Semi-Annual Report 2010
Announcement No.:【CMPD】2010-026
Chapter 1. Important Notice, Definitions & Content
(I) Important Notice
Board of Directors, Supervisory Committee of China Merchants Property Development Co.,
Ltd. (hereinafter referred to as the Company) and its directors, supervisors and senior
executives hereby confirm that there are no any important omissions, fictitious statements or
serious misleading information carried in this report, and shall take all responsibilities,
individual and/or joint, for the reality, accuracy and completion of the whole contents.
Sun Chengming - Legal Representative, Huang Peikun –Chief Financial Officer, and Xu
Yixia –Manager of Accounting Department hereby confirm that the Financial Report
enclosed in the Semiannual Report is true and complete.
This report has been prepared in Chinese and English version respectively. In the event of
difference in interpretation between the two versions, the Chinese report shall prevail.
The Semi-annual Financial Report of the Company was not audited.
(II) Definitions
Unless carried in the report, the following abbreviations possess the meanings as follows:
1. CSRC: China Securities Regulatory Commission
2. The Company: China Merchants Property Development Co., Ltd.
3. China Merchants Group: China Merchants Group Ltd.
4. Top Chief: Top Chief Co., Ltd.
5. Shekou Industrial Zone: China Merchants Shekou Industrial Zone Co., Ltd.
6. Shenzhen CMRE: Shenzhen China Merchants Real Estate Co., Ltd.
7. CMPS: Shenzhen China Merchants Power Supply Co., Ltd.
9. CMWS: Shenzhen China Merchants Water Supply Co., Ltd.
9. Hong Kong Ruijia: Ruijia Investment Industrial Co., Ltd.
10. CMC: Shenzhen China Merchants Construction Co., Ltd.
(III) Content
Chapter 1. Important Notice, Definitions & Content
Chapter 2. Company Profile
Chapter 3. Changes in Share Capital and Particulars about Shareholders
Chapter 4. Particulars about Directors, Supervisors and Senior Executives
Chapter 5. Report of the Board of Directors
Chapter 6. Significant Events
Chapter 7. Financial Report
Chapter 8. Documents Available for Reference2
Chapter 2. Company Profile
(I) Profile
I. Legal Name of the Company:
In Chinese: 招商局地产控股股份有限公司
Abbr: 招商地产
In English: CHINA MERCHANTS PROPERTY DEVELOPMENT CO., LTD.
Abbr: CMPD
II. Legal Representative: Sun Chengming
III. Secretary of the Board: Liu Ning
Securities Affair Representative: Zeng Fanyue
Address: No.3 Building, Nanhai E Cool Park, No.6 Xinghua Road, Shekou Industrial Zone,
Nanshan District, Shenzhen
Post Code: 518067
Email: investor@cmpd.cn
Tel: (0755)26819600
Fax: (0755)26818666 26819680
IV. Registered Address: No.3 Building, Nanhai E Cool Park, No.6 Xinghua Road, Shekou
Industrial Zone, Nanshan District, Shenzhen
Office Address: No.3 Building, Nanhai E Cool Park, No.6 Xinghua Road, Shekou Industrial
Zone, Nanshan District, Shenzhen
Post Code: 518067
Email: investor@cmpd.cn
V. Newspapers Chosen for Disclosing the Information of the Company: China Securities
Journal, Securities Times, Shanghai Securities News and Hong Kong Commercial Daily
Internet Website for Publishing Annual Report Designated by CSRC:
http://www.cninfo.com.cn
Place Where the Semi-Annual Report is Prepared and Placed: Secretariat of the Board of
Directors
VI. Stock listed in: Shenzhen Stock Exchange
The Secondary Stock Exchange listed with: Singapore Stock Exchange
Short Form of the Stock: CMPD, CMPD-B
Stock Code: 000024, 200024
VII. Other Relevant Information of the Company
1. Initial registration date: September 19, 1990
2. Initial registration place: Shenzhen
3. Registration code for business license of corporation: 4403015032878413
4. Number of taxation registration: National Tax – Shen Zi 440300618845136
Local Tax – Deng Zi 440300618845136
5. Organization Code Certificate: 61884513-6
6. Name and office address of the certified public accountants engaged by the Company:
Deloitte Touche Tohmatsu (Shanghai) CPA Ltd.
30/F, Bund Center, Yan An Road East, Shanghai
(II) Main financial data and index Unit: RMB)
Ended the
report period
End of last
year
Increase/decrease
(%)
Total assets 51,785,644,895 47,897,160,497 8.12%
Shareholders’ equity attributable
to shareholders of the listed
company 17,179,481,845 16,278,736,754 5.53%
Capital stock 1,717,300,503 1,717,300,503 -
Net assets per share
attributable to shareholders of the
listed company 10.00 9.48 5.49%
This report
period
The same
period of last
year
Increase/decrease in
this report period
year-on-year (%)
Total operating revenue 6,981,153,925 2,875,777,226 142.76%
Operating profit 1,829,861,942 607,570,645 201.18%
Total profit 1,833,668,498 624,090,354 193.81%
Net profit attributable to
shareholders of the listed company 1,050,179,281 486,847,748 115.71%
Net profit attributable to
shareholders of the listed company
after deducting non- recurring
gains and losses 1,051,236,135 478,362,040 119.76%
Basic earnings per share 0.61 0.28 117.86%
Diluted earnings per share 0.61 0.28 117.86%
Return on equity (weighted) 6.25% 3.24% Increased by 3.01％
Net cash flow arising from
operating activities -1,998,549,301 3,146,422,732 -163.52%
Net cash flow per share arising
from operating activities -1.16 1.83 -163.39%
Non-recurring gain and loss items:
Non-recurring gain and loss items Amount
Gains/losses from the disposal of non-current
assets -210,473
Withdrawal of impairment provisions 2,861
Government subsidies 2,226,430
Other non-operating income/expenditure, net -3,071,464
Impact on income tax 180,5184
Influences on minority shareholders’ -184,726
Total -1,056,854
Indexes calculated in accordance with Regulations on the Information Disclosure of
Companies Publicly Issuing Shares (No. 9) are as follows
Earnings per share
(RMB)
Profit index
Weighted average
return on equity
(%) Basic Fully
diluted
Net profit attributable to the shareholders of the company
6.25% 0.61 0.61
Net profit attributable to the shareholders of the
company after deducting non-recurring gains and
losses 6.25% 0.61 0.61
Influences of adjustment made under IAS on net profit and net asset (RMB’000)
Net profit attributable to the
shareholders of the listed company
Net asset attributable to the shareholders
of the listed company
This report The same Ended the End of last
Upon International Accounting 1,050,179,281 486,847,748 18,519,311,074 17,618,565,983
Upon China Accounting 1,050,179,281 486,847,748 17,179,481,845
16,278,736,754
Difference between domestic and - - 1,339,829,229 1,339,829,229
Of which：Adjustment of - - 1,339,829,229 1,339,829,229
Notes to the There’s no difference between the net profit attributable to the listed5
Chapter 3. Changes in Share Capital and Particulars about Shareholders
(I) Chart of share change
Before the change Increase / decrease this time (+, -) After the change
Amount Proportion
Issuance of
new shares
Amount Proportion
Issuance
of new
shares
Amount Proportion
Issuance of
new shares
I. Shares with conditional
subscription
929,439,484 54.12% 929,439,484 54.12%
1. State-owned shares
2. State-owned legal person’s shares 731,298,105 42.58% 731,298,105 42.58%
3. Other domestic shares
Including: Domestic nonstate-
owned legal person’s shares
Domestic natural person’s shares
4. Foreign shares 197,709,440 11.51% 197,709,440 11.51%
Including: Foreign legal
person’s shares
197,709,440 11.51% 197,709,440 11.51%
Foreign natural person’s
shares
5. Senior executives’ shares 431,939 0.03% 431,939 0.03%
II. Shares with unconditional
subscription
787,861,019 45.88% 787,861,019 45.88%
1. RMB common shares 646,434,394 37.64% -13,950 -13950 646,420,444 37.64%
2. Domestically listed foreign shares 141,426,625 8. 24% 13,950 13,950 141,440,575 8. 24%
3. Overseas listed foreign shares
4. Others
III. Total shares 1,717,300,503 100.00% 1,717,300,503 100.00%
Notes:
(1) Foreign shares in shares with conditional subscription were held by underling subsidiary
of Shekou Industrial Zone;
(2) Shares with conditional subscription include: Shekou Industrial Zone directly holds A
shares of 693,419,317 and indirectly holds B shares of
197,709,440, China Merchants Zhangzhou Development Zone Co., Ltd. directly holds A
shares of 37,878,788, senior executives hold A shares of
238,664 and B shares of 193,275.
(3) Other changes are reclassification of the Company senior management share with sales
limit relieved.6
(II) Particulars about shares held by the top ten shareholders (Unit: Share)
Total number of
shareholders
107,726 shareholders (97,092 are A share shareholders, 10,634 are B share shareholders）
Shareholding situation of top 10 shareholders
Nature of the
shareholder
Proporti
on
of shareholding
Amount of
share held
Amount of
unconditional
shares held
Shares pledged
or frozen
China Merchants Shekou Industrial
Zone Co., Ltd.
State-owned
legal person
40.38% 693,419,317 693,419,317
Naught
Full Space Investment Ltd.
Foreign legal
person
5.48% 94,144,050 94,144,050
Naught
China Merchants Securities Hong
Kong Ltd.
Foreign legal
person
2.91% 49,893,378 49,242,245
Naught
China Merchants Zhangzhou
Development Zone Co., Ltd
State-owned
legal person
2.21% 37,878,788 37,878,788
Naught
FOXTROT INTERNATIONAL LIMITED
Foreign legal
person
1.61% 27,720,000 27,720,000
Naught
Full Goal Selected Mixed Open-ended
Security Investment Fund
Domestic non- stateowned
legal person
1.60% 27,522,577 Unknown
ORIENTURE INVESTMENT LTD Foreign legal person 1.55% 26,603,145 26,603,145 Naught
China International Advantaged Security
Investment Fund
Domestic nonstate-
owned legal
person
1.24% 21,269,899 Unknown
Efunds SZSE 100 Open-ended Index
Security Investment Fund
Domestic nonstate-
owned legal
person
0.74% 12,729,595 Unknown
Penghua Value Advantage Stock-linked
Security Investment Fund
Domestic nonstate-
owned legal
person
0.58% 10,000,000 Unknown
Top 10 holders of unconditional shares
Full name of shareholder
Amount of unconditional
shares held
Type of shares
Full Goal Selected Mixed Open-ended Security Investment Fund 27,522,577 A-shares
China International Advantaged Security Investment Fund 21,269,899 A-shares
Efunds SZSE 100 Open-ended Index Security Investment Fund 12,729,595 A-shares
Penghua Value Advantage Stock-linked Security Investment Fund 10,000,000 A-shares
CNCA A/C COMPAGNIE FINANCIERE EDMOND DE ROTHSCHILD 8,999,770 B-shares
DREYFUS PREMIER INVESTMENT FDS INC.-DREYFUS GREATER CHINA
FD
8,678,901 B-shares
Rongtong SZSE 100 Index Security Investment Fund 8,253,780 A-shares
Invesco Great Wall Resource Monopoly Stock Equity Investment Fund（ＬＯ
Ｆ）
8,000,000 A-shares
GUOTAI JUNAN SECURITIES(HONGKONG) LIMITED 7,463,783 B-shares
China Life Insurance Company Co., Ltd.-traditional-ordinary insurance products-005LFH002
7,263,983 A-shares
Explanation on associated
relationship or accordant
action among the aforesaid
shareholders
(1) Among the shares held by China Merchants Securities Hong Kong Ltd., 49,242,245 shares
were purchased-in entrusted by Top Chief Co., Ltd.; Top Chief Co., Ltd., Full Space Investment Ltd.,
FOXTROT INTERNATIONAL LIMITED and ORIENTURE INVESTMENT LTD are the whollyowned
subsidiaries of China Merchants Shekou Industrial Zone Co., Ltd..7
(III) Conditional shares and their conditions
Name of the shareholder
Amount of
conditional
shares
(Share)
Nature
of
shares
Date when the
shares are
allowed to be
traded in
market
Committed condition
China Merchants
Shekou
Industrial Zone Co.,
Ltd.
693,419,317 A share Sep. 24, 2010
1. Commitment in share relocation: The price of
A- shares of the Company sold in the
stock market before February 9, 2011 shall not be
lower than 120% of the arithmetical average in
30 days prior to the publishing of share
merger reform prospectus, i.e.
RMB11.51 (after profit
distribution of year 2005: RMB0.2 for each
10 shares; year 2006: RMB2.1 for each 10
shares; year 2007: RMB1, 3 bonus shares
and 2 capitalized shares for each 10 shares;
year 2008: RMB1 for each 10 shares and the
price has been adjusted to RMB7.33).
2、In year 2007, because Shekou Industrial Zone
increasingly held the privately offering shares of
the Company, Shekou Industrial Zone
promised to not sell the holding shares of
the Company before September 24, 2010
including the shares held directly indirectly.
Full Space Investment
Ltd.
94,144,050 B share Sep. 24, 2010
China Merchants
Securities Hong Kong
Ltd.
49,242,245 B share Sep. 24, 2010
China Merchants
Zhangzhou
Development Zone
Co., Ltd
37,878,788 A share Sep. 24, 2010
FOXTROT
INTERNATIONAL
LIMITED
27,720,000 B share Sep. 24, 2010
ORIENTURE
INVESTMENT LTD
26,603,145
B share Sep. 24, 2010
Promised not to sell the Company’s shares until
September 24, 2010 for the associated
relationship with Shekou Industrial Zone
Chapter 4. Particulars about Directors, Supervisors and Senior Executives
(I) Change in the Company’s shares held by its directors, supervisors and senior
executives during the report period
Unit: share
Shares held at period-begin Shares held at period-end
Name A share B share A share B share
Reason for change
Lin Shaobin 41,670 100,500 41,670 100,500
Yang Baiqian 89,900 - 89,900 -
He Jianya 97,170 - 97,170 -
Yang Zhiguang 44,295 33,000 44,295 33,0008
Huang Peikun - 130,700 - 130,700
Wang Li 30,187 - 30,187 -
Liu Ning - 13,500 - 13,500
Liu Ye 15,000 15,000
Total 318,222 277,700 318,222 277,700
(II)New engagement or dismissal of directors, supervisors and senior executives in the report
period
On April 15, 2010, the 6th board of Company held the 2nd temporary conference in 2010
and employed Wang Zhengde as the chief economist.
Chapter 5 Report of the Board of Directors
I. Discussion and analysis of the management
Since the second half of 2009, the rapid rise in price of houses again attracted the significant
attention from the central government and the society. The State Council and relevant
departments issued a package of policies of regulation and control aiming to curb
speculative ventures and property inflation in real estate.
In the wake of the improvement and implementation of various measures of regulation and
control over the past six months, change in real estate market expectation was on its way,
and such measures began to show effect. Currently, the market is under observation period
of regulation effect. According to the data of nationwide real estate sales and development,
over the first half the 2009, the sales area of commercial house totaled to 394 million square
meters, up 15.4% year-on-year and downward 7.1% in growth rate from January to July; the
sales amount of commercial house hit RMB 1.98 trillion, up 25.4% year-on-year and
downward 13.0% in growth rate from January to May; investment in real estate development
reached RMB 19.747 billion, up 38.1% year-on-year; area of new started houses hit 805
million square meters, up 67.9% year-on-year. Under the influence of gradual fall in price
and sharp drop in sales amount, the real estate market develops under the governmental
regulation and control.
In the first half year, by properly adjusting the sales strategies and development pace and
adopting the market-oriented price policy, the company optimized the inventory structure,
seized the opportunity and successfully launched 21 elaborate projects including Shanghai
Magnificent Phase II and Suzhou Stone City Phase III in 11 cities. The sales area hit 287.5
thousand square meters, and the contract sales amount reached RMB 42.30 billion. In the
first half year, the company newly started nine projects with a building area of 670 thousand
square meters and increased 460 thousand square meters of land reserve, which kept the total
land reserve over 10 million square meters and provided adequate resources for the
sustainable development of the company in future.
The company continued implementing the concept of “continuous improvement” and
satisfying the working requirements on reinforcing delicacy management and improving
information construction and forged a more standard, optimal and efficient process and
system and laid a firm management foundation for the realization of goals of “forging
another merchant property” and “building excellent company”. Meanwhile, the company
also devoted great efforts to push forward the construction of performance evaluation system9
and the accumulation and cultivation of human resources and further intensify the ability of
sustainable development the competitive strength.
The company fully understood the goal of this package of policies of real estate regulation
and control. In the second half year, on the premise of responding to the requirements of the
government and in connection with its own development, the company would focused on the
following work: continue to carry out the balanced and careful policies of land acquisition,
pay attention to area selection, wait for appropriate opportunity to rationally expand land
reserves, set up the precise marketing concept of thorough market research and refined
project quality, make great efforts to improve marketing capability, carry out measures to
promote sales and optimize inventory structure in short term; continue to carry out the robust
financial management methods and do a good job on the prospective financing arrangement;
rationally arrange the cash flow to ensure financial safety and stable operation according to
the financial conditions of the company; actively promote the study and practice on urban
complex mode, seize the huge opportunity in commercial real estate, give full play to the
stable cash flow of commercial real estate to make it become the effective means of
enhancing performance and curbing fluctuation; continue to follow the operation philosophy
of “environmental-friendly company”, adhere to the development strategy of
“environmental-friendly real estate”, develop the products suitable for market need and
industrial prospect; improve manpower and rationally use price lever, sustainably improve
the core competitive strength and market position as well as performance to bring abundant
benefits to shareholders.
II. Main operation in the report period
1. Operation achievement
Unit: RMB’000
Item
Jan. to June, 2010
Jan. to June, 2009
Increase or decrease
Operation income 698,115 287,578 142.76%
Operation profit 182,986 60,757 201.18%
Net profit attributable to
shareholders of listed company
105,018
48,685 115.71%
Operation income:
The operation income realized by the Company in this period obviously grew over the same
period of last year, main benefiting from the great growth in carry-over volume of real estate
development business.
Operation profit:
In the period, the operation profit increased substantially. Except for the growth in income
from the carry-over of real estate development business, the profit and loss from change in
fair value of NDF business increased greatly over the same period of last year.
③ Net profit belonging to the shareholders of the listed companies
In the report period, growth rate of net profit of shareholders of the listed companies is lower
than the growth rate of the business profit, and the main reason is that in the report period,
profit and loss growth of a few shareholders grew greatly.
2. Main business
Unit: RMB’00010
Classified
according to
industries
Operation
income Operation cost Gross profit
rate
Increase or
decrease
yearon-
year in
operation
income（%）
Increase or
decrease
yearon-
year in
operation
cost（%）
Increase or
decrease
yearon-
year in
gross profit
rate（%）
Development &
sales for real estate
610,030 349,197 42.76% 188.77% 217.53% -5.19%
Rental property operation 25,154 13,342 46.96% 5.68% 3.42% 1.16%
Property agency service 5,037 3,713 26.29% -3.29% -15.06% 10.20%
Power & water supply for
parks and communities
32,127 23,671 26.32% 6.13% 9.92% -2.54%
Property management 19,905 16,547 16.87% 20.15% 24.14% -2.67%
Engineering construction
income
5,335 5,275 1.22% - - -
(1) Business of development & sales for real estate:
In the report period, income realized from this business increased over the same period of
last year, mainly due to that the carry-over area of real estate increased over the same period
of last year; however, growth scope of sales cost exceeded the increase scope of sales
income, which made the gross profit ratio for this business declined over the same period
of last year.
(2) Business of rental property operation:
In the report period, the newly started rental properties - Garden City Center South Area and
Garden City Digital Building - made the rentable area increased on a year-on-year basis. The
occupancy rate of Nanhai E-cool building 5# has been improved, with income from rental
operation also increased on a year-on-year basis.
(3) Business of property agency service:
In the report period, due to the macro-control policies of the government, the decline in turnover at
the secondhand housing market in Shenzhen caused the synchronous slowdown in both income
and cost of the business.
(4) Business of garden power & water supply
In the report period, the electricity sales amount of the Company grew in Chiwan and
Qianhai areas, so the income from electricity sales greatly increased.
(5) Property management
In the report period, because the Company added new property management project, income
scope of property management increased accordingly. However, because the lowest wage
standard was enhanced, increase rate of man power cost is larger than the growth rate of
income on year-on-year basis, the gross interest rate decreased on year-on-year basis.
2. Main business classified according to area
Unit: RMB’000
Area Operation income Increase or decrease year-on-year
Area around Pearl River Delta 398,984 97.14%
Area around Yangtze River Delta 190,762 271.46%
Area around Bohai Sea 63,291 107.21%
Other areas 45,078 1268.50%
Total 698,115 142.76%11
In the report period, the settlement area and operation income in all areas greatly increased,
benefiting from the sound tendency of real estate sales in the second half of 2009. Reason
for the year-on-year increase in other areas mainly benefited from the first revenue of
Chongqing Jiangwan City Phase I. Therefore, the growth ratio was high.
3. Settlement for main real estate projects
Project
Area for settlement
(square meter’0000)
Amount for settlement
(RMB’000)
Shenzhen Buena Vista Phase III 3.86 205,122
Shanghai Nan Qiao Ya Yuan 8.61 95,959
Shanghai Magnificent Phase I 4.56 54,135
Foshan Evian Town 6.68 48,563
Beijing Lakeward Scenery 1.97 42,604
Chongqing Jiangwan City Phase I 7.00 41,087
Shenzhen Mount Orchid Riverlet Phase II 0.97 37,751
Nanjing Yi Yun Xi Gu Phase III 3.97 34,857
Shenzhen Yi Shan Jun 2.17 15,222
Shenzhen Estate at waterside 1.30 13,006
4. Financial condition
Unit: RMB’000
Items
June 30,
2010
Dec. 31,
2009
Change
scope
Reason
Transactional
financial assets
2,565 644 298%
Increased due to decrease of fluctuation of NDF
market price
Others receivable 105,030 192,651 -45%
Bond for land bid in early 2010 was confirmed
as the down payment of land accrued and
transferred into deposit
Other current
assets
85,189 62,480 36%
Due to the holding assets of subsidiaries to be
sold in the report period
Fixed assets 18,682 29,962 -38%
Decreased due to part of fixed assets transferred
into the holding assets of subsidiaries to be sold
in the report period
Deferred income
tax assets
43,816 29,049 51%
Increased due to the deductible temporary
differences caused by accrued land value-added
taxes
Accounts payable 179,620 270,552 -34% Pay for part of land cost in the report period
Payroll payable 9,633 16,283 -41% Pay for payroll payable in the report period
Tax payable 38,012 58,986 -36%
Decreased due to payment of tax payable in the
report period
Interest payable 3,976 2,187 82% Increased due to accrued interest payable
Dividends payable 21,793 10,775 102%
Increased due to declaration of dividends
distribution in 2009
Long-term loan 951,528 572,030 66%
Due to business scale expansion and adjustment
on short and long-term loan structure
Converted
difference in
foreign currency
statements
9,575 7,281 32%
Due to adjustment on rate in foreign money
currency in the report period12
Minority
shareholder's
interest
286,397 202,330 42%
Due to the increase in registered capital of
cooperation project and realized profit
III. Investment
(I)Progress and income of the project invested with raised proceeds
In the report period, the raised proceeds used by the Company included the proceeds raised
through the
2007 non-public share offer and the 2008 public share offer, of which, the use progress of
the proceeds raised with non-public share offer is 97.34% and the use progress of the
proceeds raised with public share offer is 91.66%.
1. Progress of the project invested with proceeds raised through the 2007 non-public
share offer, and application of the proceeds:
Unit: RMB’0000
Total raised proceeds used
in this period
1,948
Total proceeds raised 229,217
Total raised proceeds
accumulatively used
223,114
Commitment
Amount
planned to
input
Whether
change
projects
Amount
actually
input
Total profit
accumulatively
realized
Whether
comply to
planned
progress
Whether
comply to
planned
income
Purchase 5%
equities
Shenzhen China
Merchants Construction
Co., Ltd.
40,000 No 40,000 14,952 Yes Yes
Purchase office building
of New
Times Square
88,000 No 88,000 6,404 Yes Note 1
Purchase land use
right of
Meilun Apartment and
develop
for construction
25,000
No
18,897 - Note 2 Note 2
Haiyue Huating 33,000 No 33,000 15,137 Yes Yes
Nanjing Xianlin (Evian
Valley)
43,217 No 43,217 21,350 Yes Yes
Total 229,217 223,114 57,843
Explanation on reason
why not
reaching the planned
progress
and projected income
Note 1: Income of RMB 11.02 million was realized by office building of New Times
Square in this period. Due to that the Company conducted a more stable depreciation
policy and the tax rate used in the aforementioned listing public notice for benefit
measure was 15%, while the rate actually used by the Company in 2010 was increased to
22%. If computed according to the depreciation and tax rate caliber of the original
listing public notice, then New Times Square realized income of RMB 15.34 million.
Note 2: Due to that it was later for position of raised capital than prediction, the use of
raised capital for Meilun Apartment and Haiyue Huating progressed slower than
prediction. Till Jun.30th of 2010, these two properties were still being developed
and no income from these projects had been yielded yet.
Explanation on reason and
procedure of change
Unchanged13
Usage and use plan of
the raised
proceeds which
hadn’t been
Use according to plan
2. Progress of the project invested with proceeds raised through the 2008 public share offer,
and application of the proceeds:
Total raised proceeds used
in this period
41,826
Total proceeds raised 577,722
Total raised proceeds
accumulatively used
529,539
Commitment
Whether
change
projects
Amount
planned to
input
Amount
actually
input
Total profit
accumulativel
y
realized
Whether
comply to
planned
progress
Whether
comply to
planned
income
Garden City Syber Port No 22,722 22,596 (336) Yes Note 2
Garden City Phase V No 22,000 22,000 - Yes Note 1
Technology Building Phase II No 16,000 16,000 (264) Yes Note 3
Pilot Tower No 44,000 44,000 - Yes Note 1
Pilot Park No 34,000 33,452 - Yes Note 1
Kings Ville No 130,000 95,558 - Note 10 Note 1
CM Guanyuan No 40,000 34,718 - Yes Note 1
CM Lanyuan No 70,000 67,153 1,466 Yes Note 4
Weijin South Road No 60,000 59,921 8,164 Yes Note 5
CM Jiangwan City No 40,000 40,000 5,915 Yes Note 6
Evian Town phase III No 26,000 21,141 7,610 Yes Note 7
Nanqiao No 35,000 35,000 15,806 Yes Note 8
Zhuanqiao No 38,000 38,000 2,583 Yes Note 9
Total 577,722 529,539 40,944
Explanation on predicted
income
Note 1: The project didn’t realize profit.
Note 2: The project was on rental in November 2009. For the low rental rate e in
early days, the predicated benefit was not realized in the first half of 2010.
Note 3: The project changed into investment property when it was completed in
March 2010. The rental contract was not signed by the end of the report perod.
Therefore, the predicated benefit was not realized in the first half of 2010.
Note 4: CM Lanyuan accumulatively carried over 7% by the end of the report period,
and made a net profit of RMB14.66 million yuan. It’s predicated that the predicated
profit can be realize when 100% carry-over is realized.
Note 5: Weijin South Road accumulatively carried over12% by the end of the report
period, and made a net profit of RMB81.64 million yuan. It’s predicated that the
predicated profit can be realize when 100% carry-over is realized.
Note 6: CM Jiangwan City accumulatively carried over 17% by the end of the report
period, and made a net profit of RMB59.15 million yuan. It’s predicated that the
predicated profit can be realize when 100% carry-over is realized.
Note 7: Evian Town phase III realized 100% carry-over by the end of 2009 and
accumulatively realized a net profit of 76.10 million. The project opened in August
2008 when the economic situation worsed abruptly. Therefore, its actual benefit is
less than the predicated level.
Note 8: Nanqiao accumulatively carried over 87% by the end of the report period,
and made a net profit of RMB158.06 million yuan. It’s predicated that the predicated
profit can be realize when 100% carry-over is realized.
Note 9: Zhuanqiao accumulatively carried over 34% by the end of the report period,
and made a net profit of RMB25.83 million yuan. It’s predicated that the predicated
profit can be realize when 100% carry-over is realized.14
Note 10: For relevant government department used this project site, which made
the relocation lagged behind schedule.
Explanation on reason and
procedure of change
Unchanged
Usage and use plan of the
raised
proceeds which hadn’t
been
used yet
Use according to plan
(II)Actual progress and benefit of the significant projects invested with non-raised proceeds
Unit: RMB’000
Project
Investment
amount in
this period
Progress
Benefit
received in
this period
Chongqing
Tanzishi
200,318 Pre-phase plan
Shanghai
Jingyuan
172,258 Pre-phase plan
Foshan
Shishan
69,442 Pre-phase plan
Guangzhou
Jinshangu
21,278
1# section of Phase II and Phase III already
completed, the main body of Phase IV is in
construction and the pre-phase plan for Phase V and
Phase VI is made
Dongcheng
International
Business
Square
20,941 Pre-phase plan
Beijing
Park·1872
20,345
Building 3# of Phase II already in partnership, the
main body of Building 2# and Building 5# is in
construction and pre-phase plan for Phase III is made
Realized gross
profit of RMB
135.18 million
Shenzhen
Xicheng
PhaseIIIPhase
IV
20,301
Phase III already in partnership and structural roofsealing
was for Phase IV already finished
Realized gross
profit of RMB
817.42 million
Foshan Evian
Town
14,533
Phase I already in partnership, the main body of Phase
II is in construction and foundation for Phase III and
Phase IV already finished
Realized gross
profit of RMB
118.28
Suzhou Stone
City
9,223
External wall construction for Phase II and Phase III,
foundation construction for Phase IV
Beijing
Xicheng
Jiayuan
8,869
The price-limited house is already completed and the
pre-phase plan for commodity house is made
Realized gross
profit of RMB
9.61
Zhuhai CM
Garden
Phase II and
Phase III
5,820 Main body construction
Zhuhai CM
Garden Phase
I
5,233 External wall construction
Beijing Conrad
Hotel
5,062 Main body construction
Foshan Evian
Up City
4,320
Phase I main body construction and Phase II
foundation construction15
Zhangzhou
CM Garden
3,835 Phase I main body construction
2# plot,
Shenzhen
Lanxigu Phase
II
3,429 Special acceptance stage
Shanghai CM
Bay Park
3,316
Phase I completion acceptance, Phase II is finalizing
and the preparation for Phase III foundation is made
Shanghai
Haide Park
Phase II-Phase
IV
3,257
Roof-ceiling for main body of the south part of Phase
III made and design for Phase IV construction
finished
Realized gross
profit of RMB
12.04
Chongqing
CM Garden
3,131 Pre-phase plan
Shenzhen CM
Green Park
2,588 Pre-phase plan
Note: the gross profit in this table excludes business tax and surcharges and land valueadded
tax.
(III)Company newly invested
1. In January 2010, the Company invested RMB 10 million to establish Chengdu CM Real
Estate Co., Ltd. The share proportion and voting right proportion of the Company are all
100%. The Company includes Chengdu company in the consolidation scope of consolidated
financial statement.
2. In March 2010, Hong Kong Ruijia, a subsidiary of the Company, established Foshan CM
Huide Real Estate Co., Ltd. and Boshi Holding Co., Ltd. The registered capital of the
Company is US$99.9 million, of which Hong Kong Jiari contributed US$49.95 million,
taking a share of 50%. As Hong Kong Ruijia has majority voting right in the board of the
Foshan company, it actually controls the finance and operational decision. The Company
includes Foshan company in the consolidation scope of consolidated financial statement.
3. In April 2010, Shanghai CM Landing Co., Ltd., a subsidiary of the Company, established
Shanghai Jingyuan Real Estate Development Co., Ltd. with Langda Industry Co., Ltd., a
company under China Vanke Co., Ltd. The registered capital of the Company is RMB30
million, of which Shanghai CM Landing Co., Ltd. contributed RMB16.5 million, taking a
share of 55%. As Shanghai CM Landing Co., Ltd. has majority voting right in the board of
the Foshan company, it actually controls the finance and operational decision. The Company
includes Shanghai company in the consolidation scope of consolidated financial statement.
IV. Modification plan for the operation plan for the later half year
N/A16
Chapter 6 Significant Events
Ⅰ. Company governance
There is no difference between the Company’s perfect administration structure and the
requirements of documents concerning corporate governance issued by CSRC. The
Company insists to continuously perfect the Company legal person governance structure,
standardize Company operation and optimize internal control system according to the
requirements of Company Law, Securities Law and Code of Corporate Governance for
Listed Companies etc., so as to continuously enhance the Company governance level and
strengthen scientificalness of decision making.
In the report period, the Company’s shareholders and the shareholders’ general meeting,
directors and the board of directors and supervisors and the supervisory committee all
regulated the operation according to law, which guaranteed the legal rights of the Company
and the shareholders, especially the medium and small shareholders.
The controlling shareholders and the actual controller of the Company exercise the right of
the investor. The Company and the controlling shareholders and the actual controller kept
independences in staff, asset, finance, organization and business. The affiliated transaction
between the Company and the shareholders of associated party conformed to the transaction
principle of openness and fairness.
In April 2010, according to the requirements of Notice About Requiring to Make Listed
Company Annual Report Information Disclosure Significient Error Responsibility
Investigation System issued by Shenzhen Securities Regulatory Bureau, the 13th meeting of
the 6th board of directors approved Annual Report Information Disclosure Significient Error
Responsibility Investigation System, and the Company strictly implemented the system.
In May 2010, according to the requirements of the Notice About Comprehensively and
Deeply Developing the Special Event of Standardizing Financial Accounting Fundamental
Work in the Listed Companies of Shenzhen issued by Shenzhen Securities Regulatory
Bureau, the Company established standardizing financial accounting fundamental work
special work group, made work scheme of developing special event, conducted self
examination and self correction to the setting of financial personnel and institution,
accounting fundamental work, capital management work, tax management work,
construction and implementation condition of financial management system, and setting and
using condition of financial information system, and completed self examination condition
report within prescribed time.
Ⅱ. Execution of profit distribution plan for year 2009
The proposal of profit distribution in 2009 was approved at the Annual General Meeting
2009 held on June 7, 2010.
According to 10% of the net profit of the parent company RMB 1,155,665,059, statutory
surplus reserve RMB 115,566,506 was withdrew;
Taking the total capital shares 1,717,300,503 shares as of year-end as the radix, cash RMB 1
(tax included) would be sent for each 10 shares, that was to say, RMB 171,730,050 cash
dividend would be sent. The residual undistributed profit RMB 3,367,380,227 was retained
to the next report year. The Company did not conduct converting capital reserve into share17
capital this year.
The Company issued the Announcement on Dividend Distribution and Implementation of
Converting Capital Reserve into Share Capital of 2009 on China Securities Journal,
Securities Times, Shanghai Securities News, Hong Kong Wen Wei Po and
http://www.cninfo.com.cn on July 6, 2010. The share equity registration day would be July
12, 2010, and the ex-dividend day would be July 13, 2010. Up till the disclosure date of this
report, implementation of the above-mentioned dividend and interest distribution scheme
has been completed.
Ⅲ. Profit distribution plan of semi-annual 2010
Neither profit distribution nor converting capital reserve into share capital will be
implemented for semi-annual 2010.
Ⅳ. Material Lawsuits and Arbitration
The Company has not involved in any material lawsuit or arbitration in the report period.
Ⅴ. Status of shareholding in other listed companies
(Unit: RMB)
Stock code
Short form of
stock
Initial
investment
Share
proportion
Book balance
at the end of
the term
Gain/Loss in
the report
period
Change of owners’
equity in the report
period
000004 ST Guonong 1,572,275 0.58% 4,129,216 - (650,978)
Total 1,572,275 0.58% 4,129,216 - (650,978)
“ST Guonong” stock right held by the Company can be accounted as “financial assets for
sale”.
Ⅵ. Material purchase, sale or asset restructuring
In the report period, the Company did not have material purchase, sale or asset restructuring.
Ⅶ. Major related transactions
1. Related transactions concerning daily operation
（1）Shenzhen China Merchants Water Supply Co., Ltd. supplies water to its largest
shareholder Shekou Industrial Zone and its subsidiaries. Shenzhen China Merchants Power
Supply Co., Ltd. supplies power to its largest shareholder Shekou Industrial Zone and its
subsidiaries. Calculated and charged utilities according to the regulations of Bureau of
Commodity Price, the water and electrical quantities of related transaction couldn’t be
counted because partial utilities were calculated and charged by other property companies.
（2） Related transactions concerning land use
The facilities, equipments, and office locations of supplying electricity and water business of
the Company were located in Shekou. Most of the leasing properties in real estate business
were built in Shekou. Therefore, the Company and the subsidiaries engaging in
aformentioned business have rented land of Shekou Industrial Zone since they were founded.18
In the report period, land using expenses of the Company and controlling subsidiaries paid to
Shekou Industrial Zone totaled to RMB 13.80 million.
（3）Guarantee and assurance
A. The wholly owned subsidiary company of Shekou Industrial Zone – Top Chief Co., Ltd.
provided liquidation guarantee for long-term foreign exchange business engaged in ING
Bank N.V., Hong Kong Branch of the Company’s subsidiary-Hong Kong Ruijia.
B. Shekou Industrial Zone and China Merchants Group provided guarantee for the loan of
the Company, and the concrete guarantee condition is as follows:
End of the term Beginning of the term
RMB Yuan RMB Yuan
Shekou Industrial Zone (Note 1) 1,357,991,058 1,723,354,595
China Merchants Group (Note 2) 3,492,078,282 1,459,670,359
Note 1: Shekou Industrial Zone provided guarantee for the loan of the Company with the
amount of RMB 1,007,909,000, for the loan of Shenzhen China Merchants Power Supply
Co., Ltd. with the amount of USD 5,569,000 (RMB 37,818,522), for the payment guarantee
of Shenzhen China Merchants Real Estate Co., Ltd. with the amount of RMB 82,012,508,
and for the bank acceptance of Shenzhen China Merchants Real Estate Co., Ltd. with the
amount of RMB 230,251,028.
Note 2: China Merchants Group provided guarantee for the RMB 2,000,000,000 obtained by
the Company from Huatai Asset Management Co., Ltd. and for the loan of Hong Kong
Ruijia with the amount of USD 203,000,000 (RMB 1,378,666,282) and HKD 130,000,000
(RMB 113,412,000).
（4）Rental income
Accumulated in this term
Accumulated in the
Same period of last year
RMB Yuan RMB Yuan
China Merchants Shekou Industrial Zone Co., Ltd. 5,946,918 5,758,446
China Merchants International (China) Investment Co., Ltd. 2,266,634 1,336,124
Shenzhen China Merchants Landmark Co., Ltd. 1,076,120 1,069,400
China Merchants Logistics Holding Co., Ltd. 763,896 738,854
Shenzhe n Beike Venture Co., Ltd. 3_3_5_,_0_0_0_ ___ 3_3_5_,_0_0_0_ ___
Total 1__0__,__3__8__8__,5__6__8__ __ 9__,__2__3__7__,8__2__4__ ____
Proportion accounting for in
the rental income of the report period 4.13％ 3.88％
Note: the above mentioned rental income is the building rental fee that subsidiary company
of the Company, Shenzhen China Merchants Property collected from the related parties such
as Shekou Industrial Zone etc., and the transaction is conducted according to the agreement
price.
2. In the report period, the following purchase and sale related transactions were conducted
between the Company and Shekou Industrial Zone:
⑴ Transfer the stock right of China Merchants Water Supply
On June 28, 2010, the Company and the subsidiary company Shenzhen China Merchants
Property signed agreement with Shekou Industrial Zone, transferring China Merchants19
Water Supply 95% and 5% stock right respectively to the big shareholder Shekou Industrial
Zone, and the stock right transfer price is RMB 162,833,200. Industrial and commercial
change registration after China Merchants Water Supply stock right transfer was completed
on July 5, 2010. The Company transferred China Merchants Water Supply 100% stock right
held, in that way, Company asset overall benefit can be enhanced, Company business
structure can be optimized, and main business can be highlighted.
⑵ Purchase land use right
On July 29, 2010, the Company subsidiary company Shenzhen China Merchants Business
Development Co., Ltd. (hereinafter referred to as “China Merchants Business) signed Land
Use Right Confirmation Contrat with Shekou Industrial Zone, purchasing the land use right
of the land block with the land number of SKC102-01. The land area was 11,904.23 square
meters, and the price was RMB 111,751,800. Purchasing the land block can enrich the land
resource of the Company, and it is also the need for developing sea world block.
3. Other related transactions
On June 30, 2010, the Company subsidiary company China Merchants Construction signed
building construction contract with the subsidiary company Shenzhen China Merchants
Front Bay Property Co., Ltd. (hereinafter referred to as “China Front Bay Property”)
indirectly controlled by Shekou Industrial Zone, and China Merchants Construction planned
to contract Front Bay Garden 3rd and 4th phase project general contracting engineering
invested by China Merchants Front Bay Property. The construction general contracting
contract price was estimated to be RMB 135,180,000. 1% general contracting management
expense of the contracting general price that China Merchants Construction can gain was
estimated to be RMB1,351,800. China Merchants construction accepting front bay garden
engineering of China Merchants Front Bay Property can accumulate building construction
achievement, create condition for the Company to promote qualification as soon as possible,
thus better meeting the development need of the Company, and it complies with the
Company overall interest.
4. Credit, debts between the Company and associated parties at the report period-end
Item name Associated party
Amount at the
end of the term
Amount at the
beginning of the
term
Other account receivable
Shenzhen TCL Optical- Electronics
Technologies Ltd.
257,339,044 187,851,513
Other account receivable
Huizhou Taitong Property Investment
Co., Ltd.
127,236,214 121,257,000
Account payable
China Merchants Shekou Industrial
Zone Co., Ltd.
9,919,240 5,338,724
Other account payable Dafeng International Inc. - 887,700,513
Other account payable
China Merchants Zhangzhou
Development Zone Co., Ltd.
475,334,117 420,821,115
Other account payable
Tianjin Xinhai real Estate Development
Co., Ltd.
133,081,399 148,831,399
Other account payable
Shenzhen Shekou Dazhong Investment
Co., Ltd.
138,235,302 138,235,302
Other account payable CM Financing 33,510,000 16,338,000
Other account payable
China Merchants Guangming
Technologies Garden Ltd.
1,069,390 1,067,447
Other account payable China Merchants Hanghua 528,151 1,051,70720
Technologies and Trade Center Co.,
Ltd.
Interest payable Dafeng International Inc. - 1,288,737
Dividend payable
China Merchants Shekou Industrial
Zone Co., Ltd. 89,112,876 -
Dividend payable
China Merchants Zhangzhou
Development Zone Co., Ltd.
3,787,878 -
Dividend payable Dafeng International Inc. 4,900,000 -
Long-term account
payable
Shenzhen CM Landmark Co., Ltd. 1,200,000 1,200,000
____________ __________
The aformentioned issues had no major influences on the Company.
Ⅷ. Significant contracts and implementation
1. In the report period, there was no other significant trust, contract or lease event.
2. Implementation of significant contracts in the report period:
（1） The Company received the notification form for line of credit from China Industrial
and Commercial Bank Shenzhen Branch, the checked line of credit was totally up to RMB
4.9 billion for the Company and underling subsidiaries with term from January 1, 2010 to
December 31, 2010.
（2） The Company received the confirmation letter for credit of RMB 7.5 billion from
China Construction Bank Shenzhen Branch, including RMB 7 billion for the Company,
RMB 0.5 billion for the underling subsidiary company – Shenzhen Merchants Real Estate
Co., Ltd.
（3） The Company signed agreement with Industrial Bank Shenzhen Branch for the credit
of RMB 1 billion with term from January 13, 2010 to January 13, 2011.
（4）The Company signed Huatai China Merchants Power Supply Project Credit
Investment Plan Investment Contract with investment principal of RMB 2 billion with
Huatai Asset Management Co., Ltd., with term from April 20, 2010 to April 19, 2017.
（5）The Company signed Issuing Guarantee Agreement with China Construction Bank
Shenzhen Branch. China Construction Bank Shenzhen Branch provided guarantee and
issued guarantee for the Company subsidiary company Hong Kong Ruijia borrowing money
from China Construction Bank Hong Kong Branch. The guarantee amount as USD 0.2
billion and the term shall not exceed three years.
（6）The Company subsidiary company Hong Kong Ruijia signed agreement with ING
BANK N.V., HONGKONG BRANCH for the credit of USD 0.1 billion with term from
April 27, 2010 to April 27, 2013.
Ended the report period, the aforementioned contract was under the implementation.
3. Capital occupation of associated parties and guarantee issues
（1） Capital occupation of associated parties
According to the requirements of Notice on Standardizing Capital Current between the
Listed Companies and Associated parties and Notice on Standardizing External Guarantee of
Listed Companies promulgated by CSRC, the Company made self-inspection onthe current
fund with the associated parties and external guarantee and report to Shenzhen Securities
Regulatory Bureau. Relevant details were as follows:21
Name of the parties
Relationship
with the
Company
Accounting
items calculated
by listed
company
Amount at
period begin
Amount in
this period
Amount in
period end
Reason Nature
Huizhou Taitong
Property Investment
Co., Ltd.
Joint venture
Other accont
receivable
121,257,000 5,979,214 127,236,214
Current
fund
Nonoperational
occupancy
Shenzhen TCL
Optical- Electronics
Technologies Ltd.
Associated
company
Other account
receivable
187,851,513 69,487,531 257,339,044
Current
fund
Nonoperational
occupancy
（2） Guarantee issues
Up till June 30, 2010, external guarantee sum of the Company and its holding subsidiary
companies was RMB 1,607,970,000, accounting for 9.88% of the parent company
shareholder net asset after the latest term of auditing. There were no overdue guarantee
amount, guarantee amount involving lawsuit and loss amount that should be shouldered for
the guarantee being judged as losing lawsuit.
Besides the above-mentioned guarantees, the Company provided mortgage loan guarantee
for purchaser of commercial house according to relevant regulations of people’s bank of
China. At present, the Company provided phase joint guarantee for purchaser of commercial
house with term from the date the bank offering loan to the date the bank completing
handling Property Ownership Certificate. If the purchaser did not implement the
responsibility of debtor in the aforesaid period, the Company had the right to take back the
sold house, so the guarantee would not cause actual loss of the Company. At the end of the
period, the Company totally provided guarantee of RMB 134,820,000.
4. Special statement and independent opinions of the independent directors regarding capital
occupation by the associated parties and providing of external guarantees.
Independent Directors of the Company – Meng Yan, Chen Yanping, Gong Xinglong and
Chai Qing checked the conditions of capital occupation by controlling shareholders and
associated parties and providing of external guarantees, and thought that:
The Company providing development fund for joint venture as shares holding proportion
and providing loan guarantee for subsidiary company as shares holding proportion were
demands of normal operation and rational use of fund. Decision-making procedure accorded
with laws and regulations without hurting interests of the Company and shareholders.
Providing guarantee for purchaser of commercial house was the routine in real estate
industry and the demand of normal operation. At the same time the Company provided
guarantee for purchaser of commercial house, the purchaser of commercial house took the
house as mortgage. The risk of the aforementioned behavior could be controlled, and
decision-making procedure accorded with laws and regulations without hurting interests of
the Company and shareholders.
5. In the report period, the Company did not entrust others to manage cash assets.
Ⅸ. Accepting investigation, and communication and interview in the report period were as
follows:
Reception date
Reception
place
Reception way Object received
Content discussed and
information provided
January 12, 2010
Shekou,
Shenzhen
Field investigation
China Securities Co.,
Ltd.
January 19, 2010 Shekou, Field Changjiang Securities
①. Introducing
operation of the
Company22
Shenzhen investigation
January 25, 2010
Shekou,
Shenzhen
Field
investigation
GTJA Allianz Funds
January 26, 2010
Shekou,
Shenzhen
Field
investigation
Goldman Sachs
January 27, 2010
Shekou,
Shenzhen
Field
investigation
Bohai Securities Co., Ltd.
February 5, 2010
Shekou,
Shenzhen
Field
investigation
Client of China Securities
Co., Ltd.
February 10, 2010
Shekou,
Shenzhen
Written
inquiry
Investor
February 22, 2010
Shekou,
Shenzhen
Written
inquiry
Investor
February 23, 2010
Shekou,
Shenzhen
Written
inquiry
Investor
March 1, 2010
Shekou,
Shenzhen
Field
investigation
Guangzhou Securities Co.,
Ltd.
March 2, 2010
Shekou,
Shenzhen
Field
investigation
Daiwa Securities Group Inc.
March 3, 2010
Shekou,
Shenzhen
Field
investigation
Essence Securities
March 12, 2010
Shekou,
Shenzhen
Written
inquiry
Investor
March 15, 2010
Shekou,
Shenzhen
Written
inquiry
Investor
March 15, 2010
Shekou,
Shenzhen
Written
inquiry
Investor
March 18, 2010
Shekou,
Shenzhen
Field
investigation
Zhongshan Securities Co.,
Ltd.
March 22, 2010
Shekou,
Shenzhen
Written
inquiry
Investor
March 25, 2010
Shekou,
Shenzhen
Field
investigation
Taishin Securities Co.
March 26, 2010
Shekou,
Shenzhen
Field
investigation
Client of J.P. MORGEN
March 29, 2010
Shekou,
Shenzhen
Field
investigation
Client of UBS
March 29, 2010
Shekou,
Shenzhen
Written
inquiry
Investor
March 31, 2010
Shekou,
Shenzhen
Written
inquiry
Investor
April 2, 2010
Shekou,
Shenzhen
Field
investigation
Client of Gaohua Securities
Co., Ltd.
April 4, 2010
Shekou,
Shenzhen
Written
inquiry
Investor
April 6, 2010
Shekou,
Shenzhen
Written
inquiry
Investor
April 6, 2010
Shekou,
Shenzhen
Written
inquiry
Investor
April 12, 2010
Shekou,
Shenzhen
Written
inquiry
Investor
April 12, 2010
Shekou,
Shenzhen
Written
inquiry
Investor
April 19, 2010
Shekou,
Shenzhen
Written
inquiry
Investor
April 20, 2010
Shekou,
Shenzhen
Written
inquiry
Investor
②. Discussing the
industry development;
③. Providing the
information announced
and brochure for
projects of the
Company.
④Visiting the
Company on-sale
buildings, and
providing building sales
brochure23
April 21, 2010
Shekou,
Shenzhen
Written
inquiry
Investor
April 23, 2010
Shekou,
Shenzhen
Field
investigation
Client of UBS
April 23, 2010
Shekou,
Shenzhen
Written
inquiry
Investor
May 6, 2010
Shekou,
Shenzhen
Field
investigation
Shenyin Wanguo organizes
group investigation
May 13, 2010 Qingdao
Field
investigation
Strategy meeting of BOC
International (China) Limited
May 18, 2010 Shanghai
Field
investigation
CLSA China Forum
May 31, 2010 Hohhot
Field
investigation
Strategy meeting of UBS
June 9, 2010 Beijing
Field
investigation
Strategy meeting of
J.P.Morgan
June 11, 2010 Shenzhen
Field
investigation
Guosen Securities
June 11, 2010 Shenzhen
Field
investigation
Everbright Securities Co.,
Ltd.
June 10, 201 Beijing
Field
investigation
Huatai United Securities
June 9, 2010 Beijing
Field
investigation
Essence Securities
June 10, 2010 Lijiang
Field
investigation
Sinolink Securities
June 23, 2010 Shenzhen
Field
investigation
China Merchants Securities
Ⅹ. Implementation of commitment made by shareholders with holding 5% or over shares
（1） Shekou Industrial Zone promised not to directly or indirectly engage in or develop
any business or project which are the same as or similar with the operation scope of the
Company; not to conduct direct or indirect competition with the Company for Shekou
Industrial Zone and it associated parties, or establish, develop, participate, and assist with
any enterprise on the behalf of any third party; not to engage, directly or indirectly
participate in competitive activities with the Company by the information obtained from the
Company, and conduct any other competitive behaviors of hurting or possibly hurting the
interests of the Company. In the report period, Shekou Industrial Zone strictly implemented
the commitment.
（2） In the report period, Shekou Industrial Zone fulfilled its commitments made about
sales: not put any of the Company’s shares on sale.
Ⅺ. In the report period, there was no criticism or condemnation received by the Company,
the Board of Directors, or the directors.
Ⅻ. Engagement or dismissal of CPAs
On June 7, 2010, the Company held Shareholders’ General Meeting of 2009, which
approved relevant proposal on Continuing Engaging Deloitte Touche Tohmatsu Certified
Public Accountants Ltd. as External Audit Institution.24
ⅩⅢ. Other significant events
After the approval of the 5th meeting of the 6th board of directors of the Company and the
1st temporary shareholders meeting in 2009, the Company planned to issue stocks not
exceeding 0.2 billion non-publicly to specific objects. In the following months, influenced
by the change of economic environment and policies, adjustment of the real estate plate of
the capital market was obvious and stock price of the Company was lowered greatly. The
13th meeting of the 6th board of directors of the Company planned to adjust the extra
issurance price this time as RMB 20.60, but later the Company stock price decreased
continuously and greatly.
After comprehensively considering all factors and analyzing and arguing carefully, the
Company decided to actively withdraw the application of non-public issurance this time.
The 14th meeting of the 6th board of directors of the Company and 2009 annual
shareholders meeting approved to withdraw the scheme of non-publicly issuing stocks this
time. The report of the Company withdrawing non-public issurance got the approval of
China Securities Regulatory Commission Administratively Permitting Application
Termination Examination Notice [2010] No. 78 Document.
Chapter 7. Financial Report (unaudited)
For the details, please refer to Appendix (Interim Financial Report 2010)
Chapter 8. Documents Available for Reference
Ⅰ. Financial statements carrying the personal signatures and seals of Legal Representative,
Person in Charge of Accounting Works and Person in Charge of Accounting Department;
Ⅱ. Originals of all documents and notices publicly disclosed on newspapers designated by
CSRC in the first half of 2010;25
China Merchants Property Development Co., Ltd.
Financial Statements
The period from January 1, 2010 to June 30, 201026 - -
Financial Statements
The period from January 1, 2010 to June 30, 2010
Contents Page
Consolidated Balance Sheet 2
Balance Sheet of the Company 3
Consolidated Income Statement 4
Income Statement of the Company 5
Consolidated Cash Flow Statement 6
Cash Flow Statement of the Company 7
Consolidated Statement of Change in Shareholders’ Equity 8
Statement of Change of Shareholders’ Equity of the Company 9
Notes to Financial Statements 10 - 90China Merchants Property Development Co., Ltd.
27 - -
The period from January 1, 2010 to June 30, 2010
Consolidated Balance Sheet
In RMB
Items Note
Balance at the
end of term
Balance at the
beginning of year Items Note
Balance at the
end of term
Balance at the
beginning of
year
Current asset: Current liabilities
Monetary capital (V)1 10,390,560,833 9,489,490,935 Short-term loans (V)18 1,629,644,446 1,372,929,609
Settlement provision - - Loan from Central Bank - -
Outgoing call loan - - Deposit received and hold for others - -
Transactional financial assets (V)2 25,651,617 6,437,479 Call loan received - -
Notes receivable - - Trade off financial liabilities (V)2 2,254,310 12,829,413
Account receivable (V)3 109,526,262 118,962,896 Notes payable (V)19 268,100,694 257,896,108
Prepayment (V)5 5,648,907 8,747,313 Account payable (V)20 1,796,195,435 2,705,521,285
Insurance receivable - - Prepayment received (V)21 8,296,324,582 9,498,461,291
Reinsurance receivable - - Selling of repurchased financial assets - -
Provisions of Reinsurance contracts
receivable
- - Fees and commissions receivable - -
Interest receivable - - Employees’ wage payable (V)22 96,330,938 162,832,982
Dividend receivable - - Tax payable (V)23 380,116,649 589,859,453
Other account receivable (V)4 1,050,297,111 1,926,509,243I nterest payable (V)24 39,755,152 21,872,418
Repurchasing of financial assets Dividend payable (V)25 217,926,308 107,751,887
Inventories (V)6 33,856,297,075 30,461,181,900 Other account payable (V)26 5,638,304,437 5,835,329,987
Non-current asset due in 1 year 1,735,693 26,754 Reinsurance fee payable - -
Other current asset (V)7 851,886,216 624,800,651 Insurance contract provision - -
Total of current asset 46,291,603,714 42,636,157,171 Entrusted trading of securities - -
Non-current assets Entrusted selling of securities - -
Loans and payment on other’s behalf
disbursed
- Non-current liability due in 1 year (V)28 1,457,610,597 1,303,501,721
Sellable financial asset (V)8 4,129,216 4,898,240 Other current liability (V)29 2,239,959,131 1,843,563,001
Expired investment in possess - - Total of current liability 22,062,522,679 23,712,349,155
Long-term receivable (V)9 1,095,238,586 1,062,146,037 Non-current liabilities
Long-term share equity investment (V)10,11 615,920,380 616,512,618 Long-term borrowings (V)30 9,515,280,804 5,720,303,012China Merchants Property Development Co., Ltd.
28 - -
Items Note
Balance at the
end of term
Balance at the
beginning of year Items Note
Balance at the
end of term
Balance at the
beginning of
year
Investment properties (V)12 2,967,575,138 2,787,842,250 Bond payable - -
Fixed assets (V)13 186,817,919 299,615,954 Long-term payable (V)31 51,233,638 46,469,703
Construction in process (V)14 14,960,414 19,254,007 Special payable - -
Engineering goods - - Expected liabilities (V)27 108,057,942 108,052,194
Fixed asset disposal - - Differed income tax liability (V)16 613,666 731,713
Production physical assets - - Other non-recurring liabilities (V)32 4,483,360 7,218,243
Gas & petrol - - Total of non-current liabilities 9,679,669,410 5,882,774,865
Intangible assets - 54,121 Total of liability 31,742,192,089 29,595,124,020
R&D expense - - Shareholders’ equity
Goodwill - - Share capital (V)33 1,717,300,503 1,717,300,503
Long-term amortizable expenses (V)15 171,237,171 180,194,127 Capital reserves (V)34 8,487,275,926 8,487,926,904
Differed income tax asset (V)16 438,162,357 290,485,972 Less: Shares in stock - -
Other non-current asset - - Special reserves - -
Total of non-current assets 5,494,041,181 5,261,003,326 Surplus reserves (V)35 785,793,010 785,793,010
Common risk provision - -
Retained profit (V)36 6,093,358,841 5,214,909,610
Different of foreign currency translation 95,753,565 72,806,727
Total of shareholders’ equity attributable to
the parent company
17,179,481,845 16,278,736,754
Minor shareholders’ equity 2,863,970,961 2,023,299,723
Total of shareholders’ equity 20,043,452,806 18,302,036,477
Total of assets 51,785,644,895 47,897,160,497 Total of owners’ equity and liabilities 51,785,644,895 47,897,160,497
The Notes to the Financial Statements are essential parts of the Financial StatementsChina Merchants Property Development Co., Ltd.
29 - -
The period from January 1, 2010 to June 30, 2010
Balance Sheet (Parent Company)
In RMB
Items Note
Balance at the end of
term
Balance at the
beginning of year Items Note
Balance at the end
of term
Balance at the
beginning of year
Current asset: Current liabilities
Monetary capital 5,087,842,852 6,268,540,842 Short-term loans (XII)3 1,127,226,500 630,397,000
Transactional financial
assets
- - Trade off financial liabilities
- -
Notes receivable - - Notes payable - -
Account receivable - - Account payable - -
Prepayment - - Prepayment received - -
Interest receivable - - Employees’ wage payable 1,338,460 6,052,306
Dividend receivable 1,090,720,147 1,090,720,147 Tax payable 8,437,959 4,514,867
Other account receivable (XII)1 17,224,211,664 12,504,314,805 Interest payable 22,128,955 9,898,520
Inventories - - Dividend payable 171,730,050 -
Non-current asset due in 1
year
- - Other account payable
4,788,934,835 3,928,393,230
Other current asset
- -
Non-current liability due in 1
year
(XII)4
750,000,000 650,000,000
Total of current asset 23,402,774,663 19,863,575,794 Other current liability 77,559 77,559
Non-current assets Total of current liability 6,869,874,318 5,229,333,482
Sellable financial asset 4,129,216 4,898,240 Non-current liabilities
Expired investment in
possess
- - Long-term borrowings
(XII)5
6,211,636,000 4,123,128,000
Long-term receivable 953,817,502 924,366,671 Bond payable - -
Long-term share equity
investment
(XII)2
3,489,252,049 3,481,655,301 Long-term payable
- -
Investment properties - - Special payable - -
Fixed assets 361,111 318,634 Expected liabilities - -
Construction in process - - Differed income tax liability 613,666 731,713
Engineering goods - - Other non-recurring liabilities - -
Fixed asset disposal - - Total of non-current liabilities 6,212,249,666 4,123,859,713China Merchants Property Development Co., Ltd.
30 - -
Items Note
Balance at the end of
term
Balance at the
beginning of year Items Note
Balance at the end
of term
Balance at the
beginning of year
Production physical assets - - Total of liability 13,082,123,984 9,353,193,195
Gas & petrol - - Shareholders’ equity
Intangible assets - - Share capital 1,717,300,503 1,717,300,503
R&D expense - - Capital reserves 8,929,876,698 8,930,527,676
Goodwill - - Less: Shares in stock - -
Long-term amortizable
expenses
63,076 158,628 Special reserves
- -
Differed income tax asset - - Surplus reserves 734,841,617 734,841,617
Other non-current asset - - Common risk provision - -
Total of non-current
assets
4,447,622,954 4,411,397,474 Retained profit
3,386,254,815 3,539,110,277
Total of shareholders’ equity 14,768,273,633 14,921,780,073
Total of assets
27,850,397,617 24,274,973,268
Total of owners’ equity and
liabilities
27,850,397,617 24,274,973,268China Merchants Property Development Co., Ltd.
31 - -
The period from January 1, 2010 to June 30, 2010
Consolidated Income Statement
In RMB
Items Note
Amount of the Current
Term
Amount of the same
period of last year
I. Total revenue (V)37 6,981,153,925 2,875,777,226
Incl. Business income 6,981,153,925 2,875,777,226
Interest income - -
Insurance fee earned - -
Fee and commission received - -
II. Total business cost 5,206,663,811 2,371,956,755
Incl. Business cost (V)37 4,127,363,733 1,628,278,262
Interest expense - -
Fee and commission paid - -
Insurance discharge payment - -
Net claim amount paid - -
Net insurance policy reserves provided - -
Insurance policy dividend paid - -
Reinsurance expenses - -
Business tax and surcharge (V)38 862,925,247 480,483,907
Sales expense 112,145,064 114,595,993
Administrative expense 101,179,394 90,818,800
Financial expenses (V)39 3,053,234 57,887,757
Asset impairment loss (V)40 (2,861) (107,964)
Plus: Income from change of fair value (V)41 29,917,874 (108,371,152)
Investment income (V)42 25,453,954 212,121,326
Incl. Investment gains from affiliates (592,236) 109,884,894
Exchange gains - -
III. Business profit 1,829,861,942 607,570,645
Plus: Non business income (V)44 8,910,241 17,875,375
Less: Non-business expenses (V)45 5,103,685 1,355,666China Merchants Property Development Co., Ltd.
32 - -
Items Note
Amount of the Current
Term
Amount of the same
period of last year
Incl. Loss from disposal of non-current assets 276,647 318,807
IV. Gross profit 1,833,668,498 624,090,354
Less: Income tax expenses (V)46 434,742,205 142,053,203
V. Net profit 1,398,926,293 482,037,151
Net profit attributable to the owners of parent co. 1,050,179,281 486,847,748
Minor shareholders’ equity 348,747,012 (4,810,597)
VI. Earning per share
(I) Basic earnings per share (V)47 0.6115 0.2834
(II) Diluted earnings per share (V)47 0.6115 0.2834
VII. Other misc. incomes (V)48 38,546,181 (224,877)
VIII. Total of misc. incomes 1,437,472,474 481,812,274
Total misc gains attributable to the parent company 1,072,475,141 486,622,871
Total misc gains attributable to the minor shareholders 364,997,333 (4,810,597)China Merchants Property Development Co., Ltd.
33 - -
The period from January 1, 2010 to June 30, 2010
Income Statement (Parent Company)
In RMB
Items Note
Amount of the Current
Term
Amount of the same period
of last year
I. Turnover - -
Less: Operation cost - -
Business tax and surcharge - -
Sales expense - -
Administrative expense 9,215,964 8,998,837
Financial expenses (14,086,134) 21,752,719
Asset impairment loss - -
Plus: Income from change of fair value - -
Investment income (XII)6 20,005,859 21,545,461
Incl. Investment gains from affiliates (2,403,251) (1,825,269)
II. Operation profit 24,876,029 (9,206,095)
Plus: Non business income - -
Less: Non-business expenses - -
Incl. Loss from disposal of non-current assets - -
III. Total of profit 24,876,029 (9,206,095)
Less: Income tax expenses 6,001,441 -
IV. Net profit 18,874,588 (9,206,095)
V. Earnings per share - -
(I) Basic earnings per share Not applicable Not applicable
(II) Diluted earnings per share Not applicable Not applicable
VI. Other misc gains (650,978) 1,775,123
VII. Total of integrated income 18,223,610 (7,430,972)China Merchants Property Development Co., Ltd.
34 - -
The period from January 1, 2010 to June 30, 2010
Consolidated Cash Flow Statement
In RMB
Items Note
Amount of the Current
Term
Amount of the same period
of last year
I. Net cash flow from business operation
Cash received from sales of products and providing of services 5,779,743,718 6,727,241,1661
Net increase of customer deposits and capital kept for brother company - -
Net increase of loans from central bank - -
Net increase of inter-bank loans from other financial bodies - -
Cash received against original insurance contract - -
Net cash received from reinsurance business - -
Net increase of client deposit and investment - -
Net increase of trade financial asset disposal - -
Cash received as interest, processing fee, and commission - -
Net increase of inter-bank fund received - -
Net increase of repurchasing business - -
Tax returned 15,311,948 9,407
Other cash received from business operation (V)49(1) 1,457,432,262 824,720,066
Sub-total of cash inflow from business activities 7,252,487,928 7,551,970,639
Cash paid for purchasing of merchandise and services 6,182,133,125 2,645,911,081
Net increase of client trade and advance - -
Net increase of savings in central bank and brother company - -
Cash paid for original contract claim - -
Cash paid for interest, processing fee and commission - -
Cash paid for policy dividend - -
Cash paid to staffs or paid for staffs 367,569,007 286,740,876
Taxes paid 1,621,816,124 689,645,723
Other cash paid for business activities (V)49(2) 1,076,378,973 783,250,227
Sub-total of cash outflow from business activities 9,247,897,229 4,405,547,907
Cash flow generated by business operation, net (1,995,409,301) 3,146,422,732
II. Cash flow generated by investingChina Merchants Property Development Co., Ltd.
35 - -
Items Note
Amount of the Current
Term
Amount of the same period
of last year
Cash received from investment retrieving - -
Cash received as investment gains - 413,971
Net cash retrieved from disposal of fixed assets, intangible assets, and other long-term assets 33,971 26,214
Net cash received from disposal of subsidiaries or other operational units - -
Other investment-related cash received (V)49(3) 12,887 77,277,985
Sub-total of cash inflow due to investment activities 46,858 77,718,170
Cash paid for construction of fixed assets, intangible assets and other long-term assets 6,321,512 23,382,118
Cash paid as investment 28,125,469 5,327,200
Net increase of loan against pledge - -
Net cash received from subsidiaries and other operational units - -
Other cash paid for investment activities - -
Sub-total of cash outflow due to investment activities 34,446,981 28,709,318
Net cash flow generated by investment (34,400,123) 49,008,852
III. Cash flow generated by financing
Cash received as investment 475,673,905 75,000,000
Incl. Cash received as investment from minor shareholders 475,673,905 75,000,000
Cash received as loans 5,730,487,074 2,167,067,165
Cash received from bond placing - -
Other financing-related cash received - -
Subtotal of cash inflow from financing activities 6,206,160,979 2,242,067,165
Cash to repay debts 1,507,153,645 3,744,278,142
Cash paid as dividend, profit, or interests 239,851,792 489,256,718
Incl. Dividend and profit paid by subsidiaries to minor shareholders 61,556,629 -
Other cash paid for financing activities 882,889,738 -
Subtotal of cash outflow due to financing activities 2,629,895,175 4,233,534,860
Net cash flow generated by financing 3,576,265,804 (1,991,467,695)
IV. Influence of exchange rate alternation on cash and cash equivalents (3,610,150) (325,164)
V. Net increase of cash and cash equivalents 1,542,846,230 1,203,638,725
Plus: Balance of cash and cash equivalents at the beginning of term (V)50(1) 8,775,661,067 7,358,057,106
VI. Balance of cash and cash equivalents at the end of term (V)50(1) 10,318,507,297 8,561,695,831China Merchants Property Development Co., Ltd.
36 - -
The period from January 1, 2010 to June 30, 2010
Cash Flow Statement (Parent Company)
In RMB
Items Note
Amount of the Current
Term
Amount of the same period of
last year
I. Net cash flow from business operation
Cash received from sales of products and providing of services - -
Tax returned - -
Other cash received from business operation 552,707,036 3,745,135,936
Sub-total of cash inflow from business activities 552,707,036 3,745,135,936
Cash paid for purchasing of merchandise and services
Cash paid to staffs or paid for staffs 5,860,756 6,505,053
Taxes paid 5,024,297 72,411
Other cash paid for business activities 2,277,673,432 1,974,950,670
Sub-total of cash outflow from business activities 2,288,558,485 1,981,528,134
Cash flow generated by business operation, net (1,735,851,449) 1,763,607,802
II. Cash flow generated by investing
Cash received from investment retrieving - -
Cash received as investment gains - -
Net cash retrieved from disposal of fixed assets, intangible assets, and other long-term assets - -
Net cash received from disposal of subsidiaries or other operational units - -
Other investment-related cash received - -
Sub-total of cash inflow due to investment activities - -
Cash paid for construction of fixed assets, intangible assets and other long-term assets 40,900 -
Cash paid as investment 10,000,000 -
Net cash received from subsidiaries and other operational units - -
Other cash paid for investment activities - -
Sub-total of cash outflow due to investment activities - -
Net cash flow generated by investment 10,040,900 -
III. Cash flow generated by financing
Cash received as investment -China Merchants Property Development Co., Ltd.
37 - -
Items Note
Amount of the Current
Term
Amount of the same period of
last year
Cash received as loans 1,318,282,000 1,698,346,000
Other financing-related cash received
Subtotal of cash inflow from financing activities 1,318,282,000 1,698,346,000
Cash to repay debts 627,909,000 2,830,102,100
Cash paid as dividend, profit, or interests 124,762,027 379,265,176
Other cash paid for financing activities
Subtotal of cash outflow due to financing activities 752,671,027 3,209,367,276
Net cash flow generated by financing 565,610,973 (1,511,021,276)
IV. Influence of exchange rate alternation on cash and cash equivalents (416,613) (30,607)
V. Net increase of cash and cash equivalents (1,180,697,989) 252,555,919
Plus: Balance of cash and cash equivalents at the beginning of term 6,268,540,841 4,728,619,945
VI. Balance of cash and cash equivalents at the end of term 5,087,842,852 4,981,175,864China Merchants Property Development Co., Ltd.
38 - -
The period from January 1, 2010 to June 30, 2010
Consolidated Statement of Change in Shareholders’ Equity
In RMB
Amount of the Current Term Amount of Last Year
Shareholders’ equity attributable to the parent company Shareholders’ equity attributable to the parent company
Items Share capital
Capital
reserves
Surplus
reserves Retained profit Others
Minor
shareholders’
equity
Total of
shareholders’
equity Share capital
Capital
reserves
Surplus
reserves
Retained
profit Others
Minor
shareholders’
equity
Total of
shareholders’
equity
I. Balance at the end of last year 1,717,300,503
8,487,926,90
4
785,793,010 5,214,909,610 72,806,727 2,023,299,723 18,302,036,477 1,717,300,503 8,548,544,784 670,226,504
3,858,062,28
6
68,612,288 1,416,760,639 16,279,507,004
Plus: Change of accounting policy - - - - - - - - - - - - - -
Correcting of previous errors - - - - - - - - - - - - - -
Others - - - - - - - - - - - - - -
II. Balance at the beginning of
current year
1,717,300,503
8,487,926,90
4
785,793,010 5,214,909,610 72,806,727 2,023,299,723 18,302,036,477 1,717,300,503 8,548,544,784 670,226,504
3,858,062,28
6
68,612,288 1,416,760,639 16,279,507,004
III. Changed in current term - (650,978) - 878,449,231 22,946,838 840,671,238 1,741,416,329 - (60,617,880) 115,566,506
1,356,847,32
4
4,194,439 606,539,084 2,022,529,473
(I) Net profit - - - 1,050,179,281 - 348,747,012 1,398,926,293 - - -
1,644,143,88
0
- 110,321,971 1,754,465,851
(II) Other integrated income - (650,978) - - 22,946,838 16,250,321 38,546,181 - 2,457,054 - - 4,194,439 1,192,914 7,844,407
Total of (I) and (II) - (650,978) - 1,050,179,281 22,946,838 364,997,333 1,437,472,474 - 2,457,054 -
1,644,143,88
0
4,194,439 111,514,885 1,762,310,258
(III) Shareholder input and withdraw
of share capital
- - - - - 475,673,905 475,673,905 - -63,074,934 - - - 795,570,007 732,495,073
1. Capital input by shareholders - - - - - 475,673,905 475,673,905 - - - - - 338,613,691 338,613,691
2. Share payment accounted into
shareholders’ equity
- - - - - - - - - - - - - -
3. Others - - - - - - - - (63,074,934) - - - 456,956,316 393,881,382
(IV) Profit distribution - - - (171,730,050) - - (171,730,050) - - 115,566,506
(287,296,556
)
- (300,545,808) (472,275,858)
1. Providing of surplus reserves - - - - - - - - - 115,566,506
(115,566,506
)
- - -
2. Common risk provision - - - - - - - - - - - - - -
3. Dividend to shareholders - - - (171,730,050) - - (171,730,050) - - - (171,730,050) - (300,545,808) (472,275,858)
4. Others - - - - - - - - - - - - - -
(V) Internal settlement of
shareholders’ equity
- - - - - - - - - - - - - -
1. Capital reserves transferred to
share capital
- - - - - - - - - - - - - -
2. Surplus reserves transferred to
share capital
- - - - - - - - - - - - - -
3. Making up losses by surplus
reserves
- - - - - - - - - - - - - -
4. Others - - - - - - - - - - - - - -China Merchants Property Development Co., Ltd.
39 - -
IV. Balance at the end of this term 1,717,300,503
8,487,275,92
6
785,793,010 6,093,358,841 95,753,565 2,863,970,961 20,043,452,806 1,717,300,503 8,487,926,904 785,793,010
5,214,909,61
0
72,806,727 2,023,299,723 18,302,036,477China Merchants Property Development Co., Ltd.
40 - -
The period from January 1, 2010 to June 30, 2010
Statement of Change in Shareholders’ Equity (Parent Company)
In RMB
Amount of the Current Term Amount of Last Year
Items Share capital Capital reserves Surplus reserves Retained profit
Total of
shareholders’ equity Share capital Capital reserves Surplus reserves Retained profit
Total of shareholders’
equity
I. Balance at the end of last year 1,717,300,503 8,930,527,676 734,841,617 3,539,110,277 14,921,780,073 1,717,300,503 8,928,070,622 619,275,111 2,670,741,774 13,935,388,010
Plus: Change of accounting policy - - - - - - - - - -
Correcting of previous errors - - - - - - - - - -
Others - - - - - - - - - -
II. Balance at the beginning of current
year
1,717,300,503 8,930,527,676 734,841,617 3,539,110,277 14,921,780,073 1,717,300,503 8,928,070,622 619,275,111 2,670,741,774 13,935,388,010
III. Changed in current term - (650,978) - (152,855,462) (153,506,440) - 2,457,054 115,566,506 868,368,503 986,392,063
(I) Net profit - - - 18,874,588 18,874,588 - - - 1,155,665,059 1,155,665,059
(II) Other integrated income - (650,978) - - (650,978) - 2,457,054 - - 2,457,054
Total of (I) and (II) - (650,978) - 18,874,588 18,223,610 - 2,457,054 - 1,155,665,059 1,158,122,113
(III) Shareholder input and withdraw
of share capital
- - - - - - - - - -
1. Capital input by shareholders - - - - - - - - - -
2. Share payment accounted into
shareholders’ equity
- - - - - - - - - -
3. Others - - - - - - - - - -
(IV) Profit distribution - - - (171,730,050) (171,730,050) - - 115,566,506 (287,296,556) (171,730,050)
1. Providing of surplus reserves - - - - - - - 115,566,506 (115,566,506) -
2. Providing of common risk
provisions
- - - - - - - - - -
3. Dividend to shareholders - - - (171,730,050) (171,730,050) - - - (171,730,050) (171,730,050)
4. Others - - - - - - - - - -
(V) Internal settlement of
shareholders’ equity
- - - - - - - - - -
1. Capital reserves transferred to share
capital
- - - - - - - - - -
2. Surplus reserves transferred to share
capital
- - - - - - - - - -
3. Making up losses by surplus
reserves
- - - - - - - - - -
4. Others - - - - - - - - - -
IV. Balance at the end of this term 1,717,300,503 8,929,876,698 734,841,617 3,386,254,815 14,768,273,633 1,717,300,503 8,930,527,676 734,841,617 3,539,110,277 14,921,780,073China Merchants Property Development Co., Ltd.
Notes to the Financial Statements
The period from January 1 to June 30, 2010
41 - -
A. (I) Company Profiles
China Merchants Property Development Co., Ltd. (the Company), originally China
Merchants Shekou Shareholding Co., Ltd., is a sino-foreign joint venture established on the
base of Shenkou China Merchants Port Service Co., Ltd. by China Merchants Sekou
Industrial Zone Co., Ltd. (Shekou Industrial Zone). The Company was incorporated in
Shenzhen China in September 1990.
On February 23 1993, the Company raised finance by issuing 27,000,000 A shares to the
local investors, and 50,000,000 B shares to foreign investors. Upon issuing of these shares,
the Company’s capital shares had increased up to 210,000,000 shares. The A shares and B
shares were listed at Shenzhen Stock Exchange in June 1993.
In July 1995, part of B shares were listed in Singapore Stock Exchange by mean of SDR
(Singapore Depository Receipts, “新加坡托管收据” in Chinese).
In June 2004, the Company changed its name to “China Merchants Property Development
Co., Ltd.” After dividend distributions and rights issues implemented during 1994-2004, the
Company’s total number of shares had increased to 618,822,672 shares up to December 31,
2004.
On January 18, 2006, as approved by the shareholders’ meeting, the A share relocation plan
was implemented. Namely holders of current A shares received 2 A shares and RMB3.14
upon each 10 current A shares from the holders of non-current A shares. The total number of
capital shares remains unchanged after completion of the relocation plan.
As approved by Document [2006]67 issued by China Securities Regulatory Commission, the
Company has made full right issue of 15,100,000 convertible corporation bonds to original
A shareholders on August 30, 2006, the part of right issue waived by the original A
shareholders would be placed offline to institution investors. The bonds are with face value
of RMB100 each. The convertible part became negotiable in Shenzhen Stock Exchange
since September 11, 2006 with ID of “CM Convertible Bond” and the convertible date was
March 1, 2007.
On May 25, 2007, CM Convertible Bond was terminated from trading and converting. All of
the bonds not converted yet were repurchased by the Company. Till then, there were totally
15,093,841 bonds (with total face value of RMB1,509,384,100) converted into 115,307,691
shares. The remained 6,159 convertible bonds (with face value of RMB615,900) were
repurchased by the Company. Thus the capital shares of the Company had increased up to
734,130,363 shares.China Merchants Property Development Co., Ltd.
Notes to the Financial Statements
The period from January 1 to June 30, 2010
42 - -
As approved by document Zheng-Jian-Fa-Xing-Zi [2007]299 issued by China Securities
Regulatory Commission, the company has placed 110,736,639 shares privately to China
Merchants Shekou Industrial Zone Co., Ltd. on September 19, 2007. The Company’s capital
shares has increased up to 844,867,002 shares since then.
On March 17, 2008, the plan for profit distribution and capitalizing of common reserves for
year 2007 was passed by the Shareholders’ General Meeting 2007, which was, basing on the
total capital share of 844,867,002 at December 31, 2007, 3 bonus shares were to distributed
to each 10 shares, meanwhile 2 new shares were to converted to each 10 shares from the
common reserves basing on the same. Since then, the total capital shares of the Company
would be increased to 1,267,300,503 shares.
Under “Approval for issuing of new shares by China Merchants Property Development Co.,
Ltd.” (Zheng-Jian-Xu-Ke[2008]989) issued by China Securities Regulatory Commission, the
Company issued 450,000,000 shares to existing A-share holders on November 26, 2008,
among which 279,349,288 shares were subscribed by China Merchants Shekou Industrial
Zone Co., Ltd. – one of the shareholders of the Company. The total capital shares of the
Company has increased up to 1,717,300,503 shares since then.
The Company has its headquarter located in Shenzhen Guangdong. The Company and its
subsidiaries (referred to as “The Group” are mainly engaged in property development, public
utilities (water and power supply), and property management.
China Merchants Shekou Industrial Zone Co., Ltd. is the parent company of the Company,
and China Merchants Group Ltd. is the ultimate holding shareholder.
B. (II) Main Accounting Policies, Estimations and Retrospecting of Previous Accounting
Errors
1、 Basis of the Financial Statements
Basis of Presentation and Principle of Pricing
The accounting basis of the Group is the accrual system. Except that some financial tools are
accounted according to fair value, the financial statements take the historical cost as the
accounting basis. If assets impair, account the corresponding provisions for impairment in
accordance with the relevant provisions.
2. Statement of compliance to the Enterprise Accounting Standard
The financial statements prepared by the Company comply with the requirement of New
Accounting Standards, and are truly and completely reflecting the financial situations as of
June 30, 2010 of both the company and consolidated, as well as the operation results andChina Merchants Property Development Co., Ltd.
Notes to the Financial Statements
The period from January 1 to June 30, 2010
43 - -
cash flow in the period from January 1, 2010 to June 30, 2010 of the Company and
consolidated as well.
3. Accounting period
The fiscal year of the Group is the solar calendar year, that is from January 1 to December
31.
4. Standard currency for bookkeeping
RMB is the primary currency in main economic environments, thus the Company and its
domestic subsidiaries adopt RMB as the standard currency for bookkeeping. The business of
the subsidiaries of the Group in Hong Kong, Singapore shall be accounted in Hong Kong
Dollar. Standard currency used in this financial statement is RMB.
5. Accounting treatment of the merging entities under common control and different
control
Merger of companies refers to those trade or event that merges over two individual
companies into one report subject. Merger of companies is divided into merger of
enterprises under common control and merger of enterprises under different control.
Assets and liabilities acquired from merger of enterprises are recognized at consolidation
day or purchasing day. Consolidation day or purchasing day is the date when the controlling
power over the target enterprise are practically obtained, namely the date when the net asset
or controlling power of business operation decision-making is transferred to the Company.
5.1 Merger of entities under common control
Both before and after the merger, the enterprises are under common control of sole party or
several parties, and the controlling power is by no means temporary, it is regarded as merger
of enterprises under common control. The party which obtained the controlling power over
other parties participated in the merger at the merger day is referred to as the merging party,
where the other parties are referred to as the merged party.
Assets and liabilities obtained by the merging party are calculated at their book value with
the merged parties at the merger day. The differences between the book value of net assets
and the book value of consideration price (or the total of face value of share issued) are
adjusted to the share capital premium under the capital reserves. If the share capital premium
is not enough to neutralize the difference, it will be adjusted to the retained gains.
Direct expenses occurred to the merging party for the merger are accounted into current
gain/loss account when occurred.
5.2 Merger of entities under different control and goodwillChina Merchants Property Development Co., Ltd.
Notes to the Financial Statements
The period from January 1 to June 30, 2010
44 - -
When the enterprises participated in the merger are not under controlling of the same party
or group of parties, either before or after the merger, the merger is regarded as merger of
enterprises under different control. At merging of enterprises under different control, the
party which obtains power of control over other participants is regarded as the buying party,
and the other parties are regarded as the bought parties.
For merger of enterprises under common control, the merger cost is the fair value of capital
paid, liability occurred or undertaken, or equity instrument issued thereof, on the day of
purchasing to obtain power of control over the bought party, and those expenses directly
related to the merger. For merger done through multiple trades, the overall cost is the sum of
cost of each single trade. If the merger contract provided faith on future events that may
influence the merger cost, and the event has great possibility to happen, and its influence
may be reliably measured, then it will be accounted into merger cost.
Recognizable assets, liabilities, and contingent liabilities obtained in merger of enterprises
under different control, are measured at their fair value on the purchase day.
When the merger cost is greater than the share of fair value of recognizable net asset of the
bought enterprise, the balance is recognized as goodwill. When the merger cost is lower than
the share of fair value of recognizable net asset of the bought enterprise, revising will firstly
be done on the merger cost and fair value of each recognizable assets, liabilities, and
contingent liabilities of the bought party, and if the merger cost is still lower than the share
of fair value of recognizable net asset of the bought enterprise, the balance will be accounted
into current gain/loss account.
Goodwill and intangible assets formed by merger of enterprises, shall be verified annually
for impairment. Verifying of goodwill is performed along with the asset group or
combination of asset groups to which the goodwill is related. I.e. the book value of goodwill
shall be reasonably amortized to the related asset group since the day acquired. Those can
hardly be amortized to the related asset group shall be amortized to the combination of asset
groups. Impairment loss is recognized when the retrievable value of the asset group or
combination of asset groups including the goodwill is lower than its book value. Impairment
losses shall be firstly amortized to the book value of goodwill of the asset group or
combination of asset groups, then amortized to other assets in the group or combination of
groups at their relative portions.
Retrievable value is the higher one of the net amount of fair value less disposal expenses and
the current value of expected future cash flow the asset may cause. Fair value is determined
according to a fair trade contract; for those without trade contract but has an active market,
the fair value is determined at the price offered by the buyer; for those without trade contract
and active market, the fair value can be determined according to the best informationChina Merchants Property Development Co., Ltd.
Notes to the Financial Statements
The period from January 1 to June 30, 2010
45 - -
obtained. Disposal expenses include those legal expenses, taxes, truckage, and other direct
expenses occurred in purpose of make the asset usable.
Goodwill impairment will not be written back in subsequent fiscal periods as soon as it was
recognized.
6. Preparing method of consolidated financial statements
Consolidation range is determined on the basis of control power for the consolidated
financial statements. Control power means the Company has the ability to decide the
financial and operation issues of another firm and can obtain profit from the firm’s business
operation.
The Company adopts the date of gaining or losing power of control over the subsidiaries as
the date of purchasing or disposal. For subsidiaries being disposed, their business result and
cash flow before the disposal day have been appropriately demonstrated in the consolidated
income statement and cash flow statement. For subsidiaries disposed in the current term, the
initial amount of the consolidated balance sheet will not be adjusted. Subsidiaries added as
merger of enterprises under different control, their operation results and cash flow after the
purchase day have been appropriately demonstrated in the consolidated income statement
and cash flow statement. The initial amount and comparison amount of the consolidated
financial statement will not be adjusted. Subsidiaries added as merger of enterprises under
common control, their operation results and cash flow from the beginning of current term to
the merger day have been appropriately demonstrated in the consolidated income statement
and consolidated cash flow statement. And the comparison amount in the consolidated
financial statement shall be adjusted accordingly.
The accounting policies and accounting periods of the subsidiaries are decided accord with
the Company’s accounting policies and accounting periods.
Trades and major accounts between the Company and subsidiary or any two subsidiaries
shall be neutralized when consolidated.
Those share of owners’ equity in the subsidiaries not attributable to the parent company are
treated as minor shareholders’ equity, and demonstrated as 搈inor shareholders’
equity?under the shareholders’ equity items in the consolidated balance sheet. The shares of
minor shareholders’ equity in net income of current term are demonstrated under ‘Minor
shareholders’ gain/loss’ under the net profit items in the consolidated income statement.
When the share of losses attributable to the minor shareholders has exceeded their shares in
the shareholders’ equity at the beginning of term, if the Articles of Association of the
Company has decided beforehand that the minor shareholders has the responsibility to
undertake the losses and have the power to make up them, the shareholders’ equity shall beChina Merchants Property Development Co., Ltd.
Notes to the Financial Statements
The period from January 1 to June 30, 2010
46 - -
deducted thereof. If not so, it will be deducted from the shareholders’ equity attributable to
the parent company of the Company. Profits produced by the subsidiary in subsequent
periods are attributable to the shareholders’ equity of the parent company of the Company
before making up of the losses attributed to the minor shareholders but undertaken by the
parent company of the Company.
7. Recognition basis of cash and cash equivalents
Cash refers to in-stock cash and bank savings which are available for payment whenever
needed. Cash equivalent refers to the investment held by the Company with short term,
strong liquidity and low risk of value fluctuation that is easy to be converted into cash of
known amount.
8. Translation of businesses and accounts in foreign currency
8.1 Foreign currency businesses
Foreign currency transactions at initial confirmation shall be translated with the approximate
exchange rate on the exchange date, the exchange rates which are approximate to the
exchange rate on the exchange date shall be determined according to the spot exchange rate
of the current month of the transaction.
At the balance sheet day, foreign currencies are translated to Renminbi at the instant
exchange rate of that day, the exchange difference caused by difference of the instant rate at
that day and the rate adopted in initial recognition, or the exchange rate adopted in previous
balance sheet, are accounted into current gain/loss account, except for: (1) The exchange
difference of special foreign currency borrowing satisfying the conditions of capitalization,
which is capitalized and accounted into cost of related asset; (2) Exchange difference of
hedge instruments for purpose of avoiding exchange risks is treated by the way of
accounting on hedge instruments;(3) Exchange differences caused by sellable non-monetary
items (shares for instance), and exchange differences caused by fluctuation of other book
balance other than retained cost of sellable monetary items, are accounted into current
income account.
Non-monetary items in foreign currency and measured with historical costs are still
measured at standard currency with exchange rate of the day when the transaction is
happened. Non-monetary foreign currency items in fair value are translated at the rate when
the fair value is determined. Differences between the standard currency and original
currency is handled as fair value fluctuation and accounted under current gain/loss account
or other integrated income and recorded into capital reserves.
8.2 Translation of foreign currency accounts
When preparing of consolidated financial statements is involving in overseas business
operation, if it is a foreign currency item practically formed net investment in overseasChina Merchants Property Development Co., Ltd.
Notes to the Financial Statements
The period from January 1 to June 30, 2010
47 - -
business, the difference caused by exchange rate fluctuation will be accounted under
“difference of foreign currency translation” of shareholders’ equity. When the overseas
business is disposed of, it will be accounted into current gain/loss.
Foreign currency financial statements prepared for the Company’s overseas businesses are
translated by the following methods: All asset and liability items in the balance sheet are
translated at the exchange rate of the balance sheet date; shareholders’ equity items except
for 搖ndistributed profit?are translated at the exchange rate of the day when they happened;
all items in the income statement and items reflecting the amount of profit distribution are
translated at the similar exchange rate of the date when the trades happened; undistributed
profit at the beginning of year is the undistributed profit translated at the end of previous
year; undistributed profit at the end of year are demonstrated according to the calculation of
profit distribution items after translated; the differences between the translated asset items
and liability items and total amount of shareholders’ equity items are demonstrated
separately as difference of foreign currency statement translation under shareholders’ equity
items in the balance sheet.
When disposing of overseas businesses, those foreign currency statement translation
differences displayed under shareholders’ equity in balance sheet and related to the overseas
businesses are fully or at the portion of the business transferred over to current gain/loss
account regarding disposal.
Foreign currency cash flow and overseas subsidiaries’ cash flow are translated on the similar
exchange rate of the day when the cash flow was happened. Influences of exchange rate
movement on cash and cash equivalents are regarded as adjustment items and demonstrated
under 揑nfluence of exchange rates on cash and cash equivalents?in the cash flow statement.
The initial amount at the beginning of year and the practical amount of last year are
presented according to the translated amount of the financial statements of last year.
9. Financial instruments
9.1 Deciding of fair value of financial assets and financial liabilities
Fair value is the amount in a fair trade decided mutually by the both parties doing the trade
or debt clearance voluntarily and who are familiar with the situation. When there is an active
market for the financial instrument, the value quoted at the active market is adopted by the
Company as the fair value. Value quoted at the active market refers to the amount can be
easily obtained from the exchange, brokers, industrial associations, or pricing institutions,
and is representing the price practically used in market transactions. When there isn’t any
active market, fair value will be recognized by evaluation techniques. Evaluation techniques
include referencing to the prices adopted in latest voluntary transaction between parties with
full understanding of the situation, referencing to the current fair value of other substantiallyChina Merchants Property Development Co., Ltd.
Notes to the Financial Statements
The period from January 1 to June 30, 2010
48 - -
similar financial instruments, discounted cash flow analysis, and future option pricing model.
9.2 Categorizing, recognition and measuring of financial assets
Transactions of financial assets in common ways are recognized and terminated according to
the accounting of the trading day. At initial recognition, financial assets are divided into
financial assets measured at fair value that accounted into current gain/loss account by its
variations, investment in possession till expiration, loans and receivables, and disposable
financial assets. Fair values are adopted in initial recognitions of financial assets. For those
financial assets measured by fair value and with variations accounted into current gain/loss
account, the relative transaction expenses are accounted into current gain/loss account
directly, while the transaction expenses of other categories are accounted into initial
recognition amounts.
9.2.1 Financial assets measured by fair value and fluctuation accounted into current income
account
Including transactional financial assets and financial assets measured by fair value and with
variations accounted into current gain/loss account
Transactional financial assets are those satisfying one of the followings:(1) The purpose of
acquiring the assets is to sell or repurchase them in a recent time;(2) It is part of the
distinguishable financial instrument portfolio under collective management, and there is
practical evidence showing that the Company is managing this portfolio by way of short
term gain;(3) Belongs to derivative financial instrument, however except for those be
recognized as effective hedging instruments, derivative instruments belongs to financial
guarantee contract, connected to option instruments without quotation in active market and
cannot be reliably measured for their fair value and can only be settled by delivery of this
option instrument.
Financial assets satisfying one of the following conditions can be recognized as financial
assets measured by fair value and with variations accounted into current gain/loss account:(1)
This recognition may eliminate or obviously reduce the divorce of gain or loss caused by
adopting of different measuring basis of the particular financial asset;(2) It has been
stipulated by the official document regarding risk management or investment strategies, that
the portfolio of financial assets or portfolio of financial assets and liabilities should be
managed, evaluated and reported to key managements on basis of fair value.
Fair value basis is adopted in successive measurement of financial assets measured by fair
value and with variations accounted into current gain/loss account. Gains or losses caused by
variation of fair value and the dividend or interest related to the financial assets is accounted
into current gain/loss account as well.China Merchants Property Development Co., Ltd.
Notes to the Financial Statements
The period from January 1 to June 30, 2010
49 - -
9.2.2 Investment held till due date
Refers to those non-derivate financial assets which has fixed expiration date, retrievable
amount, and the Company has definite intention and ability to hold under its possession.
Accounting of investment hold till expiration is on actual interest rate basis, and successive
measurement will upon retained cost after amortization, where the gains and losses occurred
at termination recognition, impairment, or amortization, are accounted into current gain/loss
account.
Actual interest rate basis refers to the method of calculating the amortized costs and every
due interests at actual interest rate of financial assets or liabilities (including a group of
financial assets or liabilities). Actual interest rate refers to the interest rates used in
discounting of future cash flow of particular financial asset or liability during its existing
period or applicable shorter time to the current book value.
At calculating of the actual interest rate, the Company predicts future cash flow with
considering the financial assets or liabilities on the basis of all contract clauses (without
considering future credit loss), as well as the costs, expenses, discounts or premiums paid
between the parties of above contracts regarding the financial assets or liabilities of which
can be regarded as part of the actual interest rates.
9.2.3 Loans and receivable accounts
They are referring to those non-derivate financial assets without quotation in the active
market, but with fixed retrievable amount. Financial assets categorized under loans and
receivables include notes receivable, account receivable, interest receivable, dividend
receivable and other receivable.
Accounting of loan and receivable is on actual interest rate basis, and successive
measurement will upon retained cost after amortization, where the gains and losses occurred
at termination recognition, impairment, or amortization, are accounted into current gain/loss
account.
9.2.4 Disposable financial assets
Includes those non-derivate financial assets recognized as disposable at initial recognition,
and financial assets other than those accounted at fair value and variations accounted into
current gain/loss, loans and receivable, and investment in possession till due.
Successive measurement of disposable financial assets is on fair value basis, gains or losses
from variation of fair values, except for impairment loss and exchange difference of foreign
currency financial assets related to retained costs, are accounted directly into shareholders’
equity, and transferred over to current gain/loss at termination of such financial assets.China Merchants Property Development Co., Ltd.
Notes to the Financial Statements
The period from January 1 to June 30, 2010
50 - -
Interests obtained during the period of holding the disposable financial assets and cash
dividend announced by the debtor are accounted into investment gains.
9.3 Impairment of financial assets
Except for financial assets accounted at fair value and variation accounted into current
gain/loss account, the Company undertake inspection on the book value of other financial
assets at each balance sheet day, whenever practical evidence showing that impairment
occurred with them, impairment provisions are provided.
Practical evidences on impairment of financial assets are the followings:
(1) The issuer or the debtor is in serious financial difficulty;
(2) The debtor has broken the conditions of contract, for instance default or overdue of
payment for interest or principal;
(3) With consideration of economic or legal factors, the Company decided to give way to the
debtor who is in financial difficulty;
(4) There is great possibility that the debtor will bankrupt or use other debt reorganizing
process;
(5) Financial asset is not able to be traded in the active market because the issuer is in
significant financial difficulty;
(6) It is hard to tell whether the cash flow of a particular asset in a portfolio has been
declining, whereas upon overall evaluation, the Company discovered that the predicted cash
flow of the portfolio has practically decreased since the initial recognition, and the decrease
is quantifiable, including:
- The debtor of the portfolio is becoming worse in ability of making payments;
- Particular situation happened with the country or area where the debtor is located, which
may cause obstructions for payment of the financial asset;
(7) Major negative change occurred with the technical, market, economical, or legal
environment of the debtors business territory, which may cause obstructions for the investor
to retrieve the investment;
(8) The fair value of right investment instrument is significantly decreasing or noncontemporarily
decreasing;
(9) Other practical evidence showing that impairment has happened with the financial asset.
The Company performs impairment test separately on individual financial assets with major
amounts; for financial assets without major amounts, the Company performs impairment test
separately or inclusively in a group of financial assets with similar characteristics of risks.
Those financial assets (individual financial assets with or without major amounts) tested
separately with no impairment found shall be tested again along with the group of financial
assets with similar risk characteristics. Financial assets confirmed for impairment
individually shall not be tested along with the group of financial assets with similar riskChina Merchants Property Development Co., Ltd.
Notes to the Financial Statements
The period from January 1 to June 30, 2010
51 - -
characteristics.
- Impairment of investment in possession till expiration, loans, an receivables
Financial assets measured at cost or retained cost after amortization are written down to the
current value of prediced future cash flow, the reduced amount is recognized as impairment
loss and accounted into current gain/loss account. Upon recognized for impairment losses, if
practical evidence showing that a particular financial asset has recovered in value, and
practically related to the issues occurred after recognition of the loss, the recognized
impairment loss is restored, the book value of the particular financial asset after the restoring
of impairment loss shall not greater than the amortized cost at the day of restoring as if no
impairment loss has ever been provided.
- Impairment of sellable financial assets
When impairment occurred with a sellable financial asset, the accumulated losses caused by
decreasing of fair value which have originally been written into capital reserves shall be
carried over to current gain/loss account, the accumulated loss carried over is the balance of
initial cost after deducting of retrieved principal, amortized amount, current fair value, and
impairment originally accounted into gain/loss account.
If practical evidence showing that the value of a particular financial asset has recovered in
value after a impairment loss has been recognized and practically related to the issues
occurred after recognition of the loss, the impairment loss recognized shall be restored.
Impairment loss of disposable equity investment instrument will be restored to other
miscellaneous income, and the same of disposable liability instrument will be restored to
current gain/loss account.
Impairment losses of right investment instrument without quotation in an active market and
can’t be reliably measured for its fair value, or derivative financial assets which must be
settled by delivering of such right investment instrument shall not be restored.
9.4 Basis of recognition and accounting of financial asset transferring
Recognition will be terminated when a financial asset satisfies one of the following
conditions:(1) The rights setout by the contract by which the the cash flow of the financial
asset is collected have been terminated;(2) The financial asset has been transferred to other
parties along with almost all of the risks and rewards attached to the financial asset;(3) The
financial asset has been transferred to other parties, although neither transferred nor reserved
the most risks and rewards attached to the financial asset, the Company gave away its
controlling power over it.China Merchants Property Development Co., Ltd.
Notes to the Financial Statements
The period from January 1 to June 30, 2010
52 - -
If the firm neither transferred nor reserved almost all of the risks and rewards attached to the
financial asset, and did not give away the control over the financial asset, then the relative
financial asset is recognized to the extent of continuous involving in the financial asset, and
relative liabilities as well. Continuous involving refers to the risk level of value fluctuation
risk the financial asset may confront the firm.
When the overall transferring of particular financial asset has satisfied the conditions of
termination, the difference between “the book value and offer in transferring” and
“accumulation of fair value fluctuation which has been accounted into miscellaneous
income” shall be accounted into current income account.
When partial transferring of particular financial asset has satisfied conditions of termination,
the book value of transferred financial asset shall be amortized between the terminated part
and un-terminated part according their corresponding fair value, and the difference between
“the total of the offer received in transferring and the accumulative of fair value fluctuation
originally accounted into other misc. income amortizable to termination part” and
“amortizable aforesaid book value” shall be accounted into current income account.
9.5 Categorizing and measuring of financial liabilities
At initial recognition, financial liabilities are classified into financial liabilities measured by
fair value with changes counted into current income account and other financial liabilities.
Initial recognition of financial liabilities is on fair value basis. For financial liabilities
measured by fair value with changes accounted into current income account, the related
transaction expenses are accounted into current income account directly, as for other
financial liabilities, the related transaction expenses are accounted into initially recognized
amount.
9.5.1 Financial liabilities accounted at fair value and fluctuation accounted into current
gain/loss account
Recognition conditions of transactional financial liabilities and those being assigned to
financial liabilities measured by fair value with changes counted into current income account
are similar with those conditions of transactional financial assets and those being assigned to
financial assets measured by fair value with changes counted into current income account.
Successive measurements of financial liabilities measured by fair value with changes
counted into current income account are on fair value basis. Gains or losses due to change of
fair value and dividend or interest payment related to the financial asset are counted into
current income account.
9.5.2 Other financial liabilities
Derivative financial liabilities bonded to those equity instruments without quotation in an
active market and cannot be reliably measured for fair value, and can only be settled byChina Merchants Property Development Co., Ltd.
Notes to the Financial Statements
The period from January 1 to June 30, 2010
53 - -
giving of the equity instrument, are measured on cost basis in successive measurement.
Accounting of other financial liabilities is on practical interest basis; successive
measurements are on amortized balance of cost; gains or losses due to termination
recognition or amortizing are accounted into current income account.
9.5.3 Financial guarantee contracts
Financial guarantee contracts that cannot be classified to financial liabilities assigned to be
calculated by fair value with changes accounted into current income account, are initially
recognized at fair value. Successive measurement will be on the greater one between the
amount recognized according to 揈nterprise Accounting Standard No.13 – Contingent
Issues?and the balance of initially recognized amount less accumulative amortization
decided according to 揈nterprise Accounting Standard No. 14 – Income?
9.6 Termination of financial liabilities
When the current liabilities of particular financial liability have been wholly or partially
relieved, recognition of the financial asset or part of it can only be terminated. When the
Group (the debtor) has entered an agreement with the creditor, by which the current financial
liability is replaced by accepting of new financial liabilities, and the contract conditions are
substantially different between the new and old contract, recognition of the financial liability
is terminated, and the new financial liability is recognized at the meantime.
When a financial liability is wholly or partially terminated, the difference between the book
value of the terminated part and offered value (including non-monetary asset transferred out
or new financial liabilities accepted) shall be accounted into current income account.
9.7 Derivative financial instruments and embedded derivative instruments
Derivative instruments are initially measured on fair value basis at the day when the
contracts are signed, and successive measurements are on fair value as well. Change of fair
value of derivative instruments are accounted into current income account.
For combined instruments with embedded derivative instruments, in case they are not
assigned as financial assets or liabilities on fair value basis and changes accounted into
current income account, there is no close relationship between the embedded derivative
instruments and the main contract regarding financial and risk characteristics, and with same
conditions, and the individual instrument is satisfying the definition of derivative instrument,
the embedded derivative instrument shall be separated from the combined instrument and
treated as if it is an individual derivative instrument. In case individual measurement is not
able to be carried out on the embedded instrument at acquisition day or successive period,
then the combined instrument is assigned to financial asset or liability accounted on fair
value basis with changes accounted into current income account.China Merchants Property Development Co., Ltd.
Notes to the Financial Statements
The period from January 1 to June 30, 2010
54 - -
9.7.1 Convertible bonds
Convertible bonds containing liabilities and converting options issued by the Company are
split and recognized separately at initial recognition. Where converting options settled by
fixed amount of cash or exchanging of other financial assets for fixed amount of self equity
instrument, are accounted as equity.
At initial recognition, the fair value of the liability part is determined with reference to the
current market price of similar bonds without converting option. Balance of the whole
issuing price of the convertible bonds less the fair value of the liability part is recognized as
the price of converting option by which the holders may convert the bonds into equity
instruments, and shall be accounted under “Capital reserves – other capital reserves (share
converting option)”
9.8 Neutralizing of financial assets and financial liabilities
The Company is legally empowered to neutralize the recognized financial assets and
financial liabilities. The power is currently executable. At the meantime, if the Company is
about to liquidate by net amount or cash in the financial assets and discharge the financial
liabilities simultaneously, the neutralized amounts of financial assets and liabilities are
demonstrated in the Balance Sheet. Except for the above, financial assets and liabilities are
demonstrated separately and shall not be neutralized by each other.
9.9 Equity instruments
Equity instruments are those contracts which can prove the retained equities in the asset the
Group holds after deduction of all liabilities. The balance of equity instrument offer received
at issuing less subscription expense is added to shareholders’ equity.
Interest allocations (exclude share dividend) to the equity instruments are deducted from
shareholders’ equity. The Group don’t recognize fair value fluctuation amount of equity
instruments.
10. Account receivable
10.1 Recognition and provision of bad debt provision on receivable accounts with large
amount
Recognition criteria of bad debt
provision on receivable accounts with
large amount
The Group recognizes receivable accounts over RMB10 million
as receivable accounts with large amount
Provision of bad debt provision on
receivable accounts with large amount
The Company performs impairment test separately on individual
financial assets with large amounts; those financial assets tested
separately with no impairment found shall be tested again along
with the group of financial assets with similar risk characteristics.
Financial assets confirmed for impairment shall not be tested
along with the group of financial assets with similar riskChina Merchants Property Development Co., Ltd.
Notes to the Financial Statements
The period from January 1 to June 30, 2010
55 - -
characteristics.
10.2 Recognition and providing of bad debt provisions on receivable accounts with minor
amount but with greater risk after combined in the group with similar characteristics
Recognition basis of credit risk groups Receivable accounts with minor amount individually and those
with large amount but tested no impairment, are grouped
according to their credit risks. These credit risks are usually
reflecting the ability of repaying according to the contract of the
debtor, and related to testing of future cash flow of the receivable
account. Receivable accounts overdue for over 3 years are
classified as minor amount but with greater risks after combining
with risk group.
Providing method decided on the
group of similar risks
When impairment testing by way of risk grouping, amount of bad
debt provision is decided according to historical experiences and
current economical situation and evaluated loss already exists with
the groups.
10.3 Rate of bad debt provisions provided on account age basis
Age analysis method
Age Rate for receivables (%) Rate for other receivables
(%)
within 3 months (include) 1% 1%
3-6 months 2% 2%
6-9 months 3% 3%
9-12 months 5% 5%
1-2 years 10% 10%
2-3 years 30% 30%
3-4 years 50% 50%
4-5 years 80% 80%
over 5 yrs 100% 100%
11. Inventories
11.1 Categorizing and pricing of inventory delivered
The inventories shall measured according to the initial cost. Inventories are divided into real
estate development products, raw materials, finished products and stocks, low-value and
consumable products and others.
The real estate development products are the real estate development products under
construction, development products which have been completed, the lands to be developed,
etc. The actual costs of real estate development products include the land transfer amount,China Merchants Property Development Co., Ltd.
Notes to the Financial Statements
The period from January 1 to June 30, 2010
56 - -
infrastructure expenses, and expenditures on construction and installation works, the
borrowing costs before the completion of the development projects and other related costs.
When the inventories are sent out, determine the actual cost by the individual valuation
method.
The actual costs of inventories include the purchase price, transportation cost, and insurance
premium, taxes and other related costs for the expenses of making inventories reach the
current site and state. When send out the inventories, determine its actual costs according to
the method of weighted average.
Construction contracts are measured at actual costs, including related direct and indirect
expenses occurred from signing to completion of the contract. Accumulated actual costs and
accumulated recognized gross profit (loss) and settled prices are demonstrated at net value in
the balance sheet after neutralization. The balance of “total of accumulated actual cost and
accumulated recognized gross profit (loss)” over the “settled price” is demonstrated as
inventory. The balance of “settled price” over “total of accumulated actual cost and
accumulated recognized gross profit (loss)” is demonstrated as account received in advance.
Expenses such as travelling expenses and bidding expenses related to construction contract
are accounted into contract cost when they can be distinguished and measured reliably, and
the contract is possibly been engaged. Otherwise are accounted into current income account.
11.2 Recognition basis of realizable net value of inventory and providing basis of inventory
impairment provision
On the balance sheet date, inventories are accounted depending on which is lower between
the cost and the net realisable value. When its net realisable value is lower than the cost,
provisions for impairment of inventories shall be drawn. Provisions for impairment of
inventories shall be accounted according to the difference between the cost of individual
inventory items and the net realisable value.
After providing of inventory impairment provision, if the impacting factors that caused
impairment of inventory were eliminated, and the realizable value of the inventory becomes
higher than the book value, the inventory impairment provision formerly provided shall be
restored into current income account.
Realizable net value is, in daily transaction, the amount of predicted sales price less
predicted cost at completion of construction, less predicted sales expense and tax.
Recognition of realizable net value of inventory shall base on confirmed evidence obtained,
with reference to the purpose to hold the inventory, and influence of post balance sheet
issues.China Merchants Property Development Co., Ltd.
Notes to the Financial Statements
The period from January 1 to June 30, 2010
57 - -
11.3 Inventory system
Inventory system is the perpetual inventory system.
11.4 Amortizing basis of low-value consumable materials
Low-value consumables are amortized on one-off basis.
12. Long-term equity investment
12.1 Recognition of initial investment cost
For the long-term equity investment formed by corporate merger, if it is the long-term equity
investment obtained from the corporate merger under the same control, the share of book
value of owner's equity on the merger date shall be taken as the initial investment cost. The
long-term equity investment obtained through the corporate merger under different control
shall be taken as the initial investment cost of long-term equity investment. The other longterm
investment besides the long-term equity investment formed by corporate merger shall
conduct initial measurement according to its cost.
12.2 Successive measurement and recognition of gain/loss
For the long-term equity investments that have no joint control or significant influence and
have no price in active market and the fair value can not be reliably measured, shall adopt
the the cost accounting method; for the long-term equity investments that have joint control
or significant influence, shall adopt the method of equity to account. For those without
controlling, joint control or significant influence, and can be measured reliably for their fair
values, they are accounted as sellable financial assets.
Meanwhile, the Company apply cost basis in accounting of long-term equity investment
with substaintial control.
12.2.1 Long-term equity investment on cost basis
When cost basis is adopted, long-term equity investments are measured at initial cost.
Investment gains are recognized as the cash dividend or profit announced and distributed,
except for those cash dividend or profit which have already included in the actual payment
of offer when the investment was made.
12.2.2 Long-term equity investment on equity basis
When equity basis is adopted, if the initial cost of the long-term equity investment is greater
than the share of fair value of the receiver’s recognizable net asset, the initial investment
cost of the long-term equity investment will not be adjusted; if the initial cost of the longterm
equity investment is less than the share of fair value of the receiver’s recognizable net
asset, the balance shall be counted into current income account, and the cost of long-term
equity investment shall be adjusted.China Merchants Property Development Co., Ltd.
Notes to the Financial Statements
The period from January 1 to June 30, 2010
58 - -
When equity basis is adopted, investment gain/loss of the current term is the share of net
gains or losses of the investment receiver of the current year. Recognition of the share of net
gains or losses of the investment receiver shall be on the basis of fair value of recognizable
asset of the receiver when the investment was made, and recognized after adjustment on the
net profit of the receiver in accordance with the Company’s accounting policies and
accounting period. For the gain/loss due to unrealised internal trade between the Company
and co-operations, the share of the Company in this gain/loss shall be neutralized, and
investment gains shall be recognized upon them. But the losses from unrealised trade
between the Company and investment receivers which are regarded as losses from asset
transferring according to “Enterprise Accounting Standard No.8 – Asset impairment” shall
not be neutralized. Change of equities of the investment receiver other than net gains or
losses shall be counted into shareholders’ equity, and the book value of long-term equity
investment shall be adjusted correspondingly and recognized as other miscellaneous income
and recorded in capital reserves.
Recognition of the share of net loss by the investment receiver shall be limited to when the
book value of long-term equity investment and other long-term equity forms substantial net
investment has been reduced to zero. Beside, if the Company is responsible for other losses
of the investment receiver, predicted liability shall be recognized upon the prediction of
responsibilities and recorded into current investment loss account. If the receiver realized net
profit in the period thereafter, the share of gains is recovered after making up of share of
losses which has not been recognized.
12.2.3 Purchasing of minority share equity
At preparing of consolidated financial statements, the differece between the newly added
long-term equity investment due to purchasing of minority share equity and share of net
asset calculated upon the new share portion from the date of acquisition (or date of
consolidation) in continuous way, shall be adjusted in capital reserves, and when the capital
reserves is not enough to be offsetted, the balance will be adjusted from the retained gains.
12.2.4 Disposal of long-term equity investment
In the consolidated financial statement, when the parent company partially disposes the longterm
equity investment in the subsidiary without losing controlling power over it, the
difference between the disposing price and the share of net asset corresponding to the
disposed long-term equity investment is accounted into shareholders’ equity. Disposal of
long-term equity investment in other conditions, the difference between the book value and
actual price received shall be accounted into current income account. For long-term equity
investment accounted on equity basis, the part originally accounted into shareholders’ equity
is carried over to current income account at corresponding rate when disposed.
12.3 Basis of deciding the common control and major influence on the invested firmChina Merchants Property Development Co., Ltd.
Notes to the Financial Statements
The period from January 1 to June 30, 2010
59 - -
Controlling power means the power over the firm’s financial and operational decisionmaking,
and can obtain profit from the operation of such firm. Mutual control means the
controlling power on particular activity hold together with others against particular contract,
and shall only take effect when all of the investment parties has collective affirmative
opinions on the major financial or operational issues. Major influence means the power to
participate in decision-making but cannot control or collectively control the same. At
considering of substantial control or major influence of a firm, the potential voting right
factors such as current convertible bonds or executable subscription options have been
considered.
12.4 Impairment testing and basis of impairment provision
Impairment testing is performed on the long-term equity investment at each balance sheet
date. In case of there is evidence showing impairment has occurred, the recoverable amount
shall be assessed. If the recoverable amount is lower than the book value, the impairment
provision shall be provided at the difference and accounted into current income account.
Once the impairment loss of a long-term equity investment is recognized, it shall not be
written back in subsequent fiscal periods.
13. Investment property
Investment real estate is defined as the real estate with the purpose to earn rent or capital
appreciation or both, including the rented land use rights and the land use rights which are
held and prepared for transfer after appreciation, the rented buildings. Furthermore, as for
the idle estates hold by the Company and ready for rent, if the Board has made written
resolutions to use them for rent and shall remain unchanged, they will be reported under
investment real estate.
Investment real estate is measured according to the initial cost. The follow-up expenses that
are related to investment real estate, if the economic interests related to the assets are is
likely to inflow cost and its costs can be reliably measured, shall be included in the cost of
investment real estate. The other follow-up expense shall be included in the current loss.
The Group adopts the cost model to have follow-up measurements of the investment real
estate, and to conduct depreciation or amortization according to the policies that are in
consistent with the land use rights.
Impairment testing is performed on investment property at each balance sheet day. When
evidence showing that impairment has occurred, the recoverable value shall be assessed.
Assessment of recoverable value is based on individual asset. If the recoverable value was
hard to evaluate separately, it shall be decided along with the group of assets it belongs to. If
the recoverable value of an asset is lower than its book value, the balance shall be providedChina Merchants Property Development Co., Ltd.
Notes to the Financial Statements
The period from January 1 to June 30, 2010
60 - -
for impairment provision and accounted into current income account.
Once impairment of investment property was recognized, it will not be written back in the
subsequent fiscal periods.
Real estates for self use or inventories converted into investment real estate or investment
real estate converted into real estate for self use, the book value before the conversion shall
be taken as the recorded value after the conversion.
The difference of the income from the sale, transfer, dispose of the investment real estate
deducting the book value and relevant taxes shall be included in the gains and losses in the
current period.
14. Fixed assets
14.1 Recognition of fixed assets
Fixed assets is defined as the tangible assets which are held for the purpose of producing
goods, providing services, lease or for operation & management, and have more than one
year of service life.
14.2 Depreciation of various fixed assets
Initial measurement shall be conducted on fixed assets according to the actual cost when
obtain them and also considering the expected costs for disposal. From the next month since
reaching the intended use state, depreciations on fixed assets shall be accounted by using the
method of average life length. The service life of fixed assets, expected net residual value
and the year depreciation rate are as follows:
Categories
Depreciation
age (yrs)
Salvage value
rate %
Annual
depreciation
ratio (%)
Houses & buildings 10-50 yrs 5%-10% 1.8%-9.5%
Equipment & machinery 10–20 yrs 5%-10% 4.5%-9.5%
Electronics, furniture, appliances 5-10 yrs 5% 9.5%-19%
Transportation equipment 5-10 yrs 5% 9.5%-19%
Estimated salvage value refers to the amount of value retrieved after deducting of predicted
disposal expense when the expected using life of a fixed asset has expired and in the
expected state of termination.
14.3 Impairment test on fixed asset and providing of impairment provision
Impairment testing is performed on fixed asset at each balance sheet day. When evidence
showing that impairment has occurred, the recoverable value shall be assessed. AssessmentChina Merchants Property Development Co., Ltd.
Notes to the Financial Statements
The period from January 1 to June 30, 2010
61 - -
of recoverable value is based on individual asset. If the recoverable value was hard to
evaluate separately, it shall be decided along with the group of assets it belongs to. If the
recoverable value of an asset is lower than its book value, the balance shall be provided for
impairment provision and accounted into current income account.
Once fixed asset impairment is recognized, it shall not be written back in subsequent fiscal
periods.
14.4 Other remarks
Subsequent expenses related to particular fixed asses, if the financial benefit attached to the
fixed asset is possibly inflowing and the cost can be measured reliably, are accounted into
fixed asset cost, and the book value of the replaced part is recognized termination.
Subsequent expense other than these are accounted into current income account when
occurred.
The Company revises, at least once at the end of year, the useful life, estimated salvage
value, and depreciation policies of the fixed assets. If any change happened, it will be treated
as changing of accounting estimations.
Income from treatment of fixed asset disposing, transferring, discarding or damage, the
balance after deducting of book value and relative taxes is recorded into current income
account.
15. Construction-in-progress
Cost of construction in process is determined at practical construction expenditures,
including all expenses during the construction, capitalized loan expenses before the
construction reaches useful status, and other relative expenses. It is transferred to fixed asset
as soon as the construction reaches the useful status.
Impairment testing is performed on construction in process at each balance sheet day. When
evidence showing that impairment has occurred, the recoverable value shall be assessed.
Assessment of recoverable value is based on individual asset. If the recoverable value was
hard to evaluate separately, it shall be decided along with the group of assets it belongs to. If
the recoverable value of an asset is lower than its book value, the balance shall be provided
for impairment provision and accounted into current income account.
Once impairment of construction impairment is recognized, it shall not be written back in
subsequent fiscal periods.
16. Borrowing expenses
Borrowing expenses include borrowing interests, amortizing of discount or premium,China Merchants Property Development Co., Ltd.
Notes to the Financial Statements
The period from January 1 to June 30, 2010
62 - -
auxiliary expenses, and exchange balances due to borrowings in foreign currencies.
Borrowing expenses that can be attributed for purchasing or construction of assets that are
complying with capitalizing conditions start to be capitalized when the payment of asset and
borrowing expenses have already occurred, and the purchasing or production activities in
purpose of make the asset usable have started; Capitalizing will be terminated as soon as the
asset that complying with capitalizing conditions has reached its usable or saleable status.
The other borrowing expenses are recognized as expenses when occurred.
Interest expenses practically occurred at the current term of a special borrowing are
capitalized after deducting of the bank saving interest of unused borrowed fund or
provisional investment gains; Capitalization amounts of common borrowings are decided by
the weighted average of exceeding part of accumulated asset expenses over the special
borrowing assets multiply the capitalizing rate of common borrowings adopted.
Capitalization rates are decided by the weighted average of common borrowings.
In the capitalization period, all of the exchange differences of special borrowings in foreign
currencies are capitalized; exchange differences of common borrowings in foreign
currencies are accounted into current income account.
Assets satisfying the conditions of capitalization are those fixed assets, investment assets or
inventories which need a long period of time to purchase, construct, or manufacturing before
becoming usable.
If purchasing, construction, or manufacturing process of an asset satisfying the conditions of
capitalization is suspended abnormally for over 3 months, capitalizing of borrowing
expenses shall be suspended until the purchasing, construction, or manufacturing process is
resumed.
17. Intangible assets
Intangible assets are those recognizable non-monetary assets without physical shape under
the Company’s possess or control.
Intangible assets are measured by their costs. Those costs related to intangible assets, if the
financial benefits are likely to inflow to the Company and can be reliably measured, then
counted into intangible asset costs. Other expenditures related to intangible items are
counted into current income account when occurred.
Land using rights purchased or by way of land using right payment for the Company’s own
use are accounted as intangible assets; land using rights purchased or by way of land using
right payment for developing of merchandise properties are accounted into property
developing costs. For those houses or buildings purchased from outside, the relatedChina Merchants Property Development Co., Ltd.
Notes to the Financial Statements
The period from January 1 to June 30, 2010
63 - -
payments are allocated between land using rights and buildings. Those which can hardly be
allocated are treated as fixed assets collectively.
Those intangible assets with limited useful life are evenly amortized on straight basis from
the date when they become useable to the end of expected useful life.
At end of report term, revising will be performed on the useful life of intangible assets with
limited useful life and the methods of amortizing. If any change happened, it will be treated
as changing of accounting estimations.
Impairment testing is performed on intangible assets at each balance sheet day. When
evidence showing that impairment has occurred, the recoverable value shall be assessed.
Assessment of recoverable value is based on individual asset. If the recoverable value was
hard to evaluate separately, it shall be decided along with the group of assets it belongs to. If
the recoverable value of an asset is lower than its book value, the balance shall be provided
for impairment provision and accounted into current income account.
Once intangible asset impairment loss was recognized, shall not be written back in
subsequent fiscal periods.
18. Long-term expenses to be amortized
Long-term amortizable expenses are those already occurred and amortizable to the current
term and successive terms for over one year. Long-term amortizable expenses are evenly
amortized to the benefit period.
19. Predicted liabilities
Responsibilities connected to contingent issues and satisfied all of the following conditions
are recognized as predictive liabilities: (1) The responsibility is a current responsibility
undertaken by the Company; (2) Fulfilling of the responsibility may lead to financial benefit
outflow; (3) The responsibility can be measured reliably for its value.
At balance sheet day, with reference to the risks, uncertainty and periodic value of currency
that connected to the contingent issues, the predicted liabilities are measured according to
the best estimation on the payment to fulfil the current responsibility.
If the expenses for clearing of predictive liability is fully or partially compensated by a third
party, and the compensated amount can be definitely received, it is recognized separated as
asset. Though the compensated amount shall not greater than the book value of the
predictive liability.
20. TurnoverChina Merchants Property Development Co., Ltd.
Notes to the Financial Statements
The period from January 1 to June 30, 2010
64 - -
20.1 Income from sales of goods
When main risks and rewards attached to the ownership of goods have been transferred to
the buyer, reserved neither continuous management power nor effective control over the
goods, incoming payment can be measured reliably, relative financial benefit possibly inflow
to the company, cost occurred or will occur can be reliably measured, sales income of goods
is recognized.
If the buyer of the property can stipulate the main structural factors of the design prior to
starting of construction, or can decide main structural alternation during the construction,
and the construction agreement satisfies the definition of construction contract, the relative
income and expenses are recognized according to “Enterprise Accounting Standard No.15 –
construction contracts”; If the buyer of the property has limited ability to alter the design of
property (for instance can only make minor alternation on the design), property sales income
is recognized upon completion and acceptance of the property and the handover procedures
were completed.
The sales income from power supply and water supply shall be recognized when the
electricity and water have been provided and have received the right to collect the money.
20.2 Income from construction contracts
When the results of construct contracts can be reliably estimated, income and costs are
recognized at the percentage of completion at the balance sheet day. Percentage of
completion of the construction contracts are decided by estimation of completed work and
other whole work.
Reliable estimation of construction results means satisfying of all of these conditions:
(1) Overall income of the contract can be measured reliably;
(2) Financial benefit attached to the contract is possibly inflow to the company;
(3) Actual costs of the contract are distinguishable and can be reliably measured;
(4) Progress of the work and expected costs can be reliably recognized.
If the results of construction contract are not able to reliably estimated, but the costs can be
recovered, income shall be recognized at the cost actually recovered, contract costs are
recognized as contract expenses at current term; if the costs are not recoverable, they are
recognized instantly as contract cost rather than contract income. When the uncertain factors,
which caused the results cannot be reliably estimated, were eliminated, income and expenses
of the construction contract are recognized on completion percentage basis.
When the contract cost is predicted greater than the income, the predicted loss is recognized
as current expenses.
20.3 Rental incomeChina Merchants Property Development Co., Ltd.
Notes to the Financial Statements
The period from January 1 to June 30, 2010
65 - -
Rental income from operational rental properties are recognized as rental income toward
periods within the contracted rental period on straight basis.
20.4 Income from property management fee
When the property management services have been provided and the income from property
management will flow into the company and the relevant income and cost can be reliably
measured, the property management income shall be recognized.
20.5 Interest income
Shall be determined and calculated according to the time of monetary capital and the actual
rate.
21. Government allowance
Government subsidies are those monetary and/or non-monetary assets obtained from the
government by free, but not include those capital input by the government by way of
ownership. Government subsidies are classified to asset-related government subsidies and
income-related government subsidies.
Monetary government subsidies are measured at the amount received or receivable. Nonmonetary
government subsidies are measured at fair value. If no fair value is available,
nominal amount will be adopted. Government subsidies measured at nominal amount are
accounted into current income account directly.
Asset-related government subsidies are recognized as differed income and accounted into
current income evenly upon their useful life. Those income-related government subsidies
used to neutralize relative expenses and losses of successive periods are recognized as
differed income and accounted into current income at the period when the expenses are
recognized; those used to neutralize relative expenses and losses which have already
occurred are accounted into current income directly.
When a recognized government subsidy needs to be returned, if there is balance of relative
deferred income, the booked balance of relative deferred income shall be neutralized, the
exceeding part shall be accounted into current income account; if there is no relative
deferred income, it will be accounted into current income account.
22. Differed income tax assets/ differed income tax liabilities
22.1 Income tax of current term
At the balance sheet date, the income tax liabilities (or assets) formed at current term or
previous terms are measured by the predicted income tax payable according to the tax law.
The taxable amount of income used in calculating of income tax expenses of current term is
the result of adjusted accounting profit before tax of the current year according to theChina Merchants Property Development Co., Ltd.
Notes to the Financial Statements
The period from January 1 to June 30, 2010
66 - -
relative tax laws.
22.2 Deferred income tax asset and deferred income tax liabilities
The differences between the book values and taxable basis of certain assets and liability
items, and provisional differences occurred between the book value and taxable basis which
are not recognized as assets and liabilities, but may be recognized for taxable basis
according to the law, are recognized as deferred income tax asset and deferred income tax
liabilities on liability basis of the balance sheet.
Those taxable provisional differences, which are related to initial recognition of goodwill,
and neither enterprise merger, nor initial recognition of assets or liabilities generated by
trades make no influence on the accounting profit and taxable income (or deductible losses),
are not recognized as relative differed income tax liabilities. Meanwhile, those taxable
provisional differences related to investments in subsidiaries, joint businesses, and
cooperative businesses, if the Company is able to control the writing back time of the
provisional differences, and these provisional differences may neither be written back in an
expectable future, are not recognized as relative differed income tax liabilities. Beside the
above exemptions, all of the other taxable provisional differences are recognized as differed
income tax liabilities.
Those deductible provisional differences, which are neither enterprise merger, nor initial
recognition of assets or liabilities generated by trades make no influence on the accounting
profit and taxable income (or deductible losses), are not recognized as relative differed
income tax assets. Meanwhile, those deductible provisional differences related to
investments in subsidiaries, joint businesses, and cooperative businesses, if these provisional
differences may neither be written back in an expectable future, or may not possibly obtain
taxable income used to deduct the provisional difference, are not recognized as relative
differed income tax assets. Beside the above exemptions, to the extend of the amount of
taxable income used to deduct the provisional difference which can possibly be obtained, all
of the other taxable provisional differences are recognized as differed income tax assets.
Those tax deductions which can be used to deduct losses and can be carried on to future
years, to the extend of the amount of taxable income used to deduct the deductible losses
and deductible tax which can possibly be obtained, are recognized as corresponding differed
income tax assets.
At the balance sheet day, those differed income tax assets and income tax liabilities,
according to the tax law, calculation will be on tax rate applicable to retrieving period of
assets or clearing of liabilities.
At the balance sheet day, verification will be performed on the book value of differedChina Merchants Property Development Co., Ltd.
Notes to the Financial Statements
The period from January 1 to June 30, 2010
67 - -
income tax assets. If it is not possible to obtain enough taxable income to neutralize the
benefit of differed income tax assets, then the book value of the differed income tax assets
shall be reduced. Whenever obtaining of taxable income became possible, the reduced
amount shall be restored.
22.3 Income tax expenese
Income tax expenditures include current income tax and differed income tax.
Except for those current income taxes and differed income taxes related to trades which are
directly accounted into shareholders’ equity are accounted into shareholders’ equity, and
differed income tax generated by merger of businesses are adjusted in the book value of
goodwill, all other current income taxes and differed income taxes expenditures or incomes
are accounted into current gain/loss account.
22.4 Neutralizing of income tax
When accounting with net amount is a stipulated rights, and tending to account with net
amount or acquire of asset and clearing of debts are performed simultaneously, the income
tax asset and liabilities of the current term are accounted at net amount after neutralization.
When accounting of income tax asset and liabilities of current term with net amount is the
stipulated rights, and the income tax asset and liabilities are related to the same subject
recognized by the same taxation authority, or to the different subjects but within each period
of writing back the differed income tax asset and liabilities with great importance, and
tending to account with net amount or acquire of asset and clearing of debts are performed
simultaneously, the income tax asset and liabilities of the current term are accounted at net
amount after neutralization.
23. Operational leasing and financial leasing
Financial leases are those which all of the risks and rewards attached to the assets have been
substantially transferred, regardless its ultimate ownership will be transferred or not. Leases
other than this are regarded as operational lease.
23.1 Recording of operational lease businesses in which the Company is the undertaker
Rentals paid for operational lease are amortized to relative asset cost or current gain/loss
account on straight basis to each term covered by the rental period. Initial direct expenses
accounted into current gain/loss account. Contingent rentals are accounted into current
gain/loss account as soon as happened.
23.2 Recording of operational lease businesses in which the Company is a lender
Rental income from operational rental property are recognized as current gain/loss at straight
basis to periods in the rental period. Initial direct expenses with large amount are capitalized
as occurred, and accounted into current income account at the same base periods same asChina Merchants Property Development Co., Ltd.
Notes to the Financial Statements
The period from January 1 to June 30, 2010
68 - -
recognition of rental income to the whole rental period. Initial direct expense with minor
amount are accounted into current income account at occurring. Contingent rental is
accounted into current income account as occurring.
24. Employee wages
In the accounting period when the employees served the Company, the remunerations
payable to the employees are recognized as liabilities.
According to the regulations, the Company has participated in the social security system
setup by the government, including endowment insurance, medical insurance, housing
reserves, and other social security policies. Corresponding expenses are accounted into
relative asset cost or current income account.
When a employee is dismissed before expiring of the employment contract, or proposed
compensation for voluntary disengaging, if the Group has produced an official
disengagement scheme or voluntary disengaging proposal and will implement them, and
these scheme or proposal are irrevocable, predicted liability shall be recognized and
accounted into current income account.
(III) Taxation
1、 Main categories and rates of taxes
Class of tax Tax basis Tax rate
Enterprise income tax Amount of income taxable (Note 1)
Business tax
Income from sales or leasing of
property
5%
VAT
Income from sales of goods
(Note 2)
17%
Income from power supply
(Note 2)
17%
Income from water supply 6%
Land VAT
Income from property sales –
amount of deducted items
on ultra-progressive tax rate of
30%-60%
Contract tax
Amount received for land using
rights and estates
3%
Property tax
70% of the original value of
estates (Note 3)
1.2%
City maintenance and construction tax Operational tax (or VAT paid) 1%-3%
Education surtax Operational tax (or VAT paid) 3%
Note 1: Except for businesses in the following areas, the income tax rate for other
subsidiaries of the Company is 25%.
Tax rate Note
Shenzhen and Zhuhai 22% (1)
Hong Kong 16.5% (2)China Merchants Property Development Co., Ltd.
Notes to the Financial Statements
The period from January 1 to June 30, 2010
69 - -
(1) Shenzhen and Zhuhai are special economical zones. According to document Guo-Fa
(2007)39 issued by National Government, since January 1, 2008, enterprises originally enjoy
preferential tax rates will shift to statutory rates gradually in five years upon implementing
of the new Tax Law. In which enterprises enjoys 15% of corporation tax will be subject to
22% of corporation tax in 2010. Therefore the subsidiaries of the Company located in
Shenzhen and Zhuhai are subject to 22% of corporation tax.
(2) According to Taxation Act of Hong Kong, enterprises located in Hong Kong are subject
to 16.5% of corporation tax.
Note 2: VAT is the balance of output tax less deductible input tax. Output tax is calculated
according to the sales income and taxable rate set forth by the relative taxation laws.
Note 3: The fixed assets of buildings and rental properties are subject to the payment of
property tax upon 70% of their original book value and stipulated tax rate. In which the
newly constructed buildings are exempted from property taxes in 3 years since documented
by the tax bureau.
2. Preferential tax and approving documents
As approved by the Ministry of Finance and National Tax Bureau General with document 财
关税[2010]22号, in the period from January 1, 2010 to December 31, 2010, the electric
power imported by Shenzhen China Merchants Power Supply Co., Ltd. from Hong Kong is
on the basic amount of 560 million Kwh. The VAT on the amount lower than the basic
amount will be refunded at 20%, where the amount beyond the basic amount is subject to
the import VAT according to the regulations.China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1 to June 30, 2010
70 - -
(IV) Merger of enterprises and consolidated financial statements
1. Particulars of the subsidiaries
Subsidiaries acquired through incorporation or investment
Full name of the
subsidiary
Ownership
of the
subsidiary
Reg. Add.
Business
property
Registered
capital (x
1000)
Business Scope
Actual
capital
input as of
end of term
(RMB’000)
Balance of
other items
actually
formed net
investment
in the
subsidiaries
Share
proportion
%
Voting
power
%
Consolid
ated?
Minor
shareholder
s’ equity
(RMB)
Amount of
minor
shareholders’
equity used to
offset the
gain/loss of
minor
shareholders
Balance of owners’
equity of the parent
company after deducting
of the share of loss of
current term by minor
shareholder over the
share of owners’ equity
in the subsidiary at
beginning of term
Ruijia Investment
Industrial Ltd.
Ltd. liability HK
Investmen
t
HKD20,000 Investment 19,919 - 100% 100% Yes
Not
applicable
Not applicable Not applicable
Shenzhen Taige
Apartment
Management Co.,
Ltd.
Ltd. liability Shenzhen
Hotel
service
RMB1,000
Indoor golf court,
Property rental,
restaurant,
shopping mall,
sales of water
supply facilities
1,000 - 100% 100% Yes
Not
applicable
Not applicable Not applicable
Shenzhen Maitesi
Civil Engineering
Co., Ltd.
Ltd. liability Shenzhen
Engineeri
ng
RMB9,000
Water supply
pipe engineering
8,100 - 90% 90% Yes 537,291 537,291 -
Shekou Xinghua
Industrial Holdings
Co., Ltd.
Ltd. liability Shenzhen
Property
developm
ent
HKD47,420
Real-estate and
other properties
38,065 - 65.07% 65.07% Yes 38,136,596 - -
Shekou Zhaofa
Property Co., Ltd.
Ltd. liability Shenzhen Property RMB36,000
Building of
commercial
houses and
auxiliary
facilities
36,000 - 100% 100% Yes
Not
applicable
Not applicable Not applicable
Guangzhou Wende
Property
Management Co.,
Ltd.
Ltd. liability Guangzhou Property RMB600
Property
management
600 - 100% 100% Yes
Not
applicable
Not applicable Not applicable
Shenzhen CM
Property
Consultancy Ltd.
Ltd. liability Shenzhen
Property
agency
RMB2,000
Real-estate
operation,
information &
2,000 - 100% 100% Yes
Not
applicable
Not applicable Not applicableChina Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1 to June 30, 2010
71 - -
Full name of the
subsidiary
Ownership
of the
subsidiary
Reg. Add.
Business
property
Registered
capital (x
1000)
Business Scope
Actual
capital
input as of
end of term
(RMB’000)
Balance of
other items
actually
formed net
investment
in the
subsidiaries
Share
proportion
%
Voting
power
%
Consolid
ated?
Minor
shareholder
s’ equity
(RMB)
Amount of
minor
shareholders’
equity used to
offset the
gain/loss of
minor
shareholders
Balance of owners’
equity of the parent
company after deducting
of the share of loss of
current term by minor
shareholder over the
share of owners’ equity
in the subsidiary at
beginning of term
consulting
Shanghai China
Merchants
Properties Co., Ltd.
Ltd. liability Shanghai
Property
developm
ent
RMB30,000
Property
development and
sales of
construction
materials
30,000 - 100% 100% Yes
Not
applicable
Not applicable Not applicable
Guangzhou China
Merchants Realestate
Co., Ltd.
Ltd. liability Guangzhou
Property
developm
ent
RMB50,000
Specialized
property
development,
leasing and sales
50,000 - 100% 100% Yes
Not
applicable
Not applicable Not applicable
CM Property
(Beijing) Ltd.
Ltd. liability Beijing
Property
developm
ent
RMB20,000
Property
development and
sales
20,000 - 100% 100% Yes
Not
applicable
Not applicable Not applicable
China Merchants
(Suzhou) Co., Ltd.
Ltd. liability Suzhou
Property
developm
ent
RMB30,000
Property
development,
operation and
sales
30,000 - 100% 100% Yes
Not
applicable
Not applicable Not applicable
CM (Chongqing)
Ltd.
Ltd. liability Chongqing
Property
developm
ent
RMB30,000
Property
development,
leasing of selfowned
properties
30,000 - 100% 100% Yes
Not
applicable
Not applicable Not applicableChina Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1 to June 30, 2010
72 - -
Full name of
the
subsidiary
Ownership of
the
subsidiary
Reg. Add.
Business
property
Registered
capital (x
1000)
Business Scope
Actual
capital input
as of end of
term
(RMB’000)
Balance of
other items
actually
formed net
investment
in the
subsidiaries
Share
proport
ion %
Voting
power %
Consolid
ated?
Minor
shareholder
s’ equity
(RMB)
Amount of
minor
shareholders
’ equity used
to offset the
gain/loss of
minor
shareholders
Balance of owners’ equity
of the parent company
after deducting of the
share of loss of current
term by minor
shareholder over the
share of owners’ equity in
the subsidiary at
beginning of term
Shenzhen City
Main Plaza
Investment
Co., Ltd.
Ltd. liability Shenzhen Investment
RMB10,00
0
Industry and domestic
commerce
10,000 - 100% 100% Yes
Not
applicable
Not
applicable
Not applicable
Shanghai
China
Merchants
Real-estates
Co., Ltd.
Ltd. liability Shanghai
Property
developme
nt
RMB30,00
0
Property development,
sales, and services
30,000 - 100% 100% Yes
Not
applicable
Not
applicable
Not applicable
CM (Nanjing)
Ltd.
Ltd. liability Nanjin
Property
developme
nt
RMB30,00
0
Property development,
sales, and services
30,000 - 100% 100% Yes
Not
applicable
Not
applicable
Not applicable
Tianjin China
Merchants
Properties
Co., Ltd.
Ltd. liability Tianjin
Property
developme
nt
RMB40,00
0
Property development,
sales, and services
30,000 - 75% 75% Yes 20,674,503 - -
Shenzhen
China
Merchants
Xin’an
Properties
Co., Ltd.
Ltd. liability Shenzhen
Property
developme
nt
RMB25,00
0
Leasing of self-owned
properties
36,803 - 100% 100% Yes
Not
applicable
Not
applicable
Not applicable
Beijing CM
Property
Management
Co., Ltd.
Ltd. liability Beijing Property RMB5,000
Property management,
decoration, consultancy,
property facility sales,
maintenance, property
leasing and agency
4,000 - 80% 80% Yes 5,830,881 - -
Nanjing CM
Property
Ltd. liability Nanjin Property RMB5,000
Property management,
decoration, consultancy,
5,000 - 100% 100% Yes
Not
applicable
Not
applicable
Not applicableChina Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1 to June 30, 2010
73 - -
Full name of
the
subsidiary
Ownership of
the
subsidiary
Reg. Add.
Business
property
Registered
capital (x
1000)
Business Scope
Actual
capital input
as of end of
term
(RMB’000)
Balance of
other items
actually
formed net
investment
in the
subsidiaries
Share
proport
ion %
Voting
power %
Consolid
ated?
Minor
shareholder
s’ equity
(RMB)
Amount of
minor
shareholders
’ equity used
to offset the
gain/loss of
minor
shareholders
Balance of owners’ equity
of the parent company
after deducting of the
share of loss of current
term by minor
shareholder over the
share of owners’ equity in
the subsidiary at
beginning of term
Management
Co., Ltd.
property facility sales,
maintenance, property
leasing and agency
Shanghai CM
Property
Management
Co., Ltd.
Ltd. liability Shanghai Property
USD
620
Property management,
decoration, consultancy,
property facility sales,
maintenance, property
leasing and agency
5,130 - 100% 100% Yes
Not
applicable
Not
applicable
Not applicable
Wuhan CM
Property
Management
Co., Ltd.
Ltd. liability Wuhan Property RMB5,000
Property management,
decoration, consultancy,
property facility sales,
maintenance, property
leasing and agency
5,000 - 100% 100% Yes
Not
applicable
Not
applicable
Not applicable
CM Property
Management
(HK) Ltd.
Ltd. liability HK Property
HKD
10
Property management,
decoration, consultancy,
property facility sales,
maintenance, property
leasing and agency
11 - 100% 100% Yes
Not
applicable
Not
applicable
Not applicable
Shenzhen
China
Merchants
Property
Management
Co., Ltd.
Ltd. liability Shenzhen Property
RMB11,20
0
Property management,
decoration, consultancy,
property facility sales,
maintenance, property
leasing and agency
11,200 - 100% 100% Yes
Not
applicable
Not
applicable
Not applicableChina Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1 to June 30, 2010
74 - -
Full name of the
subsidiary
Ownership
of the
subsidiary
Reg. Add.
Business
property
Registered
capital (x
1000)
Business Scope
Actual
capital
input as of
end of
term
(RMB’00
0)
Balance of
other items
actually
formed net
investment
in the
subsidiaries
Share
proport
ion %
Voting
power
%
Consolid
ated?
Minor
shareholder
s’ equity
(RMB)
Amount of
minor
shareholders
’ equity used
to offset the
gain/loss of
minor
shareholders
Balance of owners’ equity of
the parent company after
deducting of the share of
loss of current term by
minor shareholder over the
share of owners’ equity in
the subsidiary at beginning
of term
Zhangzhou CM
Property Management
Ltd.
Ltd. liability Zhangzhou Property RMB500
Property
management,
decoration,
consultancy,
property facility
sales, maintenance,
property leasing and
agency
500 - 100% 100% Yes
Not
applicable
Not
applicable
Not applicable
Shenzhen CM Qile
Property Management
Ltd.
Ltd. liability Shenzhen Property RMB2,000
Property
management,
decoration,
consultancy,
property facility
sales, maintenance,
property leasing and
agency
1,200 - 60% 60% Yes (1,063,542) 800,000 -
Zhangzhou CM
Honglong Property
Ltd.
Ltd. liability Zhangzhou
Property
development
RMB40,000
Property
development and
sales
38,448 - 100% 100% Yes
Not
applicable
Not
applicable
Not applicable
Foshan Xincheng
Property Co., Ltd.
(Note 1)
Ltd. liability Foshan
Property
development
USD127,000
Property
development, sales,
and services
478,690 - 50% 60% Yes 529,361,629 - -
Huipeng Property
Development Co., Ltd.
(Note 1)
Ltd. liability HK
Property
development
HKD
10
Property
development, sales,
and services
5 - 50% 60% Yes (53,384,536) 4,682 -
Suzhou Shuanghu
Property Co., Ltd.
(Note 1)
Ltd. liability Suzhou
Property
development
USD244,000
Property
development, sales,
and services
826,135 - 50% 60% Yes 808,370,430 58,929,445 -
Tianjing Zhaosheng
Property Co., Ltd.
Ltd. liability Tianjin
Property
development
RMB30,000
Property
development, sales,
30,000 - 100% 100% Yes
Not
applicable
Not
applicable
Not applicableChina Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1 to June 30, 2010
75 - -
Full name of the
subsidiary
Ownership
of the
subsidiary
Reg. Add.
Business
property
Registered
capital (x
1000)
Business Scope
Actual
capital
input as of
end of
term
(RMB’00
0)
Balance of
other items
actually
formed net
investment
in the
subsidiaries
Share
proport
ion %
Voting
power
%
Consolid
ated?
Minor
shareholder
s’ equity
(RMB)
Amount of
minor
shareholders
’ equity used
to offset the
gain/loss of
minor
shareholders
Balance of owners’ equity of
the parent company after
deducting of the share of
loss of current term by
minor shareholder over the
share of owners’ equity in
the subsidiary at beginning
of term
and services
Suzhou CM Nanshan
Property Co., Ltd.
Ltd. liability Suzhou
Property
development
RMB100,000
Property
development, sales,
and services
60,000 - 60% 60% Yes 82,645,197 - -
Shenzhen CM Anye
Investment
Development Co., Ltd.
Ltd. liability Shenzhen Investment RMB10,000
Industrial
investment, domestic
commerce
5,100 - 51% 51% Yes 4,076,274 823,726 -
Shanghai CM
Minsheng Property
Ltd.
Ltd. liability Shanghai
Property
development
RMB30,000
Property
development,
interior decoration,
construction material
sales
30,000 - 100% 100% Yes
Not
applicable
Not
applicable
Not applicable
Shanghai CM
Fengsheng Property
Ltd.
Ltd. liability Shanghai
Property
development
RMB30,000
Property
development,
interior decoration,
construction material
sales
30,000 - 100% 100% Yes
Not
applicable
Not
applicable
Not applicableChina Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1 to June 30, 2010
76 - -
Full name of the
subsidiary
Ownership of
the subsidiary
Reg. Add.
Business
property
Registered
capital (x
1000)
Business Scope
Actual
capital
input as of
end of term
(RMB’000)
Balance of
other items
actually
formed net
investment in
the
subsidiaries
Share
proportio
n %
Voting
power
%
Consoli
dated?
Minor
shareholders
’ equity
(RMB)
Amount of
minor
shareholders
’ equity
used to
offset the
gain/loss of
minor
shareholders
Balance of owners’
equity of the parent
company after deducting
of the share of loss of
current term by minor
shareholder over the
share of owners’ equity in
the subsidiary at
beginning of term
Shenzhen CM
Construction Co., Ltd.
Ltd. liability Shenzhen
Property
develop
ment
RMB50,000
Construction
engineering,
decoration, elevator,
air conditioner
maintaining, sales of
construction
materials
50,000- 100% 100% Yes
Not
applicable
Not
applicable
Not applicable
Guangzhou Qidi Tech &
Science Investment Co.,
Ltd.
Ltd. liability Guangzhou
Property
develop
ment
RMB30,000 Ventual Investment 21,777- 72.59% 72.59% Yes 6,965,279 1,257,721 -
Foshan Xinjie Property
Co., Ltd. (Note 1)
Ltd. liability Foshan
Property
develop
ment
USD219,80
0
Property
development, sales,
and services
1,511,578- 100% 100% Yes
Not
applicable
Not
applicable
Not applicable
Heighten Holdings
Limited
BVI (British
Virgin Island)
British
Virgin Island
Investme
nt
USD0.002 Investment 11- 100% 100% Yes
Not
applicable
Not
applicable
Not applicable
Converage Holdings
Limited
BVI
British
Virgin Island
Investme
nt
USD0.002 Investment 11- 100% 100% Yes
Not
applicable
Not
applicable
Not applicable
China Merchants
Properties (Chongqing)
Co., Ltd.
Ltd. liability Chongqing
Property
develop
ment
RMB30,000
Property
development,
interior decoration,
sales of construction
material
30,000- 100% 100% Yes
Not
applicable
Not
applicable
Not applicable
China Merchants
Jiaming (Beijing)
Property Development
Co., Ltd.
Ltd. liability Beijing
Property
develop
ment
RMB350,00
0
Property
development,
interior decoration,
sales of construction
material
175,000- 50% 60% Yes 178,159,299 - -
Shenzhen CM
Commercial
Ltd. liability Shenzhen
Property
develop
RMB51,000
Developing of
commercial
51,000- 100% 100% Yes
Not
applicable
Not
applicable
Not applicableChina Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1 to June 30, 2010
77 - -
Full name of the
subsidiary
Ownership of
the subsidiary
Reg. Add.
Business
property
Registered
capital (x
1000)
Business Scope
Actual
capital
input as of
end of term
(RMB’000)
Balance of
other items
actually
formed net
investment in
the
subsidiaries
Share
proportio
n %
Voting
power
%
Consoli
dated?
Minor
shareholders
’ equity
(RMB)
Amount of
minor
shareholders
’ equity
used to
offset the
gain/loss of
minor
shareholders
Balance of owners’
equity of the parent
company after deducting
of the share of loss of
current term by minor
shareholder over the
share of owners’ equity in
the subsidiary at
beginning of term
Development Co., Ltd. ment property, operation,
management,
leasing, investment
in industry
Beijing Kanglade
Property Development
Co., Ltd.
Ltd. liability Beijing
Property
develop
ment
RMB30,000
Property
development, sales
of its products, hotel
development, import
& export of goods
and technologies
18,000- 60% 60% Yes 11,011,049 988,951 -
Chongqing China
Merchants Property
Development Co., Ltd.
(Note 3)
Ltd. liability Chongqing
Property
develop
ment
USD99,990
Developing, leasing,
sales and
management of
property
682,781- 100% 100% Yes
Not
applicable
Not
applicable
Not applicable
Chengdu China
Merchants Beihu
Property Co., Ltd.
Ltd. liability Chengdu
Property
develop
ment
RMB50,000
Property
development,
project investment,
property agency, and
management service
50,000- 100% 100% Yes
Not
applicable
Not
applicable
Not applicableChina Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1 to June 30, 2010
78 - -
Full name of
the subsidiary
Ownership of
the subsidiary
Reg.
Add.
Business
property
Registered
capital (x
1000)
Business Scope
Actual capital
input as of
end of term
(RMB’000)
Balance of
other items
actually
formed net
investment in
the
subsidiaries
Share
proportion
%
Voting
power %
Consolida
ted?
Minor
shareholders
’ equity
(RMB)
Amount of
minor
shareholders
’ equity
used to
offset the
gain/loss of
minor
shareholders
Balance of owners’
equity of the parent
company after deducting
of the share of loss of
current term by minor
shareholder over the
share of owners’ equity in
the subsidiary at
beginning of term
Tianjin
Gangwei
Property
Development
Co., Ltd.
Ltd. liability Tianjin
Property
developme
nt
RMB15,0
00
Property
development, sales,
leasing, management
and information
service
15,000 - 100% 100% Yes
Not
applicable
Not
applicable
Not applicable
Shenzhen
China
Merchants
OCT
Investment
Co., Ltd.
(Note 4)
Ltd. liability Shenzhen
Property
developme
nt
RMB100,
000
Property
development,
management, agency,
and decoration
50,000 - 50% 57% Yes 595,016,399- -
Shenzhen
China
Merchants
Electric Power
Measurement
Co., Ltd.
Ltd. liability Shenzhen
Power
supply
RMB
1,500
Special measurement
technologies
authorized by
Shenzhen Quality and
Technical Supervisory
Bureau
1,500 - 100% 100% Yes
Not
applicable
Not
applicable
Not applicable
Pride Oasis
Limited (Note
3)
BVI
British
Virgin
Island
Investment USD0.002 Investment
USD
0.05
- 50% 60% Yes 2,462,265 - -
Cosmo City
Limited(Note
3)
Ltd. liability HK Investment USD0.002 Investment
USD
0.05
- 100% 100% Yes
Not
applicable
Not
applicable
Not applicable
Chengdu CM
Property Co.,
Ltd. (Note 5)
Ltd. liability Chengdu
Property
developme
nt
RMB
10,000
Property development,
property management;
project investment,
property agency
10,000 - 100% 100% Yes
Not
applicable
Not
applicable
Not applicableChina Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1 to June 30, 2010
79 - -
Full name of
the subsidiary
Ownership of
the subsidiary
Reg.
Add.
Business
property
Registered
capital (x
1000)
Business Scope
Actual capital
input as of
end of term
(RMB’000)
Balance of
other items
actually
formed net
investment in
the
subsidiaries
Share
proportion
%
Voting
power %
Consolida
ted?
Minor
shareholders
’ equity
(RMB)
Amount of
minor
shareholders
’ equity
used to
offset the
gain/loss of
minor
shareholders
Balance of owners’
equity of the parent
company after deducting
of the share of loss of
current term by minor
shareholder over the
share of owners’ equity in
the subsidiary at
beginning of term
Foshan CM
Huidefeng
Property Co.,
Ltd. (Note 6)
Ltd. liability Foshan
Property
developme
nt
USD
99,900
Property development,
property management;
project investment,
property agency
340,978 - 50% 60% Yes 340,528,018 450,662 -
Shanghai
Jingyuan
Property
Development
Co., Ltd.
(Note 7)
Ltd. liability Shanghai
Property
developme
nt
RMB
30,000
Property development
and trading, lease of
own property,
property management,
interior decoration
service
16,500 - 55% 60% Yes 13,498,058 1,942 -China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1 to June 30, 2010
80 - -
(2) Subsidiaries acquired from merger under common control
Full name of
the subsidiary
Ownership of
the
subsidiary
Reg. Add.
Business
property
Registered
capital (x
1000)
Business Scope
Actual
capital input
as of end of
term
(RMB’000)
Balance of
other items
actually
formed net
investment
in the
subsidiaries
Share
proportion
%
Voting
power %
Consolidated
?
Minor
shareholders
’ equity
(RMB)
Amount of
minor
shareholders
’ equity used
to offset the
gain/loss of
minor
shareholders
Balance of owners’
equity of the parent
company after deducting
of the share of loss of
current term by minor
shareholder over the
share of owners’ equity
in the subsidiary at
beginning of term
Shenzhen
China
Merchants
Property Co.,
Ltd.
Ltd. liability Shenzhen
Property
development
RMB500,00
0
Property
development and
sales
3,492,312 - 100% 100% Yes
Not
applicable
Not
applicable
Not applicable
Shenzhen CM
Power Supply
Co., Ltd.
Ltd. liability Shenzhen
Power
supply
RMB57,000
Power supply
and sales
592,978 - 100% 100% Yes
Not
applicable
Not
applicable
Not applicable
Shenzhen CM
Water Supply
Co., Ltd.
(Note 8)
Ltd. liability Shenzhen
Water
supply
RMB43,000
Water supply
and installations
70,766 - 100% 100% Yes
Not
applicable
Not
applicable
Not applicable
Zhangzhou
China
Merchants
Properties
Co., Ltd.
Ltd. liability Zhangzhou
Property
development
RMB50,000
Property
development and
sales
25,500 - 51% 51% Yes 46,908,396- -
China
Merchants
Property
Management
Co., Ltd.
Ltd. liability Shenzhen Property RMB25,000
Property
management,
decoration,
consultancy,
property facility
sales,
maintenance,
property leasing
and agency
169,200 - 100% 100% Yes
Not
applicable
Not
applicable
Not applicableChina Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1 to June 30, 2010
81 - -
(3) Subsidiaries acquired from merger under different control
Full name of
the subsidiary
Ownership of
the subsidiary
Reg. Add.
Business
property
Registered
capital (x
1000)
Business Scope
Actual
capital input
as of end of
term
(RMB’000)
Balance of
other items
actually
formed net
investment
in the
subsidiaries
Share
proportion
%
Voting
power %
Consolidated
?
Minor
shareholders
’ equity
(RMB)
Amount of
minor
shareholders
’ equity used
to offset the
gain/loss of
minor
shareholders
Balance of owners’ equity
of the parent company
after deducting of the share
of loss of current term by
minor shareholder over the
share of owners’ equity in
the subsidiary at beginning
of term
Shanghai CM
Fengrui
Property Ltd.
Ltd. liability Shanghai
Property
development
RMB10,00
0
Property
development,
interior
decoration, sales
of construction
material
10,000 - 100% 100% Yes
Not
applicable
Not
applicable
Not applicable
Zhuhai China
Merchants
Property Co.,
Ltd.
Ltd. liability Zhuhai
Property
development
RMB8,000
Property
development and
sales
8,000 - 100% 100% Yes
Not
applicable
Not
applicable
Not applicable
Zhuhai
Yuanfeng
Property Co.,
Ltd.
Ltd. liability Zhuhai
Property
development
RMB8,000
Property
development and
sales
4,080 - 51% 51% Yes (2,407,635) 3,920,000 -
Shanghai
Fengyang
Property
Development
Co., Ltd.
Ltd. liability Shanghai
Property
development
RMB30,00
0
Property
development and
sales
353,250 - 60% 60% Yes 240,517,676 - -
Shenzhen
Meiyue
Properties
Consultants
Co., Ltd.
Ltd. liability Shenzhen
Property
development
RMB1,000
Property
consultancy,
planning and
brokerage
82,666 - 100% 100% Yes
Not
applicable
Not
applicable
Not applicableChina Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
82 - -
Note 1: Through its subsidiary Ruijia Investment & Industry Co., Ltd., the Company is
holding the major of the voting capital of Foshan Xincheng Real Estate Co., Ltd., Huipeng
Real Estate Co., Ltd., and Suzhou Shuanghu Real Estate Co., Ltd. respectively. Because
these subsidiaries are holding the major amount of voting capital in these companies, they
are substantially controlling over the financial and business operations of these companies.
Thus the Company includes them in the consolidate range of the consolidated financial
statements. In which, Huipeng Real Estate Co., Ltd. is holding 100% of the equity capital of
Foshan Xinjie Real Estate Co., Ltd., thus Foshan Xinjie Real Estate Co., Ltd. is included in
the consolidation range.
Note 2: China Merchants Jianming (Beijing) Property Co., Ltd. was founded jointly by
Shenzhen CM Property Co., Ltd. and Jianming Investment Co., Ltd. In which Shenzhen CM
Real-Estate invested RMB100 million and take 50% of capital shares. For the Company is
holding major voting rights in the board of the company through Shenzhen CM Property,
thus take control over the financial and business decisions. Therefore it was included in the
consolidation range.
Note 3: In December 2009, Converage Holdings Limited – one of the subsidiaries of the
Company, subscribed 50 shares of Pride Oasis Limited (face value USD1.00) with USD50.
After the subscription, the Company holds 50% of the voting rights of Pride Oasis Limited.
For the Company is holding the majority voting rights in Pride Oasis Limited and holds
control over the financial and operational decisions, Pride Oasis Limited is included in the
consolidated financial statements. And for Pride Oasis Limited is holding 100% of the
equity of Cosmo City Limited, it was included in the consolidated financial statements too.
Upon completion of the above acquisition, Cosmo City Limited invested to establish
Chongqing China Merchants Property Development Co., Ltd. in December 2009 and holds
100% of the share and voting rights. Thus Chongqing China Merchants Property
Development Co., Ltd. was included in the consolidated financial statements.
Note 4: The Company invested through Shenzhen CM Real-Estate to take 50% of capital
shares of Shenzhen CM OCT Investment Co., Ltd. For the Company is holding major voting
rights in the board of the company through Shenzhen CM Property, thus take control over
the financial and business decisions. Therefore it was included in the consolidation range.
Note 5: In January 2010, the Company invested RMB10 million to setup Chengdu CM
Property Co., Ltd. It was consolidated for the Company is holding 100% of the capital shares.
Note 6: In March 2010, Ruijia Investment & Industry Co., Ltd. – one of the subsidiaries of
the Company, and Boshi Shareholding Co., Ltd. invested to setup Foshan CM HuidefengChina Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
83 - -
Property Co., Ltd. with registered capital of USD99.9 million. In which Ruijia invested
USD49.95 million and took 50% of the share equity. For Ruijia is holding the majority votes
in the board of Foshan CM Huidefeng Property Co., Ltd., thus it has practical control over
the financial and business affairs of the company. Therefore the Company includes it in the
consolidated financial statements.
Note 7: In April 2010, Shanghai CM Property Co., Ltd. – one of the subsidiaries of the
Company, and Langda Industry Co., Ltd. invested to setup Shanghai Jingyuan Property
Development Co., Ltd. with registered capital of RMB30 million. In which Shanghai CM
Property invested RMB16.5 million and took 55% of the share equity. For Shanghai CM
Property is holding the majority votes in the board of Shanghai Jingyuan Property
Development Co., Ltd., thus it has practical control over the financial and business affairs of
the company. Therefore the Company includes it in the consolidated financial statements.
Note 8: On June 28, 2010, Shenzhen CM Property Co., Ltd. – one of the subsidiaries of the
Company, the Company, and CMSIZ entered the ‘Agreement of Transferring the 100%
share equities of Shenzhen China Merchants Water Supply Co., Ltd.’ By this agreement, the
Company and Shenzhen CM Property Co., Ltd. will transfer the 95% and 5% share equities
of Shenzhen CM Water Supply Co., Ltd. over to CMSIZ respectively. The deal was decided
with reference to the net capital value appraised on June 30, 2010, namely RMB162.8332
million. As of June 30, 2010, the Company has not received any of the payment and the
share transferring procedures were not completed. Thus Shenzhen CM Water Supply Co.,
Ltd. is still in the consolidation range.
Voting rights of the Group on above companies are decided by the voting rights in each
board of directors of the companies.
2. Entities newly consolidated in current term
In RMB
Name Net asset at end of
term
Net profit of the
current term (loss)
Chengdu CM Property Co., Ltd. (Note 1) 9,242,920 (757,080)
Foshan CM Huidefeng Property Co., Ltd. (Note 2) 681,056,035 (901,324)
Shanghai Jingyuan Property Development Co., Ltd. (Note 3) 29,995,683 (4,317)
Note 1: See Note (IV) 1 – Note 5.
Note 2: See Note (IV) 1 – Note 6.
Note 3: See Note (IV) 1 – Note 7.
3. Exchange rate of main accounts of overseas businesses
Currency Balance Sheet Income StatementChina Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
84 - -
HKD 0.8724 0.8779
(V) Notes to the consolidated financial statements
1. Monetary fund
In RMB
Items End of term Beginning of term
Original currency
Exchange
rate Amount RMB
Original
currency
Exchange
rate Amount RMB
Cash:
RMB 63,079 1.00 63,079 37,271 1.00 37,271
HKD 3,967 0.87 3,461 6,519 0.88 5,740
Bank account:
RMB 9,843,612,054 1.00 9,843,612,054 8,524,304,914 1.00 8,524,304,914
USD 68,997,911 6.79 468,573,192 36,388,061 6.83 248,474,062
HKD 3,571,007 0.87 3,115,511 3,224,701 0.88 2,839,080
Other monetary fund
(Note)
USD 10,535,273 6.79 71,549,869 102,892,290 6.83 702,599,868
RMB 3,643,667 1.00 3,643,667 11,230,000 1.00 11,230,000
Total 10,390,560,833 9,489,490,935
Note: Balance of other monetary capital was mainly deposits of foreign currency future
contracts and guarantee letters of project payment.
2. Transactional financial assets / liabilities
(1) Details:
In RMB
Items Fair value at end of term
Fair value at beginning
of term
Transactional financial assets:
1. Transactional bond investment - -
2. Transactional equity instruments - -
3. Financial assets defined to measured at fair value and
fluctuation accounted into current gain/loss account
- -
4. Derivate financial assets 25,651,617(Note) 6,437,479
5. Others -
Total 25,651,617 6,437,479
Transactional financial liabilities:
1. Transactional bond investment -China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
85 - -
Items Fair value at end of term
Fair value at beginning
of term
2. Transactional equity instruments -
3. Financial liabilities defined to measured at fair value and
fluctuation accounted into current gain/loss account
-
4. Derivate financial liabilities 2,254,310(Note) 12,829,413
5. Others -
Total 2,254,310 12,829,413
Note: This was the fair value at end of the contract year by which Ruijia Investment
Industrial Co., Ltd. and ING Bank N.V., Hong Kong Branch engaged for future foreign
currency trading without transferring of principal. As of June 30, 2010, the nominal
principal has amounted to USD396,639,000. Such contracts will due amongst August 27,
2010 to April 26, 2011.
3. Account receivable
(1) Account receivable categorized by property
In RMB
End of term Beginning of term
Categories Book balance Bad debt provision Book balance Bad debt provision
Amount
Proportio
n %
Amount
Proportio
n %
Amount
Proportio
n %
Amount
Proportio
n %
Single receivable account
with mass amount
- - - - - - - -
No major amount
individually but with great
risk after combined with
others with similar credit
risk
7,168,514 6% 3,012,499 57% 4,869,129 4% 2,998,082 56%
Other non-material
receivables
107,666,855 94% 2,296,608 43% 119,402,874 96% 2,311,025 44%
Total 114,835,369 100% 5,309,107 100% 124,272,003 100% 5,309,107 100%
Note: Single receivable account with mass amount is defined to account over RMB10 milion.
Ages of receivable accounts:
In RMB
End of term Beginning of term
Age Amount
Proportion
%
Bad debt
provision Book value Amount
Proportion
%
Bad debt
provision Book value
within 1 yr 100,522,862 88% 2,130,739 98,392,123 114,517,835 92% 2,176,502 112,341,333
1-2 years 6,556,906 6% 45,763 6,511,143 4,360,465 4% 120,106 4,240,359
2-3 years 2,668,682 2% 120,106 2,548,576 524,574 - 14,417 510,157
Over 3 yrs 5,086,919 4% 3,012,499 2,074,420 4,869,129 4% 2,998,082 1,871,047
Total
114,835,369 100% 5,309,107
109,526,26
2
124,272,003 100% 5,309,107 118,962,896China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
86 - -
(2) No balance in the account receivable due from shareholders holding 5% or over of the
Company’s shares.
(3) Top 5 receivable accounts
In RMB
Name of the companies
Relation with
the Company Amount Ages
Portion in total
receivables
Juxin Technologies Co., Ltd. Client 5,482,143 within 1 yr 5%
Shenzhen Zijincheng Investment Co.,
Ltd.
Client
3,704,738
within 1 yr 3%
Huawei Technologies Co., Ltd. Client 2,772,743 within 1 yr 2%
Shenzhen Rainbow Shopping Mall Co.,
Ltd.
Client
2,313,031
within 1 yr 2%
Shenzhen Shengdi Investment
Development Co., Ltd.
Client
1,777,586
within 1 yr 2%
Total 16,050,241 14%
(4) No account receivable due from related parties.
4. Other account receivable.
(1) Other account receivable categorized by property
In RMB
End of term Beginning of term
Book balance Bad debt provision Book balance Bad debt provision
Categories
Amount
Proportion
%
Amount
Proportion
%
Amount Proportion % Amount
Proportion
%
Other receivable
with major
individual amount
946,250,151 90% - - 1,852,727,261 96% - -
No major amount
individually but
with great risk after
combined with
others with similar
credit risk
10,131,924 1% 1,758,972 98% 3,839,254 - 1,745,947 75%
Other minor other
receivables
96,252,011 9% 578,003 2% 72,276,842 4% 588,167 25%
Total
1,052,634,08
6
100% 2,336,975 100% 1,928,843,357 100% 2,334,114 100%
Note: Note: Single other receivable account with mass amount is defined to account over
RMB10 million.
Age of other receivable accounts:
In RMB
End of term Beginning of term
Age
Amount
Proportio
n %
Bad debt
provision
Book value Amount
Proportio
n %
Bad debt
provision
Book valueChina Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
87 - -
within 1 yr 1,021,801,081 97% 43,057 1,021,758,024 1,849,097,605 96% 40,196 1,849,057,409
1-2 years 10,548,506 1% 534,946 10,013,560 73,203,703 4% 534,946 72,668,757
2-3 years 10,152,575 1% - 10,152,575 2,702,795 - 13,025 2,689,770
Over 3 yrs 10,131,924 1% 1,758,972 8,372,952 3,839,254 - 1,745,947 2,093,307
Total 1,052,634,086 100% 2,336,975 1,050,297,111 1,928,843,357 100% 2,334,114 1,926,509,243
(2) No other receivable account due from shareholders with 5% or over of shares of the
Company in the balance.
(3) Top other receivable accounts
In RMB
Name of the companies
Relation with the
Company
Amount Ages
Portion in total
other receivables
(%)
Shenzhen TCL Optical-Electronics
Technologies Ltd.
Affiliate of the
Company
257,339,044 1-2 years 24%
Chengdu Beijiao Scenery Area
Administrative Committee
Non-related 200,000,000 within 1 yr 19%
Jiasen International Co., Ltd.
Shareholder of
subsidiary
179,574,894 within 1 yr 17%
Huizhou Taitong Property Investment Co.,
Ltd.
Joint venture of the
Company
127,236,214 within 1 yr 12%
Guangzhou Property Trading and
Registration Center
Non-related 113,100,000 within 1 yr 11%
Total 877,250,152 83%
(4) Receivables from related parties
In RMB
Name of the companies
Relation with the
Company
Amount
Portion in total other
receivables (%)
Shenzhen TCL Optical-Electronics
Technologies Ltd.
Affiliate of the
Company
257,339,044 24%
Huizhou Taitong Property Investment Co.,
Ltd.
Joint venture of the
Company
127,236,214 12%
Total 384,575,258 36%
5. Prepayment
(1) Prepayments presented by ages
In RMB
Age End of term Beginning of term
Amount Proportion % Amount Proportion %
within 1 yr 1,957,105 35% 3,222,296 37%
1-2 years 3,357,402 59% 5,190,617 59%
2-3 years 334,400 6% 334,400 4%
Over 3 yrs - - - -
Total 5,648,907 100% 8,747,313 100%
(2) No prepayment due from shareholders with 5% or over of shares of the Company.China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
88 - -
(3) Prepayments presented by clients
In RMB
Categories End of term Beginning of term
Single prepayment with large amount (Note) - -
Single prepayment with minor amount but with great
risk after combined into group with similar credit risk
- -
Other minor prepayments 5,648,907 8,747,313
Total 5,648,907 8,747,313
Note: Single prepayment account with mass amount is defined to account over RMB10
million.
6. Inventories
(1) Categories of inventory
In RMB
End of term Beginning of term
Items Book balance
Impairment
provision Book value Book balance
Impairment
provision Book value
Real property
development costs
31,485,807,744 296,210,000 31,189,597,744 29,767,117,792 296,210,000 29,470,907,792
Property products 2,584,005,432 2,584,005,432 931,435,216 - 931,435,216
Raw materials 6,053,585 6,053,585 4,276,489 - 4,276,489
Low-value consumables
and others
2,003,296 162,982 1,840,314 1,925,385 162,982 1,762,403
Sub-total 34,077,870,057 296,372,982 33,781,497,075 30,704,754,882 296,372,982 30,408,381,900
Inventory formed by
construction contract
Completed but not
settled (Note)
74,800,000 - 74,800,000 52,800,000 - 52,800,000
Sub-total 74,800,000 - 74,800,000 52,800,000 - 52,800,000
Total 34,152,670,057 296,372,982 33,856,297,075 30,757,554,882 296,372,982 30,461,181,900
Note: This is the “Contract for Construction of Low Rental Apartments” entered by China
Merchants Jiaming (Beijing) Property Development Co., Ltd. and Beijing Construction
Committee.
Property development costs:
In RMB
Projects Start date Planned
finish date
Expected total
investment
Balance at the end
of term
Balance at the
beginning of termChina Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
89 - -
RMB0’000 RMB Yuan RMB Yuan
Development costs of real
estate under construction:
Xicheng Jiayuan Beijing
(Note 1)
2008.10 2013.05 434,899 2,192,725,242 2,104,036,652
Foshan Yiyun Shangcheng 2008.08 2012.04 282,598 1,744,807,917 1,701,606,478
Beijing Park 1872 2006.10 2012.12 378,198 1,679,023,805 1,706,269,205
Shenzhen Xicheng Phase IV,
V
2010.02 2012.10 347,173 1,656,276,626 -
Suzhou Xiaoshicheng 2008.04 2016.12 431,063 1,398,002,215 1,312,808,406
Foshan Yiyunshui’an 2008.04 2011.05 324,049 1,263,384,608 1,453,565,179
Shenzhen CM Guanyuan 2008.08 2010.10 195,073 1,211,589,616 993,833,761
Tianjin Star City 2007.10 2012.08 394,315 1,058,382,610 1,363,422,177
Shenzhen Yongjinwan 2009.07 2011.12 203,935 1,008,565,732 948,094,905
Shanghai Haide Garden Phase
II-IV
2006.05 2013.08 150,842 879,511,445 846,939,463
Jinshan Valley, Guangzhou 2008.02 2015.07 482,973 1,194,494,058 981,712,186
Shanghai CM Haiwan Garden 2008.10 2013.12 163,139 740,439,112 707,281,733
Chongqing China Merchants
Jiangwan City
2007.10 2012.09 179,892 679,399,979 955,503,667
Tianjin Jingjiang Road Project 2010.03 2012.12 133,981 671,646,033 -
Zhangzhou CM Garden City
Phase I
2008.04 2010.11 72,484 485,707,976 433,381,447
Zhuhai CM Garden City
Phase II and III
2009.12 2012.12 135,332 485,361,923 427,163,839
Beijing Kanglade Hotel 2009.12 2011.12 120,419 468,077,664 417,452,769
Shanghai CM Yonghua
Garden
2008.07 2011.05 132,539 466,950,839 929,129,714
Phase V. Garden City 2008.03 2010.08 38,833 261,276,872 237,499,898
Zhangzhou CM Garden City 2008.07 2011.01 63,701 258,571,914 220,224,406
Shenzhen Meilun Apartment 2008.03 2010.07 29,467 214,318,212 185,309,528
Shenzhen Lanxigu Phase II,
land II
2008.08 2010.08 30,890 167,072,861 132,780,136
Nanjing Yiyunxigu Phase IV 2006.12 2010.10 100,524 116,674,305 65,861,754
Shenzhen Xicheng Phase III 2008.09 2010.03 99,922 - 387,164,158
36 Xikang Road Tianjin 2007.02 2010.05 55,672 82,081,812 75,295,066
Shenzhen CM Lanyuan 2008.03 2010.06 155,498 - 1,267,193,998
Shenzhen Technical Building
Phase II
2009.03 2010.02 29,360 - 233,518,941
Shanghai CM Nanqiao
Yayuan
2008.03 2010.01 84,502 - 735,111,814
Others - - - 87,691,403 84,282,252
Sub-total 20,472,034,779 20,906,443,532
Land to be developed:
In RMB
Projects Start date Planned
finish date
Planned total
investment
Balance at the end
of term
Balance at the
beginning of termChina Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
90 - -
RMB0’000 RMB Yuan RMB Yuan
Land to be developed:
Chongqing Danzishi TBD TBD TBD 2,003,183,000 -
Shanghai Jingyuan TBD TBD TBD 1,722,581,019 -
Nanjing G67 project 2010.08 TBD TBD 1,450,150,204 1,431,811,856
Chongqing CM Garden City 2010.07 2013.05 361,338 1,354,903,683 1,323,592,687
Suzhou Weiting 2010.08 2014.12 170,818 1,030,198,951 1,026,362,838
Foshan Shishan Project TBD TBD TBD 694,421,000 -
Zhangzhou Jiari 365 2010.07 2015.05 41,112 94,510,442 92,212,266
Shenzhen Jiangangshan Phase VI 2010.12 2012.03 80,961 546,990,599 546,539,397
Shenzhen CM Plaza 2010.10 2012.11 150,226 478,868,169 473,230,882
Shenzhen CM Guoling Garden 2010.10 2012.08 118,303 440,219,835 414,341,737
Shenzhen Wuzi Apartment 2010.12 2012.08 83,691 338,236,027 323,568,922
Chengdu CM Dongcheng
International Business Plaza
2010.08 2012.11 58,802 209,410,101 -
Zhangzhou Kadalansi
(former Zhangzhou Nanpaotai
Project)
2010.07 2020.07 311,049 650,099,935 632,686,541
Shenzhen Xicheng phase IV, V 2010.02 2012.10 347,173 - 1,934,265,191
Tianjin Jingjiang Road Project 2010.03 2012.05 129,031 - 662,061,943
Sub-total 11,013,772,965 8,860,674,260
Total 31,485,807,744 29,767,117,792
Property development products:
In RMB
Projects
Date of
finish
Balance at the
beginning of
term
Increased this
term
Decreased this
term
Balance at the
end of term
CM Lanyuan 2010.06 - 1,467,395,208 102,745,823 1,364,649,384
Tianjin Xincheng phase I 2010.03 - 396,300,000 21,865,250 374,434,750
Shanghai Haide Garden Phase I,
II, and III north
2009.06 197,093,654 - 11,804,816 185,288,838
Shenzhen Lanxigu Phase II. 2007.06 199,478,035 - 73,173,278 126,304,757
Shanghai CM Yonghua Garden 2010.06 - 579,510,916 471,994,119 107,516,797
Shanghai CM Nanqiao Yayuan 2010.01 - 792,403,879 695,980,806 96,423,073
Chongqing CM. Jiangwancheng
Phase I
2010.01 - 387,379,017 300,675,894 86,703,124
Xicheng Phase III 2010.03 - 868,165,204 790,990,397 77,174,807
Tianjin 36 Xikang Road 2008.11 85,897,387 156,743 29,638,256 56,415,874
Shenzhen Haiyue Huating 2009.06 40,555,752 - - 40,555,752
Zhangzhou Sun Garden Phase I 2006.06 11,479,422 - - 11,479,422
Zhangzhou CM Jianzhu 2007.12 11,090,109 - - 11,090,109
Shenzhen Yishanjun Phase II 2008.08 12,997,680 - 3,209,151 9,788,529
Zhangzhou CM Garden City
Phase I west
2009.12 8,482,178 - - 8,482,178China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
91 - -
Zhangzhou Yinshanhai Phase II 2007.12 5,239,996 - - 5,239,996
Nanjing Yiyunxigu phase I - III 2009.12 247,167,734 2,045,538 244,020,303 5,192,969
Suzhou Xiaoshicheng Phase I 2009.12 - 7,036,509 3,786,205 3,250,304
Beijing Park 1872 (block 3) 2010.03 - 230,696,992 228,633,510 2,063,482
Shenzhen Yishanjun Phase III 2009.09 91,646,738 42,729,230 132,718,917 1,657,051
Zhangzhou Jinshanjiao
Apartment
2004.12 1,439,657 - - 1,439,657
Shenzhen Technical Building
Phase II
2010.06 - 247,607,469 247,607,469 -
Foshan Yiyunshui’an phase I 2010.01 - 335,510,570 335,510,570 -
Tianjin 36 Xikang Road
apartment and shops
2009.12 3,593,879 4,806,668 8,400,547 -
Beijing Park 1872 Phase I (block
9)
2008.12 6,285,941 - 6,285,941 -
Others 8,987,054 129,955 262,429 8,854,579
Total 931,435,216 5,361,873,898 3,709,303,681 2,584,005,432
Note 1: As of June 30, 2010, China Merchants Jiaming (Beijing) Property Development Co.,
Ltd. – one of the subsidiaries of the Company, entered the Pledge Contract with China
Merchants Bank Beijing Sanhuan Branch, by which the 106,700 square meters of land of
Beijing Xicheng Jiayuan (Land CY09 in Changping) was pledged to the bank for the loan of
RMB275,000,000. Except for this, there is no inventory under pledge, guarantee, suspension,
or abandoned.
Note 2: As of June 30, 2010, the land using contracts for land 2009G67 Nanjing, Land No.2
Haide Garden Shanghai, Chongqing Garden City, Shenzhen Bao’an Xicheng B, and Tianjin
Jinjiang Road project totaled to 937,478 square meters has been engaged, and the land using
certificate is under process.
Loan expenses capitalized in the term was RMB164,702,213 (RMB256,568,371 for the first
half of 2009).
(2) Inventory impairment provision
In RMB
Decreased this term
Categories
Balance of book
value at beginning
Provided this
term Written Transferred
Balance of book
value at end of term
Real property development costs 296,210,000 - - - 296,210,000
Low-value consumables and others 162,982 - - - 162,982
Total 296,372,982 - - - 296,372,982
Note: Inventory impairment provision was provided at the balance of realizable value lower
than the book value of the inventory, namely RMB296,372,982.China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
92 - -
7. Other current assets
In RMB
Items End of term Beginning of term
Subsidiaries to be disposed (Note 1) 112,764,727 -
Incl. Monetary capital 4,419,861 -
Account receivable 317,751 -
Other account receivable 1,770,794 -
Advance account 131,576 -
Inventories 777,669 -
Fixed assets 103,496,225 -
Construction in process 1,813,492 -
Long-term amortizable expenses 37,359 -
Operation tax and surcharges prepaid 426,217,303 334,952,908
Prepaid income tax
171,185,998
263,792,293
112,458,907
Land VAT prepaid (Note 2) 134,059,677 160,046,409
Prepaid rent 2,242,028 8,968,112
Others 5,416,483 8,374,315
Total 851,886,216
851,886,216
624,800,651
Note 1: On June 28, 2010, Shenzhen CM Property Co., Ltd. – one of the subsidiaries of the
Company, the Company, and CMSIZ entered the ‘Agreement of Transferring the 100%
share equities of Shenzhen China Merchants Water Supply Co., Ltd.’ By this agreement, the
Company and Shenzhen CM Property Co., Ltd. will transfer the 95% and 5% share equities
of Shenzhen CM Water Supply Co., Ltd. over to CMSIZ respectively. For details please see
Note (IV)1 – Note 8. This deal was approved at the 15th meeting of the 6th term of Board,
therefore the whole asset and liabilities of this company were treated as asset to be disposed
and liabilities respectively.
Note 2: For the property sales income collected prior to finishing of construction, the
Company pays Land VAT at legal portion and account them into other current asset. Upon
finishing of the construction, the actual Land VAT is calculated upon the income from sales
of property less the legal deductive items, and is accounted into other current liabilities after
deducting of prepaid amount.
8. Disposable financial asset
In RMB
Items Fair value at end of term Fair value at beginning of term
Sellable equity instruments 4,129,216 4,898,240
Incl. Guonong Tech shares 4,129,216 4,898,240
Others - -
Total 4,129,216 4,898,240China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
93 - -
9. Long-term receivables
In RMB
Items End of term Beginning of term
Entrusted loan (Note 1) 953,817,502 924,366,673
Balance of share equity transfer (Note 2) 141,421,084 137,779,364
Total 1,095,238,586 1,062,146,037
Note 1: IThe Company entered the Entrusted Loan Contract with China Agriculture Bank
Nanshan Branch for the loan quota of RMB900,000,000. The loan was provided to Nanjing
Fucheng Property Development Co., (Nanjing Fucheng), and Nanjing Fucheng put the
property of 100,189 square meters located at floor 1-6 and 8-51 into pledge.
As of June 30, 2010, the principal of entrusted loan was RMB881,623,583, interest
receivable upon the entrusted loans was RMB72,193,919.
Note 2: Heighten Holdings Limited – one of the Company’s subsidiaries transferred its
shares in Elite Trade Investment Limited, the balance receivable was RMB152,906,973.
According to the Share Trading Agreement entered with ADF Phoenix IV Limited, the
receiver, the balance would be retrieved in one to two years. The Company calculated, but
not confirmed, financing expenses of RMB11,485,889 with reference to the bank loan rates
at the similar period. It was deducted from the long-term receivables.China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
94 - -
(V) Notes to the consolidated financial statements – cont.
10. Investment in affiliates and joint ventures
List of joint ventures and affiliates and their major financial information
Name of the Companies
Ownership
type
Reg. Add.
Legal
representative
Business
property
Registered
capital
RMB000
Shares held
by the
Company %
Voting power
of the
Company in
the entity %
Total asset at end of
term (RMB)
Total debt at
end of term
(RMB)
Net asset at
end of term
(RMB)
Turnover of
current
term
(RMB)
Net profit
of current
term
(RMB)
I. Joint ventures
Guangzhou Panyu Innovation
Technology Garden Co., Ltd.
Ltd.
liability
GuangzhouHu Jianxin
Property leasing
and management
150,000 70% 50% 639,725,937 33,174,320 606,551,617 - -
Shenzhen China Merchants
OCT Investment Co., Ltd.
Ltd.
liability
Shenzhen Lin Shaobin
Property
management
5,000 50% 50% 8,454,036 2,090,418 6,363,618 5,496,367 507,432
Huizhou Taitong Property
Investment Co., Ltd.
Ltd.
liability
Huizhou
Wang
Quanlin
Property
development
8,000 50% 50% 262,320,602 254,529,474 7,791,129 - (208,756)
II. Affiliates
Beijing Tianping Property
Management Co., Ltd.
Ltd.
liability
Beijing
Wang
Guanghui
Property
management
1,000 49% 49% 3,740,599 391,616 3,348,983 3,926,599 279,522
China Merchants Guangming
Technologies Garden Ltd.
Ltd.
liability
Shenzhen
Yang
Tianping
Property
development
and management
200,000 49% 49% 314,014,976 141,060,216 172,954,761 720,000 (4,904,594)
Shenzhen Haitao Hotel Co.,
Ltd.
Ltd.
liability
Shenzhen He Jianya
Hotel
management
6,000 45% 45% 14,678,495 1,915,755 12,762,741 4,960,562 600,000
Tianjin Xinhai real Estate
Development Co., Ltd.
Ltd.
liability
Tianjin He Jianya
Property
development
15,000 45% 45% 309,866,908 30,234,058 279,632,850 8,750,813 4,654,908
Shenzhen TCL Optical-
Electronics Technologies Ltd.
Ltd.
liability
Shenzhen Bo Lianming
Leasing and
management of
self-owned
property
200,000 40% 40% 773,487,732 686,395,711 87,092,021 -- (2,100,000)China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
95 - -
11. Long-term equity investment
(1) Details of long-term equity investment
In RMB
Company invested in
Calculating
basis
Initial costs
Balance at
the
beginning of
term
Changed by
Balance at
the end of
term
Percentage of
share in the
firm %
Voting power
in the firm %
Statement on
differences
between the
shareholding and
voting rights
Impairmen
t provision
Impairmen
t provision
provided
this term
Cash dividend
of the current
term
Guangzhou Panyu Innovative
Technologies Garden Co., Ltd.(Note 1)
Equity basis 350,000,000 345,409,546 345,409,546 70% 50% (Note 1) - - -
Tianjin Xinhai real Estate Development
Co., Ltd.
Equity basis 6,750,000 116,738,432 2,094,709 118,833,141 45% 45% - - - -
China Merchants Guangming
Technologies Garden Ltd.
Equity basis 98,000,000 86,010,889 (2,403,252) 83,607,637 49% 49% - - - -
Shenzhen TCL Optical-Electronics
Technologies Ltd.
Equity basis 42,010,652 40,073,574 (840,000) 39,233,574 40% 40% - - - -
Shenzhen Haitao Hotel Co., Ltd. Equity basis 4,996,675 5,729,366 270,000 5,999,366 45% 45% - - - -
Huizhou Taitong Property Investment
Co., Ltd.
Equity basis 4,900,000 4,881,510 (104,377) 4,777,133 50% 50% - - - -
Shenzhen China Merchants OCT
Investment Co., Ltd.
Equity basis 2,500,000 3,037,151 253,716 3,290,867 50% 50% - - - -
Beijing Tianping Property Management
Co., Ltd.
Equity basis 490,000 1,534,255 136,966 1,671,221 49% 49% - - - -
Beijing Hengshihuarong Real-estate
Development Co., Ltd.
Cost basis 14,532,541 12,997,895 12,997,895 12% 12% - - - -
Shenzhen China Merchants Engineering
Co., Ltd.
Cost basis 100,000 100,000 100,000 5% 5% - - - -
Shenzhen Fishermans’ Wharf Restaurant
Co., Ltd. (Note 2).
Cost basis 100,000 100,000 100,000 - - - 100,000 - -
Total 524,379,868 616,612,618 (592,238) 616,020,380 100,000
Less: Impairment provision 100,000 100,000
Long-term equity investment (net) 616,512,618 615,920,380
Note1: Guangzhou Qidi Technologies Garden Investment Co., Ltd. – one of the Company’s subsidiaries, is holding 70% shares of GuangzhouChina Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
96 - -
Panyu Innovative Technologies Garden Co., Ltd. As stipulated in the Articles of Association of Guangzhou Panyu Innovative Technologies
Garden Co., Ltd., all of the financial and operational decision making have to be decided by presenting of the whole shareholders, thus
Guangzhou Qidi Technologies Garden Investment Co., Ltd. has no controlling power over Guangzhou Panyu Innovative Technologies Garden
Co., Ltd.. Thus it was not included in the consolidation range.
Note 2: Shenzhen Fisherman Port Restaurant Co., Ltd. was established by Shenzhen Taige Apartment Management Co., Ltd in 2001. Due to
poor management, now it is closed. Shenzhen Taige Apartment Management Co., Ltd fully accounted provision for impairment on its long-term
investment.
(2) The Company’s long-term equity investment receivers as of June 30, 2010 were not limited in ability to transfer capital to the Company.China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
97 - -
12. Investment property
In RMB
Items Balance of book
value at
beginning of term
Increased this
term
Decreased this
term
Balance of book
value at end of
term
I. Total of original book value 3,569,997,734 249,371,078 1,473,101 3,817,895,711
1. House and buildings 2,388,786,421 107,636,078 1,473,101 2,494,949,398
2. Land using rights 1,181,211,313 141,735,000 - 1,322,946,313
II. Total of accumulated depreciation
and amortizing 782,155,484
68,873,766 708,677
850,320,573
1. House and buildings 683,673,427 53,356,007 708,677 736,320,757
2. Land using rights 98,482,057 15,517,759 - 113,999,816
III. Total of net book value of
investment property 2,787,842,250
2,967,575,138
1. House and buildings 1,705,112,994 1,758,628,641
2. Land using rights 1,082,729,256 1,208,946,497
IV. Total of impairment provision - - - -
1. House and buildings - - - -
2. Land using rights - - - -
V. Total of book value of investment
property 2,787,842,250
2,967,575,138
1. House and buildings 1,705,112,994 1,758,628,641
2. Land using rights 1,082,729,256 1,208,946,497
Note 1: The depreciation of the term was RMB68,873,766
Note 2: As of June 30, 2010, none of the Company’s investment properties is on pledge.
Note 2: As of June 30, 2010, there were investment properties amounted to
RMB752,061,934. (net value) which have not been granted the certificate of property.
13. Fixed assets
(1) Details of fixed assets
In RMB
Items
Balance of book
value at beginning of
term
Increased this
term
Decreased this
term
Balance of book
value at end of term
I. Total of original book value 708,008,818 7,855,851 271,545,171 444,319,498
Incl. House & Buildings 228,061,377 10,300 73,845,146 154,226,531
Equipment & machinery 365,451,743 3,083,830 182,356,364 186,179,210
Transportation equipment 54,165,265 1,415,033 2,480,614 53,099,683
Electronics, furniture,
appliances
60,330,433 3,346,687 12,863,047 50,814,073
II. Total of accumulative depreciation 408,392,864 16,924,895 167,816,180 257,501,579
Incl. House & Buildings 95,182,530 4,510,534 45,848,701 53,844,363
Equipment & machinery 236,317,849 5,106,236 108,407,924 133,016,161
Transportation equipment 34,527,282 2,592,294 1,951,325 35,168,250
Electronics, furniture, 42,365,203 4,715,832 11,608,231 35,472,804China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
98 - -
appliances
III. Total of net book value of fixed
assets
299,615,954 186,817,919
Incl. House & Buildings 132,878,847 100,382,168
Equipment & machinery 129,133,894 53,163,049
Transportation equipment 19,637,983 17,931,433
Electronics, furniture,
appliances
17,965,230 15,341,269
IV. Total of impairment provisions - - - -
Incl. House & Buildings - - - -
Equipment & machinery - - - -
Transportation equipment - - - -
Electronics, furniture,
appliances
- - - -
V. Total of fixed asset book value 299,615,954 186,817,919
Incl. House & Buildings 132,878,847 100,382,168
Equipment & machinery 129,133,894 53,163,049
Transportation equipment 19,637,983 17,931,433
Electronics, furniture,
appliances
17,965,230 15,341,269
Note 1: The depreciation was RMB16,924,895 for the current term.
Note 2: The original value of fixed assets increased in the current term by transferring of
construction in process was RMB3,137,020.
Note 3: Decrease in the current term was caused by the fixed assets of Shenzhen CM Water
Supply Co., Ltd. which transferred into other current assets – subsidiaries to be disposed,
with net value of RMB103,496,225, see details with Note (V) 7.
Note 4: As of June 30, 2010, the Company still has houses and buildings of RMB60,346,646
which are not granted property certifications. For these properties were constructed a long
time ago, and the original materials are not enough to file for certification, thus are not in
filing process at present.
14. Construction-in-progress
Details of construction in process:
In RMB
End of term Beginning of term
Items
Book balance
Impairment
provision
Net book
value
Book balance
Impairment
provision
Net book value
Construction project 2,936,043 - 2,936,043 2,936,043 - 2,936,043
Transformer Station 12,024,371 - 12,024,371 13,719,271 - 13,719,271
Water supply
project
- - - 2,598,693 - 2,598,693China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
99 - -
Total 14,960,414 14,960,414 19,254,007 - 19,254,007
15. Long-term expenses to be amortized
In RMB
Items At beginning
of term
Increased this
term
Amortized
this term
Other
decrease
At end of
term
Reason of other
decreasing
Renewing of fixed assets for
rent 174,912,809
-
6,394,846
-
168,517,96
3
Outdoor advertisement
facilities 2,735,176
-
1,307,370
-
1,427,806
Golf club membership 158,628 - 95,552 - 63,076
Others 2,387,514 654,628 1,813,816 - 1,228,326
Total
180,194,127 654,628 9,611,584 -
171,237,17
1
16. Differed income tax assets/ differed income tax liabilities
(1) Differed income tax assets and differed income tax liabilities recognized
In RMB
Items End of term Beginning of term
Differed income tax assets:
Land VAT drawn in advance 429,964,422 282,716,985
Expected liabilities 6,145,623 6,118,200
Amortizing of other long-term assets 817,109 817,109
Bad debt provision on receivables 563,569 558,091
Bad debt provision on other receivables 566,215 220,991
Inventory impairment provision 35,856 32,596
Long-term equity investment impairment provision 22,000 22,000
Depreciation of fixed assets 47,563 -
Sub-total 438,162,357 290,485,972
Differed income tax liabilities:
Fluctuation of fair value of disposable financial
assets accounted into capital reserves
613,666 731,713
Sub-total 613,666 731,713China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
100 - -
(2) Details of income tax assets not recognized
In RMB
Items End of term Beginning of term
Deductible provisional differences 618,030,977 867,140,392
Neutralizable losses 60,655,242 325,619,889
Total 678,686,219 1,192,760,281
Deductible losses from not recognized differed income tax assets shall due not later than
2015.
(3) Provisional differences caused by recognized differed income tax assets/ differed income
tax liabilities
In RMB
Items Amount of temporary differences
End of term:
Deductible provisional difference and deductible losses:
Land VAT drawn in advance 1,969,526,457
Expected liabilities 27,934,648
Depreciation of investment property 3,268,434
Bad debt provision on receivables 2,561,678
Bad debt provision on other receivables 2,534,872
Inventory impairment provision 162,982
Long-term equity investment impairment provision 100,000
Depreciation of fixed assets 216195
Sub-total 2,006,305,266
Taxable provisional difference:
Fluctuation of fair value of disposable financial assets accounted
into capital reserves
2,556,942
Sub-total 2,556,942
Beginning of term:
Deductible provisional difference and deductible losses:
Land VAT drawn in advance 1,259,319,813
Expected liabilities 27,810,000
Depreciation of investment property 3,268,434
Bad debt provision on other receivables 2,561,678
Bad debt provision on receivables 1,101,342
Inventory impairment provision 162,982China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
101 - -
Long-term equity investment impairment provision 100,000
Sub-total 1,294,324,249
Taxable provisional difference:
Fluctuation of fair value of disposable financial assets accounted
into capital reserves
3,325,965
Sub-total 3,325,965
17. Detail of asset impairment provision
In RMB
Decreased this term
Items
Balance of
book value at
beginning of
term
Increased
this term Written
back Transferred
Exchange rate
adjustment
Balance of
book value at
end of term
I. Bad debt provision 7,643,221 2,861 7,640,360
II. Inventory impairment
provision 296,372,982 296,372,982
III. Disposable financial
asset impairment provision - - - - - -
IV. Investment equity hold
till expiring impairment
provision
- - - - - -
V. Long-term equity
investment impairment
provision
100,000 - - - - 100,000
VI. Property investment
impairment provision - - - - - -
VII. Fixed asset impairment
provision - - - - - -
VIII. Project material
impairment provision - - - - - -
IX. Construction in process
impairment provision - - - - - -
X. Production biological
material asset impairment
provision
- - - - - -
Incl. Mature production
biological material asset
impairment provision
- - - - - -
XI. Gas & oil asset
impairment provision - - - - - -
XII. Intangible asset
impairment provision - - - - - -
XIII. Goodwill impairment
provision - - - - - -
XIV. Other - - - - - -
Total 304,116,203 2,861 304,113,342
18. Short-term loans
In RMB
Items End of term Beginning of termChina Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
102 - -
Loan by pledge - -
Pledged loan - -
Guarantee loan 105,727,522(Note) 398,125,029
Credit loan 1,523,916,924 974,804,580
Total 1,629,644,446 1,372,929,609
Note: The Company borrowed USD10,000,000 (RMB67,909,000) from China Merchants
Bank Shenzhen Shekou Branch. Shenzhen CM Power Supply Co., Ltd. – one of the
subsidiaries of the Company borrowed USD5,569,000 (RMB37,818,522) from the same
bank. Both of these loans were secured by CMSIZ.
19. Notes payable
In RMB
Categories End of term Beginning of term
Commercial acceptance - -
Bank accepted drafts (Note) 268,100,694 257,896,108
Total 268,100,694 257,896,108
Note: As of June 30, 2010, Shenzhen CM Property Co., Ltd. – one of the subsidiaries of the
Company has the balance of RMB37,849,666 of accepted drafts in China Construction Bank
Shekou Branch; and the balance of RMB230,251,028 in China Merchants Bank Shenzhen
New Age Branch. Both of above were secured by CMSIZ and will expire in 2010.
20. Account payable
(1) Details of payable accounts:
In RMB
Items End of term Beginning of term
Project payment 1,420,437,792 1,454,062,917
Land price 163,001,348 1,096,001,348
Payment for purchasing of share equity 70,650,000 70,650,000
Warrant pay 34,051,200 21,499,544
Others 108,055,095 63,307,476
Total 1,796,195,435 2,705,521,285
(2) Payable accounts due to shareholders with 5% or over of the Company’s shares or related
parties:
In RMB
Name of the companies End of term Beginning of term
China Merchants Shekou Industrial Zone Co., Ltd. 9,919,240 5,338,724
Total 9,919,240 5,338,724China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
103 - -
(3) Payable accounts with large amount and due over 1 year
In RMB
Name of the companies End of term Age Reason of overdue
Amount to
repay after the
report term
Shanghai Meiyang Property
Co., Ltd.
70,650,000 1-2 years
Payment for purchasing
of share equity
-
Baoshan Yanghang Town
Government
72,192,000 1-2 years Land price -
Shenzhen OCT Construction
and Installation Co., Ltd.
45,210,211 1-3 years
Project quality warranty
at 5%, payable upon
expiring of warranty
period and no claiming.
-
Chaoyang Property
Development Co., Ltd.
40,000,000 4-5 years
Moving assisting fee
payable to Chaoyang
Property Development
Co., Ltd., payable upon
completion letter granted
by National Land
Property Bureau.
-
21. Account received in advance
(1) Age analyse of prepayment received
In RMB
Age End of term Beginning of term
Amount % Amount %
within 1 yr 6,993,513,080 84% 9,454,578,537 100%
1-2 years 1,301,401,770 16% 33,778,332 -
2-3 years 1,363,000 - 8,026,332 -
Over 3 yrs 46,732 - 2,078,090 -
Total 8,296,324,582 100% 9,498,461,291 100%
Including: presale of properties:
In RMB
Projects End of term Beginning of term
Planned finish
date
Presale
portion
Tianjin Xincheng phase I 580,458,390 539,347,212 2010 91%
Beijing Park 1872 2,108,712,290 1,609,282,424 2012 98%
Foshan Yiyun Shui’an phase I,II 1,084,494,119 1,090,757,116 2011 90%
Shenzhen CM Lanyuan North 907,787,593 691,948,950 2010 98%
Tianjin Xincheng Phase II (Low density) 244,866,051 - 2010 41%
Beijing Xicheng Jiayuan 813,390,292 563,964,405 2012 61%
Chongqing CM Jiangwancheng phase I, II 523,927,434 475,822,198 2010 73%
Phase V. Garden City 377,187,198 - 2010 57%China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
104 - -
Guangzhou Jinshangu phase II 323,082,199 318,212,200 2010 96%
Zhangzhou CM Garden City Phase I 220,237,208 - 2010 75%
Foshan Yiyun Shangcheng phase I 203,347,599 24,100,950 2010 60%
Shanghai CM Yonghuayuan Phase I,II 192,619,698 658,889,318 completed 67%
Shenzhen Xicheng Phase III 151,093,498 2,014,274,540 completed 95%
Zhangzhou CM Garden City Phase I 138,546,829 1,701,305 2011 92%
Shenzhen Haiyue Huating 89,874,826 2,762,368 completed 98%
Guangzhou Jinshangu Phase III - 1 77,400,193 - 2010 9%
Shenzhen Lanxigu Phase II. 27,734,125 41,896,025 completed 86%
Tianjin 36 Xikang Road 16,800,000 11,107,049 completed 72%
Shanghai CM Nanqiao Yayuan 15,660,132 751,329,017 2010 89%
Nanjing Yiyunxigu Phase IV 9,980,601 347,394,769 completed 4%
Shanghai Haiwan Garden Phase II 8,121,731 - 2010 7%
Zhangzhou CM Jianzhu 6,728,737 2,458,519 completed 100%
Zhangzhou Yinshanhai Phase II 1,385,532 759,573 completed 100%
Shenzhen Haijing Plaza 1,328,637 1,328,637 completed 100%
Shenzhen Yishanjun phase II, III 771,660 149,215,837 completed 100%
Others 10,869,765 20,307,368
Total 8,136,406,337 9,316,859,780
(2) No prepayment account received from shareholders holding 5% or over of shares of the
Company.
22. Wage payable
In RMB
Items Balance of
book value
at beginning
of term
Increased
this term
Decreased
this term
Balance of
book value at
end of term
I. Wage, bonus, allowances 138,779,990 245,997,003 311,549,754 73,227,239
II. Employees’ welfare 703,632 13,372,360 12,591,369 1,484,623
III. Social security 5,116,720 21,112,666 24,641,632 1,587,754
IV. Housing fund 90,207 3,082,450 3,033,157 139,500
V. Dismissing welfare 1,280,000 629,680 629,680 1,280,000
VI. Others 16,862,433 8,690,074 6,940,685 18,611,822
Incl. Trade union fee and training fee 15,488,395 6,902,061 4,093,163 18,297,293
Total 162,832,982 292,884,233 359,386,277 96,330,938
Note: Balance of union fund and employee training fund is RMB18,297,293. Balance of
dismissing compensation is RMB1,280,000.China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
105 - -
23. Tax payable
In RMB
Items End of term Beginning of term
Enterprise income tax 235,353,960 345,044,458
Land VAT (Note) 72,986,793 82,326,199
Business tax 58,126,774 100,574,873
VAT 5,372,245 15,659,902
Personal income tax 3,897,506 4,462,646
City maintenance and construction tax 1,775,099 1,225,228
Land using tax 856,874 765,383
Consumption tax - -
Others 1,747,398 39,800,764
Total 380,116,649 589,859,453
Note: See Note (V)7.
24. Tax disbursable
In RMB
Items End of term Beginning of term
Long-term loan interest with instalments 38,362,168 19,532,853
Interest of company bond - -
Short-term borrowing interests payable 1,392,984 2,339,565
Total 39,755,152 21,872,418
25. Dividend payable
In RMB
Name of the companies End of term Beginning of term Reason of overdue for over
1 year
CMSIZ. (Note 1) 89,112,876 -
CM Zhangzhou Development Co., Ltd.
(Note 1) 3,787,878 -
Dafeng International Holdings Co., Ltd.
(Note 1) 4,900,000 -
Other investors of the PLC (Note 1) 73,929,296 -
Shenzhen Nanshan Property Development
Co., Ltd. (Note 2) 23,806,776 23,806,776
Tianjin Shenmiao Investment Group Co.,
Ltd. (Note 3) 22,103,882 22,103,882
Shekou Huayuan Seafood Restaurant 285,600 285,600
This company has been
closed up.
Shenzhen OCT Property Co., Ltd. - 61,555,629
Total
217,926,308 107,751,887
Note 1: This was the dividend payable according to the distribution plan of 2009 approved atChina Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
106 - -
the Shareholders’ Annual Meeting 2009 held on June 7, 2010.
Note 2: According to the profit distribution plan as of December 31, 2009 adopted by the
board meeting of Suzhou CM Nanshan Property Co., Ltd. held on December 28, 2009, this
was the profit payable to Shenzhen Nanshan Property Co., Ltd.
Note 3: According to the profit distribution plan as of December 31, 2009 adopted by the
board meeting of Tianjin CM Property Co., Ltd. held on December 28, 2009, this was the
profit payable to Tianjin Shenmiao Investment Group Co., Ltd.
26. Other account payable.
(1) Details of other payable accounts
In RMB
Items End of term Beginning of term
Interchange with co-operative
companies
4,553,769,559 3,673,592,439
Loans to related companies - 887,698,968
Deposit 657,194,279 642,352,024
Temporary payment 236,290,542 368,284,408
Others 191,050,057 263,402,148
Total 5,638,304,437 5,835,329,987
(2) Details of other payable accounts to shareholders with 5% or over of shares of the
Company:
In RMB
Name of the companies End of term Beginning of term
Dafeng International Holdings - 887,700,513
CM Zhangzhou Development Zone Ltd. 475,334,117 420,821,115
Tianjin Xinhai real Estate Development
Co., Ltd. 133,081,399 148,831,399
Shenzhen Shekou Dazhong Investment
Co., Ltd. 138,235,302 138,235,302
Shenzhen China Merchants Financing
Service Co., Ltd. 33,510,000 16,338,000
China Merchants Guangming
Technologies Garden Ltd. 1,069,390 1,067,447
China Merchants Hanghua Technologies
and Trade Center Co., Ltd. 528,151 1,051,707
Total 781,758,359 1,614,045,483
(3) Statement on other payable accounts with large amount and aged over 1 yearChina Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
107 - -
In RMB
Name of the companies End of term Age Reason of overdue
Huidefeng Property (China) Co., Ltd. 750,524,622 2-3 years
Investment payable by Huipeng
Property Development Co., Ltd.
to Huidefeng Property (China)
Co., Ltd. who paid the
investment payment to Foshan
Xinjie Property Co., td. on its
behalf
Shenzhen Nanshan Development
Industrial Co., Ltd.
327,220,681 2-3 years
Suzhou CM Nanshang Property
Co., Ltd. payable to Shenzhen
Nanshan Development Industry
Co., Ltd. of payment made on
behalf
Beijing Jiaming Property Development
Co., Ltd.
246,155,074 1-2 years
CM Jianming (Beijing) Property
Development Co., Ltd. payable
to Beijing Jiaming Property Co.,
Ltd. of payment made on behalf
CHINA INTERNATIONAL MARINE
CONTAINERS (GROUP) CO., LTD
147,095,730
1-2 years
Shanghai Fengyang Property
Development Co., Ltd. payable
to China International Marine
Container (Group) Co., Ltd. for
the payment paid on behalf.
Shenzhen Shekou Dazhong Investment
Co., Ltd.
138,235,302 1-2 years
Beijing Kanglade Property
Development Co., Ltd. payable
to Shenzhen Shekou Dazong
Investment Co., Ltd. for the
payment paid on behalf.
Shenzhen China Merchants Financing
Service Co., Ltd.
33,510,000 1-2 years
Beijing Kanglade Property
Development Co., Ltd. payable
to Shenzhen CM Financial
Services Co., Ltd. for the
payment paid on behalf.
27. Predicted liabilities
In RMB
Items
Beginning of
term
Increased this
term
Decreased this
term
End of term
Providing of external guarantees - - - -
Unsettled lawsuit
- lawsuit of Yishanjun (Note 1) 27,810,000 - - 27,810,000
Dismissing policy - - - -
Loss contract to be executed - - - -
Predicted expenses (Note 2) 80,242,194 5,748 - 80,247,942
Total 108,052,194 5,748 - 108,057,942
Note 1. Some of the owners of Shenzhen Yishanjun, which was developed by Shenzhen
CM Property Co., Ltd., sued to the court claiming for compensation of delayed propertyChina Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
108 - -
certification. The compensation of RMB27,810,000 could be paid by Shenzhen CM
Property Co., Ltd.
Note 2: According to the agreement engaged with Nanjing Fucheng Property Development
Co., Ltd., the Company is expected to pay for the land using rights, land VAT, house
maintaining fund, and other taxes for the transferring of International Finance Center held by
Nanjing Fucheng Property Development Co., Ltd.
28. Non-current liabilities due in one year
(1) Details of non-current liabilities due in one year
In RMB
Items End of term Beginning of term
Long-term loans due in 1 year 1,457,610,597 1,303,402,319
Bond payable due in one year - -
Long-term payable due in 1 year - -
Other non-current liabilities due in 1 year 99,402
Total 1,457,610,597 1,303,501,721
(2) Long-term loans due in 1 year
(a) Long-term loans due in one year
In RMB
Items End of term Beginning of term
Loan by pledge - -
Pledged loan (Note 1) 275,000,000 218,000,000
Guaranteed loan (Note 2) 432,610,597 835,402,319
Credit loan 750,000,000 250,000,000
Total 1,457,610,597 1,303,402,319
Note 1: China Merchants Jiaming (Beijing) Property Development Co., Ltd. – one of the
subsidiaries of the Company, entered the Pledge Contract with China Merchants Bank
Beijing Sanhuan Branch, by which the 106,700 square meters of land of Beijing Xicheng
Jiayuan (Land CY-09 in Changping) was pledged to the bank for the loan of
RMB275,000,000.
Note 2: Ruijia Investment Industrial Co., Ltd. Raised loans of USD47,000,000
(RMB319,198,597) and HKD130,000,000 (RMB113,412,000) from China Industrial &
Commercial Bank (Asia), which were both secured by China Merchants Group (HK) Co.,
Ltd.
(b) Long-term loans due in 1 year top 5 in amountChina Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
109 - -
In RMB
End of term Beginning of term
Loan provided by
Commence
date
Terminate
date
Currency
Interest
rates %
Amount of
foreign
currency
Amount of
original
currency
Amount of
foreign
currency
Amount of
original
currency
China Construction Bank
Shekou Branch
2008.11.24 2011.02.23 RMB 4.86% - 500,000,000 - -
China Industrial and
Commercial Bank (Asia)
2008.12.14 2010.12.17 USD
浮动利
率
47,000,000 319,198,597 47,000,000 320,937,319
China Merchants Bank
Beijing Beisanhuan
Branch
2009.06.29 2011.05.20 RMB
Float
rates
- 275,000,000 - 218,000,000
China Minsheng Bank
Shenzhen Shekou branch
2008.11.28 2010.11.28 RMB 4.86% - 200,000,000 - 200,000,000
China Industrial and
Commercial Bank (Asia)
2008.12.24 2010.12.24 HKD
Float
rates
130,000,00
0
113,412,000
130,000,00
0
114,465,000
Total
1,407,610,59
7
853,402,319
29. Other current liability
In RMB
Items
Balance of book
value at end of
term
Balance of book
value at beginning
of term
Subsidiaries to be disposed (Note 1)
Incl. Account payable 156,218 -
Account received in advance 773,618 -
Employees’ wage payable 4,154,122 -
Tax payable 369,170 -
Other payables 40,393,353 -
Other long-term liabilities 2,784,584 -
Land VAT drawn in advance (Note 2) 2,159,065,278 1,819,878,069
Outsourced cleaning and security guard services 11,660,143 7,857,914
Improving of intelligent system 1,729,173 2,763,676
Original water and power supply 2,893,238 2,364,392
Uniforms 2,501,671 466,201
Visiting tours 2,122,500 -
Agencies - 3,012,000
Others 11,356,063 7,220,749
Total
2,239,959,131
2,237,152,128
223
1,843,563,001China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
110 - -
Note 1: See Note (V)7, note 1.
Note 2: Land VATs are calculated and provided in accordance with 国税发[2006]187号
with the heading of circular about Settlement of Land VAT of Property Development
Enterprises issued by National Tax Bureau General, and accounted into current income
account. Meanwhile, when calculating of the income tax of current year, corresponding
adjustments were done by the subsidies of the Company on the taxable income account
according to the relative income tax rules of local governments.
30. Long-term loans
(1) Categories of long-term loans
In RMB
Items End of term Beginning of term
Loan by pledge - -
Pledged loan - -
Guaranteed loan (Note 1) 5,690,737,832 2,244,268,040
Credit loan 3,671,636,000 3,323,128,000
Entrusted loan (Note 2) 152,906,972 152,906,972
Total 9,515,280,804 5,720,303,012
Note 1: The Company raised loan of RMB470,000,000 from China Merchants Bank Shekou
Branch, and RMB470,000,000 from China Merchants Bank New Age Branch, both of them
were secured by China Merchants Shekou Industrial Zone Co., Ltd.
The Company obtained RMB2,000,000,000 of input capital from Huatai Asset Management
Co., Ltd., Ruijia Investment & Industry Co., Ltd. raised USD36,000,000 (RMB244,492,543)
from China Merchants Bank Offshore Business Dept., and USD50,000,000
(RMB339,572,976) and USD70,000,000 (RMB475,402,166) from ING Bank N.V., Hong
Kong Branch. All of them were secured by China Merchants Group (HK) Co., Ltd.
Shenzhen CM Power Supply Co., Ltd. – one of the subsidiaries of the Company raised the
loan of USD30,000,000 (RMB203,727,000) from ING Bank N.V., Shanghai Branch, which
was secured by the Company.
Ruijia Investment & Industry Co., Ltd. – one of the subsidiaries of the Company, raised
USD194,000,000 (RMB1,317,543,147) of loan from China Construction Bank Hong Kong
Branch. According to the ‘Agreement of Guarantee Letter’ engaged between the Company
and China Construction Bank Shenzhen Branch, it forms a substantial guarantee liability to
the Company over Ruijia Investment & Industry Co., Ltd.China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
111 - -
Zhuhai Yuanfeng Property Co., Ltd. raised RMB170,000,000 of loan from Guangdong
Development Bank Zhuhai Branch, which was secured by the Company at 51% of the
outstanding balance.
Note 2: According to the “Contract for Entrusted Loans in RMB” entered by Shenzhen
China Merchants Construction Co., Ltd., Nanjing Fucheng Property Development Co., Ltd.
and Bank of China Shekou Branch, Nanjing Fucheng Property Development Co., Ltd.
entrusted Bank of China Shekou Branch to provide Shenzhen China Merchants Construction
Co., Ltd. the loan with term of 3 years.
(2) Long-term loans top 5 in amount
End of term Beginning of term
Loan provided by
Commence
date
Terminate
date
Currency
Interest
rates %
Amount of
foreign
currency
Amount of
original
currency
Amount
of foreign
currency
Amount of
original
currency
Huatai Asset Management
Co., Ltd.
2010.04.20 2017.04.19 RMB
Float
rates
- 2,000,000,000 - -
Xinhua Trust & Investment
Co., Ltd.
2009.07.21 2012.07.20 RMB
Float
rates
- 1,000,000,000 - 1,000,000,000
China Construction Bank
Hong Kong Branch
2010.01.05 2012.12.23 USD
Float
rates
130,000,000 882,889,738 -
China Merchants Bank
Newage Branch
2009.07.27 2012.07.27 RMB 4.86% - 470,000,000 - 600,000,000
China Construction Bank
Hong Kong Branch
2010.01.14 2012.12.23 USD
Float
rates
64,000,000 436,453,409 - -
Total 4,789,343,147 1,600,000,000
31. Long term payables
In RMB
Units Term Initial
amount
Interest
rates %
Interest
payable
Balance at
the end of
term
Condition
Main body maintaining fund - 50,033,638 - - 50,033,638 -
Shenzhen China Merchants
Landmark Co., Ltd.
- 1,200,000 - - 1,200,000 -
Total 51,233,638 - 51,233,638
32. Other non-current liabilities
In RMB
Items Balance of book Balance of book
Differed rental income 4,483,360 2,983,360
Infrastructure construction fund granted by Bureau of Water - 2,737,985
Special grant for culture development - - 1,500,000
Other water supply grants - - 96,300
Total 4,483,360 7,317,645China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
112 - -
Less: Other non-current liabilities due in 1 year - 99,402
Incl. Infrastructure construction fund granted by Bureau of Water - 99,402
Non-current liabilities due beyond 1 year 4,483,360 7,218,243
33. Capital Share
In RMB
Changed this term
Items
Beginning of
term
Issuing of
new shares
Bonus
shares
Transferred
from reserves Others
Subtotal
End of term
June 30, 2010
I. Shares with conditional
subscription
1. State-owned shares - - - - - - -
2. National legal person
shares
731,298,105 - - - - - 731,298,105
3. Other domestic shares - - - - - - -
4. Foreign shares 197,709,440 - - - 197,709,440
5. Management shares 431,939 431,939
Total of conditional shares 929,439,484 - - - 929,439,484
II. Shares with
unconditional subscription
1. RMB common shares 646,434,394 - - - 646,434,394
2. Foreign shares placed
in domestic exchange
141,426,625 - - - 141,426,625
3. Foreign shares listed
overseas
- - - - -
4. Others - - - - -
Total of unconditional
shares
787,861,019 - - - 787,861,019
III. Total of capital shares 1,717,300,503 - - - - -
1,717,300,50
3
December 31, 2009
I. Shares with conditional
subscription
1. State-owned shares - - - - - - -
2. National legal person
shares
731,298,105 - - - - - 731,298,105
3. Other domestic shares - - - - - - -
4. Foreign shares 197,709,640 - - - (200) (200) 197,709,440China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
113 - -
5. Management shares 473,789
(41,850
)
(41,850) 431,939
Total of conditional shares 929,481,534 - - -
(42,050
)
(42,050) 929,439,484
II. Shares with
unconditional subscription
1. RMB common shares 646,407,544 - - - 26,850 26,850 646,434,394
2. Foreign shares placed
in domestic exchange
141,411,425 - - - 15,200 15,200 141,426,625
3. Foreign shares listed
overseas
- - - - -
4. Others - - - - -
Total of unconditional
shares
787,818,969 - - - 42,050 42,050 787,861,019
III. Total of capital shares 1,717,300,503 - - - - -
1,717,300,50
3
The above shares are with par value of RMB1 yuan.
34. Capital reserves
In RMB
Items Beginning of
term
Increased this
term
Decreased
this term
End of term
June 30, 2010
Share capital premium 8,369,949,610 - 8,369,949,610
Incl. Capital input by investors 8,884,412,549 - - 8,884,412,549
Using of converting rights of convertible
bonds
1,394,072,217 - - 1,394,072,217
Liabilities converted to capital - - - -
Difference formed by merger of firms under
common control
(1,354,694,800) - - (1,354,694,800)
Acquiring share equities from minor
shareholders of subsidiaries
(384,866,956) - (384,866,956)
Capital reserves capitalized (168,973,400) - - (168,973,400)
Other misc incomes 13,565,536 650,978 12,914,558
Other capital reserves 104,411,758 - - 104,411,758
Incl. Equity part distilled from convertible bond - - - -
Fair value of equity instrument accounted at
equity basis
- - - -
Balance of moving compensation granted by
government for public interests
- - - -China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
114 - -
Transferred from capital reserves under
original system
104,411,758 - - 104,411,758
Total 8,487,926,904 - 650,978 84,87,275,926
December 31, 2009
Share capital premium 8,433,024,544 - 63,074,934 8,369,949,610
Incl. Capital input by investors 8,884,412,549 - - 8,884,412,549
Using of converting rights of convertible
bonds
1,394,072,217 - - 1,394,072,217
Liabilities converted to capital - - - -
Difference formed by merger of firms under
common control
(1,354,694,800) - - (1,354,694,800)
Acquiring share equities from minor
shareholders of subsidiaries
(321,792,022) - 63,074,934 (384,866,956)
Capital reserves capitalized (168,973,400) - - (168,973,400)
Other misc incomes 11,108,482 2,457,054 - 13,565,536
Other capital reserves 104,411,758 - - 104,411,758
Incl. Equity part distilled from convertible bond - - - -
Fair value of equity instrument accounted at
equity basis
- - - -
Balance of moving compensation granted by
government for public interests
- - - -
Transferred from capital reserves under
original system
104,411,758 - - 104,411,758
Total 8,548,544,784 2,457,054 63,074,934 8,487,926,904
35. Surplus reserves
In RMB
Items Beginning of
term
Increased this
term
Decreased this
term
End of term
June 30, 2010
Statutory surplus reserves 645,672,972 - - 645,672,972
Optional surplus reserves 140,120,038 - - 140,120,038
Preserved fund - - - -
Enterprise development fund - - - -
Others - - - -
Total 785,793,010 - - 785,793,010
December 31, 2009
Statutory surplus reserves 530,106,466 115,566,506 - 645,672,972
Optional surplus reserves 140,120,038 - - 140,120,038China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
115 - -
Preserved fund - - - -
Enterprise development fund - - - -
Others - - - -
Total 670,226,504 115,566,506 - 785,793,010
Legal common reserves could be used to makeup losses, expand business operation or
capitalized to capital shares.
36、 Retained profit
In RMB
Items Amount Percentage of
drawing or
allocation
The period from January 1, 2010 to June 30, 2010
Before adjustment: Retained profit at end of last year 5,214,909,610
Adjustment: Total of retained profit at beginning of year (+ for
increase, - for decrease)
-
Adjusted: Retained profit at beginning of year 5,214,909,610
Plus: Net profit attributable to owners of the parent company 1,050,179,281
Less: Statutory surplus reserves -
Optional surplus reserves -
Common risk provisions -
Common share dividend payable 171,730,050 Note 1
Common share dividend transferred to capital share -
Retained profit at the end of term 6,093,358,841
Year 2009
Before adjustment: Retained profit at end of last year 3,858,062,286
Adjustment: Total of retained profit at beginning of year (+ for
increase, - for decrease)
-
Adjusted: Retained profit at beginning of year 3,858,062,286
Plus: Net profit attributable to owners of the parent company 1,644,143,880
Less: Statutory surplus reserves 115,566,506
Optional surplus reserves -
Common risk provisions -
Common share dividend payable 171,730,050
Common share dividend transferred to capital share -
Retained profit at the end of term 5,214,909,610
Note 1: Cash dividend approved by the Shareholders’ Annual MeetingChina Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
116 - -
According to the resolutions adopted at the Shareholders’ Meeting 2009 held in June 2010,
on the basis of 1,717,300,503 shares at December 31, 2009, the Company distributed
RMB1.00 to each 10 shares, and totally RMB171,730,050 was distributed.
Note 2: Surplus reserves drawn by subsidiaries
As of June 30, 2010, there was RMB505,929,305 of surplus reserves provided by the
subsidiaries which has been included in the retained profit of the Company. (December 31,
2009: RMB505,929,305).
37. Operational turnover and cost
(1) Turnover
In RMB
Items Occurred current
term
Amount occurred
same period last year
Major business turnover 6,980,394,887 2,874,721,644
Other business income 759,038 1,055,582
Major business cost 4,127,221,400 1,628,092,292
Other business cost 142,333 185,970
(2) Main businesses (on industries)
In RMB
Occurred current term Amount occurred same period last
year
Name of industry Turnover Operation cost Turnover Operation cost
Property development 6,460,083,143 3,725,031,407 2,407,393,782 1,279,625,305
Public Utilities 321,265,272 236,716,661 301,655,272 215172676
Property management 199,046,472 165,473,332 165,672,590 133,294,311
Total 6,980,394,887 4,127,221,400 2,874,721,644 1,628,092,292
(3) Income from top 5 clients
In RMB
Name of clients Turnover
Percentage in total
turnover of the
Company %
Shenzhen Nanshan Property Development Co., Ltd. 52,437,650 0.75%
Owner of block 152, phase III of Xicheng 49,305,296 0.71%
Owner of block 163, phase III of Xicheng 46,627,472 0.67%
Owner of block 143, phase III of Xicheng 43,415,227 0.62%
Owner of block 165, phase III of Xicheng 33,903,042 0.49%China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
117 - -
Total 225,688,687 3.24%
(4) Turnover from construction contracts:
In RMB
Project Contract amount
Accumulated
costs occurred
Accumulation of
gross profit
recognized
Settled amount
Constructio
n contract
with fixed
price
Low rental
project of Beijing
Xicheng Jiayuan
88,000,000
67,460,834
7,339,166 -
38. Business tax and surcharge
In RMB
Items
Occurred current
term
Amount occurred
same period last
year
Rate
Land VAT 509,082,873 344,756,208 Note
Business tax 335,311,052 129,410,111 Note
City maintenance and construction tax 10,008,345 2,335,284 Note
Education surtax 7,158,099 2,919,672 Note
Resource tax - -
Consumption tax - -
Others 1,364,878 1,062,632
Total 862,925,247 480,483,907
Note: See Note (III).
39. Financial expenses
In RMB
Items Occurred current term Amount occurred same
period last year
Interest expense 195,007,097 328,428,319
Less: Interest expenses capitalized 173,094,565 262,854,000
Less: Interest income 48,785,129 9,608,370
Exchange differences 26,152,464 349,430
Less: Exchange difference capitalized 8,392,352 -
Others 12,165,719 1,572,378
Total 3,053,234 57,887,757
40. Borrowing expenses
In RMB
Items Amount of borrowing expenses
capitalized in current term
Capitalization rateChina Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
118 - -
Inventories 164,702,213 5.31%
Production physical assets - -
Biological assets with public interests - -
Construction in process - -
Intangible assets - -
Subtotal of borrowing expenses capitalized in
current term
164,702,213 5.31%
Borrowing expenses accounted into current
income account
21,912,532 -
Total of borrowing expenses of current term 186,614,745 5.31%
41. Income from fair value fluctuation
In RMB
Source of income from fluctuation of fair value Occurred current
term
Amount occurred
same period last year
Transactional financial assets 19,394,866 (108,371,152)
Incl. Gains from fluctuation of fair value of derivate financial
instruments 19,394,866
(108,371,152)
Trade off financial liabilities 10,523,008 -
Investment property measured at fair value - -
Others - -
Total 29,917,874 (108,371,152)
Note: See Note (V)2.
42. Investment income
(1) Detailed investment gains
In RMB
Items Occurred current
term
Amount occurred
same period last year
Long-term equity investment gains on cost basis - -
Long-term equity investment gains on equity basis (592,236) 109,884,894
Investment gains from disposal of long-term equity investment - -
Investment gains in the period of holding transactional
financial assets
- -
Investment gains in the period from receiving to expiration - -
Investment gains in period of holding disposable financial
assets
- -
Investment gains from disposal of transactional financial assets 3,637,080 81,835,093
Investment gains from disposal of investment hold to - -China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
119 - -
expiration
Investment gains from disposal of disposable financial assets - -
Others
22,409,110(Note
1)
20,401,339
Total 25,453,954 212,121,326
Note 1: Interest income from entrusted loans was RMB22,409,110 after deducting of taxes.
For details please see Note (V)9.
(2) Details of gains from long-term equity investment on equity basis
In RMB
Company invested in
Occurred current
term
Amount occurred
same period last
year Causation of change
China Merchants Guangming
Technologies Garden Ltd. (2,403,252) (1,825,269)
Increase of loss by invested
business
Tianjin Xinhai real Estate
Development Co., Ltd. 2,094,709 1,963,199
Profit of the firm increased
Shenzhen China Merchants OCT
Investment Co., Ltd. - 110,525,808
Included in the consolidation
range since October 2009
Total (308,543) 110,663,738
43. Asset impairment loss
In RMB
Items Occurred current
term
Amount occurred
same period last year
I. Bad debt loss (2,861) (107,964)
II. Inventory impairment loss - -
III. Disposable financial asset impairment - -
IV. Impairment loss from investment held till expiration - -
V. Impairment loss from long-term stock investment - -
VI. Property investment impairment loss - -
VII. Fixed asset impairment loss - -
VIII. Engineering goods impairment loss - -
IX. Construction-in-process impairment loss - -
X. Production goods impairment loss - -
XI. Gas and fuel asset impairment loss - -
XII. Intangible asset impairment loss - -
XIII. Goodwill impairment loss - -
XIV. Other - -China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
120 - -
Total (2,861) (107,964)
44. Non-business income
(1) Details of non-operational income
In RMB
Items Occurred current
term
Amount occurred
same period last year
Total of gains from disposal of non-current assets 66,174 20,524
Incl. Gains from disposal of fixed assets 66,174 20,524
Gains from disposal of intangible assets - -
Gains from debt reorganization - -
Gains from exchange of non-monetary assets - -
Donation received - -
Government subsidy 7,088,493 8,484,431
Write back of predicted debts - 7,450,000
Income from penalties 599,948 1,847,513
Others 1,155,626 72,907
Total 8,910,241 17,875,375
Details of government subsidy
In RMB
Items Occurred current term Amount occurred Remarks
VAT refund for electric power import 4,862,063 7,755,000 Note 1
Industrial development special fund 600,000 - Note 2
Tax refund 556,129 634,730 Note 3
Government financing for pipe 49,702 49,702 Note 4
Subsidy for solar energy application 1,020,600 45,000 Note 5
Total 7,088,493 8,484,432
Note 1: As approved by the Ministry of Finance and National Tax Bureau General with
document 财关税[2010]22号, in the period from January 1, 2010 to December 31, 2012, the
electric power imported by Shenzhen China Merchants Power Supply Co., Ltd. from Hong
Kong is on the basic amount of 560 million Kwh. The VAT on the amount lower than the
basic amount will be refunded at 20%, where the amount beyond the basic amount is subject
to the import VAT according to the regulations.
Note 2: This was the special fund for industrial development received by Shenzhen CM
Real-estate Co., Ltd. – one of the subsidiaries of the Company.
Note 3: Tax refund received by Shanghai China Merchants Property Management Co., Ltd.
– the subsidiary of the Company, according to the tax refunding agreement engaged withChina Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
121 - -
Shanghai Hongkou Government.
Note 4. It was the differed income formed by government grant received by Shenzhen China
Merchants Water Supply Co., Ltd. for reconstruction of Shahexi DN1200 pipe lines and
expanding engineering of Xili (Beihuan-Langshan) water pipe.
Note 5. This was government financing granted by Shenzhen Nanshan District Bureau of
Finance and the first disburse of solar energy application subsidy granted by Shenzhen
Bao’an District Bureau of Finance for Shenzhen China Merchants Lanyuan Project.
45. Non-business expenditures
In RMB
Items Occurred current
term
Amount occurred
same period last year
Total of loss from disposal of non-current assets 276,647 318,807
Incl. Loss from disposal of fixed assets 276,647 318,807
Loss from disposal of intangible assets - -
Losses from debt restructuring - -
Loss from exchange of non-monetary assets - -
Expected liability expense - -
Donations 2,232,000 190,461
Others 2,595,038 846,398
Total 5,103,685 1,355,666
46. Income tax expenses
In RMB
Items Occurred current
term
Amount occurred
same period last year
Income tax calculated according to the law and regulations of
current term
582,418,590 198,172,477
Adjustment of differed income tax (147,676,385) (56,119,274)
Total 434,742,205 142,053,203
Adjustments on income tax expenditure and accounting profit:
In RMB
Occurred current
term
Amount occurred
same period last year
Accounting profit 1,833,668,498 624,090,354
Income tax at 22% (20% last year) 403,407,070 124,831,715
Influence of taxes may not be neutralized by expenses 16,484,665 37,319,173China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
122 - -
Influence of tax-free income (2,229,334) (23,673,865)
Influence of taxes not confirmed to neutralize loss and
neutralizable provisional differences
(45,150,629) (13,088,910)
Tax influence by using of unrecognized previous loss and
deductible provisional differences
43,672,028 -
Influence of inconsistency in tax rates of subsidiaries in other
region
18,558,405 16,665,090
Income tax expenses 434,742,205 142,053,203
47. Calculation of basic earning per share and diluted earning per share
At calculating of basic earning per share, the net profit of current term attributable to
common shareholders is:
In RMB
Occurred current
term
Amount occurred
same period last year
Net profit of current term attributable to common shareholders 1,050,179,281 486,847,748
Incl. Net profit attributable to continuous operation 1,050,179,281 486,847,748
Net profit attributable to terminating operation - -
At calculating of diluted earning per share, the net profit of current term attributable to
common shareholders is:
In RMB
Occurred current
term
Occurred in previous
term
Net profit of current term attributable to common shareholders 1,050,179,281 486,847,748
Diluting potential common share interests recognized as
expenses at current term
The part attributable to common shareholders after deducting of
income tax
- -
The part of income or expenses generated by converting of
diluted potential common shares attributable to common
shareholders after deducting of income tax
- -
Incl. Net profit attributable to continuous operation 1,050,179,281 486,847,748
Net profit attributable to terminating operation - -
At calculating of basic earning per share, the denominator is the weighted average of
common shares issued outside, the calculation formula is as:
In RMBChina Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
123 - -
Occurred current
term
Amount occurred
same period last year
Common shares out in the market at beginning of year 1,717,300,503 1,717,300,503
Plus: Weighted amount of common shares issued this term - -
Less: weighted amount of common shares repurchased in current
term
- -
Weighted amount of common shares issued outside at end of
year
1,717,300,503 1,717,300,503
At calculating of diluted earning per share, the formula for weighted average amount of
common shares issued outside is as:
RMB Yuan
Occurred current
term
Occurred in previous
term
Weighted average of common shares used
in calculating of basic earnings per share
1,717,300,503 1,717,300,503
Plus: Weighted average amount of common shares increased
with assumption of the diluted potential common shares
have been converted to current common shares
- -
Incl. Weighted amount of common shares increased by
converting of convertible bonds
- -
Weighted amount of common shares increased by
exercising of subscription certificate / share option
- -
Weighted amount of common shares increased by
executing of repurchasing commitment
- -
Weight average amount of common shares
used in calculating of diluted earning per share
1,717,300,503 1,717,300,503
Earnings per share
In RMB
Occurred current
term
Amount occurred same
period last year
Calculated according to net profit attributable to the shareholders
of the parent company
Basic earnings per share 0.6115 0.2834
Diluted earnings per share 0.6115 0.2834
Calculated according to continuous operation net profit
attributable to the shareholders of parent companyChina Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
124 - -
Basic earnings per share 0.6115 0.2834
Diluted earnings per share 0.6115 0.2834
Calculated according to termination net profit attributable to the
shareholders of parent company
Basic earnings per share - -
Diluted earnings per share - -
48. Other miscellaneous income
In RMB
Items
Occurred current
term
Amount occurred
same period last year
1. Gain(loss) generated by sellable financial assets (769,024) 2,218,903
Less: Income tax influence of sellable financial assets (118,046) 443,780
Net amount written into other gains and transferred into gain/loss
in previous terms -
-
Sub-total (650,978) 1,775,123
2. Share in other misc. income of the invested company on equity
basis -
-
Less: Income tax influence of shares in other gains of investees on
equity basis -
-
Net amount written into other gains and transferred into gain/loss
in previous terms -
-
Sub-total - -
3. Gain(loss) generated by cash flow of hedging instrument - -
Less: Income tax influence of cash flow hedge instruments - -
Net amount written into other gains and transferred into gain/loss
in previous terms -
-
Adjustment converted to initially recognized amount of hedging
subject -
-
Sub-total - -
4. Difference in translating of foreign currency accounts 39,197,159 -
Less: Net amount of disposing overseas business and transferred to
current gain/loss -
-
Sub-total 39,197,159 -
5. Others - (2,000,000)
Less: Income tax influence by other accounted into other misc.
incomes -
-
Net amount accounted into other misc. income and transferred into
current gain/loss in previous terms -
-
Sub-total - (2,000,000)China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
125 - -
Total 38,546,181 (224,877)
49. Notes to cash flow statements
(1) Other cash received relating to business operation
In RMB
Items Occurred current term Amount occurred same
period last year
Operational trade money received 965,050,266 500,146,184
Project deposit received 337,179,945 125,550,342
Interest received 50,537,793 24,367,967
Operational provisional money received 104,664,258 174,655,573
Total 1,457,432,262 824,720,066
(2) Other cash paid relating to business operation
In RMB
Items Occurred current term Amount occurred same
period last year
Operational trade money paid 475,466,354 618,392,498
Project deposit refunded 477,206,606 65,130,245
Cash paid for sales expenses 71,933,008 67,049,266
Cash paid for administrative expenses 51,773,005 32,678,218
Total 1,076,378,973 783,250,227
(3) Other cash received relating to investment operation
In RMB
Items Occurred current term Amount occurred same
period last year
Cash received from trade of foreign currency future contract 12,887 77,277,985
Total 12,887 77,277,985
50. Supplementary data of cash flow statement
(1) Supplementary cash flow statement
In RMB
Supplementary Info.
Amount of the
Current Term
Amount of the same
period of previous
term
1. Net profit adjusted to cash flow of business operation
Net profit 1,398,926,293 482,037,151
Plus: Asset impairment provision (2,861) (107,964)
Fixed asset depreciation, gas and petrol depreciation, 16,924,895 17,499,053China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
126 - -
production goods depreciation
Amortizing of intangible assets and investment
properties
68,873,765 62,839,470
Amortizing of long-term expenses 9,611,584 11,167,990
Loss from disposal of fixed assets, intangible assets
and other long-term assets
210,473 298,283
Loss of disposing fixed assets - -
Loss (gain) from fair value fluctuation (29,917,874) 108,371,152
Financial expenses 3,053,234 57,887,757
Investment loss (gains) (25,453,955) (212,121,326)
Decrease of differed income tax assets (increase) (147,676,385) (56,119,274)
Increase of differed income tax liabilities (118,047) 443,780
Decreasing (increase) of inventory (3,339,843,203) (2,042,467,115)
Decrease (increase) of operational receivables 888,747,172 484,523,627
Increase of operational payables (838,744,392) 4,232,170,148
Others
Cash flow generated by business operation, net (1,995,409,301) 3,146,422,732
2. Major investment and financing operation not involving
with cash
Liabilities converted to capital - -
Convertible bond expire in 1 year - -
Fixed assets leased through financing - -
3. Net change of cash and cash equivalents
Balance of cash at period end 10,315,367,297 8,561,695,831
Less: Initial balance of cash 8,775,661,067 7,358,057,106
Plus: Balance of cash equivalents at the period end - -
Less: Initial balance of cash equivalents - -
Net increasing of cash and cash equivalents 1,539,706,230 1,203,638,725
(2) Composition of cash and cash equivalents
In RMB
Items End of term Beginning of term
I. Cash 10,315,367,297 8,775,661,067
Incl: Cash in stock 66,540 43,011
Bank savings could be used at any time 10,315,300,757 8,775,618,056
Other monetary capital could be used at any time - -
Usable money in Central Bank - -
Money saved in associated financial bodies - -
Money from associated financial bodies - -
II. Cash equivalents - -China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
127 - -
Incl. Bond investment due in 3 months - -
III. Balance of cash and cash equivalents at end of term 10,315,367,297 8,775,661,067China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
128 - -
(VI) Related parties and related transactions
1. Particulars about the parent company of the Company
In RMB
Name of the parent co.
Relationshi
p
Ownership
type Reg. Add.
Legal
representative
Business
property
Registered
capital
Shareholding of the
parent co.
Voting power of the
parent company %
Ultimate holder
of the
Company Organization code
China Merchants Shekou
Industrial Zone Co., Ltd.
Controlling
shareholder
Ltd.
liability
Shenzhen Fu Yuning
Establishment
and
management
of various
types of
enterprises.
2,236,000,000 51.89% 51.89%
China
Merchants
Group Co., Ltd.
10001146 - 0
The ultimate controlling party of the Group is China Merchants Group Co., Ltd. The parent company and the ultimate controlling party of the Group do not provide financial statements to
outsiders.
2. Particulars of the subsidiaries
See Note (IV)
3. Joint-ventures and affiliates
See Note (V) 10China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
129 - -
4. Other related parties
Name of the related parties Relationship with the Company Organization code
Shenzhen China Merchants Landmark
Co., Ltd.
Under same controlling shareholder
70844202 - 3
Shenzhen Beike Venture Co., Ltd. Under same controlling shareholder 72304387 - 2
Dafeng International Holdings Under same controlling shareholder Not applicable
Shenzhen China Merchants Financing
Service Co., Ltd.
Under same controlling shareholder
19244397 - 2
China Merchants Logistics Holdings
Co., Ltd.
Under same controlling shareholder
72472882 - 2
Shenzhen Shekou Dazhong Investment
Co., Ltd.
Under same controlling shareholder
61880956 - 5
China Merchants Hanghua
Technologies and Trade Center Co.,
Ltd.
Under same controlling shareholder
60002262 - 5
China Merchants Group (HK) Ltd.
Under common substantial controlling
shareholder
Not applicable
China Merchants Securities Co., Ltd.
Under common substantial controlling
shareholder
19218149 - 0
China Merchants International (China)
Investment Co., Ltd.
Under common substantial controlling
shareholder
71786931-X
CM Zhangzhou Development Zone
Ltd.
Under common substantial controlling
shareholder
61145106 - 2
Shenzhen CM Qianhaiwan Property
Co., Ltd.
Under common substantial controlling
shareholder
79386851 - 1
Shenzhen TCL Optical-Electronics
Technologies Ltd.
Affiliate of the Company
26639365 - 3
China Merchants Guangming
Technologies Garden Ltd.
Affiliate of the Company
76755303 - 0
Tianjin Xinhai real Estate Development
Co., Ltd.
Affiliate of the Company
7581445 – 4
Huizhou Taitong Property Investment
Co., Ltd.
Joint venture of the Company
67314099 – 0
Director, general manager and vice
general manager
Key management
5. Related transactions
(1) Related transactions of goods and services
In RMBChina Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
130 - -
Occurred current term
Amount occurred same
period last year
Related parties
Type of
trade
Subjects of
the related
transactions
Pricing and decision
making process
Amount
Percentage
in similar
trades %
Amount
Percentage in
similar trades
%
Shenzhen CM
Qianhaiwan Property
Co., Ltd.
income of
constructio
n contract
Note 1
approved by the
board
53,350,00
0
100% - -
Note 1: Shenzhen CM Construction Co., Ltd. contracted for the general project of phase I
and II of Qianhaiwan Garden from Shenzhen CM Qianhaiwan Property Co., Ltd. The
company actually gained RMB603,347 after subcontracted the project.
(2) Related rents
In RMB
Name of the owner Name of the tenant
Description of the
property
Leases
Start date
Stop date Rental income
China Merchants Shekou
Industrial Zone Co., Ltd.
Shenzhen China Merchants
Property Co., Ltd.
Land using right 2010.1.1 2010.12.31 4,580,516
China Merchants Shekou
Industrial Zone Co., Ltd.
Shenzhen China Merchants
Property Co., Ltd.
Nanhai E-cool 2008.9.1 2023.8.31 6,726,084
China Merchants Shekou
Industrial Zone Co., Ltd.
Shenzhen CM Water Supply
Co., Ltd.
Land using right 1982.01.01 2025.06.30 1,366,986
China Merchants Shekou
Industrial Zone Co., Ltd.
Shenzhen CM Power Supply
Co., Ltd.
Land using right 2007.01.01 2010.12.31 1,120,500
Shenzhen China Merchants
Property Co., Ltd.
China Merchants Shekou
Industrial Zone Co., Ltd.
Office building of New
Time Plaza
2010.01.01 2010.12.31 5,946,918
Shenzhen China Merchants
Property Co., Ltd.
China Merchants
International (China)
Investment Co., Ltd.
Office building of New
Time Plaza, industrial
building
2010.02.01
2011.01.31
2,266,63
4
Shenzhen China Merchants
Property Co., Ltd.
Shenzhen China Merchants
Landmark Co., Ltd.
Office building of New
Time Plaza
2009.10.01 2010.09.30 1,076,120
Shenzhen China Merchants
Property Co., Ltd.
China Merchants Logistics
Holdings Co., Ltd.
China Merchants
Building, Haibin
Commercial Center
2010.01.01 2010.12.31 763,896
Shenzhen China Merchants
Property Co., Ltd.
Shenzhen Beike Venture Co.,
Ltd.
Beike Chuangye
Building
2000.07.01 2015.06.03 335,000
The above transactions are implemented according to agreement price.
(3) Related guarantees
In RMB
The guarantor The beneficiary
Amount
guaranteed
Start date Due date
Completed or
not
CMSIZ. (Note 1) The Company 1,007,909,000 2009.05.26 2012.07.27 No
CMSIZ. (Note 1)
Shenzhen China
Merchants Property Co.,
Ltd.
230,251,028 2 0 1 0.01.06 2010.12.28 No
CMSIZ. (Note 1)
Shenzhen CM Power
Supply Co., Ltd.
37,818,522 2 0 0 9.08.26 2010.08.26 No
CMSIZ. (Note 1)
Shenzhen China
Merchants Property Co.,
Ltd.
82,012,508 2 0 0 9.11.15 2012.03.20 No
China Merchants Group (HK)
Co., Ltd. (Note 2)
The Company 2,000,000,000 2010.04.20 2017.04.19 No
China Merchants Group (HK) Ruijia Investment 244,492,543 2 0 0 9.12.01 2011.11.28 NoChina Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
131 - -
Co., Ltd. (Note 2) Industrial Ltd.
China Merchants Group (HK)
Co., Ltd. (Note 2)
Ruijia Investment
Industrial Ltd.
339,572,976 2 0 0 7.11.20 2012.11.19 No
China Merchants Group (HK)
Co., Ltd. (Note 2)
Ruijia Investment
Industrial Ltd.
475,402,166 2 0 1 0.04.27 2013.04.27 No
China Merchants Group (HK)
Co., Ltd. (Note 2)
Ruijia Investment
Industrial Ltd.
319,198,597 2 0 0 8.12.24 2010.12.24 No
China Merchants Group (HK)
Co., Ltd. (Note 2)
Ruijia Investment
Industrial Ltd.
113,412,000 2 0 0 8.12.24 2010.12.24 No
Dafeng International Holding Co., Ltd. – fully-owned subsidiary of CMSIZ, provided credit
guarantee for Ruijia Investment & Industry Co., Ltd. – subsidiary of the Company, for the
future foreign currency contract in ING Bank N.V., Hong Kong Branch.
Note 1: China Merchants Shekou Industrial Zone Co., Ltd. provided RMB1,007,909,000 of
loan guarantee for the company; USD5,569,000 (RMB37,818,522) of loan guarantee for
Shenzhen CM Power Supply Co., Ltd.; RMB82,012,508 of credit guarantee for Shenzhen
China Merchants Property Co., Ltd.; and RMB230,251,028 of guarantee for accepted draft
to Shenzhen China Merchants Property Co., Ltd.
Note 2: The Company obtained RMB2,000,000,000 of input capital from Huatai Asset
Management Co., Ltd., Ruijia Investment & Industry Co., Ltd. raised USD36,000,000
(RMB244,492,543) from China Merchants Bank Offshore Business Dept., and
USD50,000,000 (RMB339,572,976) and USD70,000,000 (RMB475,402,166) from ING
Bank N.V., Hong Kong Branch, and USD47,000,000 (RMB319,198,597) and
HKD130,000,000 (RMB113,412,000) from China Industrial & Commercial Bank (Asia) All
of them were secured by China Merchants Group (HK) Co., Ltd.
(4) Asset acquisition
On June 29, 2010, Shenzhen CM Commerce Development Co., Ltd. – one of the
subsidiaries of the Company entered the ‘Land Using Right Confirmation Contract’ with
CMSIZ, to purchase the land using right of land SKC102-01. The land is of 11,904.23
square meters with 40 years of using rights. It is stipulated for commercial use. The
consideration was RMB111.7518 million.
(5) Asset transferring
On June 28, 2010, Shenzhen CM Properties and the Company entered the agreement
with CMSIZ to transfer the 100% share equities of Shenzhen CM Water Supply Co., Ltd.
held directly or indirectly over to CMSIZ with the consideration of RMB162.8332 million.
6. Receivable and payables due with related parties
In RMB
Projects Related parties
Amount at end of
term
Initial amount
Other account receivable
Shenzhen TCL Optical-Electronics
Technologies Ltd.
257,339,044 187,851,513China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
132 - -
Other account receivable
Huizhou Taitong Property Investment Co.,
Ltd.
127,236,214 121,257,000
Account payable
China Merchants Shekou Industrial Zone Co.,
Ltd.
9,919,240 5,338,724
Other account payable Dafeng International Holdings Co., LTd. - 887,700,513
Other account payable CM Zhangzhou Development Zone Ltd. 475,334,117 420,821,115
Other account payable
Tianjin Xinhai real Estate Development Co.,
Ltd.
133,081,399 148,831,399
Other account payable
Shenzhen Shekou Dazhong Investment Co.,
Ltd.
138,235,302 138,235,302
Other account payable
Shenzhen China Merchants Financing Service
Co., Ltd.
33,510,000 16,338,000
Other account payable
China Merchants Guangming Technologies
Garden Ltd.
1,069,390 1,067,447
Other account payable
China Merchants Hanghua Technologies and
Trade Center Co., Ltd.
528,151 1,051,707
Interest payable Dafeng International Holdings Co., LTd. - 1,288,737
Dividend payable
China Merchants Shekou Industrial Zone
Co., Ltd. 89,112,876 -
Dividend payable CM Zhangzhou Development Zone Ltd. 3,787,878 -
Dividend payable Dafeng International Holdings 4,900,000 -
Long-term payable
Shenzhen China Merchants Landmark Co.,
Ltd.
1,200,000 1,200,000
(VII) Contingent issues
As of June 30 2010, the Company has provided guarantees for property mortgages to the
banks totalled to RMB134,818,721 (December 31, 2009: RMB251,212,905). This issue
makes no material influence on the financial situations of the report term and the period after
the report term.
(VIII) Commitments
(1) Capital commitment
In RMB
Items End of term Beginning of term
Signed but not yet recognized in the financial statements -
- commitment of long-term asset purchasing - 3,494,368
- Outsourcing contract with large amount - -
－Real estate development projects 5,188,660,756 2,277,962,492
－Investment commitment to the outside -
Total 5,188,660,756 2,281,456,860
(2) Operational leasing commitment
By the balance sheet date, information on irrevocable operation lease contract signed with
outside, as follows:
In RMB
Items End of term Beginning of termChina Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
133 - -
Minimum lease payments of irrevocable operation lease:
The first year since the balance sheet date. 29,936,742 29,845,542
The Second years since the balance sheet date. 25,946,332 29,460,842
The Third years since the balance sheet date. 24,917,024 25,381,484
The following years. 215,009,652 227,468,164
Total 295,809,750 312,156,032
(IX) Post-balance-sheet issues
No post-balance-sheet issue with the Company up to the date of this report.
(X) Segment report
The Group decides and disclose the segment report according to “Interpreting of Enterprise
Accounting Standard” for year 2009, and no longer execute “Enterprise Accounting
Standard No.35 – Segment Report”.
According to the internal structure, administrative requirement and reporting criteria of the
Group, the Group divides its businesses into four reporting segments. These reporting
segments are decided according to the characteristics of businesses. The executives evaluate
the business performance of these segments and decide the allocation of resources. These
segments are: property development, public sector business, property management and
others.
Segment report adopts same accounting policies and measurement basis with those adopted
in preparing of this financial statement.China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
134 - -
(1) Segment report data
In RMB
Property development Public sector Property management Others Unclassified projects Neutralized between segments Total
Current year
Same period
last year
Current year
Same period
last year
Current year
Same period
last year
Current year
Same period
last year
Current year
Same period
last year
Current year
Same period
last year
Current year
Same period
last year
Turnover
Income from external
trade
6,460,083,143 2,407,393,782 321,265,272 301,655,272 199,046,472 165,672,590 759,038 1,055,582 - - - - 6,981,153,925 2,875,777,226
Income among the
segments
- - - - - - - - - - - - - -
Total turnover of the
segments
6,460,083,143 2,407,393,782 321,265,272 301,655,272 199,046,472 165,672,590 759,038 1,055,582 - - - - 6,981,153,925 2,875,777,226
Adjusted items:
Total of turnover in the
financial statement
6,981,153,925 2,875,777,226
Operation cost 3,725,031,407 1,279,625,305 236,716,661 215,172,676 165,473,332 133,294,311 142,333 185,970 - - - - 4,127,363,733 1,628,278,262
Segment operation profit
(loss)
2,735,051,736 1,127,768,477 84,548,611 86,482,596 33,573,140 32,378,279 616,705 869,612 - - - - 2,853,790,192 1,247,498,964
Adjusted items:
Business tax and
surcharge
851,678,388 471,218,073 815,766 913,586 10,431,093 8,352,248 - - - - - - 862,925,247 480,483,907
Sales expense 112,145,064 114,595,993 - - - - - - - - - - 112,145,064 114,595,993
Administrative expense 71,161,608 56,844,994 6,674,145 5,038,804 13,060,686 13,672,120 10,282,955 15,262,882 - - - - 101,179,394 90,818,800
Financial expenses (15,283,182) (6,244,587) (272,842) 21,806,324 (1,519,832) (3,120,883) 20,129,090 45,446,902 - - - - 3,053,234 57,887,757
Asset impairment loss (2,861) (107,964) - - - - - - - - - - (2,861) (107,964)
Income from change of
fair value
- - - - - - 29,917,874 (108,371,152) - - - - 29,917,874 (108,371,152)
Investment income 2,927,006 108,857,278 - - 390,684 (116,505) 1,057,234,603 604,089,760
(1,035,098,339
)
(500,709,206) - - 25,453,954 212,121,326
Operation profit 1,718,279,725 600,319,246 77,331,542 58,723,882 11,991,877 13,358,289 1,057,357,137 435,878,436
(1,035,098,339
)
(500,709,206) - - 1,829,861,942 607,570,645
Non-operational income 3,396,091 9,403,326 4,912,894 7,804,701 601,256 667,348 - - - - - - 8,910,241 17,875,375
Non-operational
expenditure
2,655,341 567,110 2,278,486 621,595 169,858 166,962 - - - - - - 5,103,685 1,355,666
Total profit 1,719,020,475 609,155,462 79,965,950 65,906,988 12,423,275 13,858,675 1,057,357,137 435,878,436
(1,035,098,339
)
(500,709,206) - - 1,833,668,498 624,090,354
Income tax 405,867,659 122,459,100 18,360,567 14,665,235 4,512,537 4,804,169 6,001,442 124,699 - - - - 434,742,205 142,053,203
Net profit 1,313,152,816 486,696,362 61,605,383 51,241,753 7,910,739 9,054,506 1,051,355,697 435,753,737 (1,035,098,339 (500,709,206) - - 1,398,926,293 482,037,151China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
135 - -
)China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
136 - -
In RMB
Property development Public sector Property management Others Unclassified projects Neutralized between segments Total
Current year
Same period
last year
Current year
Same period
last year
Current year
Same period
last year
Current year
Same period last
year
Current year
Same period last
year
Current year
Same period last
year
Current year
Same period last
year
Total asset of
the segments
48,700,383,337 41,330,383,216 3,770,461,248 1,814,453,728 472,737,757 335,013,896 33,051,010,397 31,188,797,460 (9,738,481,949) (7,850,392,575) (24,470,465,895)
(18,921,095,228
)
51,785,644,895 47,897,160,497
Total asset in the
financial
statements
48,700,383,337 41,330,383,216 3,770,461,248 1,814,453,728 472,737,757 335,013,896 33,051,010,397 31,188,797,460 (9,738,481,949) (7,850,392,575) (24,470,465,895)
(18,921,095,228
)
51,785,644,895 47,897,160,497
Total liability of
the segments
35,548,838,318 33,063,133,537 2,785,938,164 885,425,597 36,330,819 245,968,027 17,841,550,683 14,321,692,087 - - (24,470,465,895)
(18,921,095,228
)
31,742,192,089 29,595,124,020
Total liability in
the financial
statements
35,548,838,318 33,063,133,537 2,785,938,164 885,425,597 36,330,819 245,968,027 17,841,550,683 14,321,692,087 - - (24,470,465,895)
(18,921,095,228
)
31,742,192,089 29,595,124,020
Supplementary
info.
Depreciation and
amortized
expenses
85,291,608 79,923,496 8,904,500 8,613,477 1,118,584 494,964 95,552 2,474,577 - - - - 95,410,244 91,506,513
Impairment
recognized in
current term
(2,861) (107,964) - - - - - - - - - - (2,861) (107,964)
Capital
expenditure
Incl. Expenditure
of constructionin-
process
- 59,501 656,918 5,290,763 - - - - - - - - 656,918 5,350,264
Expenditure for
purchasing of
fixed assets
3,225,824 1,449,679 150,015 1,523,893 1,286,592 979,890 56,400 - - - - - 4,718,831 3,953,462
Expenditure for
purchasing of
intangible assets
- - - - - - - - - - - - 0 0
Expenditure for
purchasing of
investment
property
249,371,078 5,262,207 - - - - - - - - - - 249,371,078 5,262,207
Non-cash
expenses other
than depreciation
and amortizing
- - - - - - - - - - - - - -China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
137 - -
(2) Income from external trade upon location of source and segment asset upon locations
In RMB
Items Occurred current term Occurred in previous term
External trade income from mainland China 6,981,153,925 2,875,777,226
External trade income from Hong Kong and abroad - -
Total 6,981,153,925 2,875,777,226
In RMB
Items End of term Beginning of term
Non-current asset located in mainland China 5,351,988,515 5,122,449,922
Non-current asset located in Hong Kong and abroad 142,052,666 138,553,404
Total 5,494,041,181 5,261,003,326China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
138 - -
(XI) Financial Instruments and Risk Management
Financial instruments adopted by the Company are available-for-sale financial assets, longterm
equity investments, loans, account receivable, account payable, transactional financial
liabilities, and convertible bonds. Details of these financial instruments are available in
respective notes herein. Risks attached to these financial instruments and the risk
management policies adopted by the Company are illustrated hereafter. The executive team
of the Company have been monitoring and controlling over the risk exposures to constrain
them in a certain extent.
1. Objective and policies of risk management
The objective of the Company’s risk management is to achieve a balance between the risk
and gains. Constrain the negative influence on business operation to the lowest limit, and
maximum the interests of shareholders and other equity holders. With regard to this target,
the basic policies of the Company are; locate and analyse the risks, set appropriate bottom
line for risks, and manage and monitor on each risk and constrain them in a certain extent.
1.1 Market risk
1.1.1 Foreign currency risk
Foreign currency risks are those generated by vibration of exchange rates. Foreign currency
risks of the Company are mainly involved with Hong Kong Dollar, and US Dollar. Except
for the overseas subsidiaries of the Company incorporated in Hong Kong Special Executive
Zone and other countries, which are doing their businesses by local currencies, all other
main business operations of the Company are in Renminbi. As of December 31, 2009,
except for the following assets which are demonstrated in Hong Kong Dollar, and US Dollar,
all of the other assets and liabilities of the Company are demonstrated in RMB. Foreign
currency risks brought by these assets and liabilities in foreign currencies may influence the
Company’s business performance.
In RMB
Items End of term Beginning of term
Monetary capital 543,242,033 953,918,750
Other account receivable 179,574,894 1,365,754,365
Other account payable 1,818,503,461 2,662,527,318
Short-term loans 1,079,644 ,446 1,322,929,609
Long-term loans due in 1 year 432,610,597 435,402,319
Long-term borrowings 2,852,373,832 1,297,396,040
Note: As of June 30, 2010, except for the above assets and liabilities accounted in HKD or
USD, the Company has the book principal of USD396,639,000 (RMB2,693,757,713)
purchased in term of foreign currency future contract without transferring of principal.China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
139 - -
The Company pays close attention on the influences of exchange rate vibration.
1.1.2 Interest risks
The Company’s loans are mainly in Renminbi, and foreign currency loans are just auxiliary
measures. Foreign currency loans are mainly floating rate loans in USD and HKD without
being influenced by adjustment of basic interest rate done by People’s Bank of China. As for
loans in RMB, the Company eliminated the influence of increasing interest rate to a certain
extent by obtaining fix rate loans in advance and raise the portion of fix rate loans in the
whole loans, in both arrangements of short-term and long-term loans.
1.1.3 Other price risks
The financial assets available to sale (see Note (V)8) held by the Company are measured at
their fair value at the balance sheet day. Thus the Company is exposed to the risks of
securities market fluctuation. So far the Company adopted no countermeasures to minimize
financial asset price fluctuation risks.
1.2 Credit risks
As at December 31, 2009, the Group’s maximum exposure to credit risk which will cause a
financial loss to the Group due to failure to discharge an obligation by the counter parties or
debtors is arising from:
· Book value of financial asset recognized in consolidated balance sheet; as for financial
instruments measured at fair value, the book value is reflecting the exposure to risks but not
actually the greatest exposure. The greatest exposure to risks fluctuates along with the future
fair value.
· Amount of financial guarantee contracts disclosed in Note (VII) – Contingent issues.
In order to minimize the credit risk, the management of the Group has delegated a team
responsible for determination of credit limits, credit approvals and other monitoring
procedures to ensure that follow-up action is taken to recover overdue debts. In addition, the
Group reviews the recoverable amount of each individual trade debt at each balance sheet
date to ensure that adequate impairment losses are made for irrecoverable amounts. In this
regard, the directors of the Company consider that the Group’s credit risk is significantly
reduced.
The credit risk on liquid funds is limited because the counterparties are banks with high
credit ratings assigned by international credit-rating agencies.
The Company adopted necessary policies to make sure that all clients and customers are
attributed with merit credit records.China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
140 - -
1.3 Liquidity risk
In the management of the liquidity risk, the Company monitors and maintains a level of cash
and cash equivalents deemed adequate by the management to finance the Company’s
operations and mitigate the effects of fluctuations in cash flows. The management monitors
the utilization of bank borrowings and ensure the loan contracts are properly exercised.
The Company uses bank loans as main capital resources. On June 30, 2010, the bank loan
credit not used was RMB25,465,440,000 (December 31, 2009: RMB24,873,030,000)
The due dates of financial liabilities held by the Company on retained contract liabilities
without discounted to cash is as the followings:
In RMB
Book value Gross value within 1 yr 1-5 yrs over 5 yrs
Monetary capital 10,390,560,833 10,390,560,833 10,390,560,833 - -
Account receivable 109,526,262 109,526,262 109,526,262 - -
Other account receivable 1,050,297,111 1,050,297,111 1,050,297,111 - -
Long-term receivable 1,095,238,586 1,150,002,968 - 1,150,002,968 -
Short-term loans 1,629,644,446 1,657,206,336 1,657,206,336 - -
Interest payable 39,755,152 39,755,152 39,755,152 - -
Dividend payable 217,926,308 217,926,308 217,926,308 - -
Other current liability 2,239,959,131 2,239,959,131 2,239,959,131 - -
Long-term loans due in 1 year 1,457,610,597 1,488,485,117 1,488,485,117 - -
Notes payable 268,100,694 268,100,694 268,100,694 - -
Account payable 1,796,195,435 1,796,195,435 1,796,195,435 - -
Other account payable 5,638,304,437 5,638,304,437 5,638,304,437 - -
Long-term borrowings
9,515,280,804 11,032,902,976 405,469,219 8,412,617,319
2,214,816,43
8
2. Fair value
Fair value of financial assets and financial liabilities are decided by the ways as provided
hereafter:
Fair values of financial assets and financial liabilities complying with standard conditions
and with active market are decided respectively with reference to the current prices of the
active market and current offers;
Fair value of other financial assets and financial liabilities (derivate instruments not included)
are recognized by general pricing matrix on future discounted cash flow basis, or recognized
by observable current market prices;China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
141 - -
Fair values of derivate instruments are determined by the public offer in the active market.
The management of the Company deems that, the book values of financial assets and
financial liabilities measured by amortized costs are close to the fair values of these assets
and liabilities.
3. Sensitivity analyse
3.1 Foreign currency risk
Foreign currency risks come mostly from the influence of exchange rate fluctuation on the
foreign currency loans raised by the Company and monetary assets and liabilities accounted
in foreign currencies. Foreign currency loans are mainly USD loans with float interest rates.
To avoid the exchange rate risks, the Group locks the future exchange rates by using future
exchange contracts without transferring of principal. On the other hand, for those monetary
asset and liabilities accounted in foreign currencies, the Group capitalizes most of the
exchange gain/loss and accounted into inventory cost.
3.2 Interest risks
Interest risks are mostly the influences of interest fluctuation on the borrowing expenses.
Most of the borrowing expenses have been capitalized and accounted into inventory cost,
therefore fluctuation of interest rate is not making major influence on the gain/loss of current
term or shareholders’ equity at end of report term.
(XII) Notes to the main items of the financial statements of the parent company
1. Other account receivable.
(1) Other account receivable categorized by property
In RMB
End of term Beginning of term
Categories Book balance Bad debt provision Book balance Bad debt provision
Amount
Proportio
n %
Amount
Proportio
n %
Amount
Proportio
n %
Amount
Proportion
%
Other receivable with major
individual amount
17,220,768,759 100% - - 12,501,248,369 100% - -
No major amount individually
but with great risk after
combined with others with
similar credit risk
- - - - - - -
Other minor other receivables 3,442,905 - - - 3,066,436 - - -
Total 17,224,211,664 100% - - 12,504,314,805 100% - -
Ages of other receivable accounts
End of term Beginning of term
Age Amount
Prop
ortio
n %
Bad debt
provisio
n Book value Amount
Prop
ortio
n %
Bad debt
provision Book value
within 1 yr 17,220,805,9
10 100% -
17,220,805,9
10
12,503,630,17
6
100
% -
12,503,630,17
6China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
142 - -
End of term Beginning of term
Age Amount
Prop
ortio
n %
Bad debt
provisio
n Book value Amount
Prop
ortio
n %
Bad debt
provision Book value
1-2 years 3,405,754 - - 3,405,754 684,629 - - 684,629
2-3 years - - - - - - - -
Over 3 yrs - - - - - - - -
Total 17,224,211,6
64 100% -
17,224,211,6
64
12,504,314,80
5
100
% -
12,504,314,80
5
(2) No other receivable account due from shareholders with 5% or over of shares of the
Company in the balance.
(3) Top other receivable accounts
In RMB
Name of the companies
Relation with the
Company
Amount Ages
Portion in
total other
receivables
(%)
Shenzhen China Merchants
Property Co., Ltd.
Subsidiary of the
Company
5,001,722,535 within 1 yr 29%
CM Power Supply Co., Ltd.
Subsidiary of the
Company
2,000,000,000 within 1 yr 12%
CM Property (Chongqing) Garden
City Co., Ltd.
Subsidiary of the
Company
1,321,273,876 within 1 yr 8%
Guangzhou China Merchants Realestate
Co., Ltd.
Subsidiary of the
Company
1,267,724,709 within 1 yr 7%
China Merchants Property
(Nanjing) Co., Ltd.
Subsidiary of the
Company
1,173,000,000 within 1 yr 7%
Total 10,763,721,120 63%
(4) Receivables from related parties
Note: See Note (XII)7(2)China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
143 - -
2. Long-term equity investment
(1) Details of long-term equity investment
In RMB
Company invested in
Calculating
basis
Initial costs
Balance at the
beginning of
term
Changed by
Balance at the
end of term
Percentage of
share in the firm
%
Voting power in
the firm %
Statement on
differences between
the shareholding and
voting rights
Impairmen
t provision
Provided
current term
Impairment
provision
Cash
dividend of
the term
China Merchants Guangming
Technologies Garden Ltd.
Equity basis 98,000,000 86,010,889 -2,403,252 83,607,637 49% 49% Not applicable - - -
Shanghai China Merchants Properties
Co., Ltd.
Cost basis 3,000,000 3,000,000 - 3,000,000 10% 10% Not applicable - - -
Shenzhen CM Property Consultancy
Ltd.
Cost basis 400,000 400,000 400,000 20% 20% Not applicable
Shenzhen City Main Plaza Investment
Co., Ltd.
Cost basis - - - - 10% 10% Not applicable - - -
Shanghai China Merchants Real-estates
Co., Ltd.
Cost basis 3,000,000 3,000,000 - 3,000,000 100% 100% Not applicable - - -
Shenzhen China Merchants Property
Co., Ltd.
Cost basis 500,000,000 2,734,841,461 - 2,734,841,461 100% 100% Not applicable - - -
Shenzhen CM Power Supply Co., Ltd. Cost basis 57,000,000 119,791,233 - 119,791,233 95% 95% Not applicable - - -
Shenzhen CM Water Supply Co., Ltd. Cost basis 43,000,000 127,209,610 - 127,209,610 95% 95% Not applicable - - -
Shenzhen China Merchants Xin’an
Properties Co., Ltd.
Cost basis 25,000,000 20,822,211 - 20,822,211 60% 60% Not applicable - - -
Ruijia Investment Industrial Ltd. Cost basis 19,919,300 19,919,300 - 19,919,300 100% 100% Not applicable - - -
CM Property (Beijing) Ltd. Cost basis 18,000,000 18,000,000 - 18,000,000 90% 90% Not applicable - - -
China Merchants (Suzhou) Co., Ltd. Cost basis 27,000,000 27,000,000 - 27,000,000 90% 90% Not applicable - - -
CM (Chongqing) Ltd. Cost basis 27,000,000 27,000,000 - 27,000,000 90% 90% Not applicable - - -
China Merchants Property Management
Co., Ltd.
Cost basis 22,500,000 36,460,597 - 36,460,597 90% 90% Not applicable - - -
CM (Nanjing) Ltd. Cost basis 14,700,000 14,700,000 - 14,700,000 49% 49% Not applicable - - -
Zhangzhou China Merchants Properties
Co., Ltd.
Cost basis 25,500,000 25,500,000 - 25,500,000 51% 51% Not applicable - - -
Tianjing Zhaosheng Property Co., Ltd. Cost basis 18,000,000 18,000,000 - 18,000,000 60% 60% Not applicable - - -
Suzhou CM Nanshan Property Co., Ltd. Cost basis 120,000,000 120,000,000 - 120,000,000 60% 60% Not applicable - - -China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
144 - -
Company invested in
Calculating
basis
Initial costs
Balance at the
beginning of
term
Changed by
Balance at the
end of term
Percentage of
share in the firm
%
Voting power in
the firm %
Statement on
differences between
the shareholding and
voting rights
Impairmen
t provision
Provided
current term
Impairment
provision
Cash
dividend of
the term
China Merchants Properties
(Chongqing) Co., Ltd.
Cost basis 30,000,000 30,000,000 - 30,000,000 100% 100% Not applicable
Chengdu China Merchants Beihu
Property Co., Ltd.
Cost basis 50,000,000 50,000,000 - 50,000,000 100% 100% Not applicable - - -
Chengdu CM Property Co., Ltd. Cost basis 10,000,000 - 10,000,000 10,000,000 100% 100% Not applicable - - -
Total 3,481,655,301 7,596,748 3,489,252,049 - -
(2) Investment in affiliates and joint-ventures
In RMB
Name of the Companies
Ownership
type
Reg.
Add.
Legal
representative
Business property
Registered
capital
Shares held by
the Company %
Voting power of the
Company in the
entity %
Total asset at
end of term
Total liability
at end of term
Total net
asset at end
of term
Total of
turnover at
current term
Net profit of
the current
term
I. Affiliates
China Merchants Guangming Technologies
Garden Ltd.
Ltd. liability Shenzhen
Yang
Tianping
Property development
and management
200,000,000 49% 49% 314,014,976 141,060,216
172,954,76
1
720,000 (4,904,594)
(3) The Company’s long-term equity investment receivers as of June 30, 2010 were not limited in ability to transfer capital to the Company.China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
- 145 -
3. Short-term loans
In RMB
Items End of term Beginning of term
Loan by pledge - -
Pledged loan - -
Guarantee loan 67,909,000 -
Credit loan 1,059,317,500 630,397,000
Total 1,127,226,500 630,397,000
4. Non-current liabilities due in one year
(1) Details of non-current liabilities due in one year
In RMB
Items End of term Beginning of term
Long-term loans due in 1 year 750,000,000 650,000,000
Bond payable due in one year - -
Long-term payable due in 1 year - -
Other non-current liabilities due in 1 year - -
Total 750,000,000 650,000,000
(2) Long-term loans due in 1 year
(a) Long-term loans due in one year
In RMB
Items End of term Beginning of term
Loan by pledge - -
Pledged loan - -
Guaranteed loan (Note) 400,000,000
Credit loan 750,000,000 250,000,000
Total 750,000,000 650,000,000
Note: See Note (V)28(2)
(b) Long-term loans due in 1 year top 5 in amount
In RMB
End of term Beginning of term
Loan provided by
Commence
date
Terminate
date Currency
Interest
rates %
Amount of
foreign
currency
Amount of
original
currency
Amount of
foreign
currency
Amount of
original
currency
China Construction Bank
Shekou Branch 2008.11.24 2011.02.23 RMB
4.86%
- 500,000,000 - -
China Minsheng Bank
Shenzhen Shekou branch 2008.11.28 2010.11.28 RMB
4.86%
- 200,000,000 - 200,000,000China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
- 146 -
China Agriculture Bank
Shenzhen Nanshan Branch 2008.07.31 2010.07.30 RMB 4.86% - 50,000,000 - 50,000,000
Total 750,000,000 250,000,000
5. Long-term loans
(1) Categories of long-term loans
In RMB
Items End of term Beginning of term
Loan by pledge - -
Pledged loan - -
Guaranteed loan (Note) 2,940,000,000 1,100,000,000
Credit loan 3,271,636,000 3,023,128,000
Entrusted loan -
Total 6,211,636,000 4,123,128,000
Note: See Note (V)30(1)
(2) Long-term loans top 5 in amount
End of term Beginning of term
Loan provided by
Commence
date
Terminate
date
Currency
Interest
rates %
Amount of
foreign
currency
Amount of
original
currency
Amount of
foreign
currency
Amount of
original
currency
Huatai Asset Management Co.,
Ltd.
2010.04.2
0
2017.04.20 RMB Float rates - 2,000,000,000 - -
Xinhua Trust & Investment
Co., Ltd.
2009.07.2
1
2012.07.20 RMB Float rates - 1,000,000,000 -
1,000,000,00
0
China Merchants Bank
Shenzhen New Times Branch
2009.07.2
7
2012.07.27 RMB 4.86% - 470,000,000 - 600,000,000
Bank of China Shenzhen
Shekou Branch
2009.07.2
4
2012.07.24 RMB 4.86% - 400,000,000 - 400,000,000
China Agriculture Bank
Nanchan Branch
2009.07.1
7
2014.07.16 RMB 5.472% 330,000,000 330,000,000
Total 4,200,000,000
2,330,000,00
0
6. Investment income
(1) Detailed investment gains
In RMB
Items Occurred current
term
Amount occurred
same period last
year
Long-term equity investment gains on cost basis - -
Long-term equity investment gains on equity basis (2,403,251) (1,825,269)
Investment gains from disposal of long-term equity investment - -
Investment gains in the period of holding transactional - -China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
- 147 -
financial assets
Investment gains in the period from receiving to expiration - -
Investment gains in period of holding disposable financial
assets
- -
Investment gains from disposal of transactional financial assets - -
Investment gains from disposal of investment hold to
expiration
- -
Investment gains from disposal of disposable financial assets - -
Others 22,409,110 23,370,730
Total 20,005,859 21,545,461
(2) Details of gains from long-term equity investment on equity basis
In RMB
Company invested in
Occurred current
term
Amount occurred
same period last
year Causation of change
China Merchants Guangming
Technologies Garden Ltd.
(2,403,252) (1,825,269)
Profit decrease of the
invested business
Total (2,403,252) (1,825,269)
7. Related Transactions
(1) Guarantees of related parties
In RMB
The guarantor The beneficiary
Amount
guaranteed
Start date Due date
Completed or
not
CMSIZ. (Note 1) The Company 67,909,000 2010.05.17 2011.05.17 No
China Merchants Group
(HK) Co., Ltd. (Note 2)
The Company 2,000,000,000 2010.04.20 2017.04.19 No
CMSIZ. (Note 2) The Company
100,000,000 2009.06.24 2012.06.24 No
CMSIZ. (Note 2) The Company
300,000,000 2009.05.26 2012.05.26 No
CMSIZ. (Note 2) The Company
540,000,000 2009.07.27 2012.07.27 No
The Company (Note 2)
Shenzhen CM Power
Supply Co., Ltd.
203,727,000 2010.06.18 2013.06.18 No
The Company (Note 2)
Zhuhai Yuanfeng Property
Co., Ltd.
86,700,000 2009.11.27 2012.06.11 No
The Company (Note 2)
Ruijia Investment
Industrial Ltd.
1,317,543,147 2010.01.05 2012.12.23 No
Note 1: See Note (V)18
Note 2: See Note (V)30(1)
(2) Receivable and payable due with the related parties
In RMBChina Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
- 148 -
Projects Related parties
Amount at end of
term
Initial ammount
Dividend receivable
Shenzhen China Merchants Property Co.,
Ltd.
859,075,614 859,075,614
Dividend receivable China Merchants (Suzhou) Co., Ltd. 182,635,544 182,635,544
Dividend receivable Suzhou CM Nanshan Property Co., Ltd. 35,710,165 35,710,165
Dividend receivable
Shanghai China Merchants Properties
Co., Ltd.
13,298,824 13,298,824
Total 1,090,720,147 1,090,720,147
Other account receivable Shenzhen China Merchants Property Co., Ltd. 5,001,722,535 4,442,695,824
Other account receivable CM Power Supply Co., Ltd. 2,000,000,000 -
Other account receivable
China Merchants Properties (Chongqing) Co.,
Ltd.
1,321,273,876 1,277,696,120
Other account receivable
Guangzhou China Merchants Real-estate Co.,
Ltd.
1,267,724,709 1,204,289,451
Other account receivable CM (Nanjing) Ltd. 1,173,000,000 200,000,000
Other account receivable Shanghai Jingyuan Property Co., Ltd. 947,232,399 -
Other account receivable Shanghai CM Fengrui Property Ltd. 703,212,194 660,363,253
Other account receivable Suzhou CM Nanchan Property Co., Ltd. 606,125,737 553,165,572
Other account receivable Tianjing Zhaosheng Property Co., Ltd. 599,248,516 683,736,391
Other account receivable
Zhangzhou China Merchants Properties Co.,
Ltd.
491,866,900 508,057,437
Other account receivable Zhuhai China Merchants Property Co., Ltd. 426,389,859 417,905,262
Other account receivable CM (Chongqing) Ltd. 400,108,953 400,108,953
Other account receivable Shanghai CM Minsheng Property Ltd. 380,000,000 299,732,000
Other account receivable Shanghai CM Fengsheng Property Ltd. 350,000,000 307,398,200
Other account receivable
Beijing Kanglade Property Development Co.,
Ltd.
255,853,158 229,581,158
Other account receivable
China Merchants Jiaming (Beijing) Property
Development Co., Ltd.
251,947,896 315,407,245
Other account receivable
Shanghai Fengyang Property Development
Co., Ltd.
220,643,596 220,643,596
Other account receivable China Merchants (Suzhou) Co., Ltd. 211,587,211 204,233,511
Other account receivable Chengdu CM Property Co., Ltd. 200,773,965 -
Other account receivable Chengdu CM Beihu Property Co., Ltd. 150,999,461 -
Other account receivable Suzhou Shuanghu Property Co., Ltd. 103,543,309 101,421,070
Other account receivable Ruijia Investment Industrial Ltd. 81,536,271 81,647,973
Other account receivable Foshan Xinjie Property Ltd. 35,769,380 27,890,037
Other account receivable
Shenzhen China Merchants Xin’an Properties
Co., Ltd.
29,896,380 34,396,380
Other account receivable Foshang CM Huifeng Property Co., Ltd. 6,456,075 -
Other account receivable Zhuhai Yuanfeng Property Co., Ltd. 104,349 -
Other account receivable
Shenzhen Meiyue Property Investment Co.,
Ltd.
50,110 -
Other account receivable CM Property (Beijing) Ltd. - 266,385,000
Total 17,217,066,839 12,436,754,433
In RMB
Projects Related parties
Amount at end of
term
Initial ammountChina Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
- 149 -
Other account payable Shenzhen CM Power Supply Co., Ltd. 1,568,543,551 1,414,231,992
Other account payable Shenzhen CM Water Supply Co., Ltd. 96,251,370 95,072,758
Other account payable
Shenzhen CM Property Consultancy
Ltd.
42,494,152 20,012,738
Other account payable
Shanghai China Merchants Properties
Co., Ltd.
184,777,154 173,006,186
Other account payable
China Merchants Guangming
Technologies Garden Ltd.
1,069,390 1,067,447
Other account payable CM Property (Beijing) Ltd. 559,172,160 164,730,677
Other account payable China Merchants (Suzhou) Co., Ltd. 476,942,526 491,582,002
Other account payable CM (Chongqing) Ltd. 207,334,473 35,900,947
Other account payable
Shekou Xinghua Industrial Holdings
Co., Ltd.
94,633,646 91,948,499
Other account payable
Zhangzhou China Merchants Properties
Co., Ltd.
50,627,993 -
Other account payable
Shenzhen City Main Plaza Investment
Co., Ltd.
30,388,279 30,388,279
Other account payable
Shanghai China Merchants Real-estates
Co., Ltd.
30,500,688 30,500,688
Other account payable CM (Nanjing) Ltd. 12,041,488 134,423,946
Other account payable
Shanghai CM Property Management
Co., Ltd.
39,020,041 36,014,281
Other account payable
Beijing CM Property Management Co.,
Ltd.
90,192,421 100,366,424
Other account payable
China Merchants Property Management
Co., Ltd.
19,564,306 23,562,444
Other account payable
Shenzhen China Merchants Property
Management Co., Ltd.
125,078,258 125,755,466
Other account payable
Tianjin China Merchants Properties Co.,
Ltd.
129,047,042 81,360,183
Other account payable
Shenzhen Taige Apartment Management
Co., Ltd.
135,536,011 118,490,378
Other account payable
Nanjing CM Property Management Co.,
Ltd.
2,034,158 6,078,108
Other account payable
Wuhan CM Property Management Co.,
Ltd.
14,095,296 15,087,597
Other account payable Zhangzhou CM Honglong Property Ltd. 11,865,965 11,573,817
Other account payable Tianjing Zhaosheng Property Co., Ltd. 76,454,407 7,496,320
Other account payable Shanghai CM Minsheng Property Ltd. 79,133,968 67,392,495
Other account payable Shenzhen CM Construction Co., Ltd. 50,534,075 50,534,075
Other account payable Shanghai CM Fengsheng Property Ltd. 535,879,500 360,600,486
Other account payable
Shanghai Fengyang Property
Development Co., Ltd.
51,763,810 62,892,770
Other account payable
Shenzhen CM Commercial
Development Co., Ltd.
49,969,324 49,969,324
Other account payable Beijing Kanglade Property Co., Ltd. 21,675 -
Other account payable Ruijia Investment Industrial Ltd. 3,416,349 3,443,990
Other account payable
Shenzhen CM Qile Property
Management Ltd.
12,281,329 12,715,005
Other account payable
Guangzhou China Merchants Real-estate
Co., Ltd.
- 76,572,970
Other account payable Shenzhen China Merchants Property - 27,340,441China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
- 150 -
Co., Ltd.
Other account payable
Shenzhen China Merchants Xin’an
Properties Co., Ltd.
- 2,072,989
Total 4,780,664,805 3,922,185,722
Dividend payable
China Merchants Shekou Industrial Zone
Co., Ltd. 89,112,876 -
Dividend payable CM Zhangzhou Development Zone Ltd. 3,787,878 -
Dividend payable Dafeng International Holdings 4,900,000 -
Dividend payable Other investors of the PLC 73,929,296 -
Total 171,730,050 -
(3) Capital coordinating by capital settlement center
The Company has established an internal capital clearance center to collectively manage and
coordinate the capital inside the Company. All of the subsidiaries save their money in the
center, and apply for fund when needed for project development. The Company charge the
fund applied at practical financial cost.
(XIII) Approval of the financial statements
The financial statements of the Company and the consolidated are approved by the Board of
Directors of the Company on July 23, 2010.
(XIV) Supplementary Info.
1. Details of non-recurring gain/loss
In RMB
Items Amount Remarks
Gain/loss of non-current assets
(210,473)
-
Tax refunding or exemption without official certification or exceeded authority -
Government subsidy recorded into current income account (other than those closely related to the
Company’s business operation, granted at fixed amount according to the national regulations)
2,226,430
-
Capital adoption fee collected from non-financial organizations and accounted into current
gain/loss
-
Gain/loss from differences between the cost of enterprise merger and the fair value of recognizable
net asset of the invested entities
- -
Gain/loss from non-monetary assets - -
Gain/loss from commissioned investment or assets - -
Asset impairment provisions provided for force-majeur - -
Gain/loss from debt reorganization - -
Enterprise reorganizing expenses, such as employee placement fee and integration fee - -
Gain/loss from trade departing from fair value - -
Current net gain/loss of subsidiaries under same control from beginning of term till date of
consolidation
- -
Gain/loss generated by contingent liabilities without connection with main businesses - -
Gain/loss from change of fair value of transactional asset and liabilities, and investment gains from
disposal of transactional financial assets and liabilities and sellable financial assets, other than
valid period value instruments related to the Company’s common businesses
- -China Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
- 151 -
Restoring of receivable account impairment provision tested individually 2,861 -
Gain/loss from commissioned loans - -
Gain/loss from change of fair value of investment property measured at fair value in follow-up
measurement
- -
Influence of one-time adjustment made on current gain/loss account according to the laws and
regulations regarding tax and accounting
- -
Consigning fee received for cosigned operation - -
Other non-business income and expenditures other than the above
(3,071,464)
-
Other gain/loss items satisfying the definition of non-recurring gain/loss account - -
Influenced amount of income tax 180,518 -
Influence on minority shareholders’ equity (after tax)
(184,726)
-
Total (1,056,854) -
2. Net income on asset ratio and earning per share
This calculation formula of net income on asset ratio and earning per share was prepared by
CMPD according to “Information Disclosure Rules of PLC No.09 – calculating and
disclosing of net income on asset and earnings per share” (Revised 2007) issued by China
Securities Regulatory Commission.
Earnings per share
Profit of the report period
Weighted average net income
on asset % Basic earnings
per share
Diluted earnings
per share
Net profit attributable to common
shareholders of the Company
6.25% 0.6115 0.6115
Net profit attributable to the common
owners of the PLC after deducting of
non-recurring gains/losses
6.25% 0.6121 0.6121
3. Analysis on irregular situation of items in the financial statements
RMB Yuan
Items Current term
Comparing
amount
Scale of
change
Causation of differences
1 Transactional financial
assets
25,651,617 6,437,479 298%Increased dueto price fluctuation of NDF
2 Other account receivable 1,050,297,111 1,926,509,243 -45%
Land bidding deposit at beginning of year
was recognized as initial pay for the land
and transferred into inventory
3 Other current asset 851,886,216 624,800,651 36%Subsidiary asset disposable increased
4 Fixed assets 186,817,919 299,615,954 -38%
Decreased because part of the fixed assets
transferred into subsidiary asset
disposable.
5 Differed income tax asset 438,162,357 290,485,972 51%
Increase of differed income tax assets
recognized by provisional difference caused by
drawn of land VAT in advance
6 Account payable 1,796,195,435 2,705,521,285 -34%Decrease of land payment payable
7 Employees’ wage payable 96,330,938 162,832,982 -41%Decreased because of greater amount of wage
paid to employees this term
8 Tax payable 380,116,649 589,859,453 -36%Decreased because of greater amount of taxesChina Merchants Property Development Co., Ltd.
Notes to Financial Statements
The period from January 1, 2010 to June 30, 2010
- 152 -
9 Interest payable 39,755,152 21,872,418 82%Increase of outstanding interest payable
10 Dividend payable 217,926,308 107,751,887 102%
Increased because announcing of dividend
distributing for 2009
11 Long-term borrowings 9,515,280,804 5,720,303,012 66%Loan increased by expanding of business scale
12 Different of foreign
currency translation
95,753,565 72,806,727 32%
Caused by adjustment of foreign currency
rate
13 Minor shareholders’ equity 2,863,970,961 2,023,299,723 42%
Caused by increase of registered capital of
co-operated projects and profit realized
14 Turnover 6,981,153,925 2,875,777,226 143%Increase of property sales income
15 Operation cost 4,127,363,733 1,628,278,262 153%Increase of property sales costs
16 Business tax and surcharge 862,925,247 480,483,907 80%
Increase of tax caused by increase of
property sales
17 Financial expenses 3,053,234 57,887,757 -95%
Mainly caused by increase of interest
income
18 Gain/loss from change of
fair value
29,917,874 -108,371,152 128%
Caused by increase of fair value of NDF
contract
19 Income tax expenses 434,742,205 142,053,203 206%Caused by increase of total profit
20 Minor shareholders’ equity 348,747,012 -4,810,597 7350%
Caused by increase of profit realized by
the co-operated projects
Note: NDF means future foreign currency trade contract without handover of principal.
