China Merchants Property Development Co., Ltd. The 3rd Quarterly Report 2010 (Full Text) 1 Stock Code: 000024, 200024 No.:【CMPD】2010-031 Short Form of the Stock: CMPD, CMPD-B China Merchants Property Development Co., Ltd. The 3rd Quarterly Report 2010 (Full text) §1 Important Declaration 1.1 The Board of Directors and the directors of the Company guarantee that there are no significant omissions, fictitious or misleading statements carried in the Report and we will accept individual and joint responsibilities for the truthfulness, accuracy and completeness of the Report. 1.2 The 3rd Quarterly Report is not audited by CPA. 1.3 Mr. Sun Chengming - the legal representative, Mr. Huang Peikun – the chief financial officer, and Ms. Xu Yixia – the manager of accounting department declare: the financial reports carried in this report is secured for its truthfulness and completeness. 1.4 This report is prepared both in English and Chinese. When there is any conflict in understanding, the Chinese version shall prevail. §2 Company Profile 2.1 Financial highlights In RMB Yuan 2010.9.30 2009.12.31 Extent of Change (%) Gross Assets (RMB) 54,380,058,827.00 47,897,160,497.00 13.54% Owners’ equity attributable to the shareholders of the listed company (yuan) 17,585,819,894 16,278,736,754.00 8.03% Capital shares (shares) 1,717,300,503 1,717,300,503 - Net asset per share attributable to the shareholders of the listed company (Yuan/share) 10.24 9.48 8.02% July-Sept. 2010 Changed over the same period of last year (%) Jan-Sept. 2010 Changed over the same period of last year (%) Turnover (yuan) 2,603,531,682.00 7.96% 9,584,685,607.00 81.27% Net profit attributable to shareholders of the listed company (yuan) 376,691,534 -20.54% 1,426,870,815 48.49% Net Cash flow generated by business operation (RMB) - - -2,238,066,670.00 -143.44% Net Cash flow per share generated by business operation (yuan/share) - - -1.30 -142.00% Basic earnings per share (Yuan/share) 0.22 -21.43% 0.83 48.21% Diluted earnings per share (Yuan/share) 0.22 -21.43% 0.83 48.21% Weighted average net income/asset ratio (%) 2.17% Down by 0.91 percentage point 8.41% Up by 2.10 percentage point Weighted average net income/asset ratio less non-recurring gain/loss(%) 2.15% Down by 0.93 percentage point 8.39% Up by 2.14 percentage pointChina Merchants Property Development Co., Ltd. The 3rd Quarterly Report 2010 (Full Text) 2 Non-recurring gain and loss items Amount from beginning of year to the end of report term Note Gain/loss of non-current assets 7,822,702.00 Government subsidies accounted into current gain/loss account, other than those closely related to the Company’s common business, comply with the national policy and continues to enjoy at certain fixed rate or amount. 1,670,301.00 Restoring of receivable account impairment provision tested individually 2,861.00 Other non-business income and expenditures other than the above -4,210,909.00 Influenced amount of income tax -3,086,826.00 Influenced amount of minority shareholders’equity -82,953.00 Total 2,115,176.00 - 2.2 Total of shareholders and the top 10 holders of unconditional shares In shares Total shareholders at the end of the report period (accounts) 103,862 Top ten holders of the shares without subscription limitation Full name of shareholder Amount of unconditional shares held at the end of report term Categories Fuguo Tianrui Fine Blend Open Fund 22,773,428 A shares Shangtou Morgan China Advantages Securities Investment Fund 21,955,750 A shares Penghua Value Stock Investment Fund 15,999,901 A shares Yifangda Shenzhen Index 100 Open Stock Fund 12,107,653 A shares CNCA A/C COMPAGNIE FINANCIERE EDMOND DE ROTHSCHILD 9,699,770 B shares DREYFUS PREMIER INVESTMENT FDS INC.-DREYFUS GREATER CHINA FD 8,678,901 B shares Rongtong Shenzhen Index 100 Securities Investment Fund 8,281,728 A shares Shangtou Morgan Internal Power Stock Investment Fund 8,000,000 A shares Everbright Baodexin Core Stock Investment Fund 7,348,063 A shares Southern Find Elements Stock Investment Fund 7,002,382 A shares Note: Shekou Industrial Zone – the holding shareholder of the Company has committed to the Company at placing of new shares in 2007 that it will not trade the newly placed shares in 36 months since the ending date of the private offer (September 24, 2007). Therefore the shares held by Shekou Industrial Zone (including its act-in-concert parties) have been restricted to trade until the releasing date, namely September 23, 2010. As of the date of this report, the Company has not yet informed by Shekou Industrial Zone (including its act-in-concert parties) to request releasing the shares for trading. §3 Significant Events 3.1 Details and causations of major change in major accounting subjects and financial indices √ applicable □ not applicable In RMB Yuan Items 2010.09.30 2009.12.31 Changed by % Major causes Transactional financial assets 498,507 6,437,479 -92% Decreased by handover of NDF contracts in the period and fluctuation of NDF market prices Fixed assets 185,383,255 299,615,954 -38% Decreased by disposal of shares in water supply Differed income tax asset 391,591,259 290,485,972 35% Increase of differed income tax assets recognized by provisional difference caused byChina Merchants Property Development Co., Ltd. The 3rd Quarterly Report 2010 (Full Text) 3 drawn of land VAT in advance Trade off financial liabilities 7,615,914 12,829,413 -41% Decreased by handover of NDF contracts in the period and fluctuation of NDF market prices Account payable 1,618,452,777 2,705,521,285 -40% Disbursing of payment for land in the beginning of term Employees’ wage payable 102,725,600 162,832,982 -37% Bonus of previous year paid in the term Tax payable 325,606,967 589,859,453 -45% Decreased by payment of tax payable made in the term Interest payable 96,042,403 21,872,418 339% Increasing of long-term loans in the term Dividend payable 22,389,482 107,751,887 -79% Payment of dividends of previous year made in the term Long-term borrowings 10,780,479,724 5,720,303,012 88% Increasing of long-term loans for expanding of business scale Different of foreign currency translation 124,298,171 72,806,727 71% Caused by foreign exchange rate fluctuation Items Jan-Sept. 2010 Jan-Sept. 2009 Changed by % Major causes Turnover 9,584,685,607 5,287,377,216 81% Increase of property sales income Operation cost 5,809,187,731 3,052,074,092 90% Increase of property sales costs Business tax and surcharge 1,126,992,261 836,763,041 35% Tax increased for increasing of sales income of properties Income from change of fair value -860,876 -115,121,120 99% Loss from fluctuation of NDF fair value Investment income 38,558,420 257,788,655 -85% Decreasing of long-term equity investment calculated on equity basis Non-operational income 12,819,515 22,125,313 -42% Expected liabilities written back in same period of last year Non-operational expenditure 8,186,280 1,387,639 490% Increase of donation and newly increased major conservation construction fund in the term Income tax expenses 585,673,458 269,613,177 117% Increase of taxable profit Minor shareholders ’ equity 361,821,446 -16,245,446 2327% Net profit of subsidiaries increased in the term and minority shareholders’ equity of the subsidiaries increased correspondingly Other misc incomes 75,749,313 -236,633 32111% Increase of difference from foreign currency translation in the term 3.2 Progress of significant events, their influence, countermeasures, and analysis 3.2.1 None-standard opinions □applicable √ not applicable 3.2.2 Illegal providing of capital or guarantees to the holding shareholder or its related parties or external parties □applicable √ not applicable 3.2.3 Signing and execution of major business contracts √ applicable □ not applicable During the period of applying for private placing in 2009, Shenzhen CM Property Co., Ltd. – one of the Company’s subsidiaries entered the “Land Right Confirmation Contract” with China Merchants Shekou Industrial Zone Co., Ltd. (CMSIZ). According to the contract, the Company has canceled the arrangement of private placing, but paid independently for the land using rights of “Jingshan Project Phase 9” to acquire the development rights of this project.China Merchants Property Development Co., Ltd. The 3rd Quarterly Report 2010 (Full Text) 4 3.2.4 Misc. □applicable √ not applicable 3.3 Fulfilling of commitment issues made by the Company, shareholder, or substantial controller √ applicable □ not applicable 3.4 Estimated accumulative profit from the year beginning to the end of the next report period may be of deficits; or in comparison with the same period of the previous year, give the warning of great change and the notice to the reasons. □applicable √ not applicable 3.5 Major events needs to be explained 3.5.1 Investment in securities √ applicable □ not applicable In RMB Yuan Commitments The undertaker Content of Commitments Status of fulfilling Commitment in share equity relocation CMSIZ The original non-negotiable shares shall not been traded or transferred in 24 months since the trading right been granted (Feb 9, 2006). Shares placed in Shenzhen Stock Exchange in 12 months upon the above 24 months shall not exceed 5% of the total shares of the Company. In 36 months upon the above 24 months, the price of A-shares of the Company shall not be lower than 120% of the arithmetical average in 30 days prior to the publishing of share reallocation announcement. In the report term, CMSIZ was fully acting as committed. Commitment made in acquisition report or equity alternation report Not applicable Not applicable Not applicable Commitment made in major asset restructuring Not applicable Not applicable Not applicable Commitment made at issuing Not applicable Not applicable Not applicable Other commitments (including supplementary commitments) CMSIZ CMSIZ, the controlling shareholder of the Company, promised not to conduct or participate with 3rd parties in any business or activities possibly competing with the Company in terms of business, new commodities and new technology in any forms (including but not limited to direct operation, indirect operation, joint investment). Never use the information obtained from the Company to conduct or participate in and competitive activities against the Company. In the report term, CMSIZ was fully acting as committed.China Merchants Property Development Co., Ltd. The 3rd Quarterly Report 2010 (Full Text) 5 No. Stock category Stock Code Stock ID Initial investment (yuan) Shares held at the end of term Book value at the end of term Portion in total stock investment at the end of report term (%) Gain/loss of the report term 1 Stock 000004 ST Guo’nong 1,572,275.00 489,824 5,579,095.00 100.00% 0.00 Other stock investment held at the end of report term 0.00 - 0.00 0.00% 0.00 Gain/loss of disposed stock investment in the report term - - - - 0.00 Total 1,572,275.00 489,824 5,579,095.00 100% 0.00 Statement on stock investment The Company holds “ST Guo’nong” stocks which are accounted under “Disposable financial assets”, the gains of RMB680,855 from change of fair value has been accounted into owners’ equity. 3.5.2 Reception of investigations, communications, or interviews The Company has been keeping good communication with the investors by means of accepting onsite investigations, telephone inquiring, and written inquiring. In the report term, the Company has been following the “Guide for standard operation of listed companies” and asked the investors which requested investigations to sign the commitment letter, and maintain the principles of fairness, justice, and open in information disclosure. Time/date Place Way Visitors Main content involved and material provided Jan 12, 2010 Shekou Shenzhen Field research Zhongxin Construction Jan 19, 2010 Shekou Shenzhen Field research Yangtze Securities Jan 25, 2010 Shekou Shenzhen Field research Guolian’an Jan 26, 2010 Shekou Shenzhen Field research Goldman Sachs Jan 27, 2010 Shekou Shenzhen Field research Bohai Securities Feb 5, 2010 Shekou Shenzhen Field research Clients of CITIC securities Feb 10, 2010 Shekou Shenzhen Witten inquiry Investor Feb 22, 2010 Shekou Shenzhen Witten inquiry Investor Feb 23, 2010 Shekou Shenzhen Witten inquiry Investor Mar 1, 2010 Shekou Shenzhen Field research Guangzhou Securities Mar 2, 2010 Shekou Shenzhen Field research Dahe Securities Mar 3, 2010 Shekou Shenzhen Field research Anxin Securities Mar 12, 2010 Shekou Shenzhen Witten inquiry Investor Mar 15, 2010 Shekou Shenzhen Witten inquiry Investor Mar 15, 2010 Shekou Shenzhen Witten inquiry Investor Mar 18, 2010 Shekou Shenzhen Field research Zhongshan Securities Mar 22, 2010 Shekou Shenzhen Written inquiry Investor Mar 25, 2010 Shekou Shenzhen Field research Taizheng Securities Mar 26, 2010 Shekou Shenzhen Field research Client of J.P. MORGEN Mar 29, 2010 Shekou Shenzhen Field research Clients of UBS Mar 29, 2010 Shekou Shenzhen Written inquiry Investor March 31, 2010 Shekou Shenzhen Written inquiry Investor Apr 2, 2010 Shekou Shenzhen Field research Clients of Gaohua Securities Apr 4, 2010 Shekou Shenzhen Written inquiry Investor (1) Company business operation situation (2) Industrial development discussion (3) Providing information and brochures already released (4) Visiting the sites of properties on sale, providing the prospectusChina Merchants Property Development Co., Ltd. The 3rd Quarterly Report 2010 (Full Text) 6 Apr 6, 2010 Shekou Shenzhen Written inquiry Investor Apr 6, 2010 Shekou Shenzhen Written inquiry Investor Apr 12, 2010 Shekou Shenzhen Written inquiry Investor Apr 12, 2010 Shekou Shenzhen Written inquiry Investor Apr 19, 2010 Shekou Shenzhen Written inquiry Investor Apr 20, 2010 Shekou Shenzhen Written inquiry Investor Apr 21, 2010 Shekou Shenzhen Written inquiry Investor April 23, 2010 Shekou Shenzhen Field research Clients of UBS April 23, 2010 Shekou Shenzhen Written inquiry Investor May 6, 2010 Shekou Shenzhen Field research Group of investors organized by Shenwan May 13, 2010 Qingdao Field research Strategic meeting of Zhongyin Securities May 18, 2010 Shanghai Field research CLSA China Forum May 31, 2010 Huhehaote Field research UBS strategic meeting June 9, 2010 Beijing Field research J.P.Morgan Strategic Meeting Jun 11, 2010 Shenzhen Field research Guosen Securities Jun 11, 2010 Shenzhen Field research Everbright Securities Jun 10, 2010 Beijing Field research Huatai united June 9, 2010 Beijing Field research Anxin Securities Jun 10, 2010 Lijiang Field research Guojin Securities Jun 23, 2010 Shenzhen Field research China Merchants Securities Jul 2, 2010 Shenzhen Field research Balin Properties Jul 6, 2010 Shekou Shenzhen Tel. Inquiry Dongxing Securities Jul 7, 2010 Chengdu Chongqing Field research Shanghai Jinli Invetment Jul 9, 2010 Shekou Shenzhen Tel. Inquiry Zhongzheng Investment Jul 15, 2010 Shekou Shenzhen Field research Shanghai Tianxiang Investment Jul 15, 2010 Shekou Shenzhen Field research Tianshun Investment Jul 15, 2010 Shekou Shenzhen Field research Aijian Securities Jul 16, 2010 Shekou Shenzhen Field research Guangfa Fund Jul 19, 2010 Shekou Shenzhen Field research Boshi Fund Jul 19, 2010 Shekou Shenzhen Field research Suisse Bank Jul 20, 2010 Shekou Shenzhen Field research Shanghai Everbright Securities Jul 28, 2010 Shekou Shenzhen Tel. Inquiry Bank of China International Jul 28, 2010 Shekou Shenzhen Tel. Inquiry China Merchants Securities July 29, 2010 Shekou Shenzhen Tel. Inquiry Zhongtou Securities August 3, 2010 Shekou Shenzhen Tel. Inquiry Investor Aug 5, 2010 Shekou Shenzhen Tel. Inquiry Merrill Lynch Aug 12, 2010 Shekou Shenzhen Tel. Inquiry Investor Aug 13, 2010 Shekou Shenzhen Tel. Inquiry InvestorChina Merchants Property Development Co., Ltd. The 3rd Quarterly Report 2010 (Full Text) 7 Aug 16, 2010 Shekou Shenzhen Tel. Inquiry Investor Aug 17, 2010 Shekou Shenzhen Field research Zexi Investment Aug 18, 2010 Shekou Shenzhen Field research Bank of China International Aug 18, 2010 Shekou Shenzhen Field research Shangtou Morgan Aug 18, 2010 Shekou Shenzhen Field research Nuo’an Fund Aug 18, 2010 Shekou Shenzhen Field research Yangtze Securities Aug 20, 2010 Shekou Shenzhen Tel. Inquiry Zhongzheng Investment Aug 20, 2010 Shekou Shenzhen Tel. Inquiry Yangtze Pension Fund Aug 22, 2010 Shekou Shenzhen Field research Shanghai Jinli Investment Aug 24, 2010 Shekou Shenzhen Tel. Inquiry Shanghai Jinli Investment Sept 7, 2010 Shekou Shenzhen Tel. Inquiry Huatai united Sept 8, 2010 Shekou Shenzhen Field research Zhongtou Securities Sept 10, 2010 Shekou Shenzhen Tel. Inquiry Investor Sept 13, 2010 Shekou Shenzhen Field research Yuanzhi Invest Sept 13, 2010 Shekou Shenzhen Field research Minseng Investment Sept 17, 2010 Shekou Shenzhen Tel. Inquiry Zhongzheng Investment Sept 21, 2010 Shekou Shenzhen Field research Penghua Fund Sept 26, 2010 Shekou Shenzhen Tel. Inquiry Yuanzhi Invest September 27, 2010 Shekou Shenzhen Field research Shangtou Morgan Sept 28, 2010 Shekou Shenzhen Tel. Inquiry Investor Sept 30, 2010 Shekou Shenzhen Tel. Inquiry Investor 3.6 Investment in derivate financial instruments √ applicable □ not applicable Statement on analyzing and controlling of risks with derivate investment in the report term (including but not limited to market risks, liquidity risks, credit risks, operation risks, and legal risks. In the report term, the major market risks of derivate investment products were the impacts of fluctuation of NDF contracts on the fair values. However the Company’s purpose to involve in NDF trade was to lockup the exchange rate and avoid the risks brought by borrowing of foreign currencies, thus it was on the basis of real borrowings in foreign currency, its trading amount and timing are matching with the borrowings of foreign currency and covers the risks. The exchange rate of the future contract has been fixed as soon as been traded, therefore the risks are under control. The Company has established the “Regulations of Trade of Derivate Financial Instruments” which limited the categories, scale, authorization, operation procedures, risk control, and information disclosure over the derivate instruments. It provides a systematic ground for controlling of risks. Change of derivate instrument market price or fair value, information disclosing on the fair value, relative estimation and setting of indexes At end of December 2009, the 1-year RMB/USD NDF has quoted equal to 2.12% of increase, while at end of September 2009, it was 1.81%. The market was expecting an increase on RMB, For the 3rd quarter of 2010, NDF fair value has caused RMB860 thousand of loss, the NDF contract handover has caused losses of RMB2.01 million. Market price basis is adopted by the Company in analyzing ofChina Merchants Property Development Co., Ltd. The 3rd Quarterly Report 2010 (Full Text) 8 derivate instrument fair value, and the fair values are adjusted at end of each month. Statement on major alternation in accounting polices and accounting basis on derivate instruments comparing with last year None Particular comments of the independent directors, sponsors, or financial consultants on investment of derivate instruments and risk controlling Not applicable 3.6.1 Derivate financial instrument stock at end of report term √ applicable □ not applicable In RMB Yuan Category of contracts Amount of the contract at beginning of term Amount of the contract at end of term Gain/loss in the report term Percentage of value of contracts on net asset at end of report term % Foreign currency future contracts 1,981,741,658.00 2,039,881,851.00 -860,875.91 11.60% Total 1,981,741,658.00 2,039,881,851.00 -860,875.91 11.60% §4 Attachments 4.1 Balance Sheet Prepared by China Merchants Property Development Co., Ltd. Ended September 30, 2010 RMB Yuan Balance at the end of term Balance at the beginning of year Items Consolidated Parent company Consolidated Parent company Current asset: Monetary capital 10,887,911,353.00 5,059,549,675.00 9,489,490,935.00 6,268,540,842.00 Settlement provision Outgoing call loan Transactional financial assets 498,507.00 6,437,479.00 Notes receivable Account receivable 92,096,220.00 118,962,896.00 Prepayment 7,924,120.00 8,747,313.00 Insurance receivable Reinsurance receivable Provisions of Reinsurance contracts receivable Interest receivable Dividend receivable 1,055,009,983.00 1,090,720,147.00 Other account receivable 1,631,378,252.00 17,916,951,927.00 1,926,509,243.00 12,504,314,805.00 Repurchasing of financial assets Inventories 35,465,452,430.00 30,461,181,900.00 Non-current asset due in 1 year 875,493.00 26,754.00 Other current asset 876,456,013.00 624,800,651.00 Total of current asset 48,962,592,388.00 24,031,511,585.00 42,636,157,171.00 19,863,575,794.00 Non-current assets Loans and payment on other’sChina Merchants Property Development Co., Ltd. The 3rd Quarterly Report 2010 (Full Text) 9 behalf disbursed Disposable financial asset 5,579,095.00 5,579,095.00 4,898,240.00 4,898,240.00 Expired investment in possess Long-term receivable 1,110,308,691.00 968,889,413.00 1,062,146,037.00 924,366,671.00 Long-term share equity investment 598,180,573.00 3,362,681,839.00 616,512,618.00 3,481,655,301.00 Investment properties 2,932,981,817.00 2,787,842,250.00 Fixed assets 185,383,255.00 367,401.00 299,615,954.00 318,634.00 Construction in process 24,273,252.00 19,254,007.00 Engineering goods Fixed asset disposal Production physical assets Gas & petrol Intangible assets 54,121.00 R&D expense Goodwill Long-term amortizable expenses 169,168,497.00 15,300.00 180,194,127.00 158,628.00 Differed income tax asset 391,591,259.00 290,485,972.00 Other non-current asset Total of non-current assets 5,417,466,439.00 4,337,533,048.00 5,261,003,326.00 4,411,397,474.00 Total of assets 54,380,058,827.00 28,369,044,633.00 47,897,160,497.00 24,274,973,268.00 Current liabilities Short-term loans 1,185,455,519.00 801,549,500.00 1,372,929,609.00 630,397,000.00 Loan from Central Bank Deposit received and hold for others Call loan received Trade off financial liabilities 7,615,914.00 12,829,413.00 Notes payable 292,254,728.00 257,896,108.00 Account payable 1,618,452,777.00 2,705,521,285.00 Prepayment received 9,674,032,846.00 9,498,461,291.00 Selling of repurchased financial assets Fees and commissions receivable Employees’ wage payable 102,725,600.00 1,106,985.00 162,832,982.00 6,052,306.00 Tax payable 325,606,967.00 9,391,202.00 589,859,453.00 4,514,867.00 Interest payable 96,042,403.00 66,005,148.00 21,872,418.00 9,898,520.00 Dividend payable 22,389,482.00 107,751,887.00 Other account payable 5,882,652,425.00 5,188,031,361.00 5,835,329,987.00 3,928,393,230.00 Reinsurance fee payable Insurance contract provision Entrusted trading of securities Entrusted selling of securities Non-current liability due in 1 year 1,458,227,246.00 700,000,000.00 1,303,501,721.00 650,000,000.00 Other current liability 2,269,721,192.00 77,559.00 1,843,563,001.00 77,559.00China Merchants Property Development Co., Ltd. The 3rd Quarterly Report 2010 (Full Text) 10 Total of current liability 22,935,177,099.00 6,766,161,755.00 23,712,349,155.00 5,229,333,482.00 Non-current liabilities Long-term borrowings 10,780,479,724.00 6,785,088,000.00 5,720,303,012.00 4,123,128,000.00 Bond payable Long-term payable 55,504,227.00 46,469,703.00 Special payable Contingent liabilities 106,299,637.00 108,052,194.00 Differed income tax liability 961,637.00 961,637.00 731,713.00 731,713.00 Other non-recurring liabilities 4,483,360.00 7,218,243.00 Total of non-current liabilities 10,947,728,585.00 6,786,049,637.00 5,882,774,865.00 4,123,859,713.00 Total of liability 33,882,905,684.00 13,552,211,392.00 29,595,124,020.00 9,353,193,195.00 Owners’ equity (or shareholders’ equity) Capital paid in (or share capital) 1,717,300,503.00 1,717,300,503.00 1,717,300,503.00 1,717,300,503.00 Capital reserves 8,488,377,835.00 8,930,978,607.00 8,487,926,904.00 8,930,527,676.00 Less: Shares in stock Special reserves Surplus reserves 785,793,010.00 734,841,617.00 785,793,010.00 734,841,617.00 Common risk provision Retained profit 6,470,050,375.00 3,433,712,514.00 5,214,909,610.00 3,539,110,277.00 Different of foreign currency translation 124,298,171.00 72,806,727.00 Total of owner’s equity belong to the parent company 17,585,819,894.00 14,816,833,241.00 16,278,736,754.00 14,921,780,073.00 Minor shareholders’ equity 2,911,333,249.00 2,023,299,723.00 Total of owners’ equity 20,497,153,143.00 14,816,833,241.00 18,302,036,477.00 14,921,780,073.00 Total of liabilities and owners’ equity 54,380,058,827.00 28,369,044,633.00 47,897,160,497.00 24,274,973,268.00 4.2 Income Statement of the report term Prepared by China Merchants Property Development Co., Ltd. Jul-Sept 2010 in RMB Amount of the Current Term Amount of the Previous Term Items Consolidated Parent company Consolidated Parent company I. Total revenue 2,603,531,682.00 2,411,599,990.00 Incl. Business income 2,603,531,682.00 2,411,599,990.00 Interest income Insurance fee earned Fee and commission received II. Total business cost 2,045,986,856.00 1,083,075.00 1,899,194,775.00 -5,917,507.00 Incl. Business cost 1,681,823,998.00 1,423,795,830.00 Interest expense Fee and commission paid Insurance discharge payment Net claim amount paidChina Merchants Property Development Co., Ltd. The 3rd Quarterly Report 2010 (Full Text) 11 Net insurance policy reserves provided Insurance policy dividend paid Reinsurance expenses Business tax and surcharge 264,067,014.00 356,279,134.00 Sales expense 51,472,808.00 59,048,409.00 Administrative expense 54,462,202.00 5,492,202.00 50,722,630.00 6,753,629.00 Financial expenses -5,847,041.00 -4,409,127.00 9,353,850.00 -12,671,136.00 Asset impairment loss 7,875.00 -5,078.00 Plus: Gains from change of fair value (“-“ for loss) -30,778,750.00 -6,749,968.00 Investment gain (“-“ for loss) 13,104,466.00 49,171,156.00 80,327,521.00 -5,043,221.00 Incl. Investment gains from affiliates -4,381,817.00 639,400.00 69,233,141.00 -742,855.00 Gains from currency exchange (“-“ for loss) III. Operational profit (“-“ for loss) 539,870,542.00 48,088,081.00 585,982,768.00 874,286.00 Plus: Non business income 3,909,274.00 317,133.00 4,249,938.00 Less: Non-business expenses 3,082,595.00 31,973.00 Incl. Loss from disposal of non-current assets 120,666.00 -13,799.00 IV. Gross profit (“-“ for loss) 540,697,221.00 48,405,214.00 590,200,733.00 874,286.00 Less: Income tax expenses 150,931,253.00 947,514.00 127,559,974.00 V. Net profit (“-“ for net loss) 389,765,968.00 47,457,700.00 462,640,759.00 874,286.00 Net profit attributable to the owners of parent company 376,691,534.00 47,457,700.00 474,075,608.00 874,286.00 Minor shareholders’ equity 13,074,434.00 -11,434,849.00 VI. Earnings per share: (I) Basic earnings per share 0.219 0.276 (II) Diluted earnings per share 0.219 0.276 VII. Other misc. incomes 37,203,132.00 1,101,908.00 -11,756.00 -11,756.00 VIII. Total of misc. incomes 426,969,100.00 48,559,608.00 462,629,003.00 862,530.00 Total of misc. incomes attributable to the owners of the parent company 406,338,049.00 48,559,608.00 474,063,852.00 862,530.00 Total misc gains attributable to the minor shareholders 20,631,051.00 -11,434,849.00 4.3 Income Statement from the beginning of year to the end of report term Prepared by China Merchants Property Development Co., Ltd. Jan-Sept 2010 in RMB Amount of the Current Term Amount of the Previous Term Items Consolidated Parent company Consolidated Parent company I. Total revenue 9,584,685,607.00 5,287,377,216.00 Incl. Business income 9,584,685,607.00 5,287,377,216.00China Merchants Property Development Co., Ltd. The 3rd Quarterly Report 2010 (Full Text) 12 Interest income Insurance fee earned Fee and commission received II. Total business cost 7,252,650,667.00 -3,787,095.00 4,236,491,338.00 1,463,319.00 Incl. Business cost 5,809,187,731.00 3,052,074,092.00 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 1,126,992,261.00 836,763,041.00 Sales expense 163,617,872.00 173,644,402.00 Administrative expense 155,641,596.00 14,708,166.00 141,541,430.00 15,752,466.00 Financial expenses -2,793,807.00 -18,495,261.00 32,581,415.00 -14,289,147.00 Asset impairment loss 5,014.00 -113,042.00 Plus: Gains from change of fair value (“-“ for loss) -860,876.00 -115,121,120.00 Investment gain (“-“ for loss) 38,558,420.00 69,177,015.00 257,788,655.00 -6,868,490.00 Incl. Investment gains from affiliates -4,974,053.00 -1,763,851.00 179,118,035.00 -2,568,124.00 Gains from currency exchange (“-“ for loss) III. Operational profit (“-“ for loss) 2,369,732,484.00 72,964,110.00 1,193,553,413.00 -8,331,809.00 Plus: Non business income 12,819,515.00 317,133.00 22,125,313.00 Less: Non-business expenses 8,186,280.00 1,387,639.00 Incl. Loss from disposal of non-current assets 397,313.00 305,008.00 IV. Gross profit (“-“ for loss) 2,374,365,719.00 73,281,243.00 1,214,291,087.00 -8,331,809.00 Less: Income tax expenses 585,673,458.00 6,948,955.00 269,613,177.00 V. Net profit (“-“ for net loss) 1,788,692,261.00 66,332,288.00 944,677,910.00 -8,331,809.00 Net profit attributable to the owners of parent company 1,426,870,815.00 66,332,288.00 960,923,356.00 -8,331,809.00 Minor shareholders’ equity 361,821,446.00 -16,245,446.00 VI. Earnings per share: (I) Basic earnings per share 0.8309 0.5594 (II) Diluted earnings per share 0.8309 0.5594 VII. Other misc. incomes 75,749,313.00 450,931.00 -236,633.00 1,763,367.00 VIII. Total of misc. incomes 1,864,441,574.00 66,783,219.00 944,441,277.00 -6,568,442.00 Total of misc. incomes attributable to the owners of the parent company 1,478,813,190.00 66,783,219.00 960,686,723.00 -6,568,442.00China Merchants Property Development Co., Ltd. The 3rd Quarterly Report 2010 (Full Text) 13 Total misc gains attributable to the minor shareholders 385,628,384.00 -16,245,446.00 4.4 Cash Flow Statement from the beginning of year to the end of report term. Prepared by China Merchants Property Development Co., Ltd. Jan-Sept 2010 in RMB Amount of the Current Term Amount of the Previous Term Items Consolidated Parent company Consolidated Parent company I. Net cash flow from business operation Cash received from sales of products and providing of services 9,768,811,329.00 10,797,563,292.00 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 15,311,948.00 1,347,949.00 Other cash received from business operation 1,991,535,324.00 527,535,307.00 1,250,535,398.00 4,197,256,719.00 Sub-total of cash inflow from business activities 11,775,658,601.00 527,535,307.00 12,049,446,639.00 4,197,256,719.00 Cash paid for purchasing of merchandise and services 9,334,463,626.00 4,140,838,730.00 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 512,454,736.00 8,088,763.00 353,886,452.00 7,411,012.00 Taxes paid 2,330,350,396.00 14,832,736.00 1,078,187,484.00 1,149,211.00 Other cash paid for business 1,836,456,513.00 2,447,713,601.00 1,324,498,657.00 880,548,883.00China Merchants Property Development Co., Ltd. The 3rd Quarterly Report 2010 (Full Text) 14 activities Sub-total of cash outflow from business activities 14,013,725,271.00 2,470,635,100.00 6,897,411,323.00 889,109,106.00 Cash flow generated by business operation, net -2,238,066,670.00 -1,943,099,793.00 5,152,035,316.00 3,308,147,613.00 II. Cash flow generated by investing Cash received from investment retrieving 1,522,182.00 Cash received as investment gains 360,094.00 45,334,075.00 413,971.00 Net cash retrieved from disposal of fixed assets, intangible assets, and other long-term assets 90,097.00 160,494.00 Net cash received from disposal of subsidiaries or other operational units 171,724,601.00 154,691,540.00 Other investment-related cash received 75,344,057.00 Sub-total of cash inflow due to investment activities 172,174,792.00 200,025,615.00 77,440,704.00 Cash paid for construction of fixed assets, intangible assets and other long-term assets 22,039,532.00 40,900.00 31,197,012.00 Cash paid as investment 28,125,469.00 10,000,000.00 7,337,852.00 Net increase of loan against pledge Net cash received from subsidiaries and other operational units Other cash paid for investment activities 1,971,145.00 Sub-total of cash outflow due to investment activities 52,136,146.00 10,040,900.00 38,534,864.00 Net cash flow generated by investment 120,038,646.00 189,984,715.00 38,905,840.00 III. Cash flow generated by financing Cash received as investment 490,673,905.00 75,000,000.00 Incl. Cash received as investment from minor shareholders 490,673,905.00 75,000,000.00 Cash received as loans 6,859,617,476.00 1,694,293,000.00 5,037,063,977.00 4,298,346,000.00 Cash received from bond placing Other financing-related cash received Subtotal of cash inflow from financing activities 7,350,291,381.00 1,694,293,000.00 5,112,063,977.00 4,298,346,000.00 Cash to repay debts 1,773,897,397.00 794,022,000.00 7,107,178,142.00 5,010,102,100.00 Cash paid as dividend, profit, or interests 525,785,040.00 354,394,448.00 626,589,538.00 479,459,685.00 Incl. Dividend and profit paid by subsidiaries to minor shareholders 256,640,389.00 1,330,292.00China Merchants Property Development Co., Ltd. The 3rd Quarterly Report 2010 (Full Text) 15 Other cash paid for financing activities 871,199,830.00 Subtotal of cash outflow due to financing activities 3,170,882,267.00 1,148,416,448.00 7,733,767,680.00 5,489,561,785.00 Net cash flow generated by financing 4,179,409,114.00 545,876,552.00 -2,621,703,703.00 -1,191,215,785.00 IV. Influence of exchange rate alternation on cash and cash equivalents -14,674,492.00 -1,752,640.00 -438,335.00 -37,684.00 V. Net increase of cash and cash equivalents 2,046,706,598.00 -1,208,991,166.00 2,568,799,118.00 2,116,894,144.00 Plus: Balance of cash and cash equivalents at the beginning of term 8,775,661,067.00 6,268,540,841.00 7,358,057,106.00 4,728,619,945.00 VI. Balance of cash and cash equivalents at the end of term 10,822,367,665.00 5,059,549,675.00 9,926,856,224.00 6,845,514,089.00 4.5 Auditors’ Report Auditor’s opinion: not audited.