ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2022 SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) CO. LTD.ANNUAL REPORT 2022 【March 2023】 1ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2022 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.Tang Xiaoping the Company’s General Manager Wang Jianfei the Company’s Chief Financial Officer 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.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.The Board has approved a final dividend plan as follows: based on the total share capital of 1011660000 shares a cash dividend of RMB0.61 (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. 2ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2022 Table of Contents Part I Important Notes Table of Contents and Defin... 2 Part II Corporate Information and Key Financial In... 6 Part III Management Discussion and Analysis ........ 10 Part IV Corporate Governance ....................... 30 Part V Environmental and Social Responsibility ..... 47 Part VI Significant Events ......................... 48 Part VII Share Changes and Shareholder Information.. 56 Part VIII Preference Shares ........................ 62 Part IX Bonds ...................................... 63 Part X Financial Statements ........................ 64 3ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2022 Documents Available for Reference 1. The financial statements with the personal signatures and stamps of the Company’s general manager Chief Financial Officer and head of the financial department; 2. The original of the Auditor’s Report with the stamp of the CPA firm as well as the personal signatures and stamps of the CPAs; and 3. The originals of all the documents and announcements disclosed by the Company on Securities Times China Securities Journal and Ta Kung Pao during the Reporting Period. 4ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2022 Definitions Term Definition The State-owned Assets Supervision and Administration Commission of the “Shenzhen SASAC” or the “Municipal SASAC” People’s Government of Shenzhen Municipal SIHC Shenzhen Investment Holdings Co. Ltd.ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. and The “Company” the “Group” “SPG” or “we” its consolidated subsidiaries except where the context otherwise requires Shenzhen Property Management Shenzhen Property Management Co. Ltd.Petrel Hotel Shenzhen Petrel Hotel Co. Ltd.Zhentong Engineering Shenzhen Zhentong Engineering Co. Ltd.Huazhan Construction Supervision Shenzhen Huazhan Construction Supervision Co. Ltd.Jianbang Group Guangdong Jianbang Group (Huiyang) Industrial Co. Ltd.Chuanqi Real Estate Development Shenzhen SPG Chuanqi Real Estate Development Co. Ltd. 5ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2022 Part II Corporate Information and Key Financial Information I Corporate Information Stock name SPG SPG-B Stock code 000029 200029 Stock exchange for stock Shenzhen Stock Exchange listing 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 ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd.any) Abbr. (if any) SPG Legal representative Liu Zhengyu Registered address 45/F-48/F SPG Plaza Renmin South Road Luohu District Shenzhen Guangdong P.R.China Zip code 518001 Changes of the registered N/A address Office address 47/F SPG Plaza Renmin South Road Luohu District Shenzhen Guangdong P.R.China Zip code 518001 Company website http://www.sfjt.com.cn Email address spg@sfjt.sihc.com.cn II Contact Information Board Secretary Securities Representative Name Luo Yi Hong Lu 47/F SPG Plaza Renmin South Road 47/F SPG Plaza Renmin South Road Address Luohu District Shenzhen Guangdong Luohu District Shenzhen Guangdong P.R.China P.R.China Tel. （86 755）25108897 （86 755）25108837 Fax （86 755）82294024 （86 755）82294024 Email address spg@sfjt.sihc.com.cn spg@sfjt.sihc.com.cn III Media for Information Disclosure and Place where this Report Is Lodged Stock exchange website where this Report is disclosed Shenzhen Stock Exchange (http://www.szse.cn/) Domestic: Securities Times China Securities Journal and Newspaper and website where this Report is disclosed http://www.cninfo.com.cn Overseas: Ta Kung Pao (HK) 47/F SPG Plaza 3005 Renmin South Road Luohu District Shenzhen Place where this Report is lodged Guangdong P.R.China IV Change to Company Registered Information Unified social credit code 91440300192179585N Change to principal activity of the No change Company since going public (if any) 6ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2022 On 24 March 1999 the controlling shareholder was changed from Shenzhen Every change of controlling shareholder Investment Management Co. Ltd. to Shenzhen Construction Investment Holdings Co.since incorporation (if any) 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 Zhao Juanjuan and Jiang Xiaoming 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 2022-over-2021 202220212020 change (%) Operating revenue 634384561.421320790648.45-51.97%1615009713.88 (RMB) Net profit attributable to the listed company’s 153718805.57 220836309.93 -30.39% 290229772.23 shareholders (RMB) Net profit attributable to the listed company’s shareholders before 21160405.11 208306710.37 -89.84% 253595334.11 exceptional gains and losses (RMB) Net cash generated from/used in operating -675775998.76 -1205952107.94 43.96% 285164013.17 activities (RMB) Basic earnings per share 0.15190.2183-30.42%0.2869 (RMB/share) Diluted earnings per 0.15190.2183-30.42%0.2869 share (RMB/share) Weighted average return 3.88%5.72%-1.84%7.81% on equity (%) Change of 31 31 December 2022 31 December 2021 December 2022 over 31 December 2020 31 December 2021 (%) Total assets (RMB) 5689769802.18 6182498050.43 -7.97% 4936916746.74 Equity attributable to the listed company’s 4004240547.70 3938260291.97 1.68% 3797512488.22 shareholders (RMB) Indicate by tick mark whether the lower of the net profit attributable to the listed company’s shareholders before and after exceptional gains and losses was negative for the last three accounting years and the latest independent auditor ’s report indicated that there was uncertainty about the Company’s ability to continue as a going concern.□ Yes □ No Indicate by tick mark whether the lower of the net profit attributable to the listed company’s shareholders before and after exceptional gains and losses was negative.□ Yes □ No 7ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2022 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 Equity attributable to the listed company’s shareholders shareholders 2022 2021 Ending amount Beginning amount Under CAS 153718805.57 220836309.93 4004240547.70 3938260291.97 Adjusted as per IFRS Under IFRS 153718805.57 220836309.93 4004240547.70 3938260291.97 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 272594952.10 93589546.80 160169563.23 108030499.29 Net profit attributable to the 162278083.59-17149753.45-20007368.5528597843.98 listed company’s shareholders Net profit attributable to the listed company’s shareholders 37225453.61-20086291.05-20271993.0024293235.55 before exceptional gains and losses Net cash generated from/used in -461062516.92-87052626.42-62497846.24-65163009.18 operating activities 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 2022 2021 2020 Note Mainly due to income Gain or loss on disposal of non-current from disposal of assets (inclusive of impairment 161542599.57 -13451.61 11429.23 allowance write-offs) interest in subsidiary in 2022 Government subsidies charged to current profit or loss (exclusive of government subsidies consistently given Government grants 559803.191669479.403370769.21 in the Company’s ordinary course of received business at fixed quotas or amounts as per government policies or standards) 8ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2022 Change in fair value of Gain or loss on assets entrusted to other monetary fund 9129650.5113024710.9115217058.60 entities for investment or management investments and return on investment Debt restructuring Gain or loss on debt restructuring 2610128.31 income Reversed portions of impairment allowances for receivables which are 482790.04 tested individually for impairment Non-operating income and expense 1094190.561542604.0129009657.60 other than the above Other gains and losses that meet the 1237002.86 definition of exceptional gain/loss Less: Income tax effects 41451680.41 4176533.19 12211479.38 Non-controlling interests effects 926291.27 (net of tax) Total 132558400.46 12529599.56 36634438.12 -- Details of other gains and losses that meet the definition of exceptional gain/loss: □ Applicable □ Not applicable No such cases for the Reporting Period.Explanation of why the Company reclassifies as recurrent an exceptional gain/loss item 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. 9ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2022 Part III Management Discussion and Analysis I Industry Overview for the Reporting Period The Company is subject to the information disclosure requirements for the real estate industry in the Disciplinary and Regulatory Guideline No. 3 of the Shenzhen Stock Exchange for Listed Companies—Industry-specific Information Disclosure.The real estate sector embraced a policy recovery in 2022 thanks to a constant number of favorable policies introduced by the regulatory authorities to advance the sound and steady development of the real estate market. Specifically the combo of policies focusing on three financing channels namely credit bonds and equities was put in place in November re-opening the refinancing channels for the listed real estate enterprises and listed enterprises engaged in real estate business which was expected to relieve the financial pressure on the real-estate enterprises. Concurrently cities across China implemented policies based on local conditions. To restore house purchasers’ confidence the government decreased the downpayment percentage and house loan interest rate and increased the provident fund loan limit. Finally the policies’ effectiveness gradually manifested.II Principal Activity of the Company in the Reporting Period The Company is subject to the information disclosure requirements for the real estate industry in the Disciplinary and Regula tory Guideline No. 3 of the Shenzhen Stock Exchange for Listed Companies—Industry-specific Information Disclosure.The Company primarily develops residential properties. During the Reporting Period it had six available-for-sale projects which are mainly located in Shenzhen Huizhou and Shantou. They are: the Chuanqi Donghu Mingyuan project and the Cuilinyuan project in Shenzhen the Linxinyuan Phase I project located in a place in Huizhou that is close to Shenzhen and the Tianyuewan project the Yuejing Dongfang project and the Jinyedao project in Shantou. In addition the Company had two under-construction projects i.e. the Guangmingli project in Guangming District Shenzhen and the Linxinyuan project located in a place in Huizhou that is close to Shenzhen.New additions to the land bank: Considerati Floor area Total land on of the Name of How the The Planned Site area with plot price Company’s land lot or Location land is Company’s use of land （㎡） ratio (RMB’000 interest project obtained interest （㎡） 0) (RMB’000 0) Cumulative land bank: Floor area available for Name of project/area Site area（0000 ㎡） Floor area（0000 ㎡） development（0000 ㎡） Xinfeng Building in Shantou 0.59 2.66 2.66 Linxinyuan Phase II 2.57 7.72 7.72 Linxinyuan Phase III 4.31 9.57 9.57 Linxinyuan Phase IV 3.23 6.45 6.45 Total 10.70 26.40 26.40 Development status of major projects: Plann Floor Cumu Expec Cumu The Time for Co % Site ed area lativel ted lative City/ Name commenc % Locat mpa deve area floor compl y total investregio of Status ement of constr （㎡ area eted compl invest ment ion ny’s lopen project constructi ucted with in the eted ment (RMB inte don ） plot Curre floor (RMB ’0000 rest ratio nt area ’0000 ) 10ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2022（㎡ Period （㎡ )）（㎡） ） Frame Linxin work Huiz Huiy 51.0 11 June 94.00 6427 1597 1157 1091 yuan in 94% hou ang Phase I constr 0% 2021 % 8 61 50 27 uction Guan Found SPG gmin ation 100. 19 Shen 70.00 1072 5360 1517 1068 Guang g pit 00 January 70% zhen mingli Distri being % 1 5 58 76 % 2022 ct built Sales status of major projects: Pre- Floor Pre-sale/sa Cumul area sale/sales Floor Floor Floor atively pre- area les revenu Cumul revenu The area area pre- sold/so e settled atively Compa with availab sold/so ld in genera in the e City/re Name of Locati settled Status ny’s plot le for ld the settled te in Curren gion project on floor in the interes ratio sale floor Curren the t area Current （㎡ （㎡ area t Curren Periodt） ） （㎡ Period(㎡) t （㎡（㎡ Period ） Period ） (RMB’ ） (RMB’ 0000) 0000) Chuanqi Luohu Read Shenz Donghu 100.00 Distric y for 55727 32857 32663 246 1606 32663 2651 16166 hen Mingyu t sale % an Longg Read Shenz Cuilinyu ang 100.00 y for 60111 56137 52884 915 2755 52884 915 2469 hen an Distric sale % t Chaoy Tianyue Read Shanto ang 100.00 15347 16037 11488 10165 wan y for 4998 2844 9131 4793 u Distric Phase I sale % 0 2 4 5 t Chaoy Tianyue Read Shanto ang 100.00 12777 13705 wan y for 28271 11580 6537 25512 13995 7295 u Distric Phase II sale % 0 9 t Huiya Linxiny On Huizh ng 51.00 15976 15976 uan pre- 2792 2236 2558 ou Distric Phase I sale % 1 1 t Rental status of major projects: Cumulative Name of The Company’s Rentable area Average Location Use rented area project interest （㎡） occupancy rate （㎡） Real Estate Shenzhen Commercial 100.00%3413.882436.6071.37% Mansion North Tower of Shenzhen Commercial Guoshang 100.00% 4819.71 4819.71 100.00% Mansion Petrel Building Shenzhen Commercial 100.00% 22475.47 22475.47 100.00% SPG Plaza Shenzhen Office building 100.00% 61005.82 30523.92 50.03% Podium of SPG Shenzhen Commercial 100.00%19896.3016123.4981.04% Plaza Wenjin Garden Shenzhen Commercial 100.00% 3531.60 3531.60 100.00% Primary land development: □ Applicable □ Not applicable Financing channels: Financing Ending balance Financing cost Maturity structure 11ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2022 channel of financings range/average financing 2-3 cost Within 1 year 1-2 years Over 3 years years Bank loans 60366770.99 4.15%-4.20% 6105770.99 54261000.00 Total 60366770.99 6105770.99 54261000.00 Development strategy and operating plan for the coming year: Please refer to “XI Prospects” in this part of the Report.Provision of guarantees for homebuyers on bank mortgages: □ Applicable □ Not applicable Guarantee amount (RMB’ Project Guarantee period Note 0000) Until the property ownership certificate is registered as collateral and Shanglinyuan 107.49 handed over to bank for keeping Cuilinyuan Until the property ownership certificate is registered as collateral and 2174.37 handed over to bank for keeping Chuanqi Donghu Until the property ownership certificate is registered as collateral and 1820.33 Mingyuan handed over to bank for keeping Tianyuewan Until the property ownership certificate is registered as collateral and 36056.20 handed over to bank for keeping Total 40158.39 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 As % of As % of the Compatibilit Cumulativ Investment total peak of Disinvestm y of actual Project Type of investor e returns amount (RMB) investmen project ent investment (RMB) t funds and returns Director supervisor or senior Linxinyuan 8950000.00 39.25% 0.90% 0.00 N/A N/A management of the Company III Core Competitiveness Analysis As a pioneer of real estate development enterprises in Shenzhen the Company has created a number of "first places" in the history of real estate development in China. For example the first to use the paid state-owned land the first to introduce the foreign investment for the cooperative land development the first to raise development funds by means of pre-sale of buildings the first to carry out public bidding for construction projects in accordance with international practices the first to set up a property management company to the buildings and residences developed in an all- rounded manner the first to win the bid in the auction of land use rights held in the Shenzhen Special Economic Zone etc.Over the past 40 years the Company has developed more than 100 high-rise buildings 500 multi-storey residential buildings and 400 garden villas with a cumulative building area of more than 4 million square meters. It has paid great efforts to 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 its planning construction cost control sales ability and brand image have been effectively improved. More importantly its main business operation ability and core competitiveness have been greatly enhanced.The Company has been granted the titles of “Socially Responsible Company” and “Honest (Quality) Company” in the real estate sector of Shenzhen for two consecutive years. 12ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2022 IV Core Business Analysis 1. Overview In 2022 strictly following relevant laws regulations and the Company’s policies and adhering to the principle of being responsible for all shareholders of the Company the Board of Directors of the Company kept improving its corporate governance capability and strictly implemented all resolutions of the Shareholders’ General Meeting thereby operating in a standard and efficient manner. All directors of the Company earnestly performed their duties and responsibilities granted by shareholders effectively safeguarding the legitimate rights and interests of the Company and its shareholders.A. Operating results of the Company During the Reporting Period the Company recorded operating revenue of RMB634.3846 million down 51.97% year on year; and a net profit attributable to shareholders of the Company as the parent of RMB153.7188 million down 30.39% year on year. As of the end of the Reporting Period equity attributable to shareholders of the Company as the parent stood at RMB4004.2405 million representing an increase of RMB65.9803 million as compared to a year ago.B. Review of Operations Management in 2022 Facing an increasingly complex external context and tougher reform and development tasks in 2022 the Company conscientiously implemented the decisions and arrangements of the State-owned Assets Supervision and Administration Commission of the People’s Government of Shenzhen Municipal (Municipal SASAC) and Shenzhen Investment Holdings Co. Ltd. (SIHC). Concurrently all SPG employees worked in unity and stayed determined to improve operations management and advance various tasks in all respects. With all these unremitting efforts a new chapter in the high-quality development of the Group was written. Major work progress for the Reporting Period is as follows: a. Focusing on development projects the Company achieved new progress in the core business Project construction: By strengthening the coordination with municipally-owned enterprises including Shenzhen General Institute of Architectural and Research Co. Ltd. Shenzhen Water Planning & Design Institute Co. Ltd. and Shenzhen Municipal Engineering Corp. the construction of the Guangmingli project progressed rapidly with the soldier piles engineering piles earthmoving and anchor cable and breast beam works having been completed and the floor underlayment and anti-floating anchors in construction. Additionally the structures of Buildings 1 to 8 of Linxinyuan Phase I and the basements of Phase II were completed.Real estate sales: The Company strengthened project promotion through multiple channels for the purpose of customer base expansion. It also accelerated the pace of destocking. As a result Chuanqi Donghu Mingyuan and Cuilinyuan in Shenzhen had only a few housing units left for sale. Concerning the Shantou Tianyuewan project approximately 75% of units in Phase I and 20% in Phase II were sold. Concurrently the units in Linxinyuan that have been sold represent approximately 3% of the total of the project. The sales area for the year totaled 20.1 thousand square meters and the new contracted sales reached RMB165 million.Rental business: The Company took pronged measures to expand the customer source. As a result it recordedRMB53.8703 million in rental revenue for the year. Additionally SPG Plaza was included among the “Buildings forShenzhen-Hong Kong Medical and Healthcare Specialty Industry”.b. Focusing on the maintenance of stable safety protection the Company newly consolidated the safety barrier 13ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2022 First the Company fully assumed its principal responsibility for safe production by requiring all levels ranging from the Chairman to general employees to sign the safe production responsibility letter doing so to ensure that the safe production accountability system for all employees would be thoroughly implemented. To this end the Company carried out 254 potential risk inspections throughout the year with more than 1000 potential risks inspected and remedied. Additionally 52 educational and training activities on safe production were organized in the year providing training for more than 2800 employees. Thanks to these efforts the line of defense for safe production was fully strengthened with no safety incidents occurring in the Group throughout the year. Second the Company organized and carried out work for public opinion management complaint petition response information publicity cybersecurity and confidentiality management. As a result no material negative public opinion incidents occurred during the Reporting Period.c. Focusing on guarantee services the Company newly maintained the corporate stability First the Company renewed the liability insurance for directors supervisors and senior managers in 2022 to provide a necessary guarantee for the performance of duties by directors supervisors and senior managers of the Company. It purchased critical illness insurance and group accident supplementary medical insurance for employees to enhance employees’ ability to resist risks. Second the Company completed talent introduction for ten urgent positions further enhancing workforce development. Third project financing was put in place. The development loan project of RMB500 million for Chuanqi Real Estate Development was completed fully guaranteeing project development and operation. Fourth accounts receivable management was strengthened with RMB414 million of funds recovered in total guaranteeing the Company’s operation. Fifth the Company fulfilled its tax obligation by laws and regulations. It paid RMB619 million in taxes and got RMB132 million in tax rebates. Sixth the Company upgraded its official website and OA system effectively improving its brand image and office efficiency.d. Focusing on internal control and internal audit the Company newly strengthened the operations management First the Company prepared the key tasks for 2022 and decomposed business targets and key tasks. Additionally it held work meetings every month to make unified arrangements for the completion of key tasks and supervise the implementation of these arrangements. Second the Company proactively advanced the streamlining of its policies and procedures. It drafted and revised eight policies for safe production and human resource management further standardizing its policy management system. Third the Company completed the disclosure of 50 items on the procurement platform and ten public bidding invitations in strict accordance with the procurement management regulations. Fourth the Company stepped up efforts at internal audit. It completed seven special audits and audits respectively. Fifth contract review was strengthened. The Company reviewed 313 contracts throughout the year achieving a contract review rate of 100%. Concurrently it properly dealt with 15 lawsuits. Sixth the Company attached great importance to the budget and settlement regarding major projects. Statistically it prepared 17 budgets and completed 21 settlement audits and the reduction in the budget and settlement upon review reached RMB8.13 million.e. Focusing on the affiliates the Company added new impetus to its business development First market expansion: Zhentong Engineering recorded 43 contracted projects throughout the year with the contract value totaling RMB140 million. Petrel Hotel successfully achieved tourism transformation and Floors 16 19 and 28 of Petrel Building with a combined area of 3600 square meters were successfully leased out. Huazhan Construction Supervision secured the project supervision business of the Guangmingli project. Second business management: Petrel 14ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2022 Hotel pushed ahead with “downsizing for efficiency” to strengthen workforce management and improve efficiency.Zhentong Engineering advanced risk control in all respects and achieved positive progress in the recovery of funds for construction projects that had been tied up and the notes receivable due. Huazhan Construction Supervision refined its risk control system and strengthened on-site supervision to improve the quality and safety of construction projects.Shantou branch improved its performance appraisal mechanism to motivate employees. Additionally the Company successfully completed the transfer of equities of Shenzhen Property Management and Yunnan Kunpeng Air Service Co. Ltd. and properly handled complicated issues such as the profit audit during the transition period and settlement of legacy accounts receivable and payable. Existing real estate including the land of Great Wall Estate Co. Inc. (U.S.) and Guoshang Mansion was listed on The Stock Exchange of Hong Kong Limited marking a breakthrough in quality and efficiency improvement.f. Focusing on the leadership of Party building the Company newly strengthened Party building First the implementation of the responsibilities for Party building was strengthened. Party organizations of the Group thoroughly learned the guiding principles of the 20th National Congress of the Communist Party of China through the “First Topics”. They adhered to the leadership of the guiding principles of the 20th National congress of the Communist Party of China and elevated the leading role of Party organizations to a new high. Special remediation was advanced strictly and rapidly with 170 special remediation tasks on the list completed effectively and efficiently.Additionally the development of the “One Brand for One Enterprise” Party building brand was advanced on an ongoing basis via the construction of the “Safe SPG Bright Project”. Moreover the “massive learning thoroughresearch and full implementation” working mechanism was implemented. Specifically 35 leadership members of the Group conducted in-depth research at the paired enterprises. In the process issues such as community-level Party building and services for the community level were addressed. The “I do practical things for the masses” practical activity was carried out regularly. Additionally the renovation of Xiabei Village Primary School in Longdu Town Chenghai District Shantou City and the helpful project of improving the learning and living environment of primary school students in Longdu Town were completed according to the arrangements of the Party Committee of SIHC fully demonstrating the Company’s sense of responsibility as a state-owned enterprise.Second the constraint of rigorous Party self-governance was enhanced. The Company persevered with the “oneposition and two responsibilities” system and arranged for the signature of the responsibility letter for improving Party conduct and ensuring integrity to decompose and fully implement the responsibilities. It strictly practiced the principles of the central Party leadership’s eight-point decision on improving conduct and implemented the regulations of thesuperior unit regarding the holidays. Moreover close attention was paid to the “pointless formalities bureaucratismhedonism and extravagance” issue tending to occur during major holidays to ensure the supervision of conduct improvement during holidays. Additionally the Integrity Education and Learning Activity Program was drafted and issued to guide the educational and learning activities of the Group for the year. The implementation of the mandatory integrity topic system in the Party branch’s learning activities was promoted to carry out practice integrity learning and education from multiple perspectives and at multiple levels. By doing so the “no desire to be corrupt” self-discipline mechanism was further enhanced and thus the ideological line of defense for integrity and self-discipline was consolidated. 15ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2022 2. Revenue and Cost Analysis (1) Breakdown of Operating Revenue Unit: RMB 20222021 As % of total As % of total Change (%) Operating revenue operating revenue Operating revenue operating revenue (%)(%) Total 634384561.42 100% 1320790648.45 100% -51.97% By operating division Property sales 309331841.57 48.76% 876161088.60 66.34% -64.69% Engineering and 241209525.7938.02%200259571.1615.16%20.45% construction Property 36660871.835.78%162526580.1812.31%-77.44% management Rental service 53870265.26 8.49% 81791161.56 6.19% -34.14% Other 5552040.91 0.88% 15776937.12 1.19% -64.81% Eliminated internal transactions and -12239983.94 -1.93% -15724690.17 -1.19% 22.16% accounts By product category Residential units 277643154.35 43.77% 875153000.99 66.26% -68.27% Shops and parking 31688687.225.00%1008087.610.08%3043.45% lots Other 337292703.79 53.17% 460354250.02 34.85% -26.73% Eliminated internal transactions and -12239983.94 -1.93% -15724690.17 -1.19% 22.16% accounts By operating segment Guangdong 640594852.83100.98%1308786001.0799.09%-51.05% Province Other regions in 5552040.910.88%27096812.692.05%-79.51% China Overseas 477651.62 0.08% 632524.86 0.05% -24.48% Eliminated internal transactions and -12239983.94 -1.93% -15724690.17 -1.19% 22.16% accounts By marketing model Principal 641072504.45101.05%1320738401.50100.00%-51.46% operations Other 5552040.91 0.88% 15776937.12 1.19% -64.81% Eliminated internal transactions and -12239983.94 -1.93% -15724690.17 -1.19% 22.16% accounts (2) Operating Division Product Category or Operating Segment Contributing over 10% of Operating Revenue or Operating Profit □ Applicable □ Not applicable Unit: RMB YoY change in YoY change in YoY change in Operating Gross profit Cost of sales operating cost of sales gross profit revenue margin revenue (%) (%) margin (%) By operating division Property sales 309331841.57 144720332.63 53.22% -64.69% -50.48% -13.42% Engineering and 241209525.79 236074624.77 2.13% 20.45% 26.64% -4.79% construction Rental service 53870265.26 46657985.12 13.39% -34.14% 31.26% -43.15% Property 36660871.83 22415236.68 38.86% -77.44% -84.64% 28.63% 16ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2022 management By product category Residential 277643154.35126448366.5854.46%-68.27%-56.72%-12.15% units Shops and 31688687.2218271966.0542.34%3043.45%23570.78%-50.00% parking lots By operating segment Guangdong 640594852.83449868179.2029.77%-51.05%-43.70%-9.18% Province By marketing model 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 2022 2021 Change (%) Sales volume RMB’0000 16522 69045 -76.07% Output RMB’0000 37603 204708 -81.63% Property sales Inventory RMB’0000 425681 403220 5.57% Any over 30% YoY movements in the data above and why: □ Applicable □ Not applicable Affected by the real estate market the Company saw less-than-expected property sales carryforwards and existing property sales in 2022 resulting in a decrease in property investment and development. (4) Execution Progress of Major Signed Sales or Purchase Contracts in the Reporting Period □ Applicable □ Not applicable (5) Breakdown of Cost of Sales By operating division Unit: RMB 20222021 Operating Item As % of total As % of total Change (%) division Cost of sales cost of sales Cost of sales cost of sales (%)(%) Property sales 144720332.63 33.11% 292260823.05 43.86% -50.48% Engineering and 236074624.77 54.02% 186409100.14 27.97% 26.64% construction Property 22415236.685.13%145898235.4921.90%-84.64% management Rental service 46657985.12 10.68% 35545938.32 5.33% 31.26% Other 2747095.64 0.63% 22151678.03 3.32% -87.60% Eliminated internal -15563273.83-3.56%-15917413.55-2.39%2.22% transactions and accounts Total 437052001.01 100.00% 666348361.48 100.00% -34.41% Note: Affected by markets and development cycles property sales experienced a year-on-year drop; engineering and construction projects saw new breakthroughs in expansion resulting in a year-on-year increase in sales; and property management revenue registered a drop due to the disposal of subsidiary Shenzhen Property Management Co. Ltd. 17ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2022 (6) Changes in the Scope of Consolidated Financial Statements for the Reporting Period □ Yes □ No See “VI Changes in the Scope of Consolidated Financial Statements” in “Part X Financial Statements”. (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) 87448833.82 Total sales to top five customers as % of total sales of the 13.78% Reporting Period (%) Total sales to related parties among top five customers as % of 0.00% total sales of the Reporting Period (%) Information about top five customers: Sales revenue contributed for As % of total sales revenue No. Customer the Reporting Period (RMB) (%) 1 Legal person A 26856591.42 4.23% 2 Legal person B 23269448.58 3.67% 3 Legal person C 15851434.16 2.50% 4 Legal person D 11879250.66 1.87% 5 Legal person E 9592109.00 1.51% Total -- 87448833.82 13.78% Other information about major customers: □ Applicable □ Not applicable Major suppliers: Total purchases from top five suppliers (RMB) 278248909.89 Total purchases from top five suppliers as % of total purchases 53.63% of the Reporting Period (%) Total purchases from related parties among top five suppliers 0.00% as % of total purchases of the Reporting Period (%) Information about top five suppliers: Purchase in the Reporting No. Supplier As % of total purchases (%) Period (RMB) 1 Legal person A 175935982.19 33.91% 2 Legal person B 72443947.18 13.96% 3 Legal person C 15035235.49 2.90% 4 Legal person D 7503316.74 1.45% 5 Legal person E 7330428.29 1.41% Total -- 278248909.89 53.63% Other information about major suppliers: □ Applicable □ Not applicable 3. Expense Unit: RMB 2022 2021 Change (%) Reason for any significant change Selling 19217595.11 42737748.22 -55.03% Decreased property sales expense Administrativ New project development and staff structure 55758749.0898307831.60-43.28% e expense adjustments 18ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2022 Decreased bank balances and deposit interest Finance costs -6507147.03 -18083491.01 64.02% income 4. R&D Investments □ Applicable □ Not applicable 5. Cash Flows Unit: RMB Item 2022 2021 Change (%) Subtotal of cash generated 668449932.341805846506.24-62.98% from operating activities Subtotal of cash used in 1344225931.103011798614.18-55.37% operating activities Net cash generated from/used -675775998.76-1205952107.9443.96% in operating activities Subtotal of cash generated 282766666.00799855541.48-64.65% from investing activities Subtotal of cash used in 713537.291751621932.29-99.96% investing activities Net cash generated from/used 282053128.71-951766390.81129.63% in investing activities Subtotal of cash generated 111428077.62266256968.76-58.15% from financing activities Subtotal of cash used in 140126109.45164908415.94-15.03% financing activities Net cash generated from/used -28698031.83101348552.82-128.32% in financing activities Net increase in cash and cash -421928565.67-2056810291.6779.49% equivalents Explanation of why any of the data above varies significantly: □ Applicable □ Not applicable Cash generated from operating activities decreased year on year primarily driven by the decreased property sales.Cash used in operating activities decreased year on year primarily driven by the land payment made last year.Net cash generated from investing activities increased year on year primarily driven by the large-amount payment made for equity acquisition and the purchase of currency funds last year.Net cash generated from financing activities decreased year on year primarily driven by the receipt of loan by project company from minority shareholder last year.Reason for any big difference between the net operating cash flow and the net profit for this Reporting Period □ Applicable □ Not applicable There is a big difference between the net operating cash flow and the net profit for the year primarily due to the long time span between property development sales and revenue recognition.V Analysis of Non-Core Businesses □ Applicable □ Not applicable VI Analysis of Assets and Liabilities 1. Significant Changes in Asset Composition Unit: RMB 31 December 2022 1 January 2022 Change in As a % of As a % of Reason for any percentage Amount total Amount total significant change (%) assets assets 19ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2022 Payment of land VAT Monetary assets 197663949.74 3.47% 564358824.63 9.13% -5.66% of Donghu Mingyuan in the current period Accounts 63580422.161.12%61048785.110.99%0.13% receivable Development of Inventories 4257109614.31 74.82% 4034933562.62 65.26% 9.56% projects Investment 566873915.079.96%588865777.169.52%0.44% property Long-term equity 93927.640.00%272168.280.00%0.00% investments Fixed assets 21425475.05 0.38% 23920424.55 0.39% -0.01% Right-of-use 232496.720.00%365351.970.01%-0.01% assets Short-term 51138077.620.90%50440116.240.82%0.08% borrowings Carryforwards from homebuyer payments Contract liabilities 43533467.29 0.77% 199965490.08 3.23% -2.46% received in advance to revenue Long-term 54261000.000.95%0.95% borrowings Lease liabilities 53885.23 0.00% 125920.77 0.00% 0.00% Held-for-trading Redemption of 408154361.427.17%514024710.918.31%-1.14% financial assets currency funds Honoring of commercial acceptance notes and Notes payable 247376403.56 4.00% -4.00% transfer of certain such notes that had become mature to accounts payable Transfer of certain such notes that had Accounts payable 434601559.67 7.64% 141447559.24 2.29% 5.35% become mature to accounts payable Payment of land VAT Taxes payable 190951185.99 3.36% 600540872.48 9.71% -6.35% of Donghu Mingyuan in the current period Other payables 574331340.84 10.09% 581377415.64 9.40% 0.69% Indicate whether overseas assets account for a high proportion of total assets.□ Applicable □ Not applicable 2. Assets and Liabilities at Fair Value □ Applicable □ Not applicable Unit: RMB Gain/loss on fair- Cumulative Impairment Purchased value fair-value allowance Sold in the Beginning in the Other Ending Item changes in changes for the Reporting amount Reporting changes amount the charged to Reporting Period Period Reporting equity Period Period Financial assets 1. Held- for-trading financial 514024718970031.51148403840815436 assets (excluding 0.91 0 0.99 1.42 derivative financial 20ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2022 assets) 4. Investment 36322704.1839235.522490765.13839235. s in other equity 33 7 41 57 instruments Total of the 55034741 8970031.5 1839235.5 13733114 42199359 above 5.24 0 7 6.40 6.99 Financial 0.000.00 liabilities 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 for restriction Project of public facilities inside and surrounding the urban Monetary assets 5674439.78 renewal project of Longgang District Shenzhen-construction funds Monetary assets 48315.48 Frozen in a lawsuit case Accounts receivable 51138077.62 Put in pledge for short-term borrowings Inventories 965000000.00 Lands mortgaged for project development loans Total 1021860832.88 VII Investments Made 1. Total Investment Amount □ Applicable □ Not applicable Total investment amount in the Total investment amount in last year Change (%) Reporting Period (RMB) (RMB) 299540000.002047080000.00-85.37% 2. Significant 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. 21ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2022 5. Use of Funds Raised □Applicable □ Not applicable No such cases in the Reporting Period.VIII 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 Amou nt Amou contri nt buted contri by the O buted equity Re w by the interes lat ne Execu sale to ts to ed rs ted as net net - Relation hi sched Selli incom Index incom pa ship p uled Di Equi ng e of to e of Pricin rty between ful or not scl Count ty Date pric the disclo the Effect of the sale g tra counterp ly if not os erpart inter of e Comp sed Comp on the Company princi ns arty and tra state ure y ests sale (RM any as infor any ple ac the ns reason dat sold B’0 a matio from tio Compan fer and e 000) percen n period n y re action tage - or d s of the beginn no or taken Comp ing to t no any’s date t net of sale incom (RMB e (%) ’0000 ) This transaction is The Shenzhe Anno in line with the transa n unce Company’s ction Internati ment price onal development on the is Trade 100 strategies and is Comp Shenz deter Center % of hen conducive to the mined Property letion equit Intern Company’s based Manage of the y ationa further on the ment Relate inter 30 l ests optimization and net Co. d- Trade 11 asset Ltd. Se of adjustment of its party Cente Febr 196 valuati (hereina pte Shen 964.5 industry structure 81.02 Ye Ye Trans r uary 67.6 on fter Yes m zhen 2 enrichment of % s s Prope 202 action Prop 7 assess referred ber rty 2 capital reserves ed by to as regard erty 20Mana expansion of new the “ITC ingMan 22 geme profit growth evalua Property age the nt tion Manage ment areas and TransfCo. agenc ment”) Co. continuous er of Ltd. y on is a Ltd. improvement of the wholly- 100% its quality. During base owned of the Reporting date subsidia Equit Period the of 30 ry of y counterparty has June ShenZh Intere 22ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2022 paid 90% 2021. en sts of (RMB17700900 Properti Shenz es & 0) of the equity hen Resourc transfer payment es Prope to the Group in Develop rty accordance with ment Mana the equity transfer (Group) geme agreement. After Ltd. nt“hereinathe equity Co.fter transfer the Ltd.referred Company to as (2022derecognized the “SZPR -032)said equity and D” and disclo confirmed the both sed on SZPRD investment www.and the income of cninfo Compan RMB161581100 y are .com.in consolidated majority cn financial -owned statements. The subsidia matter has a ries of Shenzhe positive impact on n the Company cash Investm flow and ent operating results Holding in 2022. s Co.Ltd.Thus an associati on relations hip is formed.IX Principal Subsidiaries and Joint Stock Companies □ Applicable □ Not applicable Principal subsidiaries and joint stock companies with an over 10% effect on the Company’s net profit: Unit: RMB Relationsh Main business Registere Total Operating Operating Company name ip with the Net assets Net profit scope d capital assets revenue profit Company Guangdong Developme - - - Jianbang Group 2800000 1485802 Subsidiary nt of real 1569655 1030693 8184594 (Huiyang) Industrial estate .00 072.25 Co. Ltd. 5.83 7.48 .48 Shenzhen SPG Developme - - Chuanqi Real Estate 3000000 1101813 9941818 Subsidiary nt of real 169495.3 191631.9 Development Co.estate 0.00 520.17 99.24 Ltd. 7 1 Shenzhen SPG Developme Longgang 3000000 1302267 5760235 2666212 3757227 1113881 Subsidiary nt of real Development Co.estate 0.00 00.89 8.61 0.02 .19 6.55 Ltd.Shantou SEZ Wellam FTY Developme - - 9122612972483790304812410093 Building Subsidiary nt of real 3225621 3225621 Development Co. estate 0.44 2.66 7.44 .12 8.54 8.54 Ltd.Shantou Huafeng Developme - - 8000000832020717624891210217 Real Estate Subsidiary nt of real 3144032 3413873 Development Co. estate 0.00 57.11 9.13 39.63 .12 .32 23ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2022 Ltd.Developme - - - Great Wall Estate 2051146 1940013 477651.6 Subsidiary nt of real 9008888 431973.1 431973.1 Co. Inc. (U.S.) estate .00 1.63 2 4.01 0 0 Shenzhen Zhentong Installation 1000000128018220168332423263535875.6345974.3 Engineering Co. Subsidiary and Ltd. maintenance 0.00 61.20 4.04 38.13 1 7 -- Shenzhen Petrel Hotel 3000000 4697826 3692432 1340143 Subsidiary 3353411 2521866 Hotel Co. Ltd. service 0.00 3.33 1.85 2.09.41.37 Shenzhen Huazhan Constructio Construction 8000000 1088498 1032818 3802892 306693.4 292964.2 Subsidiary n Supervision Co.supervision .00 8.58 5.16 .48 7 5 Ltd.Investment --- Xin Feng Enterprise and 502335.0 3390715 Subsidiary 2263709 1293488 1293488 Co. Ltd. managemen 0 13.82 t 65.47 6.25 6.25 Subsidiaries obtained or disposed in the Reporting Period: □ Applicable □ Not applicable Way of gaining and disposing Influence on overall production and Name subsidiaries operation as well as performance Shenzhen Property Management Co. Refer to Note VIII Sale of Major Assets Negotiating transfer Ltd. and Equity Interests Information about major majority- and minority-owned subsidiaries: 1. In May 2021 through the payment of consideration of RMB450 million the Group acquired 51% equity interest in Guangdong Jianbang Group (Huiyang) Industrial Co. Ltd. The project company will develop the Linxingyuan Project with a gross site area of 200000 square meters and a total capacity building area of 0.4 million square meters which will be developed in four phases and is expected to achieve revenue of RMB6 billion and total profit of approximately RMB1.8 billion from 2023 to 2025. The Group has control over the project company which will be included in the scope of consolidation in May 2021. As at the end of 2022 eight residential buildings of Phase I have been capped the basement of Phase II has been completed the development of Phase III and Phase IV are to be initiated and construction permit has not been granted for the school. In 2022 new areas sold totaled 2236 square meters income from sales increased by RMB25.58 million and RMB22.29 million was withdrawn. 2. In October 2021 the Company won the bid for a land plot in Guangming District and established the project company Shenzhen SPG Chuanqi Real Estate Development Co. Ltd. to be responsible for the development and construction of the land. In 2022 actual investment totaled RMB74.81 million which was mainly made in primary supporting piles and groundworks. 3. The subordinate subsidiaries engaged in real estate development also 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 RMB24.69 million in 2022 (the percentage of accumulative sales carried forward was 96%). 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 completed in December 2019. The Phase II started construction in November 2018 and was completed at the end of June 2021. The overall sales progress is relatively slow with an accumulated sales rate of about 74% for Phase I and 19% for Phase II. 4. Shenzhen Zhentong Engineering Co. Ltd. was engaged in the business of building installation and maintenance with the 2022 operating revenues of RMB242 million and of 38.20% to the operating revenues of the Company. 24ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2022 5. The 2022 net profit of Xin Feng Enterprise Co. Ltd. was of RMB-12.93 million which mainly due to the changes of exchange rate and it conducts no business. 6. The 2022 net profit of Shenzhen Petrel Hotel Co. Ltd. was of RMB-2.52 million which mainly due to the fact that the hotel industry is generally facing difficulties in the business operation during the Reporting Period.X Structured Bodies Controlled by the Company □Applicable □ Not applicable XI Prospects (I) Industrial Pattern and Trend The real estate industry is still the pillar industry of China’s national economy. After a series of strong macro-control the industry is undergoing a gradual return to the track of sound and healthy development. Since the end of last year loose policies have been introduced for real estate credits bonds equities and overseas loans under domestic guarantees so China’s urbanization will still be in a stage of rapid development in the next period of time and there will be enough space for demands to support the steady development of the real estate industry and the real estate market is expected to recover step by step.(II) Potential Risks and Countermeasures 1. Macroeconomic risks and countermeasures The real estate industry has a greater correlation with the macroeconomy and is more influenced by the macroeconomic cycle. The geopolitical situation is now volatile the risk of the world economy going downward is rising and the domestic economy is repeatedly impacted by multiple factors that go beyond expectations. Pressures from shrinking demand supply shock and weakening expectations continue to evolve and the development environment is gaining complexity severity and uncertainty. The Company will continue to pay attention to the international and domestic macroeconomic situation and actively adjust its business strategy. 2. Industry regulation risks and countermeasures On the whole industry regulation has been relaxed and policies are gradually shifting but there are little changes in the policies of tier-one cities represented by Beijing Shanghai Guangzhou and Shenzhen. Market sentiment and homebuyer confidence remain low. The Company will continue to deepen its research on industry policies follow the national strategies innovate its operating model and optimize its development method while continuing to study industry-university-institute cooperation strenuously exploring new areas and actively cultivating new business models. 3. Business operating risks and countermeasures The land space in Shenzhen where the Company’s business focus is located is limited while project expansion requires a large amount of capital so the Company faces challenges in adding land reserves. The Company will pay close attention to the market and industry policy changes formulate targeted land expansion plans and the Company will pay close attention to the quality and efficiency improvement of existing assets and maintain a good operating revenue scale and performance level.(III) Development strategy and operating plan The year 2023 is the first year for implementing the spirit of the 20th National Congress of the Communist Party of China a crucial year for connecting the past and the next in the 14th Five-year Plan and a critical year for the Company to deepen reform and seek development. Based on the high-quality development strategies of the central 25ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2022 government the provincial government and the municipal government the Company will earnestly implement the deployment requirements of the State-owned Assets Supervision and Administration Commission of the People’s Government of Shenzhen Municipal (“Shenzhen SASAC) and Shenzhen Investment Holdings Co. Ltd. (“SIHC”) further analyze and study the situation based on its own development face up to challenges seize opportunities strengthen overall planning and promote the high-quality development of the Group to a new level.The Company has made an overall operating plan for 2023. Guided by the Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era the Company will conscientiously implement the spirit of the 20th National Congress of the Communist Party of China the Central Economic Working Conference and important addresses of General Secretary Xi Jinping make overall plans highlight implementation carry out reform and innovation forge ahead and exert all efforts to promote the steady and long-term high-quality development of Shenzhen Properties Group (“SPG”) in accordance with the decisions and arrangements of Shenzhen Municipal Party Committee and Government Shenzhen SASAC and SIHC adhering to the idea of seeking progress while maintaining stability andrealizing sustainable development centering on the overall objective of “consolidating primary business exploringdevelopment paths preventing and mitigating risks and making plans of high-quality and sustainable development” and following the leadership of Party building.In 2023 the Company will focus on the following five aspects: 1. Deepening implementation and going all out to achieve performance targets First it will endeavor to the sales of Guangmingli and Tianyuewan projects and existing real estate projects to ensure quick withdrawal of funds and smooth achievement of performance targets. Second it will intensify leasing business to achieve the annual leasing target. Third it will advance land sales in the United States to promote the realization of inefficient assets overseas. Fourth it will exert more efforts in recovering arrears to boost revenue and profit realization.Fifth it will strengthen the operation management of its affiliates to ensure the completion of all business targets. 2. Making a sound overall plan and implementing key tasks on all fronts First it will complete the re-election of members of the Board of Directors and the Party Committee and improve the structure of its corporate governance. Second it will highlight project construction and ensure smooth implementation of project development plans. Third it will promptly define the right of the land for Xinfeng Building in Shantou and go through the construction application procedure as soon as possible. Fourth it will promote the cleaning-up of “zombie enterprises” and properly address problems carried over from the past. Fifth it will advance the construction of the “Buildings for Shenzhen-Hong Kong Medical and Healthcare Specialty Industry” and take the initiative to create the “Massive Health” ecological economic circle centering on SPG Plaza. 3. Taking multiple measures at the same time and making every effort to ensure business operation First it will well manage funds and financing to provide a solid guarantee for the Company’s capital turnover. Second it will optimize talent and organization structures to improve work efficiency from all aspects. Third it will intensify performance appraisal and promote the establishment and improvement of a medium- and long-term incentive mechanism. Fourth it will effectively respond to litigations and executions to mitigate potential risks. Fifth it will emphasize security and stability maintenance related to safe production stability maintenance and public opinion control so as to guard the Company’s business operation and management. 4. Enhancing synergy and actively exploring future development paths The Company will sticking to the development strategies of the central government provincial government and municipal government earnestly implement the decisions and deployments of superiors intensify industrial research 26ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2022 centering on the development directions of controlling shareholders enhance strategic and collaborative development of SIHC and synergetic development with system houses and strive to make breakthroughs in the process of supporting and serving the development strategy of SIHC and form the Company’s new core competitiveness. 5. Following the leadership of Party building and leading overall high-quality development Guided by the Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era the Company will continue to organize the study publicity and implementation of the spirit of the 20th National Congress of the Communist Party of China and turn the effects of such study publicity and implementation into a powerful driving force for its reform and development. On top of that the Company will strengthen its Party organization theoretically and organizationally improve the Party organization’s conduct and effectively integrate Party leadership into corporate governance to lead to high-quality development of the Company.XII Communications with the Investment Community such as Researches Inquiries and Interviews during the Reporting Period □ Applicable □ Not applicable Place Index to Way of Type of Date of visit of Visitor Contents and materials provided main inquiry visit visitor visit information The Inquired of the future development plan By Individual 4 January 2022 Comp Individual of the Company and didn’t offer written N/A telephone investor any materials The By Individual Inquired of project sales of the Company 18 January 2022 Comp Individual N/A telephone investor and didn’t offer written materials any The Inquired of the land reserves and projects By Individual 24 January 2022 Comp Individual progress of the Company and didn’t offer N/A telephone investor any written materials The Inquired of business situations and By Individual 10 February 2022 Comp Individual strategic planning of the Company and N/A telephone investor any didn’t offer written materials The Inquired of the future development plan By Individual 15 February 2022 Comp Individual of the Company and didn’t offer written N/A telephone investor any materials The Inquired of business situations and By Individual 21 February 2022 Comp Individual strategic planning of the Company and N/A telephone investor any didn’t offer written materials The By Individual Inquired of business situation and didn’t 1 March 2022 Comp Individual N/A telephone investor offer written materials any The Inquired of the land reserves and projects By Individual 9 March 2022 Comp Individual progress of the Company and didn’t offer N/A telephone investor any written materials The Inquired of the future development plan By Individual 25 March 2022 Comp Individual of the Company and didn’t offer written N/A telephone investor any materials The By Individual Inquired of business situation and didn’t 30 March 2022 Comp Individual N/A telephone investor offer written materials any The Inquired of business situations and By Individual 8 April 2022 Comp Individual strategic planning of the Company and N/A telephone investor any didn’t offer written materials The By Individual Inquired of project sales of the Company 11 April 2022 Comp Individual N/A telephone investor and didn’t offer written materials any 27ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2022 The Inquired of the future development plan By Individual 18 April 2022 Comp Individual of the Company and didn’t offer written N/A telephone investor any materials The Inquired of the land reserves and projects By Individual 21 April 2022 Comp Individual progress of the Company and didn’t offer N/A telephone investor any written materials The Inquired of business situations and By Individual 10 May 2022 Comp Individual strategic planning of the Company and N/A telephone investor any didn’t offer written materials The By Individual Inquired of project sales of the Company 12 May 2022 Comp Individual N/A telephone investor and didn’t offer written materials any The Inquired of the future development plan By Individual 23 May 2022 Comp Individual of the Company and didn’t offer written N/A telephone investor any materials The Inquired of the land reserves and projects By Individual 2 June 2022 Comp Individual progress of the Company and didn’t offer N/A telephone investor any written materials The Inquired of business situations and By Individual 14 June 2022 Comp Individual strategic planning of the Company and N/A telephone investor any didn’t offer written materials The Inquired of business situations and By Individual 16 June 2022 Comp Individual strategic planning of the Company and N/A telephone investor any didn’t offer written materials The By Individual Inquired of project sales of the Company 20 June 2022 Comp Individual N/A telephone investor and didn’t offer written materials any The Inquired of business situations and By Individual 22 June 2022 Comp Individual strategic planning of the Company and N/A telephone investor any didn’t offer written materials The By Individual Inquired of project sales of the Company 29 June 2022 Comp Individual N/A telephone investor and didn’t offer written materials any The Inquired of business situations and By Individual 4 July 2022 Comp Individual strategic planning of the Company and N/A telephone investor any didn’t offer written materials The Inquired of the future development plan By Individual 20 July 2022 Comp Individual of the Company and didn’t offer written N/A telephone investor any materials The Inquired of the project sales and future By Individual 25 July 2022 Comp Individual development plan of the Company and N/A telephone investor any didn’t offer written materials The By Individual Inquired of project sales of the Company 10 August 2022 Comp Individual N/A telephone investor and didn’t offer written materials any The Inquired of the future development plan By Individual 24 August 2022 Comp Individual of the Company and didn’t offer written N/A telephone investor any materials The Inquired of the future development plan By Individual 5 September 2022 Comp Individual of the Company and didn’t offer written N/A telephone investor any materials The Inquired of the land reserves and projects By Individual 8 September 2022 Comp Individual progress of the Company and didn’t offer N/A telephone investor any written materials The Inquired of business situations and By Individual 14 September 2022 Comp Individual strategic planning of the Company and N/A telephone investor any didn’t offer written materials The Inquired of the future development plan By Individual 11 October 2022 Comp Individual of the Company and didn’t offer written N/A telephone investor any materials 28ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2022 The By Individual Inquired of project sales of the Company 17 October 2022 Comp Individual N/A telephone investor and didn’t offer written materials any The Inquired of the future development plan By Individual 20 October 2022 Comp Individual of the Company and didn’t offer written N/A telephone investor any materials The Inquired of the land reserves and projects By Individual 1 November 2022 Comp Individual progress of the Company and didn’t offer N/A telephone investor any written materials The By Individual Inquired of project sales of the Company 2 November 2022 Comp Individual N/A telephone investor and didn’t offer written materials any The Inquired of the future development plan By Individual 15 November 2022 Comp Individual of the Company and didn’t offer written N/A telephone investor any materials The Inquired of the land reserves and projects By Individual 15 December 2022 Comp Individual progress of the Company and didn’t offer N/A telephone investor any written materials The By Individual Inquired of project sales of the Company 19 December 2022 Comp Individual N/A telephone investor and didn’t offer written materials any The Inquired of the future development plan Field Individual 28 December 2022 Comp Individual of the Company and didn’t offer written N/A research investor any materials 29ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2022 Part IV Corporate Governance I Basic Situation of Corporate Governance In accordance with the requirements of the Company Law the Securities Law the Code on the Governance of Listed Companies and other laws and regulations the Company has been improving its governance structure continuously adhering to standardized operation and an operational mechanism featuring decision-making by the board of directors execution by the management team and supervision by the board of supervisors has been formed.During the reporting period the Company's governance institutions at all levels have carried out their responsibilities and authorities clearly and definitely and have performed their own functions. At the same time they have checked and balanced each other in decision-making implementation and supervision effectively and have operated in a coordinated manner. (1) Operation of the general meeting of shareholders The preparation holding of the annual and extraordinary general meetings of shareholders of the Company as well as disclosure of the resolutions made at the meetings have been carried out in strict accordance with the Company Law the Rules of the General Meeting of Shareholders of Listed Companies of China Securities Regulatory Commission (CSRC) the Articles of Association and the Rules of Procedure of the General Meeting of Shareholders of the Company. The notification time of the meeting the procedure of authorization the procedure of convening the convener the qualification of the personnel attending the meeting and the voting procedure of the meeting have all been in line with relevant provisions. An on-site interaction for shareholders has been set at the shareholders' meeting to ensure that the shareholders especially the small and medium-sized shareholders can exercise their legitimate rights. (2) Operation of the board of directors The preparation and holding of the board meeting of the Company and the disclosure of the resolution made at the meeting have been carried out in strict accordance with the Company Law the Self-regulation Guidelines for Listed Companies of Shenzhen Stock Exchange No. 1-Standardized Operation of Listed Companies on the Main Board the Articles of Association and the Rules of Procedure of the Board Meeting of the Company. The number and manning of the board of directors have met the requirements of laws and regulations. The directors have worked diligently and responsibly and the board of directors has worked hard in making decisions and setting the direction for the Company and has exercised its power in accordance with the requirements for corporate governance. (3) Operation of the supervisory committee The number and manning of the board of supervisors have met the requirements of laws and regulations. All members of the board of supervisors of the Company have performed their duties diligently and conscientiously. They have supervised and inspected the important matters of the Company in strict accordance with the Company Law the Self- regulation Guidelines for Listed Companies of Shenzhen Stock Exchange No. 1-Standardized Operation of Listed Companies on the Main Board the Articles of Association and the Rules of Procedure of the Board of Supervisors of the Company exercised the power of supervision effectively gave a full play to the supervisory function have played a substantial role in the operation and management of the Company and have protected the legitimate rights and interests of the Company and the shareholders. (4) Operation at manager level The manager level of the Company has performed its duties in strict accordance with the Company Law the Self- regulation Guidelines for Listed Companies of Shenzhen Stock Exchange No. 1-Standardized Operation of Listed Companies on the Main Board the Articles of Association and the Detailed Working Rules for the General Manager of the Company. The manager level is responsible for the production operation and management of the Company all- roundly. They have performed their duties diligently and conscientiously and have carried out the decisions of the board of directors effectively. The members at the manager level have had a clear division of labor among them they have worked diligently and conscientiously and there has not existed any situation of "control under insiders ".Indicate by tick market whether there is any material incompliance with laws administrative regulations and regulations governing the governance of listed companies issued by the CSRC.□Yes □ No No such cases in the Reporting Period. 30ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2022 II The Company’s Independence from Its Controlling Shareholder and Actual Controller in Business Personnel Asset Organization and Financial Affairs (I) In respect of assets the Company possessed independent and integrated assets and the property of the Company is transparent.(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 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.(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 business the Company possessed independent production supply and sales system.III Horizontal Competition □ Applicable □ Not applicable Relationship Comp Company Progress and Type with the any Course Countermeasures name follow-up plan Company nature The Company and ShenZhen For the Company’s existing Refer to the Properties & business that has horizontal Announcement on Resources competition with ShenZhen Receiving the Development Properties & Resources Avoiding Horizontal (Group) Ltd. Development (Group) Ltd. Competition (hereinafter Shenzhen Investment Holdings Commitment Letter referred to as Co. Ltd. will within the scope from the “SZPRD”) are permitted by laws and Controlling majority-owned regulations timely launch one Shareholder (No.: subsidiaries of or several of the following 2021-032) disclosed Shenzhen solutions that is practically by the Company on Shenzhen Investment feasible and complete the 11 September 2021 Horizontal Controlling Investmen Holdings Co. implementation of the relevant and the competitio Other shareholder t Holdings Ltd. The solution(s) before 9 November Announcement on n Co. Ltd. Company and 2024 to solve the existing Resolutions of the SZPRD are horizontal competition problem: 1st Extraordinary operating real (1) Solve the horizontal General Meeting of estate competition between the two 2021 (No.: 2021-34) development and through asset sales or asset disclosed by commercial replacement; (2) Solve the ShenZhen property sales horizontal competition between Properties & business which the two through equity transfer; Resources belong to the (3) Take other measures that Development same industry. can effectively solve the (Group) Ltd. on 27 There is problem of horizontal September 2021 for horizontal competition. details.competition.IV Annual and Extraordinary General Meeting Convened during the Reporting Period 1. General Meetings Convened during the Reporting Period Investor Convened Disclosure Meeting Type participati Index to disclosed information date date on ratio The 2021 Resolutions of 2021 Annual General Meeting Annual Annual disclosed on China Securities Securities Times General 63.56% 17 May 2022 18 May 2022 General Meeting Ta Kung Pao and www.cninfo.com.cn (No.: Meeting 2022-018) 31ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2022 The 1st Resolutions of the 1st Extraordinary General Extraordinar Extraordinar 16 November 17 November Meeting of 2022 disclosed on China Securities y General y General 56.27% Meeting of Meeting 2022 2022 Securities Times Ta Kung Pao and 2022 www.cninfo.com.cn (No.: 2022-041) 2. Extraordinary General Meeting Convened at Request of Preference Shareholders with Resumed Voting Rights □Applicable □ Not applicable V Directors Supervisors and Senior Management 1. Basic Information Other Beginni Increase Decreas incre Ending Incum Ge ng in the e in the ase/d Reaso Offic A Start of End of shareh Name bent/F nd sharehol Reportin Reportin ecrea n for e title ge tenure tenure olding ormer er ding g Period g Period se change (share) (share) (share) (share) (shar e) Tang 31 Direc Incum Ma Xiaopin 53 December 0 0 0 0 0 tor g bent le 2020 Tang 14 Incum Ma Xiaopin GM 53 December 0 0 0 0 0 g bent le 2020 Person al Deng Direc Incum Ma 17 April financi Kangch 57 10000 0 2500 0 7500 tor 2012 eng bent le al arrang ement Wang Direc Incum Ma 11 October 5000000 Jianfei tor bent le 2021 22 Wang Incum Ma CFO 50 September 0 0 0 0 0 Jianfei bent le 2021 Fe Direc Incum 8 September Wen Li ma 54 0 0 0 0 0 tor bent 2006 le 31 Sun Direc Incum Ma 42 December 0 0 0 0 0 Minghui tor bent le 2020 Indep ende Kang Incum Ma 15 May nt 59 0 0 0 0 0 Xiaoyue direct bent le 2018 or Indep ende He Incum Ma 30 June nt 61 0 0 0 0 0 Zuowen 2020 direct bent le or Indep ende Mi Incum Ma 30 June nt 48 0 0 0 0 0 Xuming direct bent le 2020 or Chair Wang man Incum Ma 17 May 5700000 Jiangtao of the bent le 2022 Supe 32ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2022 rviso ry Com mitte e Supe Incum Ma 15 May Ren Wei rviso 43 2000 0 0 0 2000 r bent le 2018 Supe Fe Incum 17 April Li Yufei rviso ma 45 0 0 0 0 0 2012 r bent le Feng Supe Incum Ma 2 March Hongwe rviso 52 0 0 0 0 0 i r bent le 2017 Supe Fe Incum 27 April Lin Jun rviso ma 54 0 0 0 0 0 bent 2016 r le Zhang Vice Incum Ma 15 July Hongwe 57 0 0 0 0 0 GM bent le 2020 i Huang Vice Incum Ma 29 July 5100000 Weijun GM bent le 2022 Wu Vice Incum Ma 29 July 5100000 Zhiyong GM bent le 2022 Secre tary 31 Incum Ma Luo Yi of the 49 December 0 0 0 0 0 Boar bent le 2020 d Chair 1 Liu man Forme Ma 15 January Nove Zhengy of the 53 0 0 0 0 0 u Boar r le 2020 mber d 2022 Chair man of the Supe Fe 31 17 Forme Li Lian rviso ma 56 December May 0 0 0 0 0 ry r le 2020 2022 Com mitte e Fe 28 Wei Vice 7 June Left ma 57 September 0 0 0 0 0 Hanping GM 2022 le 2012 Total -- -- -- -- -- -- 12000 0 2500 0 9500 -- Indicate by tick mark whether any directors or supervisors left or any senior management were disengaged during the Reporting Period □Yes □ No 1. Chairman Mr. Liu Zhengyu of the Company no longer serves as the Chairman of the Board of Directors or a director of the Company due to job changes. For details please refer to the Announcement on Leave of Chairman and Election of A Director to Act as the Chairman (Announcement No. 2022-040) disclosed by the Company on 2 November 2022 on cninfo.com.cn. 2. Chairman Ms. Li Lian of the Board of Supervisors of the Company has gone through the procedure to get retired and no longer serves as the Chairman of the Board of Supervisors or a supervisor of the Company. For details please refer to the Announcement on Change of Supervisor and Chairman of the Board of Supervisors (Announcement No. 2022-020) disclosed by the Company on 18 May 2022 on cninfo.com.cn. 33ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2022 3. Deputy General Manager Ms. Wei Hanping of the Company has gone through the procedure to get retired and no longer serves as the Deputy General Manager of the Company. For details please refer to the Announcement on Retirement and Leave of Deputy General Manager (Announcement No. 2022-021) disclosed by the Company on 8 June 2022 on cninfo.com.cn.Change of Directors Supervisors and Senior Management □ Applicable □ Not applicable Name Office title Type of change Date of change Reason for change Liu Zhengyu Chairman of the Board Left 1 November 2022 Job change Chairman of the Li Lian Supervisory Left 17 May 2022 Retirement Committee Wei Hanping Vice GM Left 7 June 2022 Retirement Chairman of the Wang Jiangtao Supervisory Elected 18 May 2022 Committee Huang Weijun Vice GM Engaged 29 July 2022 Wu Zhiyong Vice GM Engaged 29 July 2022 2. Biographical Information Professional backgrounds major work experience and current duties in the Company of the incumbent directors supervisors and senior management: 1. Tang Xiaoping: he ever act as CFO and finance minister of Shenzhen HRD Assets Management Company minister of Financial Operations Management Department of Shenzhen Foreign Labor Service Co. Ltd. and executive director of Shenzhen Foreign Affairs Service Center Manager of Financing Plan Department deputy GM secretary of the Board of the Company and deputy secretary of the CPC of the Company. He is currently the director GM and secretary of the CPC of the Company. 2. Deng Kangcheng: he was once deputy director director of the Office of Shenzhen Investment Holdings Co. Ltd. and supervisor of the Company. And now he acts as the director Vice Secretary of CPC and Chairman of the Trade Union Federation of the Company. 3. Wang Jianfei: he was once the minister of the Financial Management Department of Shenzhen Construction Development (Group) Company vice GM of Hubei SIHC Investment Development Co. Ltd. And now he acts as the director and CFO of the Company. 4. 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 vice secretary of CPC in Shenzhen Bay Technology Development Co. Ltd. and the director of the Company. 5. Sun Minghui: Former the senior director of the Finance Department and the Office of the Board of Directors of Shenzhen Investment Holdings Co. Ltd. and the deputy director of the Finance Department (Settlement Center); currently he is the director of the Finance Department (Settlement Center) of Shenzhen Investment Holdings Co. Ltd.and a director of the Company. 6. Kang Xiaoyue: he was once the staff member of Department of Justice of Jiangxi Province a reporter editor and head of Special Issue Department of Shenzhen Legal Newspaper. Chief Lawyer senior partner of Guangdong New Century Law Firm (later renamed Guangdong Wancheng Law Firm). Now he serves as a senior partner of Beijing Weiheng (Shenzhen) Law Firm and the independent director of the Company. 7. He Zuowen: formerly associate professor of accounting deputy director of teaching and research section and member of the Disciplinary Committee of Changsha University of Science & Technology partner and deputy director of Shenzhen Huapeng Certified Public Accountants director and vice GM of Beijing Zhongtian Huazheng Certified Public Accountants Co. Ltd. (Dahua Certified Public Accountants) as well as head of Shenzhen Branch of it partner of BDO Certified Public Accountants; advisory expert of Internal Control Standard Committee of the Ministry of Finance (the 1st 2nd and 4th) director of Shenzhen Institute of Certified Public Accountants director of the Investigation 34ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2022 Committee member of the Shenzhen Municipal Social Organization Disciplinary Inspection Committee member of CPC Vice Secretary of CPC & Secretary of the Disciplinary Committee of Shenzhen CPA Industry Committee etc.currently partner of Dahua Certified Public Accountants (Special General Partnership) Secretary of CPC General Branch of Shenzhen Branch Chairman of Shenzhen Tianye Tax Agent Co. Ltd. and also served as the independent director of Shenzhen Textile (Group) Co. Ltd. Shenzhen Bioeasy Biotechnology Co. Ltd. Shenzhen Tongyi Industry Co. Ltd. and the Company. The main social positions are: judge of the Shenzhen Municipal Senior Accountant Review Committee external master tutor of Shenzhen University member of Shenzhen CPA Industry Committee director of Shenzhen Certified Tax Agents Association and Member of the Capital Market Advisory Expert Committee of the Xinjiang Regulatory Bureau of the China Securities Regulatory Commission expert of the experts database of State- owned Assets Supervision and Administration Commission of the People’s Government of Shenzhen Municipality Development and Reform Commission of Shenzhen Municipality Science and Technology Innovation Commission of Shenzhen Municipality Shenzhen Bureau of Radio Television Culture Tourism and Sports Shenzhen United Property and Equity Exchange etc. 8. Mi Xuming: Former lecturer and associate professor at Shenzhen University post-doctor of post-doctoral mobile station for applied economics of School of Economics of Xiamen University visiting scholar at the University of Exeter; currently professor and master tutor of Shenzhen University and at the same time as the independent directors of Shenzhen Farben Information Technology Co. Ltd. and the Company. 9. Wang Jiangtao: Former Deputy General Manager and Secretary of the Party Branch of Shenzhen Foreign Economic and Trade Investment Company Director Secretary of the Disciplinary Committee Secretary of CPC and Chairman of the Supervisory Committee of Shenzhen Architecture Design General Research Institute; currently Chairman of the Supervisory Committee Secretary of the Disciplinary Committee and member of CPC of the Company. 10. 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. and the supervisor of the Company. 11. Li Yufei: she ever worked as the Assistant to the Manager of the Investment Department and Assistant to the Manager & 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 deputy director of Discipline Inspection Office in Shenzhen Investment Holdings Co. Ltd. and the supervisor of the Company. 12. Feng Hongwei: he once was the Vice Chief of the Board Secretariat the Securities Representative and Minister of Audit Department. Now he acts as the supervisor member of the Disciplinary Committee and Manager of Asset Management Center of the Company. 13. Lin Jun: She once was the Vice Chief and Chief of the Party-Mass Work Department. And she has been acting as a supervisor of the Company the Vice Discipline Inspection Secretary and Director of Discipline Inspection and Supervision Office (Office of the Board of Supervisors). 14. Zhang Hongwei: once served as GM of Shenzhen Urban Construction Investment Development Co. Ltd. Hefei Ruifa Urban Construction Investment Development Co. Ltd. manager of the Company's Development Department Sales Department Project II Department Project Management Department; currently deputy GM of the Company member of CPC Chairman of Jianbang Group and GM of Longgang Development Company. 15. Huang Weijun: Once served as a member of the Party Committee Secretary of the Committee for Discipline Inspection and Deputy GM of Shenzhen Guangming Group Co. Ltd. a member of the Party Committee Secretary of the Committee for Discipline Inspection and Deputy GM of Shenzhen OCT Vision Inc. (concurrently as an executive 35ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2022 director of Shenzhen OCT International Media Performing Co. Ltd.) and now serving as the Deputy GM of the Company. 16. Wu Zhiyong: Once served as the Chairman and GM of Shenzhen Petrel Hotel Co. Ltd. and Deputy Manager of Property Management Department and Asset Operation Center of the Company and now serving as the Deputy GM of the Company. 17. Luo Yi: He was once the Vice GM Deputy Director of Board Secretariat and Securities Representative in the Shantou branch of the Company. And he now serves as the Board Secretary and Director of the Board Secretariat in the Company.Offices held concurrently in shareholding entities: □ Applicable □ Not applicable Remuneration or Shareholding Office held in the End of Name Start of tenure allowance from the entity shareholding entity tenure shareholding entity Shenzhen Chief of Financial Sun Minghui Investment Department (Settlement 11 November 2020 Yes Holdings Co. Ltd Center) Shenzhen Vice minister of Audit Ren Wei Investment 18 September 2017 Yes Department Holdings Co. Ltd Shenzhen Deputy Director of Li Yufei Investment Discipline Inspection 9 July 2015 Yes Holdings Co. Ltd Office Offices held concurrently in other entities: □ Applicable □ Not applicable Remuneration or Office held in End of Name Other entity Start of tenure allowance from the the entity tenure entity Sun China Nanshan Development (Group) Supervisor 17 October 2017 No Minghui Co. Ltd.Shenzhen Highway Passenger Sun Transportation Service Centre Co. Supervisor 16 June 2017 No Minghui Ltd.Sun ULTRARICH Director 11 November 2020 No Minghui INTERNATIONAL LIMITED Sun Shenzhen Chiwan Industry Supervisor 30 June 2021 No Minghui Development Co. Ltd.Sun Hubei SIHC Investment Development Director 11 November 2020 No Minghui Co. Ltd.Sun Shenzhen Textile (Holdings) Co. Ltd. Director 10 February 2021 No Minghui Shenzhen Shenzhen-Hong Kong Sun Science and Technology Innovation Director 18 October 2021 No Minghui Cooperation Zone Development Co.Ltd.Shenzhen Sungang China Resources Ren Wei Supervisor 17 October 2017 No Land Development Co. Ltd.Li Yufei Shenzhen Dapengwan Huaqiao Tomb Director 19 November 2015 No Shenzhen Shentou Cultural Li Yufei Director 2 September 2022 No Investment Co. Ltd.Kang Beijing Weiheng (Shenzhen) Law Senior partner 2 December 2019 Yes Xiaoyue Firm He Dahua Certified Public Accountants Partner 1 December 2002 Yes Zuowen (Special General Partnership) He Shenzhen Tianye Tax Agency Co. Chairman of 1 December 2008 Yes Zuowen Ltd. the Board He Shenzhen JPT Opto-Electronics Co. Independent 20 April 1 June 2017 Yes Zuowen Ltd. director 2022 He Independent Shenzhen Textile (Holdings) Co. Ltd. 19 July 2017 Yes Zuowen director 36ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2022 He Shenzhen Bioeasy Biotechnology Independent 1 October 2017 Yes Zuowen Co. Ltd. director He Independent Shenzhen Tongyi Industry Co. Ltd. 11 October 2018 Yes Zuowen director Mi Professor and Shenzhen University 1 December 2009 Yes Xuming master tutor Mi Independent 16 May ChinaLin Securities Co. Ltd. 10 April 2017 Yes Xuming director 2022 Mi Shenzhen Farben Information Independent 29 January 2021 Yes Xuming Technology Co. Ltd. director 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 3. Remuneration of Directors Supervisors and Senior Management Decision-making procedure determination basis and actual payments of remuneration for directors supervisors and senior management: The remuneration of the Company's directors supervisors and senior managers shall be determined and implemented in accordanc e with the regulations of the Company's remuneration management system.After the review and approval at the 2013 Annual General Meeting of Shareholders held on 23 April 2014 the allowance for independent directors has been adjusted to RMB7000 (tax included) per person per month since May 2014 and independent directors will not receive any remuneration other than it from the Company.Remuneration of directors supervisors and senior management for the Reporting Period Unit: RMB’0000 Total before-tax Any Incumbent/For remuneration remuneration Name Office title Gender Age mer from the from related Company party Tang Xiaoping Director and GM Male 53 Incumbent 111.51 No Deng Director Male 57 Incumbent 56.4 No Kangcheng Wang Jianfei Director and CFO Male 50 Incumbent 74.4 No Wen Li Director Female 54 Incumbent 0 No Sun Minghui Director Male 42 Incumbent 0 No Kang Xiaoyue Independent director Male 59 Incumbent 0 No He Zuowen Independent director Male 61 Incumbent 0 No Mi Xuming Independent director Male 48 Incumbent 0 No Chairman of the Wang Jiangtao Male 57 Incumbent 40 No Supervisory Committee Ren Wei Supervisor Male 43 Incumbent 0 No Li Yufei Supervisor Female 45 Incumbent 0 No Feng Hongwei Supervisor Male 52 Incumbent 62.12 No Lin Jun Supervisor Female 54 Incumbent 62.09 No Zhang Vice GM Male 57 Incumbent 97.31 No Hongwei Huang Weijun Vice GM Male 51 Incumbent 28.19 No Wu Zhiyong Vice GM Male 51 Incumbent 73.02 No Luo Yi Secretary of the Board Male 49 Incumbent 64.12 No Liu Zhengyu Chairman of the Board Male 53 Former 0 No Chairman of the Li Lian Female 56 Former 83.2 No Supervisory Committee Wei Hanping Vice GM Female 57 Former 59.9 No Total -- -- -- -- 812.26 -- 37ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2022 VI Performance of Duty by Directors in the Reporting Period 1. Board Meeting Convened during the Reporting Period Meeting Date of the meeting Disclosure date Index to disclosed information Announcement on Resolutions of the 70th Meeting of The 70th Meeting of the 7th Board of Directors (No.: 2022-002) disclosed the 7th Board of 28 February 2022 1 March 2022 on China Securities Journal Securities Times Ta Directors Kung Pao and www.cninfo.com.cn.Announcement on Resolutions of the 71st Meeting of The 71st Meeting of the 7th Board of Directors (No.: 2022-003) disclosed the 7th Board of 17 March 2022 18 March 2022 on China Securities Journal Securities Times Ta Directors Kung Pao and www.cninfo.com.cn.Announcement on Resolutions of the 72nd Meeting of The 72nd Meeting of the 7th Board of Directors (No.: 2022-014) disclosed the 7th Board of 29 April 2022 30 April 2022 on China Securities Journal Securities Times Ta Directors Kung Pao and www.cninfo.com.cn.Announcement on Resolutions of the 73rd Meeting of The 73rd Meeting of the 7th Board of Directors (No.: 2022-024) disclosed the 7th Board of 29 July 2022 30 July 2022 on China Securities Journal Securities Times Ta Directors Kung Pao and www.cninfo.com.cn.Announcement on Resolutions of the 74th Meeting of The 74th Meeting of the 7th Board of Directors (No.: 2022-027) disclosed the 7th Board of 25 August 2022 26 August 2022 on China Securities Journal Securities Times Ta Directors Kung Pao and www.cninfo.com.cn.Announcement on Resolutions of the 75th Meeting of The 75th Meeting of the 7th Board of Directors (No.: 2022-034) disclosed the 7th Board of 28 October 2022 29 October 2022 on China Securities Journal Securities Times Ta Directors Kung Pao and www.cninfo.com.cn.Announcement on Resolutions of the 76th Meeting of The 76th Meeting of the 7th Board of Directors (No.: 2022-043) disclosed the 7th Board of 7 December 2022 8 December 2022 on China Securities Journal Securities Times Ta Directors Kung Pao and www.cninfo.com.cn. 2. Attendance of Directors at Board Meetings and General Meetings Attendance of directors at board meetings and general meetings The director Total number Board Board Board failed to of board Board meetings meetings meetings the attend two General meetings the meetings attended by Director attended director consecutive meetings director was attended on way of through a failed to board attended eligible to site telecommuni proxy attend meetings attend cation (yes/no) Tang 7 0 7 0 0 No 2 Xiaoping Deng 7 0 7 0 0 No 2 Kangcheng Wang Jianfei 7 0 7 0 0 No 2 Wen Li 7 0 7 0 0 No 2 Sun Minghui 7 0 7 0 0 No 2 Kang 7 0 7 0 0 No 2 Xiaoyue He Zuowen 7 0 7 0 0 No 2 Mi Xuming 7 0 7 0 0 No 2 Liu Zhengyu 6 0 6 0 0 No 0 Why any independent director failed to attend two consecutive board meetings: Not applicable 38ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2022 3. Objections Raised by Directors on Matters of the Company Indicate by tick mark whether any directors raised any objections on any matter of the Company.□Yes □ No No such cases in the Reporting Period. 4. Other Information about the Performance of Duty by Directors Indicate by tick mark whether any suggestions from directors were adopted by the Company.□Yes □ No Suggestions from directors adopted or not adopted by the Company: During the Reporting Period all directors of the Company performed their duties diligently and conscientiously. They thoroughly mastered the Company’s production and operation internal control and standardized operation and put forward relevant opinions on the Company’s major governance and operation decisions based on their professional advantages. These opinions were fully communicated and discussed among the directors before forming consensus which effectively promoted scientific and objective decision-making by the Board of Directors and helpfully safeguarded the legitimate rights and interests of the Company and all shareholders.VII Performance of Duty by Specialized Committees under the Board in the Reporting Period Other Number informat Details of ion about Commit meeting Conven Important opinions and suggestions about issues Members Content tee s ed date raised the with convene perform objections d ance of (if any) duty It is believed that the Company has chosen and applied appropriate accounting policies and made reasonable accounting estimates in accordance with the provisions of the new Accounting Standards for Deliberation Business Enterprises. The Company 14 on the has always been cautious about January Company’s changes in accounting policies and 2022 2021 financial accounting estimates. There is no use statements or abuse of changes in accounting Audit He Commit policies or accounting estimates to Zuowen tee of adjust profits. The financial Sun the 4 statements prepared by the Company Minghui Board of Mi are true and reliable with complete Director Xuming contents.s Deliberation It is believed that the Company’s on the 2021 financial statements prepared by preliminary Grant Thornton China (LLP) comply audit opinions with all provisions of the Accounting 10 of Grant Standards for Business Enterprises March Thornton and truly and completely represent 2022 China (LLP) the Company’s financial position as on the of 31 December 2021 and its Company’s operating results and cash flows for 2021 financial the year 2021 in all material respects.statements Deliberation It is believed that Grant Thornton 17 on the China (LLP) has completed the audit 39ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2022 March summary of of the Company’s 2021 financial 2022 the 2021 audit statements well. service provided by Grant Thornton China (LLP) for the Company It is believed that Grant Thornton China (LLP) (hereinafter referred to as “Grant Thornton”) possesses independence professional competence the ability to protect investors and the experience and capability of providing audit services for listed companies. During the audit of the Company’s 2021 financial statements and internal control Grant Thornton was able to earnestly Deliberation perform its duties in accordance with 21 on the the requirements of the auditing October proposed standards and the Basic Code for 2022 renewal of the Internal Control of Enterprises. It audit firm independently objectively and fairly evaluated the Company’s financial position and operating results demonstrating occupational ethics and professional competence.Therefore it is proposed to the Company’s Board of Directors that Grant Thornton should be renewed as the auditing agency for the Company’s 2022 financial statements and internal control.It is held that the Management Measures for Business Performance Deliberation Appraisal and Remuneration on the Management of Senior Management Proposal on Members (Trial) formulated by the Formulating Company is in line with the income the distribution policy for state-owned Management enterprises and the relevant Measures for 22 regulations of Shenzhen SASAC can Business Februar effectively enhance the loyalty and Performance y 2022 diligence consciousness of the Appraisal and Remune management team further improve Remuneration the performance appraisal and ration Management incentive and restraint mechanism for and of Senior Mi senior management members and Apprais Management advance the Company’s corporate Xuming Members al governance and is conducive to the Wang (Trial) Commit 4 Company’s long-lasting and healthy Jianfei tee of development.He Deliberation the It is believed that the remuneration Zuowen on the annual Board of decision-making procedures for the remuneration Director Company’s directors supervisors and of directors senior management are compliant the s supervisors 17 remuneration payment standards for and senior March the Company’s directors supervisors management 2022 and senior management are in line as disclosed in with the regulations of the the remuneration system and that the Company’s remuneration disclosed in the 2021 2021 annual annual report is true and accurate.report Review of the It is held that: 29 April Implementatio 1. The Implementation Plan for 2022 n Plan for Performance Appraisal of Senior Performance Management Members in 2021 is in 40ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2022 Appraisal of line with the Company requirements Senior put forward in the Management Management Measures for Business Performance Members in Appraisal and Remuneration 2021 the Management of Senior Management Implementatio Members the appraisal indicators are n Plan for scientifically and reasonably set and Performance the plan is conducive to further Appraisal of improving the incentive and restraint Senior mechanism for senior management Management members.Members in 2. The Implementation Plan for 2022 and the Performance Appraisal of Senior 2022 Management Members in 2022 is in Statement of line with the Company requirements Responsibility put forward in the Management of Senior Measures for Business Performance Management Appraisal and Remuneration Members for Management of Senior Management Business Members the appraisal indicators are Performance scientifically and reasonably set and the plan is conducive to further improving the incentive and restraint mechanism for senior management members. 3. The 2022 Statement of Responsibility of Senior Management Members for Business Performance is in line with the Company’s Articles of Association and the Management Measures for Business Performance Appraisal and Remuneration Management of Senior Management Members and is conducive to further improving the incentive and restraint mechanism for senior management members and promoting the Company’s long-lasting and healthy development.It is held that the decision-making process of the performance appraisal of senior management members of Review of the the Company in 2021 conforms to the results of relevant laws and regulations of performance China and the Company’s Articles of appraisal of Association and Management 7 senior Measures for Business Performance Decemb management Appraisal and Remuneration er 2022 members of Management of Senior Management SPG in 2021 Members and has caused no damage and the result to the interests of the Company or its application shareholders. Therefore the plan Committee recognizes the above and agrees to submit them to the 76th Meeting of the 7th Board of Directors of the Company for deliberation.It is believed that Mr. Huang Weijun Deliberation and Mr. Wu Zhiyong are not involved on the in the circumstances stipulated in the Nominat ion Kang nomination of Company Law that prohibit them Commit Xiaoyue Mr. Huang from serving as a director a tee of Deng 22 July Weijun and supervisor or a senior management 1 the Kangchen 2022 Mr. Wu member have never received Board of g He Zhiyong as punishment by the China Securities Director Zuowen the Regulatory Commission and other s Company’s relevant authorities or disciplinary vice managers action by the stock exchange have not been placed on file for 41ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2022 investigation by judicial organs for suspected crimes or placed on file for inspection by the China Securities Regulatory Commission for suspected violations of laws and regulations are not a defaulter are not a person held liable or punished for dishonesty and have the qualifications required by relevant laws administrative regulations departmental rules and normative documents. It is agreed that Mr. Huang Weijun and Mr. Wu Zhiyong may be recommended as the Company’s vice managers.VIII 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.IX Employees 1. Number Functions and Educational Backgrounds of Employees Number of in-service employees of the Company as the parent 112 at the period-end Number of in-service employees of major subsidiaries at the 164 period-end Total number of in-service employees at the period-end 276 Total number of paid employees in the Reporting Period 273 Number of retirees to whom the Company as the parent or its 0 major subsidiaries need to pay retirement pensions Functions Function Employees Production 137 Sales 14 Technical 15 Financial 32 Administrative 78 Total 276 Educational backgrounds Category Number Doctors 2 Masters 21 Bachelors 103 College graduates 72 Technical secondary school graduates 11 High school graduates and below 67 Total 276 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. 42ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2022 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 X Profit Distributions (in the Form of Cash and/or Stock) How the profit distribution policy especially the cash dividend policy was formulated executed or revised in the Reporting Period: □ Applicable □ Not applicable As audited by Grant Thornton Certified Public Accountants (Special General Partnership) ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. as the parent recorded retained earnings of RMB1474557043.86 at the beginning of 2022. This plus the net profit of RMB341088743.27 in 2022 and minus the 10% statutory surplus reserve of RMB34108874.33 and the payout in 2022 of the 2021 dividend of RMB89026080.00 equals the distributable profit of RMB1692510832.80.According to the Company’s Articles of Association and taking into account the actual situation and future development of the Company a final dividend plan for 2022 has been proposed as follows: based on the total share capital of 1011660000 shares at 31 December 2022 a cash dividend of RMB0.61 (tax inclusive) per 10 shares is to be distributed to the shareholders with no bonus issue from either profit or capital reserves.A total of RMB61711260.00 of cash dividends will be distributed accounting for 40.15% of the consolidated net profit of RMB153718805.57 attributable to the Company as the parent for the year. And the retained earnings of RMB1630799572.80 will be carried forward to the next accounting period.Special statement about the cash dividend policy In compliance with the Company’s Articles of Association and Yes resolution of general meeting Specific and clear dividend standard and ratio Yes Complete decision-making procedure and mechanism Yes Independent directors faithfully performed their duties and Yes played their due role Non-controlling interests are able to fully express their opinion Yes and desire and their legal rights and interests are fully protected In case of adjusting or changing the cash dividend policy the conditions and procedures involved are in compliance with Not applicable applicable regulations and transparent Indicate by tick mark whether the Company fails to put forward a cash dividend proposal for 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 shareholders are positive.□Applicable □ Not applicable Final Dividend Plan for the Reporting Period □ Applicable □ Not applicable Bonus shares for every 10 shares (share) 0 Dividend for every 10 shares (RMB) (tax inclusive) 0.61 Total shares as the basis for the profit distribution proposal 1011660000 (share) Cash dividends (RMB) (tax inclusive) 61711260.00 43ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2022 Cash dividends in other forms (such as share repurchase) 0.00 (RMB) Total cash dividends (including those in other forms) (RMB) 61711260.00 Distributable profit (RMB) 1692510832.80 Total cash dividends (including those in other forms) as % of 100% total profit distribution 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 2022 was reviewed and approved by the 78th Meeting of the 7th Board of Directors held on 17 March 2023 and intended to be submitted to The 2022 Annual General Meeting for review. Based on the total 1011660000 shares of the Company as at 31 December 2022 a cash dividend of RMB0.61 (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 Shareholde rs’ General Meeting of the Company.XI Equity Incentive Plans Employee Stock Ownership Plans or Other Incentive Measures for Employees □Applicable □ Not applicable No such cases in the Reporting Period.XII Establishment and Execution of the Internal Control System for the Reporting Period 1. Establishment and Execution of the Internal Control System The Company has established a relatively complete and continuously effective internal control system and has carried out internal control evaluation in accordance with the internal control matrix and documents. In accordance with the requirements of the standard system for enterprise internal control and relevant regulations the Company has maintained effective internal control over financial reporting in all material respects. No major deficiencies in internal control not related to financial reporting have been found and no factors affecting the evaluation conclusion of internal control effectiveness have occurred. At the same time the Company attaches great importance to the regulation and steering role of the big supervision system. By holding joint supervision meetings and carrying out key supervision and inspection the Company has promoted the standardization level improvement of relevant management work. No major violations of regulations and disciplines have been found. In the future the Company will continue to develop internal control in a standardized manner and strengthen the supervision and inspection of internal control in order to promote the healthy and sustainable development of the Company. 2. Material Internal Control Weaknesses Identified for the Reporting Period □Yes □ No XIII Management and Control over Subsidiaries by the Company for the Reporting Period Integration Countermeasur Settlement Follow-up Subsidiary Integration plan Problem progress es taken progress settlement plan N/A N/A N/A N/A N/A N/A N/A Note: 1. No new subsidiary was purchased during the Reporting Period. 44ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2022 XIV Internal Control Self-Evaluation Report or Independent Auditor’s Report on Internal Control 1. Internal Control Self-Evaluation Report Disclosure date of the internal control 18 March 2023 self-evaluation report Index to the disclosed internal control 2022 Internal Control Self-Evaluation Report on www.cninfo.com.cn self-evaluation report Evaluated entities’ combined assets as % 81.50% of consolidated total assets Evaluated entities’ combined operating revenue as % of consolidated operating 95.37% revenue Identification standards for internal control weaknesses Weaknesses in internal control over Weaknesses in internal control not Type financial reporting related to financial reporting 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 Company in line with the actual the influence scope and other factors. If situation when the follows events or the follows events or indicators occur indications happen which means there there may be serious or important defects probably existing serious or important of internal control in the non-financial defects in the financial report; (1) the statements:(1) Lack democratic decision- directors supervisors and senior making process if lack significant executives were fraud. (2) Certified problem decision-making important Public Accountant find that there is a appointment and dismissal of cadres significant error in the financial report Nature standard significant project investment decision- however the internal control did not making; usage of large capital (three discover it when conducting internal important one large); (2) Unscientific control; (3) The Audit Committee under decision-making process such as the the Board and Internal Audit Service's major decision-making errors has caused supervision to the internal control is a serious property loss to the company; invalid. (4) The accounting personnel (3) Seriously violating state laws and were without necessary qualities to regulations; (4) Loss of key management complete the preparation of financial personnel or important talent; (5) statements.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.Serious defects: the defects or defect group may lead to the financial results misstatement or potential losses >3% of The criterion of quantity of the net assets; important defects: 1% of net recognition of defects of internal control assets

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