SHENZHEN PROPERTIES & RESOURCES

DEVELOPMENT (GROUP) LTD.

ANNUALREPORT 2020

(Announcement No. 2021-07)

March 2021

Part I Important Notes Table of Contents and Definitions

The Board of Directors (or the “Board”) the Supervisory Committee as well as the directors

supervisors and senior management of ShenZhen Properties & Resources Development

(Group) Ltd. (hereinafter referred to as the “Company”) hereby guarantee the factuality

accuracy and completeness of the contents of this Report and its summary and shall be

jointly and severally liable for any misrepresentations misleading statements or material

omissions therein.Liu Shengxiang the Company’s legal representative Cai Lili the Company’s head of

financial affairs and Liu Qiang head of the Company’s financial department (equivalent to

financial manager) hereby guarantee that the 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 Report

and its summary.The Company is subject to the Guideline No. 3 of the Shenzhen Stock Exchange on

Information Disclosure by Industry—for Listed Companies Engaging in Real Estate.The Company has described in detail in this Report the possible risks facing it along with

countermeasures. Please refer to the section headed “Prospects” of “Part IV OperatingPerformance Discussion and Analysis” of this Report.The Board has approved a final dividend plan as follows: based on the share capital of

595979092 shares a cash dividend of RMB4.1 (tax inclusive) per 10 shares is to be

distributed to the shareholders with no bonus issue from either profit or capital reserves.This Report and its summary have been prepared in both Chinese and English. Should there

be any discrepancies or misunderstandings between the two versions the Chinese versions

shall 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 andAnalysis............................................................16

Part V Significant Events.................................................................................................................47

Part VI Share Changes and Shareholder Information................................................................. 65

Part VII Preferred Shares................................................................................................................75

Part VIII Convertible Corporate Bonds........................................................................................ 76

Part IX Directors Supervisors Senior Management and Staff...................................................77

Part X Corporate Governance........................................................................................................ 87

Part XI Corporate Bonds.................................................................................................................95

Part XII Financial Statements.........................................................................................................96

Part XIII Documents Available for Reference............................................................................. 252

Definitions

Term Definition

The “Company” the “Group” “SZPRD” or “we”

ShenZhen Properties & Resources Development (Group) Ltd. and its

consolidated subsidiaries except where the context otherwise requires

SIHC Shenzhen Investment Holdings Co. Ltd.

ITC Technology Park Shenzhen ITC Technology Park Service Co. Ltd.

Huangcheng Real Estate Shenzhen Huangcheng Real Estate Co. Ltd.

Dongguan Company Dongguan ITC Changsheng Real Estate Development Co. Ltd.

Xuzhou Company SZPRD Xuzhou Dapeng Real Estate Development Co. Ltd.Yangzhou Company SZPRDYangzhou Real Estate Development Co. Ltd.Rongyao Real Estate Shenzhen Rongyao Real Estate Development Co. Ltd.

ITC Property Management Shenzhen International Trade Center Property Management Co. Ltd.

Huangcheng Property Management Shenzhen Huangcheng Property Management Co. Ltd.Shandong Shenguomao Real Estate Management Shandong Shenguomao Real Estate Management Co. Ltd.

Chongqing Shenguomao Real Estate Management Chongqing Shenguomao Real Estate Management Co. Ltd.

Shouxihu Jingyue Yangzhou Shouxihu Jingyue Property Development Co. Ltd.Shenshan Guomao Property Development

Shenzhen Shenshan Special Cooperation Zone Guomao Property

Development Co. Ltd.

Guomao Tongle Property Management Shenzhen Guomao Tongle Property Management Co. Ltd.

Commercial Operation Company Shenzhen SZPRD Commercial Operation Co. Ltd.

Guomao Catering Shenzhen Guomao Catering Co. Ltd.Supervision Company Shenzhen Property Engineering and Construction Supervision Co. Ltd.

RMB RMB’0000 RMB’00000000

Expressed in the Chinese currency of Renminbi expressed in tens of

thousands of Renminbi expressed in hundreds of millions of Renminbi

COVID-19 The novel coronavirus disease that started in 2019

Part II Corporate Information and Key Financial Information

I Corporate Information

Stock name PRD PRD-B Stock code 000011 200011

Changed stock name (if any) N/A

Stock exchange for stock

listing

Shenzhen Stock Exchange

Company name in Chinese 深圳市物业发展(集团)股份有限公司

Abbr. 深物业集团

Company name in English (if

any)

ShenZhen Properties & Resources Development (Group) Ltd.

Abbr. (if any) SZPRD

Legal representative Liu Shengxiang

Registered address

39/F and 42/F International Trade Center Renmin South Road Luohu District Shenzhen

Guangdong Province P.R.China

Zip code 518014

Office address

16/F 20/F 39/F and 42/F International Trade Center Renmin South Road Luohu District

Shenzhen Guangdong Province P.R.China

Zip code 518014

Company website www.szwuye.com.cn

Email address 000011touzizhe@szwuye.com.cn

II Contact Information

Board Secretary Securities Representative

Name Zhang Gejian Ding Minghua and Chen Qianying

Address

20/F International Trade Center Renmin South

Road Luohu District Shenzhen Guangdong

Province P.R.China

39/F International Trade Center Renmin South Road

Luohu District Shenzhen Guangdong Province

P.R.China

Tel. 0755-82211020 0755-82211020

Fax 0755-82210610 82212043 0755-82210610 82212043

Email address 000011touzizhe@szwuye.com.cn 000011touzizhe@szwuye.com.cn

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

Newspapers designated by the Company for

information disclosure

For A-stock investors: Securities Times

For B-stock investors: Ta Kung Pao (HK)

Website designated by CSRC for publication of this

Report

www.cninfo.com.cn

Place where this Report is lodged

Board Office 39/F International Trade Center Renmin South Road Luohu

District Shenzhen Guangdong Province P.R.China

IV Change to Company Registered Information

Unified social credit code No change

Change to principal activity of the

Company since going public (if any)

No change

Every change of controlling shareholder

since incorporation (if any)

On 29 September 2004 the State-Owned Assets Supervision and Administration

Commission of Shenzhen Municipality (“SASAC Shenzhen”) decided to incorporate

Shenzhen Investment Holdings Co. Ltd. (“SIHC”) to include Shenzhen Investment

Management Co. Ltd. (“SIM” the former controlling shareholder of the Company)

and Shenzhen Construction Investment Holdings Corporation (“SCIHC”). SCIHC and

SIM hold 323796324 and 56582573 shares respectively in the Company

representing a combined stake of 63.82%.

On 19 October 2018 the Company was notified by its actual controlling shareholder

SIHC that it had received the Confirmation of Securities Transfer Registration from

China Securities Depository and Clearing Co. Ltd. (Shenzhen branch) marking the

completion of the equity transfer to SIHC. As such SIHC has become the controlling

shareholder of the Company.The controlling shareholder remained unchanged during the Reporting Period.V Other Information

The independent audit firm hired by the Company:

Name Baker Tilly China Certified Public Accountants LLP

Office address

9/F Zhonghe Plaza 2002 Shennan Middle Road Futian District Shenzhen Guangdong

Province China

Accountants writing signatures Li Ming and Chen Zihan

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 Information

Indicate by tick mark whether there is any retrospectively restated datum in the table below.√ Yes □ No

Reasons for the retrospective restatements:

Business combination involving entities under common control

2020 2019

2020-over-2019

change (%)

2018

Before Restated

Operating revenue (RMB) 4104374646.02 3961669942.44 3.60% 2787240632.53 3376673249.90

Net profit attributable to

the listed company’s

shareholders (RMB)

798572121.74 817805780.12 -2.35% 592723852.71 698050728.96

Net profit attributable to

the listed company’s

shareholders before

exceptional gains and

losses (RMB)

788377322.39 695675201.19 13.33% 591362024.37 591362024.37

Net cash generated

from/used in operating

activities (RMB)

385497782.12 939789565.96 -58.98% 1123594927.59 1231718056.18

Basic earnings per share

(RMB/share)

1.3399 1.3722 -2.35% 0.9945 1.1713

Diluted earnings per share

(RMB/share)

1.3399 1.3722 -2.35% 0.9945 1.1713

Weighted average return on

equity (%)

23.47% 20.46% 3.01% 18.94% 19.47%

31 December 2020 31 December 2019

Change of 31

December 2020

over 31

December 2019

(%)

31 December 2018

Before Restated

Total assets (RMB) 12207356912.54 10772491740.53 13.32% 5820202137.54 7023354613.55

Equity attributable to the

listed company’s

shareholders (RMB)

3727917440.03 3147949009.38 18.42% 3337949324.64 3872406104.67

Indicate by tick mark whether the lower of the net profit attributable to the listed company’s shareholders before and after exceptional

gains and losses was negative for the last three accounting years and the latest independent auditor’s report indicated that there was

uncertainty about the Company’s ability to continue as a going concern.□ Yes √ No

Indicate by tick mark whether the lower of the net profit attributable to the listed company’s shareholders before and after exceptional

gains and losses was negative.□ Yes √ No

VII Accounting Data Differences under China’s Accounting Standards for Business

Enterprises (CAS) and International Financial Reporting Standards (IFRS) and Foreign

Accounting Standards

1. Net Profit and Equity under CAS and IFRS

□Applicable √ Not applicable

No difference for the Reporting Period.

2. Net Profit and Equity under CAS and Foreign Accounting Standards

□Applicable √ Not applicable

No difference for the Reporting Period.VIII Key Financial Information by Quarter

Unit: RMB

Q1 Q2 Q3 Q4

Operating revenue 861546080.08 559531687.75 332619949.47 2350676928.72

Net profit attributable to the

listed company’s shareholders

152014318.10 59953416.66 -19555182.58 606159569.56

Net profit attributable to the

listed company’s shareholders

before exceptional gains and

losses

152909860.77 57711762.61 -19618268.67 597373967.68

Net cash generated from/used in

operating activities

-609307576.52 -1013874562.38 1170415181.72 838264739.30

Indicate by tick mark whether any of the quarterly financial data in the table above or their summations differs materially from what

have been disclosed in the Company’s quarterly or interim reports.□ Yes √ No

IX Exceptional Gains and Losses

√ Applicable □ Not applicable

Unit: RMB

Item 2020 2019 2018 Note

Gain or loss on disposal of non-current

assets (inclusive of impairment allowance

write-offs)

-322603.77 47015.23 -79489.58

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)

7100657.34 2410184.82 165676.08

Pandemic-related

government grant

Current profit or loss on subsidiaries

obtained in business combinations

involving enterprises under common

control from the period-beginning to

combination dates net

118680871.93 105442907.48

Gain or loss on contingencies that do not

arise in the Company’s ordinary course of

business

-2396947.00

Expected lawsuit-related

compensation

Reversed portions of impairment

allowances for receivables and contract

assets which are tested individually for

impairment

19900.00

Non-operating income and expense other

than the above

9089508.74 2048751.21 1724017.41

Demolition compensation

received

Other gains and losses that meet the

definition of exceptional gain/loss

94284.37 91337.56

Less: Income tax effects 3470226.55 1146936.51 448375.57

Non-controlling interests effects (net of

tax)

-80226.22 645.31 116031.23

Total 10194799.35 122130578.93 106688704.59 --

Explanation of why the Company reclassifies as recurrent an exceptional gain/loss item defined or listed in the Explanatory

Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Exceptional Gain/Loss

Items:

□ Applicable √ Not applicable

No such cases for the Reporting Period.Part III Business Summary

I Principal Activity of the Company in the Reporting Period

(I) Core Business Overview

Established in 1982 the Company was originally known as "Luohu Engineering and Construction Headquarters" and renamed

"Shenzhen Municipal Property Development Corporation" in August 1985. The Company was determined as the second batch of

pilot units for joint-stock reform of state-owned enterprises in 1988. Approved by the municipal government the Company renamed

to ShenZhen Properties & Resources Development (Group) Ltd. in 1990. The stock of the group company (stock name: SZPRD A/B;

stock code: 000011 200011) was officially listed in Shenzhen Stock Exchange in March 1992.The Company contracted and built Shenzhen International Trade Center Building as Party A and created planned and organized the

world-famous "Shenzhen Speed". The building was the place where Chairman Deng Xiaoping gave talks in his inspection to the

south. SZPRD came into being because of the building and has risen amid the Reform and Opening up campaign. Emerging and

growing together with Shenzhen a city of miracles the Company has been “a loyal practitioner of the spirit of the ox” and overcome

difficulties in proposing new services in the new era. In the past four decades of trials and hardships generations of SZPRD

employees have manifested the enterprise spirit of "going ahead and reforming" and centered on the functional positioning as state

assets of "serving national economic and social development the city the industry and the people". The Company has adhered to the

original aspiration and striven ahead to be a pioneer. Therefore it has made remarkable achievements in development speed and

quality. So far the Company has grown into a large comprehensive industrial group from the project company that built Shenzhen

International Trade Center Building. Looking ahead it will size up the situation and seize the momentum in the new era and phase

and forge ahead toward the goal and vision of becoming a "leading smart operator of industry-city space in China".The year 2020 marks the end of the "13th Five-Year" plan and is a key year for the Company to make major adjustments to win

critical battles in implementing its reforms on all fronts. In the Reporting Period facing the abrupt COVID-19 and deep regulation

and control in real estate the Company vigorously explored ways to make breakthroughs in transformation and integrated and

renovated traditional businesses such as real estate property management and house asset operations. Besides it optimized and

reshaped its business segments so as to form four major business segments that is industry-city space development property

management services industrial ecosystem operation and main business ecosystem investment. SZPRD endeavored to further

consolidate and highlight its advantages of industry-city integration and the whole industry chain through expanding the main

business and making breakthroughs.

1. Industrial & urban space development

In terms of the space development segment the Company is specialized in developing the residence the hi-end apartment the office

building and the industrial park and has developed a batch of brand projects including Shenzhen International Trade Center Building

Huanggang Port Tian'an International Building Qianhai Gangwan Garden and Golden Collar Holiday Apartment. Based on its

present real estate development business the Company will improve its existing portfolio and plan for new businesses. It will engage

a number of subsidiaries in property development and urban renewals including Huangcheng Real Estate Rongyao Real Estate the

Urban Renewal Company Dongguan Company Xuzhou Company and Yangzhou Company strengthen capital operation via the

listing platform and make a reasonable layout of the city space development segment. In the Reporting Period SZPRD made

multiple efforts for this segment. For instance it steadily advanced the existing project development inside and outside Shenzhen

accelerated the sales of projects in Xuzhou Yangzhou and Dongguan and sped up the recovery of investment. Moreover it focused

on the development and construction of industry-city complexes and accelerated to create an integrated and co-existing model for the

development of boutique urban residences and high-end industry space.2. Property management services

In the Reporting Period SZPRD deeply integrated its property management segment to establish a business layout featuring the

platform of ITC Property Management and "1+1>2" coordinated development. The total area of property management exceeded 24

million square meters. Over more than 30 years of development ITC Property Management has developed into a domestic top

branded property service provider of industrial parks. It has won the titles of "Top 100 National Property Management Enterprises"

and "Excellent Enterprise of Property Management of Industrial Park in China" for several years successively and has subsidiaries

including Shenzhen Guomaomei Life Service Co. Ltd. Shandong Shenguomao Real Estate Management and Chongqing

Shenguomao Real Estate Management and three joint ventures namely Shenshan Guomao Property Management Guomao Tongle

Property Management and Shouxihu Jingyue. It has built striking brand advantages and established property service projects all over

the country. Next the Company will take advantage of the brand ITC Property Management strive to integrate property

management resources inside and outside the system quickly expand channel space upgrade property management and significantly

enhance channel service quality. In addition it will combine industry chain and new requirements of community development and

earnestly utilize new technologies such as the Internet of Things (IoT) big data and artificial intelligence (AI) to develop a smart

service platform where production and life services can be scheduled in a unified manner.

3. Industrial ecosystem operation

With respect to the industrial ecosystem operation segment the Company gave full play to its foundation in the three basic industries

namely real estate development property management and leasing and the advantage of the whole industry chain and deepened

internal and external strategic cooperation. It is committed to creating a closed loop of the whole industrial ecosystem covering

project development services park operation services and supporting rental operations and keeping improving the space service and

rental ecosystem in the industrial park. The Company is expediting the stock taking and assessment of its properties in stock and

strengthening the management over them. In the future it will gradually expand the scope of leasing and raise the development

capability of property rental. Moreover the Company will gradually shift the focus of industrial ecosystem operation to sci-tech

parks provide supporting services covering the whole value chain such as the import of industrial ecosystem project development

services and park operation services and serve the role of "space service provider" centering on sci-tech parks.

4. Other business

In the Reporting Period the Company's businesses also included catering service and project supervision service. The catering

service is operated by Shenzhen Guomao Catering Co. Ltd. Guomao Catering Co. Ltd. established in 1986 became famous at

home and abroad as it was the place where President Deng Xiaoping gave talks during his inspection to the south in 1992. Since its

establishment it has received more than 600 domestic and overseas state heads famous people and numerous domestic and overseas

guests with its reputation spreading all over the world. The revolving restaurant had its integrated renovation completed and was

reopened in 2020. The project supervision service is handled by the subordinated supervision company of the Group. The company

has the Grade A supervision qualification of building works of the Ministry of Housing and Urban-Rural Development (MOHURD).It was originally known as Shenzhen Property Engineering Management Department and takes part in the construction and

management work of Shenzhen International Trade Center Building. It is a witness of the whole process of "Shenzhen speed" and

mainly serves for the development project of the Group.(II) Industry development stage and cyclic characteristics of the Company and industry position of the Company during the

Reporting Period

1. Real estate industry

During the Reporting Period China maintained the basic tone of real estate policy regulation and control unchanged including

"Houses are for living in not for speculating on." and "three stabilities" and further reinforced its financial regulation. In order to

fight against the COVID-19 pandemic the primary objectives for the first half of the year were "six stabilities" and "six guarantees".Local governments adopted more flexible policies commensurate with their local situations. Multiple regions released an

underpinning policy for the real estate market. Thus real estate sales remained high in the country. In the second half of the year

China constantly tightened its real estate financing policies issued new regulations for the investment of insurance funds and trusts in

real estate and strictly investigated the rule-violating transfer of funds from the bank to the real estate industry. Under such a policy

background China's real estate industry mainly presents the following characters:

(1) Real estate market remains resilient and has broad prospects

According to the National Bureau of Statistics in 2020 the sales area of national commercial housing was 1761 million square

meters with an increase of 2.6% year-on-year (YoY) while the sales amount was RMB17.36 trillion up by 8.7% YoY and higher

than the growth rate of 6.5% in 2019. The sales amount of residential housing reached RMB15.46 trillion rising by 10.8% YoY

representing nearly 90% of the total sales amount of commercial housing. However the sales amount of office buildings and houses

for business use dropped by 5.3% and 11.2% respectively from the same period last year. Prices of commercial housing generally

climbed and demonstrated apparent differences by region. The dramatic increase in the prices in core cities such as those in the

Yangtze River Delta and the Pearl River Delta drove the growth in surrounding areas. The real estate industry remained resilient

amid the pandemic.

(2) Financing regulation turned stricter than expectations. The capital chain of real estate enterprises became tight

The central monetary policies were loose so as to effectively promote the resumption of work and production at the beginning of the

year. Governments in multiple regions loosened the regulation and credit policies for real estate enterprises. Monetary policies have

resume tight since May as the adverse impact of the pandemic turned weaker and weaker and the sales of commercial housing and

land remained hot. The principle that "Houses are for living in not for speculating on." has been stressed again. The monitoring of

the flow of funds from the bank to real estate enterprises has been intensified. The "Three Red Lines" policy was introduced and

piloted in August to further regulate the financing of real estate enterprises. Financing in the real estate industry slowed down in 2020

amid stricter regulation over financing and growth in the scale of debts due. The financing scale fell. The overall financing cost

dropped slightly. In terms of structure self-raised funds and mortgage loans accounted for a higher proportion. Bond issuance

continued to grow in China while the scale of bonds overseas plunged drastically. Innovative products like ABS became increasingly

important. The peak of the repayment of overseas bonds brought some cash flow risks to real estate enterprises. The industry might

usher in a new cycle of supply-side reform.

(3) Land sales remained hot. Both sales volumes and prices increased

Real estate enterprises showed an increasing willingness to purchase land attributable to the loose monetary policies and

performance of the commercial housing market better than expectations. Besides local governments accelerated to promote land

sales. Both the supply and demand sides jointly pushed forward the increase in sales volumes and prices. In 2020 turnover of land

sales through tendering auctioning and listing was approximately RMB8.05 trillion rising by 18.8% YoY. 4925 million square

meters of planned building area were transferred with a YoY increase of 14.9%. The average sales price of land was

RMB1635/square meter throughout the year which climbed by 3.5% YoY. By regions tier-1 cities represented by those in the

Yangtze River Delta the Pearl River Delta and the Beijing-Tianjin-Hebei Region maintained high increases in both the sales area

and amount of land followed by tier-3 cities. Because of a high inventory the growth rates in tier-2 cities were weak and at the

downside of the cycle.

2. Industry of property management

With the acceleration of urbanization the upgrading of citizen's consumption level and the constant increase of stock property area

the Chinese property management industry enters a cycle of rapid progress as driven by favorable policies. At present the property

management industry is scattered in China. In other words its market concentration is not high. Large property management

enterprises will occupy a higher market share along with the progress of M&As of such enterprises. China's property management

industry mainly presents the following characteristics:

(1) Market prospects are broad. Revenue grows rapidly

According to the Evaluation Report of Comprehensive Strengths of Property Service Enterprises for 2020 in 2019 the total national

management area of the property management industry was 31 billion square meters with a YoY increase of 11%. The top 100

property management enterprises actively implemented diversified expansion strategies. Their number of projects under management

in 2019 averaged 212 up by 10.42% YoY while the area under management 42788300 square meters with a YoY increase of

15.08%. The market share of the top 100 property management enterprises was approximately 43.6%. The industry concentration

further increased. The gap among enterprises at different levels turned wider. In general the property service fee grew. In December

2020 the composite index of property service prices in 20 major cities reached 1070.32 up by 0.6% YoY. The property service

industry in China will enter a golden period of rapid development along with the increase in the existing and new properties and the

progress of new types of communities. The industry scale will hopefully surpass RMB2 trillion.

(2) The craze of listing among property management enterprises continues. Industry competition is becoming stronger

Property management enterprises have endeavored to get listed since 2018 thanks to the high valuation in the market. The year 2020

witnessed the listing of 17 such enterprises most of which were H-share-listed indicating an apparent Matthew Effect. Nevertheless

the stock prices on the first day of over half of the property management enterprises listed in 2020 were lower than their issue prices

which implied that the valuation of property management enterprises diverged from reality. Property management enterprises

accelerate to perform M&As and integration in order to cope with the increasingly fierce industry competition and expand scale and

business. Quality underlying assets are like "sweet pastries". Leading enterprises have raised the area under management to a new

level of 500 million square meters through M&As.

(3) The industry speeds up to transform and vigorously expand the Blue Ocean Market

The ten ministries and departments of China published the Notice on Strengthening and Improving Residential Property Management

in January 2021. The document encourages property service enterprises to proactively employ technologies such as the IoT cloud

computing big data blockchain and AI to build a smart property management service platform and explore the "property service +

life service" model. As property services are expanding to cover elderly and child care housekeeping culture health house agency

and express delivery and receipt multi-level and diversified residential and life demands of owners will be better satisfied.

Furthermore property management enterprises will hopefully expand the Blue Ocean Market and improve the profitability per unit

area. The legal status of the owners' committee of the community is specified upon the implementation of the Civil Code. The

committee is becoming stronger. Disputes over the rights to operations and earnings of public space are surging leading to pressure

on the sustainable development of the property management industry.

3. Industry position of the Company

SZPRD arises together with Shenzhen opening up and devotes to Shenzhen real estate and property management and other fields for

more than 30 years. Its comprehensive capacity and brand influence is getting stronger. Its industry position improves gradually. It

has won many honors and awards in the past years. During the Reporting Period at the 10th Grand Ceremony of Shenzhen Real

Estate held by the Shenzhen Real Estate Association the Group won the honor of "Brand Value Enterprise of Shenzhen Real Estate

Development Industry".

ITC Property Management was among the first batch of national qualified Level I enterprises of property management. During the

Reporting Period thanks to its continuous improvement in internal control steady progress in property management quality and

constant R&D of services and products matching customer requirements ITC Property Management was granted the titles of "Top

100 Enterprises of China's Property Management in 2020" and "Property Management Enterprises of China's Industrial Park in

2020". Additionally it was ranked 27th among China's top 100 property services for comprehensive competency up by six places

over 2019. It has been included in the Top 100 Enterprises of China's Property Service for five consecutive years since 2016. Besides

it was ranked 11th of the "Top 100 of Comprehensive Capacity of Shenzhen Property Service Enterprises in 2019".II Significant Changes in Major Assets

1. Significant Changes in MajorAssets

Major assets Main reason for significant changes

Equity assets

Up 1.41% from the beginning amount primarily driven by return on investment in

joint ventures recognized at the equity method

Fixed assets

Up 24.24% from the beginning amount primarily driven by decoration spending for

the Company’s own housing properties

Intangible assets Down 31.17% from the beginning amount primarily driven by amortization

Construction in progress No such assets

Monetary assets

Up 27.54% from the beginning amount primarily driven by settlement of sales and an

increase in bank borrowings

Long-term prepaid expenses

Up 68.64% from the beginning amount primarily driven by additional decoration

spending for housing properties in the lease business

Deferred income tax assets

Up 44.45% from the beginning amount primarily driven by an increase in tax-related

deductible loss

2. Major Assets Overseas

□ Applicable √ Not applicable

III Core Competitiveness Analysis

Long-lasting enterprise spirit The enterprise spirit of "going ahead and reforming" has run through the development of the

Company from the pioneering implementation of the joint-stock system reform at the end of the 1980s to the acquisition of the ITC

Sci-tech Park epitomizing the "Shenzhen Speed" of marketized incorporation of state-owned enterprises in Shenzhen and the first

adoption of the following investment system of urban renewal projects in municipal state-owned asset system. The key of the

Company to maintain its vitality over the past three decades lies in being brave and courageous to reform and good at reform. The

Company will fully study and judge the macro-economic environment and the industry development progress and deeply analyze its

advantages and disadvantages while stepping on the new journey of the "14th Five-year Plan". It will make a forward-looking layout

transform in an appropriate time and seek progress based on reform.Rise of all major businesses based on accumulated strength The Company has devoted enormous resources in real estate and

property management industries. It has kept a foothold in Shenzhen and earnestly expanded the external market. Up to now it has

created a market layout where key businesses are highlighted and promoted hierarchically. In regard to the real estate business the

Company regards Huangcheng Real Estate as its primary platform and Rongyao Real Estate Xuzhou Company Yangzhou Company

and Dongguan Company as property development entities. At present its main projects are distributed in Shenzhen Xuzhou

Yangzhou and Dongguan. In terms of the property management business ITC Property Management embraces subsidiaries such as

Shenzhen Guomaomei Life Service Co. Ltd. Chongqing Shenguomao Real Estate Management and Yangzhou Jingyue Property

Management Co. Ltd. and has grown into a first-class property service provider for industrial parks in China. Currently its area

under management exceeds 24 million square meters including nearly 8 million square meters in high-end industrial parks

demonstrating its ever-growing business expansion capabilities.Standardized and effective corporate governance Guided by the philosophy of running by law the Company constantly

deepened system construction and improved its governance structure. It revised nearly 30 regulations and rules in the year including

the Articles of Association the Rules of Procedure of Shareholders' Meeting the Rules of Procedure of the Board of Directors the

Rules of Procedure of Board of Supervisors implementation rules of special committees under the Board of Directors as well as

documents on bidding and tendering investment and merger internal control and authorities. The internal governance structure is

clear and sound. In the meantime the Group deeply implemented the remuneration reform established market-oriented and

multi-level incentive and performance assessment mechanisms and stimulated the enthusiasm of all employees for work and

entrepreneurship.Widely recognized brand value SZPRD arises together with Shenzhen opening up and has been highly recognized in the market

by virtue of its "ITC" brand that carries the spirit of opening up. At the 10th Grand Ceremony of Shenzhen Real Estate held by the

Shenzhen Real Estate Association the Group won the honor of "Brand Value Enterprise of Shenzhen Real Estate Development

Industry". Moreover it has won multiple honors for years consecutively such as the "Best 500 of China Real Estate Developers" and

the "Guangdong Top 500 Enterprises" with its social influence and brand reputation improved constantly.Part IV Operating Performance Discussion and Analysis

I Overview

The Company is subject to the Guideline No. 3 of the Shenzhen Stock Exchange on Information Disclosure by Industry—for Listed

Companies Engaging in Real Estate.

(I) Industry review for the Reporting Period

1. Macro economic situation

The COVID-19 pandemic exerted a severe impact across the world in 2020 and became a systematic system with extremely great

uncertainties co-existing with trade frictions and geopolitics. It constituted a tremendous shock to the world economy. Currently

COVID-19 has been effectively controlled in China while the situation overseas is still not optimistic. In the financial field the

economic downturn has resulted in soaring risk aversion and frequent fluctuations in the global stock market. Rising unemployment

rates and decreasing income are inhibiting consumption. Central banks in all countries have taken loose monetary policies to promote

economic recovery. Global debts have hit a new high. Generally pandemic rebound hinders economic recovery in the United States

and Europe. Global inflation remains sluggish. It is predicted that the economy in 2020 would shrink by 3.5%. That said the severest

moment has passed. The world economy will hopefully enter a recovery cycle as the pandemic across the world becomes a new

normal the world political situation turns stable and trade protection measures are expected to decrease. The recovery progress is

mainly determined by the pandemic trend all over the world.In the context of the global economic depression China recorded a GDP of RMB101.6 trillion in 2020 with a YoY increase of 2.3%.It was the first time for China to surpassed RMB10 billion. Besides China was the only major economy in the world that achieved

positive growth in the year. Most regions across the country stopped work and production as influenced by the sudden outbreak of

COVID-19 at the beginning of the year. Consequently the first quarter (Q1) witnessed a YoY decrease of 6.8% in GDP. However as

the pandemic was gradually controlled and the resumption of work and production was orderly promoted China's economy steadily

recovered. The YoY growth rates of GDP in Q2 Q3 and Q4 were 3.2% 4.9% and 6.5% respectively. China took the lead in

controlling the pandemic while repeated outbreaks occurred overseas. Hence China had an outstanding performance in exports. The

export trade totaled RMB32.16 trillion in the year growing by 1.9% YoY. Specifically exports rose by 4% while imports declined

by 0.7%. Total retail sales of consumer goods amounted to RMB3.92 billion down by 3.9% YoY. Prices slowly recovered after a

slight decrease at the beginning of the year. The annual CPI climbed by 2.5%. Generally investment in fixed assets first declined and

then rose. The growth rates of investment in manufacturing and infrastructure construction gradually picked up. Investment in the

real estate industry continued to be resilient. From January to November investment in real estate development amounted to

RMB12949.2 billion with a YoY increase of 6.8%. The industry prospects kept recovering.

The year 2021 marks the start of the "14th Five-year Plan". The pandemic still exists. China is recovering its economy. Its fiscal and

monetary policies will resume neutral. Endogenous consumption and manufacturing investment will become the main engine of

economic growth. It is expected that China's economy will gradually return to normal in 2021 and make significant contributions to

the global economic recovery. In general the momentum of the steady economic progress in China will remain unchanged.

2. Policy environment of the industry

In 2020 the central government of China observed the basic tone that "Houses are for living in not for speculating on." in terms of

real estate regulation and control. It adopted loose monetary policies when the pandemic was the most severe in the first half of the

year. As a result the fund environment of the real estate industry was improved. Local governments implemented more flexible

policies in line with their actual situations. For the demand side priority was given to the talent attraction policy and loosened

requirements for household registration. For the supply side relevant market support policies were released. For instance Shanghai

Hangzhou and Nanjing relaxed the time limit for real estate enterprises to pay the land transfer fee. Fuzhou Huzhou and Tianjin

allowed the delay of the start and completion of projects. Xuzhou and Dongguan adjusted the pre-sale conditions for commercial

housing. Nanchang Jinan Wuxi and Xi'an reduced the regulatory requirements for funds. Xiamen Shenzhen and Guangzhou raised

credit lines.In the second half of the year as the pandemic turned weaker and the real estate market enjoyed high popularity against the trend

regulation and control policies turned tighter. Financial regulation was constantly reinforced. In August the MOHURD and the

People's Bank of China (PBoC) held a symposium attended by key real estate enterprises in order to stress again that "Houses are for

living in not for speculating on." stabilize land prices house prices and expectations and maintain the continuity and stability of

regulation and control policies for the real estate industry. Fund monitoring and financing management rules were formulated for key

real estate enterprises at the symposium. Through the "Three Red Lines" new requirements were raised to change the traditional

financing model of real estate enterprises which would be beneficial to guide the benign development of the real estate industry.

Eight key tasks of the central government of China were proposed for 2021 at the Central Economic Work Conference held in

December 2020. Prominent problems about housing in major cities should be properly addressed. Housing problems are related to

the well-being of the people. Multiple policies should be adopted in line with the actual situation to push forward the steady and

wholesome progress of the real estate market. Great importance should be attached to the construction of security rental houses. The

long-term rental market should be strictly standardized. Moreover more land should be provided for the construction of rental houses.Real estate enterprises should be encouraged to utilize collective land for construction and self-owned idle land to construct rental

houses. Meanwhile the tax burden of rental houses should be reduced. The rental market should be remedied. The rent level should

be reasonably regulated and controlled.The PBoC and the China Banking and Insurance Regulatory Commission (CBIRC) jointly published a notice on December 31 2020

to decide to formulate a policy for managing the concentration of real estate loans provided by financial institutions in the banking

industry. The policy is designated to facilitate market entities to form stable policy expectations and promote the sustainable

development of the real estate market.

3. Regional market layout

In 2020 the real estate market in Shenzhen led the national market in both supply and demand despite the pandemic and policy

regulation and control. In Q1 due to the impact of the pandemic the real estate market was basically stagnant. In Q2 as the

pandemic was gradually controlled and policies were relaxed a large amount of capital flew in to boost the real estate market. House

prices surged dramatically resulting in pain points such as hot housing speculation the rule-violating flow of funds and

supply-demand imbalance. In view of this the Shenzhen Municipal Bureau of Housing and Urban-Rural Development issued eight

measures on July 15 to regulate and control the real estate market from eight aspects including identification of the house purchase

qualification and time of household registration adjustment of the policy for the restricted purchase of commercial houses and

promotion of signing of the mortgage loan contract online. The market quickly recovered upon the implementation of new policies.Second-hand houses were sold at a low price. The government relaxed the pre-sales policy followed by an increase in the supply of

houses. Q4 marked the 40th anniversary of the establishment of the Shenzhen Special Economic Zone. The construction of the

Guangdong-Hong Kong-Macao Greater Bay Area and the Demonstration Area of Socialism with Chinese Characteristics was

promoted constantly. There were high expectations for the long-term prospects of the real estate market. The enthusiasm of buyers

ran high again.Generally in 2020 Shenzhen supplied 54000 sets of new houses. 4489000 square meters/45384 sets of new residential houses

were sold up by 20.5% and 19.8% YoY respectively. The transaction scale had reached a record high since 2016. Throughout the

year the sales rate on the opening day was higher than 60% setting a new record in the past three years. The average annual

transaction price of new houses was RMB53000/square meter which was stable with a slight decline. 95273 sets of second-hand

houses were sold in the year rising by 23.5% YoY. The Longgang Center Buji and Xixiang took the first three places in transaction

volumes. The average transaction price in the city was RMB66000/square meter higher than that in the same period last year.Throughout the year 24910 sets of commercial apartments were approved and sold with a total area of 1.47 million square meters.The two figures increased by 23.6% and 23.7% over the same period last year. Apartments demonstrated a stronger quasi-residential

property. In 2020 Shenzhen listed and transferred 96 plots of land including 34 plots of residential land with an accumulative land

transfer fee of RMB80 billion. Looking into 2021 the real estate market in Shenzhen will continue the basic tone that "Houses are

for living in not for speculating on." and raise house supply. Shenzhen will stabilize land prices house prices and expectations

drive the steady and wholesome progress of the real estate market and effectively prevent and mitigate risks in the market.(II) Business Review for the Company in 2020

In 2020 the Company successfully accomplished various objectives. For the year it recorded operating revenue of approximately

RMB4.1 billion and a gross profit of around RMB1.03 billion. In addition its total assets reached RMB12.2 billion hitting a record

high. All these remarkable results represented a perfect ending for the “13th Five-Year Plan” of the Company.

For the 13th Five Year the Company cumulatively recorded operating revenue a gross profit and a net profit of RMB16.82 billion

RMB4.33 billion and RMB3.19 billion respectively up 132% 114% and 112% compared to the 12th Five Year; and its total assets

and net assets as at the end of the period went up 179% and 80% respectively from five years ago. These data represented

considerable over-fulfillment of the goals set. During the 13th Five Year the Company adopted a sustained consistent and active

dividend policy taking into account both reasonable return to investors and the sustainability of the Company. The five-year period

saw a total dividend payout amount of RMB924 million (including the 2020 dividend payout plan).

1. A phased victory was achieved in fighting against the pandemic through unity of efforts

In the face of the sudden outbreak of the COVID-19 pandemic the Group immediately established an anti-pandemic leading group

accurately implemented all anti-pandemic tasks and spared no pains to arrange the resumption of work and production. No

suspicious or confirmed cases were identified among over 8000 employees of the Group. In addition the Group actively adopted the

policy requirement for rent reduction and exemption and joined hands with small- and medium-sized private enterprises to respond to

challenges. Approximately RMB38 million of rents were reduced and exempted benefiting nearly 700 tenants. The Group and

individuals donated over RMB2 million which fully reflected the mission and responsibility as a state-owned enterprise.

2. The Company stuck to the business philosophy of market orientation and achieved remarkable performances in the two

major segments

In the Reporting Period the Company hosted a real estate work meeting and introduced a whole-cycle development management

system. It specified the goal of "efficiency benefits and effects" of operations and management of real estate projects and strove to

manage the process in a planned coordinated and cooperative manner. Furthermore it followed the "117" specific implementation

path to holistically and constantly improve the operations and management of real estate projects. The Company planned and

precisely implemented strategies amid the pandemic. It delivered 100% of finely decorated Tower C of Golden Collar Holiday

Apartment in advance and successfully sold Phase II of Xuzhou out. Throughout the year the Company recorded revenue of

approximately RMB2.9 billion in real estate and a net profit of around RMB661 million. Project resources were expanded through

multiple channels such as tendering auctioning listing and cooperative development. Substantial progress was made in the

Integrated Industry-city Project of the Ecological Health Valley of Yangzhou Shouxihu the urban renewal project in the Fuyuan

Industry Park the Guangming Tangjia Project and the Baolu Project in the year.With respect to the property management segment the Company vigorously blazed a trail based on endogenous expansion and

M&As. In 2020 it accumulatively had 27 new projects with a total area of over 3 million square meters better than the annual

objective for endogenous growth. Moreover the Company explored non-conventional investment methods for the first time such as

overseas investment and private non-controlling investment so as to open a new path to cope with the fierce competition. First it

successfully expanded the overseas market by establishing a subsidiary in Vietnam. Besides it entered into an agreement with VCEP

to jointly create a national demonstration zone of the "the Belt and Road" initiative. The new area under property management in the

park was approximately 1.96 million square meters. Second new investment cooperation models were proposed. The three joint

ventures namely Shenzhen Guomao Tongle Property Management Co. Ltd. Shenshan Guomao Property Development and

Shouxihu Jingyue have grown gradually by taking advantage of the resources of their partners. Especially Shouxihu Jingyue won

key projects like Sanwan Scenic Spot of Yangzhou Canal Songjia City and Hua Du Hui. Its area under management was up to

around 3.7 million square meters. It is an effective example of the market-oriented expansion of the property management business.

3. The Company adhered to the idea that development is the top priority and addressed many prominent problems

concerning overall operations and development.

First it actively promoted the demolition of the Bangling Project held the opening ceremony in October and started the substantial

construction of Phase II. Second it assisted foreign trade groups in activating assets. The first batch of assets have been disposed of.Over RMB1.5 billion was realized. Third it actively supported the tax examination over the key and large enterprises specified by

the State Taxation Administration spared no effort to solve the historical problem of land costs in the Huangyuyuan Area and

basically eliminated the risk of a supplementary payment of increment tax on land value. Fourth it strongly supported shanty house

renovation projects of the government and completed the signing for the removal of tenants and house delivery of tenants on

Chuanbu Street. It is estimated that the Group will obtain an area of relocated property of approximately 14000 square meters by

2025. For other aspects a comprehensive agreement was signed for Yupinluanshan Garden project after nearly one decade. The

Fumin Complex was renovated and put into operation becoming the first rental house project for special talent of professional

lawyers. Effective measures have been adopted to promote Phase II of Fuchang upon negotiation with several parties. Basements

were constructed in the Reporting Period.

4. Internal reform was deepened. Vitality and power of quality development of the Group were significantly stimulated

The remuneration reform was earnestly promoted. The long-acting incentive and restraint plan for the first phase has been

implemented. The integration of business segments was coordinated. Incentive and performance assessment mechanisms such as the

remuneration reform and incremental sharing were comprehensively conducted in all subordinated companies from top to bottom. In

addition the Company orderly promoted the optimization of the organizational structure after the acquisition of TK Property and the

integration of property management and rental segments. The Project Management Department and the Industry Operation Office

were newly set up in the Headquarters. Shortcomings in operations were improved. A development platform was created for the four

major businesses. A platform business system with a reasonable structure and independent operations was developed. Furthermore

policies were revised as appropriate. Over 30 regulations and rules were revised including the Articles of Association to practically

improve corporate governance. In terms of other aspects a new stride was made in integrated financial management. Approximately

RMB1.6 billion new financing was added. Tendering and the determination of bid winners were strengthened. Cost control was

reinforced. Additionally the Company firmly upheld the concept of safe development and took multiple measures to ensure

production safety.(III) Land Bank

1. New additions to the land bank

There were no new additions to the land bank in the current period.

2. Cumulative land bank

Name of project/area Site area（0000 ㎡） Floor area（0000 ㎡）

Floor area available for

development（0000 ㎡）

Yupinluanshan Garden

project

2.19 7.89 7.89

Baolu project 3.24 8.16 8.16

Land in Danshui Huiyang

District Huizhou City

1.77 6.20 6.20

Land in Hongqi Town

Haikou City

15.8 - -

Total 23 22.25 22.25

Note: The floor areas of the Yupinluanshan Garden project the Baolu project and the land in Danshui Huiyang District Huizhou

City are floor areas with plot ratio.

(IV) Development status of major projects

City/regi

on

Name of

project

Locatio

n

Usage

The

Compa

ny’s

interest

Time for

commen

cement

of

construct

ion

%

develo

ped

% that has

completed

construction

Site area

（㎡）

Planned

floor

area with

plot ratio

（㎡）

Floor

area

that

comple

ted

constru

ction in

the

Curren

t

Period

（㎡）

Cumulat

ive floor

area that

has

complete

d

construct

ion

（㎡）

Estimate

d total

investme

nt

(RMB’0

000)

Cumulat

ive

investme

nt

(RMB’0

000)

Shenzhe

n

Golden

Collar’s

Resort

apartmen

ts

Futian

District

Resid

ential

100% 2014.03 100% 100% 12598 133800 0 183295 138311 108406

Shenzhe

n

Fuhui

Huayuan

Futian

District

Affor

dable

housin

g

100% 2018.12

Under

constru

ction

Concrete roof

completed for

the basements

in Section 1

and 2;

structure

completed for

-2/F of Section

3

4274 33430 0 0 90439 60072

Xuzhou

City

Banshan

Yujing

(Phase II)

Tongsha

n

District

Resid

ential

100% 2019.03

Under

constru

ction

Pre-acceptance

completed for

the main frame

31537 22795 0 0 23581 15997

Shenzhe

n

Guanlan

Bangling

Longhu

a

District

Resid

ential

comm

ercial

apart

ments

and

indust

69% 2020.10

Under

constru

ction

75.88%

completed for

demolition

68300 433640 0 0 694150 330262

rial

(V) Sales status of major projects

City/re

gion

Name

of

project

Location Usage

The

Comp

any’s

interes

t

Floor area

with plot

ratio （㎡）

Floor area

available

for sale

（㎡）

Cumulativ

e

pre-sold/s

old floor

area（㎡）

Floor

area

pre-sold/s

old in the

Current

Period

（㎡）

Pre-sale/sal

es revenue

generate in

the Current

Period

(RMB’000

0)

Cumulativ

e settled

floor area

(㎡)

Floor area

settled in

the

Current

Period

（㎡）

Pre-sale/

sales

revenue

settled

in the

Current

Period

(RMB’0

000)

Shenz

hen

Golde

n

Collar’

s

Resort

apartm

ents

Intersecti

on of

Futian

South

Road and

Binhe

Road in

Futian

District

Residenti

al studio

apartmen

ts and

commerc

ial

100% 133800.6 125231.07 68323.44 33414.96 262382 64287.07 37184.94 274075

Dongg

uan

City

Songh

u

Langy

uan

Dalang

Town

Residenti

al

commerc

ial

100% 147139.96 140911 140911 0 0 145443 0 0

Shenz

hen

SZPR

D-Qia

nhai

Gang

wan

Garde

n

Intersecti

on of

Yueliang

wan

Boulevar

d and

Xinghai

Boulevar

d in

Nanshan

District

Residenti

al

100% 64625.13 63448.26 63448.26 0 0 63336.29 0 0

Xuzho

u City

Bansh

an

Yujing

(Phase

I)

6

Huashan

Road

Tongshan

District

Xuzhou

City

Villa 100% 54589.12 85652.81 85652.81 0 0 85652.81 2331.54 1802.17

Jiangsu

Province

Xuzho

u City

Bansh

an

Yujing

(Phase

II)

6

Huashan

Road

Tongshan

District

Xuzhou

City

Jiangsu

Province

Residenti

al

(elevator

houses of

floors)

100% 22794.76 21720.72 21720.72 9992.97 12256.85 0 0 0

Yangz

hou

City

Hupan

Yujing

Phase

I

Intersecti

on of

Shouxihu

Road and

Hangou

Road

Residenti

al units

shops

apartmen

ts

parking

garages

and lots

100% 36141.28 48870.98 42349.26 870.59 332.2 42215.85 944.67 575.03

Yangz

hou

City

Hupan

Yujing

Phase

II

Intersecti

on of

Shouxihu

Road and

Hangou

Road

Residenti

al units

shops

apartmen

ts

parking

garages

and lots

100% 56935.75 73121.96 67523.37 1317.54 1678.47 64177.89 1060.9 1042.74

(VI) Rental status of major projects

Name of project

Locatio

n

Usage

The Company’s

working

interest

Rentable area

（㎡）

Cumulative

rented area

（㎡）

Average

occupancy rate

Xi Apartments

(Longyuan)

Shenzhe

n

Apartments

for

long-term

rental

100.00% 3967 3967 100.00%

Xi Apartments (Longhua)

Shenzhe

n

Apartments

for

long-term

rental

100.00% 1609 1609 100.00%

Xi Apartments (Xinhu)

Shenzhe

n

Apartments

for

100.00% 1600 1600 100.00%

23

long-term

rental

Food Court in the

International Trade Center

Shenzhe

n

Commercial 100.00% 4049 2645 65.00%

Fumin Complex

Shenzhe

n

Commercial

apartments

100.00% 6450 4576 71.00%

Tower A of Wenjindu Port

Building

Shenzhe

n

Office

building

75.00% 5884 5703 97.00%

Haiwai Lianyi Building

Shenzhe

n

Commercial

units and

offices

75.00% 9788 9788 100.00%

Anhua Building

Shenzhe

n

Offices 75.00% 1414 1414 100.00%

Training

Building/Dormitory

Shenzhe

n

Residential

units/offices

/commercial

units

75.00% 4244 4244 100.00%

Pengfu Building

Shenzhe

n

Offices 75.00% 6494 6494 100.00%

Jinfu Building

Shenzhe

n

Shenzhe

n

Commercial 75.00% 1702 1702 100.00%

Jinfu Building

Shenzhe

n

Shenzhe

n

Commercial 100.00% 568 568 100.00%

Fuxing Garden

Shenzhe

n

Residential/

commercial

75.00% 5877 5877 100.00%

Fuxing Garden

Shenzhe

n

Commercial 100.00% 1417 1417 100.00%

Plant area in Tangxia

Town Dongguan City

Donggu

an City

Plant 75.00% 22034 22034 100.00%

Pacific Business Building

Shenzhe

n

Commercial

units/offices

75.00% 3199 3199 100.00%

Pacific Business Building

Shenzhe

n

Commercial

units/offices

15.00% 14889 14718 99.00%

Kangti Building

Shenzhe

n

Commercial

units/offices

75.00% 2096 2096 100.00%

Kangti Building

Shenzhe

n

Commercial

units/offices

15.00% 1147 1147 100.00%

Lyuhua Building

Shenzhe

n

Commercial

and

residential

75.00% 6960 6578 94.51%

Shops on the ground floor

of Tower 48 in Lianhua

North Village

Shenzhe

n

Shops 75.00% 1000 1000 100.00%

Haonianhua Building

Shenzhe

n

Apartments

and

commercial

units

100.00% 1803 1774 98.00%

Haonianhua Building

Shenzhe

n

Apartments

and

commercial

units

75.00% 2278 2235 98.00%

Hostel 2 at Yuxin School

Shenzhe

n

Hostel 75.00% 3000 3000 100.00%

Kaifeng Garden in

Shangmeilin

Shenzhe

n

Residential 100.00% 1307 1084 83.00%

Fuyuan Industrial Zone

Shenzhe

n

Plant area 75.00% 47130 47130 100.00%

Tonglu Industrial Zone

Shenzhe

n

Plant area 100.00% 76886 73221 95.00%

Gonglu Building

Shenzhe

n

Commercial

/offices

75.00% 317 317 100.00%

Gonglu Building

Shenzhe

n

Offices 100.00% 89 89 100.00%

Jiangling Industrial Zone

Shenzhe

n

Plant area 75.00% 10397 10397 100.00%

Zone 21

Shenzhe

n

Commercial

/offices

75.00% 9514 9514 100.00%

Baoli Community

Shenzhe

n

Residential 75.00% 9020 9003 99.81%

Songgang Plant

Shenzhe

n

Plant area 75.00% 5700 5700 100.00%

Longbu Plant

Shenzhe

n

Plant area 75.00% 7471 7471 100.00%

Gonglu Building in Shenzhe Offices 75.00% 4600 4461 96.98%

Huanggang n

Yuetong Complex

Shenzhe

n

Offices 75.00% 3044 3044 100.00%

(VII) Primary land development

□Applicable √ Not applicable

(VIII) Financing channels

Financing channel

Ending balance of

financings

Financing cost

range/average

financing cost

Maturity structure

Within 1

year

1-2 years 2-3 years Over 3 years

Bank loans 3618800000.00 4%-6% 3000000.00 3615800000.00

Total 3618800000.00 4%-6% 3000000.00 3615800000.00

(IX) Development strategy and operating plan for the coming year

In regard to land reserves the Company will continue to expand its land reserves through market competition and capital operation in

2021. It will exert more efforts in this aspect and push forward the fast launch of projects. By property types residential projects will

be mainly distributed in the Guangdong-Hong Kong-Macao Greater Bay Area the Yangtze River Delta Metropolitan Area and the

areas with existing projects. Besides the Company will gradually pay attention to and expand its presence in key cities in the central

urban agglomeration centering on Wuhan the Chengdu-Chongqing Region in western China and the Beijing-Tianjin-Hebei Region.Urban renewal projects will primarily be launched in Shenzhen and the areas surrounding Shenzhen like Dongguan and Huizhou.The Company will gradually track such projects in Guangzhou. Most of the comprehensive industry-city projects will be located in

the Guangdong-Hong Kong-Macao Greater Bay Area the Yangtze River Delta central China centering on Wuhan and the

Chengdu-Chongqing Region in western China.

In regard to sales in 2021 the Company will constantly enhance the overall control over the general goal phased objectives

schedule and investment plan of all projects pay close attention to the whole sales of Tower A and the remaining houses of Tower C

of Golden Collar Holiday Apartment and fully promote the construction of Phases I and II of Guanlan Bangling. Furthermore it will

strive to sell all houses of Hupan Yujing out and complete and deliver Banshan Yujing Phase II in Xuzhou and endeavor to complete

the project setup of the Fuyuan Industry Park the land replacement of Baolu the capping of Phase II of Fuchang and the

construction of Yupin Luanshan.Please refer to “IX Prospects” in “Part IV Operating Performance Discussion and Analysis”.(X) Provision of guarantees for homebuyers on bank mortgages

√ Applicable □ Not applicable

As a usual practice for real estate developers the Company has been providing guarantees and security deposits for its homebuyers

on their bank mortgages. As at 31 December 2020 security deposits for such outstanding guarantees amounted to RMB1148647.30

which will be returned upon the expiry of the guarantees i.e. when the relevant homebuyers paid off their bank mortgages. On the

ground that there have been no default by the homebuyers so far and that the market prices of the relevant properties are currently

higher than the trading prices the Company believes the risk associated with such guarantees is low.(XI) Joint investments by directors supervisors and senior management and the listed company (applicable for such

investments where the directors supervisors and senior management are the investment entities)

√ Applicable □ Not applicable

Name of

project

Type of investment

entity

Amount of

investment

% of

investmen

As % of the

peak of the

Cumu

lative

Disinvest

ment

Compatibility

of actual

(RMB’000

0)

t amount project funds inco

me

investment

amount and

distributed

income

Urban

Renewal of

Bangling

Section at

Guanlan

Street

Mandatory investment

entities (including

directors and senior

management)

2647.00 66.18% N/A 0 None N/A

Voluntary investment

entities

1353.00 33.82% N/A 0 None N/A

Note: Since this is an ongoing project the peak of the project funds cumulative income and disinvestment are unknown. For details

please refer to the relevant announcements disclosed by the Company on www.cninfo.com.cn dated 9 November 2019.

II Core Business Analysis

1. Overview

See “I Overview” above.

2. Revenue and Cost Analysis

(1) Breakdown of Operating Revenue

Unit: RMB

2020 2019

Change (%)

Operating revenue

As % of total

operating revenue

(%)

Operating revenue

As % of total

operating revenue

(%)

Total 4104374646.02 100% 3961669942.44 100% 3.60%

By operating division

Property

development

2895323736.80 70.54% 2665571690.51 67.28% 8.62%

Property

management

1070094746.33 26.07% 1097767114.02 27.71% -2.52%

Property rental 138956162.89 3.39% 198331137.91 5.01% -29.94%

By product category

Property

development

2895323736.80 70.54% 2665571690.51 67.28% 8.62%

Property

management

1070094746.33 26.07% 1097767114.02 27.71% -2.52%

Property rental 138956162.89 3.39% 198331137.91 5.01% -29.94%

By operating segment

Shenzhen 3718740286.40 90.60% 3712909688.00 93.72% 0.16%

Other 385634359.62 9.40% 248760254.44 6.28% 55.02%

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

Revenue or Operating Profit

√ Applicable □ Not applicable

Unit: RMB

Operating revenue Cost of sales

Gross

profit

margin

YoY change in

operating

revenue (%)

YoY change in

cost of sales

(%)

YoY change in

gross profit

margin (%)

By operating division

Property

development

2895323736.80 388253086.57 86.59% 8.62% -10.56% 2.88%

Property

management

1070094746.33 912325050.31 14.74% -2.52% -0.56% -1.68%

By product category

Property

development

2895323736.80 388253086.57 86.59% 8.62% -10.56% 2.88%

Property

management

1070094746.33 912325050.31 14.74% -2.52% -0.56% -1.68%

By operating segment

Core business data of the prior year restated according to the changed statistical caliber for the Reporting Period:

□ Applicable √ Not applicable

(3) Whether Revenue from Physical Sales Is Higher than Service Revenue

√ Yes □ No

Operating division Item Unit 2020 2019 Change (%)

Property

development

Sales volume m2 47540.93 69138.45 -31.23%

Output m2 262098 262098 0.00%

Inventory m2 76447.91 114628 -38.18%

Any over 30% YoYmovements in the data above and why:

√ Applicable □ Not applicable

Due to cyclical changes in the industry as well as the development and sales progress of projects etc. the sales volume and the

inventory both showed a decrease.

(4) Execution Progress of Major Signed Sales Contracts in the Reporting Period

□Applicable √ Not applicable

(5) Breakdown of Cost of Sales

By operating division

Unit: RMB

Operating

division

Item

2020 2019

Change (%)

Cost of sales

As % of total

cost of sales

(%)

Cost of sales

As % of total

cost of sales

(%)

Property

development

388253086.57 28.00% 434102478.63 30.28% -10.56%

Property

management

912325050.31 65.79% 917506251.33 64.00% -0.56%

Property rental 86132102.66 6.21% 82007155.47 5.72% 5.03%

(6) Changes in the Scope of Consolidated Financial Statements for the Reporting Period

√ Yes □ NoOne new entity was added to the consolidated financial statements of the year under review compared to last year. See “VIII Changesto the Consolidation Scope” in “Part XII Financial Statements” in this Report.

(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) 354418642.97

Total sales to top five customers as % of total sales of the

Reporting Period (%)

8.64%

Total sales to related parties among top five customers as % of

total sales of the Reporting Period (%)

1.17%

Information about top five customers:

No. Customer Sales revenue contributed As % of total sales revenue (%)

for the Reporting Period

(RMB)

1

Property Management Center of the

Government of Futian District Shenzhen

237929904.00 5.80%

2

Shenzhen Bay Technology Development

Co. Ltd.

47871320.92 1.17%

3 Tencent Technology (Shenzhen) Co. Ltd. 27967605.26 0.68%

4 Tao Bao (China) Co. Ltd. 22981728.34 0.60%

5 WeBank Co. Ltd. 17668084.45 0.43%

Total -- 354418642.97 8.64%

Other information about major customers:

□ Applicable √ Not applicable

Major suppliers:

Total purchases from top five suppliers (RMB) 338484600.00

Total purchases from top five suppliers as % of total purchases

of the Reporting Period (%)

50.06%

Total purchases from related parties among top five suppliers

as % of total purchases of the Reporting Period (%)

0.00%

Information about top five suppliers:

No. Supplier

Purchase in the Reporting

Period (RMB)

As % of total purchases (%)

1

The Fifth Construction Co. Ltd of

China Construction Fourth Engineering

Bureau

227074600.00 33.59%

2

Shenzhen Futian Security Service Co.Ltd.

34299200.00 5.07%

3

Shenzhen Ruihe Construction

Decoration Co. Ltd.

29126900.00 4.31%

4

Shenzhen Weiye Decoration Group Co.Ltd.

29004600.00 4.29%

5

Shenzhen Shenxu Air-Conditioning Eng.

Co. Ltd.

18979300.00 2.81%

Total -- 338484600.00 50.06%

Other information about major suppliers:

□ Applicable √ Not applicable

3. Expense

Unit: RMB

2020 2019 Change (%) Reason for any significant change

Selling expenses 44753247.18 111553952.50 -59.88%

Decrease in commissions for sales

agents and advertising expenditure

Administrative

expenses

238625143.31 204654552.64 16.60%

Increase in remunerations

intermediary agent expense and

depreciation and amortization expense

Finance costs 111263558.80 134718833.57 -17.41%

Decrease in the average interest rate of

borrowings

4. R&D Investments

□Applicable √ Not applicable

5. Cash Flows

Unit: RMB

Item 2020 2019 Change (%)

Subtotal of cash generated from

operating activities

4809961005.82 5264435040.93 -8.63%

Subtotal of cash used in operating

activities

4424463223.70 4324645474.97 2.31%

Net cash generated from/used in

operating activities

385497782.12 939789565.96 -58.98%

Subtotal of cash generated from

investing activities

136131.48 357613.40 -61.93%

Subtotal of cash used in investing

activities

48482853.70 1031698003.98 -95.30%

Net cash generated from/used in

investing activities

-48346722.22 -1031340390.58 -95.31%

Subtotal of cash generated from

financing activities

2176820000.00 2236220000.00 -2.66%

Subtotal of cash used in financing

activities

1627885573.80 2740366078.11 -40.60%

Net cash generated from/used in

financing activities

548934426.20 -504146078.11 -208.88%

Net increase in cash and cash

equivalents

882809678.36 -595682024.42 -248.20%

Explanation of why any of the data above varies significantly:

√ Applicable □ Not applicable

? Net cash generated from operating activities decreased year on year primarily driven by the payment of a large amount of taxes

and levies in the Reporting Period for which provisions were made in the prior period.② Net cash used in investing activities decreased year on year primarily driven by a decrease in payments for the acquisition of

equity investments in the Reporting Period.③ Net cash generated from financing activities increased year on year primarily driven by new bank borrowings.Reason for any big difference between the net operating cash flow and the net profit for this Reporting Period

√ Applicable □ Not applicable

For the Reporting Period net cash generated from operating activities stood at RMB385497782.12 representing a big difference

from the net profit of RMB731337869.73 primarily driven by the time difference between making tax provisions for real estate

development projects and the actual payments as well as between the receipt of property sales and the recognition of these sales.III Analysis of Non-Core Businesses

√ Applicable □ Not applicable

Unit: RMB

Amount As % of total profit Source/Reason Recurrent or not

Return on

investment

634098.07 0.06% Share of profits of joint ventures Yes

Asset

impairments

-51185.46 0.00% Changes in inventory valuation allowances Not

Non-operati

ng income

11697661.23 1.13% Compensation for demolition Not

Non-operati

ng expense

5244329.50 0.51%

Lawsuit-related compensation and

compensation for removing tenants

Not

Credit

impairments

4623356.81 0.45%

Changes in allowances for doubtful

receivables

Not

IV Analysis of Assets and Liabilities

1. Significant Changes in Asset Composition

Indicate whether the Company has adopted the new accounting standards governing revenue and leases since 2020 and restated the

beginning amounts of relevant financial statement line items in the year.

Applicable.

Unit: RMB

31 December 2020 1 January 2020 Change in

percentage

(%)

Reason for any

significant changeAmount As % of Amount As % of

total

assets

total

assets

Monetary assets 4206266629.32 34.46% 3297890935.91 30.61% 3.85%

Increase in sales

recognized and bank

borrowings

Accounts

receivable

187697631.47 1.54% 216923663.25 2.01% -0.47%

Decrease in arrears

due to greater efforts

spent by the property

management

subsidiaries on

payment collection

Inventories 5312489258.20 43.52% 4913510876.66 45.61% -2.09%

Recognition of cost

of the Golden Collar

project and increase

in capitalized

expense of the

Bangling and other

projects

Investment

property

484738506.83 3.97% 503323428.61 4.67% -0.70%

Depreciation

allowances

Long-term equity

investments

45710220.79 0.37% 45076122.72 0.42% -0.05%

Fixed assets 116233936.04 0.95% 93557782.83 0.87% 0.08%

Increase in

decoration expense

on the Company’s

own housing

properties

Long-term

borrowings

3587800000.00 29.39% 2193833000.00 20.37% 9.02%

New borrowing in

the Reporting Period

Other receivables 789050350.51 6.46% 917981165.74 8.52% -2.06%

Settlement of certain

receivables from

external parties

Deferred income

tax assets

950681245.50 7.79% 658153122.73 6.11% 1.68%

Increase in

tax-related

deductible loss

Accounts payable 468269685.65 3.84% 577689139.10 5.36% -1.52%

Decrease in accounts

payable for

engineering

Contract liabilities 666893629.72 5.46% 690543580.95 6.41% -0.95%

Recognition of

operating revenue

Other non-current

liabilities

108778327.45 0.89% 108164737.46 1.00% -0.11%

2. Assets and Liabilities at Fair Value

√ Applicable □ Not applicable

Unit: RMB

Item

Beginning

amount

Gain/loss

on

fair-value

changes in

the

Reporting

Period

Cumulative

fair-value

changes

charged to

equity

Impairme

nt

allowance

for the

Reporting

Period

Purchas

ed in the

Reportin

g Period

Sold in

the

Reportin

g Period

Other

changes

Ending

amount

Financial

assets

Investments

in other

equity

instruments

1580475.86 -494182.95 -41387.79 1044905.12

Subtotal of

financial

assets

1580475.86 -494182.95 -41387.79 1044905.12

Total of the

above

1580475.86 -494182.95 -41387.79 1044905.12

Financial

liabilities

0.00 0.00 0.00 0.00

Other changes are impacts of exchange rate fluctuations.Significant changes to the measurement attributes of the major assets in the Reporting Period:

□ Yes √ No

3. Restricted Asset Rights as at the Period-End

(1) In term of monetary assets with restricted right to use at the period-end there was limited capital of frozen account with

RMB11031.58 in the subsidiary company Shenzhen Huazhengpeng Property Management Co. Ltd.

(2) In term of monetary assets with restricted right to use at the period-end there was custody deposit account with RMB44554.35 in

the subsidiary company Catering Branch of Shandong Shenguomao Real Estate Management.

(3) In term of monetary assets with restricted right to use at the period-end there was RMB1148647.30 which is the Company as a

real estate developer and historically provided mortgage guarantees and paid loan guarantees for commercial housing purchasers in

accordance with real estate business practices.

(4) In term of monetary assets with restricted right to use at the period-end there was payment guarantee with RMB11213310.06

(principal of RMB11075002.60 and interest of RMB138307.46) in the subsidiary company Xuzhou Company which signed the No.Xingyin Xubao (2020) 25 payment guarantee with Jiangsu Hanjian Group on 1 June 2020.

(5) In term of monetary assets with restricted right to use at the period-end there was RMB25394174.20 which is the interest of

fixed deposits accrued at the end of the period.

(6) In term of monetary assets with restricted right to use at the period-end there was an guarantee letter of RMB300000.00 issued

by the subsidiary company Supervision Company for the second phase project supervision and service project of Bangling District

Guanlan Street Longhua District of Rongyao Real Estate in 2020.

(7) The Company applied for a loan from Shenzhen Branch of Bank of Communication Co. Ltd. with the land use right of Fumin

New Village Futian District as the pledge due to the needs of its daily business activities. The period of the loan is from 27

November 2020 to 27 November 2023. The interest of the loan is a floating interest rate and the first execution interest rate is

4.655%.

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

Unit: RMB

Variet

y of

securit

y

Code of

security

Name

of

securit

y

Initial

investm

ent cost

Accou

nting

measu

remen

t

metho

d

Beginni

ng

carrying

value

Gai

n/L

oss

on

fair

valu

e

cha

nge

s in

Rep

orti

ng

Peri

od

Accum

ulated

fair

value

change

s

charge

d to

equity

Purc

hase

d in

Repo

rting

Perio

d

Sold

in

Repor

ting

Perio

d

Gain/lo

ss in

Reporti

ng

Period

Ending

carrying

value

Account

ing title

Sourc

e of

invest

ment

funds

Dome

stic/Fo

reign

stock

400016、

420016

Gintia

n A

Gintia

n B

356585

6.06

Fair

value

metho

d

158047

5.86

0.00

-4941

82.95

0.00 0.00

-41387.

79

104490

5.12

Investm

ents in

other

equity

instrume

nts

Obtain

ed in

Gintia

n’s

debt

restruc

turing

Total

356585

6.06

--

158047

5.86

0.00

-4941

82.95

0.00 0.00

-41387.

79

104490

5.12

-- --

Disclosure date of

announcement on Board’s

consent for securities

investment

Disclosure date of

announcement on

shareholders’ meeting’s

consent for securities

investment (if any)

(2) Investments in Derivative Financial Instruments

□Applicable √ Not applicable

No such cases in the Reporting Period.

5. Use of Funds Raised

□Applicable √ Not applicable

No such cases in the Reporting Period.VI Sale of Major Assets and Equity Interests

1. Sale of Major Assets

□Applicable √ Not applicable

No such cases in the Reporting Period.

2. Sale of Major Equity Interests

□Applicable √ Not applicable

VII Major Subsidiaries

√ Applicable □ Not applicable

Major fully/majority-owned subsidiaries and those minority-owned subsidiaries with an over 10% effect on the Company’s net profit:

Unit: RMB

Name

Relationsh

ip with the

Company

Principal

activity

Registered

capital

Total assets Net assets

Operating

revenue

Operating

profit

Net profit

Shenzhen

Huangcheng

Real Estate

Co. Ltd.

Subsidiary

Developme

nt and sales

of real

estate

30000000 4640791319.39 1592008734.84

2842263

700.56

11114607

91.87

831385847.81

Shenzhen

Rongyao

Real Estate

Developme

nt Co. Ltd.

Subsidiary

Developme

nt and sales

of real

estate

10000000 4379435501.61 125509116.39 0.00

-2896658

46.19

-217986090.23

Subsidiaries obtained or disposed in the Reporting Period:

√ Applicable □ Not applicable

Subsidiary

How subsidiary was obtained or

disposed in the Reporting Period

Effects on overall operations and

operating performance

Shenzhen SZPRD Fuyuantai

Development Co. Ltd.

Newly established

Income was of RMB0 and the loss was

of RMB2000

VIII Structured Bodies Controlled by the Company

√ Applicable □ Not applicable

For details see IX 1. Equity interests in subsidiaries in Part XII Financial Report herein.

IX Prospects

(I) Development Environment Analysis

Refer to "(I) Review of industry development during the reporting period" in "Part IV: Operating Performance Discussion and

Analysis"

(II) The Company’s Future Development Strategy

As the traditional real estate market’s development declines on the whole various industrial resources have been continuously

occupied by the large-scale brand houses which has threatened the survival and development of medium and small-sized property

companies. “Large-scale Enterprises Taking All Advantages” has become normal in the industry and the positioning of “Houses arefor living in not for speculating on” has already been established. In this case Shenzhen Properties & Resources Development

(Group)Ltd. specialized in the traditional real estate will be confronted with the extremely severe industrial situation.In this context the Company put forward the “12345” overall development idea of “1 Vision + 2 Major Sectors + 3 Driving Factors +

4 Businesses + 5 Value-added Services”. In other words the Company will take effective measures with the focus on “spatial assetmanagement” and “data asset management” to develop four major businesses including industrial and urban space developmentindustrial ecological operation property management services and main ecological investment through expanding the main business

and making breakthroughs. Meanwhile the Company will realize rapid deployment and integration of five major value-added

services including high-end consulting services customized housekeeper services intelligent operation platform big data operation

and ecosystem integration. Base on Shenzhen with scientific and technological innovation as the primary driving force the Company

will include Guangdong Hong Kong and Macao metropolitan area and surrounding areas to maximize the leverage of capital to builda door type intelligent management and control service platform with basic functions aiming to build “the world’s leading intelligentoperator of industrial and urban space”.In accordance with three-step strategic implementation route of “strengthening bases brink breakthrough and focus on leading” the

Company will seek transformation and upgrading in the development base on the current development conditions and promote

incremental development in the transformation to build unique development advantages and create a new pattern of innovation and

development of the Company.(III) Key tasks in 2021

Standing at the new historical starting point the Company will keep the general principal of steady and progress in 2021 and focuson promoting high-quality transformation and development based on the guide line of “expansion acceleration transformationempowerment and effectiveness”.

I. Focusing on project launch. The Company will increase investment in expansion to cover the planned construction of new

integration project of production towns over 600000㎡ in the year including the promotion of launch of projects of Yangzhou

Slender West Lake Ecological Health Valley and urban renewal of Fuyuan Industrial Zone the signing of cooperation development

agreement on Tianjun Industrial Park project and completion of adjustment of the renewal direction of Guangming Tangjia project

and functional substitution of industrial land of Baolu.II. Overall control and promotion of project construction. The newly started construction area is over 620000m2 including the

construction of Phase I and II of Bengling project which shall be fully and legally started the advance booking of Phase II of

Bengling project; the completion of improvement of Block A of Jinling project to ensure sales and admission; the signing of contract

on the capping and counter-purchase of the main part of Fuchang Phase II project; and the construction of Yupinluanshan Garden to ±

0 level focusing on the completion of approval procedure of project separation and transfer and listing.

III. Consolidation of the base of four business platforms. The Company will basically form platform operation capability of space

development plate with the ability to independently execute project operation in the whole process; construct investment

management system of industrial ecological operation section to explore operation transformation and upgrading and improve asset

operation ability aiming to complete the industrial positioning report and investment operation plan of Bengling project Yangzhou

project and Fuyuan Industrial Zone; complete the construction of professional operation standard model and precise assessment

system focusing on the completion of repositioning and system process reconstruction of the headquarters of ITC Property

Management Co. Ltd.; achieve new material management area not less than 10 million ㎡ and endogenous growth not less than 1

million ㎡ by means of M&A and joint venture cooperation and try to complete the establishment and operation mechanism

construction of the industrial investment platform company of the Group establish and operate industrial funds and carry out

targeted investment.IV. Financial management enhancement for business development. The Company will enhance comprehensive budget

management to control and assess budget; improve the integration of industry and finance financial analysis and tax planning and

dynamic traction of asset liability ratio ROE and IRR on business operation; innovate financing methods broaden financing

channels reduce overall capital cost and raise funds from multiple channels according to the company’s financial standing and actual

conditions to ensure business development of the Group.V. Risk control enhancement for safety in production. The Company will keep promoting the standardization of safe production

and the construction of “dual prevention mechanism” by implementing list management on key areas and risk points of important

links and building information platform for safe production and construction for accident prevention throughout the year. The

Company will also work on request from complaint letters and visits and risk investigation and prevention and strengthen dynamic

tracking and implementation of major risks to maintain stable operation and development of the Group.VI. Talent team development for joint force of development. The Company will actively promote the construction of multi-level

incentive mechanism focusing on the tenure system and contractual management of managers by formulating and implementing

incentive schemes such as long-term incentive excess bonus project node award and incremental sharing of subordinate enterprises

on the basis of salary benchmarking market and realize full coverage of incentive principles for incremental performance determined

by incremental revenue. The Company will develop cadre teams by broadening personnel selection and employment and optimize

talent introduction reservation training and use to meet the business development needs of the Group. The Company will also

strengthen branding of the Group training center build a high-level talent training system and increase the exchange and rotation of

Group employees to fully improve the comprehensive ability and quality of employees for group business development.(IV) Risk analysis

1. Market risk

Affected by the epidemic China’s economic growth rate declined in 2020. As consumption decreased the Company faces businessdevelopment opportunities and challenges. The guidance of polices of “ensuring stability in employment financial operation foreigntrade foreign investment domestic investment and expectations” “ensuring security in job basic living needs operations of marketentities food and energy security stable industrial and supply chains and the normal functioning of primary-level government”

“three red lines” and “houses are for living in not for speculating on” which remain unchanged led to a downward track of the

demand end of real estate market and the central government is implementing strict financial supervision on the real estate market.

Due to the epidemic the construction period of some projects under construction has lagged behind. As payment rate of property

management fee is low and main income from sales and rent are under downward pressure the market environment is complex.

Facing the difficulties the Company studied the opportunities and challenges brought by macroeconomic and policy trend for

strategic breakthrough. The Company put forward the “12345” overall development idea of “1 Vision + 2 Major Sectors + 3 Driving

Factors + 4 Businesses + 5 Value-added Services” and included Guangdong Hong Kong and Macao metropolitan area and

surrounding areas in expansion target based on Shenzhen to improve sustainable development ability.

2. Land Reserve Risk

As a matter of fact the Company still lacks enough land reserves and development power at later stages. In recent years the supply

of residential land on Shenzhen Market has continuously declined. As the price of each single plot increases year after year various

large-scale real estate enterprises have enlarged their market shares and accelerated their M&A pace. While the real estate industry is

centralizing the degree of centralization of the land reserve scale has also been enhanced. As the external environment and the

industry’s trend become much more complicated and severe the increment market scale will further shrink and the market

competition will become increasingly fierce.

Facing the challenges the Company will continue to expand through market competition capital operation and urban renewal

increase land reserves and promote the launch of projects. In respect to property type residential projects will focus on

Guangdong-Hong Kong-Macao Greater Bay Area Yangtze River Delta metropolitan area and areas where existing projects locate

and gradually turn to central urban agglomeration surrounding Wuhan key cities in Chengdu- Chongqing in the West and those in

Beijing Tianjin and Hebei. Urban renewal projects will focus on Shenzhen Dongguan and Huizhou and follow-up of urban renewal

projects in Guangzhou. Comprehensive industry and urban projects will focus on Guangdong-Hong Kong-Macao Greater Bay Area

Yangtze River Delta region Wuhan region in the central part and Chengdu-Chongqing area in the West.

3. Financing Risk

As the central government tightened financial supervision over real estate and implemented the “three red lines” in the second half of

2020 financing of real estate enterprises are further restricted. In the process of actively increasing land reserves and accelerating the

business development the Company needs to invest a large amount of funds for land acquisition and project development. In

addition to its own funds the Company’s project development funds need to be externally financed through bank loans and issuing

securities.

Currently the Company has steady financial situation sufficient cash flow and good credit condition and will further strictly control

financial risks actively explore various financing channels so as to raise funds for project development in the future.The above business plan and business objectives do not represent the listed Company’s profit forecast for 2021. Whether it

can be achieved depends on various factors including changes in market conditions and the effort made by the management

team. Investors must pay special attention to that because there exists huge uncertainty.

X Communications with the Investment Community such as Researches Inquiries and

Interviews

1. During the Reporting Period

√ Applicable □ Not applicable

Date of visit

Place

of visit

Way of visit Type of visitor Visitor Contents and materials provided

2020-01-02

The

Compa

ny

Others Individual Individual

Inquired of disclosure of the Company’s

2011 annual report

2020-01-06

The

Compa

ny

Others Individual Individual

Inquired of completion of occupation of

Golden Collar’s Resort Project

2020-02-24

The

Compa

ny

Others Individual Individual

Inquired of the transfer of some shares by

SIHCAgreement

2020-03-04

The

Compa

ny

By phone Individual Individual

Inquired of the Company’s stock price

performance and result

2020-03-05

The

Compa

ny

Others Individual Individual

Inquired of the custody situation of China

Shenzhen Foreign Trade Group

2020-03-18

The

Compa

ny

By phone Individual Individual

Inquired of the construction status of the

project in the annual report

2020-03-18

The

Compa

ny

By phone Individual Individual

Inquired of the inventory and project

construction status in the annual report

2020-03-18

The

Compa

ny

By phone Individual Individual

Inquired of the income of the property

management sector and the progress of the

Bangling project in the annual report

2020-03-21

The

Compa

ny

Others Individual Individual

Inquired of the performance of Rongyao

Real Estate

2020-03-23 The By phone Individual Individual Inquired of the proportion of business

Compa

ny

sectors and project progress in the annual

report

2020-04-02

The

Compa

ny

By phone Individual Individual

Inquired of the Company's share price

performance

2020-04-02

The

Compa

ny

By phone Individual Individual

Inquired of the Company’s general meeting

of shareholders

2020-04-02

The

Compa

ny

Others Individual Individual Inquired of the Company's work resumption

2020-04-03

The

Compa

ny

Others Individual Individual

Inquired of the Company's first-quarter

report disclosure time

2020-04-07

The

Compa

ny

By phone Individual Individual

Inquired of the profitability of the

Company's 2019 property management

sector

2020-04-08

The

Compa

ny

By phone Individual Individual

Inquired of the Company's implementation

of dividends

2020-04-08

The

Compa

ny

By phone Individual Individual

Inquired of the Company’s leasing business

development

2020-04-13

The

Compa

ny

By phone Individual Individual

Inquired of the Company's 2020 sales

forecast dividends restructuring project

progress

2020-04-14

The

Compa

ny

By phone Individual Individual

Inquired of the Company’s sales and

construction of Bangling project and

Golden Collar’s Resort project

2020-04-15

The

Compa

ny

Others Individual Individual

Inquired of the Company's annual report

information disclosure

2020-04-16

The

Compa

ny

Others Individual Individual Inquiry of the date of equity registration

2020-04-18

The

Compa

ny

Others Individual Individual

Inquired of the Company's saleable real

estate projects

2020-04-23

The

Compa

By phone Individual Individual

Inquired of the Company's Golden Collar’s

Resort project sales

ny

2020-04-23

The

Compa

ny

Others Individual Individual

Inquired of the Company’s three main

businesses

2020-04-27

The

Compa

ny

By phone Individual Individual

Inquired of the Company’s general meeting

of shareholders

2020-04-27

The

Compa

ny

Others Individual Individual Inquired of stock dividends

2020-04-29

The

Compa

ny

By phone Individual Individual

Inquired of the impact of COVID-19 on the

Company's first-quarter operations

2020-04-29

The

Compa

ny

Others Individual Individual

Inquired of the Company's net profit and

dividend in the first quarter

2020-05-06

The

Compa

ny

By phone Individual Individual

Inquiry of the implementation of dividend

distribution of the Company

2020-05-11

The

Compa

ny

By phone Individual Individual Inquired of the Bangling and other projects

2020-05-12

The

Compa

ny

Others Individual Individual

Inquiry of the Company's property

management business scope

2020-05-14

The

Compa

ny

Others Individual Individual

Inquired of the demolition progress of

Bangling project

2020-05-18

The

Compa

ny

Others Individual Individual

Inquired of the Company's first-quarter

revenue and profit in the property

management sector

2020-05-20

The

Compa

ny

Others Individual Individual

Inquired of the Company's B-share stock

price

2020-05-26

The

Compa

ny

Others Individual Individual

Inquired of number of the Company’s

shareholders

2020-05-26

The

Compa

ny

By phone Individual Individual

Inquired of the Company's dividend

payment status

2020-05-27

The

Compa

ny

Others Individual Individual

Inquired of the impact of the mixed reform

of state-owned enterprises for the Company

2020-05-28

The

Compa

ny

Others Individual Individual

Inquired of the Company's stock XR

dividends

2020-05-28

The

Compa

ny

By phone Individual Individual

Inquired of the Company's property

management sector composition and project

construction progress

2020-06-01

The

Compa

ny

Others Individual Individual

Inquired of number of the Company’s

shareholders

2020-06-03

The

Compa

ny

Others Individual Individual

Inquiry of the Company's expected

performance in the first half of the year

2020-06-03

The

Compa

ny

By phone Individual Individual

Inquiry of the Company's Huiyang plot

construction progress

2020-06-04

The

Compa

ny

By phone Individual Individual

Inquiry of the Company's stock price

changes

2020-06-04

The

Compa

ny

Others Individual Individual Inquiry of the Company's market value

2020-06-05

The

Compa

ny

Others Individual Individual

Inquiry of the Company's stock price

changes

2020-06-08

The

Compa

ny

Others Individual Individual

Inquiry of if the Company has any major

investment plans in the near future

2020-06-10

The

Compa

ny

By phone Individual Individual

Inquiry of the Company's stock price

changes

2020-06-12

The

Compa

ny

Others Individual Individual Inquiry of managers of the Company

2020-06-12

The

Compa

ny

By phone Individual Individual

Inquiry of the Company's stock price

changes

2020-06-15 The Others Individual Individual Inquiry of managers of the Company

Compa

ny

2020-06-16

The

Compa

ny

Field research Institution

Researche

rs from

several

funds and

securities

companies

Inquiry of the Company's business in 2019

project construction and future business

plans

2020-06-17

The

Compa

ny

By phone Individual Individual

Inquiry of the Company's stock price

changes

2020-06-17

The

Compa

ny

By phone Individual Individual

Inquiry of the Company's B-share stock

price

2020-06-19

The

Compa

ny

By phone Individual Individual

Inquiry of the Company's stock price rise

property management model

2020-06-19

The

Compa

ny

By phone Individual Individual

Inquiry of the Company's stock price rise

and the recovery of the inquiry letter

2020-06-23

The

Compa

ny

Others Individual Individual

Inquiry of the Company's major asset

restructuring plan

2020-06-24

The

Compa

ny

Others Individual Individual

Inquiry of the Company's real estate

subsidiary

2020-06-28

The

Compa

ny

Others Individual Individual

Inquiry of the Company's progress of

Bangling project

2020-06-29

The

Compa

ny

Others Individual Individual

Inquiry of the Company's partial equity

transfer

2020-07-01

The

Compa

ny

Others Individual Individual

Inquiry of the inventory in the Company's

financial statements

2020-07-01

The

Compa

ny

Others Individual Individual

Inquiry of the Company's semi-annual

report

2020-07-02

The

Compa

Others Individual Individual

Inquiry of the Company's performance in

the first half of the year

ny

2020-07-06

The

Compa

ny

Others Individual Individual

Inquiry of if the Company has applied for a

tax-exempt business license plan

2020-07-06

The

Compa

ny

By phone Individual Individual

Inquiry of the Company's semi-annual

report

2020-07-07

The

Compa

ny

Others Individual Individual

Inquiry of the cooperation between the

Company and Shenzhen Duty Free Group

2020-07-15

The

Compa

ny

Others Individual Individual Inquiry of the Company's property rights

2020-07-20

The

Compa

ny

By phone Individual Individual

Inquiry of major shareholders' shareholding

reduction

2020-07-23

The

Compa

ny

By phone Individual Individual

Inquiry of the cooperation between the

Company and Shenzhen Duty Free Group

2020-07-24

The

Compa

ny

Others Individual Individual

Inquiry of the impact of Sino-U.S. relations

for the Company’s performance

2020-07-27

The

Compa

ny

Others Individual Individual

Inquiry of the Company's future

development plans

2020-08-10

The

Compa

ny

Others Individual Individual

Inquiry of the revitalization project of the

Renmin South Commercial District in

Luohu District is led by the Company

2020-08-17

The

Compa

ny

Others Individual Individual

Inquiry of the Company whether to

undertake the construction project of the"Shenzhen Demonstration Pilot Zone” or

provide property services for it

2020-08-25

The

Compa

ny

By phone Individual Individual

Inquiry of the reasons for the sharp drop in

the Company's share price

2020-08-28

The

Compa

ny

Others Individual Individual

Inquiry of the Company's stock price

changes

2020-08-31

The

Compa

Others Individual Individual

Inquiry of the progress of the Renmin South

Commercial District renovation plan

ny

2020-09-07

The

Compa

ny

Others Individual Individual Inquiry of the progress of Bangling project

2020-09-14

The

Compa

ny

Others Individual Individual

Inquiry of the cooperation between the

Company and Shenzhen Duty Free Group

2020-10-15

The

Compa

ny

Others Individual Individual

Inquiry of the Company's land reserves

area under construction and sales of

Golden Collar’s Resort project

2020-10-18

The

Compa

ny

Others Individual Individual

Inquiry of if the Company has plans to

invest in marine industry clusters

2020-10-20

The

Compa

ny

Others Individual Individual

Inquiry of the cash flow of the semi-annual

report

2020-10-21

The

Compa

ny

Others Individual Individual

Inquiry of the Company's future business

plans

2020-10-26

The

Compa

ny

Others Individual Individual

Inquiry of the Company's third-quarter

report revenue and cash flow

2020-10-27

The

Compa

ny

Others Individual Individual

Inquiry of number of the Company’s

shareholders

2020-10-28

The

Compa

ny

Others Individual Individual

Inquiry of the progress of the Bangling

project and Fuchang Building

2020-10-29

The

Compa

ny

Others Individual Individual Inquiry of the operation of smart park

2020-11-20

The

Compa

ny

Others Individual Individual

Inquiry of the progress of the Company's

major shareholders' shareholding reduction

2020-11-26

The

Compa

ny

By phone Individual Individual

Inquiry of the reasons for the sharp drop in

the Company's share price

2020-11-26

The

Compa

ny

Others Individual Individual

Inquiry of the reasons for the sharp drop in

the Company's share price

2020-12-08

The

Compa

ny

Others Individual Individual Inquiry of the progress of Vietnam project

2020-12-19

The

Compa

ny

Others Individual Individual

Inquiry of the Company's cash flow and tax

expenditures

Times of communications 90

Number of institutions communicated with 1

Number of individuals communicated with 89

Number of other communication parties 0

Tip-offs or leakages of substantial

supposedly-confidential information during

communications

None

Part V Significant Events

I Profit Distributions to Ordinary Shareholders (in the Form of Cash and/or Stock)

How the profit distribution policy especially the cash dividend policy for ordinary shareholders was formulated executed or revised

in the Reporting Period:

□ Applicable √ Not applicable

The profit distributions to ordinary shareholders either in the form of cash or stock in the past three years (including the Reporting

Period) are summarized as follows:

Year Profit distributions (in the form of cash or stock)

2020 A cash dividend of RMB4.10 (tax included) per 10 shares and no share capital increase from capital

reserve

2019 A cash dividend of RMB3.60 (tax included) per 10 shares and no share capital increase from capital

reserve

2018 A cash dividend of RMB3.00 (tax included) per 10 shares and no share capital increase from capital

reserve

Cash dividend for ordinary shareholders in the past three years (including the Reporting Period):

Unit: RMB

Year

Cash

dividends (tax

inclusive) (A)

Net profit

attributable to

ordinary

shareholders of

the listed

company in

consolidated

statements for

the year (B)

A as % of

B (%)

Cash

dividends

in other

forms

(such as

share

repurchase

) (C)

C as % of

B (%)

Total cash

dividends

(including those

in other forms)

(D)

D as % of

B (%)

2020 244351427.72 798572121.74 30.60% 244351427.72 30.60%

2019 214552473.12 817805780.12 26.24% 214552473.12 26.24%

2018 178793727.60 698050728.96 25.61% 178793727.60 25.61%

Indicate by tick mark whether the Company fails to put forward a cash dividend proposal for the ordinary shareholders despite the

facts that the Company has made profits in the Reporting Period and the profits of the Company as the parent distributable to the

ordinary shareholders are positive.

□ Applicable √ Not applicable

II Final Dividend Plan for the Reporting Period

√ Applicable □ Not applicable

Bonus shares for every 10 shares (share) 0

Dividend for every 10 shares (RMB) (tax inclusive) 4.1

Total shares as the basis for the profit distribution proposal

(share)

595979092

Cash dividends (RMB) (tax inclusive) 244351427.72

Cash dividends in other forms (such as share repurchase)

(RMB)

0.00

Total cash dividends (including those in other forms) (RMB) 244351427.72

Distributable profit (RMB) 1487964894.53

Total cash dividends (including those in other forms) as % of

total profit distribution

100%

Cash dividend policy

If the Company is in a mature development stage and has no plans for any significant expenditure in profit allocation the ratio of

cash dividends in the profit allocation shall be 80% or above.

Details about the proposal for profit distribution and converting capital reserve into share capital

According to the Company’s Articles of Association as well as the actual situation of its development and operation the proposal of

the Company for 2020 annual profit distribution is as follows: Based on the total 595979092 shares of the Company as at 31

December 2020 a cash dividend of RMB4.1 (tax included) will be distributed to all its shareholders for every 10 shares they hold

with the total cash dividends to be distributed amounting to RMB244351427.72. No capital reserves will be turned into share

capital for 2020.III Fulfillment of Commitments

1. Commitments of the Company’s Actual Controller Shareholders Related Parties and Acquirers as well

as the Company Itself and other Entities Fulfilled in the Reporting Period or Ongoing at the Period-end

√ Applicable □ Not applicable

Commitment Promisor

Type of

commitment

Details of commitment

Date of

commitme

nt making

Term of

commitme

nt

Fulfillment

Commitments

made in

acquisition

documents or

shareholding

alteration

documents

Shenzhen

Investment

Holdings Co.Ltd.

Commitments on

horizontal

competition

related-party

transactions and

capital occupation

Wholly-owned subsidiary Shenzhen

Expander and subsidiary holding SPG

of Shenzhen Investment Holdings

deal with real estate operation and

commercial house sales which belong

to the same industry of the Listed

Company and has horizontal

competition with the Listed Company.To avoid horizontal competition

Shenzhen Investment Holdings make

6

September

2018

Three

years

Normal

performance

the following commitments1.Shenzhen

Investment

Holdings Co.Ltd.

Commitments on

horizontal

competition

related-party

transactions and

capital occupation

To reduce and standardize related

transactions with the Listed Company

Shenzhen Investment Holdings makes

the following commitments2.

6

September

2018

Long-term

Normal

performance

Other

commitments

made to

minority

shareholders

Shenzhen

Investment

Holdings Co.Ltd.Performance

commitment and

compensation

arrangement

Shenzhen Investment Holdings sighed

equity transfer contract on 100%

equity transfer of TK Property with

the Company and the contract

stipulated relevant commitments on

performance3.

23

September

2019

Three

years

Normal

performance

Fulfilled on time Yes

Note 1:Wholly-owned subsidiary Shenzhen Expander and subsidiary holding SPG of Shenzhen Investment Holdings deal with real

estate operation and commercial house sales which belong to the same industry of the Listed Company and has horizontal

competition with the Listed Company. To avoid horizontal competition Shenzhen Investment Holdings make the following

commitments: 1. On the horizontal competition solution of Shenzhen Expander: as the holding shareholder of the Listed Company

during the listing period at Shenzhen Stock Exchange of the Listed Company as for the current business of Shenzhen Expander

which has horizontal competition with the Listed Company within the scope permitted by law and regulation within 12 months from

the equity of SZPRD being transferred to Shenzhen Investment Holdings Shenzhen Investment Holdings will start the solution with

practical operability among below horizontal competition solution timely and complete implementation of the solution within 3 years

from the date that the equity of SZPRD is transferred to Shenzhen Investment Holdings to solve current horizontal competition

problems: (1) Shenzhen Expander signs asset custody agreement with the Listed Company entrusts the assets which has direct

competition with the Listed Company to the Listed Company confirms fair custodian fee at the same time and takes effective

measures to solve horizontal competition within commitment period; (2) Inject assets with direct competition with the Listed

Company into the Listed Company; (3) Transfer assets with direct competition with the Listed Company to unrelated third party; (4)

other measures which can solve horizontal competition effectively and is favorable for protecting the interest of the Listed Company

and legal interests of other shareholders. Before solving current horizontal competition while company enterprise economic

organization (not including enterprises controlled by the Listed Company hereinafter referred to as subordinated Companies) which

the Listed Company and Shenzhen Investment Holdings hold controlling shares or controls actually have business in case the

involved dispute etc. have major influence on the business Shenzhen Investment Holdings should keep neutral as a controlling

shareholder to ensure that the Listed Company and subordinated Companies can take part in market competition on the principle of

fair competition. 2. Horizontal competition solution of SPG: From 14 September 2016 to now SPG has had stock suspension

because of major assets reconstruction. According to Review Opinions on Delaying Stock Resumption because of Major Assets

Reconstruction of SPG announced by CITIC Securities and Huatai Securities on 26 November 2016 the reconstruction solution isthat SPG plans to issue A share and / or use currency to purchase 100% equity of Evergrande Group (hereinafter referred to as “thereconstruction of SPG”). On 9 November 2020 SPG issued an announcement that the current condition to continue to promote the

major assets reconstruction was not sound yet based on the current market environment and decided to terminate this transaction to

safeguard interests of the Company and all shareholders. After the termination of this transaction Shenzhen Investment Holdings is

still the controlling shareholder of SPG. For business of SPG which has horizontal competition with the Listed Company Shenzhen

Investment Holdings within the scope permitted by law and regulation Shenzhen Investment Holdings will start a rational horizontal

competition solution according to actual situation at the time within 12 months after the termination of reconstruction of SPG and

stock resumption announcement date and fulfill announcement obligation and SPG will complete to implement the solution and

solve the horizontal competition between SZPRD and SPG within 3 years from the date SPG terminates the reconstruction and

announces stock resumption. 3. Other commitments to avoid horizontal competition: as the controlling shareholder of the Listed

Company and during the listing period of the Listed Company at Shenzhen Stock Exchange other subordinated Companies of

Shenzhen Investment Holdings will not engage in relevant business which has direct horizontal business competition with the Listed

Company in new business fields except for in the business field where it already has had horizontal competition with the Listed

Company. Shenzhen Investment Holdings promises not to seek improper benefits with the position of controlling shareholder of the

Listed Company and damage the interest of the Listed Company and its shareholders. In case of violating above commitment

Shenzhen Investment Holdings shall undertake corresponding legal liabilities including but not limited to undertaking compensation

responsibilities for all losses caused to the Listed Company.

On 17 October 2019 the Company received Correspondence on the Progress of Horizontal Competition Solving from controlling

shareholder Shenzhen Investment Holdings. During the commitment period of horizontal competition solving Shenzhen Investment

Holdings actively fulfilled its relevant commitments with the details as the following: 1. Shenzhen Investment Holdings is sorting

out the relevant assets and business of Shenzhen Expander and studying to formulate the solution of horizontal competition. Due to

the long history of Shenzhen Expander and the complicated asset state relevant solution needs to be further analyzed and

demonstrated. Shenzhen Investment Holdings will active promote relevant work strives for solve competition problem within

commitment period. 2. The reconstruction of SPG with Evergrande Group is terminated for some reason Shenzhen Investment

Holdings will start a rational horizontal competition solving solution according to ongoing situation of reconstruction and announce

timely. 3. Within the commitment period Shenzhen Investment Holdings will not engage in relevant business which has direct

horizontal business competition with SZDRP in new business fields except for in the business field where it already has had

horizontal competition with SZDRP. Shenzhen Investment Holdings does not seek improper benefits with the position of controlling

shareholder of SZPRD and damage the interest of the Listed Company and its shareholders.Note 2: To reduce and standardize related transactions with the Listed Company as controlling shareholder of the Listed company

and during the listing period of the Listed Company at Shenzhen Exchange Stock Shenzhen Investment Holdings promises: 1.Shenzhen Investment Holdings and its controlling or actually controlled companies enterprises economic organizations (not

including enterprises controlled by the Listed Company hereinafter referred to as the “subordinated companies”) will strictly

exercise the rights of shareholders according to provisions of laws regulations and other normative documents and fulfill the

obligations of shareholders and keep the independence of the Listed Company in assets finance employees business and agency

etc. 2. Shenzhen Investment Holdings promises not to use its position of controlling shareholder to promote board of shareholders or

board of directors to make resolutions which may damage the legal interest of the Listed Company or other shareholders; 3.Shenzhen Investment Holdings and its subordinated companies will try their best to avoid having related transactions with the Listed

Company. In case the transaction with the Listed Company is inevitable Shenzhen Investment Holdings and its subordinated

companies will have transaction with the Listed Company on the basis of equality and free will according to fair rational and normal

commercial transaction conditions will not require or accept conditions which is more preferential than the Listed Company gives to

the third party in any fair market transactions and strictly fulfill various related transactions with the Listed Company with good will.

4. Shenzhen Investment Holdings and its subordinated companies will strictly fulfill decision making procedures and relevant

information disclosure obligations of related transactions according to articles of association of the Listed Company and relevant

laws and regulations. 5. Shenzhen Investment Holdings and its subordinated companies will make sure that they will not seek special

interests beyond above stipulations by having related transactions with the Listed Company will not use related transactions to

illegally transfer funds and profits of the Listed Company and to maliciously damage the legal interests of the Listed Company and

its shareholders. 6. As for current related transaction with the Listed Company within the scope permitted by laws and regulations

Shenzhen Investment Holdings promises to confirm rational related transaction solution within 12 months after the Company shares

are transferred to Shenzhen Investment Holdings and complete to implement the solution within 5 years after the Company shares

are transferred to Shenzhen Investment Holdings to solve such related transactions completely. The specific forms include: (1) After

current related transaction contract expires it will not be renewed. In case contract renewal is necessary according to the operation

needs of the Listed Company it will fulfill relevant decision making procedures strictly according to procedures of related

transactions. (2) Under the precondition of possible realization terminate contract which is being fulfilled and adopt marketized and

open bid invitation etc. inquire again on service items involved in such related transactions to confirm appropriate service provider.In case related transaction is involved it should fulfill relevant decision making procedures according to related transaction

procedures. (3) In case there is possibility of price re-negotiation in the related transaction contract which is being fulfilled conduct

price negotiation again make the contract amount after re-pricing conform to market price and not higher than the amount of contract

which is being fulfilled and strictly fulfill relevant decision making procedures according to related transaction procedures.(4) Other

appropriate measures which can reduce and finally eliminate current related transaction but not necessary. 7. In case of violating

above commitments Shenzhen Investment Holdings shall undertake corresponding legal liabilities including but not limited to

undertaking compensation liability for all the losses caused to the Listed Company.Note 3: Shenzhen Investment Holdings sighed equity transfer contract on 100% equity transfer of TK Property with the Company

and the contract stipulated: 1. Shenzhen Investment Holdings promises that the cumulative net profits (net profit after deducting

extraordinary items) of TK Property from 2019 to 2021 will not be less than 18% of the equity transfer payment amount of this

transaction i.e. three-year cumulative net profits ≥ equity transfer payment * 18%. The above net profits are subject to the amount

which is confirmed by audited financial report of TK Property. 2. In case three-year cumulative profits of TK Property fails to reach

above promised amount TP Property shall compensate the insufficient part to the Company in full amount by cash. In case three-year

cumulative profits (net profit after deducting extraordinary items) of TK Property is more than the promised amount the Company

will not refund. 3. In case Shenzhen Investment Holdings needs to fulfill performance compensation obligation it shall complete the

performance compensation obligation within 30 days after receiving the compensation notice of the Company and the specific

delivery method will be agreed by both parties. In case Shenzhen Investment Holdings delays to pay the performance compensation

it shall pay liquidated damages of 3/10000 of unpaid amount for each day delay. In case of failing to pay for more than 90 days then

Company has the right to cancel the contract. On 27 November 2019 the Company completed the procedures for registration

changes in industry and commerce regarding 100% equity transfer of Shenzhen Investment Holdings. According to the Equity

Transfer Contract and the audit result on profit or loss of transitional period in the audit report the final price for this equity transfer

was determined bilaterally as RMB1027382513.56. As of 28 April 2020 the Company had paid off above accounts and the

related-party transaction was formally completed. Above commitments are under normal performance.

2. Where there had been an earnings forecast for an asset or project and the Reporting Period was still

within 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 Related

Parties 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 Independent

Directors (if any) Regarding the Independent Auditor's “Modified Opinion” on the Financial

Statements of the Reporting Period

□Applicable √ Not applicable

VI YoY Changes to Accounting Policies Estimates and Methods

√ Applicable □ Not applicable

The Company has adopted the provisions of Accounting Standard for Business Enterprises No. 14 –Revenue (CK [2017] No. 22)

since 1 January 2020. According to cumulative effects the Company adjusted retained earnings at the beginning of the year and other

relevant items in the financial statements without adjustment of any information of the comparable period. The impact of accounting

policy changes includes:

Contents of changes in accounting policies and reasons

thereof

Items and amounts of financial statements affected

Consideration paid by customers before the delivery of goods

is listed as “contract liabilities” in accordance with the newstandard for income and tax included is listed as “othercurrent liabilities”.In the consolidated balance sheet on 1 January 2020 “Advancesfrom customers” are RMB516988.76 “Contract liabilities” are

RMB690543580.95 and “Other current liabilities” are

RMB37125462.92;

In the balance sheet of the Company as the Parent on 1 January

2020 “Advances from customers” are RMB320469.53 “Contractliabilities” are RMB0.00 and “Other current liabilities” are

RMB0.00.

The right to receive consideration for goods or services that

have been transferred to customers (which depends on other

factors other than time) is listed as “contract assets” in

accordance with the new standard for income.In the consolidated balance sheet on 1 January 2020 “Contractassets” are RMB0.00;

In the balance sheet of the Company as the Parent on 1 Januray

2020 “Contract assets” are RMB0.00.

Incremental cost (such as sales commission) incurred for

contract acquisition is recognized as an asset as cost of

contract acquisition and listed as cost of contract acquisition

in “other current assets” or “other non-current assets” in

accordance with the new standard for income. However if the

amortization of asset is within one year it can be included in

the current profit and loss when it occurs.In the consolidated balance sheet on 1 January 2020 “Other currentassets” are RMB0.00 and “Other non-current assets” are RMB0.00;In the balance sheet of the Company as the Parent on 1 Januray

2020 “Other current assets” are RMB0.00 and “Other non-currentassets” are RMB0.00.The Company adopts simple treatment method to include sales commission with amortization period within one year in the current

profit and loss when it occurs. The amortization period of sales commission in 2019 is within one year.VII Retrospective Restatements due to Correction of Material Accounting Errors in the

Reporting 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

For the detailed changes to the scope of the Company’s consolidated statements of the Reporting Period see “Part XII FinancialStatements” VIII.IX Engagement and Disengagement of Independent Auditor

Current independent auditor:

Name of the domestic independent auditor Baker Tilly China Certified Public Accountants (LLP)

The Company’s payment to the domestic independent auditor

(RMB’0000)

84

How many consecutive years the domestic independent auditor

has provided audit service for the Company

One year

Names of the certified public accountants from the domestic

independent auditor writing signatures on the auditor’s report

Li Ming Chen Zihan

How many consecutive years the certified public accountants

have provided audit service for the Company

One year for Li Ming and one year for Chen Zihan

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 audit period.□ Yes √ No

Indicate by tick mark whether an approval procedure was implemented for the change of independent auditor.√ Yes □ No

Further details about the change of independent auditor:

Pan-China Certified Public Accountants (LLP) (hereinafter referred to as “Pan-China CPA”) originally hired by the Company

provided the audit service for the Company. Pan-China CPA adhered to the principle of independent audit in the course of practicing

and reflected the financial status of the Company in an objective fair and impartial way earnestly fulfilled their due responsibilities

and effectively safeguarded the legitimate rights and interests of the Company and its shareholders from a professional perspective.

Based on the demand of business development and future audit of the Company and bilateral communication and negotiation

Pan-China CPA was no longer the independent auditor of the Company. The Company held the 12th Meeting of the 9th Board of

Directors and the 2019 Annual General Meeting of Shareholders respectively on 7 April 2020 and 28 April 2020 and determined to

hire Baker Tilly China Certified Public Accountants (LLP) as the auditor for the 2020 Financial Statements and internal control of the

Company. The said proposal has been approved both on the board meeting and shareholders meeting.

Independent auditor financial advisor or sponsor engaged for the audit of internal controls:

√ Applicable □ Not applicable

In this Reporting Period the Company engaged Baker Tilly China Certified Public Accountants (LLP) for its internal control audit

and paid an internal control audit fee of RMB0.15 million to it for the period.X Possibility of Delisting after Disclosure of this Report

□Applicable √ Not applicable

XI Insolvency and Reorganization

□Applicable √ Not applicable

No such cases in the Reporting Period.XII Major Legal Matters

√ Applicable □ Not applicable

General

information

Involved

amount

(RMB’000

0)

Provision Progress

Decisions and

effects

Execution of

decisions

Disclo

sure

date

Index

to

discl

osed

infor

matio

n

Litigation matters

in disputes over

environmental

pollution liability

of CSCEC and the

Company (180

cases in total)

815.4 Not

The verdict was

reached in the

first instance

and the plaintiff

appealed

The first

instance judged

that the

Company

undertook no

compensation

liabilities.No need to

perform

Summary of other

contract disputes

840.62

See Part XII

Financial

Report-XIV-2

See Part XII

Financial

Report-XIV-2

See Part XII

Financial

Report-XIV-2

See Part XII

Financial

Report-XIV-2

XIII Punishments and Rectifications

□Applicable √ Not applicable

No such cases in the Reporting Period.XIV Credit Quality of the Company as well as Its Controlling Shareholder and Actual

Controller

□Applicable √ Not applicable

XV Equity Incentive Plans Employee Stock Ownership Plans or Other Incentive Measures

for Employees

□Applicable √ Not applicable

No such cases in the Reporting Period.XVI Major Related-Party Transactions

1. Continuing Related-Party Transactions

√ Applicable □ Not applicable

Related Relati Type Specif Pricin Trans Total As % Appro Over Metho Obtaina Disc Ind

party onshi

p with

the

Comp

any

of

transa

ction

ic

transa

ction

g

princi

ple

action

price

value

(RM

B’00

00)

of

total

value

of all

same-

type

transa

ctions

ved

transa

ction

line

(RM

B’00

00)

the

appro

ved

line or

not

d of

settle

ment

ble

market

price for

same-ty

pe

transacti

ons

losu

re

date

ex

to

dis

clo

sed

inf

or

mat

ion

Shenzh

en Bay

Technol

ogy

Develo

pment

Co.

Ltd.Wholl

y-own

ed

subsid

iary

of the

Comp

any as

the

parent

Relate

d-part

y

transa

ctions

gover

ning

sales

of

comm

odity

and

provi

ding

of

labors

Proper

ty

manag

ement

servic

es

Mark

et

princi

ple

Agree

ment

price

4787.

13

4.47

%

3792 Yes Cash 4787.13

Shenzh

en Bay

Technol

ogy

Develo

pment

Co.

Ltd.Wholl

y-own

ed

subsid

iary

of the

Comp

any as

the

parent

Relate

d-part

y

transa

ctions

gover

ning

purch

ase of

comm

odity

and

provi

ding

of

labors

Mana

gemen

t

servic

es

Mark

et

princi

ple

Agree

ment

price

6460.

99

7.08

%

6692 Not Cash 6460.99

Shenzh

en

Wholl

y-own

Lease

Entrus

ted

Mark

et

Agree

ment

4834.

13

34.79

%

6080 Not Cash 4834.13

Shento

u Real

Estate

Develo

pment

Co.Ltd.ed

subsid

iary

of the

Comp

any as

the

parent

manag

ement

servic

es of

house

s

princi

ple

price

Total -- --

1608

2.25

--

1656

4

-- -- -- -- --

Large-amount sales return in detail N/A

Give the actual situation in the

Reporting Period (if any) where an

estimate had been made for the total

value of continuing related-party

transactions by type to occur in the

Reporting Period

The total amount of daily related-party transactions of the Company in 2020 is expected

to be RMB168.87 million and actual total amount of daily related-party transactions is

RMB170.39 million. The excess amount is lower than the disclosure standard. For

details please refer to the Proposal on Daily-Related Party Transactions in 2021 disclosed

on the same day of this report.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

Indicate by tick mark whether there were any credits and liabilities with related parties for non-operating purposes.√ Yes □ No

Receivable from related parties

Related

party

Relationship

with the

Company

Reason

Capital

occupati

on for

non-ope

Beginning

balance

(RMB’00

00)

Amount

newly

added in

current

period

(RMB’0

Amount

received in

current

period

(RMB’000

0)

Intere

st rate

Current

interest

(RMB’0

000)

Ending

balance

(RMB’00

00)

rating

purpose

s

(yes/no)

000)

Shenzhen

Xinhai

Holdings

Co. Ltd.

The parent

company of

the

subsidiary

Rongyao

Real

Estate’s

minority

shareholder

Xinhai

Rongyao

Business

circulating

funds

before

acquisitio

n

No 55150 15000 40150

Shenzhen

Xinhai

Rongyao

Real

Estate

Developm

ent Co.Ltd.Minority

shareholder

of the

subsidiary

Rongyao

Real Estate

Business

circulating

funds

before

acquisitio

n

No 33047.29 33047.29

Influence on the

Company’s operating

results and financial

condition

All were within the risks control of the Company and not influenced the operating results and the

financial conditions.Liabilities payable to related parties

Related party

Relation

with the

Company

Formation

reason

Beginning

balance

(RMB’00

00)

Amount

newly added

in current

period

(RMB’0000)

Amount

returned in

current

period

(RMB’000

0)

Inter

est

rate

Current

interest

(RMB’00

00)

Ending

balance

(RMB’000

0)

Shenzhen Jifa

Warehouse Co.Ltd.Joint vent

ure

Intercours

e funds

3579.67 3579.67

Shenzhen

Tian’an

International

Building

Property

Management

Co. Ltd.

Joint vent

ure

Intercours

e funds

521.43 521.43

Influence on the Company’s

operating results and financial

condition

All were within the risks control of the Company and not influenced the operating results and

the financial conditions.

5. Other Major Related-Party Transactions

√Applicable □ Not applicable

1. On September 6 and 23 2019 the Company held the eighth meeting of the ninth session of the Board of Directors and the 2019

second extraordinary general meeting of shareholders respectively to review and pass the Proposal on Acquisition of 100% of Equity

Interests in TK Property and Related-party Transaction. The Company purchased 100% equity of TK Property held by Shenzhen

Investment Holdings Co. Ltd. the controlling shareholder of TK Property in the form of cash payment. On November 27 2019 the

Company completed the industrial and commercial registration procedures for the transfer of 100% equity interests of TK Property.

According to the agreement on Equity Interest Transfer Contract and audit report on the profit and loss of the transition period both

parties confirmed that the final price of equity interests transfer was RMB 1027382513.56. As of April 28 2020 the Company has

paid the above amount and completed the related-party transaction. For details please refer to the Announcement on Acquisition of

100% of Equity Interests in TK Property and Related-party Transaction published on www.cninfo.com.cn on April 28 2020.

2. On December 28 2020 the Company held the 21st meeting of the ninth session of Board of Directors to review and pass the

Proposal on Signing the Property Management Service Contract with An Duong Industrial Park of Haiphong Vietnam and

Related-Party Transaction. VCEP entrusted ITC Property Management to provide property management services to An Duong

Industrial Park located in Hongfeng Township An Duong Town Haiphong City Vietnam with a service area of 1.961 million square

meters of industrial park (including administrative office and dormitory buildings). VCEP a wholly-owned subsidiary of Shenzhen

Investment Holdings the controlling shareholder of the Company is a related party of the Company and this transaction constituted

a related-party transaction. For details please refer to the Announcement on Signing the Property Management Service Contract with

An Duong Industrial Park of Haiphong Vietnam and Related-Party Transaction published on www.cninfo.com on December 28

2020.

XVII Major Contracts and Execution thereof

1. Entrustment Contracting and Leases

(1) Entrustment

√Applicable □ Not applicable

Description of trusteeship situation:

The Company signed the Agreement for Engagement in Assisted Management with its controlling shareholder Shenzhen Investment

Holdings Co. Ltd. (SIHC) on 1 March 2020. According to the Agreement the Company was appointed to exercise assisted

management over China Shenzhen Foreign Trade (Group) Co. Ltd. a wholly-owned subsidiary of SIHC. The assisted management

period would be six months from 1 March 2020 to 31 August 2020. For the specific content please refer to the Company’s Voluntary

Information Disclosure Announcement on the Agreement for Engagement in Assisted Management Signed with the Controlling

Shareholder No. 2020-5 disclosed on http://www.cninfo.com.cn on 3 March 2020.Projects whose profits and losses for the Company reached more than 10% of the total profits during the Reporting Period:

□ 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

(1) Guarantees

Unit: RMB'0000

Guarantees provided by the Company as the parent and its subsidiaries for external parties (exclusive of those for subsidiaries)

Obligor

Disclosure

date of the

guarantee

line

announcem

ent

Line of

guarantee

Actual

occurrence

date

Actual

guarantee

amount

Type of

guarante

e

Term of

guarantee

Having

expired

or not

Guaran

tee for

a

related

party

or not

Guarantees provided by the Company for its subsidiaries

Obligor

Disclosure

date of the

guarantee

line

announcem

ent

Line of

guarantee

Actual

occurrence

date

Actual

guarantee

amount

Type of

guarante

e

Term of

guarantee

Having

expired

or not

Guaran

tee for

a

related

party

or not

Shenzhen

Rongyao Real

Estate

Development Co.

Ltd.

18 October

2019

500000

27 November

2019

299980

Joint-lia

bility

27

November

2019 to 20

November

2024

No Yes

Total approved line for such

guarantees in the Reporting

Period (B1)

0

Total actual amount of

such guarantees in the

Reporting Period (B2)

80700

Total approved line for such

guarantees at the end of the

Reporting Period (B3)

500000

Total actual balance of

such guarantees at the

end of the Reporting

299980

Period (B4)

Guarantees provided between subsidiaries

Obligor

Disclosure

date of the

guarantee

line

announcem

ent

Line of

guarantee

Actual

occurrence

date

Actual

guarantee

amount

Type of

guarante

e

Term of

guarantee

Having

expired

or not

Guaran

tee for

a

related

party or

not

Total guarantee amount (total of the three kinds of guarantees above)

Total guarantee line approved in

the Reporting Period

(A1+B1+C1)

Total actual guarantee

amount in the

Reporting Period

(A2+B2+C2)

80700

Total approved guarantee line at

the end of the Reporting Period

(A3+B3+C3)

500000

Total actual guarantee

balance at the end of

the Reporting Period

(A4+B4+C4)

299980

Total actual guarantee amount (A4+B4+C4) as % of the

Company’s net assets

80.47%

Of which:

Balance of guarantees provided for shareholders actual

controller and their related parties (D)

0

Balance of debt guarantees provided directly or indirectly for

obligors with an over 70% debt/asset ratio (E)

299980

Amount by which the total guarantee amount exceeds 50% of

the Company’s net assets (F)

113584

Total of the three amounts above (D+E+F) 299980

Compound guarantees:

Naught

(2) Irregularities in Provision of 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

No such cases in the Reporting Period.(2) Entrusted Loans

□Applicable √ Not applicable

No such cases in the Reporting Period.

4. Continuing Major Contracts

□Applicable √ Not applicable

5. Other Major Contracts

□Applicable √ Not applicable

No such cases in the Reporting Period.XVIII Corporate Social Responsibility (CSR)

1. Measures Taken to Fulfill CSR Commitment

Since its inception SZPRD has been adhering to the concept of honesty responsibility and win-win cooperation for the benefit of

society. The Company actively fulfills its social responsibilities and always takes repaying the society as an important development

concept. It actively fulfills its statutory social responsibilities and ethical social obligations and unifies the realization of economic

and social benefits to create an excellent corporate image. The Company carried out the following activities to perform its social

responsibility in 2020:

(1) Carry forward the spirit of reform and opening-up create a building brand with CCP characteristics

To maximize the historical value of International Trade Center Building and inherit and carry forward the spirit of reform and

opening-up SZPRD started the preparation of history exhibition in Shenzhen International Trade Center in early 2019 to create a red

tour route on the basis of functioning as on-site teaching center of Shenzhen Party School on reform and opening up. The exhibition

was completed at the end of August 2020 and launched on September 1.The exhibition in Shenzhen International Trade Center truly presented the building in the 1980s which was famous for the

“Shenzhen Speed” that “one floor was completed in three days” and reproduced the important historical scene of Deng Xiaoping's

Talks in the South. The exhibition consists of six parts to show the scenes of Deng Xiaoping Jiang Zemin Hu Jintao and other

leader’s visit to Shenzhen International Trade Center and reform and opening up of Shenzhen Special Economic Zone including the

Preface Hall (Leaders’ care) Shenzhen Speed Talks in the South Historical Moment Video stories and Enterprise Development

which display precious historical materials to show “Shenzhen story” and the spirit of “venture courage and work hard” of Shenzhen

Special Zone.SZPRD created a red education route in International Trade Center to innovate and promote the building work with CCP

characteristics and strengthen the construction of Party Member Service Center to share with government departments streets and

communities and provide a learning platform and rich teaching materials to SZPRD internal staff Party members and the public.Since its opening the exhibition hall has received 147 interviews of People.cn Xuexi.cn and other media who made 114 reports and

visits of 2755 person-time including important receptions of leaders of the Organization Department of the CPC Central Committee

Guangdong Provincial Government and Shenzhen Municipal Government. The building with CCP characteristics built by SZPRD is

recognized by Shenzhen municipal and Luohu district departments. It has become an important part of red education resources in

Shenzhen being listed as a red route visiting spot by the Organization Department of the Municipal Party Committee and education

site on reform and opening up of the Party School.SZPRD held the exhibition on reform and opening up to revitalize and reshape the cultural image and business atmosphere of

International Trade Center for the landing of duty-free town in Guangdong-Hong Kong-Macao Greater Bay Area to promote the

revitalization of Renmin South Business District of Luohu.

(2) Carry out blood donation create projects with CCP characteristics on the principals of “projects led by the Secretarybrands created by branches achievements made by Party members”To celebrate the 99th anniversary of the founding of CCP consolidate the educational achievements of the theme of “remain true toour original aspiration and keep our mission firmly in mind” on 1 July the party committee of Shenzhen International Trade Center

Property Management Co. Ltd. subordinated to SZPRD together with the Jiabei Community Station of Nanhu Sub-district in Luohu

District and International Trade Center Sub-branch of Shenzhen Branch of Bank of China held the activity of “Red Banner & Red

Action” Voluntary Blood Donation attracting a total of 115 people to voluntarily donate their blood on the day with the total amount

of blood donation 41950 ml.Since 2011 the party committee of Shenzhen International Trade Center Property Management Co. Ltd. has insisted on carrying out

the theme activity for public benefits of “Red Banner & Red Action” to commemorate the party’s birthday every year allowing party

member volunteers to play an exemplary role. Fortunately the activity has attracted the active response from the owners and tenants

of ITC Building various party organizations in the southern business district and Jiabei Community station and people from all walksof life and become a unique party building activity featuring “the secretary controls the activity the party branch creates the brandand the party members strive for becoming the vanguard”. This activity has been held for consecutive nine years. In terms of this

activity more than 700 people have donated their blood voluntarily with the total unpaid blood donation volume nearly 270000 ml.In addition to support Shenzhen blood bank to meet the urgent demand after the outbreak of the epidemic this year and carry forward

the voluntary service spirit of “dedication fraternal love mutual aid and progress” the Youth League Committee of SZPRD

organized and carried out the public welfare activity of “Fraternal Love TK’s Support in People’s Livelihood” for blood donation

from March 24 to 25. About 110 Youth League members from Youth League Committees of TK Property and Youth League

branches of Huangcheng Real Estate and Huangcheng Property Management which are affiliated to the Youth League Committee of

the Group participated in blood donation and donated 43400ml blood in total. Grass-roots Youth League members supported theepidemic prevention and control voluntarily to respond to the activity of “show your party member identities in epidemic preventionand build brands with love” held by the Group fully demonstrating the actions of the new era youth fresh troops and commandos of

Shenzhen property group and make great contributions to the promotion of urban civilization in Shenzhen and epidemic prevention

and control.

(3) Donate RMB2 Million to support epidemic prevention and control exempt small and medium-sized enterprises from

payment of rent approximating RMB38 Million

After the outbreak of COVID-19 epidemic in 2020 residential quarters office buildings and industrial parks managed by property

management enterprises of the Group worked hard on epidemic prevention and control and work resumption. Leaders and staff of

property management enterprises made great contributions to epidemic prevention and control and recognized by the society and

property owners. In March 2020 the Group donated RMB2 million to support Hubei and Wuhan to tackle the epidemic including

RMB50 thousand donated by Party members.

To implement the policies and requirements of the Municipal Party Committee Municipal Government and Municipal State-owned

Assets Supervision and Administration Commission (SASAC) on tackling the epidemic and supporting enterprises to tide over the

difficulties SZPRD acted quickly to implement property rent reduction policy to support private enterprises to relieve operation

difficulties.In March 2020 SZPRD exempted non-state-owned enterprises scientific research institutions medical institutions and individual

businesses from payment of two months’ rent in three stages. Based on the policy of moderate leniency the Group also included

natural persons who rent properties for production and operation in the scope of two months’ rent exemption covering office

buildings shops factories supporting service facilities and other properties with an area of about 310000m2 which accounted for

about 83% of the Company’s total areas for lease benefiting 447 leasees and 700 companies by rent reduction of RMB24.88 million

in total.

In August 2020 to respond to the requirements of the Municipal Government and SASAC on alleviation rent pressure of small and

micro enterprises in the service industry and individual business SZPRD extended the rent exemption period of state-owned property

for one month which involved a property area of about 270000m2 benefiting 584 leasees by rent reduction of approximating

RMB13 million. So far SZPRD exempted rent payment approximating RMB38 million in total.

(4) Carry out poverty alleviation work

The Group carried out pro-consumption activities to aid poverty alleviation and purchased agricultural and side-line products

totalled RMB865432 from poor areas online.Meanwhile Huangcheng Real Estate Co. Ltd. of the Group supported targeted poverty alleviation and elimination and made a

targeted donation of RMB10000 to Mulam Nationality in Luocheng.

(5) Care for employees take on social responsibility

To implement the Group’s assistance mechanism SZPRD Party Committee carried out activities before the Spring Festival to express

care for employees with difficulties on January 17. Liu Shengxiang Secretary of the Party Committee and Chairman of the Group

Wang Hangjun Deputy Secretary of the Party committee and General Manager of the Group Wei Xiaodong Deputy secretary of the

Party Committee and Secretary of the Discipline Inspection Commission visited employee families in difficulties and sent gifts and

consolation money to express care and greetings on behalf of the Group.To celebrate the 99th anniversary of the founding of the CCP and implement the inner-party incentive care and assistance

mechanism SZPRD Party Committee carried out “July 1st conversations” to express care to Party members in difficulties in the

morning of August 3. To help party members in need in an effective way the Party Committee and Party branches of the Group

conducted an in-depth investigation on family life of party members and determined member families to visit.

(6) Social honors

In 2020 Housing and Urban-Rural Development of Shandong Province announced the list of outstanding enterprises in the property

service industry in Shandong Province. Shandong Shenguomao Real Estate Management of SZPRD was awarded the title of

“Provincial Model Enterprise for Civilization of the Property Management Service Industry” and Zhang Ning employee of the

Company was awarded the title of “Provincial Service Star for Civilization of the Property Management Service Industry”.

On May 13 China Index Academy released the list of China’s Top 100 Property Management Service Enterprises 2020. ITC

Property Management of SZPRD was awarded the title of “China’s Top 100 Property Management Service Enterprises 2020” and

“China’s Excellent Enterprises in Industrial Park Service 2020” by virtue of continuous improvement of internal control property

management quality and service products meeting customers’ needs. ITC Property Management ranked 27th in the top 100 property

management service companies. It is the fifth consecutive year that ITC Property Management won this honor.

At the 10th Grand Ceremony hosted by Shenzhen Real Estate Association on August 28 SZPRD was awarded the title of “enterprisewith brand value” in Shenzhen real estate development industry. Wang Hangjun General Manager of the Group was awarded the

title of “40 Outstanding Persons of Real Estate Industry in Shenzhen Special Economic Zone”.

2. Measures Taken for Targeted Poverty Alleviation

The Company didn’t take any targeted measures to help people lift themselves out of poverty during the Reporting Period no

targeted poverty alleviation plan temporarily too.

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 protection

authorities.□ Yes √ No

XIX Other Significant Events

□Applicable √ Not applicable

No such cases in the Reporting Period.XX Significant Events of Subsidiaries

□Applicable √ Not applicable

Part VI Share Changes and Shareholder Information

I. Share Changes

1. Share Changes

Unit: share

Before Increase/decrease in the Reporting Period (+/-) After

Shares

Percenta

ge (%)

New

issues

Shares

as

dividen

d

convert

ed from

profit

Shares

as

dividend

converte

d from

capital

reserves

Other Subtotal Shares

Percentag

e (%)

I. Restricted shares 1931280 0.33% 0 0 0 -32974 -32974 1898306 0.32%

1. Shares held by State 0 0.00% 0 0 0 0 0 0 0.00%

2. Shares held by

state-owned legal person

0 0.00% 0 0 0 3326 3326 3326 0.00%

3. Shares held by other

domestic investors

1931280 0.33% 0 0 0 -36300 -36300 1894980 0.32%

Among which: Shares

held by domestic legal

person

1894980 0.32% 0 0 0 0 0 1894980 0.32%

Shares held by domestic

natural person

36300 0.01% 0 0 0 -36300 -36300 0 0.00%

4. Shares held by other

foreign investors

0 0.00% 0 0 0 0 0 0 0.00%

II. Unrestricted shares 594047812 99.67% 0 0 0 32974 32974 594080786 99.68%

1. RMB common shares 526442569 88.33% 0 0 0 32974 32974 526475543 88.34%

2. Domestically listed

foreign shares

67605243 11.34% 0 0 0 0 0 67605243 11.34%

3. Overseas listed foreign

shares

0 0.00% 0 0 0 0 0 0 0.00%

4. Others 0 0.00% 0 0 0 0 0 0 0.00%

III. Total shares 595979092 100.00% 0 0 0 0 0 595979092 100.00%

Reasons for share changes:

√ Applicable □ Not applicable

On 16 January 2020 the shareholder with restricted public shares of the Company Han Yihua repaid the advanced shares for share

reform of 3326 to the Company’s controlling shareholder Shenzhen Investment Holdings and transferred the share ownership to the

latter. On 30 April 2020 all 32974 restricted shares held by Han Yihua were desterilized and officially circulated in the market.

Approval of share changes:

√ Applicable □ Not applicable

Above-mentioned desterilization of non-tradable shares has been approved by Shenzhen Stock Exchange and completed the change

registration in Shenzhen Branch of China Securities Depository and Clearing Corporation Limited.Transfer of share ownership:

□ Applicable √ Not applicable

Progress on any share repurchases:

□ 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 ordinary

shareholders and other financial indicators of the prior year and the prior accounting period respectively:

□ Applicable √ Not applicable

Other information that the Company considers necessary or is required by the securities regulator to be disclosed:

√ Applicable □ Not applicable

On January 29 2021 the Company disclosed the Announcement of Shenzhen Properties & Resources Development (Group) Ltd. on

the Transfer of Some State-owned Shares Held by Controlling Shareholders to Social Security Fund without Compensation. The

controlling shareholders of the Company decided to transfer 38037 890 unrestricted common A shares of the Company to Shenzhen

State-owned Equity Management Co. Ltd. for the purpose of replenishing social security fund. On March 15 the transfer procedures

of state-owned shares without Compensation were completed by China Securities Depository and Clearing Corporation Limited.

After the transfer Shenzhen Investment Holdings holds 301414637 shares of the Company accounting for 50.575% of the total

share capital and Shenzhen State-owned Equity Management Co. Ltd. holds 38037890 shares of the Company accounting for

6.382% of the total share capital. Shenzhen State-owned Equity Management became the second largest shareholder of the Company.

2. Changes in Restricted Shares

√ Applicable □ Not applicable

Unit: share

Name of

shareholders

Number of

restricted

shares at the

period-begin

Number of

increased

restricted

shares

Number of

released

restricted

shares

Number of

restricted

shares at the

period-end

Reason for

restriction

Date of

restriction

release

Han Yihua 36300 0 32974 0

Share reform

commitments

30 April 2020

Shenzhen

Investment

Holdings Co.

0 3326 0 3326

Repayment

of advance

shares for

-

Ltd. stock reform

Total 36300 3326 32974 3326 -- --

II. Issuance and Listing of Securities

1. Securities (Exclusive of Preferred Shares) Issued in the Reporting Period

□Applicable √ Not applicable

2. Changes to Total Shares Shareholder Structure and Asset and Liability Structures

□Applicable √ Not applicable

3. Existing Staff-Held Shares

□Applicable √ Not applicable

III Shareholders and Actual Controller

1. Shareholders and Their Shareholdings at the Period-End

Unit: share

Number of

ordinary

shareholders

52587

Number of

ordinary

shareholders at

the month-end

prior to the

disclosure of this

Report

54313

Number of

preferred

shareholders with

resumed voting

rights (if any)

0

Number of

preferred

shareholders

with resumed

voting rights at

the month-end

prior to the

disclosure of this

Report (if any)

0

5% or greater shareholders or top 10 shareholders

Name of

shareholder

Nature of

shareholder

Sharehol

ding

percenta

ge

Total shares

held at the

period-end

Increase/dec

rease in the

Reporting

Period

Restricted

shares

held

Unrestricted

shares held

Shares in pledge or frozen

Status Shares

Shenzhen

Investment

Holdings Co. Ltd.State-owned

legal person

56.96% 339452527 -40926370 3326 339449201

China Orient Asset

Management Co.Ltd.State-owned

legal person

4.99% 29798300 29798300 0 29798300

Hong Kong

Securities Clearing

Company Ltd.

Foreign legal

person

0.31% 1874823 1874823 0 1874823

Shenzhen

Duty-Free

Commodity

Enterprises Co.

Ltd.

Domestic

non-state-own

ed legal

person

0.29% 1730300 0 1730300 0

Duan Shaoteng

Domestic

natural person

0.27% 1618565 550865 0 1618565

Yang Yaochu

Domestic

natural person

0.25% 1500384 75364 0 1500384

Mai Furong

Domestic

natural person

0.18% 1049200 -132300 0 1049200

UBS AG

Foreign legal

person

0.17% 1036938 1036938 0 1036938

He Simo

Domestic

natural person

0.17% 1011750 249100 0 1011750

China Construction

Bank-Wanjia

Selected Mixed

Type Securities

Investment Fund

Other 0.16% 982300 982300 0 982300

Strategic investor or general legal

person becoming a top-10 ordinary

shareholder due to rights issue (if

any)

N/A

Related or acting-in-concert parties

among the shareholders above

The first largest shareholder Shenzhen Investment Holdings Co. Ltd. is the actual controlling

shareholder of the Company. And the Company does not know whether there are related parties

or acting-in-concert parties among the other 9 shareholders.Top 10 unrestricted shareholders

Name of shareholder Unrestricted shares held at the period-end

Shares by type

Type Shares

Shenzhen Investment Holdings

Co. Ltd.

339449201 RMB common share 339449201

China Orient Asset Management

Co. Ltd.

29798300 RMB common share 29798300

Hong Kong Securities Clearing

Company Ltd.

1874823 RMB common share 1874823

Duan Shaoteng 1618565 RMB common share 1618565

Yang Yaochu 1500384 Domestically listed 1500384

foreign share

Mai Furong 1049200

Domestically listed

foreign share

1049200

UBS AG 1036938 RMB common share 1036938

He Simo 1011750

Domestically listed

foreign share

1011750

China Construction Bank-Wanjia

Selected Mixed Type Securities

Investment Fund

982300 RMB common share 982300

Shenzhen Junhao Trading Co. Ltd. 831200 RMB common share 831200

Related or acting-in-concert parties among top 10

unrestricted public shareholders as well as between top

10 unrestricted public shareholders and top 10

shareholders

The first largest shareholder Shenzhen Investment Holding Corporation

is the actual controlling shareholder of the Company. And the Company

does not know whether there are related parties or acting-in-concert

parties among the other 9 shareholders.Top 10 ordinary shareholders involved in securities

margin trading (if any)

N/A

Indicate by tick mark whether any of the top 10 ordinary shareholders or the top 10 unrestricted ordinary shareholders of the

Company conducted any promissory repo during the Reporting Period.

□ Yes √ No

No such cases in the Reporting Period.

2. Controlling Shareholder

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

Type of the controlling shareholder: legal person

Name of controlling

shareholder

Legal

representative/pers

on in charge

Date of

establishment

Unified social credit

code

Principal activity

Shenzhen Investment

Holdings Co. Ltd.Wang Yongjian 13 October 2004 914403007675664218

To execute investments

and M&A on financial

equity such as banks

securities insurance

funds and guarantees and

pseudo-banking equity;

to engage in the property

development and

operation business within

the scale of legally

acquire the land use right;

to execute investments

and services in strategic

emerging industry; to

execute the investment

operating and

management of the

state-owned equities of

the wholly-owned

controlling and

stock-participating

enterprises through the

methods such as the

restructuring integration

capital operation and

assets disposal; other

business developed with

the authority from the

Municipal State-owned

Assets Supervision and

Administration

Commission (if the

activity needs approval as

required by state

regulations it shall not be

operated until it is

approved).Shareholdings of the

controlling shareholder in

other listed companies at

home or abroad in this

Reporting Period

Shenzhen Textile A (000045) holds 234.07 million shares accounting for 46.10%; SPG A

(000029) holds 642.88 million shares accounting for 63.55%; Shenzhen Universe A (000023)

holds 9.59 million shares accounting for 6.91%; Ping’an (601318) holds 962.72 million shares

accounting for 5.27%; Guosen Securities (002736) holds 3223.11 million shares accounting for

33.53%; Guotai Jun’an (601211) holds 609.43 million A-shares and 103.37 million H-shares

totally accounting for 8.00%; Telling Telecommunication (000829) holds 195.03 million shares

accounting for 18.89%; Shenzhen International (00152) holds 952.01 million shares accounting

for 43.39%; Beauty Star (002243) holds 604.82 million shares accounting for 49.96%; Bay Area

Development (00737) holds 2213.45 million shares accounting for 71.83%; Infinova (002528)

holds 315.83 million shares accounting for 26.35%; Eternal Asia (002183) holds 388.45 million

shares accounting for 18.30%; Shenzhen Energy (000027) holds 6.77 million shares accounting

for 0.14%; Bank of Communications (601328) holds 9.52 million shares accounting for 0.01%;

Techand (300197) holds 113.98 million shares accounting for 4.84%; Vanke (02202) holds 77.27

million shares accounting for 0.67%.

Change of the controlling shareholder in the Reporting Period:

□ Applicable √ Not applicable

No such cases in the Reporting Period.3. Actual Controller and Its Acting-in-Concert Parties

Nature of the actual controller: local institution for state-owned assets management

Type of the actual controller: legal person

Name of actual

controller

Legal

representative/

person in

charge

Date of

establishme

nt

Unified social credit

code

Principal activity

Shenzhen Municipal

State-owned Assets

Supervision and

Administration

Commission

Yu Gang 1 July 2004 K31728067

(I) Implementing and practicing state

provincial and municipal laws and regulations

related to management on state-owned assets

drafting local laws regulations and policies

about management on state-owned assets and

organizing implementation activities upon

approvals. Intending to draft supervision

systems and methods about operational

state-owned assets and organizing

implementation activities.(II) On the basis of authorization from

municipal government fulfilling duties of

investors according to laws and regulations

and protecting the rights and interests of

investors for state-owned assets according to

laws

(III) Taking charge of Party-building work for

enterprises in its supervision and organs

entrusted

(IV) Undertaking the supervision over

state-owned assets of municipal enterprises

strengthening management on state-owned

assets further perfecting the management

mechanism for state-owned assets with the

unification of power obligation and duties as

well as the combination of managing assets

people and affairs

(V) Being responsible for hedging and

appreciation of the value of state-owned assets

of enterprises in its supervision establishing

and perfecting the index system for hedging

and appreciation of the value of state-owned

assets setting out assessment standards

supervising on hedging and appreciation of the

value of state-owned assets of enterprises in its

supervision by statistics audit and check and

urging enterprises in its supervision to fulfill

social duties

(VI) In charge of researching and preparing

the general planning for transformation and

development of state-owned enterprise in its

supervision guiding and boosting

transformation and re-organization of

state-owned enterprises prompting the

construction of modern enterprise system

carrying forward operation of state-owned

capital pushing the strategic adjustment on

state-owned economy layout and structure

and making state-owned capital play the role

in significant industries and key fields

including national security national economy

lifeline etc.(VII) Directing and propelling enterprises in

its supervision to perfect company governance

structure intensifying construction of Board

and Supervision Committees of enterprises in

its supervision and forming the governance

mechanism with specific duties coordinating

operation and effective counterbalance

(VIII) Assuming the management work of

income distribution for enterprises in its

supervision and standardizing the income

distribution and position-related consumption

over people in charge of enterprises in its

supervision

(IX) In line with rules of municipal Party

committee appointing and dismissing

appraising as well as in accordance with

business performance rewarding and

punishing people in charge of enterprises in its

supervision by applying legal procedures

establishing the mechanism of selecting and

choosing candidates meeting the requirements

of socialist market economy system and

modern enterprise system and perfecting the

incentive and control system for operators

(X) Being responsible for appointing or

recommending board directors supervisors

CFOs to enterprises in its supervision and

auditing on economic duties of people in

charge of enterprises in its supervision

according to rules about management

authorization to people in charge of enterprises

(XI) In charge of preparing the draft of

budgets and final accounts of annual

state-owned capital of enterprises in its

supervision including it to the government

budget system organizing the execution upon

approvals and collecting earnings of

state-owned capital handed in by enterprises in

its supervision

(XII) In charge of strategy research policy

formulation and guidance for transformation

development and asset management related to

collectively-owned enterprises

(XIII) Assuming other assignments assigned

by municipal government and superior

departments

Shareholdings of the actual controller in

other listed companies at home or

abroad in this Reporting Period

Listed companies such as the Shenzhen Airport YTP Shenzhen Energy Shenzhen

Zhenye Shenzhen Tagen and SDGI.

Change of the actual controller during the Reporting Period:

□ Applicable √ Not applicable

No such cases in the Reporting Period.Ownership and control relations between the actual controller and the Company:

Indicate by tick mark whether the actual controller controls the Company via trust or other ways of asset management.□ Applicable √ Not applicable

4. Other 10% or Greater Corporate Shareholders

□Applicable √ Not applicable

5. Limitations on Shareholding Decrease by the Company’s Controlling Shareholder Actual Controller

Reorganizer and Other Commitment Makers

□Applicable √ Not applicable

Part VII Preference Shares

□Applicable √ Not applicable

No preference shares in the Reporting Period.Part VIII Convertible Corporate Bonds

□Applicable √ Not applicable

No convertible corporate bonds in the Reporting Period.Part IX Directors Supervisors Senior Management and Staff

I Change in Shareholdings of Directors Supervisors and Senior Management

Name Office title

Incum

bent/

Form

er

Ge

nde

r

Ag

e

Start of tenure End of tenure

Beginn

ing

shareh

olding

(share)

Increas

e in the

Reporti

ng

Period

(share)

Decreas

e in the

Reporti

ng

Period

(share)

Other

increas

e/decre

ase

(share)

Ending

shareho

lding

(share)

Liu

Shengxi

ang

Party Secretary and

Chairman of the

Board

Incum

bent

Ma

le

50 15 June 2018 14 June 2021 0 0 0 0 0

Wang

Hangjun

Director Deputy

Party Secretary

GM

Incum

bent

Ma

le

55 15 June 2018 14 June 2021 0 0 0 0 0

Wei

Xiaodon

g

Director Deputy

Party Secretary

Incum

bent

Ma

le

51 15 June 2018 14 June 2021 0 0 0 0 0

Shen

Xueying

Director and CFO

Incum

bent

Fe

mal

e

52 15 June 2018 14 June 2021 0 0 0 0 0

Wang

Ge

Director

Incum

bent

Ma

le

50 15 June 2018 14 June 2021 0 0 0 0 0

Xie

Chang

Director

Incum

bent

Ma

le

49 7 April 2020 14 June 2021 0 0 0 0 0

Zhang

Shilei

Director

Form

er

Ma

le

43 15 June 2018 6 April 2020 0 0 0 0 0

Yuan

Hongcha

ng

Independent

Director

Incum

bent

Ma

le

50 14 April 2017 14 June 2021 0 0 0 0 0

Mei

Yonghon

g

Independent

Director

Incum

bent

Ma

le

57 15 June 2018 14 June 2021 0 0 0 0 0

Li

Qingyua

n

Independent

Director

Incum

bent

Ma

le

44 15 June 2018 14 June 2021 0 0 0 0 0

Dai Chairman of the Incum Ma 59 15 June 2018 14 June 2021 0 0 0 0 0

Xianhua Supervisory

Committee

Secretary of

Committee for

Discipline

Inspection

bent le

Zhang

Manhua

Supervisor

Incum

bent

Ma

le

46 15 June 2018 14 June 2021 0 0 0 0 0

Li

Qinghua

Supervisor

Incum

bent

Ma

le

39 15 June 2018 14 June 2021 0 0 0 0 0

Wang

Qiuping

Employee

supervisor

executive director

of ITC Technology

Park Party

Secretary GM

Incum

bent

Fe

mal

e

51 15 June 2018 14 June 2021 0 0 0 0 0

Gu

Weimin

Employee

supervisor

Director of

Discipline

Inspection Office

Incum

bent

Fe

mal

e

40 15 June 2018 14 June 2021 0 0 0 0 0

Fan

Weiping

Member of the

Party Committee

Vice GM General

Counsel Board

Secretary

Form

er

Ma

le

56 15 June 2018 28 December 2020 0 0 0 0 0

Chen

Hongji

Member of the

Party Committee

Vice GM

Incum

bent

Ma

le

52 28 December 2020 14 June 2021 0 0 0 0 0

Cai Lili

Member of the

Party Committee

Vice GM

Incum

bent

Fe

mal

e

49 15 June 2018 14 June 2021 0 0 0 0 0

Li Peng

Member of the

Party Committee

Vice GM

Incum

bent

Ma

le

45 15 June 2018 14 June 2021 0 0 0 0 0

Zhang

Gejian

Member of the

Party Committee

Vice GM Board

Secretary (Acting)

Incum

bent

Ma

le

46 15 June 2018 14 June 2021 0 0 0 0 0

Total -- -- -- -- -- -- 0 0 0 0 0

II Change of Directors Supervisors and Senior Management

√ Applicable □ Not applicable

Name Office title Type of change Date of change

Reason for

change

Zhang Shilei Director Leaving 7 April 2020

Leaving for job

turnover

Fan Weiping Vice GM Board Secretary Leaving 28 December 2020

Leaving for job

turnover

III Biographical Information

Professional backgrounds major work experience and current duties in the Company of the incumbent directors supervisors and

senior management:

Members of the Board of Directors:

Mr. Liu Shengxiang born in August 1971 is a now member of the Communist Party of China professor-level senior engineer

National Certified Architect (Level 1) and has obtained his Bachelor Degree Master of Engineering and MBA. In June 1994 he

joined Shenzhen Tagen Group Co. Ltd. and successively served as the deputy general manager general manager and general Party

branch secretary of Shenzhen Municipal Engineering Corp. and the deputy general manager of Shenzhen Tagen Group Co. Ltd. In

June 2013 he joined Shenzhen Road & Bridge Group as the executive director Secretary of the Party Committee and general

manager. He starts to serve as the Secretary of the Party Committee and the Chairman (June 2018) of the Company & the Secretary

of the Party Committee Executive director and GM (from August 2018 to May 2020) in Shenzhen Toukong Property Management

Co. Ltd. & the Secretary of the Party Committee and the Chairman of the Board (from March 2020 to now) in China Shenzhen

Foreign Trade (Group) Corp. Ltd. since September 2017. Mr. Liu Shengxiang was awarded the title of Outstanding Communist Party

Member of Shenzhen in 2001 and obtained Tien-yow Jeme Civil Engineering Prize in 2013 and May 1st Labor Medal of Shenzhen

in 2015 the Party representative of the 6th Party Congress in Shenzhen.

Mr. Wang Hangjun born in Nov. 1966 member of Communist Party of China is a senior auditor with a master degree of economy.He ever took post of Deputy Chief of Audit Bureau of Nanshan District Shenzhen; Vice Minister Minister of Audit Department of

Shenzhen Investment and Management Company; Vice Minister Minister of Supervision Department of Shenzhen Investment and

Management Company; Minister of Audit and Inspection Department of Shenzhen Investment Holding Co. Ltd. He has been Deputy

GM of the Company since Oct. 2007. Now he is the Director deputy Party Secretary and GM of the Company.Mr. Wei Xiaodong born in January 1970 is a member of the Communist Party of China with the Bachelor’s Degree. Mr. Wei

Xiaodong ever worked in the municipal government department of Shenzhen for many years. In 2008 he began to work for

Shenzhen State-owned Assets Supervision and Administration Commission and successively served as the deputy director and

director of Shenzhen SASAC Office. In June 2014 he served as the deputy director of Shenzhen SASAC Office and now he is the

Director deputy secretary of the Party committee and Chairman of the Labor Union in the Company.

Ms. Shen Xueying born in October 1969 Bachelor of Economics is a senior accountant. Ms. Shen Xueying has been engaged in

the financial management of listed companies for more than 20 years. She joined the Finance Department of the Company in 1991

and successively served as the clerk and deputy manager of the financial management department of the Company. She was the

manager of the financial management department of the Company from 2007-2018 and now she is currently the Director and Chief

Financial Officer of the Company.

Mr. Wang Ge born in October 1971 the member of the Communist Party of China is now the senior engineer with the degree of

Bachelor of Engineering. Mr. Wang Ge has been engaged in the enterprise management for many years. He successively served as

the deputy director and director of the engineering department of Shenzhen Jian’an (Group) Co. Ltd. the manager and the deputy

secretary of the Party Branch of Jian’an Group Construction and Municipal Engineering Company and the deputy general manager

director the deputy secretary of the Party Committee and the general manager of Jian’an Group. From March 2017 to present he has

served as the Chief Engineer of Shenzhen Investment Holdings Co. Ltd.Mr. Xie Chang born in November 1971 CPC member bachelor of engineering senior engineer economist and political engineer.He used to be the head of the Party and Mass Work Department member of the Disciplinary Committee and head of the Asset

Management Department of Shenzhen Jian'an (Group) Co. Ltd.; the deputy GM of Shenzhen Sibiono GeneTech Co. Ltd.; the head

of the operation management department office director secretary of the Board of Directors of Shenzhen Foreign Labor Service Co.Ltd.; office director of Shenzhen Talent Exchange Service Center Co. Ltd. He has served as the head of the comprehensive

management department of Shenzhen Investment Holdings Co. Ltd. from September 2017 and plans to be the director of the

Company from April 2020.

Mr. Yuan Hongchang born in Mar. 1971 Chinese nationality without overseas residency is a undergraduate and postgraduate of

Tsinghua University EMBA of Central Europe. He holds professional qualification of registered land appraiser of China and

registered real estate broker. He joined in Shenzhen WorldUnion Properties Consultancy Incorporated in 2001 and acted as Secretary

of Board vice GM of Director Group director in Shenzhen WorldUnion Properties Consultancy Incorporated. Now he works as

Chairman of the Supervisory Committee of Shenzhen WorldUnion Properties Consultancy Incorporated. & GM of Shanghai

WorldUnion.Mr. Mei Yonghong born in October 1964 is the member of the Communist Party of China and graduated from the Department of

Agriculture of Huazhong Agricultural University with the Degree of Bachelor of Agriculture. He successively served as the deputy

director of the General Office of Ministry of Science and Technology and the director of the information research office the director

of the Policy Regulations and System Reform Department of Ministry of Science and Technology and the mayor of Jining City in

Shandong Province. Now he serves as the Chairman of the Board of BGI Agricultural Group Vice president of Country Garden

Group & CEO of Country Garden Holdings Co. Ltd.Mr. Li Qingyuan Born in 1977 is the member of the Communist Party of China with the Chinese nationality. After he obtained the

degree of the Doctor of Accountancy he became a visiting scholar of Columbia University and was successively supported by

Program for New Century Excellent Talents in University of Ministry of Education in 2012 351 Program for Talents of Wuhan

University in 2011 and Outstanding Accounting Talents (Academic) of Ministry of Finance in 2008. Meanwhile he also serves as

the member of the Academic Exchange Committee of Accounting Society of China the editor member of China Journal of

Accounting Studies the professional editor-in-chief of Luojia Management Review and the director of the Board of Journal of

Management Accounting Studies. As a professor (Level 4) he is nominated and elected into National Support Program for

Outstanding Young Talents and now serves as the deputy dean of the department of economy and management and the director of

the department of accounting of Wuhan University.Members of the Supervisory Committee:

Mr. Dai Xianhua was born in April 1962 doctor degree Party member of CPC. He worked as a lecturer in School of Business and

Economy of Zhongnan University of Economics and Law from 1986 to 1989. He took posts of editor of department of theory and

review vice director and editor-in-chief in Shenzhen Economic Daily from 1992 to 1997; worked in Shenzhen State Assets

Administration Committee (hereinafter referred as “Shenzhen SAC”) as Vice Section Chief of Assets Management Department

investigator of property right management Department Vice Director investigator of Office and investigator of Appraisal and

Distribution Department from 1997 to 2012. Since 2012 he is the Chairman of the Supervisory Committee of the Company and is the

Party Secretary since 2020.Mr. Zhang Manhua born in Feb. 1975 master’s degree member of the Communist Party of China studied and worked in Central

South University from 1992 to 2004; Senior Manager in the Investment Center of Konka Group and concurrently worked as the

Board Secretary for Shenzhen Jvlong Optoelectronic Co. Ltd. and Investment Manager in Shenchao Technological Investment Co.

Ltd. from 2004 to 2013; he worked as deputy director in the Strategy & Development Department in Shenzhen Investment Holding

Co. Ltd from 2013 to 2018. He is the director in Law and Risks Management department of Shenzhen Investment Holdings Co. Ltd

since 2018.Mr. Li Qinghua born in April 1982 has obtained his Bachelor degree. From 2003 to 2013 he worked for DZX International

Appraisal Limited and successively served as the project assistance the project manager and the senior manager; from 2013 to 2017

he served as the senior executive of the property right management and legal affairs department of Shenzhen Investment Holdings

Co. Ltd. and from 2017 till now he serves as the deputy director of the audit department of Shenzhen Investment Holdings Co. Ltd.

Ms. Wang Qiuping born in Jan. 1970 Bachelor degree member of the Communist Party of China is a senior economist. From

1992 to 2015 she ever took post in GM office Plan and Finance Department and Development Management. Now she is the

Executive director and GM of Shenzhen ITC Technology Park Property Management Co. Ltd.

Ms. Gu Weimin Born in October 1981 is the member of the Communist Party of China with the Master’s Degree. From 2007 to

2010 he served as the audit assistance manager of KPMG Shenzhen; from 2011 till now he has worked for the Company in the audit

department (the office of the board of supervisors) and is now the director of the Discipline Inspection Office.

Executive officers:

Mr. Wang Hangjun born in Nov. 1966 member of Communist Party of China is a senior auditor with a master degree of economy.He ever took post of Deputy Chief of Audit Bureau of Nanshan District Shenzhen; Vice Minister Minister of Audit Department of

Shenzhen Investment and Management Company; Vice Minister Minister of Supervision Department of Shenzhen Investment and

Management Company; Minister of Audit and Inspection Department of Shenzhen Investment Holding Co. Ltd. He has been Deputy

GM of the Company since Oct. 2007. Now he is the Director deputy Party Secretary and GM of the Company.Mr. Chen Hongji born in May 1968 CPC member postgraduate degree and master of philosophy. He has worked in Shenzhen

Municipal People's Government for many years. He joined Shenzhen Construction Investment Holding Co. Ltd. in January 1998 and

successively served as section chief of development research department deputy director of office deputy director of Party

committee office and director of secretary office of board of directors. In October 2004 he joined Shenzhen Investment Holding Co.Ltd. and successively served as director of the party mass department and director of the board office. Since July 2012 he has been

the deputy GM of Shenzhen Expander. From December 2020 he has served as a member of the party committee and deputy GM of

the Company.Ms. Cai Lili Born in November 1972 is the member of the Communist Party of China and has obtained the Master’s Degree in

Economics. Since 1995 he has worked in Shenzhen Tax Service SAT and ever served as the deputy chief of the taxation and

scientific and technological development department of Shenzhen Tax Service SAT and the member of the Party Organization and

the deputy director of Futian District Tax Bureau in Shenzhen. Currently he is the member of the Party Committee deputy general

manager and Chief Financial Officer.Mr. Li Peng Born in May 1976 is the member of the Communist Party of China the Bachelor of Engineering and the intermediate

economist. Since July 1999 he has worked for the Company as the operation manager and successively served as the deputy

manager of the Company’s development management department the manager of the cost control department and the secretary of

the Party branch and the deputy general manager of Shenzhen Huangcheng Real Estate Co. Ltd. Currently he now is the member of

the Party Committee and deputy general manager.Mr. Zhang Gejian born in September 1975 the member of the Communist Party of China MBA is an Accountant as well as

Auditor. He was engaged in internal auditing work in Audit Department of the Company since July 1997. He acted as the audit

manager Supervisor of the Company and concurrently the Cost Control Manager. Now he is the member of the Party Committee the

vice GM and Board Secretary (Acting) of the Company.Ms. Shen Xueying born in October 1969 the member of the Communist Party of China Bachelor of Economics is a senior

accountant. Ms. Shen Xueying has been engaged in the financial management of listed companies for more than 20 years. She joined

the Finance Department of the Company in 1991 and successively served as the clerk and deputy manager of the financial

management department of the Company. She has been the manager of the financial management department of the Company from

2007 to 2018 and now she is the Director and Chief Financial Officer of the Company.

Offices held concurrently in shareholding entities:

√Applicable □Not applicable

Name Shareholding entity Office held in theshareholding entity Start of tenure

End of

tenure

Remuneration or

allowance from

the shareholding

entity

Wang Ge

Shenzhen Investment

Holdings Co. Ltd.

Chief Engineer of

Shenzhen Investment

Holdings Co. Ltd.

1 March 2017 Yes

Xie Chang

Shenzhen Investment

Holdings Co. Ltd.

Director of the

general management

department of

Shenzhen Investment

Holdings Co. Ltd.

7 April 2020 Yes

Zhang Manhua

Shenzhen Investment

Holdings Co. Ltd.

Director of the legal

and risk management

department of

Shenzhen Investment

Holdings Co. Ltd.

1 January 2017 Yes

Li Qinghua

Shenzhen Investment

Holdings Co. Ltd.

Deputy director of the

audit department of

Shenzhen Investment

Holdings Co. Ltd.

1 January 2017 Yes

Offices held concurrently in other entities:

√Applicable □Not applicable

Name Other entity Office held in the entity Start of tenure End oftenure

Remuneration or

allowance from

the entity

Yuan

Hongchang

Shenzhen WorldUnion

Properties Consultancy

Incorporated

Chairman of the

Supervisory Committee of

Shenzhen WorldUnion

Properties Consultancy

Incorporated & GM of

Shanghai WorldUnion

1 September 2013 Yes

Mei Yonghong

BGI Agricultural

Group County Garden

Chairman of BGI

Agricultural Group Vice

president of County

Garden Group & CEO of

Country Garden Holdings

Co. Ltd.

1 September 2015 Yes

Li Qingyuan Wuhan University

Deputy dean of the

department of economy

1 December 2015 Yes

and management and the

director of the department

of accounting of Wuhan

University.

Dai Xianhua

ShenZhen Special

Economic Zone Real

Estate & Properties

(Group) Co. Ltd.

Chairman of the

Supervisory Committee of

ShenZhen Special

Economic Zone Real

Estate & Properties

(Group) Co. Ltd.

16 January 2020

31

Decemb

er 2020

No

Punishments imposed in the recent three years by the securities regulator on the incumbent directors supervisors and senior

management as well as those who left in the Reporting Period:

□ Applicable √ Not applicable

IV Remuneration of Directors Supervisors and Senior Management

Decision-making procedure determination basis and actual payments of remuneration for directors supervisors and senior

management:

During this Reporting Period the board and the management of the Company signed statement of operation objectives responsibility

for 2020 conducted appraisal system integrating operation indicators classification indicators with management objectives. After the

end of this Reporting Period assessment was implemented by the board. Remuneration of senior executives was determined

according to “Management Method of Annual salary System of Directors Supervisors and Senior Executives” and “Long-termIncentive-and-Restraint Mechanism of ShenZhen Properties & Resources Development (Group) Ltd.” and need to be implemented

after the annual assessment of the board.Remuneration of directors supervisors and senior management for the Reporting Period

Unit: RMB'0000

Name Office title Gender Age

Incumbent/For

mer

Total before-tax

remuneration

from the

Company

Any

remuneration

from related party

Liu

Shengxian

g

Party Secretary and Chairman of the

Board

Male 50 Incumbent 226.33 No

Wang

Hangjun

Director Deputy Party Secretary GM Male 55 Incumbent 201.63 No

Wei

Xiaodong

Director Deputy Party Secretary Male 51 Incumbent 161.75 No

Shen

Xueying

Director and CFO Female 52 Incumbent 129.42 No

Wang Ge Director Male 50 Incumbent 0 Yes

Xie Chang Director Male 49 Incumbent 0 Yes

Zhang

Shilei

Director Male 43 Former 0 Yes

Yuan

Hongchan

g

Independent Director Male 50 Incumbent 8 Yes

Mei

Yonghong

Independent Director Male 57 Incumbent 8 Yes

Li

Qingyuan

Independent Director Male 44 Incumbent 8 Yes

Dai

Xianhua

Chairman of the Supervisory Committee

Secretary of Committee for Discipline

Inspection

Male 59 Incumbent 133.63 No

Zhang

Manhua

Supervisor Male 46 Incumbent 0 Yes

Li

Qinghua

Supervisor Male 39 Incumbent 0 Yes

Wang

Qiuping

Employee supervisor executive director

of ITC Technology Park Party Secretary

GM

Female 51 Incumbent 61.49 No

Gu

Weimin

Employee supervisor Director of

Discipline Inspection Office

Female 40 Incumbent 57.15 No

Fan

Weiping

Member of the Party Committee Vice

GM General Counsel Board Secretary

Male 56 Former 161.93 No

Chen

Hongji

Member of the Party Committee Vice

GM

Male 52 Incumbent 0 Yes

Cai Lili

Member of the Party Committee Vice

GM

Female 49 Incumbent 173.33 No

Li Peng

Member of the Party Committee Vice

GM

Male 45 Incumbent 173.54 No

Zhang

Gejian

Member of the Party Committee Vice

GM Board Secretary (Acting)

Male 46 Incumbent 141.04 No

Total -- -- -- -- 1645.24 --

Equity incentives for directors supervisors and senior management in the Reporting Period:

□ Applicable √ Not applicable

V Employees

1. Number Functions and Educational Backgrounds of Employees

Number of in-service employees of the Company as the parent 101

Number of in-service employees of major subsidiaries 7934

Total number of in-service employees 8035

Total number of paid employees in the Reporting Period 8035

Number of retirees to whom the Company as the parent or its

major subsidiaries need to pay retirement pensions

0

Functions

Function Employees

Production 5557

Sales 214

Technical 1380

Financial 244

Administrative 453

Managerial 187

Total 8035

Educational backgrounds

Educational background Employees

College and Technical secondary school graduates and above 3273

High school graduates and below 4762

Total 8035

2. Employee Remuneration Policy

In 2020 the Group stuck to remuneration system of industrialization within the Group and marketization in the industry referred to

market remuneration level of the same industry reformed bravely and promoted the income distribution system reform and

upgrading of the subordinate companies stably by learning from external experience as well as multiple demonstration completed

remuneration performance management system established incremental sharing mechanism studied and revised organization

framework design department function division fixed position and fixed arrangement and remuneration performance of

subordinated Companies based on marketized principle.

3. Employee Training Plans

In 2020 the Group promoted the construction of learning type organization formulated training plan according to operation

development needs with the key contents including special courses of real estate comprehensive management ability team

expansion position ability and quality improvement and other courses taking the method of combining internal training and external

training organized all the employees to take part in training by grade as planned improved the professional quality business ability

and execution ability of staff team enhanced the understanding and conscientiousness for governing the enterprise by law and acting

according to rules.

4. Labor Outsourcing

□Applicable √ Not applicable

Part X Corporate Governance

I General Information of Corporate Governance

The internal control system of the Company is complete accomplished and defined that in accordance with Company Law Articles

of Association and other laws and regulations as well as requirements of regulatory documents. The convene of Shareholders’

General Meeting the Board of Directors and Supervisory Board are strictly in accordance with relevant rules and regulations all

directors and supervisors earnestly and diligently commit their responsibilities. Corporate structure of the Company is complete and

the operation of the Company is standardized.

During the reporting period the Company revised the Articles of Association Rules of Procedures for General Meeting of

Shareholders Rules of Procedures for the Board of Directors Rules of Procedures for the Board of Supervisors and regulations on

the work of special committees under the Board of Directors in accordance with the Company Law Securities Law Listing Rules

and other relevant provisions based on the actual conditions of the Company to establish and improve internal management and

control system.

Abiding by the principle of being scientific simplified and high efficient the Company adjusted the its setting of departments and

institutions currently set up Party-mass office discipline inspection and supervision office (the audit department office of the

supervisory committee office of board of directors comprehensive office (procedure and information center letters and visits office)

HR department (training center) financial management department (settlement center) investment development department

operation and management department design management department (technological center) cost contract department engineering

management department (office of security committee) office of industrial operation. Each department performs its own functions

and strictly carries out work according to internal control system to ensure the normal and efficient operation of the Company.The Company has always attached great importance on standardizing insider information management formulated and completed

Management Provisions on Information Disclosure Work Procedures of Annual Report of Auditing Committee Accountability

System of Major Errors in Information Disclosure of Annual Report Work System of Annual Report Insider Management System of

Insider Information Management System of Investor Relationship and other internal control system to ensure the authenticity

accuracy and completeness of Company information disclosure. During the reporting period the Company strictly carried out

information disclosure corporate governance conference organization and other work according to requirements of securities

supervision disclosed information timely accurately and completely without any accidents which violate relevant internal control

system of information disclosure.

At the end of the reporting period the Company carried out quality self-examination of listed companies according to the

requirements of Shenzhen Securities Regulatory Bureau to find out deficiencies in the operation of the Company and formulate

rectification plan to improve company governance and standard operation.Indicate by tick market whether there is any material incompliance with the regulatory documents issued by the CSRC governing the

governance of listed companies.□ Yes √ No

No such cases in the Reporting Period.II The Company’s Independence from Its Controlling Shareholder in Business Personnel

Asset Organization and Financial Affairs

The Company was independent from the controlling shareholder in business personnel assets organization and finance to realize

that independent personnel independent finance complete assets independent organization and independent business.1. In aspect of business: The Company was independent from the controlling shareholder with independent and complete business

and independent operation capability. There was no business which was same or competitive with the controlling shareholder.

2. In aspect of personnel: The Company was complete independent from the controlling shareholder in terms of labor and personnel

management on remuneration. Personnel of the Company are independent all ones signed labor contract with the Company. The

Company was independent from the shareholders or other related parties in personnel management social security salary etc.

3. In aspect of asset: The Company’s assets were complete and independent the property relationship was clear. There was no capital

occupation by controlling shareholder and assets of the Company were completely independent from controlling shareholder.

4. In aspect of organization: The Company’s organization was independent and the Company implemented rules and regulations as

well as responsibilities for all departments formed independent responsibilities and rights scientific and rational internal control

system.

5. In aspect of finance: The Company’s finance was independent with independent finance department. The Company established the

independent finance settling system and financial management system had its own finance account and paid the tax in line with laws

run finance decision-making independently.The controlling shareholder of the Company performed normatively with no conduct that intervened with the operation

decision-making and operation activities directly or indirectly over the shareholders’ general meeting however the controlling

shareholder could influence on the significant decision-making through the shares holding.III Horizontal Competition

□Applicable √ Not applicable

IV Annual and Special General Meetings Convened during the Reporting Period

1. General Meeting Convened during the Reporting Period

Meeting Type

Investor

participation ratio

Date of the meeting Disclosure date

Index to disclosed

information

The 1st

Extraordinary

General

Meeting of 2020

Extraordinary

General

Meeting

63.90% 15 January 2020 16 January 2020

Announcement on

Resolutions of the 1st

Extraordinary

General Meeting of

2020 (No.: 2020-3)

on Cninfo

The 2019

Annual General

Meeting

Annual General

Meeting

63.90% 28April 2020 29 April 2020

Announcement on

Resolutions of the

2019 Annual General

Meeting (No.:

2020-21) on Cninfo

The 2nd

Extraordinary

General

Meeting of 2020

Extraordinary

General

Meeting

62.91% 12 October 2020 13 October 2020

Announcement on

Resolutions of the

2nd Extraordinary

General Meeting of

2020 (No.: 2020-47)

on Cninfo

2. Special General Meetings Convened at the Request of Preferred Shareholders with Resumed Voting

Rights

□Applicable √ Not applicable

V Performance of Duty by Independent Directors in the Reporting Period

1. Attendance of Independent Directors at Board Meetings and General Meetings

Attendance of independent directors at board meetings and general meetings

Independent

director

Total

number of

board

meetings the

independent

director was

eligible to

attend

Board

meetings

attended on

site

Board

meetings

attended by

way of

telecommuni

cation

Board

meetings

attended

through a

proxy

Board

meetings the

independent

director

failed to

attend

The

independent

director

failed to

attend two

consecutive

board

meetings

(yes/no)

General

meetings

attended

Yuan

Hongchang

9 0 9 0 0 No 3

Mei Yonghong 9 0 9 0 0 No 3

Li Qingyuan 9 0 9 0 0 No 3

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

Not applicable

2. Objections Raised by Independent Directors on Matters of the Company

Indicate by tick mark whether any independent directors raised any objections on any matter of the Company.□ Yes √ No

No such cases in the Reporting Period.

3. Other Information about the Performance of Duty by Independent Directors

Indicate 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:

With attitude of credibility and diligence to the Company and all shareholders independent directors was diligent and responsible

reviewed all resolutions and in line with their professional knowledge and capability made independent objective and fair judgment

away from influence from the Company and principal shareholders of the Company. Also independent directors expressed

independent objective and fair opinion on relevant events which made practical efforts to safeguard interests of the Company and

minority shareholders.VI Performance of Duty by Specialized Committees under the Board in the Reporting Period

The four special committees under the 9th board—the Strategic Development and Investment Decision-Making Committee theNomination Committee the Remuneration and Appraisal Committee and the Audit Committee—according to “Governance Principleof listed Company” “Articles of Association” “and Rules of Procedure of the Board of Directors” and implementation rules ofspecial committee earnestly performed their duties.

During this Reporting Period strategic development and investment decision-making committee paid attention to authorization of the

board to project development and financing kept good contact with the management and had a good knowledge of matters within

their power.The Nomination Committee communicated and exchanged with relevant departments of the Company on the demand for directors

and senior executives to adapt to the development and changes of the Company’s business pattern and asset scale and held a meeting

to review the qualification of Mr. Chen Hongji to act as a Senior Manager and offered opinions.The Compensation and Assessment Committee communicated with the Management and held four meetings to respectively review

the performance appraisal of company organizations in 2019 the Long-term Incentive and Restraint Plan executive appraisal method

and executive appraisal results for 2019.The Audit Committee held five meetings to listen to the audit opinions on the Company’s audit work report for 2019 and audit work

plan for 2020 offer audit opinions on the re-employment of accounting firm internal audit work in the first half of 2020 and internal

audit work in the third quarter of 2020 and review the comprehensive budget for 2021 (draft).VII Performance of Duty by the Supervisory Committee

Indicate by tick mark whether the Supervisory Committee found any risk to the Company during its supervision in the Reporting

Period.□ Yes √ No

The Supervisory Committee raised no objections in the Reporting Period.VIII Appraisal of and Incentive for Senior Management

During the reporting period the Board of Directors signed the Letter of Responsibility for Business Objectives of 2020 with the

Management of the Company referring to the Measures for Assessment of Senior Management by the Board of Directors of SZPRD

and Measures for Performance Assessment of Deputy General Manager of SZPRD and adopted the assessment method integrating

performance assessment with bonus item for assessment at the end of the year. The salary system of the Company’s senior managers

is based on the Management Measures for Annual Salary of Directors Supervisors and Senior Managers which is implemented after

annual assessment of the Board of Directors. The first long-term incentive and restraint plan of the Group has been implemented

which is conducive to better motivate senior executives to achieve good performance.IX Internal Control

1. Material Internal Control Weaknesses Identified for the Reporting Period

□ Yes √ No

2. Internal Control Self-Evaluation Report

Disclosure date of the internal control

self-evaluation report

31 March 2021

Index to the disclosed internal control

self-evaluation report

http://www.cninfo.com.cn

Evaluated entities’ combined assets as %

of consolidated total assets

99.00%

Evaluated entities’ combined operating

revenue as % of consolidated operating

revenue

99.00%

Identification standards for internal control weaknesses

Type

Weaknesses in internal control over

financial reporting

Weaknesses in internal control not

related to financial reporting

Nature standard

Indications of the serious defect of the

financial report were including: 1. the

control environment is invalid;

2. Commitment of major fraud by

directors supervisors or senior

management of the Company;

3. the audit institution discovered the

current financial report had great defect

while the internal control of the Company

didn’t found out during the operating

process;

4. Correction of major misstatement in

financial reports reported or disclosed by

the Company;

5. the supervision of the Company’s Audit

Committee and the internal audit

department on the internal control was

invalid.Indications of the important defect of the

financial report were including: 1. didn’t

abide by the universally acknowledged

accounting standard to choose and apply

the accounting policies; 2. had not built up

the anti-fraud process and the control

measures; 3. had not built up the

corresponding control mechanism or had

not executed the corresponding

compensating control for the accounting

Major defects include: 1. Serious

violation of national laws and

regulations leading to major litigation

or investigation of regulatory agencies

ordered suspension of business for

rectification investigation for criminal

responsibility or replacement of senior

managers;

2. Abnormal major changes of

directors supervisors senior

management and main technical

personnel of the Company;

3. Major decision-making errors due to

lack of internal democratic

decision-making procedures or

unscientific procedures;

4. Serious loss of core management or

technical personnel;

5. Vicious negative news frequently

appeared in the media involving a

wide range and negative existing

influence;

6. Significant impact on the

Company’s production and operation

due to lack of system control or system

failure of important business;

7. Major defects of internal control

treatment which was unconventional or

with special transaction; 4. the control

during the process of the financial report at

the period-end existed one or multiple

defects that could not guarantee the

compile of the financial report reach the

goal of being real and complete;

5. Important or general defects of internal

control to be rectified.

Common defect: refers to the other control

defect except for the above great defect

and significant defect.evaluation to be rectified;

8. Any other negative circumstances

generating significant impact on the

Company.

Significant defects include: 1.Incomplete democratic

decision-making process that affects

production and operation of the

Company;

2. Violation of internal rules and

regulations leading to important losses;

3. Exposure of negative news by the

media leading to significant impact on

the Company;

4. Important defects of important

business regulations or system to be

rectified;

5. Any other negative case leading to

great impact on the Company.

Common defects: any other control

defect except for the above major and

significant defects.Quantitative standard

Serious defect: potential misstatement of

the operating income≥1% of the operating

income of the consolidated statements of

the Company potential misstatement of

the total assets amount≥0.40% of the total

assets of the consolidated statements of the

Company potential misstatement of the

net assets≥1.00% of the net assets of the

consolidated statements of the Company.Important defect: 0.50% of the operating

income of the consolidated statements of

the Company≤misstatement<1% of the

operating income of the consolidated

statements of the Company; 0.2% of the

total assets of the consolidated statements

of the Company ≤misstatement<0.4% of

the total assets of the consolidated

statements of the Company 0.5% of the

net assets of the consolidated statements of

the Company ≤misstatement<1% of the

net assets of the consolidated statements of

Major defects: direct property loss ≥

1.00% of net assets of the previous

year;

Significant defects: 0.5% of net assets

of the previous year ≤ direct property

loss < 1.00% of net assets of the

previous year;

Common defects: direct property loss

< 0.5% of net assets of the previous

year.the Company. Common defect:

misstatement of the operating

income<0.5% of the operating income of

the consolidated statements of the

Company misstatement of the total assets

amount<0.2% of the total assets amount of

the consolidated statements of the

Company misstatement of the net

assets<0.5% of the net assets of the

consolidated statements of the Company.Number of material weaknesses in

internal control over financial reporting

0

Number of material weaknesses in

internal control not related to financial

reporting

0

Number of serious weaknesses in

internal control over financial reporting

0

Number of serious weaknesses in

internal control not related to financial

reporting

0

X Independent Auditor’s Report on Internal Control

√ Applicable □ Not applicable

Opinion paragraph in the independent auditor’s report on internal control

We believe that Shenzhen Properties & Resources Development (Group) Ltd. maintained efficient internal control of financial

reports in all significant aspects according to “Basic Standards of Corporate Internal Control” and relevant regulations.Independent auditor’s report on

internal control disclosed or not

Disclosed

Disclosure date 31 March 2021

Index to such report disclosed http://www.cninfo.com.cn

Type of the auditor’s opinion Unmodified unqualified opinion

Material weaknesses in internal

control not related to financial

reporting

None

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

control.□ Yes √ No

Indicate by tick mark whether the independent auditor’s report on the Company’s internal control is consistent with the internal

control self-evaluation report issued by the Company’s Board.√ Yes □ No

Part XI Corporate Bonds

Does the Company have any corporate bonds publicly offered on the stock exchange which were outstanding before the date of this

Report’s approval or were due but could not be redeemed in full?

No.Part XII Financial Statements

I Independent Auditor’s Report

Type of the independent auditor’s opinion Unmodified unqualified opinion

Date of signing this report 30 March 2021

Name of the independent auditor Baker Tilly China Certified Public Accountants (LLP)

Reference number of Audit Report Baker Tilly YZ[2021]No.14873

Name of the certified public accountants Li Ming Chen Zihan

Text of the Auditor’s Report

All shareholders of Shenzhen Properties & Resources Development (Group) Ltd.:

1. Opinion

We have audited the financial statements of Shenzhen Properties & Resources Development (Group) Ltd. (the “Company”) which

comprise the consolidated and parent company balance sheets as of 31 December 2020 the consolidated and parent company

statements of income cash flows and changes in shareholders’ equity for the year then ended as well as the notes to the financial

statements.In our opinion the financial statements referred to above present fairly in all material respects the consolidated and parent company

financial position of the Company at 31 December 2020 and the consolidated and parent company operating results and cash flows

for the year then ended in conformity with the Chinese Accounting Standards (CAS).

2. Basis for Opinion

We conducted our audits in accordance with the Audit Standards for Chinese Registered Accountants. Our responsibilities under

those standards are further described in the Auditor’s Responsibilities for Audit of Financial Statements section of our report. We are

independent of the Company in accordance with the China Code of Ethics for Certified Public Accountants and we have fulfilled our

other ethical responsibilities in accordance with the said Code of Ethics. We believe that the audit evidence we have obtained is

sufficient and appropriate to provide a basis for our opinion.

3. Key audit items

Key audit items are the items that are considered most important for the audit of the current financial statements based on our

professional judgment. The response to these items is based on the audit of the financial statements as a whole and the formation of

audit opinions. We do not comment on these items separately.Key audit item Audit response

1. Recognition and measurement of revenue from real estate development and sales

SZPRD achieved a revenue of RMB2.792 billion from real

estate development projects in 2020 accounting for 68.03% of

the total operating revenue. SZPRD confirms revenue from real

estate development projects when all the following conditions

are met: (1) Real estate products of sales contracts under

development are completed and accepted; (2) Irreversible sales

Our audit procedures for this key audit issue include:

Understanding and sampling key control measures related to

property sales business to evaluate the effectiveness of

implementation of control procedures.Obtaining and reviewing completion acceptance documents of

projects; reviewing property sales contracts and verifying the

contracts are signed and buyers’ payment certificates are

received; (3) Notice of property acceptance is issued.The recognition and measurement of revenue from real estate

business has a significant impact on the operating results of

SZPRD which may be inaccurately measured or recognized in

improper accounting period. Therefore we regard the

recognition and measurement of real estate development and

sales revenue as key audit issues.

For accounting policies and details of revenue from real estate

development and sales please refer to Note III (26) VI (32) to

the financial statement.authenticity of revenue from property sales recognized in this

year; checking original collection certificates or certificates of

bank mortgage procedures to determine whether full payment

amount is received; reviewing admission notice or other

supporting documents on delivery of properties to evaluate

whether revenue from property sales meets the conditions for

revenue recognition as stipulated by the Company’s accounting

policy.Obtaining and reviewing supporting documents for property

delivery before and after the balance sheet date to evaluate

whether revenue from property sales is recorded in proper

accounting period.

2. Provision of increment tax on land value

The Company shall pay increment tax on land value at the rate

of 30-60% of extra progressive tax rate of increment amount on

land value for real estate sales and development. At the end of

each financial reporting period the Management shall estimate

the provision amount of increment tax on land value. When

making estimation judgment main factors to be included in

consideration shall include the provisions and explanations of

relevant tax laws and regulations the amount of estimated

revenue from sale of real estate minus estimated deductible land

cost real estate development cost interest expense and

development cost etc. The actual amount in final settlement

payable by SZPRD for increment tax on land value may be

different from the estimated amount.

As the importance of provision of increment tax on land value

on the profit and loss of real estate enterprises and Management

includes the understanding of relevant tax laws and regulations

and actual practices in consideration for estimation judgment

we determine the provision of increment tax on land value of

SZPRD as a key audit issue.Our audit procedures for this key audit issue include:

Obtaining calculation data of increment tax on land value of

main real estate development projects to review and calculate

the accuracy of amount of increment tax on land value accrued

by the Company in this year.

Combining the audit revenue from real estate sales to review the

rationality of estimated amount of revenue from real estate sales

made by the Management in the calculation of increment tax on

land value.

Combining inventory audit to review the accuracy of land cost

real estate development cost interest expense and development

cost deducted by the Management in the calculation of

increment tax on land value.

4. Other InformationThe Company’s management (hereinafter referred to as the Management”) is responsible for the other information. The other

information comprises all of the information included in the Company’s 2020 Annual Report other than 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 conclusion

thereon.In connection with our audit of the financial statements our responsibility is to read the other information and in doing so consider

whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or

otherwise appears to be materially misstated.If based on the work we have performed we conclude that there is a material misstatement of this other information we are required

to report that fact. We have nothing to report in this regard.5. Responsibilities of Management and Those Charged with Governance for Financial Statements

The Management is responsible for the preparation of the financial statements that give a fair view in accordance with CAS and for

designing implementing and maintaining such internal control as the management determines is necessary to enable the preparation

of financial statements that are free from material misstatement whether due to fraud or error.In preparing the financial statements the Management is responsible for assessing the Company’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 the

Management either intends to liquidate the Company or to cease operations or have no realistic alternative but to do so.Those charged with governance (hereinafter referred to as the “Governance”) are responsible for overseeing the Company’s financial

reporting process.

6. Auditor’s Responsibilities for Audit of Financial Statements

Our 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 CAS will always detect a material misstatement

when it exists. Misstatements can arise from fraud or error and are considered material if individually or in the aggregate they could

reasonably 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 CAS we exercise professional judgment and maintain professional skepticism throughout the

audit. We also:

(1) Identify and assess the risks of material misstatement of the financial statements whether due to fraud or error design and

perform audit procedures responsive to those risks and obtain audit evidence that is sufficient and appropriate to provide a basis for

our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error as

fraud may involve collusion forgery intentional omissions misrepresentations or the override of internal control.

(2) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the

circumstances.

(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures

made by the management.

(4) Conclude on the appropriateness of the 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 or conditions that may cast significant doubt on the

Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists we are required by CAS to draw

users’ attention in our auditor’s report to the 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’s report. However future

events or conditions may cause the Company to cease to continue as a going concern.

(5) 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 fair presentation.

(6) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the

Company to express an opinion on the financial statements. We are responsible for the direction supervision and performance of the

Company audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding the planned scope and timing of the audit and significant audit

findings including any noteworthy deficiencies in internal control that we identify during our audit.We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding

independence and communicate with them all relationships and other matters that may reasonably be thought to bear on our

independence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine those matters that were of most significance in

the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these

matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when in extremely rare

circumstances we determine that a matter should not be communicated in our report because the adverse consequences of doing so

would reasonably be expected to outweigh the public interest benefits of such communication.

Baker Tilly YZ[2021]No.14873

Beijing·China

30 March 2021

Chinese CPA

(Engagement Partner): Li Ming

Chinese CPA: Chen Zihan

II Financial Statements

Currency unit for the financial statements and the notes thereto: RMB

1. Consolidated Balance Sheet

Prepared by Shenzhen Properties & Resources Development (Group) Ltd.

31 December 2020

Unit: RMB

Item 31 December 2020 31 December 2019

Current assets:

Monetary assets 4206266629.32 3297890935.91

Settlement reserve

Interbank loans granted

Held-for-trading financial assets

Derivative financial assets

Notes receivable

Accounts receivable 187697631.47 216923663.25

Accounts receivable financing

Prepayments 50543422.85 69546774.17

Premiums receivable

Reinsurance receivables

Receivable reinsurance contract

reserve

Other receivables 789050350.51 917981165.74

Including: Interest receivable

Dividends receivable

Financial assets purchased under

resale agreements

Inventories 5312489258.20 4913510876.66

Contract assets

Assets held for sale

Current portion of non-current

assets

Other current assets 48991965.92 42500585.94

Total current assets 10595039258.27 9458354001.67

Non-current assets:

Loans and advances to customers

Investments in debt obligations

Investments in other debt

obligations

Long-term receivables

Long-term equity investments 45710220.79 45076122.72

Investments in other equity

instruments

1044905.12 1580475.86

Other non-current financial assets

Investment property 484738506.83 503323428.61

Fixed assets 116233936.04 93557782.83

Construction in progress

Productive living assets

Oil and gas assets

Right-of-use assets

Intangible assets 482049.51 700369.66

Development costs

Goodwill

Long-term prepaid expense 11862716.14 7034472.79

Deferred income tax assets 950681245.50 658153122.73

Other non-current assets 1564074.34 4711963.66

Total non-current assets 1612317654.27 1314137738.86

Total assets 12207356912.54 10772491740.53

Current liabilities:

Short-term borrowings

Borrowings from the central bank

Interbank loans obtained

Held-for-trading financial

liabilities

Derivative financial liabilities

Notes payable

Accounts payable 468269685.65 577689139.10

Advances from customers 473274.48 728186032.63

Contract liabilities 666893629.72

Financial assets sold under

repurchase agreements

Customer deposits and interbank

deposits

Payables for acting trading of

securities

Payables for underwriting of

securities

Employee benefits payable 177190197.36 143493868.80

Taxes payable 2487212979.37 2598283291.68

Other payables 847142613.09 1149104928.85

Including: Interest payable

Dividends payable 12202676.04 12202676.04

Handling charges and commissions

payable

Reinsurance payables

Liabilities directly associated with

assets held for sale

Current portion of non-current

liabilities

36722824.88 3921032.24

Other current liabilities 43354691.51

Total current liabilities 4727259896.06 5200678293.30

Non-current liabilities:

Insurance contract reserve

Long-term borrowings 3587800000.00 2193833000.00

Bonds payable

Including: Preferred shares

Perpetual bonds

Lease liabilities

Long-term payables

Long-term employee benefits

payable

Provisions 2396947.00 2903327.87

Deferred income 341259.63

Deferred income tax liabilities 262.20 3821.08

Other non-current liabilities 108778327.45 108164737.46

Total non-current liabilities 3698975536.65 2305246146.04

Total liabilities 8426235432.71 7505924439.34

Owners’ equity:

Share capital 595979092.00 595979092.00

Other equity instruments

Including: Preferred shares

Perpetual bonds

Capital reserves 80488045.38 80488045.38

Less: Treasury stock

Other comprehensive income -6749589.41 -2698371.44

Specific reserve

Surplus reserves 19205979.63 17060448.05

General reserve

Retained earnings 3038993912.43 2457119795.39

Total equity attributable to owners of

the Company as the parent

3727917440.03 3147949009.38

Non-controlling interests 53204039.80 118618291.81

Total owners’ equity 3781121479.83 3266567301.19

Total liabilities and owners’ equity 12207356912.54 10772491740.53

Legal representative: Liu Shengxiang Head of financial affairs: Cai Lili

Head of the financial department: Liu Qiang

2. Balance Sheet of the Company as the Parent

Unit: RMB

Item 31 December 2020 31 December 2019

Current assets:

Monetary assets 3216703036.69 2455001204.14

Held-for-trading financial assets

Derivative financial assets

Notes receivable

Accounts receivable 2624500.42 755932.14

Accounts receivable financing

Prepayments 496729.09

Other receivables 145325697.20 501082153.81

Including: Interest receivable

Dividends receivable

Inventories 653885107.24 624499208.02

Contract assets

Assets held for sale

Current portion of non-current

assets

Other current assets 496729.09 1113935.28

Total current assets 4019035070.64 3582949162.48

Non-current assets:

Investments in debt obligations

Investments in other debt

obligations

Long-term receivables

Long-term equity investments 1071176101.18 1070542003.11

Investments in other equity

instruments

1275405.12 1810975.86

Other non-current financial assets

Investment property 303827356.62 312638785.76

Fixed assets 51091963.72 26337488.29

Construction in progress

Productive living assets

Oil and gas assets

Right-of-use assets

Intangible assets

Development costs

Goodwill

Long-term prepaid expense 432440.01 605416.29

Deferred income tax assets 252331518.26 343958821.07

Other non-current assets 1197407234.55 1613657031.92

Total non-current assets 2877542019.46 3369550522.30

Total assets 6896577090.10 6952499684.78

Current liabilities:

Short-term borrowings

Held-for-trading financial

liabilities

Derivative financial liabilities

Notes payable

Accounts payable 55887947.36 64503938.37

Advances from customers 320469.53

Contract liabilities

Employee benefits payable 50710148.02 36735205.68

Taxes payable 3736082.67 1322751671.37

Other payables 3971988862.11 3146684268.89

Including: Interest payable

Dividends payable 29642.40 29642.40

Liabilities directly associated with

assets held for sale

Current portion of non-current

liabilities

31573154.86

Other current liabilities

Total current liabilities 4113896195.02 4570995553.84

Non-current liabilities:

Long-term borrowings 588200000.00

Bonds payable

Including: Preferred shares

Perpetual bonds

Lease liabilities

Long-term payables

Long-term employee benefits

payable

Provisions

Deferred income

Deferred income tax liabilities

Other non-current liabilities 40000000.00 40000000.00

Total non-current liabilities 628200000.00 40000000.00

Total liabilities 4742096195.02 4610995553.84

Owners’ equity:

Share capital 595979092.00 595979092.00

Other equity instruments

Including: Preferred shares

Perpetual bonds

Capital reserves 53876380.11 53876380.11

Less: Treasury stock

Other comprehensive income -2545451.19 -2051268.24

Specific reserve

Surplus reserves 19205979.63 16403637.61

Retained earnings 1487964894.53 1677296289.46

Total owners’ equity 2154480895.08 2341504130.94

Total liabilities and owners’ equity 6896577090.10 6952499684.78

3. Consolidated Income Statement

Unit: RMB

Item 2020 2019

1. Revenue 4104374646.02 3961669942.44

Including: Operating revenue 4104374646.02 3961669942.44

Interest income

Insurance premium income

Handling charge and commission

income

2. Costs and expenses 3094700417.31 2966054505.18

Including: Cost of sales 1386710239.54 1433615885.43

Interest expense

Handling charge and commission

expense

Surrenders

Net insurance claims paid

Net amount provided as insurance

contract reserve

Expenditure on policy dividends

Reinsurance premium expense

Taxes and surcharges 1313348228.48 1081511281.04

Selling expense 44753247.18 111553952.50

Administrative expense 238625143.31 204654552.64

R&D expense

Finance costs 111263558.80 134718833.57

Including: Interest expense 182930469.55 194545794.14

Interest

income

72357101.87 61860403.42

Add: Other income 12770810.75 5150377.43

Return on investment (“-” for

loss)

634098.07 5076839.48

Including: Share of profit or loss of

joint ventures and associates

634098.07 5076839.48

Income from the derecognition of

financial assets at amortized cost (“-”

for loss)

Exchange gain (“-” for loss)

Net gain on exposure hedges (“-” for

loss)

Gain on changes in fair value

(“-” for loss)

Credit impairment loss (“-” for loss) 4623356.81 -18701016.31

Asset impairment loss (“-” for loss) -51185.46 -1234250.84

Asset disposal income (“-” for loss) 2311.70

3. Operating profit (“-” for loss) 1027653620.58 985907387.02

Add: Non-operating income 11697661.23 23732348.28

Less: Non-operating expense 5244329.50 4793503.85

4. Profit before tax (“-” for loss) 1034106952.31 1004846231.45

Less: Income tax expense 302769082.58 262716180.91

5. Net profit (“-” for net loss) 731337869.73 742130050.54

5.1 By operating continuity

5.1.1 Net profit from continuing 731337869.73 742061273.73

operations (“-” for net loss)

5.1.2 Net profit from discontinued

operations (“-” for net loss)

68776.81

5.2 By ownership

5.2.1 Net profit attributable to

shareholders of the Company as the

parent

798572121.74 817805780.12

5.2.1 Net profit attributable to

non-controlling interests

-67234252.01 -75675729.58

6. Other comprehensive income net of

tax

-4051217.97 -912189.75

Attributable to owners of the Company

as the parent

-4051217.97 -912189.75

6.1 Items that will not be reclassified to

profit or loss

-494182.95 -2051268.24

6.1.1 Changes caused by

remeasurements on defined benefit

schemes

6.1.2 Other comprehensive income that

will not be reclassified to profit or loss

under the equity method

6.1.3 Changes in the fair value of

investments in other equity instruments

-494182.95 -2051268.24

6.1.4 Changes in the fair value arising

from changes in own credit risk

6.1.5 Other

6.2 Items that will be reclassified to

profit or loss

-3557035.02 1139078.49

6.2.1 Other comprehensive income that

will be reclassified to profit or loss

under the equity method

6.2.2 Changes in the fair value of

investments in other debt obligations

6.2.3 Other comprehensive income

arising from the reclassification of

financial assets

6.2.4 Credit impairment allowance for

investments in other debt obligations

6.2.5 Reserve for cash flow hedges

6.2.6 Differences arising from the

translation of foreign

currency-denominated financial

-3557035.02 1139078.49

statements

6.2.7 Other

Attributable to non-controlling

interests

7. Total comprehensive income 727286651.76 741217860.79

Attributable to owners of the Company

as the parent

794520903.77 816893590.37

Attributable to non-controlling

interests

-67234252.01 -75675729.58

8. Earnings per share

8.1 Basic earnings per share 1.3399 1.3722

8.2 Diluted earnings per share 1.3399 1.3722

Where business combinations under common control occurred in the Current Period the net profit achieved by the acquirees before

the combinations was RMB0.00 with the amount for the same period of last year being RMB118680871.93.Legal representative: Liu Shengxiang Head of financial affairs: Cai Lili

Head of the financial department: Liu Qiang

4. Income Statement of the Company as the Parent

Unit: RMB

Item 2020 2019

1. Operating revenue 64151369.60 393330909.38

Less: Cost of sales 45749528.01 61706002.23

Taxes and surcharges 8552661.46 152745770.45

Selling expense 2287301.10 13078323.49

Administrative expense 98340542.43 77139133.61

R&D expense

Finance costs -43492708.54 -43712067.17

Including: Interest expense 15950523.75

Interest income 65751243.49 42193217.20

Add: Other income 253884.96 85442.53

Return on investment (“-” for

loss)

116246519.46 86697646.64

Including: Share of profit or loss of

joint ventures and associates

634098.07 5076839.48

Income from the derecognition of

financial assets at amortized cost (“-”

for loss)

Net gain on exposure hedges

(“-” for loss)

Gain on changes in fair value

(“-” for loss)

Credit impairment loss (“-” for loss) -116544.34 811051.45

Asset impairment loss (“-” for loss)

Asset disposal income (“-” for loss)

2. Operating profit (“-” for loss) 69097905.22 219967887.39

Add: Non-operating income 9989210.85 359518.50

Less: Non-operating expense 374965.45 1292469.73

3. Profit before tax (“-” for loss) 78712150.62 219034936.16

Less: Income tax expense 50688730.41 54998560.04

4. Net profit (“-” for net loss) 28023420.21 164036376.12

4.1 Net profit from continuing

operations (“-” for net loss)

28023420.21 164036376.12

4.2 Net profit from discontinued

operations (“-” for net loss)

5. Other comprehensive income net

of tax

-494182.95 -2051268.24

5.1 Items that will not be reclassified

to profit or loss

-494182.95 -2051268.24

5.1.1 Changes caused by

remeasurements on defined benefit

schemes

5.1.2 Other comprehensive income

that will not be reclassified to profit

or loss under the equity method

5.1.3 Changes in the fair value of

investments in other equity

instruments

-494182.95 -2051268.24

5.1.4 Changes in the fair value arising

from changes in own credit risk

5.1.5 Other

5.2 Items that will be reclassified to

profit or loss

5.2.1 Other comprehensive income

that will be reclassified to profit or

loss under the equity method

5.2.2 Changes in the fair value of

investments in other debt obligations

5.2.3 Other comprehensive income

arising from the reclassification of

financial assets

5.2.4 Credit impairment allowance

for investments in other debt

obligations

5.2.5 Reserve for cash flow hedges

5.2.6 Differences arising from the

translation of foreign

currency-denominated financial

statements

5.2.7 Other

6. Total comprehensive income 27529237.26 161985107.88

7. Earnings per share

7.1 Basic earnings per share 0.0470 0.2752

7.2 Diluted earnings per share 0.0470 0.2752

5. Consolidated Cash Flow Statement

Unit: RMB

Item 2020 2019

1. Cash flows from operating activities:

Proceeds from sale of commodities and

rendering of services

4390400364.60 4536821506.05

Net increase in customer deposits and

interbank deposits

Net increase in borrowings from the

central bank

Net increase in loans from other financial

institutions

Premiums received on original insurance

contracts

Net proceeds from reinsurance

Net increase in deposits and investments

of policy holders

Interest handling charges and

commissions received

Net increase in interbank loans obtained

Net increase in proceeds from repurchase

transactions

Net proceeds from acting trading of

securities

Tax rebates 17586334.90

Cash generated from other operating

activities

401974306.32 727613534.88

Subtotal of cash generated from operating

activities

4809961005.82 5264435040.93

Payments for commodities and services 1398688587.24 2805353837.83

Net increase in loans and advances to

customers

Net increase in deposits in the central

bank and in interbank loans granted

Payments for claims on original

insurance contracts

Net increase in interbank loans granted

Interest handling charges and

commissions paid

Policy dividends paid

Cash paid to and for employees 660768525.22 635119649.94

Taxes paid 2200056926.04 698846233.34

Cash used in other operating activities 164949185.20 185325753.86

Subtotal of cash used in operating activities 4424463223.70 4324645474.97

Net cash generated from/used in operating

activities

385497782.12 939789565.96

2. Cash flows from investing activities:

Proceeds from disinvestment

Return on investment

Net proceeds from the disposal of fixed

assets intangible assets and other

long-lived assets

136131.48 357613.40

Net proceeds from the disposal of

subsidiaries and other business units

Cash generated from other investing

activities

Subtotal of cash generated from investing

activities

136131.48 357613.40

Payments for the acquisition of fixed assets

intangible assets and other long-lived assets

48482853.70 62167787.99

Payments for investments

Net increase in pledged loans granted

Net payments for the acquisition of

subsidiaries and other business units

969530215.99

Cash used in other investing activities

Subtotal of cash used in investing activities 48482853.70 1031698003.98

Net cash generated from/used in investing

activities

-48346722.22 -1031340390.58

3. Cash flows from financing activities:

Capital contributions received 1820000.00 3220000.00

Including: Capital contributions by

non-controlling interests to subsidiaries

1820000.00 3220000.00

Borrowings raised 2175000000.00 2193000000.00

Cash generated from other financing

activities

40000000.00

Subtotal of cash generated from financing

activities

2176820000.00 2236220000.00

Repayment of borrowings 750133000.00 2193067000.00

Interest and dividends paid 411945003.98 423796908.60

Including: Dividends paid by subsidiaries to

non-controlling interests

Cash used in other financing activities 465807569.82 123502169.51

Subtotal of cash used in financing activities 1627885573.80 2740366078.11

Net cash generated from/used in financing

activities

548934426.20 -504146078.11

4. Effect of foreign exchange rates changes

on cash and cash equivalents

-3275807.74 14878.31

5. Net increase in cash and cash equivalents 882809678.36 -595682024.42

Add: Cash and cash equivalents beginning

of the period

3285345233.47 3881027257.89

6. Cash and cash equivalents end of the

period

4168154911.83 3285345233.47

6. Cash Flow Statement of the Company as the Parent

Unit: RMB

Item 2020 2019

1. Cash flows from operating activities:

Proceeds from sale of commodities and

rendering of services

64857663.10 338520399.21

Tax rebates

Cash generated from other operating

activities

2041809928.38 3301015120.23

Subtotal of cash generated from operating

activities

2106667591.48 3639535519.44

Payments for commodities and services 67846809.36 617310657.83

Cash paid to and for employees 50551468.21 47049144.09

Taxes paid 1296096715.75 342530888.32

Cash used in other operating activities 377760390.30 45901384.05

Subtotal of cash used in operating activities 1792255383.62 1052792074.29

Net cash generated from/used in operating

activities

314412207.86 2586743445.15

2. Cash flows from investing activities:

Proceeds from disinvestment 565000000.00 100000000.00

Return on investment 42319444.45

Net proceeds from the disposal of fixed

assets intangible assets and other

long-lived assets

7398.06 690.00

Net proceeds from the disposal of

subsidiaries and other business units

Cash generated from other investing

activities

Subtotal of cash generated from investing

activities

565007398.06 142320134.45

Payments for the acquisition of fixed assets

intangible assets and other long-lived assets

33629541.56 25563107.56

Payments for investments 495807569.82 2634574943.74

Net payments for the acquisition of

subsidiaries and other business units

Cash used in other investing activities

Subtotal of cash used in investing activities 529437111.38 2660138051.30

Net cash generated from/used in investing

activities

35570286.68 -2517817916.85

3. Cash flows from financing activities:

Capital contributions received

Borrowings raised 619000000.00

Cash generated from other financing

activities

40000000.00

Subtotal of cash generated from financing

activities

619000000.00 40000000.00

Repayment of borrowings

Interest and dividends paid 229729842.01 178793727.60

Cash used in other financing activities

Subtotal of cash used in financing activities 229729842.01 178793727.60

Net cash generated from/used in financing

activities

389270157.99 -138793727.60

4. Effect of foreign exchange rates changes

on cash and cash equivalents

-28110.51 14878.31

5. Net increase in cash and cash equivalents 739224542.02 -69853320.99

Add: Cash and cash equivalents beginning 2450935673.17 2520788994.16

of the period

6. Cash and cash equivalents end of the

period

3190160215.19 2450935673.17

7. Consolidated Statements of Changes in Owners’ Equity

2020

Unit: RMB

Item

2020

Equity attributable to owners of the Company as the parent

Non

-con

trolli

ng

inter

ests

Tota

l

own

ers’

equit

y

Sha

re

cap

ital

Other equity

instruments

Capi

tal

reser

ves

Less

:

Trea

sury

stoc

k

Othe

r

com

preh

ensi

ve

inco

me

Spec

ific

reser

ve

Surp

lus

reser

ves

Gen

eral

reser

ve

Reta

ined

earni

ngs

Othe

r

Subt

otal

Pre

fer

red

sha

res

Per

pet

ual

bo

nds

Ot

her

1. Balance as

at the end of

the prior year

595

97

90

92.

00

804

880

45.3

8

-26

983

71.4

4

170

604

48.0

5

245

711

979

5.39

314

794

900

9.38

118

618

291.

81

326

656

730

1.19

Add:

Adjustment

for change in

accounting

policy

Adjustment

for correction

of previous

error

Adjustment

for business

combination

under

common

control

Other

adjustments

2. Balance as

at the

beginning of

595

97

90

804

880

45.3

-26

983

71.4

170

604

48.0

245

711

979

314

794

900

118

618

291.

326

656

730

the year 92.

00

8 4 5 5.39 9.38 81 1.19

3. Increase/

decrease in

the period

(“-” for

decrease)

-40

512

17.9

7

214

553

1.58

581

874

117.

04

579

968

430.

65

-65

414

252.

01

514

554

178.

64

3.1 Total

comprehensiv

e income

-40

512

17.9

7

798

572

121.

74

794

520

903.

77

-67

234

252.

01

727

286

651.

76

3.2 Capital

increased and

reduced by

owners

182

000

0.00

182

000

0.00

3.2.1

Ordinary

shares

increased by

owners

182

000

0.00

182

000

0.00

3.2.2 Capital

increased by

holders of

other equity

instruments

3.2.3

Share-based

payments

included in

owners’

equity

3.2.4 Other

3.3 Profit

distribution

214

553

1.58

-216

698

004.

70

-214

552

473.

12

-214

552

473.

12

3.3.1

Appropriation

to surplus

reserves

280

234

2.02

-28

023

42.0

2

3.3.2

Appropriation

to general

reserve

3.3.3

Appropriation

to owners (or

shareholders)

-214

552

473.

12

-214

552

473.

12

-214

552

473.

12

3.3.4

Other

-656

810.

44

656

810.

44

3.4

Transfers

within

owners’

equity

3.4.1

Increase in

capital (or

share capital)

from capital

reserves

3.4.2

Increase in

capital (or

share capital)

from surplus

reserves

3.4.3

Loss offset by

surplus

reserves

3.4.4

Changes in

defined

benefit

schemes

transferred to

retained

earnings

3.4.5

Other

comprehensiv

e income

transferred to

retained

earnings

3.4.6

Other

3.5 Specific

reserve

3.5.1

Increase in

the period

3.5.2

Used in the

period

3.6 Other

4. Balance as

at the end of

the period

595

97

90

92.

00

804

880

45.3

8

-67

495

89.4

1

192

059

79.6

3

303

899

391

2.43

372

791

744

0.03

532

040

39.8

0

378

112

147

9.83

2019

Unit: RMB

Item

2019

Equity attributable to owners of the Company as the parent

Non-

contr

olling

intere

sts

Total

owne

rs’

equit

y

Sha

re

cap

ital

Other equity

instruments

Capi

tal

reser

ves

Less

:

Trea

sury

stoc

k

Othe

r

com

preh

ensi

ve

inco

me

Spec

ific

reser

ve

Surp

lus

reser

ves

Gen

eral

reser

ve

Reta

ined

earni

ngs

Othe

r

Subt

otal

Pr

efe

rre

d

sh

are

s

Pe

rpe

tua

l

bo

nd

s

Oth

er

1. Balance as

at the end of

the prior year

595

97

90

92.

00

483

347

184.

25

-17

861

81.6

9

299

569

569.

96

249

529

644

0.15

387

240

610

4.67

9111

409.

91

3881

517

514.5

8

Add:

Adjustment

for change in

accounting

policy

Adjustment

for correction

of previous

error

Adjustment

for business

combination

under

common

control

Other

adjustments

2. Balance as

at the

beginning of

the year

595

97

90

92.

00

483

347

184.

25

-17

861

81.6

9

299

569

569.

96

249

529

644

0.15

387

240

610

4.67

9111

409.

91

3881

517

514.5

8

3. Increase/

decrease in

the period

(“-” for

decrease)

-402

859

138.

87

-912

189.

75

-282

509

121.

91

-38

176

644.

76

-724

457

095

.29

1095

0688

1.90

-614

9502

13.39

3.1 Total

comprehensi

ve income

-912

189.

75

817

805

780.

12

816

893

590.

37

-756

7572

9.58

7412

1786

0.79

3.2 Capital

increased and

reduced by

owners

-402

859

138.

87

-298

912

759.

52

-660

785

059.

67

-13

625

569

58.0

6

1851

8261

1.48

-117

7374

346.

58

3.2.1

Ordinary

shares

increased by

owners

3220

000.

00

3220

000.

00

3.2.2 Capital

increased by

holders of

other equity

instruments

3.2.3

Share-based

payments

included in

owners’

equity

3.2.4 Other

-402

859

138.

87

-298

912

759.

52

-660

785

059.

67

-13

625

569

58.0

6

1819

6261

1.48

-118

0594

346.

58

3.3 Profit

distribution

164

036

37.6

1

-195

197

365.

21

-178

793

727

.60

-178

7937

27.60

3.3.1

Appropriatio

n to surplus

reserves

164

036

37.6

1

-16

403

637.

61

3.3.2

Appropriatio

n to general

reserve

3.3.3

Appropriatio

n to owners

(or

shareholders)

-178

793

727.

60

-178

793

727

.60

-178

7937

27.60

3.3.4

Other

3.4

Transfers

within

owners’

equity

3.4.1

Increase in

capital (or

share capital)

from capital

reserves

3.4.2

Increase in

capital (or

share capital)

from surplus

reserves

3.4.3

Loss offset

by surplus

reserves

3.4.4

Changes in

defined

benefit

schemes

transferred to

retained

earnings

3.4.5

Other

comprehensi

ve income

transferred to

retained

earnings

3.4.6

Other

3.5 Specific

reserve

3.5.1

Increase in

the period

3.5.2

Used in the

period

3.6 Other

4. Balance as

at the end of

the period

595

97

90

92.

00

804

880

45.3

8

-26

983

71.4

4

170

604

48.0

5

245

711

979

5.39

314

794

900

9.38

1186

1829

1.81

3266

567

301.1

9

8. Statements of Changes in Owners’ Equity of the Company as the Parent

2020

Unit: RMB

Item 2020

Share

capit

al

Other equity

instruments Capita

l

reserv

es

Less:

Treasu

ry

stock

Other

compr

ehensi

ve

incom

e

Specifi

c

reserv

e

Surplu

s

reserv

es

Retai

ned

earni

ngs

Other

Total

owners’

equity

Prefe

rred

share

s

Perp

etual

bond

s

Othe

r

1. Balance as

at the end of

the prior year

5959

7909

2.00

53876

380.1

1

-2051

268.24

16403

637.6

1

167

729

628

9.46

234150

4130.94

Add:

Adjustment

for change in

accounting

policy

Adjustment

for correction

of previous

error

Other

adjustments

2. Balance as

at the

beginning of

the year

5959

7909

2.00

53876

380.1

1

-2051

268.24

16403

637.6

1

167

729

628

9.46

234150

4130.94

3. Increase/

decrease in the

period (“-” for

decrease)

-4941

82.95

2802

342.02

-189

331

394.

93

-187023

235.86

3.1 Total

comprehensive

income

-4941

82.95

280

234

20.2

1

275292

37.26

3.2 Capital

increased and

reduced by

owners

3.2.1 Ordinary

shares

increased by

owners

3.2.2 Capital

increased by

holders of

other equity

instruments

3.2.3

Share-based

payments

included in

owners’ equity

3.2.4 Other

3.3 Profit

distribution

2802

342.02

-217

354

815.

14

-214552

473.12

3.3.1

Appropriation

to surplus

reserves

2802

342.02

-280

234

2.02

3.3.2

Appropriation

to owners (or

shareholders)

-214

552

473.

12

-214552

473.12

3.3.3

Other

3.4

Transfers

within owners’

equity

3.4.1

Increase in

capital (or

share capital)

from capital

reserves

3.4.2

Increase in

capital (or

share capital)

from surplus

reserves

3.4.3

Loss offset by

surplus

reserves

3.4.4

Changes in

defined benefit

schemes

transferred to

retained

earnings

3.4.5

Other

comprehensive

income

transferred to

retained

earnings

3.4.6

Other

3.5 Specific

reserve

3.5.1

Increase in the

period

3.5.2

Used in the

period

3.6 Other

4. Balance as

at the end of

the period

5959

7909

2.00

53876

380.1

1

-2545

451.19

19205

979.6

3

148

796

489

4.53

215448

0895.08

2019

Unit: RMB

Item

2019

Shar

e

capit

al

Other equity

instruments

Capit

al

reserv

es

Less:

Treas

ury

stock

Other

compr

ehensi

ve

incom

e

Specifi

c

reserve

Surpl

us

reserv

es

Retaine

d

earning

s

Other

Total

owners’

equity

Pref

erre

d

shar

es

Perp

etual

bon

ds

Othe

r

1. Balance as

at the end of

595

979

9232

6467.

2989

1275

20805

13737.

306773

2056.76

the prior year 092.

00

62 9.52 62

Add:

Adjustment

for change in

accounting

policy

Adjustment

for correction

of previous

error

Other

adjustments

2. Balance as

at the

beginning of

the year

595

979

092.

00

9232

6467.

62

2989

1275

9.52

20805

13737.

62

306773

2056.76

3. Increase/

decrease in

the period

(“-” for

decrease)

-3845

0087.

51

-2051

268.2

4

-282

5091

21.91

-40321

7448.1

6

-726227

925.82

3.1 Total

comprehensiv

e income

-2051

268.2

4

16403

6376.1

2

161985

107.88

3.2 Capital

increased and

reduced by

owners

-3845

0087.

51

-298

9127

59.52

-37205

6459.0

7

-709419

306.10

3.2.1

Ordinary

shares

increased by

owners

3.2.2 Capital

increased by

holders of

other equity

instruments

3.2.3

Share-based

payments

included in

owners’

equity

3.2.4 Other

-3845

0087.

51

-298

9127

59.52

-37205

6459.0

7

-709419

306.10

3.3 Profit

distribution

1640

3637

.61

-19519

7365.2

1

-178793

727.60

3.3.1

Appropriatio

n to surplus

reserves

1640

3637

.61

-16403

637.61

3.3.2

Appropriatio

n to owners

(or

shareholders)

-17879

3727.6

0

-178793

727.60

3.3.3

Other

3.4

Transfers

within

owners’

equity

3.4.1

Increase in

capital (or

share capital)

from capital

reserves

3.4.2

Increase in

capital (or

share capital)

from surplus

reserves

3.4.3

Loss offset

by surplus

reserves

3.4.4

Changes in

defined

benefit

schemes

transferred to

retained

earnings

3.4.5

Other

comprehensiv

e income

transferred to

retained

earnings

3.4.6

Other

3.5 Specific

reserve

3.5.1

Increase in

the period

3.5.2

Used in the

period

3.6 Other

4. Balance as

at the end of

the period

595

979

092.

00

5387

6380.

11

-2051

268.2

4

1640

3637

.61

16772

96289.

46

234150

4130.94

III Company Profile

Shenzhen Properties & Resources Development (Group) Ltd. (hereinafter referred to as “the Company” or “Company”) was

incorporated based on the reconstruction of Shenzhen Properties & Resources Development Co. Ltd. after obtaining approval of

ZFBF [1991] No. 831 from People’s Government of Shenzhen Municipality. It was registered with Shenzhen Industrial and

Commercial Administration Bureau on 17 January 1983 with Shenzhen as its headquarters. Now the Company holds the business

license for legal person with the registration number/unified social credit code of 91440300192174135N. The registered capital was

RMB595979092 with the total shares of 595979092 (RMB1 face value per share) among which restricted public shares:

1898306 A shares and 0 B shares; unrestricted public shares: 526475543 A shares and 67605243 B shares. The stock of the

Company has been listed on the Shenzhen Stock Exchange on 30 March 1992.

The Company is in the real estate sector. Its main business includes development of real estate and sale of commercial housing

construction and management of buildings house rent supervision of construction domestic trading and materials supply and

marketing (excluding exclusive dealing and monopoly sold products and commodities under special control to purchase). Main

products or services rendered mainly include the development and sales of commercial residential housing; property management;

buildings and the building devices maintenance garden afforest and cleaning service; property leasing; supervise and management of

the engineering; retails of the Chinese food Western-style food and wines and etc.The financial statements were approved and authorized for issue by the 22nd Meeting of the 9th Board of Directors of the Company on

30 March 2021.

The consolidation scope of the Company’s consolidated financial statements was determined based on the control. There were 44

subsidiaries including Shenzhen Huangcheng Real Estate Co. Ltd. Dongguan Guomao Changsheng Real Estate Development Co.Ltd. Shenzhen International Trade Center Property Management Co. Ltd. included in the consolidation financial statements in this

report. Please refer to the Note VIII and Note IX of the financial report for details.

IV Basis for Preparation of Financial Statements

1. Preparation Basis

Based on the continuing operation the financial statements of the Company are prepared in accordance with the actual transactions

governing provisions of the Accounting Standards for Business Enterprises and the following major accounting policies and

estimates.

2. Continuation

There was no such case where the sustainable operation ability within 12 months since the end of the Reporting Period was highly

doubted.V. Important Accounting Policies and Estimations

Indication of specific accounting policies and estimations:

1. Statement for Complying with the Accounting Standard for Business Enterprise

The financial statement prepared by the Company complies with the requirements of the latest accounting standards for business

enterprises as well as the application guidelines interpretations and other relevant regulations (hereinafter referred to as the

“accounting standards for business enterprises”) issued by the Ministry of Finance. It reflects the Company’s financial conditions

operating results cash flow and other related information in a truthful and complete manner.In addition in the preparation of the financial report reference was made to the presentation and disclosure requirements of the Rule

for Information Disclosure by Companies Offering Securities to the Public No. 15 - General Provisions on Financial Reports (2014

Revision) and the Notice on Related Matters of the Implementation of New Accounting Standards for Business Enterprises by Listed

Companies (KJBH [2018] No. 453).

2. Fiscal Period

The fiscal year of the Company is a solar calendar year which is from 1 January to 31 December.

3. Operating Cycle

Except for the real estate industry other businesses run by the Company have relatively short operating cycles according to the

classification standard of 12-month’s liquidity of assets and liabilities. The operating cycle of the real estate industry shall be

generally more than 12 months from real estate development to cash the sales. The specific cycle shall be determined by the

development project and classified by the assets and liabilities liquidity.

4. Standard Currency of Accounts

The Company adopts Renminbi as a standard currency of accounts.5. Accounting Process of Business Combinations under the Same Control and not under the Same Control

1. Accounting Process of Business Combinations under the Same Control

The assets and liabilities that the Company obtains in a business combination shall be measured on the basis of their carrying amount

combined party in the consolidated financial statements of the final controller on the combining date. As for the balance between

the carrying amount of combined party’s owners equities in the consolidated financial statements of the final controller and the

carrying amount of the consideration paid by it or the total par value of the shares issued) the additional paid-in capital shall be

adjusted. If the additional paid-in capital is not sufficient to be offset the retained earnings shall be adjusted.

2. Accounting Process of Business Combinations not under the Same Control

The Company shall recognize the positive balance between the combination costs and the fair value of the identifiable net assets

obtained from the acquiree on purchase date as goodwill. If the combination costs are less than the fair value of the identifiable net

assets obtained from the acquire the Company shall recheck the various identifiable assets and liabilities obtained from the acquire

fair value with liabilities and measurement of combination costs. If the combination costs are less than the fair value of the

identifiable net assets obtained from the acquire after recheck the Company shall the record the balance into the profit and loss of the

current period.

6. Methods for Preparing Consolidated Financial Statements

The Company as the parent included its all subsidiaries into the consolidation scope of consolidated financial statements. Based on

the financial statements of the Company as the parent and its subsidiaries and other related materials the consolidated financial

statements were prepared by the Company as the parent according to Accounting Standards for Enterprises No. 33 –Consolidated

Financial Statements.

7. Classification of Joint arrangements and Accounting Treatment of Joint Operations

1. Joint arrangement is classified into joint operation and joint ventures.

2. When the Company is a party of a joint operation recognize the following items related to the profits in the joint operation:

(1) Recognize the assets held independently and recognize the assets held jointly in the holding portion;

(2) Recognize the liabilities borne independently and recognize the liabilities held jointly in the holding portion;

(3) Recognize the revenue generated from the output portion of joint operation shared for selling the Company;

(4) Recognize the revenue generated from the sale of assets in joint operation in the holding portion of the Company;

(5) Recognize the expenses incurred independently and recognize the expenses incurred in joint operation in the holding portion of

the Company.

8. Recognition Standard for Cash and Cash Equivalents

In the Company’s understanding cash and cash equivalents include cash on hand any deposit that can be used for cover and

short-term (usually due within 3 months since the day of purchase) and high circulating investments which are easily convertible

into known amount of cash and whose risks in change of value are minimal.

9. Foreign Currency Businesses and Translation of Foreign Currency Financial Statements

(1) Accounting treatments for translation of foreign currency business

As for a foreign currency transaction in its initial recognition the amount in the foreign currency shall be translated into the amount

in the Renminbi at the spot exchange rate of the transaction date. On balance sheet date the foreign currency monetary items shall be

translated as the spot exchange rate on the balance sheet date the balance occurred thereof shall be recorded into the profits and

losses at the current period except that the balance of exchange arising from the principal and interests of foreign currency

borrowings for the purchase and construction or production of assets eligible for capitalization. The foreign currency non-monetary

items measured at the historical cost shall still be translated at the spot exchange rate on the transaction date of which the amount of

functional currency shall not be changed. The foreign currency non-monetary items measured at the fair value shall be translated at

the spot exchange rate on the confirming date of fair value of which the balance of exchange shall be included into the profit and

loss of the current period or other comprehensive income.

(2) Translation of foreign currency financial statements

The asset and liability items in the balance sheets shall be translated at a spot exchange rate on the balance sheet date. Among the

owner’s equity items except for the items as “retained earnings” other items shall be translated at the spot exchange rate at the time

when they are incurred. The income and expense items in the income statements shall be translated at the approximate spot exchange

rate at the time when they are incurred. The difference from translation of foreign currency financial statements thereof shall be

recorded into other comprehensive income.

10. Financial Instruments

1. Classification of Financial Assets and Financial Liabilities

Financial assets shall be classified into the following three categories when they are initially recognized: (1) financial assets

measured at amortized cost; (2) financial assets at fair value through other comprehensive income; (3) financial assets at fair value

through profit or loss.

Financial liabilities shall be classified into the following four categories when they are initially recognized: (1) financial liabilities at

fair value through profit or loss; (2) financial liabilities generated from transfer of financial assets not conforming to requirements of

derecognition or continuous involvement of transferred financial assets; (3) financial guarantee contracts not belonging to above (1)

or (2) and loan commitments not belonging to above (1) and at lower interest rate than the market interest rate; (4) financial

liabilities measured at amortized cost.

2. Recognition Basis Calculation Method and Termination of Recognition of Financial Assets and Liabilities

(1) Recognition basis and initial calculation method of financial assets and liabilities

When the Company becomes a party to a financial instrument it shall recognize a financial asset or financial liability. The financial

assets and financial liabilities initially recognized shall be measured at their fair values. For the financial assets and liabilities

measured at their fair values and of which the variation is recorded into the profits and losses of the current period the transaction

expenses thereof shall be directly recorded into the profits and losses of the current period; for other categories of financial assets and

financial liabilities the transaction expenses thereof shall be included into the initially recognized amount. However when the

accounts receivable initially recognized by the Company do not include significant financing or the Company does not consider the

financing in contracts not over one year it shall be initially calculated at the transaction price.

(2) Subsequent calculation method of financial assets

1) Financial assets at amortized cost

The Company shall make subsequent measurement on its financial assets at amortized cost by adopting the actual interest rate

method. The gains or losses generated from the financial assets at amortized cost and not belonging to any hedging relationship shall

be recorded into the current profit of loss when decognized reclassified amortized with the actual interest rate method or

recognizing impairments.Investments in debt instruments at fair value through other comprehensive income

The Company shall make subsequent measurement at fair value. The interest calculated by adopting the actual interest rate method

impairment losses or profits and foreign exchange gains shall be recorded into the current profit or loss and other profits or losses

shall be recorded into other comprehensive income. When derecognized the accumulative profits or losses thereof originally

recorded into other comprehensive income shall be transferred out and then recorded into the current profit or loss.Investments in equity instruments at fair value through other comprehensive income

The Company shall make subsequent measurement at fair value. The dividends obtained (exclude those belong to recovery of

investment cost) shall be recorded into the current profit or loss and other gains or losses recorded into other comprehensive income.When derecognized the accumulative gains or losses thereof originally recorded into other comprehensive income shall be

transferred out and then recorded into the retained earnings.

Financial assets at fair value through profit or loss

The Company shall make subsequent measurement at fair value. The gains or losses generated (include interest and dividend income)

shall be recorded into the current profit or loss unless the financial asset is one part of a hedging relationship.Subsequent calculation method of financial liabilities

Financial liabilities at fair value through profit or loss

Such financial liabilities include trading financial liabilities (include derivative instruments belonging to financial liabilities) and

those designated as financial liabilities at fair value through profit or loss. For such financial liabilities the subsequent measurement

shall be conducted at fair value. The amount of changes in fair value of designated financial liabilities at fair value through profit or

loss due to the Company’s credit risk changes shall be recorded into other comprehensive income unless this treatment will result in

or enlarge accounting mismatch of the profit or loss. The other gains or losses generated from such financial liabilities (including

interest expense changes of fair value not caused by the Company’s credit risk changes) shall be recorded into the current profit or

loss unless the they are one part of a hedging relationship. And when derecognized the accumulative gains or losses thereof

originally recorded into other comprehensive income shall be transferred out and then recorded into the retained earnings.

Financial liabilities generated from financial assets transfer not conforming to derecognition conditions or continuous involvement of

transferred financial assets

They shall be measured in accordance with regulations of Accounting Standards for Business Enterprises No.23-Transfer of Financial

Assets

financial guarantee contracts not belonging to above (1) or (2) and loan commitments not belonging to above (1) and at lower

interest rate than the market interest rate;

The subsequent measurement shall be conducted according to the higher of the following two amounts after initial recognition: ①

amount of allowance for impairments recognized in accordance with the impairment provisions of financial instruments; ② the

residual of initial recognized amount after deducted accumulative amortized amount recognized as relevant regulations.

Financial liabilities at amortized cost

The Company shall measure at amortized cost by adopting actual interest rate method. The gains or losses generated from financial

liabilities at amortized cost and not belonging to any hedging relationship shall be recorded into the current profit or loss when

derecognized or amortized with actual interest rate method.

Derecognition of financial assets and financial liabilities

Derecognize financial assets when meeting one of the following conditions:

① The contract rights for collecting cash flow of financial assets have terminated;

② Financial asset has been transferred and the transfer meets the provisions of Accounting Standards for Business Enterprises

No.23-Transfer of Financial Assets governing the derecognition of financial assets.

2) When the current obligation of the financial liability (or some of it) has been relieved the financial liability (or some of it) shall be

accordingly derecognized.

3. Recognition Basis and Measurement of Transfer of Financial Assets

Where the Company has transferred nearly all of the risks and rewards related to the ownership of the financial asset to the transferee

it shall stop recognizing the financial asset and separately recognize the rights and obligations generated retained from the transfer as

assets or liabilities. If it retained nearly all of the risks and rewards related to the ownership of the financial asset it shall continue to

recognize the transferred financial asset. Where the Company does not transfer or retain nearly all of the risks and rewards related to

the ownership of a financial asset it shall deal with it according to the circumstances as follows respectively: (1) If it gives up its

control over the financial asset it shall stop recognizing the financial asset and separately recognize the rights and obligations

generated retained from the transfer as assets or liabilities; (2) If it does not give up its control over the financial asset it shall

according to the extent of its continuous involvement in the transferred financial asset recognize the related financial asset and

recognize the relevant liability accordingly.If the transfer of an entire financial asset satisfies the conditions for stopping recognition the difference between the amounts of the

following 2 items shall be recorded in the profits and losses of the current period: (1) The carrying value of the transferred financial

asset on the derecognition date; (2) The sum of consideration received from the transfer of financial assets and derecognition amount

among the accumulative amount of the changes of the fair value originally recorded in the other comprehensive income (the financial

assets involve transfer are investments in debt instruments at fair value through other comprehensive income. If the transfer of partial

financial asset satisfies the conditions to stop the recognition the entire carrying value of the transferred financial asset shall

between the portion whose recognition has been stopped and the portion whose recognition has not been stopped be apportioned

according to their respective relative fair value on the transfer date and the difference between the amounts of the following two

items shall be included into the profits and losses of the current period: (1)The carrying value of the portion whose recognition has

been stopped; (2)The sum of consideration of the portion whose recognition has been stopped and derecognition amount among the

accumulative amount of the changes of the fair value originally recorded in the other comprehensive income (the financial assets

involve transfer are investments in debt instruments at fair value through other comprehensive income.

4. Recognition Method of Financial Assets and Financial Liabilities’ Fair Value

The Company adopts the valuation technique with sufficient useful data and supported by other information which is suitable for the

current situation to recognize the fair value of related financial assets and liabilities. The Company classifies the input value used in

the valuation technique into the following levels and uses them in sequence:

(1) The first level of input value is the non-adjustable offer of the same assets or liabilities in the active market on the calculation

date;

(2) The second level of input value is the directly or indirectly observable input value of related assets or liabilities except the input

value on the first level including: offer of similar assets or liabilities in the active market; offer of identical or similar assets or

liabilities in the non-active market; other observable input value except offer including the observable interest rate during the interval

period of common offer profit rate curve etc.; the input value for market verification etc..

(3) The third level of input value is the non-observable input value of related assets or liabilities including interest rates that cannot

be observed directly or verified by the data of observable market stock fluctuation rate future cash flow of the disposal obligation

borne in corporate mergers financial forecast based on self-data etc..

5. Impairment of financial instrument

(1) Impairment measurement and accounting handling of financial instrument

Based on expected credit loss the Company conducts impairment handling and confirms loss reserve for financial assets which is

measured by amortized cost debt instrument investment which is measured by fair value and whose change is calculated into other

comprehensive profits accounts receivable of rental loan commitment which is beyond financial debt classified as the one which is

measured by fair value and whose change is calculated into current profits and losses financial debt which does not belong to the one

which is measured by fair value and whose change is calculated into current profits or losses or financial guarantee contract of

financial debt which is formed when it does not belong to financial asset transfer and doesn’t conform to confirmation condition of

termination or keeps on being involved in transferred financial asset.

Expected credit loss refers to weighted average of credit loss of financial instrument which takes the risk of contract breach

occurrence as the weight. Credit loss refers to the difference between all contract cash flow which is converted into cash according to

actual interest rate and receivable according to contract and all cash flow which to be charged as expected i.e. current value of all

cash shortage. Among it as for financial asset purchased or original which has had credit impairment it should be converted into

cash according actual interest rate of this financial asset after credit adjustment.

As for financial asset purchased or original which has had credit impairment the Company only confirms cumulative change of

expected credit loss within the whole duration after initial confirmation on the balance sheet date as loss reserve.

As for accounts receivable which don’t include major financing contents or the Company does not consider financing contents in

contract which is less than one year the Company applies simplified measurement method and measures loss reserve according to

amount of expected credit loss within the whole duration.

As for account receivable of rental and accounts receivable including major financing contents the Company applies simplified

measurement method and measure loss reserve according to amount of expected credit loss within the whole duration.

As for financial asset beyond above mentioned measurement methods the Company evaluates whether its credit risk has increased

obviously since the initial confirmation on each balance sheet date. In case credit risk has increased obviously the Company

measures the loss reserve according to amount of expected credit loss within the whole duration; in case the credit risk does not

increase obviously the Company measures loss reserve according to the amount of expected credit loss in next 12 months.

By utilizing obtainable rational and well grounded information including forward-looking information comparing the risk of

contract breach on balance sheet date and risk of contract breach on initial confirmation date the Company confirms whether the

credit risk of financial instrument has increased obviously from initial confirmation.On balance sheet date in case the Company judges that the financial instrument just has relatively low credit risk then it will be

assumed that credit risk of the financial instrument has not increased obviously.

Based on single financial instrument or financial portfolio the Company evaluates expected credit risk and measures expected credit

loss. When based on financial instrument portfolio the Company takes common risk characteristics as the basis and divides financial

instruments into different portfolios.The Company measures expected credit loss again on each balance sheet date the increase of loss reserve or amount which is

transfer back generated by it is calculated into current profits and losses as impairment profits or losses. As for financial asset which

is measured by amortized cost loss reserve offsets the carrying value of the financial asset listed in the balance sheet; as for debt

investment which is measured by fair value and whose change is calculated into other comprehensive profits the Company confirms

its loss reserve in other comprehensive profits and does not offset the carrying value of the financial asset.

(2) Financial instruments assessing expected credit risk by groups and measuring expected credit losses

Item Recognition basis Method of measuring expected credit losses

Other receivables-intercourse funds among

related party group within the consolidation

scope

Accounts nature Consulting historical experience in credit losses

combining actual situation and prediction for future

economic situation the group’s expected credit loss

rate shall be accounted through exposure at default

and the expected credit loss rate within the next 12

months or the entire life

Other receivables-interest receivable group

Other receivables-other intercourse funds

among related party group

Other receivables-credit risk characteristics

group

Aging group Consulting historical experience in credit losses

combining actual situation and prediction for future

economic situation the group’s expected credit loss

rate shall be accounted through exposure at default

and the expected credit loss rate within the next 12

months or the entire life

(3) Accounts receivable with expected credit losses measured by groups

① Specific groups and method of measuring expected credit loss

Item Recognition basis Method of measuring expected credit losses

Bank’s acceptance bills receivable Bill type Consulting historical experience in credit losses

combining actual situation and prediction for future

economic situation the group’s expected credit loss

rate shall be accounted through exposure at default

and the expected credit loss rate within the entire life

Trade acceptance bills receivable

Accounts receivable-other intercourse funds

among related party group

Account nature Consulting historical experience in credit losses

combining actual situation and prediction for future

economic situation the group’s expected credit loss

rate shall be accounted through exposure at default

and the expected credit loss rate within the entire life

Accounts receivable-credit risk characteristics

group

Aging group Prepare the comparative list between aging of

accounts receivable and expected credit loss rate

over the entire life by consulting historical

experience in credit losses combining actual

situation and prediction for future economic

situation

② Accounts receivable-the comparative list between aging of common customer group and expected credit loss rate over the entire

life

Aging Expected credit loss rate of accounts receivable (%)

Within 1 year (inclusive the same below) 3.00

1 to 2 years 10.00

2 to 3 years 30.00

3 to 4 years 50.00

4 to 5 years 80.00

Over 5 years 100.00

6. Offset between financial asset and financial debt

Financial asset and financial debt are listed in the balance sheet separately and don’t offset each other. However when the following

conditions are met at the same time the Company will list the net amount after mutual offset in the balance sheet: (1) The Company

has the legal right to offset the confirmed amount and the legal right is executable currently; (2) The Company plans to settle by net

amount or monetize the financial asset and liquidate the financial debt at the same time.

For those transfers of financial assets not meeting the derecognition conditions the Company does not offset the transferred financial

assets and relative liabilities.

11. Notes Receivable

Refer to Note V 10 Financial Instruments of the financial statements for details.

12. Accounts Receivable

Refer to Note V 10 Financial Instruments of the financial statements for details.

13. Accounts Receivable Financing

Not applicable.

14. Other Receivables

Recognition and accounting treatment methods regarding expected credit losses of other receivables

Refer to Note V 10 Financial Instruments of the financial statements for details.

15. Inventory

(1) Inventories Classification

Inventories include development land held for sale or consumption in the process of development and operation development

products temporarily leased development products which intended for sale relocation housing stock materials inventory equipment

and low-value consumables etc. as well as development costs in the process of development.

(2) Cost Flow Assumption

1) Send-out materials shall adopt the moving weighted average method.

2) During the development of the project the development land shall be included in the development cost of the project by the floor

area apportion of the developed products.3) Send-out developed products shall be accounted by specific identification method.

4) The temporarily leased development products which intended for sale and relocation housing shall be amortized averagely by

stages according to the expected useful life of the same kind of fixed assets of the Company.

5) If the public supporting facilities are completed earlier than the relevant development products after the final account of the public

supporting facilities， it shall be account into the development cost of the relevant development projects according to the buildingarea; If the public supporting facilities are completed later than the relevant development products the relevant development products

shall withhold the public supporting facilities fees and adjust the relevant development product costs according to the difference

between the actual occurrence and the withhold amount after the completed public supporting facilities' final accounts.

(3) Recognition basis of Net Realizable Value of Inventory

On the balance sheet date inventory shall be measured at the lower of cost or net realizable value and provision shall be made for

falling price of inventories on the ground of the difference between the cost of each item of inventories and the net realizable value.Inventories directly for sale under normal producing process to the amount after deducting the estimated sale expense and relevant

taxes from the estimated sell price of the inventory the net realizable value has been recognized; inventories which need to be

processed under normal producing process to the amount after deducting the estimated cost of completion estimated sale expense

and relevant taxes from the estimated sale price of produced finished goods the net realizable value has been recognized; on the

balance sheet date in the same item of inventories if some have contractual price agreement while others do not the net realizable

value shall be recognized respectively and compared with their cost and the amount of provision withdrawal or reversal for falling

price of inventories shall be recognized respectively.

(4) Inventory System for Inventories

Inventory system: Perpetual inventory system

(5) Amortization Method of the Low-value Consumption Goods and Packing Articles

1) Low-value Consumption Goods

One-off amortization method

2) Packing Articles

One-off amortization method

16. Contract Assets

The Company presents contract assets or contract liabilities on the balance sheet according to the relationship between the fulfillment

of its contract performance obligations and its customers’ payment. Considerations that the Company has the right to collect for

commodities transferred or services provided to customers (except for accounts receivable) are presented as contract assets.

For contract assets that do not contain significant financing components the Company uses the simplified model of expected credit

loss measuring the loss provision according to an amount that is equivalent to the amount of expected credit loss of the entire

duration. The increased loss provision or reversed amount thereof shall be recorded into the current profit or loss as impairment

losses or gains.

For contract assets that contain significant financing components the Company has made the accounting policy choice and selected

the simplified model of expected credit loss measuring the loss provision according to an amount that is equivalent to the amount of

expected credit loss of the entire duration. The increased loss provision or reversed amount thereof shall be recorded into the current

profit or loss as impairment losses or gains.

17. Contract Costs

Contract costs comprise contract performance cost and contract acquisition cost.

The cost incurred by the Company from performing a contract is recognized into an asset as contract performance cost when it meets

the following conditions:

This cost directly relates to an existing contract or a contract expected to be acquired. It consists of direct labor direct materials

manufacture costs (or similar costs) costs specified to be borne by the customer and other costs incurred from this contract solely.This cost has increased the Company’s sources that are used to fulfill its contract performance obligations in the future.This cost is expected to be recovered.

An incremental cost that is incurred by the Company for acquiring a contract and expected to be recovered is recognized into an asset

as contract acquisition cost. However for such asset with an amortization period of less than one year the Company recognizes them

into current profit/loss at their occurrence.

Assets related to contract costs are amortized on the same basis for recognizing the revenue from commodities or services related to

such assets.When the carrying value of an asset related to contract costs is higher than the difference between the following two items the

Company will withdraw impairment provision for the exceeded part and recognize it as asset impairment loss:

Residual consideration expected to be gained from transferring commodities and services related to this asset;

Costs expected to be incurred from transferring such commodities or services.

When the aforementioned asset impairment provision is reversed later the carrying value of the asset after the reversal should not

exceed its carrying value on the reversal date under the assumption of no withdrawal of impairment provision.

18. Assets Held for Sale

The Company divides its components (or non-current assets) meeting the following conditions into available for sale assets: (1)

Assets can be sold immediately under the current conditions according to the practice of selling such assets or disposal groups in

similar transactions; (2) The sale is likely to occur and a resolution has been made on a sale plan and a firm purchase commitment is

obtained (a firm purchase commitment refers to a legally binding purchase agreement signed between an enterprise and other parties

which contains important terms such as transaction price time and severe penalty for breach of contract to minimize the possibility

of major adjustment or cancellation of the agreement. The sale is expected to be completed within a year. It has been approved by

relevant authorities or regulatory authorities according to relevant regulations.The Company adjusts the estimated net residual value of available for sale assets to the net amount of its fair value minus the selling

expenses (which shall not exceed the original book value of the assets available for sale). The difference between the original book

value and the adjusted estimated net residual value shall be included in the current profit and loss as the loss of asset impairment and

provisions for impairment of assets available for sale shall be made. For the amount of impairment loss of disposal group available

for sale recognized the book value of goodwill of the disposal group shall be offset first and then the book value of disposal group

shall be offset in proportion according to the share of the book value of non-current assets in the disposal group measured according

to this Standard.When the net amount of fair value of non-current assets available for sale minus the selling expenses increases on the subsequent

balance sheet date the amount previously written down shall be restored and reversed within the amount of asset impairment loss

recognized after being classified as available for sale assets and the reversed amount shall be included in the current profits and

losses. The impairment loss of assets recognized before being classified as available for sale assets shall not be reversed. When the

net amount of fair value of disposal group available for sale minus the selling expenses increases on the subsequent balance sheet

date the amount previously written down shall be restored and reversed within the amount of asset impairment loss recognized as

non-current assets in the disposal group measured according to this Standard after being classified into the categories available for

sale assets and the reversed amount shall be included in the current profits and losses. The book value of goodwill that has been

offset and the impairment loss of non-current assets measured according to this Standard shall not be reversed before they are

classified as available for sale assets. The subsequent reversal amount of asset impairment loss recognized as disposal group

available for sale shall be increased in proportion to the share of the book value of non-current assets in the disposal group except

goodwill which are measured according to this Standard. In case that an enterprise loses its control over a subsidiary due to sale of

its investment in the subsidiary the investment in the subsidiary to be sold shall be divided into the available for sale category in

individual financial statement of the parent company when the proposed investment in the subsidiary meets the conditions for

classification of available for sale category and all assets and liabilities of the subsidiary shall be classified into available for sale

category in the consolidated financial statements no matter whether the enterprise retains part of equity investment after the sale.

19. Investments in Debt Obligations

Not applicable.

20. Investments in other Debt Obligations

Not applicable.

21. Long-term Receivable

Not applicable.

22. Long-term Equity Investments

1. Judgment of Joint Control and Significant Influences

The term "joint control" refers to the joint control over an arrangement in accordance with the related agreements which does not

exist unless the participants sharing the control power agree with each other about the related arranged activity. The term "significant

influences" refers to the power to participate in making decisions on the financial and operating policies of an enterprise but not to

control or do joint control together with other parties over the formulation of these policies.

2. Recognition of Investment Cost

(1) If the business combination is under the common control and the acquirer obtains long-term equity investment in the

consideration of cash non-monetary asset exchange bearing acquiree’s liabilities or the issuance of equity securities the initial cost

is the carrying amount of the proportion of the acquiree’s owner’s equity at the acquisition date. The difference between the initial

cost of the long-term equity investment and the carrying amount of the paid combination or the total amount of the issued shares

should be adjusted to capital surplus. If the capital surplus is not sufficient for adjustment retained earnings are adjusted respectively.When a long-term equity investment is formed from the business combination under common control through the Company’s

multiple transactions step by step the treatment shall be carried out based on whether the transactions constitute the “package deal”.If they do the accounting treatment shall be carried out on the basis of assuming all transactions as one transaction with the

acquisition of control. If they do not the initial investment cost shall be the portion of the carrying value of acquiree’s net assets

entitled in the consolidated financial statements of the final controller after the consolidation. The difference between the initial

investment cost of the long-term equity investment on the combination date and the carrying value of the investment before the

combination plus the carrying value of the newly-paid consideration for the acquisition of the shares on the consolidation date shall

be adjusted to capital reserve; if the capital reserve is insufficient for the adjustment retained earnings should be adjusted

accordingly.

(2) For those formed from the business combination under different control the initial investment cost is the fair value of the

combination consideration paid on the acquisition date.When a long-term equity investment is formed from the business combination under different control through the Company’s

multiple transactions step by step the accounting treatment shall be carried out based on whether the financial statements are

individual or consolidated:

1) In individual financial statements the initial investment cost accounted in cost method is the sum of the carrying value of the

equity investment originally held and the cost of new investment.

2) In consolidate financial statements judge whether the transactions constitute the “package deal”. If they do the accounting

treatment shall be carried out on the basis of assuming all transactions as one transaction with the acquisition of control. If they do

not for the acquiree’s equity held before the acquisition date re-measurement shall be carried out according to the fair value of the

equity on the acquisition date and the difference between the fair value and the carrying value shall be recorded into current

investment income; if the acquiree’s equity held before the acquisition date involves other comprehensive income accounted in

equity method other comprehensive income related to it shall be transferred into the income for the period in which the acquisition

date falls with the exception of the other comprehensive incomes occurred because of the changes of net liabilities or net assets of

the defined benefit pension plans be re-measured for setting by the investees.

3) For those formed other than from business combination: If they are acquired in cash payment the initial investment cost is the

purchase price actually paid; if they are acquired in the issue of equity securities the initial investment cost is the fair value of the

issued equity securities; if they are acquired in debt restructuring the initial investment cost shall be recognized according to the

Accounting Standards for Enterprises No. 12 - Debt Restructuring; if they are acquired in the exchange of non-monetary assets the

initial investment shall be recognized according to the Accounting Standards for Enterprises No. 7 - Exchange of Non-Monetary

Assets.

3. Method of subsequent measurement and recognition of profits and losses

Long-term equity investment with control over investees shall be accounted in cost method; long-term equity investment on

associated enterprises and joint ventures shall be accounted in equity method.

4. Method of treating the disposal of the investment in a subsidiary stem by step through multiple transactions until the loss

of the controlling right

(1) Individual financial statements

For the disposed equity the difference between its fair value and the actually obtained price shall be recorded into current profits or

losses. For the residual equity the part that still has significant effects on investees or with common control jointly with other parties

shall be accounted in equity method; the part that has no more control common control or significant effects on investees shall be

accounted in accordance with the relevant regulation of the Accounting Standards for Enterprises No. 22 - Recognition and

Measurement of Financial Instruments.

(2) Consolidated financial statements

1) For the disposal of the investment in subsidiaries step by step until the loss of the controlling right through multiple transactions

which do not constitute the “package deal”

Before the loss of the controlling right for the balance between the disposal remuneration and the shares of net assets in the

subsidiaries that have been calculated since the acquisition date or combination date corresponding to the disposal of long-term

equity investment capital reserve (capital premium) shall be adjusted and if the capital premium is not sufficient for the write-down

the retained earnings shall be written down.

At the loss of the controlling right over the original subsidiaries the residual equity shall be re-measured at its fair value on the date

of losing the controlling right. The difference between the consideration obtained in the equity disposal plus the fair value of the

remaining equities less the Company’s share of net assets enjoyed of the former subsidiary that has been calculated since the

acquisition date or combination date according to the former shareholding ratio shall be recorded into the investment gains for the

period when the control ceases; meanwhile goodwill shall be written down. Other comprehensive income related to former

subsidiary's equity investment shall be transferred into current investment income when the control ceases.

2) For the disposal of the investment in subsidiaries step by step until the loss of the controlling right through multiple transactions

which constitute the “package deal”

The accounting treatment shall be carried out on the basis of considering each transaction as a transaction of disposing the subsidiary

and losing control. However before losing control the difference between each disposal price before losing the control and the

corresponding net assets share enjoyed of subsidiary when disposing long-term equity investment shall be recognized as other

comprehensive income in the consolidated financial statements and when the control ceases transferred into current profits or losses

of the period of losing control.

(5) Impairment test method and impairment provision method

When there is objective evidence indicating impairment of the investment in subsidiaries joint ventures and cooperative enterprises

on the balance sheet date corresponding provision for impairment shall be made according to the difference between the book value

and recoverable amount.

23. Investment Property

Measurement mode of investment real estates

Measurement of cost method

Depreciation or amortization method

1. The term "investment real estate" includes the right to use any land which has already been rented the right to use any land which

is held and prepared for transfer after appreciation and the right to use any building which has already been rented.

2. The Company initially measures the investment property according to the costs and adopts the cost method in the subsequent

measurement of investment property and adopts the same methods with fixed assets and intangible assets to withdraw depreciation

or amortization. When there is any indication of impairment of investment property on the balance sheet date corresponding

provision for impairment shall be made according to the difference between the book value and recoverable amount.

24. Fixed Assets

(1) Recognized Standard of Fixed Assets

The term "fixed assets" refers to the tangible assets that simultaneously possess the features as follows: they are held for the sake of

producing commodities rendering labor service renting or business management; and their useful life is in excess of one fiscal year.No fixed asset may be recognized unless it simultaneously meets the conditions as follows: (1) The economic benefits are likely to

flow into the enterprise; (2) The cost of the fixed asset can be measured reliably.

(2) Depreciation Method

Category Depreciation method Useful life (year)

Expected net salvage

value

Annual deprecation

Houses and buildings

Straight-line

depreciation

20-25 5-10 3.6-4.75

Transportation

Straight-line

depreciation

5 5 19

Other equipment

Straight-line

depreciation

5 5 19

Machinery equipment

Straight-line

depreciation

5 5 19

Decoration of fixed

assets

Straight-line

depreciation

5 0 20

(3) Recognition Basis Pricing and Depreciation Method of Fixed Assets by Finance Lease

Not applicable.

25. Construction in Progress

1. No construction in progress may be recognized unless it simultaneously meets the conditions as follows: (1) The economic

benefits are likely to flow into the enterprise; (2) The cost of the fixed asset can be measured reliably. Construction in progress shall

be measured according to the occurred actual costs before the assets available for the intended use.

2. When the construction in progress is available for the intended use it shall be transferred to fixed assets according to the actual

cost of the project. For construction in progress available for the intended use but not dealing with final accounts of completed

project it shall be transferred to fixed assets according to the estimated value first and then adjust original temporarily estimated

value based on the actual costs after the final accounts of completed project but not adjust the depreciation that was already

calculated.26. Borrowing Costs

1. Recognition Principle of Capitalization of Borrowing Costs

Where the borrowing costs incurred to the Company can be directly attributable to the acquisition and construction or production of

assets eligible for capitalization it shall be capitalized and recorded into the costs of relevant assets. Other borrowing costs shall be

recognized as expenses when it occurred and shall be recorded into the current profits and losses.

2. Capitalization Period of Borrowings Costs

(1) The borrowing costs shall not be capitalized unless they simultaneously meet the following requirements: 1) The asset

disbursements have already incurred; 2) The borrowing costs have already incurred; 3) The acquisition and construction or

production activities which are necessary to prepare the asset for its intended use or sale have already started.

(2) Where the acquisition and construction or production of a qualified asset is interrupted abnormally and the interruption period

lasts for more than 3 months the capitalization of the borrowing costs shall be suspended. The borrowing costs incurred during such

period shall be recognized as expenses and shall be recorded into the profits and losses of the current period till the acquisition and

construction or production of the asset restarts.

(3) When the acquisition and construction or production of a qualified asset eligible for capitalization are available for its intended

use or sale the capitalization of borrowing costs shall be stopped.

3. Capitalized rate and amount of borrowing costs

To the extent that funds are borrowed specifically for the purpose of acquiring or constructing a qualifying asset the amount of

borrowing costs eligible for capitalization on that asset is determined as the actual interest costs (including amortization of discount

and premium confirmed according to effective interest method) incurred on that borrowing during the period less any investment

income on the temporary investment of the borrowing. To the extent that funds are borrowed generally and used for the purpose of

acquiring or constructing a qualifying asset the amount of borrowing costs eligible for capitalization shall be determined by applying

a capitalization rate to the weighted average of excess of accumulated expenditures on qualifying asset over that on specific purpose

borrowing.

27. Biological Assets

Not applicable.

28. Oil and Gas Assets

Not applicable.

29. Right-of-use Assets

Not applicable.

30. Intangible Assets

(1) Pricing Method Useful Life and Impairment Test

1. Intangible assets include right to use land sites use right of software etc. and conduct the initial measurement according to the

costs.

2. With regard to intangible assets with limited service life it shall be amortized systematically and reasonably within their service

life according to the expected implementation of economic interests related to the intangible assets. If it can’t recognize the expected

implementation reliably it shall be amortized by straight-line method. The specific useful lives are as follows:

Items Useful life for amortization (years)

Use right of lands Statutory life of land use right

Use right of software 5

The intangible assets with uncertain service life shall not be amortized and the Company rechecks the service life of the intangible

assets in every accounting period. For intangible assets with uncertain service the recognition basis is without certain service life and

expected benefit life.

3. For intangible assets with definite service life when there is any indication of impairment on the balance sheet date corresponding

provision for impairment shall be made according to the difference between the book value and recoverable amount; for intangible

assets with uncertain service life and those not ready for service impairment test shall be conducted every year no matter whether

there is any indication of impairment.

(2) Accounting Policies of Internal R&D Expenses

Not applicable.

31. Impairment of Long-term Assets

For long-term assets such as long-term equity investment investment property measured by cost model fixed assets construction in

progress and intangible assets with limited service life the Company shall estimate the recoverable amount if there are signs of

impairment on balance sheet date. For intangible assets with uncertain goodwill or service life formed by enterprise combination

whether or not there is sign of impairment impairment test shall be conducted every year. Goodwill combination and its related

assets group or combination of assets group shall be conducted the impairment test.If the recoverable amount of the above-mentioned long-term assets is lower than its carrying value it shall make the preparation for

assets impairment based on its balance and be recorded into current profits and losses.

32. Long-term Prepaid Expenses

Long-term deferred expenses refer to general expenses with the amortized period over one year (one year excluded) that have

occurred. Long-term prepaid expense shall be recorded into the account according to the actual accrual. Long-term prepaid expense

shall be amortized averagely within benefit period or specified period. In case of no benefit in the future accounting period the

amortized value of such project that fails to be amortized shall be transferred into the profits and losses of the current period.

33. Contract Liabilities

The Company presents contract assets or contract liabilities on the balance sheet according to the relationship between the fulfillment

of its contract performance obligations and its customers’ payment. Obligations to be fulfilled by the Company of transferring

commodities or providing services to customers as the Company has received or should receive customers’ considerations are

presented as contract liabilities.

34. Payroll

(1) Accounting Treatment of Short-term Compensation

During the accounting period when the employees providing the service for the Company the actual short-term compensation shall

be recognized as liabilities and be recorded into the current profits and losses or related assets costs.

(2) Accounting Treatment of the Welfare after Demission

The Company's welfare after demission plans is divided into defined contribution plans and defined benefit plans (1) During the

accounting period when the employee providing service for the Company the amount paid in line with the setting drawing plan will

be recognized as liabilities and recorded into current profits or losses or cost of relevant assets.

(2) The accounting treatment of defined benefit plans usually consists of the following steps:

1) According to the expected cumulative welfare unit method adopt unbiased and mutually consistent actuarial assumptions to

evaluate related demographic variables and financial variables measure the obligations generated from defined benefit plans and

recognize the period in respect of related obligations. Meanwhile discount the obligations generated from defined benefit plans to

recognize their present value and the current service costs;

2) If there are any assets in a defined benefit plan the deficit or surplus formed from the present value of the defined benefit plan

obligations less the fair value of the defined benefit plan assets shall be recognized as net liabilities or net assets of a defined benefit

plan. If there is any surplus in a defined benefit plan the net assets of the plan shall be measured at the lower of the surplus or the

upper asset limit;

3) At the end of the period the staff remuneration costs generated from a defined benefit plan shall be recognized as services costs

net interests of the net liabilities or net assets of the plan and changes from the re-measurement of the net liabilities or net assets of

the plan. Service costs and net interests of the net liabilities or net assets of the plan shall be recorded into the current profits or losses

or related asset costs while changes from the re-measurement of the net liabilities or net assets of the plan shall be recorded into

other comprehensive income and shall not be transferred back to profits or losses in subsequent accounting periods. But the amounts

recognized in other comprehensive income may be transferred within the equity scope.

(3) Accounting Treatment of Demission Welfare

When the Company is unable to unilaterally withdraw the plan on the cancellation of labor relationship or the layoff proposal or

when recognizing the costs or expenses (the earlier one between the two) related to the reorganization of paying the demission

welfare should recognize the payroll liabilities from the demission welfare and include in the current gains and losses.

(4) Accounting Treatment of Other Welfare of the Long-term Employees

The Company provides the other long-term employee benefits for the employees and for those met with the defined contribution

plans accounting treatment should be conducted according to the related regulations of the defined contribution plans; the for the

others long-term employee benefits except for the former accounting treatment should be conducted according to the related

regulations of the defined benefit plans. In order to simplify the related accounting treatment the payrolls shall be recognized as

service costs the net amount of interest of net liabilities and net assets of other welfare of the long-term employees. The total net

amounts made up from the changes of measuring the net liabilities and net assets of other welfare of the long-term employees again

shall be recorded into the current profits and losses or related assets costs.

35. Lease Liabilities

Not applicable.

36. Provisions

1. The obligation such as external guaranty litigation or arbitration product quality assurance loss contract pertinent to a

contingencies shall be recognized as the provisions when the following conditions are satisfied simultaneously: ① That obligation

is a current obligation of the enterprise; ② It is likely to cause any economic benefit to flow out of the enterprise as a result of

performance of the obligation; and ③ The amount of the obligation can be measured in a reliable way.

2. The Company shall conduct the initial measurement to provisions according to the best estimate number needed for performing the

related current obligation and recheck the carrying value of accrued liabilities on balance sheet date.

37. Share-based Payment

Not applicable.

38. Other Financial Instruments such as Preference Shares and Perpetual Bonds

Not applicable.

39. Revenue

The Accounting Policy Adopted for Recognition and Measurement of Revenue

(1) Recognition of revenue

The Company gains revenue mainly from property sales property management and property leasing (refer to 42. Leasing for more

detail).The Company recognizes revenue when it has fulfilled the obligation of contract performance namely when it has acquired the

control of the related commodity. The acquisition of control over a commodity refers to the capacity to control the use of the

commodity and to gain almost all economic interests thereof.

(2) The Company judges whether a contract performance obligation is “a contract performance obligation fulfilled in a timeperiod” or “a contract performance obligation fulfilled at a time point” according to the terms in revenue standards andrecognizes revenue according to the following principles.When the Company meets one of the following conditions the obligation should be classified as a contract performance obligation

fulfilled in a specific time period:

The customer gains and consumes the economic interests brought by the Company’s contract performance when the Company

performs the contract.The customer is able to control the assets in progress during the Company’s contract performance.The assets produced during the Company’s contract performance have irreplaceable use and the Company has the right to collect

payment in respect of its completed contract performance accumulated as of now throughout the entire contract period.

For a contract performance obligation fulfilled in a time period the Company recognizes revenue according to the progress towards

contract completion in that period but excluding the case when such progress cannot be reasonably determined. The Company uses

the output or input method to determine the right progress towards contract completion by considering the nature of the commodity.

For one that is classified as a contract performance obligation fulfilled at a time point instead of in a time period the Company

recognizes revenue when the customer acquires the control over the related commodity.In judging whether the customer has acquired the control over a commodity the Company considers the following signs:

The Company is entitled to the current right of payment collection in respect of the commodity. In other words the customer has the

current obligation to pay for the commodity.The Company has transferred the legal ownership of the commodity to the customer. In other words the customer has owned the

legal ownership of the commodity.The Company has transferred the physical commodity to the customer. In other words the customer has taken physical possession of

the commodity.The Company has transferred the major risks and remunerations in respect of the ownership of the commodity. In other words the

customer has acquired the major risks and remunerations in respect of the ownership of the commodity.The customer has accepted the commodity.Other signs indicating that the customer has acquired control over the commodity.

3) Specific policies of the Company for recognizing revenue:

(1) Real Estate Sales Contracts

The realization of sales revenue shall be recognized under the following conditions: the developed products have been completed and

accepted the sales contract has been signed and the obligations stipulated in the contract have been fulfilled the main risks and

rewards of ownership of the developed products have been transferred to the buyer at the same time the Company shall no longer

retain the continuous management rights normally associated with ownership and effectively control the sold developed products the

revenue amount can be measured reliably the related economic benefits are likely to flow in and the related costs that have occurred

or will occur can be measured reliably.

For the sale of self-occupied housing the realization of sales income shall be recognized under the following conditions: the main

risks and rewards of ownership of self-occupied houses are transferred to the buyer the Company will no longer retain the