ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE & PROPERTIES (GROUP) CO. LTD.ANNUAL REPORT 2021 March 2022 1ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 Part I Important Notes Table of Contents and Definitions The Board of Directors (or the “Board”) the Supervisory Committee as well as the directors supervisors and senior management of ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. (hereinafter referred to as the “Company”) hereby guarantee the factuality accuracy and completeness of the contents of this Report and its summary and shall be jointly and severally liable for any misrepresentations misleading statements or material omissions therein.Liu Zhengyu chairman of the Company’s Board 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 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.Risks facing the Company have been explained in detail in “XI Prospects” in “Part IIIManagement Discussion and Analysis” herein.The Board has approved a final dividend plan as follows: based on the total share capital of 1011660000 shares a cash dividend of RMB0.88 (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 2021 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 ........ 11 Part IV Corporate Governance ....................... 41 Part V Environmental and Social Responsibility ..... 66 Part VI Significant Events ......................... 68 Part VII Share Changes and Shareholder Information.. 77 Part VIII Preferred Shares ......................... 84 Part IX Bonds ...................................... 85 Part X Financial Statements ........................ 86 3ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 Documents Available for Reference 1. The financial statements with the personal signatures and stamps of the Company’s legal representative 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 2021 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.The “Company” the “Group” “SPG” or “we” and its consolidated subsidiaries except where the context otherwise requires Shenzhen Property Management Shenzhen Property Management Co. Ltd.Petrel Hotel Shenzhen Petrel Hotel Co. Ltd.Zhentong Engineering Shenzhen Zhentong Engineering Co. Ltd.Huazhan Construction Supervision Shenzhen Huazhan Construction Supervision Co. Ltd.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 2021 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@163.net 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@163.net spg@163.net III Media for Information Disclosure and Place where this Report Is Lodged Stock exchange website where this Report is disclosed S henzhen Stock Exchange (http://www.szse.cn/) 6ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 Domestic: Securities Times China Securities Journal and Newspaper and website where this Report is disclosed h ttp://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 (unified social credit code) Change to principal activity of the No change Company since going public (if any) 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 2021-over-2020 202120202019 change (%) Operating revenue (RMB) 1320790648.45 1615009713.88 -18.22% 2548740319.49 Net profit attributable to the listed 220836309.93 290229772.23 -23.91% 552452307.59 company’s shareholders (RMB) Net profit attributable to the listed 208306710.37 253595334.11 -17.86% 524204812.66 company’s shareholders before exceptional gains and losses (RMB) Net cash generated from/used in -1205952107.94 285164013.17 -522.90% 603607724.75 7ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 operating activities (RMB) Basic earnings per share (RMB/share) 0.2183 0.2869 -23.91% 0.5461 Diluted earnings per share 0.2183 0.2869 -23.91% 0.5461 (RMB/share) Weighted average return on equity 5.72% 7.81% -2.09% 15.90% (%) Change of 31 December 2021 over 31 December 2021 31 December 2020 31 December 2019 31 December 2020 (%) Total assets (RMB) 6182498050.43 4936916746.74 25.23% 4909669536.09 Equity attributable to the listed 3938260291.97 3797512488.22 3.71% 3666874569.99 company’s 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 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 2021 2020 Ending amount Beginning amount Under CAS 220836309.93 290229772.23 3938260291.97 3797512488.22 Adjusted as per IFRS Under IFRS 220836309.93 290229772.23 3938260291.97 3797512488.22 8ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 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 415282352.53 279315865.94 272065605.11 354126824.87 Net profit attributable to the listed 88040167.6044406954.5429640906.7058748281.09 company’s shareholders Net profit attributable to the listed company’s shareholders before 87395877.39 44042111.19 29576289.10 47292432.69 exceptional gains and losses Net cash generated from/used in 303456191.73-588996943.19-978555623.0958144266.61 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 2021 2020 2019 Note Gain or loss on disposal of non-current assets (inclusive of impairment allowance -13451.61 11429.23 write-offs) Government subsidies charged to current profit or loss (exclusive of government subsidies consistently given in the 1669479.403370769.211168127.90 Company’s ordinary course of business at fixed quotas or amounts as per government policies or standards) Gain or loss on assets entrusted to other 13024710.91 15217058.60 31425651.98 Purchase of currency 9ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 entities for investment or management fund Reversed portions of impairment allowances for receivables which are tested individually 482790.04 for impairment Non-operating income and expense other 1542604.0129009657.601118861.69 than the above Other gains and losses that meet the 1237002.86 definition of exceptional gain/loss Interest income from undue structured 3950685.00 deposits Less: Income tax effects 4176533.19 12211479.38 9415831.64 Total 12529599.56 36634438.12 28247494.93 -- 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. 10ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 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.In order to achieve the central government's target of stabilizing land and housing prices as well as market expectations real estate regulators have successfully implemented a series of policies including "three red lines" real estate loan concentration management mechanism in 2020 and "concentrated supply of land" in 2021. These policies resulted in a significant difference between different districts in the same city and an overall stable and slow trend in nationwide real estate market.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 Regulatory Guideline No. 3 of the Shenzhen Stock Exchange for Listed Companies—Industry-specific Information Disclosure.The Company primarily develops residential properties with its available-for-sale projects mainly located in Shenzhen and Shantou during the Reporting Period. Meanwhile two new projects have been launched one in Huizhou which is close to Shenzhen and another in Guangming District Shenzhen. In Shenzhen the Chuanqi Donghu Mingyuan project and the Cuilinyuan project both completed construction and have started the hand-over and move-in process with some remnant units still available for sale. In Shantou the Tianyuewan project completed construction in June 2021 with Phase I around 80% sold cumulatively and Phase II around 20%. In mid May 2021 the Company completed the acquisition of a controlling stake in the Linxinyuan project (located in Huizhou close to Shenzhen) which resumed construction in late June 2021 and has kicked off pre-sale for Phase I in mid December 2021. Additionally the Company won the bid for the right to use the state-owned Land Lot No.A511-0039 in Guangming District Shenzhen in late September 2021 with construction kicking off in mid January 2022.New additions to the land bank: Consideratio Floor area The Total land n of the Name of land Planned use How the land Location Site area（㎡） with plot Company’s price Company’s lot or project of land is obtained ratio （㎡） interest (RMB’0000) interest (RMB’0000) Changbu Linxinyuan Village (previously Xinxu Town Commercial the Huiyang and 198676.60 397353.20 Acquisition 51.00% 60667 45000 “Linxijun” District residential project) Huizhou City 11ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 Guangdong Province Southeast corner of the junction of Mingzheng Commercial Road and SPG and Bidding at an Deya Road 10721.07 53605.00 100.00% 96500 Guangmingli residential auction Guangming type 2 Street Guangming District Shenzhen 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 SPG Guangmingli 1.07 5.36 5.36 Total 11.77 31.76 31.76 Development status of major projects: Time Planned Floor Cumulat Expecte Cumulat for floor area The ively d total ive commen % % area complet City/reg Name of Locatio Compan Site area complet investm investm Status cement develop construc with ed in the ion project n y’s （㎡） ed floor ent ent of ed ted plot Current interest area (RMB’0 (RMB’0 construc ratio Period （㎡）000)000) tion （㎡） （㎡） Tianyue Chaoya 1 Complet 100.00 100.00 Shantou wan ng October 100% 33362 127770 127770 127770 65485 64597 ed % % Phase II District 2018 Framew Linxiny ork in 11 June Huizhou u an Huiyang 51.00% 77% 77.00% 64278 159761 0 0 115750 89044 construc 2021 Phase I tion SPG Guangm Foundat 19 Shenzhe 100.00 Guangm ing ion pit January - 10721 53605 - - 151758 99395 n % ingli District being 2022 12ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 built Sales status of major projects: Pre-sale/ Pre-sale/ Floor Cumulati sales Floor sales area Floor vely revenue Cumulati area revenue The Floor pre-sold/ area pre-sold/ generate vely settled in settled in City/regi Name of Compan area with sold in Location Status available sold in the settled the the on project y’s plot ratio the for sale floor Current floor Current Current interest （㎡） Current （㎡） area Period area (㎡) Period Period Period （㎡） (RMB’0 （㎡） (RMB’0 （㎡） 000)000) Chuanqi Shenzhe Donghu Luohu Ready 100.00%557273285732440716048361300121416970662 n Mingyua District for sale n Shenzhe Cuilinyu Longgan Ready 100.00%60111561375196935161519693381148 n an g District for sale Tianyue Chaoyan Ready Shantou wan 100.00% 153470 160372 114462 14951 7967 92524 15531 8008 g District f or sale Phase I Tianyue Chaoyan On Shantou wan 100.00% 127770 137059 17004 15829 9174 11517 11517 6159 g District p re-sale Phase II Linxinyu Huiyang On Huizhou an Phase 51.00% 159761 159761 844 844 1018 District pre-sale I Rental status of major projects: The Company’s Rentable area Cumulative Average Name of project Location Use interest （㎡） rented area （㎡） occupancy rate Real Estate Shenzhen Commercial 100.00%3413.883413.88100.00% Mansion North Block of Shenzhen Commercial Guoshang 100.00% 4819.71 4752.98 98.62% Mansion Petrel Building Shenzhen Commercial 100.00% 22475.47 22475.47 100.00% SPG Plaza Shenzhen Office building 100.00% 61015.82 36667.96 60.09% SPG Plaza Shenzhen Commercial 100.00%19886.316123.4981.08% Podium Wenjin Garden Shenzhen Commercial 100.00% 3531.60 3531.60 100.00% Primary land development: 13ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 □ Applicable √ Not applicable Financing channels: Financing cost Maturity structure Ending balance of Financing channel range/average financings Within 1 year 1-2 years 2-3 years Over 3 years financing cost 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 amou Project Guarantee period Note nt (RMB’0000) Cuilinyuan Until the property ownership certificate is 2802.31 registered as collateral and handed over to bank for keeping Chuanqi Donghu Until the property ownership certificate is 2924.43 Mingyuan registered as collateral and handed over to bank for keeping Tianyuewan Until the property ownership certificate is 33511.08 registered as collateral and handed over to bank for keeping Total 39237.82 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 the Compatibility of Type of Investment As % of total Cumulative Disinvestme Project peak of project actual investment investor amount (RMB) investment returns nt funds and returns Director Linxinyuan supervisor or (previously the senior 8950000.00 39.25% 0.90% 0.00 N/A N/A “Linxijun” management of project) 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 14ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 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.In 2021 the Company were granted the titles of “Socially Responsible Company” and “Honest Company” in the real estate world of Shenzhen.IV Core Business Analysis 1. Overview In 2021 in the face of many challenges such as the ever-changing environment the pandemic the economic downturn and the intensifying market competition the Company’s management team conscientiously implemented the decisions and deployment of the controlling shareholder the CPC Committee of the Group and the Board of Directors led the working staff to unite as one stay determined and focus on operation and management and completed all tasks in an all-round way achieving a good start for the “14th Five-Year Plan”.The development of the Company became more stable more high-quality and more resilient. The main achievements in the past year are as follows: (I) Impressive results in major corporate events by seizing opportunities and preventing risks 1. New breakthroughs in project expansion The Company actively promoted the expansion of main business projects. In mid-May it successfully completed the acquisition of Linxinyuan Project in Huizhou. On 28 September it participated in the second-round auction of Shenzhen’s “concentrated supply of land” for 2021 and successfully won the bid for No. A511-0039 land in Guangming District Shenzhen at the reserved price. Throughout the year the new capacity development area totaled 450000 square meters injecting new momentum for the Company’s sustainable development. 2. New progress in project construction First the Company completed the completion acceptance for Longgang Project and Shantou Tianyuewan Phase II Project in April and June respectively. Second in Huizhou the Company recovered the construction for Linxinyuan Project at the end of June and the project was opened for sale in early December. Third the land of SPG Guangmingli Project was acquired at the end of September and the construction started smoothly in mid-January 2022. 3. New achievements in real estate sales 15ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 In 2021 307 units of the Company’s main business projects were sold in initial subscription with a sales area of 38729 square meters and a sales amount of RMB676 million including 69 units in Shenzhen (with a sales area of 7923 square meters and a sales amount of RMB504 million) and 238 units in Shantou (with a sales area of 30806 square meters and a sales amount of RMB172 million). 4. New actions in quality and efficiency improvement First the Company successfully completed the tourism transformation of Petrel Hotel. Second the Company completed the signing of the equity transfer agreement for Shenzhen Property Management. Third the Company introduced high-end pharmaceutical medical and medical aesthetic companies such as Shenzhen Luohu HospitalGroup and actively made a plan for creating an SPG Plaza-centric “comprehensive health eco-economic industrycomplex”. Fourth the equity transfer of Yunnan Kunpeng Air Service Co. LTD. was listed on The Stock Exchange of Hong Kong Limited. Fifth steady progress was made in clearing out zombie companies and disposing of and reducing losses. 5. New explorations for future development First the Company actively conducted research on its future development and formulated the Quality Improvement Action Plan to provide action guidelines for the Company’s future development. Second the Company made studies and demonstrations of new industry markets and actively sought target projects with strategic synergies in the industry. Third the Company enhanced communication with capital platforms in the SASAC system to solicit support in aspects such as strategic consulting and project expansion and explore industry fund cooperation. 6. New guarantees for safety and stability First the Company thoroughly implemented safe production accountability established sound policies of safety management and intensified efforts on checking and rectifying potential safety hazards thereby maintaining stable production safety throughout the year. Second the Company adhered to regular pandemic prevention and control with targeted measures fulfilled all work requirements of the CPC Shenzhen Municipal Committee the Shenzhen Municipal People’s Government the Municipal SASAC and the controlling shareholder and saw responsibilities were fulfilled by all the stakeholders. As a result a steady situation of pandemic prevention and control was guaranteed. Third the Company coordinately focused on stability maintenance of petitioning and public opinion monitoring to create a harmonious and stable environment for business operation and development.(II) Gratifying achievements in business management by strengthening the foundation and making up for deficiencies 1. Continuous improvement of corporate governance The Company fully revised and improved policies including the Rules of Procedure of the CPC Committee and the List of Major Business Operation and Management Matters for the CPC Committee to Study and Discuss. By making the CPC Committee’s studies and discussions a prerequisite for the decision-making of major issues by the Board of Directors and the management team the Company strictly controlled its major decision-making processes. Additionally the Company revised/formulated 42 policies related to corporate governance and internal management and compiled them into a book to build a more scientific and sounder policy system constantly improving the level of corporate governance. It continued to promote the development of a comprehensive risk management system and organized all units to carry out internal control self-assessment which consolidated the foundation for the steady development of the Company. 2. Practical effectiveness of financial management First the Company successfully completed the distribution of profits for 2020 and paid cash dividends to all shareholders achieving normal cash dividends for three consecutive fiscal years. Second the Company attained capital gains of more than RMB40 million through negotiated deposits monetary funds and other means 16ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 throughout the year. Third the Company thoroughly cleaned up its receivables and recovered nearly RMB20 million of overdue receivables. Fourth the Company was active in coordination and communication. It completed the land appreciation tax refund process for Longgang Project and received a tax refund of more than RMB70 million. Fifth the Company overcame difficulties and completed the mortgage bank cooperation negotiations for Linxinyuan Project in Huizhou obtaining a mortgage of RMB800 million to provide support for project sales. 3. Breakthroughs in addressing issues left over from history The Company actively took measures to speed up the execution of cases such as those involving Fresh Peak Property Sandao and Golden Times with more than RMB1.7 million recovered. It also kept promoting the special work of historical housing payment collection. A total of more than RMB1.5 million in arrears was recovered throughout the year. 4. Good results in cost control The Company continued to strictly control project development costs. It implemented full cost whole process and penetration management and paid close attention to the budget and final accounting of major projects.Throughout the year the Company prepared 32 budgets and the reduction rate of budget amount was 2.08%; 27 settlement audits were completed and the reduction rate of settlement amount was 5.34%. 5. Steady growth in lease business The Company promoted lease property through multiple channels. Throughout the year a total of 109 lease contracts were newly signed or renewed covering an area of 33000 square meters; the Company’s cumulative lease revenue reached 107.6% of the annual target a year-on-year increase of 33%. 6. Orderly development of human resources work The Company explored the establishment of a sound incentive/constraint mechanism and organized employee co-investment in Linxinyuan Project in Huizhou so as to stimulate employees’ enthusiasm and creativity. It actively carried out human resources management and enriched the cadre and staff teams. It also completed the work for full coverage of special review of personnel files efficiently with quality and quantity assured in accordance with the requirements of the Organization Department of the CPC Shenzhen Municipal Committee and SIHC. 7. Solid progress in audit supervision The Company actively carried out internal audit supervision. It completed the audit and assessment filing for the capital verification based on physical inventory of Linxinyuan Project in Huizhou and Yunnan Kunpeng Air Service Co. LTD. conducted special inspections of the capital safety management of subordinated enterprises and organized and coordinated the investment control audit team to complete the special audit of Tianyuewan Project in Shantou empowering the stable and healthy development of the Company.(III) New momentum to the development of subordinated enterprises by stabilizing operation and overcoming difficulties 1. Business performance Affected by factors such as the economic downturn industry regulation and the pandemic the Shantou branch of the Company Petrel Hotel and Zhentong Engineering operated under pressure. Shenzhen Property Management and Huazhan Construction Supervision overcame many difficulties and adverse factors paid close attention to operation and achieved their annual business objectives. 2. Business management Shenzhen Property Management successfully completed the re-certification for its management system and carried out the special action of garbage sorting in communities. Its management level was improved to a certain extent. Petrel Hotel standardized its operating process and organized special training such as sales and etiquette promoting its services to a higher level. Zhentong Engineering successfully obtained the Grade B qualification for 17ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 curtain wall design which created good hardware conditions for business expansion. Huazhan Construction Supervision strengthened on-site supervision to effectively guarantee project safety and project quality. The Shantou branch of the Company intensified efforts on project cost control thereby effectively reducing project costs. Jianbang Group coordinately advanced different tasks including development construction marketing and promotion with practical results achieved. 3. Market expansion Zhentong Engineering made great efforts to develop external markets and signed 57 projects. Petrel Hotel introduced the internet-famous shop project and successfully leased out some properties that had been vacant for a long time. Huazhan Construction Supervision successfully won the bid for the supervision project of the Tigo Semiconductor Memory Industry Base.(IV) A clean and righteous atmosphere that enables entrepreneurs to focus on business development by working on Party building and fostering harmony 1. Solid progress in Party building The CPC Committee of the Company created new methods to promote the provision and effectiveness of Party history education. Party organizations at all levels in the system integrated the education of the Party history intoeveryday life. Adhering to the problem-orientated concept the Company continuously led the practice of “I dopractical things for the masses” in depth and donated property management equipment to support happy community building. With a strict and pragmatic approach it consolidated the development of community-level Party organizations normalized and institutionalized the study by the Theoretical Center Team of the CPC Committee and earnestly carried out all tasks of the “Five Ones” project in the education of Party members. 2. Furthering deepening of clean and honest Party conduct development The Company fully implemented the joint deployment implementation inspection and assessment of clean and honest Party conduct development and business operation. It gave full play to the synergy of the big supervision system facilitated the integration of different supervision measures focused on the main business and primary responsibilities and effectively ensured that all tasks in the annual list of tasks for development of clean and honest Party conduct and anti-corruption work as well as key points of annual supervision were implemented.On the occasion of the 100th anniversary of the founding of the Party the Company enhanced honesty publicity and education solidly organized the discipline education and learning month strengthened work style development promoted the positive energy of honesty and created a clean and righteous atmosphere that enables entrepreneurs to focus on business development. 3. Great vitality of corporate culture development Throughout the year the Company organized more than 150 football tennis badminton table tennis yoga and other interest group and sports activities enriching employees’ lifestyle after work. The Company successfully held the “SPG Cup” Table Tennis Invitational Competition and carried out the “Zouhongqiao” “EmployeeCollective Birthday Party” visits to Linxinyuan Project in Huizhou and other activities creating a sound environment where the Company builds platforms and the employees participate enhancing corporate cohesiveness. 2. Revenue and Cost Analysis (1) Breakdown of Operating Revenue Unit: RMB 2021 2020 Change (%) 18ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 As % of total As % of total Operating revenue operating revenue Operating revenue operating revenue (%)(%) Total 1320790648.45 100% 1615009713.88 100% -18.22% By operating division Property sales 876161088.60 66.34% 1158411393.81 71.73% -24.37% Engineering and 200259571.1615.16%251454463.4315.57%-20.36% construction Property 162526580.1812.31%151968675.519.41%6.95% management Rental service 81791161.56 6.19% 63254584.48 3.92% 29.30% Other 15776937.12 1.19% 12215550.30 0.76% 29.15% Eliminated internal transactions and -15724690.17 -1.19% -22294953.65 -1.38% -29.47% accounts By product category Residential units 875153000.99 66.26% 1157620917.61 71.68% -24.40% Shops and parking 1008087.610.08%790476.200.05%27.53% lots Other 460354250.02 34.85% 478893273.72 29.65% -3.87% Eliminated internal transactions and -15724690.17 -1.19% -22294953.65 -1.38% -29.47% accounts By operating segment Guangdong Province 1308786001.07 99.09% 1613933749.67 99.93% -18.91% Other regions in 27096812.692.05%22531905.611.40%20.26% China Overseas 632524.86 0.05% 839012.25 0.05% -24.61% Eliminated internal transactions and -15724690.17 -1.19% -22294953.65 -1.38% -29.47% accounts By marketing model Principal operations 1320738401.50 100.00% 1625089117.23 100.62% -18.73% Other 15776937.12 1.19% 12215550.30 0.76% 29.15% Eliminated internal transactions and -15724690.17 -1.19% -22294953.65 -1.38% -29.47% accounts 19ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 (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 Operating Gross profit YoY change in Cost of sales operating revenue gross profit revenue margin cost of sales (%) (%) margin (%) By operating division Property sales 876161088.60 292260823.05 66.64% -24.37% -24.61% 0.11% Engineering and 200259571.16186409100.146.92%-20.36%-23.76%4.16% construction Property 162526580.18145898235.4910.23%6.95%4.26%2.31% management By product category Residential units 875153000.99 292183630.99 66.61% -24.40% -24.57% 0.08% Shops and 1008087.6177192.0692.34%27.53%-73.44%29.11% parking lots By operating segment Guangdong 1308786001.07799028972.3038.95%-18.91%0.00%-24.50% 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 2021 2020 Change (%) Sales volume RMB’0000 69045 38767 78.10% Property sales Output RMB’0000 204708 15616 1210.89% Inventory RMB’0000 403220 121599 231.60% Any over 30% YoY movements in the data above and why: √ Applicable □ Not applicable Compared with 2020 the year 2021 saw growth and breakthroughs in property development sales and investment. 20ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 (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 20212020 Operating Item As % of total cost As % of total cost Change (%) division Cost of sales Cost of sales of sales (%) of sales (%) Property sales 292260823.05 43.86% 387659747.71 48.13% -24.61% Engineering and 186409100.1427.97%244511214.5830.35%-23.76% construction Property 145898235.4921.90%139937487.1217.37%4.26% management Rental service 35545938.32 5.33% 35984852.34 4.47% -1.22% Other 22151678.03 3.32% 11611768.12 1.44% 90.77% Eliminated internal -15917413.55-2.39%-14196621.19-1.76%12.12% transactions and accounts Total 666348361.48 100.00% 805508448.68 100.00% -17.28% Note: Affected by markets and development cycles property sales and construction both experienced a year-on-year drop. (6) Changes in the Scope of Consolidated Financial Statements for the Reporting Period √ Yes □ No See “VI Changes to the scope of consolidation” 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) 58130053.77 Total sales to top five customers as % of total sales of the 4.45% Reporting Period (%) 21ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 Total sales to related parties among top five customers 0.00% as % of total sales of the Reporting Period (%) Information about top five customers: Sales revenue contributed for No. Customer As % of total sales revenue (%) the Reporting Period (RMB) 1 Legal person A 15319118.77 1.17% 2 Legal person B 11483285.27 0.88% 3 Legal person C 11167029.09 0.86% 4 Legal person D 10532814.03 0.81% 5 Legal person E 9627806.61 0.74% Total -- 58130053.77 4.45% Other information about major customers: □ Applicable √ Not applicable Major suppliers: Total purchases from top five suppliers (RMB) 89911678.31 Total purchases from top five suppliers as % of total 34.81% purchases of the Reporting Period (%) Total purchases from related parties among top five suppliers as % of total purchases of the Reporting Period 12.00% (%) Information about top five suppliers: Purchase in the Reporting No. Supplier As % of total purchases (%) Period (RMB) 1 Legal person A 30985550.60 12.00% 2 Legal person B 32704335.85 12.66% 3 Legal person C 10113649.04 3.92% 4 Legal person D 8196092.74 3.17% 5 Legal person E 7912050.08 3.06% Total -- 89911678.31 34.81% Other information about major suppliers: □ Applicable √ Not applicable 3. Expense Unit: RMB 2021 2020 Change (%) Reason for any significant change Selling expense 42737748.22 55989397.22 -23.67% 22ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 Administrative expense 98307831.60 93616226.75 5.01% Finance costs -18083491.01 -21505685.05 15.91% 4. R&D Investments □ Applicable √ Not applicable 5. Cash Flows Unit: RMB Item 2021 2020 Change (%) Subtotal of cash generated from 1805846506.241783707997.051.24% operating activities Subtotal of cash used in 3011798614.181498543983.88100.98% operating activities Net cash generated from/used in -1205952107.94285164013.17522.90% operating activities Subtotal of cash generated from 799855541.481019824221.85-21.57% investing activities Subtotal of cash used in 1751621932.29749215.31233694.20% investing activities Net cash generated from/used in -951766390.811019075006.54-193.40% investing activities Subtotal of cash generated from 266256968.7676893995.94246.26% financing activities Subtotal of cash used in 164908415.94218571160.17-24.55% financing activities Net cash generated from/used in 101348552.82-141677164.23155.44% financing activities Net increase in cash and cash -2056810291.671161914166.47-277.02% equivalents Explanation of why any of the data above varies significantly: √ Applicable □ Not applicable Cash used in operating activities increased substantially year-on-year primarily because property investment and development increased.Net cash generated from investing activities decreased primarily due to the purchase of financial products for investment purposes.Net increase in cash and cash equivalents decreased substantially year-on-year primarily due to investment in property project.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 23ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 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 2021 1 January 2021 Change in As a % of As a % of percentag Reason for any significant change Amount Amount total assets total assets e (%) 564358824.639.13%2687465070.54.44%-45.31% Monetary assets Purchase of project stake and land 01 Accounts 61048785.11 0.99% 59590944.06 1.21% -0.22% receivable 4034933562.62 65.26% 1220464112. 24.72% 40.54% New project and new addition to land Inventories 56 bank Investment 588865777.16 9.53% 616365621.53 12.48% -2.95% property Long-term equity 272168.28 0.00% 377489.65 0.01% -0.01% investments Fixed assets 23920424.55 0.39% 28039978.43 0.57% -0.18% Right-of-use 365351.97 0.01% 0.00% 0.01% assets Short-term 50440116.24 0.82% 76893995.94 1.56% -0.74% borrowings Contract 199965490.08 3.23% 196786977.19 3.99% -0.76% liabilities Lease liabilities 125920.77 0.00% 0.00% 0.00% Taxes payable 600497936.70 9.71% 459709646.95 9.31% 0.40% Land value-added tax provision 581377415.64 9.40% 277105129.74 5.61% 3.79% Borrowing to project company from Other payables minority shareholder Indicate whether overseas assets account for a high proportion of total assets.□ Applicable √ Not applicable 24ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 2. Assets and Liabilities at Fair Value √ Applicable □ Not applicable Unit: RMB Gain/loss on Cumulative Impairment fair-value fair-value Purchased in Sold in the Beginning allowance for Other Ending Item changes in the changes the Reporting Reporting amount the Reporting changes amount Reporting charged to Period Period Period Period equity Financial assets 4. Investments 36322704. in other 37510860.51 -1188156.18 4509209.49 33 equity instruments Subtotal of 36322704. financial 37510860.51 -1188156.18 4509209.49 33 assets Total of the 36322704. 37510860.51-1188156.184509209.49 above 33 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 Accounts receivable 50440116.24 Put in pledge for short-term borrowings Monetary assets 3500000.00 Frozen in a lawsuit case Monetary assets 5674439.78 Project of public facilities inside and surrounding the urban renewal project of Longgang District Shenzhen-construction funds Total 59614556.02 -- 25ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 VII Investments Made 1. Total Investment Amount √ Applicable □ Not applicable Total investment amount in the Reporting Total investment amount in last year Change (%) Period (RMB) (RMB) 2047080000.00205660000.00895.37% 2. Significant Equity Investments Made in the Reporting Period √ Applicable □ Not applicable Unit: RMB Whet her Name Invest Inve Inve invol of Sharehol Fundin ment Date of Disclos Main stme stme Status as on the ved investe Invested ding g Partne Produc Predicte return disclos ure busin nt nt date of the balance in e amount percenta Resour rs t type d return in the ure (if index esses meth Dura sheet any enterpri ge ces current any) (if any) ods tion legal se period action s Ownership Announ transfer cement formalities were on completed in mid Progres May 2021. s on Jianbang Group Acquisi Guang has been included tion of Guangd zhou in the Company’s 51% of ong Bopi consolidated Equity Jianban Real Enterp Reside financial in g estate acqu rise ntial statements. The -6422 Guangd Group 450000 Self-o 637500 15 May devel isitio 51.00% Manag - units Linxinyuan 929.28 Yes ong (Huiya 000.00 wned 000.00 2021 opme n ement and project developed Jianban ng) nt Consul shops by Jianbang g Industri ting Group has Group al Co.Co. resumed (Huiya Ltd.Ltd. construction in ng) late June 2021 Industri with Phase I al Co.kicking off Ltd.pre-sale in mid (No.: December 2021. 2021-0 Currently the 20) 26ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 Company is disclose operating as d on planned. www.c ninfo.c om.cn Announ cement on Progres s on Incorpo Shenzh Incorporation ration en SPG formalities were of Chuanq Real Reside completed on 29 1 Wholly i Real estate Inco ntial 995000 Self-o October 2021. 335670 -6264 Novem -owned Estate devel rpor 100.00% - - units No 000.00 wned This project has 000.00 68.85 ber Subsidi Develo opme ated and started 2021 ary pment nt shops construction in (No.Co.mid January 2022. 2021-0 Ltd. 48) disclose d on www.c ninfo.c om.cn 144500973170-70493 Total -- -- -- -- -- -- -- -- -- -- -- 0000.00000.0098.13 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. 27ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 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 Amo unt cont Amou ribut nt ed contrib by uted the by the sale equity to interes net ts to Rel inco Own Executed net ate me ershi as Selling incom d-p Relationship Index to of p scheduled Equity price e of arty between disclose Count Date Effect of the sale the Pricing fully or not if Disclos interes (RMB the tran counterparty d erparty of sale on the Company Com principle trans not state ure date ts sold ’0000 Comp sact and the informat pany ferre reason and ) any ion Company ion as a d or actions from or perc not taken period not enta -begin ge of ning to the date of Com sale pany (RMB ’s ’0000 net ) inco me (%) 28ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 Shenzhen Announ This transaction is International cement in line with the Trade Center on the Company’s Property Progress development Management of the strategies and is Co. Ltd.Related- conducive to the (hereinafter party Company’s further referred to as Transactoptimization and The “ITC Propertyionadjustment of its transactio Management” regardin 100% industry structure n price is ) is a Shenz g the of enrichment of determine wholly-owned hen Transfer equity capital reserves d based subsidiary of Interna of 100% interes expansion of new on the net ShenZhen tional of ts of profit growth asset Properties & Trade 11 Equity Shenz areas and valuation Resources 15 Center Februa 19667 0.00 Interests hen 334.69 continuous assessed Yes D evelopment Yes Yes Februar Proper ry .67 % of Proper improvement of its by the (Group) Ltd. y 2022 ty 2022 Shenzhety quality. Proceeds evaluatio “hereinafterManag n Manag from this equity n agency referred to as ement Property ement transfer will be on the “SZPRD” and Co. Manage Co. carried forward in base date both SZPRD Ltd. ment Ltd. 2022 and will have of 30 and the Co.a positive impact June Company are Ltd.on the cash flows 2021. majority-owne (No.: of the Company. d subsidiaries The specific of Shenzhen 1) impact is subject Investment disclose to the annual Holdings Co.d on auditing result Ltd. Thus an www.cn issued by the audit association info.co firm. relationship is m.cn formed.IX Major Subsidiaries √ Applicable □ Not applicable Major fully/majority-owned subsidiaries and those minority-owned subsidiaries with an over 10% effect on the Company’s net profit: Unit: RMB Relationship Principal Registered Operating Operating Name with the activity Total assets Net assets Net profit capital revenue profit Company Guangdong Subsidiary Development 2800000.00 119431256 -7511961.3 -8490635.4 -6422929.2 29ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 Jianbang of real estate 2.50 5 4 8 Group (Huiyang) Industrial Co. Ltd.Shenzhen SPG Chuanqi Development 30000000.0 994623335. 994373531.Real Estate Subsidiary -826235.27 -626468.85 of real estate 0 62 15 Development Co. Ltd.Shenzhen SPG Development 30000000.0 265395040. 124744977. 28911854.2 10236841.3 Longgang Subsidiary 9645676.62 of real estate 0 07 43 8 1 Development Co. Ltd.Shantou SEZ Wellam FTY Development 91226120.4 170626252. 122561035.Subsidiary 1008087.61 251183.65 170289.40 Building of real estate 4 25 98 Development Co. Ltd.Shantou Huafeng Real Development 80000000.0 978047725. 21038772.4 141667875.Estate Subsidiary 542656.62 397168.52 of real estate 0 92 5 10 Development Co. Ltd.Great Wall Development 18201422.1 -80904534.Estate Co. Subsidiary 2051146.00 632524.86 -284455.30 -284455.30 of real estate 3 73 Inc. (U.S.) Shenzhen Installation Zhentong 10000000.0 122011401. 19822359.6 201876257. -6226318.9 -4786992.9 Subsidiary and Engineering 0 31 7 29 0 8 maintenance Co. Ltd.Shenzhen Property Property 100916928. 35164476.4 163141074.Subsidiary 7250000.00 4514075.45 3346927.48 Management management 47 1 63 Co. Ltd.Shenzhen 30000000.049219742.739446188.217378195.0-3539934.3-2703299.9 Petrel Hotel Subsidiary Hotel Service 022751 Co. Ltd.Shenzhen Subsidiary Construction 8000000.00 10639068.8 10035220.9 3214530.36 111097.51 99035.57 Huazhan 30ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 Construction supervision 6 1 Supervision Co. Ltd.Xin Feng Investment 413340621.-132382885 Enterprise Subsidiary and 502335.00 1285471.06 1285471.06 60.12 Co. Ltd. management Subsidiaries obtained or disposed in the Reporting Period: √ Applicable □ Not applicable Influence on overall production and Name Way of gaining and disposing subsidiaries operation as well as performance The real estate project company is Guangdong Jianbang Group (Huiyang) currently under the development and Share acquisition Industrial Co. Ltd. construction and will be carried forward in 2023. It is currently in the initial stage of Shenzhen SPG Chuanqi Real Estate Newly established development and construction and will be Development Co. Ltd.carried forward in 2024.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. 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. 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 RMB29 million in 2021 (the percentage of accumulative sales carried forward was 95%) accounting for 2.19% of the Company's operating revenue. Jinyedao and YuejingDongfang developed by Shantou SEZ Wellam FTY Building Development Co. Ltd. left a few amount of remaining buildings for sale. And Shantou Huafeng Real Estate Development Co. Ltd. was responsible for the development of Tianyuewan project (divided into Phase I and Phase II). Tianyuewan Phase I was opened for sale in October 2016 and completed in December 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 72% for Phase I and 13% for Phase II. 4. Shenzhen Zhentong Engineering Co. Ltd. was engaged in the business of building installation and maintenance with the 2021 operating revenues of RMB202 million and of 15.28% to the operating revenues of the Company. 5. Shenzhen Property Management Co. Ltd was engaged in the industry of property management. The 2021 operating revenues was of RMB163 million that was of 12.35% to the operating revenues of the Company. 6. The 2021 net profit of Xin Feng Enterprise Co. Ltd. was of RMB1.29 million which mainly due to the changes of exchange rate and it conducts no business. 7. The 2021 net profit of Shenzhen Petrel Hotel Co. Ltd. was of RMB-2.7 million which mainly due to the epidemic. 31ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 X Structured Bodies Controlled by the Company □ Applicable √ Not applicable XI Prospects (I) Industrial Pattern and Trend The state continues to uphold the principle that “houses are for living in not for speculating on” encourages both housing purchase and renting and implements city-specific policies to promote a virtuous circle and the healthy development of the real estate industry. Under the continuous control of multiple financial regulatory policies the real estate enterprises have gradually shifted their development goals from “quantity first” to “quality first”. The top enterprises with high qualities as a result will be easy to get more resources and a new industry competition landscape will be presented.(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. At present along with the accelerated rate of global vaccination and the lifting of lockdown measures in various countries the global economic recovery has been significantly enhanced but the world economic situation remains complicated and severe due to the repeated ups and downs of the pandemic and frequent variants of the virus. 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 Under the guidance of "housing is for living in not for speculation" the regulation and control policies are progressive. The market is entering a period of adjustment and the industry is entering a stage of profound changes. The development of the Company is undergoing new tests. The Company will continue to deepen its research on industry policies follow the national strategies innovate its operating model and optimize its development method. At the same time the Company will conduct research on strategic emerging industries in a timely manner to explore new areas and cultivate new business models. 3. Business operating risks and countermeasures Due to the implementation of a series of policies such as the real estate loan concentration management mechanism and "centralized land supply" it poses new challenges for the Company to expand its development land reserve. 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 2022 will see the convening of the 20th National Congress of the Communist Party of China. It is also a crucial year for the Company to deepen its reform. The Company will resolutely implement the decisions and deployment of the CPC Shenzhen Municipal Committee the Shenzhen Municipal People’s Government the Municipal SASAC and SIHC. The “Dual Zone” construction in Shenzhen and the policy of deepening the reform of state-owned assets and enterprises have brought strategic opportunities for the Company to plan for projects reserves and stabilize operation and management. Correspondingly the Company will strive to seek new breakthroughs in its reform and development.The Company has made an overall operating plan for 2022. Guided by the Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era the Company will conscientiously implement the spirit of the 19th 32ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 National Congress of the Communist Party of China all previous plenary sessions of the 19th Central Committee of the Communist Party of China and the Central Economic Work Conference and take overall planning of production and operation by Party building and high-quality development. It will stabilize the operation on the basis of safety management explore future development directions and focus on project development and sales while strengthening the implementation. At the same time the Company will make efforts in key tasks such as project financing quality and efficiency improvement and risk control. Additionally the Company will work hard to improve its internal strength and operate meticulously making every effort to promote its high-quality development to a new level. 1. Focus on the main business and continue to build a solid foundation for development First the Company will accelerate project construction to ensure the smooth implementation of project development plans. Second the Company will fully boost project sales to provide sufficient cash flow and performance support for its future development. Third the Company will intensify efforts to research real estate policies work on land development surveys moderately expand the resource reserves of main business projects and continually strengthen the foundation for high-quality development. 2. Enhance synergy and actively explore future development directions First with the help of intermediary service agencies the Company will keep strengthening market research on strategic emerging industries. Second the Company will continue to enhance communication with the Municipal SASAC and the controlling shareholder and strive to achieve strategic synergy with the systems. Third the Company will cooperate with system capital platforms to leverage social capital in the form of industry investment funds and jointly explore business opportunities. Fourth through fund operation the Company will select target projects that generate stable revenue and profits show great growth potential and can be integrated in order to steadily increase profits. 3. Improve quality and efficiency and continuously optimize the industry structure First the Company will speed up the collection of equity transfer funds and the transfer of assets and personnel with respect to Shenzhen Property Management. Second the Company will sell self-owned properties that do not have urban renewal qualifications or appreciation potential. Third the Company will accelerate the equity transfer of Yunnan Kunpeng Air Service Co. LTD. and recover the investment funds as soon as possible. Fourth the Company will continue to clear out zombie companies. Fifth the Company will keep promoting in-depth cooperation with the Luohu District People’s Government and Shenzhen Luohu Hospital Group on the theme of comprehensive health. 4. Make sound overall planning to conduct major works in an orderly fashion First the Company will enhance communication with financial institutions strive to expand financing channels flexibly operate different financing instruments and rationally optimize its asset-debt structure. Second the Company will strengthen organizational guarantees fulfill its responsibilities and make every effort to solve problems left over from history. Third benchmarked against model enterprises the Company will turn to lean management improve rules and regulations continuously and standardize decision-making procedures in order to improve the quality of decision-making and fully enhance its comprehensive strength. Fourth the Company will maintain team stability optimize the age structure and knowledge structure of the talent team and ensure that the team’s combat effectiveness does not decline and execution power does not lag behind. Fifth the Company will take multiple measures to consolidate responsibilities and intensify efforts to collect arrears. Sixth the Company will deeply advance the development of its policies on supervision inspection and accountability comprehensively strengthen the application of supervision results take accountability and performance management seriously and focus on improving execution power to ensure the implementation of all tasks. 33ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 5. Make unremitting efforts on the implementation of different measures for safe production The Company will unify its thinking clarify its directions carry out safe production and petitioning stability maintenance creatively with high standards closely based on its own reality and strive to break new grounds in safety and stability. First the Company will continue to establish sound policies of safe production management strictly implement the accountability system for safe production intensify efforts on checking potential safety hazards and enhance safety governance in major areas. Second the Company will adhere to regular pandemic prevention and control with targeted measures by taking various steps and stringent precautions for strictly preventing and controlling the pandemic to guarantee a steady situation of pandemic prevention and control. 6. Strengthen leadership and work on Party building Guided by the Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era the Company will organize the study publicity and implementation of the spirit of the 20th National Congress of the Communist Party of China consolidate and deepen the achievements of Party history education and incorporate Party history education into all Party building tasks. On top of that the Company will strengthen its Party organization theoretically and organizationally and improve the Party organization’s conduct. Playing a leadership role the Party organization will set the right direction keep in mind the big picture ensure the implementation of Party policies and principles and mobilize and give full play to the exemplary and vanguard role of Party members. The Company will take a two-pronged approach on both Party building and business operation effectively integrating 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 Contents and Index to main inquiry Date of visit Place of visit Way of visit Type of visitor Visitor materials information provided Inquired of the future development The Individual 2021-01-07 By telephone Individual plan of the N/A Company investor Company and didn’t offer written materials Inquired of project sales of The Individual 2021-01-13 By telephone Individual the Company N/A Company investor and didn’t offer written materials Inquired of the land reserves The Individual 2021-01-22 By telephone Individual and projects N/A Company investor progress of the Company and 34ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 didn’t offer written materials Inquired of business situations and The Individual strategic 2021-01-25 By telephone Individual N/A Company investor planning of the Company and didn’t offer written materials Inquired of the future development The Individual 2021-02-03 By telephone Individual plan of the N/A Company investor Company and didn’t offer written materials Inquired of business situations and The Individual strategic 2021-02-26 By telephone Individual N/A Company investor planning of the Company and didn’t offer written materials Inquired of business The Individual 2021-03-01 By telephone Individual situation and N/A Company investor didn’t offer written materials Inquired of the land reserves and projects The Individual 2021-03-02 By telephone Individual progress of the N/A Company investor Company and didn’t offer written materials Inquired of the future The Individual 2021-03-18 By telephone Individual development N/A Company investor plan of the Company and 35ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 didn’t offer written materials Inquired of business The Individual 2021-03-25 By telephone Individual situation and N/A Company investor didn’t offer written materials Inquired of business situations and The Individual strategic 2021-03-30 By telephone Individual N/A Company investor planning of the Company and didn’t offer written materials Inquired of project sales of The Individual 2021-04-07 By telephone Individual the Company N/A Company investor and didn’t offer written materials Inquired of the future development The Individual 2021-04-16 By telephone Individual plan of the N/A Company investor Company and didn’t offer written materials Inquired of the land reserves and projects The Individual 2021-04-28 By telephone Individual progress of the N/A Company investor Company and didn’t offer written materials Inquired of business situations and The Individual strategic 2021-05-14 By telephone Individual N/A Company investor planning of the Company and didn’t offer written materials 36ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 Inquired of project sales of The Individual 2021-05-18 By telephone Individual the Company N/A Company investor and didn’t offer written materials Inquired of the future development The Individual 2021-05-20 By telephone Individual plan of the N/A Company investor Company and didn’t offer written materials Inquired of the land reserves and projects The Individual 2021-06-02 By telephone Individual progress of the N/A Company investor Company and didn’t offer written materials Inquired of business situations and The Individual strategic 2021-06-11 By telephone Individual N/A Company investor planning of the Company and didn’t offer written materials Inquired of business situations and The Individual strategic 2021-06-22 By telephone Individual N/A Company investor planning of the Company and didn’t offer written materials Inquired of project sales of The Individual 2021-06-24 By telephone Individual the Company N/A Company investor and didn’t offer written materials The Individual Inquired of 2021-06-29 By telephone Individual N/A Company investor business 37ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 situations and strategic planning of the Company and didn’t offer written materials Inquired of project sales of The Individual 2021-07-07 By telephone Individual the Company N/A Company investor and didn’t offer written materials Inquired of business situations and The Individual strategic 2021-07-20 By telephone Individual N/A Company investor planning of the Company and didn’t offer written materials Inquired of the future development The Individual 2021-08-11 By telephone Individual plan of the N/A Company investor Company and didn’t offer written materials Inquired of project sales and future The Individual development 2021-08-19 By telephone Individual N/A Company investor plan of the Company and didn’t offer written materials Inquired of project sales of The Individual 2021-08-24 By telephone Individual the Company N/A Company investor and didn’t offer written materials Inquired of the The Individual 2021-09-01 By telephone Individual future N/A Company investor development 38ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 plan of the Company and didn’t offer written materials Inquired of the future development The Individual 2021-09-02 By telephone Individual plan of the N/A Company investor Company and didn’t offer written materials Inquired of the land reserves and projects The Individual 2021-09-15 By telephone Individual progress of the N/A Company investor Company and didn’t offer written materials Inquired of business situations and The Individual strategic 2021-09-23 By telephone Individual N/A Company investor planning of the Company and didn’t offer written materials Inquired of the future development The Individual 2021-10-11 By telephone Individual plan of the N/A Company investor Company and didn’t offer written materials Inquired of project sales of The Individual 2021-10-15 By telephone Individual the Company N/A Company investor and didn’t offer written materials Inquired of the The Individual future 2021-10-26 By telephone Individual N/A Company investor development plan of the 39ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 Company and didn’t offer written materials Inquired of the land reserves and projects The Individual 2021-11-03 By telephone Individual progress of the N/A Company investor Company and didn’t offer written materials Inquired of project sales of The Individual 2021-11-11 By telephone Individual the Company N/A Company investor and didn’t offer written materials Inquired of the future development The Individual 2021-11-18 By telephone Individual plan of the N/A Company investor Company and didn’t offer written materials Inquired of the land reserves and projects The Individual 2021-12-07 By telephone Individual progress of the N/A Company investor Company and didn’t offer written materials Inquired of project sales of The Individual 2021-12-21 By telephone Individual the Company N/A Company investor and didn’t offer written materials Inquired of the future development The Individual 2021-12-29 Field research Individual plan of the N/A Company investor Company and didn’t offer written materials 40ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 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 41ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 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.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 Relationshi Company Company Progress and Type p with the Course Countermeasures name nature follow-up plan Company The Company and For the Company’s Refer to the ShenZhen Properties & existing business that has Announcement Shenzhen Resources Development horizontal competition on Receiving the Horizontal Controlling Investment (Group) Ltd. (hereinafter with ShenZhen Properties Avoiding Other competition shareholder Holdings referred to as “SZPRD”) are & Resources Horizontal Co. Ltd. majority-owned subsidiaries Development (Group) Competition of Shenzhen Investment Ltd. Shenzhen Commitment Holdings Co. Ltd. The Investment Holdings Co. Letter from the 42ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 Company and SZPRD are Ltd. will within the scope Controlling operating real estate permitted by laws and Shareholder (No.: development and regulations timely launch 2021-032) commercial property sales one or several of the disclosed by the business which belong to following solutions that is Company on 11 the same industry. There is practically feasible and September 2021 horizontal competition. complete the and the implementation of the Announcement relevant solution(s) before on Resolutions of 9 November 2024 to solve the 1st the existing horizontal Extraordinary competition problem: (1) General Meeting Solve the horizontal of 2021 (No.: competition between the 2021-34) two through asset sales or disclosed by asset replacement; (2) ShenZhen Solve the horizontal Properties & competition between the Resources two through equity Development transfer; (3) Take other (Group) Ltd. on measures that can 27 September effectively solve the 2021 for details.problem of horizontal competition.IV Annual and Extraordinary General Meeting Convened during the Reporting Period 1. General Meetings Convened during the Reporting Period Investor Index to disclosed Meeting Type Convened date Disclosure date participation ratio information Resolutions of 2020 Annual General Meeting disclosed The 2020 Annual Annual General on China Securities 63.55% 28 April 2021 29 April 2021 General Meeting Meeting Securities Times Ta Kung Pao and www.cninfo.com.cn (No.: 2021-011) Resolutions of the 1st The 1st Extraordinary Extraordinary Extraordinary General Meeting of 63.55% 16 July 2021 17 July 2021 General Meeting General Meeting of 2021 2021 disclosed on 43ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 China Securities Securities Times Ta Kung Pao and www.cninfo.com.cn (No.: 2021-026) Resolutions of the 2nd Extraordinary General Meeting of The 2nd 2021 disclosed on Extraordinary Extraordinary 63.59% 11 October 2021 12 October 2021 China Securities General Meeting of General Meeting Securities Times Ta 2021 Kung Pao and www.cninfo.com.cn (No.: 2021-040) Resolutions of the 3rd Extraordinary General Meeting of The 3rd 2021 disclosed on Extraordinary Extraordinary 1.98% 29 December 2021 30 December 2021 China Securities General Meeting of General Meeting Securities Times Ta 2021 Kung Pao and www.cninfo.com.cn (No.: 2021-053) 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 Numbe Increas Decreas Beginni r of Other e in the e in the Ending Incumb ng granted increas Reason Office Start of End of Stock Reporti Reporti shareho Name ent/For Gender Age shareho restricte e/decre for title tenure tenure options ng ng lding mer lding d ase change Period Period (share) (share) shares (share) (share) (share) (share) Liu Chairm 15 Incumb Zhengy an of Male 52 January 0 0 0 0 0 0 0 ent u the 2020 44ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 Board 31 Tang Directo Incumb Decem Xiaopin Male 52 0 0 0 0 0 0 0 r ent ber g 2020 14 Tang Incumb Decem Xiaopin GM Male 52 0 0 0 0 0 0 0 ent ber g 2020 Deng 17 Directo Incumb Kangch Male 56 April 10000 0 0 0 0 0 10000 r ent eng 2012 11 Wang Directo Incumb Male 49 October 0 0 0 0 0 0 0 Jianfei r ent 2021 22 Wang Incumb Septem CFO Male 49 0 0 0 0 0 0 0 Jianfei ent ber 2021 8 Directo Incumb Septem Wen Li Female 53 0 0 0 0 0 0 0 r ent ber 2006 31 Sun Directo Incumb Decem Minghu Male 41 0 0 0 0 0 0 0 r ent ber i 2020 Kang Indepen Incumb 15 May Xiaoyu dent Male 58 0 0 0 0 0 0 0 ent 2018 e director He Indepen Incumb 30 June Zuowe dent Male 60 0 0 0 0 0 0 0 ent 2020 n director Mi Indepen Incumb 30 June Xumin dent Male 47 0 0 0 0 0 0 0 ent 2020 g director Chairm 31 an of Incumb Decem Li Lian the Female 55 0 0 0 0 0 0 0 ent ber Supervi 2020 sory 45ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 Commi ttee Ren Supervi Incumb 15 May Male 42 2000 0 0 0 0 0 2000 Wei sor ent 2018 17 Li Supervi Incumb Female 44 April 0 0 0 0 0 0 0 Yufei sor ent 2012 Feng 2 Supervi Incumb Hongw Male 51 March 0 0 0 0 0 0 0 sor ent ei 2017 27 Supervi Incumb Lin Jun Female 53 April 0 0 0 0 0 0 0 sor ent 2016 28 Wei Vice Incumb Septem Hanpin Female 56 0 0 0 0 0 0 0 GM ent ber g 2012 Zhang Vice Incumb 15 July Hongw Male 56 0 0 0 0 0 0 0 GM ent 2020 ei Secreta 31 ry of Incumb Decem Luo Yi Male 48 0 0 0 0 0 0 0 the ent ber Board 2020 31 Zhao 11 Directo Decem Zhongli Former Male 52 October 0 0 0 0 0 0 0 r ber ang 2021 2020 1422 Zhao Decem Septem Zhongli CFO Former Male 52 0 0 0 0 0 0 0 ber ber ang 20202021 Total -- -- -- -- -- -- 12000 0 0 0 0 0 12000 -- Indicate by tick mark whether any directors or supervisors left or any senior management were disengaged during the Reporting Period √ Yes □ No Change of Directors Supervisors and Senior Management √Applicable □ Not applicable Name Office title Type of change Date of change Reason for change Zhao Zhongliang D irector Left 11 October 2021 Job change 46ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 22 September Zhao Zhongliang CFO Left Job change 2021 2. Biographical Information Professional backgrounds major work experience and current duties in the Company of the incumbent directors supervisors and senior management: 1. Liu zhengyu: he once was the director of Inspection Department in State-owned Assets Supervision and Administration Commission of the People’s Government of Shenzhen Municipal Chief Accountant vice GM and member of CPC of Shenzhen Investment Holdings Co. Ltd. Now he acts as the executive director president and Vice Secretary of CPC of Shenzhen International Holdings Limited the Chairman of the Board secretary of CPC of the Company. 2. Tang Xiaoping: he ever act as CFO and finance minister of Shenzhen HRD Assets Management Company minister of Financial Operations Management Department of Shenzhen Foreign Labor Service Co. Ltd. and executive director of Shenzhen Foreign Affairs Service Center Manager of Financing Plan Department deputy GM of the Company and secretary of the Board of the Company. He is currently the director GM and deputy secretary of the CPC of the Company. 3. Deng Kangcheng: he was once deputy director director of the Office of Shenzhen Investment Holdings Co. Ltd. and supervisor of the Company. And now he acts as the director Vice Secretary of CPC and Chairman of the Trade Union Federation of the Company. 4. 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. 5. 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. 6. 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. 7. 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. 8. He Zuowen: formerly associate professor of accounting 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 director of Shenzhen Institute of Certified Public Accountants 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 47ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 Branch Chairman of Shenzhen Tianye Tax Agent Co. Ltd. and also served as the independent director of Shenzhen JPT Opto-Electronics Co. Ltd. Shenzhen Textile (Group) Co. Ltd. Shenzhen Bioeasy Biotechnology Co. Ltd. Shenzhen Tongyi Industry Co. Ltd. and the Company. The main social positions are: judge of the Guangdong Provincial Senior Accountant Review Committee external master tutor of Shenzhen University member of the Shenzhen Municipal Social Organization Disciplinary Inspection Committee of the Communist Party of China 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. 9. Mi Xuming: Former lecturer 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 associate professor and master tutor of Shenzhen University and at the same time as the independent directors of ChinaLin Securities Co. Ltd. Shenzhen Farben Information Technology Co. Ltd. and the Company. 10. Li Lian: Former Deputy Director and Deputy Secretary of the Party Branch of Shenzhen Foreign Economic and Trade Service Center Secretary of the Disciplinary Committee and Chairman of the Supervisory Committee of Shenzhen Shentou Education Co. Ltd.; currently Chairman of the Supervisory Committee Secretary of the Disciplinary Committee and member of CPC of the Company. 11. Ren Wei: he once was the CFO of Xian Zhenye Real Estate Development Co. Ltd. minister of Budget & Financing Department and director of Fund Centre of Shenfubao Group Co. Ltd. Now he serves as the vice minister of Audit Department of Shenzhen Investment Holdings Co. Ltd. and the supervisor of the Company. 12. Li Yufei: she ever worked as the Assistant to the Manager of the Investment Department and Assistant to 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. 13. Feng Hongwei: he once was the Vice Chief of the Board Secretariat and the Securities Representative. Now he acts as the supervisor member of the Disciplinary Committee and minister of Audit Department of the Company. 14. Lin Jun: She once was the Vice Chief and Chief of the Party-Mass Work Department. And she has been 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). 15. Wei Hanping: she ever worked as the manager of the Leasing Operation Department in Shenzhen City Construction Development (Group) Co. and the manager of Cost Control Department of the Company. And she now serves as the Vice GM and member of CPC of the Company. 16. Zhang Hongwei: once served as GM of Shenzhen Urban Construction Investment Development Co. Ltd. Hefei Ruifa Urban Construction Investment Development Co. Ltd. manager of the Company's 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. 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 Name Shareholding entity Office held in Start of tenure End of tenure Remuneration or 48ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 the allowance from the shareholding shareholding entity entity Vice GM Liu Zhengyu Shenzhen Investment Holdings Co. Ltd member of 9 January 2017 9 August 2021 Yes CPC Chief of Financial 11 November Sun Minghui Shenzhen Investment Holdings Co. Ltd Department Yes 2020 (Settlement Center) Vice minister 18 September Ren Wei Shenzhen Investment Holdings Co. Ltd of Audit Yes 2017 Department Deputy Director of Li Yufei Shenzhen Investment Holdings Co. Ltd Discipline 9 July 2015 Yes Inspection Office Offices held concurrently in other entities: √Applicable □Not applicable Remuneration or Office held in Name Other entity Start of tenure End of tenure allowance from the entity the entity Executive director president and Liu Zhengyu Shenzhen International Holdings Limited 19 August 2021 Yes Vice Secretary of CPC China's State Owned Capital Venture 9 September Liu Zhengyu Director 16 August 2016 No Capital Fund 2021 Liu Zhengyu Kashi Shenzhen City Co. Ltd. Director 8 October 2013 18 October 2021 No Non-executiv Shenzhen Investment Holdings Bay Area e director 30 December Liu Zhengyu 14 March 2018 No Development Co. Ltd. Chairman of 2021 the Board Shenzhen Investment International Capital 18 December Liu Zhengyu Director 18 October 2021 No Holdings Infrastructure Co. Ltd. 2017 Shenzhen Investment International Capital 9 September Liu Zhengyu Director 18 October 2021 No Holdings Co. Ltd. 2016 49ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 December 12 Liu Zhengyu Tsinghua Tri Shenzhen Co. Ltd. Director 18 October 2021 No 2019 SIHC Hong Kong Investment Holdings Liu Zhengyu Director March 11 2019 18 October 2021 No Limited Research Institute of Tsinghua University in Member of a Liu Zhengyu April 10 2018 18 October 2021 No Shenzhen council Director GM Shenzhen Bay Technology Development and Vice December 2 Wen Li Yes Co. Ltd. Secretary of 2016 CPC Hubei SIHC Investment Development Co. 1 February Wen Li Director No Ltd. 2018 Director GM Shenzhen Chuangke Park Investment Co. 30 December Wen Li and legal No Ltd. 2021 representative Chengdu Xingjin Bailuwan Construction Chairman of Wen Li 7 July 2021 No and Development Co. Ltd. the Board China Nanshan Development (Group) Co. October 17 Sun Minghui Supervisor No Ltd. 2017 Shenzhen Highway Passenger Sun Minghui Supervisor June 16 2017 No Transportation Service Centre Co. Ltd.China Science And Technology Sun Minghui Supervisor June 27 2017 No Development Co. Ltd.ULTRARICH INTERNATIONAL November 11 Sun Minghui Director No LIMITED 2020 November 11 Sun Minghui China Southern Fund Management Co. Ltd. Supervisor April 28 2021 No 2020 Hubei SIHC Investment Development Co. November 11 Sun Minghui Director No Ltd. 2020 February 10 Sun Minghui Shenzhen Textile (Holdings) Co. Ltd. Director No 2021 Shenzhen Shenzhen-Hong Kong Science October 18 Sun Minghui and Technology Innovation Cooperation Director No 2021 Zone Development Co. Ltd.Shenzhen Sungang China Resources Land October 17 Ren Wei Supervisor No Development Co. Ltd. 2017 November 19 Li Yufei Shenzhen Dapengwan Huaqiao Tomb Director No 2015 Deng Shenzhen Leaguer Co. Ltd. Director 15 June 2020 No 50ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 Kangcheng 4 November Wei Hanping Shenzhen Talents Housing Group Co. Ltd. Director No 2021 Shenzhen Special Zone Construction 4 November Wei Hanping Director No Engineering Group Co. Ltd. 2021 December 2 Kang Xiaoyue Beijing Weiheng (Shenzhen) Law Firm Senior partner Yes 2019 Dahua Certified Public Accountants December 1 He Zuowen Partner Yes (Special General Partnership) 2002 Chairman of December 1 He Zuowen Shenzhen Tianye Tax Agency Co. Ltd. Yes the Board 2008 Independent He Zuowen Shenzhen JPT Opto-Electronics Co. Ltd. June 1 2017 Yes director Independent He Zuowen Shenzhen Textile (Holdings) Co. Ltd. July 19 2017 Yes director Independent He Zuowen Shenzhen Bioeasy Biotechnology Co. Ltd. October 1 2017 Yes director Independent October 11 He Zuowen Shenzhen Tongyi Industry Co. Ltd. Yes director 2018 Associate December 1 Mi Xuming Shenzhen University professor and Yes 2009 master tutor Independent Mi Xuming ChinaLin Securities Co. Ltd. April 10 2017 Yes director Shenzhen Farben Information Technology Independent January 29 Mi Xuming Yes Co. Ltd. director 2021 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: 1. The remuneration of the Company's directors supervisors and senior managers shall be determined and implemented in accordance with the regulations of the Company's remuneration management system. 2. After the review and approval at the 2013 Annual General Meeting of Shareholders held on April 23 2014 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. 51ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 Remuneration of directors supervisors and senior management for the Reporting Period Unit: RMB’0000 Total before-tax Any Incumbent/Forme remuneration Name Office title Gender Age remuneration r from the from related party Company Chairman of the Liu Zhengyu Male 52 Incumbent Yes Board Tang Xiaoping Director and GM Male 52 Incumbent 122.22 No Deng Kangcheng Director Male 56 Incumbent 109.43 No Wang Jianfei Director and CFO Male 49 Incumbent 9.63 No Wen Li Director Female 53 Incumbent Yes Sun Minghui Director Male 41 Incumbent Yes Independent Kang Xiaoyue Male 58 Incumbent 8.4 No director Independent He Zuowen Male 60 Incumbent 8.4 No director Independent Mi Xuming Male 47 Incumbent 8.4 No director Chairman of the Li Lian Supervisory Female 55 Incumbent 101.70 No Committee Ren Wei Supervisor Male 42 Incumbent Yes Li Yufei Supervisor Female 44 Incumbent Yes Feng Hongwei Supervisor Male 51 Incumbent 63.15 No Lin Jun Supervisor Female 53 Incumbent 63.15 No Wei Hanping Vice GM Female 56 Incumbent 105.31 No Zhang Hongwei Vice GM Male 56 Incumbent 98.46 No Secretary of the Luo Yi Male 48 Incumbent 65.62 No Board Zhao Zhongliang Director and CFO Male 52 Former 80.77 No Total -- -- -- -- 844.64 -- 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 52ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 Announcement on Resolutions of the 60th Meeting of the 7th Board of Directors (No.: The 60th Meeting of the 7th Board 19 March 2021 20 March 2021 2021-004) disclosed on China of Directors Securities Journal Securities Times Ta Kung Pao and www.cninfo.com.cn.Announcement on Resolutions of the 61st Meeting of the 7th Board of Directors (No.: The 61st Meeting of the 7th Board 28 April 2021 29 April 2021 2021-012) disclosed on China of Directors Securities Journal Securities Times Ta Kung Pao and www.cninfo.com.cn.Announcement on Resolutions of the 62nd Meeting of the 7th Board of Directors (No.: The 62nd Meeting of the 7th Board 30 April 2021 6 May 2021 2021-018) disclosed on China of Directors Securities Journal Securities Times Ta Kung Pao and www.cninfo.com.cn.Announcement on Resolutions of the 63rd Meeting of the 7th Board of Directors (No.: The 63rd Meeting of the 7th Board 30 June 2021 1 July 2021 2021-023) disclosed on China of Directors Securities Journal Securities Times Ta Kung Pao and www.cninfo.com.cn.Announcement on Resolutions of the 64th Meeting of the 7th Board of Directors (No.: The 64th Meeting of the 7th Board 20 August 2021 21 August 2021 2021-027) disclosed on China of Directors Securities Journal Securities Times Ta Kung Pao and www.cninfo.com.cn.Announcement on Resolutions of the 65th Meeting of the 7th Board of Directors (No.: The 65th Meeting of the 7th Board 27 August 2021 28 August 2021 2021-028) disclosed on China of Directors Securities Journal Securities Times Ta Kung Pao and www.cninfo.com.cn. 53ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 Announcement on Resolutions of the 66th Meeting of the 7th Board of Directors (No.: The 66th Meeting of the 7th Board 22 September 2021 23 September 2021 2021-033) disclosed on China of Directors Securities Journal Securities Times Ta Kung Pao and www.cninfo.com.cn.Announcement on Resolutions of the 67th Meeting of the 7th Board of Directors (No.: The 67th Meeting of the 7th Board 19 October 2021 20 October 2021 2021-042) disclosed on China of Directors Securities Journal Securities Times Ta Kung Pao and www.cninfo.com.cn.Announcement on Resolutions of the 68th Meeting of the 7th Board of Directors (No.: The 68th Meeting of the 7th Board 25 October 2021 26 October 2021 2021-044) disclosed on China of Directors Securities Journal Securities Times Ta Kung Pao and www.cninfo.com.cn.Announcement on Resolutions of the 69th Meeting of the 7th Board of Directors (No.: The 69th Meeting of the 7th Board 13 December 2021 14 December 2021 2021-049) disclosed on China of Directors Securities Journal Securities Times Ta 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 Total number Board The director Board of board Board meetings Board failed to attend meetings General meetings the meetings attended by meetings the two Director attended meetings director was attended on way of director failed consecutive through a attended eligible to site telecommunica to attend board meetings proxy attend tion (yes/no) Liu Zhengyu 10 5 5 0 0 No 4 Tang Xiaoping 10 5 5 0 0 No 4 Deng Kangcheng 10 5 5 0 0 No 4 54ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 Wang Jianfei 3 1 2 0 0 No 1 Wen Li 10 3 7 0 0 No 1 Sun Minghui 10 5 5 0 0 No 2 Kang Xiaoyue 10 5 5 0 0 No 4 He Zuowen 10 2 8 0 0 No 4 Mi Xuming 10 5 5 0 0 No 4 Zhao Zhongliang 7 4 3 0 0 No 2 Why any independent director failed to attend two consecutive board meetings: Not applicable 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 Details Other Number about informatio of issues Important opinions and n about Committee Members meetings Convened date Content with suggestions raised the convene objection performan d s ce of duty (if any) Strategic Liu Zhengyu Deliberation on It is believed that the Committee of Tang Xiaoping the acquisition Company’s acquisition of 1 30 April 2021 the Board of Wen Li Mi of 51% equity 51% equity interest in Directors Xuming Kang interest in Guangdong Jianbang Group 55ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 Xiaoyue Guangdong (Huiyang) Industrial Co.Jianbang Group Ltd. will effectively increase (Huiyang) the Company’s land reserve Industrial Co. resources which is Ltd. conducive to the sustainable development of the Company in the future; the project has good economic benefits is conducive to enhancing the Company’s future business performance and profitability and is in line with the interests of the Company and all shareholders.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 Business Enterprises.Deliberation on The Company has always the Company’s 20 January 2021 been cautious about changes 2020 financial in accounting policies and statements accounting estimates. There Audit He Zuowen is no use or abuse of Committee of Sun Minghui 4 changes in accounting the Board of Mi Xuming policies or accounting Directors estimates to adjust profits.The financial statements prepared by the Company are true and reliable with complete contents.It is believed that the Deliberation on Company’s 2020 financial the preliminary statements prepared by audit opinions of Grant Thornton China 16 March 2021 Grant Thornton (LLP) comply with all China (LLP) on provisions of the the Company’s Accounting Standards for 2020 financial Business Enterprises and 56ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 statements truly and completely represent the Company’s financial position as of 31 December 2020 and its operating results and cash flows for the year 2020 in all material respects.Deliberation on the summary of It is believed that Grant the 2020 audit Thornton China (LLP) has service provided 19 March 2021 completed the audit of the by Grant Company’s 2020 financial Thornton China statements well.(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 2020 financial statements Deliberation on and internal control Grant the proposed 25 June 2021 Thornton was able to renewal of the earnestly perform its duties audit firm in accordance with the requirements of the auditing standards and the Basic Code for Internal Control of Enterprises. It independently objectively and fairly evaluated the Company’s financial position and operating results demonstrating occupational ethics and professional competence.Therefore it is proposed to 57ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 the Company’s Board of Directors that Grant Thornton should be renewed as the auditing agency for the Company’s 2021 financial statements and internal control.It is believed that the remuneration Deliberation on decision-making procedures the annual for the Company’s directors remuneration of supervisors and senior Remuneration directors management are compliant Mi Xuming and Appraisal supervisors and the remuneration payment Zhao Committee of 1 19 March 2021 senior standards for the Company’s Zhongliang He the Board of management as directors supervisors and Zuowen Directors disclosed in the senior management are in Company’s line with the regulations of 2020 annual the remuneration system report and that the remuneration disclosed in the 2020 annual report is true and accurate.It is believed that Mr. Wang Jianfei is not involved in the circumstances stipulated in Article 146 of the Company Law that prohibit him from serving as a director or a senior management member has never received Deliberation on punishment by the China the nomination Nomination Kang Xiaoyue Securities Regulatory of Mr. Wang Committee of Deng 14 September Commission and other 1 Jianfei as the the Board of Kangcheng He 2021 relevant authorities or Company’s Directors Zuowen disciplinary action by the director and stock exchange has not CFO been placed on file for 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 58ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 regulations is not a defaulter is not a person held liable or punished for dishonesty and has the qualifications required by relevant laws administrative regulations departmental rules and normative documents. It is agreed that Mr. Wang Jianfei may be recommended as the Company’s director and CFO and that the relevant proposal should be submitted to the 66th Meeting of the 7th Board of Directors of the Company for deliberation.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 at 109 the period-end Number of in-service employees of major subsidiaries at the 1469 period-end Total number of in-service employees at the period-end 1578 Total number of paid employees in the Reporting Period 1575 Number of retirees to whom the Company as the parent or its 0 major subsidiaries need to pay retirement pensions Functions Function Employees Production 950 59ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 Sales 79 Technical 422 Financial 53 Administrative 74 Total 1578 Educational backgrounds Category Number Doctors 1 Masters 15 Bachelors 175 College graduates 214 Technical secondary school graduates 88 High school graduates and below 1085 Total 1578 2. Employee Remuneration Policy The management personnel above vice general manager (including vice GM) of the Company conducted annual salary system other employees conducted contacting the performance with the benefit salary system. 3. Employee Training Plans The Company established annual training plan in line with Measures for the Management of Employee Training The Company adopts internal training hires experts give lectures to the Company or participate professional training train the on job employees with job knowledge professional skills rules and regulations the business process etc. which enrich and renew the professional knowledge enhance the comprehensive quality and business skills of the employees. 4. Labor Outsourcing □ Applicable √ Not applicable 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 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 60ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 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) 0.88 Total shares as the basis for the profit distribution 1011660000 proposal (share) Cash dividends (RMB) (tax inclusive) 89026080.00 Cash dividends in other forms (such as share 0.00 repurchase) (RMB) Total cash dividends (including those in other 89026080.00 forms) (RMB) Distributable profit (RMB) 220836309.93 Total cash dividends (including those in other 100% forms) as % of 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 2021 was reviewed and approved by the 71st Meeting of the 7th Board of Directors held on 17 March 2022 and intended to be submitted to The 2021 Annual General Meeting for review. Based on the total 1011660000 shares of the Company as at 31 December 2021 a cash dividend of RMB0.88 (tax included) will be distributed to the A-share and B-share holders for every 10 shares they hold without bonus share (tax included) and no share capital increase from capital reserve would be conducted. The profit distribution plan can be implemented upon review and approval of the Shareholders’ General Meeting of the Company.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 61ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 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 Countermeasures Settlement Follow-up Subsidiary Integration plan Problem progress taken progress settlement plan Jianbang Group has been included in the scope of the Company’s consolidated statements. The During the construction for Reporting Period Linxinyuan the Company Project developed Guangdong acquired 51% by the Company Jianbang Group equity interest in was successfully (Huiyang) Jianbang Group. N/A N/A N/A N/A resumed at the Industrial Co. The equity end of June 2021 Ltd. registration and the Phase I change was was pre-sold in completed in mid-December.mid-May 2021.At present the company’s operation and management are being carried out as planned.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 2022 62ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 self-evaluation report Index to the disclosed internal control 2021 Internal Control Self-Evaluation Report on www.cninfo.com.cn self-evaluation report Evaluated entities’ combined assets as % of 85.58% consolidated total assets Evaluated entities’ combined operating revenue as % of consolidated operating 99.16% revenue Identification standards for internal control weaknesses Weaknesses in internal control over financial Weaknesses in internal control not Type 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 influence scope and other factors. If The Company in line with the actual the follows events or indicators occur situation when the follows events or there may be serious or important defects indications happen which means there of internal control in the non-financial probably existing serious or important statements:(1) Lack democratic defects in the financial report; (1) the decision-making process if lack directors supervisors and senior executives significant problem decision-making were fraud. (2) Certified Public Accountant important appointment and dismissal of find that there is a significant error in the cadres significant project investment Nature standard financial report however the internal control decision-making; usage of large capital did not discover it when conducting internal (three important one large); (2) control; (3) The Audit Committee under the Unscientific decision-making process Board and Internal Audit Service's such as the major decision-making supervision to the internal control is invalid. errors has caused a serious property loss (4) The accounting personnel were without to the company; (3) Seriously violating necessary qualities to complete the state laws and regulations; (4) Loss of preparation of financial statements. key management personnel or important talent; (5) Negative news media appear frequently and widely spread; (6) The results of the internal control evaluation especially large or significant defects have not been corrected. (7) Important business systems lack control rules or systemic failure.Quantitative standard Serious defects: the defects or defect group The criterion of quantity of the 63ShenZhen Special Economic Zone Real Estate & Properties (Group) Co. Ltd. Annual Report 2021 may lead to the financial results recognition of defects of internal control misstatement or potential losses >3% of net in the non-financial statements mainly assets; important defects: 1% of net were amount of direct economy losses in assets

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