BCTC 2019

China
ChinaEvergrande
EvergrandeGroup
China Evergrande Group
China Evergrande Group 中國恒大集團
23rd Floor, China Evergrande Centre
38 Gloucester Road
Group
Wanchai
2019
Hong Kong
ANNUAL REPORT
http://www.evergrande.com
ANNUAL
ANNUAL
REPORT
REPORT
2019
2018
NATIONAL
LAYOUT MAP
The Group focuses on property development for the people
as its foundation, with cultural tourism and health industry as
complimentary pillars, spearheaded by new energy vehicle
industry, ranking at 138th in Fortune Global 500, a leap of
358 positions from 2016.
876 PROJECTS
293 MILLION SQUARE METRES OF

LAND RESERVE
237 CITIES
13
Heilongjiang
18
Jilin
9
46
Xinjiang 38
Liaoning
Hebei
22 2
Inner Mongolia Beijing

9
Tianjin
23
6 Shanxi 49
1 Ningxia Shandong
Qinghai 10 66
Gansu 17 49
Jiangsu
Shaanxi Henan
49 3
37
Anhui Shanghai
Tibet Hubei
50 39
35
Sichuan Zhejiang
Chongqing
44 36
31
24 Jiangxi
Hunan
Fujian
Guizhou
13
92
Hainan Yunnan 33 Taiwan
Guangdong
Guangxi
SOUTH CHINA SEA ISLANDS
12
Hainan
BOARD OF DIRECTORS
AND COMMITTEES
CHAIRMAN OF THE BOARD OF NOMINATION COMMITTEE
DIRECTORS
Professor Hui Ka Yan (Chairman)
Professor Hui Ka Yan Mr. He Qi
Mr. Chau Shing Yim, David
EXECUTIVE DIRECTORS
AUTHORISED REPRESENTATIVES
CONTENTS
Professor Hui Ka Yan
Dr. Xia Haijun Professor Hui Ka Yan
Ms. He Miaoling Mr. Fong Kar Chun, Jimmy
Mr. Shi Junping
Mr. Pan Darong
2 Board of Directors and Committees
Mr. Huang Xiangui
3 Corporate and Shareholder Information
8 Report of Chairman
INDEPENDENT NON-EXECUTIVE
9 Business review DIRECTORS
12 Business outlook
13 Corporate social responsibility
15 Awards
Mr. He Qi
15 Final dividend
15 Acknowledgement Ms. Xie Hongxi
18 Management discussion and analysis

24 Directors and Administrative Structure AUDIT COMMITTEE
29 Investor Relations Report For 2019
Mr. Chau Shing Yim, David (Chairman)
32 2019 Major Awards and Prizes Mr. He Qi
34 2019 Milestones Ms. Xie Hongxi
40 Corporate Governance Report

52 Report of the Board of Directors REMUNERATION COMMITTEE
67 Independent Auditor’s Report
Mr. He Qi (Chairman)
217 Five Years Financial Summary Professor Hui Ka Yan
Ms. Xie Hongxi
2 China Evergrande Group Annual Report 2019

BOARD OF DIRECTORS
AND COMMITTEES
CHAIRMAN OF THE BOARD OF NOMINATION COMMITTEE
DIRECTORS
Professor Hui Ka Yan Mr. He Qi
EXECUTIVE DIRECTORS
AUTHORISED REPRESENTATIVES
CONTENTS
Professor Hui Ka Yan
Dr. Xia Haijun Professor Hui Ka Yan
Ms. He Miaoling Mr. Fong Kar Chun, Jimmy
Mr. Shi Junping
Mr. Pan Darong
2 Board of Directors and Committees
Mr. Huang Xiangui
3 Corporate and Shareholder Information
8 Report of Chairman
INDEPENDENT NON-EXECUTIVE
9 Business review DIRECTORS
12 Business outlook
13 Corporate social responsibility
15 Awards
Mr. He Qi
15 Final dividend
15 Acknowledgement Ms. Xie Hongxi
18 Management discussion and analysis

24 Directors and Administrative Structure AUDIT COMMITTEE
29 Investor Relations Report For 2019
Mr. Chau Shing Yim, David (Chairman)
32 2019 Major Awards and Prizes Mr. He Qi
34 2019 Milestones Ms. Xie Hongxi
40 Corporate Governance Report

52 Report of the Board of Directors REMUNERATION COMMITTEE
67 Independent Auditor’s Report
Mr. He Qi (Chairman)
217 Five Years Financial Summary Professor Hui Ka Yan
Ms. Xie Hongxi

CORPORATE AND
SHAREHOLDER INFORMATION
Head Office Principal Bankers
No.1126 Haide 3rd Road China Minsheng Banking Corp., Ltd.

Nanshan District, Shenzhen Agricultural Bank of China Limited
Guangdong Province China CITIC Bank Corporation Limited
The PRC China Everbright Bank Company Limited
Postal code: 518054 Industrial and Commercial Bank of China Limited
China Zheshang Bank Co., Ltd.
Shanghai Pudong Development Bank Co., Ltd.
Place of Business in Hong Kong Industrial Bank Co., Ltd.
Agricultural Development Bank of China
23rd Floor Bank of Jiujiang Co., Ltd.
China Evergrande Centre Nanyang Commercial Bank (China)
38 Gloucester Road China Bohai Bank Co., Ltd.
Wanchai, Hong Kong China Guangfa Bank Co., Ltd.
Bank of Jilin Co., Ltd.
China Construction Bank Corporation
Website Bank of China Limited
Hua Xia Bank Company Limited
www.evergrande.com Bank of Luoyang Co.,Ltd.
Bank of Shanghai Co., Ltd.
Longjiang Bank Corporation
Company Secretary
Mr. Fong Kar Chun, Jimmy Shareholder Information

Hong Kong solicitor
Listing Information
The shares of the Company are listed on The Stock
Auditor Exchange of Hong Kong Limited (“Stock Exchange”)
The bonds of the Company are quoted on Singapore Stock
PricewaterhouseCoopers
Exchange Limited (“Singapore Stock Exchange”)
China Evergrande Group Annual Report 2019 3

CORPORATE AND
Securities Codes US$1,344,921,000 7.50% Senior Notes due 2023

Common Code: 162759949
Stock ISIN: XS1627599498
HKEX: 3333 US$850,000,000 10.0% Senior Notes due 2023

Bonds ISIN: XS1982037779
US$1,565,000,000 11.00% Senior Notes due 2020
Common Code: 190367169 US$2,000,000,000 12.0% Senior Notes due 2023
ISIN: XS1903671698 Common Code: 210919210
ISIN: XS2109192109
US$598,181,000 6.25% Senior Notes due 2021
ISIN: XS2106834299
Common Code: 162759914 US$590,000,000 13.75% Senior Notes due 2023
ISIN: XS1903671938
ISIN: XS1587867539
Common Code: 158043114 US$700,000,000 10.5% Senior Notes due 2024
ISIN: XS1982040641
ISIN: XS2106834372
ISIN: XS1627599654
ISIN: XS2109191986

ISIN: XS1903671854
HK$18,000,000,000 4.25% Convertible Bonds due 2023

ISIN: XS1767800961

CORPORATE AND
Investor Relations
For enquiries, please contract:

Investor Relations Department
Email: evergrandeIR@evergrande.com
Telephone: (852) 2287 9229

REAL
ESTATE
Industry
REPORT OF
CHAIRMAN
Hui Ka Yan
Chairman
Dear Shareholders,
I am pleased to present the reports of China Evergrande Group
(“Evergrande” or the “Company”) and its subsidiaries (the “Group”)
for the year ended 31 December 2019. The Group’s turnover and gross
profit for the year amounted to RMB477.6 billion and RMB132.9 billion
respectively. Net profit was RMB33.5 billion. Profit attributable to
shareholders was RMB17.3 billion. Basic earnings per share was
RMB1.315.
In order to repay the trust and support of shareholders, the Board

recommended the payment of a final dividend of RMB0.653 per share for
the year 2019, which will be distributed upon approval at the general
meeting of the Group.

REPORT OF CHAIRMAN
BUSINESS REVIEW new energy vehicles as the leading growth driver, the Group
gained a leading position among its peers in terms of
In 2019, under the impact of protectionism and unilateralism, operation scale and profit. In 2019, the Group successfully
global economic growth continued to decline. The increased its shareholding in Shengjing Bank which had total
International Monetary Fund (IMF) lowered its global assets of RMB1,021.5 billion2, and became the single largest
economic growth forecast four times. The latest forecast shareholder with 36.4% shareholding. Together with the
was only 3%, the lowest since the 2008 global financial 50% shareholding in Evergrande Life which had total assets
crisis. However, in a complicated international environment, of RMB188.6 billion2, the combined total assets managed
the Chinese economy demonstrated strong resilience with a by the Group amounted to RMB3,416.7 billion. At the same
GDP of RMB99,086.5 billion, representing a year-on-year time, the Group was ranked 138th in the Fortune Global 500
increase of 6.1% at comparable prices, ranking among the in 2019, significantly improving by 358 positions from 496th
top economies in the world, contributing 28% of the global when it entered the list for the first time in 2016.
economic growth, and becoming the largest contributor to
global economic growth for the 14th consecutive year. Further strengthening the real estate
business, and continuously maintaining
Under the overall guidelines to maintain steady economic abundant high-quality land reserves
growth and deepen supply-side structural reform, the In 2019, the Group further strengthened the real estate
Chinese Central Government continued to implement the business and continued to maintain abundant High-quality
real estate policy of “housing is for living, not for land reserves in order to facilitate quality development. The
speculation”. Adhering to the principle of “different policies Group acquired 153 new pieces of land and further acquired
according to specific situations in different cities” and the land surrounding 39 existing projects during the Year.
category-based policy guidelines, local governments New land reserves acquired were evenly distributed among
implemented various regulation policies, and the overall cities such as Beijing, Guangzhou, Nanjing, Taiyuan,
market remained stable. National contracted sales volume of Kunming, Chengdu, Chongqing, Hangzhou, Zhengzhou,
commodity housing continued to hit its historical high, which Fuzhou, Urumqi, Foshan, Zhuhai, Dalian, Yantai and
increased by 6.5% year-on-year to RMB15.97 trillion. Tangshan. The newly acquired land reserves had a total
Contracted sales volume of residential housing reached GFA of 67.03 million square meters at an average cost of
RMB13.94 trillion, representing year-on-year growth of RMB2,101 per square meter.
10.3%. Inventory levels continued to decline, with 498 million
square meters of properties available for sale at the end of As at 31 December 2019, the Group’s total land reserves
the period, down by 4.9% year-on-year, in which residential covered 876 projects located in 237 cities across China,
housing inventory decreased to 225 million square meters, covering almost all first-tier cities, municipalities and
down by 10.4%. The market share among the top 20 real provincial capitals, as well as a majority of economically
estate companies was 29.91%, a year-on-year increase of 0.59 developed prefecture-level cities with high growth potential.
percentage points.1 The land reserves of the Group had a total planned GFA of
293 million square meters with an original value of
Faced with the complexities in the economic environment RMB527.3 billion and an average cost of RMB1,800 per
domestically and abroad as well as intense industry square meter. In particular, the original value of land reserves
competition, the Group fully understood that housing is for in first-tier and second-tier cities amounted to RMB352.4
people to live in, and firmly carried out controlling policies billion, representing 67% of the total value with an average
following the government’s direction, thus achieving “stable land cost of RMB2,252 per square meter. The original value
land price, stable property price and stable expectations”. of land reserves in third-tier cities amounted to RMB174.9
Having real estate development as the foundation, billion, representing 33% of the total value with an average
developing cultural tourism and health wellbeing cost of RMB1,281 per square meter.
management as the complementary pillars, and focusing on
1
Data source: CRIC Real Estate Research ‘‘2019 Top 200 PRC Real Estate Developers in Terms of Sales’’
2
As at 31 December 2019

REPORT OF CHAIRMAN
Among the abovementioned land reserves, land premium of and Foshan. There were a total of 1,012 projects for sale
RMB117.8 billion remained outstanding, of which RMB47.5 which were at different stages ranging from being completed
billion, RMB35.7 billion and RMB34.6 billion will be due in to under construction distributed in 254 cities.
2020, 2021 and in and after 2022 respectively.
The stable growth in sales performance of the Group is
The Group had 101 urban redevelopment projects, of which rooted in the consistent adherence to the “scale+profitability”
6 projects with 1.22 million square meters in Shenzhen were development model, the Group’s efforts in enhancing added
included in the land reserves. value of products and the large number of projects and
resources for sale. In addition, digital technology, mobile
Steady growth in contracted sales with Internet, big data and other cutting-edge technologies have
strong execution and flexible and been widely used in marketing activities, matching with
progressive strategies flexible and aggressive sales strategies and strong execution
of all staff on marketing, so that the Group can face various
In 2019, the Group achieved contracted sales of
market risks and challenges at ease, and ensure that sales
RMB601.06 billion, a year-on-year increase of 9.0%,
performance can repeatedly hit new highs.
refreshing annual sales record for the 10th consecutive year
since its listing in 2009. The contracted sales GFA was
In 2020, in response to the COVID-19 epidemic, the Group
58.463 million square meters, a year-on-year increase of
pioneered online sales through the “Heng Fang Tong (恒房通)”
11.5%; and the average selling price was RMB10,281 per
platform on 13 February, thus greatly promoting robust sales
square meter.
of the Group. In March 2020, the Group realized unaudited
contracted sales of RMB62.08 billion and unaudited cash
During the Year, the Group launched 178 new projects for
collection of RMB66.4 billion. From January to March 2020,
sale in several dozens of cities including Shanghai,
the Group realized unaudited contracted sales of
Shenzhen, Nanjing, Chongqing, Chengdu, Hefei, Tianjin,
RMB147.37 billion1 and unaudited cash collection of
Changsha, Kunming, Taiyuan, Xi’an, Guiyang, Shenyang,
RMB113.3 billion.

REPORT OF CHAIRMAN
Precise and scientific construction cooperation, the Group acquired the world-leading core
planning and proper coordination among technology and intellectual property in different key fields
demands for sales, completion and including 3.0 chassis architecture, power battery, engine
delivery and integrated electric powertrain system. The Group
carried out strategic cooperation with the world’s top
The Group strives to optimize its construction planning automotive engineering technology leaders and top 15
scientifically and emphasize the precise coordination among design and styling masters to simultaneously develop 14
plans of sales, completion and delivery. The Group had new new car models on the basis of 3.0 chassis architecture.
construction start with GFA of 65.13 million square meters Hengchi 1 is expected to be introduced in 2020. Products
during the Year. As at 31 December 2019, the Group had under Hengchi Series will gradually commence volume
752 projects under construction with GFA of 123 million production from 2021. Through strategic cooperation with
square meters. During the Year, a total of 783 projects were the world’s top 60 automotive equipment suppliers, the
partially or fully completed with GFA of 77.01 million square Group established high-end smart factory based on the
meters, an increase of 6.6% year on year. Industry 4.0 Standard, which adopted the world’s leading
manufacturing equipment and production technologies, thus
In 2019, the Group had a total of 901 delivered projects with realizing “Dark Factory” under automated operation. The
total revenue of RMB464.57 billion. The Board believes that construction of production bases in Guangdong and
the large scale development and construction has not only Shanghai is expected to be completed in the second half of
ensured ample saleable resources to further support sales, 2020.
but has also boosted the completion and delivery in the next
phase with corresponding increase in overall revenue. In terms of automobile sales network, the Group invested in
Guanghui Group, the world’s largest automobile distributor.
Diversified industries going hand in hand Together with on our sales teams of over 10,000 employees
with emerging synergies and the network of over 6 million owners covering more than
Evergrande, in cooperation with leading companies in 1,000 communities, the Group has established a large
different fields of global automobile industry, integrated the offline-sales network. Leveraging more than 14 million part-
world-leading R&D and manufacturing resources in order to time salespersons on the vast online sales network on “Heng
build the largest, most powerful new energy automobile Fang Tong” Platform, the Group has further expanded its
group through blazing a new trail. With regard to automobile online sales network served by both full-time and part-time
R&D and manufacturing, through acquisition and salespersons.

REPORT OF CHAIRMAN
In terms of smart charging, we established a 50-50 joint Elderly Care Valley integrates first-class resources in medical
venture, namely State Grid-Evergrande, with State Grid. The services, health management, wellness living, elderly care,
joint venture focused on smart charging service for car park insurance and tourism and intends to build a comprehensive
spaces in communities. Currently, it is planned to construct membership platform. It provides whole-lifecycle, high-
smart charging facilities in 418 communities across China, quality and multi-dimensional healthcare services to its
with construction in 154 communities having been members through its unique “four major gardens”, “five
completed. major innovations” and “four major services”. Currently there
are 24 Evergrande Elderly Care Valley projects under
After 10 years of research and exploration, Evergrande development and over 70 more are being planned over the
Tourism Group is focusing to developing two flagship next three years. Boao Evergrande International Hospital is
theme-park products that are the first of their kind in the the first Evergrande international hospital and the only
world, namely Evergrande Fairyland and Evergrande Water overseas affiliated hospital of Brigham and Women’s
World. Evergrande Fairyland is developed specifically for Hospital (affiliated teaching hospital of Harvard Medical
children aged 2–15 years. It is the only large-scale School), which has officially opened for operation.
themepark that is completely indoor and offers entertainment
facilities under all weather conditions throughout the year. The health industry and new energy vehicle industry are
Each Evergrande Fairyland can serve an area with a radius planned and operated by Evergrande Health Industry Group
of 500 kilometers, with 80 million population in surrounding Limited (00708.HK), a subsidiary of the Group.
area. At present, the planning for 15 Fairyland projects had
been completed, and is expected to gradually put into
operations from 2022 onwards. BUSINESS OUTLOOK
Evergrande Water World is designed to be the world’s Looking forward, the Board believes that the global
largest “all-indoor, all-weather, all-season” hot-spring water economy in 2020 will continue to be hindered by various
theme park and each component park offers over 120 most factors such as trade protectionism, mounting debts and
popular water park rides selected from existing over 170 geopolitics. Moreover, the global economy are also facing
water park features around the world. Evergrande Tourism challenges from the outbreak of the COVID-19 pandemic
Group expects to develop 20–30 Evergrande Water World since the end of 2019, but at the same time new
projects in the next 3 years. opportunities of industry consolidation and industrial
upgrading may arise therefrom, even though some industries
Ocean Flower Island, located in Hainan, has already may be affected adversely.
completed its exterior facade construction work and is
currently undergoing interior decoration and equipment Judging from past experience, the Board considers that the
installation. It is expected to open for operation in 2020. At effect of the epidemic on the Chinese economy will be
present, there are 35 global restaurants and 255 temporary. As the central government has introduced a
international retail brands contracted. Ocean Flower Island is series of fiscal and monetary policies to stabilize growth, the
planned to have its grand opening in 2020. Chinese economy will sustain the general trend of growth
amid stability with long-term promising outlook. As an
Evergrande Health Group is focusing on developing its emerging country with the largest middle-income population
flagship health management product entitled Evergrande in the world, China’s GDP per capita has exceeded
Elderly Care Valley, a first of its kind in China. Evergrande USD$10,000. Under the new pattern of fully opening up, the
new economy, new industries and consumption upgrading
in China will create benefits both at home and abroad in a
more extensive sense.

REPORT OF CHAIRMAN
In respect of industry policy, it is expected that the central CORPORATE SOCIAL

government will continue to adhere to its stance of “housing RESPONSIBILITY
is for living, not for speculation”, focus on stability, implement
a long-term and effective management system for real While maintaining focus on its steady and rapid growth, the
estate, maintain the continuity and stability of policies on Group continued to commit itself to charity and public
adjustments to the real estate market and ensure the welfare work relating to people’s livelihood, poverty
sustained healthy development of the industry. The central alleviation, education, environmental protection, sports and
government will prepare the new energy vehicle industry others, in order to make contributions to fulfilling corporate
development plan for the period ending in 2035, optimize social responsibility and promoting harmony and progression
industry development environment, promote high-quality of the society.
industry development and support leading companies to
drive the synergetic development of upstream and With respect to people’s livelihood, the Group adhered to its
downstream companies, raising the standard of industry philosophy of properties for the people and provided high
chains. An internationally competitive new energy vehicle quality and affordable homes to the public. Meanwhile, the
industrial cluster will be constructed and the construction of Group continued to implement “return with no reason
a powerful automotive country will be accelerated. Following required” to protect home-buyers’ interests. The Group had
the trends of quality improvement, transformation and established solid strategic cooperation with over 7,000
upgrading of cultural and tourism consumption, the central domestic and overseas upstream and downstream
government will introduce safeguarding policies on, among companies, fostered the long-term strategic cooperation
others, funds, land and infrastructure, so as to unlock the with leading companies, integrated strong industry chains
potentials of cultural and tourism consumption. It will also and supported the healthy development of the real estate
put the “Healthy China 2030” blueprint into practice, push market.
forward the transformation and upgrading of health industry
and expand the industry size to form a bunch of large-scale With regard to poverty alleviation, the Group has initiated its
enterprises with strong innovation capacity and international poverty alleviation plan for 畢節市 (Bijie City) since December
competitiveness, developing the industry into the pillar 2015 under the support and encouragement of the National
industry in the national economy. Committee of CPPCC. It made a charitable donation of
RMB11 billion and assigned a poverty alleviation team of 2,108
Based on the systematic analysis of the global economy and persons to station in Wumeng mountainous areas, in order
national industry policies, the Group will fully implement the to take hold of the key link of targeted poverty alleviation,
development strategy of “growing sales, controlled scale namely industrial poverty alleviation, relocating poverty
and reduced leverage”: the Group will leverage its abundant alleviation, and vocational poverty alleviation, planning to
land reserves and its huge advantage of online channels to ensure that more than 1.03 million people in poverty in the
achieve rapid sales growth; it plans to steadily reduce overall city will be lifted out of poverty by 2020. Up to now, the
land reserves with average reduction of 30 million sq.m. per Group has donated RMB7 billion to the poverty alleviation
year. The Group plans to significantly reduce its total debt fund, helping 905,000 people achieve poverty alleviation at
and lower its net gearing ratio. the first stage. Among which, Qianxi County, Dafang County,
Qixingguan District and Zhijin County have officially come off

REPORT OF CHAIRMAN
the list of poverty- stricken areas. In addition, the Group also As for sports, the Group continued to make contributions to
donated RMB750 million to the “2019 Guangdong Poverty China’s sports development. Guangzhou Evergrande
Alleviation Day” to help the construction of beautiful villages Taobao Football Club won the Champion in the 2019
in Lianping County and Heping County, Heyuan City, Chinese Super League, setting the record of the first team
Guangdong. At the same time, the Group participated in with eighth trophies in the history of the Chinese Super
poverty alleviation works in Eastern and Western China, League. Evergrande Football School won 15 champions in
offering help in Xunwu County, Jiangxi and Zhaotong City, various competitions in 2019 and 63 students were selected
Yunnan. into the national team at various levels for 119 times. The
Group also successfully organized the Evergrande 2019
Regarding education and public health, the Group donated World Snooker China Championship, which is an A-grade
RMB300 million to 清華大學教育發展基金會 (Tsinghua international snooker championship.
University Education Foundation); RMB198 million to 中國科
學院 (Chinese Academy of Sciences); RMB100 million to After the outbreak of the COVID-19, the Group proactively
廣東省中山大學教育發展基金會 (Sun Yat-Sen University assumed its social responsibility to combat the epidemic.
Education Development Foundation (Guangdong)); RMB200 The Group donated RMB200 million in cash and 5,000
million to 陝西省慈善協會 (Shaanxi Charity Association); tonnes of fresh vegetables to Wuhan right away, helping
RMB20 million to 北京協和醫學院教育基金會 (the Education millions of citizens in Wuhan to overcome the difficult times.
Foundation of Peking Union Medical College); and RMB380 We also donated RMB100 million to the Chinese Academy
million to Taikang County, Zhoukou City, Henan. of Medical Sciences, and established the Research Fund for
Furthermore, the Group has also continued to deepen its Innovative Anti-Virus Drug. Evergrande, as the program
cooperation with top institutions around the world such as coordinator, jointly established the Task Force for Scientific
Harvard University and Tsinghua University to encourage the Research on COVID-19 with Harvard University and the
research, application and promotion of green architecture. research team led by Zhong Nanshan. RMB800 million will
be provided to support scientific research in the coming 5
As far as promoting employment is concerned, the Group years. In addition, the Group donated RMB100 million to
recruited talents from major universities and the whole Red Cross Society of China, and established the
society, and provided a good employment and development International Anti-Epidemic Aid Fund to support the launch
platform for various types of professionals, solving of international anti-epidemic aid works by the state.
employment involving more than 2.6 million personnel
annually.

REPORT OF CHAIRMAN
AWARDS FINAL DIVIDEND
In 2019, the Group won 92 various honourary awards, The Board recommended the payment of a final dividend of
including 37 international and national awards. They mainly RMB0.653 per Share for the year ended 31 December
include: included on the list of the Fortune Global 500 for the 2019. The payment of the final dividend is subject to
fourth consecutive year, ranking 138th among the Global approval by the shareholders at the forthcoming annual
500 and 16th among the China Top 500; ranked 81st in the general meeting of the Company. Further details about the
Brand Finance Global 500 and secured a place in the top 20 final dividend payment, including the record date, expected
Chinese brands; ranked first among the Top 500 China Real payment date of the final dividend and exchange rate, will be
Estate Developers and the Top 100 China Real Estate set out in the circular of the Company to be despatched to
Developers for the third consecutive year. It also won first the shareholders.
place among the Top 10 Companies with Comprehensive
Strength and Top 10 Responsible Real Estate Companies.
ACKNOWLEDGEMENT
With respect to social responsibility, the Group won first
place in the Model Company on Poverty Alleviation of 2019, The steady development of the Group has been blessed
and was awarded the title of Model Company of Targeted with the trust and support of its shareholders, investors and
Poverty Alleviation Contribution of 2019 and the Best business partners as well as the loyalty of our staff members.
Targeted Poverty Alleviation Award of 2019, etc. Mr. Hui Ka On behalf of the Board, I hereby express my heartfelt
Yan, the chairman of the Board, was honoured as one of the gratitude towards them.
Best 30 people in 30 Years of the China Foundation for
Poverty Alleviation and was commented as China’s First
Philanthropist for the fourth time by Forbes.
The above awards fully demonstrated the trust and

recognition from the government and all sectors of the
society for the operation and development of the Group, and By Order of the Board
they will serve as driving force for the Group’s continued China Evergrande Group
ascension to the peak. The Group will continue to give play Hui Ka Yan
to its advantages in scale, brand and team, and be Chairman
determined to surpass and never stop progressing in the
future. Hong Kong, 31 March 2020

Cultural
Tourism
Industry
MANAGEMENT DISCUSSION
AND ANALYSIS
Overall Performance Gross Profit
During the Year, the revenue was RMB477.56 billion (2018: Gross profit of the Group was RMB132.94 billion for the
RMB466.20 billion), representing a year-on-year growth of Year. Decrease in gross profit for the Year was mainly
2.4%. Gross profit was RMB132.94 billion (2018: attributable to the delivery and settlement of revenue of the
RMB168.95 billion). lower-priced clearance stock properties in 2019. Therefore,
profit decreased despite the increase in revenue. Gross
Core business profit for the Year was RMB40.82 billion, profit rate was 27.8% for the Year, which was mainly due to
which is based on the net profit excluding fair value gains on the lower selling prices of clearance stock properties and the
investment properties, exchange gains or losses, fair value slight increases in construction and installation costs per
gains or losses on financial instruments, donations and square meter for delivered properties, land costs and
certain non-property development business losses. Core interest capitalised.
business profit margin for the Year was 8.5%.
Fair Value Gain on Investment

Revenue Properties
Revenue of the Group was RMB477.56 billion for the Year, Fair value gain on investment properties of the Group for the
representing an increase of 2.4% as compared with 2018. Year was RMB1.52 billion, which is approximately the same
Revenue generated from the property development segment as compared with 2018. Investment properties of the Group
increased by 2.6% to RMB464.57 billion. The increase was mainly include commercial podiums in living communities,
mainly due to the 7.2% increase in delivered area for the office buildings with gross floor area of about 8.95 million
Year as compared to 2018, while the average selling price of square meters and approximately 363,000 car parking
delivered properties decreased by 4.3% as compared to spaces.
2018. Revenue generated from property management
amounted to RMB4.38 billion, an increase of 7.6% from
2018, which was mainly due to the increase in area under
the Group’s management service for the Year. Revenue
generated from investment properties amounted to
RMB1.36 billion, up by 15.3%, which was mainly from the
increased rental income attributable to a larger rental area of
the investment properties.

AND ANALYSIS
Other Income Selling and Marketing Costs
Other income of the Group for the Year was RMB7.0 billion, During the Year, selling and marketing costs of the Group
which was mainly attributable to the interest income, increased from RMB18.09 billion in 2018 to RMB23.29
forfeited customer deposits and management and consulting billion, up by 28.8%. The 3.9% ratio of selling and marketing
service income from joint ventures. expenses to contracted sales was mainly because the
Group, in response to the market environment, increased
the sales commissions, investment in advertisements and
Other Gains, Net marketing campaigns to promote sales.
Other net gains were RMB1.73 billion for the Year. It mainly
represents gains from the disposal of subsidiaries and Administrative Expenses
exchange gains. Other net gains for the last year amounted
to RMB2.65 billion, which was mainly attributable to the During the Year, administrative expenses of the Group
gains from the disposal of subsidiaries. increased to RMB19.81 billion from RMB14.81 billion in
2018, which was mainly attributable to the continuous
expansion of the Group’s nation-wide business and
increases in staff remuneration as well as administrative and
office expenses for the Year.

AND ANALYSIS
FINANCIAL REVIEW
Borrowings
As at 31 December 2019, the borrowings of the Group amounted to RMB799.90 billion, with the following maturities:
As percentage As percentage
31 December of total 31 December of total
2019 borrowings 2018 borrowings
(RMB billion) (RMB billion)
Less than 1 year 372.1 46.5% 318.3 47.3%

1–2 years 206.5 25.8% 181.5 27.0%
2–5 years 183.5 23.0% 128.0 19.0%
More than 5 years 37.8 4.7% 45.3 6.7%
799.9 100.0% 673.1 100.0%
A portion of the borrowings were secured by a pledge of The Group will closely monitor its exchange risk exposure
properties and equipment, land use rights, investment and will adjust its debt profile when necessary based on
properties, properties under development, completed market changes. The Group has not entered into any
properties held for sale, cash at bank and the equity forward exchange contracts to hedge its exposure to foreign
interests of certain subsidiaries of the Group. As at 31 exchange risk.
December 2019, the average effective interest rate of
borrowings was 8.99% per annum (2018: 8.13%). Liquidity
As at 31 December 2019, the total balance of cash and
Foreign Exchange Exposure
cash equivalents and restricted cash of the Group was
The Group’s business is principally conducted in Renminbi. RMB228.77 billion. The abundant working capital ensured
A significant portion of residential and investment properties normal operation of the Group, while providing adequate
are located in Mainland China. However, there are 24.6% of support for the Group as it explores best business
borrowings denominated in US dollar and HK dollar. opportunities.
We estimate the Renminbi exchange rate to continue its

two-way volatility as the Renminbi exchange mechanism Contracted Sales
becomes more market-oriented. We incurred exchange
losses during the Year due to depreciation in the RMB. In 2019, the Group’s accumulated contracted sales
However, there is still uncertainty on the actual exchange increased by 9.0% year on year to RMB601.06 billion;
losses or gains relating to borrowings in foreign currencies, contracted sales GFA reached 58.463 million square meters,
when they were repaid on due dates. representing a year- on-year increase of 11.5%; contracted
ASP amounted to RMB10,281 per square meter. During the
Year, the Group launched 178 new projects for sale, and the
number of projects for sale which were at different stages
ranging from being completed to under construction
reached 1,012 in aggregate, covering 31 provinces, regions
and cities in China.

AND ANALYSIS
The following table sets out the geographical distribution of contracted sales 2829
27 30
amount of the Group in 2019. 26 31
24 25 1
23
Percentage of 22
21
No. Province Sales amount sales amount 20
19 2
(RMB million)
18
17 3
1 Guangdong Province 65,863 10.96% 16
2 Jiangsu Province 47,192 7.85% 15 4
3 Sichuan Province 37,374 6.22%
14
4 Zhejiang Province 33,556 5.58%
13 5
5 Henan Province 30,612 5.09%
12
6 Shandong Province 29,100 4.84% 6
11
7 Chongqing 28,166 4.69% 10 7
9 8
8 Hubei Province 25,963 4.32%
9 Liaoning Province 25,562 4.25%
10 Hunan Province 25,331 4.21%
10.96% 1 Guangdong Province
11 Anhui Province 22,397 3.73%
7.85% 2 Jiangsu Province
12 Jiangxi Province 20,617 3.43%
6.22% 3 Sichuan Province
13 Shanxi Province 20,498 3.41%
5.58% 4 Zhejiang Province
14 Shaanxi Province 18,488 3.08%
5.09% 5 Henan Province
15 Guangxi Zhuang Autonomous Region 17,670 2.94%
4.84% 6 Shandong Province
16 Hebei Province 17,374 2.89%
4.69% 7 Chongqing
17 Inner Mongolia Autonomous Region 17,157 2.85%
4.32% 8 Hubei Province
18 Jilin Province 15,730 2.62%
4.25% 9 Liaoning Province
19 Fujian Province 14,695 2.44%
4.21% 10 Hunan Province
20 Yunnan Province 14,565 2.42% 3.73% 11 Anhui Province
21 Heilongjiang Province 13,476 2.24% 3.43% 12 Jiangxi Province
22 Guizhou Province 13,439 2.24% 3.41% 13 Shanxi Province
23 Hainan Province 12,554 2.09% 3.08% 14 Shaanxi Province
24 Shanghai 11,174 1.86% 2.94% 15 Guangxi Zhuang Autonomous Region
25 Gansu Province 6,933 1.15% 2.89% 16 Hebei Province
26 Xinjiang Uygur Autonomous Region 3,880 0.65% 2.85% 17 Inner Mongolia Autonomous Region
27 Tianjin 3,661 0.61% 2.62% 18 Jilin Province
28 Beijing 3,261 0.54% 2.44% 19 Fujian Province
29 Ningxia Hui Autonomous Region 2,935 0.49% 2.42% 20 Yunnan Province
30 Hong Kong Special Administrative Region 1,786 0.30% 2.24% 21 Heilongjiang Province
31 Qinghai Province 55 0.01% 2.24% 22 Guizhou Province
2.09% 23 Hainan Province
Total 601,064 100.00% 1.86% 24 Shanghai
1.15% 25 Gansu Province
0.65% 26 Xinjiang Uygur Autonomous Region
In 2020, the total saleable area of the Group is estimated to be approximately
0.61% 27 Tianjin
132 million square meters and the annual contract sales target is RMB650
0.54% 28 Beijing
billion. From January to March 2020, unaudited contracted sales of RMB147.37
0.49% 29 Ningxia Hui Autonomous Region
billion in total was realized.
0.30% 30 Hong Kong Special Administrative Region
0.01% 31 Qinghai Province

AND ANALYSIS
PROPERTY DEVELOPMENT 28 29
27 30
26 31
In 2019, the Group had a total of 783 projects completed or partially completed, 22 23 24 25 1
21
located in 31 provinces, regions and cities of China, with a total completed GFA 20
19 2
of 77.01 million square meters. As at 31 December 2019, the Group had a total 18
of 752 projects under construction, with a total area of 123 million square 17
meters. 16 3
15
The following table sets out the distribution of completed areas of the Group in 14 4
2019. 13
12 5
Completed
No. Province area in 2019 Percentage 11
6
(‘000 m2) 10
9 7
8
1 Jiangsu Province 6,271 8.14%

2 Guangdong Province 6,186 8.03% 8.14% 1 Jiangsu Province
3 Anhui Province 5,198 6.75% 8.03% 2 Guangdong Province
4 Henan Province 5,186 6.73% 6.75% 3 Anhui Province
5 Sichuan Province 4,703 6.11% 6.73% 4 Henan Province
6 Hunan Province 4,662 6.05% 6.11% 5 Sichuan Province
7 Hubei Province 4,289 5.57% 6.05% 6 Hunan Province
8 Zhejiang Province 4,003 5.20% 5.57% 7 Hubei Province
9 Shandong Province 3,939 5.11% 5.20% 8 Zhejiang Province
10 Chongqing 3,198 4.15% 5.11% 9 Shandong Province
11 Guizhou Province 3,006 3.90% 4.15% 10 Chongqing
12 Guangxi Zhuang Autonomous Region 2,931 3.81% 3.90% 11 Guizhou Province
13 Hebei Province 2,584 3.36% 3.81% 12 Guangxi Zhuang Autonomous Region
14 Shaanxi Province 2,470 3.21% 3.36% 13 Hebei Province
15 Jiangxi Province 2,129 2.76% 3.21% 14 Shaanxi Province
16 Liaoning Province 2,072 2.69% 2.76% 15 Jiangxi Province
17 Inner Mongolia Autonomous Region 1,972 2.56% 2.69% 16 Liaoning Province
18 Jilin Province 1,877 2.44% 2.56% 17 Inner Mongolia Autonomous Region
19 Hainan Province 1,764 2.29% 2.44% 18 Jilin Province
20 Yunnan Province 1,413 1.83% 2.29% 19 Hainan Province
21 Fujian Province 1,411 1.83% 1.83% 20 Yunnan Province
22 Shanxi Province 1,291 1.68% 1.83% 21 Fujian Province
23 Heilongjiang Province 1,246 1.62% 1.68% 22 Shanxi Province
24 Gansu Province 846 1.10% 1.62% 23 Heilongjiang Province
25 Xinjiang Uygur Autonomous Region 834 1.08% 1.10% 24 Gansu Province
26 Beijing 514 0.67% 1.08% 25 Xinjiang Uygur Autonomous Region
27 Tianjin 482 0.63% 0.67% 26 Beijing
28 Ningxia Hui Autonomous Region 417 0.54% 0.63% 27 Tianjin
29 Tibet Tibetan Autonomous Region 60 0.08% 0.54% 28 Ningxia Hui Autonomous Region
30 Shanghai 52 0.07% 0.08% 29 Tibet Tibetan Autonomous Region
31 Qinghai Province 5 0.01% 0.07% 30 Shanghai
0.01% 31 Qinghai Province
Total 77,011 100.00%

AND ANALYSIS
In 2019, the Group achieved total delivery of 901 projects, The Group organized various culture-building activities from
with a delivery amount of RMB464.57 billion, up 2.6% year- multiple dimensions so as to establish good channels for
on-year. training and enhancement, cross-field development and
remodeling for its employees. In order to improve the
comprehensive quality of employees and strengthen talents
HUMAN RESOURCES pool, the Group continued to organize the postgraduate
course for Master of Project Management with Tsinghua
As at 31 December 2019, the Group had a total of 133,123 University in 2019. The Group organized approximately
employees, of whom approximately 90% were graduates 130,982 training sessions and professional seminars for staff
with bachelor’s degree or above in property development or at headquarters, regional companies and industry groups
construction, forming a team of young, highly educated and throughout the Year and trained approximately 2,204,260
high-quality personnel. During the Year, the Group recruited staff in aggregate. The total training hours amounted to
1,568 fresh graduates through open recruitment, including approximately 223,298 hours with approximately 1.7 hours
254 fresh graduates from top 15 colleges and universities per session.
such as Peking University and Tsinghua University. There
were 49,695 experts recruited who reported duty. The Group firmly believes that talent is the most important
corporate resource and always adheres to a people-oriented
human resources development strategy, creating a sound
working environment featuring harmonious development and
positive interaction between the Group and its staff. For the
year ended 31 December 2019, total staff costs (including
directors’ emoluments) of the Group were approximately
RMB27.24 billion (for the year ended 31 December 2018:
approximately RMB24.22 billion).

DIRECTORS AND
ADMINISTRATIVE STRUCTURE
HUI KA YAN ( 許家印 )
aged 61, Chairman of the Board of the Group, Chairman of the real estate group.
Professor Hui is responsible for organizing the overall development strategies of
the Group. He has over 37 years of experience in real estate investment, property
development and corporate management. Professor Hui is a member of the 11th
National Committee of the Chinese People’s Political Consultative Conference, a
member of the standing committee of the 12th and 13th National Committee,
vice-chairmen of B20 China Business Council, vice president of APEC China
Business Council and also the vice-chairman of the China Enterprise
Confederation, China Enterprise Directors Association and China Real Estate
Association. He won “Top 100 Private Entrepreneurs in the 40th Anniversary of
China’s Reform and Opening-up”, “China National Award for Fighting against
Poverty”, “China National Model Worker”, “Excellent Builder for the Socialist
Cause with Chinese Characteristics”, and other national honors. He graduated
from Wuhan University of Science and Technology in 1982, and was awarded an
honorary doctorate degree in commerce by the University of West Alabama in
2008. Professor Hui has been a professor in management in Wuhan University of
Science and Technology since 2003 and was appointed as doctoral tutor of that
university in 2010.
XIA HAIJUN ( 夏海鈞 )
aged 56, Vice president of the Board and Chief Executive Officer of the Group. Dr.
Xia has over 32 years of experience in property development and corporate
management. Dr. Xia takes full charge of our daily operations, including financial
and capital operation and management of the Group, comprehensive monitoring
and legal affairs management, information construction of the Group and overseas
affairs and public affairs management, etc. Dr. Xia graduated from Jinan University
with a master’s degree in business administration in 1998 and a doctor’s degree
in industrial economy in 2001, and is a senior economist in China.
HE MIAOLING ( 何妙玲 )
aged 54, executive Director and vice president of the Group. Ms. He is
responsible for the Group’s marketing management and legal supervision for all
industry businesses. She has more than 22 years of experience in marketing
strategies and brand promotion in the property projects. Ms. He joined the Group
in August 1997, and has a bachelor’s degree in applied mathematics and a
master’s degree in engineering management. Currently, Ms. He is Non-executive
Director of E-House (China) Enterprise Holdings Limited.

DIRECTORS AND
SHI JUNPING ( 史俊平 )
aged 36, our executive Director and the chairman of Evergrande Bao Group (恒大
寶集團). Mr. Shi takes full charge of the management of the Evergrande Bao
Group. He has over 13 years of experience in marketing and management for
property development and brand image strategic operations for multiple
industries, including real estate and finance. Mr. Shi joined the Group in 2006, and
has a bachelor of arts degree and a bachelor of laws degree, and a master’s
degree in engineering management.
PAN DARONG ( 潘大榮 )
aged 47, our executive Director and chief financial officer. Mr. Pan takes full
charge of financial management of the Group. Mr. Pan has over 25 years of
experience in auditing, accounting and finance. Mr. Pan graduated from the
investment and economic faculty of Zhongnan University of Economics (中南財經
大學). He is an economist as approved in China.
HUANG XIANGUI ( 黃賢貴 )
aged 49, our executive Director and general manager of the Hong Kong company.
Mr. Huang joined us in 2004. He graduated from Harbin Engineering University
and University of Stirling, and obtained a bachelor degree in chemical engineering
and a master degree of science in banking and finance respectively. Mr. Huang is
currently responsible for the international capital operation and investment
management of the Group, and has over 23 years of experience in marketing,
human resource management, foreign capital and funds operation and
management. Mr. Huang is also currently an executive director of HengTen
Networks Group Limited.

DIRECTORS AND
INDEPENDENT NON-EXECUTIVE DIRECTORS

Chau Shing Yim, David (周承炎), aged 56, has over 20 years of experience in corporate finance and was formerly a partner
of one of the big four accounting firms in Greater China, holding the position as their Head of Merger and Acquisition and
Corporate Advisory. He is a member of the Institute of Chartered Accountants of England and Wales (“ICAEW”), and was
granted the Corporate Finance Qualification of ICAEW. Mr. Chau is a member of the Hong Kong Institute of Certified Public
Accountants (“HKICPA”) and was an ex-committee member of the Disciplinary Panel of HKICPA. Mr. Chau is a member as
well as director of the Hong Kong Securities Institute and the Chairman of Corporate Outreach Committee. Mr. Chau is also
a member of Hospital Governing Committee of Pamela Youde Nethersole Eastern Hospital (“PYNEH”) and the Trustee of the
PYNEH Charitable Trust. Mr. Chau is also a member of Jinan Municipal Committee of the Chinese People’s Political
Consultation Conference.
Mr. Chau is currently an independent non-executive director of BC Technology Group Limited (Stock Code: 863), Evergrande
Health Industry Group Limited (Stock Code: 708), HengTen Networks Group Limited (Stock Code: 136), IDG Energy
Investment Group Limited (Stock Code: 650), Lee & Man Paper Manufacturing Limited (Stock Code: 2314) and Man Wah
Holdings Limited (Stock Code: 1999). All the aforesaid companies are listed on the Stock Exchange.
Mr. Chau was also an independent non-executive director of Richly Field China Development Limited (Stock Code: 313) from
February 2014 to September 2018 and Asia Grocery Distribution Limited (Stock Code: 8413) from March 2017 to August
2018. All the aforesaid companies are listed on the Stock Exchange of Hong Kong.
He Qi (何琦), aged 64, is our independent non-executive director. Mr. He was elected an independent non-executive
director on October 14, 2009. Mr. He is the secretary of Circulation and Leasing Committee of China Real Estate
Association. He worked in the State Infrastructure Commission of the State City Construction General Bureau from 1981 to
1994. He was an executive of the Development Center of the China Real Estate Association from 1995 to 1999, and an
executive deputy mayor of Ji’an City of Jiangxi Province from 1999 to 2001. Mr. He is an independent non-executive director
of China Merchants Land Limited and Orient Victory Travel Group Company Limited. Both companies are listed on the Stock
Exchange of Hong Kong.
Xie Hongxi (謝紅希), aged 61, is our independent non-executive director. Ms. Xie is currently the deputy director, senior
engineer and master degree instructor at the Engineering Training and National Experiment, Education and Demonstration
Center of South China University of Technology. From 1982 to 2002, she worked at the Guangzhou Non-ferrous Metal
Research Institute, chaired or participated in a number of major research projects, and was previously awarded the National
Science and Technology Progress Award and the Science and Technology Achievement Award. Since 2002, she has been
teaching at the South China University of Technology, engaging in operations management, teaching experimental studies at
the undergraduate level and conducting research in the direction of metal surface technology. She has won provincial level
awards, the university teaching achievement award and the outstanding teaching award.

DIRECTORS AND
SENIOR MANAGEMENT OF THE GROUP

Jiang Dalong (蔣大龍), aged 54, chairman of Evergrande national energy new energy automobile investment group(恒大国
能新能源汽车集团). Mr. Jiang is responsible for the strategic decisions of the group. He has over 27 years of management
experience. He holds a bachelor’s degree in social science from Malardalens University.
Li Guodong (李國東), aged 57, our vice president. He is responsible for capital planning and financial auditing management
of the Group. He has over 20 years of experience in financial operation and management, and holds a degree in auditing.
Tan Zhaohui (談朝暉), aged 52, our vice president. She is responsible for management of capital operations of the Group.
She has more than 30 years of experience in project development and operations management. She holds a bachelor’s
degree in civil engineering.
Chen Min (陳敏), aged 46, our vice president. She is responsible for our investor relations, overseas affairs, and daily
management of overseas capital operations. She has over 24 years of experience in the investment banking industry and
capital operations. She holds a master’s degree in business administration from Harvard Business School.
Jiang Liming (姜麗明), aged 57, our vice president. She is currently in charge of treasury of the Group. Ms. Jiang has over
33 years of experience in the management of financial regulatory authorities and banking systems.
Shi Shouming (時守明), aged 45, is our vice president and chairman of our health industry group. Mr. Shi is responsible for
the daily management of our health industry group and has more than 22 years of experience in real estate, project
development and operations management. Mr. Shi holds a Bachelor’s degree in management and is a Certified Public
Accountant. He is also currently an executive director of Evergrande Health Industry Group Limited.
Zhu Jialin (朱加麟), aged 55, is our vice president. He is responsible for the investment, financing management of the
Group, docking with operations with Evergrande Life Insurance, Shengjing Bank and others. He has more than 30 years of
experience in finance, investment and financing management and corporate management, and holds a master’s degree in
finance.

DIRECTORS AND
SENIOR MANAGEMENT OF INDUSTRY GROUPS

Zhen Litao (甄立濤), aged 51, is president of our real estate group. Mr. Zhen is responsible for the daily management of the
group. He has over 28 years of experience in development, operation and management of real estate projects. He joined the
Group in 2009. Mr. Zhen holds a master’s degree in business management and is a registered PRC constructor and senior
engineer.
Peng Jianjun (彭建軍), aged 49, president of Evergrande national energy new energy automobile investment group (恒大國
能新能源汽車集團)—National Electric Vehicle Sweden AB (NEVS). He is responsible for Evergrande national energy new
energy automobile investment group (恒大國能新能源汽車集團) overseas company and global research & development
management. Mr. Peng has more than 27 years of experience in business management and holds a doctor’s degree in
business administration from Jinan University. He is also currently an executive director of Evergrande Health Industry Group
Limited.
Siu Shawn (肖恩), aged 49, is president of Evergrande national energy new energy automobile investment group (恒大國能
新能源汽車集團) and chairman of powertrain technology group. Mr. Siu is responsible for the overall business management
of the group. He joined us in November 2013, and has more than 19 years of business management project operation
experience. He received a master’s degree in economic law from Southwest University of Political Science and Law.
Duan Shengli (段勝利), aged 37, chairman of our tourism group. Mr. Duan is responsible for the overall business
management of the group. He has over 14 years of business management and project management experience. He holds a
bachelor’s degree in English from Tsinghua University.
Liu Yongzhuo (劉永灼), aged 39, chairman of new energy technology group. He is responsible for the daily management of
our new energy technology businesses. He has over 17 years of experience in human resources management, investment
and operation of real estate projects, and operation and management of multi-industry companies. He holds a master’s
degree in engineering management. He is also currently an executive director of HengTen Networks Group Limited.

INVESTOR RELATIONS REPORT
FOR 2019
Attaching great importance to the capital market consistently, the Group continues to strengthen information disclosure
management and establish transparent, smooth and two-way interactive investor relations with its comprehensive and multi-
channel communication system.
In 2019, through different means and channels such as regular publication of results announcements, timely information
disclosure in compliance with relevant regulations, launching global roadshows, participation in annual conferences of
investment banks, hosting site visits and meetings for investors, and releasing news through emails and on the website, the
Group maintained a close connection with the capital market, deepening the understanding of the shareholders and
investors towards the development strategies, business performance and operations of the Company.
In 2019, the Group managed its daily compliance work in strict accordance with the Hong Kong Listing Rules and relevant
regulations and issued in aggregate 57 announcements of all sorts. The Group has met over 2,600 investors of all sorts from
more than 1,000 institutions worldwide in aggregate during the year. Of which, the management organized 2 large-scale
results press conferences for communication and exchange with 884 investors on the conferences, at which the interim and
annual results of the Company were also reported; 2 results road shows (non-deal) for in-depth communication with 686
investors, and 1 annual general meeting for reporting our business performance to more than 150 shareholders. The
management attended 17 annual conferences for investors held by investment banks, and met around 425 investors. The
management communicated and interacted with a total of 476 investors through reverse roadshows, project research, talks
and exchanges and other forms.
The Group also delivers to its investors its latest information regarding development strategies, development progress, sales
results and market outlook through various kinds of communication channels, such as website and emails. Currently, the
Group has more than 2,000 investment institutions and 3,000 investors as its regular receivers of the materials.
Through broadly listening to the views and suggestions of the capital market, the Group has continuously optimized and
improved the level of corporate governance and management structure, and our relationship with investors has reached a
new stage of continuous sound development.
NUMBER OF PARTICIPANTS MET IN 2019
1 TYPE OF ACTIVITIES
686 1 Road shows

4 425 2 Annual conferences of investment banks
476 3 Exchange meetings, project researches
884 4 Results meetings
150 5 General meetings
2

HEALTH
CARE
Industry
2019 MAJOR AWARDS
AND PRIZES
8
2 11
17
3
7
15
18 4 5
1. Top 100 Chinese Real Estate Firms for 2019 - Top 10 Comprehensive Strength
2. Top 10 of the China Real Estate Developers for 2019
3. Top 10 Enterprise Responsible Real Estate of the China Real Estate Developers for 2019
4. Top 10 Comprehensive Development of the China Real Estate Developers for 2019
5. Top 10 Comprehensive Strength of the China Real Estate Developers for 2019
6. Guangdong-Hong Kong-Macau Greater Bay Area Comprehensive Operation Model Enterprise for 2019
7. Top 10 Corporate Governance of Chinese Listed Real Estate Companies for 2019
8. Top 10 Comprehensive Strength of Chinese Real Estate Companies Listed in Hong Kong for 2019
9. Top 10 Investment Value of Chinese Real Estate Companies Listed in Hong Kong for 2019
10. Guangdong Province Glorious Contribution Award

9 1
6
20 14
12
16
13
19 10
11. Top 50 Cases of Targeted Poverty Alleviation by Chinese Enterprises (2018)

12. Best 30 people in 30 Years of the China Foundation for Poverty Alleviation
13. People's Daily and International Finance News Best Awards for Poverty Alleviation for 2019
14. Chinese National Brand
15. Chinese Real Estate Annual Poverty Alleviation Model Enterprise for 2018-2019
16. Exemplary Enterprise of Contribution to Targeted Poverty Alleviation for 2019
17. Gold Cup of Hongmian Cup for Poverty Alleviation in Guangdong for 2018
18. The third place of Top 100 of Guangdong Province Private Enterprises for 2019
19. “Promote China" Influence Brand Poverty Alleviation Contribution Award
20. Outstanding Contribution Award for 2018 of China Foundation for Poverty Alleviation

2019 MILESTONES
Evergrande formed a joint venture with January

Koenigsegg, a world-class luxury automobile
manufacturer, and obtained strong
manufacturing capability of super luxury
automobiles. Swedish Prime Minister Stefan
Löfven met with Hui Ka Yan, the chairman of
the Board of Evergrande, at the Prime
Minister's Office.
Evergrande published its annual results for March

2018.
Dafang County, Guizhou officially came off April

the list of poverty- stricken areas.
Evergrande and the Guangzhou Municipal June

People's Government signed a strategic
cooperation framework agreement.

2019 MILESTONES
Evergrande was ranked 138th in the List of July

Fortune Global 500 .
Evergrande established a joint venture with

hofer AG, an international leader in
automative power engineering, and obtained
world-leading power assembly technology.
State Grid-Evergrande Smart Energy Service

Company (國網恒大智慧能源服務公司) was
unveiled to solve charging problems and
contribute to the national energy strategy.

2019 MILESTONES
The new energy vehicle group of September

Evergrande, and BENTELER Group and FEV
Group in Germany held a handover
ceremony of the intellectual property rights
for the 3.0 chassis architecture of new
energy vehicles, and officially obtained the
intellectual property rights for world-class 3.0
chassis architecture.
Hui Ka Yan, the chairman of the Board of October

Evergrande, boarded the Tiananmen Gate
to participate in the celebration of the 70th
anniversary of the founding of the People's
Republic of China, to watch the grand
military parade and mass parade.

2019 MILESTONES
Evergrande’s Ocean Flower Island debuted. October
Evergrande New Energy Auto Global November

Strategic Partners Summit was held in
Guangzhou.
Guangzhou Evergrande Taobao Football December

Team won the Champion in the Chinese
Super League, setting the record of the first
team with eighth trophies.

NEW
ENERGY
VEHICLE
Industry
CORPORATE GOVERNANCE REPORT
The Company recognises the value and importance of Board of Directors

achieving high corporate governance standards consistently
to the enhancement on corporate performance and Composition of the Board
accountability. The board (the “Board”) of directors (the
“Director(s)”) of the Company is committed to abide by During the year ended 31 December 2019 and up to the
date of issue of this annual report, the Board of the
principles of good corporate governance to meet legal and
Company comprises the following executive Directors and
commercial standards and requirements, focusing on areas
independent non-executive Directors.
such as internal control, risk management, fair disclosure
and accountability to the shareholders of the Company,
except for the following deviation from the Corporate
Dr. Xia Haijun (Vice Chairman and
Governance Code.
Chief Executive Officer)
Ms. He Miaoling (Executive Director)
According to Code Provision E.1.2 of the Corporate Mr. Shi Junping (Executive Director)
Governance Code, the chairman of the Board should attend Mr. Pan Darong (Executive Director and Chief Financial
the annual general meeting of the Company. Professor Hui Officer)
Ka Yan, the chairman of the Board, did not attend the Mr. Huang Xiangui (Executive Director)
annual general meeting held on 6 June 2019 due to his Mr. Chau Shing Yim, David
other business commitment. Mr. Huang Xiangui, an (Independent Non-executive Director)
Executive Director, acted as the Chairman of the annual Mr. He Qi (Independent Non-executive Director)
general meeting. Ms. Xie Hongxi (Independent Non-executive Director)
Save for the above deviation, the Directors are of the view Biographical details of the current members of the Board are
that the Company has been conducting its business set out on page 24 to page 26 of this annual report. Save
according to the principles of the Corporate Governance for being members of the Board, each of the Directors is
Code (“Corporate Governance Code”) set out in Appendix independent and not related to one another.
14 to the Listing Rules, and has complied with all the code
provisions of the Corporate Governance Code during the During the year ended 31 December 2019, the Board has at
year ended 31 December 2019. all times met the requirements of Rules 3.10(1) and (2) of the
Listing Rules relating to the appointment of at least three
For the year ended 31 December 2019, the Board has independent non-executive Directors, and at least one
independent non-executive Director possesses appropriate
reviewed the effectiveness of the risk management and
professional qualifications, or accounting or related financial
internal control systems of the Company and considers
management expertise.
them effective and adequate.
Each of the executive Directors has entered into a service

contract with the Company for a period of three years until
terminated by not less than three months’ notice in writing
served by either party on the other. Each of the independent
non-executive Directors has entered into a letter of
appointment with the Company for a term of one year. The
appointments are subject to the provisions of retirement by
rotation of Directors under the articles of association of the
Company (the “Articles”). In accordance with the Articles, at
every annual general meeting of the Company, one-third of
the Directors for the time being or, if their number is not
three or a multiple of three, the number nearest to but not
less than one-third shall retire from office by rotation,
provided that every Director (including those appointed for a
specific term) shall be subject to retirement by rotation at
least once every three years.

The Company has received, from each of the independent The external auditors will report to the Company on the
non-executive Directors, an annual confirmation of his weakness in the Group’s internal control and accounting
independence pursuant to Rule 3.13 of the Listing Rules. procedures which have come to their attention during the
The Board was satisfied with the independence of the course of their audit work.
independent non-executive Directors.
The Board is responsible for performing the following
Roles and Duties corporate governance duties: (a) to formulate and review the
Company’s policies and practices on corporate governance
The Board is in charge of formulating strategic business
and make recommendations to the Board; (b) to review and
development, reviewing and monitoring the business
monitor the training and continuous professional
performance of the Group, approving major funds allocation
development of Directors and senior management; (c) to
and investment proposals as well as preparing and
review and monitor the Company’s policies and practices in
approving the financial statements of the Group. The Board
compliance with legal and regulatory requirements; (d) to
also gives clear instructions on the authority delegated to the
formulate, review and monitor the code of conduct and
management in relation to the administration and
compliance manual (if any) applicable to employees and
management of the Group.
Directors; and (e) to review the Company’s compliance with
the Corporate Governance Code as set out in Appendix 14
Under code provision A.2.1 of the Corporate Governance
of the Listing Rules and disclosures in the Corporate
Code, the roles of the chairman and chief executive officer
Governance Report in the annual report of the Company.
(“CEO”) of a listed company should be separated and should
not be performed by the same individual. The Company was
The Board may delegate the corporate governance duties to
in compliance with code provision A.2.1 during the period
a committee of the Board. The Board meets regularly to
under review with Professor Hui Ka Yan being the chairman
discuss and formulate the overall strategy as well as the
and Dr. Xia Haijun being the CEO of the Company,
operation and financial performance of the Group. Directors
respectively.
may participate in the meetings either in person, by proxy, or
by means of electronic communications.
The Board is responsible for the internal control of the Group
and for reviewing its effectiveness. The Company has
Eight Board meetings were convened by the Company
procedures in place for safeguarding assets against
during the year ended 31 December 2019. At least 14 days’
unauthorised use or disposition, the maintenance of proper
notice before the date of the meeting is given for a regular
accounting records for the provision of reliable financial
Board meeting to allow all Directors to make arrangements
information for internal use or publications and the
to attend. For all other Board meetings, reasonable notices
compliance with applicable laws and regulations. For the
were also given.
year ended 31 December 2019, the Directors reviewed the
overall effectiveness of the internal control and risk
management systems of the Group. An internal audit
department has been established to perform regular financial
and operational reviews and conduct audit and risk
management assessment on the Company and its
subsidiaries. The work carried out by the internal audit
department will ensure the internal controls and risk
management systems are in place and function properly as
planned.

The attendance of individual Directors at the Board meetings and general meetings held during the year ended 31 December
2019 is set out below:
Number of meetings attended/

Number of meetings held
Annual Extraordinary
General General
Director Meeting Meeting Board Meeting
Professor Hui Ka Yan 0/1 0/1 4/8

Dr. Xia Haijun 0/1 0/1 4/8
Ms. He Miaoling 0/1 0/1 8/8
Mr. Shi Junping 0/1 0/1 8/8
Mr. Pan Darong 1/1 1/1 8/8
Mr. Huang Xiangui 1/1 1/1 8/8
Mr. Chau Shing Yim, David 1/1 1/1 8/8
Mr. He Qi 1/1 1/1 8/8
Ms. Xie Hongxi 1/1 1/1 8/8
Committees of the Board Audit Committee

The Company has set up the audit committee, remuneration
The audit committee comprised three members, namely Mr.
committee and nomination committee in respect of the
Chau Shing Yim, David, chairman of the committee, Mr. He
Board.
Qi and Ms. Xie Hongxi, who were all independent non-
executive Directors. The audit committee adopted the
Directors’ Training
written terms of reference which were basically the same as
During the year under review, all of the Directors of the those set forth in the code provision C.3.3 of the Corporate
Company have attended continuous professional Governance Code. The audit committee is principally
development training sessions in compliance with Code responsible for the following duties, inter alia:
Provision A.6.5 of the Corporate Governance Code.
• to provide recommendations on the appointment,
The company secretary of the Company has also complied reappointment and removal of external auditors to the
with the 15 hours training requirements under Rule 3.29 of Board, approve the remuneration and terms of
the Listing Rules. engagement of the external auditors and handle any
issues related to the resignation or dismissal of the
auditors;
• to review and monitor whether the external auditors

are independent and objective and whether the audit
procedures are effective in accordance with applicable
standards;
• to formulate and implement policies for the

engagement of external auditors for the provision of
non-audit services;

• to monitor the integrity of the financial statements, the Remuneration Committee

annual reports and accounts and the interim reports of
the Company, and review the material financial The remuneration committee’s terms of reference were
reporting judgements therein; basically the same as those set forth in code provision B.1.2
of the Corporate Governance Code. The majority of the
• to review the financial control, internal control and risk members of the remuneration committee were independent
management systems of the Company; non-executive Directors. For the year ended 31 December
2019, the members of the remuneration committee included
• to discuss the internal control and risk management Professor Hui Ka Yan, Mr. He Qi (chairman of the
systems with the management and to ensure that the remuneration committee) and Ms. Xie Hongxi.
management has discharged its duties of setting up
an effective internal control and risk management The remuneration committee is principally responsible for
system; the following duties:
• to review the financial and accounting policies and • to make recommendations and suggestions to the
practices of the Group; and Board in respect of the remuneration policy and
structure of the Directors and senior management of
• to review the external auditors’ letter to the the Company and the establishment of formal and
management, any material queries that the auditors transparent procedures for developing such
made to the management in respect of the accounting remuneration policy;
records, financial accounts or systems of control as
well as the management’s response. • to determine the specific remuneration packages of all
executive Directors and senior management;
Two meetings of the audit committee were held on 20
March 2019 and 26 August 2019, respectively, to review • to review and approve performance-based
the Group’s 2018 annual results and 2019 interim results remuneration by reference to corporate goals and
and all the committee members attended those two objectives resolved by the Board from time to time;
meetings. The audit committee has recommended the
Board in relation to the re-appointment of • to review and approve payments to the executive
PricewaterhouseCoopers as the Company’s external Directors regarding compensation for their loss or
auditor for the financial year ending 31 December 2020 at termination of office or appointment, to ensure relevant
the forthcoming annual general meeting of the Company. terms of the contracts, and that the compensation is
fair and not excessive for the Company;
For the year ended 31 December 2019, the emolument of
the external auditor of the Company for the annual audit and • to review and approve the compensation
review of interim financial statements amounted to RMB38 arrangements involved in the termination or dismissal
million. For the year ended 31 December 2019, the of Directors due to misconduct, to ensure that those
emolument of the external auditor of the company for non- arrangements are determined according to the
audit services amounted to RMB6 million. relevant terms of the contracts, and that the
compensation is reasonable and appropriate; and
Pursuant to the Articles, the tenure of the auditor of
the Company will expire upon the conclusion of the 2019 • to ensure that no Director or any of his associates
annual general meeting. The audit committee is involved in deciding his/her own remuneration.
recommended the Board to propose the re-appointment of
PricewaterhouseCoopers as the auditor of the Company at One meeting was convened by the remuneration committee
the 2019 annual general meeting. for the year ended 31 December 2019 to review the
remuneration of the directors.

Risk Management and Internal Risk Management

Control 1. Establishment of a risk management
system and structure
Duties of the Board and the Management Based on the measures in the previous year, China
The Board is responsible for the risk management and Evergrande Group continued to improve the risk
internal controls system and has the responsibility to review management system structure at the group level to
the effectiveness of the system. The Board is responsible for guide the risk assessment activities of various
assessing and determining the nature and extent of the risks segments and ongoing risk monitoring activities
that the Group is willing to take in achieving the strategic through the following measures:
objectives, and monitoring the establishment and
maintenances of appropriate and effective risk management • Established a risk management organizational
and internal controls system. The management is structure — An organizational structure with
responsible for designing and maintaining an effective risk the Audit Committee of China Evergrande Group
management and internal control system as well as as the decision-maker, the leading officers
providing confirmations to the Board on the effectiveness of groups and management of various business
the system. segments of the Company as the execution unit,
has been established to divide risk management
Sound risk management and internal controls systems are responsibilities and set out clear responsibilities
designed to manage rather than eliminate the risk of failure for risk management and the risk information
to achieve business objectives, and can only provide reporting line.
reasonable but not absolute assurance that there will be no
material misstatements or losses.

Major roles and responsibilities under the risk management system are set out below:
Role Major Responsibility
The Board • Evaluates and determines the nature and acceptable extent of risks so as to ensure
(the decision-making party) that the strategic objectives can be achieved;
• Ensures the establishment and maintenance of effective risk management and
internal control system;
• Supervises the management in designing, implementing and supervising the risk
management and internal control system;
The Audit Committee • Reviews the structure of risk management and monitors its effectiveness on a
(the decision-making party) continuous basis, and reviews the fundamental risk management system;
• Supervises the management in designing, implementing and supervising the risk
management and internal control system;
• Monitors the frequency of the occurrence of material control default or discovery of
material control weakness, and the extent to which they have resulted in unforeseen
and emergent outcomes or contingencies that have had, may have or may in the
future have, a material impact on the Company’s financial performance or condition;
Senior management of • Facilitates the establishment of risk management system, and reviews the policy and
the Group mechanism in relation to the risk management on regular basis;
(the leader) • Designs, implements and supervises the risk management of the Group, reports
matters in relation to risk management to the Audit Committee on a regular basis,
and reports and discloses significant risk information to the Audit Committee;
• Confirms to the Audit Committee on whether the risk management system is effective
or not;
Management of the • Updates the risk exposure list of operations on a regular basis, and conducts relevant
Group’s headquarters and works such as risk identification and evaluation;
the management of the • Formulates and implements risk response plan for operations;
segments under the Group • Responsible for the execution and implementation of specific risk management
(the execution party) measures;
• Monitors and controls various risk exposures in operations, and timely reports risk
information to the coordinator and management of risk management matters;
• Conducts other works in relation to risk management;
Coordinator of risk • Organizes the commencement of risk identification and evaluation works;
management matters • Organizes the preparation of regular risk evaluation reports and submits the results to
the management of risk management matters;
• Organizes and coordinates risk management training and guidance;
Internal audit function • Acts as risk management supervisory institution, responsible for supervising and
evaluating the risk management works conducted by the Group and its business
segments.

• Updated risk assessment criteria — During

the Year, based on the changes in the internal
and external environment, the Group updated rt Ide
po nt
the risk assessment criteria applicable to each Re i
business segment according to the nature,
fic
ati
business characteristics and strategic objectives
on
of the Group and various activities of the
RISK
pervision
business segments and the risk appetite of the
MANAGEMENT
management. The risks that are most likely to PROCEDURE
ti o n
affect the achievement of the objectives have
Su
also been assessed using commonly recognized
ua
assessment methods and assessment criteria.
al
Ev
• Formulation and standardization of work Re
spo n s e
flow for risk management work — The Group
has established risk management procedures (for
details, please refer to Figure 1: Risk
Management Procedures set out below), with (Figure 1: Risk Management Procedures)
major steps including identification, analysis,
response, control and reporting, so as to
manage, mitigate and control risk exposures
systematically. By mainly considering the
operating goals of the Group and different
business segments, the Group identifies risk
factors affecting the achievement of such
operating goals. The Group also evaluates
possible and potential impacts of each specific
risk, adopts specific measures in response to
identified risk exposures, and continuously
supervises and evaluates changes in risk
exposure and timely adjusting response
measures. During the Year, the Group reviewed,
adjusted and improved the risk management
procedures to improve the efficiency and
standardization of its operations.
• Frequency of risk management review is

determined — The frequency of evaluation and
report on risk management of the Group has
been determined (at least once for every year).
The aforesaid key elements standardized the
format and frequency of report through the Risk
Management Manual of China Evergrande
Group.

2. Risk Evaluation Conducted by Various

Segments of China Evergrande Group in
n
2019 atio ris Im
tific kr p
n es l
In addition to the above risk management framework de p
em nse
i
en mea
sk
o
at the group level, the management of the Group also
Ri
tat
ion
engaged external advisors to assist in the continuous
of
sure
maintenance and improvement of the risk
s
management system of two major segments, namely
real estate segment and insurance segment, in 2019,
C o n ti n
risk m
details of which include the following:
u o u m en
ana
e a tio e s s
re f
su n o
t a ve n
ge
so
• Follow up on the implementation of risk
s
pt a
m
i
ct
iz fe
i
management improvement measures nd atio ef e n
t
co n of w t h e le m m
of various important segments from n tr R ev i e i m p n s e
ol e
of th e s p o
last year’s risk assessment r
risk
During the Year, the management of the Group
followed up on the implementation of the risk
management improvement measures identified (Figure 2: Management and Control Mode for
in prior year’s risk assessment, as well as Risk Management)
establishing a continuous risk management
cycle which contains the process of “Risk • Conduct a comprehensive review of
assessment — Implementation the of the risk risk management system of various
management procedures — Follow-up of the important segments in 2019
implementation of risk management measures The management of various segments updated
— Ri sk ma n a g e m e n t sy st e m ongoing the risk assessment standards and risk database
monitoring” in order to ensure that the any risk based on the external market environment,
management gaps are rectified and the ability to changes in the internal operation environment,
prevent and cope with risks is strengthened (for business development and risk preferences. In
details, please refer to Figure 2: Risk assessment addition, it adopted a systematic risk
and management model). assessment method to review the changes in
the nature and degree of the material risks facing
its business segments, identified the material
risks facing its business segments, analyzed the
status of risk management and control and
countermeasures to be adopted and key risk
management strategies, and reported the risk
assessment results to the Audit Committee. The
Audit Committee reviewed and assessed the
changes in the nature and degree of material
risks on behalf of the Board, and completed the
review of the risk management systems and
considered the risk management systems is
effective and sufficient.

Internal Control 2. Internal Audit

China Evergrande Group has in place internal control
1. Establishment of Internal Control and
functions. The management has developed measures
Management Framework
for improvement in view of the vulnerabilities and
China Evergrande Group has established its own
weaknesses identified during the internal controls
internal control system by making reference to the
review, which are followed up on by the Supervision
internal control and management framework of the
Department on a regular basis to ensure the timely
Committee of Sponsoring Organizations of the
implementation of the relevant measures for
Treadway Commission (COSO) (please refer to chart 3:
improvement.
COSO internal control management framework). The
Group’s risk management system consists of five
Review of Risk Management and Internal
interdependent elements, which coordinates with each
Control System
other and operate to ensure the effectiveness of
internal control functions of the Group. The five During the Year, the Board of China Evergrande Group had
elements are: control environment, risk assessment, conducted a comprehensive review of the risk management
control activities, information and communication and and internal control system of the Group through the Audit
monitoring activities. Committee. Major works included the continuous
implementation of the results of risk evaluation and internal
control review in the prior year, as well as the
commencement of various material risk evaluations for the
Year and internal control review of key operating procedures.
The period under review covered the accounting year of
2019. The scope of review covered the Group and major
business segments, primarily focuses on review of controls
over all major aspects, including financial control, operating
control and compliance control. Such review had considered
Operation the changes in the nature and severity level of material risks
and the capability of the Group in handling business and
external environment changes. The Board considers that the
relevant systems are effective and sufficient.
(Figure 3: Internal Control and The Audit Committee has reviewed the resources, staff
Management Framework of COSO) qualifications and experience of the Company on
accounting, risk management, internal audit and financial
The internal control system of China Evergrande Group, as reporting functions as well as its staff training programs and
an integral part of its risk management, is established based budget and confirmed the adequacy of the same.
on the risks facing the Group. The management at the
headquarters of the Group, its business segments and other
departments have designed and implemented a series of
policies and procedures in view of the process relating to
finance, operation and compliance, and monitors the
implementation of these policies and procedures and their
effectiveness.

Framework for Disclosure of • to make recommendations and suggestions to the

Inside Information Board regarding the appointment and re-appointment
of Directors by the Company and succession plan for
The Company has put in place a framework for the handling Directors (especially the chairman and CEO, if any, of
and disclosure of inside information in compliance with the the Company).
SFO. The framework sets out the procedures and internal
controls, including but not limited to establishing controls for In the nomination of a new Director to the Board, the
monitoring business and corporate developments and Nomination Committee will consider potential new
events so that any potential inside information is promptly candidates openly from time to time having regard to the
identified and escalated, restricting access to inside strategic needs of the Company and the Board. The
information to a limited number of employees on a need-to- potential pool of candidates include (but without limitation)
know basis, and ensuring employees who are in possession local and overseas academia, Hong Kong and overseas
of inside information are fully conversant with their listed companies directors, executives and experts in the
obligations to preserve confidentiality, for the handling and relevant fields.
dissemination of inside information in a timely manner so as
to allow all the shareholders and stakeholders to assess the The Nomination Committee will consider the candidates
latest position of the Group. based on merit having regard to the experience, skills and
expertise as well as the overall board diversity, and make
recommendations to the Board as appropriate.
Nomination Committee
The Board has adopted a “Board Diversity Policy” to ensure
The nomination committee’s terms of reference were that the Board has the appropriate balance of skills,
basically the same as those set forth in code provision A.5.2 experience and diversity of perspectives necessary to
of the Corporate Governance Code. The majority of the enhance the effectiveness of the Board and to maintain high
members of the nomination committee were independent standards of corporate governance. Selection of board
non-executive Directors. For the year ended 31 December candidates shall be based on a range of diversity
2019, the members of the nomination committee included perspectives with reference to the Company’s business
Professor Hui Ka Yan, chairman of the committee, Mr. He Qi model and specific needs, including but not limited to
and Mr. Chau Shing Yim, David. gender, age, race, language, cultural background,
educational background, industry experience and
The nomination committee is principally responsible for the professional experience.
following duties:
The Nomination Committee reviews the Board Diversity
• to review the structure, size and composition (including Policy as appropriate to ensure the continued effectiveness
skills, diversity, knowledge and experience) of the of the Board.
Board on a regular basis, and make recommendations
and suggestions to the Board on any proposed During the year ended 31 December 2019, one meeting
changes; was convened by the nomination committee to consider the
composition of the Board.
• to identify individuals with suitable qualifications and
diversity to serve as members of the Board, and select
and nominate the relevant persons to serve as
Directors or make recommendations and suggestions
to the Board in this regard;
• to appraise the independence of the independent non-

executive Directors in accordance with the provisions
of applicable laws, regulations and rules; and

Securities Transactions by Relationship with our

the Directors Controlling Shareholders
The Company has adopted the Model Code for Securities The Company has received, from each of Xin Xin (BVI)
Transactions by Directors of Listed Issuers (the “Model Limited and Professor Hui Ka Yan, an annual declaration on
Code”) set forth in Appendix 10 of the Listing Rules as the the compliance with the deed of non-competition (the “Deed”)
code of conduct for securities transactions conducted by entered into by each of them in favour of the Company
the Directors. The Company, having made detailed and pursuant to which each of Xin Xin (BVI) Limited and
cautious enquiries, confirmed that all Directors have abided Professor Hui Ka Yan has unconditionally undertaken to the
by the Model Code for the year ended 31 December 2019. Company that it/he will not directly or indirectly participate
in, hold any right or interest, or otherwise be involved in any
business which may compete with that of the Group. The
Directors’ Responsibilities for independent non-executive Directors have reviewed and
the Financial Statements were satisfied that each of Xin Xin (BVI) Limited and
Professor Hui Ka Yan has complied with the Deed for the
The Directors acknowledge their responsibilities for year ended 31 December 2019.
preparing the consolidated financial statements of the Group
in accordance with statutory requirements and applicable
accounting standards. The Directors also acknowledge their Amendments to the Company’s
responsibilities to ensure that the consolidated financial Constitutional Documents
statements of the Group are published in a timely manner.
During the year ended 31 December 2019, the Company
has not amended its memorandum of association or its
Dividend Policy articles of association.
The Company has, since listing, adopted a dividend policy (the

“Dividend Policy”) where the Company would, where the Shareholders’ Rights
situation allows, declare dividends to shareholders every
year and may declare special dividends from time to time. In Right to convene an extraordinary general meeting (“EGM”)
deciding whether to propose a dividend and in determining (including the right of making proposals/moving resolutions
the dividend amount, the Board will take into consideration at the EGM).
the Group’s distributable profits generated during the year,
the financial situation and liquidity of the Group, the Any two or more shareholders holding at the date of deposit
investment needs and the retained profits that should be set of the requisition not less than one-tenth of the paid up
aside for future development purposes. While sharing the share capital of the Company carrying the right of voting at
profit with shareholders, the Company will also maintain the general meetings of the Company (the “Eligible
sufficient reserves to meet its liabilities and to ensure the Shareholder(s)”) shall at all times have the right, by written
implementation of the Group’s strategy for future requisition to the Board or the company secretary of the
development. The payment of dividend is also subject to any Company (the “Company Secretary”), to require an EGM to
restrictions under the laws of Cayman Islands, the laws of be called by the Board for the transaction of any business
Hong Kong and the articles of association of the Company. specified in such requisition, including making proposals or
moving resolutions at the EGM.

Eligible Shareholders who wish to convene an EGM for the The Notice will be verified by the Company’s branch share
purpose of making proposals or moving resolutions at the registrar and upon their confirmation that the request is
EGM must deposit a written requisition (the “Requisition”) proper and in compliance with the rules of procedures, the
signed by the Eligible Shareholder(s) concerned to the Company Secretary will ask the nomination committee of
principal place of business of the Company in Hong Kong at the Company (the “Nomination Committee”) and the Board
23rd Floor, China Evergrande Centre, 38 Gloucester Road, of the Company to consider to include the resolution in the
Wanchai, Hong Kong, for the attention of the Company agenda for the general meeting proposing such person to
Secretary. be elected as a Director.
If within 21 days of the deposit of the Requisition the Board

has not notified the Eligible Shareholders and fails to convene Disclaimers
such EGM, the Eligible Shareholder(s) himself/herself/
themselves may do so in accordance with the memorandum The contents of the section headed “Shareholders’ Rights”
and articles of association of the Company, and all reasonable in this report are for reference only and in compliance with
expenses incurred by the Eligible Shareholder(s) concerned disclosure requirements, which do not represent and shall
as a result of the failure of the Board to convene such meeting not be regarded as legal or other professional advice to the
shall be reimbursed to the Eligible Shareholder(s) concerned shareholders. Shareholders should seek their independent
by the Company. legal or other professional advice as to their rights as
shareholders of the Company. The Company disclaims any
liability for all liabilities and losses incurred by the
Right to Nominate Directors shareholders in reliance upon any contents of the section
for Election at General headed “Shareholders’ Rights”.
Meetings
If a shareholder wishes to propose a person other than a Investor Relations

Director of the Company for election as a Director, the
shareholder must deposit a written notice (the “Notice”) to The Company emphasises communication with institutional
the principal place of business of the Company in Hong investors so as to enhance the transparency of the
Kong at 23rd Floor, China Evergrande Centre, 38 Gloucester Company, and stresses the importance of channels to
Road, Wanchai, Hong Kong, or the branch share registrar of collect and respond to the opinions of institutional investors.
the Company, Computershare Hong Kong Investor Services
Ltd., at 17M Floor, Hopewell Centre, 183 Queen’s Road During the year under review, the Directors and senior
East, Wanchai, Hong Kong, for the attention of the Company management of the Company participated in several
Secretary. The Notice must state clearly the name of the roadshows and investment meetings. Additionally, the
shareholder(s) and his/her/their shareholding, the full name Company released information and responded to questions
of the person proposed for election as a Director, including from the media through press conferences and the
the person’s biographical details as required by Rule Company’s website, and communicated with the media on
13.51(2) of the Listing Rules, and be signed by the a regular basis.
shareholder concerned (not the person to be nominated).
Shareholders, investors and the media can make enquiries
The Notice must also be accompanied by a letter of consent with us by the following methods:
signed by the person nominated to be elected on his/her
willingness to be elected as a Director. The period for By telephone: (852) 2287 9229
lodgment of the Notice will commence no earlier than the By post: 23rd Floor, China Evergrande Centre,
day after the despatch of the notice by the Company of the 38 Gloucester Road, Wanchai, Hong Kong
general meeting appointed for the election of Directors of By email: evergrandeir@evergrande.com
the Company and end no later than seven (7) days prior to
the date of such general meeting.

REPORT OF THE BOARD OF DIRECTORS
The Directors of the Company are pleased to present their Final Dividend
report and the audited consolidated financial statements for
the year ended 31 December 2019 of the Group.
The Board recommended the payment of a final dividend of
RMB0.653 per Share for the year ended 31 December 2019
(the “Proposed Dividend Payment”).
Major Business
The Proposed Dividend Payment is subject to approval by
The Group is a developer of large scale quality residential
property projects and a leader adopting a standardised the shareholders at the forthcoming annual general meeting
operational model in China to manage various projects in of the Company. Further details, including the record date,
different cities across China. The Group is also engaged in expected payment date of the final dividend and exchange
other businesses including property construction, hotel rate, will be set out in the circular of the Company to be
operations, finance business, tourism and real estate despatched to the shareholders.
business, healthcare business. The analysis of the revenue
of the Group during the year is set out in Note 6 to the
financial statements. Reserve
Details of the changes in reserve of the Group during the

Business Review year are set out in Note 22 to the financial statements.
A review of the business of the Group during the year under

review and a discussion on the Group’s future business
development, possible risks and uncertainties that the Group
Property, PLANT and Equipment
may be facing and important events affecting the Company
occurred during the year ended 31 December 2019 are The changes in property, plant and equipment during the
provided in the section headed “Chairman’s Statement” and year are set out in Note 7 to the financial statements.
the section headed “Management Discussion and Analysis”
of this annual report.
Major Customers and
A analysis of the Group’s performance during the year Suppliers
ended 31 December 2019 using financial performance
indicators is provided in the section headed “Management During the year, purchases from the Group’s five largest
Discussion and Analysis” of this annual report.
suppliers accounted for less than 30% of the Group’s total
purchases.
Financial Statements
The percentage of turnover attributable to the Group’s five
largest customers in aggregate was less than 30% of the
The results of the Group during the year are set out in the
Group’s total turnover. The Company was not aware of any
consolidated statement of comprehensive income. The
of the Directors or their connected persons and shareholders
financial position of the Group as at 31 December 2019 is
set out in the consolidated balance sheet. The cash flow holding over 5% of the interest in the share capital of the
position of the Group during the year is set out in the Company having any interest in the above suppliers and
consolidated statement of cash flows. customers.
Capital
The changes in the capital of the Group during the year are
set out in Note 21 to the financial statements.

Relationship with Directors

Stakeholders
The Directors in office during the year and as of the date of
The Group recognizes that employees, customers and this report are as follows:
business partners are keys to its sustainable development.
The Group is committed to establishing a close and caring Executive Directors
relationship with its employees, providing quality services to
its customers and enhancing cooperation with its business Professor Hui Ka Yan
partners. Dr. Xia Haijun
Ms. He Miaoling
The Company provides a fair and safe workplace, promotes Mr. Shi Junping
diversity to our staff, provides competitive remuneration and Mr. Pan Darong
benefits and career development opportunities based on Mr. Huang Xiangui
their merits and performance. The Group also puts ongoing
efforts to provide adequate trainings and development Independent Non-Executive Directors
resources to the employees so that they can keep abreast
of the latest development of the market and the industry
Mr. He Qi
and, at the same time, improve their performance and self-
Ms. Xie Hongxi
fulfillment in their positions.
The Group understands that it is important to maintain good Biographical details of the Directors and senior management
relationship with customers and provide the products in a are set forth in the section headed “Directors and
way that satisfy needs and requirements of the customers. Administrative Structure” of this report.
The Group enhances the relationship by continuous
interaction with customers to gain insight on the changing Pursuant to Article 16.18 of the Articles, Mr. Shi Junping,
market demand for the products so that the Group can Mr. Pan Darong and Mr. Huang Xiangui will retire in the
respond proactively. The Group has also established forthcoming AGM, and being eligible, will offer themselves
procedures in place for handling customers’ complaints to for re-election.
ensure customers’ complaints are dealt with in a prompt
and timely manner.
Service Contracts of
The Group is also dedicated to develop good relationship Directors
with suppliers and contractors as long-term business
partners to ensure stability of the Group’s business. We There was no service contract that cannot be terminated by
reinforce business partnerships with suppliers and the Company without compensation (other than statutory
contractors by ongoing communication in a proactive and compensation) within one year, entered into by the
effective manner so as to ensure quality and timely delivery. Company with any Directors proposed to be re-elected in
the forthcoming AGM of the Company.
Donation
During the year, the charitable contributions and other
donations made in Hong Kong and China by the Group
totalled RMB3,104 million.

Directors’ Interests in The number of Shares in respect of the options that may be
Contracts granted according to the 2009 Share Option Scheme shall
not exceed 10% of the total number of issued Shares of the
There was no significant contract with any member of the Company immediately after completion of the Global
Group being a party therein and in which the Directors of the Offering (as defined in the prospectus) of the Company.
Company had direct or indirect substantial interests, and Such scheme mandate limit was refreshed on 3 October
which was still valid on the year end date or any time during 2017, and on 8 June 2018, the shareholders of the
the year and related to the business of the Group. Company again resolved to refresh the scheme mandate
limit of the 2009 Share Option Scheme to 1,317,838,890
Shares, representing 10% of the total number of shares of
Directors’ Interests in the Company in issue on the date of the passing of the
Competitive Business resolution to refresh such mandate limit.
None of the Directors or their respective associates has an Unless otherwise approved by the shareholders of the
interest in any business which competes or may compete Company in a general meeting, the number of Shares that
with the business of the Group. Xin Xin (BVI) Limited is may be granted to each of the Participants under the
beneficially owned by our chairman, Professor Hui Ka Yan, options shall not exceed 1% within any 12-month period (other
who is the controlling shareholder of the Company. The than those granted to the substantial shareholders, as
controlling shareholders have provided annual confirmation defined in the Listing Rules), or the total number of shares
of their compliance with the deed of non-competition that may be granted under the options to the independent
undertaken by them. The independent non-executive non-executive Directors or any of their respective connected
Directors have reviewed whether the controlling shareholders persons shall not exceed 0.1% of the shares in issue of the
abided by the non-competition undertaking and confirmed Company from time to time.
that no controlling shareholder had violated the non-
competition undertaking given by them. There is no minimum period for which the options must be
held before they become exercisable, and the options
granted shall be exercised within the period decided by the
Share Option Schemes Board, provided that no options shall be exercised 10 years
after they have been granted.
On 14 October 2009, the Company adopted a share option
scheme (the “2009 Share Option Scheme”) whereby the The exercise price of the options shall not be lower than the
Board can grant options for the subscription of the shares of highest of (a) the closing price of the Shares on the daily
the Company to the employees, executives and officers of quotation sheet of the Stock Exchange on the date of grant;
the Group and such other persons that the Board considers (b) the average closing price of the Shares on the daily
to contribute or having contributed to the Group (the quotation sheet of the Stock Exchange for the five business
“Participants”) as described in the 2009 Share Option days immediately preceding the date of grant; and (c) the
Scheme for the purposes of providing incentives and nominal value of the Shares.
rewards for their contributions to the Group.
Each grantee shall pay a consideration of HK$1.00 at the
time the option is granted.
Other details of the 2009 Share Option Scheme are set out
in appendix VIII — Statutory and General Information of the
prospectus published by the Company on 22 October 2009.

On 18 May 2010, the Company granted an aggregate of The Share Option Scheme does not specify a minimum
713,000,000 options to 137 Participants to subscribe for an period for which an option must be held nor a performance
aggregate of 713,000,000 Shares in the Company, target which must be achieved before an option can be
representing approximately 4.75% of the number of Shares exercised. However, the rules of the Share Option Scheme
in issue as at the date of grant. On 9 October 2014, the provide that the Board may determine, at its sole discretion,
Company granted in aggregate 530,000,000 options to 8 such terms and conditions on the grant of an option.
Directors and 93 employees to subscribe for 530,000,000
Shares, representing approximately 3.63% of the number of Based on 13,127,834,900 Shares in issue as at the date of
Shares in issue as at the date of grant. The Company the annual general meeting, the maximum number of Shares
refreshed the scheme mandate limit at the extraordinary that may be issued upon the exercise of the options that
general meeting held on 3 October 2017 and on 6 October may be granted under the Share Option Scheme is
2017, the Company granted in aggregate 743,570,000 1,312,783,490 Shares, being 10% of the issued share
options to 5 Directors and 7,989 employees to subscribe for capital of the Company as at the date of the adoption of the
743,570,000 Shares, representing approximately 5.7% of Share Option Scheme.
the total number of Shares of the Company in issue as at
the date of grant. The maximum number of Shares in respect of which options
may be granted under the Share Option Scheme to any
As the 2009 Share Option Scheme was nearing the expiry eligible participant shall not exceed 1% of the Shares in
of its term, the shareholders of the Company has resolved at issue within any 12-month period.
the annual general meeting held on 6 June 2019 to adopt a
new share option scheme (the “Share Option Scheme”) with Any option offer will be deemed to have been granted and
largely similar terms as that of the 2009 Share Option accepted by the grantee when the duplicate offer document
Scheme. Upon the adoption of the Share Option Scheme constituting acceptance of the option duly signed by the
on 6 June 2019, the 2009 Share Option Scheme was grantee, and a remittance in favour of the Company of
cancelled. Options that have been granted under the 2009 HK$1.00 as consideration for the grant thereof is received
Share Option Scheme prior to its cancellation shall remain by the Company within 30 days of the offer date.
valid in accordance with its terms.
The exercise price of the options is determined by the Board
The purpose of the Share Option Scheme is to enable the at its absolute discretion and will be not less than the highest
Company to grant options to selected eligible participants as price of the official closing price of the shares of the
incentives or rewards for their contribution or potential Company as stated in the daily quotations sheets issued by
contribution to the Group. The Directors consider that the the Stock Exchange on the date of offer, the average official
Share Option Scheme will serve to motivate the eligible closing prices of the Company’s shares as stated in the daily
participants to contribute to the Group’s development. The quotations sheets issued by the Stock Exchange for the five
Share Option Scheme, which will be in the form of options business days immediately preceding the date of grant and
to subscribe for Shares, will enable the Group to recruit, the nominal value of the shares of the Company.
incentivize and retain high-calibre staff, which the Directors
consider that it is in line with modern commercial practice The aggregate number of Shares which may be issued upon
that eligible participants, which will include full-time or part- the exercise of all share options that may be granted under
time employees, directors, members of the management, the Share Option Scheme and all outstanding share options
advisors, consultants, agents, suppliers and joint venture granted and yet to be exercised under the other share
partners who have contributed to the Group, be given option schemes of the Company has not exceeded 30% of
incentives and align their interests and objectives with that of the Shares in issue.
the Group.
No options have been granted under the Share Option
Scheme since its adoption.

The details of movement in the options granted under the 2009 Share Option Scheme for the year ended 31 December
2019 are as follows:
Number of share options

Cancelled
Outstanding and Outstanding
as at Granted Exercised Lapsed as at
Exercise Exercise 1 January during the during the during the 31 December
Grantees Date of grant price period 2019 period period period 2019
(HK$)
Xia Haijun 9 October 2014 3.05 Note 2 59,149,000 N/A 54,758,000 N/A 4,391,000
6 October 2017 30.20 Note 3 600,000 N/A N/A N/A 600,000
He Miaoling 9 October 2014 3.05 Note 2 6,000,000 N/A N/A N/A 6,000,000
Shi Junping 9 October 2014 3.05 Note 2 3,600,000 N/A N/A N/A 3,600,000
Huang Xiangui 9 October 2014 3.05 Note 2 3,000,000 N/A N/A N/A 3,000,000
Pan Darong 6 October 2017 30.20 Note 2 3,000,000 N/A N/A N/A 3,000,000
Chau Shing Yim, 9 October 2014 3.05 Note 2 200,000 N/A N/A N/A 200,000
David
He Qi 9 October 2014 3.05 Note 2 400,000 N/A N/A N/A 400,000
Xie Hongxi 9 October 2014 3.05 Note 2 600,000 N/A N/A N/A 600,000
Other employees 18 May 2010 2.04 Note 1 1,285,000 N/A 1,135,000 150,000 —
of the Group 9 October 2014 3.05 Note 2 81,940,000 N/A 52,228,000 2,400,000 27,312,000
(in aggregate) 6 October 2017 30.20 Note 3 631,800,000 N/A 3,000 95,367,000 536,430,000
Notes:
1. The options granted on 18 May 2010 with respect to a Participant will (iii) the third tranche of 20% of the Shares that are the subject of
be exercisable in 5 tranches in the following manners: the options granted (rounded down to the nearest whole
number) will be exercisable at any time during the period from
(i) the first tranche of 20% of the Shares that are the subject of 18 May 2013 to 17 May 2018;
the options granted (rounded down to the nearest whole (iv) the fourth tranche of 20% of the Shares that are the subject of
number) will be exercisable at any time during the period from the options granted (rounded down to the nearest whole
18 May 2011 to 17 May 2016; number) will be exercisable at any time during the period from
(ii) the second tranche of 20% of the Shares that are the subject 18 May 2014 to 17 May 2019; and
of the options granted (rounded down to the nearest whole (v) the fifth tranche of remaining Shares that are subject of the
number) will be exercisable at any time during the period from options granted will be exercisable at any time during the
18 May 2012 to 17 May 2017; period from 18 May 2015 to 17 May 2020.

2. The options granted on 9 October 2014 with respect to a Participant

will be exercisable in 5 tranches in the following manners:
Subsidiaries’ share option
schemes
(i) the first tranche of 20% of the Shares that are the subject to
the Option granted (rounded down to the nearest whole
Evergrande Health Industry Group Limited
number) will be exercisable at any time during the period
commencing from 9 October 2015 and ending on 8 October Evergrande Health Industry Group Limited (“Evergrande
2020;
Health”) is a non-wholly owned subsidiary of the Company,
(ii) the second tranche of 20% of the Shares that are the subject
to the Options granted (rounded down to the nearest whole the shares of which are listed on the main board of the
number) will be exercisable at any time during the period Stock Exchange (Stock Code: 708).
commencing from 9 October 2016 and ending on 8 October
2021;
Evergrande Health adopted a share option scheme on 6
(iii) the third tranche of 20% of the Shares that are the subject to
the Options granted (rounded down to the nearest whole June 2018 (the “Evergrande Health Scheme”). The purpose
number) will be exercisable at any time during the period of the Evergrande Health Scheme is to enable Evergrande
commencing from 9 October 2017 and ending on 8 October Health to grant options to selected eligible participants as
2022;
incentives or rewards for their contribution to the
(iv) the fourth tranche of 20% of the Shares that are the subject to
the Options granted (rounded down to the nearest whole development of Evergrande Health. Under the Evergrande
number) will be exercisable at any time during the period Health Scheme, the directors of Evergrande Health may, at
commencing from 9 October 2018 and ending on 8 October their discretion, grant options to any full-time or part time
2023; and
employee, any director including non-executive director and
(v) the fifth tranche comprising the remaining number of Shares
that are subject to the Option granted will be exercisable at independent non-executive director of Evergrande Health
any time during the period commencing from 9 October 2019 and any of its subsidiaries and any adviser, professional or
and ending on the expiry date of the Option Period. consultant, supplier, customer and agent whom the board
of Evergrande Health, at its absolute discretion, considered
3. On 6 October 2017, an aggregate of 743,570,000 options were
granted to 5 Directors and 7,989 employees. The exercise price of the had or will have contribution for Evergrande Health and any
options is HK$30.20 and the closing price of the Shares on 4 October of its subsidiaries, to subscribe for shares in Evergrande
2017, the date immediately before the date on which the options were Health representing up to a maximum of 10% of the number
granted, was HK$30.75. The options will be exercisable in 5 tranches
of shares of Evergrande Health in issue as at 6 June 2018.
in the following manners:
(i) the first tranche of 20% of the Shares that are the subject of The total number of shares of Evergrande Health that may
the Options granted will be exercisable at any time during the fall to be issued upon the exercise of the options granted
period commencing from 6 October 2018 to 5 October 2023;
under the Evergrande Health Scheme and any other share
(ii) the second tranche of 20% of the Shares that are the subject
of the Options granted will be exercisable at any time during option schemes of Evergrande Health to each eligible
the period commencing from 6 October 2019 to 5 October participant in any 12-month period up to the date of grant
2024; shall not exceed 1% of the number of shares of Evergrande
(iii) the third tranche of 20% of the Shares that are the subject of
Health in issue as at the date of grant. Upon acceptance of
the Options granted will be exercisable at any time during the
period commencing from 6 October 2020 to 5 October 2025; the option, the grantee shall pay HK$1.00 to Evergrande
(iv) the fourth tranche of 20% of the Shares that are the subject of Health by way of consideration for the grant.
the Options granted will be exercisable at any time during the
period commencing from 6 October 2021 to 5 October 2026;
The exercise period of options shall be determined by the
and
(v) the fifth tranche of 20% of the Shares that are the subject of board of Evergrande Health at its absolute discretion but
the Options granted will be exercisable at any time during the shall not be exercised after the expiry of 10 years from the
period commencing from 6 October 2022 to 5 October 2027. date of each grant. The exercise price is determined by
Evergrande Health at its absolute discretion and will be not
4. The expiry date of the Share Option Scheme is 13 October 2019,
being the date of not more than 10 years pursuant to Rule 17.03(11) less than the highest price of the official closing price of the
of the Listing Rules. shares of Evergrande Health as stated in the daily quotations
sheets issued by the Stock Exchange on the date of offer,
the average official closing prices of the shares of
Evergrande Health as stated in the daily quotations sheets
issued by the Stock Exchange for the five business days
immediately preceding the date of grant and the nominal
value of the shares of Evergrande Health.

The Evergrande Health Scheme shall be valid and effect for The exercise period of options shall be determined by the
a period of 10 years commencing on 6 June 2018. No share board of Hengten Networks at its absolute discretion but
options have been granted by Evergrande Health under the shall not be exercised after the expiry of 10 years from the
Evergrande Health Scheme since its adoption. date of each grant. The exercise price is determined by
Hengten Networks at its absolute discretion and will be not
Hengten Networks Group Limited less than the highest price of the official closing price of the
shares of Hengten Networks as stated in the daily quotations
Hengten Networks Group Limited (“Hengten Networks”) is a
sheets issued by the Stock Exchange on the date of offer,
non-wholly owned subsidiary of the Company, the shares of
the average official closing prices of the shares of Hengten
which are listed on the main board of the Stock Exchange
Networks as stated in the daily quotations sheets issued by
(Stock Code: 136).
the Stock Exchange for the five business days immediately
preceding the date of grant and the nominal value of the
Hengten Networks adopted a share option scheme on 31
shares of Hengten Networks.
October 2013 (the “Hengten Networks Scheme”). The
purpose of the Hengten Networks Scheme is to enable
The Hengten Networks Scheme shall be valid and effect for
Hengten Networks to grant options to selected eligible
a period of 10 years from its adoption. There were no
participants as incentives or rewards for their contribution to
outstanding share options under the Hengten Networks at
the development of Hengten Networks. Under the Hengten
the end of 2018 and no share options have been granted by
Networks Scheme, the directors of Hengten Networks may,
Hengten Networks in the six months ended 30 June 2019.
at their discretion, grant options to any full-time or part time
employee, any director including non-executive director and
Evergrande Intelligent Technology Co.,
independent non-executive director of Hengten Networks
Ltd.* (恒大智慧科技有限公司)
and any of its subsidiaries and any adviser, professional or
consultant, supplier, customer and agent whom the board Evergrande Intelligent Technology Co., Ltd. (“EIT”) is a
of Hengten Networks, at its absolute discretion, considered subsidiary of the Company established in the PRC. EIT
had or will have contribution for Hengten Networks and any adopted a share option scheme on 6 June 2019 (the “EIT
of its subsidiaries, to subscribe for shares in Hengten Scheme”).
Networks. The number of shares which may be issued upon
exercise of all share options to be granted under the The purpose of the EIT Scheme is to enable EIT to grant
Hengten Networks Scheme shall not exceed 7,359,057,611 options to selected grantees as incentives or rewards for
shares, representing 10% of the total number of shares in their contribution or potential contribution to the company.
issue on 10 June 2016, the date when the refreshment of The EIT Scheme will provide the grantees with the
the scheme mandate limit under the Hengten Networks opportunity to acquire proprietary interests in EIT and will
Scheme was approved by the then shareholders of Hengten encourage such grantees to work towards enhancing the
Networks. value of the company and its shares for the benefit of the
Company and the Shareholders as a whole.
The maximum number of shares in respect of which options
may be granted to each participant (including both exercised 5% of the share capital of EIT has been set aside for the EIT
and outstanding options) in any 12-month period cannot Scheme. Such scheme limit may be refreshed by approval
exceed 1% of the total number of the issued share of from the shareholders of the Company in general meeting.
Hengten Networks. Upon acceptance of option, the grantee
shall pay HK$1 to Hengten Networks by way of The board of directors of EIT may, at its discretion, offer to
consideration of the grant. grant an option to the core management and other
personnel of EIT to subscribe for such number of shares in
EIT as the board of EIT may determine. The grantee shall
not be required to pay any consideration for the acceptance
of the option.

The total number of shares of EIT issued and which may fall 5% of the share capital of EICT has been set aside for the
to be issued upon the exercise of the options granted under EICT Scheme. Such scheme limit may be refreshed by
the EIT and any other share option schemes of EIT (including approval from the shareholders of the Company in general
both exercised and outstanding options) to each grantee in meeting.
any 12-month period up to the date of grant shall not
exceed 1% of the shares of EIT in issue as at the date of The board of directors of EICT may, at its discretion, offer to
grant. grant an option to the core management and other
personnel of EICT to subscribe for such number of shares in
Subject to the compliance with the requirements of the EICT as the board of EICT may determine. The grantee shall
Listing Rules, the subscription price of shares in EIT under not be required to pay any consideration for the acceptance
the EIT Scheme shall be such price as the board of directors of the option.
of EIT in its absolute discretion shall determine.
The total number of shares of EICT issued and which may
Subject to any vesting period as stipulated in the scheme, fall to be issued upon the exercise of the options granted
an option may be exercised in accordance with the terms of under the EICT and any other share option schemes of EICT
the EIT Scheme at any time after the date upon which the (including both exercised and outstanding options) to each
option is deemed to be granted and accepted and prior to grantee in any 12-month period up to the date of grant shall
the expiry of 5 years from that date. not exceed 1% of the shares of EICT in issue as at the date
of grant.
The period during which an option may be exercised will be
determined by the board of directors of EIT in its absolute Subject to the compliance with the requirements of the
discretion, save that no option may be exercised more than Listing Rules, the subscription price of shares in EICT under
5 years after it has been granted. the EICT Scheme shall be such price as the board of
directors of EICT in its absolute discretion shall determine.
The EIT Scheme shall be valid and effect for a period of 5
years commencing on 6 June 2019. No share options have Subject to any vesting period as stipulated in the scheme,
been granted by under the EIT Scheme since its adoption. an option may be exercised in accordance with the terms of
the EICT Scheme at any time after the date upon which the
Evergrande Intelligent Charging option is deemed to be granted and accepted and prior to
Technology Co., Ltd.* (恒大智慧充電科技 the expiry of 5 years from that date.
有限公司)
The period during which an option may be exercised will be
Evergrande Intelligent Charging Technology Co., Ltd. (“EICT”)
determined by the board of directors of EICT in its absolute
is a subsidiary of the Company established in the PRC. EICT
discretion, save that no option may be exercised more than
adopted a share option scheme on 6 June 2019 (the “EICT
5 years after it has been granted.
Scheme”).
The EICT Scheme shall be valid and effect for a period of 5

The purpose of the EICT Scheme is to enable EICT to grant
years commencing on 6 June 2019. No share options have
options to selected grantees as incentives or rewards for
been granted by under the EICT Scheme since its adoption.
their contribution or potential contribution to the company.
The EICT Scheme will provide the grantees with the
opportunity to acquire proprietary interests in EICT and will
encourage such grantees to work towards enhancing the
Debenture
value of the company and its shares for the benefit of the
At any time during the year, neither the Company nor its
Company and the Shareholders as a whole.
holding company or its subsidiaries was a party to any
arrangements to enable the Directors acquire benefits by
means of acquisition of the shares or debentures of the
Company or any other body corporate.

Interest and Short Positions of Directors in Shares,

Underlying Shares or Debentures
As at 31 December 2019, the interest and short positions of the Directors and chief executives of the Company in the
Shares, underlying shares or debentures of the Company or any of its associated corporation (within the meaning of Part XV
of the Securities and Futures Ordinance (“SFO”)) which were required pursuant to Section 352 of the SFO to be entered in
the register referred to therein or were required to be notified to the Company and the Stock Exchange pursuant to the
Model Code are as follows:
(i) Interest in the Shares of the Company

Approximate
Percentage of
Names of Director Nature of interest Number of Shares shareholding
Hui Kai Yan (Note 1) Interest of controlled corporation 10,162,119,735(L) 76.83%

Chau Shing Yim, David Beneficial Owner 800,000(L) 0.00%
Note:
(1) Of the 10,162,119,735 Shares held, 9,370,871,497 Shares were held by Xin Xin (BVI) Limited, a company wholly owned by Professor Hui Ka
Yan, and 791,248,238 Shares were held by Even Honour Holdings Limited, a company indirectly wholly owned by Professor Hui Ka Yan’s
spouse, Ms. Ding Yumei (“Mrs Hui”). The interest of Even Honour Holdings Limited in the Company is also deemed to be held by Professor Hui
Ka Yan pursuant to the SFO.
(ii) Interest in the underlying shares of the Company

Number of Shares Approximate percentage of
outstanding shareholding of those options
involved in the granted and exercised under
options granted the Share Option Scheme
under the Share based on the existing issued
Name of Director Nature of interest Option Scheme share capital of the Company
Xia Haijun Beneficial owner 4,991,000 0.04%

He Miaoling Beneficial owner 6,600,000 0.05%
Shi Junping Beneficial owner 4,100,000 0.03%
Huang Xiangui Beneficial owner 3,300,000 0.03%
Pan Darong Beneficial owner 3,000,000 0.02%
Chau Shing Yim, David Beneficial owner 200,000 0.00%
He Qi Beneficial owner 400,000 0.00%
Xie Hongxi Beneficial owner 600,000 0.00%

(iii) Interest in associated corporation of the Company

Approximate
Number of percentage of
Name of Director Name of associated corporation securities shareholding
Hui Kai Yan Xin Xin (BVI) Limited 100 shares 100%
Even Honour Holdings Limited (Note) 1 share 100%
Note: Pursuant to the SFO, Even Honour Holdings Limited is indirectly wholly owned by the spouse of Professor Hui Ka Yan and is deemed to be an
associated corporation of the Company.
(iv) Interest in debentures of the Company

Amount of
debentures
Amount of in same class
Name of Director Currency of debentures debenture held in issue
Xia Haijun US$ 38,000,000 2,300,000,000

US$ 47,250,000 1,565,000,000
Save as disclosed above, as at 31 December 2019, none of the Directors, executives of the Company or their
respective associates had any other interests or short positions in any Shares, underlying shares or debentures of the
Company or any of its associated corporation (within the meaning of Part XV of the SFO) which were required pursuant
to Section 352 of the SFO to be entered in the register referred to therein or were required to be notified to the
Company and the Stock Exchange pursuant to the Model Code.

Substantial Shareholders’ Interests and Short Positions
As far as the Directors or executives of the Company are aware, as at 31 December 2019, other than the Directors or chief
executives of the Company as disclosed above, the following persons had interest or short positions in the Shares or
underlying shares which were required to be notified to the Company under the provisions of Divisions 2 and 3 of Part XV of
the SFO or were required pursuant to Section 336 of the SFO to be entered in the register to be kept therein or to be notified
to the Company and the Stock Exchange:
Approximate
percentage of
Name of shareholder Nature of interest held Interest in the shares shareholding
Mrs. Hui Interest of controlled corporation 10,162,119,735(L) (Note 1) 76.83%
Xin Xin (BVI) Limited Beneficial owner 9,370,871,497(L) (Note 2) 70.85%
Even Honour Holdings Limited Beneficial owner 791,248,238(L) (Note 3) 5.98%
Yaohua Limited Interest of controlled corporation 791,248,238(L) (Note 3) 5.98%
Chan Hoi Wan Interest in controlled corporation, 1,173,383,000 (Note 4) 8.87%

beneficial owner and trustee
Lau Luen Hung Interest of spouse and interest of 1,173,383,000 (Note 5) 8.87%
children under 18 years of age
Chinese Estates Holdings Limited Interest in controlled corporation 857,541,000 (Note 6) 6.48%
Sino Omen Holdings Limited Interest in controlled corporation 857,541,000 (Note 6) 6.48%
Solar Bright Ltd. Interest in controlled corporation 857,541,000 (Note 6) 6.48%
Notes:
1. Of the 10,162,119,735 Shares held, 791,248,238 Shares were held 4. Ms. Chan Hoi Wan beneficially owns 315,842,000 shares and is the
by a company wholly owned by Mrs Hui, and 9,370,871,497 Shares trustee for 857,541,000 shares for her children under 18. The
were held by Xin Xin (BVI) Limited, a company indirectly wholly owned 857,541,000 shares that are held on trust are held through a series of
by Dr Hui Ka Yan, the spouse of Mrs. Hui. The interest of Xin Xin (BVI) companies wholly owned by Chinese Estates Holdings Limited, a
Limited in the Company is also deemed to be held by Mrs Hui company which is 50.02% owned by Solar Bright Limited. Solar Bright
pursuant to the SFO. Limited is a wholly-owned subsidiary of Sino Omen Holdings Limited,
a company wholly-owned by Ms. Chan Hoi Wan.
2. Xin Xin (BVI) Limited is beneficially owned by Professor Hui Ka Yan.
5. Mr. Lau Luen Hung is the spouse of Ms. Chan Hoi Wan, and his
3. Even Honour Holdings Limited is wholly owned by Yaohua Limited, interests in the Company are the interest of his spouse and interests
and Yaohua Limited is wholly owned by Mrs. Hui. of his children under 18.
6. Chinese Estates Holdings Limited is 50.02% held by Solar Bright

Limited, which is a wholly-owned subsidiary of Sino Omen Holdings
Limited. Sino Omen Holdings Limited is a company wholly-owned by
Ms. Chan Hoi Wan.

Subsidiaries Compliance with Laws and Regulations

The Group has established procedures in place to ensure
Details of the major subsidiaries of the Company as at 31
that its operations comply with applicable laws, rules and
December 2019 are set out in Note 45 to the financial
regulations. The audit committee of the Company is
statements.
delegated by the Board to monitor the Group’s policies and
practices for achieving compliance with legal and other
regulatory requirements, and such policies and practices are
Management Contracts regularly reviewed. Any changes in the applicable laws, rules
and regulations are brought to the attention of relevant
No contracts concerning the management and
employees and relevant operating units whenever necessary.
administration of the whole or any substantial part of the
business of the Company were entered into or subsisting
As far as the Company is aware, the Group has complied in
during the year.
all material respects with laws and regulations that have a
significant impact on the Group’s business and operations.
Employee and Remuneration Workplace Quality

Policies
The Group is an equal opportunity employer and does not
As at 31 December 2019, the Group had an aggregate of discriminate on the basis of any personal characteristics. It
133,123 employees. The Group recruited and promoted has employee handbooks outlining terms and conditions of
individual persons according to their strength and employment, expectations for employees’ conduct and
development potential. The Group determined the behaviour, and employees’ rights and benefits. The Group
remuneration packages of all employees (including the also establishes and implements policies that promote a
Directors) with reference to individual performance and harmonious and respectful workplace.
current market rate.
The Group believes that employees are the most valuable
assets of an enterprise and regards human resources as its
Environmental, Social and corporate wealth. The Group provides on-the-job training
Governance and development opportunities to enhance its employees’
career progression. Through different types of training,
Environmental Protection staff’s knowledge of corporate operations as well as their
occupational and management skills are enhanced. The
Environmental protection is a key focus for the Group. The
Group also organises staff-friendly activities for employees,
conscientious use of resources and adoption of related best
such as outings, to promote staff relationships and physical
practices across the Group’s businesses underlie its
fitness.
commitment to safeguarding the environment. The Group
encourages environmental protection by promoting
Health and Safety
awareness of the issue amongst its employees. It also
complies with relevant environmental legislation. The Group prides itself on providing a safe, effective and
congenial work environment and it values the health and
An ever-improving management system, enhanced well-being of its staff. Adequate arrangements, training and
monitoring of activities and procedures, energy conservation guidelines have been implemented to ensure its working
and environmental protection are strongly promoted. environment is healthy and safe. The Group provides
communications on health and safety matters and other
programmes to employees in order to raise their awareness
of such issues and enhance their related behavior.

Training and Development Community Investment

The Group is committed to the professional and personal The Group upholds the corporate philosophy of “Put people
development and growth of all employees and considers first, serve the country through industry development” with
training and development a critical continuous process. integration of its business features and advantages in
Many on the-job and other training courses and programmes resources, to actively commit to social responsibility and
are provided to help employees maintain and develop their philanthropy and assist to solve the social problems. Since
skills and professionalism. Structured training programmes the establishment of the Group, it has focused its key
including seminars are offered to staff with the objective of concern on various charity events in respect of people’s
grooming and unleashing their full potential, supporting, livelihood, poverty alleviation, environmental protection,
organisational development and facilitating team synergies. education, sports, and culture. The Group does its utmost
Employees are encouraged to take advantage of these to shoulder its social responsibility and create social value in
programmes in order to equip themselves with the skills and an effort to achieve harmonious development between the
knowledge for expanded career opportunities within the Company and society.
Group.
The Company has complied with the Environmental, Social
Commitment to Quality and Governance Reporting Guide set out in Appendix 27 of
the Listing Rules. The Environmental, Social and Governance
The Group has made relentless efforts in providing property
Report of the Company will be separately disclosed to the
development and management services. Looking forward to
public after the publication of this annual report.
2020, the Company will continue with its research and
investment to enrich the Group’s services.
The Company will also ensure the quality of its services and
Corporate Governance
place customers’ demands at its priority in order to maintain
The Company strives to maintain a high corporate
its competitive advantage and to increase shareholders’
governance standard and has complied with the Corporate
value further.
Governance Code set out in Appendix 14 of the Listing
Rules. Further information of the corporate governance
Management of Supply Chain
practices of the Company is set out in the Corporate
The Group adheres to open, fair and transparent criteria in Governance Report section of this annual report.
selecting suppliers and service providers, and has
established a supplier evaluation system in which suppliers’
price, quality, cost, delivery and after-sales service are Foreign Exchange Risks
assessed. The Group will carry out long-term monitoring of
suppliers’ quality and conduct regular reviews of all suppliers Details of the foreign exchange risks are set out in Note 4(a)(i)
as well as casual examinations of different suppliers to to the financial statements.
ensure the sustainable quality of material supplies and
services it receives.

Purchase, Sale OR REDEMPTION MATERIAL ACQUISITIONS AND

OF LISTED SECURITIES DISPOSALS
On 25 January 2019, the Company issued (1) additional On 20 June 2019, Evergrande Group (Nan Chang) Co., Ltd.
US$1,100 million 7.0% senior notes due 2020 (which were (“Evergrande Nan Chang”), a wholly-owned subsidiary of the
consolidated and form a single series with the US$500 Company entered into a subscription agreement with
million 7.0% senior notes due 2020 issued by the Company Shengjing Bank Co., Ltd. (“Shengjing Bank”), pursuant to
on 23 March 2017); (2) additional US$875 million 6.25% which Evergrande Nan Chang conditionally agreed to
senior notes due 2021 (which were consolidated and form a subscribe for 2,200,000,000 domestic shares of Shengjing
single series with the US$598.181 million 6.25% senior Bank at RMB6.00 per share (the “Subscription”). The
notes due 2021 issued by the Company on 28 June 2017); Subscription was completed on 28 November 2019. Upon
and (3) additional US$1,025 million 8.25% senior notes due completion of the Subscription, Evergrande Nan Chang’s
2022 (which were consolidated and form a single series with interests in Shengjing Bank increased from 17.28% to
the US$1,000 million 8.25% senior notes due 2022 issued 36.40% and became the single largest shareholder of
by the Company on 23 March 2017). Shengjing Bank.
On 6 March 2019, Scenery Journey Limited, a subsidiary of Save as disclosed, the Company has no other material
the Company, issued US$600 million 9.0% senior notes due acquisitions or disposals during the year ended 31
2021. December 2019.
On 11 April 2019, the Company issued (i) US$1,250 million

9.5% senior notes due 2022 (the “2022 9.5% Notes”), (ii) Disclosure Under Rule 13.20 of
US$450 million 10.0% senior notes due 2023 (the “2023 the Listing Rules
10.0% Notes”), and (iii) US$300 million 10.5% senior notes
due 2024 (the “2024 10.5% Notes”). The Directors are not aware of any circumstances resulting
in the responsibility of disclosure under Rule 13.20 of the
On 18 April 2019, the Company issued (a) additional Listing Rules regarding the provision of advances by the
US$200 million 9.5% senior notes due 2022 (which were Company to an entity.
consolidated and form a single series with the 2022 9.5%
Notes); (b) additional US$400 million 10.0% senior notes
due 2023 (which were consolidated and form a single series Subsequent Events
with the 2023 10.0% Notes); and (c) additional US$400
million 10.5% senior notes due 2024 (which were On 22 January 2020, the Company issued (i) US$1,000
consolidated and form a single series with the 2024 10.5% million 11.5% senior notes due 2023, and (ii) US$1,000
Notes). million 12.0% senior notes due 2024.
All of the notes issued above are listed and traded on the On 24 January 2020, Scenery Journey Limited, a subsidiary
Singapore Stock Exchange. of the Company, issued (i) US$2,000 million 11.5% senior
notes due 2022, and (ii) US$2,000 million 12.0% senior
Save as disclosed above, neither the Company nor any of notes due 2023.
its subsidiaries has purchased, sold or redeemed any of the
Company’s listed securities during the year ended 31 All of the notes above are listed and traded on the Singapore
December 2019. Stock Exchange.

Five Years Financial Summary Auditor
The summary of the results, assets and liabilities of the The Company has appointed PricewaterhouseCoopers as
Group in the past five years is set out on pages 217 to 218. the auditor of the Company for the year ended 31 December
2019. The audit and reporting responsibilities of the
Company ’s auditor on the financial statements of the Group
Pre-Emptive Rights are set out in the “Independent Auditor’s Report” in this
annual report. The Company will propose a resolution at the
There is no provision regarding pre-emptive rights in the forthcoming AGM to re-appoint PricewaterhouseCoopers as
articles of association of the Company or the law of the the auditor of the Company.
Cayman Islands which stipulates that the Company is
required to offer Shares to the existing shareholders of the For and on behalf of the Board
Company any new shares according to their respective Hui Ka Yan
shareholding for any fresh issue of shares. Chairman
Hong Kong, 31 March 2020
Adequate Public Float
At the time of listing of the Company in 2009, the Company

has applied to the Stock Exchange for a waiver in respect of
the public float requirement under Rule 8.08(1)(d) of the
Listing Rules. The Stock Exchange has accepted a lower
level of public float for the Company at the time of the listing
subject to the minimum public float should be the higher of (a)
15%, or (b) such a percentage of shares held by the public
immediately after completion of the global offering of the
Company, as increased by the shares issued upon the
exercise of the over-allotment option under the global
offering. As announced by the Company on 27 November
2009 with regard to the exercise of the over-allotment option
and the end of the stabilization period for the global offering,
the percentage of shares that was held by the public then
was 22.04%. As such, the minimum public float requirement
that the Company should maintain at all times should be
22.04%.
The Company has maintained adequate public float during

the year.

INDEPENDENT AUDITOR’S REPORT
To the Shareholders of China Evergrande Group

(incorporated in the Cayman Islands with limited liability)
Opinion
What we have audited

The consolidated financial statements of China Evergrande Group (the “Company”) and its subsidiaries (the “Group”) set out
on pages 74 to 216, which comprise:
• the consolidated balance sheet as at 31 December 2019;
• the consolidated statement of comprehensive income for the year then ended;
• the consolidated statement of changes in equity for the year then ended;
• the consolidated statement of cash flows for the year then ended; and
• the notes to the consolidated financial statements, which include a summary of significant accounting policies.
Our opinion
In our opinion, the consolidated financial statements give a true and fair view of the consolidated financial position of the
Group as at 31 December 2019, and of its consolidated financial performance and its consolidated cash flows for the year
then ended in accordance with Hong Kong Financial Reporting Standards (“HKFRSs”) issued by the Hong Kong Institute of
Certified Public Accountants (“HKICPA”) and have been properly prepared in compliance with the disclosure requirements of
the Hong Kong Companies Ordinance.
Basis for Opinion
We conducted our audit in accordance with Hong Kong Standards on Auditing (“HKSAs”) issued by the HKICPA. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated
Financial Statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence
We are independent of the Group in accordance with the HKICPA’s Code of Ethics for Professional Accountants (the “Code”),
and we have fulfilled our other ethical responsibilities in accordance with the Code.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
consolidated financial statements of the current period. These matters were addressed in the context of our audit of the
consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion
on these matters.
Key audit matters identified in our audit are summarised as follows:
• Assessment of net realisable value of properties under development and completed properties held for sale
• Fair value of investment properties
• Fair value of derivative financial liabilities arising from strategy investment in a major subsidiary
Key Audit Matters How our audit addressed the Key Audit Matters
Assessment of net realisable value of properties under development and completed properties held for sale
Refer to note 2(n) and note 2(o) accounting policies of We have performed the following procedures to address
properties under development and completed this key audit matter:
properties held for sale, note 5(a) critical accounting
estimates and judgements, note 12 properties under (i) We understood, evaluated and validated the internal
development and completed properties held for sale to control over the Group’s process in determining the
the consolidated financial statements. net realisable values of PUD and PHS based on
prevailing market conditions;
At 31 December 2019, properties under development
(“PUD”) and completed properties held for sale (“PHS”) (ii) We compared the relevant PUD and PHS balances
totalled RMB1,327,461 million and accounted for against the result of management’s net realisable
approximately 60% of the Group’s total assets. PUD value assessment made in the prior years to consider,
and PHS are stated at the lower of cost and net with hindsight, whether management’s assessment
realisable value, write-down of carrying amounts of had been subject to management bias;
PUD and PHS to their net realisable value amounted to
RMB2,325 million as at 31 December 2019. (iii) We then challenged the reasonableness of
management’s key estimates for:
We focused on this net realisable value assessment
because the determination of net realisable values of • Estimated selling price which is based on the
PUD and PHS involved critical accounting estimates on prevailing market conditions, we compared the
the selling price, variable selling expenses and estimated selling price to the recent market
estimated costs to completion of PUD. transactions, such as the Group’s selling price
of the pre-sale units in the same project or the
prevailing market price of the comparable
properties with similar size, usage and location;

• Estimated variable selling expenses as a

percentage of the related estimated selling price
of the properties, we compared the above
estimated percentage with the actual average
selling expenses to revenue ratio of the Group in
the current year; and
• Estimated costs to completion for PUD, we

reconciled the estimated costs to completion to
the budgets approved by management and
examined, on a sample basis, the construction
contracts or compared to the actual costs of
similar completed properties of the Group.
We found that management’s estimates on the net

realisable value of the Group’s PUD and PHS were
supported by the available evidence.
Fair value of investment properties
Refer to note 2(h) accounting policy of investment We have performed the following procedures to address
properties, note 5(b) critical accounting estimates and this key audit matter:
judgements and note 9 of investment properties to the
consolidated financial statements. (i) We understood, evaluated and validated the internal
control over the Group’s process in determining the
The Group’s investment properties were measured at fair value of investment properties;
fair value of RMB162,556 million as at 31 December
2019, with net revaluation gains of RMB1,516 million (ii) We evaluated the independent external valuers’
recorded in the consolidated statement of competence, capabilities and objectivity;
comprehensive income for the year then ended.
Independent external valuations were obtained for the (iii) We involved our in-house valuation experts to assess
whole investment property portfolio in order to support the appropriateness of the income capitalisation
management’s estimates. approach and residual approach used by the external
valuers based on our knowledge of the property
The valuations of completed investment properties industry; and
prepared under income capitalisation approach were
dependent on certain key assumptions that required (iv) We checked, on a sample basis, the accuracy and
significant management judgement, including relevance of the input data used, including the
capitalisation rates, market rent and market price. The capitalisation rates, market rent and market price, to
valuations of investment properties under construction the recent renewal of lease or sale transactions of the
prepared under residual approach were also dependent Group and of the market. For the estimated costs to
upon the estimated costs to completion and completion and anticipated developer’s profit margin,
anticipated developer’s profit margin. we checked to the construction budget and historical
information of similar properties of the Group.
Given the significant balance of investment properties
and the involvement of critical accounting estimates, We found that the key assumptions used in the valuations
the assessment of fair value of investment properties is were supported by the available evidence.
considered a key audit matter.

Fair value of derivative financial liabilities arising from strategy investment in a major subsidiary
Refer to note 2(m) accounting policy of derivative We have performed the following procedures to address
financial instruments, note 5(c) critical accounting this key audit matter:
estimates and judgements and note 24(a) derivative
financial liabilities to the consolidated financial (i) We evaluated the independent external valuer’s
statements. competence, capabilities and objectivity;
Hengda Real Estate Group Limited (“Hengda Real (ii) We involved our in-house valuation experts to assess
Estate”), a major subsidiary of the Group, has raised the appropriateness of Binomial Lattice Model
three rounds of funding totalling RMB130 billion by way approach used by the external valuer based on our
of issuance of new shares to certain Strategy Investors knowledge;
(“SIs”) in 2017.
(iii) We assessed the appropriateness of the key
Pursuant to the investment agreements with the SIs, if assumptions used in the Binomial Lattice Model
Hengda Real Estate could not effectively list on the approach, including:
Shenzhen Stock Exchange Limited by the defined
dates (“Proposed Reorganisation”), the SIs have the • checking on a sample basis, the accuracy and
right to request the Group to compensate the SIs with relevance of the input data used in the valuations
additional shares of Hengda Real Estate equal to 50% of fair value of PHS, PUD, properties for self-use
of shares held by the SIs before compensation. The and investment properties. For PHS, PUD and
above share compensation arrangement constitutes an properties for self-use, we checked the market
embedded derivative financial liability and was price used to the recent sale transactions of the
measured at fair value. The Group measured the above Group or prevailing market price of the
derivative financial liability at fair value of RMB2,483 comparable properties. For PUD, we also
million as at 31 December 2019, with a revaluation gain checked the estimated costs to completion and
of RMB357 million recognised in profit or loss for the anticipated developer’s profit margin to the
year then ended. Independent external valuation from construction budget and historical actual
an independent external valuer was obtained to construction costs of similar properties of the
support management’s estimates. Group. For investment properties, we performed
the audit procedures stated in the key audit
The valuation of the derivative financial liability under matter of fair value of investment properties;
the Binomial Lattice Model approach was dependent
on certain key assumptions that required significant • comparing the revenue growth rates with
management judgements. These included the fair value historical sales performance of the Group; and
of the net identifiable assets of Hengda Real Estate,
which mainly consisted of the fair value of PUD, PHS, • assessing the appropriateness of the estimated
properties for self-use and investment properties, probability of the Proposed Reorganisation not
estimated revenue growth rates and the probability of being completed by the defined date. This
the Proposed Reorganisation not being completed by included understanding the progress of the
the defined date. The valuations of PHS and properties Proposed Reorganisation, checking board
for self-use were prepared under the direct comparison minutes and materials for application for the
approach making reference to market prices, and the Proposed Reorganisation and conducting
valuations of PUD were prepared under the residual independent research on the rules, regulations
approach using fair market price less estimated costs and new implementation guidance issued by the
to completion, anticipated developer’s profit margin People’s Republic of China (the “PRC”)
and selling expenses. Given the above mentioned government authorities and publicly available
critical accounting estimates on the fair value of information related to the stock markets in the
derivative financial liabilities, the fair value of derivative PRC.
financial liabilities is considered a key audit matter.
We found that the key assumptions used in the valuations
were supported by the available evidence.

Other Information
The directors of the Company are responsible for the other information. The other information comprises all of the information
included in the annual report other than the consolidated financial statements and our auditor’s report thereon.
Our opinion on the consolidated financial statements does not cover the other information and we do not express any form
of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our
knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Responsibilities of Directors and Those Charged with

Governance for the Consolidated Financial Statements
The directors of the Company are responsible for the preparation of the consolidated financial statements that give a true
and fair view in accordance with HKFRSs issued by the HKICPA and the disclosure requirements of the Hong Kong
Companies Ordinance, and for such internal control as the directors determine is necessary to enable the preparation of
consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the directors are responsible for assessing the Group’s ability to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but
to do so.
Those charged with governance are responsible for overseeing the Group’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated

Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. We
report our opinion solely to you, as a body, and for no other purpose. We do not assume responsibility towards or accept
liability to any other person for the contents of this report. Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with HKSAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial
statements.

As part of an audit in accordance with HKSAs, we exercise professional judgement and maintain professional scepticism
throughout the audit. We also:
• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is
higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s
internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by the directors.
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the
audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant
doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or,
if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained
up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue
as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the
disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a
manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction,
supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought
to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most
significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters.
We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the
adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
The engagement partner on the audit resulting in this independent auditor’s report is Yeung Chor Ho.
PricewaterhouseCoopers
Certified Public Accountants
Hong Kong, 31 March 2020

CONSOLIDATED BALANCE SHEET
31 December 31 December
2019 2018
Note RMB million RMB million
ASSETS
Non-current assets
Property, plant and equipment 7 55,798 40,794
Right-of-use assets 8 13,553 —
Land use rights 8 — 9,466
Investment properties 9 162,556 162,322
Goodwill 10 7,788 1,595
Intangible assets 11 7,960 424
Trade and other receivables 13 6,332 6,029
Prepayments 14 2,697 1,677
Investments accounted for using equity method 15 87,811 67,046
Financial assets at fair value through other comprehensive income 16 1,587 1,570
Financial assets at fair value through profit or loss 17 8,005 8,965
Deferred income tax assets 25 5,676 4,389
359,763 304,277
Current assets
Inventories 574 —
Properties under development 12 1,198,388 971,802
Completed properties held for sale 12 129,073 121,971
Trade and other receivables 13 143,706 123,141
Contract acquisition costs 2,757 3,587
Prepayments 14 130,461 138,752
Income tax recoverable 12,167 11,116
Financial assets at fair value through profit or loss 17 921 1,173
Restricted cash 19 78,711 74,845
Cash and cash equivalents 20 150,056 129,364
1,846,814 1,575,751
Total assets 2,206,577 1,880,028
EQUITY
Capital and reserves attributable to shareholders of the Company
Share capital and premium 21 1,575 1,205
Other reserves 22 66,133 65,998
Retained earnings 77,992 65,792
145,700 132,995
Non-controlling interests 40 212,837 175,631
Total equity 358,537 308,626

CONSOLIDATED BALANCE SHEET
2019 2018
LIABILITIES
Non-current liabilities
Borrowings 23 427,726 354,857
Derivative financial liabilities 24 4,666 5,647
Deferred income tax liabilities 25 60,766 49,899
Other payables 26 4,847 1,543
498,005 411,946
Current liabilities
Borrowings 23 372,169 318,285
Trade and other payables 26 717,618 554,313
Contract liabilities 129,705 185,586
Current income tax liabilities 27 130,543 101,272
1,350,035 1,159,456
Total liabilities 1,848,040 1,571,402
Total equity and liabilities 2,206,577 1,880,028
The above consolidated balance sheet should be read in conjunction with the accompanying notes.
Hui Ka Yan Pan Da Rong

Director Director

CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
Year ended 31 December
2019 2018
Revenue 6 477,561 466,196

Cost of sales 30 (344,624) (297,249)
Gross profit 132,937 168,947

Fair value gains on investment properties 9 1,516 1,343
Impairment losses on financial assets (194) (137)
Other gains, net 28 1,729 2,645
Other income 29 6,997 6,694
Selling and marketing costs 30 (23,287) (18,086)
Administrative expenses 30 (19,811) (14,813)
Other operating expenses 30 (5,037) (5,179)
Operating profit 94,850 141,414

Share of profits/(losses) of investments accounted for
using equity method 15 2,967 (874)
Fair value (losses)/gains on financial assets at fair value through
profit or loss 17 (1,863) 51
Fair value gains on derivative financial liabilities 24 981 797
Finance costs, net 32 (22,763) (14,623)
Profit before income tax 74,172 126,765
Income tax expenses 33 (40,630) (60,218)
Profit for the year 33,542 66,547
Other comprehensive income

(Item that may be reclassified to profit or loss)
Share of other comprehensive income of investments accounted
for using the equity method 35 81
Currency translation differences (287) 457
(Item that may not be reclassified to profit or loss)

Revaluation gains arising from transfer of construction in progress to
investment properties, net of tax 7 —
Share of other comprehensive income of investments accounted
for using the equity method (7) —
Change in fair value of financial assets at fair value through other
comprehensive income, net of tax 13 (383)
Other comprehensive income for the year, net of tax (239) 155
Total comprehensive income for the year 33,303 66,702
Profit attributable to:

Shareholders of the Company 17,280 37,390
Non-controlling interests 16,262 29,157
33,542 66,547

COMPREHENSIVE INCOME

2019 2018
Total comprehensive income attributable to:

Shareholders of the Company 17,109 37,502
Non-controlling interests 16,194 29,200
33,303 66,702
Earnings per share for profit attributable to shareholders of the Company

for the year (expressed in RMB per share)
— Basic earnings per share 34 1.315 2.849
— Diluted earnings per share 34 1.304 2.765
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.

CHANGES IN EQUITY
Non-
controlling
Attributable to shareholders of the Company interests
Share Share Retained
capital premium Reserves earnings Total Others Total
RMB million RMB million RMB million RMB million RMB million RMB million RMB million
Balance as at
1 January 2018 928 342 57,374 55,594 114,238 127,207 241,445
Comprehensive income
Profit for the year — — — 37,390 37,390 29,157 66,547
Other comprehensive
income
Change in value of financial
assets at fair value through
other comprehensive
income, net of tax — — (234) — (234) (149) (383)
Share of other
comprehensive income of
investments accounted for
using the equity method — — 81 — 81 — 81
Currency translation
differences — — 265 — 265 192 457
Total comprehensive
income — — 112 37,390 37,502 29,200 66,702
Transactions with owners

Transfer to statutory reserves — — 9,895 (9,895) — — —
Issuance of shares pursuant
to the option scheme
(note 21, note 22) 7 361 (76) — 292 — 292
Employee share option
schemes — — 1,679 — 1,679 532 2,211
Repurchase of shares (11) (422) 11 (2,495) (2,917) — (2,917)
Dividends (note 40) — — — (14,802) (14,802) (12,882) (27,684)
Changes in ownership
interests in subsidiaries
without change of control
(note 40) — — (2,997) — (2,997) (11,510) (14,507)
Capital injection from non-
controlling interests
(note 40) — — — — — 42,071 42,071
Non-controlling interests
arising from business
combination
(note 40) — — — — — 10 10
Acquisition of subsidiaries
(note 40) — — — — — 1,365 1,365
Disposal of subsidiaries
(note 40) — — — — — (362) (362)
Total transactions with

owners (4) (61) 8,512 (27,192) (18,745) 19,224 479
Balance as at
31 December 2018 924 281 65,998 65,792 132,995 175,631 308,626
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.

CHANGES IN EQUITY
Non-
controlling
Attributable to shareholders of the Company interests
Share Share Retained
capital premium Reserves earnings Total Others Total
Balance as at
1 January 2019 924 281 65,998 65,792 132,995 175,631 308,626
Comprehensive income
Profit for the year — — — 17,280 17,280 16,262 33,542
Other comprehensive
income
Change in value of financial
other comprehensive
income, net of tax — — (14) — (14) 27 13
Share of other
comprehensive income of
investments accounted for
using the equity method — — 28 — 28 — 28
Revaluation gains arising
from transfer of
construction in progress to
investment properties, net
of tax — — 7 — 7 — 7
Currency translation
differences — — (192) — (192) (95) (287)
Total comprehensive
income — — (171) 17,280 17,109 16,194 33,303
Transactions with owners

Transfer to statutory reserves — — 5,080 (5,080) — — —
Issuance of ordinary shares
pursuant to share option
scheme (note 21, note 22) 8 362 (75) — 295 — 295
Employee share option
schemes — — 489 — 489 177 666
Dividends (note 40) — — — — — (2,748) (2,748)
Changes in ownership
interests in subsidiaries
without change of control
(note 40(iii)) — — (5,188) — (5,188) (28,653) (33,841)
Capital injection from non-
controlling interests
(note 40(i)) — — — — — 46,932 46,932
Non-controlling interests
arising from business
combination
(note 40, note 41) — — — — — 4,717 4,717
(note 40(ii)) — — — — — 607 607
Disposal of subsidiaries
(note 40) — — — — — (20) (20)
Total transactions with

owners 8 362 306 (5,080) (4,404) 21,012 16,608
Balance as at
31 December 2019 932 643 66,133 77,992 145,700 212,837 358,537
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.

CASH FLOWS
2019 2018
Cash flows of operating activities

Net cash generated from operations 36 18,493 135,347
Income tax paid (19,059) (25,510)
Interest paid (66,791) (55,088)
Net cash (used in)/generated from operating activities (67,357) 54,749
Cash flows of investing activities

Acquisition of subsidiaries, net of cash acquired 41 (12,714) (9,860)
Purchases of property, plant and equipment and investment properties (11,838) (9,594)
Proceeds from disposal of property, plant and equipment,
land use rights and intangible assets 423 314
Proceeds from disposal of investment properties 3,378 3,083
Purchase of land use rights (2,056) (553)
Purchase of intangible assets (1,269) (203)
Investment in associates (16,133) (17,514)
Investment in joint ventures (4,405) (17,199)
Proceeds from disposal of joint ventures and associates 1,895 41
Net cash received from disposal of subsidiaries 898 1,631
Purchase of financial assets at fair value through other
comprehensive income — (46,308)
Proceeds from disposal of financial assets at fair value through other
comprehensive income — 49,012
Dividend received 182 610
Purchase of financial assets at fair value through profit or loss 17 (7,925) (4,209)
Proceeds from disposal of financial assets at fair value
through profit or loss 17 7,372 1,531
Repayment from associates — 20
Repayment from joint ventures 11,041 3,907
Repayment from non-controlling interests 4,745 3,127
Cash advance to associates (30) —
Cash advance to joint ventures (19,986) (15,883)
Cash advance to non-controlling interests (12,112) (3,837)
Prepayments for acquisition of subsidiaries (2,169) (2,363)
Interest received 3,844 3,884
Proceeds from governments grant for construction 1,551 —
Net cash used in investing activities (55,308) (60,363)

CASH FLOWS

2019 2018
Cash flows of financing activities

Proceeds from bank and other borrowings 36(b) 462,121 349,068
Repayments of bank and other borrowings 36(b) (407,323) (433,010)
Proceeds from PRC corporate bonds 36(b) 19,933 —
Repayments from PRC corporate bonds 36(b) (18,544) (10,325)
Proceeds from senior notes 36(b) 52,708 19,172
Proceeds from convertible bonds 36(b) — 14,385
Repayment to unit holders of consolidated investment entities (697) (2,636)
Repurchase of shares — (2,917)
Issuance of ordinary shares pursuant to share option scheme 295 292
Dividends paid (2,748) (27,684)
Acquisitions of non-controlling interests in subsidiaries (33,841) (14,507)
Capital injection from non-controlling interests 40 46,932 42,071
Cash advance from associates 457 —
Cash advance from joint ventures 34,489 11,203
Cash advance from non-controlling interests 10,258 2,386
Repayment to joint ventures (7,070) (484)
Repayment made to non-controlling interests (7,065) (11,956)
Restricted cash pledged for bank borrowings (5,554) 46,555
Deposits for other borrowings (295) 736
Principal elements of lease payments (893) —
Net cash generated/(used in) from financing activities 143,163 (17,651)
Net increase/(decrease) cash and cash equivalents 20,498 (23,265)

Cash and cash equivalents at beginning of year 129,364 152,008
Exchange gains on cash and cash equivalents 194 621
Cash and cash equivalents at end of year 150,056 129,364
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.

NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
1 General Information
China Evergrande Group (the “Company”) was incorporated in the Cayman Islands on 26 June 2006 as an exempted
company with limited liability under the Companies Law, Cap. 22 (2009 Revision as consolidated and revised from time
to time) of the Cayman Islands and is engaged in investment holding. The Company and its subsidiaries (the “Group”)
are principally engaged in the property development, property investment, property management, new energy vehicle
business, hotel operations, finance business, internet business and health industry business in the People’s Republic
of China (the “PRC”). The address of its registered office is P.O. Box 309, Ugland House, Grand Cayman, KY1-1104,
Cayman Islands.
The Company had its listing on the Main Board of The Stock Exchange of Hong Kong Limited (the “Stock Exchange”)
on 5 November 2009.
These consolidated financial statements are presented in Renminbi Yuan (“RMB”) millions, unless otherwise stated.
These consolidated financial statements have been approved for issue by the Board of Directors (the “Board”) of the
Company on 31 March 2020.
2 Summary of Significant Accounting Policies
The principal accounting policies applied in the preparation of these consolidated financial statements are set out
below. These policies have been consistently applied to all the years presented, unless otherwise stated.
(a) Basis of Preparation

These consolidated financial statements have been prepared in accordance with Hong Kong Financial Reporting
Standards (“HKFRSs”) and disclosure requirements of the Hong Kong Companies Ordinance Cap. 622. The
consolidated financial statements have been prepared under the historical cost convention, as modified by the
revaluation of financial assets at fair value through other comprehensive income, financial assets at fair value
through profit or loss, investment properties and derivative financial liabilities, which are carried at fair value.
The preparation of financial statements in conformity with the HKFRS requires the use of certain critical
accounting estimates. It also requires management to exercise its judgement in the process of applying the
Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the consolidated financial statements are disclosed in note 5.

2 Summary of Significant Accounting Policies (Continued)
(a) Basis of Preparation (Continued)

(i) New standards and amendments to standards adopted by the Group as at 1 January
2019
The following amendments to standards are mandatory for the Group’s financial year beginning on 1
January 2019 for the Group:
HKFRS 16 Leases
HKFRS 9 (Amendment) Prepayment Features with Negative Compensation
HKAS 19 (Amendment) Plan Amendment, Curtailment or Settlement
HKAS 28 (Amendment) Long-term Interests in an Associate and Joint Venture
Annual Improvements to 2015–2017 Improvements to HKFRS
Cycle
HK (IFRIC) 23 Uncertainty over Income Tax Treatments
Save for the impact of adoption of HKFRS 16 disclosed in note 3, the adoption of other new and amended
standards does not have any significant impact to the results and financial position of the Group.
(ii) New standards and amendments to standards that have been issued but are not
effective
HKAS 1 and HKAS 8 (Amendments) Definition of Material1
HKFRS 3 (Amendments) Definition of a Business1
Amendments to HKAS 39, HKFRS 7 and HKFRS 9 Interest rate benchmark reform1
Revised Conceptual Framework for Financial Reporting Improvements to HKFRS1
HKFRS 17 Insurance Contracts2
HKFRS 10 and HKAS 28 (Amendments) Sale or contribution of assets between an investor
and its associate or joint venture3
1
Effective for periods beginning on or after 1 January 2020.
2
Effective for periods beginning on or after 1 January 2021.
3
Effective date is to be determined by the International Accounting Standard Board.
The Group has already commenced an assessment of the impact of these new or revised standards and
amendments, certain of which are relevant to the Group’s operations. According to the preliminary
assessment made by the Group, no significant impact on the financial performance and position of the
Group is expected when they become effective.

(b) Consolidation
(i) Subsidiaries
Subsidiaries are entities (including a structured entity) over which the Group has control. The Group
controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with
the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are
consolidated from the date on which control is transferred to the Group. They are deconsolidated from the
date that control ceases.
Intra-group transactions, balances and unrealised gains on transactions between group companies are
eliminated. Unrealised losses are also eliminated. When necessary, amounts reported by subsidiaries have
been adjusted to conform with the Group’s accounting policies.
(ii) Business combinations

The Group applies the acquisition method to account for business combinations. The consideration
transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities
incurred to the former owners of the acquiree and the equity interests issued by the Group. The
consideration transferred includes the fair value of any asset or liability resulting from a contingent
consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a
business combination are measured initially at their fair values at the acquisition date.
The Group recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition basis.
Non-controlling interests in the acquiree that are present ownership interests and entitle their holders to a
proportionate share of the entity’s net assets in the event of liquidation are measured at either fair value or
the present ownership interests’ proportionate share in the recognised amounts of the acquiree’s
identifiable net assets. All other components of non-controlling interests are measured at their acquisition
date fair value, unless another measurement basis is required by HKFRS.
Acquisition-related costs are expensed off as incurred.
If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s
previously held equity interest in the acquiree is re-measured to fair value at the acquisition date; any gains
or losses arising from such re-measurement are recognised in profit or loss.
Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition
date. Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset
or liability is recognised in accordance with HKAS 39 in profit or loss. Contingent consideration that is
classified as equity is not remeasured, and its subsequent settlement is accounted for within equity.
The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and
the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the
identifiable net assets acquired is recorded as goodwill. If the total of consideration transferred, non-
controlling interest recognised and previously held interest measured is less than the fair value of the net
assets of the subsidiary acquired in the case of a bargain purchase, the difference is recognised directly in
the income statement.

(b) Consolidation (Continued)

(iii) Changes in ownership interests in subsidiaries without change of control
Transactions with non-controlling interests that do not result in a loss of control are accounted for as equity
transactions — that is, as transactions with the owners of the subsidiary in their capacity as owners. The
difference between fair value of any consideration paid and the relevant share acquired of the carrying
amount of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling
interests are also recorded in equity.
(iv) Disposal of subsidiaries

When the Group ceases to have control, any retained interest in the entity is re-measured to its fair value at
the date when control is lost, with the change in carrying amount recognised in profit or loss. The fair value
is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an
associate, joint venture or financial asset. In addition, any amounts previously recognised in other
comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of
the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive
income are reclassified to profit or loss.
(v) Investments in subsidiaries

In the Company’s statement of financial position, the investments in subsidiaries are accounted for at cost
less impairment. Cost includes direct attributable costs of investment. The results of subsidiaries are
accounted for by the Company on the basis of dividend received and receivable.
Impairment testing of the investments in subsidiaries is required upon receiving a dividend from these
investments if the dividend exceeds the total comprehensive income of the subsidiary in the period the
dividend is declared or if the carrying amount of the investment in the separate financial statements
exceeds the carrying amount in the consolidated financial statements of the investee’s net assets including
goodwill.

(c) Associates
An associate is an entity over which the Group has significant influence but not control, generally accompanying
a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for using
the equity method of accounting after initially being recognised at cost. Under the equity method, the investment
is initially recognised at cost, and the carrying amount is increased or decreased to recognise the investor’s share
of the profit or loss of the investee after the date of acquisition. The Group’s investments in associates include
goodwill identified on acquisition. Upon the acquisition of the ownership interest in an associate, any difference
between the cost of the associate and the Group’s share of the net fair value of the associate’s identifiable assets
and liabilities is accounted for as goodwill.
If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate share
of the amounts previously recognised in other comprehensive income is reclassified to profit or loss where
appropriate.
The Group’s share of post-acquisition profit or loss is recognised in the income statement, and its share of post-
acquisition movements in other comprehensive income is recognised in other comprehensive income with a
corresponding adjustment to the carrying amount of the investment. When the Group’s share of losses in an
associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group
does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on
behalf of the associate.
The Group determines at each reporting date whether there is any objective evidence that the investment in the
associate is impaired. If this is the case, the Group calculates the amount of impairment as the difference
between the recoverable amount of the associate and its carrying value and recognises the amount adjacent to
‘share of post-tax loss of associates’ in the income statement.
Profits and losses resulting from upstream and downstream transactions between the Group and its associate
are recognised in the Group’s financial statements only to the extent of unrelated investor’s interests in the
associates. Unrealised losses are eliminated unless the transaction provides evidence of an impairment of the
asset transferred. Accounting policies of associates have been changed where necessary to ensure consistency
with the policies adopted by the Group.
Gain or losses on dilution of equity interest in associates are recognised in the income statement.

(d) Joint arrangements

The Group has applied HKFRS 11 to all joint arrangements. Under HKFRS 11 investments in joint arrangements
are classified as either joint operations or joint ventures depending on the contractual rights and obligations of
each investor. The Group has assessed the nature of its joint arrangements and determined them to be joint
ventures. Joint ventures are accounted for using the equity method.
Under the equity method of accounting, interests in joint ventures are initially recognised at cost and adjusted
thereafter to recognise the Group’s share of the post-acquisition profits or losses and movements in other
comprehensive income. The Group’s investments in joint ventures include goodwill identified on acquisition.
Upon the acquisition of the ownership interest in a joint venture, any difference between the cost of the joint
venture and the Group’s share of the net fair value of the joint venture’s identifiable assets and liabilities is
accounted for as goodwill. When the Group’s share of losses in a joint venture equals or exceeds its interests in
the joint ventures (which includes any long-term interests that, in substance, form part of the Group’s net
investment in the joint ventures), the Group does not recognise further losses, unless it has incurred obligations
or made payments on behalf of the joint ventures.
Unrealised gains on transactions between the Group and its joint ventures are eliminated to the extent of the
Group’s interest in the joint ventures. Unrealised losses are also eliminated unless the transaction provides
evidence of an impairment of the asset transferred. Accounting policies of the joint ventures have been changed
where necessary to ensure consistency with the policies adopted by the Group.
(e) Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision-maker (CODM). The CODM who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the executive directors that makes strategic
decisions.

(f) Foreign currency translation

(i) Functional and presentation currency
Items included in the financial statements of each group entities are measured using the currency of the
primary economic environment in which the entities operate (the “functional currency”). The consolidated
financial statements are presented in RMB, which is the functional and presentation currency of the
Company.
(ii) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing
at the dates of the transactions or valuation where items are re-measured. Foreign exchange gains and
losses resulting from the settlement of such transactions and from the translation at year-end exchange
rates of monetary assets and liabilities denominated in foreign currencies are recognised in the consolidated
statement of comprehensive income, except when deferred in equity as qualifying cash flow hedges and
qualifying net investment hedges.
Foreign exchange gain and losses that relate to borrowings denominated in foreign currencies are
presented in the consolidated statement of comprehensive income within ’finance income/(costs), net’. All
other foreign exchange gain and losses are presented in the consolidated statement of comprehensive
income within ’Other losses’.
Translation differences on non-monetary financial assets and liabilities such as equities held at fair value
through profit or loss are recognised in profit or loss as part of the fair value gain or loss. Translation
differences on non-monetary financial assets, such as equities classified as fair value through other
comprehensive income, are included in other comprehensive income.
(iii) Group entities

The results and financial positions of the group entities (none of which has the currency of a
hyperinflationary economy) that have a functional currency different from the presentation currency are
translated into the presentation currency as follows:
• assets and liabilities of each balance sheet of the group entities are translated at the closing rate at
the date of that balance sheet;
• income and expenses of each income statement of the group entities are translated at average
exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates
prevailing on the transaction dates, in which case income and expenses are translated at the dates of
the transactions); and
• all resulting exchange differences are recognised in other comprehensive income.
On consolidation, exchange differences arising from the translation of the net investment in foreign
operations are taken into equity holders’ equity. When a foreign operation is partially disposed of or sold,
exchange differences that were recorded in equity are recognised in the income statement as part of the
gain or loss on sale.
Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets
and liabilities of the foreign operation and translated at the closing rate.

(g) Property, plant and equipment

Property, plant and equipment are stated at historical cost less depreciation and any impairment loss. Historical
cost includes expenditure that is directly attributable to the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits associated with the item will flow to the Group and the
cost of the item can be measured reliably. All other repairs and maintenance are recognised in profit or loss
during the period in which they are incurred.
Depreciation on property, plant and equipment is calculated using the straight-line method to allocate their cost
to their residual values over their estimated useful lives or, in the case of leasehold improvements and certain
leased plant and equipment, the shorter lease term as follows:
Buildings 20–30 years

Machinery 5–10 years
Transportation equipment 5–10 years
Furniture, fitting and equipment 5–10 years
The assets’ residual values and useful lives are reviewed and adjusted if appropriate, at each balance sheet date.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount
is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are
recognised within other (losses)/gains, in the statement of comprehensive income.
Assets under construction are stated at historical cost less impairment losses. Historical cost includes
expenditure that is directly attributable to the development of the assets which comprises construction costs,
amortisation of land use rights, borrowing costs and professional fees incurred during the development period.
On completion, the assets are transferred to buildings within property, plant and equipment.
No depreciation is provided for assets under construction. The carrying amount of an asset under construction is
written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated
recoverable amount.

(h) Investment properties

Property that is held for long-term rental yields or for capital appreciation or both, and that is not occupied by the
Group, is classified as investment property. Properties and land use right that are currently being constructed or
developed for future use as investment property is classified as investment property.
Investment property is measured initially at its cost, including related transaction costs.
After initial recognition, investment property is carried at fair value. Where fair value of investment property under
construction is not reliably measurable, the property is measured at cost until the earlier of the date construction
is completed or the date at which fair value becomes reliably measurable. Fair value is based on active market
prices, adjusted, if necessary, for any difference in the nature, location or condition of the specific asset. If this
information is not available, the Group uses alternative valuation methods such as recent prices on less active
markets or discounted cash flow projections.
Subsequent expenditure is charged to the asset’s carrying amount only when it is probable that future economic
benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All
other repairs and maintenance costs are recognised in profit or loss during the financial period in which they are
incurred.
Changes in fair values of investment property are recognised in profit or loss.
If an investment property becomes owner-occupied or commences to be further developed for sale, it is

reclassified as property, plant and equipment and land use right or properties under development, and its fair
value at the date of change in use becomes its cost for accounting purposes.
If an item of property, plant and equipment becomes an investment property because its use has changed, any
difference resulting between the carrying amount and the fair value of this item at the date of transfer is
recognised in equity as a revaluation of property, plant and equipment under HKAS 16. However, if a fair value
gain reverses a previous impairment loss, the gain is recognised in profit or loss to the extent the impairment
provision previous made.
(i) Intangible assets

(i) Brand names
Brand names acquired in a business combination are recognised at fair value at the acquisition date. Brand
names have a finite useful life and are carried at cost less accumulated amortisation. Amortisation is
calculated using the straight-line method to allocate the cost of brand name over its estimated useful lives
less than 10 years.
(ii) Copy rights

Copy rights are acquired and are recognised at historical cost. Copy rights have a finite useful life and are
carried at cost less accumulated amortisation. Amortisation is calculated using the straight-line method to
allocate the cost of copy rights over its estimated useful lives less than 10 years.

(i) Intangible assets (Continued)

(iii) Customer relationships
Customer relationships acquired in a business combination are recognised at fair value at the acquisition
date. The contractual customer relations have a finite useful life and are carried at cost less accumulated
amortisation. Amortisation is calculated using the straight-line method from three to five years over the
expected life of the customer relationship.
(iv) Patent, proprietary technology and franchise right

Purchased patents, proprietary technology and franchise right are initially recorded at actual cost and are
amortised on a straight-line basis over their estimated useful lives of 5 to 18 years.
(v) Computer softwares

Acquired computer software licenses are capitalised on the basis of the costs incurred to acquire and bring
to use the specific software. These costs are amortised over their estimated useful lives of three to ten
years.
(vi) Research and development costs

Research costs are expensed as incurred. An intangible asset arising from development expenditure on the
Group’s proprietary brands project is recognised only when the Group can demonstrate the technical
feasibility of completing the intangible asset so that it will be available for use or sale, its intention to
complete and its ability to use or sell the asset, how the asset will generate future economic benefits, the
availability of resources to complete and the ability to measure reliably the expenditure during the
development. Following the initial recognition of the development expenditure, the cost model is applied
requiring the asset to be carried at cost less any accumulated amortisation and accumulated impairment
losses. Any expenditure capitalised is amortised over the period of expected future sales from related
project of 5 years.
The carrying value of development costs is reviewed for impairment annually when the asset is not yet in
use, or more frequently when an indication of impairment arises during a financial period.
(vii) Goodwill
Goodwill arises on the acquisition of subsidiaries represents the excess of the consideration transferred,
the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous
equity interest in the acquiree over the fair value of the identified net assets acquired.
For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of
the cash-generating units (“CGUs”), or groups of CGUs, that is expected to benefit from the synergies of
the combination. Each unit or group of units to which the goodwill is allocated represents the lowest level
within the entity at which the goodwill is monitored for internal management purposes. Goodwill is
monitored at the operating segment level.
Goodwill impairment reviews are undertaken annually or more frequently if events or changes in
circumstances indicate a potential impairment. The carrying value of the CGU containing the goodwill is
compared to the recoverable amount, which is the higher of value in use and the fair value less costs of
disposal. Any impairment is recognised immediately as an expense and is not subsequently reversed.

(j) Impairment of non-financial assets

Intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for
impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for
the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is
the higher of an asset’s fair value less costs to sell and value in use. For the purpose of assessing impairment,
assets are grouped at the lowest levels for which there are separately identifiable cash flows (“cash-generating
unit”). Non-financial assets that suffered an impairment are reviewed for possible reversal of the impairment at
each reporting date.
(k) Financial assets

(i) Classification
The Group classifies its financial assets in the following measurement categories:
• those to be measured subsequently at fair value (either through other comprehensive income, or
through profit or loss), and
• those to be measured at amortised cost.
The classification depends on the entity’s business model for managing the financial assets and the
contractual terms of the cash flows.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or other
comprehensive income. For investments in equity instruments that are not held for trading, the classification
will depend on whether the Group has made an irrevocable election at the time of initial recognition to
account for the equity investment at fair value through other comprehensive income.
The Group reclassifies debt investments when and only when its business model for managing those
assets changes.
(ii) Measurement
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial
asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition
of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are
expensed in profit or loss.
Financial assets with embedded derivatives are considered in their entirety when determining whether their
cash flows are solely payment of principal and interest.

(k) Financial assets (Continued)

(iii) Debt instruments
Subsequent measurement of debt instruments depends on the Group’s business model for managing the
asset and the cash flow characteristics of the asset. There are three measurement categories into which
the Group classifies its debt instruments:
• Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows
represent solely payments of principal and interest are measured at amortised cost. A gain or loss on
a debt investment that is subsequently measured at amortised cost and is not part of a hedging
relationship is recognised in the consolidated statement of comprehensive income when the asset is
derecognised or impaired. Interest income from these financial assets is included in other income
using the effective interest rate method.
• Financial assets at fair value through other comprehensive income: Assets that are held for collection
of contractual cash flows and for selling the financial assets, where the assets’ cash flows represent
solely payments of principal and interest, are measured at financial assets at fair value through other
comprehensive income (“FVOCI”). Movements in the carrying amount are taken through other
comprehensive income, except for the recognition of impairment gains or losses, interest revenue
and foreign exchange gains and losses which are recognised in profit or loss. When the financial
asset is derecognised, the cumulative gain or loss previously recognised in other comprehensive
income is reclassified from equity to profit and loss accounts and recognised in other gains/(losses).
Interest income from these financial assets is included in other income using the effective interest rate
method.
• Financial assets at fair value through profit or loss: Assets that do not meet the criteria for amortised
cost or FVOCI are measured at financial assets at fair value through profit or loss(“FVPL”). A gain or
loss on a debt investment that is subsequently measured at fair value through profit or loss accounts
and is not part of a hedging relationship is recognised in profit or loss and presented as a separate
line item in the consolidated statement of comprehensive income within “Fair value gain or loss on
financial assets at fair value through profit or loss” in the period in which it arises. Interest income
from these financial assets is included in the other income.
(iv) Equity instruments

The Group subsequently measures all equity investments at fair value. Where the Group’s management
has elected to present fair value gains and losses on equity investments in other comprehensive income,
there is no subsequent reclassification of fair value gains and losses to profit or loss following the
derecognition of the investment. Dividends from such investments continue to be recognised in profit or
loss as other income when the Group’s right to receive payments is established.
Changes in the fair value of financial assets at FVPL are recognised in other gains/(losses) in the profit or
loss accounts as applicable. Impairment losses (and reversal of impairment losses) on equity investments
measured at FVOCI are not reported separately from other changes in fair value.

(k) Financial assets (Continued)

(v) Impairment
The Group assesses on a forward looking basis the expected credit losses associated with its debt
instruments carried at amortised cost and FVOCI. The impairment methodology applied depends on
whether there has been a significant increase in credit risk.
For trade receivables, the Group applies the simplified approach permitted by HKFRS 9, which requires
expected lifetime losses to be recognised from initial recognition of the receivables. For other receivables,
the Group applies the 12 months expected losses method to assessed the expected credit losses. See
note 4(a)(iii) for further details.
(l) Offsetting financial instruments

Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally
enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the
asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events
and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy
of the company or the counterparty.
(m) Derivative financial instruments

Derivative financial instruments are initially recognised at fair value on the date a derivative contract is entered into
and are subsequently re-measured to their fair value at the end of each reporting period. The subsequent
changes in fair value is recognised immediately in profit or loss within ’fair value gains or losses on derivative
financial instruments ’.
(n) Properties under development

Properties under development are stated at the lower of cost and net realisable value. Net realisable value takes
into account the price ultimately expected to be realised, less applicable variable selling expenses and anticipated
cost to completion.
Development cost of property comprises mainly construction costs, cost of land use rights, borrowing costs, and
professional fees incurred during the development period. On completion, the properties are transferred to
completed properties held for sale.
Properties under development are classified as current assets unless those will not be realised in one normal
operating cycle.
(o) Completed properties held for sale

Completed properties remaining unsold at the end of each relevant year are stated at the lower of cost and net
realisable value.
Cost comprises development costs attributable to the unsold properties.
Net realisable value is determined by reference to the estimated selling price in the ordinary course of business,
less applicable estimated selling expenses to make the sale.

(p) Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined using the weighted
average method. The cost of finished goods and work in progress comprises, raw materials, direct labour, other
direct costs and related production overheads (based on normal operating capacity). It excludes borrowing
costs. Net realisable value is the estimated selling price in the ordinary course of business, less applicable
variable selling expenses.
(q) Trade and other receivables

Trade receivables are amounts due from customers for properties sold or services performed in the ordinary
course of business. If collection of trade and other receivables is expected in one year or less (or in the normal
operating cycle of the business if longer), they are classified as current assets. If not, they are presented as non-
current assets.
Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost
using the effective interest method, less provision for impairment.
(r) Cash and cash equivalents

Cash and cash equivalent includes cash in hand and at banks and deposits held at call with banks, other short-
term high liquidity investment with original maturities of three months or less.
Bank deposits which are restricted to use are classified as “restricted cash”. Restricted cash are excluded from
cash and cash equivalents in the cash flow statements.
(s) Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new share or
options are shown in equity as a deduction, net of tax, from the proceeds.
Where any group company purchases the company’s share (treasury shares), the consideration paid, including
any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the
company’s equity holders until the shares are cancelled or reissued. Where such ordinary shares are
subsequently reissued, any consideration received, net of any directly attributable incremental transaction costs
and the related income tax effects, is included in equity attributable to the company’s equity holders.
(t) Trade and other payables

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of
business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or
less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities.
Trade and other payables are recognised initially at fair value and subsequently measured at amortised cost
using effective interest method.

(u) Borrowings
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently
stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption
value is recognised in profit or loss over the period of the borrowings using the effective interest method.
Fees paid to the establishment of loan facilities are recognised as transaction costs of the loan to the extent that
it is probable that part or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down
occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down,
the fee is capitalised as a pre-payment for liquidity services and amortised over the period of the facility to which
it relates.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of
the liability for at least 12 months after the respective balance sheet date.
(v) Borrowing costs

General and specific borrowing costs directly attributable to the acquisition, construction or production of
qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their
intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready
for their intended use or sale. Investment income earned on the temporary investment of specific borrowings
pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.
Other borrowing costs are recognised as an expense in the period in which they are incurred.
Borrowing costs include interest expense, and exchange differences arising from foreign currency borrowings to
the extent that they are regarded as an adjustment to interest costs. The exchange gains and losses that are an
adjustment to interest costs include the interest rate differential between borrowing costs that would be incurred
if the entity had borrowed funds in its functional currency, and the borrowing costs actually incurred on foreign
currency borrowings. Such amounts are estimated based on forward currency rates at the inception of the
borrowings.
When the construction of the qualifying assets takes more than one accounting period, the amount of foreign
exchange differences eligible for capitalisation is determined for each annual period and are limited to the
difference between the hypothetical interest amount for the functional currency borrowings and the actual interest
incurred for foreign currency borrowings. Foreign exchange differences that did not meet the criteria for
capitalisation in previous years should not be capitalised in subsequent years.

(w) Current and deferred income tax

The tax expense for the period comprises current and deferred tax. Tax is recognised in the profit or loss, except
to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case
the tax is also recognised in other comprehensive income or directly in equity, respectively.
(i) Current income tax

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted
at the balance sheet date in the countries where the Group’s entities operate and generate taxable income.
Management periodically evaluates positions taken in tax returns with respect to situations in which
applicable tax regulation is subject to interpretation and establishes provisions where appropriate on the
basis of amounts expected to be paid to the tax authorities.
(ii) Deferred income tax

Inside basis differences
Deferred income tax is recognised, using the liability method, on temporary differences arising between the
tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements.
However, the deferred income tax is not accounted for if it arises from initial recognition of an asset or
liability in a transaction other than a business combination that at the time of the transaction affects neither
accounting nor taxable profit or loss. Deferred income tax is determined using the tax rates that have been
enacted or substantially enacted by the balance sheet date and are expected to apply when the related
deferred income tax asset is realised or the deferred income tax liability is settled.
Outside basis differences

Deferred income tax liabilities are provided on taxable temporary differences arising from investments in
subsidiaries, associate and joint ventures, except for deferred income tax liability where the timing of the
reversal of the temporary difference is controlled by the Group and it is probable that the temporary
difference will not reverse in the foreseeable future. Generally the Group is unable to control the reversal of
the temporary difference for its associate, only where there is an agreement in place that gives the Group
the ability to control the reversal of the temporary difference not recognised.
Deferred income tax assets are recognised on deductible temporary differences arising from investments in
subsidiaries, associates and joint ventures only to the extent that it is probable the temporary difference will
reverse in the future and there is sufficient taxable profit available against which the temporary difference
can be utilised.
(iii) Offsetting
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current
tax assets against current tax liabilities and when the deferred income tax assets and liabilities relate to
income taxes levied by the same taxation authority on either the taxable entity or different taxable entities
where there is an intention to settle the balances on a net basis.

(x) Employee benefits

(i) Employee leave entitlements
Employee entitlements to annual leave and long service leave are recognised when they accrue to
employees. A provision is made for the estimated liability for annual leave and long service leave as a result
of services rendered by employees up to the balance sheet date.
Employee entitlements to sick leave and maternity leave are not recognised until the time of leave.
(ii) Retirement benefits

In accordance with the rules and regulations in the PRC, the PRC based employees of the Group
participate in various defined contribution retirement benefit plans organised by the relevant municipal and
provincial governments in the PRC under which the Group and the PRC based employees are required to
make monthly contributions to these plans calculated at a percentage of the employees’ salaries.
The municipal and provincial governments undertake to assume the retirement benefit obligations of all
existing and future retired PRC based employees’ payable under the plans described above. Other than
the monthly contributions, the Group has no further obligation for the payment of retirement and other post
retirement benefits of its employees. The assets of these plans are held separately from those of the Group
in independently administrated funds managed by the PRC government.
The Group also participates in a pension scheme under the rules and regulations of the Mandatory
Provident Fund Scheme Ordinance (“MPF Scheme”) for all employees in Hong Kong, which is a defined
contribution retirement scheme. The contributions to the MPF Scheme are based on minimum statutory
contribution requirement of 5% of eligible employees’ relevant aggregate income. The assets of this
pension scheme are held separately from those of the Group in independently administered funds.
The Group’s contributions to the defined contribution retirement schemes are expensed as incurred.
(iii) Termination benefits

Termination benefits are payable when employment is terminated by the Group before the normal
retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits.
The Group recognises termination benefits when it is demonstrably committed to either: terminating the
employment of current employees according to a detailed formal plan without possibility of withdrawal; or
providing termination benefits as a result of an offer made to encourage voluntary redundancy. Benefits
falling due more than 12 months after balance sheet date are discounted to present value.

(y) Share-based payments

The Group operates a number of equity-settled share-based compensation plans, under which the entity
receives services from employees as consideration for equity instruments (“options”) of the Group. The fair value
of the employee services received in exchange for the grant of the options is recognised as an expense. The total
amount to be expensed is determined by reference to the fair value of the options granted:
(i) including any market performance conditions (for example, an entity’s share price);
(ii) excluding the impact of any service and non-market performance vesting conditions (for example,
profitability, sales growth targets and remaining an employee of the entity over a specified time period); and
(iii) including the impact of any non-vesting conditions (for example, the requirement for employees to save).
Non-market performance and service conditions are included in assumptions about the number of options that
are expected to vest. The total expense is recognised over the vesting period, which is the period over which all
of the specified vesting conditions are to be satisfied. At the end of each reporting period, the Group revises its
estimates of the number of options that are expected to vest based on the non-marketing performance and
service conditions. It recognises the impact of the revision to original estimates, if any, in profit or loss, with a
corresponding adjustment to equity.
The cash subscribed for the shares issued when the options are exercised is credited to share capital (nominal
value) and share premium, net of any directly attributable transaction costs.
The options granted by the Company over its equity instruments to the employees of subsidiary undertakings in
the Group are treated as a capital contribution. The fair value of employee services received, measured by
reference to the grant date fair value, is recognised over the vesting period as an increase to investment in
subsidiary undertakings, with a corresponding credit to equity.

(z) Provisions and contingent liabilities

Provisions are recognised when: the Group has a present legal or constructive obligation as a result of past
events; it is more likely than not that an outflow of resources will be required to settle the obligation; and the
amount has been reliably estimated. Provisions are not recognised for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is
determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of
an outflow with respect to any one item included in the same class of obligations may be small.
Provisions are measured at the present value of the expenditures expected to be required to settle the obligation
using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks
specific to the obligation. The increase in the provision due to passage of time is recognised as interest expense.
A contingent liability is a possible obligation that arises from past events and whose existence will only be
confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the
control of the Group. It can also be a present obligation arising from past events that is not recognised because
it is not probable that outflow of economic resources will be required or the amount of obligation cannot be
measured reliably.
A contingent liability is not recognised but is disclosed in the notes to the financial statements. When a change in
the probability of an outflow occurs so that outflow is probable, it will then be recognised as a provision.

(aa) Revenue recognition

Revenue comprises the fair value of the consideration received or receivable for the sales of properties and
services in the ordinary course of the Group’s activities. Revenue is shown, net of discount and after eliminated
sales with the group entities. The Group recognises revenue when the amount of revenue can be reliably
measured, it is probably that future economic benefits will flow to the entity and specific criteria have been met
for each of the Group’s activities as described below.
(i) Sales of properties

Revenue are recognised when or as the control of the asset is transferred to the customer. Depending on
the terms of the contract and laws that apply to the contract, control of the asset may transfer over time or
at a point in time. Control of the asset is transferred over time if the Group’s performance:
• Provides all the benefits received and consumed simultaneously by the customer; or
• Creates and enhances an asset that the customer controls as the Group performs; or
• Do not create an asset with an alternative use to the Group and the Group has an enforceable right
to payment for performance completed to date.
If control of the asset transfers over time, revenue is recognised over the period of the contract by reference
to the progress towards complete satisfaction of that performance obligation. Otherwise, revenue is
recognised at a point in time when the customer obtains control of the asset.
The progress towards complete satisfaction of the performance obligation is measured based on the
Group’s efforts or inputs to the satisfaction of the performance obligation, by reference to the contract
costs incurred up to the end of reporting period as a percentage of total estimated costs for each contract.
For property sales contract for which the control of the property is transferred at a point in time, revenue is
recognised when the customer obtains the physical possession or the legal title of the completed property
and the Group has present right to payment and the collection of the consideration is probable.
In determining the transaction price, the Group adjusts the promised amount of consideration for the effect
of a financing component if it is significant.
(ii) Property management

Revenue arising from property management is recognised in the accounting period in which the services
are rendered.
(iii) Construction services

For construction services, the Group’s performance creates or enhances an asset or work in progress that
the customer controls as the asset is created or enhanced, thus the Group satisfies a performance
obligation and recognises revenue over time, by reference to completion of the specific transaction
assessed on the basis of the actual costs incurred up to the end of the reporting period as a percentage of
total estimated costs for each contract.

(aa) Revenue recognition (Continued)

(iv) Hotel operations
Hotel revenue from room rentals, food and beverage sales and other ancillary services are recognised
when the goods are delivered or services are rendered.
(v) Interest income

Interest income is recognised on a time-proportion basis using the effective interest method. When a
receivable impaired, the Group reduces the carrying amount to its recoverable amount, being the estimated
future cashflow discounted at original effective interest rate of the instrument, and continues unwinding the
discount as interest income. Interest income on impaired loans is recognised using the original effective
interest rate.
(vi) Rental income

Rental income of property leasing under operating leases is recognised on a straight-line basis over the
lease terms.
(vii) Income from medical cosmetology and health management

Income from medical cosmetology and health management are recognised when the services have been
rendered to customers. The period of these services rendered is usually within a day.
(ab) Leases
The Group has changed its accounting policy for leases where the group is the lessee. The new policy is
described below and the impact of the change in note 3.
The Group leases various offices and commercial properties. Rental contracts are typically made for fixed periods
of 1 to 10 years but may have extension options as described in (ii) below. Lease terms are negotiated on an
individual basis and contain a wide range of different terms and conditions.
Until 31 December 2018, leases of property and equipment were classified as operating leases. Payments made
under operating leases (net of any incentives received from the lessor) were charged to profit or loss on a
straight-line basis over the period of the lease.
From 1 January 2019, leases are recognised as a right-of-use asset and a corresponding liability at the date at
which the leased asset is available for use by the Group. Each lease payment is allocated between the liability
and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant
periodic rate of interest on the remaining balance of the liability for each period.
Contracts may contain both lease and non-lease components. The Group allocates the consideration in the
contract to the lease and non-lease components based on their relative stand-alone prices. However, for leases
of real estate for which the Group is a lessee, it has elected not to separate lease and non-lease components
and instead accounts for these as a single lease component.

2 Summary of significant accounting policies (Continued)
(ab) Leases (Continued)

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include
the net present value of the following lease payments:
• fixed payments (including in-substance fixed payments), less any lease incentives receivable,
• variable lease payments that are based on an index or a rate,
• amounts expected to be payable by the lessee under residual value guarantees,
• the exercise price of a purchase option if the lessee is reasonably certain to exercise that option, and
• payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.
Lease payments to be made under reasonably certain extension options are also included in the measurement of
the liability.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be determined,
the lessee’s incremental borrowing rate is used, being the rate that the lessee would have to pay to borrow the
funds necessary to obtain an asset of similar value in a similar economic environment with similar terms and
conditions.
To determine the incremental borrowing rate, the Group:
• where possible, uses recent third-party financing received by the individual lessee as a starting point,
adjusted to reflect changes in financing conditions since third party financing was received.
• uses a build-up approach that starts with a risk-free interest rate adjusted for credit risk for leases held by
the Group, which does not have recent third party financing, and
• makes adjustments specific to the lease, e.g. term, country, currency and security.
The Group is exposed to potential future increases in variable lease payments based on an index or rate, which
are not included in the lease liability until they take effect. When adjustments to lease payments based on an
index or rate take effect, the lease liability is reassessed and adjusted against the right-of-use asset.
Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss
over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability
for each period.
Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line
basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less. Low-
value assets comprise IT-equipment and small items of office furniture.

(ab) Leases (Continued)

Right-of-use assets are measured at cost comprising the following:
• the amount of the initial measurement of lease liability,
• any lease payments made at or before the commencement date less any lease incentives received,
• any initial direct costs, and
• restoration costs.
The right-of-use asset which was recognised as investment properties is carried at fair value at each reporting
date after initial recognition and others being included in property and equipment is depreciated over the shorter
of the asset’s useful life and the lease term on a straight-line basis.
Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line
basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less.
(i) Variable lease payments

Variable lease payments based on an index or a rate are initially measured using the index or the rate at the
commencement date. The Group do not forecast future changes of the index/rate; these changes are
taken into account when the lease payments change. Variable lease payments that are not based on an
index or a rate are not part of the lease liability, but they are recognised in profit or loss when the events or
conditions that triggers those payments occurs.
(ii) Extension and termination options

Extension and termination options are included in a number of property and equipment leases of the
Group. These terms are used to maximise operational flexibility in terms of managing contracts. The
majority of extension and termination options held are exercisable upon fulfillment of certain notice period.
In determining the lease term, management considers all facts and circumstances that create an economic
incentive to exercise such options. The assessment is reviewed if a significant event or a significant change
in circumstances occurs which affects this assessment.
Lease income from operating leases where the Group is a lessor is recognised in income on a straight-line
basis over the lease term (Note 9). Initial direct costs incurred in obtaining an operating lease are added to
the carrying amount of the underlying asset and recognised as expense over the lease term on the same
basis as lease income. The respective leased assets are included in the balance sheet based on their
nature. The Group did not need to make any adjustments to the accounting for assets held as lessor as a
result of adopting the new leasing standard.

(ac) Dividend distribution

Dividend distribution to the equity holders of the Company is recognised as a liability in the Group’s and the
Company’s financial statements in the period in which the dividends are approved by the equity holders or the
board of directors, where appropriate.
(ad) Government grants

Grants from the government are recognised at their fair value where there is a reasonable assurance that the
grant will be received and the Group will comply with all attached conditions.
Government grants relating to costs are deferred and recognised in profit or loss over the period necessary to
match them with the costs that they are intended to compensate. Government grants are deducted in reporting
the related expenses, when appropriate.
Government grants relating to property, plant and equipment and intangible assets are charged against carrying
amount of related assets or recognised as deferred income. If it is recognised as deferred income, it will credit to
the relevant assets when it is ready for use and included in profit or loss over the useful life of related assets.
(ae) Financial guarantee liabilities

Financial guarantee liabilities are recognised in respect of the financial guarantee provided by the Group to the
banks for property purchasers.
Financial guarantee liabilities are recognised initially at fair value plus transaction costs that are directly attributable
to the issue of the financial guarantee liabilities. After initial recognition, such liabilities are measured at the higher
of the present value of the best estimate of the expenditure required to settle the present obligation and the
amount initially recognised less cumulative amortisation of fees recognised.
Financial guarantee liabilities are derecognised from the balance sheet when, and only when, the obligation
specified in the contract is discharged or cancelled or expired.

3 Changes in accounting policies
This note explains the impact of the adoption of HKFRS 16 Leases on the Group’s financial information and the new
accounting policies that have been first applied from 1 January 2019.
The Group has adopted HKFRS 16 from its mandatory adoption date of 1 January 2019. The Group has applied the
simplified transition approach and has not restated comparative amounts for the year ended 31 December 2018. The
reclassifications and the adjustments arising from the new leasing rules are therefore recognised in the opening
balance sheet on 1 January 2019. The new accounting policies are disclosed in Note 2(ab).
On adoption of HKFRS 16, the Group recognised lease liabilities in relation to leases which had previously been
classified as ’operating leases’ under the principles of HKAS 17 Leases. These liabilities were measured at the present
value of the remaining lease payments, discounted using the lessee’s incremental borrowing rate as at 1 January 2019.
The weighted average lessee’s incremental borrowing rate applied to the lease liabilities on 1 January 2019 was 6.00%.
(i) Practical expedients applied

In applying HKFRS 16 for the first time, the Group has used the following practical expedients permitted by the
standard:
• the use of a single discount rate to a portfolio of leases with reasonably similar characteristics,
• reliance on previous assessments on whether leases are onerous,
• the accounting for operating leases with a remaining lease term of less than 12 months as at 1 January
2019 as short-term leases,
• the exclusion of initial direct costs for the measurement of the right-of-use asset at the date of initial
application, and
• the use of hindsight in determining the lease term where the contract contains options to extend or
terminate the lease.
The Group has also elected not to reassess whether a contract is, or contains a lease at the date of initial
application. Instead, for contracts entered into before the transition date, the Group relied on its assessment
made applying HKAS 17 and HK(IFRIC) 4 Determining whether an Arrangement contains a Lease.

3 Changes in accounting policies (Continued)
(ii) Measurement of lease liabilities

The recognised lease liabilities are classified as below:
2019
RMB million
Operating lease commitments disclosed as at 31 December 2018 2,391

Discounted using the lessee’s incremental borrowing rate of at the date of initial application 2,272
(Less): short-term leases and low-value leases recognised on a straight-line basis as
expense (461)
Lease liability recognised as at 1 January 2019 1,811

Of which are:
Current lease liabilities 712
Non-current lease liabilities 1,099
1,811
(iii) Measurement of right-of-use assets

Under the simplified transition approach, the associated right-of-use assets were measured at the amount equal
to the lease liabilities on adoption, adjusted by the amount of any prepaid or accrued lease payments relating to
that lease recognised in the balance sheet as at 31 December 2018. There were no onerous lease contracts that
would have required an adjustment to the right-of-use assets at the date of initial application.
The land use rights are reclassified to right-of-use assets as at 31 December 2019 and 1 January 2019,
respectively.

3 Changes in accounting policies (Continued)
(iv) Adjustments recognised in the balance sheet on 1 January 2019

The change in accounting policy resulted from the adoption of HKFRS16 affected the following items in the
balance sheet on 1 January 2019:
Land used Right-of-use Lease

At 1 January 2019 rights assets liabilities
RMB million RMB million RMB million
Opening balance — as previously reported 9,466 — —

Reclassify from land use rights to right-of-use assets (9,466) 9,466 —
Recognised lease liabilities and right-of-use assets — 1,811 1,811
Opening balance — as restated — 11,277 1,811
There was no impact on the Group’s retained earnings as at 1 January 2019 as a result of the adoption of
HKFRS 16.
(v) Lessor accounting

The Group did not need to make any adjustments to the accounting for assets held as lessor under operating
leases as a result of the adoption of HKFRS 16.
4 Financial risk management
(a) Financial risk factor

The Group’s major financial instruments include cash and bank deposits, trade and other receivables, FVOCI,
FVPL, trade and other payables, derivative financial liabilities and borrowings. Details of these financial
instruments are disclosed in the respective notes. The risks associated with these financial instruments and the
policies on how to mitigate these risks are set out below. The Group manages and monitors these exposures to
ensure appropriate measures are implemented on a timely and effective manner.

4 Financial risk management (Continued)
(a) Financial risk factor (Continued)

(i) Foreign exchange risk
The Group’s businesses are principally conducted in RMB, except that certain receipts of sales proceeds
and borrowings are denominated in other currencies. As at 31 December 2019, the carrying amounts of
the Group’s foreign currency denominated monetary assets and liabilities at the respective balance sheet
dates are as follows:
31 December
2019 2018
RMB million RMB million
Monetary assets
— HK$ 19,714 5,145
— US$ 13,709 17,819
— EURO 973 14
— Others 632 344
35,028 23,322
Monetary liabilities
— HK$ 37,971 37,219
— US$ 162,706 112,175
200,677 149,394
The aggregate net foreign exchange gains/losses recognised in profit or loss were:

2019 2018
Net foreign exchange gain included in other gains 621 585

Exchange losses on foreign currency borrowing included in
finance costs — net (4,022) (6,244)
Total net foreign exchange losses recognised in profit before

income tax for the year (3,401) (5,659)


(i) Foreign exchange risk (Continued)
The following table shows the sensitivity analysis of a 2% change in RMB against the relevant foreign
currencies. The sensitivity analysis includes only foreign currency denominated monetary items and adjusts
their translation at the year-end for a 2% change in foreign currency rates. If there is a 2% increase/
decrease in RMB against the relevant currencies, the effect of increase/(decrease) in the profit for the year
is as follows:
31 December
2019 2018
2% appreciation in RMB against HK$ 274 481

2% depreciation in RMB against HK$ (274) (481)
2% appreciation in RMB against US$ 2,235 1,415

2% depreciation in RMB against US$ (2,235) (1,415)
2% appreciation in RMB against EUR$ (15) —

2% depreciation in RMB against EUR$ 15 —
(ii) Interest rate risk

The Group’s interest-bearing assets and liabilities are mainly restricted cash, cash and cash equivalents
and borrowings. The Group’s exposure to changes in interest rates is mainly attributable to its long term
borrowings. Borrowings at variable rates expose the Group to cash flow interest-rate risk. Borrowings
issued at fixed rates expose the Group to fair value interest-rate risk.
As at 31 December 2019, if interest rate on borrowings at variable rates had been 100 basis point higher/
lower with all variables held constant, post-tax profit for the year ended 31 December 2019 would
decrease/increase by approximately RMB1,021 million (2018: decrease/increase by approximately
RMB915 million), mainly as a result of more/less interest expenses on borrowings at variable rates.
The Group has not used any interest rate swaps to hedge its exposure to interest rate risk.


(iii) Credit risk
The Group is exposed to credit risk in relation to its trade and other receivables and cash deposits with
bank.
The carrying amounts of trade and other receivables, restricted cash and cash and cash equivalents
represent the Group’s maximum exposure to credit risk in relation to financial assets.
Cash transactions are limited to high-credit-quality institutions. Deposits are only placed with reputable
banks.
The Group has policies in place to ensure that credit sales are made to customers with an sufficient
financial strength and appropriate percentage of down payment. The Group closely monitors the collection
of progress payments from customers in accordance with payment schedule agreed with customers and
follow up action is taken to recover overdue debts, if any.
Meanwhile, the Group has the right to cancel the contracts once repayment from the customers is in
default; it also has monitoring procedures to ensure that follow-up actions are taken to recover overdue
balances. In addition, the Group regularly reviews the recoverable amount of each individual trade and
other receivables to ensure that adequate impairment provisions are made for irrecoverable amounts. The
Group has no significant concentrations of credit risk, with exposure spread over a number of
counterparties and customers.
The Group typically provides guarantees to banks in connection with the customers’ borrowing of
mortgage loans to finance their purchase of properties for an amount up to 70% of the total purchase price
of the property. Detailed disclosure of these guarantees is made in note 37. If a purchaser defaults on the
payment of its mortgage loan during the guarantee period, the bank holding the guarantee may demand
the Group to repay the outstanding principal of the loan and any interest accrued thereon. Under such
circumstances, the Group is able to retain the customer’s deposit and resell the property to recover the
amounts paid by the Group to the bank. In this regard, the directors of the Company consider that the
Group’s credit risk is significantly reduced.
For other receivables, management makes periodic collective assessments as well as individual
assessment on the recoverability of other receivables based on historical settlement records and past
experience. The directors believe that there is no material credit risk inherent in the Group’s outstanding
balance of other receivables.


(iii) Credit risk (Continued)
The Group considers the probability of default upon initial recognition of asset and whether there has been
a significant increase in credit risk on an ongoing basis throughout each reporting period. To assess
whether there is a significant increase in credit risk the Group compares the risk of a default occurring on
the asset as at the reporting date with the risk of default as at the date of initial recognition. It considers
available reasonable and supportive forwarding-looking information. Especially the following indicators are
incorporated:
• internal credit rating
• external credit rating
• actual or expected significant adverse changes in business, financial or economic conditions that are
expected to cause a significant change to the borrower’s ability to meet its obligations
• actual or expected significant changes in the operating results of the borrower
• significant increases in credit risk on other financial instruments of the same borrower
• significant changes in the expected performance and behaviour of the borrower, including changes in
the payment status of borrowers in the group and changes in the operating results of the borrower.
The Group accounts for its credit risk by appropriately providing for expected credit losses on a timely
basis. In calculating the expected credit loss rates, the Group considers historical loss rates for each
category of receivables and adjusts for forward looking macroeconomic data.
Trade receivables
The Group applies the simplified approach to providing for expected credit losses prescribed by HKFRS 9,
which permits the use of the lifetime expected loss provision for all trade receivables.
To measure the expected credit losses of trade receivables, trade receivables have been grouped based
on shared credit risk characteristics and the days of initial recognition.
The loss allowance provision of trade receivables as at 31 December 2019 is set out in note 13.


(iii) Credit risk (Continued)
Other receivables
Other financial assets at amortised cost include other receivables from third parties and related parties. The
Group has assessed that the expected credit losses for these receivables under the 12 months expected
losses method.
Management considered other receivables from third parties and related parties to be low credit risk as
they have a low risk of default and a strong capacity to meet its contractual cash flow obligations in the
near term.
The expected loss rate of other receivables which are deposit in nature, such as deposits for acquisition of
land use right, construction projects and borrowings, is assessed to be near to zero and no loss allowance
provision is made for these deposits during the period.
To measure the expected credit losses of other receivables other than deposits, other receivables
excluding deposits have been grouped based on shared credit risk characteristics and the days past due.
Loss allowance provision movement

As at 31 December 2019, the loss allowance provision for trade and other receivables reconciles to the
opening loss allowance for that provision as follows:
Trade Other
receivables receivables Total
Balance as at 1 January 2018 139 1,436 1,575
Provision for loss allowance recognised in

profit or loss for the year 35 102 137
Balance as at 31 December 2018 174 1,538 1,712
Provision for loss allowance recognised in

profit or loss for the year (10) 204 194
Balance as at 31 December 2019 164 1,742 1,906
(iv) Liquidity risk

Management aims to maintain sufficient cash and cash equivalents or have available funding through an
adequate amount of available financing, including proceeds from pre-sale of properties, committed credit
facilities and short-term and long-term borrowings to meet its construction commitments. Due to the
dynamic nature of the underlying businesses, the Group maintains flexibility in funding by maintaining
adequate amount of cash and cash equivalents and through having available sources of financing.


(iv) Liquidity risk (Continued)
To cope with the rapid expansion of the Group’s businesses, the Group raised significant amounts of
borrowings during the year ended 31 December 2019. As at 31 December 2019, the Group’s total
borrowings stood at RMB799,895 million. During the year ended 31 December 2019 and the period up to
the date of these consolidated financial statements, in order to properly manage the Group’s liquidity risk
and capital structure, the Group has conducted the following major financing activities:
— On 25 January 2019, the Group issued 7.00%, 18-month senior notes with an aggregated principal
amount of US$1,100 million at 98.627% of the face value, 6.25%, 30-month senior notes with an
aggregated principal amount of US$875 million at 93.096% of the face value and 8.25%, 42-month
senior notes with an aggregated principal amount of US$1,025 million at 94.054% of the face value.
— On 6 March 2019, the Group issued 9.0%, two-year senior notes with an aggregated principal
amount of US$600 million at the face value.
— On 11 April 2019, the Group issued 9.50%, three-year senior notes with an aggregated principal
amount of US$1,450 million, 10.0%, 4-year senior notes with an aggregated principal amount of
US$850 million and 10.5%, 5-year senior notes with an aggregated principal amount of US$700
million.
— On 6 May 2019, the Group issued 6.27%, four-year public PRC corporate bonds with an aggregated
principal amount of RMB15,000 million at 100% of the face value, and 6.80%, five-year public PRC
corporate bonds with an aggregated principal amount of RMB5,000 million at 100% of the face
value.
— On 24 May 2019, 30 July 2019, 24 September 2019, 18 December 2019 and 19 December 2019,
the Company issued 8.90%, 2-year senior notes with an aggregated principal amount of US$1,050
million at 100% of the face value.
— On 8 January 2020, the Group issued 6.98%, three-year public PRC corporate bonds with an
aggregated principal amount of RMB4,500 million at 100% of the face value.
— On 22 January 2020, the Group issued 11.50%, three-year senior notes with an aggregated principal
amount of US$1,000 million, and 12.00%, four-year senior notes with an aggregated principal
amount of US$1,000 million.
— On 24 January 2020, the Group issued 11.50%, 33 month senior notes with an aggregated principal
amount of US$2,000 million, and 12.00%, 45 month senior notes with an aggregated principal
amount of US$2,000 million.
— During the year, the Group obtained capital contribution from non-controlling interest totaling
RMB46,932 million.


Except for the aforementioned recent developments, the Group has a number of alternative plans to
mitigate the potential impacts on anticipated cash flows should there be significant adverse changes in
economic environment. These include control on investment in land reserve, adjusting project development
timetable to adapt the changing local real estate market environment, implementing cost control measures,
promotion of sales of completed properties, accelerating sales with more flexible pricing. The Group will
pursue such options based on its assessment of relevant future costs and benefits.
With the aforementioned activities and plans, the directors of the Company considered the Group’s liquidity
risk has been controlled. The directors of the Company has reviewed the working capital forecast of the
Group for the 12 months from 31 December 2019 and are of the opinion that the Group will have sufficient
working capital to meet its financial obligations as and when they fall due within the next 12 months from
the date of the consolidated balance sheet.
The table below analyses the Group’s financial liabilities into relevant maturity groupings based on the
remaining period at the balance sheet date to the contractual maturity date. The amounts disclosed in the
table are the contractual undiscount cash flows.
Less than Between Between Over

1 year 1 and 2 years 2 and 5 years 5 years Total
RMB million RMB million RMB million RMB million RMB million
At 31 December 2019
Borrowings 425,486 234,608 211,389 40,587 912,070
Trade and other payables* 690,910 948 3,147 42 695,047
1,116,396 235,556 214,536 40,629 1,607,117
At 31 December 2018
Borrowings 363,339 204,889 151,069 51,934 771,231
Trade and other payables* 533,511 1,800 — — 535,311
896,850 206,689 151,069 51,934 1,306,542
* Excluding staff welfare benefit payable, other taxes payable and deferred income from government grants.


The amounts have not included financial guarantee contracts:
— which the Group could be required to settle under the arrangement for the full guaranteed amount if
that amount is claimed by the counterparty to the guarantee for loans procured by the purchasers of
the Group’s properties (note 37). Such guarantees terminate upon the earlier of (i) issuance of the real
estate ownership certificate which will generally be available within an average period of two to three
years upon the completion of guarantee registration; or (ii) the satisfaction of mortgaged loan by the
purchasers of properties;
— which the Group makes for its cooperation parties and joint ventures’ bank borrowings (note 37).
Such guarantees terminate upon the repayment of relevant bank borrowings.
The Group considers that it is more likely than not that no amount will be payable under the arrangement.
(b) Capital risk management

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going
concern in order to provide returns for equity owners and benefits for other stakeholders and to maintain an
optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to equity
owners, issue new shares or sell assets to reduce debt.
Consistent with others in the industry, the Group monitors capital on the basis of the gearing ratio. This ratio is
calculated as total borrowings divided by total assets, as shown in the consolidated balance sheets.
The gearing ratios as at 31 December 2019 and 2018 were as follows:
31 December
2019 2018
Total borrowings (note 23) 799,895 673,142

Total assets 2,206,577 1,880,028
Gearing ratio 36.3% 35.8%

(c) Fair value estimation

(i) The different levels of fair value estimation have been defined as follows:
• Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1).
• Inputs other than quoted prices included within level 1 that are observable for the asset or liability,
either directly (that is, as prices) or indirectly (that is, derived from prices) (level 2).
• Inputs for the asset or liability that are not based on observable market data (that is, unobservable
inputs) (level 3).
The following table presents the Group’s financial assets and financial liabilities that are measured at fair
value:
Level 1 Level 2 Level 3 Total

RMB million RMB million RMB million RMB million
At 31 December 2019
Assets
FVOCI 734 — 853 1,587
FVPL 265 — 8,661 8,926
Total assets 999 — 9,514 10,513
Liabilities
Derivative financial liabilities — 2,183 2,483 4,666
At 31 December 2018
Assets
FVOCI 633 — 937 1,570
FVPL 1,173 — 8,965 10,138
Total assets 1,806 — 9,902 11,708
Liabilities
Derivative financial liabilities — 2,807 2,840 5,647
The carrying amount of trade and other receivables and the carrying amount of trade and other payables
approximate their fair value due to their short maturities. The fair value of financial liabilities for disclosure
purposes is estimated by discounting the future contractual cash flows at the current market interest rate
that is available to the Group for similar financial instruments.

5 Critical accounting estimates and assumptions
Estimates and judgements used in preparing the financial statements are evaluated and based on historical experience
and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by
definition, seldom equal the related actual results. The estimates and assumptions that may have a significant effect on
the carrying amounts of assets and liabilities within the next financial year are discussed below:
(a) Assessment of net realisable value of properties under development and

completed properties held for sale
As at 31 December 2019, the carrying amounts of properties under development and completed properties held
for sale amounted to RMB1,198,388 million (2018: RMB971,802 million) and RMB129,073 million (2018:
RMB121,971 million) respectively, which in total accounted for approximately 60% (2018: 58%) of the Group’s
total assets. The Group assesses the carrying amounts of properties under development and completed
properties held for sale according to their net realisable values based on the realisability of these properties. Net
realisable value for properties under development is determined by reference to management’s estimates of the
selling price based on prevailing market conditions, less applicable variable selling expenses and the anticipated
costs to completion. Net realisable value for completed properties held for sale is determined by reference to
management’s estimates of the selling price based on prevailing market conditions, less applicable variable
selling expenses. Based on management’s best estimates, write-down of carrying amounts of properties under
development and completed properties held for sale amounted to RMB2,325 million as at 31 December 2019
(2018: RMB1,496 million).
(b) Fair value of investment properties

The fair value of investment properties is determined by using valuation technique. Details of the judgment and
assumptions have been disclosed in note 9.
(c) Fair value of derivative financial liability of share compensation arrangement

The Group assesses the fair value of its derivative financial liability by reference to valuation performed by the
independent and professional qualified valuer. Binomial Lattice Model approach is used for valuation of the fair
value of derivative financial liability and it is dependent on certain key assumptions that required significant
management judgement. These include the fair value of properties under development, completed properties
held for sale, properties for self-use and investment properties, the revenue growth rates and the probability of
Proposed Reorganisation (note 24(a)) not being completed by the defined date. The valuation of completed
properties held for sale and properties for self-use were prepared under the direct comparison approach making
reference to fair market prices, and the valuation of properties under development was prepared under the
residual approach using fair market price less estimated costs to completion, anticipated developer’s profit
margin and selling expenses. Detailed disclosure of the valuation of investment properties is made in note 9.
The change of the aforesaid key assumptions may lead to significant difference of the fair value estimation of
financial liability.

5 Critical accounting estimates and assumptions (Continued)
(d) PRC corporate income taxes and deferred taxation

The Group’s subsidiaries that operate in the PRC are subject to income tax in the PRC. Judgement is required in
determining the provision for income tax and withholding tax on unremitted earnings of PRC subsidiaries. There
are many transactions and calculations for which the ultimate determination is uncertain during the ordinary
course of business. Where the final tax outcome of these matters (including the effect of change in the dividend
policies of PRC subsidiaries) is different from the amounts that were initially recorded, such difference will impact
the income tax and deferred tax provision in the period in which such determination is made.
Deferred tax assets relating to certain temporary differences and tax losses are recognised when management
considers to be probable that future taxable profit will be available against which the temporary differences or tax
losses can be utilised. The outcome of their actual utilisation may be different.
(e) PRC land appreciation taxes

The Group is subject to land appreciation taxes in the PRC. However, the implementation and settlement of LAT
varies among various tax jurisdictions in cities of the PRC, and the Group has not finalised its LAT calculation and
payments with local tax authorities in the PRC for most of its property projects. Accordingly, judgement is
required in determining the amount of the land appreciation taxes. The Group recognised these land appreciation
taxes based on management’s best estimates according to the interpretation of the tax rules. The final tax
outcome could be different from the amounts that were initially recorded, and these differences will impact the
income tax expense and tax provisions in the periods in which such taxes have been finalised with local tax
authorities.

6 Segment information
The chief operating decision-maker (“CODM”) of the Group has been identified as the executive directors of the
Company who are responsible for reviewing the Group’s internal reporting in order to assess performance and allocate
resources. Management has determined the operating segments based on these reports. The Group is organised into
four business segments: property development, property investment, property management and other businesses.
Other businesses mainly include new energy vehicle business, hotel operations, internet business, health industry
business and investment business. As the CODM of the Group considers most of the revenue and results of the Group
are attributable to the market in the PRC, and only an immaterial part (less than 10%) of the Group’s assets are located
outside the PRC, no geographical segment information is presented.
The directors of the Company assess the performance of the operating segments based on a measure of segment
results. Impairment losses on financial assets, fair value gains or losses on FVPL, fair value gains or losses on derivative
financial liabilities, dividend income of FVOCI and finance costs are not included in the result for each operating
segment.
Revenue for the year ended 31 December 2019 consists of sales of properties, rental income of investment properties,
income from property management services and income from other businesses, which are set out below:

2019 2018
Sales of properties 464,568 452,764

Rental income 1,364 1,178
Property management services 4,375 4,067
Other businesses 7,254 8,187
477,561 466,196

6 Segment information (Continued)
The segment results and other segment items included in the consolidated statement of comprehensive income for the
year ended 31 December 2019 are as follows:
Property
Property Property management Other
development investment services businesses Group
Gross segment revenue 464,568 1,729 6,734 38,438 511,469

Inter-segment revenue — (365) (2,359) (31,184) (33,908)
Revenue 464,568 1,364 4,375 7,254 477,561
Revenue from contracts with

customers
— Recognised at a point
in time 464,568 — — 3,958 468,526
— Recognised over time — — 4,375 3,296 7,671
Revenue from other sources
— Rental income — 1,364 — — 1,364
Share of post-tax profits of

associates 35 — — 4,521 4,556
Share of post-tax losses of joint
ventures (163) — — (1,426) (1,589)
Segment results 97,754 2,807 651 (3,220) 97,992
Impairment losses on financial

assets (194)
Dividend income of FVOCI 19
Losses on FVPL (1,863)
Gains on derivative financial
liabilities 981
Finance costs, net (22,763)
Profit before income tax 74,172

Income tax expenses (40,630)
Profit for the year 33,542
Depreciation and amortisation 1,701 — 15 2,654 4,370

Fair value gains on investment
properties — 1,516 — — 1,516

The segment results and other segment items included in the consolidated statement of comprehensive income for the
year ended 31 December 2018 are as follows:
Property
Gross segment revenue 452,764 1,510 5,710 34,871 494,855

Inter-segment revenue — (332) (1,643) (26,684) (28,659)
Revenue 452,764 1,178 4,067 8,187 466,196
Revenue from contracts with

customers
— Recognised at a point
in time 452,764 — — 5,227 457,991
— Recognised over time — — 4,067 2,960 7,027
Revenue from other sources
— Rental income — 1,178 — — 1,178
Share of post-tax profits of

associates 163 — — 93 256
Share of post-tax losses of joint
ventures (337) — — (793) (1,130)
Segment results 139,347 2,528 712 (1,910) 140,677
Impairment losses on financial

assets (137)
Gains on FVPL 51
Gains on derivative financial
liabilities 797
Finance costs, net (14,623)
Profit before income tax 126,765

Income tax expenses (60,218)
Profit for the year 66,547
Depreciation and amortisation 1,216 — 14 1,383 2,613

Fair value gains on investment
properties — 1,343 — — 1,343

Segment assets and liabilities as at 31 December 2019 are as follows:
Property
Segment assets 1,843,001 162,556 3,277 169,387 2,178,221

Unallocated assets 28,356
Total assets 2,206,577
Segment assets include:

Interest in associates 5,139 — — 47,263 52,402
Interest in joint ventures 14,624 — — 20,785 35,409
Segment liabilities 842,781 — 4,638 4,751 852,170

Unallocated liabilities 995,870
Total liabilities 1,848,040
Capital expenditure 1,490 2,025 13 28,104 31,632

Segment assets and liabilities as at 31 December 2018 are as follows:
Property
Segment assets 1,602,712 162,322 2,868 84,913 1,852,815

Unallocated assets 27,213
Total assets 1,880,028
Segment assets include:

Interest in associates 2,256 — — 29,447 31,703
Interest in joint ventures 14,816 — — 20,527 35,343
Segment liabilities 700,634 — 4,214 36,594 741,442

Unallocated liabilities 829,960
Total liabilities 1,571,402
Capital expenditure 212 12,241 25 11,721 24,199
Sales between segments are carried out at agreed terms amongst relevant parties. The revenue from external parties
reported to the management is measured in a manner consistent with that in the consolidated statement of
comprehensive income.
Segment assets consist primarily of property, plant and equipment, investment properties, right-of-use assets, land
use rights, properties under development, completed properties held for sale, receivables, contract acquisition costs,
prepayments and cash balances. They exclude deferred tax assets, income tax recoverable, FVOCI and FVPL.
Segment liabilities consist of operating liabilities. Unallocated liabilities comprise taxation, borrowings and derivative
financial liabilities.

Capital expenditure comprises additions to property, plant and equipment, investment properties, right-of-use assets,
land use rights and intangible assets.
Reportable segment assets are reconciled to total assets as follows:
31 December
2019 2018
Segment assets 2,178,221 1,852,815
Unallocated:
Income tax recoverable 12,167 11,116
Deferred income tax assets 5,676 4,389
FVOCI 1,587 1,570
FVPL 8,926 10,138
Total assets per consolidated balance sheet 2,206,577 1,880,028
Reportable segment liabilities are reconciled to total liabilities as follows:
31 December
2019 2018
Segment liabilities 852,170 741,442
Unallocated:
Current income tax liabilities 130,543 101,272
Deferred income tax liabilities 60,766 49,899
Borrowings 799,895 673,142
Derivative financial liabilities 4,666 5,647
Total liabilities per consolidated balance sheet 1,848,040 1,571,402
No material revenues are derived from any single external customer (2018: none).

7 Property, plant and equipment
Furniture,
Transportation Fitting and Construction
Buildings Machinery equipment equipment in progress Total
RMB million RMB million RMB million RMB million RMB million RMB million
Year ended 31 December 2018

Opening net book amount 14,771 858 1,457 5,169 10,643 32,898
Additions 1,176 226 131 406 3,041 4,980
Acquisition of subsidiaries 1,686 1 23 4 — 1,714
Transfer from construction
in progress to Property,
plant and equipment 1,109 15 — 373 (1,497) —
Transfer from properties under
development — — — — 3,712 3,712
Disposals (31) (77) (57) (225) — (390)
Depreciation (858) (90) (280) (892) — (2,120)
Closing net book amount 17,853 933 1,274 4,835 15,899 40,794
At 31 December 2018
Cost 21,124 1,266 2,525 8,505 15,899 49,319
Accumulated depreciation (3,271) (333) (1,251) (3,670) — (8,525)
Net book amount 17,853 933 1,274 4,835 15,899 40,794
Opening net book amount 17,853 933 1,274 4,835 15,899 40,794
Additions 146 221 1,035 278 10,955 12,635
(note 41) 2,213 982 2 248 2,258 5,703
Transfer from construction in
progress to property, plant and
equipment 2,131 573 — 478 (3,182) —
Transfer from construction
in progress to investment
properties — — — — (171) (171)
Disposals (37) (13) (188) (34) — (272)
Depreciation (1,065) (209) (297) (1,308) — (2,879)
Currency difference 1 (13) — — — (12)
Closing net book amount 21,242 2,474 1,826 4,497 25,759 55,798
At 31 December 2019
Cost 25,566 2,985 2,971 9,423 25,759 66,704
Accumulated depreciation (4,324) (511) (1,145) (4,926) — (10,906)
Net book amount 21,242 2,474 1,826 4,497 25,759 55,798

7 Property, plant and equipment (Continued)
Depreciation charge of the Group was included in the following categories in the consolidated statement of
comprehensive income:

2019 2018
Cost of sales 951 656

Selling and marketing costs 253 266
Administrative expenses 1,675 1,198
2,879 2,120
During the year ended 31 December 2019, the Group capitalised borrowing costs amounting to RMB1,556 million (2018:
RMB822 million) on the construction in progress. Borrowing costs were capitalised at the weighted average rate of its
general borrowings of 8.63% (2018: 8.11% ).
As at 31 December 2019, property, plant and equipment of RMB4,831 million (2018: RMB5,042 million) were pledged
as collateral for the Group’s bank borrowings (note 23).
8 Right-of-use assets/land use rights

(a) Right-of-use assets
Year ended 31 December 2019
Land use Lease
rights properties Total
Opening net book amount as at 1 January 2019 — — —

Adjustment for change in accounting policy (note 3) 9,466 1,811 11,277
Additions 2,056 379 2,435
Acquisition of subsidiaries (note 41) 632 245 877
Disposal (28) — (28)
Amortisation (277) (731) (1,008)
Closing net book amount 11,849 1,704 13,553
Land use rights comprise cost of acquiring rights to use certain land, which are principally located in the PRC, for
hotel buildings, self-use buildings and self-operating properties over fixed periods.

8 Right-of-use assets/land use rights (Continued)
(b) Land use rights

Year ended
31 December
2018
RMB million
Opening net book amount 7,935

Additions 553
Transfer from properties under development 1,244
Amortisation (266)
Closing net book amount 9,466
9 Investment properties

2019 2018
Opening net book amount 162,322 151,950

Additions 355 12,241
Acquisition of subsidiaries (note 41) 1,492 37
Disposals (3,314) (2,977)
Disposals of subsidiaries (207) (807)
Transfer from property, plant and equipment 178 —
Fair value gains on investment properties, net 1,516 1,343
Currency translation differences 214 535
Closing net book amount 162,556 162,322
Comprise of:
Completed 140,039 135,709
Under construction 22,517 26,613
As at 31 December 2019, investment properties of RMB9,786 million (2018: RMB13,003 million) were pledged as
collateral for the Group’s borrowings (note 23).
The capitalisation rate of borrowing costs for the year ended 31 December 2019 was 8.63% (2018: 8.11% ).

9 Investment properties (Continued)
(a) Valuation processes of the Group

The Group measures its investment properties at fair value. The fair value of the Group’s investment properties
has been determined on the basis of valuation carried out by an independent and professionally qualified valuer.
Discussions of valuation processes and results are held between the management and the valuer at least once
every six months, in line with the Group’s interim and annual reporting dates.
(b) Valuation techniques

Valuations were based on either:
(i) direct comparison approach is adopted assuming sale of each of these properties in its existing state with
the benefit of vacant possession. By making reference to sales transactions as available in the relevant
market, comparable properties in close proximity have been selected and adjustments have been made to
account for the difference in factors such as location and property size.
(ii) income approach takes into account the current rents of the property interests and the reversionary
potentials of the tenancies, term yield and reversionary yield are then applied respectively to derive the
market value of the property.
(iii) residual method of valuation which is commonly used in valuing development sites by establishing the
market value of the properties on an “as-if” completed basis with appropriate deduction on construction
costs, professional fees, contingency, marketing and legal cost, and interest payments to be incurred,
anticipated developer’s profits, as well as land acquisition costs.
There were no changes to the valuation techniques during the year.

(c) Information about fair value measurements using significant unobservable

inputs (level 3)
Fair value Range of
as at Valuation unobservable
Property category 31 December 2019 techniques Unobservable inputs inputs
Completed investment Commercial properties 26,744 Income Terminal yield 2.10%–6.00%

properties capitalisation
Reversionary yield 2.10%–6.00%
Capitalisation rates 2.10%–6.00%
Expected 0.00%–20.00%
vacancy rate
Monthly rental (RMB/ 23–830

square meter/month)
65,841 Direct comparison Market price (RMB/ 3,000–88,000

square meter)
Car park 47,454 Direct comparison Market price (RMB/ 60,000–450,000

per car park)
Investment properties Commercial properties 21,231 Residual method Market price (RMB/ 4,500–67,700
under construction square meter)
Budgeted cost (RMB/ 1,269–25,059

square meter)
Anticipated developer’s 5.00%–15.00%

profit margin
Car park 1,286 Residual method Market price (RMB/ 95,100–154,800

per car park)
Budgeted cost (RMB/ 563–2,374

square meter)

profit margin


inputs (level 3) (Continued)
Fair value Range of
as at Valuation unobservable
Property category 31 December 2018 techniques Unobservable inputs inputs
Completed investment Commercial properties 12,933 Income Terminal yield 4.00%–5.75%

properties capitalisation
Reversionary yield 4.00%–5.75%
Capitalisation rates 4.00%–5.75%
Expected 0.00%–15.00%
vacancy rate
Monthly rental (RMB/ 35–740

square meter/month)
72,746 Direct comparison Market price (RMB/ 3,121–150,000

square meter)
Car park 50,030 Direct comparison Market price (RMB/ 60,000–530,000

per car park)
Investment properties Commercial properties 24,406 Residual method Market price (RMB/ 4,500–57,700
under construction square meter)

square meter)

profit margin
Car park 2,207 Residual method Market price (RMB/ 99,000–161,700

per car park)

square meter)

profit margin


inputs (level 3) (Continued)
Relationship of unobservable inputs to fair value:
• The higher terminal and reversionary yield, the lower fair value;
• The higher capitalisation rate, the lower fair value;
• The higher expected vacancy, the lower fair value;
• The higher monthly rental, the higher fair value;
• The higher market price, the higher fair value;
• The higher budgeted construction cost to be incurred, the lower fair value;
• The higher the anticipated developer’s profit margin, the lower fair value.
(d) The following amounts have been recognised in the consolidated statement of
comprehensive income:
2019 2018
Rental income 1,364 1,178

Direct operating expenses arising from investment properties that
generate rental income (137) (99)
The future aggregate minimum rental receivables under non-cancellable operating leases are as follows:
31 December
2019 2018
Not later than one year 1,313 1,340

Later than one year and not later than five years 1,180 868
Later than five years 717 666
3,210 2,874
During the years ended 31 December 2019 and 2018, the investment properties are mainly located in the PRC
and have lease periods less than 20 years.

10 Goodwill

2019 2018
Opening net book amount 1,595 1,402

Acquired from business combination (note 41) 6,193 193
Closing book amount 7,788 1,595
11 intangible assets
Patent,
Research and proprietary
development technology and
costs franchise rights Others Total
Years ended 31 December 2019
Cost 2,897 5,251 405 8,553

Accumulated amortisation and impairment (123) (339) (131) (593)
Net book amount 2,774 4,912 274 7,960
Opening net book amount — 187 237 424

Acquired from business combination
(note 41) 2,036 4,954 48 7,038
Additions 861 286 122 1,269
Disposals — (19) (92) (111)
Amortisations (123) (319) (41) (483)
Impairment — (175) — (175)
Currency difference — (2) — (2)
Closing book amount 2,774 4,912 274 7,960

11 intangible assets (Continued)
Patent,
Research and proprietary
development technology and
costs franchise rights Others Total
Years ended 31 December 2018
Cost — 249 327 576

Accumulated amortisation — (62) (90) (152)
Net book amount — 187 237 424
Opening net book amount — 113 151 264

Acquired from business combination — — 14 14
Additions — 95 98 193
Disposals — (6) (2) (8)
Amortisations — (15) (24) (39)
Closing book amount — 187 237 424
12 Properties under development and completed properties

held for sale
(a) Properties under development

31 December
2019 2018
Properties under development expected to be completed

with one operating cycle included under current assets 1,198,388 971,802
Properties under development comprise:

— Construction costs and capitalised expenditures 538,799 369,218
— Interests capitalised 132,323 104,341
— Land use rights 527,266 498,243
1,198,388 971,802

12 Properties under development and completed properties

held for sale (Continued)
(a) Properties under development (Continued)

All the properties under development are expected to be completed within one operating cycle.
The properties under development include costs of acquiring rights to use certain lands, which are located in the
PRC, for property development over fixed periods. Land use rights are held on leases of between 40 to 70 years.
As at 31 December 2019, properties under development of approximately RMB369,072 million (2018:

RMB337,228 million) were pledged as collateral for the Group’s borrowings (note 23).
The capitalisation rate of borrowing costs for the year ended 31 December 2019 is 8.63% (2018: 8.11% )
(b) Completed properties held for sale

All completed properties held for sale are located in the PRC.
As at 31 December 2019, completed properties held for sale of approximately RMB7,718 million (2018:
RMB14,408 million) were pledged as collateral for the Group’s borrowings (note 23).
During the year ended 31 December 2019, a provision of RMB829 million (2018: RMB462 million) was made to write
down the properties under development and completed properties held for sale (note 30).
As at 31 December 2019, write-down of carrying amounts of properties under development and completed properties
held for sale amounted to RMB2,325 million (2018: RMB1,496 million).
13 Trade and other receivables
31 December
2019 2018
Trade receivables (a) 51,303 37,239

Other receivables (b) 98,735 91,931
150,038 129,170
Less: non-current portion of trade receivables and other receivables (6,332) (6,029)
Current portion 143,706 123,141

13 Trade and other receivables (Continued)
(a) Trade receivables

31 December
2019 2018
Trade receivables 51,467 37,413

Less: allowance provision for impairment (164) (174)
Trade receivables — net 51,303 37,239
Less: non-current portion (6,039) (4,722)
During the year ended 31 December 2019, reverse loss of provision of RMB10 million (2018: loss of provision of
RMB35 million was made against the gross amount of trade receivables) (note 4(a)(iii)).
Trade receivables mainly arose from sales of properties. Proceeds in respect of sales of properties are to be
received in accordance with the terms of the related sales and purchase agreements.
The ageing analysis of trade receivables based on revenue recognition date as at the respective balance sheet
dates is as follows:
31 December
2019 2018
Within 90 days 41,656 22,339

Over 90 days and within 180 days 4,928 3,023
Over 180 days and within 365 days 3,818 4,193
Over 365 days 1,065 7,858
51,467 37,413
The maximum exposure to credit risk at each balance sheet date is the carrying value of each class of receivables
mentioned above. The Group has retained the legal titles of the properties sold to these customers before the
trade receivables are settled.

13 Trade and other receivables (Continued)
(b) Other receivables

31 December
2019 2018
Other receivables
— associates (note 39(b)) 30 —
— joint ventures (note 39(b)) 27,744 17,470
— non-controlling interests (note (a)) 17,427 10,060
— loans to third parties facilitated through internet finance
platform (note (b)) 709 10,862
— third parties (note (c)) 54,567 55,077
100,477 93,469
Less: allowance provision for impairment (1,742) (1,538)
Other receivables — net 98,735 91,931
Less: non-current portion (293) (1,307)
Other receivables — net 98,442 90,624
(a) Amounts are unsecured, interest free and repayable on demand.
(b) Amounts represented loans to certain third parties which were facilitated through the internet finance
platform.
(c) Amounts mainly represented the deposits for acquisition of land use rights, deposits for construction
projects and borrowings, receivables of cooperation parties.
During the year ended 31 December 2019, impairment provision of RMB204 million (2018: RMB102 million) was
made against the gross amount of other receivables.
The carrying amounts of the Group’s other receivables are denominated in RMB.
The maximum exposure to credit risk at each balance sheet date is the carrying value of each class of receivables
mentioned above.
As at 31 December 2019 and 2018, the fair value of trade and other receivables approximated their carrying
amounts.

14 Prepayments
31 December
2019 2018
Prepaid value added taxes and other taxes 16,208 13,436

Prepayments to third parties 116,950 126,993
— for acquisition of land use rights 103,123 97,556
— for acquisition of subsidiaries 8,989 25,371
— others 4,838 4,066
133,158 140,429
Less: non-current portion

— prepayments for acquisition of property, plant and equipment (2,697) (1,677)
130,461 138,752
15 Investments accounted for using equity method
31 December
2019 2018
Associates 52,402 31,703

Joint ventures 35,409 35,343
87,811 67,046
The amounts recognised in profit and loss are as follows:

2019 2018
Share of profits of associates 4,556 256

Share of losses of joint ventures (1,589) (1,130)
2,967 (874)

15 Investments accounted for using equity method (Continued)
(a) Investments in associates

The movements of the investments in associates are as follows:

2019 2018
Balance as at 1 January 31,703 13,372

Additions 16,133 30,290
— Shengjing Bank Co., Ltd (note (a)) 13,200 —
— Smart King Limited (note (b)) — 13,044
— others 2,933 17,246
Acquisition of subsidiaries (note 41) 172 —
Disposals — (11,989)
— Smart King Limited — (11,986)
— others — (3)
Dividend declared (163) (226)
Share of post-tax profits of associates 4,556 256
— Shengjing Bank Co., Ltd (note (i)) 905 886
— Smart King Limited (note (b)) — (1,058)
— Negative goodwill and impairment loss, net (note (a)) 3,612 —
— others 39 428
Other comprehensive loss 1 —
Balance as at 31 December 52,402 31,703
Note (a):
Shengjing Bank Co., Ltd (“Shengjing Bank”) is principally engaged in banking services in the PRC including provision of corporate and personal
deposits, loans and advances, settlements, treasury businesses and etc. On 28 November 2019, Shengjing bank issued 2,200,000,000
domestic shares at a price of RMB6.0 per share and 800,000,000 H shares at a price of HK$6.8 (equivalent to approximately RMB6.0) per H
Share (“Share Issuance”).
The Group subscribed 2,200,000,000 domestic shares of Shengjing Bank (“New Shares Subscription”) at a price of RMB6.0 per share with a
total consideration of RMB13,200 million. Before the New Shares Subscription, the Group held 1,001,680,000 domestic shares of Shengjing
Bank (“Original Investment”), representing approximately 17.28% equity interest of Shengjing Bank. After the New Shares Subscription, the Group
held totally 3,201,680,000 domestic shares of Shengjing Bank, representing approximately 36.40% equity interest of Shengjing Bank.
The Group recognised a negative goodwill of RMB7,151 million for the New Shares Subscription due to the consideration of New Shares
Subscription was lower than the equity interest in fair value of identifiable net assets of Shengjing Bank after Share Issuance; and recognised an
impairment loss of RMB3,539 million due to the Original Investment was higher than its recoverable amount.

(a) Investments in associates (Continued)

Note (b):
The Group acquired 45% equity interest of Smart King Limited at a consideration of US$ 2,000 million (equivalent to approximately RMB13,044
million), of which RMB5,688 million was paid in July 2018. Smart King Limited is engaged in the research, development and production of battery
electric vehicle. After certain arbitrations and litigations and as per the restructuring agreement on 31 December 2018, the Group owns 32% of
preference shares of Smart King Limited with a call option granted to the original shareholder exercisable for a period within the next five years.
The investment was reclassified to financial assets at fair value through profit or loss at RMB3,980 million(note 17). The Group recognised a share
of post-tax loss of RMB1,058 million and disposal loss of RMB138 million in 2018, respectively.
Set out below is the summarised financial information for the associate that is material to the Group.
(i) Shengjing Bank Co., Ltd

Summarised balance sheet
31 December
2019 2018
Cash and balances with central bank 90,533 97,574

Other assets 934,707 894,540
Total assets 1,025,240 992,114
Financial liabilities 933,617 924,710

Other liabilities 9,682 3,693
Total liabilities 943,299 928,403
Net assets 81,941 63,711
Net assets attributable to:
Shareholders of the Shengjing Bank 81,375 63,140

Non-controlling interests 566 571
81,941 63,711


(i) Shengjing Bank Co., Ltd (Continued)
Summarised statement of comprehensive income

2019 2018
Interest income 44,944 42,805

Interest expenses (28,594) (30,388)
Profit before tax 5,868 5,539

Income tax expense (636) (413)

Other comprehensive loss — —
Total comprehensive income 5,232 5,126
Shareholders of the Shengjing Bank 5,237 5,129

Non-controlling interests (5) (3)
5,232 5,126
Share of post-tax profits of Shengjing Bank 905 886


(i) Shengjing Bank Co., Ltd (Continued)
Reconciliation of summarised financial information

2019 2018
Net assets as at 1 January 63,140 59,057

Dividend (696) (1,043)
Others (i) 13,694 —
Net assets as at 31 December 81,375 63,140
Interest in the associate 29,621 10,911

Goodwill — 1,210
Carrying value 29,621 12,121
(i) Amounts mainly represented the net impact of capital injection from Share Issuance and impairment loss of intangible assets.
There are no contingent liabilities or commitment relating to the Group’s interest in the associates.
(b) Investments in joint ventures

The movements of the interests in joint ventures are as follows:

2019 2018

Additions (note a) 4,405 19,541
Dividend declared — (115)
Disposals (2,801) (38)
Share of post-tax losses of joint ventures (1,589) (1,130)
Other comprehensive income 27 81
Note a The additions during the year mainly included the investments in a number of property development companies newly established.
Set out below is the summarised financial information for the joint venture that is material to the Group.

(b) Investments in joint ventures (Continued)

(i) Evergrande Life Insurance Co., Ltd.
Evergrande Life Insurance Co., Ltd. (“Evergrande Life Insurance”) is engaged in insurance business,
including life insurance, health insurance and etc. The Group made additional capital injections of
RMB3,000 million and RMB9,000 million to Evergrande Life Insurance in 2015 and 2016, respectively.
Pursuant to the resolutions of shareholders’ meeting of Evergrande Life Insurance, all shareholders agreed
that the additional capital injections by the Group are only attributable to the Group and other shareholders
will not share the capital surplus.
The Group held 50% equity interest of Evergrande Life Insurance.
Summarised consolidated balance sheet
31 December
2019 2018
Cash and cash equivalents 19,244 2,797

Other assets 174,275 122,591
Total assets 193,519 125,388
Financial liabilities (excluding insurance liabilities) 13,302 2,360

Other liabilities (including insurance liabilities) 158,776 103,114
Net assets 21,441 19,914
Net assets attributable to:
Shareholders of the Evergrande Life Insurance 21,432 19,906

Non-controlling interests 9 8
21,441 19,914


(b) Investment in joint ventures (Continued)
(i) Evergrande Life Insurance Co., Ltd. (Continued)
Summarised consolidated statement of comprehensive income

2019 2018
Revenue 36,760 36,196
Profit before tax 1,500 1,572

Income tax expenses (26) (6)

Shareholders of the Evergrande Life Insurance 1,526 1,689

Non-controlling interests 2 —
1,528 1,689
Share of post-tax profits of Evergrande Life Insurance 736 783

Share of other comprehensive income of Evergrande Life
Insurance 27 62
Reconciliation of summarised financial information

2019 2018
Net assets as at 1 January 19,906 18,217

Net assets as at 31 December 21,432 19,906
Interest in the Joint Venture 16,721 15,958

Goodwill 879 879
Carrying value 17,600 16,837

16 Financial assets at fair value through other comprehensive

income

2019 2018
Balance as at 1 January 1,570 —

Reclassified from available-for-sale financial assets — 5,786
Additions — 46,308
Disposals — (50,012)
Net fair value gains/(losses) recognised in equity 17 (512)
FVOCI include the following:

2019 2018
Listed equity securities 734 633

Unlisted equity investments 853 937
1,587 1,570
As at 31 December, FVOCI are denominated in US$ and RMB.

17 Financial assets at fair value through profit or loss

2019 2018

Reclassified from available-for-sale financial assets — 279
Additions 7,925 8,189
— Smart King Limited (note (15)(b)) — 3,980
— Others 7,925 4,209
Fair value (losses)/gains (1,863) 51
Disposals (7,372) (1,531)
Less: non-current portion (8,005) (8,965)
921 1,173
FVPL include the following:
31 December
2019 2018
Listed equity securities 265 1,173

Unlisted equity investments 8,661 8,965
8,926 10,138
As at 31 December 2019 and 2018, the listed equity securities of FVPL represented the Group’s equity investments in
certain companies listed on the Shanghai Stock Exchange Limited (the “Shanghai Stock Exchange”), the Shenzhen
Stock Exchange Limited (the “Shenzhen Stock Exchange”) and the Stock Exchange, which are quoted in an active
market.
As at 31 December 2019, the unlisted equity investments of FVPL mainly represented the Group’s equity investment in
certain high technology and media companies, and the fair value of these investments has been determined by
reference to the valuation carried out by independent and professionally qualified valuers.
Changes in fair values of these investments are recorded in “Fair value losses on financial assets at fair value through
profit or loss” in the consolidated statement of comprehensive income.

18 Financial instruments by category
Assets as per consolidated balance sheet

31 December
2019 2018
At amortised cost
Loans and receivables
— Trade and other receivables 150,038 129,170
— Restricted cash 78,711 74,845
— Cash and cash equivalents 150,056 129,364
378,805 333,379
At fair value
— FVPL 8,926 10,138
— FVOCI 1,587 1,570
389,568 345,087
Liabilities as per consolidated balance sheet

31 December
2019 2018
At amortised cost
Other financial liabilities
— Borrowings 799,895 673,142
— Trade and other payables excluding other taxes, payroll payable and
deferred income from government grants 693,756 534,825
1,493,651 1,207,967
At fair value
— Derivative financial liabilities 4,666 5,647
1,498,317 1,213,614

19 Restricted cash
The restricted cash is denominated in the following currencies:
31 December
2019 2018
— Denominated in RMB 78,330 74,326

— Denominated in other currencies 381 519
78,711 74,845
The Group’s restricted cash mainly comprised of guarantee deposits for construction of pre-sale properties and
guarantee deposits for bank acceptance notes and loans.
The conversion of the RMB denominated bank balances into foreign currencies and the remittance of such foreign
currencies denominated bank balances and cash out of the PRC are subject to relevant rules and regulation of foreign
exchange control promulgated by the PRC government.
20 Cash and cash equivalents
31 December
2019 2018
Cash at bank and in hand:

— Denominated in other currencies 21,224 10,106
150,056 129,364
The conversion of RMB denominated balances into foreign currencies and the remittance of such foreign currencies
denominated bank balances and cash out of the PRC are subject to relevant rules and regulation of foreign exchange
control promulgated by the PRC government.
Cash at banks earns interest at floating daily bank deposit rates.

21 Share capital and premium
Nominal
Number of value of Equivalent
ordinary ordinary nominal value of Share
shares shares ordinary share premium Total
Share US$ RMB million RMB million RMB million
As at 1 January 2018 13,168,259,900 131,682,599 928 342 1,270

Issuance of shares pursuant to
the option scheme 110,332,000 1,103,320 7 361 368
Repurchase of shares (160,528,000) (1,605,280) (11) (422) (433)
As at 31 December 2018 13,118,063,900 131,180,639 924 281 1,205
As at 1 January 2019 13,118,063,900 131,180,639 924 281 1,205

Issuance of shares pursuant to
the option scheme 108,124,000 1,081,240 8 362 370
As at 31 December 2019 13,226,187,900 132,261,879 932 643 1,575

22 Reserves
Employee Capital
Merger Other Statutory share option redemption Translation
reserve reserves reserves reserve reserve reserves Total
(note (a)) (note (b)) (note (c))
Balance at 1 January 2018 (986) 44,989 11,763 899 293 334 57,292
Change in accounting policy — 82 — — — — 82
Restated balance at 1 January 2018 (986) 45,071 11,763 899 293 334 57,374
Revaluation of FVOCI — (234) — — — — (234)

Retained earnings appropriated to
statutory reserves — — 9,895 — — — 9,895
Changes in ownership interests in
subsidiaries without change of
control — (2,997) — — — — (2,997)
Issuance of shares pursuant to the
option scheme — — — (76) — — (76)
Employee share option scheme (note (c)) — — — 1,679 — — 1,679
Repurchase of shares — — — — 11 — 11
Share of other comprehensive income
of investments accounted for using
the equity method — 81 — — — — 81
Currency translation differences — — — — — 265 265
Balance at 31 December 2018 (986) 41,921 21,658 2,502 304 599 65,998
Balance at 1 January 2019 (986) 41,921 21,658 2,502 304 599 65,998
Revaluation of FVOCI — (14) — — — — (14)

Retained earnings appropriated to
statutory reserves — — 5,080 — — — 5,080
Changes in ownership interests in
subsidiaries without change of
control — (5,188) — — — — (5,188)
Issuance of shares pursuant to the
option scheme — — — (75) — — (75)
Employee share option scheme (note (c)) — — — 489 — — 489
Share of other comprehensive income
of investments accounted for using
the equity method — 28 — — — — 28
Revaluation gains arising from transfer
of construction in progress to
investment properties, net of tax — 7 — — — — 7
Currency translation differences — — — — — (192) (192)
Balance at 31 December 2019 (986) 36,754 26,738 2,916 304 407 66,133

22 Reserves (Continued)
(a) Merger reserve

The merger reserve represents the aggregate nominal value of the share capital/paid-in capital of the subsidiaries
acquired by the Company less considerations paid and payable to the then shareholders of the Group during the
reorganisation undertaken in 2006 for preparing listing of the Company on the Stock Exchange.
(b) Statutory reserves

Pursuant to the relevant rules and regulation concerning foreign investment enterprise established in the PRC
and the articles of association of certain PRC subsidiaries of the Group, those subsidiaries are required to
transfer an amount of their profit after taxation to the statutory reserve fund, until the accumulated total of the
fund reaches 50% of their registered capital. The statutory reserve fund may be distributed to equity holders in
form of bonus issue.
(c) Employee share option reserve

Share options are granted to directors and other selected employees. Options are conditional on the employee
have served the Group for certain periods (the vesting period). The Group has no legal or constructive obligation
to repurchase or settle the options in cash.
On 18 May 2010, 713,000,000 share options (the “2010 Options”) were granted to directors and employees with
an exercise price of HK$2.4 per share. All the options granted will be exercisable within 5 years after vesting.
On 9 October 2014, 530,000,000 share options (the “2014 Options”) were granted to directors and employees
with an exercise price of HK$3.05 per share. All the options granted will be exercisable within 5 years after
vesting.
On 6 October 2017, 743,570,000 share options (the “2017 Option”) were granted to directors and employees
with an exercise price of HK$30.2 per share. All the options granted will be exercisable within 5 years after
vesting.
Movements of share options are as follows:

2019 2018
Balance at 1 January 792,974,000 986,736,000

Exercised during the year (108,124,000) (110,332,000)
Cancelled and lapsed during the year (97,917,000) (83,430,000)
Balance at 31 December 586,933,000 792,974,000

22 Reserves (Continued)
Particulars of share options as at 31 December 2019 and 2018 are as follows:
Number of outstanding shares

as at 31 December
Date of grant Vesting period Exercise period Exercise price 2019 2018
2010 Options:
18 May 2010 5 years 18 May 2015 – HK$2.4 — 1,285,000

17 May 2020
2014 Options:
9 October 2014 4 year 9 October 2018 – HK$3.05 — 68,009,000

8 October 2023
9 October 2014 5 year 9 October 2019 – HK$3.05 45,503,000 86,880,000
8 October 2024
2017 Options:

5 October 2023
5 October 2024
5 October 2025
5 October 2026
5 October 2027
586,933,000 792,974,000
The weighted average fair value of the aforesaid options granted were determined by reference to valuation prepared
by independent valuers, using the Binomial Model.

23 Borrowings
31 December
2019 2018
Borrowings included in non-current liabilities:

Senior notes (note (a)) 136,601 79,912
PRC corporate bonds (note (b)) 45,195 43,666
Convertible bonds (note (c)) 13,427 12,704
Other borrowings (note (d)) 232,631 223,493
Bank borrowings (note (e)) 225,396 196,650
653,250 556,425
Less: current portion of non-current borrowings (225,524) (201,568)
427,726 354,857
Borrowings included in current liabilities:

Bank borrowings 56,596 59,423
Current portion of non-current borrowings 225,524 201,568
— Senior notes (note (a)) 22,637 —
— PRC corporate bonds (note (b)) 25,253 26,510
— Other borrowings (note (d)) 93,926 112,952
— Bank borrowings (note (e)) 83,708 62,106
Other borrowings 90,049 57,294
372,169 318,285
Total borrowings 799,895 673,142
The total borrowings are denominated in the following currencies:
RMB 603,225 529,669

US dollar 160,802 110,075
HK dollar 35,868 33,398
799,895 673,142

23 Borrowings
(a) Senior notes

2018 New issuance 2019
US$ million US$ million US$ million
Par value
2017 issued 2021 Notes 598 — 598
2017 issued 2023 Notes 1,345 — 1,345
2017 issued 2025 Notes 4,681 — 4,681
2017 issued 2020 Notes 500 — 500
2017 issued 2022 Notes 1,000 — 1,000
2017 issued 2024 Notes 1,000 — 1,000
2018 issued 2020 Notes 1,565 — 1,565
2018 issued 2022 Notes 645 — 645
2018 issued 2023 Notes 590 — 590
2019 issued 2020 Notes I — 1,100 1,100
2019 issued 2021 Notes I — 875 875
2019 issued 2022 Notes I — 1,025 1,025
2019 issued 2020 Notes II — 100 100
2019 issued 2021 Notes II — 600 600
2019 issued 2022 Notes II — 1,450 1,450
2019 issued 2023 Notes — 850 850
2019 issued 2024 Notes — 700 700
2019 issued 2022 Notes III — 300 300
2019 issued 2021 Notes III — 1,050 1,050
Total 11,924 8,050 19,974
Unrecognised financing charges (281) (393)
Amortised cost — US$ 11,642 19,581
Amortised cost — RMB 79,912 136,601
On 23 March 2017, the Company issued 7.0%, three-year senior notes with an aggregated principal amount of
US$500 million (equivalent to approximately RMB3,443 million) at 100% of the face value (“2017 issued 2020
Notes”) and 8.25%, five-year senior notes with an aggregated principal amount of US$1,000 million (equivalent
to approximately RMB6,886 million) at 100% of the face value (“2017 issued 2022 Notes”).
On 29 March 2017, the Company issued 9.5%, seven-year senior notes with an aggregated principal amount of
US$1,000 million (equivalent to approximately RMB6,886 million) at 100% of the face value (“2017 issued 2024
Notes”).
On 28 June 2017, the Company issued 6.25%, four-year senior notes with an aggregated principal amount of
Notes”), 7.5%, six-year senior notes with an aggregated principal amount of US$1,345 million (equivalent to
approximately RMB9,172 million) at 100% of the face value (“2017 issued 2023 Notes”) and 8.75%, eight-year
senior notes with an aggregated principal amount of US$4,681 million (equivalent to approximately RMB31,921
million) at 100% of the face value (“2017 issued 2025 Note”).

23 Borrowings (Continued)
(a) Senior Notes (Continued)

On 6 November 2018 and 19 November 2018, the Group has issued 11.00% two-year senior notes with
aggregated principal amount of US$565 million (equivalent to approximately RMB3,874 million) and US$1,000
million (equivalent to approximately RMB6,838 million), respectively, at 100% of the face value (“2018 issued
2020 Notes”).
On 6 November 2018 the Group has issued 13.0% four-year senior notes with an aggregated principal amount
of US$645 million (equivalent to approximately RMB4,419 million) at 100% of the face value (“2018 issued 2022
Notes”), and 13.75% five-year senior notes with an aggregated principal amount of US$590 million (equivalent to
approximately RMB4,042 million) at 100% of the face value (“2018 issued 2023 Notes”).
On 25 January 2019, the Company issued 7.00%, 18-month senior notes with an aggregated principal amount
of US$1,100 million (equivalent to approximately RMB7,474 million) at 98.627% of the face value (“2019 issued
2020 Notes I”), 6.25% , 30-month senior notes with an aggregated principal amount of US$875 million (equivalent
to approximately RMB5,945 million) at 93.096% of the face value (“2019 issued 2021 Notes I”), and 8.25%,
42-month senior notes with an aggregated principal amount of US$1,025 million (equivalent to approximately
RMB6,964 million) at 94.054% of the face value (“2019 issued 2022 Notes I”).
On 21 February 2019, the Company issued 8.00%, 18-month senior notes with an aggregated principal amount
of US$ 100 million (equivalent to approximately RMB672 million) at 100% of the face value (“2019 issued 2020
Notes II”).
On 6 March 2019, a subsidiary of the Company issued 9.00%, 2-year senior notes with an aggregated principal
amount of US$ 600 million (equivalent to approximately RMB4,023 million) at 100% of the face value (“2019
issued 2021 Notes II”).
On 11 April 2019, the Company issued 9.50%, 3-year senior notes with an aggregated principal amount of
US$1,450 million (equivalent to approximately RMB9,728 million) at 100% of the face value (“2019 issued 2022
Notes II”), 10.00% , 4-year senior notes with an aggregated principal amount of US$850 million (equivalent to
approximately RMB5,702 million) at 100% of the face value (“2019 issued 2023 Notes”), and 10.50%, 5-year
senior notes with an aggregated principal amount of US$700 million (equivalent to approximately RMB4,696
million) at 100% of the face value (“2019 issued 2024 Notes”).
On 30 April 2019, the Company issued 9.50%, 33-month senior notes with an aggregated principal amount of
Notes III”).
On 24 May 2019, 30 July 2019, 24 September 2019, 18 December 2019 and 19 December 2019, the Company
issued 8.90%, 2-year senior notes with an aggregated principal amount of US$1,050 million (equivalent to
approximately RMB7,314 million) at 100% of the face value (“2019 issued 2021 Notes III”).
All senior notes contain various early redemption options. Early redemption options exercisable by the Group are
regarded as embedded derivatives not closely related to the host contract. The directors of the Company
consider that the fair value of the above early redemption options was insignificant on initial recognition and at 31
December 2019 and 2018.
The above senior notes are jointly guaranteed by certain subsidiaries and secured by pledges of the shares of
these subsidiaries.

(b) PRC corporate bonds

On 19 June 2015, a subsidiary of the Company issued 5.38%, five-year public PRC corporate bonds (“PRC
bonds”) with an aggregated principal amount of RMB5,000 million at 100% of the face value. The Group has
repaid RMB2,976 million of the bonds in June 2018.
On 7 July 2015, a subsidiary of the Company issued 5.30%, four-year public PRC bonds with an aggregated
principal amount of RMB6,800 million and 6.98%, seven-year PRC bonds with an aggregated principal amount
of RMB8,200 million at 100% of the face value.
On 16 October 2015, a subsidiary of the Company issued 7.38%, five-year non-public PRC bonds with an
aggregated principal amount of RMB17,500 million and 7.88%, five-year PRC bonds with an aggregated
principal amount of RMB2,500 million at 100% of the face value. The Group has repaid RMB777 million of the
bonds in October 2018 and RMB8,641 million of the bonds in July 2019.
On 12 January 2016, a subsidiary of the Company issued 6.98%, four-year non-public PRC bonds with an
aggregated principal amount of RMB10,000 million at 100% of the face value. The Group has repaid RMB5,482
million of the bonds in January 2018.
On 29 July 2016, a subsidiary of the Company issued 6.80%, three-year non-public PRC bonds with an
aggregated principal amount of RMB4,200 million at 100% of the face value. The Group has repaid RMB1,090
million of the bonds in July 2018 and RMB3,110 million of the bonds in July 2019.
On 6 May 2019, a subsidiary of the Company issued 6.27%, four-year public PRC corporate bonds with an
aggregated principal amount of RMB15,000 million at 100% of the face value, and 6.80%, five-year public PRC
corporate bonds with an aggregated principal amount of RMB5,000 million at 100% of the face value.
Except for the PRC corporate bonds amounting to RMB2,500 million issued on 16 October 2015, other PRC
corporate bonds contain the early redemption options.
Early redemption options are regarded as embedded derivatives not closely related to the host contract. The
directors consider that the fair value of the early redemption options was insignificant as at 31 December 2019
and 2018.

(c) Convertible bonds

On 30 January 2018, the Company entered into the Subscription Agreement with certain investment banks,
pursuant to which the investment banks have agreed to subscribe and pay for, or to procure subscribers to
subscribe and pay for, the convertible bonds (the “Convertible bonds”) in an aggregate principal amount of
HK$18,000 million at the face value.
The Convertible bonds will be mature in five years from the issuance date with an interest rate of 4.25% per
annum, and can be convertible to ordinary shares of the Company at the holder’s option at the conversion price
of HK$38.99 per share during the period from 27 March 2018 to the seventh day prior to the Bonds’ maturity
date.
On 14 February 2018 (the “issuance Day”), the Group received the net proceeds from issuance of the Convertible
Bonds of HK$17,736 million (equivalent to RMB14,383 million).
The Convertible bonds was recognised as embedded financial derivatives and debt component as follows:
• Embedded financial derivatives, comprise the fair value of the option of the holders of the Convertible
bonds to convert the Convertible bonds into ordinary shares of the Company at the conversion price; the
fair value of the option of the holders of the Convertible bonds to require the Company to redeem the
Convertible bonds; and the fair value of the option of the Company to redeem the Convertible bonds.
These embedded options are interdependent as only one of these options can be exercised. Therefore,
they are not able to be accounted for separately and a single compound derivative was recognised.
• Debt component initially recognised at the residual amount after deducting the fair value of the derivative
component from the net proceeds at the initial recognition, and is subsequently carried at amortised cost.
A valuation on the embedded derivatives of the Convertible bonds has been performed by an independent
qualified valuer on 31 December 2019, the binomial model is used in the valuation of the embedded financial
derivatives. A fair value gain of RMB624 million was recognised in profit and loss for the year ended 31 December
2019.
(d) Other borrowings

Certain group companies in the PRC which are engaged in development of real estate projects have entered into
fund arrangements with certain financial institutions (the “Trustees”), respectively, pursuant to which Trustees
raised trust funds and injected the funds to the group companies. All the funds bear fixed interest rates and have
fixed repayment terms.
As at 31 December 2019, the Group’s other borrowings of RMB227,060 million (2018: RMB217,914 million)
were secured by pledge of the Group’s property, plant and equipment, right-of-use assets, investment
properties, properties under development, completed properties held for sale, cash in bank, intangible assets,
account receivables and equity interest of certain subsidiaries, totaling RMB343,845 million (2018: RMB303,642
million).

(e) Bank borrowings

As at 31 December 2019, the Group’s bank borrowings of RMB241,188 million (2018: RMB240,665 million)
were secured by pledge of the Group’s property, plant and equipment, right-of-use assets, investment
properties, properties under development, completed properties held for sale, cash in bank, intangible assets,
account receivables and equity interests of certain subsidiaries, totalling RMB300,086 million (2018: RMB262,669
million).
The exposure of the bank and other borrowings to interest-rate changes and the contractual repricing dates or
maturity date whichever is earlier are as follows:
6 months
or less 6–12 months 1–5 years Over 5 years Total
At 31 December 2019 106,706 265,463 389,943 37,783 799,895

At 31 December 2018 128,022 228,261 275,019 41,840 673,142
The maturity of the borrowings is as follows:
31 December
2019 2018
Bank borrowings, other borrowings, senior notes and PRC bonds:

Within 1 year 372,169 318,285
1–2 years 206,486 181,454
2–5 years 183,457 128,047
Over 5 years 37,783 45,356
799,895 673,142
The effective interest rates were as follows:
31 December 2019 31 December 2018

Effective Effective
weighted weighted
RMB million average rate RMB million average rate
Bank and other borrowings 604,672 8.85% 536,860 7.99%

Senior notes 136,601 10.06% 79,912 8.99%
PRC bonds 45,195 7.08% 43,666 7.50%
Convertible bonds 13,427 10.71% 12,704 10.71%

(f) The carrying amounts and fair value of the non-current borrowings are as
follows:
31 December 2019 31 December 2018
Carrying Carrying
amount Fair value amount Fair value
Bank and other borrowings 458,027 458,027 420,143 420,143

Senior notes — public 126,813 120,426 79,912 71,879
Senior notes — non-public 9,788 9,788 — —
PRC bonds — public 30,125 32,665 16,948 20,174
PRC bonds — non-public 15,070 15,070 26,718 26,718
Convertible bonds 13,427 12,924 12,704 10,572
The fair value of the Group’s bank borrowings, other borrowings and non-public PRC bonds approximates their
carrying amounts at each of the balance sheet date for the reason that the impact of discounting is not significant
or the borrowings carry floating rate of interests.
The fair values of senior notes as at 31 December 2019 are determined directly by references to the price
quotations published by the Singapore Exchange Limited and The Hong Kong Exchanges and Clearing Limited
on 31 December 2019, the last dealing date of 2019.
The fair value of the public PRC bonds at 31 December 2019 are determined directly by references to the price
quotations published by The Shanghai Stock Exchange and Shenzhen Stock Exchange on 31 December 2019,
the last dealing date of 2019.
24 Derivative financial liabilities
2019 2018
Embedded financial derivatives of share compensation arrangement (note (a)) 2,483 2,840
Embedded financial derivatives of convertible bonds (note 23(c)) 2,183 2,807
4,666 5,647

24 Derivative financial liabilities (Continued)
(a) On 3 October 2016, Guangzhou Kailong Real Estate Company Limited (“Kailong Real Estate”, an indirectly
wholly-owned PRC subsidiary of the Company) and Hengda Real Estate Group Company Limited (“Hengda Real
Estate”, a wholly-owned PRC subsidiary of Kailong Real Estate), entered into a cooperation agreement with
Shenzhen Special Economic Zone Real Estate and Properties (Group) Co. Ltd. (“Shenzhen Real Estate”, a
company listed on the Shenzhen Stock Exchange) and Shenzhen Investment Holding Co. Ltd. (the controlling
shareholder of Shenzhen Real Estate). Pursuant to the agreement, the four parties agreed to work towards
entering into a reorganisation agreement under which Shenzhen Real Estate will acquire 100% of the equity
interest in Hengda Real Estate from Kailong Real Estate by way of issue of Renminbi ordinary shares (A shares)
and/or the payment of cash consideration to Kailong Real Estate, which will result in Kailong Real Estate
becoming the controlling shareholder of Shenzhen Real Estate and thereby enabling the Group to effectively list
its real estate related business on the Shenzhen Stock Exchange (the “Proposed Reorganisation”).
On 30 December 2016, Kailong Real Estate and Hengda Real Estate entered into the First Round Investment
Agreements with certain strategy investors (the “First Round SIs”), pursuant to which the First Round SIs agreed
to inject capital of RMB30,000 million to Hengda Real Estate. The amount of capital injection was subsequently
revised to RMB30,500 million on 31 March 2017. On 31 May 2017, Kailong Real Estate and Hengda Real Estate
entered into the Second Round Investment Agreements with certain strategy investors (the “Second Round SIs”),
pursuant to which the Second Round SIs agreed to inject capital of RMB39,500 million to Hengda Real Estate.
Up to 1 June 2017, total capital contributions of RMB70,000 million have been received by Hengda Real Estate
in full.
On 6 November 2017, Kailong Real Estate, Hengda Real Estate and Professor Hui Ka Yan entered into the Third
Round Investment Agreements with certain strategy investors (the “Third Round SIs”), pursuant to which the
Third Round SIs agreed to inject capital of RMB60,000 million to Hengda Real Estate. The capital contributions
of RMB60,000 million have been received by Hengda Real Estate on 7 November 2017.
Kailong Real Estate, Hengda Real Estate, Professor Hui Ka Yan and the First round SIs and the Second Round
SIs have further entered into an amendment agreement (the “Amendment Agreement”) on 28 June 2017.
Pursuant to the First Round Investment Agreements, the Second Round Investment Agreements, the
Amendment Agreement, the Third Round Investment Agreements, and the supplemental investment agreements
to First Round SIs and Second Round SIs on 13 January 2020, if the Proposed Reorganisation cannot be
completed by 31 January 2021, the SIs have right to:
(i) request Kailong Real Estate to repurchase the SIs’ equity interest in Hengda Real Estate at their original
investment costs; Kailong Real Estate has the option of electing not to repurchase such equity interest, in
such event, Professor Hui Ka Yan should repurchase SIs’ equity interest at its original investment cost; or
(ii) request Kailong Real Estate to compensate the SIs additional shares of Hengda Real Estate equal to 50%
of the shares held by the SIs before compensation.
The above share compensation arrangement constitutes an embedded derivative and has been recognised as a
derivative financial liability. The fair value of derivative financial liability was determined by reference to valuation
prepared by an independent valuer, using the Binomial Lattice Model approach.
A fair value gain of RMB357 million was recognised in profit and loss for the year ended 31 December 2019.

25 Deferred income tax
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets
against current tax liabilities and when the deferred income taxes relate to the same fiscal authority. The offset amounts
of deferred tax assets and liabilities of the Group are as follows:
31 December
2019 2018
Deferred income tax assets to be recovered within 12 months (2,349) (2,479)

Deferred income tax assets to be recovered after more than 12 months (3,327) (1,910)
Deferred income tax assets (5,676) (4,389)
Deferred income tax liabilities to be settled within 12 months 6,650 4,715

Deferred income tax liabilities to be settled after more than 12 months 54,116 45,184
Deferred income tax liabilities 60,766 49,899
55,090 45,510
The net movements on the deferred taxation are as follows:

2019 2018
At 1 January 45,510 47,684

Change in accounting policy — (254)
Acquisition of subsidiaries (note 41) 15,695 2,586
Tax charged relating to components of other comprehensive income 4 (128)
Disposal of subsidiaries — (1,079)
Recognised in income tax expenses (note 33) (6,119) (3,299)
At 31 December 55,090 45,510

25 Deferred income tax (Continued)
Movements in gross deferred tax assets and liabilities are as follows:
Deferred income tax assets

Impairment
losses on
financial
assets,
Temporary Temporary Carrying write-down
difference on difference on amount of of properties
unrealised recognition land use under
profit of of cost of Revaluation right smaller development
intercompany sales and of financial than the tax and held for
transactions Tax losses expenses assets bases sale Total
As at 1 January 2018 (1,964) (1,880) (1,180) (308) (55) (398) (5,785)
Change in accounting policy — — — — — (254) (254)

Disposal of subsidiaries — — 32 — — — 32
Charged to other comprehensive
income — — — (119) — — (119)
Credited to the income tax
expenses (412) (1,008) (149) — 18 (150) (1,701)
As at 31 December 2018 (2,376) (2,888) (1,297) (427) (37) (802) (7,827)
As at 1 January 2019 (2,376) (2,888) (1,297) (427) (37) (802) (7,827)

income — — — 4 — — 4
Credited to the income tax
expenses (341) (938) (528) 37 2 (256) (2,024)
As at 31 December 2019 (2,717) (3,826) (1,825) (386) (35) (1,058) (9,847)

Deferred income tax assets

Deferred income tax assets are recognised for tax losses carry-forwards to the extent that the realisation of the related
benefit through future taxable profits is probable. As at 31 December 2019, the Group did not recognise deferred tax
assets of RMB6,986 million (2018: RMB5,613 million) in respect of tax losses amounting to RMB27,944 million (2018:
RMB22,453 million) in certain subsidiaries as the future profit streams of these subsidiaries are uncertain. These tax
losses will expire in the following years:
Year RMB million
2020 542
2021 1,558
2022 12,232
2023 6,064
2024 7,548
27,944

Deferred income tax liabilities

Excess of
carrying Temporary
amount of difference on Withholding
land use right recognition of tax on profit
and intangible fair value gain to be Revaluation
asset over of investment distributed of financial
the tax bases properties in future assets Total
As at 1 January 2018 33,832 17,811 1,809 17 53,469
Acquisition of subsidiaries 2,586 — — — 2,586

Disposal of subsidiaries (1,066) (45) — — (1,111)
income — — — (9) (9)
(Credited)/charged to the income tax
expenses (1,953) 355 — — (1,598)
As at 31 December 2018 33,399 18,121 1,809 8 53,337
As at 1 January 2019 33,399 18,121 1,809 8 53,337
Acquisition of subsidiaries 15,695 — — — 15,695

Credited to the income tax expenses (3,880) (215) — — (4,095)
As at 31 December 2019 45,214 17,906 1,809 8 64,937

26 Trade and other payables
31 December
2019 2018
Trade payables — third parties (note (d)) 544,653 423,648

Other payables: 139,918 104,111
— associates (note 39(b)) 457 —
— joint ventures (note 39(b)) 38,623 11,204
— shareholders of the company (note 39(b)) — 141
— non-controlling interests (note (a)) 12,924 9,731
— unit holders of consolidated investment entities — 697
— holders of internet finance business products 709 10,062
— payables for acquisition of land use rights 34,847 31,516
— payables for acquisition of subsidiaries 7,123 9,191
— payables for acquisition of associates (note (b)) 5,700 4,034
— third parties (note (c)) 39,535 27,535
Accrued expenses 7,643 7,066
Payroll payable 3,374 2,558
Deferred income from government grants 1,551 —
Lease liabilities 1,542 —
Other taxes payable 23,784 18,473
722,465 555,856
Less: non-current portion

Other payables: (2,546) (1,543)
— non-controlling interests (note (a)) (2,546) —
— payables for acquisition of an associate — (1,543)
Deferred income from government grants (1,551) —
Lease liabilities (750) —
(4,847) (1,543)
(a) Amounts included certain cash advances from non-controlling interests of approximately 2,546 million (2018:
RMB257 million) which bear average interest at 15% per annum (2018: 10.4%) and are repayable according to
respective agreements.
(b) Amounts of RMB4,034 million (2018: RMB4,034 million) represented payable for acquisition of an associate
which bear average interest rate at 8.0% per annum and are repayable according the relevant agreement.

26 Trade and other payables (Continued)
(c) Amounts mainly represented value-added-tax received in advance from customers, deposits and temporary
receipts.
(d) The following is an ageing analysis of trade payables presented based on invoice date at the end of reporting
period:
31 December
2019 2018
Within one year 485,475 378,322

Over one year 59,178 45,326
544,653 423,648
The trade and other payables are denominated in the following currencies:
31 December
2019 2018

— Denominated in other currencies 4,138 5,921
722,465 555,856
27 Current income tax liabilities
The current income tax liabilities are analysed as follows:
31 December
2019 2018
Income tax payables

— PRC corporate income tax 65,272 49,162
— PRC land appreciation tax 65,271 52,110
130,543 101,272

28 Other gains, net

2019 2018
Gains on disposal of subsidiaries 1,110 2,198

Losses on disposal of joint ventures and associates (2) (138)
Net foreign exchange gains 621 585
1,729 2,645
29 Other income

2019 2018
Interest income 4,573 3,884

Forfeited customer deposits 943 766
Gain on disposal of investment properties 64 106
Dividend income of FVOCI 19 320
Management and consulting service income (note 39(a)) 600 1,100
Others 798 518
6,997 6,694

30 Expenses by nature
Major expenses included in cost of sales, selling and marketing costs, administrative expenses and other operating
expenses are analysed as follows:

2019 2018
Cost of properties sold — including construction costs, land costs and

interest costs 331,575 285,890
Tax and other levies 2,300 2,590
Employee benefit expenses (note 31) 19,046 16,649
Employee benefit expenditure — including directors’ emoluments 27,241 24,221
Less: capitalised in properties under development, investment properties
under construction and construction in progress (8,195) (7,572)
Advertising expenses 9,876 7,943
Sales commissions 5,915 3,401
Depreciation 2,879 2,120
Amortisation 1,491 493
Auditors’ remunerations 44 38
— Audit services 38 35
— Non-audit services 6 3
Short-term and low value lease expenses 476 —
Operating lease expenses — 617
Write-down of properties held for sale 829 462
Impairment losses on financial assets 194 137
Donations 3,104 3,793

31 Employee benefit expenses

2019 2018
Wages, salaries and bonus 21,852 17,569

Pension costs — statutory pension (note (a)) 1,722 1,736
Staff welfare 2,201 1,955
Medical benefits 800 750
Employee share option schemes 666 2,211
27,241 24,221
Less: capitalised in properties under development, investment properties
under construction and construction in progress (8,195) (7,572)
19,046 16,649
(a) Pensions — defined contribution plans

Employees in the Group’s PRC subsidiaries are required to participate in a defined contribution retirement
scheme administrated and operated by the local municipal government. The Group’s PRC subsidiaries contribute
funds which are calculated on certain percentage of the average employee salary as agreed by local municipal
government to the scheme to fund the retirement benefits of the employees.
The Group also participates in a pension scheme under the rules and regulations of the MPF Scheme for all
employees in Hong Kong. The contributions to the MPF Scheme are based on minimum statutory contribution
requirement of 5% of eligible employees’ relevant aggregate income.
Details of the retirement scheme contributions for the employees, which have been dealt with in the consolidated
statement of comprehensive incomes of the Group, are as follows:

2019 2018
Gross scheme contributions 1,722 1,736

31 Employee benefit expenses (Continued)
(b) Five highest paid individuals

During the year ended 31 December 2019, the five highest paid individuals include 2 directors (2018: 2), whose
emoluments are reflected in the analysis presented in note 44. The aggregate amounts of emoluments of the
other 3 highest paid individuals for the year ended 31 December 2019 (2018:3) are set out below:

2019 2018
Salaries and other benefits 187 95
The emoluments fell within the following bands:

2019 2018
HK$20,000,000 to HK$30,000,000 1 2
HK$30,000,000 to HK$40,000,000 1 —
HK$50,000,000 to HK$60,000,000 — 1
HK$120,000,000 to HK$130,000,000 1 —
During the year ended 31 December 2019, no emolument was paid by the group entities to any of the above
directors or the highest paid individuals as an inducement to join or upon joining the Group or as compensation
for loss of office (2018: nil).

32 Finance costs

2019 2018
Interest expenses
— Bank and other borrowings 51,395 48,381
— Senior notes 11,916 5,105
— Convertible bonds 1,359 1,097
— PRC bonds 3,770 3,344
— Less: interest capitalised (50,924) (49,935)
17,516 7,992
Exchange losses from borrowings 4,022 6,244

Other finance costs 1,225 387
22,763 14,623
33 Income tax expense

2019 2018
Current income tax

— Hong Kong profits tax 44 18
— PRC corporate income tax 25,606 36,232
— PRC land appreciation tax 21,099 27,267
46,749 63,517
Deferred income tax (note 25)
— PRC corporate income tax (3,760) (2,417)
— PRC land appreciation tax (2,359) (882)
40,630 60,218

33 Income tax expense (Continued)
The income tax on the Group’s profit before income tax differs from the theoretical amount that would arise using the
enacted tax rate of the home country of the group entities as follows:

2019 2018
Profit before income tax 74,172 126,765

Adjusted: share of (profits)/losses of investments in joint ventures and
associates, net (2,967) 874
71,205 127,639
Calculated at PRC corporate income tax rate 17,801 31,910

PRC land appreciation tax deductible for PRC corporate income tax purposes (4,685) (6,596)
Income not subject to tax (note (a)) (302) (212)
Expenses not deductible for tax purposes (note (b)) 7,151 4,985
Utilisation of previously unrecognised tax losses (341) —
Tax losses for which no deferred income tax asset was recognised 1,887 1,736
Effect of different tax rates of subsidiaries (108) (613)
PRC corporate income tax 21,403 31,210
PRC withholding income tax 487 2,623

PRC land appreciation tax 18,740 26,385
40,630 60,218
(a) Income not subject to tax for the year ended 31 December 2019 mainly comprised fair value gain on derivative
financial liabilities.
(b) Expenses not deductible for tax purpose for the year ended 31 December 2019 comprised mainly: (i) costs of
land premium without official invoices resulted from acquisition of land through acquisition of companies; and (ii)
borrowing costs and administrative expenses incurred by off-shore group companies.

33 Income tax expense (Continued)
Overseas income tax

The Company was incorporated in the Cayman Islands as an exempted Company with limited liability under the
Companies Law, Cap. 22 (2009 Revision as consolidated and revised from time to time) of the Cayman Islands and
accordingly, is exempted from Cayman Islands income tax. The group companies in the British Virgin Islands were
incorporated under the International Business Companies Act of the British Virgin Islands and, accordingly, exempted
from British Virgin Islands income tax.
Hong Kong profits tax

Hong Kong profits tax has been provided at the rate of 16.5% (2018: 16.5%) on the estimated assessable profit for the
current period in respect of operations in Hong Kong.
PRC corporate income tax

The income tax provision of the Group in respect of operations in Mainland China has been calculated at the applicable
tax rate of 25% (2018: 25%) on the estimated assessable profits for the year, based on the existing legislation,
interpretations and practices in respect thereof.
PRC withholding income tax

According to the new Corporate Income Tax Law of the PRC, starting from 1 January 2008, a withholding tax of 10%
will be levied on the immediate holding companies outside the PRC when their PRC subsidiaries declare dividend out
of profits earned after 1 January 2008. A lower 5% withholding tax rate may be applied when the immediate holding
companies of the PRC subsidiaries are established in Hong Kong according to the tax treaty arrangements between
the PRC and Hong Kong.
PRC land appreciation tax

PRC land appreciation tax is levied at progressive rates ranging from 30% to 60% on the appreciation of land value,
being the proceeds of sales of properties less deductible expenditures including land use rights and property
development expenditures.
34 Earnings per share
(a) Basic
Basic earnings per share are calculated by dividing the profits attributable to shareholders of the Company by the
weighted average number of ordinary shares in issue during the year.

2019 2018
Profit attributable to shareholders of the Company (RMB million) 17,280 37,390

Weighted average number of ordinary shares in issue (millions) 13,138 13,125
Basic earnings per share (RMB) 1.315 2.849

34 Earnings per share (Continued)
(b) Diluted
Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding
to assume conversion of all dilutive potential ordinary shares. The Company’s dilutive potential ordinary shares
consist of share options and Convertible bonds. For the share options, a calculation is done to determine the
number of shares that could have been acquired at fair value (determined as the average annual market share
price of the Company’s shares) based on the monetary value of the subscription rights attached to outstanding
share options. The Convertible bonds are assumed to have been converted into ordinary shares. Interest savings
on Convertible bonds are adjusted to the extent of the amount charged to the profit attributable to shareholders
of the Company, if applicable. The number of shares calculated as above is compared with the number of shares
that would have been issued assuming the exercise of the share options and Convertible bonds. Convertible
bonds were excluded from the computation of diluted earnings per share as they are anti-dilutive for the year
ended 31 December 2019.

2019 2018
Profit attributable to equity holders of the Company (RMB million) 17,280 37,390
Profit adjustments for Convertible bonds (RMB million) — 300
17,280 37,690
Weighted average number of ordinary shares in issue (millions) 13,138 13,125

Adjustments for share options and Convertible bonds (millions) 114 506
Weighted average number of ordinary shares for diluted earnings per

share (millions) 13,252 13,631
Diluted earnings per share (RMB) 1.304 2.765
35 Dividends
A final dividend in respect of the year ended 31 December 2019 of RMB0.653 per share amounting to approximately
RMB8,658 million has been proposed by the Board on 31 March 2020, which is subject to approval by the
shareholders in the forthcoming Annual General Meeting. These financial statements have not reflected this dividend
payable.
A dividend in respect of the years ended 31 December 2018 of RMB1.419 per share totaling RMB18,770 million was
approved by an extraordinary general meeting of the Company on 15 January 2020.

36 Cash flow information
(a) Net cash generated from operations

2019 2018
Adjustments for:
Income tax expenses 40,630 60,218
Interest income (note 29) (4,573) (3,884)
Finance costs (note 32) 18,741 8,379
Exchange losses (note 28, note 32) 3,401 5,659
Depreciation (note 7) 2,879 2,120
Amortisation (note 30) 1,491 493
Employee share option schemes (note 31) 666 2,211
Fair value gains on investment properties (note 9) (1,516) (1,343)
Fair value losses/(gains) on financial assets at fair value through
profit or loss (note 17) 1,863 (51)
Fair value gains on derivative financial liabilities (note 23(c), note 24(a)) (981) (797)
Gains on disposal of investment properties (note 29) (64) (106)
Gains on disposal of subsidiaries (note 28) (1,110) (2,198)
Share of (profits)/losses of investments accounted for using equity
method (note 15) (2,967) 874
Losses on disposal of joint ventures and associates (note 28) 2 138
Dividend income on FVOCI (note 29) (19) (320)
Gain of disposal of property and equipment and intangible asset (12) —
Impairment losses on intangible asset 175 —
Changes in working capital:

Properties under development and completed properties held for sale (111,641) (90,029)
Inventories (219) 126
Restricted cash as guarantee for construction of projects and
other operating activities 1,704 14,314
Trade and other receivables, contract acquisition costs and
prepayments 6,661 10,897
Trade and other payables and contract liabilities 29,840 62,099
Net cash generated from operations 18,493 135,347

36 Cash flow information(Continued)
(b) The reconciliation of liabilities arising from financial activities is as follows:

Other
payables
Borrowings (note (i)) Total
As at 1 January 2019, as previously reported 673,142 21,632 694,774

Changes accounting policy — 1,811 1,811
As at 1 January 2019, as restated 673,142 23,443 696,585
Cash flows
— Inflow from financing activities 534,762 45,204 579,967
— Outflow from financing activities (425,867) (15,725) (441,592)
Non-cash changes
— Acquisition of subsidiaries 11,695 379 12,074
— Acquisition — leases — 245 245
— Foreign exchange adjustments 4,022 — 4,022
— Other non-cash movement 2,141 — 2,140
As at 31 December 2019 799,895 53,546 853,441
As at 1 January 2018 732,625 23,119 755,744

Cash flows
— Inflow from financing activities 382,625 13,589 396,214
— Outflow from financing activities (443,335) (15,076) (458,411)
Non-cash changes
— Acquisition of subsidiaries 10,598 — 10,598
— Disposal of subsidiaries (12,785) — (12,785)
— Derivative financial liabilities of the convertible
bonds at initial recognition (3,604) — (3,604)
— Foreign exchange adjustments 6,244 — 6,244
— Other non-cash movement 774 — 774
As at 31 December 2018 673,142 21,632 694,774
(i) Amounts represent cash advances from associates, joint ventures, non-controlling interests, unit holders of
consolidated investment entities and lease liabilities.

37 Financial guarantees
31 December
2019 2018
Guarantees in respect of mortgage facilities for certain purchasers of

the Group’s property units (note (a)) 456,982 412,721
Guarantees for borrowings of cooperation parties (note (b)) 64,479 49,711
Guarantees for borrowings of joint ventures and an associate (note 39(c)) 24,898 19,052
546,359 481,484
(a) The Group has arranged bank financing for certain purchasers of the Group’s property units and provided
guarantees to secure obligations of such purchasers for repayments. Such guarantees terminate upon the earlier
of (i) issuance of the real estate ownership certificate which will generally be available within an average period of
two to three years upon the completion of guarantee registration; or (ii) the satisfaction of mortgaged loan by the
purchasers of properties.
Pursuant to the terms of the guarantees, upon default in mortgage payments by these purchasers, the Group is
responsible to repay the outstanding mortgage principals together with accrued interest and penalty owed by the
defaulted purchasers to the banks and the Group is entitled to take over the legal title and possession of the
related properties. The Group’s guarantee period starts from the dates of grant of the mortgages. The directors
consider that the likelihood of default in payments by purchasers is minimal and the financial guarantees
measured at fair value is immaterial.
(b) Amounts represent guarantees provided to certain cooperation parties (mainly construction subcontractors) of
the Group, who are independent third parties, to obtain borrowings after assessing the credit history of these
cooperation parties. The Group closely monitors the repayment progress of the relevant borrowings by these
cooperation parties. The directors consider that the likelihood of default in payments is minimal and the financial
guarantees measured at fair value is immaterial.

38 Commitments
(a) Commitments for property development and acquisition of subsidiaries

31 December
2019 2018
Contracted but not provided for

Property development activities 318,977 283,004
Acquisition of land use rights 84,664 61,585
Acquisition of subsidiaries 4,298 2,710
407,939 347,299
(b) Lease Commitments

The future aggregate minimum lease payments under non-cancellable operating leases are as follows:
31 December
2019 2018
Not later than one year 102 947

Later than one year and not later than five years — 1,281
Later than five years — 163
102 2,391
As at 31 December 2019, the Group’s lease commitments represented short-term and low value lease
commitments.

39 Related party transactions
Xin Xin (BVI) Limited (“Xin Xin” ) is the immediate holding company of the Company, and Dr Hui Ka Yan (“Dr. Hui” ) is
the ultimate controlling shareholder and also the director of the Company.
(a) Transactions with related parties

Save as disclosed in note 13, 26 and 37, during the years ended 31 December 2019 and 2018, the Group had
the following significant transactions with related parties, which are carried out in the normal course of the
Group’s business:

2019 2018
Nature of transactions
Associates
Loan interest charged by an associate 159 258
Joint ventures
Management and consulting service to joint ventures 600 1,100
Sales of goods to joint ventures 671 650
Provision of services to joint ventures 395 337
Rental income from joint ventures 46 14
Interest income from joint ventures 729 536
Advertisement service fees charged by a joint venture 472 420
Rental fee charged by joint ventures 110 75
Purchase of goods from a joint venture 35 52
Integrated insurance procurement 155 —
Loan interest charged by a joint venture 523 383
Shareholders of the Company

Loan interest charged by Xin Xin and Dr. Hui 229 141
Aforementioned related party transactions were charged in accordance with the terms of the underlying
agreements which, in the opinion of the directors of the Company, were determined with reference to the market
price of the prescribed year. In the opinion of the directors of the Company, the above related party transactions
were carried out in the normal course of business and at terms mutually negotiated between the Group and the
respective related parties.

39 Related party transactions (Continued)
(b) Balances with related parties

As at 31 December 2019 and 2018, the Group had the following significant non-trade balances with related
parties:
31 December
2019 2018
Due from related parties

Included in cash and cash equivalents:
— An associate 48,598 24,631
Included in trade and other receivables (note (i))

— An associate 30 —
— Joint ventures 27,744 17,470
27,774 17,470
Included in prepayments
— Joint ventures 76 66
Note (i): Except for the amounts of RMB15,524 million (2018: RMB7,564 million) which carry interest rate ranging from 4% to 15% (2018: 4%
to 15%) per annum and receivable according to respective loan agreements, the remaining balances are cash advances in nature,
which are unsecured, interest-free and repayable on demand.
31 December
2019 2018
Due to related parties

Included in trade and other payables (note (i))
— Joint ventures 38,623 11,204
— Associates 457 —
— Xin Xin and Dr. Hui — 141
39,080 11,345
Included in borrowings (note (ii))

— A joint venture 6,504 3,700
— An associate 1,300 4,336
— Xin Xin and Dr. Hui — 6,807
7,804 14,843

39 Related party transactions (Continued)
(b) Balances with related parties (Continued)

Note (i): The balances are cash advances in nature, which are unsecured, interest-free and repayable on demand.
Note (ii): The balances are borrowings in nature, which are secured, carry interest ranging from 6.27% to 15.00% per annum and repayable
according to respective loan agreements.
(c) Financial guarantees to joint ventures and associates

31 December
2019 2018
— Joint ventures and associates 24,898 19,052
(d) Key management compensation

Key management includes directors and heads of major operational departments. The compensation paid or
payable to key management for employee services is shown below:

2019 2018
Salaries and other employee benefits 1,132 1,022

Retirement scheme contributions 5 4
1,137 1,026

40 Non-controlling interests
The movements of non-controlling interests were as follows:
31 December
2019 2018
At 1 January 175,631 127,436

Change in accounting policy — (229)
Change in value of FVOCI 27 (149)
Currency translation differences (95) 192
Capital injection (note (i)) 46,932 42,071
Acquisition of subsidiaries — acquisition of asset (note (ii)) 607 1,365
Acquisition of subsidiaries — acquisition of business 4,717 10
Changes in ownership interests in subsidiaries without change of control
(note (iii)) (28,653) (11,510)
Dividends (2,748) (12,882)
Disposal of subsidiaries (20) (362)
Employee share option schemes 177 532
212,837 175,631
(i) Capital injection

During the year ended 31 December 2019, the Group has established certain new subsidiaries engaging in
property development and property investment businesses and received capital injections from minority interests
totaling RMB46,932 million.
(ii) Acquisition of subsidiaries

During the year ended 31 December 2019, the Group acquired controlling interests of certain property
development companies in the PRC at consideration totaling approximately RMB2,736 million. These companies
only held parcels of land and did not conduct any substantial operation before they were acquired by the Group.
Thus, the directors are of the view that the acquisitions do not constitute acquisition of businesses, and should
be treated as acquisition of land use rights. These acquisitions resulted in an increase in the non-controlling
interests of the Group totaling RMB607 million.
(iii) Changes in ownership interests in subsidiaries without change of control

During the year ended 31 December 2019, the Group acquired certain equity interests of certain subsidiaries
amounting to RMB28,653 million from non-controlling shareholders, the difference between consideration paid
and the carrying amount of equity interest acquired amounting to RMB5,188 million was recongnised as a
decrease in reserves.

41 Business combinations
During the year ended 31 December 2019, the Group acquired controlling interests of certain companies engaged in
new energy vehicles business and property development in the PRC and Europe to increase its land reserve and
diversify its business.
(i) Acquisition of National Electric Vehicle Sweden AB

In January 2019, the Group entered into a Sale and Purchase Agreement with a third party in relation to the
acquisition of 100% equity interest of Mini Minor Limited (“Mini Minor”) with a consideration of US$1,130 million
(equivalent to approximately RMB7,755 million). Mini Minor held 51% shareholding of National Energy Vehicle
Sweden AB (“NEVS”). NEVS, with its headquarters based in Sweden, is a global electric vehicle company
focused on intelligent automobiles. Mini Minor subsequently acquired additional 17% equity interest of NEVS in
May 2019.
The following table summarises the considerations paid for acquisition of these subsidiaries, the fair value of
assets acquired and liabilities assumed at the acquisition dates.
RMB million
Cash consideration 7,755
Recognised amounts of identifiable assets acquired and liabilities assumed

Property, plant and equipment 4,420
Right-of-use assets 776
Intangible assets 6,065
Inventories 23
Trade and other receivables 282
Prepayments 77
Financial assets at fair value through profit or loss 65
Restricted cash 16
Cash and cash equivalents 904
Borrowings (4,522)
Deferred income tax liabilities (1,532)
Trade and other payables (1,635)
Total identifiable net assets 4,939

Non-controlling interest (2,641)
Identifiable net assets acquired 2,298
Goodwill 5,457

41 Business combinations (Continued)
(ii) Other acquisitions of new energy vehicles business

During the year ended 31 December 2019, saved for the acquisition of NEVS, the Group acquired some other
new energy vehicles business with an aggregate consideration of RMB1,960 million.
RMB million

Property, plant and equipment 858
Investments accounted for using equity method 29
Intangible assets 971
Inventories 323
Prepayments 90
Borrowings (314)
Deferred income tax liabilities (171)
Trade and other payables (880)
Contract liabilities (31)

Non-controlling interest (682)
Goodwill 736

(iii) Acquisition of HangFa Investment Management Co., Ltd

In October 2019, the Group acquired 100% equity interest of HangFa Investment Management Co., Ltd at total
consideration of RMB10,400 million.
RMB million

Investment properties 329
Properties under development 56,097
Trade and other receivables 5,510
Prepayments 203
Cash and cash equivalents 1,544
Borrowings (4,063)
Contract liabilities (16,798)
Current income tax liabilities (346)

Non-controlling interest (1,390)
Goodwill —

(iv) Acquisition of Kunming Jialize Tourism Culture Co., Ltd. (“KJTC”)

In September 2019, the Group acquired 100% equity interest of KJTC at total consideration of RMB3,600 million.
RMB million

Intangible assets 2
Inventories 9
Borrowings (1,892)
Trade and other payables (268)
Contract liabilities (64)

Non-controlling interest —
Goodwill —

(v) Other acquisitions of property development business

During the year ended 31 December 2019, the Group acquired controlling interests in certain companies
engaged in property development in the PRC.
RMB million
Cash consideration 984

Prepayments 1,198
Financial assets at fair value through profit or loss 33
Borrowings (904)
Deferred income tax liabilities (571)
Contract liabilities (1,868)
Total identifiable net assets 988

Non-controlling interest (4)
Identifiable net assets acquired 984
Goodwill —

(v) Other acquisitions of property development business (Continued)

Reconciliation of total cash considerations of business combinations and cash outflow on acquisitions is as
follows:
RMB million
Cash considerations 24,699

Prepaid in prior year (8,808)
Considerations deferred (2,502)
Cash and cash equivalents acquired (3,533)
Payment for business combinations conducted in the year 9,856
Payment for business combinations conducted in prior year 2,858
Cash outflow on acquisitions 12,714
Acquisition-related costs of RMB2 million have been charged to administrative expenses in the consolidated
statement of comprehensive income for the year ended 31 December 2019.
The acquired businesses contributed revenues of RMB10,649 million and net losses of 2,439 million to the
Group for the period from the respective acquisition dates to 31 December 2019. If the acquisitions had occurred
on 1 January 2019, consolidated revenue and consolidated profit for the year ended 31 December 2019 would
have been RMB478,208 million and RMB32,934 million respectively.

42 Balance sheet and reserve movements of the Company
Balance sheet of the Company

2019 2018
ASSETS
Non-current assets
Investments in subsidiaries 5,301 5,003
Property, plant and equipment 2 2
5,303 5,005
Current assets
Amounts due from subsidiaries 128,168 94,367
Other receivables 486 419
Cash and cash equivalents 13,766 993
142,420 95,779
Total assets 147,723 100,784
EQUITY
Capital and reserves attributable to shareholders of the Company
Share capital and premium 1,575 1,205
Other reserves 4,852 4,261
Accumulated losses (19,854) (11,701)
Total equity (13,427) (6,235)
LIABILITIES
Non-current liabilities
Derivative financial liabilities 2,183 2,807
Borrowings 127,134 73,583
129,317 76,390
Current liabilities
Amounts due to subsidiaries 31,833 30,629
Total equity and liabilities 147,723 100,784
The balance sheet of the Company was approved by the Board on 31 March 2020 and was signed on its behalf.
Hui Ka Yan Pan Da Rong

Director Director

42 Balance sheet and reserve movements of the Company (Continued)
Reserve movement of the Company

Accumulated
Other reserves losses
At 1 January 2018 2,115 (7,491)

Profit for the year — 13,087
Dividends — (14,802)
Issuance of shares pursuant to the option scheme (76) —
Employee share option schemes 2,211 —
Repurchase of shares 11 (2,495)
At 31 December 2018 4,261 (11,701)
At 1 January 2019 4,261 (11,701)

Loss for the year — (8,153)
Issuance of shares pursuant to the option scheme (75) —
Employee share option schemes 666 —
At 31 December 2019 4,852 (19,854)
43 Subsequent events
(a) Upon the outbreak of Coronavirus Disease 2019 (“COVID-19 outbreak”) in early 2020 in the PRC, a series of
precautionary and control measures have been and continued to be implemented across the PRC, including
extension of the Chinese New Year holiday nationwide, postponement of work resumption after the Chinese New
Year holiday in some regions, certain level of restrictions and controls over the travelling of people and traffic
arrangements, quarantine of certain residents, heightening of hygiene and epidemic prevention requirements in
factories and offices and encouraged social distancing, etc.
In order to minimise the impact of the COVID-19 outbreak and changes in the market, the Group has actively
coordinated relevant resources and adjusted the advertising and promotion strategies in a timely manner. Certain
cases of the Group’s projects construction and sales were postponed for one or two months, while it will be
caught up in the following months based on the enhanced advertising activities and adoption of online selling
mode.
The Group will pay close attention to the development of the COVID-19 outbreak and continue to evaluate its
impact on the financial position and operating results of the Group.

43 Subsequent events (Continued)
(b) On 8 January 2020, the Group issued 6.98% PRC corporate bonds due 2023 with an aggregated principal
amount of RMB4,500 million at the face value.
On 22 January 2020, the Group issued 11.5% senior notes due 2023 with an aggregated principal amount of
US$1,000 million at the face value, and 12.0% senior notes due 2024 with an aggregated principal amount of
US$1,000 million.
On 24 January 2020, the Group issued 11.5% senior notes due 2022 with an aggregated principal amount of
US$2,000 million at the face value, and 12% senior notes due 2023 with an aggregated principal amount of
US$2,000 million at the face value.
44 Benefits and interests of directors
(a) Directors’ and chief executives’ emoluments

The remuneration of directors of the Company for the year ended 31 December 2019 is set out below:
Contribution Employees
to pension share option
Fees Salary scheme scheme Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Dr. Hui 240 — 12 — 252

Mr. Xia Haijun (Chief executive) 240 152,171 16 1,656 154,083
Ms. He Miaoling 240 19,990 16 1,656 21,902
Mr. Pan Da Rong 240 8,041 72 8,282 16,635
Mr. Shi Junping 240 13,564 67 1,380 15,251
Mr. Huang Xiangui 240 8,728 16 828 9,812
Mr. Chau Shing Yim David 360 — — — 360
Mr. He Qi 360 — — — 360
Ms. Xie Hongxi 360 — — — 360
2,520 202,494 199 13,802 219,015

44 Benefits and interests of directors (Continued)
(a) Directors’ and chief executives’ emoluments (Continued)

The remuneration of directors of the Company for the year ended 31 December 2018 is set out below:
Contribution Employees
to pension share option
Fees Salary scheme scheme Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Dr. Hui 240 — 13 — 253

Mr. Xia Haijun (Chief executive) 240 222,768 16 19,453 242,477
Ms. He Miaoling 240 13,316 15 3,806 17,377
Mr. Pan Da Rong 240 6,455 72 10,201 16,968
Mr. Shi Junping 240 8,741 67 2,760 11,808
Mr. Huang Xiangui 240 5,475 30 1,903 7,648
Mr. Chau Shing Yim David 300 — — 59 359
Mr. He Qi 360 — — 118 478
Ms. Xie Hongxi 360 — — 177 537
2,460 256,755 213 38,477 297,905
(b) Directors’ retirement benefits

During the year ended 31 December 2019, there were no additional retirement benefit received by the directors
except for the attribution to a retirement benefit scheme as disclosed in note (a) above (2018: same).
(c) Directors’ termination benefits

During the year ended 31 December 2019, there was no termination benefits received by the directors (2018:
same).
(d) Consideration provided to third parties for making available directors’ services
During the year ended 31 December 2019, no consideration was paid for making available the services of the
directors of the Company (2018: same).
(e) Information about loans, quasi-loans and other dealings in favour of directors,
controlled bodies corporate by and connected entities with such directors
During year ended 31 December 2019, there were no loans, quasi-loans and other dealings entered into by the
Company or subsidiaries undertaking of the Company, where applicable, in favour of directors.
(f) Directors’ material interests in transactions, arrangements or contracts

No significant transactions, arrangements and contracts in relation to the Group’s business to which the
Company was a party and in which a director of the Company had a material interest, whether directly or
indirectly, subsisted at the end of the year or at any time during the year.

45 Particulars of principal subsidiaries
The following is a list of the particulars of principal subsidiaries at 31 December 2019:
Nominal value of
Date of issued and fully Percentage of
incorporation/ paid share capital/ attributable equity
Name Establishment paid-in capital interest Principal activities
Directly Indirectly
Incorporated in the BVI with limited liability and operating in the PRC
ANJI (BVI) Limited 26 June 2006 US$100 100% — Investment holding
ShengJian (BVI) Limited 29 January 2007 US$100 — 100% Investment holding
Ever Grace Group Limited 18 September 2008 US$100 — 100% Investment holding
Incorporated in Hong Kong with limited liability and operating in the PRC
Success Will Group Limited 5 July 2007 HK$1,000 — 100% Investment holding
Wisdom Gain Group Limited 13 June 2003 US$10,000 — 100% Investment holding
Full Hill Limited 3 January 2002 US$1 — 100% Investment holding
Grandday Group Limited 16 January 2008 US$100 — 100% Investment holding
Incorporated and operating in Hong Kong with limited liability
Pioneer Time Investment Limited 15 January 2016 US$10,000 — 100% Property investment
Incorporated in the PRC with limited liability and operating in the PRC
恒大地產集團有限公司 24 June 1996 RMB2,500,000,000 — 63.46% Property development

Hengda Real Estate Group
Company Limited
恒大地產集團重慶有限公司 17 July 2006 RMB4,821,000,000 — 100% Property development

Hengda Real Estate Group (Chongqing)
Company Limited
恒大地產集團江津有限公司 27 July 2006 RMB1,330,000,000 — 100% Property development

Hengda Real Estate Group (Jiangjin)
Company Limited

45 Particulars of principal subsidiaries (Continued)
Nominal value of
Directly Indirectly
鄂州恒大房地產開發有限公司 11 July 2008 RMB390,000,000 — 100% Property development

Ezhou Hengda Real Estate
Development Company Limited
恒大鑫豐 (彭山)置業有限公司 23 April 2010 RMB821,520,000 — 100% Property development

Hengda Xinfeng (Pengshan)
Property Company Limited
啟東勤盛置業有限公司 1 January 2007 USD141,100,000 — 100% Property development

Qinsheng (Qidong) Property
Company Limited
金碧物業有限公司 10 September 1997 RMB177,600,000 — 100% Property management

Jinbi Property Management
Company Limited
恒大地產集團洛陽有限公司 5 September 2007 RMB457,000,000 — 100% Property development

Hengda (Luoyang) Real Estate Group
南寧銀象房地產開發有限責任公司 24 November 2005 RMB20,000,000 — 100% Property development

Yinxiang (Nanning) Real Estate
佛山市南海俊誠房地產開發有限公司 23 November 2007 RMB1,632,653,061 — 100% Property development

Nanhai Juncheng (Foshan) Real Estate
恒大地產集團包頭有限公司 9 August 2008 RMB525,000,000 — 100% Property development

Hengda Real Estate Group (Baotou)
Company Limited
江西宏吉投資有限公司 12 November 2012 RMB383,580,000 — 100% Property development

Hongji (Jiangxi) Investment
Company Limited

Nominal value of
Directly Indirectly
長沙寶瑞房地產開發有限公司 13 July 2004 RMB470,000,000 — 100% Property development

Baorui (Changsha) Real Estate
海南東方明珠房地產有限公司 8 June 2004 RMB70,000,000 — 100% Property development

Dongfang Mingzhu (Hainan)
Real Estate Development
Company Limited
天津市津麗湖投資有限公司 13 November 2009 RMB690,000,000 — 100% Property development

Jinli Lake (Tianjin) Investment
Company Limited
濟南恒大綠洲置業有限公司 18 January 2010 RMB870,000,000 — 100% Property development

Jinan Hengdalvzhou Property
Corporation Limited
太原俊景房地產開發有限公司 2 April 2010 RMB782,200,000 — 66% Property development

Junjing (Taiyuan) Real Estate
成都天府水城房地產開發有限公司 22 March 2010 USD230,000,000 — 84% Property development

Tianfu Shuicheng (Chengdu)
Company Limited
濟南恒大金碧房地產開發有限公司 18 May 2010 RMB740,000,000 — 100% Property development

Hengda Jinbi (Jinan) Real Estate
石家莊地益嘉房地產開發有限公司 5 April 2010 RMB5,000,000 — 100% Property development

Shijiazhuang Diyijia Real Estate
Company Limited
榆中俊興房地產開發有限公司 28 July 2010 RMB790,000,000 — 100% Property development

Yuzhong Junxing Real Estate
Company Limited

Nominal value of
Directly Indirectly
恒大地產集團呼和浩特有限公司 6 September 2010 RMB390,000,000 — 100% Property development

Hengda (Hohhot) Real Estate Group
Company Limited
安陽通瑞達房地產開發有限公司 8 October 2010 RMB500,000,000 — 100% Property development

Tongruida (Anyang) Real Estate
天津濱僑投資有限公司 28 November 2007 RMB1,000,000,000 — 100% Property development

Binqiao (Tianjin) Investment
Company Limited
哈爾濱市恒大偉業房地產開發 26 January 2011 RMB780,000,000 — 100% Property development

有限公司
Harbin Hengda Weiye Real Estate
清遠市銀湖城投資有限公司 28 September 2009 RMB1,463,000,000 — 51% Property development

Yinhucheng (Qingyuan) Investment
Company Limited
濰坊金碧置業有限公司 4 March 2011 RMB600,000,000 — 100% Property development

Jinbi (Weifang) Property
Company Limited
恒大地產集團韶關有限公司 16 March 2011 RMB1,003,170,000 — 100% Property development

Hengda (Shaoguan) Real Estate Group
Company Limited
合肥粵通置業有限公司 25 August 2011 RMB200,000,000 — 100% Property development

Yuetong (Hefei) Property
Company Limited
南昌中電投高新置業有限公司 10 May 2011 RMB963,000,000 — 100% Property development

Zhongdiantou Gaoxin (Nanchang)

Nominal value of
Directly Indirectly
六安粵通置業有限公司 13 July 2011 RMB290,000,000 — 100% Property development

Luan Yuetong Property
Corporation Limited
恒大地產集團恩平有限公司 21 February 2012 RMB1,020,000,000 — 100% Property development

Hengda (Enping) Real Estate
Group Company Limited
新鄉御景置業有限公司 23 May 2012 RMB100,000,000 — 100% Property development

Yujing (Xinxiang) Property
Corporation Limited
城博(寧波)置業有限公司 18 January 2011 USD328,000,000 — 100% Property development

Chengbo (Ningbo) Property
Company Limited
潮州市恒大置業有限公司 10 July 2012 RMB280,000,000 — 100% Property development

Chaozhou Hengda Property
Company Limited
寧波御城置業有限公司 30 May 2012 USD76,834,508 — 100% Property development

Yucheng (Ningbo) Property
Company Limited
無錫盛東房產開發有限公司 6 May 2010 RMB200,000,000 — 100% Property development

Shengdong (Wuxi) Real Estate
海口外灘城房地產有限公司 5 September 2012 RMB700,000,000 — 100% Property development

Waitancheng (Haikou) Real Estate
Company Limited
濟南俊匯置業有限公司 13 May 2013 RMB288,000,000 — 100% Property development

Junhui (Jinan) Property
Company Limited

Nominal value of
Directly Indirectly
長沙鑫芙置業有限公司 13 May 2013 RMB663,265,300 — 100% Property development

Xinfu (Changsha) Property
Company Limited
廣州市鑫誠置業有限公司 23 May 2013 RMB720,000,000 — 100% Property development

Xincheng (Guangzhou) Property
Company Limited
重慶恒大鑫泉置業有限公司 6 June 2013 RMB2,000,000,000 — 100% Property development

Hengda Xinquan (Chongqing) Property
Company Limited
恒大地產集團河源有限公司 17 June 2013 RMB20,000,000 — 100% Property development

Hengda Real Estate Group (Heyuan)
Company Limited
北京沙河恒大置業有限公司 12 July 2013 RMB1,330,000,000 — 100% Property development

Shahe Hengda (Beijing) Property
Company Limited
合肥粵誠置業有限公司 9 September 2013 RMB1,920,000,000 — 100% Property development

Yuecheng (Hefei) Property
Company Limited
宜昌楚天恒大房地產開發有限公司 10 September 2013 RMB150,000,000 — 60% Property development

Chutian Hengda (Yichang) Real Estate
Company Limited
常德鑫澤置業有限公司 26 August 2013 RMB110,000,000 — 100% Property development

Xinze (Changde) Property
Company Limited
恒大地產集團北京有限公司 11 September 2013 RMB1,830,000,000 — 100% Property development

Hengda (Beijing) Real Estate Group
Company Limited

Nominal value of
Directly Indirectly
杭州穗華置業有限公司 25 September 2013 RMB1,500,000,000 — 100% Property development

Hangzhou Suihua Property
Company Limited
南京旭泰房地產開發有限公司 20 November 2013 RMB970,000,000 — 100% Property development

Nanjing Xutai Real Estate
Company Limited
南京美旭房地產開發有限公司 20 November 2013 RMB1,503,000,000 — 100% Property development

Nanjing Meixu Real Estate
北京恒興盛房地產開發有限公司 8 November 2013 RMB3,520,000,000 — 100% Property development

Hengxingsheng (Beijing) Real Estate
Company Limited
上海金碧置業有限公司 25 December 2013 RMB865,000,000 — 100% Property development

Jinbi (Shanghai) Property
Company Limited
上海松裕置業有限公司 24 December 2013 RMB655,000,000 — 100% Property development

Songyu (Shanghai) Property
Company Limited
上海茸善置業有限公司 23 December 2013 RMB418,000,000 — 100% Property development

Rongshan (Shanghai) Property
Company Limited
天津帝景房地產開發有限公司 23 December 2013 RMB30,000,000 — 100% Property development

Tianjin Dijing Real Estate Development
Company Limited
太原市俊恒房地產開發有限公司 16 January 2014 RMB1,160,000,000 — 100% Property development

Taiyuan Junheng Real Estate
Company Limited

Nominal value of
Directly Indirectly
北京正浩置業有限公司 4 March 2014 RMB1,750,000,000 — 100% Property development

Zhenghao (Beijing) Property
Company Limited
北京恒龍置業有限公司 12 March 2014 RMB1,719,090,500 — 70% Property development

Henglong (Beijing) Property
Company Limited
成都市恒大新西城置業有限公司 29 April 2014 RMB710,000,000 — 100% Property development

Hengda New West City (Chengdu)
長沙金霞開發建設有限公司 5 September 2014 RMB122,450,000 — 51% Property development

Jinxia (Changsha) Real Estate
太原金世恒房地產開發有限公司 27 November 2014 RMB1,685,530,000 — 100% Property development

Jinshiheng (Taiyuan) Real Estate
Company Limited
鄭州恒林置業有限公司 6 September 2013 RMB500,239,600 — 51% Property development

Henglin (Zhengzhou) Property
Company Limited
濟南東進龍鼎置業有限公司 3 November 2014 RMB820,000,000 — 100% Property development

Jinan Dongjin Longding Property
Company Limited
岳陽金瑞置業有限公司 15 January 2015 RMB20,000,000 — 64% Property development

Jinrui (Yueyang) Property
Company Limited
成都恒大新東城置業有限公司 15 January 2015 RMB1,620,000,000 — 100% Property development

Hengda New East City (Chengdu)

Nominal value of
Directly Indirectly
武漢恒大都市房地產開發有限公司 17 March 2015 RMB50,000,000 — 60% Property development

Hengda Dushi (Wuhan) Real Estate
Company Limited
莆田金碧置業有限公司 2 April 2015 RMB20,000,000 — 100% Property development

Putian Jinbi Property
Company Limited
贛州恒大地產有限公司 6 May 2015 RMB261,000,000 — 100% Property development

Hengda (Ganzhou) Real Estate
Company Limited
重慶永利置業有限公司 22 April 2015 RMB703,320,000 — 100% Property development

Yongli (Chongqing) Property
Company Limited
張家港盛建置業有限公司 13 May 2015 RMB350,000,000 — 100% Property development

Shengjian (Zhangjiagang) Property
Company Limited
廈門恒大置業有限公司 4 June 2015 RMB20,000,000 — 100% Property development

Xiamen Hengda Property
Company Limited
重慶恒大鑫溉置業有限公司 21 August 2014 RMB1,000,000,000 — 62% Property development

Chongqing Hengda Xingai Property
Company Limited
北京恒隆興置業有限公司 25 June 2015 RMB1,000,000,000 — 100% Property development

Henglongxing (Beijing) Property
Company Limited
汕頭市恒悅置業有限公司 27 May 2015 RMB300,000,000 — 100% Property development

Hengyue (Shantou) Property Company
Limited

Nominal value of
Directly Indirectly
雲南恒雲置業有限公司 26 May 2015 RMB214,000,000 — 51% Property development

Yunnan Hengyun Property
Company Limited
武漢三江航天嘉園房地產開發 11 November 2015 RMB10,000,000 — 100% Property development

有限公司
Sanjiang Hangtian Jiayuan (Wuhan)
Company Limited
武漢三江航天投資發展有限公司 11 November 2015 RMB10,000,000 — 100% Property development

Sanjiang Hangtian (Wuhan) Investment
Company Limited
湖北三江航天商業經營有限公司 11 December 2015 RMB10,000,000 — 100% Property development

Sanjiang Hangtian (Wuhan)
Business Operation
Company Limited
重慶中渝物業發展有限公司 10 July 2015 USD131,000,000 — 100% Property development

Zhongyu (Chongqing) Property
Management Company Limited
愛美高實業(成都)有限公司 14 July 2015 RMB2,708,705,103 — 100% Property development

Avergo (Chengdu) Industrial
Company Limited
儋州中潤旅遊開發有限公司 19 August 2015 RMB20,000,000 — 100% Property development

Zhongrun (Danzhou) Tourism
儋州信恒旅遊開發有限公司 19 August 2015 RMB800,000,000 — 100% Property development

Xinheng (Danzhou) Tourism
漳州信成房地產開發有限公司 20 January 2015 RMB112,755,500 — 100% Property development

Xincheng (Zhangzhou) Real Estate
Company Limited

Nominal value of
Directly Indirectly
柳州市兆福地產置業有限公司 18 September 2015 RMB163,265,300 — 100% Property development

Zhaofu (Liuzhou) Property
Company Limited
江陰雅盛恒泰置業有限公司 19 July 2013 RMB400,000,000 — 100% Property development

Jiangyin Yasheng Hengtai Property
Company Limited
懷來恒天房地產開發有限公司 18 September 2015 RMB871,008,700 — 86% Property development

Hengtian (Huailai) Real Estate
重慶尖置房地產有限公司 10 July 2015 HKD5,880,000,000 — 100% Property development

Jianzhi (Chongqing) Real Estate
Company Limited
阜陽粵通置業有限公司 27 November 2015 RMB650,000,000 — 100% Property development

Yuetong (Fuyang) Property
Company Limited
衡水隆澤房地產開發有限公司 10 December 2015 RMB617,293,000 — 60% Property development

Longze (Hengshui) Real Estate
南寧耀世龍庭房地產開發有限公司 25 November 2015 RMB320,000,000 — 100% Property development

Yaoshi Longting (Nanning)
Company Limited
南京臨江御景房地產開發有限公司 11 December 2015 RMB1,471,650,000 — 100% Property development

Linjiang Yujing (Nanjing)
Company Limited
珠海市恒大海泉灣置業有限公司 10 December 2015 RMB821,812,000 — 51% Property development

Hengda Haiquanwan (Zhuhai) Property
Company Limited

Nominal value of
Directly Indirectly
海南陵水棕櫚泉置業有限公司 12 June 2015 RMB1,070,000,000 — 100% Property development

Lingshui Zonglvquan (Hainan) Property
Company Limited
杭州晶立置業有限公司 2 February 2016 USD370,000,000 — 76% Property development

Hangzhou Jingli Property
Company Limited
貴陽新世界房地產有限公司 18 February 2016 USD301,350,000 — 100% Property development

New World (Guiyang) Real Estate
Company Limited
武漢新世界康居發展有限公司 5 January RMB96,000,000 — 60% Property development

New World Peaceful Living (Wuhan) 2016
上海豐濤置業有限公司 14 March 2016 RMB316,949,620 — 100% Property development

Fengtao (Shanghai) Property
Company Limited
哈爾濱市佳業房地產開發有限公司 18 January 2016 RMB20,000,000 — 100% Property development

Jiaye (Harbin) Real Estate Development
Company Limited
青島金灣置業有限公司 25 January 2016 RMB1,000,000,000 — 100% Property development

Qingdao Jinwan Property
Company Limited
長沙湘江名苑房地產有限公司 22 April 2016 RMB410,000,000 — 51% Property development

Xiangjiang Mingyuan (Changsha)
Real Estate Company Limited
北京富華房地產開發有限公司 11 January 2016 USD66,500,000 — 100% Property development

Fuhua (Beijing) Real Estate

Nominal value of
Directly Indirectly
廣盛華僑 (大亞灣)投資有限公司 29 April 2016 USD20,820,000 — 100% Property development

Guangsheng Huaqiao (Dayawan)
Investment Company Limited
恒大地產集團鹽城城南置業有限公司 27 January 2016 RMB620,000,000 — 100% Property development

Hengda Chengnan (Yancheng) Real
Estate Property Company Limited
柳州御景龍恒房地產開發有限公司 3 February 2016 RMB20,000,000 — 100% Property development

Yujing Longheng (Liuzhou) Real Estate
Company Limited
天津御景灣投資有限公司 29 February 2016 RMB740,000,000 — 100% Property development

Yujingwan (Tianjin) Investment
Company Limited
南京恒裕房地產開發有限公司 29 January 2016 RMB685,000,000 — 100% Property development

Hengyu (Nanjing) Real Estate
Company Limited
佛山市裕朗通房地產開發有限公司 26 February 2016 RMB1,600,000,000 — 100% Property development

Yulangtong (Foshan) Real Estate
瀋陽嘉興置業有限公司 28 March 2016 RMB350,000,000 — 100% Property development

Jiaxing (Shenyang) Property
Company Limited
佛山市南海俊凱房地產開發有限公司 13 April 2016 RMB1,200,000,000 — 100% Property development

Nanhai Junkai (Foshan) Real Estate
廣東江門船廠有限公司 17 October 2016 RMB40,000,000 — 80% Property development

Jiangmen Chuanchang (Guangdong)
Company Limited

Nominal value of
Directly Indirectly
河南恒龍置業有限公司 14 April 2016 RMB500,000,000 — 100% Property development

Henglong (Henan) Property
Company Limited
甘肅恒源房地產開發有限公司 25 March 2016 RMB60,000,000 — 100% Property development

Hengyuan (Gansu) Real Estate
哈爾濱高登置業有限公司 31 March 2016 RMB941,200,000 — 100% Property development

Gaodeng (Harbin) Property
Company Limited
濟南御峰置業有限公司 1 April 2016 RMB500,000,000 — 100% Property development

Yufeng (Jinan) Property
Company Limited
北海君海旅遊文化有限公司 31 March 2016 RMB1,000,000 — 100% Property development

Junhai (Beihai) Tourism Culture
Company Limited
成都心怡房地產開發有限公司 3 May 2016 USD99,500,000 — 100% Property development

Xinyi (Chengdu) Real Estate
武漢市金碧翡翠房地產開發有限公司 13 May 2016 RMB975,000,000 — 100% Property development

Jinbi Feicui (Wuhan) Real Estate
瀋陽嘉景置業有限公司 23 May 2016 RMB350,000,000 — 100% Property development

Jiajing (Shenyang) Property
Company Limited
開封國際城一號實業開發有限公司 17 May 2010 RMB788,247,873 — 100% Property development

Guojicheng Yihao (Kaifeng) Industrial

Nominal value of
Directly Indirectly
山西蘭花康宇房地產開發有限公司 1 July 2016 RMB50,400,000 — 82% Property development

Lanhua Kangyu (Shanxi) Real Estate
成都盛世瑞城置業有限公司 4 July 2016 RMB530,000,000 — 100% Property development

Shengshi Ruicheng (Chengdu)
鄭州玖智房地產開發有限公司 5 July 2016 RMB500,000,000 — 51% Property development

Jiuzhi (Zhengzhou) Real Estate
貴陽中渝置地房地產開發有限公司 26 December 2016 USD130,000,000 — 100% Property development

Zhongyu (Guiyang) Property
Company Limited
梅州大百匯品牌產業園有限公司 8 June 2016 RMB1,022,000,000 — 100% Property development

Big Parkway (Meizhou) Brand Industrial
Park Company Limited
淶水利華房地產開發有限公司 8 July 2016 RMB142,857,000 — 65% Property development

Laishui Lihua Real Estate Development
Company Limited
四川亞天瑞和投資有限公司 6 June 2016 RMB102,500,000 — 100% Property development

Yatian Ruihe (Sichuan) Investment
Company Limited
成都樹仁置業有限公司 14 July 2016 RMB10,000,000 — 100% Property development

Shuren (Chengdu) Property
Company Limited
上饒市恒大置業有限公司 11 August 2016 RMB50,000,000 — 100% Property development

Hengda (Shangrao) Property
Company Limited

Nominal value of
Directly Indirectly
大連東方盛都置地有限公司 8 July 2016 RMB110,000,000 — 100% Property development

Dongfang Shengdu (Dalian) Real
Estate Company Limited
新津恒大新城置業有限公司 22 June 2016 RMB483,118,005 — 100% Property development

Hengda Xincheng (Xinjin) Property
Company Limited
無錫雲廈置業有限公司 25 July 2016 RMB560,000,000 — 100% Property development

Yunxia (Wuxi) Property
Company Limited
濟南源浩置業有限公司 18 July 2016 RMB900,000,000 — 100% Property development

Jinan Yuanhao Property
Company Limited
柳州山水韻和置業有限公司 24 August 2016 RMB33,333,400 — 85% Property development

Shanshui Yunhe (Liuzhou) Property
Company Limited
濟南西開置業有限公司 16 August 2016 RMB18,000,000 — 100% Property development

Jinan Xikai Property Company Limited
濟南西業置業有限公司 16 August 2016 RMB18,000,000 — 100% Property development

Jinan Xiye Property Company Limited
焦作御景置業有限公司 22 August 2016 RMB100,000,000 — 100% Property development

Yujing (Jiaozuo) Property
Company Limited
威海華府置業有限公司 6 September 2016 RMB300,000,000 — 100% Property development

Huafu (Weihai) Property
Company Limited
佛山市三水盈盛房地產發展有限公司 8 September 2016 RMB1,560,000,000 — 100% Property development

Sanshui Yingsheng (Foshan)
Company Limited

Nominal value of
Directly Indirectly
成都裕龍壹號房地產開發有限公司 18 September 2012 RMB525,000,000 — 100% Property development

Yulong Yihao (Chengdu) Real Estate
海南金萃房地產開發有限公司 25 November 2016 RMB169,380,000 — 100% Property development

Jincui (Hainan) Real Estate
Company Limited
紹興永恒置業有限公司 30 September 2016 RMB2,400,000,000 — 100% Property development

Yongheng (Shaoxing) Property
Company Limited
汕頭市恒合置業有限公司 3 December 2015 RMB200,000,000 — 100% Property development

Henghe (Shantou) Property
Company Limited
湖州市烏虹湖置業有限公司 27 October 2016 RMB1,632,653,061 — 51% Property development

Wuhonghu (Huzhou) Property
Company Limited
昆明恒海房地產開發有限公司 24 October 2016 RMB180,000,000 — 100% Property development

Henghai (Kunming) Real Estate
長沙恒大童世界旅遊開發有限公司 20 October 2016 RMB1,920,000,000 — 100% Property development

Hengda Tongshijie (Changsha) Real
臨沂恒金置業有限公司 23 September 2016 RMB50,000,000 — 60% Property development

Hengjin (Linyi) Property
Company Limited
太原恒德隆房地產開發有限公司 4 November 2016 — — 100% Property development

Hengdelong (Taiyuan) Real Estate

Nominal value of
Directly Indirectly
成都萬浩置業有限公司 29 September 2016 RMB19,600,000 — 100% Property development

Wanhao (Chengdu) Property
Company Limited
西安遠聲實業有限公司 26 December 2016 RMB120,000,000 — 100% Property development

Yuansheng (Xian) Industrial
Company Limited
重慶恒大鑫南置業有限公司 22 December 2016 RMB718,000,000 — 100% Property development

Chongqing Hengda Xinnan Property
Company Limited
重慶同景宏航置地有限公司 22 December 2016 RMB220,000,000 — 100% Property development

Tongjing Honghang (Chongqing)
Land Limited
重慶同景共好置地有限公司 22 December 2016 RMB610,000,000 — 100% Property development

Tongjing Gonghao (Chongqing)
哈爾濱市振業房地產開發有限公司 28 September 2016 RMB20,000,000 — 100% Property development

Zhenye (Harbin) Real Estate
Company Limited
南通盛建置業有限公司 9 January 2017 RMB500,000,000 — 100% Property development

Shengjian (Nantong) Property
Company Limited
揚州盛基房地產開發有限公司 22 March 2017 RMB20,000,000 — 100% Property development

Shengji (Yangzhou) Real Estate
Company Limited
四川川大科技園 (南區)開發有限公司 13 January 2017 RMB37,915,300 — 91% Property development

Sichuan University Science Park
(Southern District) Development
Company Limited

Nominal value of
Directly Indirectly
深圳市萬京投資有限公司 28 March 2017 RMB30,000,000 — 100% Property development

Wanjing (Shenzhen) Investment
Company Limited
佛山市三水區能潤置地房地產 4 April 2007 RMB752,000,000 — 100% Property development

開發有限公司
Sanshui Nengrun (Foshan)
Company Limited
濟南西創置業有限公司 18 January 2017 RMB18,000,000 — 100% Property development

Xichuang (Jinan) Property
Company Limited
濟南西實置業有限公司 18 January 2017 RMB18,000,000 — 100% Property development

Xishi (Jinan) Property Company Limited
四川雍橋置業有限公司 26 October 2009 RMB100,000,000 — 100% Property development

Yongqiao (Sichuan) Property
Company Limited
南京東潤置業有限公司 1 April 2017 RMB640,000,000 — 83% Property development

Dongrun (Nanjing) Property
Company Limited
溫州國鵬置業有限公司 31 October 2017 RMB650,000,000 — 100% Property development

Guopeng (Wenzhou) Property
Company Limited
安徽省陽光半島文化發展有限公司 31 August 2018 RMB7,186,050,000 — 100% Property development

Yangguang Bandao (Anhui) Real
前海君臨實業發展(深圳)有限公司 17 April 2015 RMB2,065,306,100 — 100% Property development

Qianhai Junlin Industrial Development
(Shenzhen) Company Limited

Nominal value of
Directly Indirectly
深圳市鴻騰投資管理有限公司 30 January 2015 RMB2,161,428,600 — 100% Property development

Shenzhen Hongteng Investment
Management Company Limited
三亞哈達農副產品交易有限公司 1 April 2016 RMB1,380,000,000 — 100% Property development

Sanya Hada Agricultural Products
Company Limited
建滔數碼發展(深圳)有限公司 5 July 2016 RMB25,323,200 — 100% Property development

Jiantao Digital Development (Shenzhen)
Company Limited
無錫盛建置業有限公司 2 December 2016 RMB1,600,000,000 — 100% Property development

Wuxi Shengjian Real Estate
Company Limited
瀋陽金道房地產開發有限公司 13 January 2018 RMB1,749,600,897 — 52% Property development

Shenyang Jindao Real Estate
淄博高新正承房地產開發有限公司 31 October 2017 RMB250,000,000 — 60% Property development

Zibo Gaoxin Zhengcheng Real Estate
泰州周山河房地產開發有限公司 7 June 2017 RMB441,176,471 — 100% Property development

Taizhou Zhoushanhe Real Estate
徐州御嘉置業有限公司 24 October 2017 RMB816,326,500 — 100% Property development

Xuzhou Yujia Real Estate
Company Limited
許昌裕豐房地產有限公司 26 July 2017 RMB20,000,000 — 75% Property development

Xuchang Yufeng Real Estate
Company Limited

Nominal value of
Directly Indirectly
唐山恒瀚邑房地產開發有限公司 17 November 2017 RMB810,000,000 — 100% Property development

Tangshan Henghanyi Real Estate
寧波穗華置業有限公司 20 November 2017 RMB1,691,400,000 — 100% Property development

Ningbo Suihua Real Estate
Company Limited
亳州恒皖置業有限公司 7 August 2017 RMB1,059,400,000 — 100% Property development

Bozhou Hengwan Real Estate
Company Limited
舟山市新誠瑞豐房地產開發有限公司 27 June 2019 RMB25,028,000 — 100% Property development

Zhoushan Xincheng Ruifeng
Company Limited
雲南尚居地產有限公司 31 October 2019 RMB300,000,000 — 70% Property development

Yunnan Shangju Real Estate
Company Limited
瀋陽航遠置業有限公司 31 October 2019 RMB50,000,000 — 100% Property development

Shenyang Hangyuan Real Estate
Company Limited
陝西航華投資管理有限公司 31 October 2019 RMB30,000,000 — 51% Property development

Shaan
xi Hanghua Investment Management
Company Limited
重慶盛懷房地產開發有限公司 31 October 2019 RMB20,000,000 — 100% Property development

Chongqing Shenghuai Real Estate
重慶航悅置業有限公司 31 October 2019 RMB190,000,000 — 100% Property development

Chongqing Hangyue Real Estate
Company Limited

Nominal value of
Directly Indirectly
眉山隆和旅遊開發有限公司 31 October 2019 RMB953,064,800 — 100% Property development

Meishan Longhe Tourism Development
Company Limited
武漢巴登城投資有限公司 31 October 2019 RMB200,000,000 — 100% Property development

Wuhan Baden City Investment
Company Limited
國能新能源汽車有限責任公司 15 January 2019 RMB3,070,655,000 — 100% Sales and manufacturing

National New Energy Vehicle of smart mobility
Company Limited
國能電動汽車 (瑞典)有限公司 15 January 2019 SEK1,279,870,800 — 82% Sales and manufacturing

National Electric Vehicle Sweden AB of smart mobility
The names of certain of the companies referred to in these consolidated financial statements represent management’s
best effort in translation of the Chinese names of these companies as no English names have been registered or
available.

(a) Non-controlling Interest

The Group held 63.46% equity interest of Hengda Real Estate, and set out below is the summarised financial
information for Hengda Real Estate which non-controlling interests are material to the Group. The amounts
disclosed for Hengda Real Estate are before inter-company elimination.
Summarised consolidated balance sheet

31 December
2019 2018
Current assets 1,646,232 1,422,411

Current liabilities (1,165,241) (1,027,577)
Net current assets 480,991 394,834
Non-current assets 215,178 213,150

Non-current liabilities (315,847) (285,735)
Non-current net liabilities (100,669) (72,585)
Net assets 380,322 322,249
Summarised consolidated statement of comprehensive income

2019 2018
Revenue 426,470 432,368

Total profit attributable to shareholders of Hengda Real Estate (note (a)) 38,771 65,874
Total profit attributable to non-controlling interest 4,097 6,365
Total comprehensive income attributable to shareholders of

Hengda Real Estate 39,123 66,078
Total comprehensive income attributable to non-controlling interest 4,097 6,365

(a) Non-controlling Interest (Continued)

Summarised consolidated statement of cash flows
Year ended31 December

2019 2018
Cash flows of operating activities, net 20,803 134,655

Cash flows of investing activities, net (40,807) (44,886)
Cash flows of financing activities, net 21,625 (120,288)
Exchange loss on cash and cash equivalents 103 371
Net increase/(decrease) in cash and cash equivalents 1,724 (30,148)
Note (a):
Pursuant to the Investment Agreements entered by Kailong Real Estate, Hengda Real Estate and Professor Hui Ka Yan with the SIs, the net profit
after deducting the non-recurring gains or losses attributable to the shareholders of Hengda Real Estate (the “Net Profit”) for the year ended 31
December 2019 should not be less than RMB55,000 million (the “Performance Undertaking Net Profit”).
The shareholders of Hengda Real Estate will make a resolution to distribute at least 68% of actual Net Profit (the “Proposed Dividend”) on
conditions that subjected dividend payment will not adversely affect the ability of Hengda Real Estate to continue to operate and reorganisation
agreement of the Proposed Reorganisation was not entered before 5 July 2020 (the “Conditions”).
The actual Net Profit for the year ended 31 December 2019 was about RMB40,400 million, which was less than the Performance Undertaking
Net Profit. Kailong Real Estate need to indemnify the SIs through adjusting upward the percentage ratio of the proportional dividend payable to
SIs and adjusting downward the percentage ratio of the proportional dividend payable to itself if the dividend resolution was made before 5 July
2020, and the indemnity amount will be about RMB3,600 million.
As at 31 December 2019, the directors consider that there is no obligations for the Proposed Dividend as the dividend resolution has not been
made which will be depend on the Conditions meet or not, and no indemnity to SIs should be reflected in the consolidated the financial
statements.

FIVE YEARS FINANCIAL SUMMARY
Consolidated Assets, Equity and Liabilities

(as at 31 December)
2015 2016 2017 2018 2019

RMB Million RMB Million RMB Million RMB Million RMB Million
ASSETS
Non-current assets 144,691 237,233 238,805 304,277 359,763
Current assets 612,344 1,113,635 1,522,947 1,575,751 1,846,814
Total assets 757,035 1,350,868 1,761,752 1,880,028 2,206,577
Total equity 142,142 192,532 242,208 308,626 358,537
LIABILITIES
Non-current liabilities 158,212 424,942 434,689 411,946 498,005
Current liabilities 456,681 733,394 1,084,855 1,159,456 1,350,035
Total liabilities 614,893 1,158,336 1,519,544 1,571,402 1,848,040
Total equity and liabilities 757,035 1,350,868 1,761,752 1,880,028 2,206,577

FIVE YEARS FINANCIAL SUMMARY
Consolidated Statements of Comprehensive Income

(for the year ended 31 December)
2015 2016 2017 2018 2019

RMB Million RMB Million RMB Million RMB Million RMB Million
Revenue 133,130 211,444 311,022 466,196 477,561

Cost of sales (95,717) (152,022) (198,760) (297,249) (344,624)
Gross Profit 37,413 59,422 112,262 168,947 132,937

Fair value gains on investment properties 12,859 5,124 8,513 1,343 1,516
Impairment losses on financial assets — — (70) (137) (194)
Other gains/(losses),net 323 6,986 (6,022) 2,645 1,729
Other income 2,262 4,937 5,547 6,694 6,997
Selling and marketing costs (13,325) (15,983) (17,210) (18,086) (23,287)
Administrative expenses (6,139) (9,598) (12,176) (14,813) (19,811)
Other operating expenses (1,077) (2,663) (5,599) (5,179) (5,037)
Operating profit 32,316 48,225 85,245 141,414 94,850

Share of (losses)/gains of investments
accounted for using equity method (392) (203) 1,402 (874) 2,967
Fair value gains/(losses) on financial
profit or loss 2,515 141 (437) 51 (1,863)
Fair value (losses)/gains on derivative
financial liabilities — — (820) 797 981
Finance (costs)/income, net (2,994) (11,301) (7,917) (14,623) (22,763)
Profit before income tax 31,445 36,862 77,473 126,765 74,172

Income tax expenses (14,105) (19,245) (40,424) (60,218) (40,630)
Profit for the year 17,340 17,617 37,049 66,547 33,542

Other comprehensive income, net of tax 30 (4,892) 3,861 155 (239)
Total comprehensive income for the year 17,370 12,725 40,910 66,702 33,303
Total comprehensive income

attributable to:
Shareholders of the Company 10,490 199 27,432 37,502 17,109
Holders of perpetual capital instruments 5,088 10,646 — — —
Non-controlling interests 1,792 1,880 13,478 29,200 16,194
Total comprehensive income for the year 17,370 12,725 40,910 66,702 33,303

China
ChinaEvergrande
EvergrandeGroup
China Evergrande Group
China Evergrande Group 中國恒大集團
23rd Floor, China Evergrande Centre
38 Gloucester Road
Group
Wanchai
2019
Hong Kong
ANNUAL REPORT
http://www.evergrande.com
ANNUAL
ANNUAL
REPORT
REPORT
2019
2018

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China

293 MILLION SQUARE METRES OF

Inner Mongolia Beijing

SOUTH CHINA SEA ISLANDS

18 Management discussion and analysis

40 Corporate Governance Report

2 China Evergrande Group Annual Report 2019

18 Management discussion and analysis

40 Corporate Governance Report

2 China Evergrande Group Annual Report 2019

No.1126 Haide 3rd Road China Minsheng Banking Corp., Ltd.

Mr. Fong Kar Chun, Jimmy Shareholder Information

China Evergrande Group Annual Report 2019 3

Securities Codes US$1,344,921,000 7.50% Senior Notes due 2023

HKEX: 3333 US$850,000,000 10.0% Senior Notes due 2023

US$645,000,000 13.0% Senior Notes due 2022

HK$18,000,000,000 4.25% Convertible Bonds due 2023

4 China Evergrande Group Annual Report 2019

For enquiries, please contract:

China Evergrande Group Annual Report 2019 5

In order to repay the trust and support of shareholders, the Board

8 China Evergrande Group Annual Report 2019

China Evergrande Group Annual Report 2019 9

10 China Evergrande Group Annual Report 2019

China Evergrande Group Annual Report 2019 11

12 China Evergrande Group Annual Report 2019

In respect of industry policy, it is expected that the central CORPORATE SOCIAL

China Evergrande Group Annual Report 2019 13

14 China Evergrande Group Annual Report 2019

AWARDS FINAL DIVIDEND

The above awards fully demonstrated the trust and

China Evergrande Group Annual Report 2019 15

Fair Value Gain on Investment

18 China Evergrande Group Annual Report 2019

Other Income Selling and Marketing Costs

China Evergrande Group Annual Report 2019 19

Less than 1 year 372.1 46.5% 318.3 47.3%

799.9 100.0% 673.1 100.0%

We estimate the Renminbi exchange rate to continue its

20 China Evergrande Group Annual Report 2019

China Evergrande Group Annual Report 2019 21

1 Jiangsu Province 6,271 8.14%

Total 77,011 100.00%

22 China Evergrande Group Annual Report 2019

China Evergrande Group Annual Report 2019 23

24 China Evergrande Group Annual Report 2019

China Evergrande Group Annual Report 2019 25

INDEPENDENT NON-EXECUTIVE DIRECTORS

26 China Evergrande Group Annual Report 2019

SENIOR MANAGEMENT OF THE GROUP

China Evergrande Group Annual Report 2019 27

SENIOR MANAGEMENT OF INDUSTRY GROUPS

28 China Evergrande Group Annual Report 2019

NUMBER OF PARTICIPANTS MET IN 2019

686 1 Road shows

China Evergrande Group Annual Report 2019 29

32 China Evergrande Group Annual Report 2019

11. Top 50 Cases of Targeted Poverty Alleviation by Chinese Enterprises (2018)

China Evergrande Group Annual Report 2019 33

Evergrande formed a joint venture with January