China Vanke Co., Ltd.
2013 Interim Report
(For the six months ended 30 June 2013)
Important Notice:
The Board of Directors, the Supervisory Committee and the Directors, members of the Supervisory
Committee and senior management of the Company warrant that in respect of the information contained in
this report, there are no misrepresentations or misleading statements, or material omission, and
individually and collectively accept full responsibility for the authenticity, accuracy and completeness of
the information contained in this report.
Chairman Wang Shi, Director Yu Liang, Director Sun Jianyi, Director Xiao Li, Director Wei Bin, Director
Chen Yin, Independent Director Qi Daqing, Independent Director Zhang Liping, Independent Director
Hua Sheng and Independent Director Elizabeth Law attended the board meeting in person. Director Qiao
Shibo was not able to attend the board meeting in person due to his business engagemens and had
authorised Director Wei Bin to represent him and vote on behalf of him at the board meeting.
The Company will not carry out profit appropriation or transfer of capital surplus reserve to share capital
for the interim period of 2013.
The Company’s interim financial report has not been audited.
Chairman Wang Shi, Director and President Yu Liang, and Executive Vice President and Supervisor of
Finance Wang Wenjin declare that the financial report contained in the interim report is warranted to be
true and complete.
Basic Corporate Information ……………………………………………………………………….…2
Major Financial Data and Guidance…………………………………………………………………...3
Directors’ Report ………………………………………………………………… …….……………3
Significant Events…...……………………………………………………………………………..…..12
Change in Share Capital and Shareholdings of Major Shareholders ..…………………………………21
Directors, Members of Supervisory Committee, Senior Management ………………..…………….…23
Financial Report (Unaudited) …..………………………………………………………………………24
1
I. Basic Corporate Information
1. Company Name (Chinese): 万科企业股份有限公司 (“万科”)
Company Name (English): CHINA VANKE CO., LTD. (“VANKE”)
2. Registered address: Vanke Center, No. 33 Huanmei Road, Dameisha, Yantian District, Shenzhen, the
People’s Republic of China
Postal code: 518083
Office address: Vanke Center, No. 33 Huanmei Road, Dameisha, Yantian District, Shenzhen, the
People’s Republic of China
Postal code: 518083
Website: www.vanke.com
E-mail address: IR@vanke.com
3. Legal representative: Wang Shi
4. Secretary of the Board: Tan Huajie
E-mail address: IR@vanke.com
Securities Affairs Representative: Liang Jie
E-mail address: IR@vanke.com
Contact Address: Vanke Center, No. 33 Huanmei Road, Dameisha, Yantian District, Shenzhen, the
People’s Republic of China
Telephone number: 0755-25606666
Fax number: 0755-25531696
5. Media for disclosure of information: “China Securities Journal”, “Securities Times”, “Shanghai
Securities News”, “Securities Daily” and an English media in Hong Kong.
Website for publication of the interim report: www.cninfo.com.cn
Location where this interim report is available for inspection: The Office of the Company’s Board of
Directors
6. Stock exchange on which the Company’s shares are listed: Shenzhen Stock Exchange
Stock short names and stock codes:
Vanke A, 000002
Vanke B, 200002
08 Vanke G1, 112005
08 Vanke G2, 112006
2
II. Major Financial Data and Guidance
(1) Major Financial Guidance
Unit: RMB’000
Financial Indicators Jan.-Jun. 2013 Jan.-Jun. 2012 Change（+/-）
Revenue 38,940,809 28,959,560 34.5%
Profit from operating activities 9,071,539 7,928,844 14.4%
Share of profits less losses of
associates and jointly controlled 387,629 422,520 -8.3%
entities
Profit before income taxation 8,780,564 7,562,983 16.1%
Income tax (3,444,673) (3,027,505) 13.8%
Profit for the period 5,335,891 4,535,478 17.6%
Profit attributed to minority (779,586) (810,393) -3.8%
Profit attributable to equity
4,556,305 3,725,085 22.3%
shareholders of the Company
Basic earnings per share 0.41 0.34 20.6%
Diluted earnings per share 0.41 0.34 20.6%
(2) Impact of IFRS Adjustments on Net Profit
Unit: RMB’000
Net profit attributable to equity shareholders
Items
of the Company
As determined pursuant to PRC accounting standards 4,556,305
As restated in conformity with IFRS 4,556,305
III. Directors’ Report
1. Management Discussion and Analysis
Changes in market environment and the Company’s perspective
During the reporting period, commodity housing transactions across China showed significant rebound
from that of the first quarter of last year, when the market was in a slump. However, monthly growth rate
declined slightly since April. The sales area of commodity housing in China increased by 41.2% and 23.8%
year-on-year in the first and second quarters respectively.
The area of commodity housing sold in the 14 cities (Beijing, Shanghai, Shenzhen, Guangzhou, Tianjin,
Shenyang, Hangzhou, Nanjing, Chengdu, Wuhan, Dongguan, Foshan, Wuxi and Suzhou) surged
significantly by 65.5% year-on-year in the first quarter, but declined by 0.01% in the second quarter when
compared to that of the same period last year. The sharp contrast in performance between the first and
second quarters was due to: on the one hand, sales area in major cities started to increase tremendously
since March last year, resulting in a relatively large comparative figure for the second quarter; on the other
hand, market transactions in the second quarter of 2013 began to slow down, with feverish sales gradually
came to an end.
The approved pre-sales area of commodity housing in the 14 cities in the first half of the year increased by
16.2% year-on-year. When compared with the first quarter, the approved pre-sales area leaped by
approximately 69% in the second quarter. Accelerated launch of new housing units in the second quarter
had ended the shortage in supply at the beginning of the year. The sales area of commodity housing in the
14 cities was 1.43 times of the approved pre-sales area of new housing in the first quarter and 0.90 times of
the approved pre-sales area of new housing in the second quarter. On the whole, the ratio of sales area of
commodity housing to approved pre-sales area of new housing in the 14 cities in the first half of the year
was approximately 1.10, reflecting a relative balance in supply and demand. As at the end of June, the area
of new housing inventory in the aforementioned cities (the area of commodity housing that had been
granted sales permit but had not been sold) fell slightly from 116 million sq m at the end of 2012 to 112
3
million sq m. The duration for the market to absorb housing inventory (based on the moving average sales
area in the last three months) was approximately 10.4 months, which was basically the same as that at the
beginning of the year and continued to remain at a relatively reasonable level.
As sales improved over that of the same period last year, the amount of housing commencing construction
works ceased to decline. The floor area of residential properties commenced construction across China in
2012 dropped by 11.2% year-on-year; the amount rose by 2.9% year-on-year in the first half of 2013.
However, the growth in floor area commencing construction was relatively small. It remains to be seen
whether the amount could return to the 2011 level in the second half of the year.
Increase in land supply and enterprises’ need to replenish their land bank in the second half of 2012 led to a
gradual recovery in land sales. Entering 2013, robust sales in the residential property market further
boosted enterprises’ confidence in investment. In the first half of 2013, site area supplied and sold in 16
cities including Shenzhen, Guangzhou, Dongguan, Foshan, Shanghai, Hangzhou, Nanjing, Suzhou,
Ningbo, Beijing, Tianjin, Shenyang, Dalian, Wuhan, Chengdu, Chongqing increased by 30.4% and 29.5%
year-on-year respectively. As enterprises intensified their investment in first- and second-tier cities, which
saw relatively satisfactory residential property sales, competition for land in these cities became ferocious.
Average price premium continued to rise, and the land markets in certain cities showed signs of overheat.
Judging from the current supply-demand condition of the residential property market, and the relatively
reasonable duration for the market to absorb housing inventory, the market is poised for steady
development with no solid ground for over-optimistic expectations of land price. Moreover, basing on
previous experience, the amount of land supply in the second half of the year will generally be more than
that of the first half. With the increase in land supply in the second half of the year, in particular in the
fourth quarter, the market is expected to become more rational.
With the resumption of new housing construction and increase in land supply, investment in residential
property development in China completed between January and June increased by 20.8% year-on-year,
representing an increase of 8.8 percentage points when compared with that of the same period last year.
Operation and management of the Company
During the reporting period, the Company actively boosted its sales by committing to target at end users
and adhering to its product positioning with a focus on small and mid-sized ordinary commodity housing.
In the first half of the year, the Company realised an accumulative sales area of 7,164,000 sq m and a sales
amount of RMB83.67 billion, representing increases of 18.9% and 33.8% year-on-year respectively.
Residential units with an area under 144 sq m accounted for 90% of all the residential properties sold.
By geographical segment, the Company realised a sales area of 2,121,000 sq m and a sales amount of
RMB26.54 billion in the Guangshen Region surrounding the Pearl River Delta; a sales area of 1,629,000
sq m and a sales amount of RMB22.57 billion in the Shanghai Region surrounding the Yangtze River Delta;
a sales area of 2,052,000 sq m and a sales amount of RMB22.77 billion in the Beijing Region surrounding
the Bohai Rim; a sales area of 1,363,000 sq m and a sales amount of RMB11.80 billion in Chengdu Region,
which comprises core cities of Central and Western Region.
From January to June, the Company realised a booked area of 3,884,000 sq m and booked revenue of
RMB38.22 billion, representing increases of 47.2% and 34.2% year-on-year respectively; the Company
realised revenue of RMB38.94 billion and a net profit of RMB4.56 billion, representing increases of 34.5%
and 22.3% respectively as compared with those of the same period last year.
During the first half of the year, the average booked price of the Company’s property business was
RMB9,842 per sq m, representing a year-on-year decrease of 8.8%. The gross profit margin of the property
business was 25.1%, down by 3.0 percentage points from that of the same period last year. The booked net
profit margin dropped by 0.04 percentage points year-on-year to 15.00%. In the first half of the year, the
Company’s diluted return on equity rose by 0.08 percentage point year-on-year to 6.84%.
In recent years, the Company has been pursuing qualitative growth, and constantly improving its operating
efficiency to mitigate the effect of declining profit margin and achieve year-on-year growth in return on
4
equity. The Company’s diluted return on equity in 2012 was a record high since 1993. Although there may
be a year-on-year decrease in the booked profit margin in 2013, the Company expects the return on equity
will be maintained at a high level.
As at the end of the reporting period, the Company had an area of 16,030,000 sq m sold but not yet booked,
which was stated in the consolidated statements as construction had yet to be completed. These unbooked
resources had a contract amount of approximately RMB176.6 billion. The area and contract amount were
18.3% and 22.9% higher than those at the end of 2012 respectively. This would provide a solid foundation
for realizing future operating results.
The Company actively pushed ahead with its inventory clearance, maintaining a reasonable mix of product
inventory. As at the end of the reporting period, the Company’s inventories included RMB17.63 billion of
completed properties (properties ready for sale), accounting for 5.7% of the total and representing a
decrease of 0.6 percentage point from that at the end of 2012.
During the first half of the year, the actual floor area commenced construction was 9,190,000 sq m ,
representing an increase of 96.3% from those of same period last year, and the actual floor area
commenced construction achieved in the first half of the year represented 55.6% of the full year plan set at
the beginning of the year. The actual floor area completed area was 4,320,000 sq m, representing an
increase of 76.9% from those of same period last year, and the actual completed area achieved in the first
half of the year represented 33.5% of the full year plan set at the beginning of the year respectively. It is
expected that the actual floor area to be completed for the full year will meet the respective targets set at
the beginning of the year.
During the reporting period, the Company continued its emphasis on securing residential land lots meeting
end-user demand in the cities where it had a presence. The Company capitalized on its flexibility in
capturing market opportunities to rationally replenish its land bank. In the first half of the year, the
Company acquired 42 development projects, with a site area attributable to Vanke’s equity holding of
approximately 3,420,000 sq m, corresponding to a planned GFA of approximately 9,250,000 sq m. The
Company adhered to a prudent investment strategy, and maintained the cost of newly acquired projects in
the first half of the year at reasonable levels with an average land premium of approximately RMB2,735
per sq m of floor area. As at the end of the reporting period, the aggregate GFA of the Company’s projects
under planning attributable to Vanke’s equity holding amounted to 41,230,000 sq m, which could basically
meet its development needs within the next two to three years. In addition, the Company was also involved
in some other city redevelopment projects at the end of the reporting period. According to the current
planning, the projects’ GFA attributable to Vanke’s equity holding was approximately 3,030,000 sq m.
Owing to increase in receipts in advance, the Company’s gearing ratio rose by 1.3 percentage points to
79.6% at the end of the reporting period when compared to that at the end of 2012. However, as receipts in
advance did not constitute any actual debt repayment pressure, the Company’s other liabilities (excluding
receipts in advance) as a percentage of total assets was 42.8%, which slightly declined from 43.8% as at
the end of 2012. As a result of proper land bank replenishment and relatively significant increase in floor
area commenced construction, the cash and cash equivalents held by the Company declined from that at
the beginning of the year to RMB36.25 billion at the end of the reporting period.
During the reporting period, three international renowned rating agencies, namely Standard & Poor’s,
Moody’s Investors Service and Fitch Ratings assigned the Company long-term corporate credit ratings of
BBB+, Baa2 and BBB+ respectively. The Company’s prudent operation practice and its corporate
credibility established over the years have gained wide recognition among international investors, which
earned the Company more opportunities and better terms for fund raising in the capital market. In March
2013, the Company’s overseas subsidiary successfully issued US$800 million bonds, with a 5-year term,
which became listed on The Stock Exchange of Hong Kong Limited. During the reporting period, the
Company’s overseas subsidiary also established a medium-term notes programme. The Company’s
international financing ability has, thus, been further enhanced.
5
During the reporting period, the Company landed on the Hong Kong, US and Singapore markets through
collaboration with local renowned property developers. The international business ventures are conducive
for widening the Company’s global perspective, strengthening its understanding of overseas mature
markets, learning from the experience of top-notch overseas counterparts, thereby enhancing the
Company’s expertise and scientific management, as well as consolidating its leading position in China.
During the reporting period, the proposal for the change of listing location of the Company’s domestically
listed foreign shares for listing and trading on the main board of The Stock Exchange of Hong Kong
Limited by way of introduction was approved at the Company’s 2013 first extraordinary general meeting.
Application of the proposal is being processed by China Securities Regulatory Commission and The Stock
Exchange of Hong Kong Limited respectively. The Company will continue to actively push forward the
proposal.
2. Operation of the Company
(1) The scope and operations of the Company’s core businesses
The Company specialises in property development with commodity housing as its major products. During
the reporting period, the Company’s sales area and sales amount were 7,164,000 sq m and RMB83.67
billion respectively, representing increases of 18.9% and 33.8% respectively when compared with those of
the same period last year. The Company realized booked area and booked revenue of property projects of
3,884,000 sq m and RMB38.22 billion respectively, representing year-on-year increases of 47.2% and 34.2%
respectively.
Due to variation in the completion schedule of different projects, the completed area from January to June
was 4,320,000 sq m, representing 33.5% of the planned area of 12,900,000 sq m to be completed for 2013.
It is expected that more projects will be completed and booked in the fourth quarter of 2013.
Unit RMB ’000
Revenue Cost of sales Operating profit margin
Sector
Amount Change Amount Change Value Change
1. Core businesses 38,776,957 34.58% 27,431,875 42.47% 24.98% -2.87 percentage point
Including: Property
-2.91 percentage point
development 38,222,663 34.19% 26,951,830 42.18% 25.15%
Property
3.49 percentage point
management 554,294 67.61% 480,045 61.12% 13.40%
2. Other -12.54 percentage poi
businesses 163,852 12.72% 69,589 59.93% 57.53% nt
Total 38,940,809 34.47% 27,501,464 42.51% 25.11% -2.94 percentage point
Note: Business tax and surcharges had been deducted from the operating profit margin
(2) Comparison of major assets & liabilities and key operational guidance
Unit RMB ’000
Change
Item 30-Jun-13 31-Dec-12 Remarks
(+/-)
Total assets 432,522,617 379,094,856 14.09% Expansion of scale of operation
Cash and cash
36,247,513 51,120,224 -29.09% Increase in prepaid deposits
equivalents
Expansion of scale of operation,
Inventory 310,226,348 253,622,152 22.32%
increase in acquired projects
Current loans and
44,854,390 35,557,359 26.15% Change in debt structure
borrowings
Non-current loans and
29,282,031 36,036,070 -18.74% Change in debt structure
borrowings
Trade and other Increase in inter-company
261,904,686 215,529,570 21.52%
payables cooperation accounts
Change
Item Jan-Jun 2013 Jan-Jun 2012 Remarks
(+/-)
Revenue 38,940,809 28,959,560 34.47% Increase in booked area
6
Cost of sales (27,501,464) (19,297,385) 42.51% Increase in booked area
Administrative
(1,230,601) (851,688) 44.49% Increase in sales area
expenses
Profit attributable to
equity shareholders of 4,582,425 3,624,339 26.43% Increase in operating profit
the Company
（3）The Company’s core business by region
During the reporting period, the revenue and profit of the Company’s core business – property business by
region are as follows:
Revenue
Booked area from core Net profit
Percentage Percentage Percentage
(sq m) business (RMB’000)
(RMB’000)
Guangshen Region 1,288,759 33.18% 13,792,645 36.08% 2,453,392 42.78%
Shanghai Region 610,502 15.72% 7,617,805 19.93% 843,576 14.71%
Beijing Region 678,909 17.48% 6,274,479 16.42% 762,572 13.30%
Chengdu Region 1,305,474 33.62% 10,537,734 27.57% 1,675,616 29.22%
Total 3,883,644 100.00% 38,222,663 100.00% 5,735,155 100.00%
Note. During the reporting period, the cities in which the Company had booked projects included Shenzhen, Guangzhou,
Dongguan, Foshan, Zhuhai, Zhongshan, Changsha, Xiamen, Fuzhou, Sanya, Huizhou, Qingyuan in Guangshen region;
Shanghai, Nantong, Hangzhou, Fuyang, Suzhou, Wuxi, Yangzhou, Nanjing, Zhenjiang, Ningbo, Nanchang, Wuhu in
Shanghai region; Beijing, Tangshan,Tianjin, Shenyang, Anshan, Fushun, Dalian, Changchun, Jilin, Qingdao, Yantai in
Beijing region, and Chengdu, Chongqing, Wuhan, Xi’an, Guiyang, Kunming in Chengdu region.
3. Investment of the Company
(1) Use of proceeds from the capital market
Public issue of A Shares in 2007
Having obtained the approval from the relevant authorities, the Company issued a prospectus regarding the
public issue of A shares on 22 August 2007. The Company issued 317,158,261 shares (par value: RMB1
per share) at an issue price of RMB31.53 per share, raising proceeds of RMB9,999,999,969.33. After
deducting issuing expenses of RMB63,398,268.11, the net proceeds amounted to RMB9,936,601,701.22
and were received on 30 August 2007. Shenzhen Nanfang-Minhe CPA Firm Co., Ltd (深圳南方民和会计
师事务所) had prepared and filed a verification report (Shen Nan Yan Zi (2007) No. 155).
The aforesaid proceeds were used to invest in 11 projects. Details on the investment amount, investment
gain, development progress of the projects as of 30 June 2013 are as follows:
Unit: RMB’000
Amount of net Total amount of funds used for
9,936,600 1,430
proceeds investment during the year
Amount of proceeds
0
with changed usage
Percentage of Accumulated funds used 9,832,930
proceeds with 0%
changed usage
Investment projects Is there any Amount of Funds used for Accumulated Progress of Accumulated Does it achieve Change in
change in funds planned investment funds used application realized estimated feasibility
project for use during the year of funds income income
Everest Town
(former Science City
No 600,000 600,000 100% 142,710 Yes No
H3 Project),
Guangzhou
The Paradiso (former
Jinshazhou No 800,000 800,000 100% 669,430 Yes No
Project), Guangzhou
The Dream Town
(former Nanzhuang No 900,000 900,000 100% 497,930 Yes No
Project), Foshan
7
Zhuhai Hotel Project,
Xiangzhou No 650,000 650,000 100% 976,980 Yes No
District, Zhuhai
West Spring Butterfly
Garden (former
No 700,000 700,000 100% 1,813,510 Yes No
Jiangcun Project),
Hangzhou
Liangzhu Project,
Yuhang District, No 1,700,000 1,700,000 100% 1,172,660 Yes No
Hangzhou
Golden Town
Project, Yinzhou No 1,636,600 1,636,600 100% 890,070 Yes No
District, Ningbo
Wujiefang Project,
No 1,200,000 1,200,000 100% - Yes No
Pudong, Shanghai
Jinse Yazhu (former
Zhonglin Project), No 700,000 700,000 100% 273,010 Yes No
Shanghai
Anpin Street Project,
Baixia District, No 650,000 1430 546,330 84% - Yes No
Nanjing
Stratford (former
Huangjiayu Project), No 400,000 400,000 100% 50,160 No No
Nanjing
Total No 9,936,600 1430 9,832,930 99% 6,486,460 No
(1). The preconstruction of Shanghai Wujiefang was affected by the government’s redirection of roads due to its
location within the Expo area. Construction commenced in the first half of 2011 and sales of the project started
in May 2012. Nanjing Anpin Street Project was not able to commence construction according to schedule, as the
Remarks on delay government was making adjustment to its planning to preserve the city’s heritage. The relevant planning has
and failure to now been approved. The overall development plan of the project was adjusted according to progress.
achieve estimated (2) Stratford Project in Nanjing was sold out and delivered in 2010. Accumulative net profit margin was 8.51%.
income (by project) The project had attained relatively good brand awareness, but the income generated from the project was yet to
reach the estimated level stated in the prospectus, while the rate of return of other projects financed by the raised
proceeds exceeded or is expected to exceed the estimated level. It is expected that the overall return from the
projects financed by the raised proceeds will be higher than the estimated level stated in the prospectus.
Remarks on reasons
and procedures for No changes
changes (by project)
Application of the
As of 30 June 2013, the Company had applied RMB9,832,930,000 of the proceeds in accordance with the
balance of the
prospectus. The amount represented 99.0% of the net proceeds of RMB9,936,600,000. The balance of the
proceeds not yet
proceeds of RMB103,670,000 will be applied in accordance with the progress of project development.
used
(2) Use of capital not from the capital market
1. Major equity investment
(1) During the reporting period, the Company promoted and established 13 new subsidiaries, each with
registered capital of over RMB30 million, with actual investment completed. The details are as
follows:
Registered Actual investment
capital made by Vanke Scope of
No. Newly established companies Currency
(in original (after converting to business
currency) RMB)
Wenzhou Zhongliang Vanke Property Co., Property
1 Ltd. RMB 500,000,000.00 60,000,000.00 development
(温州万科中梁置业有限公司) and operation
Property
Hangzhou Wanzhou Property Co., Ltd. (杭
2 RMB 450,000,000.00 450,000,000.00 development
州万洲置业有限公司) and operation
Qingdao Vanke Real Estate Development & Property
3 Construction Co., Ltd. RMB 430,000,000.00 219,300,000.00 development
(青岛万科房地产开发建设有限公司) and operation
8
Qindao Vanke Yinshengtai Property Co., Property
4 Ltd. RMB 380,000,000.00 265,827,848.53 development
(青岛万科银盛泰置业有限公司) and operation
Property
Beijing Wuhe Vanke Real Estate Co., Ltd.
5 RMB 250,000,000.00 34,500,000.00 development
(北京五和万科房地产开发有限公司)
and operation
Property
Nanjing Vanke Real Estate Co., Ltd.
6 RMB 200,000,000.00 200,000,000.00 development
(南宁市万科城房地产有限公司)
and operation
Property
7 Nanjing Wanrong Real Estate Co., Ltd. (南
RMB 200,000,000.00 200,000,000.00 development
宁市万荣房地产有限公司) and operation
Property
8 Hangzhou Wanjue Property Co., Ltd.
RMB 200,000,000.00 200,000,000.00 development
(杭州万爵置业有限公司)
and operation
Property
9 Ningbo Wanjiang Property Co., Ltd.
USD 134,000,000.00 491,075,000.00 development
(宁波万江置业有限公司)
and operation
Quanzhou Vanke Beifengfang Real Estate Property
10
Co., Ltd. RMB 120,000,000.00 72,000,000.00 development
(泉州市万科北峰房地产有限公司) and operation
Zhengzhou Vanke Meijing Real Estate Property
11 Development Co., Ltd. RMB 100,000,000.00 51,000,000.00 development
(郑州万科美景房地产开发有限责任公司) and operation
Property
12 Suzhou Wanjiang Real Estate Co., Ltd. (苏
RMB 50,000,000.00 50,000,000.00 development
州万江房地产有限公司) and operation
QingdaoVanke Yinshengtai Investment Co., Property
13 Ltd. RMB 50,000,000.00 35,000,000.00 development
(青岛万科银盛泰投资有限公司) and operation
Total 2, 328,702,848.53
In addition, the Company had also promoted and established another 49 new companies, with a total
investment amount of RMB242 million.
(2) The major companies that the Company acquired during the reporting period are as follows:
A. On 29 March 2013, the Company acquired 100% equity interests in Beijing Kaide Xinming Real Estate
Development Co., Ltd. (北京凯德新铭房地产开发有限公司) for a cash consideration of RMB502
million.
B. On 1 January 2013, the Company acquired 60% equity interests in Shenzhen Shangmo Development
Co., Ltd. (深圳市尚模发展有限公司) for a cash consideration of RMB465 million.
C. On 25 January 2013, the Company acquired 80% equity interests in Changsha Vanke Global Village
Property Co., Ltd. (长沙万科环球村置业有限公司) for a cash consideration of RMB346,930,000.
Changsha Vanke Global Village Property Co., Ltd. holds 100% equity interests in Hunan Xiangchengyibai
Property Co., Ltd. (湖南湘诚壹佰置地有限公司) and Changsha Metro Land Property Management Co.,
Ltd (长沙京投银泰物业管理有限公司).
D. On 1 April 2013, the Company acquired 51% equity interests in Hunan Baihui Investment Co., Ltd. (湖
南百汇投资有限公司) for a cash consideration of RMB315,470,000.
E. On 8 January 2013, the Company acquired 51% equity interests in Beijing Jingtou Yangguang Real
Estate Development Co., Ltd. (北京京投阳光房地产开发有限公司) for a cash consideration of
RMB136,180,000.
F. On 21 February 2013, the Company acquired 100% equity interests in Henan Meijingzhizhou Property
Development Co., Ltd. (河南省美景之州地产开发有限公司) for a cash consideration of RMB100
million.
9
During the reporting period, the Company acquired another 11 companies for a total consideration of
RMB286 million.
(3) During the reporting period, in order to support majority-owned subsidaries’ business development, the
Company increased the capital of 12 subsidiaries by RMB1,717 million. Of the total amount, RMB281
million was for Hangzhou Wanhong Property Co., Ltd. (杭州万泓置业有限公司), RMB280 million for
Vanke Property (Hong Kong) Co., Ltd. (万科置业地产(香港)有限公司), RMB249 million for Chengdu
Vanke Longjin Property Co., Ltd. (成都万科龙锦置业有限公司), RMB230 million for Nanjing Wanrong
Property Co., Ltd. (南京万融置业有限公司), RMB230 million for Nanjing East Station Property Co., Ltd.
(南京站东置业有限公司), RMB174 million for Shanghai Wanrong Property Co., Ltd. (上海万茸置业有
限公司) and RMB273 million for other subsidiaries
2. Other investments
During the reporting period, the Company acquired 42 new projects, with a site area attributable to Vanke’s
equity holding of approximately 3,420,000 sq m (planned GFA of approximately 9,250,000 sq m). Details
of the projects are as follows:
GFA
attributable to
Percentage of Site Area Planned GFA
City Project Location Vanke’s equity Progress
shareholding (sq m) (sq m)
holding
(sq m)
Shenzhen Bayifu Project Longgang 100% 28,894 115,040 115,040 Preconstruction
Dongguan Qifeng Road Project Guancheng 100% 53,887 215,547 215,547 Preconstruction
Hecheng Project,
Foshan Shunde 100% 43,748 153,118 153,118 Preconstruction
Chencun, Shunde
Qingyuan Dream Town Qingyuan 100% 493,076 986,153 986,153 Preconstruction
University City
Fuzhou Minhou 51% 213,602 679,836 346,716 Preconstruction
Project
Quanzhou Dream Town Fengze 60% 46,434 162,516 97,510 Preconstruction
Chengji Xinyuan
Changsha Yuhua 80% 335,796 1,007,952 806,361 Preconstruction
Project
Changsha Baihui Project Yuelu 51% 159,393 505,845 257,981 Preconstruction
Under
Shanghai Dream Town Minhang 100% 129,571 310,970 310,970
construction
Phase II South
Nanjing Railway Station Yuhuatai 80% 45,022 133,261 106,609 Preconstruction
Project
Land Lot J, Huaixi
Xuzhou Quanshan 85% 11,733 22,143 18,822 Preconstruction
Project
Haichuangyuan
Nanchang Gaoxin 50% 163,213 350,094 175,047 Preconstruction
Project
Xikezhan Project,
Nanchang Jiulonghu New Honggutan 50% 80,120 180,449 90,225 Preconstruction
District
Mingzhu Road
Ningbo Gaoxin 100% 48,004 105,815 105,815 Preconstruction
Project
Jinyu Zhongyang
(formerly
Wenzhou Ouhai 60% 53,765 144,939 86,963 Preconstruction
known as Nanxian
Huayuan)
Beijing Shanglinwan Project Fangshan 51% 27,528 55,056 28,079 Preconstruction
Beijing Park Avenue Tongzhou 50% 88,767 210,738 105,369 Preconstruction
Land Lot 09,
Beijing Changyang Town, Fangshan 69% 129,510 211,084 145,648 Preconstruction
Fangshan
Beijing Yufu 77 Dongcheng 100% 4,103 15,130 15,130 Preconstruction
Tianzhu Joying City
Beijing Shunyi 56% 17,985 31,051 17,389 Preconstruction
Project
10
Land Lot No
Beijing Tongzhou 50% 61,717 123,434 61,717 Preconstruction
005,Taihu
Jiefang South
Tianjin Hexi 80% 62,205 124,410 99,528 Preconstruction
Road Project
Tianjin Wonderland Xiqing 51% 409,701 502,892 256,475 Preconstruction
Fenghuang New
Tangshan Ershierye Project 48% 88,848 262,552 126,025 Preconstruction
City
Blue Mountain
Dalian Ganjingzi 100% 125,100 214,470 214,470 Preconstruction
Project
Chenghua East
Dalian Shahekou 100% 35,757 63,840 63,840 Preconstruction
Project
Development
Fushun The Paradiso 100% 73,621 294,484 294,484 Preconstruction
District
Yantai Liangjiacun Project Zhifu 51% 341,943 447,139 228,041 Preconstruction
Jinan Dream Town Lixia 50% 191,418 478,545 239,273 Preconstruction
Land Lot B, Jinyu
Jinan Gaoxin 63% 89,596 291,890 183,891 Preconstruction
International
Public Transport
Taiyuan Company’s Land Wanbolin 100% 37,060 177,415 177,415 Preconstruction
Lot
Chengdu Music Park Chenghua 60% 152,852 759,036 455,422 Preconstruction
Chengdu Golden Paradise Xindu 100% 111,166 331,161 331,161 Preconstruction
East Lake
Wuhan Chenghua Jingyuan Development 50% 89,664 410,000 205,000 Preconstruction
Zone
East Lake
Wuhan Jiayuan Development 100% 67,273 324,100 324,100 Preconstruction
Zone
Kunming Glamorous City Guandu 55% 417,919 1,724,080 948,244 Preconstruction
Guiyang No 5 Park Yunyan 70% 10,927 100,906 70,634 Preconstruction
Chongqing Panlong Project Jiulongpo 100% 31,769 142,960 142,960 Preconstruction
Mei Jing Longmen
Zhengzhou Guancheng 51% 79,457 353,018 180,039 Preconstruction
Dragon Hall
Meiming
Zhengzhou Technology Gaoxin 51% 130,817 457,863 233,510 Preconstruction
Industrial Park
Phase II of King
Urumqi New District 82% 37,364 130,776 107,236 Preconstruction
Metropolis
Urumqi Rancho Santa Fe Sayibak 60% 203,529 203,529 122,117 Preconstruction
Total 5,023,851 13,515,236 9,250,072 —
From the end of the reporting period to the date of announcement of this report, the Company acquired 14
new projects, with site area attributable to Vanke’s equity holding of approximately 650,000 sq m,
corresponding to a planned GFA attributable to Vanke’s equity holding of approximately 1,790,000 sq m.
Details are as follows:
GFA
attributable to
Percentage of Site Area Planned GFA
City Project Location Vanke’s equity Progress
shareholding (sq m) (sq m)
holding
(sq m)
Zhujiang Tunnel, Liwan Preconstruction
Guangzhou Liwan 100% 7,141 30,706 30,706
(荔湾珠江隧道口项目)
Liaobufu Hill Project Preconstruction
Dongguan Liaobu Town 100% 68,431 150,547 150,547
(寮步凫山项目)
Expanded Land Lot 205, Preconstruction
Changsha Jingtou Yintai Yuhua 80% 10,857 32,672 26,138
(京投银泰 205 扩容地块)
Land Lot at the eastern end Preconstruction
Pudong New
Shanghai of Zhangjiang High 100% 79,548 218,978 197,080
District
Technological Park
11
(张江高科技园区东侧地
块)
Economic Preconstruction
Chengnan Road Project
Jiaxing Development 100% 31,945 67,083 67,083
(城南路项目)
Zone
Phase I Minghuang Project Preconstruction
Changzhou Wujin 100% 93,847 234,618 234,618
(鸣凰一期项目)
Land Lot No. 2013-28, Preconstruction
Huaihai West Road Project
Xuzhou Quanshan 85% 20,744 76,779 65,262
(淮海西路项目 2013-28 号
地)
Qianjiang New City Projet Preconstruction
Hangzhou Jianggan 100% 21,915 76,703 76,703
(钱江新城项目)
Dream Town East Project Preconstruction
Ningbo Zhenhai 49% 70,795 127,431 62,441
(万科城东项目)
Daxing Core New City Preconstruction
Beijing Project Daxing 50% 64,323 126,996 63,498
(大兴核心新城项目)
Taohuayuan Project Preconstruction
Qingdao Chengyang 80% 129,032 230,194 184,155
(桃花源项目)
East Lake Preconstruction
Jincheng
Wuhan Development 100% 38,290 202,620 202,620
(锦程)
Zone
Xian 35 Mu Project, Gaoxin Gaoxin 100% 23,800 150,000 150,000 Preconstruction
Vanke Meijing Dream Town Preconstruction
Zhengzhou Gaoxin 51% 190,319 542,528 276,689
(万科美景万科城)
Total 850,987 2,267,855 1,787,540 —
Among the abovementioned projects, certain projects may be developed jointly with external partners in
future. As such, the respective equity interests held by Vanke in the relevant projects may alter. The
percentage of shareholdings disclosed above is only for periodical reference for investors.
4. Comparison between the actual operating results during the reporting period and the
planned targets at the beginning of the period
The Company’s actual operating results during the reporting period did not deviate much from the planned
targets at the beginning of the period.
IV. Significant events
1. Corporate governance
As one of the first batch of companies listed in the PRC, the Company has always abided by its corporate
values: to pursue simplicity, to be transparent, to be regulated and to be responsible. It continues to explore
ways to raise its corporate governance standard. With a foundation built on sound corporate governance,
Vanke has established long-standing trust and win-win relationships with its investors.
During the reporting period, the Company continued to persist in maintaining complete independence from
its single largest shareholder, China Resources Co., Limited (“CRC”), and its connected companies in
respect of business operation, staff, assets, organisation and finance, to ensure independence in its business
integrity and operation autonomy. The Company had not taken any actions that violated the code on
corporate governance practices such as reporting to CRC on any undisclosed information.
The Company had strengthened the management of inside information. During the reporting period, no
insider who had access to inside information had violated the laws to engage in insider trading. The
Company’s corporate governance did not deviate from the relevant requirements of China Securities
Regulatory Commission.
As a key pilot company to implement the Basic Internal Control Norms for Enterprises and its
implementation guidelines, the Company continued to adopt a pragmatic internal control approach to
establish the internal control process in a systematic manner. It also continued to promote internal control
of specialized units according to the monthly theme of internal control, and conducted internal control
12
inspection and recommended the best internal control practices. Pursuant to the requirements for change of
listing location of the Company’s B shares to The Stock Exchange of Hong Kong Limited (“SEHK”), the
Company will further revise and fine-tune its internal control system with reference to the requirements of
the rules of SEHK.
2. Implementation of the Company’s proposal on dividend distribution for the previous
year and profit appropriation for the interim period of 2013
Proposal on dividend distribution for the year 2012 was approved at the 2012 annual general meeting held
on 20 March 2013. The proposal on the dividend distribution was: based on the total share capital as at the
close of the market on the record date of the Company, a cash dividend of RMB1.8 (including tax) would
be distributed for every 10 existing shares held. At the time of distribution, a cash dividend of RMB1.71,
after deducting a withholding income tax at a 5% rate, was paid for every 10 existing shares beneficially
held by individual shareholders of A shares, investment funds of A shares and individual shareholders of B
shares. When a shareholder transfers his/her shares, China Securities Depository and Clearing Corporation
Limited will, according to the Notice from the Ministry of Finance, the State Administration of Taxation
and China Securities Regulatory Commission Regarding Policies of Implementation of Differential
Individual Income Tax on Bonus Shares and Dividends of Listed Companies (Cai Shui [2012] No. 85),
withhold the outstanding amount of tax that has not been withheld and paid in accordance with the actual
tax amount to be paid by the shareholder, which is calcaluated basing on the holding period of the shares,
and such outstanding balance will be paid by the Company on behalf of the shareholder. A cash dividend of
RMB1.62, after deducting a withholding income tax at a 10% rate, was paid for every 10 existing shares
beneficially held by non-resident enterprise shareholders of A and B shares (including qualified foreign
institutional investors of A shares).
The aforesaid proposal was implemented after the reporting period: the record date for A shares was 15
May 2013, and ex-dividend date was 16 May 2013, while the last trading day of B shares was 15 May
2013, ex-dividend date was 16 May 2013, and the record date was 20 May 2013. For details on the
implementation of the proposal, please refer to the announcement published in China Securities Journal,
Securities Times, Shanghai Securities News, Securities Daily, www.cninfo.com.cn and Hong Kong’s
website www.irasia.com on 8 May 2013.
The Company will not carry out profit appropriation or the transfer of capital surplus reserve to share
capital for the interim period of 2013.
3. Implementation of the A-Share Stock Option Incentive Scheme
The A-Share Stock Option Incentive Scheme (Revised Draft) of China Vanke Co., Ltd. (“Stock Option
Incentive Scheme”) had been approved at the first extraordinary general meeting of the Company in 2011.
On 25 April 2011, being the grant date of stock options under the A-Share Stock Option Incentive Scheme,
the beneficiaries obtained their stock options.
During the reporting period, a total of 18.172 million stock options were exercised by the beneficiaries.
Owing to the reasons such as resignation of certain beneficiaries, 1.658 million stock options became
invalid during the reporting period. As at the end of the reporting period, there were 73.337 million stock
options that had been granted but yet to be exercised.
The Company implemented the proposal on dividend distribution for 2012 on 16 May 2013, and
distributed a cash dividend of RMB1.8 (including tax) to all shareholders for every 10 existing shares held.
Pursuant to the approval of the resolution regarding granting the Board the authority to handle matters
relating to the Company’s Stock Option Incentive Scheme at the first extraordinary general meeting in
2011, the Board resolved to make corresponding adjustment of the exercise price of the A-share stock
options. The adjusted exercise price was RMB8.48.
According to the authority granted to the Board at a shareholders meeting, on 19 April 2013, the Board
considered and passed the resolution regarding the fulfillment of the vesting conditions of the second
exercise period for A-Share Stock Option Incentive Scheme. In May 2013, the remuneration and
nomination committee of the Board voted, via correspondence, and confirmed 640 beneficaries of the
Scheme had met the conditions for exercising the stock options in the second exercise period. Upon the
13
completion of the relevant procedures for approval, the Stock Option Incentive Scheme entered the second
exercise period on 29 May 2013, and the beneficiaries of the Scheme can, between 29 May 2013 and 24
April 2015, exercise 30% of the options they hold.
Accounting treatments for the A-Share Stock Option Incentive Scheme as equity-settled share-based
payment are carried out in accordance with the “Accounting Standard for Business Enterprises No. 11 –
Share-based payment”. On each balance sheet date within the vesting period, the Company shall include,
based on the best estimate of the number of vested stock options, the services obtained from the
beneficiaries during the period in the costs and expenses as well as in the capital surplus reserves at the fair
value of the stock options on the grant date. During the exercise period of the stock options, the Company
shall make no adjustment to the relevant costs, expenses or the capital surplus reserves which have been
recognised. On each balance sheet date, based on the actual number of options exercised, the capital
surplus reserves recognised shall be settled.
The Stock Option Incentive Scheme adopts Binomial tree option pricing model to estimate the fair value of
the stock options on the grant date. According to the straight-line method, the cost of stock options of
RMB32.577 million amortised by the Company for the first, second and third exercise periods was
included in the costs and expenses during the reporting period, while the Company’s capital surplus
reserves increased by RMB32.577 million. Please refer to the notes to the financial statements for details
on the accounting treatments.
The introduction of the Stock Option Incentive Scheme will complement the Company’s incentive
instruments with a long-term plan, while establishing a check-and-balance mechanism between
shareholders and professional management team through linking up their interests. The Scheme will
further improve the Company’s corporate governance structure and strengthen the Company’s
competitiveness.
For details, please refer to the announcements published on China Securities Journal, Securities Times,
Shanghai Securities News, Securities Daily, and www.cninfo.com.cn on 23 April 2013, 14 May 2013 and
29 May 2013.
4. Material Litigation, Arbitration and Issues of Media Interest
During the reporting period, the Company did not involve in any material litigation or arbitration, or any
issues that attract negative media interest.
5. Major Acquisition and Disposal of Assets
During the reporting period, the Company did not have any major acquisition or disposal of assets.
6. Other investments
6.1 Investment of securities
□Applicable √Not applicable
6.2 Equity interests held in other listed companies
Unit: RMB
Booked Changes in equity
Gains/(losses)
Initial value as at attributable to
Stock Stock Percentage of during the
investment the end of equity holders
code short name shareholdings reporting
amount the reporting during the
period
period reporting period
600751 Tianjin Marine 143,600.00 0.02% 741,300.00 - 448,275.00
Shipping Co., Ltd.
Total 143,600.00 0.02% 741,300.00 - 448,275.00
Note: Equity interests held in Tianjin Marine Shipping Co., Ltd are legal person shares held by the Company over the years.
The company has recently undergone share reform.
6.3 Shareholding in non-listed financial corporations and companies planning for listing
Nil
14
7. Major Connected Transactions
On 11 May 2012, the Company’s 2011 annual general meeting authorised the Board to determine, within
RMB10.59 billion, the continuous cooperation with China Resources (Holdings) Co., Ltd and its
connected companies (collectively “CRH”), including entering into a loan agreement with China
Resources Bank of Zhuhai Co., Ltd., using the funds under China Resources SZITIC Trust Co., Ltd. and
Harvest Capital Partners Limited, and joint investment with China Resources SZITIC Trust Co., Ltd. and
Harvest Capital Partners Limited. The granted authority is valid for a one-year period.
During the reporting period, Shanghai Vanke Investment Management Co., Ltd. (“Shanghai Vanke
Investment”), a wholly-owned subsidiary of the Company, transferred its 39% equity interests of Shanghai
Hongqiao Project No. 11 to Shenzhen Huawei Xincheng No. 1 Partnership Enterprise (limited partnership)
(深圳市華威欣城一號投资合伙企业) (“Huawei Xincheng”) to satisfy the development needs of
Shanghai Hongqiao Project No. 11. Both parties will jointly develop Shanghai Hongqiao Project No. 11.
Harvest Capital Partners Limited and China Resources SZITIC Trust Co., Ltd. respectively hold 51 per
cent and 49 per cent equity interests in Shenzhen Huawei Yongsheng Management Co., Ltd. (深圳市華威
永盛企業管理有限公司), which is a general partner of Huawei Xincheng.
On 20 March 2013, the Company’s 2012 annual general meeting authorised the Board to decide on the
continuous cooperation with CRH. The validty of the granted authority was adjusted to two years, while
the aggregate authorised amount was adjusted to not more than RMB12.7 billion per year (i.e. not more
than 20% of the Company’s audited net assets value as at the end of 2012). During the reporting period, no
new cooperation within the scope of granted authority had been implemented.
The cooperation with CRH will help fully leverage CRH’s financial strengths and platform, which will
help broaden the Company’s financing channels, strengthen its ability to avert risk and enhance return on
assets.
8. Major Contracts and Their Implementation
(1) During the reporting period, the Company was not subject to any material entrustment,
sub-contracting or leasing arrangements involving assets of other companies, nor were any other
companies entitled to any entrustment, sub-contracting or leasing arrangements involving assets of the
Company.
(2) During the reporting period, the Company did not have any financial entrustment.
(3) Details on the new guarantees made by the Company during the reporting period are as follows:
Guarantor Principal of the
(% of equity guarantee (% of Guarantee Details of the Guarantee
No Remarks
interest held equity interest held Amount guarantee Period
by Vanke ) by Vanke )
Provided a guarantee
Dongguan Xinwan for a bank loan of From 11
Shenzhen Vanke
Real Estate RMB25.5 RMB50 million in January 2013
1 Real Estate Co.,
Development Co., Ltd. million proportion to the to 11 January
Ltd. (100%)
(51%) Company’s equity 2015
holding
Provided a guarantee
Guangzhou for a bank loan of From 16
Guangzhou Wanshang
Vanke Real RMB11.22 RMB34 million in January 2013
2 Real Estate Co., Ltd.
Estate Co., Ltd. million proportion to the to 5 December
(33%)
(100%) Company’s equity 2015
holding
15
Ningbo Zhongwan
Property Co., Ltd. Provided a guarantee
Ningbo Vanke
(49% held by Vanke, for a bank loan of From 25
Real Estate
15% of which were RMB375,00 RMB2.5 million in January 2013
3 Development
held through Ningbo 0 proportion to the to 5 December
Co., Ltd.
Vanke Real Estate Company’s equity 2014
(100%)
Development Co., holding
Ltd.)
Provided a guarantee
Beijing Zhuzong
Beijing Vanke for a loan of RMB1 From 17 May
Vanke Real Estate RMB500
4 Company billion in proportion 2013 to 17
Development Co., Ltd. million
Limited (100%) to the Company’s May 2016
(50%)
equity holding
Continue the
Provided a guarantee From 30 guarantee
Beijing Kaide
Beijing Vanke for a loan of RMB207 September obligations
XinmingReal Estate RMB207mil
5 Company million in proportion 2011 to 30 undertaken by
Development Co., Ltd. lion
Limited (100%) to the Company’s September the original
(100%) equity holding 2013 shareholder of
the principal
Vanke Real Provided a guarantee From 13
Bestgain Real Estate
Estate (Hong US$905 for the principle and March 2013 to
6 Kong) Company
(Hong Kong) Limited
million interest of US$800 13 March
(100%)
Limited (100%) million 2018
From 28
Vanke Property Provided a guarantee
WK Property Financial HK$300 March 2013 to
7 (Overseas)
Limited (75%) million
for a bank loan of
28 December
Limited (75%) HK$300 million
2015
From 16 April
2013 to
Vanke Property withdrawal
Wkdeveloper Sig I Provided a guarantee
(Hong Kong) SGD135.51 from the
8 Company
Private Limited
million
for a bank loan of
project or
(100%) SGD135.51 million
Limited (100%) settlement
date of the
project
During the reporting period, the amount of new guarantees provided by the Company and its
majority-owned subsidiaries was RMB7,232 million, and the amount of guarantees discharged was
RMB5,666 million. There was a slight change in the outstanding amount of guarantees at the beginning of
the reporting period due to changes in exchange rates. As at the end of the reporting period, the outstanding
amount of guarantees provided by the Company was RMB12,681 million, accounting for 19.87% of the
audited equity attributable to shareholders of the Company as at the end of 2012. The outstanding amount
of guarantees provided by the Company and its majority-owned subsidiaries for other majority-owned
subsidiaries was RMB12,355 million; the outstanding amount of guarantees provided by the Company and
its majority-owned subsidiaries for associates and joint venture companies was RMB326 million. The
Company and its majority-owned subsidiaries did not have any external guarantees.
The Company did not provide guarantee for shareholders, beneficial controller and its connected parties,
nor did it have any overdue guarantees or guarantees involving litigation.
9. Specific elaboration and independent opinions of the independent directors on the use
of capital and external guarantees by connected parties
There had been no non-operational use of capital by the controlling shareholder or other connected parties
of the Company.
During the reporting period, the Company, in strict compliance with the related rules, regulated its external
guarantee activities in order to control risks. There was no violation against the “Notice regarding the
16
regulation of external guarantees by listed companies”. The Company’s guarantees had been made to meet
its production and operational needs and the requirements for reasonable use of capital. The procedures for
determining the provision of guarantees are legal and reasonable, without prejudice to the interests of the
Company and its shareholders.
10. Undertakings
China Resources National Corporation (“CRNC”), the parent company of CRC, being the Company’s
original single largest shareholder and the present single largest shareholder, gave a significant undertaking
to the Company in 2001: CRNC would provide as much support to the Company as it did in the past, as
long as such support was beneficial to the Company’s development, and that it would remain impartial in
the event of any horizontal competition between the investment projects of the Company and that of
CRNC and its subsidiaries, and in the event of any disagreements or disputes arising from horizontal
competition. CRNC had fulfilled its undertaking.
11. Details on the Company’s investor meetings
Issues
discussed
Type of meeting Date Location Approach Types of investors
and information
provided
BNP Face to face Investors including securities companies, (I) Major issues
2013.1 Hong Kong
meeting meeting funds, etc discussed:
Nomura (1) The
Face to face Investors including securities companies, Company’s
Securities 2013.1 Hong Kong
meeting funds, etc daily
meeting
Credit Suisse Face to face Investors including securities companies, operations;
2013.1 Hong Kong (2)The
meeting meeting funds, etc
Face to face Investors including securities companies, Company’s
Barclays meeting 2013.1 Hong Kong development
meeting funds, etc
Guotai Junan Face to face Investors including securities companies, strategies;
2013.1 Shenzhen (3)The
meeting meeting funds, etc
CLSA Securities Face to face Investors including securities companies, Company’s
2013.1 Hong Kong opinion on the
meeting meeting funds, etc
changes in the
Hong Kong, Face to face
Annual results Investors including securities companies, industry.
2013.2 Shenzhen (Shanghai, meeting
presentation funds, individual investors, etc (II) Major
Beijing)
information
CLSA Securities Face to face Investors including securities companies,
2013.2 Hong Kong provided:
meeting meeting funds, etc
Published
Credit Suisse Face to face information
Investors including securities companies,
Securities 2013.3 Hong Kong meeting including the
funds, etc
meeting Company’s
JP Morgan Face to face Investors including securities companies, regular reports.
2013.3 Hong Kong
meeting meeting funds, etc
CLSA Securities Face to face Investors including securities companies,
2013.3 Hong Kong
meeting meeting funds, etc
Face to face Investors including securities companies,
Barclays meeting 2013.3 Hong Kong
meeting funds, etc
Credit Suisse Face to face
Investors including securities companies,
Securities 2013.3 Hong Kong meeting
funds, etc
meeting
Shenyin Wanguo Face to face Investors including securities companies,
2013.3 Shenzhen
meeting meeting funds, etc
Face to face Investors including securities companies,
CICC meeting 2013.4 Beijing
meeting funds, etc
DBS Vickers Face to face Investors including securities companies,
2013.4 Hong Kong
meeting meeting funds, etc
Face to face Investors including securities companies,
HSBC meeting 2013.4 Hong Kong
meeting funds, etc
Face to face Investors including securities companies,
UBS meeting 2013.4 Hong Kong
meeting funds, etc
17
Macquarie Face to face Investors including securities companies,
2013.5 Hong Kong
meeting meeting funds, etc
CLSA Securities Face to face Investors including securities companies,
2013.5 Beijing
meeting meeting funds, etc
Morgan Stanley Face to face Investors including securities companies,
2013.5 Hong Kong
meeting meeting funds, etc
China Securities Face to face Investors including securities companies,
2013.5 Zhengzhou
meeting meeting funds, etc
Korea
Investment & Face to face Investors including securities companies,
2013.5 Beijing
Securities meeting funds, etc
meeting
Orient Securities Face to face Investors including securities companies,
2013.5 Shanghai
meeting meeting funds, etc
Shenyin Wanguo Face to face Investors including securities companies,
2013.5 Xiamen
meeting meeting funds, etc
Face to face Investors including securities companies,
Barclays meeting 2013.5 Hong Kong
meeting funds, etc
Guotai Junan Face to face Investors including securities companies,
2013.5 Shanghai
meeting meeting funds, etc
JP Morgan Face to face Investors including securities companies,
2013.6 Beijing
meeting meeting funds, etc
Face to face Investors including securities companies,
Guosen meeting 2013.6 Beijing
meeting funds, etc
CLSA Securities Face to face Investors including securities companies,
2013.6 Hong Kong
meeting meeting funds, etc
China Merchants
Face to face Investors including securities companies,
Securities 2013.6 Shenzhen
meeting funds, etc
meeting
Face to face Investors including securities companies,
CICC meeting 2013.6 Shenzhen
meeting funds, etc
Shenyin Wenguo Face to face Investors including securities companies,
2013.6 Hong Kong
meeting meeting funds, etc
Huatai Securities Face to face Investors including securities companies,
2013.6 Nanjing
meeting meeting funds, etc
Haitong
Face to face Investors including securities companies,
Securities 2013.6 Dalian
meeting funds, etc
meeting
Citigroup Face to face Investors including securities companies,
2013.6 Hong Kong
meeting meeting funds, etc
Note: The above-mentioned meetings included one-on-one meetings, small group meetings and large group presentation. The
Company received or met with investors from over 50 companies.
Shenzhen, Citigroup, Shenyin Wanguo, Guotai Junan, CITIC
Dongguan, Securities, Mizuho Securities, UBS Securities, JP
Guangzhou, Foshan, Morgan, Deutsche Bank, Morgan Stanley, Naito
Sanya, Fuzhou, Securities, CITIC Construction Securities, Dongxing
Xiamen, Changsha, Securities, Nomura Securities, CICC, Barclays,
Shanghai, Jiading, Goldman Sachs Gaohua , Guosen Securities, CLSA,
Suzhou, Nanjing, HSBC, Shanghai Securities, Galaxy Securities, Credit
During Hangzhou, Hefei, Suisse Securities, GF Securities, Goldman Sachs,
Small group
Securities the Ningbo, Wenzhou, Standard Chartered Bank, Macquarie, BOCI,
or
companies reporting Beijing, Tangshan, Everbright Securities, Changjiang Securities, BNP,
one-on-one
period Tianjin, Shenyang, Jefferies, DBS Vickers (HK) Ltd, Kim Eng etc.
Changchun, Dalian,
Anshan, Qingdao,
Jinan, Taiyuan,
Wuhan, Chengdu,
Chongqing, Xi'an,
Guiyang, Kunming,
Zhengzhou, etc.
18
Ping An Asset, Orient Securities Asset Management,
Boshi Fund, Southern Fund, Rongtong Fund
Management, China Int’l Fund, GF Fund Management,
E Fund, China Universal Asset Management (HK) Co.,
Ltd, WanJia Asset, Taikang Asset, China AMC, Harvest
Fund, Dacheng Fund, ICBC Credit Suisse Asset, China
Life, Invesco Great Wall Fund, Yinhua Fund, Fortis
Haitong Fund, Hua An Fund, China Universal Asset
Management, Penghua Fund, Huatai-PineBridge
Investments, Shenyin Wenguo Paris Fund, UBS SDIC
Fund, , Argyle Street Management,Fidelity,Dodge &
Cox,Matthews International Capital Management,BEA
Union,Templeton,RCM Asia Pacific Limited,Myriad
Asset Management,Capital Research,Franklin
Templeton Investments (Asia) Limited,Goldman Sachs
Asset Management International,Keywise Capital
Management (HK) Limited,Lazard Asset Management
LLC,Morgan Stanley Investment Management
Inc,Pictet Asset Management
SA,PLATINUM,Columbia
Shenzhen, Management,STICHTING,T Rowe Price,Lion Global
Dongguan, Investors,Baring Asset Management,Mirae Asset
Guangzhou, Foshan, Global,SAC Capital,Geosphere,Capital
Sanya, Fuzhou, Land,Invesco,Aberdeen,Alliance
Xiamen, Changsha, Bersntein,ACQ,Wellington Asset mgt,Libra Capital
Shanghai, Jiading, Management (HK) Ltd,Zeal Asset,Standard
Suzhou, Nanjing, Pacific,Primero Investment Limited,UG
Funds and other
During Hangzhou, Hefei, Funds,Chinarock Capital Management,Neuberger
investment Small group
the Ningbo, Wenzhou, Berman,EFMI,Prime Capital,Goldman Sachs Asset
companies and or
reporting Beijing, Tangshan, Management,Value Partners,Seatown,Henderson
individual one-on-one
period Tianjin, Shenyang, Global Investors,JP Morgan Asset,Asuka Corporate
investors
Changchun, Dalian, Advisory,BT Investment,CIMB-Principal Asset
Anshan, Qingdao, Management Berhad,Ashmore Group,Financiere de l’
Jinan, Taiyuan, Echiquier,Emerging Markets,Amundi (HK),Alphinity
Wuhan, Chengdu, Investment,Brookside Capital,Comgest,Hillhouse
Chongqing, Xi'an, Capital Mgmt Ltd,Sumitomo Mitsui Trust &
Guiyang, Kunming, Banking,Invesco,Lloyd George Investment
Zhengzhou, etc. Management,Harvest Global Investments Limited,SFM
HK Management,Kynikos
Associates,Temasek,Manulife Asset
Management,Opportunity Asset
Management,Newfoundland Capital Management,SPX
Gestao de Recursos,Caisse De Depot Et Placement Du
Quebec,JK Capital Management Ltd,Orion Asset
Management,Crosby Advisors,Tradewinds Global
Investors,Trilogy Global Advisors,AXA Investment
Managers UK Ltd,Legal & General Investment Mgt
Ltd,Credit Suisse Hedging-Griffo Servicos,Carnegie
AM,Engineers Pension Fund,VKR A/S,BI Asset
Management Fondsmaeglerselskab,Lundbeck
Foundation,GE Asest Management,Hermes Investment
Management,Schroders,Harris
Associates,Och-Ziff,PSE INVESTMENT,JCP
Investment Partners,Future Fund,Victoria
1522,American Century,Luminus Management,Lion
Global Investors,Colonial First State Asset,APAC
Resources Capital,Tiger Management,LBN Investmen
etc.
12. Corporate bonds and related matters
During the reporting period, the Company’s issued bonds, including “08 Vanke G1” (Bond code: 112005)
and “08 Vanke G2” (Bond code: 112006), was tracked and rated by China Chengxin Securities Rating Co.,
Ltd. (中诚信证券评估有限公司) (“China Chengxin”). The rating company continued to assign AAA
credit ratings to the Company’s secured corporate bonds “08 Vanke G1” and non-secured corporate bonds
“08 Vanke G2” as well as the Company’s overall corporate credit. China Chengxin gave a stable outlook
19
rating to the Company. During the reporting period, the Company maintained a good credit standing.
During the reporting period, the Shenzhen branch of China Construction Bank Corporation, being the
guarantor of the secured corporate bonds “08 Vanke G1” issued by the Company, had safe assets and stable
operating results, with no material change in credit standing.
13. Progress of the change of listing location of the Company’s domestically listed
foreign shares (“B shares”) for listing and trading on the main board of The Stock
Exchange of Hong Kong Limited (“SEHK”) by way of introduction
On 19 January 2013, the Company announced the proposal for the change of listing location of China
Vanke Co., Ltd.’s domestically listed foreign shares for listing and trading on the main board of The Stock
Exchange of Hong Kong Limited by way of introduction. The proposal was approved at the Company’s
2013 first extraordinary general meeting on 4 February. With regard to the application for the proposed
change, the Company obtained a confirmation letter on 7 February regarding the processing of the
application for administrative licence issued by China Securities Regulatory Commission. On 15 February,
the Company received a confirmation letter from the SEHK. After the Company announced its 2012
annual results on 28 February, the Company submitted additional information including the 2012 annual
report. The relevant application is currently in progress.
The change of listing location of the Company’s B shares to the main board of SEHK is conducive to
enhancing the Company’s international reputation, and enable the Company to leverage overseas resources
and markets to strengthen its core competitiveness.
14. Investment in derivatives
In order to limit the risk associated with the fluctuations of
interest rate, the Company entered into an interest rate swap
Remarks on risk analysis and management of derivative (“IRS”) agreement to hedge floating rate foreign currency loan.
positions during the reporting period (including but not The Company would charge the counterparty an interest
according to a floating rate, in order to pay the floating-rate
limited to market risk, liquidity risk, credit risk, interest to the original lender, while paying a fixed rate to the
operational risk and legal risk, etc.) counterparty. In terms of the term and amount of the foreign
currency loan, IRS limits the risk of fluctuations of interest rate
through fixed forward rate.
Change in market price or fair value of the derivatives The effect of the change in the IRS value on the Company’s
invested during the reporting period, as well as the profit and loss during the reporting period amounted to
method, related assumptions and parameters used to RMB(29,400). The value of the IRS was determined based on
analyse the fair value of derivatives should be disclosed the fair value assessed on 30 June 2013
Remarks on whether there has been a material change in
the accounting policy and accounting measurement
principles for the Company’s derivatives during the Nil
reporting period as compared with those of the previous
reporting period
The Company’s independent directors are of the view that
financial instruments such as IRS prevent the possible loss
Special advice on derivative investment and risk control
associated with foreign currency loan in the event of
by independent directors, sponsors or financial advisors
significant fluctuations in interest rate. The relevant
arrangement of the Company had been prudent and reasonable.
Derivative positions as at the end of the reporting period
Unit: RMB’000
Contract amount
as a percentage of the
Contract amount as Contract amount Profit/loss during
Company’s equity
Type of contracts at the beginning of as at the end of the reporting
attributable to
the period the period period
shareholders as at the
end of the reporting period
Interest rate swap
2,553,798.7 2,170,577.3 (29.4) 2.46
(IRS) agreement
Total 2,553,798.7 2,170,577.3 (29.4) 2.46
20
V. Change in Share Capital and Shareholdings of Major Shareholders
1. Change in Share Capital (as at 30 June 2013)
Unit: Share
Before the Change Increase / After the Change
Class of Share Percentage of decrease Percentage of
Quantity (+, -） Quantity
shareholding shareholding
I. Restricted Shares
1. State-owned and
State-owned legal person
shares
2. Shares held by domestic
non-State-owned legal
persons
3. Shares held by domestic
18,402,673 0.17% +5,425,588 23,828,261 0.22%
natural persons
4. Shares held by foreign
investors
Total number of restricted
18,402,673 0.17% +5,425,588 23,828,261 0.22%
shares
II. Non-restricted Shares
1. RMB-denominated
9,662,194,977 87.87% +12,746,263 9,674,941,240 87.84%
ordinary shares (A shares)
2. Domestic listed foreign
1,314,955,468 11.96% 0 1,314,955,468 11.94%
shares (B shares)
Total number of
10,977,150,445 99.83% +12,746,263 10,989,896,708 99.78%
non-restricted shares
III. Total Number of Shares 10,995,553,118 100.00% +18,171,851 11,013,724,969 100.00%
Note: As there were changes in the Company’s senior management staff during 2012, while some of the senior management
staff exercised A-share stock options during the reporting period, the Shenzhen office of China Securities Depository &
Clearing Corporation Limited, according to regulations, lifted and imposed trading restrictions on shares held by the related
senior management staff accordingly. As a result, the number of restricted shares and non-restricted shares of the Company
changed accordingly.
2. The shareholdings of the Company’s top 10 shareholders and the shareholdings of the
top 10 holders of non-restricted shares (as at 30 June 2013)
Unit: Share
Total number of shareholders 683,703 (including 666,684 holders of A shares and 17,019 holders of B Shares)
Shareholdings of the top 10 shareholders
Classification Percentage of Total Change Number of Number of
of shareholder shareholdings number of (+/-) restricted pledged or
Name of shareholder shares held during the shares held lock-up
reporting shares
period
State-owned
CRC 14.70% 1,619,094,766 0 0 0
legal person
China Life Insurance Company
Limited-Dividend
Others 1.37% 151,360,847 11,977,364 0 0
Distribution-Personal
Dividend-005L-FH002 Shen
Liu Yuansheng Others 1.21% 133,791,208 0 0 0
China Minsheng Banking Corp. Ltd
- Yinhua Shenzhen 100 Index
Others 1.06% 116,416,601 25,427,209 0 0
Classified Securities Investment
Fund
Bosera Value Growth Securities
Others 1.01% 111,237,491 19,499,439 0 0
Investment Fund
Bank of China - E Fund Shenzhen
Stock Exchange 100 Others 0.97% 106,852,627 -27,157,666 0 0
Exchange-Traded Fund
HTHK/CMG FSGUFP-CMG
Foreign
FIRST STATE CHINA GROWTH 0.93% 102,472,924 6,251,536 0 0
shareholder
FD
21
ICBC -Rongtong Shenzhen Stock
Exchange 100 Index Securities Others 0.80% 88,364,818 -14,734,245 0 0
Investment Fund
Staff Committee of China Vanke
Others 0.61% 67,168,517 0 0 0
Co., Ltd.
Gao Hua-HSBC-GOLDMAN,
Others 0.59% 64,779,520 11,971,047 0 0
SACHS & CO
Remarks on strategic investor or
ordinary legal person becoming top
Nil
10 shareholders after placing of
new shares
Shareholdings of the top 10 holders of non-restricted shares
Name of shareholder Number of non-restricted Class of shares
shares held
CRC 1,619,094,766 Ordinary RMB-denominated shares (A shares)
China Life Insurance Company
Limited-Dividend
151,360,847 Ordinary RMB-denominated shares (A shares)
Distribution-Personal
Dividend-005L-FH002 Shen
Liu Yuansheng 133,791,208 Ordinary RMB-denominated shares (A shares)
China Minsheng Banking Corp. Ltd
- Yinhua Shenzhen 100 Index
116,416,601 Ordinary RMB-denominated shares (A shares)
Classified Securities Investment
Fund
Bosera Value Growth Securities
111,237,491 Ordinary RMB-denominated shares (A shares)
Investment Fund
Bank of China - E Fund Shenzhen
Stock Exchange 100 106,852,627 Ordinary RMB-denominated shares (A shares)
Exchange-Traded Fund
HTHK/CMG FSGUFP-CMG
FIRST STATE CHINA GROWTH 102,472,924 Domestic listed foreign shares (B shares)
FD
ICBC-Rongtong Shenzhen Stock
Exchange 100 Index Securities 88,364,818 Ordinary RMB-denominated shares (A shares)
Investment Fund
Staff Committee of China Vanke
67,168,517 Ordinary RMB-denominated shares (A shares)
Co., Ltd.
Gao Hua-HSBC-GOLDMAN,
64,779,520 Ordinary RMB-denominated shares (A shares)
SACHS & CO
Remarks on the connected It is not known as to whether there are connections or persons deemed to be acting in concert under “the
relationship or action in concert of Measures for the Administration of the Takeover of Listed Companies” among the above-mentioned
the aforementioned shareholders shareholders.
Remarks on shareholders involved Nil
in securities margin trading
3. Bondholdings of the Company’s top 10 bondholders (as at 30 June 2013)
(1) Name of the top 10 bondholders of 08 Vanke G1 bonds and their bondholdings
No. Bondholder No. of bonds held
New China Life Insurance Company-Dividend Distribution-Personal
1 5,548,262
Dividend-018L-FH002 Shen
2 China Petroleum Finance Co., Ltd. 4,157,662
3 China Pacific Insurance (Group) Co. Ltd. 3,433,312
4 China Life Insurance Company Ltd. 2,698,727
China Ping An Property and Casualty Insurance Company Limited – Traditional –
5 3,085,862
General Insurance Products
6 Taiping General Insurance Co., Ltd. 1,003,216
7 China Property & Casualty Reinsurance Company Ltd. 776,162
8 Haitong-BOC-Futong Bank 722,532
China Life Property and Casualty Insurance Company Ltd. – Traditional – General
9 700,000
Insurance Products
10 Postal Savings Bank of China - Penghua Fengze Classification Bond Fund 578,104
Note: It is not known as to whether there are other connections or persons deemed to be acting in concert under “the
Measures for the Administration of the Takeover of Listed Companies” among the above-mentioned bondholders.
22
(2) Name of the top 10 bondholders of 08 Vanke G2 bonds and their bondholdings
No. Bondholder No. of bonds held
1 Pacific Asset Management Co., Ltd. - Pacific Prudent Financial Plan One 3,514,198
2 Agricultural Bank of China Limited 1,427,662
3 Hongta Securities Co., Ltd. 928,000
4 CNPC Pension Scheme – ICBC 888,960
ICBC Credit Suisse Asset Management Co., Ltd.–ICBC–China Industrial and
5 777,688
Commercial Bank of China Limited
6 Industrial Bank Co., Ltd. - Tianhong Yongli Bond Fund 606,730
Bank of Communications Schroders Fund Management Co., Ltd. –Bank of
7 605,228
Communications–Bank of Communications International Trust Co., Ltd.
8 CCB-Penghua Fengrun Bond Fund 599,993
9 CCB-Penghua Harvest Bond Fund 563,644
10 CCB-Huaxia Xinghua Mixed Securities Investment Fund 503,670
Note: “CCB-Penghua Fengrun Bond Fund” and “CCB-Penghua Harvest Bond Fund” are managed by Penghua Fund
Management Co., Ltd. Apart from the above-mentioned relationships, it is not known as to whether there are other
connections or persons deemed to be acting in concert under “the Measures for the Administration of the Takeover of Listed
Companies” among the above-mentioned bondholders.
4. Change of controlling shareholders and beneficial controllers
There were neither controlling shareholders nor beneficial controllers in the Company, and this situation
remained the same during the reporting period.
VI. Directors, Members of Supervisory Committee and Senior Management
1. Changes in the shareholdings of directors, members of Supervisory Committee and
senior management during the reporting period
Unit: Share
Number of Number of
Number of Number of share options share options
Number of
shares held at shares held as at exerciseable as exercised as at
Name Capacity share options
the beginning the end of the at the date of the date of
granted
of the period period announcement announcement
of the report of the report
Wang Shi Chairman 6,817,201 7,617,201 6,600,000 3,820,000 800,000
Yu Liang Director, President 4,106,245 6,306,245 5,500,000 1,650,000 2,200,000
Chairman of
Ding Fuyuan Supervisory 2,018,408 2,018,408 - - -
Committee
Sun Jianyi Director 692,236 692,236 - - -
Executive Vice
Ding Changfeng 1,487,660 2,337,660 2,200,000 690,000 850,000
President
Executive Vice
Xie Dong 1,487,660 1,987,660 2,200,000 1,040,000 500,000
President
Executive Vice
Zhang Jiwen 1,548,950 1,548,950 2,200,000 1,540,000 0
President
Executive Vice
Mo Jun 1,548,950 2,048,950 2,200,000 1,040,000 500,000
President
Director,
Xiao Li Executive Vice 1,446,849 1,946,849 2,200,000 1,040,000 500,000
President
Executive Vice
Wang Wenjin 1,343,591 2,223,591 2,200,000 660,000 880,000
President
Executive Vice
Zhou Weijun 1,038,065 1,583,265 2,000,000 858,000 542,000
President
Executive Vice
Mao Daqing 0 800,000 2,000,000 600,000 800,000
President
23
Secretary to the
Tan Huajie 0 640,000 1,600,000 480,000 640,000
Board
Member of
Zhou Qingping Supervisory 20,000 20,000 - - -
Committee
Note: Save for the above-mentioned persons, other Directors, members of the Supervisory Committee and senior
management of the Company did not hold any of the Company’s shares.
2. Change of Directors, members of the Supervisory Committee and senior management
of the Company during the reporting period
During the reporting period, Mr Wang Yin and Mr Jiang Wei submitted to the Board their resignation as
directors. At the Company's 2012 annual general meeting, Mr Wei Bin and Mr Chen Ying were elected as
directors of the sixteenth Board.
VII. Financial Report (Unaudited)
24
China Vanke Co., Ltd.
万科企业股份有限公司
30 June 2013
25
China Vanke Co., Ltd.
Financial statements for the six months ended 30 June 2013
Consolidated statement of profit or loss
for the six months ended 30 June 2013
(Expressed in Renminbi Yuan)
Six months ended 30 June
2013 2012
Note
RMB’000 RMB’000
Revenue 4(a) 38,940,809 28,959,560
Cost of sales (27,501,464) (19,297,385)
Gross profit 11,439,345 9,662,175
Other revenue 5 359,642 395,098
Other net income 6 33,201 74,687
Distribution costs (1,431,103) (1,238,382)
Administrative expenses (1,230,601) (851,688)
Other operating expenses 7 (98,945) (113,046)
Profit from operations 9,071,539 7,928,844
Finance costs 8(a) (678,604) (788,381)
Share of profits less losses of associates 15 198,699 256,481
Share of profits less losses of joint
ventures 16 188,930 166,039
Profit before taxation 8,780,564 7,562,983
Income tax 9(a) (3,444,673) (3,027,505)
Profit for the period 5,335,891 4,535,478
Attributable to:
Equity shareholders of the Company 4,556,305 3,725,085
Non-controlling interests 779,586 810,393
Profit for the period 5,335,891 4,535,478
Basic earnings per share (RMB) 11 0.41 0.34
The accompanying notes form part of these financial statements. Details of dividends
payable to equity shareholders of the Company attributable to the profit for the period are set
out in note 30(c).
26
China Vanke Co., Ltd.
Financial statements for the six months ended 30 June 2013
Consolidated statement of profit or loss and other
comprehensive income
for the six months ended 30 June 2013
(Expressed in Renminbi Yuan)
Six months ended 30 June
2013 2012
Note
RMB’000 RMB’000
Profit for the period 5,335,891 4,535,478
-------------------- --------------------
Other comprehensive income for the period
(after tax and reclassification adjustments) 10
Items that may be reclassified subsequently to
profit or loss:
Exchange differences on translation of
financial statements of overseas subsidiaries 25,671 (73,372)
Available-for-sale securities:
- net movement in the fair value reserve 449 (27,374)
26,120 (100,746)
------------------- -------------------
Total comprehensive income for the period 5,362,011 4,434,732
Attributable to:
Equity shareholders of the Company 4,582,425 3,624,339
Non-controlling interests 779,586 810,393
Total comprehensive income for the period 5,362,011 4,434,732
The accompanying notes form part of these financial statements.
27
China Vanke Co., Ltd.
Financial statements for the six months ended 30 June 2013
Consolidated statement of financial position
as at 30 June 2013
(Expressed in Renminbi Yuan)
Note 30 June 2013 31 December 2012
RMB’000 RMB’000
Non-current assets
Property, plant and equipment 12 3,354,795 3,132,540
Investment properties 13 1,831,992 1,714,136
Goodwill 14 201,690 201,690
Interest in associates 15 4,705,397 2,915,844
Interest in joint ventures 16 4,252,463 4,043,247
Other financial assets 17 95,249 85,979
Other non-current assets 18 1,139,527 879,582
Deferred tax assets 26(b) 3,656,856 3,219,894
19,237,969 16,192,912
------------------- -------------------
Current assets
Inventories 19 310,226,348 253,622,152
Trade and other receivables 20 65,454,674 56,988,250
Pledged deposits 21 1,356,113 1,171,318
Cash and cash equivalents 22 36,247,513 51,120,224
413,284,648 362,901,944
------------------- -------------------
Current liabilities
Bank loans and borrowings
from financial institutions 23 44,854,390 35,557,359
Financial derivatives 24 13,818 25,761
Trade and other payables 25 261,904,686 215,529,570
Current taxation 26(a) 7,328,407 8,720,876
314,101,301 259,833,566
------------------- -------------------
Net current assets 99,183,347 103,068,378
------------------- -------------------
Total assets less current liabilities 118,421,316 119,261,290
------------------- -------------------
The accompanying notes form part of these financial statements.
28
China Vanke Co., Ltd.
Financial statements for the six months ended 30 June 2013
Consolidated statement of financial position
as at 30 June 2013 (continued)
(Expressed in Renminbi Yuan)
Note 30 June 2013 31 December 2012
RMB’000 RMB’000
Non-current liabilities
Bank loans and borrowings
from financial institutions 23 29,282,031 36,036,070
Deferred tax liabilities 26(c) 981,434 1,027,055
Provisions 27 58,551 44,292
Other non-current liabilities 28 33,818 15,678
30,355,834 37,123,095
------------------- -------------------
NET ASSETS 88,065,482 82,138,195
CAPITAL AND RESERVES 30
Share capital 11,013,725 10,995,553
Reserves 55,630,902 52,830,001
Total equity attributable to equity
shareholders of the Company 66,644,627 63,825,554
Non-controlling interests 21,420,855 18,312,641
TOTAL EQUITY 88,065,482 82,138,195
Approved and authorised for issue by the board of directors on 5 August 2013.
Wang Shi )
Yu Liang )
) Directors
)
)
The accompanying notes form part of these financial statements.
29
China Vanke Co., Ltd.
Financial statements for the six months ended 30 June 2013
Consolidated statement of changes in equity (continued)
For the six months ended 30 June 2013
(Expressed in Renminbi Yuan)
Attributable to equity shareholders of the Company
Share-based Non-
Share Share compensation Statutory Exchange Other Retained controlling
Note capital premium reserve reserves reserve reserves profits Total interests Total equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Balance at 1 January 2013 10,995,553 8,792,995 193,775 17,017,051 440,990 (302,909) 26,688,099 63,825,554 18,312,641 82,138,195
Changes in equity for for the six months
ended 30 June 2013:
Profit for the period - - - - - - 4,556,305 4,556,305 779,586 5,335,891
Other comprehensive income 10 - - - - 25,671 449 - 26,120 - 26,120
Total comprehensive income - - - - 25,671 449 4,556,305 4,582,425 779,586 5,362,011
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Dividends approved in respect of
the previous period 30(c) - - - - - - (1,981,401) (1,981,401) - (1,981,401)
Appropriation to statutory reserves 30(b) - - - - - - - - - -
Exercise of Share Options 30(a) 18,172 293,326 - - - - - 311,498 - 311,498
Equity settled share-based transactions 29 - - (122,621) - - - - (122,621) - (122,621)
Share issued upon exercise
of share option - - - - - - - - - -
Capital contribution from
non-controlling interests - - - - - - - - 2,430,969 2,430,969
Acquisitions of subsidiaries - - - - - - - - 550,287 550,287
Acquisitions of additional interest
in subsidiaries - - - - - 29,172 - 29,172 (22,583) 6,589
Disposals of subsidiaries - - - - - - - - (2,445) (2,445)
Dividends declared to non-controlling
interests - - - - - - - - (627,600) (627,600)
Balance at 30 June 2013 11,013,725 9,086,321 71,154 17,017,051 466,661 (273,288) 29,263,003 66,644,627 21,420,855 88,065,482
The accompanying notes form part of these financial statements.
30
China Vanke Co., Ltd.
Financial statements for the six months ended 30 June 2013
Consolidated statement of changes in equity
Year ended 31 December 2012
(Expressed in Renminbi Yuan)
Attributable to equity shareholders of the Company
Share-based Non-
Share Share compensation Statutory Exchange Other Retained controlling
Note capital premium reserve reserves reserve reserves profits Total interests Total equity
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Balance at 1 January 2012 10,995,210 8,789,676 106,236 13,648,727 545,776 (52,448) 18,934,618 52,967,795 14,864,744 67,832,539
Changes in equity for 2012:
Profit for the year - - - - - - 12,551,182 12,551,182 3,111,406 15,662,588
Other comprehensive income - - - - (104,786) (27,373) - (132,159) - (132,159)
Total comprehensive income - - - - (104,786) (27,373) 12,551,182 12,419,023 3,111,406 15,530,429
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Dividends approved in respect of
the previous year 30(c) - - - - - - (1,429,377) (1,429,377) - (1,429,377)
Appropriation to statutory reserves 30(b) - - - 3,368,324 - - (3,368,324) - - -
Equity settled share-based transactions - - 88,231 - - - - 88,231 88,231
Share issued upon exercise
of share options 343 3,319 (692) - - - - 2,970 - 2,970
Capital contribution from
non-controlling interests - - - - - - - - 2,747,932 2,747,932
Acquisitions of subsidiaries - - - - - - - - 517,617 517,617
Acquisitions of additional interest
in subsidiaries - - - - - (223,088) - (223,088) (1,160,135) (1,383,223)
Disposals of subsidiaries - - - - - - - - (40,000) (40,000)
Dividends declared to non-controlling
interests - - - - - - - - (1,728,923) (1,728,923)
Balance at 31 December 2012 10,995,553 8,792,995 193,775 17,017,051 440,990 (302,909) 26,688,099 63,825,554 18,312,641 82,138,195
The accompanying notes form part of these financial statements.
31
China Vanke Co., Ltd.
Financial statements for the six months ended 30 June 2013
Consolidated cash flow statement
for the six months ended 30 June 2013
(Expressed in Renminbi Yuan)
Six months ended 30 June
2013 2012
Note
RMB’000 RMB’000
Operating activities
Cash received from customers 67,220,443 48,164,285
Cash generated from other operating activities 4,900,606 3,406,592
Cash paid to suppliers (56,258,619) (31,537,772)
Cash paid to and for employees (2,279,046) (1,821,229)
Cash paid for other taxes (5,749,221) (4,266,938)
Cash used in other operating activities (10,557,731) (5,573,901)
Cash generated from operations (2,723,568) 8,371,037
PRC Corporate Income Tax (“CIT”)
and Hong Kong Profits Tax paid (4,415,336) (3,045,888)
Land Appreciation Tax (“LAT”) paid (2,653,496) (2,505,954)
Net cash (used in)/generated from
operating activities (9,792,400) 2,819,195
------------------- -------------------
Investing activities
Acquisitions of subsidiaries, net of
cash acquired 35 (889,290) (835,148)
Investment in associates and joint ventures (1,821,023) (125,450)
Acquisitions of additional interest in subsidiaries (24,260) (6,000)
Acquisitions of other investments (44,780) (60,000)
Acquisitions of property, plant and equipment (48,493) (79,462)
Net cash inflow from disposals of subsidiaries 36 63,181 -
Proceeds from disposal of property, plant
and equipment 1,013 679
Proceeds from disposals of investments 248,363 4,000
Interest received 224,753 189,256
Dividends received 552,922 47,684
Net cash used in investing activities (1,737,614) (864,441)
------------------- -------------------
The accompanying notes form part of these financial statements.
32
China Vanke Co., Ltd.
Financial statements for the six months ended 30 June 2013
Consolidated cash flow statement
for the six months ended 30 June 2013 (continued)
(Expressed in Renminbi Yuan)
Six months ended 30 June
2013 2012
RMB’000 RMB’000
Financing activities
Contributions from non-controlling interests 1,027,459 132,213
Proceeds from bank loans and borrowings
from financial institutions 19,457,690 26,317,972
Proceeds from issuing of corporate bonds 4,873,555 -
Repayment of bank loans and borrowings
from financial institutions (23,421,883) (13,798,424)
Dividends and interest paid (5,248,549) (2,481,267)
Net cash (used in)/generated from
financing activities (3,311,728) 10,170,494
------------------- -------------------
Effect of foreign exchange rate changes (30,969) (19,632)
------------------- -------------------
Net (decrease) / increase in cash and
cash equivalents (14,872,711) 12,105,616
Cash and cash equivalents at 1 January 51,120,224 33,614,112
Cash and cash equivalents at 30 June 36,247,513 45,719,728
The accompanying notes form part of these consolidated financial statements.
33
China Vanke Co., Ltd.
Financial statements for the six months ended 30 June 2013
Notes to the consolidated financial statements
(Expressed in Renminbi Yuan unless otherwise indicated)
1 Reporting entity
China Vanke Co., Ltd (the “Company”) is a company domiciled in the People’s Republic of
China(the “PRC”). The consolidated interim financial statements (“interim financial
statements”) as at and for the six months ended 30 June 2013 comprise the Company and its
subsidiaries (together referred to as the “Group” and individually as “Group entities”) and the
Group’s interests in associates and joint ventures. The Group’s principal activities are
development and sale of properties in the PRC.
2 Significant accounting policies
(a) Statement of compliance
These interim financial statements have been prepared in accordance with the International
Financial Reporting Standards (“IFRSs”) issued by the International Accounting Standards
Board (“IASB”). A summary of the significant accounting policies adopted by the Group is
set out below.
IASB has issued certain new and revised IFRSs that are first effective or available for early
adoption for current accounting period of the Group. Note 2(c) provides information on any
changes in accounting policies resulting from initial application of these developments to the
extent that they are relevant to the Group for the current and prior accounting periods
reflected in these interim financial statements.
(b) Basis of preparation
The measurement basis used in the preparation of the interim financial statements is the
historical cost basis except that the following assets and liabilities are stated at their fair value
as explained in the accounting policies set out below:
financial instruments classified as available-for-sale (see note 2(g));
derivative financial instruments are measured at fair value (see note 2(h)).
The preparation of interim financial statements in conformity with IFRSs requires
management to make judgments, estimates and assumptions that affect the application of
policies and reported amounts of assets, liabilities, income and expenses. The estimates and
associated assumptions are based on historical experience and various other factors that are
believed to be reasonable under the circumstances, the results of which form the basis of
making the judgments about carrying values of assets and liabilities that are not readily
apparent from other sources. Actual results may differ from these estimates.
34
China Vanke Co., Ltd.
Financial statements for the six months ended 30 June 2013
2 Significant accounting policies (continued)
(b) Basis of preparation (continued)
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the period in which the estimate is revised if the
revision affects only that period, or in the period of the revision and future periods if the
revision affects both current and future periods.
Judgments made by management in the application of IFRSs that have significant effect on
the interim financial statements and major sources of estimation uncertainty are discussed in
note 3.
(c) Changes in accounting policies
The Group has adopted the following new standards and amendments to standards, including
any consequential amendments to other standards, with a date of initial application of 1
January 2013.
IFRS 10 Consolidated Financial Statements (2011) (see (i))
IFRS 11 Joint Arrangements (see (ii))
IFRS 12 Disclosure of interests in other entities (see (iii))
IFRS 13 Fair Value Measurement (see (iv))
Presentation of Items of Other Comprehensive Income (Amendments to IAS 1) (see (v))
The Group has not applied any new standard or interpretation that is not yet effective for the
current accounting period.
The nature and the effect of the changes are further explained below.
(i) Consolidated financial statements
As a result of IFRS 10 (2011), the Group has changed its accounting policy for determining
whether it has control over and consequently whether it consolidates its investees. IFRS 10
(2011) introduces a new control model that is applicable to all investees, by focusing on
whether the Group has power over an investee, exposure or rights to variable returns from its
involvement with the investee and ability to use its power to affect those returns. In
particular, IFRS 10 (2011) requires the Group consolidate investees that it controls on the
basis of de facto circumstances.
(ii) Joint arrangements
As a result of IFRS 11, the Group has changed its accounting policy for its interests in joint
arrangements. Under IFRS 11, the Group classies its interests in joint arrangements as either
joint operations or joint ventures depending on the Group’s rights to the assets and
obligations for the liabilities of the arrangements. When making this assessment, the Group
considers the structure of the arrangements, the legal form of any separate vehicles, the
contractual terms of the arrangements and other facts and circumstances. Previously, the
structure of the arrangement was the sole focus of classication.
35
China Vanke Co., Ltd.
Financial statements for the six months ended 30 June 2013
2 Significant accounting policies (continued)
(c) Changes in accounting policies (continued)
(iii) Disclosure of interests in other entities
IFRS 12 brings together into a single standard all the disclosure requirements relevant to the
Group’s interests in subsidiaries, joint arrangements, associates and unconsolidated
structured entities. The disclosures required by IFRS 12 are generally more extensive than
those previously required by the respective standards.
(iv) Fair value measurement
IFRS 13 establishes a single framework for measuring fair value and making disclosures
about fair value measurements, when such measurements are required or permitted by other
IFRSs. In particular, it unies the denition of fair value as the price at which an orderly
transaction to sell an asset or to transfer a liability would take place between market
participants at the measurement date. It also replaces and expands the disclosure requirements
about fair value measurements in other IFRSs, including IFRS 7 Financial Instruments:
Disclosures. Some of these disclosures are specically required in interim nancial
statements for nancial instruments; accordingly, the Group has included additional
disclosures in this regard (see note 2(g) and note 2(h) ).
In accordance with the transitional provisions of IFRS 13, the Group has applied the new fair
value measurement guidance prospectively, and has not provided any comparative
information for new disclosures. Notwithstanding the above, the change had no signicant
impact on the measurements of the Group’s assets and liabilities.
(v) Presentation of items of other comprehensive income
As a result of the amendments to IAS 1, the Group has modied the presentation of items of
other comprehensive income in its consolidated statement of prot or loss and other
comprehensive income, to present separately items that would be reclassied to prot or loss
in the future from those that would never be. Comparative information has also been
re-presented accordingly.
The adoption of the amendment to IAS 1 has no impact on the recognised assets, liabilities
and comprehensive income of the Group.
(d) Subsidiaries and non-controlling interests
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is
exposed, 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. When assessing whether the
Group has power, only substantive rights (held by the Group and other parties) are
considered.
36
China Vanke Co., Ltd.
Financial statements for the six months ended 30 June 2013
2 Significant accounting policies (continued)
(d) Subsidiaries and non-controlling interest (continued)
An investment in a subsidiary is consolidated into the consolidated financial statements from
the date that control commences until the date that control ceases. Intra-group balances,
transactions and cash flows and any unrealised profits arising from intra-group transactions
are eliminated in full in preparing the consolidated financial statements. Unrealised losses
resulting from intra-group transactions are eliminated in the same way as unrealised gains but
only to the extent that there is no evidence of impairment.
Non-controlling interests represent the equity in a subsidiary not attributable directly or
indirectly to the company, and in respect of which the Group has not agreed any additional
terms with the holders of those interests which would result in the Group as a whole having a
contractual obligation in respect of those interests that meets the definition of a financial
liability. For each business combination, the Group can elect to measure any non-controlling
interests either at fair value or at the non-controlling interests’ proportionate share of the
subsidiary’s net identifiable assets.
Non-controlling interests are presented in the consolidated statement of financial position
within equity, separately from equity attributable to the equity shareholders of the company.
Non-controlling interests in the results of the Group are presented on the face of the
consolidated statement of profit or loss and the consolidated statement of profit or loss and
other comprehensive income as an allocation of the total profit or loss and total
comprehensive income for the period between the non-controlling interests and the equity
shareholders of the company. Loans from holders of non-controlling interests and other
contractual obligations towards these holders are presented as financial liabilities in the
consolidated statement of financial position in accordance with notes 2(p) or (q) depending
on the nature of the liabilities.
Changes in the Group’s interests in a subsidiary that do not result in a loss of control are
accounted for as equity transactions, whereby adjustments are made to the amounts of
controlling and non-controlling interests within consolidated equity to reflect the change of
the relative interests, but no adjustments are made to goodwill and no gain or loss is
recognised.
When the Group loses control of a subsidiary, it is accounted for as a disposal of the entire
interest in that subsidiary, with a resulting gain or loss being recognised in profit or loss.
Any interest retained in that former subsidiary at the date when control is lost is recognised at
fair value and this amount is regarded as the fair value on initial recognition of a financial
asset(see note 2(e)) or, when appropriate, the cost on initial recognition of an investment in
an associate or joint venture (see note 2(e)).
37
China Vanke Co., Ltd.
Financial statements for the six months ended 30 June 2013
2 Significant accounting policies (continued)
(e) Associates and joint ventures
An associate is an entity in which the Group or company has significant influence, but not
control or joint control, over its management, including participation in the financial and
operating policy decisions.
A joint venture is an arrangement whereby the Group or company and other parties
contractually agree to share control of the arrangement, and have rights to the net assets of
the arrangement.
An investment in an associate or a joint venture is accounted for in the consolidated financial
statements under the equity method, unless it is classified as held for sale (or included in a
disposal group that is classified as held for sale). Under the equity method, the investment is
initially recorded at cost, adjusted for any excess of the Group’s share of the acquisition-date
fair values of the investee’s identifiable net assets over the cost of the investment (if any).
Thereafter, the investment is adjusted for the post acquisition change in the Group’s share of
the investee’s net assets and any impairment loss relating to the investment (see notes 2(l)).
Any acquisition-date excess over cost, the Group’s share of the post-acquisition, post-tax
results of the investees and any impairment losses for the period are recognised in the
consolidated statement of profit or loss, whereas the Group’s share of the post-acquisition
post-tax items of the investees’ other comprehensive income is recognised in the
consolidated statement of profit or loss and other comprehensive income.
When the Group’s share of losses exceeds its interest in the associate or the joint venture, the
Group’s interest is reduced to nil and recognition of further losses is discontinued except to
the extent that the Group has incurred legal or constructive obligations or made payments on
behalf of the investee. For this purpose, the Group’s interest is the carrying amount of the
investment under the equity method together with the Group’s long-term interests that in
substance form part of the Group’s net investment in the associate or the joint venture.
Unrealised profits and losses resulting from transactions between the Group and its associates
and joint venture are eliminated to the extent of the Group’s interest in the investee, except
where unrealised losses provide evidence of an impairment of the asset transferred, in which
case they are recognised immediately in profit or loss.
If an investment in an associate becomes an investment in a joint venture or vice versa,
retained interest is not re-measured. Instead, the investment continues to be accounted for
under the equity method.
In all other cases, when the Group ceases to have significant influence over an associate or
joint control over a joint venture, it is accounted for as a disposal of the entire interest in that
investee, with a resulting gain or loss being recognised in profit or loss. Any interest retained
in that former investee at the date when significant influence or joint control is lost is
recognised at fair value and this amount is regarded as the fair value on initial recognition of
a financial asset (see note 2(g)).
38
China Vanke Co., Ltd.
Financial statements for the six months ended 30 June 2013
2 Significant accounting policies (continued)
(f) Goodwill
Goodwill represents the excess of
(i) the aggregate of the fair value of the consideration transferred, the amount of any
non-controlling interest in the acquiree and the fair value of the Group’s previously
held equity interest in the acquiree; over
(ii) the net fair value of the acquiree’s identifiable assets and liabilities measured as at the
acquisition date.
When (ii) is greater than (i), then this excess is recognised immediately in profit or loss as a
gain on a bargain purchase.
Goodwill is stated at cost less accumulated impairment losses. Goodwill arising on a
business combination is allocated to each cash-generating unit, or groups of cash generating
units, that is expected to benefit from the synergies of the combination and is tested annually
for impairment (see note 2(l)).
On disposal of a cash generating unit during the period, any attributable amount of purchased
goodwill is included in the calculation of the profit or loss on disposal.
(g) Other investments in equity securities
The Group’s policies for investments in equity securities, other than investments in
subsidiaries, associates and joint venture, are as follows:
Investments in equity securities are initially stated at fair value, which is their transaction
price unless fair value can be more reliably estimated using valuation techniques whose
variables include only data from observable markets. Cost includes attributable transaction
costs.
Investments in equity securities that do not have a quoted market price in an active market
and whose fair value cannot be reliably measured are recognised in the statement of financial
position at cost less impairment losses (see note 2(l)).
Investments in equity securities which are not held for trading are classified as
available-for-sale securities. At the end of each reporting period the fair value is remeasured,
with any resultant gain or loss being recognised in other comprehensive income and
accumulated separately in equity. Dividend income from these investments is recognised in
profit or loss in accordance with the policy set out in note 2(v)(v). When these investments
are derecognised or impaired (see note 2(l)), the cumulative gain or loss is reclassified from
equity to profit or loss.
39
China Vanke Co., Ltd.
Financial statements for the six months ended 30 June 2013
2 Significant accounting policies (continued)
(h) Derivative financial instruments
Derivative financial instruments are recognised initially at fair value. At the end of each
reporting period the fair value is remeasured. The gain or loss on remeasurement to fair value
is recognised immediately in profit or loss.
(i) Investment property
Investment properties are buildings which are owned or held under a leasehold interest (see
note 2(k)) to earn rental income and/or for capital appreciation. These include property that is
being constructed or developed for future use as investment property.
Investment properties are stated at cost less accumulated depreciation and accumulated
impairment loss. Rental income from investment properties is accounted for as described in
note 2(v)(iv).
Depreciation is calculate to write off the costs of investment properties, less its residual value
of 0% to 4%, if any, using the straight-line method over their estimated useful lives of 12.5 to
40 years. Both the useful life and residual value, if any, are reviewed annually.
(j) Property, plant and equipment
The following items of property, plant and equipment are measured at cost less accumulated
depreciation and accumulated impairment loss (see note 2(l)):
- buildings held for own use which are situated on leasehold land classified as held under
operating lease (see note 2(k)); and
- other items of plant and equipment.
The cost of self-constructed items of property, plant and equipment includes the cost of
materials, direct labour, the initial estimate, where relevant, of the costs of dismantling and
removing the items and restoring the site on which they are located, and an appropriate
proportion of production overheads and borrowing costs (see note 2(x)).
Gain or loss arising from the retirement or disposal of an item of property, plant and
equipment are determined as the difference between the net disposal proceeds and the
carrying amount of the item and are recognised in profit or loss on the date of retirement or
disposal.
40
China Vanke Co., Ltd.
Financial statements for the six months ended 30 June 2013
2 Significant accounting policies (continued)
(j) Property, plant and equipment (continued)
Depreciation is calculated to write off the cost of items of property, plant and equipment, less
their estimated residual value, if any, using the straight line method over their estimated
useful lives as follows:
Residual value Useful life
Leasehold land 0% unexpired term of lease
Hotel and other buildings 4% the shorter of the unexpired
term of lease and 12.5 - 40 years
Improvements to premises 0% 5 - 10 years
Machinery and motor vehicles 4% 5 - 10 years
Other equipment 4% 5 years
Where parts of an item of property, plant and equipment have different useful lives, the cost
of the item is allocated on a reasonable basis between the parts and each part is depreciated
separately. Both the useful life of an asset and its residual value, if any, are reviewed
annually.
(k) Leased assets
An arrangement, comprising a transaction or a series of transactions, is or contains a lease if
the Group determines that the arrangement conveys a right to use a specific asset or assets for
an agreed period of time in return for a payment or a series of payments. Such a
determination is made based on an evaluation of the substance of the arrangement and is
regardless of whether the arrangement takes the legal form of a lease.
Where the Group has the use of assets held under operating leases, payments made under the
leases are charged to profit or loss in equal instalments over the accounting periods covered
by the lease term, except where an alternative basis is more representative of the pattern of
benefits to be derived from the leased asset. Lease incentives received are recognised in
profit or loss as an integral part of the aggregate net lease payments made. Contingent rentals
are charged to profit or loss in the accounting period in which they are incurred.
The cost of acquiring land held under an operating lease is amortised on a straight-line basis
over the period of the lease term except where the property is held for development for sale
(see note 2(m)(ii)).
41
China Vanke Co., Ltd.
Financial statements for the six months ended 30 June 2013
2 Significant accounting policies (continued)
(l) Impairment of assets
(i) Impairment of investments in equity securities and other receivables
Investments in equity securities and other current and non-current receivables that are stated
at cost or amortised cost or are classified as available-for-sale securities are reviewed at the
end of each reporting period to determine whether there is objective evidence of impairment.
Objective evidence of impairment includes observable data that comes to the attention of the
Group about one or more of the following loss events:
- significant financial difficulty of the debtor;
- a breach of contract, such as a default or delinquency in interest or principal
payments;
- it becoming probable that the debtor will enter bankruptcy or other financial
reorganisation;
- significant changes in the technological, market, economic or legal environment that
have an adverse effect on the debtor; and
- a significant or prolonged decline in the fair value of an investment in an equity
instrument below its cost.
If any such evidence exists, any impairment loss is determined and recognised as follows:
- For investments in associates and joint venture (including those recognised using the
equity method (see note 2(e)), the impairment loss is measured by comparing the
recoverable amount of the investment with its carrying amount in accordance with note
2(l)(ii). The impairment loss is reversed if there has been a favourable change in the
estimates used to determine the recoverable amount in accordance with note 2(l)(ii).
- For unquoted equity securities carried at cost, the impairment loss is measured as the
difference between the carrying amount of the financial asset and the estimated future
cash flows, discounted at the current market rate of return for a similar financial asset
where the effect of discounting is material. Impairment losses for equity securities
carried at cost are not reversed.
42
China Vanke Co., Ltd.
Financial statements for the six months ended 30 June 2013
2 Significant accounting policies (continued)
(l) Impairment of assets (continued)
(i) Impairment of investments in equity securities and other receivables (continued)
- For trade and other current receivables and other financial assets carried at amortised
cost, the impairment loss is measured as the difference between the asset’s carrying
amount and the present value of estimated future cash flows, discounted at the financial
asset’s original effective interest rate (i.e. the effective interest rate computed at initial
recognition of these assets), where the effect of discounting is material. This assessment
is made collectively where these financial assets share similar risk characteristics, such
as similar past due status, and have not been individually assessed as impaired. Future
cash flows for financial assets which are assessed for impairment collectively are based
on historical loss experience for assets with credit risk characteristics similar to the
collective group.
If in a subsequent period the amount of an impairment loss decreases and the decrease
can be linked objectively to an event occurring after the impairment loss was recognised,
the impairment loss is reversed through profit or loss. A reversal of an impairment loss
shall not result in the asset’s carrying amount exceeding that which would have been
determined had no impairment loss been recognised in prior years.
- For available-for-sale securities, the cumulative loss that has been recognised in equity is
reclassified to profit or loss. The amount of the cumulative loss that is recognised in
profit or loss is the difference between the acquisition cost (net of any principal
repayment and amortisation) and current fair value, less any impairment loss on that
asset previously recognised in profit or loss.
Impairment losses recognised in profit or loss in respect of available-for-sale equity
securities are not reversed through profit or loss. Any subsequent increase in the fair
value of such assets is recognised in other comprehensive income.
Impairment losses are written off against the corresponding assets directly, except for
impairment losses recognised in respect of trade debtors included within trade and other
receivables, whose recovery is considered doubtful but not remote. In this case, the
impairment losses for doubtful debts are recorded using an allowance account. When the
Group is satisfied that recovery is remote, the amount considered irrecoverable is written off
directly and any amounts held in the allowance account relating to that debt are reversed.
Subsequent recoveries of amounts previously charged to the allowance account are reversed
against the allowance account. Other changes in the allowance account and subsequent
recoveries of amounts previously written off directly are recognised in profit or loss.
43
China Vanke Co., Ltd.
Financial statements for the six months ended 30 June 2013
2 Significant accounting policies (continued)
(l) Impairment of assets (continued)
(ii) Impairment of other assets
Internal and external sources of information are reviewed at the end of each reporting period
to identify indications that the following assets may be impaired or, except in the case of
goodwill, an impairment loss previously recognised no longer exists or may have decreased:
- property, plant and equipment;
- pre-paid interests in leasehold land classified as being held under an operating lease;
and
- goodwill.
If any such indication exists, the asset’s recoverable amount is estimated. In addition, for
goodwill, the recoverable amount is estimated annually whether or not there is any indication
of impairment.
- Calculation of recoverable amount
The recoverable amount of an asset is the greater of its fair value less costs to sell and
value in use. In assessing value in use, the estimated future cash flows are discounted to
their present value using a pre-tax discount rate that reflects current market assessments
of the time value of money and the risks specific to the asset. Where an asset does not
generate cash inflows largely independent of those from other assets, the recoverable
amount is determined for the smallest group of assets that generates cash inflows
independently (i.e. a cash-generating unit).
- Recognition of impairment losses
An impairment loss is recognised in profit or loss if the carrying amount of an asset, or
the cash-generating unit to which it belongs, exceeds its recoverable amount.
Impairment losses recognised in respect of cash-generating units are allocated first to
reduce the carrying amount of any goodwill allocated to the cash-generating unit (or
group of units) and then, to reduce the carrying amount of the assets in the unit (or group
of units) on a pro rata basis, except that the carrying value of an asset will not be reduced
below its individual fair value less costs to sell, or value in use, if determinable.
- Reversals of impairment losses
In respect of assets other than goodwill, an impairment loss is reversed if there has been
a favourable change in the estimates used to determine the recoverable amount. An
impairment loss in respect of goodwill is not reversed.
A reversal of an impairment loss is limited to the asset’s carrying amount that would
have been determined had no impairment loss been recognised in prior years.
Reversals of impairment losses are credited to profit or loss in the period in which the
reversals are recognised.
44
China Vanke Co., Ltd.
Financial statements for the six months ended 30 June 2013
2 Significant accounting policies (continued)
(m) Inventories
(i) Construction materials
Construction materials are carried at the lower of cost and net realisable value.
Cost is calculated using the weighted average cost formula and comprises all costs of
purchase, costs of conversion and other costs incurred in bringing the construction materials
to their present location and condition.
Net realisable value is the estimated selling price in the ordinary course of business less the
estimated costs of completion and the estimated costs necessary to make the sale.
(ii) Property development
Inventories in respect of property development activities are carried at the lower of cost and
net realisable value. Cost and net realisable values are determined as follows:
- Property held for development and property under development
The cost of properties held for development and properties under development
comprises specifically identified cost, including the acquisition cost of land, aggregate
cost of development, materials and supplies, wages and other direct expenses, an
appropriate proportion of overheads and borrowing costs capitalised (see note 2(x)). Net
realisable value represents the estimated selling price less estimated costs of completion
and costs to be incurred in selling the property.
- Completed property for sale
In the case of completed properties developed by the Group, cost is determined by
apportionment of the total development costs for that development project, attributable
to the unsold properties. Net realisable value represents the estimated selling price less
costs to be incurred in selling the property.
The cost of completed properties held for sale comprises all costs of purchase, costs of
conversion and other costs incurred in bringing the inventories to their present location
and condition.
(n) Construction contracts
Construction contracts are contracts specifically negotiated with a customer for the
construction of an asset or a group of assets, where the customer is able to specify the major
structural elements of the design. The accounting policy for contract revenue is set out in
note 2(v)(iii). When the outcome of a construction contract can be estimated reliably,
contract costs are recognised as an expense by reference to the stage of completion of the
contract at the end of the reporting period. When it is probable that total contract costs will
exceed total contract revenue, the expected loss is recognised as an expense immediately.
When the outcome of a construction contract cannot be estimated reliably, contract costs are
recognised as an expense in the period in which they are incurred.
45
China Vanke Co., Ltd.
Financial statements for the six months ended 30 June 2013
2 Significant accounting policies (continued)
(n) Construction contracts (continued)
Construction contracts in progress at the end of the reporting period are recorded at the net
amount of costs incurred plus recognised profit less recognised losses and progress billings,
and are presented in the statement of financial position as the “Gross amount due from
customers for contract work” (as an asset) or the “Gross amount due to customers for
contract work” (as a liability), as applicable. Progress billings not yet paid by the customer
are included under “Trade and other receivables”. Amounts received before the related work
is performed are presented as “Receipts in advance” under “Trade and other payables”.
(o) Trade and other receivables
Trade and other receivables are initially recognised at fair value and thereafter stated at
amortised cost using the effective interest method, less allowance for impairment of doubtful
debts (see note 2(l)), except where the receivables are interest-free loans made to related
parties without any fixed repayment terms or the effect of discounting would be immaterial.
In such cases, the receivables are stated at cost less allowance for impairment of doubtful
debts.
(p) Interest-bearing borrowings
Interest-bearing borrowings are recognised initially at fair value less attributable transaction
costs. Subsequent to initial recognition, interest-bearing borrowings are stated at amortised
cost with any difference between the amount initially recognised and redemption value being
recognised in profit or loss over the period of the borrowings, together with any interest and
fees payable, using the effective interest method.
(q) Trade and other payables
Trade and other payables are initially recognised at fair value. Except for financial guarantee
liabilities measured in accordance with note 2(u)(i), trade and other payables are
subsequently stated at amortised cost unless the effect of discounting would be immaterial, in
which case they are stated at cost.
(r) Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and on hand, demand deposits with banks
and other financial institutions, and short-term, highly liquid investments that are readily
convertible into known amounts of cash and which are subject to an insignificant risk of
changes in value, having been within three months of maturity at acquisition.
46
China Vanke Co., Ltd.
Financial statements for the six months ended 30 June 2013
2 Significant accounting policies (continued)
(s) Employee benefits
(i) Short term employee benefits and contributions to defined contribution retirement plans
Salaries, annual bonuses, paid annual leave, contributions to defined contribution retirement
plans and the cost of non-monetary benefits are accrued in the period in which the associated
services are rendered by employees. Where payment or settlement is deferred and the effect
would be material, these amounts are stated at their present values.
(ii) Share-based payments
The fair value of share options granted to employees is recognised as an employee cost with
a corresponding increase in the share-based compensation reserve within equity. The fair
value is measured at grant date using the Binomial model, taking into account the terms and
conditions upon which the options were granted. Where the employees have to meet vesting
conditions before becoming unconditionally entitled to the options, the total estimated fair
value of the options is spread over the vesting period, taking into account the probability that
the options will vest.
During the vesting period, the number of share options that is expected to vest is reviewed.
Any resulting adjustment to the cumulative fair value recognised in prior years is
charged/credited to the profit or loss for the period of the review, unless the original
employee expenses qualify for recognition as an asset, with a corresponding adjustment to
the share-based compensation reserve. On vesting date, the amount recognised as an expense
is adjusted to reflect the actual number of options that vest (with a corresponding adjustment
to the share-based compensation reserve). The equity amount is recognised in the
share-based compensation reserve until either the option is exercised (when it is transferred
to the share premium account) or the option expires (when it is released directly to retained
profits).
(iii) Termination benefits
Termination benefits are recognised when, and only when, the Group demonstrably commits
itself to terminate employment or to provide benefits as a result of voluntary redundancy by
having a detailed formal plan which is without realistic possibility of withdrawal.
(t) Income tax
Income tax for the period comprises current tax and movements in deferred tax assets and
liabilities. Current tax and movements in deferred tax assets and liabilities are recognised in
profit or loss except to the extent that they relate to items recognised in other comprehensive
income or directly in equity, in which case the relevant amounts of tax are recognised in
other comprehensive income or directly in equity, respectively.
Current tax is the expected tax payable on the taxable income for the period, using tax rates
enacted or substantively enacted at the end of the reporting period, and any adjustment to tax
payable in respect of previous years.
47
China Vanke Co., Ltd.
Financial statements for the six months ended 30 June 2013
2 Significant accounting policies (continued)
(t) Income tax (continued)
Deferred tax assets and liabilities arise from deductible and taxable temporary differences
respectively, being the differences between the carrying amounts of assets and liabilities for
financial reporting purposes and their tax bases. Deferred tax assets also arise from unused
tax losses and unused tax credits.
Apart from certain limited exceptions, all deferred tax liabilities, and all deferred tax assets to
the extent that it is probable that future taxable profits will be available against which the
asset can be utilised, are recognised. Future taxable profits that may support the recognition
of deferred tax assets arising from deductible temporary differences include those that will
arise from the reversal of existing taxable temporary differences, provided those differences
relate to the same taxation authority and the same taxable entity, and are expected to reverse
either in the same period as the expected reversal of the deductible temporary difference or in
periods into which a tax loss arising from the deferred tax asset can be carried back or
forward. The same criteria are adopted when determining whether existing taxable temporary
differences support the recognition of deferred tax assets arising from unused tax losses and
credits, that is, those differences are taken into account if they relate to the same taxation
authority and the same taxable entity, and are expected to reverse in a period, or periods, in
which the tax loss or credit can be utilised.
The limited exceptions to recognition of deferred tax assets and liabilities are those
temporary differences arising from goodwill not deductible for tax purposes, the initial
recognition of assets or liabilities that affect neither accounting nor taxable profit (provided
they are not part of a business combination), and temporary differences relating to
investments in subsidiaries to the extent that, in the case of taxable differences, the Group
controls the timing of the reversal and it is probable that the differences will not reverse in
the foreseeable future, or in the case of deductible differences, unless it is probable that they
will reverse in the future.
The amount of deferred tax recognised is measured based on the expected manner of
realisation or settlement of the carrying amount of the assets and liabilities, using tax rates
enacted or substantively enacted at the end of the reporting period. Deferred tax assets and
liabilities are no discounted.
The carrying amount of a deferred tax asset is reviewed at the end of each reporting period
and is reduced to the extent that it is no longer probable that sufficient taxable profits will be
available to allow the related tax benefit to be utilised. Any such reduction is reversed to the
extent that it becomes probable that sufficient taxable profits will be available.
Additional income taxes that arise from the distribution of dividends are recognised when the
liability to pay the related dividends is recognised.
48
China Vanke Co., Ltd.
Financial statements for the six months ended 30 June 2013
2 Significant accounting policies (continued)
(t) Income tax (continued)
Current tax balances and deferred tax balances, and movements therein, are presented
separately from each other and are not offset. Current tax assets are offset against current tax
liabilities, and deferred tax assets against deferred tax liabilities, if the Group has the legally
enforceable right to set off current tax assets against current tax liabilities and the following
additional conditions are met:
- in the case of current tax assets and liabilities, the Group intends either to settle on a net
basis, or to realise the asset and settle the liability simultaneously; or
- in the case of deferred tax assets and liabilities, if they relate to income taxes levied by
the same taxation authority on either:
- the same taxable entity; or
- different taxable entities, which, in each future period in which significant amounts
of deferred tax liabilities or assets are expected to be settled or recovered, intend to
realise the current tax assets and settle the current tax liabilities on a net basis or
realise and settle simultaneously.
(u) Financial guarantees issued, provisions and contingent liabilities
(i) Financial guarantees issued
Financial guarantees are contracts that require the issuer (i.e. the guarantor) to make specified
payments to reimburse the beneficiary of the guarantee (the “holder”) for a loss the holder
incurs because a specified debtor fails to make payment when due in accordance with the
terms of a debt instrument.
Where the Group issues a financial guarantee, the fair value of the guarantee (being the
transaction price, unless the fair value can otherwise be reliably estimated) is initially
recognised as deferred income within trade and other payables. Where consideration is
received or receivable for the issuance of the guarantee, the consideration is recognised in
accordance with the Group’s policies applicable to that category of asset. Where no such
consideration is received or receivable, an immediate expense is recognised in profit or loss
on initial recognition of any deferred income.
The amount of the guarantee initially recognised as deferred income is amortised in profit or
loss over the term of the guarantee as income from financial guarantees issued. In addition,
provisions are recognised in accordance with note 2(u)(ii) if and when (i) it becomes
probable that the holder of the guarantee will call upon the Group under the guarantee, and
(ii) the amount of that claim on the Group is expected to exceed the amount currently carried
in trade and other payables in respect of that guarantee i.e. the amount initially recognised,
less accumulated amortisation.
49
China Vanke Co., Ltd.
Financial statements for the six months ended 30 June 2013
2 Significant accounting policies (continued)
(u) Financial guarantees issued, provisions and contingent liabilities (continued)
(ii) Other provisions and contingent liabilities
Provisions are recognised for other liabilities of uncertain timing or amount when the Group
has a legal or constructive obligation arising as a result of a past event, it is probable that an
outflow of economic benefits will be required to settle the obligation and a reliable estimate
can be made. Where the time value of money is material, provisions are stated at the present
value of the expenditure expected to settle the obligation.
Where it is not probable that an outflow of economic benefits will be required, or the amount
cannot be estimated reliably, the obligation is disclosed as a contingent liability, unless the
probability of outflow of economic benefits is remote. Possible obligations, whose existence
will only be confirmed by the occurrence or non-occurrence of one or more future events are
also disclosed as contingent liabilities unless the probability of outflow of economic benefits
is remote.
(v) Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable. Provided it
is probable that the economic benefits will flow into the Group and the revenue and costs, if
applicable, can be measured reliably, revenue is recognised in profit or loss as follows:
(i) Sale of properties
Revenue arising from the sale of properties is recognised upon the signing of the sale and
purchase agreement, the receipt of the deposits and confirmation of arrangement of
settlement of remaining sales proceeds or the achievement of status ready for hand-over to
customers as stipulated in the sale and purchase agreement, whichever is the later. Deposits
and instalments received on properties sold prior to the date of revenue recognition are
presented as “Receipts in advance” under “Trade and other payables”.
(ii) Provision of services
Revenue from services is recognised when services are rendered.
(iii) Contract revenue
When the outcome of a construction contract can be estimated reliably:
- revenue from a fixed price contract is recognised using the percentage of completion
method, measured by reference to the percentage of contract costs incurred to date to
estimated total contract costs for the contract; and
- revenue from a cost plus contract is recognised by reference to the recoverable costs
incurred during the period plus an appropriate proportion of the total fee, measured by
reference to the proportion that costs incurred to date bear to the estimated total costs of
the contract.
When the outcome of a construction contract cannot be estimated reliably, revenue is
recognised only to the extent of contract costs incurred that it is probable will be recoverable.
50
China Vanke Co., Ltd.
Financial statements for the six months ended 30 June 2013
2 Significant accounting policies (continued)
(v) Revenue recognition (continued)
(iv) Rental income from operating leases
Rental income receivable under operating leases is recognised in profit or loss in equal
instalments over the periods covered by the lease term, except where an alternative basis is
more representative of the pattern of benefits to be derived from the use of the leased asset.
Lease incentives granted are recognised in profit or loss as an integral part of the aggregate
net lease payments receivable. Contingent rentals are recognised as income in the accounting
period in which they are earned.
(v) Dividend income
- Dividend income from unlisted investments is recognised when the shareholder’s right
to receive payment is established.
- Dividend income from listed investments is recognised when the share price of the
investment goes ex-dividend.
(vi) Interest income
Interest income is recognised as it accrues using the effective interest method.
(vii) Government grants
Government grants are recognised in the statement of financial position initially when there
is reasonable assurance that they will be received and that the Group will comply with the
conditions attaching to them. Grants that compensate the Group for expenses incurred are
recognised as revenue in profit or loss on a systematic basis in the same periods in which the
expenses are incurred. Grants that compensate the Group for the cost of an asset are deducted
from the carrying amount of the asset and consequently are effectively recognised in profit or
loss over the useful life of the asset by way of reduced depreciation expense.
(w) Translation of foreign currencies
Foreign currency transactions during the period are translated at the foreign exchange rates
ruling at the transaction dates. Monetary assets and liabilities denominated in foreign
currencies are translated at the foreign exchange rates ruling at the end of the reporting
period. Exchange gains and losses are recognised in profit or loss.
Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign
currency are translated using the foreign exchange rates ruling at the transaction dates.
Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair
value are translated using the foreign exchange rates ruling at the dates the fair value was
determined.
51
China Vanke Co., Ltd.
Financial statements for the six months ended 30 June 2013
2 Significant accounting policies (continued)
(w) Translation of foreign currencies (continued)
The results of foreign operations are translated into Renminbi at the exchange rates
approximating the foreign exchange rates ruling at the dates of the transactions. Statement of
financial position items are translated into Renminbi at the closing foreign exchange rates at
the end of the reporting period. The resulting exchange differences are recognised in other
comprehensive income and accumulated separately in equity in the exchange reserve.
On disposal of a foreign operation, the cumulative amount of the exchange differences
relating to that foreign operation is reclassified from equity to profit or loss when the profit or
loss on disposal is recognised.
(x) Borrowing costs
Borrowing costs that are directly attributable to the acquisition, construction or production of
an asset which necessarily takes a substantial period of time to get ready for its intended use
or sale are capitalised as part of the cost of that asset. Other borrowing costs are expensed in
the period in which they are incurred.
The capitalisation of borrowing costs as part of the cost of a qualifying asset commences
when expenditure for the asset is being incurred, borrowing costs are being incurred and
activities that are necessary to prepare the asset for its intended use or sale are in progress.
Capitalisation of borrowing costs is suspended or ceases when substantially all the activities
necessary to prepare the qualifying asset for its intended use or sale are interrupted or
complete.
(y) Related parties
(a) A person, or a close member of that person’s family, is related to the Group if that person:
(i) has control or joint control over the Group;
(ii) has significant influence over the Group; or
(iii) is a member of the key management personnel of the Group or the Group’s parent.
(b) An entity is related to the Group if any of the following conditions applies:
(i) The entity and the Group are members of the same group (which means that each
parent, subsidiary and fellow subsidiary is related to the others).
(ii) One entity is an associate or joint venture of the other entity (or an associate or joint
venture of a member of a group of which the other entity is a member).
(iii) Both entities are joint ventures of the same third party.
(iv) One entity is a joint venture of a third entity and the other entity is an associate of the
third entity.
(v) The entity is a post-employment benefit plan for the benefit of employees of either
the Group or an entity related to the Group.
52
China Vanke Co., Ltd.
Financial statements for the six months ended 30 June 2013
2 Significant accounting policies (continued)
(y) Related parties (continued)
(b) An entity is related to the Group if any of the following conditions applies: (continued)
(vi) The entity is controlled or jointly controlled by a person identified in (a).
(vii) A person identified in (a)(i) has significant influence over the entity or is a member of
the key management personnel of the entity (or of a parent of the entity).
Close members of the family of a person are those family members who may be expected to
influence, or be influenced by, that person in their dealings with the entity.
(z) Segments reporting
Operating segments, and the amounts of each segment item reported in the financial
statements, are identified from the financial information provided regularly to the Group’s
most senior executive management for the purposes of allocating resources to, and assessing
the performance of, the Group’s various lines of business and geographical locations.
Individually material operating segments are not aggregated for financial reporting purposes
unless the segments have similar economic characteristics and are similar in respect of the
nature of products and services, the nature of production processes, the type or class of
customers, the methods used to distribute the products or provide the services, and the nature
of the regulatory environment. Operating segments which are not individually material may
be aggregated if they share a majority of these criteria.
3 Accounting judgement and estimates
(a) Critical accounting judgments in applying the Group’s accounting policies
In the process of applying the Group’s accounting policies, management has made the
following accounting judgements:
(i) Classification between investment properties and owner-occupied properties
The Group determines whether a property qualifies as an investment property, and
has developed criteria in making that judgement. Investment property is a property
held to earn rentals or for capital appreciation or both. Therefore, the Group considers
whether a property generates cash flows largely independently of the other assets held
by the Group. Some properties comprise a portion that is held to earn rentals or for
capital appreciation and another portion that is held for use in the production or
supply of goods or services or for administrative purposes. If these portions could be
sold separately or leased out separately under finance lease, the Group accounts for
the portions separately. If the portions could not be sold separately, the property is an
investment property only if an insignificant portion is held for use in the production
or supply of goods or services or for administrative purposes. Judgement is made on
an individual property basis to determine whether ancillary services are so significant
that a property does not qualify as an investment property.
53
China Vanke Co., Ltd.
Financial statements for the six months ended 30 June 2013
3 Accounting judgement and estimates (continued)
(a) Critical accounting judgments in applying the Group’s accounting policies (continued)
(ii) Classification between investment properties and properties held for sale
The Group develops properties held for sale and properties held to earn rentals and/or
for capital appreciation. Judgement is made by management on determining whether
a property is designated as an investment property or a property held for sale. The
Group considers its intention for holding the properties at the early development stage
of the related properties. During the course of construction, the related properties
under construction are accounted for as properties under development included in
current assets if the properties are intended for sale after their completion, whereas,
the properties are accounted for as investment properties under construction if the
properties are intended to be held to earn rentals and/or for capital appreciation.
(b) Sources of estimation uncertainty
Notes 14 and 31 contain information about the assumptions and their risk factors relating to
goodwill impairment and fair value of financial instruments. Other key sources of estimation
uncertainty are as follows:
(i) Properties for sale
As explained in note 2(m), the Group’s properties for sale are stated at the lower of
cost and net realisable value. Based on the Group’s recent experience and the nature
of the subject properties, the Group makes estimates of the selling prices, the costs of
completion in cases for properties held for development and properties under
development, and the costs to be incurred in selling the properties based on prevailing
market conditions.
If there is an increase in costs to completion or a decrease in net sales value, the net
realisable value will decrease and this may result in provision for properties for sale.
Such provision requires the use of judgement and estimates. Where the expectation is
different from the original estimate, the carrying value and provision for properties in
the periods in which such estimate is changed will be adjusted accordingly.
In addition, given the volatility of the PRC property market and the unique nature of
individual properties, the actual outcomes in terms of costs and revenue may be
higher or lower than that estimated at the end of the reporting period. Any increase or
decrease in the provision would affect profit or loss in future years.
(ii) Impairment for trade and other receivables
The Group estimates impairment losses for trade and other receivables resulting from
the inability of the customers to make the required payments. The Group bases the
estimates on the aging of the trade and other receivable balance, customer
creditworthiness, and historical write-off experience. If the financial condition of the
customers were to deteriorate, actual provisions would be higher than estimated.
54
China Vanke Co., Ltd.
Financial statements for the six months ended 30 June 2013
3 Accounting judgement and estimates (continued)
(b) Sources of estimation uncertainty (continued)
(iii) Recognition of deferred tax assets
Deferred tax assets in respect of tax losses and other deductible temporary differences
carried forward are recognised and measured based on the expected manner of
realisation or settlement of the carrying amount of the assets, using tax rates enacted
or substantively enacted at the end of the reporting period. In determining the
carrying amounts of deferred tax assets, expected taxable profits are estimated which
involves a number of assumptions relating to the operating environment of the Group
and require a significant level of judgement exercised by the directors. Any change in
such assumptions and judgement would affect the carrying amounts of deferred tax
assets to be recognised and hence the net profit in future years.
(iv) LAT
As explained in note 9(a), LAT is levied on properties developed by the Group for
sale, at progressive rates ranging from 30% to 60% on the appreciation of land value,
which under the applicable regulations is calculated based on the proceeds of sales of
properties less deductible expenditures including lease charges of land use rights,
borrowing cost and relevant property development expenditures.Given the
uncertainties of the calculation basis of land appreciation tax to be interpreted by the
local tax bureau, the actual outcomes may be higher or lower than that estimated at
the end of the reporting period. Any increase or decrease in estimates would affect
profit or loss in future years.
4 Revenue and segment reporting
(a) Revenue
The principal activities of the Group are development and sale of properties in the PRC.
Revenue mainly represents income from sale of properties, construction contract and
property management and related services earned during the period, net of business tax and
other sales related taxes and discounts allowed, and is analysed as follows:
Six months ended 30 June
2013 2012
RMB’000 RMB’000
Sale of properties 37,870,769 27,847,524
Construction contracts 351,894 635,963
Property management and related services 554,294 330,713
Others 163,852 145,360
38,940,809 28,959,560
The Group’s customer base is diversified and does not have customer with whom
transactions have exceeded 10% of the Group’s revenue.
55
China Vanke Co., Ltd.
Financial statements for the six months ended 30 June 2013
4 Revenue and segment reporting (continued)
(b) Segment reporting
The Group manages its business by divisions, which are organised by a mixture of both
business lines (products and services) and geography. In a manner consistent with the way in
which information is reported internally to the Group’s most senior executive management
for the purpose of resource allocation and performance assessment, the Group has presented
the following five reportable segments.
Property development (Beijing region/Guangshen region/Shanghai region/Chengdu
region): given the importance of the property development division to the Group, the
Group’s property development business is segregated further into four reportable
segments on a geographical basis, as the divisional managers for each of these regions
report directly to the senior executive team. All the four segments mainly derive their
revenue from development and sale of residential properties. The properties are
mainly sold to individual customers; therefore, the Group does not have major
customers. Currently the Group’s activities in this regard are carried out in the PRC.
Details about the specific cities covered by each region are set out in note 4(b)(i).
Property management: this segment provides property management and related
services to purchasers and tenants of the Group’s own developed residential
properties and shopping arcades, as well as those developed by the external property
developers. Currently the Group’s activities in this regard are also carried out in the
PRC.
Although the operating segment of property management services does not meet any of the
quantitative thresholds specified in IFRS 8, Operating Segments, management believes that
information about the segment would be useful to users of the consolidated financial
statements.
(i) Segment results, assets and liabilities
For the purpose of assessing segment performance and allocating resources among segments,
the Group’s most senior executive management monitors the results, assets and liabilities
attributable to each reportable segment on the following bases:
Segment assets include all tangible, intangible assets, other investments and current assets in
Mainland China with the exception of deferred tax assets and other corporate assets.
Segment liabilities include trade creditors, accruals, bank loans and borrowings from
financial institutions, and the provision for the estimated losses to be borne by the Group in
relation to the property management projects in Mainland China, but excluding deferred tax
liabilities.
Revenue and expenses are allocated to the reportable segments with reference to sales before
sales tax generated by those segments and the expenses incurred by those segments or which
otherwise arise from the depreciation or amortisation of assets attributable to those segments.
56
China Vanke Co., Ltd.
Financial statements for the six months ended 30 June 2013
4 Revenue and segment reporting (continued)
(b) Segment reporting (continued)
(i) Segment results, assets and liabilities (continued)
The measure used for reporting segment profit is the profit before CIT, excluding share of profit
or loss of associates or joint ventures, dividend income, other income and other operating
expenses in Mainland China, but including the provision for doubtful debts and the profit arising
from the inter-segment transactions. LAT which is considered directly attributable to the sale of
properties is deducted from the segment profit for the review by the Group’s most senior
executive management.
Inter-segment sales are priced with reference to prices charged to external parties for similar
transactions.
Real estate development (note (1))
Beijing Guangshen Shanghai Chengdu Property
region region region region management Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
For the six months ended 30
June 2013
Revenue from external customers,
before sales taxes 6,686,301 14,654,280 8,162,741 11,230,582 620,892 41,354,796
Inter-segment revenue - - - - 315,087 315,087
Reportable segment revenue,
before sales taxes 6,686,301 14,654,280 8,162,741 11,230,582 935,979 41,669,883
Reportable segment profit 766,779 3,010,550 791,191 2,172,434 1,711 6,742,665
Interest income 137,714 83,320 60,495 70,227 2,413 354,169
Interest expenses 190,169 148,113 195,612 92,624 24 626,542
Share of profits less losses of
associates and joint
ventures (note (2)) 133,573 68,624 173,702 15,109 - 391,008
Reportable segment assets 122,727,314 131,203,750 124,347,998 80,208,458 2,751,338 461,238,858
Reportable segment liabilities 103,143,399 115,494,386 111,662,729 71,245,251 2,377,495 403,923,260
57
China Vanke Co., Ltd.
Financial statements for the six months ended 30 June 2013
4 Revenue and segment reporting (continued)
(b) Segment reporting (continued)
(i) Segment results, assets and liabilities (continued)
Real estate development (note (1))
Beijing Guangshen Shanghai Chengdu Property
region region region region management Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
For the six months ended 30 June 2012
Revenue from external customers,
before sales taxes 7,169,322 8,608,262 8,271,885 6,274,232 389,598 30,713,299
Inter-segment revenue 55,744 192,493 - - 290,926 539,163
Reportable segment revenue,
before sales taxes 7,225,066 8,800,755 8,271,885 6,274,232 680,524 31,252,462
Reportable segment profit 1,348,769 2,146,954 1,305,043 1,119,931 (19,459) 5,901,238
Interest income 267,987 78,197 91,223 38,160 2,110 477,677
Interest expenses 211,277 288,386 250,863 26,182 38 776,746
Share of profits less losses of
associates and joint
ventures (note (2)) 303,681 82,346 (47,564) 31,459 - 369,922
Reportable segment assets 94,626,710 108,695,974 85,640,978 54,718,202 1,842,118 345,523,982
Reportable segment liabilities 79,713,170 94,455,810 74,739,427 49,540,815 1,628,694 300,077,916
Note (1): Beijing region represents Beijing, Tianjin, Shenyang, Anshan, Dalian, Qingdao,
Changchun, Yantai, Jilin, Taiyuan, Tangshan, Langfang, Fushun, Qinhuangdao and
Jinzhong.
Guangshen region represents Shenzhen, Guangzhou, Qingyuan, Dongguan, Foshan,
Zhuhai, Zhongshan, Changsha, Xiamen, Fuzhou, Huizhou, Hainan, Putian, Quanzhou
and Nanning.
Shanghai region represents Shanghai, Hangzhou, Su’nan, Ningbo, Nanjing,
Zhenjiang, Nanchang, Hefei, Yangzhou, Jiaxing, Wuhu and Wenzhou.
Chengdu region represents Chengdu, Wuhan, Xi’an, Chongqing, Kunming, Guiyang,
Urumqi and Zhengzhou.
Note (2): Share of losses less profits of associates and joint ventures that is attributable to head
office and not allocated to the respective segments is RMB3 million.( share of profit
less losses for the period ended 30 June 2012: RMB53 million)
58
China Vanke Co., Ltd.
Financial statements for the six months ended 30 June 2013
4 Revenue and segment reporting (continued)
(b) Segment reporting (continued)
(ii) Reconciliation of reportable segment revenue, profit, assets and liabilities
Six months ended 30 June
2013 2012
RMB’000 RMB’000
Revenue
Reportable segment revenue 41,669,883 31,252,462
Elimination of inter-segment revenue (315,087) (539,163)
Unallocated revenue 35,550 9,693
Sales taxes (2,449,537) (1,763,432)
Consolidated revenue 38,940,809 28,959,560
Profit
Reportable segment profit 6,742,665 5,901,238
Elimination of inter-segment profit 543,258 (19,060)
Share of profits less losses of associates and
joint ventures 387,629 422,520
Dividend income 1,418 27,324
Other net income, excluding net exchange gain 49,207 69,907
Other operating expenses, excluding provision
for doubtful debts (21,046) (12,729)
Unallocated expenses (569,719) (340,526)
LAT 1,647,152 1,514,309
Consolidated profit before taxation 8,780,564 7,562,983
30 June 2013 31 December 2012
RMB’000 RMB’000
Assets
Reportable segment assets 461,238,858 407,352,376
Elimination of inter-segment receivables (206,887,664) (192,577,435)
Unallocated assets 178,171,423 164,319,915
Consolidated total assets 432,522,617 379,094,856
Liabilities
Reportable segment liabilities 403,923,260 349,522,384
Elimination of inter-segment payables (189,539,931) (176,161,335)
Unallocated liabilities 130,073,806 123,595,612
Consolidated total liabilities 344,457,135 296,956,661
59
China Vanke Co., Ltd.
Financial statements for the six months ended 30 June 2013
5 Other revenue
Six months ended 30 June
2013 2012
RMB’000 RMB’000
Interest income 358,224 367,774
Dividend income 1,418 27,324
359,642 395,098
6 Other net income
Six months ended 30 June
2013 2012
RMB’000 RMB’000
Penalty receipts, forfeited deposits and
compensation from customers 26,818 23,640
Loss/(gain) on disposals of subsidiaries (11) 36,928
Net loss on disposals of other investments (1,493) (14,256)
Net (loss)/gain on disposals of property,
plant and equipment (5,016) 33
Net realised and unrealised gain/(loss) on financial
derivatives 1,464 (2,271)
Net exchange (loss)/gain (16,006) 4,780
Other sundry income 27,445 25,833
33,201 74,687
7 Other operating expenses
Six months ended 30 June
2013 2012
RMB’000 RMB’000
Provision for doubtful debts 77,899 100,317
Donations 2,420 904
Penalties and compensation to customers 12,513 10,155
Other sundry expenses 6,113 1,670
98,945 113,046
60
China Vanke Co., Ltd.
Financial statements for the six months ended 30 June 2013
8 Profit before taxation
Profit before taxation is arrived at after charging / (crediting):
(a) Finance costs
Six months ended 30 June
2013 2012
RMB’000 RMB’000
Interest on interest-bearing borrowings 2,992,052 2,606,843
Less: Interest expense capitalised into
inventories (note) (2,313,448) (1,818,462)
678,604 788,381
Note: The borrowing costs have been capitalised at a rate of 8.2% per annum (six months
ended 30 June 2012: 9.2%).
(b) Staff costs
Six months ended 30 June
2013 2012
RMB’000 RMB’000
Salaries, wages and other benefits 1,469,805 1,013,852
Contributions to defined contribution
retirement plan 164,207 128,862
Equity-settled share-based payment expenses 32,578 57,814
1,666,590 1,200,528
(c) Other items
Six months ended 30 June
2013 2012
RMB’000 RMB’000
Depreciation and amortisation 91,128 76,439
Impairment loss on trade and other receivables 77,899 100,317
Cost of inventories 26,580,291 18,383,496
Operating lease charges in respect of properties 43,840 34,381
Rental income from investment properties (37,792) (125,192)
61
China Vanke Co., Ltd.
Financial statements for the six months ended 30 June 2013
9 Income tax in the consolidated statement of profit or loss
(a) Taxation in the consolidated income statement represents:
Six months ended 30 June
2013 2012
RMB’000 RMB’000
Current tax
Provision for CIT and Hong Kong Profits Tax 2,235,716 1,910,218
Provision for LAT 1,659,736 1,537,251
Withholding tax 21,138 25,945
3,916,590 3,473,414
------------------- -------------------
Deferred tax
Fair value adjustments arising from
business combinations
- CIT and Hong Kong Profits Tax (15,553) (8,927)
- LAT (12,585) (22,940)
Accrual for LAT (110,886) (53,672)
Tax losses (312,965) (294,789)
Accruals for construction costs (81,304) (6,919)
Withholding tax (17,632) 27,112
Unrealised profits (37,706) (51,947)
Other temporary differences 116,714 (33,827)
(471,917) (445,909)
------------------- -------------------
3,444,673 3,027,505
(i) CIT and Hong Kong Profits Tax
The provision for CIT is calculated based on the estimated taxable income at the rates
applicable to each company in the Group. The income tax rates applicable to the principal
subsidiaries in the PRC are 25% (2012: 25%).
The provision for Hong Kong Profits Tax for 2013 is calculated at 16.5% (2012: 16.5%) of
the estimated assessable profits for the period.
62
China Vanke Co., Ltd.
Financial statements for the six months ended 30 June 2013
9 Income tax in the c consolidated statement of profit or loss (continued)
(a) Taxation in the consolidated income statement represents: (continued)
(ii) LAT
LAT is levied on properties developed by the Group for sale, at progressive rates ranging
from 30% to 60% on the appreciation of land value, which under the applicable regulations
is calculated based on the proceeds of sale of properties less deductible expenditures
including lease charges of land use rights, borrowing costs and relevant property
development expenditures.
(iii) Withholding tax
Withholding tax is levied on the overseas subsidiaries in respect of dividend distributions
arising from profit of PRC subsidiaries earned after 1 January 2008 ranging from 5% to 10%.
(b) Reconciliation between tax expense and accounting profit at applicable tax rates:
Six months ended 30 June
2013 2012
RMB’000 RMB’000
Profit before taxation 8,780,564 7,562,983
Less: LAT (1,647,151) (1,514,311)
Profit before CIT and Hong Kong Profits Tax 7,133,413 6,048,672
Notional tax on profit before CIT and Hong Kong
Profits Tax calculated at effective income tax
rate of the relevant group entities concerned 1,726,532 1,495,776
Non-taxable income (97,262) (105,630)
Non-deductible expenses 126,485 88,950
Effect of temporary difference not recognised 41,767 55,989
Recognition of previously unrecognised tax losses - (21,891)
CIT and Hong Kong Profits Tax 1,797,522 1,513,194
LAT 1,647,151 1,514,311
Income tax expense 3,444,673 3,027,505
63
China Vanke Co., Ltd.
Financial statements for the six months ended 30 June 2013
10 Other comprehensive income
(a) Tax effects relating to each component of other comprehensive income
six months ended 30 June 2013 six months ended 30 June 2012
Before-tax Tax Net-of-tax Before-tax Tax Net-of-tax
amount expense amount amount benefit amount
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(note 26(d)) (note 26(d))
Exchange differences on
translation of financial
statements of overseas
subsidiaries 25,671 - 25,671 (73,372) - (73,372)
Available-for-sale securities
- net movement in fair
value reserve 598 (149) 449 (36,498) 9,124 (27,374)
Other comprehensive
income 26,269 (149) 26,120 (109,870) 9,124 (100,746)
(b) Components of other comprehensive income, including reclassification adjustments
Six months ended 30 June
2013 2012
RMB’000 RMB’000
Net movement in the fair value reserve during the
period recognised in other comprehensive income 449 (27,374)
11 Basic earnings per share
The calculation of basic earnings per share is based on the profit attributable to equity
shareholders of the Company of RMB4,556,304,906.89 (2012: RMB3,725,085,079.33) and
the weighted average of 11,004,639,043.50 (2012: 10,995,210,218.00) shares in issue during
the period.
The Group has a share option scheme which was adopted on 25 April 2011 (see note 29).
During the period, 18,171,851 share options have been exercised.
64
China Vanke Co., Ltd.
Financial statements for the six months ended 30 June 2013
12 Property, plant and equipment
Hotel and Leasehold Machinery Electronic
other buildings Improvements land and motor and other Construction
held for own use to premises prepayment vehicles equipment in progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Cost:
At 1 January 2012 1,654,119 119,245 455,070 177,397 237,079 705,552 3,348,462
Additions 82,109 21,045 1,473 18,604 40,864 378,030 542,125
Transfers 32,464 - - - - (32,464) -
Disposals (51,375) (2,876) - (10,999) (14,713) - (79,963)
At 31 December 2012 1,717,317 137,414 456,543 185,002 263,230 1,051,118 3,810,624
----------------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
At 1 January 2013 1,717,317 137,414 456,543 185,002 263,230 1,051,118 3,810,624
Additions 68,908 46,159 35 21,254 23,392 173,724 333,472
Transfers 1,320 839 - - - (2,159) -
Disposals (31,967) (15) - (10,573) (2,910) - (45,465)
At 30 June 2013 1,755,578 184,397 456,578 195,683 283,712 1,222,683 4,098,631
----------------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
65
China Vanke Co., Ltd.
Financial statements for the six months ended 30 June 2013
12 Property, plant and equipment (continued)
Hotel and Leasehold Machinery Electronic
other buildings Improvements land and motor and other Construction
held for own use to premises prepayment vehicles equipment in progress Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Accumulated depreciation:
At 1 January 2012 257,374 62,937 19,596 84,596 146,070 - 570,573
Charge for the year 71,084 24,671 10,100 20,057 31,901 - 157,813
Written back on disposals (26,589) (2,620) - (8,245) (12,848) - (50,302)
At 31 December 2012 301,869 84,988 29,696 96,408 165,123 - 678,084
----------------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
At 1 January 2013 301,869 84,988 29,696 96,408 165,123 - 678,084
Charge for the period 24,976 19,156 5,054 13,009 17,242 - 79,437
Written back on disposals (3,187) (3) - (8,432) (2,063) - (13,685)
At 30 June 2013 323,658 104,141 34,750 100,985 180,302 - 743,836
----------------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
Net book value:
At 30 June 2013 1,431,920 80,256 421,828 94,698 103,410 1,222,683 3,354,795
At 31 December 2012 1,415,448 52,426 426,847 88,594 98,107 1,051,118 3,132,540
66
China Vanke Co., Ltd.
Financial statements for the six months ended 30June 2013
13 Investment properties
30 June 2013 31 December 2012
RMB’000 RMB’000
Cost:
At 1 January 1,754,029 1,155,944
Additions 122,443 1,286,081
Transfers - (675,300)
Disposals - (12,696)
At balance sheet date 1,876,472 1,754,029
------------------- -------------------
Accumulated depreciation:
At 1 January 39,893 29,840
Charge for the period 4,587 10,599
Written back on disposals - (546)
At balance sheet date 44,480 39,893
------------------- -------------------
Net book value:
At balance sheet date 1,831,992 1,714,136
Investment properties include those under development at the end of the reporting period
with carrying amount of RMB803 million (31 December 2012: RMB684 million).
Investment properties comprise certain commercial properties that are leased to third parties.
The directors, having regard to recent market transactions of similar properties in the same
location as the Group’s investment properties, consider the estimated fair value of the
investment properties, together with leasehold land on which the investment properties
located as set out in note 18, to be RMB4,050 million (31 December 2012: RMB4,080
million).
(a) The analysis of net book value of investment properties is set out as follows:
30 June 2013 31 December 2012
RMB’000 RMB’000
In the PRC, held on leases of
- Between 10 and 50 years 615,152 686,918
- Over 50 years 213,451 124,905
828,603 811,823
------------------- ------------------
In Hong Kong, held on leases of
- Over 50 years 1,003,389 902,313
------------------- -------------------
1,831,992 1,714,136
67
China Vanke Co., Ltd.
Financial statements for the six months ended 30June 2013
13 Investment properties (continued)
(b) The Group leases out investment properties under operating leases. The leases typically run
for an initial period of two to twenty years. None of the leases includes contingent rentals.
The Group’s total future minimum lease payments under non-cancellable operating leases are
receivable as follows:
30 June 2013 31 December 2012
RMB’000 RMB’000
Within 1 year 93,326 57,496
After 1 year but within 5 years 322,839 314,671
After 5 years 451,564 454,588
867,729 826,755
14 Goodwill
Goodwill arose from acquisition of Vanke Property (Overseas) Limited by the Group in
2012. As at period end, an impairment test was performed by comparing the goodwill with
its recoverable amount and no impairment was recorded.
15 Interest in associates
30 June 2013 31 December 2012
RMB’000 RMB’000
Share of net assets 4,705,397 2,915,844
The following list contains only the particulars of associates, all of which are unlisted
corporate entities, which principally affected the results or assets of the Group.
68
China Vanke Co., Ltd.
Financial statements for the six months ended 30June 2013
15 Interest in associates (continued)
Proportion of
ownership interest
Place of Group’s
incorporation effective Principal
Name of company and operation interest activity
Beijing Jinyu Vanke Property PRC 49% Property
Development Company Limited development
Wuhan Golf City Garden Real Estate PRC 49% Property
Company Limited (note 1) development
Shanghai Nandu Baima Real Estate PRC 49% Property
Company Limited development
Chengdu Yihang Vanke Binjiang Real PRC 49% Property
Estate Company Limited (note 1) development
Hefei Yihang Vanke Real Estate PRC 50% Property
Company Limited (note1, 2) development
Suzhou Zhonghang Vanke Changfeng PRC 49% Property
Real Estate Company Limited (note 1) development
Changsha Oriental City Real Estate PRC 20% Property
Company Limited development
Shanghai Zunyi Property Co., Ltd PRC 30% Property
development
Foshan Shunde District Zhonghang PRC 49% Property
Vanke Property Company Limited development
Xiamen Wantefu Property Development PRC 30% Property
Company Limited development
Guangzhou Yinyejunrui Property PRC 49% Property
Development Company Limited (note 1) development
Shanghai Jingyuan Property Development PRC 45% Property
Company Limited development
Langfang Kuangshijiye Property PRC 50% Property
Development Company Limited (note 2) development
Shanghai Vanke Changning Property PRC 49% Property
Development Company Limited (note 1) development
Ningbo Zhongwan Property Development Property
Company Limited PRC 49% development
Shanghai Chongwan Property Development PRC 49% Property
Company Limited (note 1) development
Shenyang Zhongtie Vanke Langyu Property PRC 49% Property
Development Company Limited (note 2) development
Chongqing Wanbin Property Development PRC 45% Property
Company Limited (note 1) development
Suzhou Kejian Property Development PRC 49% Property
Company Limited (note 1) development
Beijing Wuyuankesheng Property PRC 49% Property
Development Company Limited development
Beijing Jingtouyintai Property Development PRC 50% Property
Company Limited (note 2) development
Guangzhou Wanshang Property PRC 33% Property
Development Company Limited development
69
China Vanke Co., Ltd.
Financial statements for the six months ended 30June 2013
15 Interest in associates (continued)
Proportion of
ownership interest
Place of Group’s
incorporation effective Principal
Name of company and operation interest activity
Chongqing Zhonghang Vanke Yunling Property PRC 45% Property
Development Company Limited (note 1) development
Chongqing Zhonghang Vanke Junjing Property PRC 45% Property
Development Company Limited (note 1) development
Changchun Vanke Xizhigu Property PRC 50% Property
Development Company Limited (note 2) development
Shenzhen Vanke Binhai Property PRC 50% Property
Company Limited(note 2) development
Foshan Changsheng Construction Technology PRC 20% Construction
Company Limited technology
research and
development
Beijing Wanhu Real Estate Development PRC 49% Property
Company Limited development
Hangzhou Dongyue Investment Management PRC 20% Investment
Company Limited management
Vankic Investment (Cayman Islands) Limited Cayman Islands 40% Investment
Management
Zhonghang Vanke Company Limited PRC 40% Property
development
Notes:
(1) Except for the equity interest held directly, the Group also hold equity interest in
these associates through Zhonghang Vanke Company Limited.
(2) Pursuant to the voting rights in the board of directors, the Group has significant
influence in these entities.
Summary financial information on associates:
six months ended
30 June 2013
30 June 2013
Assets Liabilities Equity Revenue Profit
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
100 per cent 55,568,798 43,959,156 11,609,642 2,956,157 355,918
Group’s effective interest 24,501,197 19,795,800 4,705,397 1,456,012 198,699
six months ended
31 December 2012
30 June 2012
Assets Liabilities Equity Revenue Profit
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
100 per cent 46,329,081 38,100,386 8,228,695 3,301,176 499,680
Group’s effective interest 20,996,384 18,080,540 2,915,844 1,622,622 256,481
70
China Vanke Co., Ltd.
Financial statements for the six months ended 30June 2013
16 Interest in joint ventures
30 June 2013 31 December 2012
RMB’000 RMB’000
Share of net assets 4,252,463 4,043,247
The following list contains only the particulars of joint ventures, all of which are unlisted
corporate entities, which principally affected the results or assets of the Group.
Proportion of
ownership interest
Place of Group’s
incorporation effective Principal
Name of company and operation interest activity
Shanghai Jialai Real Estate Development PRC 49% Property
Company Limited (note) development
Dongguan Vanke Property Company Limited PRC 50% Property
development
Wuhan Vanke Qinganju Property Company PRC 30% Property
Limited (note) development
Yunnan Vanke Chengtou Property Company PRC 51% Property
Limited (note) development
Changsha Lingyu Real Estate Development PRC 60% Property
Company Limited (note) development
Changsha Lingyu Investment Company PRC 60% Property
Limited (note) development
Beijing Zhongliang Vanke Real Estate PRC 50% Property
Development Company Limited development
Tianjin Diwan Investment Company PRC 40% Property
Limited (note) development
Hangzhou Xiangge Investment Management PRC 50% Management
Company Limited and consulting
Hangzhou Dongshang Property PRC 50% Property
Development Company Limited development
Zhuhai Haiyu Property Development PRC 50% Property
Company Limited development
Tianjin Songke Real Estate Company PRC 49% Property
Limited (note) development
Beijing Jingtou Vanke Property Development PRC 20% Property
Company Limited (note) development
Fuyang Yongtong Property Development PRC 20% Property
Company Limited (note) development
Pingdu Vanke Property Company Limited (note) PRC 51% Property
Fuyang Donghe Property Company Limited (note) PRC 20% Property
development
Shanghai Wanzhicheng Property PRC 50% Property
Development Company Limited development
71
China Vanke Co., Ltd.
Financial statements for the six months ended 30June 2013
16 Interest in joint ventures (continued)
Proportion of
ownership interest
Place of Group’s
incorporation effective Principal
Name of company and operation interest activity
Shanghai Ledu Property Development PRC 33.3% Property
Company Limited (note) development
Shanghai Wanshuang Construction Technology PRC 60% Construction
Company Limited (note) management
consulting
Shanghai Vanke Yida Investment Management PRC 50% Investment
Company Limited management
Chongqing Liangjiang Vanke Investment PRC 50% Property
Company Limited developmet
Wuhan Liantou Vanke Property Development PRC 50% Property
Company Limited development
Tangshan Wanrun Real Estate Company Limited (note) PRC 40% Property
development
Wuhan Yayuan Vanke Property Company Limited PRC 50% Property
development
Beijing Oriental Vanke Investment Management PRC 50% Property
Company Limited development
Shandong Xiaozhushan Construction PRC 34% Tourism property
Development Company Limited (note) development
Yunnan Zhelian Property Development Company PRC 23% Property
Limited (note) development
Zhejiang Nuoya Capital Management PRC 49% Property
Company Limited (note) development
Guangzhou Wanxuan Real Estate PRC 51% Property
Company Limited (note) development
Jinan Wanzhu Real Estate Development PRC 50% Property
Company Limited development
Foshan Nanhai Wanhong Real Estate PRC 50% Property
Company Limited development
Beijing Shoukai Vanke Real Estate PRC 50% Property
Development Company Limited development
Chengdu Vanke Nancheng Real Estate PRC 50% Property
Development Company Limited development
Fuyang Dongrun Property PRC 50% Property
Company Limited development
Suzhou Wankang Property PRC 50% Property
Company Limited development
Wuhan Vanke Huajingyuan Property PRC 50% Property
Company Limited development
201 Folsom Acquisition JV,L.P (note) USA 71.5% Property
development
Sherwood Development Pte Ltd (note) Singapore 30% Property
development
72
China Vanke Co., Ltd.
Financial statements for the six months ended 30June 2013
16 Interest in joint ventures (continued)
Notes: A contractual arrangement between the Group and the counterparties of these entities
establishes joint control over the financial and operating policies of these entities.
A Summary of the financial information on joint ventures – Group’s effective interest
30 June 2013 31 December 2012
RMB’000 RMB’000
Non-current assets 1,989,191 1,033,392
Current assets 54,822,952 16,422,935
Non-current liabilities (2,603,588) (754,982)
Current liabilities (49,956,092) (12,658,098)
Net assets 4,252,463 4,043,247
Six months ended 30 June
2013 2012
RMB’000 RMB’000
Income 1,891,300 1,040,475
Expenses (1,702,370) (874,436)
Profit for the period 188,930 166,039
17 Other financial assets
30 June 2013 31 December 2012
RMB’000 RMB’000
Available-for-sale securities in the PRC
Equity securities
- Unlisted 94,508 81,215
- Listed in the PRC 741 4,764
95,249 85,979
73
China Vanke Co., Ltd.
Financial statements for the six months ended 30June 2013
18 Other non-current assets
The other non-current assets mainly represent prepayments for acquisitions of investees and
prepayment for leasehold land on which the Group’s investment properties located.
Movement of prepayment for leasehold land is analysed as follows:
30 Jun. 2013 31 Dec. 2012
RMB’000 RMB’000
Cost:
At 1 January 675,300 -
Transfer - 675,300
At balance sheet date 675,300 675,300
------------------- -------------------
Accumulated amortisation:
At 1 January 14,208 -
Charge for the period 7,104 14,208
At balance sheet date 21,312 14,208
------------------- -------------------
Net book value:
At balance sheet date 653,988 661,092
19 Inventories
30 June 2013 31 December 2012
RMB’000 RMB’000
Properties held for development 94,099,623 76,733,826
Properties under development 198,241,047 160,676,827
Completed properties for sale 17,625,424 15,993,829
Others 260,254 217,670
310,226,348 253,622,152
74
China Vanke Co., Ltd.
Financial statements for the six months ended 30June 2013
19 Inventories (continued)
(a) The analysis of carrying value of leasehold land held for property development for sale is
as follows:
30 June 2013 31 December 2012
RMB’000 RMB’000
In the PRC, held on lease of
- Between 10 and 50 years 24,699,048 14,452,874
- Over 50 years 134,373,833 131,311,363
159,072,881 145,764,237
(b) The analysis of the amount of inventories recognised as an expense and included in profit
or loss is as follows:
Six months ended 30 June
2013 2012
RMB’000 RMB’000
Carrying amount of inventories sold 26,580,291 18,383,496
(c) The amount of properties held for development and properties under development expected
to be recovered after more than one year is RMB158,200 million (2012: RMB115,592
million).
20 Trade and other receivables
30 June 2013 31 December 2012
RMB’000 RMB’000
Trade debtors (note (a)) 1,781,677 1,915,305
Less: allowance for doubtful debts (33,373) (28,756)
1,748,304 1,886,549
Other debtors 20,722,845 10,784,562
Amounts due from associates (note (b)) 4,222,342 5,642,821
Amounts due from joint ventures (note (b)) 7,961,419 3,465,502
Prepayments (note (c)) 29,601,947 33,373,612
Gross amount due from customers for
contract work (note (d)) 1,197,817 1,835,204
65,454,674 56,988,250
75
China Vanke Co., Ltd.
Financial statements for the six months ended 30June 2013
20 Trade and other receivables (continued)
(a) As of the end of the reporting period, the ageing analysis of trade debtors (which are included
in trade and other receivables), based on the date the trade debtors recognised and net of
allowance for doubtful debts, is as follows:
30 June 2013 31 December 2012
RMB’000 RMB’000
Within 1 year 1,482,839 1,653,991
1 to 2 years 152,370 154,308
2 to 3 years 98,284 55,874
Over 3 years 14,811 22,376
1,748,304 1,886,549
The Group’s credit policy is set out in note 31(a).
Trade debtors that were past due but not impaired relate to a number of independent debtors
that have a good track record with the Group. Based on the past experience, management
believes that no impairment allowance is necessary in respect of these balances as there has
not been a significant change in credit quality and the balances are still considered fully
recoverable. The Group does not hold any collateral over these balances.
(b) The amounts due from associates and joint ventures as at 30 June 2013 include an amount of
RMB5,664 million (2012: RMB5,713 million) which are interest bearing at market rate,
unsecured and repayable on demand. The interest income from these associates and joint
ventures amounts to RMB285 million (2012 January to June: RMB95 million) in 2013. The
remaining amounts due from associates and joint ventures are unsecured, interest free and
repayable on demand.
(c) The balance includes prepayments for leasehold land of RMB12,919 million (2012:
RMB22,326 million).
(d) The aggregate amount of costs incurred plus recognised profits less recognised losses to date,
included in the gross amount due from customers for contract work at 30 June 2013, is
RMB2,587 million (2012: RMB2,213 million).
21 Pledged deposits
The balance mainly represents the guarantee deposits in respect of mortgage loans related to
property sale.
22 Cash and cash equivalents
30 June 2013 31 December 2012
RMB’000 RMB’000
Cash at bank and on hand 36,247,513 51,120,224
76
China Vanke Co., Ltd.
Financial statements for the six months ended 30June 2013
23 Bank loans and borrowings from financial institutions
This note provides information about the contractual terms of the Group’s bank loans and
borrowings from financial institutions. For more information about the Group’s exposure to
interest rate risk, please refer to note 31(c).
30 June 2013 31 December 2012
RMB’000 RMB’000
Current
Secured
- Bank loans (note (a)) 1,354,016 3,358,380
- Borrowings from financial institutions (note (b)) 1,400,000 2,690,400
- Corporate bonds (note (c)) 2,998,337 2,985,306
5,752,353 9,034,086
------------------- -------------------
Guaranteed
- Borrowings from financial institutions (note (b)) 320,000 -
320,000 -
------------------- -------------------
Unsecured
- Bank loans 6,057,030 10,247,981
- Borrowings from financial institutions (note (b)) 29,825,337 13,378,980
- Corporate bonds (note (c)) 2,899,670 2,896,312
38,782,037 26,523,273
------------------- -------------------
44,854,390 35,557,359
Non-current
Secured
- Bank loans (note (a)) 3,250,020 5,055,824
- Corporate bonds (note (c)) 4,831,780 -
8,081,800 5,055,824
------------------- -------------------
Guaranteed
- Bank loans (note (a)) 300,000 190,000
- Borrowings from financial institutions (note (b)) - 320,000
300,000 510,000
------------------- -------------------
77
China Vanke Co., Ltd.
Financial statements for the six months ended 30June 2013
23 Bank loans and borrowings from financial institutions (continued)
30 June 2013 31 December 2012
RMB’000 RMB’000
Unsecured
- Bank loans 10,619,470 10,190,210
- Borrowings from financial institutions (note (b)) 10,280,760 20,280,036
20,900,230 30,470,246
------------------- -------------------
29,282,030 36,036,070
At 30 June, non-current interest-bearing loans and borrowings and corporate bonds were
repayable as follows:
30 June 2013 31 December 2012
RMB’000 RMB’000
After 1 year but within 2 years 14,968,950 27,286,992
After 2 years but within 5 years 14,313,080 8,749,078
29,282,030 36,036,070
Notes:
(a) Bank loans
The secured bank loans are secured over certain properties held for development and
investment properties with aggregate carrying value of RMB20,783 million (2012:
RMB11,079 million) or pledged by the shares of interest in certain subsidiaries of the Group.
(b) Borrowings from financial institutions
30 June 2013 31 December 2012
RMB’000 RMB’000
Current
Proceeds 31,748,815 16,326,322
Transaction costs (203,478) (256,942)
31,545,337 16,069,380
Non-current
Proceeds 10,304,198 20,760,429
Transaction costs (23,438) (160,393)
10,280,760 20,600,036
78
China Vanke Co., Ltd.
Financial statements for the six months ended 30June 2013
23 Bank loans and borrowings from financial institutions (continued)
(b) Borrowings from financial institutions(continued)
The secured borrowings from financial institutions are pledged by the shares of interest in
certain subsidiaries of the Group.
The guaranteed borrowings from financial institutions are guaranteed by third party with nil
consideration.
(c) Corporate bonds
Current 30 June 2013
No.101688 No.101699
Bonds Bonds
RMB’000 RMB’000
At 1 January 2,896,312 2,985,306
Transaction costs amortised 3,358 13,031
At 30 June 2,899,670 2,998,337
31 December 2012
No.101688 No.101699
Bonds Bonds
RMB’000 RMB’000
At 1 January 2,889,947 2,960,450
Transaction costs amortised 6,365 24,856
At 31 December 2,896,312 2,985,306
In September 2008, the Company issued two series of corporate bonds, namely the “No.
101688 Bonds” and the “No. 101699 Bonds”, amounting to RMB 5,900 million. Both Bonds
are listed on the Shenzhen Stock Exchange.
The No. 101688 Bonds are with no guarantee and interest bearing at 7% per annum payable
in arrears on 6 September 2009, 2010 and 2011. In accordance with the terms of the No.
101688 Bonds, on 6 September 2011 the Company has the option to adjust upward the
interest rate of the Bonds for the next two years by maximum of 100 basis points and each of
the Bond is, at the option of the bondholder, redeemable at its par value of RMB 100 each on
the same date. If not being redeemed on 6 September 2011, the Bonds are repayable on 6
September 2013 and the interest for the next two years is payable in arrears on 6 September
2012 and 2013. None of the No. 101688 Bonds were early redeemed by the bondholders on 6
September 2011.
The No. 101699 Bonds are guaranteed by the China Construction Bank Shenzhen branch and
are repayable on 6 September 2013. The Bonds are interest bearing at 5.5% per annum
payable in arrears on 6 September 2009, 2010, 2011, 2012 and 2013.
79
China Vanke Co., Ltd.
Financial statements for the six months ended 30June 2013
23 Bank loans and borrowings from financial institutions (continued)
(c) Corporate bonds(continued)
Non-current 30 June 2013
RMB’000
At 1 January -
Principle 4,825,162
Transaction costs amortised 6,618
At 30 June 4,831,780
On 13 March 2013, the Company issued to institutional investors US$800,000,000 corporate
bonds, with a 5-year term and a fixed coupon rate of 2.625% per annum. The interest payable
semi-annually is calculated on a simple interest basis (as opposed to compound interest).
Vanke Real Estate (Hong Kong) Company Limited, a subsidiary of the Company, provided
an irrevocable joint liability guarantee for the corporate bonds.
24 Financial derivatives
30 June 2013 31 December 2012
RMB’000 RMB’000
Interest rate swaps 13,818 25,761
80
China Vanke Co., Ltd.
Financial statements for the six months ended 30June 2013
25 Trade and other payables
30 June 2013 31 December 2012
RMB’000 RMB’000
Trade creditors and bills payable 59,261,263 49,838,127
Other payables and accruals 38,776,681 31,839,905
Amounts due to associates 1,178,597 907,773
Amounts due to joint ventures 3,286,357 1,919,788
Receipts in advance 159,401,788 130,989,093
Gross amount due to customers for contract
work - 34,884
261,904,686 215,529,570
Included in trade and other payables is retention payable of RMB385 million (2012:
RMB451 million) which are expected to be settled after one year.
The amounts due to associates and joint ventures include an amount of RMB2,538 million
(2012: RMB959 million) which are interest bearing at market rate, unsecured and repayable
on demand. The interest expenses to these associates and joint ventures amounted to RMB27
million (2012 January to June: RMB31 million) for the period ended 30 June 2013. The
remaining amounts due to associates and joint ventures are unsecured, interest free and
repayable on demand.
26 Income tax in the consolidated statement of financial position
(a) Current taxation in the consolidated statement of financial position represents:
30 June 2013 31 December 2012
RMB’000 RMB’000
CIT and Hong Kong Profits Tax 1,426,697 2,873,002
LAT 5,901,710 5,847,874
7,328,407 8,720,876
LAT provisions have been made pursuant to Guo Shui Fa (2006) No. 187 Circular of State
Administration of Taxation on Relevant Issues of Settlement and Management of Land
Appreciation Tax for Real Estate Developers. The Group considers the timing of settlement
is dependent on the practice of local tax bureaus. As a result of the uncertainty of timing of
payment of LAT, the provisions have been recorded as current liabilities as at 30 June 2013
and 31 December 2012.
81
China Vanke Co., Ltd.
Financial statements for the six months ended 30June 2013
26 Income tax in the statement of financial position (continued)
(b) Deferred tax assets
Deferred tax assets are attributable to the items set out below:
30 June 2013 31 December 2012
RMB’000 RMB’000
Tax losses 1,342,491 1,029,526
Bad debt provision and write-down of inventories 54,378 37,553
Accruals for construction costs 342,987 261,683
Accrual for LAT 1,383,681 1,272,795
Unrealised profits 419,327 381,621
Other temporary differences 113,992 236,716
3,656,856 3,219,894
Deferred tax assets have not been recognised in respect of the following items:
30 June 2013 31 December 2012
RMB’000 RMB’000
Tax losses 1,074,601 966,124
Deductible temporary differences 92,503 89,863
1,167,104 1,055,987
The tax losses will expire between 2013 and 2018. The deductible temporary differences will
not expire under the current tax legislation. Deferred tax assets have not been recognised in
respect of these items because it is not probable that future taxable profit will be available
against which the Group can utilise the benefits therefrom.
(c) Deferred tax liabilities
Deferred tax liabilities are attributable to the items set out below:
30 June 2013 31 December 2012
RMB’000 RMB’000
Fair value adjustments on
available-for-sale securities 149 -
Fair value adjustments arising from
business combinations 929,895 958,033
Withholding tax 51,390 69,022
981,434 1,027,055
82
China Vanke Co., Ltd.
Financial statements for the six months ended 30June 2013
26 Income tax in the statement of financial position (continued)
(d) Movements in deferred taxation, net:
30 June 2013 31 December 2012
RMB’000 RMB’000
At 1 January 2,192,839 1,221,480
Net credit to profit or loss (note 9(a)) 482,732 962,235
Net credit / (charge) to other comprehensive
income (note 10(a))
(149) 9,124
At the balance sheet date 2,675,422 2,192,839
27 Provisions
30 June 2013 31 December 2012
RMB’000 RMB’000
Balance at 1 January 44,292 38,678
Provisions made during the period 15,320 12,346
Provisions used during the period (1,061) (6,732)
Balance at the balance sheet date 58,551 44,292
The balance represents the estimated losses to be borne by the Group in relation to the
property management projects.
28 Other non-current liabilities
The balance mainly represents the amounts that hold on behalf of the owners committees in
the property management sector.
29 Equity settled share-based transactions
The Group has a share option scheme which was adopted on 25 April 2011 whereby the
senior management and key staff of the Group are granted certain options at nil consideration
to subscribe for an aggregate of 110,000,000 A shares of the Company. The key management
personnel were granted with 33,000,000 share options. 40% of the options vest after one year
(30% after two years and the remaining 30% after three years) from the date of grant and are
then exercisable within a period of two years. Each option gives the holder the right to
subscribe for one A share of the Company.
83
China Vanke Co., Ltd.
Financial statements for the six months ended 30June 2013
29 Equity settled share-based transactions (continued)
(a) The number and weighted average exercise prices of share options are as follows:
Six months ended 30 June
Number
’000
Outstanding at the beginning of the period 93,167
Exercised during the period (18,172)
Forfeited during the period (1,658)
Outstanding at the end of the period 73,337
Exercisable at the end of the period 46,726
The weighted average share price at the date of exercise for shares options exercised during
the period was RMB8.60.
(b) Terms of unexpired and unexercised share options at the end of the reporting period:
30 June 2013
Exercise price * Number
RMB ’000
25 April 2012 to 24 April 2014 8.48 21,751
25 April 2013 to 24 April 2015 8.48 24,975
25 April 2014 to 22 April 2016 8.48 26,611
73,337
* The original exercise price is RMB8.89. The exercise price was adjusted to RMB8.79
after declaration of dividend of RMB0.10 per share during 2011 in accordance with
the terms and conditions of the share option scheme.
The exercise price was adjusted to RMB8.66 after declaration of dividend of
RMB0.13 per share during 2012 in accordance with the terms and conditions of the
share option scheme.
The exercise price was further adjusted to RMB8.48 after declaration of dividend of
RMB0.18 per share during the period in accordance with the terms and conditions of
the share option scheme.
84
China Vanke Co., Ltd.
Financial statements for the six months ended 30June 2013
30 Capital, reserves and dividends
(a) Share capital:
30 June 2013 31 December 2012
RMB’000 RMB’000
Authorised, issued and fully paid:
A shares of RMB1 each 9,698,770 9,680,598
B shares of RMB1 each 1,314,955 1,314,955
11,013,725 10,995,553
Included in the A shares are 23,828,261 shares (2012: 18,402,673 shares) with restriction to
transfer.
The holders of A and B shares are entitled to receive dividends as declared from time to time
and are entitled to one vote per share at general meetings of the Company. Both A and B
shares rank equally with regard to the Company’s residual assets.
Upon the completion of the relevant procedures for approval, the share option scheme (see
note 29) entered the second exercise period on 29 May 2013. During the reporting period,
there were a total of 18,171,851 share options exercised. The Company’s total number of
shares thus increased by18,171,851 shares accordingly.
(b) Nature and purpose of reserves
(i) Share-based compensation reserve
The share-based compensation reserve comprises the portion of the grant date fair value of
unexercised share options that has been recognised in accordance with the accounting policy
adopted for share-based payments in note 2(s)(ii).
(ii) Statutory reserves
Statutory surplus reserve
According to the PRC Company Law, the Company is required to transfer 10% of its profit
after taxation, as determined under PRC Accounting Regulations, to statutory surplus reserve
until the reserve balance reaches 50% of the registered capital. The transfer to this reserve
must be made before distribution of a dividend to shareholders.
Statutory surplus reserve can be used to make good previous years’ losses, if any, and may be
converted into share capital by the issue of new shares to equity shareholders in proportion to
their existing shareholdings or by increasing the par value of the shares currently held by
them, provided that the balance after such issue is not less than 25% of the registered capital.
For the six months ended 30 June 2013, the Company transferred RMB nil (2012:
561,387,000), being nil (2012:10%) of the Company’s current year’s net profit as determined
in accordance with the PRC accounting rules and regulations, to this reserve.
85
China Vanke Co., Ltd.
Financial statements for the six months ended 30June 2013
30 Capital, reserves and dividends (continued)
(b) Nature and purpose of reserves (continued)
(ii) Statutory reserves (continued)
Discretionary surplus reserve
The appropriation to the discretionary surplus reserve is subject to the shareholders’
approval. The utilisation of the reserve is similar to that of the statutory surplus reserve.
For the six months ended 30 June 2013, the directors proposed to transfer RMB nil (2012:
RMB2,806,937,000), being nil (2012: 50%) of the Company’s current year’s net profit as
determined in accordance with the PRC accounting rules and regulations, to this reserve.
(iii) Exchange reserve
The exchange reserve comprises all foreign exchange differences arising from the translation
of the financial statements of foreign operations. The reserve is dealt with in accordance with
the accounting policies set out in note 2(w).
(iv) Other reserves
Other reserves are mainly resulted from transactions with owners in their capacity as owners,
fair value movement of available-for-sale securities and a share award scheme in prior years.
The movement for the six months ended 30 June 2013 mainly represents the difference
between the fair value and book value of the acquirees’ net assets at the dates of acquisitions
of non-controlling interests and fair value movement of available-for-sale securities.
(c) Dividends
(i) There is no interim dividend declared during the reporting period.
(ii) Dividend payable to equity shareholders of the Company attributable to the previous
financial year, approved and paid during the period
Six months ended 30 June
2013 2012
RMB’000 RMB’000
Final dividend in respect of the previous financial
year, approved and paid during the period,
of RMB0.18 per share (2012: RMB0.13 per share) 1,981,401 1,429,377
86
China Vanke Co., Ltd.
Financial statements for the six months ended 30June 2013
30 Capital, reserves and dividends (continued)
(d) Capital management
The Group’s primary objectives when managing capital are to safeguard the Group’s ability
to continue as a going concern, so that it can continue to provide returns for shareholders and
benefits for other stakeholders, by pricing products and services commensurately with the
level of risk and by securing access to finance at a reasonable cost.
The Group actively and regularly reviews and manages its capital structure to maintain a
balance between the higher shareholder returns that might be possible with higher levels of
borrowings and the advantages and security afforded by a sound capital position, and makes
adjustments to the capital structure in light of changes in economic conditions.
Consistent with industry practice, the Group monitors its capital structure on the basis of
gearing ratio. This ratio is calculated as net debt divided by total equity of the Group. Net
debt is calculated as total bank loans and borrowings from financial institutions less cash and
cash equivalents and pledged deposits. The gearing ratio at the balance sheet date is
calculated as follows:
30 June 2013 31 December 2012
RMB’000 RMB’000
Bank loans and borrowings from financial institutions 74,136,421 71,593,429
Less: Cash and cash equivalents (36,247,513) (51,120,224)
Pledged deposits (1,356,113) (1,171,318)
Net debt 36,532,795 19,301,887
Total equity 88,065,482 82,138,195
31 Financial risk management and fair values
Exposure to credit, liquidity, interest rate and currency risks arises in the normal course of
the Group’s business. The Group’s exposure to these risks and the financial risk management
policies and practices used by the Group to manage these risks are described below.
(a) Credit risk
The Group’s credit risk is primarily attributable to cash and cash equivalents, pledged
deposits, trade and other receivables and other financial assets. Management has a credit
policy in place and the exposures to these credit risks are monitored on an on-going basis.
Cash and cash equivalents and pledged deposits held by the Group are mainly deposited in
financial institutions such as commercial banks which maintain sound reputation and
financial situation. The credit risk is considered low. The Group sets deposit limits against
the financial institutions’ credit risks.
87
China Vanke Co., Ltd.
Financial statements for the six months ended 30June 2013
31 Financial risk management and fair values (continued)
(a) Credit risk (continued)
In respect of trade receivables, credit risk is minimised as the Group normally receives full
payment from buyers before the transfer of property ownership.
In respect of amounts due from associates and joint ventures, the Group facilitates their
capital demand by assessing and closely monitoring their financial conditions and
profitability.
In respect of other receivables due from third parties, the Group reviews the exposures and
manages them based on the need of operation.
At the end of the reporting period, 23.96% (2012: 27.87%) of the total trade receivables was
due from the Group’s five largest trade debtors.
Except for the financial guarantees given by the Group as set out in note 33, the Group does
not provide any other guarantees which would expose the Group to credit risk.
(b) Liquidity risk
The Group’s policy is to regularly monitor its liquidity requirements and its compliance with
lending covenants, to ensure that it maintains sufficient reserves of cash and adequate
committed lines of funding from major financial institutions to meet its liquidity
requirements in the short and long terms.
The following table details the remaining contractual maturities at the end of the reporting
period of the Group’s non-derivative financial liabilities and derivative financial liabilities,
which are based on contractual undiscounted cash flows (including interest payments
computed using contractual rates or, if floating, based on current rates at the end of the
reporting period) and the earliest date the Group can be required to pay:
30 June 2013
Total contractual More than 1 More than 2
Carrying undiscounted Within 1 year year but less years but less
amount cash flow or on demand than 2 years than 5 years
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Bank loans and borrowings from
financial institutions 63,406,633 69,127,692 42,385,874 16,382,063 10,359,755
Corporate bonds 10,729,788 10,947,308 6,004,348 - 4,942,960
Trade creditors and accruals 106,290,159 106,369,189 106,026,667 188,023 154,499
Financial derivatives 13,818 13,818 13,818 - -
Interest payable 705,952 705,952 705,952 - -
Other non-current liabilities 33,819 33,819 - - 33,819
Total 181,180,169 187,197,778 155,136,659 16,570,086 15,491,033
88
China Vanke Co., Ltd.
Financial statements for the six months ended 30June 2013
31 Financial risk management and fair values (continued)
(b) Liquidity risk (continued)
31 December 2012
Total contractual More than 1 More than 2
Carrying undiscounted Within 1 year year but less years but less
amount cash flow or on demand than 2 years than 5 years
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Bank loans and borrowings from
financial institutions 65,711,812 75,554,883 34,959,538 30,443,032 10,152,313
Corporate bonds 5,881,618 6,145,333 6,145,333 - -
Trade creditors and accruals 88,061,192 88,174,864 86,786,154 994,105 394,605
Financial derivatives 25,761 25,761 25,761 - -
Interest payable 649,688 649,688 649,688 - -
Other non-current liabilities 15,678 15,678 - - 15,678
Total 160,345,749 170,566,207 128,566,474 31,437,137 10,562,596
(c) Interest rate risk
The Group’s interest rate risk arises primarily from its cash and cash equivalent and bank
loans and borrowings from financial institutions. Cash and cash equivalent and bank loans
and borrowings from financial institutions issued at variable rates expose the Group to cash
flow interest rate risk. The interest rate and terms of repayment of the Group’s interest
bearing borrowings are disclosed in notes 22 and 24 to the consolidated financial statements.
Sensitivity analysis
At 30 June 2013, it is estimated that a general increase/decrease of 50 basis points in interest
rates of cash and bank loans and borrowings from financial institutions of the Group, with all
other variables held constant, would have decreased/increased the Group’s profit after tax
and total equity by approximately RMB54 million (2012: RMB81 million).
In respect of the exposure to cash flow interest rate risk arising from floating rate
non-derivative instruments held by the Group at the end of the reporting period, the impact
on the Group’s profit after tax and total equity is estimated as an annualised impact on
interest expense or income of such a change in interest rates. The analysis is performed on
the same basis for 2012.
The sensitivity analysis above assumes that the change in interest rates had occurred at the
end of the reporting period and had been applied to all floating rate bank loans and
borrowings from financial institutions, without taking into account the impact of interest
capitalisation.
89
China Vanke Co., Ltd.
Financial statements for the six months ended 30June 2013
31 Financial risk management and fair values (continued)
(d) Currency risk
The Group is exposed to foreign currency risk primarily on cash and cash equivalents and
bank loans and borrowings that are denominated in a currency other than the functional
currency of the operations to which they relate. The currencies giving rise to this risk are
primarily United States dollars, Hong Kong dollars and Japanese Yen.
Cash and cash equivalents denominated in a currency other than the functional currency of
the entity to which they relate are as follows:
30 June 2013 31 December 2012
RMB’000 RMB’000
United States Dollars 1,671,225 1,305,831
Hong Kong Dollars 888,118 333,206
Japanese Yen 3,028 -
Bank loans and borrowings from financial institutions denominated in a currency other than
the functional currency of the entity to which they relate are as follows:
30 June 2013 31 December 2012
RMB’000 RMB’000
United States Dollars 5,682,520 3,972,044
Hong Kong Dollars 238,980 -
Sensitivity analysis
Based on the assumption that Hong Kong Dollars continue to be pegged to United States
Dollars, management estimated that a 10% appreciation/depreciation of United States
Dollars/Hong Kong Dollars against Renminbi would not have a material effect on the
Group’s profit and the Group’s equity would be decreased/increased by approximately
RMB58 million (2012: RMB522 million).
The analysis has been determined assuming that the change in foreign exchange rates had
occurred at the end of the reporting period and that all other variables remain constant.
90
China Vanke Co., Ltd.
Financial statements for the six months ended 30June 2013
31 Financial risk management and fair values (continued)
(e) Fair values
Financial instruments carried at fair value
The following table presents the carrying value of financial instruments measured at fair
value at the end of the reporting period across the three levels of the fair value hierarchy
defined in IFRS 7, Financial Instruments: Disclosures, with the fair value of each financial
instrument categorised in its entirety based on the lowest level of input that is significant to
that fair value measurement. The levels are defined as follows:
Level 1 (highest level): fair values measured using quoted prices (unadjusted) in active
markets for identical financial instruments
Level 2: fair values measured using quoted prices in active markets for similar financial
instruments, or using valuation techniques in which all significant inputs are directly or
indirectly based on observable market data
Level 3 (lowest level): fair values measured using valuation techniques in which any
significant input is not based on observable market data
30 June 2013
In millions of RMB
Level 1 Level 2 Level 3 Total
Assets
Available-for-sales equity securities 1 - 4 5
Level 1 Level 2 Level 3 Total
Liabilities
Interest rate swaps (14) - - (14)
31 December 2012
In millions of RMB
Liabilities
Interest rate swaps (26) - - (26)
91
China Vanke Co., Ltd.
Financial statements for the six months ended 30June 2013
32 Commitments
(a) Capital commitments outstanding at 30 June 2013 not provided for in the financial
statements were as follows:
30 June 2013 31 December 2012
RMB’000 RMB’000
Construction and development contracts 46,304,901 45,734,215
Land agreements 15,191,716 20,991,522
Land agreements 61,496,617 66,725,737
Commitments mainly related to land and development costs for the Group’s properties under
development.
(b) At 30 June 2013, the total future minimum lease payments under non-cancellable
operating leases are payable as follows:
30 June 2013 31 December 2012
RMB’000 RMB’000
Within 1 year 41,028 45,839
After 1 year but within 2 years 35,582 39,489
After 2 years but within 3 years 28,508 33,241
After 3 years 28,954 41,087
134,072 159,656
The Group is the lessee in respect of a number of properties held under operating leases.
The leases typically run for an initial period of two to ten years, with an option to renew the
lease when all terms are renegotiated. None of the leases includes contingent rentals.
33 Contingent liabilities
As at the end of the reporting period, the Group has issued guarantees to banks to secure the
mortgage arrangement of property buyers. The outstanding guarantees to the banks
amounted to RMB46,453 million (2012: RMB29,360 million), including guarantees of
RMB46,381 million (2012: RMB29,269 million) which will be terminated upon the
completion of the transfer procedures with the buyers in respect of the legal title of the
properties, and guarantees of RMB72 million (2012: RMB91 million) which will be
terminated upon full repayment of mortgage loans by buyers to the banks.
The directors do not consider it probable that the Group will sustain a loss under these
guarantees as the bank has the rights to sell the property and recovers the outstanding loan
balance from the sale proceeds if the property buyers default payment. The Group has not
recognised any deferred income in respect of these guarantees as its fair value is considered
to be minimal by the directors.
92
China Vanke Co., Ltd.
Financial statements for the six months ended 30June 2013
33 Contingent liabilities (continued)
In addition, the Group is the defendant in certain lawsuits as well as the plaintiff in other
proceedings arising in the ordinary course of business. While the outcomes of such
contingencies, lawsuits or other proceedings cannot be determined at present, management
believes that any resulting liabilities will not have a material adverse effect on the financial
position or operating results of the Group.
34 Material related party transactions
(a) Reference should be made to the following notes regarding related parties:
Associates (note 15, 20 & 25)
Joint ventures (note 16, 20 & 25)
Key management personnel (see note (c) below)
(b) Loans from a related party
The details of the loans from a related party are as follows:
Loans balance Interest incurred
As at 30 June Period ended 30 June
2013 2012 2013 2012
RMB’000 RMB’000 RMB’000 RMB’000
China Resources SZITIC Trust
Co., Ltd. (the “Trust”) 5,100,000 4,000,000 253,915 155,561
The Trust is a subsidiary of China Resources Co., Limited (“CRC”). CRC holds the largest
percentage of the share of interest in the Company among all shareholders.
The loans bear interests that are not higher than other trust loans borrowed during the period
from independent third parties, are unsecured and repayable in 2013 and 2014.
(c) Key management personnel remuneration
Remuneration for key management personnel of the Group is as follows:
six months ended 30 June
2013 2012
RMB’000 RMB’000
Short-term employee benefits 5,212 5,683
Total remuneration is included in “staff costs” (see note 8(b)).
93
China Vanke Co., Ltd.
Financial statements for the six months ended 30June 2013
34 Material related party transactions (continued)
(c) Key management personnel remuneration (continued)
No non-monetary employee benefits was provided to the key management personnel in the
form of purchase discount on sale of the Group’s properties to them for the period ended 30
June 2013.
The Group also provides non-monetary employee benefits to the key management personnel
in the form. Details of such transactions are as follows:
six months ended 30 June
2013 2012
RMB’000 RMB’000
Sale of properties to the key management personnel - 10,509
Related cost of sales - (3,826)
Gross profit - 6,683
Estimated fair value of the properties sold to
the key management personnel - 11,574
All the above were approved by the Board of Directors as a kind of employment benefits to
the key management personnel.
In 2010 the Group launched the Economic Profits Bonus Plan (the “Plan”) as a supplement to
the existing employee remuneration system. The bonus amount attributable to each period is
determined by reference to the key performance indicator of Economic Profits in the
corresponding year. No short-term employee benefits was recorded for the period ended at 30
June 2013 (2012 January to June: Nil) as the amount in respect of the Economic Profits in
2013 has not been determined up to the date of these consolidated financial statements.
In addition to the short-term employee benefits and the Economic Profits Bonus Plan, the key
management personnel were granted certain share options by the Group in 2011. As at 30
June 2013, the outstanding options held by the key management personnel amounted to
22,688,000 (2012: 30,900,000).
35 Acquisitions of subsidiaries
During the period, the Group has acquired certain subsidiaries which hold property
development projects. Acquisitions of these subsidiaries enable the Group to expand its land
banks. Acquisitions of major subsidiaries by the Group during the period are summarised as
follows:
Percentage of equity
Date of acquisition Name of subsidiaries acquired interest acquired Consideration
8 January 2013 Beijing Jingtou Sunshine Real Estate 51% RMB136,184,000
Development Co., Ltd.
94
China Vanke Co., Ltd.
Financial statements for the six months ended 30June 2013
35 Acquisitions of subsidiaries (continued)
Percentage of equity
Date of acquisition Name of subsidiaries acquired interest acquired Consideration
28 January 2013 Tangshan 22th Metallurgical Wanzhu 80% RMB 40,000,000
Real Estate Development Co., Ltd.
1 January 2013 Shenzhen Shangmo Development 60% RMB 465,000,000
Co., Ltd.
1 January 2013 Yantai Zhulinyuan Property Co., Ltd. 51% RMB 5,100,000
21 February 2013 Zhengzhou Meiming Technology 100% RMB 30,000,000
Industrial Park Comprehensive
Development Co., Ltd.
21 February 2013 Henan Meijingzhizhou Real Estate 100% RMB 100,000,000
Co., Ltd.
4 March 2013 Beijing Mingda Yuantong 90% RMB 90,000
Investment Management Co., Ltd.
8 March 2013 Chengdu Media Cultural Property 60% RMB 72,345,000
Co., Ltd.
29 March 2013 Beijing Kaide Xinming Real Estate 100% RMB 502,000,000
Development Co., Ltd.
31 March 2013 Yunnan Zhewan Property Co., Ltd. 55% RMB 4,500,000
25 January 2013 Changsha Vanke Global Village 80% RMB 346,930,000
Property Co., Ltd.*
1 April 2013 Hunan Baihui Investment Co., Ltd. 51% RMB 315,473,000
25 April 2013 Guiyang Chuangyuan Real Estate 70% RMB 52,869,000
Development Co., Ltd.
3 May 2013 Wuhan Wanyuecheng Real Estate 100% RMB 10,000,000
Development Co., Ltd.
15 May 2013 Henan Meijing Hongcheng Property 51% RMB 35,777,000
Co., Ltd.
3 May 2013 Zhengzhou Meidi Property Co., Ltd. 51% RMB 5,100,000
5 June 2013 Zhengzhou Airport Zone Vanke 100% RMB 30,000,000
Meijing Property Co., Ltd.
95
China Vanke Co., Ltd.
Financial statements for the six months ended 30June 2013
35 Acquisitions of subsidiaries (continued)
Note 1: Based on the voting right in the board of directors of the company, the Group
controlled the company’s financial and operating policies. Therefore, the company
was included in the Group’s consolidated scope.
The acquisitions of these subsidiaries had the following combined effect on the Group’s
assets and liabilities upon the dates of acquisitions:
Recognised
Carrying values on
amount Adjustments acquisitions
RMB’000 RMB’000 RMB’000
Current assets 10,899,832 719,391 11,619,223
Non-current assets 171,223 347,774 518,997
Current liabilities (7,287,068) - (7,287,068)
Non-current liabilities (2,002,047) - (2,002,047)
Non-controlling interests (697,737) - (697,737)
Group’s share of net identifiable
assets and liabilities 1,084,203 1,067,165 2,151,368
Total consideration 2,151,368
Consideration to be paid subsequent to 30 June 2013 (870,690)
Considerations prepaid in prior year (133,092)
Consideration paid for the six months ended 30 June 2013 1,147,586
Total cash and cash equivalents acquired (285,890)
861,696
Consideration paid for the acquisitions prior to 2013 27,594
Net cash outflow 889,290
The above subsidiaries contributed an aggregate revenue of RMB113 million and loss
attributable to the equity shareholders of the Company of RMB25 million to the Group for
the six months ended 30 June 2013. Should the acquisitions had occurred on 1 January 2013,
the consolidated revenue and the consolidated profit attributable to the equity shareholders of
the Company for the six months ended 30 June 2013 would have been RMB38,941 million
and RMB4,556 million respectively.
The acquired subsidiaries’ major assets are properties held for development, properties under
development and/or completed properties for sale. The directors consider that the purpose of
acquiring those subsidiaries is solely to acquire the underlying properties.
96
China Vanke Co., Ltd.
Financial statements for the six months ended 30June 2013
36 Disposal of subsidiaries
During the period, the Group has disposed certain subsidiaries which hold property
development projects. Disposal of major subsidiaries by the Group during the period are
summarised as follows:
Percentage of equity
Date of disposal Name of subsidiaries disposed interest disposed Consideration
4 March 2013 Hangzhou Junhong Investment 100% RMB100,000.00
Management Co., Ltd.
14 March 2013 Jinan Wanzhu Real Estate Development 50% RMB50,000,000.00
Co., Ltd.
28 February 2013 Guangzhou Wanxuan Real Estate 49% RMB49,000,000.00
Co., Ltd.
5 June 2013 Chengdu Vanke Nancheng Property 50% RMB25,000,000.00
Co., Ltd.
19 April 2013 Hangzhou Dongyue Investment 81.63% RMB81,000.00
Management Co., Ltd.
7 April 2013 Shanghai Wanpu Property Co., Ltd. 75% RMB7,500,000.00
10 January 2013 Foshan Nanhai Wanhong Real Estate 100% RMB 20,000.00
Co., Ltd.
The effect on the Group’s assets and liabilities is set out below:
RMB’000
Current assets (6,581,944)
Interest in joint ventures and associates 128,163
Other non-current assets (359,238)
Current liabilities 6,678,862
Minority interests 2,445
Net identifiable assets and liabilities disposed of (131,712)
Gain on disposal 11
Consideration to be received subsequent to 30 June 2013 49,100
Cash disposed of 19,420
Net cash outflow (63,181)
No significant variance between the fair value and net book value of above companies’ net
identifiable assets and liabilities was noted at the disposal date.
37 Non-adjusting post balance sheet events
No post balance sheet event was noted.
97
China Vanke Co., Ltd.
Financial statements for the six months ended 30June 2013
38 Possible impact of amendments, new standards and interpretations issued but
not yet effective for the period ended 30 June 2013
Up to date of issue of these financial statements, the IASB has issued a number of
amendments and five new standards which are not yet effective for the year ended 31
December 2013 and which have not been adopted in these financial statements. These
include the following which may be relevant to the Group.
Effective for
accounting periods
beginning on or after
Amendments to IFRS 10, IFRS 12 and IAS 27, Investment entities 1 January 2014
Amendments to IAS 32, Financial instruments:
-Presentation - Offsetting financial assets and financial liabilities 1 January 2014
Amendments to IAS 36,
-Recoverable amount disclosures for non-financial assets 1 January 2014
Amendments to IAS 39,
-Novation of derivatives and continuation of hedge accounting 1 January 2014
IFRIC 21, Levies 1 January 2014
IFRS 9, Financial instruments 1 January 2015
Amendments to IFRS 9, Financial instruments and IFRS 7
-Financial instruments: Disclosures-Mandatory effective date
and transition disclosures 1 January 2015
The Group is in the process of making an assessment of what the impact of these
amendments, new standards and new interpretations is expected to be in the period of initial
application. So far it has concluded that the adoption of them is unlikely to result in a
restatement of the Group’s results of operations and financial position.
98
China Vanke Co., Ltd.
Financial statements for the six months ended 30June 2013
39 Principal subsidiaries
Place of
Ownership Effective Principal
Name of company establishment Paid in capital
interest interest activities
and operation
Shenzhen Vanke Real Estate Company Property
Shenzhen RMB 600,000,000 100% 100%
Limited development
Shenzhen Vanke Xizhigu Real Estate Property
Shenzhen RMB 10,000,000 60% 60%
Company Limited development
Shenzhen Vanke City Scenery Property Property
Shenzhen RMB 120,000,000 100% 100%
Company Limited development
Shenzhen Vanke Xingye Property Property
Shenzhen RMB 62,413,230 100% 100%
Company Limited development
Shenzhen Vanke Nancheng Real Estate Property
Shenzhen RMB 10,000,000 100% 100%
Company Limited development
Shenzhen Vanke Daolin Investment Property
Shenzhen RMB 20,000,000 100% 100%
Development Company Limited development
Property
Huizhou Vanke Property Company Limited Huizhou RMB 10,000,000 100% 100%
development
Guangzhou Vanke Real Estate Company Property
Guangzhou RMB 1,000,000,000 100% 100%
Limited development
Foshan Vanke Real Estate Company Property
Foshan RMB 80,000,000 100% 100%
Limited development
Guangzhou Wanxin Property Company Property
Guangzhou HKD 760,000,000 100% 100%
Limited development
Guangzhou Pengwan Property Company Property
Guangzhou RMB 200,000,000 50% 60%
Limited(note) development
Qingyuan Hongmei Investment Company Property
Qingyuan RMB 280,000,000 95% 100%
Limited development
Dongguan Vanke Real Estate Company Property
Dongguan RMB 300,000,000 100% 100%
Limited development
Dongguan Xinwan Property Development Property
Dongguan RMB 10,000,000 51% 51%
Company Limited development
Dongguan Songhuju Property Company Property
Dongguan RMB 10,000,000 100% 100%
Limited development
Dongguan Xintong Industry Investment Property
Dongguan RMB 10,000,000 51% 51%
Company Limited development
Foshan Nanhai District Jinyulanwan Property
Foshan USD 190,000,000 55% 55%
Property Company Limited development
Zhuhai Vanke Real Estate Company Property
Zhuhai RMB 10,000,000 100% 100%
Limited development
Zhuhai Zhubin Property Development Property
Zhuhai RMB 109,000,000 95% 100%
Company Limited development
Xiamen Vanke Real Estate Company Property
Xiamen RMB 50,000,000 100% 100%
Limited development
Fuzhou Vanke Real Estate Company Property
Fuzhou RMB 20,000,000 100% 100%
Limited development
Hainan Vanke Property Development Property
Hainan RMB 10,000,000 100% 100%
Company Limited development
Shanghai Vanke Investment and Property
Shanghai RMB 204,090,000 100% 100%
Management Company Limited development
Shanghai Hengda Property Shareholding Property
Shanghai RMB 141,348,200 99.80% 100%
Company Limited development
Shanghai Vanke Baobei Property Company Property
Shanghai RMB 10,000,000 100% 100%
Limited development
Shanghai Meilanhuafu Property Company Property
Shanghai RMB 700,000,000 100% 100%
Limited development
Shanghai Xiangda Real Estate Property
Shanghai RMB 1,783,000,000 75% 75%
Development Company Limited development
Shanghai Vanke Real Estate Company Property
Shanghai RMB 800,000,000 100% 100%
Limited development
Shanghai Luolian Property Company Property
Shanghai RMB 470,000,000 100% 100%
Limited development
99
China Vanke Co., Ltd.
Financial statements for the six months ended 30June 2013
39 Principal subsidiaries (continued)
Place of
Ownership Effective Principal
Name of company establishment Paid in capital
interest interest activities
and operation
Nantong Vanke Real Estate Company Property
Nantong RMB 20,000,000 100% 100%
Limited development
Jiaxing Vanke Real Estate Company Property
Jiaxing RMB 100,000,000 100% 100%
Limited development
Nanjing Vanke Property Company Property
Nanjing RMB 150,000,000 100% 100%
Limited development
Nanjing Hengyue Property Company Property
Nanjing RMB 10,000,000 100% 100%
Limited development
Nanjing Jinyu Blue Bay Property Company Property
Nanjing RMB 90,000,000 100% 100%
Limited development
Yangzhou Wanwei Property Company Property
Yangzhou RMB 550,000,000 65% 66.70%
Limited development
Property
Wuxi Vanke Real Estate Company Limited Wuxi RMB 300,000,000 60% 60%
development
Wuxi Wansheng Real Estate Development Property
Wuxi USD 49,200,000 100% 100%
Company Limited development
Wuxi Dongcheng Real Estate Company Property
Wuxi USD 149,400,000 100% 100%
Limited development
Jiangsu Sunan Vanke Real Estate Company Property
Suzhou RMB 30,000,000 100% 100%
Limited development
Suzhou Vanke Zhongliang Property Property
Suzhou RMB 230,000,000 51% 51%
Company Limited development
Property
Suzhou Vanke Property Company Limited Suzhou USD 42,500,000 100% 100%
development
Hangzhou Wankun Property Development Property
Hangzhou RMB 30,000,000 51% 51%
Company Limited development
Hangzhou Vanke Hotel Management Hotel
Hangzhou RMB 10,000,000 100% 100%
Company Limited management
Hangzhou Vanke Junyuan Property Property
Hangzhou USD 455,095,000 100% 100%
Company Limited development
Fuyang Vanke Real Estate Development Property
Hangzhou RMB 300,000,000 100% 100%
Company Limited development
Ningbo Vanke Real Estate Company Property
Ningbo RMB 150,000,000 100% 100%
Limited development
Ningbo Jiangbei Vanke Property Property
Ningbo RMB 675,000,000 100% 100%
Development Company Limited development
Property
Hefei Vanke Property Company Limited Hefei RMB 200,000,000 100% 100%
development
Wuhu Vanke Wanjia Property Company Property
Wuhu RMB 30,000,000 100% 100%
Limited development
Beijing Vanke Enterprises Shareholding Property
Beijing RMB 2,000,000,000 100% 100%
Company Limited development
Beijing Chaoyang Vanke Property Property
Beijing RMB 200,000,000 60% 60%
Development Company Limited development
Beijing Vanke Zhongliang Jiarifengjing
Property
Real Estate Development Company Limited Beijing RMB 830,000,000 50% 60%
development
(note)
Tangshan Vanke Property Development Property
Tangshan RMB 200,000,000 100% 100%
Company Limited development
Tianjin Vanke Real Estate Company Property
Tianjin RMB 390,000,000 100% 100%
Limited development
Tianjin Wanbin Real Estate Development Property
Tianjin RMB 455,000,000 60% 60%
Company Limited development
Tianjin Zhongtian Wanfang Investment Property
Tianjin RMB 30,000,000 100% 100%
Company Limited development
Tianjin Wanzhu Investment Company Property
Tianjin RMB 30,000,000 100% 100%
Limited development
Tianjin Wanfu Investment Company Property
Tianjin RMB 192,000,000 100% 100%
Limited development
100
China Vanke Co., Ltd.
Financial statements for the six months ended 30June 2013
39 Principal subsidiaries (continued)
Place of
Ownership Effective Principal
Name of company establishment Paid in capital
interest interest activities
and operation
Shenyang Vanke Real Estate Development Property
Shenyang RMB 100,000,000 100% 100%
Company Limited development
Shenyang Vanke Tianqinwan Property Property
Shenyang USD 99,980,000 55% 55%
Company Limited development
Shenyang Vanke Hunnan Jinyu Property Property
Shenyang RMB 1,022,520,000 100% 100%
Development Company Limited development
Shenyang Vanke Jinyu Blue Bay Property Property
Shenyang RMB 578,150,000 100% 100%
Development Company Limited development
Fushun Vanke Property Development Property
Fushun RMB 10,000,000 100% 100%
Company Limited development
Dalian Vanke Real Estate Development Property
Dalian RMB 32,000,000 100% 100%
Company Limited development
Dalian Vanke City Real Property Company Property
Dalian USD 42,000,000 100% 100%
Limited development
Anshan Vanke Property Development Co., Property
Anshan USD 5,173,000 100% 100%
Ltd. development
Changchun Vanke Real Estate Company Property
Changchun RMB 50,000,000 100% 100%
Limited development
Yantai Vanke Property Development Property
Yantai RMB 30,000,000 100% 100%
Company Limited development
Taiyuan Vanke Real Estate Company Property
Taiyuan RMB 60,000,000 100% 100%
Limited development
Qingdao Vanke Real Estate Company Property
Qingdao RMB 20,000,000 100% 100%
Limited development
Qingdao Vanke Yinshengtai Real Estate Property
Qingdao RMB 100,000,000 80% 80%
Development Co., Ltd. development
Qingdao Da Shan Real Estate Development Property
Qingdao RMB 100,000,000 100% 100%
Company Limited development
Chengdu Vanke Real Estate Company Property
Chengdu RMB 80,000,000 100% 100%
Limited development
Chengdu Vanke Guobin Property Company Property
Chengdu USD 140,000,000 60% 60%
Limited development
Chengdu Vanke Guanghua Property Property
Chengdu USD 131,428,571 100% 100%
Company Limited development
Chengdu Vanke Jinjiang Property Company Property
Chengdu RMB 10,000,000 100% 100%
Limited development
Chengdu Vanke Huadong Real Estate Property
Chengdu RMB 77,680,000 90% 100%
Company Limited development
Chengdu Vanke Chenghua Property Property
Chengdu RMB 554,479,142 85% 85%
Company Limited development
Wuhan Vanke Real Estate Company Property
Wuhan RMB 150,000,000 100% 100%
Limited development
Wuhan Vanke Tiancheng Real Estate Property
Wuhan USD 12,100,000 100% 100%
Company Limited development
Property
Wuhan Guohao Property Company Limited Wuhan RMB 10,000,000 100% 100%
development
Wuhan Wangjiadun Modern City Property Property
Wuhan RMB 200,000,000 100% 100%
Company Limited development
Chongqing Yu Development Coral Property Property
Chongqing RMB 20,000,000 51% 51%
Company Limited development
Vanke (Chongqing) Real Estate Company Property
Chongqing RMB 100,000,000 100% 100%
Limited development
Xi'an Vanke Real Estate Company Property
Xi'an RMB 20,000,000 100% 100%
Limited development
101
China Vanke Co., Ltd.
Financial statements for the six months ended 30June 2013
39 Principal subsidiaries (continued)
Place of
Ownership Effective Principal
Name of company establishment Paid in capital
interest interest activities
and operation
Guiyang Vanke Real Estate Company Property
Guiyang RMB 100,000,000 100% 100%
Limited development
Kunming Vanke Property Development Property
Kunming RMB 20,000,000 100% 100%
Co., Ltd. development
Xinjiang Vanke Real Estate Company Property
Urumchi RMB 100,000,000 100% 100%
Limited development
Zhengzhou Vanke Real Estate Company Property
Zhengzhou RMB 100,000,000 100% 100%
Limited development
Xuzhou Vanke Property Development Property
Xuzhou RMB 100,000,000 100% 100%
Company Limited development
Property
Jinan Vanke Real Estate Company Limited Jinan RMB 100,000,000 100% 100%
development
Nanning Vanke Real Estate Company Property
Nanning RMB 10,000,000 100% 100%
Limited development
Note: The directors consider these entities as subsidiaries of the Group as the Group has the
power to govern the financial and operating policies of these entities.
102
