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招商局B:2010年半年度报告(英文版)2010-07-26  

						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.