018)ReclassificationRecalculationAdjusted book amount (1 January 2019)
Aesset:
Cash at bank and in hand2,048,522,435.932,282,500.00--2,050,804,935.93
Account receivable33,426,991.65---6,748,360.8326,678,630.82
Other receivables45,018,027.61-2,282,500.00-19,726,051.8023,009,475.81
Available-for-sale financial assets17,464,240.74-17,464,240.74----
Other equity instruments investment--17,464,240.7413,457,914.2830,922,155.02
Deferred income tax assets154,543,788.80--311,694.66154,855,483.46
Liabilities:--------
Deferred income tax liabilities----3,364,478.583,364,478.58
Entities:
Other comprehensive income10,564,385.97--10,093,435.7020,657,821.67
Surplus reserves95,906,222.59---416,151.4395,490,071.16
Undistributed profit1,235,884,122.72---25,355,845.721,210,528,277.00
Minority equity-131,524,530.88---390,720.82-131,915,251.70

The adjustment table between the loss provision at the end of 2018 and the loss provision at the beginning of 2019 measured in accordance with theoriginal rules of financial instruments is as follows:

CategoryBook amount before adjustment (31 December 2018)ReclassificationRecalculationAdjusted book amount (1 January 2019)
Impairment provision for accounts receivable19,243,657.51--6,748,360.8325,992,018.34
Other provisions for impairment of receivables174,758,743.31--19,726,051.80194,484,795.11

② Financial statement format

The Ministry of Finance issued the notice of the ministry of finance on the revision and issuance of the general financial statement format of the year2019 in April 2019 (No. 6 of finance and accounting [2019]), and the notice of the ministry of finance on the revision and issuance of the generalfinancial statement format of the year 2018 (No. 15 of finance and accounting [2018]) issued in June 2018 shall be abolished simultaneously;InSeptember 2019, the ministry of finance issued the notice of the ministry of finance on revising and printing the format of consolidated financialstatements (version 2019) (No. 16 of finance and accounting [2019]), and the notice of the ministry of finance on revising and printing the format ofconsolidated financial statements for 2018 (No. 1 of finance and accounting [2019]) shall be abrogated simultaneously.According to accounting [2019]No. 6 and accounting [2019] No. 16, the company has revised the financial statement format as follows:

Balance sheet, dividing the items of "notes receivable and accounts receivable" into "notes receivable" and "accounts receivable";The "notes payableand accounts payable" line item is divided into "notes payable" and "accounts payable".The company shall adjust the comparative data of the comparable period according to document No. 6 of accounting [2019].

The revision of the financial statement format has no effect on the company's total assets, total liabilities, net profits and other comprehensiveincome.As of 31 December 2019, there were no other significant accounting policy changes during the reporting period.

(2)Important accounting estimate changes

The Group's significant accounting estimates have not changed during the reporting period.

(3)At the first implementation of the new financial instrument standards, the situation to adjust the relevant items of the financial statements at thebeginning of the first implementation year is as follow:

Consolidated balance sheet

Category

CategoryAs at 31/12/2018As at 1/1/2019Adjustments
Current asset:
Cash at bank and in hand2,048,522,435.932,050,804,935.932,282,500.00
Accounts receivable33,426,991.6526,678,630.82-6,748,360.83
Accounts receivable financing------
Prepayment4,177,767.884,177,767.88--
Other receivables45,018,027.6123,009,475.81-22,008,551.80
Inventories1,685,152,051.261,685,152,051.26--
Other current assets6,780,999.566,780,999.56--
Total current assets3,823,078,273.893,796,603,861.26-26,474,412.63
Non-current assets
Available-for-sale financial assets17,464,240.74---17,464,240.74
Long-term equity investments12,561,107.2412,561,107.24--
Other equity instruments investments--30,922,155.0230,922,155.02
Investing properties623,930,838.15623,930,838.15--
Fix assets33,926,198.5233,926,198.52--
Long-term deferred expenses387,066.91387,066.91--
Deferred income tax assets154,543,788.80154,855,483.46311,694.66
Total non-current assets842,813,240.36856,582,849.3013,769,608.94
Total assets4,665,891,514.254,653,186,710.56-12,704,803.69
Current liabilities:
Short term loans17,260,103.4617,260,103.46--
Accounts payable216,758,906.71216,758,906.71--
Advances from customers156,426,152.86156,426,152.86--
Employee benefits payable45,836,830.0545,836,830.05--
Taxes payable300,547,372.98300,547,372.98--
Other payables721,819,898.48721,819,898.48--
Total current liabilities1,458,649,264.541,458,649,264.54--
Non-current liabilities:
Long-term payable6,507,139.206,507,139.20--
Deferred income tax liabilities--3,364,478.583,364,478.58

Category

CategoryAs at 31/12/2018As at 1/1/2019Adjustments
Total non-current liabilities6,507,139.209,871,617.783,364,478.58
Total liabilities1,465,156,403.741,468,520,882.323,364,478.58
Entities
Share capital1,011,660,000.001,011,660,000.00--
Capital reserve978,244,910.11978,244,910.11--
Other comprehensive income10,564,385.9720,657,821.6710,093,435.70
Surplus reserve95,906,222.5995,490,071.16-416,151.43
Retained earnings1,235,884,122.721,210,528,277.00-25,355,845.72
Total owners' equity attributable to parent company3,332,259,641.393,316,581,079.94-15,678,561.45
Minority interests-131,524,530.88-131,915,251.70-390,720.82
Total entieies3,200,735,110.513,184,665,828.24-16,069,282.27
Total liabilities and entities4,665,891,514.254,653,186,710.56-12,704,803.69

Balance sheet of parent company

CategoryAs at 31/12/2018As at 1/1/2019Ajustments
Current asset:
Cash at bank and in hand1,344,486,378.531,346,768,878.532,282,500.00
Accounts receivable5,164,795.671,533,739.14-3,631,056.53
Receivable financing------
Prepayment200,000.00200,000.00--
Other receivables770,374,849.84767,188,991.98-3,185,857.86
Inventories543,912,100.37543,912,100.37--
Other current assets215,745.41215,745.41--
Total current assets2,664,353,869.822,659,819,455.43-4,534,414.39
Non-current assets
Available-for-sale financial assets12,000,000.00---12,000,000.00
Long-term equity investments235,284,776.57235,284,776.57--
Other equity instruments investments--13,297,189.6613,297,189.66
Investing properties511,040,299.65511,040,299.65--
Fix assets21,942,842.1121,942,842.11--
Long-term deferred expense346,015.72346,015.72--
Deferred income tax assets16,699,980.2316,745,319.0145,338.78
Total non-current assets797,313,914.28798,656,442.721,342,528.44
Total assets3,461,667,784.103,458,475,898.15-3,191,885.95
Current liabilities
Accounts payable16,743,360.9616,743,360.96--
Advances from customers22,035,608.4522,035,608.45--
Employee benefits payable19,687,728.5019,687,728.50--
Taxes payable144,621,616.85144,621,616.85--

Category

CategoryAs at 31/12/2018As at 1/1/2019Ajustments
Other payables594,392,900.98594,392,900.98--
Total current liabilities797,481,215.74797,481,215.74--
Non-current liabilities:
Deferred income tax liabilities--324,297.42324,297.42
Total non-current liabilities--324,297.42324,297.42
Total liabilities797,481,215.74797,805,513.16324,297.42
Entities
Share capital1,011,660,000.001,011,660,000.00--
Capital reserve964,711,931.13964,711,931.13--
Other comprehensive income--972,892.24972,892.24
Surplus reserve72,776,609.1872,360,457.75-416,151.43
Retained earnings615,038,028.05610,965,103.87-4,072,924.18
Total owners' equity attributable to parent company2,664,186,568.362,660,670,384.99-3,516,183.37
Minority interests------
Total entieies2,664,186,568.362,660,670,384.99-3,516,183.37
Total liabilities and entities3,461,667,784.103,458,475,898.15-3,191,885.95

IV. Taxation

1. Main types of taxes and corresponding tax rates

Tax typeTax basisTax rate%
VATTaxable income9,6,5,3
Land appreciation taxIt 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 productFour progressive rates of excess rate : 30,40,50, 60
Property taxThe original value of house deducts 30%1.2
City maintenance and construction taxTurnover tax payable7
Education surchargeTurnover tax payable3
Local education surchargeTurnover tax payable2
Corporate income taxTaxable profits25,16.5

Description of VAT rates for different businesses:

The group is engaged in real estate development, property management, engineering and other business income, "notice on the pilot of replacingbusiness tax with VAT" (Caishui [201636]) and other relevant provisions. Since May 1, 2016, the group's VAT taxable items and tax rates are shownin the following table:

Type of revenueTaxTax rate%
Sales of propertiesSimply filing return5
Construction, installation incomeSimply filing return9,3
Rental income of PropertySimply filing return5

Income of Property Management

Income of Property ManagementFiling return generally6

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 companies incorporated in Hong Kong.V. Notes to the consolidated financial statements

1. Cash at bank and in hand

ItemAs at 31/12/2019As at 31/12/2018
Foreign currency amountExchange rateRMB equivalentForeign currency amountExchange rateRMB equivalent
Cash in hand:----66,252.42----57,979.40
RMB----66,252.42----57,979.40
Cash at bank:----1,493,123,507.93----1,148,464,456.53
RMB----1,485,217,117.53----1,140,213,287.57
USD5,532.956.976238,598.9745,331.776.8845312,086.57
HKD8,783,167.250.895787,867,791.439,031,948.110.87907,939,082.39
Including: Deposits in finance company------------
Other monetary funds:----1,017,950,685.00----900,000,000.00
RMB----1,017,950,685.00----900,000,000.00
Total----2,511,140,445.35----2,048,522,435.93
Including: Total overseas deposits----7,936,545.69----8,239,667.62

Note: At the end of the year 2019, other monetary funds were RMB 1,017,950,685.00. RMB 1,000,000,000.00 was structured deposit principalmeasured at amortized cost, RMB 3,950,685.00 was interest, and RMB 14,000,000.00 was a seven-day notice deposit.

2. Accounts receivable

(1) Accounts receivable by aging balance

AgingAs at 31/12/2019As at 31/12/2018
Within 1 year65,195,782.6620,297,050.49
1 to 2 years66,518.001,422,214.09
2 to 3 years--2,698,788.09
More than 3 years24,956,115.9628,252,596.49
Subtotal90,218,416.6252,670,649.16
Less: provision for bad and doubtful debts28,159,360.9419,243,657.51
Total62,059,055.6833,426,991.65

(2)The classification of bad and doubtful debts

ItemAs at 31/12/2019

Book balance

Book balanceProvision for bad and doubtful debtsCarrying amount
Book valueProportion (%)Book valueExpected credit loss(%)
Provision made on an individual basis24,866,900.2727.5624,866,900.27100.00--
Provision for bad and doubtful debts collectively65,351,516.3572.443,292,460.675.0462,059,055.68
Including:
Accounts receivable from sales of proporties10,761,284.3711.93538,064.225.0010,223,220.15
Accounts receivable from other customers54,590,231.9860.512,754,396.455.0551,835,835.53
Total90,218,416.62100.0028,159,360.9431.2162,059,055.68

Continued

ItemAs at 1/1/2019
Book balanceProvision for bad and doubtful debtsCarrying amount
Book valueProportion(%)Book valueExpected credit loss(%)
Provision made on an individual basis24,426,477.7346.3824,426,477.73100.00--
Provision for bad and doubtful debts collectively28,244,171.4353.621,565,540.615.5426,678,630.82
Including::
Accounts receivable from sales of proporties2,330,074.804.42116,503.745.002,213,571.06
Accounts receivable from other customers25,914,096.6349.201,449,036.875.5924,465,059.76
Total52,670,649.16100.0025,992,018.3449.3526,678,630.82

Provision made on an individual basis:

ItemAs at 31/12/2019
Book balanceProvision for bad and doubtful debtsExpected credit loss (%)Rationale of provision
Agent business payment of import and export11,574,556.0011,574,556.00100.00Expected to be not recoverable
Long-term accounts receivable from sales of proproties10,626,436.8410,626,436.84100.00Expected to be not recoverable
Accounts receivable from revoked subsidaries2,328,158.402,328,158.40100.00Expected to be not recoverable
Other customers337,749.03337,749.03100.00Expected to be not recoverable
Total24,866,900.2724,866,900.27100.00

Provision for bad and doubtful debts collectively:

Accounts receivable from sales of proporties

Aging

AgingAs at 31/12/2019
Account receivableProvision for bad and doubtful debtsExpected credit loss(%)
Within 1 year10,690,000.00534,500.005.00
1 to 2 years71,284.373,564.225.00
Total10,761,284.37538,064.225.00

Accounts receivable from other customers

AgingAs at 31/12/2019
Account receivableProvision for bad and doubtful debtsExpected credit loss(%)
Within 1 year54,590,231.982,754,396.455.05

As at 31/12/2018,Provision for bad and doubtful debts:

CategoryAs at 31/12/2018
Book valueProportion(%)Provision for bad and doubtful debtsProportion (%)Carrying amount
Accounts receivable of which provision for bad debts is of individually significant----------
Provision for bad and doubtful debts collectively----------
Accounts receivable of which provision for bad debts is of individually insignificant52,670,649.16100.0019,243,657.5136.5433,426,991.65
Total52,670,649.16100.0019,243,657.5136.5433,426,991.65

(3)Provision, recovery or reversal of bad debt

ItemProvision for bad and doubtful debts
As at 31/12/201819,243,657.51
Adjustment amount for the first implementation of the new financial instrument guidelines6,748,360.83
As at 1/1/201925,992,018.34
Provision2,167,342.60
Recovery--
Written-off--
2019.12.3128,159,360.94

(4)Top 5 entities with the largest balances of other receivables

Name of EntityAmountProportion of theBad debt

amount to the total AR

(%)

amount to the total AR (%)provision
Corporation unit No.125,744,944.5028.541,287,247.23
Corporation unit No.215,590,603.6817.28779,530.18
Corporation unit No.32,696,015.002.99134,800.75
Individual No.12,309,255.462.56115,462.77
Corporation unit No.42,185,557.482.42109,277.87
Total48,526,376.1253.792,426,318.80

(5)At the end of the year 2019, the group has handled the factoring of accounts receivable(RMB 51,647,260.17), corresponding to the book value of

accounts receivable RMB 51,647,260.17 which has not been terminated for recognition. The detail is set out in note V. 42.

3. Prepayments

(1) The aging analysis of prepayments is as follows:

AgingAs at 31/12/2019As at 31/12/2018
AmountProportion(%)AmountProportion(%)
Within 1 year19,398.178.824,177,217.8899.99
1 and 2 years200,000.0090.93----
More than 3 years550.000.25550.000.01
Total219,948.17100.004,177,767.88100.00

(2)Top 5 entities with the largest balances of prepayment

The total amount of prepayment is RMB 219,072.21, accounting for 99.60% of the total amount of the ending balance of prepayment.4.Other receivables

ItemAs at 31/12/2019As at 31/12/2018
Interest receivables--2,453,067.78
Dividend receivables1,052,192.761,052,192.76
Other receivables27,223,035.5041,512,767.07
Total28,275,228.2645,018,027.61

(1) Interest receivables

ItemAs at 31/12/2019As at 31/12/2018
Fixed deposits--170,567.78
Structured deposit--2,282,500.00
Subtotal:--2,453,067.78
Less:Provision for bad and doubtful debts----
Total--2,453,067.78

(2) Dividend receivables

ItemAs at 31/12/2019As at 31/12/2018

Yunnan KunPeng Flight service Co., Ltd

Yunnan KunPeng Flight service Co., Ltd1,052,192.761,052,192.76
Less:Provision for bad and doubtful debts----
Total1,052,192.761,052,192.76

Including: significant dividends receivable aging over 1 year:

ItemAs at 31/12/2019AgingReason for uncollectedWhether an impairment occurred and the basis for its judgment
Yunnan KunPeng Flight service Co., Ltd1,052,192.765 yearsDelay to issueNone

(3) Other receivables

①Other receivables by aging

AgingAs at 31/12/2019As at 31/12/2018
Within 1 year20,256,667.467,746,036.15
1 to 2 years5,670,455.809,382,626.85
2 to 3 years--1,512,791.00
More than 3 years196,658,114.17197,630,056.38
Subtotal222,585,237.43216,271,510.38
Less:Provision for bad and doubtful debts195,362,201.93174,758,743.31
Total27,223,035.5041,512,767.07

②Other receivables categorized by nature

ItemAs at 31/12/2019As at 31/12/2018
Book valueProvision for bad and doubtful debtsCarrying amountBook valueProvision for bad and doubtful debtsCarrying amount
Amount receivables from government4,371,247.34--4,371,247.3413,272,259.19--13,272,259.19
Amount receivables from employee’s inprest fund716,684.01--716,684.011,202,293.00--1,202,293.00
Amount receivables from the collecting and paying on another's behalf594,012.08--594,012.08684,325.81--684,325.81
Amount receivables from other customers56,713,292.6235,639,303.9121,073,988.7141,109,356.5317,029,617.5624,079,738.97
Amount receivables from related parties160,190,001.38159,722,898.02467,103.36160,003,275.85157,729,125.752,274,150.10

Total

Total222,585,237.43195,362,201.9327,223,035.50216,271,510.38174,758,743.3141,512,767.07

③ Provision for bad and doubtful debts

As at 31/12/2019, the provision for bad debts in the first stage :

CategoryBook balance12-month expected credit loss(%)Provision for bad and doubtful debtsCarrying amountReasons
Collectively assessed for impairment based on credit risk characteristics
Amount receivables from government4,371,247.34----4,371,247.34
Amount receivables from employee’s inprest fund716,684.01----716,684.01
Amount receivables from the collecting and paying on another's behalf594,012.08----594,012.08
Amount receivables from other customers22,183,146.015.001,109,157.3021,073,988.71
Amount receivables from related parties491,687.745.0024,584.38467,103.36
Total28,356,777.184.001,133,741.6827,223,035.50

As at 31/12/2019, the company does not have interest receivable, dividends receivable and other receivables in the second stage.As at 31/12/2019, the provision for bad debts in the third stage :

CategoryBook balanceTo lifetime expected credit lossProvision for bad and doubtful debtsCarrying amountReasons
Individually assessed for impairment individually
Other receiables from revoked subsidaries3,838,281.67100.003,838,281.67--Expected to be not recoverable
Other receiables from existed subsidaries190,390,178.58100.00190,390,178.58--Expected to be not recoverable
Including: Other receivables from related parties159,698,313.64100.00159,698,313.64--Expected to be not recoverable
Total194,228,460.25100.00194,228,460.25--

As at 31/12/2018,Provision for bad and doubtful debts:

CategoryAs at 31/12/2018
Book value%Provision for bad and doubtful debts%Carrying amount
Accounts receivable of which provision for bad debts is of individually significant145,114,361.4467.10144,780,234.6299.77334,126.82
Provision for bad and doubtful----------

debts collectively

debts collectively
Accounts receivable of which provision for bad debts is of individually insignificant71,157,148.9432.9029,978,508.6942.1341,178,640.25
Total216,271,510.38100.00174,758,743.3180.8141,512,767.07

④ Provision, recovery or reversal of bad debt

Provision for bad and doubtfulThe first stageThe second stageThe third stageTotal
To 12-month expected credit lossTo lifetime expected credit loss (no credit impairment)To lifetime expected credit loss (has occurred credit impairmen)
As at 31/12/2018----174,758,743.31174,758,743.31
Adjustment amount for the first implementation of the new financial instrument guidelines352,721.66--19,373,330.1419,726,051.80
As at 31/12/2018352,721.66--194,132,073.45194,484,795.11
Provision805,229.49--96,386.80901,616.29
Recovery24,209.47----24,209.47
Written-off--------
As at 31/12/20191,133,741.68--194,228,460.25195,362,201.93

⑤There were no other receivables written off in the current period.

⑥Top 5 entities with the largest balances of other receivables

Name of EntityNatureAmountAgingProportion of the amount to the total OR (%)Bad debt provision
Canada Great Wall( Vancouver) Co.,LtdCurrent account89,035,748.07More than 5 years40.0089,035,748.07
Paklid LimitedCurrent account19,319,864.85More than 5 years8.6819,319,864.85
Bekaton property LimitedCurrent account12,559,290.58More than 5 years5.6412,559,290.58
Guangdong province Huizhou Luofu Hill Mineral Water Co.,LtdCurrent account10,465,168.81More than 5 years4.7010,465,168.81
Xi’an Fresh Peak Property Trading Co., LtdCurrent account8,419,205.19More than 5 years3.788,419,205.19
Total--139,799,277.50--62.80139,799,277.50

5. Inventories

(1)Categories of inventory

ItemAs at 31/12/2019As at 31/12/2018
Book valueProvision for impairment of inventoriesCarrying amountBook valueProvision for impairment ofCarrying amount

inventories

inventories
Real estate development projects
Real estate developing products400,425,673.85--400,425,673.85517,451,829.98--517,451,829.98
Real estate developed products1,060,130,671.64268,941.601,059,861,730.041,093,907,013.99268,941.601,093,638,072.39
Subtotal1,460,556,345.49268,941.601,460,287,403.891,611,358,843.97268,941.601,611,089,902.37
Non real estate development projects
Raw material882,857.81240,000.00642,857.81882,857.81240,000.00642,857.81
Finished products317,200.8138,891.91278,308.90319,679.8738,891.91280,787.96
Construction in progress1,020,477.58--1,020,477.5873,138,503.12--73,138,503.12
Subtotal2,220,536.20278,891.911,941,644.2974,341,040.80278,891.9174,062,148.89
Total1,462,776,881.69547,833.511,462,229,048.181,685,699,884.77547,833.511,685,152,051.26

(2)Provision for impairment of inventories

CategoryAs at 1/1/2019Additions during the year Provision othersWritten back during the yearAs at 31/12/2019
Reversals or write-offothers
Real estate development projects
Real estate developing costs----------
Real estate developed products268,941.60------268,941.60
Non real estate development projects
Raw material240,000.00------240,000.00
Finished products38,891.91------38,891.91
Construction in progress----------
Total547,833.51------547,833.51

Provision for impairment of inventories (continued)

ItemThe basis for determining the net realizable value/residual consideration and the costs to be incurredThe cause of inventory depreciation provision for the current period
Real estate developing costs
--
Real estate developed productsThe estimated selling price of the inventory less the estimated selling cost and related taxes--
Raw materials
--
Finished productsThe estimated selling price of the inventory less the--

estimated selling cost and related taxes

estimated selling cost and related taxes
Construction in progressThe 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 31/12/2019, the Group's inventory balance contains the amount capitalized on the borrowing costs with RMB 4,910,251.90 (As at 31/12/2018,RMB 37,274,519.11).

(4)Real estate developing products

TtemStarting timeFinished timeEstimated total investmentAs at 31/12/2019As at 31/12/2018Provision for inventory devaluation
ChuanQi DongHu Building(Fromer DongHuDiJing Building)2017201951,000.00--309,169,276.59--
ShanTou Fresh Peak Building------25,291,908.1125,291,908.11--
TianYue Bay No.22015202165,485.00375,133,765.74182,990,645.28--
Total400,425,673.85517,451,829.98--

(5)Real estate developed products

ItemFinished timeAs at 1/1/2019IncreaseDecreaseAs at 31/12/2019Provision for inventory devaluation
Jinye Island Multi-tier villa199739,090,848.0936,371.05--39,127,219.14--
Jinye Island villa No.1020106,079,171.97--2,551,243.043,527,928.93--
Jinye Island villa No.1120086,881,309.24--2,540,146.754,341,162.49--
YueJing dongfang Project20149,789,881.19--1,943,875.127,846,006.07--
Wenjin Garden3,299,040.20--3,206,827.4392,212.77--
Real Estate building9,710,518.65--9,710,518.65----
HuaFeng Building1,631,743.64----1,631,743.64--
HuangPu XinCun289,802.88439,627.12--729,430.00--
XingHu Garden156,848.69----156,848.69--
Chuanqishan Project20138,969,652.53--8,969,652.53----
Shenfang Shanglin Garden201410,206,656.46----10,206,656.46268,941.60

Beijing Fresh PeakBuliding

Beijing Fresh Peak Buliding304,557.05----304,557.05--
TianYue Bay No.12017618,140,958.93--142,392,835.79475,748,123.14--
Chuanqi Jingyuan2018210,020,135.8519,914,665.39229,934,801.24----
Shengfang CuiLin Building2018169,335,888.62--69,389,822.0899,946,066.54--
Chuanqi Donghu2019--502,775,707.2786,302,990.55416,472,716.72--
Total1,093,907,013.99523,166,370.83556,942,713.181,060,130,671.64268,941.60

Note: the decrease of Wenjing Garden and Real Estate building is caused by the transfer from the rental inventory into investment properties andamortization.

6、Other non-current assets

ItemAs at 31/12/2019As at 31/12/ 2018
Income tax84,000,516.75--
Advance payment of VAT10,211,601.86--
Pending deduct VAT4,741,727.706,336,815.15
LAT2,617,779.37--
Business tax353,427.19444,184.41
Others856,802.61--
Total102,781,855.486,780,999.56

7、Available-for-sale financial assets

ItemAs at 31/12/2019As at 31/12/2018
Book valueProvision for impairmentCarrying amountBook valueProvision for impairmentCarrying amount
Available-for-sale equity instruments------17,464,240.74--17,464,240.74
including:at cost------17,464,240.74--17,464,240.74
Total------17,464,240.74--17,464,240.74

8、Long-term equity investments

Investee

InvesteeBalance as at 1/1/2019Movements during the yearBalance as at 31/12/2019Balance of provision for impairment as at 31/12/2019
Additional investmentReduce investmentInvestment gains and losses confirmed by the equity methodAdjustment of other comprehensive incomeChanges in other equityThe issuance of profitImpairmentOther
① Joint ventures
Guangdong province Huizhou Luofu Hill Mineral Water Co.,Ltd9,969,206.09----------------9,969,206.099,969,206.09
Fengkai Xinhua Hotel9,455,465.38----------------9,455,465.389,455,465.38
Subtotal19,424,671.47----------------19,424,671.4719,424,671.47
②Associates
Shenzhen Ronghua JiDian Co.,ltd1,471,164.04----75,629.25----------1,546,793.291,076,954.64
Shenzhen Runhua Automobile trading Co.,Ltd1,445,425.56----------------1,445,425.561,445,425.56
Dongyi Real Estate Co., Ltd30,376,084.89----------------30,376,084.8930,376,084.89
Subtotal33,292,674.49----75,629.25----------33,368,303.7432,898,465.09
③Other equity investments
Paklid Limited201,100.00----------------201,100.00201,100.00
Bekaton Property Limited906,630.00----------------906,630.00906,630.00
Shenzhen10,000,000.00----------------10,000,000.0010,000,000.00

Investee

InvesteeBalance as at 1/1/2019Movements during the yearBalance as at 31/12/2019Balance of provision for impairment as at 31/12/2019
Additional investmentReduce investmentInvestment gains and losses confirmed by the equity methodAdjustment of other comprehensive incomeChanges in other equityThe issuance of profitImpairmentOther
Shenfang Department Store Co. Ltd.
Shantou Fresh Peak Building58,547,652.25----------------58,547,652.2558,547,652.25
Guangdong Province Fengkai Lain Feng Cement Manufacturing Co., Ltd56,228,381.64----------------56,228,381.6456,228,381.64
Jiangmen Xinjiang Real Estate Co., Ltd9,037,070.89----------------9,037,070.899,037,070.89
Xi’an Fresh Peak Property Trading Co., Ltd32,840,729.61------------12,166,897.84--32,840,729.6132,840,729.61
Subtotal167,761,564.39------------12,166,897.84--167,761,564.39167,761,564.39
Total167,761,564.39------------12,166,897.84--167,761,564.39167,761,564.39

Note:

1、After the suspension of Xi’an Fresh Peak Property Trading Co., Ltd, there is no sign of the resumption of business activities in the foreseeable future. Therefore, the group takes RMB 12,166,897.84 for the long-term equityinvestment of Xi 'an Xinfeng property trading co., LTD as a provision.

2、Other equity investments are the equity of the company's subsidiaries not included in the scope of the merger. These subsidiaries may or have completed the cancellation procedures, but the company has not written off itslong-term equity investment, or they ceased operations many years ago, and the company has 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

ItemAs at 31/12/2019As at 31/12/2018
Shantou Small &Medium Enterprises Financing Guarantee Co., Ltd13,229,501.03--
Yunnan KunPeng Flight service Co.,Ltd19,897,229.01--
Total33,126,730.04--

Note: Since the above equity instruments are investments that the Group plans to hold for a long time for strategic purposes, the group designatesthem as financial assets measured at fair value and their changes recorded in other comprehensive income.

ItemDividend income recognized for the current periodThe cumulative gainsThe cumulative lossThe amount of other comprohensive reserve transferred into retained earningsTranfering reasons
Shantou Small &Medium Enterprises Financing Guarantee Co., Ltd928,200.003,444,300.00------
Yunnan KunPeng Flight service Co.,Ltd--1,653,305.67------
Total928,200.005,097,605.67------

10. Investment properties

(1) Investment properties measured using the cost model

ItemBuildingsLand use rightsTotal
Ⅰ.Cost
1.Balance as at 31/12/20181,010,636,392.81106,115,418.001,116,751,810.81
2.Additions during the year32,607,479.941,413,433.6334,020,913.57
(1)Transfers from inventory32,607,479.94--32,607,479.94
(2)Others(exchange fluctuation)--1,413,433.631,413,433.63
3. Decrease during the year------
4.Balance as at 31/12/20191,043,243,872.75107,528,851.631,150,772,724.38
Ⅱ.Accumulated depreciation or amortization
1.Balance as at 31/12/2018391,598,553.08--391,598,553.08
2.Charge for the year24,549,780.59--24,549,780.59
(1)Depreciated or amortised24,549,780.59--24,549,780.59
3. Reductions during the year------
4.Balance as at 31/12/2019416,148,333.67--416,148,333.67
III.Provision for impairment
1.Balance as at 31/12/201814,128,544.6287,093,874.96101,222,419.58
2.Charge for the year--1,160,070.931,160,070.93
(1)Other additions(exchange fluctuation)--1,160,070.931,160,070.93
3. Reductions on disposals------

Item

ItemBuildingsLand use rightsTotal
4.Balance as at 31/12/201914,128,544.6288,253,945.89102,382,490.51
IV.Carrying amounts
1.As at 31/12/2019612,966,994.4619,274,905.74632,241,900.20
2.As at 31/12/2018604,909,295.1119,021,543.04623,930,838.15

Note: The original value of land use right and the amount of the increase of the impairment provision are caused by the exchange rate changes in thetranslation of foreign currency statements.

11. Fixed assets

ItemAs at 31/12/2019As at 31/12/2018
Fixed assets30,522,035.1133,926,198.52
Fixed assets to be disposed of----
Total30,522,035.1133,926,198.52

(1) Fixed assets

①Fixed assets

ItemPlant & buildingsMotor vehiclesElectronic equipment & othersTotal
Ⅰ.Cost
1.Balance as at 31/12/2018107,110,751.4212,287,244.7514,210,579.58133,608,575.75
2.Additions during the year--641,365.74613,347.761,254,713.50
(1)Purchases--641,365.74613,347.761,254,713.50
3. Decrease during the year--2,487,543.00897,404.553,384,947.55
(1)Disposals or written-offs--2,487,543.00897,404.553,384,947.55
4.Balance as at 31/12/2019107,110,751.4210,441,067.4913,926,522.79131,478,341.70
II.Accumulated depreciation:
1.Balance as at 31/12/201877,203,923.0110,932,114.2511,546,339.9799,682,377.23
2.Charge for the year3,440,124.50259,061.38658,842.854,358,028.73
(1)Provision3,440,124.50259,061.38658,842.854,358,028.73
3.Reductions for the year
(1)Disposal or written-offs--2,245,974.50838,124.873,084,099.37
4.Balance as at 31/12/201980,644,047.518,945,201.1311,367,057.95100,956,306.59
III.Provision for impairment
IV.Carrying amount
1.As at 31/12/201926,466,703.911,495,866.362,559,464.8430,522,035.11
2.As at 31/12/201829,906,828.411,355,130.502,664,239.6133,926,198.52

12. Intangible assets

(1)Intangible assets

Item

ItemSoftwareTotal
I.Cost
1.Balance as at 31/12/20182,241,800.002,241,800.00
2.Additions during the year
3.Decrease during the year
(1)Disposals
4.Balance as at 31/12/20192,241,800.002,241,800.00
II.Accumulative amortisation
1.Balance as at 31/12/20182,241,800.002,241,800.00
2.Charge for the year----
3.Reduction for the year----
4.Balance as at 31/12/20192,241,800.002,241,800.00
III.Provision for impairment
IV.Carrying amount
1.As at 31/12/2019----
2.As at 31/12/2018----

13. Long-term deferred expenses

ItemAs at 31/12/2018Additions during the yearDecreases during the yearAs at 31/12/2019
Amortisation for the yearOthers decreases
Renovation costs346,015.85--183,890.13--162,125.72
Others41,051.06--41,051.06----
Total387,066.91--224,941.19--162,125.72

14. Deferred tax assets and deferred tax liabilities

(1) Deferred tax assets and deferred tax liabilities not offsetting

ItemAs at 31/12/2019As at 31/12/2018
(1) Deductible or taxable temporary differencesDeferred tax assets/ deferred tax liabilities(2) Deductible or taxable temporary differencesDeferred tax assets/ deferred tax liabilities
Deferred tax assets:
Provisions for impairment of assets5,157,896.861,289,474.22268,941.6067,235.40
Deductible loss46,877,417.4611,719,354.3772,853,906.3218,213,476.58
Provision for land appreciation tax liquidation reserves83,816,495.8120,954,123.95416,873,760.12119,730,695.91
Expected profit for advances from customers----12,937,987.443,234,496.86
Unrealized profits of intra-group transactions29,309,607.927,327,401.984,419,308.841,104,827.21
Contract tentative estimate cost20,603,882.915,150,970.7347,474,275.3212,193,056.84

Item

ItemAs at 31/12/2019As at 31/12/2018
(1) Deductible or taxable temporary differencesDeferred tax assets/ deferred tax liabilities(2) Deductible or taxable temporary differencesDeferred tax assets/ deferred tax liabilities
Sub-total185,765,300.9646,441,325.25554,828,179.64154,543,788.80
Deferred tax liabilities:
Interest on unexpired structured deposits3,950,685.00987,671.25----
Changes in fair value of other equity instruments15,662,489.303,915,622.33----
Sub-total19,613,174.304,903,293.58----

(2)Details of unrecognized deferred tax assets

ItemAs at 31/12/2019As at 31/12/2018
Deductible losses31,568,944.6930,987,611.48
Bad debt provision218,911,499.52194,281,292.73
Provision for impairment of long-term equity investments220,084,700.95207,917,803.11
Provision for impairment of investment properties102,382,490.51101,222,419.58
Total572,947,635.67534,409,126.90

Note: Due to the uncertainty of whether sufficient taxable income can be obtained in the future, there is no confirmation of deductible temporarydifferences and deductible losses on deferred tax assets.

(3) Unrecognized deductible losses of deferred tax assets will expire at the end of following years

YearAs at 31/12/2019As at 31/12/2018Note
2019--107,123.28
20209,692,495.529,692,495.52
202111,349,323.0611,349,323.06
20225,753,184.385,753,184.38
20234,085,485.244,085,485.24
2024688,456.49--
Total31,568,944.6930,987,611.48

15. Short-term loans

(1) Short-term loans by category

CategoryAs at 31/12/2019As at 31/12/2018
Pledged loans51,647,260.1715,260,103.46
Credit loans--2,000,000.00
Total51,647,260.1717,260,103.46

Note: At the end of the period, the Group discounted the account receivables amounted to RMB 51,647,260.17 by factoring to financial institutionsand received cash proceeds of RMB 51,647,260.17.

16. Accounts payable

Item

ItemAs at 31/12/2019As at 31/12/2018
Construction241,850,173.72214,354,593.64
Others2,374,304.742,404,313.07
Total244,224,478.46216,758,906.71

17. Advances from customers

ItemAs at 31/12/2019As at 31/12/2018
Housing151,031,759.1388,339,354.35
Construction1,805,298.7859,728,753.52
Others6,645,452.528,358,044.99
Total159,482,510.43156,426,152.86

18. Employee benefits payable

ItemAs at 31/12/2018Accrued during the yearDecreased during the yearAs at 31/12/2019
Short-term employee benefits45,693,840.70172,194,173.32164,070,342.8853,817,671.14
Post-employment benefits - defined contribution plans142,989.3514,622,967.9014,674,051.9091,905.35
Total45,836,830.05186,817,141.22178,744,394.7853,909,576.49

(1)Short-term employee benefits

ItemAs at 31/12/2018Accrued during the yearDecreased during the yearAs at 31/12/2019
Salaries, bonus, allowances44,535,073.06153,522,845.02145,514,192.6652,543,725.42
Staff welfare39,600.003,670,713.733,672,513.7337,800.00
Social insurances1,578.574,666,822.544,666,822.541,578.57
Including:1、Medical insurance1,503.224,211,966.494,211,966.491,503.22
2、Work-related injury insurance591.0481,950.7781,950.77591.04
3、Maternity insurance-515.69372,905.28372,905.28-515.69
Housing Fund628,129.715,974,861.656,019,324.53583,666.83
Labor union fees, staff and workers’ education fee489,459.364,358,930.384,197,489.42650,900.32
Total45,693,840.70172,194,173.32164,070,342.8853,817,671.14

(2) Defined contribution plans

ItemAs at 31/12/2018Accrued during the yearDecreased during the yearAs at 31/12/2019
Post-employment benefits142,989.3514,622,967.9014,674,051.9091,905.35
Including: 1.Basic pension insurance75,075.1110,088,061.8810,088,061.8875,075.11
2.Unemployment insurance914.12228,826.01228,826.01914.12
3.Annuity67,000.124,306,080.014,357,164.0115,916.12

Total

Total142,989.3514,622,967.9014,674,051.9091,905.35

19. Taxes payable

ItemAs at 31/12/2019As at 31/12/2018
Corporate income tax51,397,791.31180,717,910.92
Land appreciation tax521,540,610.07106,254,407.65
Value-added tax10,221,416.8811,361,028.95
Personal Income Tax1,049,224.90828,729.71
City maintenance and construction tax632,944.99385,048.81
Property tax262,015.56335,365.77
Education surcharge335,721.66239,105.38
Local education surcharge119,929.8685,955.80
Others141,160.13339,819.99
Total585,700,815.36300,547,372.98

20、Other payables

ItemAs at 31/12/2019As at 31/12/2018
Interest payables16,535,277.9416,535,277.94
Dividend payables----
Other payables260,783,896.59705,284,620.54
Total277,319,174.53721,819,898.48

(1)Interest payables

ItemAs at 31/12/2019As at 31/12/2018
Non-financial institution borrowing interest (interest payable to parent company)16,535,277.9416,535,277.94

Significant overdue interest as follows:

DebtorOverdue amountOverdue reason
Shenzhen Invetment Holdings Co., Ltd.16,535,277.94Payment hold

Note: The principal of the loan was fully repaid on 22 December 2016.

(2) Other payables

ItemAs at 31/12/2019As at 31/12/2018
Provision for land appreciation tax59,710,423.57509,788,654.15
Rrelated parties12,549,466.412,770,322.64
Deposits105,828,118.27100,011,180.52
Others82,695,888.3492,714,463.23
Total260,783,896.59705,284,620.54

Including significant other payables aging over 1 year

Item

ItemAmountReason for no repayment
Provision for land appreciation tax59,710,423.57Payment has not been liquidated

21. Long-term payables

ItemAs at 31/12/2019As at 31/12/2018
Long-term payables7,499,192.926,507,139.20
Special payables----
Total7,499,192.926,507,139.20

(1) Long-term payables

ItemAs at 31/12/2019As at 31/12/2018
Maintenance fund7,499,192.926,507,139.20

22. Share capital (Unit: ten thousand shares)

InvestorAs at 31/12/2018Issued sharesBonus sharesProvident fund increase sharesOthersSubtotalAs at 31/12/2019
Total number of shares101,166.00----------101,166.00

23. Capital reserve

ItemAs at 31/12/2018Additions during the yearReductions during the yearAs at 31/12/2019
Share premium557,433,036.93----557,433,036.93
Other capital reserves420,811,873.18----420,811,873.18
Total978,244,910.11----978,244,910.11

24. Other comprehensive income

ItemAs at 31/12/2018 (1)Adjusted amount for the first implementation of the new financial instrument standardAs at 2019.1.1 (3)=(1)+(2)
Pre-tax income for the periodLess: income tax expenseNet-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--13,457,914.283,364,478.5810,093,435.70--10,093,435.70
1. Changes in fair value of other equity instruments--13,457,914.283,364,478.5810,093,435.70--10,093,435.70
II.Items that may be reclassified10,564,385.97--------10,564,385.97

Item

ItemAs at 31/12/2018 (1)Adjusted amount for the first implementation of the new financial instrument standardAs at 2019.1.1 (3)=(1)+(2)
Pre-tax income for the periodLess: income tax expenseNet-of-tax amount attributable to shareholders of the Company (2)Net-of-tax amount attributable to non-controlling interests
to profit or loss
1.Translation differences arising from translation of foreign currency financial statements10,564,385.97--------10,564,385.97
Total10,564,385.9713,457,914.283,364,478.5810,093,435.70--20,657,821.67

Continued

ItemAs at 2019.1.1 (1)Movements during the yearAs at 2019.12.31 (3)=(1)+(2)
Before-tax amountLess: income tax expenseNet-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 loss10,093,435.702,204,575.02551,143.751,653,431.27--11,746,866.97
1. Changes in fair value of other equity instruments10,093,435.702,204,575.02551,143.751,653,431.27--11,746,866.97
II.Items that may be reclassified to profit or loss10,564,385.97-1,480,248.81---1,480,248.81-349,804.559,084,137.16
1. Translation differences arising from translation of foreign currency financial statements10,564,385.97-1,480,248.81---1,480,248.81-349,804.559,084,137.16
Total20,657,821.67724,326.21551,143.75173,182.46-349,804.5520,831,004.13

25. Surplus reserve

ItemAs at 31/12/2018Beginning adjustmentAdditions during the yearReductions during the yearAs at 31/12/2019
Statutory surplus reserve95,906,222.59-416,151.4395,732,767.78---191,222,838.94

Note: For the impact of changes in accounting policies on the opening surplus reserve, please refer to Note III.30

26. Retained earnings

Item

ItemYear ended 31/12/2019Year ended 31/12/2018Appropriation or distribution percentage
Retained earnings as at 31/12/2018 (before adjustment)1,235,884,122.72742,624,845.71--
Total adjustments for opening retained earnings(“+” for increase; “–” for decrease)-25,355,845.72----
Retained earnings as at 01/01/2019 (after adjustment)1,210,528,277.00742,624,845.71--
Add: Net profits for the year attributable to shareholders of the Company552,452,307.59503,498,831.60--
Less: Appropriation for statutory surplus reserve95,732,767.7810,239,554.5910.00
Dividends payable to ordinary shares202,332,000.00----
Retained earnings as at 31/12/20191,464,915,816.811,235,884,122.72--

Note: The impact of changes in accounting policies and corrections of significant accounting errors on opening retained earnings please refer to NoteIII. 30.

27. Operating income and operating cost

Item20192018
RevenueCostRevenueCost
Principal operating2,533,402,850.39944,347,757.512,149,857,315.87918,680,658.37
Other operating15,337,469.1013,404,895.0325,329,926.7319,705,354.72

(1) Operating income and operating costs from principal activities (classified by industries)

Industry20192018
Operating incomeOperating costOperating incomeOperating cost
Real estate2,017,872,864.14497,310,023.381,595,473,065.40445,500,004.85
Engineering construction304,837,313.46298,315,846.77370,298,109.36358,335,541.20
Property management157,665,638.01142,261,602.88146,123,975.95128,536,788.40
Lease86,484,133.7945,173,891.0592,015,827.2346,069,096.38
Sub-total2,566,859,949.40983,061,364.082,203,910,977.94978,441,430.83
Less: internal offset33,457,099.0138,713,606.5754,053,662.0759,760,772.46
Total2,533,402,850.39944,347,757.512,149,857,315.87918,680,658.37

(2) Operating income and operating costs from principal activities(classified by geographical areas)

Region20192018
Operating incomeOperating costOperating incomeOperating cost
Domestic:2,566,271,187.43984,319,212.902,203,317,074.26978,441,430.83
Guangdong:2,491,373,238.76910,671,531.262,117,245,186.96895,675,822.41
Others:74,897,948.6773,647,681.6486,071,887.3082,765,608.42

Overseas:

Overseas:588,761.97--593,903.68--
USA588,761.97--593,903.68--
Sub-total2,566,859,949.40984,319,212.902,203,910,977.94978,441,430.83
Less: internal offset33,457,099.0138,713,606.5754,053,662.0759,760,772.46
Total2,533,402,850.39945,605,606.332,149,857,315.87918,680,658.37

28. Taxes and surcharges

Item20192018
Land appreciation tax725,378,098.62422,072,101.03
Property tax9,522,347.249,538,716.87
Urban maintenance and construction tax8,326,655.336,817,766.33
Education surcharge3,646,297.053,169,793.46
Local education surcharge2,266,337.541,970,507.72
Embankment protection fees1,874,192.431,843,855.48
Business tax---47,598.97
Total751,013,928.21445,365,141.92

Note: The criteria of taxes and surcharges accrued and paid refer to Note IV. Taxation.

29. Selling and distribution expenses

Item20192018
Sales agency fees and commissions64,830,444.0138,454,875.23
Advertising expenses5,292,324.976,657,350.04
Employee benefits4,002,688.153,996,226.96
Entertaiment expenses935,889.90900,385.69
Others4,418,906.992,554,142.30
Total79,480,254.0252,562,980.22

30. General and administrative expenses

Item20192018
Employee benefits49,342,369.8650,904,497.46
Depreciation2,901,508.293,134,997.46
Business Hospitality2,601,004.992,796,377.72
Intermediary fee2,862,135.592,499,764.35
Administrative expenses1,949,136.921,480,234.71
Water and electricity charges412,641.471,051,402.14
Repair charge660,950.10925,690.83
Other amortization486,466.27847,356.79
Travel expense329,477.95359,268.65
Others7,308,927.2610,030,250.33
Total68,854,618.7074,029,840.44

31. Financial expenses

Item

Item20192018
Interest expenses38,642.512,817,521.60
Less: Interest capitalized----
Interest income19,686,882.1319,825,334.08
Exchange losses/(gains)-1,744,304.53-547,960.63
Less: Exchange losses and gains capitalized----
Bank charges and others486,394.95320,050.95
Total-20,906,149.20-17,235,722.16

32. Other income

Item (Source of other income)20192018Related to assets/ income
Input VAT deduction1,163,713.00--Income
Subsidies of steable post4,414.90--Income
Total1,168,127.90--

Note:

(1) The related information is set out in Note XIII.1.

(2) Among them, the input tax deduction is related to normal operations, non-incidental, and is a recurring gains or losses.

33. Investment income

Item20192018
Income from long-term equity investments accounted for using the equity method75,629.25-52,651.66
Investment income from holding available-for-sale financial assets--827,100.00
Dividend from investments in other equity instruments928,200.00--
Structured deposit income31,425,651.9816,347,157.53
Total32,429,481.2317,121,605.87

34. Credit impairment losses(Losses are listed with "-")

Item20192018
Account receivables-2,184,042.21--
Other Receivables-927,215.23--
Total-3,111,257.44--

35. Impairment losses ("-" for losses)( Impairment losses of assets)

Item20192018
Impairment of receivables---29,797.00

Long-term equity investments

Long-term equity investments-12,166,897.84-17,274,902.75
Total-12,166,897.84-17,304,699.75

36. Gains from assets disposal

Item20192018
Gains from disposals of fixed assets (“-’’ for losses)---530.20

37. Non-operating income

Item20192018Amount included in non-recurring gains or losses for the year ended 31/12/2019
Gains on penalty1,152,266.31586,932.131,152,266.31
Other193,162.18814,611.19193,162.18
Government grants unrelated to the Company's daily activities--10,243.00--
Total1,345,428.491,411,786.321,345,428.49

Details of government grants are as follows:

Item20192018Related to assets/incomeNote
Stable job Subsidies--10,243.00Income

Note:

(1) The related information is set out in Note XIII.1.

(2) All non-operating income items are included in non-recurring gains and losses.

38. Non-operating expenses

Item20192018Amount included in non-recurring gains or losses for the year ended 31/12/2019
Donations provided30,000.00330,000.0030,000.00
Loss in damage and scrap of non-current assets169,935.9569,209.53169,935.95
Fines1,445.3939,016.091,445.39
Others25,185.46140,874.3925,185.46
Total226,566.80579,100.01226,566.80

39. Income tax expenses

(1) Details of income tax expenses

Item20192018
Current tax expense for the year based on tax law and regulations81,384,471.24295,133,757.80

Changes in deferred tax assets/liabilities

Changes in deferred tax assets/liabilities109,401,829.46-112,377,271.44
Total190,786,300.70182,756,486.36

(2) Reconciliation between income tax expenses and accounting profit is as follows:

Item2019
Profits before tax731,983,330.76
Expected income tax expenses at applicable tax rate (profits before tax 25 %)182,995,832.69
Effect of different tax rates applied by subsidiaries5,114,261.95
Effect of gains or losses from joint ventures and associates accounted for using the equity method-30,453,128.98
Effect of non-deductible costs, expenses and losses21,337,044.56
Effect of using the deductible temporary differences or deductible losses for which no deferred tax asset was recognized in previous (expressed in “-”)-661,881.43
Effect of deductible temporary differences or deductible losses for which no deferred tax asset was recognized this year12,454,171.91
Income tax expenses190,786,300.70

40、Notes to items in the cash flow statements

(1)Other cash receipts relating to operating activities

Item20192018
Interest income15,906,764.9119,825,334.08
The collecting and paying on another's behalf8,051,762.095,425,177.51
Current account and Others55,720,858.4732,271,657.37
Total79,679,385.4757,522,168.96

(2)Other cash payments relating to operating activities

Item20192018
Handling fee682,722.12320,050.95
Cash paid expenses97,554,049.4668,007,623.74
Current account and Others8,702,866.8715,023,926.92
Total106,939,638.4583,351,601.61

(3)Other cash receipts relating to Investment activities

Item20192018
Restricted cash recoverd in the current period – structured deposit2,200,000,000.00600,000,000.00

(4)Other cash payments relating to financing activities

Item20192018
Restricted cash paid in the current period2,300,000,000.001,500,000,000.00

–structured deposit

(5)Other cash receipts relating to financing activities

–structured depositItem

Item20192018
Restricted cash recovery - security deposit--290,033.83

41. Supplementary information on cash flow statement

(1) Supplement to cash flow statement:

Supplement information20192018
1、Reconciliation of net profit/loss to cash flows from operating activities:
Net profit541,197,030.06499,971,564.96
Add: Provisions for impairment of assets12,166,897.8417,304,699.75
Provisions for impairment of credit3,111,257.44--
Depreciation of fixed assets, depreciation of investment properties28,907,809.3228,889,127.19
Amortization of intangible assets--55,200.00
Amortization of long-term deferred expenses224,941.19199,283.75
Losses from disposal of fixed assets, intangible assets, and other long-term assets ("-" for gains)--530.20
Loss from scrapping of fixed assets ("-" for gains)169,935.9569,209.53
Losses from changes in fair value ("-" for gains)----
Financial expenses ("-" for income)38,642.512,269,560.97
Losses arising from investment ("-" for gains)-32,429,481.23-17,121,605.87
Decrease in deferred tax assets ("-" for increase)108,102,463.55-107,053,693.61
Increase in deferred tax liabilities ("-" for decrease)987,671.25--
Decrease in inventories ("-" for increase)190,315,523.1478,934,592.68
Decrease in operating receivables ("-" for increase)-136,075,098.50147,437,501.15
Increase in operating payables ("-" for decrease)-113,109,867.77411,611,434.89
Others--
Net cash flows from operating activities603,607,724.751,062,567,405.59
2、Investing and financing activities not requiring the use of cash:
Conversion of debt into capital
Convertible bonds due within one year
Acquisition of fixed assets under finance leases
3、Change in cash and cash equivalents:
Cash as at 31/12/20191,507,189,760.351,148,522,435.93
Less: cash as at 31/12/20181,148,522,435.931,206,789,056.46
Add: cash equivalents as at 31/12/2019----
Less: cash equivalents as at 31/12/2018----
Net increase in cash and cash equivalents358,667,324.42-58,266,620.53

(2) Details of cash and cash equivalents

Item

Item20192018
1.Cash1,507,189,760.351,148,522,435.93
Including: Cash on hand66,252.4257,979.40
Bank deposits available on demand1,493,123,507.931,148,464,456.53
Other monetary funds available on demand14,000,000.00--
2. Cash equivalents
3. Cash and cash equivalents as at 31/12/20191,507,189,760.351,148,522,435.93

42. Assets with restrictive ownership title or right of use

ItemAs at 31/12/2019Reason for restriction
Cash at bank and on hand1,003,950,685.00Unexpired structured deposits
Accounts receivable51,647,260.17Short-term loan pledged
Total1,055,597,945.17

43. Foreign currency translation

(1)Items in Foreign currency

ItemOriginalExchange rateAmount (RMB)
Cash at bank and on hand
Including: USD5,532.956.976238,598.97
HKD8,783,167.250.895787,867,791.43
Accounts receivable
Including: HKD4,905,150.100.895784,393,935.36
Other receivables
Including: HKD20,165,086.700.8957818,063,481.36
Other payables
Including: USD655,299.336.97624,571,499.19

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

NamePrincipal place of businessRegistration placeBusiness natureShareholding%Acquisition method
DirectIndirect
Shenzhen City SPG Long Gang Development Ltd.ShenzhenShenzhenReal estate development95.005.00Acquiring through establishment or investment
American Great Wall Co., LtdU.S.U.S.Real estate development70.00--Acquiring through establishment or investment

Name

NamePrincipal place of businessRegistration placeBusiness natureShareholding%Acquisition method
DirectIndirect
Shenzhen City Property Management Ltd.ShenzhenShenzhenProperty management95.005.00Acquiring through establishment or investment
Shenzhen Petrel Hotel Co. Ltd.ShenzhenShenzhenHotel Services68.1031.90Acquiring through establishment or investment
Shenzhen Zhen Tung Engineering Ltd.ShenzhenShenzhenInstallation and maintenance73.0027.00Acquiring through establishment or investment
Shenzhen City We Gen Construction Management Ltd.ShenzhenShenzhenSupervision75.0025.00Acquiring through establishment or investment
Shenzhen Lain Hua Industry and Trading Co., Ltd.ShenzhenShenzhenMechanical & Electrical device installation95.005.00Acquiring through establishment or investment
Fresh Peak Zhiye Co., Ltd.Hong KongHong KongInvestment and management100.00--Acquiring through establishment or investment
Xin Feng Enterprise Co., Ltd.Hong KongHong KongInvestment and management100.00--Acquiring through establishment or investment
Shenzhen City Shenfang Free Trade Trading Ltd.ShenzhenShenzhenCommecial trade95.005.00Acquiring through establishment or investment
Shenzhen City Shenfang Investment Ltd.ShenzhenShenzhenInvestment90.0010.00Acquiring through establishment or investment
Shenzhen Special Economic Zone Real Estate (Group) Guangzhou Property and Estate Co., Ltd.ShenzhenShenzhenReal estate95.005.00Acquiring through establishment or investment
Beijing fresh peak property development management limited companyBeijingBeijinReal estate75.0025.00Acquiring through establishment or investment

Note:

① In consolidation scope, there are five subsidiaries in “revoked but not cancelled” condition: Beijing SPG Property Management Limited,Guangzhou Huangpu Xizun real estate limited company, Shenzhen Special Economic Zone Real Estate (Group) Guangzhou Property and EstateCo., Ltd., Fresh Peak Real Estate Dev. Construction (Wuhan) Co. Ltd. and Beijing Shenfang Property Management Co., Ltd. They are presented onthe basis of discontinued operations, these five subsidiaries 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 scope of consolidation are as follows:

NamePrincipal place of businessRegistration placeBusiness natureShareholding%Acquisition method
DirectIndirect
Shenzhen Shenfang Department Store Co. LtdShenzhenShenzhenCommecial trade95.005.00Acquiring through establishment or

Name

NamePrincipal place of businessRegistration placeBusiness natureShareholding%Acquisition method
DirectIndirect
investment
Paklid LimitedHong KongHong KongCommecial trade60.0040.00Acquiring through establishment or investment
Bekaton Property LimitedAustraliaAustraliaReal estate60.00--Acquiring through establishment or investment
Canada Great Wall ( Vancouver)CanadaCanadaReal estate--60.00Acquiring through establishment or investment
Guangdong Fengkai County Lianfeng Cement Manufacturing Co.,Ltd.Fengkai GuangdongFengkai GuangdongManufacturing--90.00Acquiring through establishment or investment
Jiangmen Xinjiang Real Estate Co., LtdJiangmen GuangdongJiangmen GuangdongReal estate--90.91Acquiring through establishment or investment
Xi’an Fresh Peak Property Trading Co., LtdXi’an ShanxiXi’an ShanxiReal estate--67.00Acquiring through establishment or investment
Shenxi LimitedShenzhenShenzhenBuilding Decoration70.00--Acquiring through establishment or investment
Shenzhen Zhentong New Electromechanical Industry Development Co., Ltd.ShenzhenShenzhenMechanical and electrical engineering95.005.00Acquiring through establishment or investment
Shenzhen Real Estate Electromechanical Management CompanyShenzhenShenzhenElectromechanical Management100.00--Acquiring through establishment or investment
Shenzhen Nanyang Hotel Co., Ltd.ShenzhenShenzhenHotel Management95.005.00Acquiring through establishment or investment
Shenzhen Kangtailong Industrial Electric Cooker Co., Ltd.ShenzhenShenzhenIndustrial manufacturing--100.00Acquiring through establishment or investment
Shenzhen Longgang Henggang Huagang Industrial Co., Ltd.ShenzhenShenzhenIndustrial Investment--79.92Acquiring through establishment or investment

Note: 1. Shenzhen Shenfang Department Store Co. Ltd held a shareholders meeting on 29 October 2007, decided to terminate the business, andformed a group for liquidation. The liquidation group issued a liquidation report on 7 December, 2007.

2. Paklid Limited, Bekaton Property Limited and Canada Great Wall ( Vancouver), they were companies established by the group overseas in theearly years. On 13 December 2000, the gourp held a board of directors and decided to liquidate these three companies. Bekaton Property Limitedand Canada Great Wall ( Vancouver) , the cancellation procedures were completed.

3. All assets from Guangdong Fengkai County Lianfeng Cement Manufacturing Co., Ltd. (including tangible and intangible asset) was auctioned bythe court on 22 January 2019, and it became a shell company.

4. Shenxi Limited was the Group’s cancelled subsidiary Shenzhen Tefa Real Estate Consolidated Services Co., Ltd’s subsidiary, By the Group “Thenotice on the menger of Shenzhen Zhen Tung Engineering Ltd and Shenxi Limited”(Shenfang [1997] No.19)announcement, all businesses formShenxi Limited were undertaken by Shenzhen Zhen Tung Engineering Ltd and Shenxi Limited was revoked on 8 February 2002.

These invested companies that have not been included in the consolidation scope were either been cancelled or ceased operation many years ago,and the company entities were no longer exist, the Group could no longer effectively control them. According to “Accounting Standard for BusinessEnterprises No. 33-Consolidated Financial Statements”, the above companies are not included in the consolidated scope of the group consolidatedfinancial statement, the group already fully provision for impairment the investment or the book value of the net investment in these companies.

(2) Material non-wholly owned subsidiaries

Name

NameProportion of ownership interest held by non-controlling interests %Profit or loss allocated to non-controlling interests during the yearDividend declared to non-controlling shareholders during the yearBalance of non-controlling interests as at 31/12/2019
Great Wall Estate Co., Inc30.00-82,021.15---21,860,102.50
Fresh Peak Investment Ltd45.00-11,167,982.90---116,154,869.74
Barenie Co. Ltd.20.00-5,273.48---3,876,363.60

(3) Key financial information about material non-wholly owned subsidiaries

NameAs at 31/12/2019
Current assetsNon-current assetsTotal assetsCurrent liabilitiesNon- current liabilitiesTotal liabilities
Great Wall Estate Co., Inc38,598.9719,274,905.7419,313,504.71107,974,695.34--107,974,695.34
Fresh Peak Investment Ltd4,817.4936,016.9040,834.39256,573,564.93--256,573,564.93
Barenie Co. Ltd.1,045.70--1,045.7032,842,234.42--32,842,234.42

Continued(1):

NameAs at 31/12/2018
Current assetsNon-current assetsTotal assetsCurrent liabilitiesNon-current liabilitiesTotal liabilities
Great Wall Estate Co., Inc312,086.5719,021,543.0419,333,629.61106,555,401.23--106,555,401.23
Fresh Peak Investment Ltd873,070.1336,016.90909,087.03256,549,015.66--256,549,015.66
Barenie Co. Ltd.1,024.4521,223,344.8521,224,369.3032,813,474.75--32,813,474.75

Continued(2):

Name20192018
Operating incomeNet profitTotal comprehensive incomeCash flows from operating activitiesOperating incomeNet profitTotal comprehensive incomeCash flows from operating activities
Great Wall Estate Co., Inc588,761.97-273,403.83---273,403.83593,903.68-184,610.61---184,610.61

Fresh PeakInvestmentLtd

Fresh Peak Investment Ltd---24,533.43-------20,135.10--997.60
Barenie Co. Ltd.---26,367.40-------9,169,123.59--1,922.53

2. Interests in joint ventures or associates

(1) Summarised financial information of immaterial joint ventures and associates:

ItemAs at 31/12/2018 / Year ended 31/12/2019As at 31/12/2018 /Year ended 31/12/2018
Joint ventures:--
Aggregate carrying amount of investments12,166,897.84
Aggregate amount of share of----
Net profit----
Other comprehensive income----
Total comprehensive income
Associates:
Aggregate carrying amount of investments469,838.65394,209.40
Aggregate amount of share of
Net profit75,629.25-52,651.66
Other comprehensive income----
Total comprehensive income----

(2) Excess loss from joint ventures or associates

InvesteeAccumulated unrecognized loss in prior periodsUnrecognized loss (or share of net profit)for the yearAccumulated unrecognized loss as at 31/12/2019
Shenzhen Fresh Peak property consultant Co., Ltd941,374.25154,587.301,095,961.55

Note: Shenzhen Fresh Peak property consultant Co., Ltd was established on 15 March 1990, Registered capital of 3,000,000, the group subscribedRMB 600,000 (20% in total capital). As at 31 December 2019, 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, accounts receivable, other receivable, other current assets, otherequity 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 financial management policies used by the Group to minimizethe risk are disclosed as below. The management manages 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 and return. It also focuses on the unpredictability offinancial markets and seeks to minimize potential adverse 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 designed according to proper acceptable in order tomonitor the risk position of the Group. Both the policies and internal control will be reviewed and revised regularly to adapt the changes of the marketand business activities of the Group. The performance of internal control will be reviewed regularly or randomly in accordance with the financialmanagement policies.

The Group’s financial instrument risks mainly include credit risk, liquidity risk and market risk. (Including currency risk, interest rate risk andcommodity price risk)The board of directors is responsible for planning and establishing the risk management structure of the Group, formulating the Group’s riskmanagement policies and related guidelines, supervising the implementation of risk management measures. The Group has established riskmanagement policies to identify and analyze the risks faced by the Group. These risk management policies clearly define specific risks, coveringmarket risk, credit risk and liquidity risk. The Group regularly assesses changes in the market environment and the Group’s operating activities todetermine whether update risk management policies and systems.The Group diversifies the risk of financial instruments through appropriate diversified investments and business combinations, and reduces the risk ofconcentration in a single industry, a specific region or a specific 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 its obligation under the terms of the financialinstrument and cause a financial loss to the Group.Credit is managed on the grouping basis. Credit risk is mainly arising from cash at bank, accounts receivable, and other receivables.The Group expects that there is no significant credit risk associated with cash at bank since it is deposited or will be accepted by the sate-ownedbanks and other medium or large size listed banks.The Group has policies to limit the credit risk exposure on accounts receivables and other receivables. The Group assesses the credit quality of andsets credit limits on its customers by taking into account their financial position, the availability of guarantee from third parties, the availability ofguarantee from third parties, their credit history and other factors such as current market conditions. The credit history of the customers is regularlymonitored by the Group. In respect of customers with a poor credit history, the Group will use written payment reminders, or shorten or cancel creditperiods, to ensure the overall credit risk of the Group is limited to a controllable extent.The Group’s debtors of account recevables are in difference industries and regions, the Group continues in evaluation the debtor’s financial status.The highest credit risk exposed to the Group is limited to the carrying amount of each financial instrument illustrated in the balance sheet. The Groupwould not provide any guarantee that might cause credit risk to the Group.Among the accounts receivable of the Group, the bills receivable and accounts receivable of the top five customers accounted for 53.79%(2018:30.43%); among the other receivables of the Group, the other receivable of the top five customers accounted for 62.80% (2018:62.19%)

(2)Liquidity risk

Liquidity risk refers to the risks that the Group will not be able to meet its obligations associated with its financial liabilities that are settled bydelivering cash or other financial assets.Cash flow forecasting is performed by Group’s finance department. The Group’s finance management monitors cash and cash equivalents to meetoperational needs and reduce the effect of floating cash flow. The department monitors the usage of bank loan so that the Group does not breachborrowing limits or covenants while maintaining sufficient headroom on its undrawn committed borrowing facilities from major financial institute tomeet the short-term and long-term liquidity requirements.The Group raises working capital from its operations, bank and other borrowings. As at 31 December 2019, the amount of bank loans not yet used bythe Group is RMB 0.00. (As at 31 December 2018: RMB 28,000,000)The financial assets and liabilities, off-balance-sheet guarantee items of the Group at 31 December 2019 are analyzed by their maturity date below attheir undiscounted contractual cash flows (RMB in ten thousand):

Item

ItemAs at 31/12/2019
Within 1 year1 to 5 yearsOver 5 yearsTotal amount
Financial liabilities:
Short-term loans5,164.73----5,164.73
Accounts payable24,422.45----24,422.45
Interest payables1,653.53----1,653.53
Other payables20,051.11----20,051.11
Long-term payables--749.92--749.92

Guarantees for client

Guarantees for client47,539.67----47,539.67
Total liabilities98,831.49749.92--99,581.41

The financial assets and liabilities, off-balance-sheet guarantee items of the Group at 31 December 2018 are analyzed by their maturity date below attheir undiscounted contractual cash flows(RMB in ten thousand):

ItemAs at 31/12/2018
Within 1 year1 to 5 yearsOver 5 yearsTotal amount
Financial liabilities:
Short-term loans1,726.01----1,726.01
Accounts payables21,675.89----21,675.89
Interest payables1,653.53----1,653.53
Other payables21,203.12----21,203.12
Long-term payables--650.71--650.71
Guarantees for client94,327.58----94,327.58
Total liabilities140,586.13650.710.00141,236.84

The amount of financial liabilities disclosed in the above table is undiscounted contractual cash flow and may differ from the carrying amount in thebalance 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 or future cash flow of a financial instrument willfluctuate 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 will fluctuate because of the floating rate. Interest raterisk arises from recognized interest-bearing financial instrument 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 exposethe Group to cash flows interest rate risk. Financial liabilities issued at fixed rate expose the Group to fair value interest rate risk. The Groupdetermines the relative proportions of its fixed rate and floating rate contracts depending on the prevailing market conditions. At the same time, theGroup monitors and maintains the combined financial instruments of fixed rate and floating rate.During the reporting period, the Group operates by its own working capital. As at 31 December, 2019, the Group has no financial liabilities with fixedor floating interest rate, such as bank loan. Therefore, the Group believes that the interest rate risk is insignificant.Interest-bearing financial instruments held by the Group (RMB in ten thousand):

ItemAs at 31/12/2019As at 31/12/2018
Fixed interest rate financial instruments
Financial liabilities--200.00
Including: Short-term borrowings--200.00
Total--200.00

Foreign currency riskForeign currency risk refers to the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreigncurrency rates. Foreign currency risk arises from the functional 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 is affected by the fluctuations of the foreignexchange rates. As the subsidiary establish in Hong Kong SAR and U.S. are using local currency as settlement currency, other foreign currencyassets and liabilities 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 continue as a going concern in order to provide returnsfor shareholders and benefits for other stakeholders and to 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 to shareholders, return capital to shareholders,issue new shares or disposes assets to reduce its liabilities.The Group monitors capital on the basis of the gearing ratio. This ratio is calculated as net liabilities divided by total capital. As at 31 December 2019,the group’s debt to asset ratio is 28.20%. (As at 31 December 2018: 40%)IX Fair ValueThe level in which fair value measurement is categorized is determined by the level of the fair value hierarchy of the lowest level input that issignificant to the entire fair value measurement. The levels are defined as follows:

Level 1 inputs: unadjusted quoted prices in active markets that are observable at the measurement date for identical assets or liabilities.Level 2 inputs: inputs other than Level 1 inputs that are either directly or indirectly observable for underlying 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 31/12/2019, assets and liabilities measured at fair value are shown as follows,

Item

ItemLevel 1 fair value measurementLevel 2 fair value measurementLevel 3 fair value measurementTotal
I.Recurring fair value measurement
Other Equity instruments----33,126,730.0433,126,730.04
Total assets measured at fair value on a recurring basis----33,126,730.0433,126,730.04

(2)Quantitative information about the unobservable inputs used in the fair value measurement that are significant and are reasonably available.

ItemsFair value As at 31/12/2019Valuation techniquesUnobservable inputs
Unlisted equity investments33,126,730.04Net asset methodBook 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 and long-term payable.In addition to above financial assets and liabilities, other financial asset and liabilities that not measured at fair value, the differ between book valuesand fair value are not significant.X. Related parties and related party transactions

1. Information about the parent of the Company

NameRegistration placeBusiness natureRegistered capital (RMB in ten thousand)Shareholding percentage %Percentage of voting rights %
Shenzhen InvetmentShenzhen,Investment, real estate2,764,900.0063.5563.55

Holdings Co., Ltd.

Holdings Co., Ltd.Guangdong provincedevelopment, guarantee

The ultimate controlling party of the company is: State-owned Assets Supervision and Management Commission of Shenzhen Municipal People’sGovernmentDuring the reporting period, the registered capital of the parent company changed as follows:

As at 31/12/2018AdditionReductionAs at 31/12/2019
2,534,900.00230,000.00--2,764,900.00

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

NameRelated party relationship
Shenzhen Jian'an Group Co., Ltd.Same controlling shareholders
Shenzhen Dongfang New world store Co., LtdParticipating stock companies
Shenxi LimitedNot 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 CompanyNot 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

5. Transactions with related parties

(1) Purchases/sales

①Purchase of goods/receiving of services

Related partyNature of transaction20192018
Shenzhen RongHua JiDian Co.,LtdElevator maintenance1,339,921.801,390,625.62

②Sales of goods/rendering of services

Related party

Related partyNature of transactionYear ended 31/12/2019Year ended 31/12/2018
Shenzhen Jian'an Group Co., Ltd.Decoration services2,836,052.811,333,878.10
Shenzhen RongHua JiDian Co.,LtdProperty Services68,772.0068,772.00

(2) Contracting arrangement

① Outsourcing with related parties

Name of main contractorName of contractorType of assets under outsourcingReception date of contractingExpiration date of contractingBasis of pricing of contracting incomeContracting income recognized in the current year year
Shantou City Huafeng Real Estate Devepment Co., LtdShenzhen Jian'an Group Co., Ltd.Construction19 October 20181 May 2021Negotiations167,885,971.23

(3) Funding from related party

Related partyAmount of fundingReception dateExpiration dateNote
Funds received
Shenzhen Investment Shareholding Co. Ltd16,535,277.9409 November 200622 December 2016The 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 is RMB 16,535,277.94.

(4) Remuneration of key management personnel

The Company has 11 key management personnel in 2019, and 10 key management personnel in 2018. Information about remuneration is as follows:

Item2019 (RMB in ten thousand)2018 (RMB in ten thousand)
Remuneration of key management personnel902.08755.33

6. Receivables from and payables to related parties

(1) Receivables from related parties

ItemRelated partyAs at 31/12/2019As at 31/12/2018
Book valueProvision for bad and doubtful debtsBook valueProvision for bad and doubtful debts
AccountsShenzhen Fresh1,205,588.761,205,588.761,185,689.73--

Item

ItemRelated partyAs at 31/12/2019As at 31/12/2018
Book valueProvision for bad and doubtful debtsBook valueProvision for bad and doubtful debts
receviblePeak property consultant Co.,Ltd司
Other receviblesGuangdong Province Huizhou Luofu Hill Mineral Water Co., Ltd10,465,168.8110,465,168.8110,465,168.8110,465,168.81
Other receviblesShenzhen Runhua Automobile Trading Co., Ltd3,072,764.423,072,764.423,072,764.423,072,764.42
Other receviblesCanada GreatWall(Vancouver)Co. ,Ltd89,035,748.0789,035,748.0789,035,748.0789,035,748.07
Other receviblesBekaton Property Limited12,559,290.5812,559,290.5812,559,290.5812,559,290.58
Other receviblesPaklid Limited19,319,864.8519,319,864.8519,173,003.7819,169,123.37
Other receviblesShenzhen Shenfang Department Store Co. Ltd.237,648.82237,648.82237,648.82189,179.82
Other receviblesShenzhen RongHua JiDian Co.,Ltd475,223.4623,761.17475,223.46--
Other receviblesXi’an Fresh Peak property management& Trading Co.,Ltd8,419,205.198,419,205.198,419,205.198,419,205.19
Other receviblesShenxi Limited7,660,529.377,660,529.377,660,529.376,236,505.15
Other receviblesShenzhen Nanyang Hotel Co., Ltd.3,168,721.003,168,721.003,168,721.003,050,666.00
Other receviblesShenzhen Jian'an Group Co., Ltd.16,464.28823.21----

(2) Payables to related parties

ItemRelated partyAs at 31/12/2019As at 31/12/2018
Intrest payablesShenzhen Investment Shareholding Co. Ltd16,535,277.9416,535,277.94
Accounts payableShenzhen Jian'an Group Co., Ltd.68,172,202.0443,446,497.68
Other payablesShenzhen Dongfang New world store Co., Ltd902,974.64902,974.64
Other payablesGuangdong Province Fengkai Lain Feng Cement1,867,348.001,867,348.00

Manufacturing Co., Ltd.

Manufacturing Co., Ltd.
Other payablesShenzhen Real Estate Electromechanical Management Company14,981,420.9914,981,420.99
Other payablesShenzhen Zhentong New Electromechanical Industry Development Co., Ltd.8,827,940.078,827,940.07
Other payablesShenzhen Shenfang Department Store Co. Ltd.639,360.38639,360.38
Other payablesShenzhen Longgang Henggang Huagang Industrial Co., Ltd.165,481.09165,481.09

XI. Commitments and contingencies

1. Significant commitments

(1) Capital commitments

Capital commitments have been entered into but not have not been in the financial statementsAs at 31/12/2019As at 31/12/2018
Significant outsourcing contracts200,684,729.85368,570,701.08

Note: The significant outsourcing contract was based on the construction contract between ShantouTianyuewan II Project and the contractor Shenzhen Jian'an (Group) Co., Ltd.

(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 2019, 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

PlaintiffDefendantCaseAppellate courtAmount of the object of actionProgress of cases
Xi’an Fresh Peak Holding limited companyXi'an Commercial and Trade Commission Xi'an Commerce and Tourism Co., Ltd.Investment compensation disputesShaanxi Higher People's Court36.62 million yuan and interestPending

Note: Xi’an Fresh Peak Holding limited company (hereinafter referred to as “Fresh Peak Company”) was sino-foreign joint venture set up in Xi’an city.Among them, Fresh Peak Enterprise Co., Ltd made 67% of the shares in cash. Xi’an Trade Building, a company directly under the Xi'an Commercialand Trade Commission (hereinafter referred to as "Xi'an C&T Commission"), invested 16% of the shares in land use rights. Hong Kong DadiwangIndustrial Investment Company holds 17% of the shares. The core business was property development. And the project was Xi’an Trade Building.The project was started on 28 November 1995. But the project had been stopped in 1996 because of the two parties differences on the operatingpolicy of the project. In 1997, the Xi’an government withdrew the Xi'an Fresh Peak investment project compulsively and assigned the project to Xi’anBusiness Tourism Co., Ltd (hereinafter referred to as “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 as follows: 1. Business Tourism Company had topay for the compensation Rmb 36,620 thousand to Xi’an Fresh Peak Company after the judgment entering into force. If the Business TourismCompany failed to pay in time, it had to pay double debt interests to Xi’an Fresh Peak Company. 2. Xi’an Joint Commission on Commerce had jointlyand severally obligation of the interests of the compensation.Untill 31 December 2019, the amount of RMB 15,201,000.00 had been called back. The company has obtained new property clues, submitted anapplication for resumption of execution, this case is still pending.

As at 31 December 2019, the book value of the long-term equity investment of Xi’an Fresh Peak Company was RMB 32,840,729.61. The bookbalance of assets was RMB 8,419,205.19. Both have been taken full provision for impairment loss.

(2) Contingent liabilities arising from guarantee provided to other entities and related financial effects.As at 31 December 2019, The Group follows the real estate operating routine provides a total of 47,593.67(RMB in ten thousand) mortgage guarantee to real estate buyers.

Item

ItemDurationAmountNote
Shengfang CuiLin BuildingUntil the Premises Permit mortgage registration is finished and in bank custody15,819.86
ChuanQi DongHu Building(Fromer DongHuDiJing Building)Until the Premises Permit mortgage registration is finished and in bank custody17,535.05
TianYue Bay No.1Until the Premises Permit mortgage registration is finished and in bank custody14,184.76
Total47,539.67

(2) Other contingencies

For contingent liabilities related to joint venture or associate investment, please refer to Note VII.2. (2)As at 31 December 2019, 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 2019, a cash dividend of RMB

1.65 (including tax) will be distributed to all shareholders for every 10 shares as total as RMB 166,923,900.00.

2. Other events after the balance sheet date

Since January 2020 pneumonia caused by COIVD-19 is spreading across the country. The prevention of pneumonia is continuing nationwide. TheGroup follows the arrangement of State-owned Asstest Supervision and Administration Commission of the People’s Government of ShenzhenMunclipal and the Shenzhen Investment Holding Co., Ltd., combined with the actual situation of the leased property within the group, planned tomake a reduction of rents for more than 300 companies and individuals for two-month, total amount about RMB10,000,000.As at 13 March 2020, there are no other events after the balance sheet date to be disclosed.XIII.Other significant items

1. Government grants

(1) Government grants recognized in proft and loss, and subsequently measured using the gross method.

ItemTypeRecognised in profit and loss for the year ended 31/12/2018Recognised in profit and loss for the year ended 31/12/2019Presentation item recognized in profit and lossRelated to asset/income
Stabilization allowanceGovernment funding10,243.004,414.90Other incomeincome

3. Others

From 14 September 2016, the Group planned the reorganization of material assets. The Group announced itintended to buy 100% stock equity of Evergrande real estate group co., LTD by issue shares or cash payment

on 14 October 2016. Guangzhou Chiron real estate co., LTD will become the controlling shareholder of thecompany after the acquisition.The restructuring of material assets is still in process as scheduled by the financial report day.XIV.Notes to the Company’s financial statements1.Accounts receivable

(1) Accounts receivable by aging balance

Aging

AgingAs at 31/12/2019As at 31/12/2018
Within 1 year4,766.371,105,116.03
1-2 years66,518.00140,732.69
2-3 years--293,033.67
More than 3 years10,715,652.5310,594,607.30
Sub-total10,786,936.9012,133,489.69
Less:Provision for bad and doubtful debts10,630,001.066,968,694.02
Total156,935.845,164,795.67

(2)Accounts receivable by category

ItemAs at 31/12/2019
Book balanceProvision for bad and doubtful debtsCarrying amount
Book valuePercentage of provision %Book valueExpected credit loss(%)
Provision made on an individual basis10,626,436.8498.5110,626,436.84100.00--
Provision for bad and doubtful debts collectively160,500.061.493,564.222.22156,935.84
Including:
Accounts receivable from related parties in consolidated scope89,215.690.83----89,215.69
Accounts receivable from sales of proporties71,284.370.663,564.225.0067,720.15
Total10,786,936.90100.0010,630,001.0698.55156,935.84

Continued

ItemAs at 1/1/2019
Book balanceProvision for bad and doubtful debtsCarrying amount
Book valuePercentage of provision %Book valueExpected credit loss(%)

Item

ItemAs at 1/1/2019
Book balanceProvision for bad and doubtful debtsCarrying amount
Book valuePercentage of provision %Book valueExpected credit loss(%)
Provision made on an individual basis10,523,723.0097.5610,523,723.00100.00--
Provision for bad and doubtful debts collectively1,609,766.6914.9276,027.554.721,533,739.14
Including:
Accounts receivable from related parties in consolidated scope89,215.690.83----89,215.69
Accounts receivable from sales of proporties1,520,551.0014.1076,027.555.001,444,523.45
Total12,133,489.69112.4810,599,750.5587.361,533,739.14

Provision made on an individual basis:

ItemAs at 31/12/2019
Book balanceProvision for bad and doubtful debtsPercentage of provision %Rationale of Provision
Amount receivables of sales of proporties for long-term uncollected10,523,723.0010,523,723.00100.00Expected to be not recoverable

Provision for bad and doubtful debts collectively:

Accounts receivable from related parties in consolidated scope

AgingAs at 31/12/2019
Accounts receivableProvision for bad and doubtful debtsExpected credit loss(%)
More than 3 years89,215.69----

Accounts receivable from sales of proporties

AgingAs at 31/12/2019
Accounts receivableProvision for bad and doubtful debtsExpected credit loss(%)
Within 1 year4,766.37238.325.00
1-2 years66,518.003,325.905.00
Total71,284.373,564.225.00

As at 31/12/2018,Provision for bad and doubtful debts:

CategoryAs at 31/12/2018
Book value%Provision for bad and doubtful%Provision for bad and doubtful

debts

debtsdebts
Accounts receivable of which provision for bad debts is of individually significant----------
Provision for bad and doubtful debts collectively----------
Accounts receivable of which provision for bad debts is of individually insignificant12,133,489.69100.006,968,694.0257.435,164,795.67
Total12,133,489.69100.006,968,694.0257.435,164,795.67

(3)Provision, recovery or reversal of bad debt:

ItemProvision for bad and doubtful debts
As at 31/12/20186,968,694.02
Adjustment amount for the first implementation of the new financial instrument guidelines3,631,056.53
As at 1/1/201910,599,750.55
Provision30,250.51
Recovery--
Written-off--
As at 31/12/201910,630,001.06

(4)Top 5 entities with the largest balances of other receivables

Name of EntityAmountProportion of the amount to the total AR (%)Bad debt provision
Corporation No.12,038,459.0818.92,038,459.08
Corporation No.21,205,588.7611.181,205,588.76
Individual No.11,200,000.0011.121,200,000.00
Individual No.2904,664.318.39904,664.31
Individual No.3876,864.118.13876,864.11
Total6,225,576.2657.726,225,576.26

2.Other receivables

① Other receivable by aging balance

AgingAs at 31/12/2019As at 31/12/2018
Within 1 year91,158,862.87158,202,023.94
1-2 years140,372,735.7573,851,395.97
2-3 years73,930,238.58310,307,057.96
More than 3 years1,330,808,992.531,023,727,012.17
Sub-total1,636,270,829.731,566,087,490.04
Less:Provision for bad and doubtful debts800,995,331.04798,092,941.31
Total835,275,498.69767,994,548.73

② Other receivables categorized by nature

Item

ItemAs at 31/12/2019As at 31/12/2018
Book balanceProvision for bad and doubtful debtsCarrying amountBook balanceProvision for bad and doubtful debtsCarrying amount
Amount receivables from government721,755.80--721,755.80721,755.80--721,755.80
Accounts receivable from employee’s inprest fund182,691.21--182,691.2130,533.81--30,533.81
Amount receivables of the collecting and paying on another's behalf3,248.36--3,248.363,961.49--3,961.49
Amount receivables of other customers6,818,306.115,744,165.491,074,140.627,318,959.855,388,819.481,930,140.37
Amount receivables of related parties135,567,522.22135,100,418.87467,103.35135,551,057.94134,576,616.49974,441.45
Amount receivables in consolidated scope1,492,977,306.03660,150,746.68832,826,559.351,422,461,221.15658,127,505.34764,333,715.81
Total1,636,270,829.73800,995,331.04835,275,498.691,566,087,490.04798,092,941.31767,994,548.73

③Provision for bad and doubtful debts:

As at 31/12/2019, the provision for bad debts in the first stage :

CategoryBook balanceTo 12-month expected credit loss (%)Provision for bad and doubtful debtsCarrying amountReasons
Provision for bad and doubtful debts collectively
Amount receivables from government721,755.80----721,755.80
Amount receivables from employee’s inprest fund182,691.21----182,691.21
Amount receivables from the collecting and paying on another's behalf3,248.36----3,248.36
Amount receivables from other customers1,130,674.345.0056,533.731,074,140.61
Amount receivables from related parties491,687.745.0024,584.38467,103.36

Category

CategoryBook balanceTo 12-month expected credit loss (%)Provision for bad and doubtful debtsCarrying amountReasons
Total2,530,057.453.2181,118.112,448,939.34

As at 31/12/2019, the provision for bad debts in the second stage :

CategoryBook balanceTo 12-month expected credit loss (%)Provision for bad and doubtful debtsCarrying amountReasons
Provision made on an individual basis
Other receivables from consolidation scope related parties1,492,977,306.0344.22660,150,746.68832,826,559.35Expected to be not recoverable

As at 31/12/2019, the provision for bad debts in the third stage :

CategoryBook balance12-month expected credit loss(%)Provision for bad and doubtful debtsCarrying amountReasons
Provision made on an individual basis
Amount receivables of other customers5,687,631.77100.005,687,631.77--Expected to be not recoverable
Amount receivables of related parties135,075,834.48100.00135,075,834.48--Expected to be not recoverable
Total140,763,466.25100.00140,763,466.25--

As at 31/12/2018, provision for bad and doubtful debts:

CategoryAs at 31/12/2018
Book value%Provision for bad and doubtful debts%Provision for bad and doubtful debts
Accounts receivable of which provision for bad debts is of individually significant
Provision for bad and doubtful debts collectively1,546,671,462.0598.76786,391,511.5950.84760,279,950.46
Accounts receivable of which provision for bad debts is of individually insignificant19,416,027.991.2411,701,429.7260.277,714,598.27
Total1,566,087,490.04100.00798,092,941.3150.96767,994,548.73

④Provision, recovery or reversal of bad debt

Provision for bad and doubtfulThe first stageThe second stageThe third stageTotal

12-monthexpected credit

loss

12-month expected credit lossLifetime expected credit loss (no credit impairment)Lifetime expected credit loss (has occurred credit impairmen)
As at 31/12/2018--658,127,505.34139,965,435.97798,092,941.31
Adjustment amount for the first implementation of the new financial instrument guidelines105,327.58--798,030.28903,357.86
As at 1/1/2019105,327.58658,127,505.34140,763,466.25798,996,299.17
Provision--2,023,241.34--2,023,241.34
Recovery24,209.47----24,209.47
Written-off--------
As at 31/12/201981,118.11660,150,746.68140,763,466.25800,995,331.04

⑤ There were no other receivables written off in the current period.

⑥Top 5 entities with the largest balances of other receivables

Name of EntityRelationship with the groupAmountAgingProportion of the amount to the total OR (%)Bad debt provision
Shantou Huafeng Estate Development Co., LtdSubsidary688,028,739.83Within 1 year、1-3 years、More than 3 years42.05--
Fresh Peak Enterprise Co., LtdSubsidiary543,327,763.52Within 1 year、More than 3 years33.21508,377,320.74
American Great Wall Co., LtdSubsidiary103,403,196.15More than 3 years6.32103,403,196.15
Fresh Peak Zhiye Co., Ltd.Subsidiary90,363,926.75More than 3 years5.5290,363,926.75
Canada Great Wall( Vancouver ) Co., LtdSubsidiary89,035,748.07More than 3 years5.4489,035,748.07
Total1,514,159,374.3292.54791,180,191.71

3、Long-term equity investments

ItemAs at 31/12/2019As at 31/12/2018
Book balanceProvision for impairmentBook valueBook balanceProvision for impairmentBook value
Investment in subsidiaries303,045,949.42152,839,271.15150,206,678.27304,045,949.4269,155,382.25234,890,567.17
Investment in joint ventures9,455,465.389,455,465.38--19,424,671.4719,424,671.47--
Investment in associates2,992,218.852,522,380.20469,838.652,916,589.602,522,380.20394,209.40
Total315,493,633.65164,817,116.73150,676,516.92326,387,210.4991,102,433.92235,284,776.57

(1)Investment in subsidiaries

Name of investee

Name of investeeOpening balanceCurr. year IncreaseCurr. year decreaseClosing balanceCurr. year impairment provisionClosing 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.20,000,000.00--1,000,000.0019,000,000.0019,000,000.0019,000,000.00
Shenzhen Zhen Tung Engineering Ltd11,332,321.45----11,332,321.45----
American Great Wall Co., Ltd1,435,802.00----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.,Ltd212,280.00----212,280.00----
Beijing Shenfang Property Management Co., Ltd.500,000.00----500,000.00500,000.00500,000.00
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 Company64,183,888.90----64,183,888.9064,183,888.9064,183,888.90

Name of investee

Name of investeeOpening balanceCurr. year IncreaseCurr. year decreaseClosing balanceCurr. year impairment provisionClosing balance of impairment provision
Shantou City Huafeng Real Estate Devepment Co., Ltd16,467,021.02----16,467,021.02----
Paklid Limited201,100.00----201,100.00--201,100.00
Bekaton Property Limited906,630.00----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 Building58,547,652.25----58,547,652.25--58,547,652.25
Total304,045,949.42--1,000,000.00303,045,949.4283,683,888.90152,839,271.15

Note:

1、 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 total shares), anothersubsidiary Shenzhen City Shenfang Investment Ltd. subscribed RMB 1.0 million(5% of total shares).

2、 After the Shenzhen Special Economic Zone Real Estate (Group) Guangzhou Real Estate Co., Ltd. ceased operations, it revoked by the government on 06 December 2013. As at the report date, the cancellation progressis not complete, and there is no sign it will be restarting operations in the foreseeable future, so the company makes a full provision of impairment.

3、After the Beijing Shenfang Property Management Co., Ltd., ceased operations, it revoked by the government on 09 December 2009. As at the report date, the cancellation progress is not complete, and there is no sign it willbe restarting operations in the foreseeable future, so the company makes a full provision of impairment.

4、After the Beijing fresh peak property development management limited company ceased operations, it revokes by the government on 12 June 2010. As at the report date, the cancellation progress is not complete, and thereis no sign it will be restarting operations in the foreseeable future, so the company makes a full provision of impairment.

(2)Investment in associates and joint ventures

Name of investeeOpening balanceChanges in this periodClosing balanceThe ending balance of impairment
Additional investmentReduce investmentInvestment gains and losses confirmed by the equityAdjustment of other comprehensive incomeChanges in other equityCash dividend or profit declaredImpairmentOthers

method

method
① Joint ventures
Guangdong Huizhou Luofu Hill Mineral Water Co., Ltd9,969,206.09---------------9,969,206.09----
Fengkai Xinghua Hotel9,455,465.38----------------9,455,465.389,455,465.38
Subtotal19,424,671.47---------------9,969,206.099,455,465.389,455,465.38
②Associates
Shenzhen Ronghua Jidian Co., Ltd1,471,164.04----75,629.25----------1,546,793.291,076,954.64
Shenzhen Runhua Automobile Trading Co., Ltd1,445,425.56----------------1,445,425.561,445,425.56
Subtotal2,916,589.60----75,629.25----------2,992,218.852,522,380.20
Total22,341,261.07----75,629.25---------9,969,206.0912,447,684.2311,977,845.58

Note:Guangdong province Huizhou Luofu Hill Mineral Water Co., Ltd was established on 6 June 1991 and revoked by the government on 6 June 2017, as at report date, the cancellation progress is not complete. Theregistered capital is 6.02 million yuan, subsidiary Xinfeng Enterprise Co., Ltd. holds 50.00%, by employing equity method.

4、Operating income and costs

Item

Item20192018
RevenueCostRevenueCost
Principal operating1,666,904,055.40330,874,297.00229,634,645.3948,332,118.70
Other operating48,857.18--47,904.78--

(1)Principal operating activities (classified by industries)

Name of industry20192018
Operating incomeOperating costOperating incomeOperating cost
Real estate1,599,279,513.73304,208,253.29158,790,845.7322,268,415.66
Leasing67,624,541.6726,666,043.7170,843,799.6626,063,703.04
Total1,666,904,055.40330,874,297.00229,634,645.3948,332,118.70

(2)Principal operating activities (classified by geographical areas)

Name of geographical area20192018
Operating incomeOperating costOperating incomeOperating cost
Guangdong province1,666,904,055.40330,874,297.00229,634,645.3948,332,118.70

5、Investment income

Item20192018
Investment income from long-term investments under cost method518,700,131.64--
Investment income from long-term investments under equity method75,629.25-52,651.66
Investment income from available-for-sale financial assets during the holding period--827,100.00
Investment income from other equity instrument928,200.00--
Investment income from structured deposit31,425,651.9816,347,157.53
Total551,129,612.8717,121,605.87

XV. Supplementary informationXV. Supplementary information1.Details of non-recurring gains or losses

Item2019Note
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 in1,168,127.90

Item

Item2019Note
accordance with the national standard)
Profit or loss on entrusted investments or assets management31,425,651.98Income from expired structured deposit
Interest on unexpired structured deposit3,950,685.00
Non-operating income/(expenses) except the above1,118,861.69
Other non-recurring gains or losses--
Total non-recurring gains or losses37,663,326.57
Less: Effects of income tax on non-recurring gains or losses9,415,831.64
Net non-recurring gains or losses28,247,494.93
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 Company28,247,494.93

2、Return on net assets and earnings per share

Profit of reporting periodWeighted average return on net assets%Earnings per share
Basic earningsDiluted earnings
Net profit attributable to the Company’s ordinary equity shareholders15.90%0.5461
Net loss attributable to the Company’s ordinary equity shareholders after deduction of non-recurring profit or loss15.09%0.5182

SHENZHEN SPECIAL ECONOMIC ZONEREAL ESTATE & PROPERTIES (GROUP) Co., Ltd.

13 March 2020

Part XIII Documents Available for Reference

1. The financial statements signed and sealed by the legal representative, the head of financialaffairs and the head of the financial department; and

2. The original copy of the Independent Auditor’s Report signed and sealed by the CPAs, as well assealed by the CPA firm; and

3. The originals of all the Company’s documents and announcements which were disclosed onSecurities Time, China Securities Journal and Ta Kung Pao (HK) during the Reporting Period.


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