SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE &

PROPERTIES (GROUP) CO. LTD.

ANNUAL REPORT 2019

March 2020

2

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 Special Economic Zone Real Estate &

Properties (Group) Co. 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 Zhengyu chairman of the Company’s Board Chen Maozheng the Company’s General

Manager Tang Xiaoping the Company’s head for financial affairs and Qiao Yanjun 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.

Certain descriptions about the Company’s operating plans or work arrangements for the

future mentioned in this Report and its summary the implementation of which is subject to

various factors shall NOT be considered as promises to investors. Therefore investors are

reminded to exercise caution when making investment decisions.Risks facing the Company have been explained in detail in “IX Prospects” in “Part IVOperating Performance Discussion and Analysis” herein.The Board has approved a final dividend plan as follows: based on the total share capital of

1011660000 shares as at 31 December 2019 a cash dividend of RMB1.65 (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 and Analysis ........................................................... 12

Part V Significant Events ................................................................................................................ 32

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

Part VII Preferred Shares ............................................................................................................... 50

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

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

Part X Corporate Governance ........................................................................................................ 61

Part XI Corporate Bonds ................................................................................................................ 68

Part XII Financial Statements ........................................................................................................ 70

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

Definitions

Term Definition

“SPG” the “Company” the “Group” or “we”

ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd.and its consolidated subsidiaries except where the context otherwise requires

Holding Company Shenzhen Investment Holdings Co. Ltd.Part II Corporate Information and Key Financial Information

I Corporate Information

Stock name SPG SPG-B Stock code 000029 200029

Stock exchange for stock listing Shenzhen Stock Exchange

Company name in Chinese 深圳经济特区房地产(集团)股份有限公司

Abbr. 深房集团

Company name in English (if any) ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd.

Abbr. (if any) SPG

Legal representative Liu Zhengyu

Registered address 45/F-48/F SPG Plaza Renmin South Road Shenzhen Guangdong P.R.China

Zip code 518001

Office address 47/F SPG Plaza Renmin South Road Shenzhen Guangdong P.R.China

Zip code 518001

Company website http://www.sfjt.com.cn

Email address spg@163.net

II Contact Information

Board Secretary Securities Representative

Name Tang Xiaoping Luo Yi

Address

47/F SPG Plaza Renmin South Road

Shenzhen Guangdong P.R.China

47/F SPG Plaza Renmin South Road

Shenzhen Guangdong P.R.China

Tel. （86 755）82293000-4638 （86 755）82293000-4715

Fax （86 755）82294024 （86 755）82294024

Email address tangxiaoping0086@126.com spg@163.net

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

Newspapers designated by the Company for

information disclosure

Domestic: Securities Times and China Securities Journal

Overseas: Ta Kung Pao (HK)

Website designated by CSRC for publication of this

Report

http://www.cninfo.com.cn

Place where this Report is lodged

47/F SPG Plaza 3005 Renmin South Road Luohu District Shenzhen

Guangdong P.R.China

IV Change to Company Registered Information

Unified social credit code 91440300192179585N (unified social credit code)

Change to principal activity of the

Company since going public (if any)

No change

Every change of controlling shareholder

since incorporation (if any)

On 24 March 1999 the controlling shareholder was changed from Shenzhen

Investment Management Co. Ltd. to Shenzhen Construction Investment Holdings Co.Ltd. And on 14 February 2006 it was changed to Shenzhen Investment Holdings Co.Ltd.V Other Information

The independent audit firm hired by the Company:

Name Grant Thornton China

Office address 5/F Sci-Tech Plaza 22 Jianguomenwai Avenue Chaoyang District Beijing

Accountants writing signatures Huang Shengsen and Zhao Juanjuan

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

□ Applicable √ Not applicable

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

□ Applicable √ Not applicable

VI Key Financial Information

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

2019 2018

2019-over-2018 change

(%)

2017

Operating revenue (RMB) 2548740319.49 2175187242.60 17.17% 1345912605.09

Net profit attributable to the listed

company’s shareholders (RMB)

552452307.59 503498831.60 9.72% 184988512.42

Net profit attributable to the listed

company’s shareholders before

exceptional gains and losses (RMB)

524204812.66 490490702.80 6.87% 181588638.91

Net cash generated from/used in operating

activities (RMB)

603607724.75 1062567405.59 -43.19% -17801139.64

Basic earnings per share (RMB/share) 0.5461 0.4977 9.72% 0.1829

Diluted earnings per share (RMB/share) 0.5461 0.4977 9.72% 0.1829

Weighted average return on equity (%) 15.90% 16.35% -0.45% 6.76%

31 December 2019 31 December 2018

Change of 31 December

2019 over 31 December

2018 (%)

31 December 2017

Total assets (RMB) 4909669536.09 4665891514.25 5.22% 3989263981.96

Equity attributable to the listed

company’s shareholders (RMB)

3666874569.99 3332259641.39 10.04% 2828242120.98

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

Unit: RMB

Net profit attributable to the listed company’s

shareholders

Equity attributable to the listed company’s

shareholders

2019 2018 Ending amount Beginning amount

Under CAS 552452307.59 503498831.60 3666874569.99 3316581079.94

Adjusted as per IFRS

Under IFRS 552452307.59 503498831.60 3670790192.32 3319891256.50

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

□ Applicable √ Not applicable

No difference for the Reporting Period.

3. Reasons for Accounting Data Differences Above

□ Applicable √ Not applicable

VIII Key Financial Information by Quarter

Unit: RMB

Q1 Q2 Q3 Q4

Operating revenue 424535370.83 826802431.74 652161755.98 645240760.94

Net profit attributable to the listed company’s shareholders 84028728.24 249127115.17 106361655.99 112934808.19

Net profit attributable to the listed company’s shareholders

before exceptional gains and losses

84055572.77 238810381.76 105876740.20 96334902.68

Net cash generated from/used in operating activities 217157204.59 468518040.51 356240434.19 -434357269.54

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 2019 2018 2017 Note

Gain or loss on disposal of non-current assets (inclusive

of impairment allowance write-offs)

-69739.73 4261370.46

Government subsidies charged to current profit or loss

(exclusive of government subsidies given in the

Company’s ordinary course of business at fixed quotas

or amounts as per the government’s uniform standards)

1168127.90 10243.00 59611.09

Gain or loss on assets entrusted to other entities for

investment or management

31425651.98 16347157.53

Income from mature

structured deposits

Non-operating income and expense other than the

above

1118861.69 891652.84 212183.13

Interest income from undue structured deposits 3950685.00

Less: Income tax effects 9415831.64 4171184.84 1133291.17

Total 28247494.93 13008128.80 3399873.51 --

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

With regard to China’s real estate market in 2019 under the macro-control policy of maintaining

stability growth in house sales continued to slow down nationwide but with relatively strong

demand in the Yangtze River Delta and the Guangdong-Hong Kong-Macau areas due to the

positive factor of urban development planning.The Company primarily develops and sells residential properties in two cities Shenzhen and

Shantou. In Shenzhen the Chuanqi Jingyuan project completed the interior fine decoration in

January 2019 and was 100% sold out and handed over during the Reporting Period; the Chuanqi

Donghu Mingyuan project completed the filing for completed construction in December 2019 and

has started the hand-over and move- in process which is cumulatively around 25% sold; and the

Cuilinyuan project is approximately 90% sold. In Shantou the Tianyuewan Phase I project has

basically finished municipal road supporting and landscape improvement which is around 50%

sold cumulatively; and the Tianyuewan Phase II project completed the basement in October 2019.II Significant Changes in Major Assets

1. Significant Changes in Major Assets

Major assets Main reason for significant changes

Equity assets

The ending amount was down by RMB12091268.59 (or 96.26%) from the beginning amount in

2019 primarily driven by the allowance for impairment of long-term equity investments.

Fixed assets

The ending amount was down by RMB3404163.41 (or 10.03%) from the beginning amount in 2019

primarily driven by the depreciation allowance.Intangible assets No significant change

Construction in progress No significant change

Accounts receivable

The ending amount was up by RMB28632064.03 (or 85.66%) from the beginning amount in 2019

primarily driven by the receivable of Shenzhen Zhentong Engineering Co. Ltd. for engineering

service provided.Other receivables

The ending amount was down by RMB16742799.35 (or 37.19%) from the beginning amount in

2019 primarily driven by the allowances for doubtful accounts.

Short-term borrowings

The ending amount was up by RMB34387156.71 (or 199.23%) from the beginning amount in 2019

primarily driven by the increased borrowings of Shenzhen Zhentong Engineering Co. Ltd. through

discounting and pledging accounts receivable.Taxes payable

The ending amount was up by RMB285153442.38 (or 94.88%) from the beginning amount in 2019

primarily driven by the provision for land VAT.Other payables

The ending amount was down by RMB444500723.95 (or 61.58%) from the beginning amount in

2019 primarily driven by the final settlement and payment of land VAT.

2. Major Assets Overseas

□ Applicable √ Not applicable

III Core Competitiveness Analysis

As one of the earliest real estate listed companies in Shenzhen the Company has a history over 40

years in real estate development in Shenzhen and rich experience in the main business of real estate

development. In recent years thanks to the experience learned from the Shenzhen- located

Chuanqishan project Chuanqi Shanglin project Chuanqi Jingyuan project and Chuanqi Donghu

Mingyuan project as well as from the Shantou- located projects the Company accelerates the

establishment of a modern enterprise HR management system and works hard in building a

professional and high-quality development team. It also keeps improving the management

mechanism and processes for project development. As a result the professionalism and

management capability of the Company have improved significantly; planning construction cost

control marketing capability and brand image have been effectively enhanced; and the operational

capability in the main business of real estate keeps increasing along with the core competitiveness.

As of the Reporting Period (inclusive) the Company has been honored jointly by the Guangdong

Provincial Enterprise Confederation and the Guangdong Provincial Association of Entrepreneurs as

a “Most Honest Enterprise in Guangdong Province” for eight years in a row. It has also wonaccolades from the Shenzhen Real Estate Association namely the “Rea l Estate Developer inShenzhen with the Highest Brand Value” for the past two years.Part IV Operating Performance Discussion and Analysis

I Overview

For 2019 the Company recorded operating revenue of RMB2549 million up 17.17% year-on-year;

a profit before tax of RMB732 million up 7.21% year-on-year; and a net profit attributable to the

listed company’s shareholders of RMB552 million up 9.72% year-on-year. As at 31 December

2019 equity attributable to the listed company’s shareholders amounted to RMB3667 million up

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

year-on-year.Review of Operation and Management for 2019

In 2019 on the backdrop of a complicated international environment and continuous recession of

world economy China’s economy continued to suffer from downward pressure but achieved

generally stable growth while making further progress. All local governments firmly implemented

the decisions of the CPC Central Committee and the State Council persisted in the positioning of

“Houses are for living in not for speculating on” without using real estate as a measure to

stimulate economic development on a short-term basis fully performed the main responsibilities of

cities and maintained an overall stable trend for the real estate market. During the Reporting Period

the Company orderly drove the progress of a number of matters including main business

development management and operations material assets restructuring party building and

production safety and set another new record in major operating indicators. The main achievements

over the year include:

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

1. The progress of project development was smooth. The Company placed importance on

improving its capacity of controlling project development implemented a full-cost whole-process

and penetrated management concept carried out tender invitation and bidding legally and in

compliance timely identified and solved problems encountered during project development and

took strict measures for the settlement of project payment. As a result it basically achieved the goal

for project development progress in main business. It completed the interior refined decoration

works for the Chuanqi Jingyuan project in Shenzhen in January 2019 and achieved 100% delivery

during the Reporting Period; it completed the regulatory filing and started the process of partnership

and delivery for the Chuanqi Donghu Mingyuan project in December 2019. It basically completed

the municipal road works and landscape renovation and upgrading works of Shantou Tianyuewan

Phase I and completed the basement works of Phase II in October 2019.

2. The property sales exceeded the forecast. The Company continued to keep watch on market

changes and policy trends. Considering the regional market status of on-sale projects and the

advantages and disadvantages of the projects the Company established different promotion and

sales plans selected such new media channels as WeChat and Toutiao for marketing and duly

kicked off citywide referral sales. As a result the Company made big breakthroughs in the sale of

on-sale projects compared with the forecast but with marked regional differences. The Chuanqi

Jingyuan project became a hot sale across the city and was sold out in just 10 months; the projects

of Chuanqi Donghu Mingyuan and Cuilinyuan were sold at a regular speed; the Tianyuewan Phase

I project required stronger promotion.(II) Higher Quality and Efficiency in Management and Operation

1. Regulated and highly efficient financial management

The Company intensified financial control by printing and distributing a number of policies

including SPG Management Measures for Financial Approval SPG Management Measures for

Expert Consultation Fee SPG Management Measures for Online Banking Payment and

Management Measures for Traveling Expense Management (Revision) making further

improvements to the financial management policy system; strengthened communication with

cooperating banks and effectively sped up the return of sales fund; fully increased the returns of

temporarily idle fund through bank structured deposits and agreement deposits; strictly controlled

period costs with a YOY decrease of 0.76% in six cost items of focus.

2. Stable growth in rental income

Affected by the economic downturn and facing the leasing trend of increasingly frequent surrender

of tenancy and reduction of leasing sizes the Company tried every means to retain customers

stabilize prices and urge payment collection worked hard to raise the leasing returns of property

stock and thus exceeded the annual rental target.

3. New progress in outstanding matters

By strengthening efforts to solve outstanding matters the Company won nine legal cases with

effective court decisions in the year and had five winning cases that had entered the enforcement

stage.

4. Continuous enhancement in the competitiveness of affiliates

All the Company’s affiliates worked hard to develop the market took tough measures for

operation strengthened management improved services and maintained profitability with growth.(III) Progress in Assets Restructuring in Compliance

In 2019 trading in the Company’s shares was suspended due to the material assets restructuring.

The Company worked with related parties to continuously promote various fundamental work for

the restructuring including the updating of due diligence documents additional audit additional

evaluation and the updating of restructuring related documents and data; while strictly observing

regulation disciplines and information disclosure principles the Company proactively and properly

handled the investor relations by attentively answering investors’ questions by deadlines and

patiently providing explanations and assurance for investors calling and visiting the Company

gaining understanding and support from the majority of them. To ensure orderly progress of its

restructuring the Company signed Supplementary Agreement V to the Cooperation Agreement on

Restructuring and Listing and Supplementary Agreement VI to the Cooperation Agreement on

Restructuring and Listing respectively on March 13 2019 and December 13 2019 with related

parties. The corresponding announcements have been disclosed through the media outlets

designated by the Company. During the Reporting Period the Company fulfilled the obligation of

information disclosure strictly in accordance with regulatory rules including disclosing the

restructuring progress at least every five trading days duly going through the procedures for

postponing the resumption of share trading and disclosing the restructuring related information.(IV) Marked Achievements in Party-Related WorkThe party committee of the Company further implemented the theme education of “Stay true toyour mission” made full use of the theoretical study of its central group the primary subject studyof itself and the branches’ study and education of “Study the party constitution and regulationsand become a qualified party member” persisted in promoting theoretical study while driving

practical rectifications and centered around study & learning investigation & research examination

of problems and rectifications throughout the whole theme education process; continued the

education in politics ideology and incorruptible practice and kept improving the risk prevention and

control system for incorruptible practice; continuously promoted the party building project of

“support from state-owned enterprises and party building to communities” gaining recognition

from the organization divisions of the provincial and the municipal party committees; continued to

carry out the “rendering warmness” activities including consoling needy employees and party

members and hospitalized employees and proactively participating in public benefit activities such

as donations on Guangdong Day of Poverty Alleviation and the clothes donation themed

“Donation of Used Clothes to Deliver Warmness”; exerted the organization role of different

groups including actively organizing diverse corporate cultural activities through interest group

activities such as soccer tennis badminton yoga and table tennis leading to increasingly stronger

corporate cohesion.(V) Effective Efforts in Production Safety

The Company formulated SPG Emergency Plan for Production Safety Accidents and printed and

distributed SPG Compilation of Safety Management Policies further refining the safety

management policy system with obvious improvements in standardization and operability. The

affiliates refined and updated their safety management policies according to the requirements and

conducted a number of targeted emergency drills based on their respective industrial characteristics.The Company has not had production safety accidents in its system for years with stable and

controllable production safety.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.

New additions to the land bank:

Name of land

lot or project

Location

Planned

usage of

land

Site area

（㎡）

Floor area

with plot

ratio （㎡）

How the

land is

obtained

The

Company’s

interest

Total land

price

(RMB’0000)

Consideration of the

Company’s interest

(RMB’0000)

Cumulative land bank:

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

Floor area available for

development（㎡）

Xinfeng Building in Shantou 0.59 2.66 2.66

Total 0.59 2.66 2.66

Development status of major projects:

City/reg

ion

Name of

project

Locatio

n

Status

The

Compan

y’s

interest

Time

for

commen

cement

of

construc

tion

%

develop

ed

%

construc

ted

Site area

（㎡）

Planned

floor

area

with

plot

ratio

（㎡）

Floor

area

complet

ed in the

Current

Period

（㎡）

Cumulat

ive

complet

ed floor

area

（㎡）

Expecte

d total

investm

ent

(RMB’0

000)

Cumulat

ive

investm

ent

(RMB’0

000)

Shenzhe

n

Chuanqi

Donghu

Mingyu

an

Luohu

District

Constru

ction

complet

ed on 18

Decemb

er 2019

100.00

%

1

Februar

y 2016

100%

100.00

%

5889.7

0

45256.

26

45256.

26

45256.

26

51000 40828

Shantou

Tianyue

wan

Phase II

Chaoya

ng

District

Framew

ork in

construc

tion

100.00

%

1

October

2018

60%

31167.

50

153470

.40

79801 69884

Sales status of major projects:

City/regi

on

Name of

project

Location Status

The

Compan

y’s

interest

Floor

area with

plot ratio

（㎡）

Floor

area

available

for sale

（㎡）

Cumulati

ve

pre-sold/

sold

floor

area

（㎡）

Floor

area

pre-sold/

sold in

the

Current

Period

（㎡）

Pre-sale/

sales

revenue

generate

in the

Current

Period

(RMB’0

000)

Cumulati

ve

settled

floor

area (㎡)

Floor

area

settled in

the

Current

Period

（㎡）

Pre-sale/

sales

revenue

settled in

the

Current

Period

(RMB’0

000)

Shenzhe

n

Cuilinyu

an

Longgan

g District

Ready

for sale

100.00%

60111.4

2

56137 50695 8059 28685 48427 7302 25675

Shenzhe

n

Chuanqi

Jingyuan

Futian

District

Sold out 49.00%

43075.4

5

21093 21093 18012 131715 21093 18719 135119

Shantou

Tianyue

wan

Phase I

Chaoyan

g District

For sale 100.00%

153470.

40

160372 69198 27630 15658 52953 28576 16629

Rental status of major projects:

Name of project Location Usage

The Company’s

interest

Rentable area

（㎡）

Cumulative

rented area （㎡）

Average

occupancy rate

Real Estate

Mansion

Shenzhen Commercial

100.00% 3413.88 3413.88 100.00%

North Block of

Guoshang

Mansion

Shenzhen Commercial

100.00% 4819.71 4819.71 100.00%

Petrel Building Shenzhen Commercial 100.00% 22475.47 22475.47 100.00%

SPG Plaza Shenzhen Office building 100.00% 59462.52 48110.57 80.91%

SPG Plaza

Podium

Shenzhen Commercial

100.00% 21456.72 21456.72 100.00%

Wenjin Garden Shenzhen Commercial 100.00% 3531.60 3531.60 100.00%

Primary land development:

□ Applicable √ Not applicable

Financing channels:

Financing

channel

Ending balance of financings

Financing cost

range/average

financing cost

Maturity structure

Within 1 year 1-2 years 2-3 years Over 3 years

Development strategy and operating plan for the coming year:

Please refer to “IX Prospects” in this part.Provision of guarantees for homebuyers on bank mortgages:

√ Applicable □ Not applicable

As at 31 December 2019 as a usual practice for real estate developers the Group provided

guarantees of a total amount of RMB475.3967 million for its homebuyers on their bank mortgages.Project Guarantee period Guarantee amount

(RMB’0000)

Note

Cuilinyuan

Until the property ownership certificate is registered as

collateral and handed over to bank for keeping

15819.86

Chuanqi Donghu

Mingyuan

Until the property ownership certificate is registered as

collateral and handed over to bank for keeping

17535.05

Tianyuewan

Phase I

Until the property ownership certificate is registered as

collateral and handed over to bank for keeping

14184.76

Total 47539.67

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 major source of investment):

□ Applicable √ Not applicable

II Core Business Analysis

1. Overview

See “I Overview” above.

2. Revenue and Cost Analysis

(1) Breakdown of Operating Revenue

Unit: RMB

2019 2018

Change (%)

Operating revenue

As % of total

operating revenue

(%)

Operating revenue

As % of total

operating revenue

(%)

Total 2548740319.49 100% 2175187242.60 100% 17.17%

By operating division

Property sales 2017872864.14 79.17% 1595473065.40 73.35% 5.82%

Engineering and

construction

304837313.46 11.96% 370298109.36 17.02% -5.06%

Property

management

157665638.01 6.19% 146123975.95 7.36% -1.17%

Rental service 86484133.79 3.39% 92015827.23 3.59% -0.20%

Other 15337469.10 0.60% 25329926.73 1.16% -0.56%

Eliminated internal

transactions and

accounts

-33457099.01 -1.31% -54053662.07 -2.49% 1.17%

By product category

Residential units 719499453.23 28.23% 1435068125.37 65.97% -37.74%

Shops and parking

lots

11526595.29 0.45% 1614094.30 0.07% 0.38%

Apartments 1286846815.62 50.49% 158790845.73 7.30% 43.19%

Other 564324554.36 22.14% 633767839.27 29.14% -6.99%

Eliminated internal

transactions and

accounts

-33457099.01 -1.31% -54053662.07 -2.49% 1.17%

By operating segment

Guangdong Province 2491373238.76 97.75% 2142575113.69 98.50% -0.75%

Other regions in

China

90235417.77 3.54% 86071887.30 3.96% -0.42%

Overseas 588761.97 0.02% 593903.68 0.03% 0.00%

Eliminated internal

transactions and

accounts

-33457099.01 -1.31% -54053662.07 -2.49% 1.17%

(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 sales 2017872864.14 497310023.38 75.35% 26.47% 11.63% 3.28%

Engineering and

construction

304837313.46 298315846.77 2.14% -17.68% -16.75% -1.09%

By product category

Residential units 719499453.23 268317902.55 62.71% -49.86% -36.48% -7.86%

Shops and

parking lots

11526595.29 4281944.66 62.85% 614.12% 441.60% 11.83%

Apartments 1286846815.62 224710176.17 82.54% 710.40% 909.10% -3.44%

By operating segment

Guangdong

Province

2491373238.76 910671531.26 63.45% 16.28% -0.51% 31.77%

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

□ Applicable √ Not applicable

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

√ Yes □ No

Operating division Item Unit 2019 2018 Change (%)

Real estate

Sales volume RMB’0000 53222 37808 40.77%

Output RMB’0000 38575 73927 -47.82%

Inventory RMB’0000 161109 176408 -8.67%

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

√ Applicable □ Not applicable

The sales volume went up 40.77% year-on-year primarily driven by the launch of a tertiary referral agent system for the purpose of

promoting sales. And the output went down year-on-year primarily because most constructions in progress had been completed and

the major ongoing construction project was Tianyuewan Phase II in Shantou.

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

□ Applicable √ Not applicable

(5) Breakdown of Cost of Sales

By operating division

Unit: RMB

Operating division Item

2019 2018

Change (%)

Cost of sales

As % of total cost

of sales (%)

Cost of sales

As % of total cost of

sales (%)

Real estate 497310023.38 51.92% 445500004.85 47.48% 16.85%

Engineering construction 298315846.77 31.15% 358335541.20 38.19% -14.97%

Property management 142261602.88 14.85% 128536788.40 15.08% 12.47%

Rental services 45173891.05 4.72% 46069096.38 3.52% -10.49%

Other 13404895.03 1.40% 19705354.72 2.10% -0.58%

Eliminated internal transactions

and accounts

-38713606.57 -4.04% -59760772.46 -6.37% -3.27%

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

□ Yes √ No

(7) Major Changes to the Business Scope or Product or Service Range in the Reporting Period

□ Applicable √ Not applicable

(8) Major Customers and Suppliers

Major customers:

Total sales to top five customers (RMB) 91065399.14

Total sales to top five customers as % of total sales of the Reporting Period (%) 3.57%

Total sales to related parties among top five customers as % of total sales of the Reporting Period (%) 0.00%

Information about top five customers:

No. Customer

Sales revenue contributed for the Reporting Period

(RMB)

As % of total sales revenue (%)

1 Legal person A 30430950.54 1.19%

2 Legal person B 19809523.81 0.78%

3 Legal person C 15607569.91 0.61%

4 Legal person D 15035134.76 0.59%

5 Legal person E 10182220.12 0.40%

Total -- 91065399.14 3.57%

Other information about major customers:

□ Applicable √ Not applicable

Major suppliers:

Total purchases from top five suppliers (RMB) 225289440.84

Total purchases from top five suppliers as % of total purchases of the Reporting Period (%) 48.32%

Total purchases from related parties among top five suppliers as % of total purchases of the

Reporting Period (%)

36.01%

Information about top five suppliers:

No. Supplier Purchase in the Reporting Period (RMB) As % of total purchases (%)

1 Legal person A 167885971.23 36.01%

2 Legal person B 19623072.70 4.21%

3 Legal person C 15035134.76 3.23%

4 Legal person D 12563042.03 2.69%

5 Legal person E 10182220.12 2.18%

Total -- 225289440.84 48.32%

Other information about major suppliers:

□ Applicable √ Not applicable

3. Expense

Unit: RMB

2019 2018 Change (%) Reason for any significant change

Selling expense 79480254.02 52562980.22 51.21% Increase of referral fee and commission

Administrative expense 68854618.70 74029840.44 -6.99%

Finance costs -20906149.20 -17235722.16 21.30% The decrease of interest expense

Taxes and surcharges 751013928.21 445365141.92 68.63% Provisions for VAT of land

Return on investment

(“-” for loss)

32429481.23 17121605.87 89.41%

Wealth management income from bank

structural deposits

4. R&D Expense

□ Applicable √ Not applicable

5. Cash Flows

Unit: RMB

Item 2019 2018 Change (%)

Subtotal of cash generated from operating

activities

2728276550.05 2274046624.46 19.97%

Subtotal of cash used in operating activities 2124668825.30 1211479218.87 75.38%

Net cash generated from/used in operating

activities

603607724.75 1062567405.59 -43.19%

Subtotal of cash generated from investing

activities

2237622620.55 614891757.53 263.91%

Subtotal of cash used in investing activities 2321918490.62 1500629839.43 54.73%

Net cash generated from/used in investing

activities

-84295870.07 -885738081.90 90.48%

Subtotal of cash generated from financing

activities

43741293.64 17550137.29 149.24%

Subtotal of cash used in financing activities 204370642.51 253025175.24 -19.23%

Net cash generated from/used in financing

activities

-160629348.87 -235475037.95 31.78%

Net increase in cash and cash equivalents 358667324.42 -58266620.53 722.34%

Explanation of why any of the data above varies significantly:

√ Applicable □ Not applicable

The subtotal of cash generated from operating activities in 2019 showed a year-on-year increase of 19.97%

mainly caused by the increase of the houses selling amount received from selling products and providing the labor

services of 2019.The subtotal of cash used in operating activities in 2019 showed a year-on-year increase of 75.38% mainly due to

the increase of tax payments.The subtotal of cash generated by investing activities in 2019 showed a year-on-year increase of 263.91% mainly

because of recovering the bank structural deposits of RMB2.2 billion in2019.The subtotal of cash used in investing activities in 2019 showed a year-on-year increase of 54.73% mainly because

the Company invested to buy bank structural deposits of RMB2.3 billion in 2019.The subtotal of cash generated by financing activities in 2019 showed a year-on-year increase of 149.24% mainly

because of the increase of wealth management income from bank structural deposits in 2019.The subtotal of cash used in financing activities in 2019 showed a year-on-year decrease of 19.23% mainly because

funds increased in the factoring operations in the current year.The net increase in cash and cash equivalents in 2019 showed a year-on-year increase of 722.34% mainly

because funds increased in the factoring operations in the current year.Reason for any big difference between the net operating cash flow and the net profit for this Reporting Period

□ Applicable √ Not applicable

III Analysis of Non-Core Businesses

□ Applicable √ Not applicable

IV Analysis of Assets and Liabilities

1. Significant Changes in Asset Composition

Unit: RMB

31 December 2019 31 December 2018 Change in

percentag

e (%)

Reason for any significant change

Amount

As % of total

assets

Amount

As % of total

assets

Monetary assets

2511140445.

35

51.15%

2050804935.

93

44.07% 7.08% Withdrawal of money from selling

Accounts

receivable

62059055.68 1.26% 26678630.82 0.57% 0.69% Increase of receivable project funds

Inventories

1462229048.

18

29.78%

1685152051.

26

36.22% -6.44%

Investment

property

632241900.2

0

12.88% 623930838.15 13.41% -0.53%

Long-term equity

investments

469838.65 0.01% 12561107.24 0.27% -0.26% Provision for impairment

Fixed assets 30522035.11 0.62% 33926198.52 0.73% -0.11%

Short-term

borrowings

51647260.17 1.05% 17260103.46 0.37% 0.68%

Increase of pledge and discount by

accounts receivable

Taxes payable

585700815.3

6

11.93% 300547372.98 6.46% 5.47% Provisions for VAT of land

Other payables

277319174.5

3

5.65% 721819898.48 15.51% -9.86% Settlement of VAT of land

2. Assets and Liabilities at Fair Value

√ Applicable □ Not applicable

Unit: RMB

Item

Beginning

amount

Gain/loss on

fair-value

changes in the

Reporting

Period

Cumulative

fair-value

changes

charged to

equity

Impairment

allowance for

the Reporting

Period

Purchased in

the Reporting

Period

Sold in the

Reporting

Period

Other

changes

Ending

amount

Financial

assets

4. Investment

s in other

equity

instruments

30922155.02 2204575.02

33126730.

04

Subtotal of

financial

assets

30922155.02 2204575.02

33126730.

04

Total of the

above

30922155.02 2204575.02

33126730.

04

Financial

liabilities

0.00 0.00

Other change

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

Item Ending carrying value Reasons

Monetary assets 1003950685.00 Undue structural deposits

Accounts receivable 51647260.17 Pledge for short-term borrowings

Total 1055597945.17

V Investments Made

1. Total Investment Amount

□ Applicable √ Not applicable

2. Major Equity Investments Made in the Reporting Period

□ Applicable √ Not applicable

3. Major Non-Equity Investments Ongoing in the Reporting Period

□ Applicable √ Not applicable

4. Financial Investments

(1) Securities Investments

□ Applicable √ Not applicable

No such cases in the Reporting Period.

(2) Investments in Derivative Financial Instruments

□ Applicable √ Not applicable

No such cases in the Reporting Period.

5. Use of Funds Raised

□ Applicable √ Not applicable

No such cases in the Reporting Period.

(1) Overall Use of Funds Raised

□ Applicable □ Not applicable

(2) Commitment Projects of Funds Raised

□ Applicable □ Not applicable

(3) Change in Projects of Funds Raised

□ Applicable □ Not applicable

VI Sale of Major Assets and Equity Interests

1. Sale of Major Assets

□ Applicable √ Not applicable

No such cases in the Reporting Period.

2. Sale of Major Equity Interests

□ Applicable √ Not applicable

VII Major Subsidiaries

√ Applicable □ Not applicable

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

Unit: RMB

Name

Relationship

with the

Company

Principal

activity

Registered

capital

Total assets Net assets

Operating

revenue

Operating

profit

Net profit

Shenzhen SPG

Longgang

Development Co.

Ltd.Subsidiary

Real estate

development

30000000.

00

641467005

.26

85723587.

64

245325748

.56

52271506.

74

39261438.

Shantou SEZ

Wellam FTY

Building

Development Co.

Ltd.Subsidiary

Real estate

development

91226120.

44

199040626

.36

124606659

.86

16142556.

25

1235069.5

9

1008352.8

8

Shantou Huafeng

Real Estate

Development Co.

Ltd.Subsidiary

Real estate

development

80000000.

00

922144188

.81

21314115.

14

158381370

.34

-2818105.3

2

-1034877

9.46

Great Wall Estate

Co. Inc. (U.S.)

Subsidiary

Real estate

development

2051146.0

0

19313504.

71

-88661190.

63

588761.97 -273403.83

-273403.8

3

Shenzhen Zhentong

Engineering Co.

Ltd.Subsidiary

Installation

and

maintenance

10000000.

00

111975243.

95

24285554.

39

306512094

.79

-1526881.6

3

-1087022.

38

Shenzhen Property

Management Co.Ltd.Subsidiary

Property

management

7250000.0

0

106677568

.29

28018960.

29

164538783

.12

5564347.7

4

4204947.2

2

Shenzhen Petrel

Hotel Co. Ltd.Subsidiary

Hotel

service

30000000.

00

51250282.

57

46221091.

78

26011914.

59

4900951.9

7

4431852.5

8

Shenzhen Huazhan

Construction

Supervision Co.Ltd.Subsidiary Supervisor

8000000.0

0

10234197.

06

9412297.9

4

3889537.6

1

789329.31 591564.98

Xin Feng Enterprise

Co. Ltd.

Subsidiary

Investment

and

management

502335.00

405581919

.38

-13863792

9.01

0.00

-16668673.

66

-1666867

3.66

Subsidiaries obtained or disposed in the Reporting Period:

□ Applicable √ Not applicable

Information about major majority- and minority-owned subsidiaries:

25

1. Except the Company the subordinate subsidiaries engaged in real estate development mainly

include: Shenzhen SPG Longgang Development Co. Ltd. Shantou SEZ Wellam FTY Building

Development Co. Ltd. Shantou Huafeng Real Estate Development Co. Ltd. The Cuilinyuan

project developed by Shenzhen SPG Longgang Development Co. Ltd. brought forward RMB245

million in 2019 (the percentage of accumulative sales carried forward was 85%) accounting for 12%

of the Company's real estate sector income 9.6% of the Company's operating revenue and 7% of

the group's combined profits. Jinyedao and YuejingDongfang developed by Shantou SEZ Wellam

FTY Building Development Co. Ltd. left a few amount of remaining buildings for sale. And

Shantou Huafeng Real Estate Development Co. Ltd. was responsible for the development of

Tianyuewan project (divided into Phase I and Phase II). Tianyuewan Phase I was opened for sale in

October 2016 and completed in December 2017. The Phase II started construction in November

2018 and was expected to be completed before the end of 2019. As of 2019 the sales progress of

the Phase I was relatively slow with a accumulated sales rate of about 50%. The main reasons for

the loss in 2019 were: the sales progress was not up to expectations and another was due to the

payment of interest on internal borrowings.

2. Shenzhen Zhentong Engineering Co. Ltd. was engaged in the business of building installation and

maintenance with the 2019 operating revenues of RMB306 million and of 8% to the operating

revenues of the Company.

3. Shenzhen Property Management Co. Ltd was engaged in the industry of property management

and the business was steady. The 2019 operating revenues was of RMB164 million that was of 6% to

the operating revenues of the Company.

4. The 2019 net profits of Xin Feng Enterprise Co. Ltd. was of RMB-16.67 million which mainly due

to the changes of exchange rate and the provision made for impairment of long-term equity

investment of RMB12.17 million.VIII Structured Bodies Controlled by the Company

□ Applicable √ Not applicable

IX Prospects

(I) Industrial Pattern and Trend

With a look into 2020 the sudden COVID-19 Epidemic has increased the downward pressure of domestic

economy for a short period. But from a long-term view due to the strong resilience of China’s economy the

short-term economic fluctuation caused by the epidemic will gradually weaken to the general trend of economic

development. The basic trend of growth amid stability and on a long-term basis of China’s economy will remain

unchanged. The real estate industry is affected by the epidemic substantially in a short term with real estate

companies under performance pressure. However with the implementation of a variety of stimulation policies

countering the epidemic impact improvement is expected in the “abnormal trend” of the real estate sector at thebeginning of the year; from an overall perspective the country’s positioning of “Houses are for living in not forspeculating on” and the target of “stabilizing land prices housing prices and expectations” are expected to remainunchanged. In 2019 Shenzhen’s medium- and long-term plans continuously yielded good results. Coupled with

partial adjustment to the real estate market policy it sparked continuous market concern and stimulated the

growth of deals. It is expected that Shenzhen’s real estate market in 2020 will continue the momentum of stable

development.(II) Development Strategy of the Company

The Company will proactively adapt to the “new norm” of macroeconomic development seek new opportunities

in the real estate industry make full use of the favorable foundation for rapid development during the 13

th

Five-Year Plan period and persist in the concept of seeking growth amid stability and continuous development.

By continuing to center around the goal of building a competitive professional real estate company it will

accelerate the development and construction of existing land and projects prudently look for new investment

opportunities recover the financing capacity on capital market vigorously promote reforms innovation and

mechanism switch and make full efforts to generate reasonable and stable investment returns for the shareholders

without insisting on high-speed growth in business scale and profit targets.(III) Potential Risks

Despite another new record in its performance during the Reporting Period the Company still have some

problems that require prompt solution:

First affected by the assets restructuring the Company has not developed any new land for reserve in recent years

bringing great challenges to its sustained operations; the restructuring work remains unsettled for prolonged time

resulting in the loss of the Company’s core professional and technical personnel with a stronger wait-and-see

attitude among the staff;

Second the transformation of the economic development pattern and the reform in the housing policy have

enhanced the competitive edges of industrial leading companies leading to a faster process of “the fittest survive”

increasingly higher concentration of the real estate industry and ever-growing market shares of advantaged

enterprises. The Company has yet to improve its core competitiveness in a number of segments involved in its real

estate development control including design construction cost control marketing and after-sale services;

Third the sudden COVID-19 Epidemic has brought substantial impact to the Company’s main business and

affiliates. Consequently its original marketing plans for the first quarter and the first half year are exposed to

serious impact and its affiliates are unable to carry out their business normally putting pressure on the annual

operating income and performance targets.The Company will attach great importance to the above-mentioned problems and proactively take effective

measures to solve them.(IV) Operating Plan

The Company will follow these guidelines for its work of 2020: Persist in the concept of innovation with stability

and sustained development; work hard to manage the efforts towards party building the construction of an honest

party and an incorruptible government and the building of corporate culture; reinforce strategic management;

focus on its main business real estate; make full efforts to properly carry out safe production and busines s

management; proactively plan for new land development; continuously improve the control level; effectively deal

with the COVID-19 Epidemic; orderly promote material assets restructuring; push the progress of all tasks to a

higher level; and strive to develop itself into a listed real estate company with industrial competitiveness.

Centering around the annual target the Company will focus on the following four aspects in 2020:

First it will focus on main business and strive to strengthen industrial competitiveness. The Company will

reinforce strategic management keep close watch on land market information proactively explore new models of

project development and increase land and project reserves through multiple channels; it will spare no efforts to

promote the construction of ongoing projects and properly control project progress quality and safety; it will pay

close attention to market changes and policy trends vigorously drive project sales and ensure the achievement of

the annual sales target; it will continue to optimize control policies and processes manage talent team building

and comprehensively improve its main business development capacity.Second it will orderly promote the material assets restructuring. The Company will keep close watch on the

trends of capital market and regulatory polic ies work hard to strengthen communication with regulatory

authorities and collaboration with all trade parties promote the material assets restructuring process in compliance

fulfill the obligation of information disclosure strictly in accordance with regulatory rules patiently and

attentively manage investor relations and maintain its good image on capital market; during the restructuring it

will stabilize the staff team and guarantee normal operations and the implementation of the original targets.Third it will make full efforts in the epidemic prevention and control and production safety. The Company will

intensify guarantee measures make active steps to deal with the epidemic work hard at the safety of project

construction rental property and office areas properly reduce the epidemic impact on production and operations

avoid production safety accidents and create favorable conditions for the achievement of this year’s operating

target.

Fourth it will endeavor to manage its efforts towards party building and the construction of an honest party and an

incorruptible government. The Company will further study and implement Xi Jinping Thought on Socialism with

Chinese Characteristics for a New Era put into effect the guiding principles of the 19

th

National Congress the

second third and fourth plenary sessions of its 19

th

Central Committee of the Communist Party of China

implement fully the decisions of the superior party committee give play to the leading role of the party

committees of state-owned enterprises in controlling directions managing the overall situation and guaranteeing

the implementation integrate party leadership into corporate governance and lead high-quality corporate

development.

X Communications with the Investment Community such as Researches Inquiries and

Interviews

1. During the Reporting Period

√ Applicable □ Not applicable

Date

Way of

communication

Type of

communication

party

Index to main information communicated

21 January 2019 By telephone Individual

Inquired of the progress of assets restructuring and the sales of project

development and didn’t offer written materials

25 February 2019 By telephone Individual

Inquired of the progress of assets restructuring and annual operation and

expected disclosure time of annual report and didn’t offer written

materials

26 March 2019 By telephone Individual

Inquired of the progress of assets restructuring and fundamentals of the

Company and didn’t offer written materials

11 April 2019 By telephone Individual

Inquired of the progress of assets restructuring and share trading

resumption time of the Company and didn’t offer written materials

17 May 2019 By telephone Individual

Inquired of the progress of assets restructuring and share trading

resumption time of the Company and didn’t offer written materials

12 June 2019 By telephone Individual

Inquired of the progress of assets restructuring and fundamentals of the

Company and didn’t offer written materials

26 June 2019 By telephone Individual

Inquired of the progress of assets restructuring and fundamentals of the

Company and didn’t offer written materials

4 July 2019 By telephone Individual

Inquired of the interim operation progress of assets restructuring and

expected share trading resumption time of the Company and didn’t offer

written materials

24 July 2019 By telephone Individual

Inquired of the progress of assets restructuring and share trading

resumption time of the Company and didn’t offer written materials

5 August 2019 By telephone Individual

Inquired of the progress of assets restructuring and share trading

resumption time of the Company and expected disclosure time of interim

report and didn’t offer written materials

12 September 2019 By telephone Individual

Inquired of the progress of assets restructuring and share trading

resumption time of the Company and didn’t offer written materials

18 September 2019 By telephone Individual

Inquired of the progress of assets restructuring and share trading

resumption time of the Company and didn’t offer written materials

30 September 2019 By telephone Individual

Inquired of the progress of assets restructuring and operation of the

Company and expected disclosure time of third quarter report and didn’t

offer written materials

10 October 2019 By telephone Individual

Inquired of the progress of assets restructuring and reasons for delaying

share trading resumption and expected share trading resumption time and

didn’t offer written materials

25 October 2019 By telephone Individual

Inquired of the progress of assets restructuring and reasons for delaying

share trading resumption and expected share trading resumption time and

didn’t offer written materials

7 November 2019 By telephone Individual

Inquired of the progress of assets restructuring and reasons for delaying

share trading resumption and expected share trading resumption time and

didn’t offer written materials

18 November 2019 By telephone Individual

Inquired of the progress of assets restructuring and share trading

resumption time of the Company and change of CPAs by the Company

and didn’t offer written materials

2 December 2019 By telephone Individual

Inquired of the progress of assets restructuring and share trading

resumption time of the Company and didn’t offer written materials

10 December 2019 By telephone Individual

Inquired of the progress of assets restructuring and share trading

resumption time of the Company and didn’t offer written materials

19 December 2019 By telephone Individual

Inquired of the progress of assets restructuring annual operation and the

sales of project development and didn’t offer written materials

26 December 2019 By telephone Individual

Inquired of the progress of assets restructuring annual operation and the

sales of project development and didn’t offer written materials

Times of communications 21

Number of institutions communicated with 0

Number of individuals communicated with 21

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:

The profit distribution strictly observe regulations of the Articles of Association and the specific

cash dividend plan is worked out after the approval of the board meeting and general meeting.Independent directors played their roles with due diligence.

For the year 2017 no profit distribution or share capital increase from capital reserve would be

conducted.

For 2018 based on the total 1011660000 shares of the Company as at 31 December 2018 a cash

dividend of RMB2.00 (tax included) will be distributed to the A-share and B-share holders for every

10 shares they hold without bonus share (tax included) and no share capital increase from capital

reserve would be conducted.

For 2019 based on the total 1011660000 shares of the Company as at 31 December 2019 a cash

dividend of RMB1.65 (tax included) will be distributed to the A-share and B-share holders for every

10 shares they hold without bonus share (tax included) and no share capital increase from capital

reserve would be conducted.

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 (%)

2019 166923900.00 552452307.59 30.22% 0.00 0.00% 166923900.00 30.22%

2018 202332000.00 503498831.60 40.19% 0.00 0.00% 202332000.00 40.19%

2017 0.00 184988512.42 0.00% 0.00 0.00% 0.00 0.00%

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) 1.65

Additional shares to be converted from capital reserve for every 10 shares (share) 0

Total shares as the basis for the profit distribution proposal (share) 1011660000

Cash dividends (RMB) (tax inclusive) 166923900.00

Cash dividends in other forms (such as share repurchase) (RMB) 0.00

Total cash dividends (including those in other forms) (RMB) 166923900.00

Distributable profit (RMB) 1280197219.96

Total cash dividends (including those in other forms) as % of total profit distribution 100%

Cash dividend policy

It’s not easy to distinguish in the Company’s development stage. While when there is a major capital spending the percentage of

cash dividends to the profit distribution shall be 20% at least when conducting the profit distribution.

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

The Profit Distribution Plan of 2019 was reviewed and approved by the 50 th Meeting of the 7th Board of Directors held on 13

March 2020 and intended to be submitted to The 2019 Annual General Meeting for review. Based on the total 1011660000

shares of the Company as at 31 December 2019 a cash dividend of RMB1.65 (tax included) will be distributed to the A-share and

B-share holders for every 10 shares they hold without bonus share (tax included) and no share capital increase from capital reserve

would be conducted. The profit distribution plan can be implemented upon review and approval of the Shareholders’ General

Meeting of the Company.III Fulfillment of Commitments

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

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

□ Applicable √ Not applicable

No such cases in the Reporting Period.

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

Please refer to “30. Changes in Main Accounting Policies and Estimates” of “III Main AccountingPolicies and Estimates” in “Part XII Financial Statements” for details.VII Retrospective Restatements due to Correction of Material Accounting Errors in 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

No such cases in the Reporting Period.

IX Engagement and Disengagement of Independent Auditor

Current independent auditor

Name of the domestic independent auditor Grant Thornton China (LLP)

The Company’s payment to the domestic independent auditor (RMB’0000) 53

How many consecutive years the domestic independent auditor has

provided audit service for the Company

0

Names of the certified public accountants from the domestic independent

auditor writing signatures on the auditor’s report

Huang Shengsen Zhao Juanjuan

How many consecutive years the certified public accountants from the

domestic independent auditor have provided audit service for the Company

0

Indicate by tick mark whether the independent auditor was changed for the Reporting Period.√ Yes □ No

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

□ Yes √ No

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

√ Yes □ No

Notes to the change of the independent auditor

Considering that Ruihua Certified Public Accountants LLP has provided audit service for the Company for consecutive years to

ensure the independence and objectivity of audit the Company made a public bidding for CPAs based on the Company’s demand for

future development. Then after review of the 47th Meeting of the 7th Board of Directors and the 1st Extraordinary General Meeting of

2019 the Company determined to hire Grant Thornton China (LLP) (hereinafter referred to as “Grant Thornton”) as the auditor for

the Company’s 2019 Financial Report and internal control.Independent auditor financial advisor or sponsor engaged for the audit of internal controls:

√ Applicable □ Not applicable

The Company hired Grant Thornton China (LLP) to provide internal control audit service for this Reporting Period at the cost of

RMB0.23 million.

X Possibility of Listing Suspension or Termination after Disclosure of this Report

□ Applicable √ Not applicable

XI Insolvency and Reorganization

□ Applicable √ Not applicable

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

√Applicable □ Not applicable

General

information

Involved

amount

(RMB’0000)

Provi

sion

Progre

ss

Decisions and effects

Execution of

decisions

Disclosure

date

Index to

disclosed

information

Xi’an

Project

Lawsuit

2100 No

In

execut

ion

? Business Tourism Company had to

pay for the compensation RMB36.62

million and the relevant interest (from

14 September 1998 to the payment day)

to Xi’an Fresh Peak Company within

one month after the judgment entering

into force. If the Business Tourism

Company failed to pay in time it had to

pay double debt interests to Xi’an Fresh

Peak Company for the overdue period;

② Xi’an Joint Commission on

Commerce had jointly and severally

obligation of the interests of the

compensation; .③ Business Tourism

Company shall bear RMB227500 of the

acceptance fee and the security fee.The applicant

has received

RMB15.20

million. Now

Business

Tourism

Company has no

executable

properties and

Xi’an Joint

Commission on

Commerce has

been refusing to

execute the

ruling. It is

difficult to

recover the rest.

21 August

2019

Interim

Report 2019

(full text) on

www.cninfo.com.cn

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

party

Relation

ship

with the

Compan

y

Type of

transacti

on

Specific

transacti

on

Pricing

principl

e

Transact

ion

price

Total

value

(RMB’0

000)

As % of

total

value of

all

same-ty

pe

transacti

ons

Approv

ed

transacti

on line

(RMB’0

000)

Over

the

approve

d line or

not

Method

of

settleme

nt

Obtaina

ble

market

price for

same-ty

pe

transacti

ons

Disclos

ure date

Index

to

disclose

d

informa

tion

Shenzhen

Jianan

(Group)

Co. Ltd.

Controll

ed by

the

same

compan

y as the

parent

Enginee

ring

construc

tion

Wholly-

owned

subsidia

ry

undertoo

k

engineer

ing

construc

tion of

related

party

Negotiat

e

through

agreeme

nts

- 283.61 0.93% 283.61 Not

Bank

transfer

-

29

March

2019

2018

Annual

Report

disclose

d on

www.c

ninfo.c

om.cn

Shenzhen

Jianan

Controll

ed by

Enginee

ring

Wholly-

owned

Negotiat

e

-

16788.

6

36.01%

16788.

6

Not

Bank

transfer

-

29

March

2018

Annual

(Group)

Co. Ltd.

the

same

compan

y as the

parent

construc

tion

subsidia

ry paid

total

account

for

construc

tion

contract

ed to

related

party

through

agreeme

nts

2019 Report

disclose

d on

www.c

ninfo.c

om.cn

Total -- --

17072.

21

--

17072.

21

-- -- -- -- --

Large-amount sales return in detail N/A

Give the actual situation in the Reporting Period (if any) where an estimate had been made for the total value of

continuing related-party transactions by type to occur in the Reporting Period

N/A

Reason for any significant difference between the transaction price and the market reference price (if applicable) N/A

2. Related-Party Transactions Regarding Purchase or Sales of Assets or Equity Interests

□ Applicable √ Not applicable

No such cases in the Reporting Period.

3. Related Transactions Regarding Joint Investments in Third Parties

□ Applicable √ Not applicable

No such cases in the Reporting Period.

4. Credits and Liabilities with Related Parties

□ Applicable √ Not applicable

No such cases in the Reporting Period.

5. Other Major Related-Party Transactions

□ Applicable √ Not applicable

No such cases in the Reporting Period.XVII Major Contracts and Execution thereof

1. Entrustment Contracting and Leases

(1) Entrustment

□ Applicable √ Not applicable

No such cases in the Reporting Period.

(2) Contracting

□ Applicable √ Not applicable

No such cases in the Reporting Period.

(3) Leases

□ Applicable √ Not applicable

No such cases in the Reporting Period.

2. Major Guarantees

□ Applicable √ Not applicable

No such cases in the Reporting Period.

3. Cash Entrusted to Other Entities for Management

(1) Cash Entrusted for Wealth Management

√ Applicable □ Not applicable

Overview of cash entrusted for wealth management in the Reporting Period

Unit: RMB’0000

Type Capital resources Amount incurred Outstanding balance

Overdue unrevoked

amount

Bank financial products Self-owned funds 100000 0 0

Bank financial products Self-owned funds 30000 0 0

Bank financial products Self-owned funds 100000 100000 0

Total 230000 100000 0

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

□ Applicable √ Not applicable

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

entrusted wealth management

□ Applicable √ Not applicable

(2) Entrusted Loans

□ Applicable √ Not applicable

No such cases in the Reporting Period.

4. Other Major Contracts

□ Applicable √ Not applicable

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

1. Measures Taken to Fulfill CSR Commitment

The Company paid attention on the execution of the social responsibilities and positively protected

the legal interests of the stakeholders such as the creditors employees customers suppliers and

community as well as executed the social responsibilities. During the Reporting Period the

Company organized the volunteer team and the Party member volunteer service team and positively

developed the volunteer service and the Party member volunteer service activities; furthermore the

Company also executed the social responsibilities as a state-owned enterprise made donations to

Shenzhen Charity Community Public Welfare Fund provided special funds for community to

carrying out joint construction joint governance and joint enjoyment helped families with family

planning difficulty paid consolation money to Party members and employees in hardship and

hospitalized employees due to diseases; carried out condolence activities for employees on their

birthday and for retired cadres on festivals; positively developed the interest teams activities such as

the badminton table tennis mountain climbing and basketball as well as football. As of the

Reporting Period the Company actively performed its social responsibilities and obligations

issuing consolation money of RMB37192.90 to vulnerable groups and donations of RMB30000.00

to poor families in the administrative region collecting donations of 52435.00 for poverty

alleviation as well as donating 1500 items of clothing.

2. Measures Taken for Targeted Poverty Alleviation

(1) Plans

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

(3) Results

Indicator Measurement unit Quantity/Progress

1. General results —— ——

2. Itemized results —— ——

2.1 Out of poverty by industrial development —— ——

2.2 Out of poverty by transferring

employment

—— ——

2.3 Out of poverty by relocation —— ——

2.4 Out of poverty by education —— ——

2.5 Out of poverty by improving health —— ——

2.6 Out of poverty by protecting ecological

environment

—— ——

2.7 Subsidy for the poorest —— ——

2.8 Social poverty alleviation —— ——

2.9 Other items —— ——

3. Accolades received (for what and at what

level)

—— ——

(4) Subsequent Plans

3. Issues Related to Environmental Protection

Indicate by tick mark whether the Company or any of its subsidiaries is identified as a major polluter by the environmental p rotection

authorities.Not applicable

XIX Other Significant Events

√ Applicable □ Not applicable

Since the controlling shareholder of the Company is planning a significant event that involves the

Company upon the application to the Shenzhen Stock Exchange trading in the stocks of the

Company (A-stock under the name of “SPG” and the code of “000029”; B-stock under the name of

“SPG-B” and the code of “200029”) was suspended starting from the opening of 14 September

2016. The Company disclosed the Announcement on Share Trading Suspension due to Planning of

Significant Event (No. 2016-022) the Announcement on Continued Share Trading Suspension due

to Planning of Significant Event (No. 2016-023) and the Announcement on Continued Share

Trading Suspension due to Planning of Significant Event (No. 2016-024) on 14 September 2016 22

September 2016 and 29 September 2016 respectively. Upon ascertainment the event constituted a

material asset restructuring. The Company disclosed the Announcement on Share Trading

Suspension due to Planning of Major Assets Restructuring (No. 2016-025) on 30 September 2016

and the Announcement on Signing Cooperation Agreement on Restructuring and Listing (No.

2016-027) on 10 October 2016.

The Company convened the 33rd Meeting of the 7th Board of the Directors on 11 November 2016

which the Proposal on Continued Share Trading Suspension due to Planning of Major Assets

Restructuring was reviewed and approved. For details see the Announcement on Continued Share

Trading Suspension after Expiration of Period of Share Trading Suspension due to Planning of

Major Assets Restructuring (No. 2016-039) disclosed on 14 November 2016.The Company convened the 1st Extraordinary General Meeting of 2016 on 12 December 2016 on

which the Proposal on Continued Share Trading Suspension due to Planning of Major Assets

Restructuring was reviewed and approved. For details see the Announcement on Application for

Continued Share Trading Suspension after Expiration of Period of Share Trading Suspension due to

Planning of Major Assets Restructuring (No. 2016-047) disclosed on 13 December 2016.The Company held an online illustration meeting to investors on 10 March 2017 communicating

this major assets restructuring with them and answering questions that they were generally

concerned about with the information allowed to be disclosed. For details see the Announcement

on Online Illustration Meeting to Investors (No. 2017-012) disclosed on 11 March 2017.

On 14 December 2019 the Company disclosed the Announcement on Signing the Supplementary

Agreement VI of the Cooperation Agreement governing Restructuring and Listing (No. 2019-090)

which extends the exclusivity period and validity period stipulated in the restructuring cooperation

agreement to 31 December 2020.To ensure the smooth progress of this major assets restructuring prevent abnormal fluctuations in

the prices of its stocks and protect the rights and interests of its non-controlling interests the

Company has applied to the Shenzhen Stock Exchange for continued share trading suspension for

no more than 1 month as of 14 February 2020 and expects to disclose the major assets restructuring

plan or report according to the requirements of the Standards for the Contents and Formats of

Information Disclosure by Companies Offering Securities to the Public No. 26—Major Assets

Restructuring of Listed Companies prior to 14 March 2020. For details see the Announcement on

Delay of Share Trading Resumption of Planning of Major Assets Restructuring (No. 2019-011)

disclosed on 14 February 2020.

During the share trading suspension period the Company shall disclose the p rogress of this major

assets restructuring at least every five trading days in strict accordance with the requirements of

applicable laws and regulations. At present this major assets restructuring is proceeding smoothly.This major assets restructuring is subject to great uncertainty. Therefore investors are kindly

reminded to pay attention to possible investment risk.XX Significant Events of Subsidiaries

□ Applicable √ Not applicable

Part VI Share Changes and Shareholder Information

I. Share Changes

1. Share Changes

Unit: share

Before Increase/decrease (+/-) After

Shares

Percentage

(%)

New

issues

Shares as

dividend

converted

from

profit

Shares as

dividend

converted

from capital

reserves

Other Subtotal Shares

Percentag

e (%)

1. Restricted shares 0 0.00% 0 0 0 0 0 0 0.00%

1.1 Shares held by the state 0 0.00% 0 0 0 0 0 0 0.00%

1.2 Shares held by state-own

Legal-person

0 0.00% 0 0 0 0 0 0 0.00%

1.3 Shares held by other domestic

investors

0 0.00% 0 0 0 0 0 0 0.00%

Among which: shares held by

domestic legal person

0 0.00% 0 0 0 0 0 0.00%

Shares held by domestic natural

person

0 0.00% 0 0 0 0 0 0 0.00%

1.4 Oversea shareholdings 0 0.00% 0 0 0 0 0 0.00%

Among which: shares held by

oversea legal person

0 0.00% 0 0 0 0 0 0 0.00%

Shares held by oversea natural

person

0 0.00% 0 0 0 0 0 0 0.00%

2. Unrestricted shares

1011660

000

100.00% 0 0 0 0 0

1011660

000

100.00%

2.1 RMB ordinary shares

8916600

00

88.14% 0 0 0 0 0

8916600

00

88.14%

2.2 Domestically listed foreign

shares

1200000

00

11.86% 0 0 0 0 0

1200000

00

11.86%

2.3 Oversea listed foreign shares 0 0.00% 0 0 0 0 0 0 0.00%

2.4 Other 0 0.00% 0 0 0 0 0 0 0.00%

3. Total shares

1011660

000

100.00% 0 0 0 0 0

1011660

000

100.00%

Reasons for share changes:

□ Applicable √ Not applicable

Approval of share changes:

□ Applicable √ Not applicable

Transfer of share ownership:

□ Applicable √ Not applicable

Progress on any share repurchase:

□ Applicable √ Not applicable

Progress on reducing the repurchased shares by means of centralized bidding:

□ Applicable √ Not applicable

Effects of share changes on the basic and diluted earnings per share equity per share attributable to the Company’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 app licable

2. Changes in Restricted Shares

□ Applicable √ Not applicable

II. Issuance and Listing of Securities

1. Securities (Exclusive of Preferred Shares) Issued in the Reporting Period

□ Applicable √ Not applicable

2. Changes to Total Shares Shareholder Structure and Asset and Liability Structures

□ Applicable √ Not applicable

3. Existing Staff-Held Shares

□ Applicable √ Not applicable

III Shareholders and Actual Controller

1. Shareholders and Their Shareholdings at the Period-End

Unit: share

Number of ordinary

shareholders

76443

Number of ordinary

shareholders at the

month-end prior to the

disclosure of this Report

76443

Number of preferred

shareholders with

resumed voting rights (if

any) (see Note 8)

0

Number of preferred

shareholders with resumed

voting rights at the month-end

prior to the disclosure of this

Report (if any) (see Note 8)

0

Shareholding of ordinary shareholders holding more than 5% shares or the top 10 of ordinary shareholders

Name of

shareholder

Nature of

shareholder

Holding

percentag

e (%)

Number

of

sharehold

ing at the

end of the

Reporting

Period

Increase

and

decrease

of shares

during

Reporting

Period

Number

of shares

held

subject to

trading

moratoriu

m

Number

of shares

held

subject to

trading

moratoriu

m

Pledged or frozen shares

Status of shares Amount

Shenzhen

Investment

Holdings Co. Ltd

State-owned legal

person

63.55%

6428842

62

6428842

62

Shandong Gold

Financial Holding

Capital

Management Co.Ltd. － Shandong

Gold Financial

Holding Sustaining

Fund 1

Domestic

non-state-owned

legal person

1.02%

1030000

0

1030000

0

Lu Zhigao

Domestic natural

person

0.32% 3246949 3246949

Tan Shiqing

Domestic natural

person

0.13% 1286701 1286701

Yang Shuilian

Domestic natural

person

0.13% 1273700 1273700

Yang Jianxiong

Domestic natural

person

0.12% 1255750 1255750

Central Huijin

Asset Management

Co. Ltd.

State-owned legal

person

0.12% 1165500 1165500

Peng Wei

Domestic natural

person

0.11% 1129082 1129082

Wu Haoyuan

Foreign natural

person

0.11% 1109300 1109300

Guotai Junan

Securities (Hong

Kong) Limited

Foreign legal

person

0.10% 1015683 1015683

Strategic investor or general legal person

becoming a top-10 ordinary shareholder due

to rights issue (if any) (see Note 3)

None

Related or acting-in-concert parties among the

shareholders above

The Company has found no related parties or acting-in-concert parties as defined in

the Administrative Measures for Shareholding Changes in Listed Companies among

the shareholders above.Top 10 unrestricted shareholders

Name of shareholder

Unrestricted shares

held at the

period-end

Shares by type

Type Shares

Shenzhen Investment Holdings Co. Ltd 642884262

RMB ordinary

shares

642884262

Shandong Gold Financial Holding Capital Management Co. Ltd.－

Shandong Gold Financial Holding Sustaining Fund 1

10300000

RMB ordinary

shares

10300000

Lu Zhigao 3246949

RMB ordinary

shares

3246949

Tan Shiqing 1286701

RMB ordinary

shares

1286701

Yang Shuilian 1273700

RMB ordinary

shares

1273700

Yang Jianxiong 1255750

Domestically

listed foreign

shares

1255750

Central Huijin Asset Management Co. Ltd. 1165500

RMB ordinary

shares

1165500

Peng Wei 1129082

RMB ordinary

shares

1129082

Wu Haoyuan 1109300

Domestically

listed foreign

shares

1109300

Guotai Junan Securities (Hong Kong) Limited 1015683

Domestically

listed foreign

shares

1015683

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 Company has found no related parties or acting-in-concert parties

as defined in the Administrative Measures for Shareholding Changes

in Listed Companies among the shareholders above.Top 10 ordinary shareholders involved in securities margin

trading (if any) (see Note 4)

The fourth shareholder held all his shares in the Company in his

margin account. And the third shareholder held part of his shares in the

Company in his margin account.

Indicate by tick mark whether any of the top 10 ordinary shareholders or the top 10 unrestricted ordinary shareholders of the

Company conducted any promissory repo during the Reporting Period.

□ Yea √ No

No such cases in the Reporting Period.

2. Controlling Shareholder

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

Type of the controlling shareholder: legal person

Name of controlling

shareholder

Legal

representative/perso

n in charge

Date of

establishment

Unified social

credit code

Principal activity

Shenzhen Investment

Holdings Co. Ltd.Wang Yongjian 13 October 2004 767566421

Investment in equities on behalf of the government

and management of those investments;

development and operation of

government-allocated land; and investment in and

provision of services for strategic emerging

industries

Controlling

shareholder’s holdings

in other listed

companies at home or

abroad in the

Reporting Period

380380000 shares in SZPRD A (000011) representing a stake of 63.82%;;

234070000 shares in STHC (000045) representing a stake of 45.96%;

12270000 shares in Shenzhen Universe A (000023) representing a stake of 8.85%;

962720000 shares in Ping An (601318) representing a stake of 5.27%;

2749530000 shares in Guosen Securities (002736) representing a stake of 33.53%;

609240000 of A shares and 103370000 of H shares in Guotai Junan (601211) representing a stake of

8%;

195030000 shares in Telling Holding (000829) representing a stake of 18.80%;

952010000 shares in Shenzhen International (00152) representing a stake of 44.04%;

604820000 shares in BEAUTYSTAR (002243) representing a stake of 51.93%;

2213450000 shares in Bay Area Development (00737) representing a stake of 71.83%;

315830000 shares in Infinova (002528) representing a stake of 26.35%;

388450000 shares in EA (002183) representing a stake of 18.30%;

5640000 shares in Shenzhen Energy (000027) representing a stake of 0.14%;

9520000 shares in BOCOM (601328) representing a stake of 0.01%;

113980000 shares in Techand Ecology (002243) representing a stake of 4.86%;

77270000 shares in Vanke (02202) representing a stake of 0.68%.

Change of the controlling shareholder in the Reporting Period:

□ Applicable √ Not applicable

No such cases in the Reporting Period.

3. Actual Controller and Its Acting-in-Concert Parties

Nature of the actual controller: Local institution for state-owned assets management

Type of the actual controller: legal person

Name of actual controller

Legal representative/person in

charge

Date of

establishment

Unified social

credit code

Principal activity

Shenzhen State-owned Assets

Supervision and Administration

Commission

Yu Gang 31 July 2004 K3172806-7

Perform the responsibilities of

investor on behalf of the state

and supervise and manage the

authorized state-owned assets

legally.Other listed companies at home

or abroad controlled by the

actual controller in the

Reporting Period

In addition to the Company controlling shareholder - Shenzhen Investment Holding Co. Ltd.Other domestic and overseas listed companies whose equity held by the actual controllers did not

rank among the top ten shareholders of the Company.

Change of the actual controller during the Reporting Period:

□ Applicable √ Not applicable

No such cases in the Reporting Period.Ownership and control relations between the actual controller and the Company:

Indicate by tick mark whether the actual controller controls the Company via trust or other ways of asset management.

□ Applicable √ Not applicable

4. Other 10% or Greater Corporate Shareholders

□ Applicable √ Not applicable

5. Limitations on Shareholding Decrease by the Company’s Controlling Shareholder Actual Controller

Reorganizer and Other Commitment Makers

□ Applicable √ Not applicable

Shenzhen State-owned Assets Supervision

and Administration Commission

Shenzhen Investment Holdings Co. Ltd.The Company

Part VII Preferred Shares

□ Applicable √ Not applicable

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

□ Applicable √ Not applicable

II Amount and Shareholding of Preferred Shareholders

Unit: share

Shareholding of preferred shareholders holding more than 5% shares or the top 10 of preferred shareholders

Name of

shareholder

Nature of

shareholder

Holding

percentage (%)

Number of

shareholdin

g at the end

of the

Reporting

Period

Increase

and

decrease of

shares

during

Reporting

Period

Number of

shares held

subject to

trading

moratorium

Number of

shares held

subject to

trading

moratorium

Pledged or frozen shares

Status of

shares

Amount

III Profit Distribution of Preferred Shares

□ Applicable √ Not applicable

IV Repurchase and Conversion of Preferred Shares

□ Applicable √ Not applicable

V Resumed Voting Rights of Preferred Shares in the Reporting Period

1. Restoration and Exercise of Preferred Shares

□ Applicable □ Not applicable

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

□ Applicable □ Not applicable

VI Accounting Policies and Reasons for Preferred Shares

□ Applicable □ Not applicable

Part VIII Convertible Bonds

□ Applicable √ Not applicable

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

II Cumulative Conversion

□ Applicable □ Not applicable

III Top 10 Shareholders of Convertible Bonds

Unit: share

No. Name of shareholder

Nature of

shareholder

Number of

convertible bonds

held at the

period-end

Amount of

convertible bonds

held at the

period-end

Proportion (%)

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

□ Applicable □ Not applicable

V Period–end Liabilities Changes of Credit Standing and Cash Arrangement of Future

Repayment of the Company

Part IX Directors Supervisors Senior Management and Staff

I Change in Shareholdings of Directors Supervisors and Senior Management

Name

Office

title

Incumben

t/Former

Gender Age Start of tenure

End of

tenure

Beginnin

g

sharehold

ing

(share)

Increase

in the

Reporting

Period

(share)

Decrease

in the

Reporting

Period

(share)

Other

increase/d

ecrease

(share)

Ending

sharehold

ing

(share)

Liu

Zhengyu

Chairman

of the

Board

Incumben

t

Male 50

15 January

2020

16 April

2015

0 0 0 0 0

Chen

Maozhen

g

General

Manager

and

Director

Incumben

t

Male 56 17 April 2012

16 April

2015

0 0 0 0 0

Dai

Xianhua

Superviso

r

Incumben

t

Male 58

15 January

2020

16 April

2015

0 0 0 0 0

Deng

Kangchen

g

Director

Incumben

t

Male 54 17 April 2012

16 April

2015

10000 0 0 0 10000

Zhang

Lei

CFO and

Director

Incumben

t

Male 52 17 April 2012

16 April

2015

0 0 0 0 0

Wen Li Director

Incumben

t

Female 51 17 April 2012

16 April

2015

0 0 0 0 0

Jiang

Lihua

Director

Incumben

t

Female 56 17 April 2012

16 April

2015

0 0 0 0 0

Song

Botong

Independ

ent

director

Incumben

t

Male 52

15 October

2010

14

October

2016

0 0 0 0 0

Zhang

Shunwen

Independ

ent

director

Incumben

t

Male 54 23 April 2014

22 April

2020

0 0 0 0 0

Kang

Xiaoyue

Independ

ent

director

Incumben

t

Male 56 15 May 2018

14 May

2021

0 0 0 0 0

Ren Wei

Superviso

r

Incumben

t

Male 40 15 May 2018

16 April

2015

2000 0 0 0 2000

Li Yufei

Superviso

r

Incumben

t

Female 42 17 April 2012

16 April

2015

0 0 0 0 0

Feng

Hongwei

Superviso

r

Incumben

t

Male 49 2 March 2017

16 April

2015

0 0 0 0 0

Lin Jun

Superviso

r

Incumben

t

Female 51 27 April 2016

16 April

2015

0 0 0 0 0

Wei

Hanping

Vice GM

Incumben

t

Female 54

28 September

2012

16 April

2015

0 0 0 0 0

Tang

Xiaoping

Vice GM

Secretary

of the

Board

Incumben

t

Male 50

22 October

2013

16 April

2015

0 0 0 0 0

Zhou

Jianping

Chairman

of the

Board

Left Male 65 17 April 2012

15

January

2020

0 0 0 0 0

Zhuang

Quan

Superviso

r

Left Male 65 17 April 2012

15

January

2020

80000 0 0 0 80000

Teng

Xianyou

Vice GM Left Male 63 17 May 2012

24

December

2019

0 0 0 0 0

Total -- -- -- -- -- -- 92000 0 0 0 92000

II Change of Directors Supervisors and Senior Management

√Applicable □ Not applicable

Name Office title Type of change Date of change Reason for change

Zhou Jianguo

Director Chairman of the Board and Director of

the Strategic Committee of the Board

Left 15 January 2020 Retired

Zhuang Quan Supervisor Chairman of the Supervisory Board Left 15 January 2020 Retired

Teng Xianyou Vice GM Left

24 December

2019

Retired

III Biographical Information

Professional backgrounds major work experience and current duties in the Company of the incumbent directors supervisors and

senior management:

1. Liu zhengyu: he once was the director of Inspection Department in State-owned Assets Supervision and Administration

Commission of the People’s Government of Shenzhen Municipal and Chief Accountant of Shenzhen Investment Holdings Co. Ltd.

Now he acts as the vice GM of Shenzhen Investment Holdings Co. Ltd. and the member of CPC. He has been the secretary of CPC

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

2. Chen Maozheng: he once was the vice secretary of CPC and managing director of Shenzhen City Construction Development

(Group) Co. Ltd. And he has been the vice secretary of CPC and director as well as managing director of the Company since October

2009.

3. Dai Xianhua: he once was vice director of the Asset Management Department in State-owned Assets Supervision and

Administration Commission of the People’s Government of Shenzhen Municipal office investigator and investigator of Appraisal

and Distribution Department. Now he acts as the Chairman of the Supervisory Board of ShenZhen Properties & Resources

Development (Group) Ltd.He has been the Chairman of the Supervisory Board of the Company since January 2020.

4. Deng Kangcheng: he was once deputy director director of the Office of Shenzhen Investment Holdings Co. Ltd. and supervisor

of the Company. And he has been director Vice Secretary of CPC and Secretary in Discipline Inspection Committee of the Company

since February 2009.

5. Zhang Lei: he was once the CFO and Secretary to the Board of SDIC ZHONGLU FRUIT Co. Ltd. And he has been the director

and CFO of the Company since October 2010.

6. Wen Li: she once worked as the vice chief of the Investment and Development Department vice director of Management Center

for Construction Project and Minister of Enterprise Department I of Shenzhen Investment Holdings Co. Ltd. Now she serves as the

director GM and vive secretary of CPC in Shenzhen Bay Technology Development Co. Ltd. And she has been the director of the

Company since September 2006.

7. Jiang Lihua: she once was the vice chief of the Finance Department and the Chief of Appraisal and Distribution Department in

Shenzhen Investment Holdings Co. Ltd. Now she serves as the Chief of Financial Department (Settlement Center). And she has

been acting as director of the Company since February 2009.

8. Song Botong: he ever took posts of vice chief of Civil Engineering Department in College of Architecture and Civil Engineering

and Chairman of Labor Union and secretary of CPC of Shenzhen University. Now he acts as standing deputy director of Research

Center for Real Estate and director of Infrastructure Department in Shenzhen University. He has been the independent director of the

Company since October 2010.

9. Zhang Shunwen: he acted as director of the Shenzhen Juyuan Certified Public Accounting now he acts as partner of BDO China

Shu Lun Pan Certified Public Accountants LLP. He acts as theindependent directors of the Company since April 2014.

10. Kang Xiaoyue: he was once the staff member of Department of Justice of Jiangxi Province a reporter editor and head of News

Department of Shenzhen Legal Newspaper. Now he serves as a general partner of BeijingWeiheng (Shenzhen) Law Firm. He acts as

the independent director of the Company since May 2018.

11. Ren Wei: he once was the CFO of Xian Zhenye Real Estate Development Co. Ltd. minister of Budget & Financing Department

and director of Fund Centre of Shenfubao Group Co. Ltd. Now he serves as the vice minister of Audit Department of Shenzhen

Investment Holdings Co. Ltd. Since May 2018 he serves as the supervisor of the Company.

12. Li Yufei: she ever worked as the Assistant to the Manager of the Investment Department and Assistant to the M anager & Vice

Manager of Assets Management Centre as well as the Senior Management Staff of Enterprise Department I and Enterprise

Department II (Journal Center) in Shenzhen Investment Holdings Co. Ltd. Now she serves as the senior executive of Industrial

Management Department. And she has been the supervisor of the Company since April 2012.

13. Feng Hongwei: he once was the Vice Chief of the Board Secretariat and the Securities Representative. Now he acts as the Audit

Supervisory Manager of the Company. He has been acting as a supervisor of the Company since March 2017.

14. Lin Jun: She once was the Vice Chief of the Party -Mass Work Department and the Vice Discipline Inspection Secretary & Chief

of the Party-Mass Work Department of the Company. And she has been acting as a supervisor of the Company since April 2016.

15. Wei Hanping: she ever worked as the manager of the Leasing Operation Department in Shenzhen City Construction Development

(Group) Co. and the manager of Cost Control Department of the Company. And she has been the Vice GM of the Company since

September 2012.16. Tang Xiaoping: he ever act as CFO of Shenzhen HRD Assets Management Company minister of Financial Operations

Management Department of Shenzhen Foreign Labor Service Co. Ltd. legal representative the executive director of the Shenzhen

Foreign Affairs Service Center and financing plan department manager of the Company. Since 22 October 2013 he acts as deputy

GM of the Company. Since 26 April 2018 he acts as secretary of the Board of the Company.Offices held concurrently in shareholding entities:

√Applicable □Not applicable

Name Shareholding entity

Office held in the shareholding

entity

Start of tenure End of tenure

Remuneration or

allowance from the

shareholding entity

Liu Zhengyu

Shenzhen Investment

Holdings Co. Ltd

Vice GM member of CPC 9 January 2017 Yes

Jiang Lihua

Shenzhen Investment

Holdings Co. Ltd

Chief of Financial Department

(Settlement Center)

6 March 2017 Yes

Ren Wei

Shenzhen Investment

Holdings Co. Ltd

Vice minister of Audit

Department

18 September

2017

Yes

Li Yufei

Shenzhen Investment

Holdings Co. Ltd

Senior executive of Industrial

Management Department

9 July 2015 Yes

Offices held concurrently in other entities:

√Applicable □Not applicable

Name Other entity

Office held in the

entity

Start of tenure

End of

tenure

Remuneration or

allowance from

the entity

Liu Zhengyu

Shenzhen Urban Transport Planning Center

Co.. Ltd.

Director 17 October 2017 No

Liu Zhengyu

Telling Telecommunication Holding Co.Ltd.

Director 2 March 2017 No

Liu Zhengyu

China's State Owned Capital Venture

Capital Fund

Director 16 August 2016 No

Liu Zhengyu Kashi Shenzhen City Co. Ltd. Director 8 October 2013 No

Liu Zhengyu

Shenzhen Investment Holdings Bay Area

Development Co. Ltd.

Non-executive

director Chairman of

the Board

14 March 2018 No

Liu Zhengyu

Shenzhen Investment International Capital

Holdings Infrastructure Co. Ltd.

Director

18 December

2017

No

Liu Zhengyu

Shenzhen Investment International Capital

Holdings Co. Ltd.

Director

9 September

2016

No

Dai Xianhua

ShenZhen Properties & Resources

Development (Group) Ltd.

Supervisor Chairman

of Supervisory Board

27 May 2011 Yes

Song Botong

Infrastructure Department of Shenzhen

University

Director 1 March 2013 Yes

Zhang Shunwen

BDO China Shu Lun Pan Certified Public

Accountants LLP.

Partner 1 March 2008 Yes

Kang Xiaoyue BeijingWeiheng (Shenzhen) Law Firm General partner

2 December

2019

Yes

Wen Li

Shenzhen Bay Technology Development

Co. Ltd.

Director GM and Vice

Secretary of CPC

1 December

2016

Yes

Zhang Lei Shenzhen Agricultural Products Co. Ltd. CFO 11 January 2017 Yes

Zhang Lei Shenzhen Zhenye (Group) Co. Ltd. Supervisor 16 March 2017 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:

It was executed according to the procedures stipulated in the Interim Measures for the Administration of Human

Resources of the Company.Their remuneration was decided in accordance with the Interim Provisions of the Annual Salary System for

Managers of the State-owned Enterprises in Shenzhen and spirit of relevant documents as well as the Interim

Measures for the Administration of Human Resources of the Company.The Directors Jiang Lihua and Wen Li and the Supervisor Ren Wei Li Yufei are dispatched by controlling

shareholders of the Company without drawing remuneration from the Company.With review and approval of the 2013 Annual General Meeting convened on 23 April 2014 allowance for each

independent director was adjusted to RMB7000 (tax included) per month since May 2014. Besides they

received no other rewards from the Company.The independent director Song Botong hasn’t received rewards from the Company since January 2019.The Company paid their remuneration monthly according to relevant systems for remuneration management of

the Company.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

Zhou Jianguo Chairman of the Board Male 65 Left 121.98 No

Chen Maozheng General Manager and Director Male 56 Incumbent 134.28 No

Zhuang Quan Supervisor Male 65 Left 86.15 No

Deng Kangcheng Director Male 54 Incumbent 114.36 No

Zhang Lei CFO and Director Male 52 Incumbent 0 No

Wen Li Director Female 51 Incumbent 0 No

Jiang Lihua Director Female 56 Incumbent 0 No

Song Botong Independent director Male 52 Incumbent 0 No

Zhang Shunwen Independent director Male 54 Incumbent 8.4 No

Kang Xiaoyue Independent director Male 56 Incumbent 8.4 No

Ren Wei Supervisor Male 40 Incumbent 0 No

Li Yufei Supervisor Female 42 Incumbent 0 No

Feng Hongwei Supervisor Male 49 Incumbent 54.65 No

Lin Jun Supervisor Female 51 Incumbent 54.65 No

Teng Xianyou Vice GM Male 64 Left 92.59 No

Wei Hanping Vice GM Female 53 Incumbent 112.26 No

Tang Xiaoping Vice GM Secretary of the Board Male 50 Incumbent 114.36 No

Total -- -- -- -- 902.08 --

Equity incentives for directors supervisors and senior management in the Reporting Period:

□ Applicable √ Not applicable

V Employees

1. Number Functions and Educational Backgrounds of Employees

Number of in-service employees of the Company as the parent 102

Number of in-service employees of major subsidiaries 1823

Total number of in-service employees 1925

Total number of paid employees in the Reporting Period 1925

Number of retirees to whom the Company as the parent or its

major subsidiaries need to pay retirement pensions

597

Functions

Function Employees

Production 1294

Sales 82

Technical 419

Financial 53

Administrative 77

Total 1925

Educational backgrounds

Educational background Employees

Doctors 1

Masters 29

Bachelors 193

College graduates 297

Technical secondary school graduates 148

High school graduates and below 1257

Total 1925

2. Employee Remuneration Policy

The management personnel above vice general manager (including vice GM) of the Company

conducted annual salary system other employees conducted contacting the performance with the

benefit salary system.

3. Employee Training Plans

The Company established annual training plan in line with Measures for the Management of

Employee Training The Company adopts internal training hires experts give lectures to the

Company or participate professional training train the on job employees with job knowledge

professional skills rules and regulations the business process etc. which enrich and renew the

professional knowledge enhance the comprehensive quality and business skills of the employees.

4. Labor Outsourcing

□ Applicable √ Not applicable

Part X Corporate Governance

I Basic Situation of Corporate Governance

In this Reporting Period the Company strictly accorded with requirements of Company Law

Securities Law Code of Corporate Governance of Listed Companies and other laws and statutes

continuously perfected its corporate governance and standardized its operation. The actual situation

of corporate governance was in line with the requirements of the relevant normative documents.The operating mechanism of which the Board of Directors made decisions the manageme nt team

took execution and the Supervisory Board implemented supervision.(I) Preparations and holding of shareholders’ general meeting and disclosure of resolution of the

meetings were normatively in line with Articles of Association and Rules for Proced ure of the

Shareholders’ General Meeting; all shareholders were on an equal position and could fully exercise

their legal rights.(II) Directors and the Board of Directors: The Board is responsible for decision-making and

choosing directions. It exercised its power as per the corporate governance requirements.Preparations holding and disclosure of resolution of the Board sessions were normatively in line

with the Articles of Association and Rules of Procedure for the Board of Directors; all directors

performed their obligations in an honest and diligent manner; independent directors had a rational

profession structure; and special committees concerning strategy audit nomination remuneration

and appraisal under the Board can operate positively and effectively.(III) Supervisors and the Supervisory Board: structure of the Supervisory Board was reasonable.The Supervisory Board conducted the supervision and inspection for the significant events of the

Company strictly in accordance with the Rules for Procedure of the Supervisory Board and

exercised its supervision right effectively and brought its supervision function into fully play.(IV) Manager level: the manager level of the Company was fully responsible for the production and

management of the Company performed their obligations in an honest and diligence manner.Implemented the resolution of the Board with efficient supervision and restriction and acquired

good achievement.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

(I) In respect of business the Company possessed independent production supply and sales system;

(II) In respect of personnel the Company was absolutely independent in management of labor

personnel and salaries from the controlling shareholders. All the senior executives of the Company

took no office title concurrently and drew no remunerations from the Shareholder Company.(III) In respect of assets the Company possessed independent and integrated assets and the property

of the Company is transparent.(IV) In respect of organization the Board of Directors and the Supervisory Board operated

independently. There existed no superior- inferior relationship between the controlling shareholder

and its function department and the Company.(V) In respect of finance the Company has independent financial department independently

accounted and paid taxes according to the law. The Company established a complete accounting

system financial accounting system and financial administrative systems. The Company opened

independent bank accounts.III Horizontal Competition

□ Applicable √ Not applicable

IV Annual and Special General Meetings Convened during the Reporting Period

1. General Meeting Convened during the Reporting Period

Meeting Type

Investor

participation ratio

Date of the meeting Disclosure date

Index to disclosed

information

The 2018 Annual

General Meeting

Annual General

Meeting

63.61% 18 April 2019 19 April 2019

Announcement on

Resolutions of 2018

Annual General Meeting

disclosed on

www.cninfo.com.cn.The 1st Extraordinary

General Meeting of

2019

Extraordinary

General Meeting

63.60% 15 November 2019 16 November 2019

Announcement on

Resolutions of the 1st

Extraordinary General

Meeting of 2019disclosed

on www.cninfo.com.cn.

2. Special General Meetings Convened at the Request of Preferred Shareholders with Resumed 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

telecommunica

tion

Board

meetings

attended

through a

proxy

Board

meetings the

independent

director failed

to attend

The

independent

director failed

to attend two

consecutive

board meetings

(yes/no)

General

meetings

attended

Song Botong 5 5 0 0 0 No 2

Zhang Shunwen 5 5 0 0 0 No 2

Kang Xiaoyue 5 4 0 1 0 No 2

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:

None

VI Performance of Duty by Specialized Committees under the Board in the Reporting Period

All committees actively effectively work providing powerful guarantee to the scientific

decision-making the relevant details are as follows:

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

During the Reporting Period the Audit Committee actively promoted the progress of the annual

audit and the relevant work. It reviewed on the Company’s following issues: Arrangement on the

Annual Audit Work Periodic Financial Report Profit Distribution Plan Change of CPAs Firm

Written Submission of the Administration on CPAs Firm Construction of Internal Control Fund

Transfer Between Listed Companies and Related Parties and Guarantee Events etc.. Besides it also

kept full and necessary communication with the annual auditor of the Company. During the

Reporting Period the Audit Committee has convened four meetings reviewed the Company’s

financial statements and the preliminary auditing result issued by the annual auditor of the Company

as well as issued their opinions after the review and remarked for the change of CPAs Firm.

2. Performance of the Remuneration and Appraisal Committee

The Remuneration and Appraisal Committee issued its opinion on annual remuneration of directors

supervisors and senior management disclosed in 2018 Annual Report on 28 March 2019.

3. Performance of the Nomination Committee

The Nomination Committee issued its opinion on the Company’s changes in directors on 24

December 2019.

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

The Company's board of directors assesses evaluates and employs management teams. The

Company’s chairman and general manager implement the annua l salary system and the annual

salary is composed of basic salary and performance compensation. The shareholder unit formulates

assessment methods for assessment. The other senior management personnel's compensation is

determined based on individual job performance with reference to the total salary of the Company’s

leader; the Company has not implemented equity incentive plan.IX Internal Control

1. Material Internal Control Weaknesses Identified for the Reporting Period

□ Yes √ No

2. Internal Control Self-Evaluation Report

Disclosure date of the internal control self-evaluation report 14 March 2020

Index to the disclosed internal control self-evaluation report

Internal Control Self-Evaluation

Report on www.cninfo.com.cn

Evaluated entities’ combined assets as % of consolidated total assets 86.25%

Evaluated entities’ combined operating revenue as % of consolidated operating revenue 100.00%

Identification standards for internal control weaknesses

Type

Weaknesses in internal control over

financial reporting

Weaknesses in internal control not related

to financial reporting

Nature standard

The Company in line with the actual

situation when the follows events or

indications happen which means there

probably existing serious or important

defects in the financial report; (1) the

directors supervisors and senior

executives were fraud. (2) Certified Public

Accountant find that there is a significant

error in the financial report however the

internal control did not discover it when

conducting internal control; (3) The Audit

Committee under the Board and Internal

Audit Service's supervision to the internal

control is invalid. (4) The accounting

personnel were without necessary qualities

to complete the preparation of financial

statements.The criterion of quality of the recognition

of defects of internal control in the

non-financial statements mainly were order

of severity of defect involving business

nature the direct or potential negative

influence nature and the influence scope

and other factors. If the follows events or

indicators occur there may be serious or

important defects of internal control in the

non-financial statements:(1) Lack

democratic decision-making process if

lack significant problem decision-making

important appointment and dismissal of

cadres significant project investment

decision-making; usage of large capital

(three important one large); (2)

Unscientific decision-making process such

as the major decision-making errors has

caused a serious property loss to the

company; (3) Seriously violating state laws

and regulations; (4) Loss of key

management personnel or important talent;

(5) Negative news media appear frequently

and widely spread; (6) The results of the

internal control evaluation especially large

or significant defects have not been

corrected. (7) Important business systems

lack control rules or systemic failure.Quantitative standard

Serious defects: the defects or defect

group may lead to the financial results

misstatement or potential losses >3% of

net assets; important defects: 1% of net

assets

lead to the financial results misstatement

or potential losses ≤ 3% of net assets;

General defects: the defects or defect

group may lead to the financial results

misstatement or potential losses ≤ 1% of

net assets. Note: Net assets in a recent

issue of the audited financial report shall

prevail

The criterion of quantity of the recognition

of defects of internal control in the

non-financial statements mainly were

amount of direct economy losses in line

with the criterion of quantity of the

recognition of defects of internal control in

financial report of the Company.Number of material weaknesses in internal control over financial report ing 0

Number of material weaknesses in internal control not related to financial reporting 0

Number of serious weaknesses in internal control over financial reporting 0

Number of serious weaknesses in internal control not related to financial reporting 0

X Independent Auditor’s Report on Internal Control

√ Applicable □ Not applicable

Opinion paragraph in the independent auditor’s report on internal control

We believe that Shenzhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. maintained effective internal control

of financial statements in all significant aspects on 31 December 2019 in accordance with Basic Standards for Internal Control and

relevant regulations.Independent auditor’s report on internal control disclosed or not Disclosed

Disclosure date 14 March 2020

Index to such report disclosed Report on Internal Control disclosed on www.cninfo.com.cn.Type of the auditor’s opinion Unmodified unqualified opinion

Material weaknesses in internal control not related to financial

reporting

No

Indicate by tick mark whether any modified opinion is expressed in the independent auditor’s report on the Company’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 t his

Report’s approval or were due but could not be redeemed in full?

No

I Basic Information of the Corporate Bonds

Name Abbr. Code Release date Due date

Bonds balance

(RMB’0000)

Interest rate

Way of

redemption

II List of the Bond Trustee and the Rating Organization

Bond trustee:

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

III List of the Usage of the Raised Funds of the Corporate Bonds

IV Rating Situation of the Corporate Bonds Information

V Credit-adding Mechanism Repayment Plan and Other Repayment Guarantee Measures of

the Corporate Bonds

VI Convene Situation of the Bonds Holders Meeting during the Reporting Period

VII List of the Duty Execution of the Bonds Trustee during the Reporting Period

VIII The Major Accounting Data and the Financial Indicators of the Recent 2 Years of the

Company up the Period-end

Unit: RMB’0000

Item 2019 2018 Change rate of the same period

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

□ Applicable □ Not applicable

IX List of the Interest Payment of Other Bonds and Debt Financing Instruments during the

Reporting Period

X List of the Acquired Bank Credit Lines Usage and the Repayment of the Bank Loans

XI. List of the Execution of the Agreements or the Commitments Related to the Company

Bonds Raising Specification during the Reporting Period

XII Significant Events Occurring during the Reporting Period

XIII Whether there Was Guarantor of the Corporate Bonds

□ Yes □ No

Part XII Financial Statements

Type of the audit opinion Unmodified unqualified opinion

Date of signing this report 31 December 2019

Name of the audit institution Grant Thornton Accounting Firm (LLP)

Number of the audit report ZTSZ (2020) No. 441ZA1280

Name of the certified public accountants Huang Shengsen Zhao Juanjuan

Text of the Audit Report

Audit Report

GTCSZ（2020）No. 441ZA 1280

To the Shareholders of SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) CO. Ltd.:

Opinion

We have audited the financial s tatement of SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP ) CO. Ltd.and its subsidiaries (the "Group") which comprise the consolidated and company statement of financial position as at 31 December 2019

the consolidated and company statement of comprehensive income the consolidated and company cash flows for the year then ended

consolidated and company statement of changes in equity and the notes to the financial s tatements.In our opinion the accompanying consolidated and company financial s tatements present fairly in all material respects the Group’s

consolidated and company financial position as at 31 December 2019 and their consolidated financial performance and their consolidated

cash flows for the year then ended in accordance with Accounting Standards for Business Enterprises.

Basis for Opinion

We conducted our audit in accordance with the China Standards on Auditing. Our responsibili ties under those standards are further

described in the A uditor’s Responsibil i ties for the A udit of the Financial S tatement S ection of our report. We are independent of the Group in

accordance with the Code of E thics for Chinese Certified P ublic Accountant (E thics Code) together with the ethical requiremen ts that are

relevant to our audit of the financial s tatements and we fulfi lled our other ethical responsibili ties in accordance with thes e requirements and

the E thics Code. We believe that the audit ev idence we have obtained is suffic ient and appropriate to prov ide a basis for our opinion.Key audi t matters

Key audit matters are those matters that in our profess ional judgment were of most significance in our audit of the consoli dated financial

statements of the current period. These matters were addressed in the contex t of our audit of the consolidated financial s tatements as a

whole and in forming our opinion thereon and we do not prov ide a separate opinion on these matters.

1.Revenue recogni tion from sales of properties

Relatively detailed information is set out i n Notes III. 23 and Note V.27.

Descriptions of the matter

In 2019 the revenue from sales of properties was RMB 2.018 billion that accounted for 79.65% of total revenue of the Group.

When all of the following conditions have been met the Group recognizes the revenue of sales of properties: (1) the signed s ales contract

fi led with the land department; (2) properties have been completed and accepted; (3) fully one-off payment or the firs t installment payment

has been received and the bank mortgage approval procedures have been completed; (4) the procedures of housing delivery have c ompleted

in accordance with the sales contract.

Due to the importance of revenue from sales of properties and any discrepancies in revenue recognition will have a significant impact on the

profit of the Group. Therefore the revenue recognition from sales of properties is a key audit matter.How our audit addressed the Key Audit Matter

Our audit procedures for the recognition of revenue inc lude:

① Understanding assessing and testing the design and implementation o f key internal controls

about the progress of contract performance and revenue recognition.

② Examining the main clauses in sales contracts to evaluate the appropriateness of the Group’s

revenue recognition policy associated with the relevant accounting s tandards;

③ Performing tests on a sample basis to examine contracts of sales of properties trace to

collection of revenue and check letter of admission (elements of revenue recognition) in o rder to assess

the compliance with the Group’s revenue recognition policy.

④ Evaluating the revenue of sales of properties on sample basis before and after the balance

sheet date by checking to sales contracts revenue collection and the letter of admission fo r the

appropriateness of the period of revenue recognition

⑤ Calculating average house price and comparing it with the price from last year to analyze the

reasonableness of revenue and gross profit.

⑥ Evaluating the appropriateness of accounting treatment p resentation and disclosure o f the

revenue recognition o f sales of properties and other relevant information by the Group in the financial

statements.

2. Accuracy of land appreciation tax calculations

Relatively detailed information is set out in Notes IV and Note V.28.

Descriptions of the matter

Land appreciation tax is the main tax category for the Group.

For the sales of properties land apprec iation tax (“LAT”) is charged at a progressive tax rate of 30% -60% . At the end of reporting period

management evaluates the prov ision of LAT with the consideration of factors inc luding the prov is ions of the relevant taxation estimable

revenue minus deductible land c osts costs of real estate development interest expense development expense etc. I t is poss ible that a

significant difference ex is ts between actual and estimated taxable amount.

Due to the importance of the LAT accrual to the consolidated financial s tatements and management's judgment when making estimates

inc ludes consideration of relevant tax laws and regulations and practical practices. Therefore we identified the accrual of LAT of the Group

as a key audit matter.How our audit addressed the Key Audit Matter

Our audit procedures for the land appreciation tax inc lude:

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

② Involved our internal tax specialis ts in the PRC to assess the prov ision of LAT on 31 December 2019 on basis of our experience

knowledge understanding of the practical operation of relevant tax laws by local tax authorities to evaluate the Group ’s assumptions and

judgments;

③ Evaluating the management's expected estimates of the estimated income from the sale of real estate and the amount of

deductible items and assess the Group’s assumptions and judgments;

④ Recalculating the amount of prov is ion of LAT and comparing it to management estimate.Other Information

Management is responsible for the other information. The other information comprises the information included in the Annual R eport of 2019

but does not include the financial s tatements 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 conc lus ion

thereon.In connection with our audit of financial s tatements our responsibil i ty is to read the other information and in doing so consider w hether the

other information is materially inconsis tent with the financial statements or our knowledge obtained in the audit or otherwis e appears to be

materially misstated.If based on the w ork w e have performed w e conclude that there is material misstatement of this other information we are required to report

that fact. We have nothing to report in this regard.Responsibilities of Management and Those Charge with Governance for the Financial Statement

Management of the Group is responsible for the preparation and fair presentation of the financial s tatement in accordance with Accounting

Standards for Business Enterprises and for such internal control as management determines in necessary to enable the preparation of

financial s tatements that are free form material misstatement whether due to fraud or error.In preparing the financial s tatements management is responsible for assessing the Group’s abil i ty to continue as a going concern disclos ing

as applicable matters related to going concern and using the going concern basis of accounting unless management either intends to

liquidate the Group or to cease operations or has no realis tic alternative but to do so.Those charge with governance are responsible for overseeing the Group’s financial reporting process.

Auditor’s Responsibili ties for the Audi t of the Financial Statement

Our objectives are to obtain reasonable assurance about whether the financial s tatements as a whole are free from material misstatement

whether due to fraud or error and to issue an auditor’s report that inc ludes our opinion. Reasonable assurance is a high level of assura nce

but is not a guarantee that an audit conducted in accordance with China Standards on Auditing wil l always detect a material m isstatement

when it ex is ts. Misstatements can arise form fraud or error and are considered material i f indiv idually or in the aggregate they could

reasonably be expected to influence the economic decis ions of users taken on the basis of these financial s tatements.

As part of an audit in accordance with China S tandards on Auditing w e exercise professional judgment and maintain profess ion al skepticism

throughout the audit. We also:

? Identify and assess the risks of material misstatement o f the financial sta tements 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 erro r as fraud may

involve collusion forgery intentional omissions misrepresentations or the override of internal control.? Obtain an understanding o f internal control relevant to the audit in order to design audit procedures

that are appropriate in the circumstances.

? Evaluate the appropriateness of accounting policies used and the reasonableness of accounting

estimates and related disclosures made by management.

? Conclude on the appropriateness of management’s use of the going concern basis o f 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 Group’s abili ty to continue as a going concern. If we

conclude that a material uncertainty exists we are required to draw attention in our auditor’s report to

the related disclosures in the financial statements or i f 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 further events or conditions may cause the Group to cease to continue as a going

concern.

? Evaluate the overall presentation structure and content o f the financial statements and whether the

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

presentation.? Obtain sufficient appropriate audit evidence regarding the financial information of the entities or

business activities within the Group to express an opinion on the consolidated financial statements.We are responsible for the direction supervision and performance of the group audit. We remain

solely responsible for our audit opinion.We communicate with those charged with governance regarding among other matters the planned scope and timing of the audit and

significant audit findings including any significant defic ienc ies in internal control that we identify during our audit.We also prov ide the governance body with a s tatement that we have complied with relevant ethical requirements regarding independence

and to 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 the governance body we determine those matters that were of most significance in the audit of the

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 prec ludes public disc losure about the matter or when in ex tremely rare circumstances we determine that a matter should

not be communicated in our report because the adverse consequences of doing so would reasonably be expec ted to outweigh the public

interest benefits of such communication.Grant Thornton

Auditor's signature and stamp

Auditor's signature and stamp

China ·B eij ing 13 March 2020

Date of the auditor's report

Consolidated and Company Balance Sheet

As at 31 December 2019

Prepared by： SHENZHEN SP ECIAL ECONOMIC ZONE REAL

ESTATE & PROPERTIES (GROUP) Co. Ltd

Expressed in RMB

Item

Note

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

Consolidated Company Consolidated Company

Current assets:

Cash at bank and on hand

Financial assets held for trading

Financial assets at fair v alue through profit or

loss

Bills rec eiv able

Accounts receiv able

Accounts receiv able financing

Prepay ments

Other receiv ables

Including: Interest receiv ables

Div idend rec eiv ables

Inv entories

Assets held for sale

Non-current assets due w ithin one y ear

Other current assets

Total current assets

Non-current assets:

Debt inv estments

Av ailable- for -sale financial assets

Other debt inv estments

Held- to-maturi ty inv estments

Long- term receiv ables

Long- term equity inv estments

Other equity instrument inv estments

Other non-current financia l assets

Inv estm ent properties

Fix ed assets

Cons truc tion in progress

Produc tiv e biologica l assets

Oil and gas assets

Intangible ass ets

Dev elopment costs

Goodw ill

Long- term deferred ex penses

Deferred tax assets

Other non-current assets

Total non-current assets

Total assets

V.1

2511140445.35

1967688122.55

2048522435.93

1344486378.53

V.2

62059055.68

156935.84

33426991.65

5164795.67

V.3

219948.17

200000.00

4177767.88

200000.00

V.4 28275228.26 835275498.69 45018027.61 770374849.84

- - 2453067.78 2380301.11

1052192.76 - 1052192.76 -

V.5 1462229048.18 419453091.86 1685152051.26 543912100.37

V.6

102781855.48

407560.64

6780999.56

215745.41

4166705581.12 3223181209.58 3823078273.89 2664353869.82

V.7

-

-

17464240.74

12000000.00

V.8

469838.65

150676516.92

12561107.24

235284776.57

V.9 33126730.04 13229501.03 - -

V.10

632241900.20

522038731.16

623930838.15

511040299.65

V.11 30522035.11 19586720.47 33926198.52 21942842.11

V.12

-

-

-

-

V.13

162125.72

162125.72

387066.91

346015.72

V.14 46441325.25 20975294.54 154543788.80 16699980.23

742963954.97

726668889.84

842813240.36

797313914.28

4909669536.09 3949850099.42 4665891514.25 3461667784.10

Consolidated and Company Balance Sheet(Continued)

As at 31 December 2019

Prepared by：SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE &

PROPERTIES (GROUP) Co. Ltd

Expressed in RMB

Item Note

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

Consolidated Company Consolidated Company

Current liabilities:

Short- term loans

Financial liabilities at fair v alue through profi t or

loss

Bills pay able

Accounts pay able

Adv ances from customers

Employ ee benefits pay able

Tax es pay able

Other pay ables

Including: In terest pay ables

Div idend pay ables

Liabilities held for sale

Non-current liabili ties

due w ithin one y ear

Other current liabili ties

Total current liabili ties

Non-current liabili ties:

Long-term loans

Debentures pay able

Long-term pay ables

Long-term employ ee benefits pay able

Prov isions

Deferred income

Deferred tax liabilities

Other non-current liab ilities

Total non-current liabilities

Total liabilities

Share capital

Capital reserv e

Less: treasury shares

Other comprehensiv e income

Specific reserv e

Surplus reserv e

Retained earnings

Total equity attributable to shareholders of the

Company

Non-controlling interes ts

Total shareholders' equity

Total liabilities and shareholders' equity

V.15

51647260.17

-

17260103.46

-

V.16

244224478.46

103915931.14

216758906.71

16743360.96

V.17 159482510.43 59409454.38 156426152.86 22035608.45

V.18 53909576.49 25544403.23 45836830.05 19687728.50

V.19 585700815.36 143434273.95 300547372.98 144621616.85

V.20 277319174.53 190666487.82 721819898.48 594392900.98

16535277.94 16535277.94 16535277.94 16535277.94

1372283815.44

522970550.52

1458649264.54

797481215.74

V.21

7499192.92

-

6507139.20

-

V.14

4903293.58

1295046.51

-

-

12402486.50 1295046.51 6507139.20 -

1384686301.94 524265597.03 1465156403.74 797481215.74

V.22 1011660000.00 1011660000.00 1011660000.00 1011660000.00

V.23 978244910.11 964711931.13 978244910.11 964711931.13

V.24 20831004.13 922125.77 10564385.97 -

V.25 191222838.94 168093225.53 95906222.59 72776609.18

V.26 1464915816.81 1280197219.96 1235884122.72 615038028.05

3666874569.99 3425584502.39 3332259641.39 2664186568.36

-141891335.84 - -131524530.88 -

3524983234.15 3425584502.39 3200735110.51 2664186568.36

4909669536.09 3949850099.42 4665891514.25 3461667784.10

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

Consolidated and Company Income Statement

For the year ended 31 December 2019

Prep ared by：SHENZH EN SP EC IA L EC ON O MIC ZO N E REAL ES TATE & P ROP ER TIES (GR OUP ) Co. Ltd Express ed in RMB

Item Note

Year ended 31/12/2019 Year ended 31/12/2018

Consolidated Compan y Consolidated Compan y

I. Operating income

Less: operating costs

Taxes and surc har ges

Sel ling and distribut ion ex penses

Gene ral and administr ativ e expenses

Res ear ch and dev elopm ent expens es

Financial expens es

Including: Inter est ex pens es

Interest i ncome

Add: Othe r inc om e

Investm ent income ("-" f or los ses)

Including: Inc om e from investm ent in

associat es and

Ga ins from derec ognit ion of financ ia l ass ets measur ed at

amort ised cost ("- " for los ses)

Ga in from net exposu re of hedge (" -" for l osses)

Ga ins from changes in fair va lue ("-" for loss es) Cr ed it

impairm ent loss es(“ -” for losses)

Impai rment los ses ("- " for l osses)

Ga ins from ass ets d isposa l ("-" for loss es)

II. Operating profit ("-" for losses)

Add: N on- oper ating incom e

Less: N on -oper ating expenses

III . Profit before income t ax ("-" for losses)

Less: Inc om e tax ex penses

IV. Net p rofit for th e yea r ("-" for n et losses)

(1) Classifica tion acco rding to operation continuity

Including: N et pr ofit from continuing operations

("-" for net loss)

Net pr ofit from d isc ontinued operations

("-" for net loss)

(2) Classifica tion acco rding to attibute

Including: S har eholders of the company( "-" for net lo ss)

Non-contro lli ng inte rests(" -" for net loss )

V. Other co mpreh ensive incom e net of tax

Other com pr ehens ive inc om e (net of tax) attributable to

shar eholder s of the c ompany

A. Items that wi ll not be r eclassif ied to profit o r loss a.Changes

in fair v alue of other equity instr uments

B. Items that may be r eclassif ied to prof it or loss

Trans lation differ enc es ar ising from trans lat ion of

foreign c urrency fi nancial stat ements

Other com pr ehens ive inc om e (net of tax) attributable to non-

contr oll ing int erests

VI. Total comprehensi ve inco me for the year

Attribut able to shar eholders of the company

Non-contro lli ng inter ests

VII . Earnings pe r share:

(1) Basic ear nings per s har e

(2)D iluted ear nings per s har e

V.27 2548740319. 49 1666952912. 58 2175187242. 60 229682550.17

V.27 957752652.54 330874297.00 938386013.09 48332 118.70

V.28 751013928.21 630418453.86 445365141.92 76302 964.10

V.29 79480 254.02 56146 749.47 52562 980.22 4052427.57

V.30 68854 618.70 30540 740.51 74029 840.44 29529 995.90

V.31

-20906 149.20

-45894 180.92

-17235 722.16

-47884 284.78

38642. 51 - 2817521.60 2399365.74

19686 882.13 41049 606.12 19825 334.08 41576 903.81

V.32 1168127.90 18998. 01 - -

V.33 32429 481.23 551129612.87 17121 605.87 17121 605.87

1003829.25 1003829.25 -52651. 66 -52651. 66

-

-

-

-

V.34 -3111257.44 -2029282.38

V.35 -12166 897.84 -83683 888.90 -17304 699.75 -

V.36 - - -530.20 -

730864469.07 1130302292. 26 681895365.01 136470934.55

V.37 1345428.49 1042266.31 1411786.32 633377.64

V.38 226566.80 64297. 33 579100.01 374436.18

731983330.76 1131280261. 24 682728051.32 136729876.01

V.39 190786300.70 173952583.46 182756486.36 34334 330.15

541197030.06 957327677.78 499971564.96 102395545.86

541197030.06

957327677.78

499971564.96

102395545.86

552452307.59

-

503498831.60

-

-11255 277.53

-3527266.64

-176622.09 -50766. 47 740984.01 -

173182.46 -50766. 47 518688.81 -

1653431.27 -50766. 47 - -

1653431.27 -50766. 47

-1480248.81 - 518688.81 -

-1480248.81

-

518688.81

-

-349804.55

-

222295.20

-

541020407.97 957276911.31 500712548.97 102395545.86

552625490.05

504017520.41

-11605 082.08

-3304971.44

0.5461

0.4977

-

-

Legal rep rese nta tive : Pe rson in cha rge of a ccoun ting : Pe rson in c harge of a ccou nting organ :

Consolidated and Company Cash Flow Statements

For the year ended 31 December 2019

Prepared by：SHENZHEN SPECIAL ECONOMIC ZONE REAL

ESTATE & PROPERTIES (GROUP) Co. Ltd

Expressed in RMB

Item Note

Year ended 31/12/2019 Year ended 31/12/2018

Consolidated Company Consolidated Company

I.Cash flows from operating activities

Proceeds from sales of goods or rendering of services Refund

of taxes

Proceeds from other operating activities

Sub-total of cash inflows

Payment for goods and services

Payment to and for employees

Payments of various taxes

Payment for other operating activities

Sub-total of cash outflows

Net cash flows from operating activities

II.Cash flows from investing activities

Proceeds from disposal of investments

Investment returns received

Net proceeds from disposal of fixed assets intangible assets and

other long-term assets

Net proceeds from disposal of subsidiaries and other business units

Proceeds from other investing activities

Sub-total of cash inflows

Payment for acquisition of fixed assets intangible assets and other

long-term assets

Payment for acquisition of investments

Net payment for acquisition of subsidiaries and other business units

Payment for other investing activities

Sub-total of cash outflows

Net cash flows from investing activities

III.Cash flows from financing activities

Proceeds from investors

subsidiaries

Proceeds from borrowings

Proceeds from other financing activities

Sub-total of cash inflows

Repayments of borrowings

Payment for dividends profit distributions or interest

Including: Dividends and profits paid to non-controlling

shareholders of subsidiaries

Payment for other financing activities

Sub-total of cash outflows

Net cash flows from financing activities

IV. Effect of foreign exchange rate changes on cash and cash

equivalents

V. Net increase in cash and cash equivalents

Add: Cash and cash equivalents as at 01/01/2019

VI. Cash and cash equivalent as at 31/12/2019

2648597164.58

1787968670.18

2216524455.50

260723994.01

- - - -

V.40 79679385.47 58719902.38 57522168.96 411645620.31

2728276550.05 1846688572.56 2274046624.46 672369614.32

639208411.38 99847275.06 686915180.64 172885291.04

178713870.65 51174841.78 155037192.56 38307017.74

1199806904.82 916815076.44 286175244.06 39081749.05

V.40 106939638.45 79596205.39 83351601.61 14362419.34

2124668825.30 1147433398.67 1211479218.87 264636477.17

603607724.75 699255173.89 1062567405.59 407733137.15

- - - -

37502720.55 143151908.78 14891757.53 184285709.71

1199 00. 00 - - -

- - - -

V.40 2200000000.00 2200000000.00 600000000.00 892206391.13

2237622620.55 2343151908.78 614891757.53 1076492100.84

21918490.62 20824023.65 629839.43 127680.54

- - - -

- - - -

V.40 2300000000.00 2300000000.00 1500000000.00 1618000000.00

2321918490.62 2320824023.65 1500629839.43 1618127680.54

-84295870.07 22327885.13 -885738081.90 -541635579.70

- - - -

- - - -

43741293.64 - 17260103.46 -

V.40 - - 290033.83 -

43741293.64 - 17550137.29 -

2000000.00 - 250207653.64 146000000.00

202370642.51 202332000.00 2817521.60 2399365.74

- - - -

- - - -

204370642.51 202332000.00 253025175.24 148399365.74

-160629348.87 -202332000.00 -235475037.95 -148399365.74

-15181.39 - 379093.73 -13487.07

358667324.42 519251059.02 -58266620.53 -282315295.36

1148522435.93 444486378.53 1206789056.46 726801673.89

1507189760.35 963737437.55 1148522435.93 444486378.53

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

Consolidated Statement of Changes in Shareholders' Equity

For the year ended 31 December 2019

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

Item

Year ended 31/12/2019

Attributable to shareholders' equity of the parent company

Non-controlling

interests

Total

Share capital

Capital reserve

Less:

trea sur y

shares

Other

comprehensive

income

Spe ci fi c

reserve

Surplus reserve R etai ned ear n i ngs

I.Balance at 31/12/2018

Add：Changes in accounting policies

Correction of prior period errors

1011660000.00 97 8 24 4 9 10. 1 1 - 10564385.97 - 95906222.59 1235884122.72 -131524530.88 3 20 0 73 5 11 0. 5 1

- - - 10 0 93 4 3 5.7 0 - -4 1 6 15 1. 43 -2 5 3 55 8 45 .7 2 -390720.82 -16069282.27

-

Business combination involving enterprises under common control -

Others -

II.Balance at 01/01/2019 1011660000.00 97 8 24 4 9 10. 1 1 - 20657821.67 - 95490071.16 1210528277.00 -131915251.70 3 18 4 66 5 82 8. 2 4

III.Changes in equity during the year( "- "for decrease) - - - 17 3 18 2. 4 6 - 95732767.78 254387539.81 -9976084.14 340317405.91

(I)Total comprehensive income - - - 17 3 18 2. 4 6 - - 552452307.59 -11605082.08 541020407.97

(II)Shareholders' contributions and decrease of capital - - - - - - - - -

1.Contribution by ordinary shareholders -

2.Capital contributed by the holders of other equity instrument -

3. Equity settled share-based payments -

4. Others -

(III) Appropriation of profits - - - - - 95732767.78 -298064767.78 - -202332000.00

1. Appropriation for surplus reserves - - - - - 95732767.78 -95732767.78 - -

2. Appropriation for general risk reserve

3. Distributions to shareholders -202332000.00 -202332000.00

4. Others -

(IV) Transfer within equity - - - - - - - - -

1.Share capital increased by capital reserves transfer -

2.Share capital increased by surplus reserves transfer -

3.Transfer of surplus reserve to offset losses -

4.Others -

(V)Specific Reserve - - - - - - - - -

1. Appropriation during the year -

2.Utilisation during the year ("- ") -

(VI)Others 1 62 8 99 7. 94 1628997.94

IV.Balance at 31/12/2019 1011660000.00 97 8 24 4 9 10. 1 1 - 20831004.13 - 191222838.94 1464915816.81 -141891335.84 3 52 4 98 3 23 4. 1 5

Prepared by：SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE &

Consolidated Statement of Changes in Shareholders' Equity

For the year ended 31 December 2019

Expressed in RMB

Item

Year ended 31/12/2018

Attributable to shareholders' equity of the parent company

Non-controlling

interests

Total

Share capital

Capital reserve

Less:

trea sur y

shares

Other

comprehensive

income

Spe ci fi c

reserve

Surplus reserve

Retained earnings

I.Balance at 31/12/2018 1 01 1 66 0 00 0. 0 0 97 8 24 4 9 10. 1 1 - 10045697.16 - 85666668.00 742624845.71 -1 2 8 21 9 55 9. 44 2700022561.54

Add：Changes in accounting policies -

Correction of prior period errors -

Business combination involving enterprises under common co -

Others -

II.Balance at 01/01/2019 1011660000.00 97 8 24 4 9 10. 1 1 - 10045697.16 - 85666668.00 742624845.71 -128219559.44 2700022561.54

III.Changes in equity during the year( "- "for decrease) - - - 518688.81 - 10239554.59 493259277.01 -3304971.44 500712548.97

(I)Total comprehensive income - - - 518688.81 - - 503498831.60 -3304971.44 500712548.97

(II)Shareholders' contributions and decrease of capital - - - - - - - - -

1.Contribution by ordinary shareholders -

2.Capital contributed by the holders of other equity instrument -

3. Equity settled share-based payments -

4. Others -

(III) Appropriation of profits - - - - - 10239554.59 -10239554.59 - -

1. Appropriation for surplus reserves - - - - - 10239554.59 -10239554.59 - -

2. Appropriation for general risk reserve

3. Distributions to shareholders -

4. Others -

(IV) Transfer within equity - - - - - - - - -

1.Share capital increased by capital reserves transfer -

2.Share capital increased by surplus reserves transfer -

3.Transfer of surplus reserve to offset losses -

4.Others -

(V)Specific Reserve - - - - - - - - -

1. Appropriation during the year -

2.Utilisation during the year ("- ") -

(VI)Others -

IV.Balance at 31/12/2019 1011660000.00 97 8 24 4 9 10. 1 1 - 10564385.97 - 95906222.59 1235884122.72 -131524530.88 3200735110.51

Company Statement of Changes in Shareholders' Equity

For the year ended 31 December 2019

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

Year ended 31/12/2019

Share capital

Capital reserve

Less:

treasury

shares

Other

comprehensive

income

Sp e ci f i c

reserve

Surplus reserve

Retained earnings

Total

I. Balance at 31/12/2018

Add：Changes in accounting policies

Correction of prior period errors Others

I I. Balance at 01/01/2019

I II . Changes in equity during the year( "- "for decrease)

(I ) Total comprehensive income

(II )Shareholders' contributions and decrease of capital

1.Contribution by ordinary shareholders

2. Capital contributed by the holders of other equity

instrument

3. Equity settled share-based payments

4. Others

(III) Appropriation of profits

1 . Appropriation for surplus reserves

2 . Appropriation for general risk reserv e

2 . Distributions to shareholders

3 . Others

(I V ) Transfer within equity

1. Share capital increased by capital reserves transfer

2.Share capital increased by surplus reserves transfer

3.Transfer of surplus reserve to offset losses 4.Others

( V) Specific Reserve

1. Appropriation during the year

2.Utilisation during the year ("- ")

( VI ) Others

IV.Balance at 31/12/2019

1011660000.00 964711931.13 - - - 7 2 7 7 6 6 0 9 . 18 615038028.05 2664186568.36

9 7 2 8 9 2. 2 4 -4 1 6 1 5 1. 4 3 -4 0 7 2 9 2 4 . 18 -3 5 1 6 1 8 3 . 37

-

9 9 6 9 2 0 6 . 0 9 9 9 6 9 2 0 6 . 0 9

1011660000.00 964711931.13 - 9 7 2 8 9 2. 2 4 - 7 2 3 6 0 4 5 7 . 75 620934309.96 2660670384.99

- - - -50766.47 - 9 5 7 3 2 7 6 7 . 78 659262910.00 754944911.31

-50766.47 957327677.78 957276911.31

- - - - - - - -

-

-

-

-

- - - - - 9 5 7 3 2 7 6 7 . 78 -298064767.78 -202332000.00

9 5 7 3 2 7 6 7 . 78 -95732767.78 -

-202332000.00 -202332000.00

-

- - - - - - - -

-

-

-

-

- - - - - - - -

-

-

-

1011660000.00 964711931.13 - 9 2 2 1 2 5. 7 7 - 1 6 8 0 9 3 2 2 5 .5 3 1280197219.96 3425584502.39

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

Prepared by：SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTA

Company Statement of Changes in Shareholders' Equity

For the year ended 31 December 2019

Expressed in RMB

Year ended 31/12/2018

Share capital

Capital reserve

Less:

tre a su r y

shares

Other

comprehens

ive income

Sp e ci f i c

reserve

Su rp l u s

reserve

R et ai n ed

e ar n i ng s

Total

I. Balance at 31/12/2018

Add：Changes in accounting policies

Correction of prior period errors Others

I I. Balance at 01/01/2019

I II . Changes in equity during the year( "- "for decrease)

(I ) Total comprehensive income

(II )Shareholders' contributions and decrease of capital

1.Contribution by ordinary shareholders

2. Capital contributed by the holders of other equity

instrument

3. Equity settled share-based payments

4. Others

(III) Appropriation of profits

1 . Appropriation for surplus reserves

2 . Appropriation for general risk reserv e

2 . Distributions to shareholders

3 . Others

(I V ) Transfer within equity

1. Share capital increased by capital reserves transfer

2.Share capital increased by surplus reserves transfer

3.Transfer of surplus reserve to offset losses 4.Others

( V) Specific Reserve

1. Appropriation during the year

2.Utilisation during the year ("- ")

( VI ) Others

IV.Balance at 31/12/2019

1011660000.00 9 7 8 2 4 4 9 1 0 .1 1 - - - 62537054.59 5 2 2 8 8 2 0 3 6 .7 8 2575324001.48

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-

-

1011660000.00 9 7 8 2 4 4 9 1 0 .1 1 - - - 62537054.59 5 2 2 8 8 2 0 3 6 .7 8 2575324001.48

- -13532978.98 - - - 10239554.59 9 2 1 5 5 9 9 1 . 27 8 8 8 6 2 5 6 6 . 88

1 0 2 3 9 5 5 4 5 .8 6 102395545.86

- - - - - - - -

-

-

-

-

- - - - - 10239554.59 -10239554.59 -

10239554.59 -10239554.59 -

-

-

- - - - - - - -

-

-

-

-

- - - - - - - -

-

-

-13532978.98 -13532978.98

1011660000.00 9 6 4 7 1 1 9 3 1 .1 3 - - - 72776609.18 6 1 5 0 3 8 0 2 8 .0 5 2664186568.36

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

Notes to the Financial Statements

I.Company general information

1. Company’s profile

Shenzhen Special Economic Zone Real Estate and Properties (Group) Co. Ltd. (the “Group” or “the Company”) was established in July 1993 as

approved by the Shenzhen Municipal Government with document SFBF (1993) 724. The Company issued A shares on 15 September 1993 and

issued B shares on 10 January 1994. On 31 A ugust 1994 the issued B shares were listed in the New York Exchange market as class A

recommendation. The total share capital is 1011660000 shares of which A shares are 891660000 shares and the B shares are 120 000000

shares. The company business license regis tration number is 440301103225878 and the regis tered capital is RMB 1011660000. 00. The

Company’s headquarter is at Floor 45-48 Shen Fang Plaza Ren Min South Road Luo Hu Distric t Shen Zhen Guang Dong prov ince.

On 13 October 2004，according to the document No.(2004) 223 “Decision on establishing Shenzhen investment Holding Co. Ltd.” issued by

State-Owned Assets Superv ision and Administration Commission of Shenzhen Municipal Government former major shareholder – Shenzhen

Construction Investment Holding Company with two other assets management companies merged to form the Shenzhen Investment Holding Co. Ltd.

By the State-owned Assets Superv ision and Adminis tration Commission of the s tate council and quasi -exempt obligations tender offer as approved

by China Security Regulatory Committee with document No. (2005)116 this issue of consolidated has been authorized and the change in regis tration

had been completed on 15 February 2006. At the end of the reporting period Shenzhen Investment Holding Limited holds 642884262 shares of the

Company (63.55% of the total share capital). The shares are all tradable unrestric ted shares.

The Company has established the corporate governance structure including the general meeting of shareholders the board of directors and board of

superv isors. Currently the Company’s structure includes human resources department financing pla n department marketing department

engineering management department and etc.The main products or serv ices prov ided by the Company and its subsidiaries (hereinafter referred to as "the Group") includes: mainly engaged in real

estate development and sales property leasing and management retail merchandising and trade hotel equipment installation and maintenance

construction interior decoration etc.The parent of the Company is Shenzhen Investment Holdings Co. Ltd. The Financial statement published on 28 March 2019 which approved by the

Group’s Board of Directors. 25 entities were consolidated into the Group in 2018 for the detail in Note 8 "Equities in other entities". The scope of

consolidation of the Group does not change as compared with that of the prev ious year.The consolidated and company financial s tatements and the notes to financial statements have been approved by the 7th Board of Directors in the

50th board meeting on 13 March 2020.

2. Scope of consolidated financial statementsThe detail is set out in Note VII "Joint arrangement classification and accounting treatment for joint operation”.In this reporting period the change of consolidation scope is in Notes VI and VII for more details.

II.Basis of preparation

The financial statements are prepared in accordance with the Accounting Standards for Business Enterprises and corresponding appl ication

guidance interpretations and other related prov isions issued by the Minis try of Finance (collectively " Accounting Standa rds for Business Enterprises

"). In addition the Group also discloses relevant financial information in accordance with the rules of information disclosure for publicly issued

securities companies No. 15 - general prov isions on financial reporting (rev ised in 2014) of the China securities regulatory commission.The financial statements of the Company have been prepared on going concern basis.The Company adopts the accrual basis of accounting. Except for certain financial instruments the financial

statements are prepared under the historical cost convention. In the event that impairment of assets occurs a

provision for impairment is made accordingly in accordance with the relevant regulations.III.Significant accounting policies and accounting estimates

The Group determines the revenue recognition policy according to its own production and operation characteris tics. The detail is set out in Note III

23 for the specific accounting policies.

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

The financial s tatements have been prepared in compliance with the Accounting Standards for Business Enterprises to truly and completely present

the Company and consolidated financial position as at 31 December 2019 and the Company and consolidated operating results and cash flows for

the year ended 31 December 2019.

2. Accounting Period

The accounting period of the Company is from 1 January to 31 December.

3. Operating Period

The operating period of the Company is 12 months.

4. Functional currency

The Company and domestic subsidiaries use Renminbi (“RMB”) as their functional currency. Offshore subsidiaries determine [American Great Wall

Co. Ltd.] as their functional currency according to the primary economic environment where they operate. The financial s tatements of the Company

have been prepared in RMB.

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

(1) Business combinations involv ing enterprises under common control

For a business combination involv ing enterprises under common control the assets acquired and liabili ties assumed are measur ed based on their

carry ing amounts in the consolidated financial s tatements of the ultimate controlling party at the combination date except for adjustments due to

different accounting policies. The difference between the carry ing amount of the net assets acquired and the consideration paid for the combination

(or the total par value of shares issued) is adjusted against share premium in the capital reserve with any excess adjusted against retained earnings.

Business combinations involv ing enterprises under common control and achieved in stages.

In the separate financial statements the initial investment cost is calculated based on the shareholding portion of the assets and liabili ties obtained

and are measured at the carry ing amounts as recorded by the enterprise being combined at the combination date. The difference between the initial

investment cost and the sum of the carry ing amount of the original investment cost and the carry ing amount of consideration paid for the combin ation

is adjusted to the capital reserve if the capital reserve is not sufficient to absorb the difference the excess difference shall be adjusted to retained

earning.In the consolidated financial statements the assets and l iabili ties obtained at the combination shall be measured at the carry ing value as recorded by

the enterprise at combination date except for adjustments of dif ferent accounting policies. The difference between the sum of the carry ing value from

original shareholding portion and the new investment cost incurred at combination date and the carry ing value of net assets obtained at combination

date shall be adjusted to capital reserve if the balance of capital reserve is not sufficient to absorb the differences any excess is adjusted to retained

earnings. The long-term investment held by the combination party the recognized profit or lose comprehensive income and other change of

shareholding’s equity at the closer date of the acquisition date and combination date under common control shall separately offset the opening

balance of retained earnings and profit or loss during comparative statements.

(2) Business combinations involv ing enterprises not under common control

For business combinations involv ing enterprises not under common control the consideration costs include acquisition-date fair value of assets

transferred liabili ties incurred or assumed and equity securities issued by the acquirer in exchange for control of the acquiree. At the acquisition date

the acquired assets liabil ities and contingent liabil ities of the acquiree are measured at their fair value. The acquiree’s identifiable asset liabili ties

and contingent liabili ties are recognised at their acquisition-date fair value.Where the combination cost exceeds the acquirer’s interest in the fair value of the acquiree’s identifiable net assets the d ifference is recognised as

goodwill and subsequently measured on the basis of its cost less accumulated impairment prov isions. Where the combination cost is less than the

acquirer’s interest in the fair value of the acquiree’s identifiable net assets the difference is recognised in profit or loss for the current period after

reassessment.

Business combinations involv ing enterprises not under common control and achieved in stages

In the separate financial s tatements the initial investment cost of the investment is the sum of the carry ing amount of the equity investment held by

the entity prior to the acquisition date and the additional investment cost at the acquisition date. The disposal accounting policy of other

comprehensive income related with equity investment prior to the purchase date recognized under equity method shall be compliance with the

method when the acquiree disposes the related assets or liabili ties. Shareholder’s equity due to the changes of other shareholder’s equity other than

the changes of net profit other comprehensive income and profit dis tribution shall be transferred to profit or lose for current period when disposed. I f

the equity investment held by the entity prior to the acquisition date is measured at fair value the cumulative changes in fair value recognized in

other comprehensive income shall be transferred to profit or loss for current period when accounted for using cost method.In the consolidation financial s tatements the combination cost is the sum of consideration paid at acquisition date and fair value of the acquiree’s

equity investment held prior to acquisition date; the cost of equity of the acquiree held prior to acquisition date shall be re-measured at the fair value

at acquis ition date the difference between the fair value and book value shall be recognized as investment income or loss for the current period.Other comprehensive income and changes of investment equity related with acquiree’s equity held prior to acquisition date shall be transferred to

investment profit or loss for current period at acquis ition date besides there is other comprehensive income incurred by the changes of net assets or

net liabili ties due to the re-measurement of defined benefit plan.

(3) Transaction costs for business combination

The overhead for the business combination including the expenses for audit legal serv ices valuation advisory and other administrative expenses

are recorded in profit or loss for the current period when incurred. The transaction costs of equity or debt securities issued as the considerations of

business combination are included in the initial recognition amount of the equity or debt securities.

6. Consolidated financial s tatements

(1) Scope of consolidated financial statements

The scope of consolidated financial statements is based on control. Control ex ists when the Company has power over the investee; exposure or

rights to variable returns from its involvement with the investee and has the abil ity to affect its returns through its power over the investee. A

subsidiary is an entity that is controlled by the Company (including enterprise a portion of an investee as a deemed separate component and

structured entity controlled by the enterprise).

(2) Basis of preparation of consolidated financial s tatements

The consolidated financial s tatements are prepared by the Company based on the financial s tatements of the Company and its subsidiaries and

other relevant information. When preparing consolidated financial statements the accounting policies and accounting periods of the subsidiaries

should be consis tent with those established by the Company and all significant intra-group balances and transactions are eliminated.Where a subsidiary or business was acquired during the reporting period through a business combination involv ing enterprises under common

control the financial statements of the subsidiary or business are included in the consolidated financial s tatements as if the combination had

occurred at the date that the ultimate controlling party first obtained control.Where a subsidiary or business was acquired during the reporting period through a business combination involv ing enterprises not under common

control the identifiable assets and liabili ties of the acquired subsidiaries or business are included in the scope of consolidation from the date that

control commences.The portion of a subsidiary ’s equity that is not attributable to the parent is treated as non -controll ing interests and presented separately in the

consolidated balance sheet within shareholders’ equity. The portion of net profit or loss of subsidiaries for the period attributable to non -controlling

interests is presented separately in the consolidated income statement below the “net profit” line item. When the amount of loss for the current period

attributable to the non-controlling shareholders of a subsidiary exceeds the non-controlling shareholders’ share of the opening owners’ equity of the

subsidiary the excess is still al located against the non-controlling interests.

(3) Changes in non-controlling interests

Where the Company acquires a non-controlling interest from a subsidiary ’s non-controlling shareholders or disposes of a portion of an interest in a

subsidiary without a change in control the transaction is treated as equity transaction and the book value of shareholder’s equity attributed to the

Company and to the non-controll ing interest is adjusted to reflect the change in the Company’s interest in the subsidiaries. The difference between

the proportion interests of the subsidiary ’s net assets being acquired or disposed and the amount of the consideration paid or received is adjusted to

the capital reserve in the consolidated balance sheet with any excess adjusted to retained earnings.

(4) Disposal of subsidiaries

When the Company loses control over a subsidiary because of disposing part of equity investment or other reasons the remaining part of the equity

investment is re-measured at fair value at the date when the control is lost. A gain or loss is recognised in the cu rrent period and is calculated by the

aggregate of consideration received in disposal and the fair value of remaining part of the equity investment deducting the share of net assets in

proportion to prev ious shareholding percentage in the former subsidiary since acquis ition date and the goodwill.Other comprehensive income related to the former subsidiary is transferred to profit or loss when the control is lost except for the comprehensive

income aris ing from the movement of net l iabili ties or assets in the former subsidiary ’s re-measurement of defined benefit plan.

7. Joint arrangement classification and accounting treatment for joint operation

A joint arrangement is an arrangement of which two or more parties have joint control. The Company classifies j oint arrangements into joint

operations and joint ventures.

(1) Joint operations

A joint operation is a joint arrangement whereby the joint operators have rights to the assets and obligations for the liabi l ities relating to the

arrangement.The Company recognizes the following items relating to its interest in a joint operation and account for them in accordance with relevan t accounting

standards:

A、its solely -held assets and its share of any assets held jointly ;

B、its solely -assumed liabili ties and i ts share of any liabil ities assumed jointly ;

C、its revenue from the sale of its share of the output arising from the joint operation;

D、its share of the revenue from the sale of the output by the joint operation; and

E、its solely -incurred expenses and its share of any expenses incurred jointly.

(2)Joint ventures

A joint venture is a joint arrangement whereby the joint venturers have rights to the net assets of the arrangement.

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

8. Cash and cash equivalents

Cash comprises cash in hand and deposits that can be readily withdrawn on demand. Cash equivalents include short-term highly liquid investments

that are readily convertible to known amounts of cash and are subject to an insignificant risk of change in value.

9. Foreign currency transactions and translation of foreign currency financial s tatements

(1)Foreign currency transactions

Foreign currency transactions are translated to the functional currency of the Company at the spot exchange rates on the dates of the transactions.

Monetary items denominated in foreign currencies are translated to Renminbi at the spot exchange rate at the balance sheet da te. The resulting

exchange differences between the spot exchange rate on balance sheet date and the spot exchange rate on initial recognition or on the prev ious

balance sheet date are recognised in profit or loss. Non-monetary items that are measured at his torical cost in foreign currencies are translated to

Renminbi using the exchange rate at the transaction date. Non-monetary items that are measured at fair value in foreign currencies are translated

using the exchange rate at the date the fair value is determined. The resulting exchange differences are recognised in profit or loss.

(2)Translation of foreign currency financial statements

When translating the foreign currency financial statements of overseas subsidiaries assets and liabilities of foreign operation are translated to

Renminbi at the spot exchange rate at the balance sheet date. Equity items excluding “retained earnings” are translated to Renminbi a t the spot

exchange rates at the transaction dates.Income and expenses of foreign operation are translated to Renminbi at the spo t exchange rates at the transaction dates.

Cash flow statement of foreign operation is translated to Renminbi at the spot exchange rates [the rates determined under a systematic and rational

method that approx imate the spot exchange rates] at the cash flow occurence dates. Effect of foreign exchange rate changes on cash and cash

equivalents is presented separately as “Effect of foreign exchange rate changes on cash and cash equivalents” in the cash flow statement.The resulting translation differences are recognised in other comprehensive income in shareholders’ equity of balance sheet.The translation differences accumulated in shareholders’ equity with respect to a foreign operation are transferred to profit or loss in the period when

the foreign operation is disposed.

10. Financial instruments

Financial instruments refer to the contracts of forming enterprise financial assets and other entities’ financial liabilities or equity instruments.

(1) Recognition and Derecognition of financial instruments

A financial asset or financial liabili ty is recognised when the Group becomes one party of financial instrument contracts.

If one of the following conditions is met the financial assets are terminated:

① The right of the contract to receive the cash flows of financial assets terminates

② The financial asset has been transferred and is in accordance with the following conditions for derecognition.If the obligations of financial liabili ty have been discharged in total or in part derecognize all or part of it. If the Gro up (debtor) makes an agreement

with the creditor to replace the current financial liabil ity of assuming new financial liabili ty which contract prov isions are different in substance

derecognize the current financial liabili ty and meanwhile recognize as the new financial liabili ty.If the financial assets are traded routinely they are recognised and derecognised at the transaction date.

(2) Classification and measurement of financial assets

Financial assets are classified into the following three categories depends on the Group’s business mode of managing financia l assets and cash flow

characteris tics of financial assets: financial ass ets measured at amortized cost financial assets at fair value through other comprehensive income

and financial assets at fair value through profit or loss.

Financial assets measured at amortised cost

The Group shall classify financial assets that meet the following conditions and are not designated as financial assets at fair value through profit or

loss as financial assets measured at amortized cost:

? The Group’s business model for managing the financial assets is to collect contractual cash flows;

? The terms of the financial asset contract stipulate that cash flows generated on a specific date are only payments of principal a nd interest

based on the amount of outs tanding principal.

After initial confirmation the real interest rate method is used to measure the amortized cost of such financial assets. Profits or losses aris ing from

financial assets measured at amortized costs and not part of any hedging relationship are included in current profits and losses when the recognition

is terminated amortized or impaired according to the Actual Interest Rate Law.

Financial assets at fair value through other comprehensive income

The Group shall classify financial assets that meet the following conditions and are not designated as financial assets measured at fair value and

whose changes are recorded in current profits and losses as financial assets measured at fair value through other comprehensive income:

? The Group’s business model for managing the financial assets is both to collect contractual cash flows and to sell the financial assets;

? The terms of the financial asset contract stipulate that cash flows generated on a specific date are only payments of princip al and interest

based on the amount of outs tanding principal.

After initial recognition financial assets are subsequently measured at fair value. Interest impairment losses or gains and exchange gains calculated

by the effective interest rate method are recognised in profit or loss while other gains or losses are recognised in other comprehensive gains. When

derecognized the accumulated gains or losses prev iously recognised in other comprehensive gains are transferred from other c omprehensive gains

and recorded in current profits and losses.

Financial assets at fair value through profit or loss

In addition to the aboving financial assets which are measured at amortized cost or at fair value a through other comprehensive income the Group

classifies all other financial assets as financial assets measured at fair value through profit or loss.When initial recognition in order to eliminate or

significantly reduce accounting mismatches the Group irrevocably designates some financial assets that should have been measured at amortized

cost or at fair value through other comprehensive gains as financial ass ets at fair value through profit or loss.

After initial recognition the financial assets are subsequently measured at fair value and the profits or losses (including interest and div idend income)

generated from which are recognised in profit or loss unless the financial assets are part of the hedging relationship.However for non-tradable equity instrument investment when initially recognized the Group irrevocably designates them as financial assets a t fair

value through other comprehensive gains. The designation is made on the basis of indiv idual investment and the relevant investment conforms to

the definition of equity instruments from the issuer’s point of v iew.

After initial confirmation financial assets are subsequently measured at fair value. Div idend income that meets the requirements is recognised in

profit and loss and other gains or losses and changes in fair value are recognised in other comprehensive gains. When dereco gnized the

accumulated gains or losses prev iously recognised in other comprehensive gains are transferred from other comprehensive gains to retained

earnings.The business model of managing financial assets refers to how the group manages financial assets to generate cash flow. The b usiness model

decides whether the source of cash flow of financial assets managed by the Group is to collect contract cash flow sell financial assets or both of

them. Based on objective facts and the specific business objectives of financial assets management decided by key managers the Group

determines the business model of financial assets management.The Group evaluates the characteris tics of the contract cash flow of financial assets to determine whether the contract cash flow generated by the

relevant financial assets on a specific date is only to pay principal and interest based on the amount of unpaid principal. Among them princ ipal refers

to the fair value of financial assets at the time of initial confirmation; interest includes the consideration of time value of money credit risk related to

the amount of unpaid principal in a specific period and other basic borrowing risks costs and profits. In addition the Group evaluates the terms and

conditions of the contracts that may lead to changes in the time dis tribution or amount of cash flow in financial asset contracts to determine whether

they meet the requirements of the aboving contract cash flow’s. characteristics

Only when the Group changes its business model of managing financial assets all the financial assets affected shall be reclassified on the firs t day

of the first reporting period after the business model changes otherwise financial assets shall not be reclass ified after initial confirmation.

Financial assets are measured at fair value at initial recognition. For financial assets that are measured at fair value and whose changes are included

in the current profit and loss related transaction costs are directly included in the current profit and loss; for other types of financial assets related

transaction costs are included in the initial ly recognized amount. For accounts receivable arising from the sale of products or the prov ision of labor

serv ices that do not include or take into account significant financing components the Group considers the amount of consideration expected to be

entitled as the initial recognition amount.

(3) Classification and Measurement of financial liabil ities

On initial recognition financial liabili ties are classified as: financial liabili ties at fair value through profit or loss (FVTPL) and financial liabili ties

measured at amortized cost. For financial liabili ties not classified as at fair value through profit or loss the transaction costs are recognised in the

initial ly recognised amount.

Financial l iabili ties at fair value through profits and losses

Financial l iabili ties at FVTPL include transaction financial liabili ties and financial liabilities designated as at fair value through profit or loss in the initial

recognition. Such financial liabil ities are subsequently measured at fair value all gains and losses arising from changes in fair value and div idend and

interest expense relative to the financial liabil ities are recognised in profit or loss for the current period.

Financial l iabili ties measured at amortized cost

Other financial liabil ities are subsequently measured at amortized cost using the effective interest method; gains and losses arising from

derecognition or amortization is recognised in profit or loss for the current period.

Distinction between financial liabili ties and equity instruments

The financial liabili ty is the liabili ty that meets one of following cateria:

① Contractual obligation to deliver cash or other financial instruments to another entity.

② Under potential adverse condition contractual obligation to exchange fi nancial assets or financial liabil ities with other parties.

③ A contract that will or may be settled in the entity ’s own equity instruments and is a non-derivative for which the entity is or may be obliged to

deliver a variable number of the entity ’s own equity instruments.

④ A derivative that will or may be settled other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of

the entity ’s own equity instruments.

An equity instrument is any contract that ev idences a residual interest in the assets of an entity after deducting all of its liabili ties.

If the group cannot unconditionally avoid fulfilling a contractual obligation by delivering cash or other financial assets t he contractual obligation meets

the definition of financial liabili ty.If a financial instrument must or are able to be settled by the group’s own equity instrument the group should consider whether the group’s equity

instrument as the settlement instrument is a substitute of cash or other financial assets or the residual interest in the assets of an entity after

deducting all of its liabili ties. If the former the tool is the group’s financial liabili ty ; if the latter the tool is the equity instrument of the group.

(4) Fair value of financial instruments

The recognization of fair value of financial assets and financial liabil ity is set out in note III. 11.

(5) Impairment of financial assets

On the basis of expected credit losses the Group performs impairment assessment on the following items and confirms the loss prov ision.? financial assets measured at amortized cost;

? debt investments at fair value through other comprehensive income;

? lease receivables;

? Financial guarantee contract(except measured at fair value through profit or loss or formed by continuing involvement of transferred financial

assets or the transfer does not qualify for derecognition).Measurement of expected credit losses

The expected credit losses refers to the weighted average of the credit losses of financial instruments that are weighted by the risk of default. Credit

loss refers to the difference between all contractual cash flows receivable from the contract and all cash flows expected to be received by the Group

at the original effective interest rate that is the present value of all cash shortages.The company considers reasonable and reliable information about past events current conditions future forecasts and weights the risk of default to

calculate the probabili ty -weighted amount of the present value of the difference between the cash flow receivable under the contract and the cash

flow expected to be received in recognition of the expected credit loss.The Group separately measures the expected credit losses of financial instruments at different stages. The credit risk on a financial instrument has

not increased significantly since initial recognition which is in the first s tage. The Group shall measure the loss allowance for that financial instrument

at an amount equal To 12-month expected credit losses. If the credit risk of financial instruments has increased significantly since the initial

recognition but no credit impairment has occurred which is in the second stage. The Group shall measure the loss allowance for a financial

instrument at an amount equal to the lifetime expected credit losses. If the financial instrument has occurred credit impairment since initial recognition

which is in the third s tage and the Group shall measure the loss allowance for a financial instrument at an amount equal to the li fetime expected

credit losses.

For financial instruments with lower credit risk at the balance sheet date the Group assumes that their credit risk has not increased significantly since

the initial recognition and shall measure the loss allowance for that financial instrument at an amo unt equal to 12-month expected credit losses.The lifetime expected credit lossesrefer to the expected credit losses caused by all possible defaults during the whole expected lifetime. The

12-month expected credit lossesrefer to the expected credit losses caused by all possible defaults during the 12-month after balance sheet date(if

the expected duration of financial instrument is less than 12 months then for the expected duration)which is part of the li fetime expected credit

losses

When measure the expected credit loss the longest contract period (including the option of renewal) that the group needs to consider is the lon gest

contract period the enterprise facing credit risk.

For financial instruments in the firs t s tagessecond stages and with lower credit risk the Group calculates interest income on the basis of their book

balances without deduction of impairment prov isions and actual interest rates. For financial instruments in the third stage the Group calculates

interest income according to their book balance minus the impairment prov ision and the actual interest rate.

For bills receivable and accounts receivable whether or not there are significant financing elements the Group shall always measure the loss

allowance for them at an amount equal to the li fetime expected credit losses.When information on expected credit losses cannot be assessed for a single financial asset in accordance with the characteris tics of credit risk the

group div ides and combines bills receivable accounts receivable and leased receivables. On the basis of the combination the group calculates the

expected credit losses. The basis of determining the combination is as follows:

A﹑ Bills receivable

? Bill receivable group 1: Bank acceptance bil ls

? Bill receivable group 2:Trade acceptance bills

B﹑ Accounts receivable

? Accounts receivable group 1: Amount receivables of related parties

? Accounts receivable group 2: Amount receivables of sales of proporties

? Accounts receivable group 3: Amount receivables of other custom ers

For the accounts receivable div ided into group the group refers to the historical credit losses combines the current situation with the forecast of

future economic situation compiles a comparison table between the age of accounts receivable and the lifetime expected credit losses rate to

calculate the expected credit losses.For the bills receivables and contract assets div ided into group the Group refers to historical credit losses with the curr ent situation and the forecast

of future economic situation calculates the expected credit losses through the exposure on default and the lifetime expected credit losses rate.Other receivables

According to the characteris tics of credit risk the group div ides other receivables into group. On the basis of the combination the group calculates

the expected credit losses. The basis of determining the combination is as follows:

? Other receivables group 1: Amount receivables from government

? Other receivables group 2: Amount receivables from employee’s inprest fund

? Other receivables group 3: Amount receivables from the collecting and paying on another's behalf

? Other receivables group 4: Amount receivables from other customers

? Other receivables group 5: Amount receivables from related parties

For other receivables a div ided into group the Group calculates the expected credit losses through the exposure on default and the li fetime expected

credit losses rate or the next 12 months.

Debt investments and Other debt investments

For debt investments and other debt investments the group calculates the expected credit losses through the exposure on default and the future

12-month or li fetime expected credit losses rate according to the nature of the investment the types of counterparty and risk exposure.

Assessment of Significant Increase in Credit Risk

By comparing the default risk of financial instruments on balance sheet day with that on initial recognition day the Group d etermines the relative

change of default risk of financial instruments during the expected li fe of financial instruments to evaluate whether the credit risk of financial

instruments has increased significantly since the initial recognition.To determine whether credit risk has increased significantly since the initial recognition. the Group considers reasonable and valid information

including forward-looking information that can be obtained without unnecessary additional costs or efforts. Information considered by the Grou p

includes:

? The debtor can’t pay principal and interest on the expiration date of the contract;

? Serious deterioration of external or internal credit ratings (if any) of financial instruments that have occurred or are expected to occur;

? Serious deterioration of the debtor’s operating results that have occurred or are expected to occur;

? Changes in the ex isting or anticipated technological market economic or legal env ironment will have a significant negative impact on the

debtor’s repayment capacity.

According to the nature of financial instruments the Group evaluates whether credit risk has increased significantly on the basis of a single financial

instrument or a combination of financial instruments. When assessing on the basis of the combination of financial instruments the Group can classify

financial instruments based on common credit risk characteris tics such as overdue information and credit risk rating.If the delay exceeds 30 days the Group determines that the credit risk of financial instruments has increased significantly.The Group considers that financial assets default in the following circumstances

? The debtor is unlikely to full pay its arrears to the group and the assessment does not take into account recourse actions t aken by the group

such as liquidation of collateral (if held);

? Financial assets have delay more than 90 days.

Financial assets that have occured credit impairment

On the balance sheet date the Group assesses whether credit impairment has occurred in financial assets measured at amortize d cost and debt

investments measured at fair value through other comprehensive income. When one or more events adversely affect the expected future cash flow

of a financial asset occur the financial asset becomes a financial asset with credit impairment. Ev idence of credit impairment of financial assets

includes the following observable information:

? Significant financial difficulties occurs to the issuer or debtor;

? The debtor breaches any of the contractual stipulations for example fails to pay or delays the payment of interests or the principal etc.;

? For economic or contractual considerations related to the financial difficulties of the debtor the Group grants concessions to the debtor that will

not be made under any other circumstances.? The debtor is probable to go bankrupt or undergo other financial restructuring.

? Financial difficulties of issuer or debtor lead to the disappearance of financial assets active market.

Presentation of expected credit losses reserve

In order to reflect the changes happened to the credit risk of financial instruments since the initial recognition the Group recalculates the expected

credit losses on each balance sheet day. The increase or reversal of the loss prov ision resulting therefrom is recognised as an impairment loss or

gain in the current profit or loss.For financial assets measured at amortized cost loss prov ision offsets the carry ing amount of the financial asse ts

shown on the balance sheet; for debt investments measured at fair value through other comprehensive income the Group recognizes its loss

prov ision through other comprehensive income and does not offset the financial assets’ carry ing amount.Write off

If the Group no longer reasonably expects that the financial assets contract cash flow can be recovered fully or partially the financial assets book

balance will be reduced directly. Such reduction constitute the derecognition of the financial assets. What usually occurs when the Group determines

that the debtor has no assets or sources of income to generate sufficient cash flows to pay the amount to be reduced. However in accordance with

the Group’s procedures for recovering due payment the financial assets reduced may still be affected by enforcement activ iti es.If the reduced financial assets are recovered later the returns as impairment losses shall be included in the profits and losses of the recovery period.

(6) Transfer of financial assets

Transfer of financial assets refers to the transference or deliverance of financial assets to the other party (the transferee) other than the issuer of

financial assets.The Group derecognizes a financial asset only if it transfers substantially all the risks and rewards of ownership of the fin ancial asset to the

transferee; the Group should not derecognize a financial asset if i t retains substantially all the risks and rewards of ownership of the financial asset.The Group neither transfers nor retains substantially all the risks and rewards of ownership shows as the following circumst ances: if the Group has

forgone control over the financial assets derecognize the financial assets and verify the assets and liabili ties; if the Group retains its control of the

financial asset the financial asset is recognized to the extent of its continuing involvement in the transferred financial asset and recognize an

associated liability is recognized.

(7) Offseting financial assets and financial liabili ties

When the Group has the legal rights to offset the recognized financial assets and financial l iabili ties and is capable to car ry it out the Group plans to

net settlement or realize the financial assets and pay off the financial liabili ties the financial assets and financial liabili ties shall be listed separately

with the neutralized amount in balance sheet and are not allowed to be offset.

11. Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liabili ty in an orderly transaction between market participants at the

measurement date.The Company measures related assets or l iabili ties at fair value assuming the assets or liabili ties are exchanged in an orderly transaction in the

princ ipal market; in the absence of a principal market assuming the assets or liabili ties are exchanged in an orderly transaction in the most

advantageous market. Princ ipal market (or the most advantageous market) is the market that the Company can normally enter into a transaction on

measurement date. The Company adopts the presumptions that would be used by market participants in achiev ing the maximized economic value of

the assets or liabili ties.

For financial assets or financial liabili ties with active markets the Company uses the quoted prices in active markets as th eir fair value. Otherwise

the Company uses valuation technique to determine their fair value.

Fair value measurement of a non-financial asset takes into account market participants’ abili ty to generate economic benefits using the asset in its

best way or by selling it to another market participant that would best use the asset.The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value

maximizing the use of relevant observable inputs and using unobservable inputs only if the observable inputs aren’t availabl e or impractical.

Fair value level for assets and liabili ties measured or disclosed at fair value in the financial statements are determined according to the significant

lowest level input to the entire measurement: Level 1 inputs are quoted prices (unadjusted) in ac tive markets for identical assets or l iabili ties that the

Company can access at the measurement date; Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the

assets or liabil ities either directly or indirectly ; Level 3 inputs are unobservable inputs for the assets or l iabili ties.

At the balance sheet date the Company revalues assets and liabilities being measured at fair value continuously in the financial statements to

determine whether to change the levels of fair value measurement.

12. Inventories

(1) Classification

The Group's inventory is classified by real estate development and non-real estate development. Inventory is mainly real estate development projects

development costs including development productes to be developed and development products to be developed and development products under

construction development products including the development costs of development products to be developed and development products under

construction development products including completed development products and intended to sell but temporari ly leased development products.Non-real estate developments include raw materials inventory and construction.

(2) Mesurement method of cost of inventories

The Group's inventory is valued at actual cost when acquired. The actual cost of product development includes land transfer fee infrastructure

expenditure construction and installation project expenditure borrowing expenses incurred before the completion of th e development project and

other related expenses in the development process. When a product is developed and shipped the actual cost is determined by indiv idual pricing.Raw materials and finished goods are calculated using weighted average method.

(3)Basis for determining the net realisable value and method for prov ision for obsolete inventories

Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs

necessary to make the sale and relevant taxes. The net realisable value is measured based on the verified ev idences and considerati ons for the

purpose of holding inventories and the effect of post balance sheet events.

Any excess of the cost over the net realisable value of of inventories is recognised as a prov ision for obsolete inventories and is recognised in profit

or loss. The Company usually recognises prov ision for decline in value of inventories by a single inventory item. If the factors caused the value of

inventory prev iously written-down have disappeared the prov ision for decline in value of inventories prev iously made is reversed.

(4)Inventory count system

The Company maintains a perpetual inventory system.

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

Low-value consumables are charged to profit or loss when they are used.

13. Long-term equity investments

Long-term equity investments include equity investments in subsidiaries and equity investments in joint ventures and associates. An associate is an

enterprise over which the Company has significant influence.

(1)Determination of initial investment cost

The initial cost of a long-term equity investment acquired through a business combination involv ing enterprises under common control is the

Company’s share of the carry ing amount of the subsidiary ’s equity in the consolidated financial statements of the ultimate controlling party at the

combination date. For a long-term equity investment obtained through a business combination not involv ing enterprises under common control the

initial cost is the combination cost.

A long-term equity investment acquired other than through a business combination: A long-term equity investment acquired other than through a

business combination is initially recognised at the amount of cash paid if the Company acquires the investment by cash or at the fair value of the

equity securities issued if an investment is acquired by issuing equity securities.

(2) Subsequent measurement and recognition of profit or loss

Long-term equity investments in subsidiaries are accounted for using the cost method. An investment in a joint venture or an assoc iate is accounted

for using the equity method for subsequent measurement.

For a long-term equity investment which is accounted for using the cost method Except for cash div idends or profit distributions declared but not yet

distributed that have been included in the price or consideration paid in obtaining the investments the Company recognises i ts share of the cash

div idends or profit dis tributions declared by the investee as investment income for the current period.

For a long-term equity investment which is accounted for using the equity method where the initial cost of a long-term equity investment exceeds the

Company’s interest in the fair value of the investee’s identifiable net assets at the date of acquisition the investment is initially recognised at cost.

Where the initial investment cost is less than the Company’s interest in the fair value of the inv estee’s identifiable net assets at the date of acquisition

the investment is initially recognised at the investor’s share of the fair value of the investee’s identifiable net assets a nd the difference is recognised

in profit or loss.Under the equity method the Company recognises its share of the investee’s profit or loss and other comprehensive income as investment income

or losses and other comprehensive income respectively and adjusts the carry ing amount of the investment accordingly. Once the investee declares

any cash div idends or profit dis tributions the carry ing amount of the investment is reduced by the amount attributable to the Company. Changes in

the Company’s share of the investee’s owners’ equity other than those arising from the investee’s net profit or loss other comprehensive income or

profit dis tribution (referred to as “other changes in owners’ equity”) is recognised directly in the Company’s equity and the carry ing amount of the

investment is adjusted accordingly. In calculating its share of the investee’s net profits or losses other comprehensive income and other changes in

owners’ equity the Group recognises investment income and other comprehensive income after making appropriate adjustments to align the

accounting policies or accounting periods with those of the Group based on the fair value of the investee’s identifiable net assets at the date of

acquisition.When the Company becomes capable of exercising joint control or significant influence (but not control) over an invest ee due to additional

investment or other reasons the Company uses the fair value of the prev iously -held equity investment together with additional investment cost as

the initial investment cost under the equity method. The difference between the fair value and carry ing amount of the prev iously -held equity

investment and the accumulated changes in fair value included in other comprehensive income shall be transferred to profit or loss for the current

period upon commencement of the equity method.When the Company can no longer exercise joint control of or significant influence over an investee due to partial disposal of the equity investment or

other reasons the remaining equity investment shall be accounting for using Accounting Standard for Business Enterprises No. 22 - Recognition and

Measurement of Financial Instruments and the difference between the fair value and the carry ing amount of the remaining equi ty investment shall be

charged to profit or loss for the current period at the date of the loss of joint control or significant influence. Any other comprehensive income

prev iously recognised under the equity method shall be accounted for on the same basis as would have been required if the Company had directly

disposed of the related assets or liabili ties for the current period upon discontinuation of the equity method. Other movement of owner’s equity

related to original equity investment is transferred to profit or loss for the current period.When the Company can no longer exercise control over an investee due to partial disposal of the equity investment or other reasons and the

remaining equity after disposal can exercise joint control of or significant influence over an investee the remaining equity is adjusted as using equity

method from acquisition. When the remaining equity can no longer exercise joint control of or significant influence over an investee the remaining

equity investment shall be accounted for using Accounting S tandard for Business Enterprises No. 22-Recognition and Measurement of Financial

Instruments and the difference between the fair value and the carry ing amount of the remaining equity investment shall be ch arged to profit or loss

for the current period at the date of loss of control.When the Company can no longer exercise control over an investee due to new capital injection by other investors and the Company can exercise

joint control of or significant influence over an investee the Company recognizes its share of the investee’s new added net assets using new

shareholding percentage. The difference between its new share of the investee’s new added net assets and its decreased shareho lding percentage

of the original investment is recognized in profit or loss. And the Company adjusts to the equity method using the new shareholding percentage as if

it uses the equity method since it obtains the investment.Unrealized internal trading gains and losses between the group and associated enterprises and joint ventures shall be calcula ted as part of the group

according to the shareholding ratio and investment gains and losses shall be recognized on an offset bas is. However unrealized internal t rading

losses between the group and the investee shall not be offset if they are impairment losses of the transferred assets.

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

Joint control is the contractually agreed sharing of control of an arrangement which ex ists only when decisions about the relevant activ ities require

the unanimous consent of the parties sharing control. When assessing whether the Company can exercise joint control over an investe e the

Company first considers whether no single participant party is in a position to control the investee’s related activ ities un i laterally and then considers

whether s trategic decis ions relating to the investee’s related activ ities require the unanimous consent of all participant parties that sharing of control.

All the parties or a group of the parties control the arrangement collectively when they must act together to direct the relevant activ ities. When more

than one combination of the parties can control an arrangement collectively joint control does not ex ist. A party that holds only protective rights does

not have joint control of the arrangement.Significant influence is the power to partic ipate in the financial and operating policy decisions of an investee but does not have control or joint control

over those policies. When determining whether the Company can exercise s ignificant influence over an investee the effect of potential voting rights

(for example warrants share options and convertible bonds) held by the Company or other parties that are currently exercisable or convertible shall

be considered.When the Company directly or indirectly through subsidiaries owns 20% of the investee (including 20% ) or more but less than 50% of the voting

shares it has significant influence over the investee unless there is clear ev idence to show that in this case the Company cannot participate in the

production and business decisions of the investee and cannot form a significant influence. When the Company owns less than 2 0% of the voting

shares generally it does not have significant influence over the investee unless there is clear ev idence to show that in this case the Company can

participate in the production and business decisions of the investee so as to form a significant influence.

(4) Method of impairment testing and impairment prov ision

For investments in subsidiaries associates and joint ventures refer to Note III. 19 for the Company’s method of asset impairment.

14. Investment property

Investment properties are properties held either to earn rental income or for capital apprec iation or for both. The Group's investment real estate

includes leased houses buildings and leased land use rights. In addition for a vacant building held by the company for operating lease if the board

of directors (or a similar institution) makes a written resolution expressly indicating that it is used for operating lease and the intention of holding does

not change in the short term it is also considered as Investment property.Investment properties are initially measured at acquisition cost and depreciated or amortized using the same policy as that for fixed assets or

intangible assets.

For the impairment of the investment properties accounted for us ing the cost model refer to Note III.19.

Gains or losses arising from the sale transfer retirement or disposal of an item of investment property are determined as the difference among the

net disposal proceeds the carry ing amount of the item related taxes and surchages and are recognised in profit or loss for current period.

15. Fixed assets

(1) Recognition of fixed assets

Fixed assets represent the tangible assets held by the Company for use in production of goods use in supply of serv ices rental or for adminis trative

purposes with useful lives over one accounting year.

Fixed assets are only recognised when its related economic benefits are likely to flow to the Company and its cost can be reliably measured.

Fixed asset are initial ly measured at cost.

(2) Depreciation of fixed assets

The cost of a fixed asset is depreciated using the straight-line method s ince the s tate of intended use unless the fixed asset is c lassified as held for

sale. Not considering impairment prov ision the estimated useful l ives residual value rates and depreciation rates of each c lass of fixed assets are as

follows:

Category Useful life （years） Residual value rate %

Annual depreciation

rate %

Plant and buildings 30 5 3.17

Motor vehicles 6 5 15.83

Electronic equipment and others 5 5 19.00

For impaired fixed assets cumulative amount of impairment prov ision is deducted in determinatingf the depreciation rate.

(3) The impairment of the fixed assets is set out in Note III. 19.

(4) Recognition and measurement of fixed assets acquired under finance leases

Fixed assets under finance leases are recognised if they meet one or more of the following criteria:

①The ownership of leased assets is transferred to the Company by the end of the lease term.②The Company has the option to purchase the asset at a price that is expected to be sufficiently lower than the fair value at the date of the option

becomes exercisable for it to be reasonably certain at the inception of the lease that the option will be exercised.

③Even if the ownership of assets is not transferred the lease term covers the major part of the useful li fe of the ass et.

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

⑤Leased assets are of a specialized nature that only the Company can use them without major modifications.

An asset acquired under a finance lease is measured at an amount equal to the lower of its fair value and the present value of the minimum lease

payments each determined at the inception of the lease. Long-term payable is recorded at an amount equal to the sum of all future minimum lease

payments. The difference between the carry ing amount of the leased assets and the minimum lease payments is accounted for as unrecognised

finance charges. Initial direct costs attributable to a finance lease incurred during the process of lease negotiation and the signing of the lease

agreement including serv ice charges attorney 's fees travelling expenses and stamp duty that are incurred by the Company are added to the

carry ing amount of the leased asset. Unrecognised finance charges are recognised as finance charge for the period using the effective interest

method over the lease term.

Depreciation is accounted for in accordance with the accounting policies of fixed assets. If there is reasonable certainty th at the Company will obtain

ownership of a leased asset at the end of the lease term the leased asset is depreciated over its estimated useful li fe. Otherwise the leased asset is

depreciated over the shorter of the lease term and its estimated useful l ife.

(5) Useful lives estimated residual values and depreciation methods are rev iewed at least at each year -end.

The Company adjusts the useful l ives of fixed assets if their expected useful l ives are different with the original estimates and adjusts the estimated

net residual values if they are different from the original estimates.

（6）Overhaul costs

Overhaul costs occurred in regular inspection are recognized in the cost if there is undoubted ev idence to confirm that this part meets the recognition

criteria of fixed assets otherwise the overhaul costs are recognized in profit or loss for the current period. Depreciation is prov ided during the period

of regular overhaul.

16. Construction in progress

Construction in progress is recognized based on the actual construction cost including all expenditures incurred for construction projects capitalised

borrowing costs and any other costs directly attributable to bringing the asset to working condition for its intended use.

Construction in progress is transferred to fixed asset when it is ready for its intended use.

The impairment of construction in progress is set out in Note III. 19.

17. Borrowing costs

（1）Capitalisation criteria

Borrowing costs that are directly attributable to the acquisition construction or production of a qualify ing asset shall be capitalised as part of the cost

of that asset. Other borrowing costs are expensed in profit or loss as incurred. The capitalisation of borr owing costs shall commence only when the

following criteria are met:

① capital expenditures have been incurred including expenditures that have resulted in payment of cash transfer of other asse ts or the

assumption of interest-bearing l iabili ties;

② borrowing costs have been incurred;

③ the activ ities that are necessary to prepare the asset for its intended use or sale have commenced.

（2）Capitalisation period

The capitalisation of borrowing costs ceases when the asset under acquisition or construction becomes ready for its intended use the borrowing

costs incurred thereafter are recognised in profit or loss for the current period.

Capitalisation of borrowing costs is suspended during periods in which the acquisition or construction of a fixed asset is interrupted abnormally and

the interruption lasts for more than 3 months until the acquis ition or construction is resumed.

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

For interest expense actually incurred on specific borrowings the eligible capitalised amount is the net amount of the borrowing costs after deducting

any investment income earned before some or all of the funds are used for expenditures on the qualify ing asset. To the extent that the Company

borrows funds generally and uses them for the purpose of obtaining a qualify ing asset the Company shall determine the amount of borrowing costs

eligible for capitalisation by apply ing a capitalisation rate to the expenditures on that asset the capitalisa tion rate shall be the weighted average of

the borrowing costs applicable to the borrowings of the Company that are outstanding during the period other than borrowings specifically for the

purpose of obtaining a qualify ing asset.In the capitalisation period exchange differences of specific borrowings in foreign currency shall be capitalised; exchange differences of general

borrowings in foreign currency is recognised in profit or loss for the current period.

18. Intangible assets

Intangible assets include software land use right patent rights and etc.Intangible assets are s tated at actual cost upon acquisition and the useful economic lives are determined at the point of acquisition. When the

useful li fe is finite amortisation method shall reflect the pattern in which the asset’s economic benefits are expected to be realised. If the pattern

cannot be determined reliably the straight-line method shall be used. An intangible asset with an indefinite useful li fe shall not be amortised.The Company shall rev iew the useful li fe and amortisation method of an intangible asset with a finite useful li fe at least at each year end. C hanges

of useful li fe and amortisation method shall be accounted for as a change in accounting estimate.

An intangible asset shall be derecognised in profit or loss when it is not expected to generate future economic benefits.

The impairment of intangible assets is set out in Note III. 19.

19. Impairment of assets

The impairment of long-term equity investments in subsidiaries associates and joint ventures investment properties measured using a cost model

fixed assets construction in progress productive biological assets measured using a cost model intangible assets goodwill proven oil and gas

mining rights and wells and related facil ities etc. (Excluding inventories investment property measured using a fair value model deferred tax assets

and financial assets) is determined as follows:

At each balance sheet date the Company determines whether there is any indication of impairment. If any indication ex ists the recoverable amount

of the asset is estimated. In addition the Company estimates the recoverable amounts of goodwill intangible assets with ind efinite useful lives and

intangible assets not ready for use at each year-end irrespective of whether there is any indication of impairment.The recoverable amount of an asset is the higher of its fair value less costs to sell and its present value of expected futur e cash flows. The

recoverable amount is estimated for each indiv idual asset. If it is not possible to estimate the recoverable amount of each indiv idual asset the

Company determines the recoverable amount for the asset group to which the asset belongs. An asset group is the smallest iden tifiable group of

assets that generates cash inflows that are largely independent of the cash inflows from other assets or asset groups.

An impairment loss is recognised in profit or loss when the recoverable amount of an asset is less than its carry ing amount. A prov ision for

impairment of the asset is recognised accordingly.

For goodwill impairment test the carry ing amount of goodwill arising from a business combinati on is allocated reasonably to the relevant asset group

since the acquisition date. If the carry ing amount of goodwill is unable to be allocated to asset group the carry ing amount of goodwill will be allocated

to asset portfolio. Asset group or portfolio of asset group is asset group or portfolio of asset group which can be benefit from synergies of a business

combination and is not greater than the reportable segment of the Company.In impairment testing if impairment indication ex ists in asset group or portfolio of asset group containing allocated goodwill impairment test is firs t

conducted for asset group or portfolio of asset group that does not contain goodwill and corresponding recoverable amount is estimated and any

impairment loss is recognized. Then impairment test is conducted for asset group or portfolio of asset group containing goodwill by comparing its

carry ing amount and its recoverable amount. If the recoverable amount is less than the carry ing amount impairment loss of go odwill is recognized.Once an impairment loss is recognised it is not reversed in a subsequent period.

20. Long-term deferred expenses

Long-term deferred expenses are recorded at the actual cost and amortized using a s traight-line method within the benefit period. For long-term

deferred expense that cannot bring benefit in future period the Company recognized its amortised cost in profit or loss for the current period.

21. Employee benefits

(1) Scope of employee benefits

Employee benefits refer to all forms of consideration or compensation given by the Company in exchange for serv ice rendered by employees or for

the termination of employment relationship. Employee benefits include short-term employee benefits post-employment benefits termination benefits

and other long-term employee benefits. Benefits prov ided to the Company’s spouse children dependents family members of deceased

employees or other beneficiaries are also part of the employee benefits.

According to liquidity employee benefits are presented as “employee benefits payable” and “long-term employee benefits payable” on the balance

sheet.(2) Short-term employee benefits

In the current period the Company has accrued for the actual wages bonuses medical insurance for employees based on standa rd rate work injury

insurance and maternity insurance and other social insurance and housing fund incurred and these are recognised as liabil ities and corresponding

costs in the profit or loss. If these liabil ities are not expected to be fully paid 12 months after the end of the reporting period in which employee

renders the serv ice to the Company and if the financial impact is significant these liabili ties shall be discounted using the net present value method.

（3）Post-employment benefits

Post-employment benefit plan includes defined contribution plans and defined benefit plans. Defined contribution plans are post-employment benefit

plans under which an enterprise pays fixed contributions into a separate fund and will have no future obligations to pay the contributions. Defined

benefit plans are post-employment benefit plans other than defined contribution plans.

Defined contribution plans

Defined contribution plans include primary endowment insurance unemployment insurance corporation pension plan and etc.

Besides basic pension insurance the Company establishes corporate pension plans in accordance with the related policies of corporate pension

regulations. Employees can join the pension plan voluntarily. The Company has no other significant commitment of employees’ social security.The Company shall recognise in the accounting period in which an employee prov ides serv ice the contribution payable to a defined contribution

plan as a liabil ity with a corresponding charge to the profit or loss for the current period or the cost of a relevant asset.

Defined benefit plan

For the defined benefit plan independent actuary uses an actuarial technique the projected unit credit method to make a reliable estimate of the

ultimate cost to the entity of the benefit that employees have earned in return for their serv ice in the current and prior periods on the balance sheet

date. The Group set the defined benefit plan including the following components:

① Serv ice costs including current serv ice costs any pas t serv ice costs and gain or loss on settlement. Among them the current serv ice cost is

the increase in the present value of the defined benefit obligation resulting from employee serv ice in the curr ent period; the past serv ice cost is the

change in the present value of the defined benefit obligation for employee serv ice in prior periods resulting from a plan amendment (the introduction

or withdrawal of or changes to a defined benefit plan) or a curtailment (a significant reduction by the entity in the number of employees covered by a

plan).② Net interest on the net defined benefit liabili ty (asset) can be v iewed as comprising interest income on plan assets interes t cost on the defined

benefit obligation and interest on the effect of the asset ceiling

③ Re-measurements of the net defined benefit liability and assets.The Group makes determining amounts to be recognized in profit or loss except other accounting standards stipulates or allows employee benefits

recorded as asset cost. Re-measurements of the changes in the net defined benefit l iabili ty (asset) recognized in other comprehensive income shall

not be reclassified to profit or loss in a subsequent period. However the entity may transfer those amounts recognized in ot her comprehensive

income within equity when original defined benefit plan is terminated.

(4) Termination benefits

The Company prov ides for termination benefits to the employees and shall recognize an employee benefits liabil ity for termination benefits with a

corresponding charge to the profit or loss for the current period at the earlier of the following dates: When the Company cannot unilaterally withdr aw

the offer of the termination benefits from an employment termination plan or a redundancy proposal; the Company recognizes the costs or expenses

relating to the payment of the termination benefits.If an employee's internal retirement plan is implemented the economic compensation before the official retirement date is a dismissal benefit. From

the date when the employee stops prov iding serv ices to the normal retirement date the salary of the retired employee and the social insurance

premium to be paid are included in the current period at one time profit and loss. Financial compensation after the official retirement date (such as a

normal retirement pension) is treated as after -serv ice benefits.

(5) Other long-term employee benefits

Other long-term employee benefits prov ided by the Company to the employees satis fied the conditions for c lassify ing as a defined contribution plan;

those benefits shall be accounted for in accordance with the above requirements relating to defined contribution plan. When th e benefits satis fy a

defined benefit plan it shall be accounted for in accordance with the above requirements relating to defined benefit plan but the movement of net

liabili ties or assets in re-measurement of defined defined benefit plan shall be recorded in profit or loss for the current period or cost of relevant

assets.

22. Prov isions

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

(1) the Company has a present obligation;

(2) it is probable that an outflow of economic benefits will be required to settle the obligation;

(3) the amount of the obligation can be estimated reliably.

A prov ision is initially measured at the best estimate of the expenditure required to settle the related present obligation. Factors pertaining to a

contingency such as the risks uncertainties and time value of money are taken into account as a whole in reaching the best estimate. Where the

effect of the time value of money is material prov isions are determined by discounting the expected future cash flows. The C ompany rev iews the

carry ing amount of a prov ision at the balance sheet date and adjusts the carry ing amount to the current best estimate.If all or part of the expenditure necessary for settling the prov ision is expected to be compensated by a third party the am ount of compensation is

separately recognized as an asset when it is basically certain to be received. The recognized compensation amount shall not exceed the carry ing

amount of the prov ision.

23. Revenue

(1) General principle

①Sale of goods

Revenue is recognised when all the following conditions are satisfied: significant risks and rewards of ownership of goods have been transferred to

the buyer; the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over

the goods sold; it is probable that the economic benefits will flow to the Company; and the revenue and costs can be measured reliably.②Rendering of serv ices

Where the outcome of a transaction involv ing the rendering of serv ices can be estimated reliably revenue is recognised by reference to the s tage of

completion.The stage of completion is based on the proportion of costs incurred to date to the estimated total costs .Rendering of serv ices can be estimated reliably when all the following conditions are satisfied: A. The revenue can be measured reliably ; B. It is

probable that the economic benefits will flow to the Company; C. The stage of completion can be measured reliably ; D. The costs incurred and to be

incurred in the transac tion can be measured reliably.Where the outcome cannot be estimated reliably revenues are recognised to the extent of the costs incurred that are expected to be recoverable

and an equivalent amount is charged to profit or loss as serv ice cost; otherwise the costs incurred are recognised in profit or loss and no serv ice

revenue is recognised.③Transfer of right to use assets

Revenue is recognized when it is probable that the economic benefits will flow to the Company and the revenue can be measured reliably.④Revenue from construction contracts

Where the outcome of a construction contract can be estimated reliably contract revenue and contract expenses associated wit h the construction

contract are recognised using the percentage of completion method. When the outcome of a construction contract cannot be estimated reliably if the

contract costs can be recovered revenue is recognised to the extent of contract costs incurred that can be recovered and the contract costs are

recognised as contract expenses when incurred; otherwise the contract costs are recognised as contract expenses immediately when incurred and

no contract revenue is recognised.If the estimated total costs exceed contract revenue the Company recognises estimated loss in profit or loss for the current period.The stage of completion of a contract is determined based on the proportion of contract costs incurred for work performed to date to the estimated

total contract costs.The outcome of a construction contract can be estimated reliably when all the following conditions are satis fied: A. The contract revenue can be

measured reliably ; B. It is probable that the economic benefits will flow to the Company; C. The actual contract costs incurred can be dis tinguished

clearly and measured reliably ; D. The completion progress of the contract and the costs need to be incurred to complete the contract can be

measured reliably.

(2)Specific revenue recognition

Specific revenue recognition is as follows:

①Real estate development sales revenue recognition specific methods

1) the sales contract has been signed and filed with the land department; 2) the real estate has been completed and accepted; 3)fully one-off

payment on the firs t installment payment has been received; 4) completed the procedures for entering the partnership in accordance with the

requirements stipulated in the sales contract.② Prov ide the specific method of property serv ice income recognition

According to the serv ice date agreed in the property serv ice contract and agreement and the area and unit price corresponding to the serv ice the

realization of the property serv ice income shall be confirmed when the relevant serv ice fee has been received or ev idence of payment has been

obtained.③Rental property income recognition of the specific method

The realization of the income from the leased property shall be confirmed when the relevant rent has been received or ev idenc e of collection has

been obtained according to the lease contract and agreement on the date of lease (consider the rent-free period if there is a rent-free period) and the

rent amount.④Other income recognition methods

Including project construction income hotel operating income etc. according to the relevant contract agreement in the relevant payment has been

received or is likely to receive the realization of revenue recognition.

24. Government grants

A government grant is recognised when there is reasonable assurance that the grant will be received and that the Group will comply with the

conditions attaching to the grant.If a government grant is in the form of a transfer of a monetary asset i t is measured at the amount received or receivable. I f a government grant is in

the form of a transfer of a non-monetary asset it is measured at fair v alue. If fair value cannot be reliably determined it is measured at a nominal

amount of RMB 1.The government grants relating to assets are grants that Group purchases construction or other methods to acquire long-term assets of government

grants. Exception of the above grants others are related to gains.

For government grants with unspecified purpose the amount of grants used to form a long-term asset is regarded as government grants related to

an asset the remaining amount of grants is regarded as government grants related to income. If i t is not possible to distinguish the amount of grants

is treated as government grants related to income.

A government grant related to an asset is offset against the carry ing amount of the related asset or.recognised as deferred income and amortised to

profit or loss over the useful life of the related asset on a reasonable and systematic manner. A grant that compensates the Group for expenses or

losses already incurred is recognised in profit or loss or offset against related expenses directly. A grant that compensates the Group for expenses or

losses to be incurred in the future is recognised as deferred income and inc luded in profit or loss or offset against related expenses in the periods in

which the expenses or losses are recognised.

A grant related to ordinary activ ities is recognised as other income or offset against related expenses based on the economic substance. A grant not

related to ordinary activ ities is recognised as non-operating income.When a recognised government grant is reversed carry ing amout of the related asset is adjusted if the grant was initial ly recognized as offset against

the carry ing amount of the related asset. I f there is balance of relevant deferred income it is offset against the carry ing amount of relevant deferred

income. Any excess of the reversal to the carry ing amount of deferred income is recognised in profit or loss for the current period. For other

circumstances reversal is directly recognized in profit or loss for the curr ent period.

25. Deferred tax assets and deferred tax liabili ties

Income tax comprises of current tax and deferred tax. Current tax and deferred tax are recognised in profit or loss except to the extent that they

relate to transactions or items recognised directly in equity and goodwill arising from a business combination.

Deferred tax assets and deferred tax liabili ties arise from deductible and taxable temporary differences respectively being the differences between

the carry ing amounts of assets and liabili ties for financial reporting purposes and their tax bases.

All the taxable temporary differences are recognized as deferred tax liabil ities except for those incurred in the following t ransactions:

(1) initial recognition of goodwill or assets or liabili ties in a transaction that is not a business combination and that affects neither accounting profit

nor taxable profit (or deductible loss);

(2) taxable temporary differences associated with investments in subsidiaries associates and joint ventures and the Company is able to control

the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.The Company recognises a deferred tax asset for deductible temporary differences deductible losses and tax credits carried forward to subsequent

periods to the extent that it is probable that future taxable profits will be available against which deductible temporary differences deductible losses

and tax credits can be uti lised except for those incurred in the following transactions:

(1) a transaction that is not a business combination and that affects neither accounting profit nor taxable profit (or deductible loss);

(2) deductible temporary differences associated with investments in subsidiaries associates and joint ventures the corresponding deferred tax

asset is recognized when both of the following conditions are satis fied: it is probable that the temporary difference will reverse in the foreseeable

future; and it is probable that taxable profits will be available in the future against which the temporary difference can be uti lized.

At the balance sheet date deferred tax is measured based on the tax consequences that would follow from the expected manner of recovery or

settlement of the carry ing amount of the assets and liabilities using tax rates enacted at the reporting date that are expected to be applied in the

period when the asset is recovered or the liabili ty is settled.The carry ing amount of a deferred tax asset is rev iewed at each balance sheet date and is reduced to the extent that it is no longer probable that the

related tax benefits will be uti lised. Such reduction is reversed to the extent that it becomes probable that sufficient taxable profits will be available.

26. Operating leases and finance leases

A finance lease is a lease that transfers substantially all the risks and rewards incidental to ownership of a leased asset t o the lessee. An operating

lease is a lease other than a finance lease.

(1)As a lessor

At the commencement of the lease term the Company recognized the aggregate of the minimum lease receipts determined at the i nception of a

lease and the initial direct costs as finance lease receivable and recognized unguaranteed residual value at the same time. The difference between

the aggregate of the minimum lease receipts the initial direct costs and the unguaranteed residual value and the aggregate of their present value is

recognized as unearned finance income. Unearned finance income is allocated to each accounting period during the lease term using the effective

interest method.Income derived from operating leases is recognized in profit or loss using the s traight-line method over the lease term. Initial direct costs are charged

to profit or loss immediately.

(2)As a lessee

When the Company acquires an asset under a finance lease the asset is measured at an amount equal to the lower of its fair v alue and the present

value of the minimum lease payments each determined at the inception of the lease. At the commencement of the lease term the minimum lease

payments are recorded as long-term payables. The difference between the carry ing amount of the leased assets and the minimum lease payments is

accounted for as 95ecognized95d finance charges. Initial direct costs attributable to a finance lease that are incurred by the Company are added to

the carry ing amount of the leased asset. Unrecognised finance charges aris ing from a finance lease are 95ecognized using an effective interest

method over the lease term. Depreciation is accounted for in accordance with the accounting policies of fixed assets.Rental payments under operating leases are recognized as part of the cost of another related asset or as expe nses on a straight-l ine basis over the

lease term. Initial direct costs are charged to profit or loss immediately.

27. Maintenance funds

The Group collects the maintenance funds from owners as the certain proportion of the sales amount when selling commerc ial housing. It shall be

included in the long-term accounts payable. The maintenance funds will reduce when it is delivered to the land and housing adminis tration.

28. Quality guarantee deposit

The quality deposit is based on the Group’s proportion of the construction and installation contracts the term of payment. It is deducted from the

construction payables and classified as accounts payable. Maintenance costs due to quality during the warranty period are directly expensed under

this account and will be eliminated when the warranty period ends.

29. Significant accounting estimates and judgments

The Group continues to make significant estimates and judgements with the consideration of his torical experience and other factors such as

reasonable forecasts about the future. The estimates and judgements will have a huge impact on the carry ing amount of assets and liabil ities in the

next financial period. The main estimates and judgements are as following:

(1)Classification of financial assets

The Group’s major judgments in determining the classification of financial assets include the analysis of business models and the characteris tics of

contract cash flows.

At the level of financial asset group the Group determines the business model for managing financial assets taking into account factors such as th e

way to evaluate and report financial assets performance to key managers the risks affecting financial assets performance and their management

methods and the way in which relevant business managers are paid.In assessing whether the contract cash flow of financial assets is consistent with the basic lending arrangements the Group has the following

judgments: whether the principal’s time dis tribution or amount may change during the lifetime for early repayment and other reasons; whether the

interest only includes the time value of money credit risk other basic lending risks and the consideration of cost and profit. For example does the

amount of advance payment only reflect the unpaid principal and interest based on the unpaid principal and reasonable compensation paid for the

early termination of the contract.

(2)Measurement of Expected Credit Loss of Account Receivable

The Group calculates the expected credit losses of accounts receivable by default risk exposure and expected credit losses rate of accounts

receivable and determines the expected credit losses rate based on default probability and default loss rate. In determining the expected credit

losses rate the Group uses internal his torical credit loss and other data and adjusts the his torical data with current situ ation and forward-looking

information. In considering forward-looking information the indicators used by the Group include the risks of economic downturn external market

env ironment technological env ironment and changes in customer conditions. The Group regularly monitors and rev iews assumptio ns related to the

calculation of expected credit losses.

(3) Deferred income tax assets

Deferred tax assets relating to certain temporary differences and tax losses are recognised as management considers it is probable that future

taxable profit will be available against which the temporary differences or tax losses can b e utilised. The management needs significant judgment to

estimate the time and extent of the future taxable profits and tax planning strategy to recognise the appropriate amount of deferred income tax

assets.

(4)The prov ision of land appreciation tax

The Group is subject to land appreciation tax (“LAT”). The Group recognised LAT based on management’s best estimates however LAT is

recognised by tax authorities according to the interpretation of the tax rules. The final tax outcome could be different f rom the amounts that were

initial ly recorded and these differences will impact tax prov ision in periods in which such taxes have been finalised with l ocal tax authorities.

(5) Determination of fair value of unlisted equity investment

The fair value of an unlis ted equity investment is the future cash flow discounted from the current discount rate of a project with similar terms and

risks. This valuation requires the group to estimate future cash flows and discount rates. Therefore it causes high uncertainty. In same cases there

is insufficient information to determine fair value or the distribution of possible estimates is wide. On the contrary the cost represents the best

estimate of fair value within that range. As a whole the cost can represent the appropriate estimate of fair value within that range.

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

(1) Prov isions Changes in significant accounting policies

①New guidelines for financial instrument guidelines

In 2017 the Ministry of Finance has issued “Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of FinancialInstruments (Revised)”“Accounting S tandards for Business Enterprises No. 23 - Finance Asset Transfer (Revised)” “Accounting S tandards for

Business Enterprises No.24 - Hedge Accounting(Revised)” “Accounting Standards for Business Enterprises No.37 - Financial InstrumentsPresentation (Revised)”(hereinafter referred to as the “New Financial Instruments Standards”). The Group has changed accounting polic ies thechanged accounting policies are stated as note III. 10.According to the new financial instruments standards financial assets are classified into the following three categories depe nds on the Group’s

business mode of managing financial assets and cash flow characteris tics of financial assets: financial assets measured at amortized cost financial

assets at fair value through other comprehensive income and financial assets at fair value through profit or loss. If the mai n contract contained in the

mixed contract belongs to financial assets it should not be separated from the mixed contract and embedded in derivatives but should be applied as

a whole to the relevant prov isions of the classification of financial assets.The adoption of the new financial instrument standards for the Group has no significant impact on the accounting policy of the Group’s financial

liabili ties.

On 1 January 2019 the Group did not designate any financial assets or l iabili ties as financial assets or liabili ties measur ed at fair value through

profits and losses nor did it revoke its prev ious designation.The new financial instrument s tandard replaces the method of recognising impairment prov ision according to actual impairment loss s tipulated in the

original financial ins trument s tandard with the method of “expected credit losses method”. The“expected credit losses method” model requires

continuous assessment of the credit risk of financial assets. Therefore under the new financial instrument s tandard the gro up’s credi t loss is

recognised earlier than the original financial instrument standard.On the basis of expected credit losses the Group performs impairment assessment on the following items and confirms the loss prov ision.

? Financial assets measured at amortized cost;

? Debt investments at fair value through other comprehensive income;

? Lease receivables;

? Financial guarantee contract(except measured at fair value through profit or loss or formed by continuing involvement of transferred financial

assets or the transfer does not qualify for derecognition).In accordance with the prov isions of the new financial instrument s tandard except in certain specific cases the Group retrospectively adjusts the

classification and measurement of financial instruments (including impairment) and calculates the difference between the original book value of

financial instruments and the new book value on the date of implementation of the n new financial instrument s tandard (i.e. January 1 2019) into the

retained earnings or other comprehensive earnings at the beginning of 2019. At the same time the Group did not adjust the comparative financial

statements data.On 1 January 2019 the results of classification and measurement of financial assets in accordance with the original financial instrument standards and the new financial instrument s tandards are as follows:

The original financial instrument standards The new financial instrument standards

Items Categories Book value Items Categories Book value

Available- for-sale financial assets

To measure (an equity

instrument) at cost.

17464240.74

Other non-current financial

assets

Measured at fair value and recorded

in current profit and loss

--

Other equity instruments

investment

Measured at fair value and recorded

in other comprehensive income

30922155.02

Receivables Amortised cost 33426991.65

Receivables Amortized cost 26678630.82

Receivables financing

Measured at fair value and recorded

in other comprehensive income

--

Other receivables Amortised cost 45018027.61

Other current asset Amortised cost --

Other receivables Amortised cost 23009475.81

On 1 January 2019 the adjustment table of the financial instrument classification and book valueat the implemention of the new financial instrument

standards were as follows:

Category

Book amount before

adjustment

(31 December 2018)

Reclassification Recalculation

Adjusted book

amount

(1 January 2019)

Aesset：

Cash at bank and in

hand

2048522435.93 2282500.00 -- 2050804935.93

Account receivable 33426991.65 -- -6748360.83 26678630.82

Other receivables 45018027.61 -2282500.00 -19726051.80 23009475.81

Available- for-sale

financial assets

17464240.74 -17464240.74 -- --

Other equity

instruments investment

-- 17464240.74 13457914.28 30922155.02

Deferred income tax

assets

154543788.80 -- 311694.66 154855483.46

Liabilities： -- -- -- --

Deferred income tax

liabilities

-- -- 3364478.58 3364478.58

Entities：

Other comprehensive

income

10564385.97 -- 10093435.70 20657821.67

Surplus reserves 95906222.59 -- -416151.43 95490071.16

Undis tributed profit 1235884122.72 -- -25355845.72 1210528277.00

Minority equity -131524530.88 -- -390720.82 -131915251.70

The adjustment table between the loss prov ision at the end of 2018 and the loss prov ision at the beginning of 2019 measured i n accordance with the

original rules of financial instruments is as follows:

Category

Book amount before

adjustment

(31 December 2018)

Reclassific

ation

Recalculation

Adjusted book amount

(1 January 2019)

Impairment prov ision for

accounts receivable

19243657.51 -- 6748360.83 25992018.34

Other provis ions for

impairment of

receivables

174758743.31 -- 19726051.80 194484795.11

② Financial s tatement format

The Minis try of Finance issued the notice of the minis try of finance on the rev ision and issuance of the general financial st atement format of the year

2019 in April 2019 (No. 6 of finance and accounting [2019]) and the notice of the minis try of finance on the rev ision and issuance of the general

financial s tatement format of the year 2018 (No. 15 of finance and accounting [2018]) issued in June 2018 shall be abolished simultaneously ;In

September 2019 the minis try of finance issued the notice of the minis try of finance on rev ising and printing the format of consolidated financial

statements (version 2019) (No. 16 of finance and accounting [2019]) and the notice of the minis try of finance on rev ising and printing the format of

consolidated financial s tatements for 2018 (No. 1 of finance and accounting [2019]) shall be abrogated simultaneously.According to accounting [2019]

No. 6 and accounting [2019] No. 16 the company has rev ised the financial s tatement format as follows:

Balance sheet div iding the items of "notes receivable and accounts receivable" into "notes receivable" and "accounts receivable";The "notes payable

and accounts payable" line item is div ided into "notes payable" and "accounts payable".The company shall adjust the comparative data of the comparable period according to document No. 6 of accounting [2019].The rev ision of the financial statement format has no effect on the company's total assets total liabili ties net profits an d other comprehensive

income.

As of 31 December 2019 there were no other significant accounting policy changes during the reporting period.

（2）Important accounting estimate changes

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

（3）At the first implementation of the new financial instrument standards the s ituation to adjust the relevant items of the financial s tatements at the

beginning of the firs t implementation year is as follow:

Consolidated balance sheet

Category As at 31/12/2018 As at 1/1/2019 Adjustments

Current asset：

Cash at bank and in hand 2048522435.93 2050804935.93 2282500.00

Accounts receivable 33426991.65 26678630.82 -6748360.83

Accounts receivable financing -- -- --

Prepayment 4177767.88 4177767.88 --

Other receivables 45018027.61 23009475.81 -22008551.80

Inventories 1685152051.26 1685152051.26 --

Other current assets 6780999.56 6780999.56 --

Total current assets 3823078273.89 3796603861.26 -26474412.63

Non-current assets

Available- for-sale financial assets 17464240.74 -- -17464240.74

Long-term equity investments 12561107.24 12561107.24 --

Other equity instruments investments -- 30922155.02 30922155.02

Investing properties 623930838.15 623930838.15 --

Fix assets 33926198.52 33926198.52 --

Long-term deferred expenses 387066.91 387066.91 --

Deferred income tax assets 154543788.80 154855483.46 311694.66

Total non-current assets 842813240.36 856582849.30 13769608.94

Total assets 4665891514.25 4653186710.56 -12704803.69

Current liabilities：

Short term loans 17260103.46 17260103.46 --

Accounts payable 216758906.71 216758906.71 --

Advances from customers 156426152.86 156426152.86 --

Employee benefits payable 45836830.05 45836830.05 --

Taxes payable 300547372.98 300547372.98 --

Other payables 721819898.48 721819898.48 --

Total current liabilities 1458649264.54 1458649264.54 --

Non-current liabilities：

Long-term payable 6507139.20 6507139.20 --

Deferred income tax liabilities -- 3364478.58 3364478.58

Category As at 31/12/2018 As at 1/1/2019 Adjustments

Total non-current liabilities 6507139.20 9871617.78 3364478.58

Total liabilities 1465156403.74 1468520882.32 3364478.58

Entities

Share capital 1011660000.00 1011660000.00 --

Capital reserve 978244910.11 978244910.11 --

Other comprehensive income 10564385.97 20657821.67 10093435.70

Surplus reserve 95906222.59 95490071.16 -416151.43

Retained earnings 1235884122.72 1210528277.00 -25355845.72

Total owners' equity attr ibutable to

parent company

3332259641.39 3316581079.94 -15678561.45

Minority interests -131524530.88 -131915251.70 -390720.82

Total entieies 3200735110.51 3184665828.24 -16069282.27

Total liabilities and entities 4665891514.25 4653186710.56 -12704803.69

Balance sheet of parent company

Category As at 31/12/2018 As at 1/1/2019 Ajustments

Current asset：

Cash at bank and in hand 1344486378.53 1346768878.53 2282500.00

Accounts receivable 5164795.67 1533739.14 -3631056.53

Receivable financing -- -- --

Prepayment 200000.00 200000.00 --

Other receivables 770374849.84 767188991.98 -3185857.86

Inventories 543912100.37 543912100.37 --

Other current assets 215745.41 215745.41 --

Total current assets 2664353869.82 2659819455.43 -4534414.39

Non-current assets

Available- for-sale financial assets 12000000.00 -- -12000000.00

Long-term equity investments 235284776.57 235284776.57 --

Other equity instruments investments -- 13297189.66 13297189.66

Investing properties 511040299.65 511040299.65 --

Fix assets 21942842.11 21942842.11 --

Long-term deferred expense 346015.72 346015.72 --

Deferred income tax assets 16699980.23 16745319.01 45338.78

Total non-current assets 797313914.28 798656442.72 1342528.44

Total assets 3461667784.10 3458475898.15 -3191885.95

Current liabilities

Accounts payable 16743360.96 16743360.96 --

Advances from customers 22035608.45 22035608.45 --

Employee benefits payable 19687728.50 19687728.50 --

Taxes payable 144621616.85 144621616.85 --

Category As at 31/12/2018 As at 1/1/2019 Ajustments

Other payables 594392900.98 594392900.98 --

Total current liabilities 797481215.74 797481215.74 --

Non-current liabilities：

Deferred income tax liabilities -- 324297.42 324297.42

Total non-current liabilities -- 324297.42 324297.42

Total liabilities 797481215.74 797805513.16 324297.42

Entities

Share capital 1011660000.00 1011660000.00 --

Capital reserve 964711931.13 964711931.13 --

Other comprehensive income -- 972892.24 972892.24

Surplus reserve 72776609.18 72360457.75 -416151.43

Retained earnings 615038028.05 610965103.87 -4072924.18

Total owners' equity attr ibutable to

parent company

2664186568.36 2660670384.99 -3516183.37

M inority interests -- -- --

Total entieies 2664186568.36 2660670384.99 -3516183.37

Total liabilities and entities 3461667784.10 3458475898.15 -3191885.95

IV. Taxation

1. Main types of taxes and corresponding tax rates

Tax type Tax basis Tax rate%

VAT Taxable income 9653

Land appreciation tax

It shall be lev ied on the basis of the value-added value of

the real estate transferred and the prescribed tax rate and

paid in advance according to the type of real estate

product

Four progress ive rates of

excess rate : 304050 60

Property tax The or iginal value of house deducts 30% 1.2

City maintenance and

construction tax

Turnover tax payable 7

Education surcharge Turnover tax payable 3

Local education surcharge Turnover tax payable 2

Corporate income tax Taxable profits 2516.5

Description of VAT rates for different businesses:

The group is engaged in real estate development property management engineering and other business income "notice on the pilot of replacing

business tax with VAT" (Caishui [201636]) and other relevant prov isions. Since May 1 2016 the group's VAT taxable items and tax rates are shown

in the following table:

Type of revenue Tax Tax rate%

Sales of properties Simply filing return 5

Construction installation income Simply filing return 93

Rental income of Property Simply filing return 5

Income of Property Management Filing return generally 6

Description of enterprise income tax rates of different tax payers:

The corporate income tax rate is 25% for companies incorporated in China and 16.5% for companies incorporated in Hong Kong.V. Notes to the consolidated financial s tatements

1. Cash at bank and in hand

Item

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

Foreign

currency

amount

Excha

nge

rate

RMB

equivalent

Foreign

currency

amount

Exchan

ge rate

RMB

equivalent

Cash in hand： -- -- 66252.42 -- -- 57979.40

RMB -- -- 66252.42 -- -- 57979.40

Cash at bank： -- -- 1493123507.93 -- -- 1148464456.53

RMB -- -- 1485217117.53 -- -- 1140213287.57

USD 5532.95 6.9762 38598.97 45331.77 6.8845 312086.57

HKD 8783167.25 0.89578 7867791.43 9031948.11 0.8790 7939082.39

Including ：

Deposits in finance

company

-- -- -- -- -- --

Other monetary

funds:

-- -- 1017950685.00 -- -- 900000000.00

RMB -- -- 1017950685.00 -- -- 900000000.00

Total -- -- 2511140445.35 -- -- 2048522435.93

Including: Total

overseas deposits

-- -- 7936545.69 -- -- 8239667.62

Note: At the end of the year 2019 other monetary funds were RMB 1017950685.00. RMB 1000000000.00 was structured deposit princ ipal

measured at amortized cost RMB 3950685.00 was interest and RMB 14000000.00 was a seven-day notice deposit.

2. Accounts receivable

(1) Accounts receivable by aging balance

Aging As at 31/12/2019 As at 31/12/2018

Within 1 year 65195782.66 20297050.49

1 to 2 years 66518.00 1422214.09

2 to 3 years -- 2698788.09

More than 3 years 24956115.96 28252596.49

Subtotal 90218416.62 52670649.16

Less: provis ion for bad and doubtful

debts

28159360.94 19243657.51

Total 62059055.68 33426991.65

（2）The classification of bad and doubtful debts

Item As at 31/12/2019

Book balance

Provision for bad and doubtful

debts Carrying

amount

Book value

Proportion

(%)

Book value

Expected credit

loss(%)

Provision made on an

individual basis

24866900.27 27.56 24866900.27 100.00 --

Provision for bad and

doubtful debts collectively

65351516.35 72.44 3292460.67 5.04 62059055.68

Including:

Accounts receivable from

sales of proporties

10761284.37 11.93 538064.22 5.00 10223220.15

Accounts receivable from

other customers

54590231.98 60.51 2754396.45 5.05 51835835.53

Total 90218416.62 100.00 28159360.94 31.21 62059055.68

Continued

Item

As at 1/1/2019

Book balance

Provision for bad and doubtful

debts

Carrying amount

Book value

Proportio

n(%)

Book value

Expected

credit loss(%)

Provision made on an

individual basis

24426477.73 46.38 24426477.73 100.00 --

Provision for bad and

doubtful debts collectively

28244171.43 53.62 1565540.61 5.54 26678630.82

Including:：

Accounts receivable from

sales of proporties

2330074.80 4.42 116503.74 5.00 2213571.06

Accounts receivable from

other customers

25914096.63 49.20 1449036.87 5.59 24465059.76

Total 52670649.16 100.00 25992018.34 49.35 26678630.82

Provision made on an indiv idual basis：

Item

As at 31/12/2019

Book balance

Provision for bad

and doubtful

debts

Expected credit

loss (%)

Rationale of

provision

Agent business payment of

import and export

11574556.00 11574556.00 100.00

Expected to be not

recoverable

Long-term accounts

receivable from sales of

proproties

10626436.84 10626436.84 100.00

Expected to be not

recoverable

Accounts receivable from

revoked subsidaries

2328158.40 2328158.40 100.00

Expected to be not

recoverable

Other customers 337749.03 337749.03 100.00

Expected to be not

recoverable

Total 24866900.27 24866900.27 100.00

Prov ision for bad and doubtful debts collectively：

Accounts receivable from sales of proporties

Aging

As at 31/12/2019

Account receivable

Provision for bad and

doubtful debts

Expected credit loss(%)

Within 1 year 10690000.00 534500.00 5.00

1 to 2 years 71284.37 3564.22 5.00

Total 10761284.37 538064.22 5.00

Accounts receivable from other customers

Aging

As at 31/12/2019

Account receivable

Provision for bad and

doubtful debts

Expected credit loss(%)

Within 1 year 54590231.98 2754396.45 5.05

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

Category

As at 31/12/2018

Book value Proportion(%)

Provision for

bad and

doubtful

debts

Proportion

(%)

Carrying

amount

Accounts receivable of which

provision for bad debts is of

individually s ignificant

-- -- -- -- --

Provision for bad and doubtful

debts collectively

-- -- -- -- --

Accounts receivable of which

provision for bad debts is of

individually ins ignificant

52670649.16 100.00 19243657.51 36.54 33426991.65

Total 52670649.16 100.00 19243657.51 36.54 33426991.65

（3）Provision recovery or reversal of bad debt

Item

Provision for bad and

doubtful debts

As at 31/12/2018 19243657.51

Adjustment amount for the first implementation of the new financial instrument

guidelines

6748360.83

As at 1/1/2019 25992018.34

Provision 2167342.60

Recovery --

Written-off --

2019.12.31 28159360.94

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

Name of Entity Amount Proportion of the Bad debt

amount to the total AR

(%)

provision

Corporation unit No.1 25744944.50 28.54 1287247.23

Corporation unit No.2 15590603.68 17.28 779530.18

Corporation unit No.3 2696015.00 2.99 134800.75

Individual No.1 2309255.46 2.56 115462.77

Corporation unit No.4 2185557.48 2.42 109277.87

Total 48526376.12 53.79 2426318.80

（5）At the end of the year 2019 the group has handled the factoring of accounts receivable（RMB 51647260.17） corresponding to the book value of

accounts receivable RMB 51647260.17 which has not been terminated for recognition. The detail is set out in note V. 42.

3. Prepayments

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

Aging

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

Amount Proportion(%) Amount Proportion(%)

Within 1 year 19398.17 8.82 4177217.88 99.99

1 and 2 years 200000.00 90.93 -- --

More than 3 years 550.00 0.25 550.00 0.01

Total 219948.17 100.00 4177767.88 100.00

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

The total amount of prepayment is RMB 219072.21 accounting for 99.60% of the total amount of the ending balance of prepayment.

4．Other receivables

Item As at 31/12/2019 As at 31/12/2018

Interest receivables -- 2453067.78

Dividend receivables 1052192.76 1052192.76

Other receivables 27223035.50 41512767.07

Total 28275228.26 45018027.61

(1) Interest receivables

Item As at 31/12/2019 As at 31/12/2018

Fixed deposits -- 170567.78

Structured deposit -- 2282500.00

Subtotal： -- 2453067.78

Less：Provision for bad and doubtful debts -- --

Total -- 2453067.78

(2) Div idend receivables

Item As at 31/12/2019 As at 31/12/2018

Yunnan KunPeng Flight service Co. Ltd 1052192.76 1052192.76

Less：Provision for bad and doubtful debts -- --

Total 1052192.76 1052192.76

Including: significant div idends receivable aging over 1 year:

Item As at 31/12/2019 Aging

Reason for

uncollected

Whether an

impairment

occurred and the

basis for its

judgment

Yunnan KunPeng

Flight serv ice Co. Ltd

1052192.76 5 years Delay to issue None

(3) Other receivables

①Other receivables by aging

Aging As at 31/12/2019 As at 31/12/2018

Within 1 year 20256667.46 7746036.15

1 to 2 years 5670455.80 9382626.85

2 to 3 years -- 1512791.00

More than 3 years 196658114.17 197630056.38

Subtotal 222585237.43 216271510.38

Less：Provision for bad and doubtful debts 195362201.93 174758743.31

Total 27223035.50 41512767.07

②Other receivables categorized by nature

Item

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

Book value

Provision for bad

and doubtful

debts

Carrying

amount

Book value

Provision for bad

and doubtful

debts

Carrying

amount

Amount

receivables

from

government

4371247.34 -- 4371247.34 13272259.19 -- 13272259.19

Amount

receivables from

employee’s

inprest fund

716684.01 -- 716684.01 1202293.00 -- 1202293.00

Amount

receivables from

the collecting

and paying on

another's behalf

594012.08 -- 594012.08 684325.81 -- 684325.81

Amount

receivables

from other

customers

56713292.62 35639303.91 21073988.71 41109356.53 17029617.56 24079738.97

Amount

receivables

from related

parties

160190001.38 159722898.02 467103.36 160003275.85 157729125.75 2274150.10

Total 222585237.43 195362201.93 27223035.50 216271510.38 174758743.31 41512767.07

③ Prov ision for bad and doubtful debts

As at 31/12/2019 the prov ision for bad debts in the first s tage :

Category

Book

balance

12-month

expected

credit loss(%)

Provision for

bad and

doubtful debts

Carrying

amount

Reasons

Collectively assessed for

impairment based on credit risk

characteris tics

Amount receivables from

government

4371247.34 -- -- 4371247.34

Amount receivables from

employee’s inprest fund

716684.01 -- -- 716684.01

Amount receivables from the

collecting and paying on

another's behalf

594012.08 -- -- 594012.08

Amount receivables from other

customers

22183146.01 5.00 1109157.30 21073988.71

Amount receivables from

related parties

491687.74 5.00 24584.38 467103.36

Total 28356777.18 4.00 1133741.68 27223035.50

As at 31/12/2019 the company does not have interest receivable div idends receivable and other receivables in the second sta ge.

As at 31/12/2019 the prov ision for bad debts in the third stage :

Category

Book

balance

To lifetime expected

credit loss

Provision for

bad and

doubtful debts

Carrying

amount

Reasons

Individually assessed for

impairment individually

Other receiables from revoked

subsidaries

3838281.67 100.00 3838281.67 --

Expected to be not

recoverable

Other receiables from exis ted

subsidaries

190390178.58 100.00 190390178.58 --

Expected to be not

recoverable

Including： Other receivables

from related parties

159698313.64 100.00 159698313.64 --

Expected to be not

recoverable

Total 194228460.25 100.00 194228460.25 --

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

Category

As at 31/12/2018

Book value %

Provision for bad

and doubtful

debts

% Carrying amount

Accounts receivable of which

provision for bad debts is of

individually s ignificant

145114361.44 67.10 144780234.62 99.77 334126.82

Provision for bad and doubtful -- -- -- -- --

debts collectively

Accounts receivable of which

provision for bad debts is of

individually ins ignificant

71157148.94 32.90 29978508.69 42.13 41178640.25

Total 216271510.38 100.00 174758743.31 80.81 41512767.07

④ Prov ision recovery or reversal of bad debt

Provision for bad and doubtful

The first stage The second stage The third stage

Total To 12-month

expected credit

loss

To lifetime

expected credit

loss (no credit

impairment)

To lifetime

expected credit

loss (has

occurred credit

impairmen)

As at 31/12/2018 -- -- 174758743.31 174758743.31

Adjustment amount for the firs t

implementation of the new financial

instrument guidelines

352721.66 -- 19373330.14 19726051.80

As at 31/12/2018 352721.66 -- 194132073.45 194484795.11

Provision 805229.49 -- 96386.80 901616.29

Recovery 24209.47 -- -- 24209.47

Written-off -- -- -- --

As at 31/12/2019 1133741.68 -- 194228460.25 195362201.93

⑤There were no other receivables written off in the current period.⑥Top 5 entities with the largest balances of other receivables

Name of Entity Nature Amount Aging

Proportion of the amount

to the total OR (%)

Bad debt

provision

Canada Great

Wall( Vancouver) Co.Ltd

Current

account

89035748.07

More than 5

years

40.00 89035748.07

Paklid Lim ited

Current

account

19319864.85

More than 5

years

8.68 19319864.85

Bekaton property Limited

Current

account

12559290.58

More than 5

years

5.64 12559290.58

Guangdong prov ince

Huizhou Luofu Hill M ineral

Water Co.Ltd

Current

account

10465168.81

More than 5

years

4.70 10465168.81

Xi’an Fresh Peak Property

Trading Co. Ltd

Current

account

8419205.19

More than 5

years

3.78 8419205.19

Total -- 139799277.50 -- 62.80 139799277.50

5. Inventories

（1）Categories of inventory

Item

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

Book value

Provision for

impairment

of

inventories

Carrying amount Book value

Provision

for

impairment

of

Carrying amount

inventories

Real estate development projects

Real estate

developing

products

400425673.85 -- 400425673.85 517451829.98 -- 517451829.98

Real estate

developed

products

1060130671.64 268941.60 1059861730.04 1093907013.99 268941.60 1093638072.39

Subtotal 1460556345.49 268941.60 1460287403.89 1611358843.97 268941.60 1611089902.37

Non real estate development projects

Raw material 882857.81 240000.00 642857.81 882857.81 240000.00 642857.81

Finished

products

317200.81 38891.91 278308.90 319679.87 38891.91 280787.96

Construction

in progress

1020477.58 -- 1020477.58 73138503.12 -- 73138503.12

Subtotal 2220536.20 278891.91 1941644.29 74341040.80 278891.91 74062148.89

Total 1462776881.69 547833.51 1462229048.18 1685699884.77 547833.51 1685152051.26

（2）Provision for impairment of inventories

Category

As at

1/1/2019

Additions during the

year

Provision others

Written back during the year

As at

31/12/2019 Reversals or

write-off

others

Real estate development

projects

Real estate developing costs -- -- -- -- --

Real estate developed products 268941.60 -- -- -- 268941.60

Non real estate development

projects

Raw material 240000.00 -- -- -- 240000.00

Finished products 38891.91 -- -- -- 38891.91

Construction in progress -- -- -- -- --

Total 547833.51 -- -- -- 547833.51

Provision for impairment of inventories (continued)

Item

The basis for determining the net realizable

value/residual consideration and the costs to

be incurred

The cause of inventory

depreciation provision for the

current period

Real estate developing

costs

The estimated selling price of the inventory minus the

estimated costs upon completion the estimated selling

expenses and the related taxes

--

Real estate developed

products

The estimated selling price of the inventory less the

estimated selling cost and related taxes

--

Raw materials

The estimated selling price of the inventory minus the

estimated costs upon completion the estimated selling

expenses and the related taxes

--

Finished products The estimated selling price of the inventory less the --

estimated selling cost and related taxes

Construction in progress

The estimated selling price of the inventory minus the

estimated costs upon completion the estimated selling

expenses and the related taxes

--

（3）Note of the capitalized amount of borrowing costs in the ending inventory balance:

As at 31/12/2019 the Group's inventory balance contains the amount capitalized on the borrowing costs with RMB 4910251.90 (As at 31/12/2018

RMB 37274519.11).

（4）Real estate developing products

Ttem

Starting

time

Finished

time

Estimated

total

investment

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

Provision for

inventory

devaluation

ChuanQi DongHu

Building(Fromer

DongHuDiJing

Building)

2017 2019 51000.00 -- 309169276.59 --

ShanTou Fresh Peak

Building

-- -- -- 25291908.11 25291908.11 --

TianYue Bay No.2 2015 2021 65485.00 375133765.74 182990645.28 --

Total 400425673.85 517451829.98 --

（5）Real estate developed products

Item

Finished

time

As at 1/1/2019 Increase Decrease As at 31/12/2019

Provision for

inventory

devaluation

Jinye Island

Multi- tier v illa

1997 39090848.09 36371.05 -- 39127219.14 --

Jinye Island villa

No.10

2010 6079171.97 -- 2551243.04 3527928.93 --

Jinye Island villa

No.11

2008 6881309.24 -- 2540146.75 4341162.49 --

YueJing dongfang

Project

2014 9789881.19 -- 1943875.12 7846006.07 --

Wenjin Garden 3299040.20 -- 3206827.43 92212.77 --

Real Estate building 9710518.65 -- 9710518.65 -- --

HuaFeng Building 1631743.64 -- -- 1631743.64 --

HuangPu XinCun 289802.88 439627.12 -- 729430.00 --

XingHu Garden 156848.69 -- -- 156848.69 --

Chuanqishan

Project

2013 8969652.53 -- 8969652.53 -- --

Shenfang Shanglin

Garden

2014 10206656.46 -- -- 10206656.46 268941.60

Beijing Fresh Peak

Buliding

304557.05 -- -- 304557.05 --

TianYue Bay No.1 2017 618140958.93 -- 142392835.79 475748123.14 --

Chuanqi Jingyuan 2018 210020135.85 19914665.39 229934801.24 -- --

Shengfang CuiLin

Building

2018 169335888.62 -- 69389822.08 99946066.54 --

Chuanqi Donghu 2019 -- 502775707.27 86302990.55 416472716.72 --

Total 1093907013.99 523166370.83 556942713.18 1060130671.64 268941.60

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

amortization.

6、Other non-current assets

Item As at 31/12/2019 As at 31/12/ 2018

Income tax 84000516.75 --

Advance payment of VAT

10211601.86 --

Pending deduct VAT 4741727.70 6336815.15

LAT 2617779.37 --

Business tax 353427.19 444184.41

Others 856802.61 --

Total 102781855.48 6780999.56

7、Available-for-sale financial assets

Item

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

Book

value

Provision for

impairment

Carrying

amount

Book value

Provision for

impairment

Carrying

amount

Available- for-sale equity

instruments

-- -- -- 17464240.74 -- 17464240.74

including：at cost -- -- -- 17464240.74 -- 17464240.74

Total -- -- -- 17464240.74 -- 17464240.74

8、Long-term equity investments

Investee

Balance

as at 1/1/2019

Movements during the year

Balance as at

31/12/2019

Balance of

provision for

impairment as

at 31/12/2019

Additional

investment

Reduce

investment

Investment

gains and

losses

confirmed

by the equity

method

Adjustment of

other

comprehensive

income

Changes

in other

equity

The

issuance

of profit

Impairment Other

① Joint ventures

Guangdong

province Huizhou

Luofu Hill M ineral

Water Co.Ltd

9969206.09 -- -- -- -- -- -- -- -- 9969206.09 9969206.09

Fengkai Xinhua

Hotel

9455465.38 -- -- -- -- -- -- -- -- 9455465.38 9455465.38

Subtotal 19424671.47 -- -- -- -- -- -- -- -- 19424671.47 19424671.47

②Associates

Shenzhen

Ronghua JiDian

Co.ltd

1471164.04 -- -- 75629.25 -- -- -- -- -- 1546793.29 1076954.64

Shenzhen

Runhua

Automobile

trading Co.Ltd

1445425.56 -- -- -- -- -- -- -- -- 1445425.56 1445425.56

Dongyi Real

Estate Co. Ltd

30376084.89 -- -- -- -- -- -- -- -- 30376084.89 30376084.89

Subtotal 33292674.49 -- -- 75629.25 -- -- -- -- -- 33368303.74 32898465.09

③ Other equity

investments

Paklid Lim ited 201100.00 -- -- -- -- -- -- -- -- 201100.00 201100.00

Bekaton Property

Limited

906630.00 -- -- -- -- -- -- -- -- 906630.00 906630.00

Shenzhen 10000000.00 -- -- -- -- -- -- -- -- 10000000.00 10000000.00

Investee

Balance

as at 1/1/2019

Movements during the year

Balance as at

31/12/2019

Balance of

provision for

impairment as

at 31/12/2019

Additional

investment

Reduce

investment

Investment

gains and

losses

confirmed

by the equity

method

Adjustment of

other

comprehensive

income

Changes

in other

equity

The

issuance

of profit

Impairment Other

Shenfang

Department Store

Co. Ltd.

Shantou Fresh

Peak Building

58547652.25 -- -- -- -- -- -- -- -- 58547652.25 58547652.25

Guangdong

Province Fengkai

Lain Feng Cement

Manufacturing

Co. Ltd

56228381.64 -- -- -- -- -- -- -- -- 56228381.64 56228381.64

Jiangmen Xinjiang

Real Estate Co.Ltd

9037070.89 -- -- -- -- -- -- -- -- 9037070.89 9037070.89

Xi’an Fresh Peak

Property Trading

Co. Ltd

32840729.61 -- -- -- -- -- -- 12166897.84 -- 32840729.61 32840729.61

Subtotal 167761564.39 -- -- -- -- -- -- 12166897.84 -- 167761564.39 167761564.39

Total 167761564.39 -- -- -- -- -- -- 12166897.84 -- 167761564.39 167761564.39

Note:

1、After the suspension of Xi’an Fresh Peak Property Trading Co. Ltd there is no sign of the resumption of business activ ities in the foreseeable future. Therefore the group takes RMB 12166897.84 for the long-term equity

investment of Xi 'an Xinfeng property trading co. LTD as a prov ision.

2、Other equity investments are the equity of the company's subsidiaries not included in the scope of the merger. These subsidiaries may or have completed the cancellation procedures but the company has not written off i ts

long-term equity investment or they ceased operations many years ago and the company has no longer ex isted the company has been unable to implement effective control over it. Refer to Note VII for details.9、Other equity instrument investments

Item As at 31/12/2019 As at 31/12/2018

Shantou Small &Medium Enterpr ises Financing Guarantee

Co. Ltd

13229501.03 --

Yunnan KunPeng Flight service Co.Ltd 19897229.01 --

Total 33126730.04 --

Note: Since the above equity instruments are investments that the Group plans to hold for a long time for strategic purposes the group designates

them as financial assets measured at fair value and their changes recorded in other comprehensive income.Item

Dividend

income

recognized for

the current

period

The cumulative

gains

The

cumulative

loss

The amount of

other

comprohensive

reserve

transferred into

retained earnings

Tranfering

reasons

Shantou Small &Medium

Enterprises Financing

Guarantee Co. Ltd

928200.00 3444300.00 -- -- --

Yunnan KunPeng Flight

service Co.Ltd

-- 1653305.67 -- -- --

Total 928200.00 5097605.67 -- -- --

10. Investment properties

(1) Investment properties measured us ing the cost model

Item Buildings Land use rights Total

Ⅰ .Cost

1.Balance as at 31/12/2018 1010636392.81 106115418.00 1116751810.81

2.Additions during the year 32607479.94 1413433.63 34020913.57

（1）Transfers from inventory 32607479.94 -- 32607479.94

（2）Others(exchange fluctuation) -- 1413433.63 1413433.63

3. Decrease during the year -- -- --

4.Balance as at 31/12/2019 1043243872.75 107528851.63 1150772724.38

Ⅱ .Accumulated depreciation or

amortization

1.Balance as at 31/12/2018 391598553.08 -- 391598553.08

2.Charge for the year 24549780.59 -- 24549780.59

（1）Depreciated or amortised 24549780.59 -- 24549780.59

3. Reductions dur ing the year -- -- --

4.Balance as at 31/12/2019 416148333.67 -- 416148333.67

III.Provision for impairment

1.Balance as at 31/12/2018 14128544.62 87093874.96 101222419.58

2.Charge for the year -- 1160070.93 1160070.93

（ 1 ） Other additions(exchange

fluctuation)

-- 1160070.93 1160070.93

3. Reductions on disposals -- -- --

Item Buildings Land use rights Total

4.Balance as at 31/12/2019 14128544.62 88253945.89 102382490.51

IV.Carrying amounts

1.As at 31/12/2019 612966994.46 19274905.74 632241900.20

2.As at 31/12/2018 604909295.11 19021543.04 623930838.15

Note: The original value of land use right and the amount of the increase of the impairment prov ision are caused by the exchange rate changes in the

translation of foreign currency statements.

11. Fixed assets

Item As at 31/12/2019 As at 31/12/2018

Fixed assets 30522035.11 33926198.52

Fixed assets to be disposed of -- --

Total 30522035.11 33926198.52

(1) Fixed assets

①Fixed assets

Item Plant & buildings Motor vehicles

Electronic

equipment &

others

Total

Ⅰ.Cost

1.Balance as at 31/12/2018 107110751.42 12287244.75 14210579.58 133608575.75

2.Additions during the year -- 641365.74 613347.76 1254713.50

（1）Purchases -- 641365.74 613347.76 1254713.50

3. Decrease during the year -- 2487543.00 897404.55 3384947.55

（1）Disposals or written-offs -- 2487543.00 897404.55 3384947.55

4.Balance as at 31/12/2019 107110751.42 10441067.49 13926522.79 131478341.70

II.Accumulated depreciation:

1.Balance as at 31/12/2018 77203923.01 10932114.25 11546339.97 99682377.23

2.Charge for the year 3440124.50 259061.38 658842.85 4358028.73

(1)Provision 3440124.50 259061.38 658842.85 4358028.73

3.Reductions for the year

(1)Disposal or written-offs -- 2245974.50 838124.87 3084099.37

4.Balance as at 31/12/2019 80644047.51 8945201.13 11367057.95 100956306.59

III.Provision for impairment

IV.Carrying amount

1.As at 31/12/2019 26466703.91 1495866.36 2559464.84 30522035.11

2.As at 31/12/2018 29906828.41 1355130.50 2664239.61 33926198.52

12. Intangible assets

(1)Intangible assets

Item Software Total

I.Cost

1.Balance as at 31/12/2018 2241800.00 2241800.00

2.Additions during the year

3.Decrease during the year

(1)Disposals

4.Balance as at 31/12/2019 2241800.00 2241800.00

II.Accumulative amortisation

1.Balance as at 31/12/2018 2241800.00 2241800.00

2.Charge for the year -- --

3.Reduction for the year -- --

4.Balance as at 31/12/2019 2241800.00 2241800.00

III.Provision for impairment

IV.Carrying amount

1.As at 31/12/2019 -- --

2.As at 31/12/2018 -- --

13. Long-term deferred expenses

Item As at 31/12/2018

Additions

during the

year

Decreases during the year

As at 31/12/2019 Amortisation for the

year

Others

decreases

Renovation

costs

346015.85 -- 183890.13 -- 162125.72

Others 41051.06 -- 41051.06 -- --

Total 387066.91 -- 224941.19 -- 162125.72

14. Deferred tax assets and deferred tax liabili ties

(1) Deferred tax assets and deferred tax liabili ties not offsetting

Item

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

(1) Deductible or

taxable temporary

differences

Deferred tax

assets/ deferred

tax liabilities

(2) Deductible or

taxable temporary

differences

Deferred tax

assets/ deferred

tax liabilities

Deferred tax assets:

Provisions for impairment of

assets

5157896.86 1289474.22 268941.60 67235.40

Deductible loss 46877417.46 11719354.37 72853906.32 18213476.58

Provision for land appreciation tax

liquidation reserves

83816495.81 20954123.95 416873760.12 119730695.91

Expected profit for advances from

customers

-- -- 12937987.44 3234496.86

Unrealized profits of intra-group

transactions

29309607.92 7327401.98 4419308.84 1104827.21

Contract tentative estimate cost 20603882.91 5150970.73 47474275.32 12193056.84

Item

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

(1) Deductible or

taxable temporary

differences

Deferred tax

assets/ deferred

tax liabilities

(2) Deductible or

taxable temporary

differences

Deferred tax

assets/ deferred

tax liabilities

Sub-total 185765300.96 46441325.25 554828179.64 154543788.80

Deferred tax liabilities:

Interest on unexpired structured

deposits

3950685.00 987671.25 -- --

Changes in fair value of other

equity instruments

15662489.30 3915622.33 -- --

Sub-total 19613174.30 4903293.58 -- --

(2)Details of unrecognized deferred tax assets

Item As at 31/12/2019 As at 31/12/2018

Deductible losses 31568944.69 30987611.48

Bad debt provision 218911499.52 194281292.73

Provision for impairment of long-term equity

investments

220084700.95 207917803.11

Provision for impairment of investment

properties

102382490.51 101222419.58

Total 572947635.67 534409126.90

Note: Due to the uncertainty of whether sufficient taxable income can be obtained in the future there is no confirmation of deductible temporary

differences and deductible losses on deferred tax assets.

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

Year As at 31/12/2019 As at 31/12/2018 Note

2019 -- 107123.28

2020 9692495.52 9692495.52

2021 11349323.06 11349323.06

2022 5753184.38 5753184.38

2023 4085485.24 4085485.24

2024 688456.49 --

Total 31568944.69 30987611.48

15. Short-term loans

(1) Short-term loans by category

Category As at 31/12/2019 As at 31/12/2018

Pledged loans 51647260.17 15260103.46

Credit loans -- 2000000.00

Total 51647260.17 17260103.46

Note: At the end of the period the Group discounted the account receivables amounted to RMB 51647260.17 by factoring to fi nancial institutions

and received cash proceeds of RMB 51647260.17.

16. Accounts payable

Item As at 31/12/2019 As at 31/12/2018

Construction 241850173.72 214354593.64

Others 2374304.74 2404313.07

Total 244224478.46 216758906.71

17. Advances from customers

Item As at 31/12/2019 As at 31/12/2018

Housing 151031759.13 88339354.35

Construction 1805298.78 59728753.52

Others 6645452.52 8358044.99

Total 159482510.43 156426152.86

18. Employee benefits payable

Item

As at

31/12/2018

Accrued during

the year

Decreased

during the

year

As at

31/12/2019

Short- term employee benefits 45693840.70 172194173.32 164070342.88 53817671.14

Post-employment benefits - defined

contribution plans

142989.35 14622967.90 14674051.90 91905.35

Total 45836830.05 186817141.22 178744394.78 53909576.49

（1）Short-term employee benefits

Item

As at

31/12/2018

Accrued during

the year

Decreased during

the year

As at

31/12/2019

Salaries bonus allowances 44535073.06 153522845.02 145514192.66 52543725.42

Staff welfare 39600.00 3670713.73 3672513.73 37800.00

Social insurances 1578.57 4666822.54 4666822.54 1578.57

Including：1、Medical insurance 1503.22 4211966.49 4211966.49 1503.22

2、Work-related injury insurance 591.04 81950.77 81950.77 591.04

3、Maternity insurance -515.69 372905.28 372905.28 -515.69

Housing Fund 628129.71 5974861.65 6019324.53 583666.83

Labor union fees s taff and workers’ education

fee

489459.36 4358930.38 4197489.42 650900.32

Total 45693840.70 172194173.32 164070342.88 53817671.14

(2) Defined contribution plans

Item

As at

31/12/2018

Accrued during

the year

Decreased during

the year

As at

31/12/2019

Post-employment benefits 142989.35 14622967.90 14674051.90 91905.35

Including: 1．Basic pension insurance 75075.11 10088061.88 10088061.88 75075.11

2．Unemployment insurance 914.12 228826.01 228826.01 914.12

3．Annuity 67000.12 4306080.01 4357164.01 15916.12

Total 142989.35 14622967.90 14674051.90 91905.35

19. Taxes payable

Item As at 31/12/2019 As at 31/12/2018

Corporate income tax 51397791.31 180717910.92

Land appreciation tax 521540610.07 106254407.65

Value-added tax 10221416.88 11361028.95

Personal Income Tax 1049224.90 828729.71

City maintenance and construction tax 632944.99 385048.81

Property tax 262015.56 335365.77

Education surcharge 335721.66 239105.38

Local education surcharge 119929.86 85955.80

Others 141160.13 339819.99

Total 585700815.36 300547372.98

20、Other payables

Item As at 31/12/2019 As at 31/12/2018

Interest payables 16535277.94 16535277.94

Dividend payables -- --

Other payables 260783896.59 705284620.54

Total 277319174.53 721819898.48

(1)Interest payables

Item

As at 31/12/2019

As at 31/12/2018

Non-financial institution borrowing interest (interest

payable to parent company)

16535277.94 16535277.94

Significant overdue interest as follows:

Debtor Overdue amount Overdue reason

Shenzhen Invetment Holdings Co. Ltd. 16535277.94 Payment hold

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

(2) Other payables

Item As at 31/12/2019 As at 31/12/2018

Provision for land apprec iation tax 59710423.57 509788654.15

Rrelated parties 12549466.41 2770322.64

Deposits 105828118.27 100011180.52

Others 82695888.34 92714463.23

Total 260783896.59 705284620.54

Including significant other payables aging over 1 year

Item Amount Reason for no repayment

Provision for land apprec iation tax 59710423.57 Payment has not been liquidated

21. Long-term payables

Item As at 31/12/2019 As at 31/12/2018

Long-term payables 7499192.92 6507139.20

Special payables -- --

Total 7499192.92 6507139.20

(1) Long-term payables

Item As at 31/12/2019 As at 31/12/2018

Maintenance fund 7499192.92 6507139.20

22. Share capital (Unit: ten thousand shares)

Investor

As at

31/12/2018

Issued

shares

Bonus shares

Provident fund

increase

shares

Others Subtotal

As at

31/12/2019

Total number

of shares

101166.00 -- -- -- -- -- 101166.00

23. Capital reserve

Item As at 31/12/2018

Additions during the

year

Reductions during the

year

As at 31/12/2019

Share premium 557433036.93 -- -- 557433036.93

Other capital reserves 420811873.18 -- -- 420811873.18

Total 978244910.11 -- -- 978244910.11

24. Other comprehensive income

Item

As at

31/12/2018

(1)

Adjusted amount for the first implementation of the new financial

instrument standard

As at

2019.1.1

（3）=（1）

+（2）

Pre-tax

income

for the period

Less:

income tax

expense

Net-of-tax

amount

attributable to

shareholders

of the

Company (2)

Net-of-tax

amount

attributable to

non-controlling

interests

I.Items that will

not be

reclassified to

profit or loss

-- 13457914.28 3364478.58 10093435.70 -- 10093435.70

1. Changes in fair

value of other

equity

instruments

-- 13457914.28 3364478.58 10093435.70 -- 10093435.70

II.Items that may

be reclassified

10564385.97 -- -- -- -- 10564385.97

Item

As at

31/12/2018

(1)

Adjusted amount for the first implementation of the new financial

instrument standard

As at

2019.1.1

（3）=（1）

+（2）

Pre-tax

income

for the period

Less:

income tax

expense

Net-of-tax

amount

attributable to

shareholders

of the

Company (2)

Net-of-tax

amount

attributable to

non-controlling

interests

to profit or loss

1.Translation

differences

arising from

translation of

foreign currency

financial

statements

10564385.97 -- -- -- -- 10564385.97

Total 10564385.97 13457914.28 3364478.58 10093435.70 -- 20657821.67

Continued

Item

As at 2019.1.1

(1)

Movements during the year

As at

2019.12.31

（3）=（1）

+（2）

Before-tax

amount

Less:

income tax

expense

Net-of-tax

amount

attributable to

shareholders of

the Company

(2)

Net-of-tax

amount

attributable to

non-controlling

interests

I. Items that will

not be

reclassified to

profit or loss

10093435.70 2204575.02 551143.75 1653431.27 -- 11746866.97

1. Changes in fair

value of other

equity instruments

10093435.70 2204575.02 551143.75 1653431.27 -- 11746866.97

II.Items that may

be reclassified to

profit or loss

10564385.97 -1480248.81 -- -1480248.81 -349804.55 9084137.16

1. Translation

differences arising

from translation of

foreign currency

financial

statements

10564385.97 -1480248.81 -- -1480248.81 -349804.55 9084137.16

Total 20657821.67 724326.21 551143.75 173182.46 -349804.55 20831004.13

25. Surplus reserve

Item As at 31/12/2018

Beginning

adjustment

Additions during

the year

Reductions

during the year

As at 31/12/2019

Statutory surplus

reserve

95906222.59 -416151.43 95732767.78 --- 191222838.94

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

26. Retained earnings

Item

Year ended

31/12/2019

Year ended

31/12/2018

Appropriation or

distribution percentage

Retained earnings as at 31/12/2018

(before adjustment)

1235884122.72 742624845.71 --

Total adjustments for opening retainedearnings（ “+” for increase; “–” fordecrease）

-25355845.72 -- --

Retained earnings as at 01/01/2019

(after adjustment)

1210528277.00 742624845.71 --

Add: Net profits for the year attributable

to shareholders of the Company

552452307.59 503498831.60 --

Less: Appropriation for statutory surplus

reserve

95732767.78 10239554.59 10.00

Dividends payable to ordinary

shares

202332000.00 -- --

Retained earnings as at 31/12/2019 1464915816.81 1235884122.72 --

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

III. 30.

27. Operating income and operating cost

Item

2019 2018

Revenue Cost Revenue Cost

Principal operating 2533402850.39 944347757.51 2149857315.87 918680658.37

Other operating 15337469.10 13404895.03 25329926.73 19705354.72

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

Industry

2019 2018

Operating income Operating cost Operating income Operating cost

Real estate 2017872864.14 497310023.38 1595473065.40 445500004.85

Engineer ing

construction

304837313.46 298315846.77 370298109.36 358335541.20

Property management 157665638.01 142261602.88 146123975.95 128536788.40

Lease 86484133.79 45173891.05 92015827.23 46069096.38

Sub-total 2566859949.40 983061364.08 2203910977.94 978441430.83

Less: internal offset 33457099.01 38713606.57 54053662.07 59760772.46

Total 2533402850.39 944347757.51 2149857315.87 918680658.37

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

Region

2019 2018

Operating income Operating cost Operating income Operating cost

Domestic： 2566271187.43 984319212.90 2203317074.26 978441430.83

Guangdong: 2491373238.76 910671531.26 2117245186.96 895675822.41

Others: 74897948.67 73647681.64 86071887.30 82765608.42

Overseas： 588761.97 -- 593903.68 --

USA 588761.97 -- 593903.68 --

Sub-total 2566859949.40 984319212.90 2203910977.94 978441430.83

Less: internal offset 33457099.01 38713606.57 54053662.07 59760772.46

Total 2533402850.39 945605606.33 2149857315.87 918680658.37

28. Taxes and surcharges

Item 2019 2018

Land appreciation tax 725378098.62 422072101.03

Property tax 9522347.24 9538716.87

Urban maintenance and construction

tax

8326655.33 6817766.33

Education surcharge 3646297.05 3169793.46

Local education surcharge 2266337.54 1970507.72

Embankment protection fees 1874192.43 1843855.48

Business tax -- -47598.97

Total 751013928.21 445365141.92

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

29. Selling and distribution expenses

Item 2019 2018

Sales agency fees and commissions 64830444.01 38454875.23

Advertising expenses 5292324.97 6657350.04

Employee benefits 4002688.15 3996226.96

Entertaiment expenses 935889.90 900385.69

Others 4418906.99 2554142.30

Total 79480254.02 52562980.22

30. General and administrative expenses

Item 2019 2018

Employee benefits 49342369.86 50904497.46

Deprec iation 2901508.29 3134997.46

Business Hospitality 2601004.99 2796377.72

Intermediary fee 2862135.59 2499764.35

Adminis trative expenses 1949136.92 1480234.71

Water and electric ity charges 412641.47 1051402.14

Repair charge 660950.10 925690.83

Other amortization 486466.27 847356.79

Travel expense 329477.95 359268.65

Others 7308927.26 10030250.33

Total 68854618.70 74029840.44

31. Financial expenses

Item 2019 2018

Interest expenses 38642.51 2817521.60

Less: Interest capitalized -- --

Interest income 19686882.13 19825334.08

Exchange losses/(gains) -1744304.53 -547960.63

Less: Exchange losses and gains

capitalized

-- --

Bank charges and others 486394.95 320050.95

Total -20906149.20 -17235722.16

32. Other income

Item (Source of other income) 2019 2018

Related to assets/

income

Input VAT deduction 1163713.00 -- Income

Subsidies of s teable post 4414.90 -- Income

Total 1168127.90 --

Note:

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

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

33. Investment income

Item 2019 2018

Income from long-term equity

investments accounted for using the

equity method

75629.25 -52651.66

Investment income from holding

available- for-sale financial assets

-- 827100.00

Dividend from investments in other

equity instruments

928200.00 --

Structured deposit income 31425651.98 16347157.53

Total 32429481.23 17121605.87

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

Item 2019 2018

Account receivables -2184042.21 --

Other Receivables -927215.23 --

Total -3111257.44 --

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

Item 2019 2018

Impairment of receivables -- -29797.00

Long-term equity investments -12166897.84 -17274902.75

Total -12166897.84 -17304699.75

36. Gains from assets disposal

Item 2019 2018

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

37. Non-operating income

Item 2019 2018

Amount included in

non-recurring gains or

losses for the year

ended 31/12/2019

Gains on penalty 1152266.31 586932.13 1152266.31

Other 193162.18 814611.19 193162.18

Government grants unrelated to the

Company's daily activities

-- 10243.00 --

Total 1345428.49 1411786.32 1345428.49

Details of government grants are as follows:

Item 2019 2018

Related to

assets/income

Note

Stable job Subsidies -- 10243.00 Income

Note:

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

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

38. Non-operating expenses

Item 2019 2018

Amount included

in non-recurring

gains or losses for

the year ended

31/12/2019

Donations provided 30000.00 330000.00 30000.00

Loss in damage and scrap of

non-current assets

169935.95 69209.53 169935.95

Fines 1445.39 39016.09 1445.39

Others 25185.46 140874.39 25185.46

Total 226566.80 579100.01 226566.80

39. Income tax expenses

(1) Details of income tax expenses

Item 2019 2018

Current tax expense for the year based on tax law and

regulations

81384471.24 295133757.80

Changes in deferred tax assets/liabilities 109401829.46 -112377271.44

Total 190786300.70 182756486.36

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

Item 2019

Profits before tax 731983330.76

Expected income tax expenses at applicable tax rate

(profits before tax 25 %)

182995832.69

Effect of different tax rates applied by subsidiaries 5114261.95

Effect of gains or losses from joint ventures and

associates accounted for using the equity method

-30453128.98

Effect of non-deductible costs expenses and losses 21337044.56

Effect of us ing the deductible temporary differences or

deductible losses for which no deferred tax asset was

recognized in previous (expressed in “-”)

-661881.43

Effect of deductible temporary differences or deductible

losses for which no deferred tax asset was

recognized this year

12454171.91

Income tax expenses 190786300.70

40、Notes to items in the cash flow statements

（1）Other cash receipts relating to operating activ ities

Item 2019 2018

Interest income 15906764.91 19825334.08

The collecting and paying on another's behalf 8051762.09 5425177.51

Current account and Others 55720858.47 32271657.37

Total 79679385.47 57522168.96

（2）Other cash payments relating to operating activ ities

Item 2019 2018

Handling fee 682722.12 320050.95

Cash paid expenses 97554049.46 68007623.74

Current account and Others 8702866.87 15023926.92

Total 106939638.45 83351601.61

（3）Other cash receipts relating to Investment activ ities

Item 2019 2018

Restric ted cash recoverd in the current per iod –

structured deposit

2200000000.00 600000000.00

（4）Other cash payments relating to financing activ ities

Item 2019 2018

Restric ted cash paid in the current per iod 2300000000.00 1500000000.00

–structured deposit

（5）Other cash receipts relating to financing activ ities

Item 2019 2018

Restric ted cash recovery - security deposit -- 290033.83

41. Supplementary information on cash flow statement

(1) Supplement to cash flow statement:

Supplement information 2019 2018

1、Reconciliation of net profit/loss to cash flows from

operating activities：

Net profit 541197030.06 499971564.96

Add: Provisions for impairment of assets 12166897.84 17304699.75

Provisions for impairment of credit 3111257.44 --

Deprec iation of fixed assets deprec iation of investment

properties

28907809.32 28889127.19

Amortization of intangible assets -- 55200.00

Amortization of long-term deferred expenses 224941.19 199283.75

Losses from disposal of fixed assets intangible assets and

other long-term assets ("-" for gains)

-- 530.20

Loss from scrapping of fixed assets ("-" for gains) 169935.95 69209.53

Losses from changes in fair value ("-" for gains) -- --

Financial expenses ("-" for income) 38642.51 2269560.97

Losses aris ing from investment ("-" for gains) -32429481.23 -17121605.87

Decrease in deferred tax assets ("-" for increase) 108102463.55 -107053693.61

Increase in deferred tax liabilities ("-" for decrease) 987671.25 --

Decrease in inventories ("-" for increase) 190315523.14 78934592.68

Decrease in operating receivables ("-" for increase) -136075098.50 147437501.15Increase in operating payables ("-" for decrease） -113109867.77 411611434.89

Others --

Net cash flows from operating activities 603607724.75 1062567405.59

2、 Investing and financing activities not requiring the use of

cash:

Conversion of debt into capital

Convertible bonds due within one year

Acquisition of fixed assets under finance leases

3、Change in cash and cash equivalents：

Cash as at 31/12/2019 1507189760.35 1148522435.93

Less: cash as at 31/12/2018 1148522435.93 1206789056.46

Add: cash equivalents as at 31/12/2019 -- --

Less: cash equivalents as at 31/12/2018 -- --

Net increase in cash and cash equivalents 358667324.42 -58266620.53

(2) Details of cash and cash equivalents

Item 2019 2018

1.Cash 1507189760.35 1148522435.93

Including: Cash on hand 66252.42 57979.40

Bank deposits available on demand 1493123507.93 1148464456.53

Other monetary funds available on demand 14000000.00 --

2. Cash equivalents

3. Cash and cash equivalents as at 31/12/2019 1507189760.35 1148522435.93

42. Assets with restric tive ownership title or right of use

Item As at 31/12/2019 Reason for restriction

Cash at bank and on hand 1003950685.00 Unexpired structured deposits

Accounts receivable 51647260.17 Short- term loan pledged

Total 1055597945.17

43. Foreign currency translation

（1）Items in Foreign currency

Item Original Exchange rate Amount (RMB)

Cash at bank and on hand

Including: USD 5532.95 6.9762 38598.97

HKD 8783167.25 0.89578 7867791.43

Accounts receivable

Including: HKD 4905150.10 0.89578 4393935.36

Other receivables

Including: HKD 20165086.70 0.89578 18063481.36

Other payables

Including: USD 655299.33 6.9762 4571499.19

VI. Change of consolidation scope

There is no change in consolidation scope during the current period.VII.Interest in other entities

1. Interests in subsidiaries

(1) Composition of the Group

Name

Principal

place of

business

Registration

place

Business

nature

Shareholding% Acquisition

method Direct Indirect

Shenzhen City SPG Long

Gang Development Ltd.Shenzhen Shenzhen

Real estate

development

95.00 5.00

Acquiring through

establishment or

investment

American Great Wall Co.

Ltd

U.S. U.S.Real estate

development

70.00 --

Acquiring through

establishment or

investment

Name

Principal

place of

business

Registration

place

Business

nature

Shareholding% Acquisition

method Direct Indirect

Shenzhen City Property

Management Ltd.Shenzhen Shenzhen

Property

management

95.00 5.00

Acquiring through

establishment or

investment

Shenzhen Petrel Hotel Co.Ltd.Shenzhen Shenzhen Hotel Services 68.10 31.90

Acquiring through

establishment or

investment

Shenzhen Zhen Tung

Engineer ing Ltd.

Shenzhen Shenzhen

Installation and

maintenance

73.00 27.00

Acquiring through

establishment or

investment

Shenzhen City We Gen

Construction Management

Ltd.Shenzhen Shenzhen Supervision 75.00 25.00

Acquiring through

establishment or

investment

Shenzhen Lain Hua Industry

and Trading Co. Ltd.Shenzhen Shenzhen

Mechanical &

Electrical

device

installation

95.00 5.00

Acquiring through

establishment or

investment

Fresh Peak Zhiye Co. Ltd.

Hong

Kong

Hong Kong

Investment and

management

100.00 --

Acquiring through

establishment or

investment

Xin Feng Enterprise Co.Ltd.Hong

Kong

Hong Kong

Investment and

management

100.00 --

Acquiring through

establishment or

investment

Shenzhen City Shenfang

Free Trade Trading Ltd.

Shenzhen Shenzhen

Commecial

trade

95.00 5.00

Acquiring through

establishment or

investment

Shenzhen City Shenfang

Investment Ltd.Shenzhen Shenzhen Investment 90.00 10.00

Acquiring through

establishment or

investment

Shenzhen Special

Economic Zone Real Estate

(Group) Guangzhou

Property and Estate Co.Ltd.Shenzhen Shenzhen Real estate 95.00 5.00

Acquiring through

establishment or

investment

Beijing fresh peak property

development management

limited company

Beijing Beijin Real estate 75.00 25.00

Acquiring through

establishment or

investment

Note:

① In consolidation scope there are five subsidiaries in “revoked but not cancelled” condition: Beijing SPG Property Management Limited

Guangzhou Huangpu Xizun real estate limited company Shenzhen Special Economic Zone Real Estate (Group) Guangzhou Property and Estate

Co. Ltd. Fresh Peak Real Estate Dev. Construction (Wuhan) Co. Ltd. and Beijing Shenfang Property Management Co. Ltd. They are presented on

the basis of discontinued operations these five subsidiaries have made full prov ision for impairment of debet for the companies outside the

consolidation scope.② The cancelled revoked and closed subsidiaries of the Company that are not included in the scope of consolidation are as follows:

Name

Principal

place of

business

Registration

place

Business

nature

Shareholding% Acquisition

method Direct Indirect

Shenzhen Shenfang

Department Store Co. Ltd

Shenzhen Shenzhen

Commecial

trade

95.00 5.00

Acquiring through

establishment or

Name

Principal

place of

business

Registration

place

Business

nature

Shareholding% Acquisition

method Direct Indirect

investment

Paklid Lim ited Hong Kong Hong Kong

Commecial

trade

60.00 40.00

Acquiring through

establishment or

investment

Bekaton Property Limited Australia Australia Real estate 60.00 --

Acquiring through

establishment or

investment

Canada Great Wall

( Vancouver)

Canada Canada Real estate -- 60.00

Acquiring through

establishment or

investment

Guangdong Fengkai County

Lianfeng Cement

Manufacturing Co.Ltd.

Fengkai

Guangdong

Fengkai

Guangdong

Manufacturing -- 90.00

Acquiring through

establishment or

investment

Jiangmen X injiang Real

Estate Co. Ltd

Jiangmen

Guangdong

Jiangmen

Guangdong

Real estate -- 90.91

Acquiring through

establishment or

investment

Xi’an Fresh Peak Property

Trading Co. Ltd

Xi’an Shanxi Xi’an Shanxi Real estate -- 67.00

Acquiring through

establishment or

investment

Shenxi Limited Shenzhen Shenzhen

Building

Decoration

70.00 --

Acquiring through

establishment or

investment

Shenzhen Zhentong New

Electromechanical Industry

Development Co. Ltd.

Shenzhen Shenzhen

Mechanical and

electr ical

engineering

95.00 5.00

Acquiring through

establishment or

investment

Shenzhen Real Estate

Electromechanical

Management Company

Shenzhen Shenzhen

Electromechani

cal

Management

100.00 --

Acquiring through

establishment or

investment

Shenzhen Nanyang Hotel Co.Ltd.Shenzhen Shenzhen

Hotel

Management

95.00 5.00

Acquiring through

establishment or

investment

Shenzhen Kangtailong

Industr ial Electric Cooker Co.Ltd.Shenzhen Shenzhen

Industr ial

manufacturing

-- 100.00

Acquiring through

establishment or

investment

Shenzhen Longgang

Henggang Huagang Industr ial

Co. Ltd.

Shenzhen Shenzhen

Industr ial

Investment

-- 79.92

Acquiring through

establishment or

investment

Note: 1. Shenzhen Shenfang Department Store Co. Ltd held a shareholders meeting on 29 October 2007 dec ided to terminate the business and

formed a group for liquidation. The liquidation group issued a liquidation report on 7 December 2007.

2. Paklid Limited Bekaton Property Limited and Canada Great Wall ( Vancouver) they were companies established by the group overseas in the

early years. On 13 December 2000 the gourp held a board of directors and decided to liquidate these three companies. Bekaton Property Limited

and Canada Great Wall ( Vancouver) the cancellation procedures were completed.

3. All assets from Guangdong Fengkai County Lianfeng Cement Manufacturing Co. Ltd. (including tangible and intangible asset) was auctioned by

the court on 22 January 2019 and it became a shell company.

4. Shenxi Limited was the Group’s cancelled subsidiary Shenzhen Tefa Real Estate Consolidated Serv ices Co. Ltd’s subsidiary By the Group “ Thenotice on the menger of Shenzhen Zhen Tung Engineering Ltd and Shenxi Limited”（Shenfang [1997] No.19）announcement all bus inesses form

Shenxi Limited were undertaken by Shenzhen Zhen Tung Engineering Ltd and Shenxi Limited was revoked on 8 February 2002.These invested companies that have not been included in the consolidation scope were either been cancelled or ceased operation many years agoand the company entities were no longer ex ist the Group could no longer effectively control them. According to “Accounting Standard for Business

Enterprises No. 33-Consolidated Financial Statements” the above companies are not included in the consolidated scope of the group consolidated

financial s tatement the group already fully prov ision for impairment the investment or the book value of the net investment in these companies.

(2) Material non-wholly owned subsidiaries

Name

Proportion of

ownership

interest held by

non-controlling

interests %

Profit or loss

allocated to

non-controlling

interests during the

year

Dividend declared to

non-controlling

shareholders during

the year

Balance of

non-controlling

interests as at

31/12/2019

Great Wall Estate Co. Inc 30.00 -82021.15 -- -21860102.50

Fresh Peak Investment

Ltd

45.00 -11167982.90 -- -116154869.74

Barenie Co. Ltd. 20.00 -5273.48 -- -3876363.60

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

Name

As at 31/12/2019

Current

assets

Non-current

assets

Total assets

Current

liabilities

Non-

current

liabilities

Total liabilities

Great Wall

Estate Co. Inc

38598.97 19274905.74 19313504.71 107974695.34 -- 107974695.34

Fresh Peak

Investment Ltd

4817.49 36016.90 40834.39 256573564.93 -- 256573564.93

Barenie Co. Ltd. 1045.70 -- 1045.70 32842234.42 -- 32842234.42

Continued（1）：

Name

As at 31/12/2018

Current

assets

Non-current

assets

Total assets

Current

liabilities

Non-current

liabilities

Total liabilities

Great Wall

Estate Co. Inc

312086.57 19021543.04 19333629.61 106555401.23 -- 106555401.23

Fresh Peak

Investment Ltd

873070.13 36016.90 909087.03 256549015.66 -- 256549015.66

Barenie Co. Ltd. 1024.45 21223344.85 21224369.30 32813474.75 -- 32813474.75

Continued（2）：

Name

2019 2018

Operating

income

Net profit

Total

comprehensive

income

Cash flows

from

operating

activities

Operating

income

Net profit

Total

comprehensive

income

Cash flows

from

operating

activities

Great Wall

Estate Co.

Inc

588761.97 -273403.83 -- -273403.83 593903.68 -184610.61 -- -184610.61

Fresh Peak

Investment

Ltd

-- -24533.43 -- -- -- -20135.10 -- 997.60

Barenie Co.

Ltd.-- -26367.40 -- -- -- -9169123.59 -- 1922.53

2. Interests in joint ventures or associates

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

Item

As at 31/12/2018 /

Year ended 31/12/2019

As at 31/12/2018 /Year

ended 31/12/2018

Joint ventures: --

Aggregate carrying amount of investments 12166897.84

Aggregate amount of share of -- --

Net profit -- --

Other comprehensive income -- --

Total comprehensive income

Associates:

Aggregate carrying amount of investments 469838.65 394209.40

Aggregate amount of share of

Net profit 75629.25 -52651.66

Other comprehensive income -- --

Total comprehensive income -- --

(2) Excess loss from joint ventures or associates

Investee

Accumulated unrecognized

loss in prior periods

Unrecognized loss

(or share of net

profit)for the year

Accumulated

unrecognized loss as at

31/12/2019

Shenzhen Fresh Peak property

consultant Co. Ltd

941374.25 154587.30 1095961.55

Note: Shenzhen Fresh P eak property consultant Co. Ltd was established on 15 March 1990 Registered capital of 3000000 the group subscribed

RMB 600000 (20% in total capital). As at 31 December 2019 the group actually contributed RMB 600000 and already confirmed long-term equity

invent lose RMB 600000.VIII. Financial instruments and risk management

The major financial instruments of the Group include cash at bank and on hand accounts receivable other receivable other current assets other

equity instrument account payables other payables short-term loans，and long-term payables. The details of these financial instruments aredisclosed in the respective notes. The financial risk of these financial instruments and financial management policies used by the Group to minimize

the risk are disclosed as below. The management manages and monitors the exposure of these risks to ensure the above risks are controlled in the

limited range.

1.Objectives and polic ies of financial risk management

The Group’s objective in risk management is to obtain an appropriate equilibrium between risk and return. It also focuses on the unpredic tabili ty of

financial markets and seeks to minimize potential adverse effects on the Group’s financial performance. Based on the objectiv es of financial risk

management certain policies are made to recognize and analyze risk and internal control is designed according to proper acceptable in order to

monitor the risk position of the Group. Both the policies and internal control will be rev iewed and rev ised regularly to adap t the changes of the market

and business activ ities of the Group. The performance of internal control will be rev iewed regularly or randomly in accordance with the financial

management policies.The Group’s financial instrument risks mainly include credit risk liquidity risk and market risk. (Including currency risk interest rate risk and

commodity price risk)

The board of directors is responsible for planning and establishing the risk management s tructure of the Group formulating t he Group’s risk

management policies and related guidelines superv ising the implementation of risk management measures. The Group has established risk

management policies to identify and analyze the risks faced by the Group. These risk management policies clearly define speci fic risks covering

market risk credit risk and liquidity risk. The Group regularly assesses changes in the market env ironment and the Group’s operating activ ities to

determine whether update risk management policies and systems.The Group diversifies the risk of financial instruments through appropriate diversified investments and business combinations and reduces the risk of

concentration in a single industry a specific region or a specific counterparty by developing appropriate risk management polic ies.

（1）Credit risk

Credit risk refers to the risk that the counterparty to a financial instrument would fail to discharge its obligation under the terms of the financial

instrument and cause a financial loss to the Group.

Credit is managed on the grouping basis. Credit risk is mainly arising from cash at bank accounts receivable and other receivables.

The Group expects that there is no significant credit risk associated with cash at bank since it is deposited or will be accepted by the sate-owned

banks and other medium or large size lis ted banks.The Group has policies to limit the credit risk exposure on accounts receivables and other receivables. The Group assesses the credit quality of and

sets credit l imits on its customers by taking into account their financial position the availabili ty of guarantee from third parties the availability of

guarantee from third parties their credit his tory and other factors such as current market conditions. The credit history of the customers is regularly

monitored by the Group. In respect of customers with a poor credit his tory the Group will use written payment reminders or shorten or cancel credit

periods to ensure the overall credit risk of the Group is limited to a controllable extent.The Group’s debtors of account recevables are in difference industries and regions the Group continues in evaluation the debtor’s financial status.The highest credit risk exposed to the Group is limited to the carry ing amount of each financial instrument i llustrated in the balance sheet. The Group

would not prov ide any guarantee that might cause credit risk to the Group.

Among the accounts receivable of the Group the bills receivable and accounts receivable of the top five customers accounted for 53.79%

(2018:30.43% ); among the other receivables of the Group the other receivable of the top five customers accounted for 62.80% (2018:62.19% )

（2）Liquidity risk

Liquidity risk refers to the risks that the Group will not be able to meet its obligations associated with its financial liabili ties that are settled by

delivering cash or other financial assets.

Cash flow forecasting is performed by Group’s finance department. The Group’s finance management monitors cash and cash equiv alents to meet

operational needs and reduce the effect of floating cash flow. The department monitors the usage of bank loan so that the Group does not breach

borrowing limits or covenants while maintaining sufficient headroom on its undrawn committed borrowing facili ties from major financial institute to

meet the short-term and long-term liquidity requirements.The Group raises working capital from its operations bank and other borrowings. As at 31 December 2019 the amount of bank loans not yet used by

the Group is RMB 0.00. (As at 31 December 2018: RMB 28000000)

The financial assets and liabili ties off-balance-sheet guarantee items of the Group at 31 December 2019 are analyzed by their maturity date below at

their undiscounted contractual cash flows (RMB in ten thousand)：

Item

As at 31/12/2019

Within 1 year 1 to 5 years Over 5 years Total amount

Financial liabilities：

Short- term loans 5164.73 -- -- 5164.73

Accounts payable 24422.45 -- -- 24422.45

Interest payables 1653.53 -- -- 1653.53

Other payables 20051.11 -- -- 20051.11

Long-term payables -- 749.92 -- 749.92

Guarantees for client 47539.67 -- -- 47539.67

Total liabilities 98831.49 749.92 -- 99581.41

The financial assets and liabili ties off-balance-sheet guarantee items of the Group at 31 December 2018 are analyzed by their maturity date below at

their undiscounted contractual cash flows（RMB in ten thousand）：

Item

As at 31/12/2018

Within 1 year 1 to 5 years Over 5 years Total amount

Financial liabilities：

Short- term loans 1726.01 -- -- 1726.01

Accounts payables 21675.89 -- -- 21675.89

Interest payables 1653.53 -- -- 1653.53

Other payables 21203.12 -- -- 21203.12

Long-term payables -- 650.71 -- 650.71

Guarantees for client 94327.58 -- -- 94327.58

Total liabilities 140586.13 650.71 0.00 141236.84

The amount of financial liabili ties disclosed in the above table is undiscounted contractual cash flow and may differ from the carry ing amount in the

balance sheet.The maximum guarantee contract that already signed dose not represent the amount need to paid.

（3）Market risk

Market risk includes interest rate risk and foreign currency risk refers to the risk that the fair value or future cash flow of a financial instrument will

fluctuate because of the changes in market price.Interest rate risk

Interest rate risk refers to the risk that the fair value or future cash flow of a financial instrument will fluctuate becaus e of the floating rate. Interest rate

risk arises from recognized interest-bearing financial instrument and unrecognized financial instrument (e.g. loan commitments).The Group’s interest rate risk arises from long-term bank loans and other interest-bearing liabilities. Financial l iabili ties issued at floating rate expose

the Group to cash flows interest rate risk. Financial liabili ties issued at fixed rate expose the Group to fair value interest rate risk. The Group

determines the relative proportions of its fixed rate and floating rate contracts depending on the prevailing market conditions. At the same time the

Group monitors and maintains the combined financial instruments of fixed rate and floating rate.

During the reporting period the Group operates by its own working capital. As at 31 December 2019 the Group has no financi al liabili ties with fixed

or floating interest rate such as bank loan. Therefore the Group believes that the interest rate risk is insignificant.Interest-bearing financial instruments held by the Group (RMB in ten thousand)：

Item As at 31/12/2019 As at 31/12/2018

Fixed interest rate financial instruments

Financial liabilities -- 200.00

Including: Short- term borrowings -- 200.00

Total -- 200.00

Foreign currency risk

Foreign currency risk refers to the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign

currency rates. Foreign currency risk arises from the functional currency denominated financial instrument measured at indiv idual entity.The foreign currency risk is mainly comes from the group’s financial posi tion and cash flow which is affected by the fluctuations of the foreign

exchange rates. As the subsidiary establish in Hong Kong SAR and U.S. are using local currency as settlement currency other foreign currency

assets and liabilities held by the Group c ompare with the group’s total assets and l iabili ties are insignificant therefore the Company believe the

foreign currency risk is insignificant.

2、Capital risk management

The objectives of the Group’s capital risk management are to safeguard the Group’s abili ty to continue as a going concern in order to prov ide returns

for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capit al.In order to maintain or adjust the capital s tructure the Group may adjust the amount of div idends paid to shareholders return capital to shareholders

issue new shares or disposes assets to reduce its liabili ties.The Group monitors capital on the basis of the gearing ratio. This ratio is calculated as net liabili ties div ided by total capital. As at 31 December 2019

the group’s debt to asset ratio is 28.20% . (As at 31 December 2018: 40% )

IX Fair Value

The level in which fair value measurement is categorized is determined by the level of the fair value hierarchy of the lowest level input that is

significant to the entire fair value measurement. The levels are defined as follows:

Level 1 inputs: unadjusted quoted prices in active markets that are observable at the measurement date for identical assets or liabil ities.Level 2 inputs: inputs other than Level 1 inputs that are either directly or indirectly observable for underly ing assets or l iabili ties.Level 3 inputs: inputs that are unobservable for underly ing assets or liabili ties.

（1）Fair value of assets and liabil ities measured at fair value

As at 31/12/2019 assets and liabili ties measured at fair value are shown as follows

Item

Level 1 fair

value

measurement

Level 2 fair

value

measurement

Level 3 fair

value

measurement

Total

I.Recurring fair value measurement

Other Equity instruments -- -- 33126730.04 33126730.04

Total assets measured at fair value

on a recurring basis

-- -- 33126730.04 33126730.04

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

Items

Fair value

As at 31/12/2019

Valuation techniques Unobservable inputs

Unlis ted equity

investments

33126730.04 Net asset method Book net assets liquidity discount

（3）Fair values of assets and liabil ities not measured at fair value

The financial assets and financial liabili ties of the Group measured at amortized cost mainly include: cash accounts receivable other receivables

short-term loans accounts payable other payables and long-term payable.In addition to above financial assets and l iabili ties other financial asset and liabili ties that not measured at fair value the differ between book values

and fair value are not significant.X. Related parties and related party transactions

1. Information about the parent of the Company

Name

Registration

place

Business nature

Registered

capital (RMB in

ten thousand)

Shareholding

percentage %

Percentage of

voting rights %

Shenzhen

Invetment Shenzhen

Investment real

estate

2764900.00 63.55 63.55

Holdings Co. Ltd.Guangdong

province

development

guarantee

The ultimate controlling party of the company is: State-owned Assets Superv ision and Management Commission of Shenzhen Municipal People’s

Government

During the reporting period the regis tered capital of the parent company changed as follows:

As at

31/12/2018

Addition Reduction

As at

31/12/2019

2534900.00 230000.00 -- 2764900.00

2. Information about the subsidiaries of the Company

For information about the subsidiaries of the Company refer to Note VII.1.

3. Information about joint ventures and associates of the Company

For information about the joint ventures and associates of the Company refer to Note VII.2.

4. Information on other related parties

Name Related party relationship

Shenzhen Jian'an Group Co. Ltd. Same controlling shareholders

Shenzhen Dongfang New world s tore Co. Ltd Participating s tock companies

Shenxi Limited

Not included in Consolidated Financial

Statements’ Subsidiary that had been

terminated its licenses by law but not

cancellation

Shenzhen Zhentong New Electromechanical Industry Development Co. Ltd.Not included in Consolidated Financial

Statements’ Subsidiary (Long-term without

operation)

Shenzhen Nanyang Hotel Co. Ltd.Not included in Consolidated Financial

Statements’ Subsidiary that had been

terminated its licenses by law but not

cancellation

Shenzhen Real Estate E lectromechanical Management Company

Not included in Consolidated Financial

Statements’ Subsidiary that had been

terminated its licenses by law but not

cancellation

Shenzhen Longgang Henggang Huagang Industrial Co. Ltd.Not included in Consolidated Financial

Statements’ Subsidiary that had been

terminated its licenses by law but not

cancellation

5. Transactions with related parties

(1) Purchases/sales

①Purchase of goods/receiv ing of serv ices

Related party Nature of transaction 2019 2018

Shenzhen RongHua

JiDian Co.Ltd

Elevator maintenance 1339921.80 1390625.62

②Sales of goods/rendering of serv ices

Related party Nature of transaction Year ended 31/12/2019 Year ended 31/12/2018

Shenzhen Jian'an Group

Co. Ltd.

Decoration services 2836052.81 1333878.10

Shenzhen RongHua

JiDian Co.Ltd

Property Services 68772.00 68772.00

(2) Contracting arrangement

① Outsourcing with related parties

Name of

main

contractor

Name of

contractor

Type of

assets

under

outsourcin

g

Reception date

of

contracting

Expiration date

of

contracting

Basis of

pricing of

contracting

income

Contracting

income recognized

in the current year

year

Shantou City

Huafeng

Real Estate

Devepment

Co. Ltd

Shenzhen

Jian'an

Group Co.Ltd.

Constructio

n

19 October 2018 1 May 2021 Negotiations 167885971.23

(3) Funding from related party

Related party Amount of funding Reception date Expiration date Note

Funds received

Shenzhen Investment

Shareholding Co.Ltd

16535277.94 09 November 2006

22 December

2016

The pr incipal of the loan was

repaid on 22 December 2016

and the remaining amount

was interest payable.In the end of reporting period interest payable for Shenzhen Investment Shareholding Co. Ltd is RMB 16535277.94.

(4) Remuneration of key management personnel

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

Item 2019 (RMB in ten thousand) 2018 (RMB in ten thousand)

Remuneration of key

management

personnel

902.08 755.33

6. Receivables from and payables to related parties

(1) Receivables from related parties

Item Related party

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

Book value

Provision for

bad and

doubtful debts

Book value

Provision for bad

and doubtful

debts

Accounts Shenzhen Fresh 1205588.76 1205588.76 1185689.73 --

Item Related party

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

Book value

Provision for

bad and

doubtful debts

Book value

Provision for bad

and doubtful

debts

recevible Peak property

consultant Co.Ltd司

Other recevibles

Guangdong

Province Huizhou

Luofu Hill M ineral

Water Co. Ltd

10465168.81 10465168.81 10465168.81 10465168.81

Other recevibles

Shenzhen Runhua

Automobile

Trading Co. Ltd

3072764.42 3072764.42 3072764.42 3072764.42

Other recevibles

Canada GreatWall（ Vancouver ）

Co. Ltd

89035748.07 89035748.07 89035748.07 89035748.07

Other recevibles

Bekaton Property

Limited

12559290.58 12559290.58 12559290.58 12559290.58

Other recevibles Paklid Lim ited 19319864.85 19319864.85 19173003.78 19169123.37

Other recevibles

Shenzhen

Shenfang

Department Store

Co. Ltd.

237648.82 237648.82 237648.82 189179.82

Other recevibles

Shenzhen

RongHua JiDian

Co.Ltd

475223.46 23761.17 475223.46 --

Other recevibles

Xi’an Fresh Peak

property

management&

Trading Co.Ltd

8419205.19 8419205.19 8419205.19 8419205.19

Other recevibles Shenxi Limited 7660529.37 7660529.37 7660529.37 6236505.15

Other recevibles

Shenzhen

Nanyang Hotel

Co. Ltd.

3168721.00 3168721.00 3168721.00 3050666.00

Other recevibles

Shenzhen Jian'an

Group Co. Ltd.

16464.28 823.21 -- --

(2) Payables to related parties

Item Related party As at 31/12/2019 As at 31/12/2018

Intrest payables

Shenzhen Investment

Shareholding Co. Ltd

16535277.94 16535277.94

Accounts payable

Shenzhen J ian'an Group Co.Ltd.

68172202.04 43446497.68

Other payables

Shenzhen Dongfang New

world s tore Co. Ltd

902974.64 902974.64

Other payables

Guangdong Province

Fengkai Lain Feng Cement

1867348.00 1867348.00

Manufacturing Co. Ltd.Other payables

Shenzhen Real Estate

Electromechanical

Management Company

14981420.99 14981420.99

Other payables

Shenzhen Zhentong New

Electromechanical Industry

Development Co. Ltd.

8827940.07 8827940.07

Other payables

Shenzhen Shenfang

Department Store Co. Ltd.

639360.38 639360.38

Other payables

Shenzhen Longgang

Henggang Huagang

Industr ial Co. Ltd.

165481.09 165481.09

XI. Commitments and contingencies

1. Significant commitments

(1) Capital commitments

Capital commitments have been entered into but not have

not been in the financial statements

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

Significant outsourcing contracts 200684729.85 368570701.08

Note: The significant outsourcing contract was based on the construction contract between Shantou

Tianyuewan II Project and the contractor Shenzhen Jian'an (Group) Co. Ltd.

(2) Information on implementation of commitments in prev ious year

The detail is set out in Note X.5.(2) Associated Contracting.

As at 31 December 2019 there is no other material commitment to be disclosed.

2. Contingencies

(1) Contingent liabili ties arising from pending arbitration and pending li tigation and related financial impact

Plaintiff Defendant Case Appellate court

Amount of

the object of

action

Progress of

cases

Xi’an Fresh Peak Holding

limited company

Xi'an Commercial and

Trade Commission

Xi'an Commerce and

Tourism Co. Ltd.Investment

compensation

disputes

Shaanxi Higher

People's Court

36.62 million

yuan and

interest

Pending

Note: Xi’an Fresh Peak Holding limited company (hereinafter referred to as “Fresh Peak Company”) was sino-foreign joint venture set up in Xi’an city.

Among them Fresh Peak Enterprise Co. Ltd made 67% of the shares in cash. Xi’an Trade Building a company directly under the Xi'an Commercial

and Trade Commission (hereinafter referred to as "Xi'an C&T Commission") invested 16% of the shares in land use rights. Hong Kong Dadiwang

Industrial Investment Company holds 17% of the shares. The core business was property development. And the project was Xi’an Trade Building.The project was started on 28 November 1995. But the project had been stopped in 1996 because of the two parties differences on the operating

policy of the project. In 1997 the Xi’an government withdrew the Xi'an Fresh Peak investment project compulsively and ass igned the project to Xi’an

Business Tourism Co. Ltd (hereinafter referred to as “Business Tourism Company”). But the two parties had insulted a lawsuit on compensation. The

ShanXi Prov ince High Peoples Court made a judgement “(2000) SJ-CZ No.25”. The judgement was as follows: 1. Business Tourism Company had to

pay for the compensation Rmb 36620 thousand to Xi’an Fresh Peak Company after the judgment entering into force. If the Busin ess Tourism

Company failed to pay in time it had to pay double debt interests to Xi’an Fresh Peak Company. 2. Xi’an Joint Commiss ion on Commerce had jointly

and severally obligation of the interests of the compensation.Untill 31 December 2019 the amount of RMB 15201000.00 had been called back. The company has obtained new property clues submitted an

application for resumption of execution this case is sti ll pending.As at 31 December 2019 the book value of the long-term equity investment of Xi’an Fresh Peak Company was RMB 32840729.61. The book

balance of assets was RMB 8419205.19. Both have been taken full prov ision for impairment loss.

(2) Contingent liabili ties arising from guarantee prov ided to other entities and related financial effects.

As at 31 December 2019 The Group follows the real estate operating routine provides a total of 47593.67

(RMB in ten thousand) mortgage guarantee to real estate buyers.

Item Duration Amount Note

Shengfang CuiLin Building

Until the Premises Permit

mortgage regis tration is finished

and in bank custody

15819.86

ChuanQi DongHu Building(Fromer

DongHuDiJing Building)

Until the Premises Permit

mortgage regis tration is finished

and in bank custody

17535.05

TianYue Bay No.1

Until the Premises Permit

mortgage regis tration is finished

and in bank custody

14184.76

Total 47539.67

(2) Other contingencies

For contingent liabil ities related to joint venture or associate investment please refer to Note VII .2. (2)

As at 31 December 2019 there is no other contingency to be disclosed.

XII. Post balance sheet date events

1. Profit dis tribution after the balance sheet date

Based on the total share capital of 1011660000 shares as of 31 December 2019 a cash dividend of RMB

1.65 (including tax) will be distributed to all shareholders for every 10 shares as total as RMB 166923900.00.

2. Other events after the balance sheet date

Since January 2020 pneumonia caused by COIVD-19 is spreading across the country. The prevention of pneumonia is continuing nationwide. The

Group follows the arrangement of State-owned Asstest Superv ision and Administration Commission of the People’s Government of Shenzhen

Munclipal and the Shenzhen Investment Holding Co. Ltd. combined with the actual situation of the leased property within the group planned to

make a reduction of rents for more than 300 companies and indiv iduals for two-month total amount about RMB10000000.

As at 13 March 2020 there are no other events after the balance sheet date to be disclosed.

XIII.Other significant items

1. Government grants

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

Item Type

Recognised in

profit and loss for

the year ended

31/12/2018

Recognised in

profit and loss for

the year ended

31/12/2019

Presentation item

recognized in profit

and loss

Related to

asset/income

Stabilization

allowance

Government

funding

10243.00 4414.90 Other income income

3. Others

From 14 September 2016 the Group planned the reorganization of material assets. The Group announced it

intended to buy 100% stock equity of Evergrande real estate group co. LTD by issue shares or cash payment

on 14 October 2016. Guangzhou Chiron real estate co. LTD will become the controlling shareholder of the

company after the acquisition.The restructuring of material assets is still in process as scheduled by the financial report day.XIV.Notes to the Company’s financial s tatements

1．Accounts receivable

(1) Accounts receivable by aging balance

Aging As at 31/12/2019 As at 31/12/2018

Within 1 year 4766.37 1105116.03

1-2 years 66518.00 140732.69

2-3 years -- 293033.67

More than 3 years 10715652.53 10594607.30

Sub-total 10786936.90 12133489.69

Less：Provision for bad and doubtful

debts

10630001.06 6968694.02

Total 156935.84 5164795.67

（2）Accounts receivable by category

Item

As at 31/12/2019

Book balance

Provision for bad and doubtful

debts

Carrying amount

Book value

Percentage

of

provision %

Book value

Expected credit

loss(%)

Provision made on an

individual basis

10626436.84 98.51 10626436.84 100.00 --

Provision for bad and doubtful

debts collectively

160500.06 1.49 3564.22 2.22 156935.84

Including:

Accounts receivable from

related parties in consolidated

scope

89215.69 0.83 -- -- 89215.69

Accounts receivable from sales

of proporties

71284.37 0.66 3564.22 5.00 67720.15

Total 10786936.90 100.00 10630001.06 98.55 156935.84

Continued

Item

As at 1/1/2019

Book balance Provision for bad and doubtful debts

Carrying amount

Book value

Percentage

of

provision %

Book value

Expected credit

loss(%)

Item

As at 1/1/2019

Book balance Provision for bad and doubtful debts

Carrying amount

Book value

Percentage

of

provision %

Book value

Expected credit

loss(%)

Provision made on an

individual basis

10523723.00 97.56 10523723.00 100.00 --

Provision for bad and doubtful

debts collectively

1609766.69 14.92 76027.55 4.72 1533739.14

Including:

Accounts receivable from

related parties in consolidated

scope

89215.69 0.83 -- -- 89215.69

Accounts receivable from sales

of proporties

1520551.00 14.10 76027.55 5.00 1444523.45

Total 12133489.69 112.48 10599750.55 87.36 1533739.14

Provision made on an indiv idual basis：

Item

As at 31/12/2019

Book balance

Provision for bad

and doubtful debts

Percentage of

provision %

Rationale of

Provision

Amount receivables of

sales of proporties for

long-term uncollected

10523723.00 10523723.00 100.00

Expected to be not

recoverable

Provision for bad and doubtful debts collectively：

Accounts receivable from related parties in consolidated scope

Aging

As at 31/12/2019

Accounts receivable

Provision for bad and

doubtful debts

Expected credit loss(%)

More than 3 years 89215.69 -- --

Accounts receivable from sales of proporties

Aging

As at 31/12/2019

Accounts receivable

Provision for bad and

doubtful debts

Expected credit loss(%)

Within 1 year 4766.37 238.32 5.00

1-2 years 66518.00 3325.90 5.00

Total 71284.37 3564.22 5.00

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

Category

As at 31/12/2018

Book value %

Provision for

bad and

doubtful

%

Provision for

bad and

doubtful

debts debts

Accounts receivable of which

provision for bad debts is of

individually s ignificant

-- -- -- -- --

Provision for bad and doubtful

debts collectively

-- -- -- -- --

Accounts receivable of which

provision for bad debts is of

individually ins ignificant

12133489.69 100.00 6968694.02 57.43 5164795.67

Total 12133489.69 100.00 6968694.02 57.43 5164795.67

（3）Provision recovery or reversal of bad debt:

Item

Provision for bad and

doubtful debts

As at 31/12/2018 6968694.02

Adjustment amount for the first implementation of the new financial instrument

guidelines

3631056.53

As at 1/1/2019 10599750.55

Provision 30250.51

Recovery --

Written-off --

As at 31/12/2019 10630001.06

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

Name of Entity Amount

Proportion of the

amount to the total AR

(%)

Bad debt

provision

Corporation No.1 2038459.08 18.9 2038459.08

Corporation No.2 1205588.76 11.18 1205588.76

Individual No.1 1200000.00 11.12 1200000.00

Individual No.2 904664.31 8.39 904664.31

Individual No.3 876864.11 8.13 876864.11

Total 6225576.26 57.72 6225576.26

2.Other receivables

① Other receivable by aging balance

Aging As at 31/12/2019 As at 31/12/2018

Within 1 year 91158862.87 158202023.94

1-2 years 140372735.75 73851395.97

2-3 years 73930238.58 310307057.96

More than 3 years 1330808992.53 1023727012.17

Sub-total 1636270829.73 1566087490.04

Less：Provision for bad and doubtful debts 800995331.04 798092941.31

Total 835275498.69 767994548.73

② Other receivables categorized by nature

Item

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

Book

balance

Provision

for bad and

doubtful

debts

Carrying

amount

Book

balance

Provision for

bad and

doubtful debts

Carrying

amount

Amount

receivables from

government

721755.80 -- 721755.80 721755.80 -- 721755.80

Accounts

receivable from

employee’s

inprest fund

182691.21 -- 182691.21 30533.81 -- 30533.81

Amount

receivables of the

collecting and

paying on

another's behalf

3248.36 -- 3248.36 3961.49 -- 3961.49

Amount

receivables of

other customers

6818306.11 5744165.49 1074140.62 7318959.85 5388819.48 1930140.37

Amount

receivables of

related parties

135567522.22 135100418.87 467103.35 135551057.94 134576616.49 974441.45

Amount

receivables in

consolidated

scope

1492977306.03 660150746.68 832826559.35 1422461221.15 658127505.34 764333715.81

Total 1636270829.73 800995331.04 835275498.69 1566087490.04 798092941.31 767994548.73

③Provision for bad and doubtful debts：

As at 31/12/2019 the prov ision for bad debts in the first s tage :

Category

Book

balance

To 12-month

expected

credit loss

(%)

Provision for

bad and

doubtful debts

Carrying

amount

Reasons

Provision for bad and doubtful

debts collectively

Amount receivables from

government

721755.80 -- -- 721755.80

Amount receivables from

employee’s inprest fund

182691.21 -- -- 182691.21

Amount receivables from the

collecting and paying on

another's behalf

3248.36 -- -- 3248.36

Amount receivables from

other customers

1130674.34 5.00 56533.73 1074140.61

Amount receivables from

related parties

491687.74 5.00 24584.38 467103.36

Category

Book

balance

To 12-month

expected

credit loss

(%)

Provision for

bad and

doubtful debts

Carrying

amount

Reasons

Total 2530057.45 3.21 81118.11 2448939.34

As at 31/12/2019 the prov ision for bad debts in the second stage :

Category

Book

balance

To 12-month

expected

credit loss

(%)

Provision for

bad and

doubtful debts

Carrying

amount

Reasons

Provision made on an individual

basis

Other receivables from

consolidation scope related

parties

1492977306.03 44.22 660150746.68 832826559.35

Expected to be

not recoverable

As at 31/12/2019 the prov ision for bad debts in the third stage :

Category

Book

balance

12-month expected

credit loss(%)

Provision for

bad and

doubtful debts

Carrying

amount

Reasons

Provision made on an

individual basis

Amount receivables of other

customers

5687631.77 100.00 5687631.77 --

Expected to be

not recoverable

Amount receivables of related

parties

135075834.48 100.00 135075834.48 --

Expected to be

not recoverable

Total 140763466.25 100.00 140763466.25 --

As at 31/12/2018 prov ision for bad and doubtful debts：

Category

As at 31/12/2018

Book value %

Provision for

bad and

doubtful debts

%

Provision for

bad and

doubtful debts

Accounts receivable of which

provision for bad debts is of

individually s ignificant

Provision for bad and doubtful

debts collectively

1546671462.05 98.76 786391511.59 50.84 760279950.46

Accounts receivable of which

provision for bad debts is of

individually ins ignificant

19416027.99 1.24 11701429.72 60.27 7714598.27

Total 1566087490.04 100.00 798092941.31 50.96 767994548.73

④Provision recovery or reversal of bad debt

Provision for bad and doubtful The first stage The second stage The third stage Total

12-month

expected credit

loss

Lifetime expected

credit loss (no

credit

impairment)

Lifetime expected

credit loss (has

occurred credit

impairmen)

As at 31/12/2018 -- 658127505.34 139965435.97 798092941.31

Adjustment amount for the firs t

implementation of the new financial

instrument guidelines

105327.58 -- 798030.28 903357.86

As at 1/1/2019 105327.58 658127505.34 140763466.25 798996299.17

Provision -- 2023241.34 -- 2023241.34

Recovery 24209.47 -- -- 24209.47

Written-off -- -- -- --

As at 31/12/2019 81118.11 660150746.68 140763466.25 800995331.04

⑤ There were no other receivables written off in the current period.⑥Top 5 entities with the largest balances of other receivables

Name of Entity

Relationship

with the

group

Amount Aging

Proportion of the

amount to the

total OR (%)

Bad debt

provision

Shantou Huafeng

Estate Development

Co. Ltd

Subsidary

688028739.83

Within 1 year、1-3years、More than 3years

42.05 --

Fresh Peak

Enterprise Co. Ltd

Subsidiary

543327763.52

Within 1 year、Morethan 3 years

33.21 508377320.74

American Great Wall

Co. Ltd

Subsidiary

103403196.15 More than 3 years 6.32 103403196.15

Fresh Peak Zhiye

Co. Ltd.

Subsidiary 90363926.75 More than 3 years 5.52 90363926.75

Canada Great

Wall( Vancouver )

Co. Ltd

Subsidiary

89035748.07 More than 3 years 5.44 89035748.07

Total 1514159374.32 92.54 791180191.71

3、Long-term equity investments

Item

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

Book balance

Provision for

impairment

Book value Book balance

Provision for

impairment

Book value

Investment in

subsidiar ies

303045949.42 152839271.15 150206678.27 304045949.42 69155382.25 234890567.17

Investment in joint

ventures

9455465.38 9455465.38 -- 19424671.47 19424671.47 --

Investment in

associates

2992218.85 2522380.20 469838.65 2916589.60 2522380.20 394209.40

Total 315493633.65 164817116.73 150676516.92 326387210.49 91102433.92 235284776.57

（1）Investment in subsidiaries

Name of investee Opening balance

Curr. year

Increase

Curr. year

decrease

Closing balance

Curr. year

impairment

provision

Closing balance of

impairment

provision

Shenzhen City Property Management Ltd. 12821791.52 -- -- 12821791.52 -- --

Shenzhen Petrel Hotel Co. Ltd. 20605047.50 -- -- 20605047.50 -- --

Shenzhen City Shenfang Investment Ltd. 9000000.00 -- -- 9000000.00 -- --

Fresh Peak Enterprise Ltd. 556500.00 -- -- 556500.00 -- --

Fresh Peak Zhiye Co. Ltd. 22717697.73 -- -- 22717697.73 -- --

Shenzhen Special Economic Zone Real

Estate (Group) Guangzhou Property and

Estate Co. Ltd.

20000000.00 -- 1000000.00 19000000.00 19000000.00 19000000.00

Shenzhen Zhen Tung Engineer ing Ltd 11332321.45 -- -- 11332321.45 -- --

American Great Wall Co. Ltd 1435802.00 -- -- 1435802.00 -- --

Shenzhen City Shenfang Free Trade

Trading Ltd.

4750000.00 -- -- 4750000.00 -- --

Shenzhen City Hua Zhan Construction

Management Ltd.

6000000.00 -- -- 6000000.00 -- --

QiLu Co.Ltd 212280.00 -- -- 212280.00 -- --

Beijing Shenfang Property Management

Co. Ltd.

500000.00 -- -- 500000.00 500000.00 500000.00

Shenzhen Lain Hua Industry and Trading

Co. Ltd.

13458217.05 -- -- 13458217.05 -- --

Shenzhen City SPG Long Gang

Development Ltd.

30850000.00 -- -- 30850000.00 -- --

Beijing Fresh Peak Property Development

Management Limited Company

64183888.90 -- -- 64183888.90 64183888.90 64183888.90

Name of investee Opening balance

Curr. year

Increase

Curr. year

decrease

Closing balance

Curr. year

impairment

provision

Closing balance of

impairment

provision

Shantou City Huafeng Real Estate

Devepment Co. Ltd

16467021.02 -- -- 16467021.02 -- --

Paklid Lim ited 201100.00 -- -- 201100.00 -- 201100.00

Bekaton Property Limited 906630.00 -- -- 906630.00 -- 906630.00

Shenzhen Shenfang Department Store Co.Ltd.

9500000.00 -- -- 9500000.00 -- 9500000.00

Shantou Fresh Peak Building 58547652.25 -- -- 58547652.25 -- 58547652.25

Total 304045949.42 -- 1000000.00 303045949.42 83683888.90 152839271.15

Note：

1、 Shenzhen Special Economic Zone Real Estate (Group) Guangzhou Property and Estate Co. Ltd. the regis tered capital of RMB 20 million yuan the company subscribed for RMB 19 million(95% of total shares) another

subsidiary Shenzhen City Shenfang Investment Ltd. subscribed RMB 1.0 million(5% of total shares).

2、 After the Shenzhen Special Economic Zone Real Estate (Group) Guangzhou Real Estate Co. Ltd. ceased operations it revoked by the government on 06 December 2013. As at the report date the cancellation progress

is not complete and there is no sign it will be restarting operations in the foreseeable future so the company makes a full prov ision of impairment.

3、After the Beijing Shenfang Property Management Co. Ltd. ceased operations it revoked by the government on 09 December 2009. As at the report date the cancellation progress is not complete and there is no sign it will

be restarting operations in the foreseeable future so the company makes a full prov ision of impairment.

4、After the Beijing fresh peak property development management limited company ceased operations it revokes by the government on 12 June 2010. As at the report date the cancellation progress is not complete and there

is no sign it will be restarting operations in the foreseeable future so the company makes a full prov ision of impairment.

（2）Investment in associates and joint ventures

Name of investee

Opening

balance

Changes in this period

Closing

balance

The ending

balance of

impairment

Additio

nal

invest

ment

Reduce

invest

ment

Investment

gains and

losses

confirmed by

the equity

Adjustment of

other

comprehensiv

e

income

Changes

in other

equity

Cash

dividend or

profit

declared

Impairm

ent

Others

method

① Joint ventures

Guangdong Huizhou

Luofu Hill M ineral

Water Co. Ltd

9969206.09 -- -- -- -- -- -- -- -9969206.09 -- --

Fengkai X inghua

Hotel

9455465.38 -- -- -- -- -- -- -- -- 9455465.38 9455465.38

Subtotal

19424671.4

7

-- -- -- -- -- -- -- -9969206.09 9455465.38 9455465.38

②Associates

Shenzhen Ronghua

Jidian Co. Ltd

1471164.04 -- -- 75629.25 -- -- -- -- -- 1546793.29 1076954.64

Shenzhen Runhua

Automobile Trading

Co. Ltd

1445425.56 -- -- -- -- -- -- -- -- 1445425.56 1445425.56

Subtotal 2916589.60 -- -- 75629.25 -- -- -- -- -- 2992218.85 2522380.20

Total

22341261.0

7

-- -- 75629.25 -- -- -- -- -9969206.09 12447684.23 11977845.58

Note：Guangdong prov ince Huizhou Luofu Hill Mineral Water Co. Ltd was established on 6 June 1991 and revoked by the government on 6 June 2017 as at report date the cancellation progress is not complete. The

regis tered capital is 6.02 million yuan subsidiary Xinfeng Enterprise Co. Ltd. holds 50.00% by employ ing equity method.4、Operating income and costs

Item

2019 2018

Revenue Cost Revenue Cost

Principal operating 1666904055.40 330874297.00 229634645.39 48332118.70

Other operating 48857.18 -- 47904.78 --

（1）Principal operating activ ities (classified by industries)

Name of industry

2019 2018

Operating income Operating cost Operating income Operating cost

Real estate 1599279513.73 304208253.29 158790845.73 22268415.66

Leasing 67624541.67 26666043.71 70843799.66 26063703.04

Total 1666904055.40 330874297.00 229634645.39 48332118.70

（2）Principal operating activ ities (classified by geographical areas)

Name of

geographical area

2019 2018

Operating income Operating cost Operating income Operating cost

Guangdong province 1666904055.40 330874297.00 229634645.39 48332118.70

5、Investment income

Item 2019 2018

Investment income from long-term investments under cost

method

518700131.64 --

Investment income from long-term investments under

equity method

75629.25 -52651.66

Investment income from available- for-sale financial assets

during the holding per iod

-- 827100.00

Investment income from other equity instrument 928200.00 --

Investment income from structured deposit 31425651.98 16347157.53

Total 551129612.87 17121605.87

XV. Supplementary information

XV. Supplementary information

1．Details of non-recurring gains or losses

Item 2019 Note

Government grants recognized in profit or loss (other

than grants which are closely related to the

Company’s business and are either in fixed amounts

or determined under quantitative methods in

1168127.90

Item 2019 Note

accordance with the national s tandard)

Profit or loss on entrusted investments or assets

management

31425651.98

Income from expired

structured deposit

Interest on unexpired structured deposit 3950685.00

Non-operating income/(expenses) except the above 1118861.69

Other non-recurring gains or losses --

Total non-recurring gains or losses 37663326.57

Less: Effects of income tax on non-recurring gains or

losses

9415831.64

Net non-recurr ing gains or losses 28247494.93

Less: Effects of non-recurring gains or losses

attributable to the minority shareholders of the

Company (after tax)

--

Non-recurring gains or losses attr ibutable to the

shareholders of the Company

28247494.93

2、Return on net assets and earnings per share

Profit of reporting period

Weighted average

return on net

assets%

Earnings per share

Basic earnings Diluted earnings

Net profit attr ibutable to the Company’s

ordinary equity shareholders

15.90% 0.5461

Net loss attributable to the Company’s

ordinary equity shareholders after deduction

of non-recurring profit or loss

15.09% 0.5182

SHENZHEN SPECIAL ECONOMIC ZONE

REAL ESTATE & PROPERTIES (GROUP) Co. Ltd.

13 March 2020

Part XIII Documents Available for Reference

1. The financial statements signed and sealed by the legal representative the head of financial

affairs and the head of the financial department; and

2. The original copy of the Independent Auditor’s Report signed and sealed by the CPAs as well as

sealed by the CPA firm; and

3. The originals of all the Company’s documents and announcements which were disclosed on

Securities Time China Securities Journal and Ta Kung Pao (HK) during the Reporting Period.